Sitting of 6 May 1982

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

  PRIVATE BUSINESS
  GREATER LONDON COUNCIL (MONEY) BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Thursday 13 May at Seven o'clock.
  TEES AND HARTLEPOOL PORT AUTHORITY BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 11 May.
  GREATER LONDON COUNCIL (GENERAL POWERS)
  (NO. 2) BILL (By Order)
  ALEXANDRA PARK AND PALACE BILL (By Order)
  LONDON TRANSPORT (LIVERPOOL STREET) BILL (By Order)
  FELTHAM STATION AREA REDEVELOPMENT (LONGFORD RIVER) BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 13 May.
  SOUTHERN WATER AUTHORITY [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to authorise the Southern Water Authority to construct works and to acquire lands, to regulate the use of vessels and houseboats on certain parts of the river Medway, to confer further powers on the Southern Water Authority, and for other purposes, it is expedient to authorise any increase in the sums payable out of money provided by Parliament under section 90 of the Land Drainage Act 1976.—[Mrs. Fenner.]

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Soft Fruit Growers
    Mr. Bill Walkerasked the Minister of Agriculture, Fisheries and Food what arrangements are in hand to safeguard the interests of soft fruit growers in the coming season.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): Soft fruit growers are protected against imports by the common customs tariff of up to 18 per cent. for fresh and frozen fruit and 11 per cent. for fruit pulp,.
    Growers of raspberries and strawberries are further protected by the Community import licensing system. This was extended to pulped and frozen strawberries in 1981) as a result of the representations which my right hon. Friend made to the Commission on behalf of our growers.
    Mr. Walker: I thank my hon. Friend for that comprehensive answer. Does she understand that the fruit growers in Strathmore are anxious about the import of pulp, because of the way in which it affected harvests in previous years? Will she give an assurance that there will be no unlimited quantity—that may have been covered in her earlier reply—as farmers are anxious about this year's crop and are looking to the Government and the European Community for support?
    Mrs. Fenner rose——
    Mr. Speaker: Order. It is difficult for hon. Members to hear what is being said if the hon. Member for Bolsover (Mr. Skinner) is talking at the same time.
    Mr. Skinner: If you will allow me to explain, Mr. Speaker, I will. I was speaking in that fashion because I have occupied this place on this Bench for 12 years, and hon. Members believe that they can muscle in——
    Mr. Speaker: Order. The hon. Gentleman can tell me about his troubles another time.
    Mr. Skinner: I am not the trouble.
    Mrs. Fenner: I assure my hon. Friend that we shall continue to monitor the market closely in consultation with the Commission and that we shall press for effective action, as necessary, in the interests of growers, processors and consumers.

    Agricultural Holdings
    Mr. Heddleasked the Minister of Agriculture, Fisheries and Food whether he will now bring forward proposals to reform the law of agricultural holdings for the specific purpose of stimulating the granting of new farm tenancies.
    The Minister of Agriculture, Fisheries and Food (Mr. Peter Walker): I have nothing to add to the reply given to my hon. Friend on 1 April. We are continuing to consider what action is required.
    Mr. Heddle: Does my right hon. Friend agree that the commitment now given by the Opposition to nationalise

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    all tenanted farm land with minimal compensation will dry up the supply of farms to rent? Does he further agree that it is therefore necessary to continue a dialogue to explore ways of finding farms and smallholdings to let on conditions and at rents that will meet with the approval of landowners and tenants alike?
    Mr. Walker: Yes. After all these years of reiterating its land nationalisation proposals, I find it surprising, but perhaps electorally pleasing, that the Labour Party in its present form should continue with that outdated and useless suggestion.
    Mr. Buchan: Does the right hon. Gentleman agree that it is extraordinary that the Government, believing that they have the correct policy on this issue, should be afraid to introduce it without the permission of the Opposition? Is he aware that if the Government wish to give up their rights and privileges on that Bench, we are willing to take them over?
    Mr. Walker: I do not know from where the hon. Gentleman got that strange view. I wish to improve the landlord and tenant situation to enable young farmers to come into farming. I am in no way under the influence of the Opposition. I have always said that it is disastrous for young people who wish to go into farming that the Opposition should so persistently ruin any chance of sensible reform. I am sorry that they continue to do that. I hope that one day they will change their view.
    Mr. Farr: Does my hon. Friend agree that, due to the mechanics of the situation, if legislation were introduced today, it is unlikely that a single new tenancy would become available during this Parliament as a result of it?
    Mr. Walker: Yes; but I have no doubt that, after the substantial defeat of the Labour Party at the next general election, things will be different.
    Mr. Buchan: How can the Minister deny that the situation is extraordinary when his first proposition was that the Government were willing to look at this matter and to bring in a modified form of tenancy agreement in line with the views of the National Farmers Union and the Country Landowners Association, but that it could not be done unless the Opposition agreed? Further to his remarks about public ownership and his apparent agreement with his hon. Friend the Member for Harborough (Mr. Fan), is he aware that one way to increase the number of tenants is to have a substantial extension of public ownership?
    Mr. Walker: I repeat that the Labour Party has done more damage to the prospects for young people wishing to enter the agriculture industry than any other political party this century, and it continues to do so. It now comes up with the absurd and outdated suggestion of land nationalisation. I assure the House that the Government will now endeavour to improve the situation, knowing that the Labour Party has no interest outside its old doctrinaire views on nationalisation.

    Marketing Initiative
    Mr. Cockeramasked the Minister of Agriculture, Fisheries and Food whether the degree of co-operation between sections of the food industry will enable him to develop properly his marketing initiative in the best interests of consumers, processors and agricultural producers.
    Mr. Peter Walker: There is wide recognition in the food and agriculture industries of the need for a more co-ordinated effort to improve the marketing of British food and agricultural produce. My discussions with leaders of the industries concerned suggest that we can establish the right basis for co-operation among all sectors.
    Mr. Cockeram: Does my right hon. Friend regard the successful reorganisation of marketing in the apple industry as a good augury for his initiative to reorganise marketing in the bacon industry?
    Mr. Walker: Yes. There has been a substantial and deserved improvement in the British apple industry, largely through its own efforts, but encouraged by the Government. I am pleased that this month the British bacon industry is to launch a new campaign for British bacon which will guarantee a high quality product for the housewife, reduce imports and increase our share of the domestic market.
    Mr. John Carlisle: I appreciate my right hon. Friend's moves towards help for co-operatives and the co-operative movements, but will he not forget those in the private sector who have invested vast amounts of money over the years? Will he give an absolute assurance that the cooperative sector will not receive any benefits in tax relief or grants which may be to the detriment of the private sector?
    Mr. Walker: I can only say that the markets in which initiatives have been taken—apples and bacon—are primarily in the private sector, not in the co-operative sector. I believe that there is a need to encourage co-operation between British farmers to improve their marketing, and I shall continue to do that.
    Mr. Skinner: Will the Minister explain why the Government, who base their whole philosophy on market forces and non-interference by the Government, nevertheless intervene positively in all these areas of agriculture to distort pure market forces? Does he enjoy that?
    Mr. Walker: It is nothing compared with the intervention in the coal industry.

    Common Fisheries Policy
    Mr. Hicksasked the Minister of Agriculture, Fisheries and Food what is the latest position relating to the negotiations for a revised Community common fisheries policy.
    Mr. Beithasked the Minister of Agriculture, Fisheries and Food when he expects further progress to be made in negotiations on the common fisheries policy.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): The next meeting of the Council of Fisheries Ministers is expected to be held this month.
    Mr. Hicks: I acknowledge the progress that has been made in obtaining a revised fisheries policy, but is my right hon. Friend aware of the increasing anxiety of fishermen in the South-West as the end of the 10-year derogation period looms closer? Is he further aware of the need for the Ministry to have contingency arrangements available to protect the fishermen's economic livelihood in the event of a final policy not being obtained by 31 December?
    Mr. Buchanan-Smith: We are aware of the concern to which my hon. Friend refers. There is no doubt that a satisfactory agreement, with stability, is one of the most important requirements for the prosperity of the industry. I shall keep in mind the points made by my hon. Friend.
    Mr. Beith: If no agreement is reached by the end of this year, what steps will the Minister take to safeguard stocks and the livelihood of fishermen?
    Mr. Buchanan-Smith: As I have said before, I do not think that any British Government would tolerate fishing up to the beaches in any circumstances at any time. I remind the hon. Gentleman that article 103 of the Treaty of Accession provides for action to be taken to limit access. That action must be taken by 31 December this year. We are bending all our efforts towards that end, in the interests of our industry.
    Mr. Donald Stewart: What reply will be given to the statement by the Scottish Fishermen's Federation of 30 April about the 12-mile exclusive limit, retention of the pout box, a guaranteed share of the catch, and so on? If the right hon. Gentleman cannot give the answer at this stage, that will be understood, but will he take those points seriously into account?
    Mr. Buchanan-Smith: As the right hon. Gentleman knows, my right hon. Friend the Secretary of State for Scotland and I keep in close touch with the fishermen's organisations. I assure him that their representations will be fully discussed with them.
    Mr. Buchan: Is the right hon. Gentleman aware of the desperate anxiety in all sectors of the fishing industry in Scotland and, indeed, in Grimsby, which now describes itself as "on the brink"? Will he give a guarantee that, before the sands of time run out at the end of this year, we shall have the 12-mile exclusive limit and the 50-mile dominant preference zone at least? Will he tell us more about the Government's contingency plans in the event of failure to obtain this by 31 December?
    Mr. Buchanan-Smith: From the way in which the hon. Gentleman puts his questions, I sometimes think that he almost wishes that the sands of time would run out. We are about to start a new round of negotiations on issues crucial to our fishing industry. It is vital that we maintain our strongest possible negotiating position. That is not necessarily helped by saying what would happen in a hypothetical set of circumstances. Nevertheless, I assure the House that, between now and the end of the year, every possible effort will be made to obtain a satisfactory settlement.

    Fishing Industry
    Sir Patrick Wallasked the Minister of Agriculture, Fisheries and Food if he now plans to give further assistance to the fishing industry.
    Mr. Buchanan-Smith: Supplementary information on the financial position of the industry has been obtained, and this is being considered along with the industry's representations.
    Sir Patrick Wall: Is my right hon. Friend aware that the desperate straits in which deep-water vessels now find themselves will be exacerbated by restrictions on their fishing? Is he further aware that these ships and crews are
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    also important as part of our naval reserves? When will the discussions be completed? Does he realise that there is very little time left if we wish to keep the deep-water fleet?
    Mr. Buchanan-Smith: It is also important to bear in mind the present economic situation in the fishing industry. The House may be interested to know that, in the first four months of this year, in the six main ports of England and Wales the volume of landings rose by 6 per cent., prices by 18 per cent. and total earnings by 25 per cent. Those factors must be taken into account.
    Mr. Mark Hughes: Does the Minister accept that in the deep-water ports the level of indebtedness of the fishing industry and the interest rates being carried cannot be sustained, even in the light of the price increases to which he has referred? Is he aware that, unless assistance is given to the deep-water fleet, it will disappear? It is no use saying that prices have risen by X and volumes by Y if at the same time the basic economics of the industry have been totally destroyed.
    Mr. Buchanan-Smith: I refute what the hon. Gentleman has said. It is quite wrong to ignore, as he seeks to do, developments in the earnings of the industry. We simply cannot set that aside. He should also consider how deep-sea fishing companies have adapted their fishing methods in recent months and the number of extremely successful voyages that they have undertaken. Moreover, no finger can be pointed at Government aid to the fishing industry, which in the past two years has amounted to about £42 million, a considerable amount of which went to the deep-sea sector.

    Pollution
    Mr. Adleyasked the Minister of Agriculture, Fisheries and Food what steps he is currently contemplating further to protect the fishing community from chemical, oil and detergent pollution of the sea.
    Mr. Buchanan-Smith: Responsibilities for dealing with chemical and oil spills at sea, including the use of dispersants to combat oil slicks, rest mainly with my noble Friend the Secretary of State for Trade. I take every opportunity to ensure that proper regard is paid to the interests of the fishing industry whenever incidents occur and in contingency planning.
    Mr. Adley: I thank my right hon. Friend for his answer. Does he agree that there is something faintly immoral about oil companies that spill oil subsequently profiting from the sale of detergents to clear up the mess for which they have been responsible? In view of the effect of these detergents on fishing interests, will my right hon. Friend consider making a ministerial visit to Oil Recovery International in my constituency, as that company has developed a system of collecting oil from the surface of the water by means of an oil mop that takes away all the harmful effects to the fishing interests caused by detergents?
    Mr. Buchanan-Smith: I know that there is concern over the use of detergents for dispersing oil slicks. However, there has been a considerable improvement in their effectiveness in recent years. We monitor carefully the effect on fishing. I do not think that the effect on fish resources is quite so serious as my hon. Friend claims. I shall watch the situation carefully. I know that it worries fishermen and my hon. Friend.
    Mr. Bill Walker: Will my right hon. Friend have discussions with Ministers at the Ministry of Defence and the Department of Trade about the relatively inexpensive method of policing the seas carried out by the Royal Hong Kong Auxiliary Air Force? It may be possible for the three Departments together to mount a similar operation.
    Mr. Buchanan-Smith: My hon. Friend may not be aware that the Department of Trade has recently announced new aerial surveillance arrangements. His proper interest in this matter may have been anticipated. If my hon. Friend wishes more details, I shall be happy to send them to him.
    Mr. Ioan Evans: Is this not an international issue? What action is the Ministry taking, together with the Departments of Trade and Environment, to implement resolutions passed at the United Nations conference at Stockholm in 1971? Is not the future of mankind threatened if we fail to deal with serious pollution of the seas?
    Mr. Buchanan-Smith: I agree, in general, with the concern expressed by the hon. Gentleman. These matters, especially those related to the high seas, are primarily the responsibility of the Department of Trade. I shall draw the attention of my noble Friend to what the hon. Gentleman said.

    Cattle, Pigs, Sheep and Poultry
    Mr. Hal Millerasked the Minister of Agriculture, Fisheries and Food what is the latest population of cattle, pigs, sheep and poultry as compared with the figures for May 1979.
    Mr. Buchanan-Smith: With permission, Mr. Speaker, I will circulate the information in the Official Report.
    Mr. Miller: Does my right hon. Friend accept that those interested in the structure and balance of British agriculture have been concerned about the apparent disparity in emphasis given to cereal rather than to livestock production? Does he further accept that there is a need to maintain confidence in the livestock sector, especially during the current negotiations on the variable beef premium?
    Mr. Buchanan-Smith: I agree with my hon. Friend. As he may know, I have been preaching this thesis for a number of years. I hope that he will be encouraged by two things. First, in regard to the present price-fixing negotiations, the relative price increases for livestock products are greater than those for cereals, which I hope will lead to a better balance. Secondly, in particular areas of livestock, such as the sheepmeat regime and the continuation of the variable beef premium, we express our concern direct for the livestock industry.
    Mr. Spearing: The Minister said that he hoped to achieve a better balance. Does he agree that, as all these matters are now decided in Brussels, he and the House have no power to determine the sort of balance for which his hon. Friend asked?
    Mr. Buchanan-Smith: Such a question is characteristic of the hon. Gentleman. When steps are taken to try to redress the balance, which I believe he wants, as I do, he throws doubt on those steps. If he were to remain true to his argument, he should welcome what has been achieved in Brussels instead of adopting a sour grapes attitude.
    Mr. Hawkins: Does my right hon. Friend agree that, whatever is shown by the figures placed by him in the Library, or wherever he puts them, the number of cattle coming forward for slaughter has shown an alarming drop of about 10,000 a week? Does he further agree that this matter has to be remedied? With the high price of stores, there is no possibility of people being able to eat cheap beef, which they consider is their right.
    Mr. Buchanan-Smith: I assure my hon. Friend that I shall not put the figures anywhere but in the Official Report where he can see them. He is correct about the beef breeding herd figures causing the greatest concern. However, the latest census figures show that the rate of decline in the beef herd is slowing down and that there is a small but welcome recovery in the dairy herd, from which two-thirds of our beef supply comes.
    The information is as follows:
    Data on livestock numbers are collected in June and December each year. Figures for June 1979 and June 1981 are as follows. Provisional figures for December 1981 are also given, but seasonal factors complicate any comparison with the June figures, especially in respect of sheep.

    Livestock populations in the United Kingdom ('000 head)

    June 1979

    June 1981

    December 1981 (provisional)

    Cattle

    13,589

    13,137

    12,965

    Sheep

    29,946

    32,091

    22,185

    Pigs

    7,864

    7,828

    7,917

    Poultry

    135,342

    132,306

    Not available

    Farm Prices
    Mr. Lathamasked the Minister of Agriculture, Fisheries and Food whether he will make a statement on the latest position regarding the European Economic Community farm price negotiations.
    Mr. Peter Walker: I refer my hon. Friend to the reply which I gave yesterday to my hon. Friend the Member for Devon, West (Mr. Mills).
    Mr. Latham: Will my right hon. Friend confirm that, while European unity and solidarity are essential at this grave time, a farm price settlement must, in the end, be achieved on its agricultural and food merits and that this should be firmly understood?
    Mr. Walker: Yes.
    Sir Anthony Meyer: Will my right hon. Friend bear in mind that the British agriculture industry will be required to pay a high price to strengthen the Government's general bargaining stance at a time when there are fairly strong political advantages in reaching an early conclusion on these matters?
    Mr. Walker: Yes. It must, however, be correct to have a farm price settlement, which is a substantial part of the European budget, on the basis of knowing who will make the contributions to the European budget.
    Mr. Buchan: Will the right hon. Gentleman take on board the point that the agriculture budget should be decided on the merits of the agricultural requirements, not on any other arguments? We are pleased about the decision that has been taken on the co-responsibility levy. It is an improvement. Will the right hon. Gentleman say more about what he meant when talking about a wine

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    agreement? Are we still in the nonsensical position of trying to create a wine lake to produce commercial alcohol at five times the price of industrial alcohol? Will the right hon. Gentleman say when the budget is likely to be made known? Will he resist attempts to push the initial 9 per cent. increase up to 11 per cent.? That will be of no value to us, and it is of no value to the consumer. Will he follow the French lead in developing national aids to produce the shift in balance that all now believe should take place?
    Mr. Walker: I believe that the settlement should be made upon its merits. Wine is an important aspect. The hon. Gentleman will be pleased to know that substantial improvements were made to the wine proposals. They will be far more cost-effective and sensible than the original proposals. A tribute should be paid to my right hon. Friend the Minister of State who, in my absence through having to attend Cabinet meetings on the Falkland Islands, conducted the negotiations and had considerable success. There is a wide range of variation in prices for various commodities. The hon. Gentleman will be relieved to know that the proposals in their present form, as made by the Presidency, would have an impact of only 1¼ per cent. on food prices and of a quarter of 1 per cent. on the retail price index.

    Horse (Classification)
    Mr. Greenwayasked the Minister of Agriculture, Fisheries and Food in which European Economic Community countries the horse is classified as an agricultural animal.
    Mrs. Fenner: We have no such information.
    Mr. Greenway: I thank my hon. Friend for that reply. I am surprised that the Government are having difficulty in obtaining the information. Is my hon. Friend aware that the present situation is illogical, sad and damaging to man's oldest friend, the horse, on whose back our country's history was substantially built? Is she further aware that the situation in other European countries, where the horse is rightly classified as an agricultural animal, means that our horse breeders are facing unfair competition and finding it increasingly difficult to keep going and maintain exports? Does my hon. Friend know that the British Equestrian Federation, the British Horse Society, the National Farmers Union, and anyone connected with horses in any knowledgable way, want the horse to be reclassified as an agricultural animal?
    Mrs. Fenner: My hon. Friend refers to classification in other countries, but it is necessary to establish what each country understands by the term "agricultural animal". Although I agree that the horse has had a historical role, only an insignificant number are used in agriculture in this country. Hence, there is no justification for a change. The number of horses used wholly or mainly for agricultural work is insignificant.
    Sir Timothy Kitson: Is my hon. Friend aware that because of the French and Irish classification of their horses they have a tremendous tax advantage that we do not have here? At least those countries have worked out something that is satisfactory, even if we do not know what they are doing.
    Mrs. Fenner: I can only reiterate to my hon. Friend that those countries may have more horses genuinely used for agricultural purposes—but we do not.
    Mr. Skinner: Is the Minister aware that some of us are fed up to the back teeth with these imported Common Market phrases, such as "sheepmeat regimes" and "beef meat regimes", and that this idiotic idea stems from all those who believe that the Common Market is great and beautiful, like the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) behind me? It is a load of nonsense. It is time that we stopped this business. What will the people think who are checking the card at Chester today when they read about "agricultural animals"?

    Tomato Growers
    Mr. Haselhurstasked the Minister of Agriculture, Fisheries and Food whether he is satisfied with the present support arrangements for United Kingdom tomato growers in comparison with their European counterparts, and if he will make a statement.
    Mr. Peter Walker: I am satisfied that the substantial support given by the Government to the United Kingdom tomato industry bears comparison in total benefit with that given to our competitors, allowing for the relative size of the industries. On heating costs, we are giving the maximum aid permitted under European Commission guidelines.
    Mr. Haselhurst: Does my right hon. Friend agree that, however one looks at the issue, our growers are not achieving the market share and profitability that properly ought to be theirs and that the responsibility or fault for that does not lie wholly with them?
    Mr. Walker: I believe that the growers have been at a disadvantage as a result of the variations in fuel prices between this country and Holland. That is why we have strongly negotiated, and expect soon to reach agreement, over a comparable position on fuel prices between Holland and this country. Unlike the position in most countris in Europe, I have given the maximum aid allowed by the Commission to our tomato industry and I know that the industry very much appreciates the £9½ million help that it has received in the last two years.
    Mr. Donald Stewart: Is the right hon. Gentleman aware that there has been a catastrophic fall in the number of tomato growers in Scotland due to the competition from subsidised Dutch growers? Will he now consider subsidising coal and gas heating as well as oil?
    Mr. Walker: There are difficulties and problems in subsidising coal and gas and I am not considering subsidising those fuels at the moment. However, I am considering with the National Coal Board the possibility of encouraging, with Government grants, conversion to coal and ways in which contract prices could be provided to make that a sensible option for tomato growers.
    Mr. Hicks: While I appreciate the action taken by my right hon. Friend, may I ask him to state when we can expect action by the Commission so that not only tomato growers but the whole range of market garden and glass house products will not be placed at a disadvantage compared with the Dutch in particular?
    Mr. Walker: At the recent meeting of the Council the Commission reported that the talks with the Dutch were making good progress. I hope, although I cannot be certain, that some conclusions from this will be reported to the Council meeting next week.

    Foot and Mouth Disease (Denmark)
    Mr. Bob Dunnasked the Minister of Agriculture, Fisheries and Food if the recent outbreak of foot and mouth disease in Denmark has any implications for United Kingdom imports of pig products.
    Mr. Peter Walker: Denmark's trade in fresh and frozen pigmeat with non-European Community countries has been disrupted. Arrangements have been made by the European Community to support the market. So far no large-scale diversions of Danish supplies to the United Kingdom market seem to have occurred. We are keeping a close watch on the situation.
    Mr. Dunn: As the import ban imposed by certain countries outside the EEC on fresh pigmeat from Denmark is having severe repercussions on the United Kingdom pigmeat sector, will the Minister press the Commission to introduce public intervention in Denmark to take the surplus off the market?
    Mr. Walker: We have carefully monitored the situation, virtually day by day, and, as I stated in my reply, there has as yet been no large-scale diversion of Danish supplies to the United Kingdom market. We have also, in agreement with the Danish Government and with the Commission, supported every measure that the Danish Government have wished to take in order to see that this does not result in a glut of pigmeat destroying the United Kingdom market. The collaboration between the Danish Government, the Commission and ourselves is working well, and I hope that it will continue to do so.

    Co-responsibility Levy
    Mr. Lennox-Boydasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the European Commission's proposal to differentiate the rate of the co-responsibility levy to the particular benefit of small dairy farmers.
    Mr. Peter Walker: As I told the House in the debate on 24 March, this proposal is not acceptable to the United Kingdom and I have strongly resisted it in the Council of Ministers.
    Mr. Lennox-Boyd: I thank my right hon. Friend for that reply. Can he give an assurance that he will continue to maintain his fierce opposition to this proposal, bearing in mind that the farming community in Britain feels that the present system of the co-responsibility levy is unsatisfactory and that any modification of it, as proposed, would make matters worse?
    Mr. Walker: Yes, Sir. The current state of negotiation is that the Presidency has come forward with proposals, after my right hon. Friend the Minister of State and I had pressed the arguments on this question, that eliminate the differential and reduce the co-responsibility levy by ½ per cent. These proposals will bring £10 million of benefit to British dairy farmers.
    Mr. Maclennan: What view does the Minister take of the Dairy Trade Federation proposals for a super levy related to excess of quantum produced by individual nation States?
    Mr. Walker: This country has always supported the concept of an effective super levy that would stop the
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    increase in production beyond present levels. I am afraid that, apart from the Commission and this country, the proposal has had no support elsewhere.
    Mr. Watson: Will my right hon. Friend confirm that large British dairy farms are among the most efficient in the world and that the longer-term interest of the EEC would not be served by any discrimination against them in favour of their smaller and less efficient counterparts on the mainland of Europe?
    Mr. Walker: I wholly agree with my hon. Friend. That is why, as a matter of principle, the United Kingdom, strongly supported by Holland and Denmark, stated that it would be wrong to have any variation in the market mechanisms that discriminate against efficient medium and large-scale dairy farmers in this country.

    Dairy Surpluses
    Mr. Dykesasked the Minister of Agriculture, Fisheries and Food if he is still concerned about the size of dairy surpluses within the European Economic Community common agricultural policy storage system.
    Mr. Peter Walker: Yes, Sir. I am accordingly arguing in the Council of Ministers for more effective measures to tackle the surplus.
    Mr. Dykes: As these surpluses must be tackled, would my right hon. Friend be surprised to learn that on a recent visit to Moscow I noticed that in food shops the bulk of butter was not of EEC origin—nor, indeed, sold as butter—but was from New Zealand? Does my right hon. Friend agree that this reality should be borne in mind when our anti-Marketeers go on about surplus EEC butter being sold to the Soviet Union?
    Mr. Walker: Yes, Sir. But, as my hon. Friend knows, the United Kingdom is opposed to the sale of cheap and subsidised butter to the Soviet Union, and will continue to be so. I am glad to say that in the market arrangements for the past year there has been a substantial reduction in the problem of surplus butter. Nevertheless, the Commission must remain vigilant in tackling the problem.
    Mr. Spearing: Does the Minister agree that the reason why his hon. Friend found New Zealand butter in Moscow is that New Zealand has no other markets in which its butter can be sold? Does the Minister further agree that, despite his remarks, there is approximately a 20 per cent. surplus of milk production in the EEC, which is costing taxpayers between £2 billion and £3 billion a year in export subsidies?
    Mr. Walker: Yes, and that is why the Government have supported measures to try to curtail the surplus without damaging Britain's efficient and important position. I am sure that the Opposition will rejoice in the retention by the British Government of a butter subsidy that is double the size achieved by the Labour Government and a school milk subsidy that has been improved by 25 per cent. following the negotiations.
    Mr. Marlow: Is my right hon. Friend aware of the fact that there are not only surpluses of butter within the Community, but also of cereals, wine and sugar? In line with the Government's commitment, will he pursue a vigorous policy to ensure that there are no price increases, even above the rate of inflation within the United Kingdom, allowed for these products now in surplus?
    Mr. Walker: My hon. Friend has mentioned a diversity of products. As I have said, my right hon. Friend the Minister of State was successful in improving the wine regime to make it more cost-effective. Price-fixing for a number of cereal commodities is below the inflation rate for Europe, and perhaps that satisfies my hon. Friend. When considering the spectacle of Poland and other countries, it seems that the only thing that is worse than a cereal surplus is a shortage.

    Dairy Herd
    Mr. Nicholas Wintertonasked the Minister of Agriculture, Fisheries and Food what is the present level of the dairy herd in the United Kingdom.
    Mr. Buchanan-Smith: In December 1981 there were 3,295,000 dairy cattle in the United Kingdom.
    Mr. Winterton: I am grateful to my right hon. Friend for that reply. However, I take up the point made so ably by my hon. Friend the Member for Skipton (Mr. Watson). Does my right hon. Friend accept that the interests of the British dairy farmer are not always those of the dairy farmer in other parts of the European Economic Community? Will he give yet again an assurance to the House that we shall not agree to any measures being introduced within the common agricultural policy that will discriminate against our dairy farmers? Has he any evidence that other countries within the Community have devised national aids to support their dairy farmers to the disadvantage of ours?
    Mr. Buchanan-Smith: Various national aids are under the Commission's scrutiny. We shall watch carefully the matters that my hon. Friend has raised. That which we have negotiated over the past week is evidence of what my hon. Friend wants to achieve, which I know the entire House wants to achieve. We shall continue with that policy. Dairy farmers in Denmark and the Netherlands have exactly the same interests as our dairy farmers and do not want to see efficient production discriminated against.
    Mr. Buchan: Does the right hon. Gentleman agree that the problem that we are facing is exactly the same as that which confronts us in other areas of the EEC? Does he accept that, instead of developing flexible policies to suit each nation's needs, we are going along with the stupid policy of using the end price as a means of dealing with the social problem created by the small herds in Europe? Should not the Minister be supporting the French in their argument that they need to develop national aids for their industry? He should follow suit by adopting the same policies to support our dairy herd within the Community.
    Mr. Buchanan-Smith: The hon. Gentleman ignores two factors. The indiscriminate extension of national aids is more likely than anything else to contribute to unfair competition, which will penalise the more efficient producers of Europe. Secondly, the hon. Gentleman must realise that within the CAP there are structural and social policies as well as price policies. We want to see an extension of some of these policies to overcome the problems that he has mentioned.
    Mr. Archie Hamilton: Does my right hon. Friend think that there is any chance that the Common Market will reintroduce the premium for slaughtering dairy cows?
    Mr. Buchanan-Smith: I hope that there is not. It was an ineffective scheme, which did not achieve its aims. We opposed it and we shall carefully examine any attempt to reintroduce it.

    Bacon
    Mr. Nicholas Bakerasked the Minister of Agriculture, Fisheries and Food what is the present percentage of the United Kingdom bacon market head by United Kingdom producers.
    Mr. Buchanan-Smith: It is estimated that the United Kingdom bacon curers held around 43 per cent. of the United Kingdom bacon market in 1981.
    Mr. Baker: I thank my right hon. Friend for that answer. What action is he taking to try to increase the percentage over the next year?
    Mr. Buchanan-Smith: I am delighted that the industry itself, through the new bacon charter scheme that is about to be launched, is taking the initiative to bring home to the British housewife the high quality and general availability of good British bacon. It is something that we are supporting and I hope that it will receive the support of the British public in the knowledge that they will get a reliable and good quality product on the British breakfast table to eat with the good British egg.

    Barley
    Mr. Spearingasked the Minister of Agriculture, Fisheries and Food what is his estimate of the net export tonnage of barley exported from the United Kingdom in 1981.
    Mr. Buchanan-Smith: The information requested is shown in table 7 of the 1982 "Annual Review of Agriculture" Cmnd. 8491.
    Mr. Spearing: I regret that the Minister did not quote the tonnage. However, does he agree that it is too great, that it represents the imbalance to which reference has been made, and that for every tonne of barley exported £40 of the taxpayer's money has to be spent to get it away from these shores?
    Mr. Buchanan-Smith: No, I do not think that it is too great. I am sorry that the hon. Gentleman does not welcome the improvement in self-sufficiency achieved by British cereal farmers. I am sorry also that he does not welcome the idea of two-way trade within Europe in cereals such as barley, to the benefit of the British economy and the British farmer.

  PRIME MINISTER

    Engagements
    Mr. Cunliffeasked the Prime Minister if she will list her official engagements for 6 May.
    The Prime Minister (Mrs. Margaret Thatcher): 'This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Cunliffe: Does the Prime Minister agree that it would be catastrophic if nurses and ancillary workers in the National Health Service had to take strike action to

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    achieve a just and living wage? Does she accept that there will be widespread support if nurses and ancillary workers have, reluctantly, to take industrial action? Does she consider that it would be wiser and more prudent if she were to meet Health Service unions to discuss a further improved offer, and will she arrange immediately to call such a meeting? [Interruption.] There is support on both sides of the House for such a course, regardless of what Conservative Members are shouting now. That support is reflected in letters written to the Nursing Mirror in support of the nurses' cause.
    The Prime Minister: I do not believe that nurses would do anything so detrimental to the interests of their patients as to go on strike. I believe that they are far more professional and far more dedicated to their work than that. Even before the present offer the Government are paying the nurses 76 per cent. more than was being paid on the day that we come into office. Part of the reason for that is that there are far more nurses now than when we took office. That shows that the Government have tried to have extra people in the NHS, especially when they are in direct contact with the patient.
    Mr. John Page: During my right hon. Friend's extremely busy and responsible day will she try to find a few moments to listen to the radio and watch television, and judge for herself whether she feels that the British case on the Falkland Islands is being presented in a way that is likely to give due confidence to our friends overseas and support and encouragement to our Service men and their devoted families?
    The Prime Minister: Judging by many of the comments that I have heard from those who watch and listen more than I do, many people are very concerned indeed that the case for our British forces is not being put over fully and effectively. I understand that there are times when it seems that we and the Argentines are being treated almost as equals and almost on a neutral basis. I understand that there are occasions when some commentators will say that the Argentines did something and then "the British" did something. I can only say that if this is so it gives offence and causes great emotion among many people.
    Mr. Foot: On the question of the diplomatic discussions about the crises itself, does the right hon. Lady agree that there appears to be a real chance of a move towards a sensible ceasefire, leading to other developments, and that there is also a chance of moving towards a real peace settlement? Does she agree that everything possible should be done to nurture that chance, and that nothing should be done to injure it? In particular, will she say what is her response and that of the Government to the proposals from the Secretary-General of the United Nations? My right hon. Friend the Member for Leeds, East (Mr. Healey) suggested that we should respond at once to those proposals, and I hope that the right hon. Lady will give a full statement to the House about it.
    The Prime Minister: Of course we are doing everything possible to pursue the diplomatic path to a negotiated settlement. However, the right hon. Gentleman knows that at the moment there are two sets of proposals. There is the one that is being pursued by the United States through Peru, to which we have made a very constructive response, and we hope to hear more about that today.
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    Whether the Argentines will respond in the same way, we do not know. The other one is being pursued through the Secretary-General, to which the right hon. Gentleman referred. There have been various rather conflicting reports about the Argentine response to that, but it seems clear—perhaps the right hon. Gentleman heard our ambassador on the news at 1 o'clock today—that they are very interested in a ceasefire. They may not accept withdrawal, and they may do it on a totally different basis, or require undertakings on sovereignty. So there is some doubt about what they have said. I believe that they have probably said that they are prepared to discuss it further with the Secretary-General.
    The right hon. Gentleman asks me what our position is. We welcome the ideas that the Secretary-General has put forward and can accept them as a framework on which more specific proposals could be built. We are sending a message to the Secretary-General today to that effect.
    May I make one more observation. It would not be impossible—indeed, it may well be likely—that the Argentines are concentrating on a ceasefire without withdrawal. That would be a very evident ploy to keep them in possession of their ill-gotten gains, and we are right to be very wary of it. The whole of the mandatory resolution 502 has to be accepted, and there can be no ceasefire unless it is accompanied by a withdrawal that is fully and properly supervised.
    Mr. Foot: Of course I understand that it may very well be the case that there is—[HON. MEMBERS: "Agree with it."] I well understand that there may well be great ambiguity in the reply that has come from the Argentine Government, but can the right hon. Lady tell us whether the Secretary-General's proposals include a linkage between the withdrawal and the ceasefire? If so, presumably that is one of the reasons why she has given, I should have thought, a positive answer. Certainly I welcome the tone in which she spoke about the response to the Secretary-General's suggestions. I very much hope that we shall be able to proceed along those lines.
    May I also ask the right hon. Lady whether she will respond to what I said earlier on another aspect of the matter? In view of the considerable improvement in the diplomatic exchanges that are now taking place—I am not referring to the Argentine Government now, but to the right hon. Lady's response—can she give us an absolute assurance—I am sure that the whole country would want that—that there will not be any deliberate escalation of the military action itself, any escalation that could injure the prospects that now appear to be much more hopeful of getting a real peace?
    The Prime Minister: The right hon. Gentleman asked me first about the Secretary-General's proposals. It is, of course, for him to say what they are. May I stress that they are very much a framework. There are no specific details attached to them, and no timetable, but they link cessation of hostilities with withdrawal, as one would expect in view of the Security Council's resolution. Beyond that, I am afraid, there is no timing and no practical arrangements. They really are a basis for discussion.
    With regard to what the right hon. Gentleman said about there seeming to be a change in the climate of diplomatic negotiations, I think that it was not a justifiable comment. The Secretary-General's proposals are now the

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    sixth set of proposals that I and my colleagues have pursued in detail over the past month. That is hardly a lack of diplomatic activity.
    Mr. Foot: I am much more interested in getting progress in these discussions than in scoring any point off the right hon. Lady. We who have urged all through the crisis that this kind of response should be made to approaches from the Secretary-General have a right to say that. I fully understand that these are procedural proposals, first of all, from the Secretary-General, but we very much hope that over the next 24 hours or two or three days the maximum possible support can be given to those original proposals.
    The Prime Minister: These are framework proposals. We are making a positive response to them. We hope to hear more about the Peruvian-United States proposals today, but I stress again that any proposals, if they are to be acceptable, if they are to work and if they are to command confidence, must be precise as to the timing and sequence and verification of events.
    Mr. Viggers: Does my right hon. Friend agree that the initial evenhanded approach of the United States Government—constructive to settlement though it may have been intended to be—may have given the impression to the Argentine leaders and people—and, indeed to the world—that there is some justice in the Argentine cause? Does she agree that it is incumbent upon the United States now to make quite clear its support for our attitude in resisting aggression, and that in this way it will assist the Argentine leaders and people to realise their true position?
    The Prime Minister: As my hon. Friend knows, we now have the total support of the United States, which we would expect, and which I think we always expected to have. I doubt whether its activities as a mediator—which we supported, and we were grateful to Mr. Haig for what he did—would ever have led people to think that there was any justice in the Argentine cause. The condemnation of the Argentine was almost universal, because the Argentine became an aggressor. Now, in the remarks that are being made, we must always remember that the Argentine was the agressor. Two days before that invasion, the same Mr. Costa Mendez, who is going to the United Nations, called in our ambassador in Buenos Aires and said to him "The diplomatic channels are now closed". That same Government refused the plea of the Security Council not to invade. That same Government refused the plea of President Reagan not to invade. That same Government invaded, and have been piling in soldiers and equipment, against the United Nations Security Council resolution, ever since. That is the kind of Government with whom we are dealing.
    Mr. Thomas Coxasked the Prime Minister if she will list her official engagements for Thursday 6 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cox: Is the Prime Minister aware of the growing views now being expressed by the British people that there must be no escalation of military intervention—[Interruption]—on the Falkland Islands issue? Against that background, is she prepared in the House today totally to repudiate those Conservative Members and the retired admirals and generals who now appear on television saying that, if need be, attacks must take place against the mainland of the Argentine? Is she aware that nothing would be more disastrous in trying to get a negotiated settlement through the United Nations than for that kind of action to be taken?
    The Prime Minister: The hon. Gentleman refers to "no escalation". The escalation of the situation while negotiations were taking place was by the Argentine, in the invasion. There has been escalation ever since. In the meantime, our own British people remain on those islands under what I believe the Leader of the Opposition called in the first debate "foul and brutal aggression". We must continue with our military activities——
    Mr. Dalyell: Answer the question.
    The Prime Minister: I am answering it. We must continue with our military activities. Again, it would be too easy to say "No military activities during negotiations". What would happen? We should be hamstrung. The people would still remain under the heel of the invader, while the Argentines increased their activities on the mainland and increased their supplies and reserves in order to attack us at will.
    Mr. Michael Hamilton: If current peace proposal:, do not succeed, will my right hon. Friend take comfort from the fact that Army wives at Fulford camp have called for no compromise and have stressed only their wish to save the islanders?
    The Prime Minister: That is wonderful of them and I should be grateful if my hon. Friend would pass on that message. Everyone realises that the aggressor must not gain from his aggression. One hopes that the United Nations will be able to carry out the mandatory resolution that it passed. Mandatory resolutions under chapter 7 are comparatively rare in United Nations history. Unfortunately, those provisions have not been carried out. The important thing is that we should get the Argentines off the islands that they still occupy. If the United Nations cannot do that, and if negotiations cannot do that, we shall have to.

Questions to Ministers
Mr. Tam Dalyell: On a point of order, Mr. Speaker. In view of the elliptical reply—[Interruption]—given yesterday by the Foreign Secretary to the hon. Member for Havant and Waterloo (Mr. Lloyd)—[Interruption]—on attacking the South American mainland——
Mr. Speaker: Order. I cannot hear the hon. Gentleman, but I hope that he is raising a point of order and not putting an argument about a Minister's reply. As he knows, I cannot rule on that.
Mr. Dalyell: It is a point of order in the sense that my hon. Friend the Member for Tooting (Mr. Cox)—[Interruption]—asked a direct question today about a pre-emptive or retaliatory attack on the mainland. Cannot he receive an answer to that important question?
Mr. Speaker: Order. That is clearly not something on which I can rule.
Mr. Andrew Faulds: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. I shall call the hon. Member for Warley, East (Mr. Faulds) in a moment, but the hon. Member for West Lothian (Mr. Dalyell) did not raise a point of order.
Mr. Faulds: On a new point of order, Mr. Speaker. Since it is quite likely, and appallingly likely, that this lunatic military venture will lead to more bloody deaths this weekend, would it not be in order—I am serious in making this point of order—to extend Prime Minister's Question Time so that we can discuss the implications of her adventure in the South Atlantic?
Mr. Speaker: As the hon. Gentleman and the House know, it is not for me to decide how long Prime Minister's Question Time should run. It usually lasts for a quarter of an hour.

Business of the House
3.32 pm
Mr. Michael Foot: Will the Leader of the House announce the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 10 MAY—Second Reading of the Northern Ireland Bill.
Motions on the Land Compensation (Northern Ireland) Order, which is a consolidation measure, and on the Probation Board (Northern Ireland) Order.
TUESDAY 11 MAY—Progress on remaining stages of the Criminal Justice Bill.
Motions on the Town and Country Planning (Fees for Applications and Deemed Applications) (Amendment) Regulations, for England and Wales and for Scotland.
WEDNESDAY 12 AND THURSDAY 13 MAY—Completion of remaining stages of the Criminal Justice Bill.
The Chairman of Ways and Means has named opposed private business for consideration at 7 o'clock on Thursday.
FRIDAY 14 MAY—Private Members' Bills.
MONDAY 17 MAY—Private Members' motions until 7 o'clock.
Afterwards, completion of remaining stages of the Local Government and Planning (Scotland) Bill.
Mr. Foot: I thank the Leader of the House for the arrangements that he has made for reporting to the House on the Falkland Islands crisis and for dealing with the problem in the House on Tuesday night. What he did greatly helped the House to deal with the matter properly and I thank him for it. Of course, I say that in prospect of future considerations! Will he give an assurance that if we wish to have a debate on this subject at any time next week he will consider it as a matter of urgency?
I raised with the right hon. Gentleman last week the subject of British Rail. We were expecting a statement from the Secretary of State for Transport, but no such statement has been made. No debate has yet been arranged, but I trust that the right hon. Gentleman understands how strong our feelings are and how vital it is to hold a proper debate on that subject before the Government proceed any further.
I asked the right hon. Gentleman to make a statement on Civil Service pay. I again ask for a statement. I trust that he will not resort to any of the subterranean methods of making such announcements, because they do not allow the House properly to cross-examine the Minister involved.
Will the amendments on the proposed restoration of capital punishment be debated during consideration of the Criminal Justice Bill on Tuesday? It would help if hon. Members knew when that debate will take place.
As I said last week, given the appalling unemployment that persists and seems likely to persist for many months, and indeed longer if the Government's policies are continued, may we have an urgent debate, in Government time, on the unemployment situation?
Mr. Biffen: I thank the Leader of the Opposition for his kind remarks on how the House was approached on the matter of debating and making statements on the Falkland

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Islands dispute. Of course, I shall bear in mind his anxiety that there should be a further debate if events in the South Atlantic necessitate that. However, I am sure that he realises that there comes a time when the amount of debating gives rise to suggestions that the House should perhaps strike a renewed balance. However, this matter is of such seriousness that I undertake to consider any representations on it.
The proposed closure of railway workshops is essentially a matter for British Rail. The hon. Member for Bishop Auckland (Mr. Foster) intends to raise that subject tonight on the Adjournment. However, I cannot guarantee that any Government time will be devoted to that topic next week.
My hon. Friend the Member for Poole (Mr. Ward) has tabled a question on Civil Service pay, which will be answered today and which, I think, deals with the general question of Civil Service pay. In the light of that, I hope that even the Leader of the Opposition will feel that there has been an equitable settlement.
The Criminal Justice Bill and capital punishment will be dealt with on Tuesday as long as there are no interruptions to the programme. The Government intend to table a motion at the commencement of Tuesday's debate to provide for a general debate on any new clauses on capital punishment that may be selected and that will enable the House to reach a decision on these matters at the conclusion of the debate.
I cannot guarantee any Government time for a debate next week on unemployment. Obviously, that matter can be debated on Monday week on the motion in the name of my hon. Friend the Member for Fife, East (Mr. Henderson). We have just concluded a heavy diet of the Committee stage of the Finance Bill in which such general economic problems could have been ventilated. In addition, the Opposition have a number of Supply days within their keep, and I earnestly hope that the right hon. Gentleman will consider one of those days for a topic that—if it is debated on the Floor of the House—will give the Government a chance to prove that their case is better than that of their adversaries.
Mr. Foot: I hope that the right hon. Gentleman will reconsider his remarks about the British Rail statement. Ultimately, Government policy affects the situation, and I trust that there will be both a statement and a debate on the subject. Although it is being raised on an Adjournment debate, that is not a satisfactory way of dealing with it. I hope that the right hon. Gentleman will consider that question.
As for his reply about Civil Service pay, the right hon. Gentleman has apparently convicted himself out of his own mouth. He is resorting to the subterranean methods that I hinted at. I am sorry that so early in his new life he should have resorted to the tricks that were perpetrated by his predecessor. [Interruption.] Nothing like that was ever done by us. Even at this stage, I hope that he can still recall the question. He should have had the nerve to present the case to the House of Commons, and I ask him to repent before it is too late.
Mr. Biffen: If I am fallen, all I can say is that I also enjoy the company that I am now keeping.
I appreciate that the question of British Rail workshops is a matter of real concern, particularly in certain constituencies. Therefore, it is by no means inappropriate
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that an hon. Member whose constituency is particularly affected should bring the matter to the Floor of the House. I shall draw to the attention of my right hon. Friend the Secretary of State for Transport the interest of the Leader of the Opposition in a statement on this matter, but I cannot hold out very much hope. I can hold out even less hope of a debate in Government time next week.
As to Civil Service pay, it might be as well if the right hon. Gentleman saw the quality of the answer that my hon. Friend the Member for Poole receives before getting himself into such emotional excitement about the matter.
Mr. J. Enoch Powell: On Monday's business, is the right hon. Gentleman aware that, at a time when it is the duty and need of the Government to secure the maximum support here and out of doors for our forces and the recovery of our rights, it is quite unintelligible that the Government should insist on attempting to proceed with a measure that is regarded by almost every section in Northern Ireland as an affront?
Mr. Biffen: No doubt the arguments can be put on Monday that are designed to demonstrate the weakness of the Bill in that respect. However, the Bill has been proffered in the belief that it will make for the better government of the Province——
Mr. Powell: The right hon. Gentleman does not believe that.
Mr. Biffen: —and for the securing of the union. These matters must be debated, and they will be debated and tested in this Chamber.
Mr. Patrick Cormack: Will my right hon. Friend take time off from his more weighty duties to thank those responsible for cleaning this Palace, particularly those who have cleaned Westminster Hall so magnificently?
Mr. Biffen: Yes.
Mr. Tam Dalyell: The Leader of the House referred to the amount of debating time that has been given to the Falklands issue. Frankly, some of us think that it is almost bordering on a disgrace that so little time has been available for the House of Commons to go into deep issues. For example, since, as with the "Repulse" and the "Prince of Wales", the "Sheffield" went down because of action by land-based aircraft in exactly the situation from which this country suffered 40 years ago, should there not be an urgent and detailed discussion next week about what may happen to the task force and so that sensibly and at length we can discuss the questions asked by my hon. Friend the Member for Tooting (Mr. Cox) and the hon. Member for Havant and Waterloo (Mr. Lloyd) about attacking the South American mainland? These are urgent issues of world-wide importance, and next week's business must pale into insignificance compared with a sensible discussion of such momentous issues.
Mr. Biffen: I know that the hon. Gentleman feels strongly about these matters. This is not the first opportunity he has had of expressing those views. I must point out that we have had four debates and seven statements on the Falklands. I think that is very fair treatment of the House on this immensely important subject. I have not ruled out the prospect of further

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debates. However, I believe that what the hon. Gentleman is suggesting would unbalance the work of the House and would not be to our advantage.
Several Hon. Members rose——
Mr. Speaker: If the House co-operates, I hope to call all those right hon. and hon. Members who have been rising in their place.
Sir John Biggs-Davison: If there were to be such a discussion as that asked for by the hon. Member for West Lothian (Mr. Dalyell), should it not be in secret session?
Does my right hon. Friend think that this is the time for the Government to seek unity in this kingdom? Will he therefore consider the deferment, or better still the withdrawal, of the Northern Ireland measure set down for consideration on Monday? It is highly contentious on both sides of the Irish Sea.
Mr. Biffen: I have nothing to add to what I said to the right hon. Member for Down, South (Mr. Powell). The matter has been debated in the sense that the White Paper has been approved by the House——
Mr. J. Enoch Powell: No.
Mr. Biffen: I am sorry. The White Paper has been before the House in a debate. I do not think that it would be appropriate to put aside the Second Reading of the Bill.
Mr. Andrew Faulds: I strongly endorse the case put by my hon. Friend the Member for West Lothian (Mr. Dalyell), but I want to raise a much more minor issue. As it seems to be becoming an increasing practice for hon. Members and staff of the House to park their cars in the spaces allotted for the handicapped in Star Chamber Court, will the right hon. Gentleman get the appropriate authorities to look into this and to stop an uncaring and selfish practice?
Mr. Biffen: Certainly.
Mr. Michael Latham: As The Guardian of the business of the House, does it worry my right hon. Friend that at this time of the year he is presenting major Bills for Second Reading? Will he ensure that no further Bills are presented for Second Reading before the end of this Session unless they deal with national emergencies?
Mr. Biffen: The difficulties that my hon. Friend underlines are only too well known to me.
Mr. Tony Benn: I return to the question of the Falklands. Is the right hon. Gentleman aware that the House of Commons is entitled to be a factor in the Government's thinking and not just convened to discuss the issue when military or diplomatic events elsewhere make it convenient? Is he also aware that in the past few days, as a result of the tragic loss of life, a growing number of people of all political persuasions are anxious about the growing escalation and bloodshed, would like to see an immediate and unconditional ceasefire—[Interruption.]—and a transfer to the United Nations which the Government now appear to contemplate after the killing is over? If the United Nations is to take over the Falklands after our men have died, why cannot we debate the case for it doing so now before more people are killed?
Mr. Biffen: I have already indicated the prospects for a debate in my reply to the Leader of the Opposition. I think the matter should rest there.
Mr. John Peyton: Will my right hon. Friend not take that last question too seriously? It seems to some of us that the right hon. Member for Bristol, South-East (Mr. Benn), running short of malice, is calling up dottiness to reinforce it.
Mr. Biffen: As long as my right hon. Friend is in the House to make such observations, no words from me are necessary.
Mr. Robert Maclennan: The Leader of the House has put down the concluding stages of the Local Government and Planning (Scotland) Bill for consideration a week on Monday. As the Government have tabled a substantial number of new clauses and dozens of amendments, is it satisfactory that that debate should begin at 7 pm if it is intended to run throughout the night? The House has been getting away from the practice of all-night sittings on important measures, and I hope that the right hon. Gentleman will use his influence to ensure that it is not reinstated under his leadership of the House.
Mr. Biffen: I hope that the quality of the arguments and the good sound sense of the House will enable business to be concluded without running through the night.
Mr. John Stokes: Is my right hon. Friend aware that there was an appeal, during the exchanges in the House yesterday, for moderation in the media? Does he agree that the House should also exercise moderation, and that we should not have too many statements and debates on the Falklands crisis, which must make diplomacy difficult and certainly do not help the task force? Is he aware that some of the scenes on Tuesday night were regrettable? I hope that they will not be repeated.
Mr. Biffen: I do not believe that the four debates and the seven statements on the Falkland Islands can in any sense be said to be prodigal. Although I appreciate that my hon. Friend feels that there should be more continence on these matters, the House is entitled to the balance that we have struck.
Mr. Derek Foster: I understand from reports in the press that the Manpower Services Commission was completely unaware that the Secretary of State for Employment was irretrievably committed to introducing legislation to remove the entitlement of participants in the new youth training scheme to supplementary benefit. Is the Leader of the House aware that that will completely jeopardise the implementation of the scheme, and may well unleash upon unsuspecting employers hordes of unwilling and sullen participants? Will he make arrangements for the Secretary of State for Employment to come to the Dispatch Box to make a statement about it?
Mr. Biffen: Like the hon. Gentleman, I have only the facility of press reports on the matter, but I shall certainly draw my right hon. Friend's attention to the hon. Gentleman's point.
Mr. John Farr: Will my right hon. Friend consider again the business for next Monday? The Northern Ireland Bill is very divisive and will not be

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supported by many Conservative Members. Will my right hon. Friend agree that it is grossly improper that a measure of such importance and magnitude for the unity of the whole United Kingdom should be debated within only one week of tabling the White Paper?
Mr. Biffen: I think that the time scale between the publication of the Bill and the White Paper and the date of Second Reading is reasonable. I cannot add to the reply that I gave to the right hon. Member for Down, South (Mr. Powell).
Mr. Dennis Skinner: Have not the Government a strange set of priorities? In the recent past we have had a debate on the Northern Ireland White Paper and we have to face another debate on the subject on Monday. It is nothing more than a house of cards, another device, another kind of superstructure, that will get nowhere at all. That is happening in a week in which it has just been announced that Britain's top director is getting just under £500,000 a year, and when it has been necessary to raise the base rate in Labour Research in order to include all the top directors getting more than £85,000 a year. Yet there has not been one statement or debate in the House on the nurses' pay claim. They have a miserly award by the Tory Government of 6·4 per cent., whereas all the top dirctors have been lining their pockets in the last 12 months.
Mr. Biffen: The pay negotiations are now proceeding through the Whitley Council and I do not believe that there would be any great advantage in having a debate on the matter next week. If the Opposition feel so strongly about it, they always have the chance of using one of their Opposition Supply days for it.
Mr. Skinner: That would be a good idea.
Mr. Harry Greenway: Has my right hon. Friend had time to study early-day motion 444?
[That this House deplores the wholly unjustified assertion of the Right honourable Member for Bristol, South-East that the Prime Minister 'rejoiced' at the loss of lives in the sinking of the cruiser, the "General Belgrano", but sees it as a characteristic of his unpatriotic utterances on the Falklands issue; and calls upon him to withdraw the remark forthwith.]
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Will my right hon. Friend arrange for an early debate on the matter?
Mr. Biffen: There are some activities that are most condemned by dismissive silence.
Mr. David Winnick: Perhaps it would be better if the hon. Member for Halesowen and Stourbridge (Mr. Stokes) were living in the Argentine, where there is no Parliament, but is the right hon. Gentleman aware that if casualties continue to mount and the war escalates we shall certainly want to have a debate? Indeed, if there is a repetition of what happened on Tuesday, we shall want a further statement, just as we had a statement from the Secretary of State for Defence on Tuesday. Is it not of some interest that the new head of the Prime Minister's policy unit, in his column this week in the Spectator, also argues for the need to try to arrange a ceasefire?
Mr. Biffen: I do not think that I have anything further to add to what I said to the Leader of the Opposition about the possibility of further discussions on the Falkland Islands issue next week.
Mr. Tony Marlow: As the United Nations is pivotal to our discussions on the Falkland Islands, would it be possible to have an early debate on the United Nations? Right hon. and hon. Members might like to mention the fact that half a generation ago United Nations resolution 242 required the withdrawal of the Israelis from the West Bank, Gaza and the Golan Heights and that they are still there. There are also United Nations forces in South Lebanon which are bypassed at will. It would be very instructive to right hon. and hon. Members—particularly to some Labour Members—to have pointed out the ineffectiveness of many past United Nations operations and resolutions.
Mr. Biffen: I can offer no prospect of a debate in Government time next week on the United Nations; but, as with many other subjects, it does not seem to stop people making speeches on them during what is supposed to be a discussion on next week's business.
Mr. Speaker: I am much obliged.

Orders of the Day
  SUPPLY
  [18TH ALLOTTED DAY]—considered
  SUPPLY

    Wales (Economy and Employment)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Budgen.]
    3.55 pm
    Mr. Alec Jones: I make no apologies for seeking this debate on Welsh affairs today, despite the fact that we recently had a Welsh day. That is because the problems of Wales remain unsolved and, even in the short time which has elapsed, have considerably worsened in many respects.
    In Wales today we see widespread feelings of hopelessness and fear. There is fear among the diminishing band of those who are still lucky enough to be in employment that their jobs may well be the next to disappear. There is hopelessness among the unemployed as their standards of living continue to fall, with the consequences for their family life. There is hopelessness as the duration of their unemployment grows longer, and hopelessness because of their despair of ever finding another job. It gives me no pleasure to say this and I wish, indeed, that it were otherwise, but merely to pretend that it were otherwise—as the Secretary of State frequently does when he wears his rose-tinted glasses at Welsh Question Time—is a disservice to Wales, for hopelessness and fear are extremely unhealthy ingredients for any democratic society.
    The Secretary of State may refute my views, but I believe that they are confirmed by the experiences reported to me by my hon. Friends and by the detailed survey of Newport carried out by the Community Projects Foundation. The report of that survey shows that, in an area where unemployment was about 13 per cent. on 20 April, it is now 15 per cent. That detailed survey finds
    "a growing disparity between those in work and those out of work, assesses the economic impact of unemployment on local businesses, and points to increased levels of poor health."
    The survey concluded:
    "What is so sad and telling is the widespread feeling of hopelessness in ordinary people. They do not believe that anything can be done locally and they feel impotent personally."
    How can such a society be healthy when those views prevail and when the evidence upon which they are based is proven fact?
    The fact remains that 171,000 Welsh men and women are unemployed. With a rate of 16·1 per cent., one in six is on the dole queue, and neither in Scotland nor in any of the regions of England is unemployment at a higher level.
    The figures include two particularly disadvantaged groups—the young and the long-term unemployed. The number of unemployed school leavers totals 7,973, with an additional 12,791 on YOP courses who will soon need permanent jobs. There has been a 73 per cent. increase in unemployment among school leavers in the past few years, and the figures will undoubtedly increase when the July school leavers join the register.
    Many, if not all, of those young people need every encouragement that we can give them and the best training
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    facilities. Above all, they need hope, but if they seek to improve their skills and employment prospects by voluntarily attending a college of further education or a similar educational institution for more than 21 hours a week, including lunch breaks and time for private study, they lose their supplementary benefit. We are talking not about scroungers or the work-shy, but about young people who want to improve their employment prospects.
    The irony is that next year a similar young person will either have to accept a place on a Government youth training scheme or lose his supplementary benefit. It is a Catch-22 situation. This year, young people who are sufficiently motivated to seek training and education will lose their supplementary benefit if they attend a course. Next year, they will lose their supplementary benefit unless they attend a course.
    It is no wonder that those matters are under review. I trust that the Secretary of State for Wales will tell us that he intends to add his weight to the calls for a review of the ridiculous 21-hour rule and to making sure that next year's scheme will be truly voluntary and will include a more realistic payment than is currently proposed.
    We were all surprised to read in today's papers that the Secretary of State for Employment is apparently adamant that it must be a compulsory scheme and must involve the non-payment of supplementary benefit. If the Secretary of State for Wales opposes his right hon. Friend, he will be in good company. He will have with him the TUC and CBI members of the MSC and, for good luck, the Wales TUC.
    Mr. Edward Rowlands: Is my right hon. Friend aware that in the past 18 months my community has witnessed the closure of the apprentice schemes at Hoover and at BSC Dowlais? Every apprenticeship scheme in Thorn's has also gone. Inside-industry training has been destroyed structurally, which means that the future, as well as the present, is being destroyed.
    Mr. Jones: I agree with my hon. Friend. One of the tragedies of the loss of job opportunities in the public and the private sectors is the loss of training opportunities, particularly for apprentices.
    In concerning ourselves with the problems of unemployed school leavers, we ought not to forget the other unemployed young people—those under 25. In the past two years there has been a 26 per cent. increase, from 52,600 to 66,383, in the number of young people under 25 in Wales who are unemployed.
    The forced unemployment of those young people must not compel that age group either to migrate to other areas of the United Kingdom or to emigrate to other countries. They must also not be exploited by unscrupulous employers. I have with me a job card issued at Towyn advertising for an arcade mechanic aged 25. The hours of work are to be arranged and applicants must be semi-skilled. The rate of pay is 75p to 80p an hour. The foolish 25-year-old man or woman who took that job would take home the princely gross sum of £32 for a 40-week. If he or she worked 80 hours a week the gross pay would still be only £64. Instead of fiddling around with jobcentres, reducing the number and moving them to back streets, the Government could give them the additional role of ensuring that the unemployed are not exploited for personal greed by unscrupulous employers.
    Of course, long-term unemployment causes the greatest stress and tension among the unemployed and their

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    families. Increasing poverty, ill health, family stress and social unrest are the curses of the unemployment that the Government have inflicted on our people. We have 94,000 long-term unemployed—those who have been out of work for more than six months—with 56,000 having been unemployed for more than 12 months. The greatest tragedy is that they see no job prospects. As redundancies continue and closures take place all around them, their feeling of hopelessness grows.
    Conservative Members constantly remind us of the levels of unemployment under the previous Labour Government. I have never sought to deny that they were far too high, but when Labour left office in 1979 there were 30,000 more Welsh men and women in employment than when we took office in 1974. Under the present Government, the reverse is the case. The number at work in Wales has fallen by 127,000.
    Even the most enthusiastic supporters of regional policies would not claim that they had created more than about 6,000 jobs a year. If that figure is accurate, it means that in three years the Government have wiped out the hard work and benefits of 21 years of regional policies. That is a measure of the disaster that the Secretary of State for Wales and his colleagues have inflicted on Wales.
    If the unemployed are to be offered hope and the possibility of a job, we must ask whether the Secretary of State is satisfied that the Government's policies can lead, if not to full employment, at least to a return to the 1979 levels. If he believes that, what time scale does he have in mind? He does not have to tie it down in great detail, but simply to give us some idea of his thoughts on the matter and, above all, evidence upon which he bases either his optimism or the truth.
    If the Secretary of State fails and we cannot return either to full employment or to the 1979 levels, what changes in policy does he propose, or is he blinded by the belief that unrestrained private enterprise can solve the unemployment problems in Wales? I know of no scrap of evidence either pre- or post-war, under either Labour or Tory Governments, that would support that proposition.
    The only real hope of jobs for the unemployed in Wales is Labour's alternative economic strategy. It is a plan for sustained economic growth over five years, to bring unemployment in Wales down by at least 100,000. It means the boosting of spending power through public investment projects, major construction programmes, better public services and improved social benefits.
    Mr. Tom Hooson: Does the right hon. Gentleman recognise that one fundamental reason for the serious unemployment figures in the country today is the irresponsible performance of the Labour Government in allowing a deterioration in the cost competitiveness of manufacturers, which meant that we were shipping jobs out every year to Germany, France and Japan?
    Sir Anthony Meyer rose——
    Mr. Jones: The hon. Member for Flint, West (Sir A. Meyer) will have to wait until I answer the previous question. The queue is getting longer and time is going on, but I have no objection.
    If the hon. Member for Brecon and Radnor (Mr. Hooson) is correct, why have more jobs been lost while the Conservative Government have been pursuing their policies than were lost when the Labour Government were pursuing theirs?
    Sir Anthony Meyer: Will the right hon. Gentleman assure the House that in the next stage of his speech he will tell us what The Guardian had to say about Labour's alternative policy, and the results when it was fed into the Treasury model?
    Mr. Jones: The hon. Gentleman must wait for the rest of my speech. I have no wish to comment on The Guardian I regard it no longer as a newspaper, but inertly as a propaganda leaflet for the SDP.
    We cannot expect the sort of policies that are necessary to reduce unemployment from the present Secretary of State or the Government. Like the leopard, the Tory Party never changes its spots. However, even pursuing his own political philosophy, there are some things that we can and do expect from the Secretary of State.
    We need an up-to-date balance sheet of jobs lost and created in Wales. We need to know whether the jobs gap is widening or narrowing, and by how much. It is much easier to find the figures for job losses than it is to ascertain the true position on the number of jobs created by the Welsh Development Agency through its advance factory programme, bespoke factories and investment policies, through the Development Board for Rural Wales and through other elements of Government assistance.
    It is true that we can pick up the odd pieces of information from parliamentary answers, particularly when the Secretary of State has a few goodies to offer. We can also pick up from the annual reports of the agencies other figures. However, there is no overall, up-to-date picture easily available.
    I shall give a few illustrations of the difficulties. I am not criticising the Welsh Development Agency. However, in its annual report it suggests that in the year ended March 1980, from advance factories it hoped to create 5,000 jobs and from extensions and bespoke factories a further 4,500—all over a three to four-year time scale—and, by March 1981, 3,100 jobs from advance factories, about 1,300 from extensions, and so on.
    In a parliamentary answer given by the Secretary of State in March 1982, we have the information that, over a certain time scale, we are likely to have 4,700 jobs created in Welsh Development Agency advance factories. When I looked at the Welsh Development Agency report from March 1980, I read of the custom-built premises, and three names leapt out.
    The report referred to a new factory for Webb Son and Company Ltd. at Ferndale. That factory has already closed and all those who were employed there are on the dole queue. The report goes on speak of the 52,850 sq. ft. factory that was built for Automotive Engineering Ltd. at Wattstown, Rhondda. That has closed, all who were employed in it are on the dole queue, and the expansion that was expected from it has ceased. The third example is that of the 21,000 sq. ft. factory at Llwynypia, Rhondda, for J. J. Plating and Engineering Ltd., which has closed with a loss of 42 jobs. The point is that, by the time these documents are printed, the facts that they contain are so out of date that it is extremely difficult for us to ascertain the true picture.
    Someone told me that it is three years to the day since the Secretary of State took office. I must say it seems more like an eternity.
    Mr. Rowlands: It seems like a nightmare.
    Mr. Jones: It must seem like that to the Secretary of State, too.
    The Secretary of State might consider celebrating his third birthday by sending the equivalent of a birthday card to the rest of the House in the form of a jobs balance sheet so that at least the House and the people of Wales can see the full picture.
    In our debate on the Welsh Development Agency on 15 July 1981, the Secretary of State referred to the lack of investment activity by the agency in the previous year. He expressed the hope that the agency would be prepared to take risks and asked the chairman to undertake a review of the agency's investment policy.
    I understand that the review has been carried out. I urge the Secretary of State to publish it and the decisions that flow from it. He will have the opportunity later today to tell us at least some of the changes that we hope will flow from the discussions that he has had with the chairman.
    The House—certainly Welsh Members—ought to be provided with the fullest information on the situation if we are to judge the need for, and the value of, any changes that the Secretary of State proposes. I want to be satisfied that the agency is both willing and able to give much needed support to existing firms because, as redundancies and closures are still being announced almost daily, the preservation of existing jobs is the key to Welsh survival.
    The Development Board for Rural Wales and its future was raised by the hon. Member for Brecon and Radnor last night in an Adjournment debate. The downgrading in terms of development area status of the area covered by the board is bound to make the board's task more difficult. No one can deny that. It will also be a serious handicap in attracting new firms to Mid-Wales.
    The Government are great ones for reviews. One is apparently taking place that will give us some splendid or dreadful news later. However, I wish to press the Government to restore, if not development area status, at least intermediate area status to the area covered by the development board. The Government should also withdraw their decision not to accept claims for selective financial assistance after 30 April.
    A month ago I went to the DBRW exhibition on the train at Marylebone station. It was an imaginative and enterprising effort. It showed the advantages to firms and business people of coming to Mid-Wales. There was an attractive slogan "Where else can you rent a house and a factory for as little as £30 a week?" A large number of inquiries were made during the exhibition. The Under-Secretary confirmed that there were 132 inquiries as a consequence of the exhibition. The tragedy is that those inquirers will have to be told that many of the terms that they discussed on that train no longer apply.
    During the Adjournment debate yesterday the Under-Secretary of State said:
    "In principle, it is open to the Department to accept applications up until the very last day".
    I cannot understand why, if it is up to the Department to accept applications up until the very last day, it will not do so. If there is no objection in principle, we should find a way around it. The Under-Secretary went on to say:
    "more than a year ago we said that we would continue to accept applications right up to 1 August".
    What on earth is the purpose of accepting applications if there is no grant to go with them? Those are meaningless words.
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    The Under-Secretary said that the letter sent to the firms in rural Wales, which I have not seen, stated that it would
    "be most advisable for any applications to be sent to the Welsh Office no later than 31 March 1982".
    There is a big difference between saying "it would be most advisable" and saying that there is an absolute cut-off point. I draw those points to the Secretary of State's attention and urge him to reconsider this matter.
    Mr. Hooson: I have two reasons to be grateful to the right hon. Gentleman. First, I am grateful that he has allowed me to interupt him a second time and, secondly, I am grateful for his moral support on this issue. Does he agree that, considering the great importance of giving all-party support to this admirable body, the DBRW, it would be appropriate for my right hon. Friend the Secretary of State to announce, preferably today, that the order refusing further applications has been rescinded and that business remains as it was before, rather than having this uncertain period, which seems particularly unfortunate when a train was sent all over the country and has now been derailed when the orders have been received?
    Mr. Jones: I agree with the hon. Gentleman. All I am hoping is that the DBRW will not die the death because of the plea that I am making. The DBRW was the brainchild of my right hon. and learned Friend the Member for Aberavon (Mr. Morris), but I played a role in setting it up. It has an important role to play in Mid-Wales. It cannot fulfil that role if the downgrading goes through. Above all, it means not only that all the effort that the board made in sending that train round the country is money down the drain, but that it cannot fulfil the undertakings that it gave to the inquirers. If that downgrading continues, it will be a mean, miserable and squalid trick that need not and should not be applied to the DBRW or to the people of Mid-Wales.
    The Government should consider modifying and changing the way in which they pay out regional development grants. The Secretary of State for Industry, in a parliamentary answer, stated that the regional grant office in Cardiff took between seven and eight weeks to approve grant applications. I am not criticising that amount of time, but, if it can be speeded up, all the better. Some of the applications are complex and must be sent back and the payment of the approved grant is deferred for four months.
    It is beyond me why industrialists, particularly in assisted areas, who have done precisely what the Government asked and wanted them to do, which was to invest, should be penalised for doing so to the extent that they are kept waiting for their grants and pay interest charges on the money borrowed, which is the equivalent of the overdue grants. The Government are lavish in their words of praise to small firms. Many firms, particularly small firms, would benefit considerably from the abolition of the four-month moratorium on the payment of regional development grants.
    I hope that the Secretary of State will keep a close watch on developments affecting the coal industry in South Wales. Many of us, particularly those who come from coal mining backgrounds or areas, were alarmed to read in the South Wales Echo on Monday night—although some of us had heard whispers of the news earlier—of the threat of the closure of the Aberthaw power station. Such a closure would involve the loss of 400 jobs at the plant. There would be a further loss of jobs in the mining industry

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    because that power station consumes 20 per cent. of the coal production of the South Wales coalfield. In addition, there would be further job losses in British Rail, which conveys that coal to powers stations.
    I understand that there is no question of the closure threat being imminent, but I believe that it is better to accept the motto: to be forewarned is to be forearmed. The CEGB and the unions in that industry are co-operating as far as possible to save the plant. The National Coal Board and the NUM are also involved. I hope that the Secretary of State and his Department will not stand aloof, but will give the fullest support to efforts to ensure successful continuation of the efforts and energies of that power station. Its closure would have serious consequences not only for power station workers, railway men and others, but for miners and the South Wales coalfield.
    Mr. Ian Grist: The right hon. Gentleman has touched on a difficult point, which concerns hon. Members representing South Wales. I am sure that he will take on board that the same report stated that South Wales coal sent to the Aberthaw power station was 5 per cent. more expensive than the coal sent to other power stations and that we are burdening our industry with heavy generating costs by not importing cheaper coal from abroad. Other firms in South Wales—for example, paper mills in the constituency of the hon. Member for Ogmore (Mr. Powell) —have had considerable difficulties because of fuel prices. Is it not important for the NUM and the NCB to keep down their costs so that jobs can be saved in other firms that must pay high electricity costs?
    Mr. Jones: I did not go into detail on the price argument, because the relative prices of South Wales coal and coal from other fields in the United Kingdom has been discussed by the NCB, the unions and the CEGB. There is the right amount of co-operation between the CEGB and its workers and the NCB and its workers. I urge the Government to ensure that such co-operation continues so that we may save the power station and the jobs of the miners and the other workers involved.
    One further area in which I am particularly anxious that the Government should act fairly speedily is the development of co-operative enterprises. There have been in Wales in the past year or so, often as a result of sudden closures and redundancies and workers feeling that they could carry on the job and wanting to use their redundancy payments, spontaneous action by redundant workers either to form their own businesses or to establish worker co-operatives.
    The Wales TUC has been most active and, as the House knows, has carried out a feasibility study in connection with this matter. I thank the Secretary of State for the support that he gave to the financing of that feasibility study. I think that £40,000 came from the Welsh Office, £5,000 from the WDA and the cost to the Wales TUC was about £7,000. The study has now been published. Those who have read it will, I am sure, agree that it is well written and well documented and that it makes a well-argued and strong case for moving further in this area.
    The study makes two main recommendations. First, it recommends the establishment of a technical resource centre and, secondly, an independent investment fund. I understand that the Wales TUC has submitted proposals to the Secretary of State for the funding of such a resource centre, and I believe its name has been changed to co-operative research and development centre.
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    There certainly have been many attempts to get worker co-operatives off the ground in Wales. Some have failed; others have succeeded. Indeed, only last Saturday I bought a shirt from the Bargoed blouse co-operative. That is one example.
    The interesting thing is that in little over a year this small co-operative, which has been supported by the Wales TUC, local authorities and a whole range of people, as well as by the efforts and energies of the people working there, has increased its work force from 17 to 30. That compares favourably with some of the small units led by the WDA and the DBRW.
    We have had failures and we have had successes, but, whether they have failed or succeeded, all have been desperately in need of the right sort of technical assistance and advice at the beginning. That is why I believe that both successes and failures show the need for the establishment of this research and development centre. Therefore, I urge the Secretary of State to keep up the good work and to give his full backing to the establishment of that centre.
    I have listed about six steps which I believe even this Government could take, even if they continue—heaven forbid! —their general economic and monetary policies. Whatever signs and omens the Government might read and use to support the more optimistic view of the economy that Ministers are from time to time prone to exaggerate, the most consistent view is that, whatever some of the indicators say, unemployment will continue to rise, even if more slowly. Of course, if that is the position, it is no help at all to the 171,000 who are already unemployed in Wales.
    The director of the Wales CBI has said:
    "I think it would be wrong to herald any false dawns … There aren't any real signs of a strong recovery in the near future."
    I must say that I see no signs of a dawn or, indeed, of any hope under this Government. The curing of unemployment and the creation of the requisite number of new jobs in Wales will not happen by accident; they will have to be planned. People in Wales certainly know now, even if some of them faltered and doubted it three years ago, that only be economic planning under a Labour Government can they be provided with the opportunities to work for themselves, for their families and for their communities.
    4.35 pm
    The Secretary of State for Wales (Mr. Nicholas Edwards): The right hon. Member for Rhondda (Mr. Jones), in opening this debate, referred to a number of specific matters. I shall have a word to say later about some of them —for example, Aberthaw and the Development Board for Rural Wales.
    On deferment of grant, which he mentioned, I understand, of course, the case for doing away with the deferment. It was one of a number of options that Ministers considered before the Budget to help and stimulate industry, and, of course, it is one of the things we could have done. We had to decide within the funds available what the priorities were and what would be most helpful, and we thought that the things that were announced by the Chancellor as a package would be more effective in stimulating industrial recovery than that particular measure.
    So we cut the Labour Government's job tax by £¾ billion in a full year, we gave £160 million of help with

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    energy prices, £240 million for the construction industry, £80 million in a full year for a package of measures to help small companies and stimulate enterprise, £130 million over three years to boost technology and £150 million more for guaranteed loans to small firms. So I do not think that the right hon. Gentleman can make a very good case on that.
    The right hon. Gentleman also referred to the TUC proposals on co-operatives. Of course I am looking sympathetically at the proposals that have been put to me. As he said, we helped to finance the research project, and I discussed these proposals the last time I met the TUC. But they are an important package of measures. We have to consider them carefully. I have to discuss them with my colleagues because, of course, they all have implications for other parts of the United Kingdom. That careful consideration is going on, and as soon as I am in a position to make an announcement I shall of course do so.
    Before the right hon. Gentleman got on to the specific points that he had to make he made the predictable attack upon the Government's economic policy and he referred to what he described as a state of widespread hopelessness and fear. He asked me what changes I proposed, but his proposals were confined to a three or four sentence reference to Labour's alternative economic strategy. Having chosen this subject for debate, having described this appalling situation, he could have been expected, speaking from the Opposition Front Bench, to try to spell out what the alternative strategy might be.
    Mr. John Morris rose——
    Mr. Edwards: I will give way when I have finished this point.
    All he had to say, however, was that a Labour Government would introduce their alternative economic strategy. That was the single phrase that was supposed to remove hopelessness and fear.
    Mr. John Morris: This must be the most unhappy birthday of the right hon. Gentleman's three years in office. It is incumbent on the Government to prove their case. The right hon. Gentleman prays in aid the Chancellor's Budget. Does he believe that a year from now it will have increased or decreased unemployment in Wales, and by how much?
    Mr. Edwards: I have never been prepared to forecast unemployment.
    It is incumbent on anyone to prove his case. The right hon. Member for Rhondda said that Labour's alternative economic strategy would do the trick, but my hon. Friend the Member for Flint, West (Sir A. Meyer) posed the awkward question. He asked about the article in The Guardian. The right hon. Gentleman dismisses The Guardian as an SDP propaganda leaflet. That does not dispose of its arguments. Whether or not one likes what it says, I believe that we all regard it as a responsible newspaper. We should take on the arguments.
    The Guardian took a close look at the alternative economic strategy that is supposed to reduce unemployment from 3 million to below 1 million within five years. As it stated, "there is a snag". It was revealed in tests commissioned by The Guardian on the Treasury's computer model of the economy. The blunt declaration from Christopher Huhne in The Guardian on 20 April is:
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    "Labour's published proposals would not work."
    Mr. Donald Anderson: Will the right hon. Gentleman give way?
    Mr. Edwards: No. Labour Members do not like their policies to be examined in detail, but that is what I propose to do. They should take note of that blunt statement made after tests run through the Treasury's computer model.
    Mr Huhne suggests that to make the alternative economic strategy work
    "Mr. Shore added a mystery ingredient to the published Labour package, namely a workable incomes policy over the whole five years".
    But there is a problem about that. I read that Welsh trade unionists voted decisively at the weekend against an incomes policy being introduced by a future Labour Government. Perhaps the right hon. Gentleman's cure for hopelessness and fear is to tell the TUC where to get off; perhaps he was trying to persuade the House that the Labour Party would implement an incomes policy; perhaps he was trying to persuade the House that the right hon. Member for Bristol, South-East (Mr. Benn) and others who think like him would not get their way; or was he telling us that it would all depend on the "national economic assessment" which the Leader of the Opposition has described as "a new social contract"—the latest version of "Solomon Binding"? The Guardian reminds its readers that in the first two years of the previous social contract earnings increases doubled to 26 per cent.
    Mr. Rowlands: The right hon. Gentleman should put his case, not that of The Guardian.
    Mr. Edwards: The Guardian's case is powerful. It is a responsible journal. I am sorry that Labour Members dislike the analysis so much.
    The Guardian computer and Mr. Huhne reveal that without an incomes policy the benefits claimed by Labour come
    "only at the cost of a wage explosion"
    and
    "inflationary horrors".
    According to the analysis, the rise in wages and salaries would double to 18·9 per cent. in 1984, with inflation averaging 18·5 per cent. during 1986 and still accelerating into the next election year.
    According to Mr. Huhne, the outlook predicted by the model without an incomes policy is achieved only by making "some heroically favourable assumptions". We have to assume, for example, that interest rates would fall from 11 per cent. in 1982 to 8 per cent. in 1986, despite the extra borrowing and increased inflation.
    Commenting on those wildly unrealistic assumptions, Mr. Huhne states:
    "It is not hard to see why Mr. Shore added his mystery ingredient."
    If an incomes policy is the mystery ingredient we are entitled to be told about it—[Interruption.]
    Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The Secretary of State deserves a reasonable hearing.
    Mr. Edwards: Whenever Labour Members do not like what is said, they shout from a sedentary position in the belief that that is an effective answer to the argument.
    We are being criticised for our policies and the central feature of the Opposition's alternative is hidden from us.
    "Two words they dare not speak"

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    is the heading that The Guardian gives a leading article on the subject—[Interruption.] Among all the interruptions, I challenge the official Opposition to tell us whether it is Labour's intention to introduce a realistic incomes policy in defiance of the Wales TUC, the TUC generally and a large part of its Back-Bench opinion.
    Mr. Anderson: Will the right hon. Gentleman give way?
    Mr. EdwardsPerhaps the hon. Member for Swansea, East (Mr. Anderson) can tell us whether Labour is to have an incomes policy.
    Mr. Anderson: The right hon. Gentleman has enjoyed the demolition job he has been doing with The Guardian article. Is he content that in Wales over 170,000 people are unemployed? What cheer or news does he have for them about reducing the figure?
    Mr. Edwards: The right hon. Member for Rhondda said that the Labour policy would cure the problem and remove those people from the unemployment register. I am entitled to see whether that is a valid argument or as spurious as everything else that comes from the Opposition.
    Mr. Huhne has a good deal more to tell us:
    "The size of Mr. Shore's give away budgets would be breathtaking by any historic standards … This cornucopia … this cocktail … leaves total public expenditure nearly £11 billion higher in the fifth year. The effect on the money supply is `electrifying'."
    The effect in other areas is equally devastating. We are told that the pound "would drop like a stone". I suppose that the Opposition do not care about that. The article concludes:
    "even the most ardent Keynesians can recognise too much of a good thing when they see it".
    Mr. Ray Powell: On a point of order, Mr. Deputy Speaker. Are we debating employment prospects, opportunities and the economy in Wales or have I come to the wrong debate?
    Mr. Deputy Speaker: Order. The Secretary of State is entirely in order. We must all listen to things with which we do not agree. The Secretary of State is entitled to a fair hearing.
    Mr. Edwards: Opposition Members have attempted to intervene, apparently on bogus points of order, only to silence me. At least the Shadow Chancellor issued a statement in which he attempted to rebut the charges that have been made. A leader in The Guardian says that the statement makes "sad reading" and that, if anything,
    "the assumptions made were favourable to Mr. Shore's position."
    [Interruption.] I see that Opposition Members do not like that. They never like the truth. I shall put them out of their misery and move on.
    Two matters must be made clear. First, we are entitled to know where the Labour Party stands on the mystery ingredient—pay policy. It is absolutely critical to the policy that it advocates. Secondly, whether or not the Labour Party believes in the arguments of that analysis, history provides us with convincing confirmation. Every time that Governments have tried to deal with the upward trend of unemployment by spending and borrowing more, the result has been higher inflation. Each time that has been done there has been a smaller impact on jobs and output.
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    Why should anyone imagine that a Labour Party that witnessed unemployment in Wales rise by 139 per cent. during its last period in office has now found a magic way of creating at least 2½ million jobs in five years? There is nothing new in what the Opposition advocate except that they intend to do it on an even more profligate scale than before. There is even more critical dependence on the price and exchange controls, which failed last time round.
    Mr. Rowlands: What has the right hon. Gentleman succeeded in doing?
    Mr. Edwards: As a result of that recipe, the Labour Government achieved 27 per cent. inflation and 30 per cent. wage increases, steadily rising unemployment and then a rescue operation by the IMF. [Interruption.] The Opposition cannot even remember their history. When they put forward that policy, those were the facts. There was steadily rising unemployment and they were then rescued by the IMF. Only after the IMF had intervened and the Labour Government had abandoned that policy was there any check in the upward surge of unemployment. The right hon. Member for Rhondda knows that that is true.
    Mr. Alec Jones: Will the right hon. Gentleman confirm that unemployment fell in each of the last five months of the Labour Government?
    Mr. Edwards: Precisely—after the IMF had rescued the Labour Government and forced them to abandon the policy that the Labour Party now says is the solution to all our difficulties.
    Mr. Rowlands: Bring back the IMF.
    Mr. Deputy Speaker: Order. Our debates are not enhanced by constant interruptions from a sedentary position.
    Mr. Ray Powell: On a point of order, Mr. Deputy Speaker. After more thought, you must agree that the Secretary of State is not addressing himself to the subject of the debate.
    Mr. Deputy Speaker: The Secretary of State takes responsibility for his own speech. He is in order. I know that we do not always agree with what is said from either side but the Secretary of State is entitled to a fair hearing.
    Mr. Edwards: The hon. Member for Ogmore (Mr. Powell) says that I am treating the House with contempt. I am only treating the Opposition's arguments with contempt. [Interruption.]
    Mr. Roy Hughes: The Secretary of State is a disgrace to Wales.
    Mr. Edwards: If we went down the road that the Opposition advocate we would throw away the real gains in competitive performance that have been achieved in the past three years. There are other improvements. In the six months to March, the retail price index, excluding seasonal foodstuffs, rose at an annual rate of only 7½ per cent. The annual inflation rate is not quite in single figures but earlier this week Sam
    Brittan wrote in the Financial Times——
    Mr. Roy Hughes: We are not satisfied with what the Secretary of State is saying. He is out of order.
    Mr. Edwards: The hon. Gentleman advocates a marvellous new intellectual argument. Just because he is not satisfied with what I am saying I am deemed to be out

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    of order. [Interruption.] If that is his way of conducting a democracy, he should go to South America and find his place there.
    Mr. Deputy Speaker: Order. The debate takes place on an Adjournment motion. The hon. Member for Newport (Mr. Hughes) is an experienced parliamentary hand. He knows that this is a wide debate on the economic and employment prospects in Wales. The Secretary of State is addressing himself to that subject.
    Mr. Edwards: Writing in the Financial Times earlier this week——
    Mr. Anderson: It is no longer The Guardian.
    Mr. Edwards: —Mr. Sam Brittan commented that, allowing for distortions and special influences, inflation is already in single figures. It is encouraging that interest rates have so far stood up so well to the Falklands crisis. The evidence is that output is gradually rising. If that is so, we are doing better than the OECD, which has just reduced its 1982 gross forecast for the whole area to zero.
    There has been a substantial upturn in house building. [Interruption.] I note that that is a matter for ridicule among Opposition Members. I should have thought that it would have been welcomed. Opposition Members called for an upturn in house building and a recovery in the construction industry all last year. I should have thought that they would have welcomed the fact that in the first three months of this year house building in Wales is 48 per cent. up on the same period last year.
    Mr. Rowlands: From zero to 48 per cent.
    Mr. Edwards: There is an improvement of more than 10 per cent. in cost competitiveness since the first quarter of 1981. There has also been an improvement of 10 per cent. in productivity during the same period. Although unit wage costs almost doubled in the five years to 1980, recently they have been rising much more slowly—3½ per cent. in the three months to February this year as compared with the year before.
    One of the most encouraging features that has now revealed itself is that, despite the severity of the recession, private investment is increasing. An increase in the period between 1979 and 1981 is not exactly what the pessimists would have had us expect. No doubt it is being stimulated by the opportunities seen in the new technologies and by the sharp increase in company profits. The downward pressure on interest rates has been greatly helped by the fact that Government borrowing is now firmly under control and will be reinforced still further if American interest rates fall, as the City expects, later in the year.
    It is against that background of a steadily improving economic position that we have to consider the prospects for the Welsh economy and the way in which it is adapting to the very substantial change in industrial structure. The effect of the recession and the move away from the previous overdependence on the old basic industries has, of course, been painful.
    Mr. Rowlands: What about Dupont?
    Mr. Anderson: Will the Minister give way?
    Mr. Edwards: No. I was merely pausing to allow a break in the flow of sedentary abuse from the hon. Member for Merthyr Tydfil (Mr. Rowlands), who believes that that provides a substitute for argument.
    Mr. Roy Hughes: It cannot be a substitute. The Minister has not produced any argument.
    Mr. Edwards: Of course, this major structural change, coming on top of the rising trend of unemployment that we inherited from our predecessors, and which has continued for a number of years under successive Governments, has a very severe social impact on individuals and communities. I in no way question the genuineness of the concern expressed by the right hon. Member for Rhondda about this. It is shared by the whole House. Where we differ is about the causes and the remedies, not about the ailment and its pain. The Opposition have apparently not been prepared today to examine seriously their own remedy and the criticisms that have been made of it. Nevertheless, it must be a matter of some relief that, despite the substantial restructuring that has taken place in basic industries, which were previously of such exceptional importance in Wales, the increase in unemployment in Wales since 1979 has still not been so great as that in the country as a whole and has been very considerably less than in some other regions, such as the West Midlands.
    The right hon. Gentleman referred to recent redundancies. They emphasise that change is still taking place, but the level has dropped. In the first six months of 1981, the average was 3,700 redundancies per month. That is now down to 2,200. I must make it absolutely clear that redundancies will continue. I warn again today, as I did in a speech last week, that in the coming months there will be cases involving closure and rationalisation that will cause severe problems for particular localities. Equally, however, I am confident that there will be major new expansion projects in the same period. The right hon. Gentleman spelt out some of the difficulties in achieving a balance, but we always hear from the Opposition long lists of closures but very little about the new businesses opening up. Those new businesses are important, and not just for the number of jobs that they will provide. It is the nature of those industries that is so important and significant to the future of the Welsh economy.
    Mr. Rowlands: Name them.
    Mr. Edwards: I have been asked to name some of them. Among the expansion projects and new projects announced since the Government came to power are ITT in electronic capital goods, Matsushita in hi-fi equipment, Hotpoint in washing machines and electrical appliances——
    Mr. Rowlands: How many jobs?
    Mr. Edwards: —Sony in radio and electronic components, Ferranti Computer Systems in computers, Golden Ltd in toiletries and cosmetics, Davison Field in ladies' wear——
    Mr. Rowlands: How many jobs?
    Mr. Edwards: —Daniel Doncaster in aircraft components, John Dunster in television cabinets, Alfred Teves in motor vehicle components——
    Mr. Rowlands: How many jobs?
    Mr. Edwards: —Aiwa in sound reproduction, Yuasa in batteries, Control Data in electronic components, Merryweather in fire-fighting equipment, Plessey in electronic equipment——
    Mr. Rowlands: How many jobs?
    Mr. Deputy Speaker: Order. I must ask the hon. Member for Merthyr Tydfil (Mr. Rowlands) please to desist from making comments of that kind from a sedentary position.
    Mr. Edwards: The hon. Gentleman does not like to hear good news being given to the House.
    Mr. Rowlands: Will the Minister give way?
    Mr. Edwards: No, I shall not give way.
    Mr. Rowlands: You have told me, Mr. Deputy Speaker, that I must not intervene from a sedentary position. I am now in a standing position. Will the Minister give way?
    Mr. Edwards: After 20 minutes of interruption from a sedentary position, I do not see why I should give way to the hon. Gentleman.
    Mr. Rowlands rose——
    Mr. Edwards: The hon. Gentleman has asked for numbers. Mitel has provided 2,000 jobs in telephone switching products. There is also Smiths Industries, providing instruments for the motor industry, Inmos, in silicon chips and microprocessors, which has just taken over its factory on time, IMT Titanium, producing titanium sponge metal, BICC Corning, optical fibres, Kimberley Clark, paper tissue, Abingdon Carpets, carpet manufacturing, Thomas Lloyd and Universal Furniture, furniture manufacture, Tetrapac, packaging, Texaco, refining, Intermagnetics, video tapes and Chemical Bank, banking.
    Mr. Alec Jones rose——
    Mr. Edwards: No, I have given way quite enough.
    That is by no means a comprehensive list, but it tells a story far removed from the picture of dereliction and decay and an industrial structure entirely dependent on coal and metal manufacture.
    Mr. Alec Jones: Will the Minister give way?
    Mr. Edwards: No, I want to press on. I have more to say.
    Mr. Barry Jones: The Minister has referred to businesses that have come to Wales. Does he intend to refer to the proposed Nissan project? He knows how many people in Wales are interested in that. Has he any news to give us?
    Mr. Edwards: The hon. Gentleman knows perfectly well that if I had any news to give about Nissan I should be delighted to do so. We have no news about Nissan's decision. No decision has been notified to the Government.
    Fortunately, the fact that this change is taking place, and that the character of the Welsh economy has already altered in this way, despite the words of gloom that flow from the Opposition, is becoming ever clearer to those in business and industry outside Wales.
    Mr. Alec Jones: The Secretary of State read a list of all the new factories that have come to Wales. If the list were longer, I should be more pleased. But hon. Members
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    on either side could read an equally long list of closures. [HON. MEMBERS: "Longer."] Will he at least consider my suggestion that he publish a balance sheet so that we may genuinely assess job loss and job creation?
    Mr. Edwards: I have said that I will certainly consider the right hon. Gentleman's point. He said that people read long lists. My point is that the Opposition always read the list of closures but never the list of new plants. It is worth taking those into account as well because this creates a different picture of Wales, and one that is actually encouraging and helps to stimulate the new business and investment that we all want.
    The Scottish head of one of Britain's greatest industrial enterprises, with important subsidiaries in Wales, said to me two or three weeks ago "The point that you have got to get over is that in Wales you do not suffer from the English disease". That is a good point. The Welsh reputation for good industrial relations and productive performance is beginning to spread around. It is one reason why Yuasa, after detailed analysis of possible locations throughout Europe, decided to go to Wales, and one of the reasons why the Canadian company, Mitel, chose Wales as a location. No group of workers has played a greater part in the past couple of years in strengthening that reputation than those at Llanwern and Port Talbot, who have now made those plants among the most competitive in Europe. There is also a wide and growing understanding that, in addition to this record of good labour relations, we now have an industrial infrastructure as good as, if not better than, anywhere else in the United Kingdom.
    Despite the need to control public expenditure, the Government have successfully carried into effect the largest capital programme of infrastructure improvement ever undertaken in the Principality. There are major road improvements in South Wales: the extension of the M4 route westward, the vastly improved network around Abergavenny and Pontypool, and the start of two other major projects—the A470 Abercynon-Pentrebach scheme and the Culverhouse Cross-Capel Llanilltern scheme, both of which we shall expect to start this year. In addition, Gwent county council has a major programme of works on the A467 linking the M4 at the Heads of the Valleys. In South Glamorgan, the council is doing a great deal to improve access to the dockland area, and in Dyfed work is under way on the links between Llanelli and the M4.
    In north Wales, the last financial year has seen the letting of what are, in financial terms, two of the largest road construction projects ever awarded in the United Kingdom on the A55. In total, last year, work started in north Wales on contracts worth about £160 million. That represents a tremendous investment in the infrastructure of north Wales. It is investment of critical importance for the whole economy of the area. Later this year, we shall expect to lay before Parliament a Bill that will enable us to proceed with the tunnel crossing of the Conwy estuary.
    At Welsh questions in recent months I have given the House details of our programme of factory building and factory letting. In the Welsh Grand Committee on 28 June 1978 my Labour predecessor, the right hon. and learned Member for Aberavon (Mr. Morris), boasted of the area of factory space formally or provisionally let. He said
    "That is the yardstick by which we should be judged".—
    [Official Report, Welsh Grand Committee, 28 June 1978; c. 12.]

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    I am happy to use that yardstick. Of the 836 advance factories completed by the WDA since its inception in January 1976, 684 have been completed since May 1979. Three times as much factory space has been built since May 1979 as in the whole period from January 1976 to May 1979. Last year, our allocation of Government factory space in Wales and the number of factories let—1·6 million sq ft and 295 units respectively—was an all-time record. The WDA has allocated in the 12 months ending this March well over 1 million sq ft and 186 factories.
    This year alone, the agency will build 1½ million sq ft which was more than anything achieved by the previous Government, and that comes after a year in which the agency built nearly 2½ million sq ft and 456 units, which is nearly twice as much factory space as was completed in the years 1976 to 1979.
    As I made clear, the achievement is not just one of construction, but of successful letting. It is because our current priority must be to let the factories that we have built that I have authorised an increase in the grant from the Welsh Development Agency to the development corporation from £644,000 to £1,102,000 a year and given the assurance that this level of support can be expected to continue for a number of years.
    Even before we see the results of this promotional effort, I can report that activity is running at record levels. I repeat that last year was a record in terms of factory allocation, and yet already in the first quarter of this year we have let more than double the number and in excess of 40 per cent. more space than in the same period last year. That news should be welcome to Opposition Members.
    In March this year, SFA applications reached their highest monthly figure yet, and, indeed, applications in the first quarter of 1982, in terms of number, value and number of new jobs, stand at substantially higher figures than in the first quarter of 1981. Inquiries to our small firms centre are 67 per cent. up on last year. In March we had 1,845 inquiries, which was 80 per cent. more than in March a year ago. The right hon. Member for Llanelli (Mr. Davies), whenever he is given good news, record figures, information that people are taking an interest in Wales or that new jobs are coming to Wales, seems to consider it a matter for laughter. I think that it should be a matter for some satisfaction that in the depths of recession we have achieved infinitely more than was ever achieved by the Government of which he was a member, when economic conditions on a world-wide scale were a great deal easier.
    Mr. Denzil Davies: Does the right hon. Gentleman know that, when he came to office, the unemployment rate in Llanelli was 5 per cent. and that it is now close to 18 per cent? Will he name one factory that has come into Llanelli during his two and a half years in office?
    Mr. Edwards: Surely to goodness, the right hon. Gentleman, if he complains and shows understandable concern about unemployment, should not be laughing when I give good news about job creation in Wales.
    Mr. Davies rose——
    Mr. Deputy Speaker: Order. It is clear that the Secretary of State is not giving way.
    Mr. Davies: Will the right hon. Gentleman answer the question?
    Mr. Edwards: The right hon. Gentleman is correct in saying that the problems of Llanelli are particularly severe. I understand that. I find it hard to believe, however, that, faced with the problems of his own constituency, the right hon. Gentleman thinks it a laughing matter that jobs, new factories and new plant are coming into Wales at a record level, that we have built more factories and that we have succeeded in getting more factories occupied, in a harsh recession, than the Labour Government. All these applications, inquiries and allocations are indications of a growing recognition of the attractions of Wales as an industrial location.
    There are signs, too, of the recovery that is beginning in the economy. I have referred to SFA applications. I was asked by the right hon. Member for Rhondda about the decision of the Government to announce a firm date of 30 April by which application for selective financial assistance had to be submitted in those areas including Mid-Wales, where it was announced that intermediate or higher status would be lost from 1 August this year.
    I must make it absolutely clear, as my hon. Friend the Under-Secretary of State did in the Adjournment debate last night, that no decision has been taken about downgradings following the review which we promised. Indeed, that review is not yet complete and the issues have yet to be considered collectively by Ministers. The announcement about applications does not prejudge the decision. The fact is that, under the provisions of the Industry Act 1972, offers of assistance cannot be made in an area which has ceased to have intermediate or higher status.
    While, therefore, in principle—the right hon. Gentleman quoted the remark—it is open to the Department to accept applications up to the very last day, in practice, as he knows perfectly well—he had to deal with these matters in the Welsh Office—this would be impossible, because all applications have to be carefully examined. They are applications for grants of public money. We have to look at each application and judge its merits. Clearly, if one allowed applications to come in right to the final date, there is no possibility of those applications being reviewed or submitted to the Welsh Industrial Development Advisory Board or going through procedures that are necessary in looking after public money. To suggest that it would be possible to deal with those applications within the legal framework in which we operate would be misleading to those concerned.
    The right hon. Gentleman asked about the letter. We warned the DBRW and all the principal companies operating in Mid-Wales over a year ago that, for this very reason, applications should be in not later than 31 March. We have extended that by a month. We have done our best to meet the point and to cover the concern expressed by the right hon. Gentleman.
    Mr. D. E. Thomas: Can the right hon. Gentleman now tell the House and the development board when he expects the result of the review by his right hon. Friend in the Department of Industry and himself will be published? The implication is, surely, that the Secretary of State is downgrading de facto by this decision and that this will be detrimental to current applications.
    Mr. Edwards: I understand the need to get an early decision, but we face the final flood of representations.

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    We must get the balance right in listening to those representations, giving the fullest consideration to the cases being made and announcing firm decisions. There are some major issues to be decided in the review.
    Mr. Hooson rose——
    Mr. Edwards: I shall give way in a moment. I was about to refer to my hon. Friend the Member for Brecon and Radnor (Mr. Hooson), but, before doing so, I repeat that the administrative arrangements that we announced do not prejudice the further review. I was about to observe that my hon. Friends the Members for Brecon and Radnor and for Montgomery (Mr. Williams) have constantly pressed me and my colleagues on this point. They have left me in no doubt about the importance that they and those they represent attach to the continuation of assisted area status and to the need to have an effective package of financial inducements.
    Mr. Hooson: I hope to expand my own comments on that matter later in the debate, but some confusion seems to be arising between the Welsh Office and the DBRW. None of us wish to see bad blood between those two organisations. I understand that on 1 April 1981 the Welsh Office sent a letter to companies in Wales and to the board, stating:
    "If the proposal to downgrade is confirmed we would continue to accept applications for assistance up until the 1 August cut-off date."
    That has never been countermanded.
    Mr. Edwards: The letter that was sent, of which Dr. Skewis has a copy, states that it would be advisable for any such applications to be sent to the Welsh Office not later than 31 March 1982.
    We sent a letter in those terms to the DBRW, and we have extended that period by a month. To suggest that in making any offers during the exhibition that the right hon. Gentleman described, which I visited, the DBRW was under any misapprehension is to ignore the clear warning that was given.
    Mr. D. E. Thomas: Does the Minister accept that there is a difference between writing a letter that says that it would be advisable for project applications to be submitted and preventing officials of his Department from talking to officials of the board and representatives of companies moving into the area?
    Mr. Edwards: If applications are put in after the deadline, it will be impossible to process all of them. To tell companies that they may expect grants and then not be able to make them, because we cannot complete the procedures and because of the legal provisions of the Act, would be misleading and irresponsible. We are absolutely right to spell out the legal position.
    I have referred to the representations that have been made, and I emphasise that we are taking account of all of them, not just for Mid-Wales. I have taken particular and careful note of the representations that have been made from Llanelli. We have not announced the results of the review, but, in giving an undertaking to the right hon. Member for Llanelli that we are currently considering those representations, he should be slightly more gracious, if he is capable of it. I assure the House that officials are preparing a thorough analysis of the representations and that all will be taken into account.
    We are undertaking a special programme of factory building in Llanelli. I warmly welcome the decision of the
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    Manpower Services Commission to continue with the Llanelli skillcentre. I do not underestimate in any way the importance of training. The right hon. Gentleman raised a number of points about that aspect. My hon. Friend the Under-Secretary of State will say something about the subject when he replies to the debate. However, as it is intended to have a debate on the subject shortly in the Welsh Grand Committee, I do not propose to deal with it now.
    Referring to the work of the DBRW, I spoke of the need for an effective package of financial inducements, and the board has made very clear the importance that it attaches to tourism grants. Tourism makes a substantial contribution to the economy of Wales, and it is estimated that the equivalent of about 90,000 full-time jobs are provided directly or indirectly by the industry. In the last three financial years the tourist board has received £12½ million. In the current year it has an allocation of £5·6 million, about £2 million of which is for its scheme of assistance to individual tourism projects. I have asked the chairman to carry out a review of policy and to let me have his suggestions for the future operations of the board
    In talking of the achievements of the tourist board arid of the DBRW and the WDA, I would not wish to give any impression that I saw them as the sole or perhaps even, in the longer term, the principal organs for Welsh economic recovery. I believe that they have an essential part to play in partnership—partnership increasingly with industrial trusts, with private industrial developments, such as those by the Abbey National, whose recent involvements I greatly welcome, and with enterprises such as Mercury, which, quite apart from the service that it proposes to offer, is already stimulating British Telecom into an entirely new spirit of enterprise. I recently met the senior management of Mercury, and we discussed the possibility of an early link-up of Welsh industrial areas with their new system. The importance of telecommunications links of this kind has been brought home to all of us by the decision of the Chemical Bank to move its European backroom operations to Cardiff and the emphasis that it has placed on the need for effective communication links. I welcome the fact that it has found that those links can be provided in Cardiff and that, after the most careful study, it was decided that Cardiff was by far the best location for its operations.
    The partnership will also involve local government and the universities. In these debates I have on previous occasions referred to INDIS—the computer-based information service for industry that is being provided at present by the Mid-Glamorgan county council. I have indicated to the council my support for this operation, and discussions are currently taking place with a view to its extension to other parts of Wales and to its support by other local authorities.
    The House will also know of the support that I have given to the industry unit at the University College at Cardiff. In the weeks ahead I shall be holding further discussions with representatives from industry, local government, the university, the private sector and the trade union movement about further co-operative ventures. We have already referred to one proposal in the debate.
    As I said, I speak of a partnership in which the private sector should have an increasing role. I have emphasised the job of the WDA to act as a catalyst and I have asked the agency to give very careful thought to its long-term strategy in this rapidly changing situation. I recently

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    discussed a working paper with the board. The right hon. Gentleman put questions to me about that. I discussed the working paper in which it began to develop its ideas. Further work is continuing, and I have arranged to meet the board later in the summer to discuss its developing plans.
    Following my comments on the subject in the Welsh Grand Committee last July, the WDA has been re-examining its investment function. It believes that there is room for further development here and that there are new ways in which it can help in the provision of investment for small and growing firms. I have given approval to the agency to set up a new subsidiary company which will offer mainly equity finance to small businesses. Full details will be announced next month, but I can say now that the intention of the new subsidiary will be to offer a readily identifiable package of investments in a fairly standardised form, together with a simplified procedure for application and assessment.
    The agency has experienced considerable succes since the autumn with its new low-interest loan service for small firms operated in co-operation with the European Coal and Steel Community. I am glad to say that a similar scheme is now being introduced, funded by the European Investment Bank, which will cover all parts of Wales.
    These various initiatives are expected to lead to an increase in the level of WDA investment and at this stage funds are available for about £5 million of investment in the present financial year, compared with about £3 million in 1981–82. There is no intention to redirect the efforts of the agency or to operate it as a holding for a significant proportion of Welsh industry, but I believe that the time is right for it to seek a shift of emphasis towards direct encouragement and stimulation of business growth. The agency is making considerable efforts to build up venture capital links with the City.
    The emphasis that I have placed on the diversification of the Welsh economy and the establishment of new industry does not mean that the old basic industries will not have a key role to play and the ability to make an immense contribution to the area. I have already spoken of the striking improvement in performance at the major strip mills and other parts of the BSC operation. At Llanwern work is going ahead on relining the No. 3 blast furnace at a cost of £11 million. The decision to refurbish the plant's coke oven will provide increased coke-making capacity. The success of those plants is important for the coal industry.
    I have been asked about the Aberthaw power station. The discussions that are taking place are not with a view to avoiding immediate closure. That is not the issue. Aberthaw A is one of the older power stations. The object of the discussions is to extend the life of the power station for as long as possible.
    The right hon. Member for Rhondda talked about cooperation. The National Coal Board and the Central Electricity Generating Board have a clear understanding of the need to reduce operating costs, which is the key. Incidentally, the CEGB expects coalburn at Aberthaw B this year to come close to last year's record level.
    Agriculture is the other basic industry. Together with fishing and forestry, it provides direct employment for over 67,000—an increase of nearly 1 per cent. in the year. During three years of great financial difficulty the
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    Government have done a great deal to support the industry. We should not forget that when the Labour Government were in office British farmers were working at a 20 per cent. to 40 per cent. disadvantage with their competitors because of the policy pursued by that Government. They now have a 9 per cent. advantage over their competitors.
    We have negotiated a series of measures to support the industry. The sheepmeat regime has provided a welcome boost. It has been worth £28 million to Welsh farmers so far. The beef premium scheme has helped our recovery in that sector.
    Mr. Leo Abse: On a point of order, Mr. Deputy Speaker. In view of the length of the right hon. Gentleman's speech, may we have an interval? The right hon. Gentleman's rambling and incoherent speech is degrading the House.
    Mr. Edwards: That sort of comment is characteristic of the hon. Gentleman. I shall not take up his comment about degrading the House, but that sort of comment certainly harms his reputation. The right hon. Member for Rhondda, who opened the debate on behalf of the Opposition, spoke for about 40 minutes. I have been noisily interrupted and asked to give way on numerous occasions. Labour Members may not wish me to respond to the right hon. Gentleman. However, if I fail to do so, I shall be attacked for discourtesy. I shall remember never to give way to the hon. Member for Pontypool for risk of prolonging the business of the House.
    Dr. Roger Thomas rose——
    Mr. Edwards: The state of the agriculture industry is very good, despite the recession. The Government's record contrasts with the threats posed by the Labour Party, which is again threatening land nationalisation. A few weeks ago the hon. Member for Liverpool, Walton (Mr. Heffer) said that the green pound should be revalued by at least 4 per cent. and that a number of commodity prices should be frozen, including milk prices. Something called the Common Market Safeguard Committee of the Labour Party has said
    "that there is no particular merit in having an agriculture industry".
    Farmers can reach their own conclusions.
    Mr. Rowlands: When will the right hon. Gentleman reach a conclusion?
    Dr. Roger Thomas: Will the Minister give way? I wish to intervene to put to him the contents of an article that appeared in The Guardian today.
    Mr. Edwards: I shall come to a conclusion.
    Mr. Rowlands: Hear, hear.
    Mr. Edwards: I shall do so by referring to a matter which is vital to the future of the Welsh economy and which was not taken up by the right hon. Member for Rhondda. I suppose that he was careful to try to cover up this issue, as he does everything else that is important within his policies. I refer to the right hon. Gentleman's approach to Europe. I have no doubt that at some stage we shall be told that all our problems are the fault of the European Community. Certainly that is the view of the hon. Member for Newport. The principal case that is usually advanced against the Community by anti-Marketeers is based on the United Kingdom's deficit with the Community in manufactured goods. However, the fact

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    that the deficit is a function of the lack of competitiveness of British industry rather than of Community membership is proved by the evidence that Britain's performance has held up much better in the Community than it has in other major industrial markets.
    The real threat provided by the Labour Party to industrial recovery in Wales especially is the threat to inward investment which is critical to the creation of new jobs. Many companies have made it clear that they have decided to set up plants in this country because Britain is a member of the Community.
    The Japanese have established the majority of their plants in Britain not elsewhere in Europe. Eight of those plants have come to Wales. The latest company to make a statement on the subject is the American organisation, Dow Corning. It has said that it has come to this country to go ahead with a major capital project that will create many new jobs in Barry, solely because of Britain's membership of the Community. I cannot think of a much greater catastrophe for the long-term economic prospects of the people of Wales and for the creation of new jobs than our withdrawal from Europe, though even now the possibility that the Labour Party might take us out must be acting as a disincentive to new investment.
    The Government can point to major achievements in the modernisation of the Welsh economy over the past three years against a background of immense difficulty. Those achievements are being increasingly recognised outside Wales. Companies are beginning to realise that Wales is an attractive location for industrial and commercial development. The Opposition's alternative, such as it is, to the policies that we are pursuing is an economic programme that has been dismissed by those who have analysed it seriously. The Opposition's European policy would be wholly destructive. Fortunately, they will never have the opportunity to put it to the test.
    5.39 pm
    Mr. John Morris: I fear that most of us heard the peroration of the Secretary of State with relief. The first part of his speech was a parody. I say with all humility that no Secretary of State since 1964 would like to be remembered for the sort of speech that the right hon. Gentleman has delivered today. It was worthy of a weak Assistant Postmaster-General in a lean year. The right hon. Gentleman made a grotesque speech. I appreciate that he has served a miserable period of office. He must be a miserable man when he considers the face of Wales today. If we have his birthday offering to Wales and the House, I sympathise with him for the record of his stewardship.
    The right hon. Gentleman's speech was remarkable only because it contained so few references to the 171,000 who are unemployed in Wales. The occasional tears were all very well when it was mentioned, and I am sure that they were not crocodile tears, but I should have thought that unemployment in Wales today would have dominated the right hon. Gentleman's speech. If unemployment in Wales does not dominate his thoughts, perhaps unemployment in Milford Haven, Haverfordwest, Pembroke Dock and Tenby will dominate his thoughts. In Milford Haven and Haverfordwest, 3,255 people are unemployed. In Pembroke Dock, the figure is 1,385. That is 22·8 per cent. In Tenby, there is a total of 811, and male
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    unemployment there is 30·7 per cent. I hope that, when he goes to Pembrokeshire, he is proud of those figures and of his record.
    My right hon. Friend the Member for Rhondda (Mr. Jones) asked about the total number of jobs that had come to Wales following all the announcements about new factories. We should have a balance sheet of the -lumber of jobs that have been lost in Wales since the Secretary of State took office, and the number of jobs that have been gained in Wales. It is that last figure that would persuade us of the efficacy of his stewardship. The right hon. Gentleman took pride in house building. Those figures have come down probably to a figure almost as low as they were in war time. To take pride in a marginal increase in those figures is a grotesque parody of ministerial pride.
    The Secretary of State spoke about the factories that he had completed. I take joy in every factory that is completed in Wales at whatever time. However, of the ones that he mentioned, many were planned and the resources provided for them during our period of office.
    In my speech I shall deal with matters mainly in my own constituency. During the Easter Recess, I had the privilege of being invited back by the Blaenau Gwent council to see the results of the energetic steps taken by the Labour Government to deal with the problems caused by steel closure in the area. We allocated a considerable amount of money to the area. The basic need was to deal with sewerage, infrastructure and water supplies, without which new industry could not be attracted. We started work on the Abergavenny-Raglan road, and we began the construction work on the very necessary southward approach to the M4. A major industrial site was needed to attract new industry—the Rassau industrial estate, in particular. My right hon. Friend the Leader of the Opposition, the then hon. and learned Member for Brecon and Radnor, Mr. Roderick, and my hon. and learned Friend the Member for Abertillery (Mr. Thomas) fought like lions for the attention and resources of the Welsh Office. I, my Under-Secretary, and one of our senior civil servants discussed the matter month after month, or went to Ebbw Vale to see what progress was being made. In the teeth of an adverse report by the planning inspector, I decided to go ahead with the Rassau industrial estate.
    Unusually—I think it is right to remind the House of this—as common land was involved, the planning decision was debatable, as such, in the House. The current mood of the then Opposition was to behave like political juvenile delinquents. They seized every opportunity to embarrass and frustrate the Government of the day. They demanded and got a debate. As a result, 323 hon. Members stayed up until 3.44 am in an effort to frustrate the rapid building of the Rassau estate. One hundred and twenty seven Opposition Members voted to send the issue to a joint Select Committee, where, inevitably, there would have been considerable delay, if not frustration of the whole venture.
    I remind the House of the names of those who made it their business to come down at 3.44 am. In that number, 127—almost the full parade, but not quite— Welsh Tory Members of Parliament all opposed expansion in Rassau in South Wales. Who were they? The right hon. Member for Pembroke (Mr. Edwards), the Secretary of State, was the first in the batting order in the alphabetical Division List. There was the hon. Member for Cardiff, North (Mr. Grist). The hon. and learned Member for Denbigh (Mr. Morgan) was far enough away, so he could come down in

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    luxury to vote against the project. There was the Under-Secretary, the hon. Member for Conway (Mr. Roberts), and the Deputy Chief Whip, the hon. Member for Monmouth (Mr. Stradling Thomas). The right hon. and learned Member for Hendon, South (Mr. Thomas), a former Secretary of State, should have known better. Lest he thinks that he is forgotten, there was also the Under-Secretary, the hon. Member for Cardiff, North-West (Mr. Roberts), who was there as a Teller for the Noes. It was a proud moment in the history of the Conservative Pary in Wales—to be on the roll of honour, having stayed up half the night to frustrate the real intentions and the needs of communities affected by steel closures in that part of Wales. When I went to Blaenau Gwent, I was glad to hear that the present Secretary of State, when he had the face and the gall to go to Ebbw Vale, was reminded of that by my right hon. Friend the Leader of the Opposition.
    It gave me some joy to see what we had sought to do and the resources that we had sought to provide to avert the tragedy in that area. The tragedy, unfortunately, is that the area has since been hit by the twin evils of the Tory Government and the recession. It could have have been within our grasp to reduce unemployment to more acceptable levels. But, despite the many factories that have been built, the large resources that have been provided, and the many people who have come in, unemployment there is still at a horrific level.
    The following day, so that I might compare the resources that we provided and the factories that we built, I took the opportunity, with the help of the Welsh Development Agency, to see how the money was being spent in Port Talbot in my constituency, following the steel slim-down. Incidentally, the Tory Party in the House initially opposed the setting up of the Welsh Development Agency, and voted against it. Now it is the main weapon that it uses to tackle unemployment in Wales. Indeed, the Tory Party has no other weapon. Nevertheless, that was its initial response. Careful reading of the last few words of the Secretary of State will show that the enhanced role that he now gives the WDA by way of finance and intervention is quite contrary to what he said in our long Committee deliberations, which were handled mainly by my right hon. Friend. It is an important but significant U-turn on his part, although I welcome any conversion.
    It is important for us to measure the efforts that are being made—I do so in my constituency, having seen what we sought to do in another part—against the real needs. The latest unemployment figures for my travel-to-work area, which includes that of my hon. Friend the Member for Ogmore (Mr. Powell), are 12,588, of whom 6,825 are in the Port Talbot, Cymmer and Porthcawl area. The travel-to-work unemployment is 15·5 per cent. for the whole area, but it is nearer 20 per cent. in Port Talbot and higher still in the valley. We have lost more than 6,000 jobs directly at BSC, and, in addition, there have been indirect losses in other industries in the area.
    I therefore want to ask a number of questions. I do not expect the Minister who is winding up to give me a complete answer tonight. Indeed, with respect to whatever figures that he can give tonight, I would prefer to receive a comprehensive letter from the right hon. Gentleman, giving me the kind of social audit that my right hon. Friend demands for Wales, for the Port Talbot travel-to-work area, to see how we are getting on.
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    First, how many jobs have been established to date in the Port Talbot and the Port Talbot travel-to-work area since the steel closure announcement? I suspect that the figures are not very different from those that my right hon. Friend the Member for Llanelli (Mr. Davies) sought to elicit. Secondly, how many jobs have been lost in the travel-to-work area since then? Thirdly, is the Secretary of State content with the funds committed so far to deal with the problem? May we have a complete breakdown of the sums allocated to the steel areas in my constituency and those of my hon. Friends the Members for Ogmore and Newport (Mr. Hughes)? Indeed, my hon. Friend the Member for Newport is as concerned as I am to know where the money has gone and how many jobs have been created by the much-vaunted package announced by the Secretary of State, which has, from time to time, been prayed in aid by the Prime Minister.
    Mr. Grist: Would it not have been possible to bring more modern and secure jobs to the right hon. and learned Gentleman's constituency and to the other constituencies that he mentioned if the British steel industry had been as competitive as our competitors were 10 or 15 years ago, during the lifetime of previous Conservative Governments, and if we had not waited until a world recession?
    Mr. Morris: It would be a pleasure to take the hon. Gentleman through the history of how manpower was built up in Port Talbot. Unhappily, we inherited what had been set up. There should have been more planning and there could have been a greater commitment of funds and more foresight before taking draconian steps overnight. Something similar to that provided in Ebbw Vale could have been offered. Indeed, I take great pride in the achievement at Ebbw Vale.
    Through the good offices of the Welsh Development Agency I saw the work that was in progress at the Baglan industrial park. The scale of the achievement should be put on record. About £3 million has been expended on sub groundwork and on the provision of utility services. The same problems also had to be tackled in Ebbw Vale. The work is continuing and we expect to spend a further £3 million in 1982–83. So far, so good. The construction of factories will begin shortly. Nine factories will be built, of which five will be 25,000 sq ft and four 10,000 sq ft. They will be built at a cost of £3·25 million. We are told that they will be completed within about 12 months. Such construction is welcome.
    However, after all the huffing and puffing, I discovered that when the factories are let—I hope that they will be let quickly—and fully occupied, a mere 500 jobs will be provided. That is against the background of 12,000 unemployed in the travel-to-work area and 6,000 plus unemployed in Port Talbot and the surrounding area. Six thousand jobs have been lost in the steelworks alone. There is also some other provision at Kenfig.
    Mr. Nicholas Edwards: Surely the right hon. and learned Gentleman is not suggesting that the scheme in Baglan is the only scheme available for people in that travel-to-work area. He knows perfectly well that that is not true.
    Mr. Morris: Of course I am not suggesting that. I am examining the much-vaunted claim that millions of pounds have been provided for the steel areas and I am trying to

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    show that that sum is inadequate compared with the area's need. In addition to the unemployment in that travel-to-work area there is unemployment in Swansea and among those who used to travel 30 miles to work in Port Talbot.
    Mr. Nicholas Edwards: In trying to give a picture or analyse the situation, the right hon. and learned Gentleman has, for some reason best known to himself, decided to give only some of the figures and facts.
    Mr. Morris: Before I was interrupted, I said that there was also some building at Kenfig, but perhaps the Secretary of State did not hear me. If the sums involved are added up, it can be seen that they are minuscule compared with the need. Even if we give the Government the benefit of the doubt and agree that 1,000 jobs will be provided, the fact remains that 12,000 people are unemployed. In the town, 6,000 are unemployed and there is also high unemployment in the constituencies of Neath, Swansea, East and Swansea, West. Therefore, the needs are much higher than the sums allocated. The much-vaunted sums that have been allocated are small and totally inadequate.
    I cross-examined officials at the Welsh Development Agency, but they said that only nine small factories are to be built in the Baglan industrial park in this financial year. There is no commitment of funds for 1983–84 or 1984–85. There was no sign of any pre-planning by way of funds for these years.
    Mr. Anderson: The Department of Industry's working assumption is that it costs the Exchequer at least £30,000 to create each new job. If that is so, the much-vaunted £48 million package for the steel areas will create roughly only 1,600 new jobs in Gwent and Glamorgan despite the scale of need that my right hon. and learned Friend has mentioned.
    Mr. Morris: My hon. Friend has underlined my point. The Secretary of State should tell us whether more funds are available. Of course, I expect our share of the Welsh Development Agency's funds for 1983–84 and the following years. However, we shall have to compete against the needs of the whole of Wales. The special steel funds will have been exhausted and other competitors will have high claims. Therefore, if the Secretary of State wants to give the area some confidence and wants to give some message to the 6,000 or more unemployed, he should quickly announce his plans for 1983–84 and 1984–85. Has he got any plans, or is he, in his battles with the Treasury—as in every other battle—a born loser? We all suspect that that is so.
    We need a breakdown of the figures. It is no good emulating the Secretary of State for Employment and telling the young people who will soon leave school with no hope or confidence in the future that they should get on their bikes. Where can they go? It is no good telling them what the Prime Minister said when she went to Swansea two years ago. It is no good telling people that they should be prepared to move. Where can they go? What message can I give to the young people in my area against the background of that inadequate provision?
    I come to the subject of apprentices. We are eating the seed corn because nothing is being done. If we ever come out of the recession and if industry recovers there will be a lack of skilled workers in my area and in most other areas in Wales. Two years ago, the British Steel Corporation cut
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    its apprentice intake by half. Last year, its apprentice intake was nil. I hope that there will be some intake this year. Construction workers tell me that apprentices are being made redundant. I have the figures with me, but shall not weary the House with them. In one year, the figures are 27, 39 and 6 and that is in addition to those who have not yet completed the probationary period. Where are they to turn to to complete those apprenticeships?
    I asked the chairman of the MSC in Wales for an assessment of this travel-to-work area. I asked about existing planning and provision for apprentices. I asked what would happen to apprentices who failed to complete their apprenticeships. I was given a helpful but general answer about what the MSC was doing for the whole of Wales. However, in respect of my particular inquiry all he could say was that
    "The MSC does not at present have information on the numbers of apprenticeships by travel-to-work areas including Port Talbot. We are, however, actively considering ways and means of obtaining such data as one of the elements of training information framework currently in preparation."
    Given the nature and extent of the problem, the MSC should have furnished that information to those of us who for the last few years have been campaigning for something to be done, given the shortfall in apprentice training in the main industry—BSC—which is now causing such anxiety to every young school leaver in my area who is seeking some skill and training.
    In the Welsh Grand Committee, I queried the Government's views on the litigation between the BSC and the British Transport Docks Board in connection with the fees for handling the iron ore at Port Talbot harbour. As I received no answer at all from the Minister on that occasion, I tabled a question to the Chancellor of the Exchequer asking whether he would increase the borrowing powers of both corporations to ensure that their capital investment proposals would not be harmed, arid so that they could finance the litigation. Eventually, the answer came back from the Chancellor:
    "I hope it will be possible for the two boards to resolve their dispute without the need for litigation".—[Official Report, 27 April 1982; Vol. 22, c. 227.]
    That view is very different from the one contained in the recently published annual report of the docks board, which said that
    "this matter is being actively pursued through the courts."
    That is very odd. After all, the nation is a shareholder in these two great corporations which are going to law to determine the appropriate amount to be paid for handling iron ore, presumably at Newport as well as at Port Talbot. This matter is being canvassed at public expense, yet the Government do not intend to take any steps, so perhaps they will clarify the situation. If we can avoid the litigation mentioned by the chairman of the docks board, I hope that it will not be at the expense of either Port Talbot or Newport paying such an amount for handling iron ore that it makes them less competitive.
    The Government believe in free competition. They believe that these industries should be able to stand on their own feet. It would be quite wrong if, as a result of an inheritance in the past when inflation was not contemplated and before the BSC came into being, there were to be frustration in both Port Talbot and Newport.
    The Government have been in power for three years. Each year in Wales the situation has got worse and unemployment has increased. The Labour Government had many problems with which to deal, but quite often one

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    forgets that during that time unemployment was reducing while employment was increasing year by year. Employment was certainly up at the end of our period of office.
    This Government have managed to double unemployment and reduce the number of people employed in Wales. That factor is frequently forgotten. I suspect that the Government have given up the ghost on tackling unemployment this side of the election. It would be much better and worthier if the Secretary of State were to be frank with Wales. The same applies to the Chancellor of the Exchequer. They should say "There is no hope at all of doing more than making a dent in unemployment this side of the election". Then at least the man, woman, young boy and young girl who face no hope today would know where they stand.
    6.4 pm
    Mr. Tom Hooson: The right hon. and learned Member for Aberavon (Mr. Morris) referred to the desirability of competition. It is deeply depressing that, when we consider the Welsh economy, no coherent competition with the Government is offered by the Labour Party. All that we heard were jungle noises interrupting the speech of my right hon. Friend the Secretary of State.
    The alliance, that bright new hope of Wales, is represented in the debate by only one of the four hon. Members who represent the centre in Wales. The Plaid Cymru Party is missing. I should therefore like to analyse what little we have been offered in the Labour Party's alternative economic strategy.
    Speeches about the number of people unemployed are a completely useless exercise unless there is an analysis of the nature of the economic problems that have produced that unemployment. Yet the moment that my right hon. Friend began a careful analysis of the Labour Party's alternative, he aroused such horror among the Opposition that in no circumstances could they listen to the truth, which sometimes even appears in The Guardian.
    Quite startling is the extent to which unemployment afflicts every advanced economy, with one significant exception—the Japanese economy, where the rate of unemployment is about 2 per cent. From my student days when I read Keynes, I believe that it must be regarded as the normal, frictional minimum. In the Western nations as a whole, between 26 million and 28 million people are unemployed. Obviously there are no easy answers to the problem.
    I am grateful that the right hon. and learned Member for Aberavon referred to the fact that any solution must be a relatively gradual one. I do not see why he should recommend that either to my right hon. Friend the Secretary of State for Wales or to my right hon. and learned Friend the Chancellor of the Exchequer as the theme of gradual recovery has been the truth uttered by every member of the Conservative Government.
    Labour Members have spoken about the doubling of unemployment under this Government. It should be remembered that unemployment has doubled under just about every Government of the past 15 years. There is an extent to which the economy is not under the control of any Government. All that a Government can strive to achieve is conditions that permit a gradual hope for business men, entrepreneurs, inventors and so on to create work.
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    I would have very little confidence in the competence of even the present Cabinet to create jobs. I would have no confidence whatever in the competence of the Shadow Cabinet to create jobs. The only contribution that politicians can make is to create the conditions in which business men can create jobs. The economic illiteracy that characterises the Labour Party is utterly pathetic. Goodness knows, we have enough trouble grappling with the economic problems of the nation. We have heard evidence from the Opposition of the total inability of the Labour Party to articulate any alternative.
    To the extent that there is an alternative, it comes back to those two unmentionable words. I am not sure whether my right hon. Friend was able to make those words heard through the hubbub from the hon. Member for Merthyr Tydfil (Mr. Rowlands). I regret that the hon. Gentleman is not in his place, because I wanted to say some critical things about him.
    Mr. D. E. Thomas: I understand that during my absence in the Business Committee the hon. Gentleman said that no member of my party was present. Perhaps he will note that I was facilitating the business of the House, which is in his interests as well as mine.
    Mr. Hooson: I accept that the absence of the hon. Member for Merioneth (Mr. Thomas) was short, and I apologise.
    What is the alternative offered by the Labour Party? Of course, one has to ask "Which Labour Party?", because there are at least two Labour Parties.
    Mr. Ray Powell: Is the hon. Gentleman suggesting that the Tory Party is united on all issues?
    Mr. Hooson: Will the hon. Member clarify his point?
    Mr. Powell: The hon. Gentleman said that there are two Labour Parties. There is only one Labour Party and it is far more united than the Tory Party is now or ever has been.
    Mr. Hooson: The truth is that there are several Labour Parties. The more I brood on the question, the more fascinated I become by the fissiparous tendencies of the Labour Party.
    There is the official Labour Party, which, generally speaking, is still wedded to the policies which, when it was in office, doubled unemployment in Wales from 38,000 to 84,000. The Leader of the Opposition tripled the unemployment in his constituency of Ebbw Vale while the Labour Government were in office, and his post at the time was that of Secretary of State for Employment.
    Dr. Roger Thomas: The hon. Gentleman might like to ask his right hon. Friend the Secretary of State for Wales about unemployment in Milford Haven, Tenby and Pembroke Dock. Does the hon. Gentleman agree that it has at least quadrupled?
    Mr. Hooson: When unemployment is rising in a country, there are bound to be increases in particular localities.
    I do not wish to be diverted from my comments about the fissiparous tendencies of the Labour Party. We have an alternative Government with no new ideas who are simply wedded to defending the policies which were so unsuccessful that they led to the Labour Party's electoral defeat by the biggest swing that Britain had seen in 40 years, and the biggest swing ever in Wales.

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    I now come to the second Labour Party, because we can see more than one Labour Party represented on the Opposition Benches—I have yet to come to the shrewd deserters from the ship. At least, the second Labour Party has an alternative economic policy. Heaven forbid that it should ever be implemented. It is a policy of isolationism, of departure from Europe. It is a policy of "Stop the world, we want to get off'. It is a policy which overlooks the jobs which have been brought to Newport. The hon. Member for Newport (Mr. Hughes) is an enthusiastic anti-European but the future of his constituency depends overwhelmingly on integration with the European Comunity.
    That is the second Labour Party. Its hope for the future is to have feather-bedding in every category of industry and to create extra paper jobs in every conceivable situation so that overmanning of the type that we saw in the 1970s would be multiplied even further. That way lies the further decline of Britain—but at least it would have the advantage that we would become recipients of development aid, having gone so far down the scale of industrialised countries.
    Then there is the group of ex-Labour Party Members whose hope for the future lies in alliance with the Liberal Party, to give Wales the benefit of a completely separate Welsh Parliament. That is the new hope, yet that direction was rejected by a rather impressive 80 per cent. of the Welsh electorate. We have to look at the strategies that are offered before we can possibly consider the solutions, within the Welsh context, to the problems of employment. The absence of any serious discussion of that subject has characterised Opposition contributions to the debate.
    The key element in the latter period of the 1970s—and which has to be seen as the price we paid for the Labour Government—was that concessions were made to the trade unions on so many fronts, economically and in every other way, with the social contract, that the increase in British wage costs averaged 14 per cent. a year over the life of that Government. It was twice that of the United States and Canada and three times that of Germany. During that period the super performer, Japan, showed no increase at all in wage costs. Naturally, it was Japan's trade that prospered.
    In 10 years, British earnings increased in paper value by over 300 per cent., while productivity improved by 15 per cent.—only one-twentieth as much. We lost sales and jobs. It was true of the country as a whole and true specifically of Wales.
    The right hon. and learned Member for Aberavon takes pride in his achievement in cushioning the effects of the decline of the steel industry but, as he was a member of the previous Labour Government, should he not also accept considerable responsibility for the long-term evasion of the fact that there was a massive degree of inefficiency hidden within the steel industry? The spectactular turn-round in the efficiency of Llanwem and Port Talbot—which we welcome on both sides of the House—is testimony to the fact that issues were neglected by the Labour Government because they were hot potatoes. The lack of courage shown by them naturally meant that problems which would have been easier to deal with in the mid-1970s became horrendous to deal with by the end of the 1970s.
    Mr. John Morris: Was it lack of courage for the then Prime Minister, my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), to have the closure
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    of the major steelworks in his constituency? Was it lack of courage for the then deputy Prime Minister, my right hon. Friend the Member for Ebbw Vale (Mr. Foot), to have a massive closure in his own constituency''
    Mr. Hooson: The right hon. and learned Member for Aberavon must be well aware that there are times when it is the duty of a responsible Cabinet Minister to tell the truth, however unpalatable it may be. The remarkable characteristic of the Labour Party has been that, when it is in office, it treats the electorate rather like nanny treats the children—"Never blurt out the truth before the children, it might upset them too much."
    Dr. Roger Thomas: I hope that the hon. Gentleman will not forget that when the then right hon. Member for Altrincham and Sale, Mr. Anthony Barber, was Chancellor of the Exchequer during the mid-1970s—he is now, of course, Lord Barber—his policy of printing money got Britain into great difficulties.
    Mr. Hooson: It is clear that we have learnt one or two lessons that I hope are beginning to penetrate the Opposition parties. The first is that printing money is a particularly profitless exercise, although it seems to be absolutely fundamental to the policies offered by the shadow Chancellor of the Exchequer.
    The second lesson that I hope is being gradually learnt is that, just as we saw an incredible loss in our wage competitiveness in the 1970s, we are now seeing the basis of an industrial recovery for Britain, including Wales, which is very closely geared to the improvement in our competitiveness. Price competitiveness against other nations improved by 10 per cent. last year, and that is remarkable progress.
    I have an extract from The Daily Telegraph of 18 March this year reporting the trend in labour costs. I note, as an index of how Britain was becoming more competitive, that the increase of 2·6 per cent. in the final quarter of 1981 compared with increases of 5 per cent. in West Germany, 3 per cent. in Japan, 6 per cent. in America and 5 per cent. in France. We have reached the point where we are either neck and neck with or even ahead of the Japanese in our improvements. That is how we will establish a strong base. It is against that background that I repeat, since the House is in a calmer state than it was when my right hon. Friend the Secretary of State was speaking, the thrust of his remarks when discussing the various offerings to the Treasury model. It is remarkable. I am not aware of any alternative policy to that of the Government that has come anywhere near the effectiveness of the Government's policies on the basis of that model. It has always been open to Plaid Cymru to make its offerings and to each of the parties in the House or any individual to feed their figures into the model.
    From the lack of any new strategy from the Labour Party for strengthening the economy I move to the secondary subject of the tactics for handling the problem of unemployment in Wales. In some respects I quarrel with the Government about those tactics, but the areas in which I have my quarrels are set in the wider context of my overwhelming endorsement of the strategic direction of the Government. I disagree merely about some of the tactics.
    We face an important month or two during which Ministers will be reviewing the downgrading of the present

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    assisted areas. I was not satisfied with the reply by the Under-Secretary of State for Wales, my hon. Friend the Member for Conway (Mr. Roberts), in the Adjournment debate yesterday. We had a dialogue of the deaf.
    My main argument was that Mid-Wales is not comparable with other areas. It has an extraordinary sparsity of population. The sparsity of Powys is demonstrated by its average population of 0·2 persons per hectare compared with 0·6 persons even in the neighbouring rural counties of Gwynedd and Dyfed. We have a sparsity of population that is unknown except in the Highlands and Islands. In turn, that is reflected by quite extraordinary burdens on the community and on the councils in the provision of numerous services, because we do not have the population base to sustain costs that are easily borne by areas with an average density of population. The economy of our area is comparable only with that of the Highlands and Islands. My complaint is a mild one, because I still have hopes that Welsh Office Ministers will listen to what we are saying in Mid-Wales.
    Mr. Anderson: The hon. Gentleman said that Ministers are deaf.
    Mr. Hooson: I said that yesterday's debate was a dialogue of the deaf. Perhaps Ministers have now found a deaf aid.
    My complaint is that I presented a case which was fundamentally built upon the comparability of Mid-Wales with the Highlands and Islands of Scotland, and with no other area, but my hon. Friend the Under-Secretary did not even mention Scotland in his reply. Instead, he gave a long recital of comments which meant very little. Welsh Office civil servants are very good at preparing stonewalling statements that say nothing. That is what they have been instructed to prepare. It is important to clarify my differences with Welsh Office Ministers and that debate was at least valuable in identifying areas of confusion. It is not for me to speculate on whether the confusion was caused by a genuine misunderstanding or by a tactical wish not to understand the points at which we are driving.
    When I was a boy I had a bumper book of conjuring tricks and I remember that one part of every trick was to find something to distract attention from the main object. That was achieved by my hon. Friend the Under-Secretary last night by means of a long discourse on the varied nature of the 10 travel-to-work areas in Mid-Wales. There was no need for him to become wrapped in all the obscure statistics of what is going up and what is coming down. The key area on which to concentrate is that covered by the Development Board for Rural Wales.
    Another persistent theme that I have heard from my hon. Friend the Under-Secretary and, previously, from my right hon. Friend the Secretary of State is that the control of the review of assisted areas is in the hands not of Welsh Office Ministers but of the Secretary of State for Industry. The two Secretaries of State are to receive a deputation from the Powys county council, the local district councils, the DBRW, my hon. Friend the Member for Montgomery (Mr. Willians) and myself, and we hope that we shall make some progress, but if we do not we in Mid-Wales will not reproach my right hon. Friend the Secretary of State for Industry for following an absolutely rigid
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    statistical line, as he is not the member of the Cabinet who is specifically charged with protecting the interests of Wales.
    Mid-Wales will know in about a month the Government's response to our representations. I reject the idea that this debate is about the ups and downs of 10 travel-to-work areas. It is about a strategic concept for rural Wales which we had assumed was generally accepted by all parties in the House and is certainly strongly supported by the overwhelming number of Conservatives in Mid-Wales.
    We in Mid-Wales are fairly straightforward country people, but I hope that Welsh Office Ministers do not assume that because we are fairly simple we are also mentally sluggish. In that context, I wish to complain about three statistical arguments that I was offered in the reply to last night's Adjournment debate.
    First, we were invited to applaud the only piece of good news offered by my hon. Friend the Under-Secretary, which was the allocation of £50,000 for a fishing research project to be based in Aberystwyth. That is good news and we welcome that initiative, but we were also told that we must not be too concerned if the loss of development area status led to the non-availability of EEC funds, since Powys had received only £2 million of such funds since 1975.
    As I have said, we are simple country people, but we can see that the ratio between the £50,000 of good news and the £2 million of bad news is 1:40. I confirmed with the chief executive and treasurer of Powys county council this morning that a 1p rate in Powys raises £92,616. Therefore, £2 million is a not insignificent contribution to the economy of the area over a few years.
    My second complaint about the too casual approach to the statistics of the Mid-Wales problem is that we were told to cheer up because Powys has the fastest growing population in Wales. It is true that there has been a considerable improvement in the population trend. That is a considerable tribute to the achievement of the strategy of the DBRW and its predecessor bodies because it reverses what had been for a century a trend of decline.
    However, that news is not altogether good. Because of the attractiveness of our rural areas, they are areas to which people retire. The moment that there is a rather larger element of elderly people in the community—and they are most welcome—the social costs for a large number of services are greatly increased. Yet the working population continues to be a declining proportion. Again, I was not satisfied with the meticulous care on the statistics. The surface figures of the trend look good but the proportion of working population is not so good.
    The third part of my hon. Friend's reply that I was dissatisfied with was his assurance that, after all, the Government were taking care of the funding of the DBRW because it was going up with the rate of inflation. Yes, it has done so, but I come back to the comparison with the similarly disadvantaged area of Scotland and what it gets. In February 1980, while the DBRW was being held strictly to the Public Expenditure Survey Committee budgets for 1980–81, the Highlands and Islands Development Board had an increase of £2½ million in its budget—from £14·8 million to £17·3 million.
    Those are the three problems that need far greater discussion when I and my hon. Friend the Member for Montgomery meet the two Secretaries of State.
    Mr. Nicholas Edwards: I am listening very carefully to my hon. Friend, and I thoroughly understand the strength of his case. However, I am inclined to ask him whether he thinks that in giving financial backing account should be taken of the unemployment factors, in particular job losses? Would he care to compare the unemployment figures and the job losses in his constituency with those in the Highlands and Islands Development Board area?
    Mr. Hooson: I accept that we have to recognise that the number of jobs lost in particular areas is a big factor. I have no quarrel with the overwhelming priority given to the steel areas; that is right. I recognise that there have been particular problems such as that of Invergordon. I am not saying that one can make a direct comparison between the two countries in every detail.
    We shall he looking for some support for the concept of a recovery programme, over a period of years, for Mid-Wales. Let us recognise that reversing the trend of a century is not achieved in a few years. We have had a period of remarkable progress by the DBRW. It is not a political football and I hope that it never will become one. It has had remarkable achievements in the creation of jobs and rural amenities in its first three or four years.
    The question now is whether the DBRW will lose its momentum. A great deal of its strength has been not only the support that it has given to the economy and to the social features, but the fact that it has been able to couple this with marketing to small businesses. They are the sort of businesses that are not in competition with Deeside. There is also the degree to which the DBRW has been able to offer investment incentives in terms of grants on machinery.
    I shall not be rigid in looking for the form in which that provision of incentives is made. We have to allow Ministers to exercise initiative. My hon. Friend the Under-Secretary told me that we should not worry about a trivial sum like £2 million. Therefore, I assume that the Government would not worry about providing a trivial sum of £2 million or £3 million to make up for any loss of European money.
    Mr. D. E. Thomas: I endorse all that the hon. Member has been saying, and I hope to develop it later if I catch your eye, Mr. Deputy Speaker. However, does he agree that, by adding £2 million to the overall budget of the DBRW, the Government would be merely taking it to the spending level of the Labour Government, which they reduced?
    Mr. Hooson: I am not sure about the hon. Gentleman's statistic. He may be right, but I am not familiar enough with the figures to know. My understanding is that during the life of the Government figures have been maintained at a good, basic level but I am not in a position to answer authoritatively on that point.
    We should allow some flexibility to Ministers in proposing a solution that addresses the peculiar problems of Mid-Wales. Our absolute statistics of unemployment are not that large. To a great extent, the problem is related not to unemployment but to the healthy functioning of a society and the propping up of little villages and small towns that are on the margin of a viable community.
    The community may find itself paying the costs in a different way if it is not tackling the costs through the DBRW. Each year we look to the Secretary of State for Wales for the safety net, which is the only source for a real
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    solution of the rate problem in Powys. Were pure statistics to be followed, the rate burden would be absurd. We are the extreme freak in all of England and Wales. The nearest freak in the same category is the Isle of Wight. We are able to survive only because we are given a dollop of charity—about £1½ million a year—by the Secretary of State, because he has to recognise that the computer print-out produces utter rubbish. That is inevitable. At the extremes, there are freak cases.
    Therefore, our problem is not large in money terms; it is not even large in the number of people who are out of work. However, it is a problem that cannot be tackled by the sledgehammer. It needs a particular approach. Basically, it calls for rather small factories, but it calls for factory employment. Overall, the increase in manufacturing employment in Mid-Wales, the DBRW area, from 14·7 per cent. in 1967 to 19·8 per cent. in 1977 is crucial if we are to have a reasonable balance of employment in the area.
    Agriculture has shown an improvement in productivity and efficiency which, had it been matched in the rest of British industry, would have left us in a very different state as a nation, but there are limits to the number of jobs in agriculture, as there are in tourism. We wish to develop tourism, but a realistic appraisal of the number of jobs that can be added in tourism in the DBRW area over five or six years is about 750.
    In this context, the continued encouragement of factory employment is essential, whether it comes through assisted area status or by enlarging the legal powers of the DBRW. That could be done by simply adding two words to the definition of its object in life. Here we should allow some flexibility to Ministers. We shall be looking to my right hon. Friend for evidence that in the next month or two he has understood that we have a particular problem in Mid-Wales.
    The Under-Secretary of State for Wales (Mr. Wyn Roberts): I should like to correct one of my hon. Friend's remarks a propos of what I said last night about the population of the development board area. I said:
    "while the rest of Britain has experienced a growth in the proportion of the population over working age, the proportion has not increased in the board's area. Indeed, the working age population of the board's area has increased by more than in the rest of Wales and Great Britain."
    I think that my hon. Friend has misinterpreted what I said last night.
    Mr. Hooson: I accept my hon. Friend's correction.
    I shall conclude with one point that modifies my hon. Friend's remarks. Although we have an increasing population in Powys, the death rate continues to exceed the birth rate. Without further inward migration and population, the population will decline.
    We need jobs for the people of working age—people in the age groups from 20 to 50—in the factories. It is important that we do not slip below the population level at which the retrieval of costs is only possible by the charity of the Secretary of State, in such directions as the rate support grant.
    Several Hon. Members rose——
    Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Hon. Members should know that the last two speeches have taken over an hour. Twelve hon. Members wish to catch my eye. Therefore, the rate of production must be increased considerably.
    6.42 pm
    Mr. Donald Anderson: The aim of a conjuring trick, as the hon. Member for Brecon and Radnor (Mr. Hooson) has truly stated, is to distract the eye and attention from the principal object of interest. For us, the object of the debate is the number of unemployed in the Principality, which is now more than 170,000, and rising. We shall not be distracted by articles in The Guardian or by lists of additional floor space when we see around us the human misery caused, in large part, by Government policies.
    The scale of unemployment in Wales is unprecedented. The seasonally adjusted figures for April this year show that Wales, at 15·2 per cent., has the largest percentage of unemployed in Great Britain. That is a far cry from the picture that was given by the Secretary of State.
    All regions have suffered an increase in unemployment, but the largest over the two and half years to December 1981 was in Wales. My source is last month's Employment Gazette. We see the picture in each of our constituencies. In my area male unemployment has risen from 8 per cent. in May 1979 to almost 20 per cent. now. Therefore, not only is the scale of the problem unprecedented, but it was not expected, and the response has been insufficient.
    My hon. Friend the Member for Pontypool (Mr. Abse) chaired the Select Committee when we had our initial sittings on unemployment in the Principality. In March 1980, we were told by the permanent under-secretary at the Welsh Office that unemployment would peak at 125,000. The range of estimates for unemployment in 1983 that was given to the Select Committee during the spring and summer of 1980 was from 144,000—estimated by Cambridge Econometrics—to 172,000, according to the Bangor college model. We may have thought that the academics, as theoreticians, were far from reality. In fact, they were optimistic in their predictions. The reality is that the figure is already above their predictions, and rising. We predicted a job gap with high pockets of unemployment in certain areas, which could not exist for long without creating social problems and tensions. We see nothing in the Government's response that in any way measures up to the scale of the need in Wales.
    From the end of the 1970s—the beginning of the Government's period of office—we have seen the death of traditional regional policy. In no way can the most dire predictions be avoided without a change in national economic and regional policy.
    Traditionally, our regional policy was designed to operate in a different context from the one that faces us today. It was designed to influence growth and the movement of manufacturing jobs to areas in decline and less healthy areas. Now we have little or no growth in the United Kingdom. There is little or no movement of industry. Manufacturing is in decline. Production in the United Kingdom has decreased by over 19 per cent. during the Government's period of office. All areas are unhealthy to a greater or lesser degree.
    We understand the traditional criticisms of the old policy, which were that it was too concerned with manufacturing industry and encouraged branch factories and failed to promote the expansion of existing firms, yet in Wales in the 1960s and early 1970s regional policy was a major success. We had an active regional policy, good labour relations and improving communications that served us well. We were able to diversify after the coal
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    losses as a result of manufacturing industries coming to the Principality. As the pace of manufacturing growth slowed down, in the middle 1970s service industries took the strain, but by the end of the 1970s even that input from service industries was declining.
    The 1979–80 period brought that era to an end. We have had real cuts in public service employment. There has been a decline ip the manufacturing sector and slow growth at home. By the late 1970s regional policy in Wales was one-third as effective in creating new jobs as it had been in the hey-day of the late 1960s. There have been regional policy cutbacks, the IDC machinery has gone and the regional employment premium was abolished by the Labour Government in 1976. In August, regional development grants will be cut from 20 per cent. to 15 per cent., and downgrading of assisted area status is likely in many parts of the Principality.
    If we are to make any impact on the current problems that face Wales and the level of unemployment, we should look again at the old regional policy, which served us so well in the past in different circumstances. Drawing on all the resources that are available to us in the Principality, we should create a new regional policy, which must be more service industry orientated and must boost job creation in local areas.
    The Secretary of State talked about growth and mentioned certain industries. As is seen from the CBI predictions, that growth is not relevant to us in Wales, whereas there have been some healthy signs outside. The last statement from the chairman of the CBI was
    "Count us out in Wales. We see no such signs of any new dawn."
    Even if there is growth in the private sector, there is such massive spare capacity at the moment that it will not have a major effect on unemployment. Therefore, where does the Welsh Office expect the contribution to the reduction of our unemployment totals to come from? When does it think that the recession will come to an end?
    A more positive role in public sector investment can help. The Secretary of State will know of the British Institute of Management Cardiff sponsored research via the Polytechnic of Wales and its detailed analysis of our unemployment problems. It stresses that its figures are not as co-ordinated as it would like and suggests that the MSC and the Welsh Office should get together to co-ordinate those figures. Its conclusion is clear. The biggest single impact on the level of male unemployment in the Principality can be achieved by a major public construction programme over a number of years. If the Government impose constraints based on their monetarist policies and the PSBR, the BIM suggests that other sources such as banks, the building societies and pension funds might be tapped in experiments such as the Tarmac M20 proposal.
    It is clear that these job losses will continue as a result of public sector cutbacks both directly within the public service and indirectly. My right hon. Friend the Member for Swansea, West (Mr. Williams) and I saw the Minister recently in relation to the South Wales Transport Company cutbacks. In this economics of the madhouse, the transport company, as a result of the general pressures on local government spending, had to save £100,000 by cutting 50 jobs, by making 50 men redundant, at a time when we know from trade statistics that one unemployed man costs the country £5,000 on average in lost income tax and increased social security payments.

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    My view is that we can accept a certain level of "inefficiency" in areas such as bus undertakings and old people's homes, which are not in the directly competitive sector if we are serious about bringing down unemployment in our areas. Growth will not be sufficient. There is too big a deficit on job generation; and short-term measures can only be of assistance—they cannot be a solution.
    It may be that we need a new approach to unemployment, a new work ethic. It may be that "full employment" as we have known it is a thing of the past. Surely the Government must accept that, even if all their policies are successful, even if all that floor space is filled, even if there are incoming industries, they will not make a substantial impact on the current level of unemployment.
    Let us say that that level of 170,000 or 180,000 is reduced over the medium term by 20,000 or 30,000. The key question is this: are the Government prepared to tolerate an unemployment level in the Principality of not less than 150,000 for as far ahead as we can see? If they are, I believe that they are massively letting down the people of Wales. How much unemployment are they assuming for next year? Certainly the Budget, which the Chancellor called a "budget for jobs", anticipated that over the period there would be an additional 300,000 people unemployed—of course, the Government are normally optimistic in their forecasts—over the United Kingdom as a whole, and Wales will have an undue proportion of that increase, as shown by recent statistics.
    Are we prepared to tolerate long-term unemployment which will result from those levels? Are we prepared as a society to tolerate the levels of youth unemployment which will stem from that? However prepared the Government are to massage the figures by moving retired people at 60 from the register on to social security, by the youth training scheme at the other end, and by making the figures appear less bad than they are, a man knows if he is unemployed, and we know the levels of unemployment which are likely to result. These are for us completely unacceptable in social and moral terms and demand a radical rethinking of our policies.
    The required more radical package of measures should include, first, a decision to delay the downgrading of our assisted areas which is due in August of this year until the unemployment figures are significantly lower. We shall have to accept a more positive role for the public sector, possibly, as the Cardiff BIM suggested, tapping more sources of private finance. We should, too, as the Wales TUC has suggested, consider a Welsh "Neddy" to co-ordinate activities in this field.
    We have to adopt a longer-term basis by identifying the problems in our area and seeing how the pool of unemployed can assist. In Wales, we look around and see the derelict land, the scars of the industrial activity of the past. We need local landscape improvement schemes on a far greater scale than we have at present, absorbing in particular young people.
    There are considerable and increasing numbers of people in our community who need help in various ways—elderly people, the mentally handicapped and the physically handicapped. One area for job expansion must surely be in working with and caring for people and bringing the community together, paying neighbours perhaps to help the aged, the mentally ill and others. That
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    has not been attempted in this country, but it is being done in the United States to some extent, mainly through tapping private sources of finance.
    We need to carry out research on new work regimes. An example is job sharing, and I would hope that the public sector would set an example in experimenting in this field. We need to support local initiatives, particularly in manufacturing. I recognise that in the recent Budget the tax position for start-up firms has been made considerably more favourable, but firms which need small amounts of assistance and soft-loan finance often have difficulty in finding money and in finding the basic professional advice to get them going. These are important matters, but will not be major job providers.
    We must also do something about our industrial structure in Wales, the existing industries, the public corporations and local authorities, which have multiplier effects in their own purchasing policies and together can buy local in a form of local "import substitution" exercise—that is, collaboration among the major users in our localities on their suppliers going back into the production line, on the old co-operative principles.
    These are all major and radical initiatives which will have to be attempted if we are to refuse to accept the present levels of unemployment and which will otherwise continue to be with us. The basic question which the Government—indeed, any Government—have to face is this: are we prepared to tolerate the current levels of unemployment, and, if not, are we prepared to break down those traditional constraints, the traditional perspectives, and seek more radical solutions?
    6.57 pm
    Mr. Ian Grist: We have been told by the Opposition, who have called for the debate, that they are concerned about the unemployed. That is the essence of the debate. It is extraordinary that, apart from the speech of the hon. Member for Swansea, East (Mr. Anderson), we have heard little about what should or could be done for the unemployed. The hon. Member for Swansea, East really did not say very much either. He indicated, among other things, that he would tolerate inefficiency in transport undertakings in order to save jobs, without seeming to appreciate that inefficiency in such a major industry would itself have a knock-on effect. both morally and on other related industries, which would deter investment, productivity and jobs in that sphere as in others.
    The hon. Gentleman also called for job sharing—a concept that I have never understood, unless it is that the cost of employing one man is to be split equally between two. Otherwise, presumably, employing two people to do one man's job, with national insurance payments and all the other things involved, would mean that the employer would be burdened with even greater costs. So how job sharing could benefit our industry and enable us to save jobs in a competitive world economy I have never understood.
    Mr. Anderson: The hon. Gentleman must know that our major competitors subsidise their transport undertakings far more heavily than we do. The sort of thing that I had in mind was a move to one-man operation of buses, which meant that elderly bus drivers, who found the strain too great, could then become conductors. There are good social reasons, not only from the point of view of fighting

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    unemployment but also as regards assisting people getting on buses, for not having a totally one-man operation throughout the bus undertakings.
    Mr. Grist: The hon. Gentleman is mistaken about this subsidy to public transport. If he looks at the amount which British Rail is given every year, he will find that it compares favourably with what the French give to their special lines.
    The hon. Gentleman might also consider the modern electric trains that British Rail has cluttering up its yards. It cannot use them because the unions will not permit one-man operation. Millions of pounds are tied up because of restrictive practices. The country has borne such curses for far too long. That is why we should have sympathy for the unemployed. Leaders of industry and of unions have for many years lived with an inefficient outlook. Time and again they have yielded to buy peace, as it seemed the easiest option at the time. We all knew in Wales that our steelworks were inefficient. We got away with it until we could no longer do so. We did not tell the people the truth early or strongly enough.
    The Opposition now stand on a programme that flies in the face of the programme that the Labour Party stood on at the election three years ago. For six years I watched a Labour Government put forward the same policies. For instance, the right hon. Member for Cardiff, South-East (Mr. Callaghan) rightly supported membership of the EEC, as did the right hon. Member for Leeds, East (Mr. Healey) and most leaders in the Labour Party at the time. The party did not; it split down the middle. For the first time, we did not have Cabinet responsibility. The Labour Government told the people to vote to stay in Europe, but Back Benchers campaigned against it. That shows Labour unity, even in government. At least its leadership then had the guts to tell the truth. We must remain in the EEC.
    That is also the difference between the hon. Member for Swansea, East and the hon. Member for Newport (Mr. Hughes), who spotted the lacuna in his hon. Friend's argument. The hon. Member for Swansea, East and other Labour Members are rightly not willing to see us leave Europe, but that is a major factor on which they will be asked to stand at the next election.
    On the question of maintaining a nuclear deterrent, the Labour Party has again changed since being in office. If Britain breaks her alliances and responsibilities in trade or in defence, others will not trust us for long-term contracts.
    Apart from the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), when he was Chancellor of the Exchequer, the greatest monetarist was the right hon. Member for Leeds, East when he was Chancellor. Building on housing estates in my division came to a halt for as long as three years because of the Labour Government's sudden spending cuts on a scale that we have never experienced under the present Government.
    Incomes control is a dirty expression now, but the Labour Party carried it through. In the autumn of 1978, when he funked the election, the right hon. Member for Cardiff, South-East stated that if pay rises were higher than 5 per cent. unemployment would rise. It is what everyone who was economically literate knew. When pay rises reached 15 per cent., up went unemployment, just as surely as night followed day. If Labour Members did not know that, they darn well should have done.
    Mr. Donald Coleman: How did the hon. Gentleman vote on the Ford issue? That was all about an incomes policy. Did he vote against the 5 per cent?
    Mr. Grist: I cannot remember a vote, but I remember Ford breaking the limit. [Interruption.] That is why we do not now have an incomes policy.
    If a company is daft enough to pay what it cannot afford, it will go bust. The alternative is a law to prevent the firm paying the money, which I do not believe the hon. Gentleman would support, bailing it out with subsidies which would have to come from the few companies left that had not paid the rises and were still making profits, or printing or borrowing the money. We are in the present mess through a mixture of all those policies.
    The right hon. and learned Member for Aberavon (Mr. Morris) was Secretary of State when we opposed the WDA. We were concerned about the mood in which the WDA and the NEB were formed before we went to the IMF and Labour lost its majority and the right hon. Member for Bristol, South-East (Mr. Benn) and his policies were riding high. We feared that the body could have been used—it would have been, but for Labour losing its majority and the economic crash—to further creeping nationalisation, which is still the policy of a large number of Labour Members.
    I return to the point that jobs lost in the BSC are, sadly, in many respects our responsibility. The Labour Party is worried about unemployment. It has not offered a plan to combat it. The Wales TUC has a plan. There is the chant of withdrawal from the EEC. It also wants more public spending, although we know that would have a chronic effect on overseas trade. Until we are competitive, more public spending means higher inflation. Even Mr. Wynne Godley admits that. According to the Cambridge school, the Labour Party's policy will have a minimal effect on unemployment over the next five years and result in higher inflation.
    The Wales TUC also wants a minimum wage. That is anti-female and anti-black. Not necessarily in Wales, but in textiles and other poorly paid trades generally the lowest paid tend to be women and the disadvantaged. They would be priced out of their jobs, which would go to Taiwan and other Third world countries, unless the policy was tied to import controls and quotas. That in turn would damage Third world countries, which we are urged to help.
    Mr. D. E. Thomas: The hon. Gentleman has exhibited himself to be sexist, racist and imperialist. The corollary of what he says is that blacks, women and workers in Third world countries should perpetually be on subsistence wages.
    Mr. Grist: It would be better for people to be in, rather than out of, jobs. That is also relevant to the young workers scheme. We are discussing unemployment. If wages become uneconomic, people lose jobs, unless we have import controls to keep out goods that are made more cheaply or competitively abroad.
    Many Opposition Members advocate import controls. Indeed, that is the policy of most of those who want Britain to leave the EEC. They want to put up import controls against the EEC. Presumably they do not want to do that against the rest of the world with which, as my right hon. Friend the Secretary of State pointed out, we have lost competitiveness faster than with our European neighbours.
    Mr. Jeffrey Thomas: Does the hon. Gentleman agree that if Britain were to withdraw from the EEC thousands of jobs—about 90,000 in Wales alone—would go? Does he also agree that firm after firm that came to Wales purely and simply because it is a springboard for Europe would pull out?
    Mr. Grist: That is obvious. The European head-quarters of National Panasonic is in my constituency. If we were outside the EEC, the attractiveness of Britain would severely contract. Apparently, some Opposition Members believe that we could come to a form of free trade area arrangement with the remaining members of the EEC. Such hon. Members are living in cloud-cuckoo-land. It is absurd to think that we should be able to compete freely and openly with countries that have no control over our competitiveness. Do Opposition Members seriously believe that British Steel, subsidised and protected, as they wish, would be allowed to enter the remaining countries of the EEC tariff and control free? Of course not. Do they seriously believe that, if we have trouble now persuading Italy to accept some of our cars with a Japanese content, such cars would be allowed in if we were not members? Of course not. It is downright dishonest for Opposition Members to con innocent members of the electorate into believing that such would be the case. They know that it would not.
    Mr. Roy Hughes: What tariff does a motor car imported into the EEC from Sweden bear?
    Mr. Grist: I cannot give that figure offhand.
    Mr. Hughes: It is nothing.
    Mr. Grist: If the hon. Gentleman believes that Britain, a country of 55 million people, is on a par with Sweden, a neutralist and small country, he should go out and tell the people of Newport that he believes that that is all we are worth. Great Britain is a major world power, not a small neutralist country.
    I should like the Minister to deal with education. The hon. Member for Merioneth (Mr. Thomas) may also wish to say something about it. I am anxious that educational standards in Britain, and especially in Wales, may not be sufficiently high now or in the future to sustain our entry into the new technology age.
    My right hon. Friend the Secretary of State mentioned the many new firms that have come to Wales. Many of them deal with new technology. I am worried not about having sufficient workers to man those plants, but about the number of people who are able to originate such works. I am worried whether people will have been educated to a sufficiently high standard to be able to start their own firms and carry on business in Britain.
    We welcome the gentleman who formed Mitel. Are we not glad that he is coming back to Wales? What a good export he was. Thank heavens he is coming back, but what a pity it is that he could not have made it here in the first place. Why did we not have the atmosphere that would have made him a multi-millionaire in Britain? The reason is that many people become envious of such people. However, when they create factories in their constituencies, they no longer seem to mind quite so much. Can we be sure that people are being educated in maths and physics? Can we be sure that in night classes and adult education centres computer technology is sufficiently studied?
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    There are worrying aspects about the paper that my right hon. Friend published on "The Effects on the Education Services in Wales of Recent Local Authority Expenditure Policies: An Assessment by HM Inspectorate". It shows a slight drop in such studies. May I be assured that in school and further education we are managing to hold our own in this subject?
    We have had this debate about three times in the past seven weeks. Nothing new has been said since the first one. We have been round the course time and again. It is about time that the Opposition started to reveal a little of what it means to be in Government. Many of them know the troubles and difficulties of Government. In their hearts, many of them know the real answers. They have been terrorised by their Left-wing and troubles in their constituencies, and, in some cases, a sense of power seeking. Their behaviour to the British public in the past three years, quite apart from any doctrinal differences that I may have with them, has been nothing short of absolutely disgraceful.
    7.15 pm
    Mr. Barry Jones: The hon. Member for Cardiff, North (Mr. Grist) has made an unusually passionate speech. He left the Front Bench to make it. I am reminded that he once worked for the Conservative Party Central Office. The House has just heard the pure and undiluted accents of Conservatism, with which I completely disagree.
    If the Secretary of State were without the Welsh Development Agency in the present emergency over jobs in Wales he would be utterly without an instrument to give any shred of hope to the Welsh people in the decade ahead.
    I have referred briefly to the speech of the hon. Member for Cardiff, North and will now deal with the Secretary of State. Where is the dignity of the famous office that he holds? There was none of that in his speech today. It is not for him to take so divisive an attitude when the Welsh people suffer the agony of mass unemployment. Many of us would say that the Secretary of State carries some responsibility for that. His speech was divisive, irritable and provocative. He should be greatly ashamed of it.
    Mr. Nicholas Edwards: Is the hon. Gentleman suggesting that the Opposition, in advancing their alternative policies, are to be immune from criticism? If they do not put forward credible policies, I shall unceasingly expose that fact to the Welsh people and the House.
    Mr. Jones: The right hon. Gentleman made an unpleasant speech. He has a responsibility, at the best of times, to try to take Wales with him. Nothing he said today adds honour to his office. The deplorable facts at the centre of the debate are that 171,000 Welsh citizens are seeking work and there are only 12,000 jobs in the pipeline for the next two or three years. In my constituency nearly 9,000 people are out of work and there are but 1,200 jobs in the pipeline.
    In the British context, since 1979, we have lost 2 million jobs. It is not an exaggeration to say that the Welsh economy has been pulverised and that the monetarist experiment has hit the regions and Wales hardest. There are now nearly 1 million citizens who have been out of work for six months or more. Long-term unemployment is widespread throughout the regions. That is especially so

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    in Wales. Welsh Office Ministers at this stage in the history of the Government do not inspire a great deal of confidence.
    They took office as fervent supporters of monetarism, but they now have to rattle their begging bowls in the Cabinet Room and elsewhere in Whitehall. In their hearts, they must all by now be Keynesians. Without a major shift in the Government's economic policy, our hopes of getting rid of mass unemployment in Wales will never reach fruition. I suspect that the daily prayer of Welsh Office Ministers must be for such a major shift in economic policy. Only huge and sustained public spending systematically to reflate the economy will banish the dole queues in Wales.
    If we wish to tackle mass unemployment in Wales, we should not invest in the Trident missile. If, as a nation, we are to be serious in tackling mass unemployment, that must surely be a battle for many years. The investment of £7 billion, £10 billion, £12 billion or even more on this unnecessary missile will surely make the British economy weaker rather than stronger.
    I urge the Government, first, to introduce subsidies for firms that take on and train labour and also for firms that recruit workers as a consequence of reduced working time. Secondly, I urge that such firms should employ workers who have been unemployed for more than six months. The emphasis of Government aid to companies must be shifted from capital subsidies to employment subsidies, and financial aid should be channelled more emphatically through the National Enterprise Board and the Manpower Services Commission.
    My hon. Friend the Member for Swansea, East (Mr. Anderson) made a brilliant analysis of some of the problems in Wales and made some effective comments on regional policy. The Government's regional aid policies must be boosted. It could be argued that at present the Government are partially dismantling regional aid policy. They should encourage more early retirement and the existing job release scheme for those in their early sixties should be greatly enlarged. So massive is our country's unemployment problem that we should also encourage more time off for workers to study, longer holidays and earlier voluntary retirement. We should also seriously consider a 35-hour week and arrangements for part-time working.
    Mr. Grist: Will the hon. Gentleman give way?
    Mr. Jones: We have been asked to keep our speeches brief, but I will give way to the hon. Gentleman if he wishes to prolong mine.
    Mr. Grist: The hon. Gentleman has put forward some very desirable objectives, which I believe that we shall achieve in time if we can pay for them. But how can we pay for them in the short term and remain competitive with other countries?
    Mr. Jones: I cannot respond fully to Conservative Party Central Office conundrums in the time available, but I have already said that the Trident missile is unnecessary. That will cost the nation at least £10 billion, which could be spent on some of the measures that I have briefly outlined.
    The hopes of many young people who are currently out of work will rest on the early implementation and success
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    of the Government's new training scheme. I warn the Secretary of State, however, that the chances of successfully operating the scheme may be blighted if the Government recklessly continue dismantling the statutory industrial training boards. If the training scheme is to be successful, the industrial training boards are vital, so that the skills and training can be delivered. In dismantling the industrial training boards, the Government are creating trouble that may well prevent their new training scheme from being successful.
    It is entirely wrong for the Government to say that payment for school leavers taking up traineeships under the scheme should be as little as £15 per week. I hope that the Government will heed the recommendation of the Manpower Services Commission's task group that by the autumn of 1983 the payment should be about £28 per week. It would also be foolish for the Government to say that school leavers who decline places on the scheme will be debarred from supplementary benefit. That would be unjust, mean and disgraceful and would introduce an element of compulsion that would not help the scheme.
    Mr. Delwyn Williams: Will the hon. give way?
    Mr. Jones: No, I am pressed for time.
    Having young men and women on the scheme who have no wish whatever to be part of it is one way of wrecking its prospects. Therefore, with regard to the weekly payment and to the possible element of compulsion and debarment from supplementary benefit, the Government should heed the warning of the CBI and the TUC.
    Between the wars, President Roosevelt gave hope and employment to thousands of working-class people in America who were without work by effectively expanding the economy through the policy that became known as the New Deal. I hope that the Government will give a new deal to the Welsh economy. The wealth from the North Sea should be used to create new work rather than to pay dole to 3 million or perhaps 3½ million demoralised citizens. My constituents face a miserable future unless there is a major change in Government policy. Untrained teenagers and the redundant middle-aged in Wales may never work again unless British Governments are prepared to invest hugely over five years or longer in industrial renewal and job creation.
    I understand that the task force in the South Atlantic may cost more than £500 million. The Secretary of State for Wales should ask the Prime Minister to set up a small task force of senior Cabinet Ministers to respond to the urgent need to bring forward measures to get rid of mass unemployment in Britain. I would welcome a task force in Deeside designed entirely to get rid of mass unemployment.
    I wish briefly to raise the question of the future of the Abbey Mill at Greenfield near Holywell in my constituency, where 130 jobs are at stake. I am informed by the secretary of Olives Paper Mill Company Ltd., which wishes to buy the mill, that £1 million will be required over the next three years for the mill to have a viable long-term future. I am told that the Welsh Office has now been asked to provide £250,000 to assist in saving both the mill and 100 jobs. I am told by the secretary of the company that wants to buy the Abbey Mill that negotiations are continuing and that a decision will be
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    made at a meeting of the responsible committee of the Welsh Office next Monday. I am asked by the company and by the work force to plead the case for saving the mill and the jobs that total over 100. I had thought that the bargain was struck.
    The work force at the mill has been magnificent in collaborating. It has agreed to de-manning and has boosted productivity hugely. It has done all that the Government can ask of any factory to survive. I wish to remind the right hon. Gentleman the Secretary of State that Connah's Quay power station has a very bleak future——
    Mr. Nicholas Edwards: I should like immediately to respond to the hon. Gentleman. My Department is in close touch and is having discussions with the company to which he has referred to see if the criteria can be met. As he rightly says, the project is going to the Welsh Industrial Development Advisory Board on Monday. We shall do everything in our power to see that a package is put together that is successful. I cannot say more than that at the moment.
    Mr. Jones: I am grateful to the right hon. Gentleman for his positive and sympathetic intervention. It must be good news for my constituents whose jobs are at risk. Nevertheless, the right hon. Gentleman must remember that, notwithstanding the fact that there are nearly 9,000 people out of work in the East Flint constituency, it is probably the case that 250 jobs will be lost at Connah's Quay power station while the Courtaulds mill at Flint is at least temporarily closed. I look to the right hon. Gentleman to help those constituents of mine.
    7.31 pm
    Mr. Tom Ellis: I was surprised to hear the response of the right hon. and learned Member for Aberavon (Mr. Morris) to the Secretary of State's speech. It would he churlish of me—I speak, like the right hon. and learned Gentleman, as a political opponent of the Secretary of State—if I did not congratulate the right hon. Gentleman on what I thought was a brilliant exposé of the hollowness and the ambiguity of the Labour Party's economic policy. I do not think that the right hon. Gentleman will be accorded higher praise than that which was implicit in the behaviour of the official Opposition whose barrage of interruptions from sedentary positions and girlish giggles amounted to what I can only call infantile behaviour which at times reduced the Chamber to the level of a circus. It was behaviour that contributes greatly to the contempt in which so many of our fellow citizens hold hon. Members.
    Your predecessor in the Chair, Mr. Deputy Speaker, reminded us several times that we were debating the economic and employment prospects of Wales. Despite some of the better news that the Secretary of State gave, it is clear that the prospects are bleak. They are bleak because prospects for the British economy and for British employment are bleak. If anyone is not convinced by what I say, I can do no better than commend some of the excellent speeches made last night in the debate on the national insurance surcharge amendment to the Finance Bill. I commend especially the speech of the hon. Member for Chippenham (Mr. Needham) from the Conservative Benches and also the speeches of my hon. Friends the Members for Gateshead, West (Mr. Horam) and for Colne Valley (Mr. Wainwright).
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    The hon. Member for Chippenham, who speaks with considerable experience of industrial management, gave many examples of what at one time were competitive companies that have gone out of business through loss of productivity. The hon. Gentleman pointed out that industry did not want lectures rather like the contribution of the hon. Member for Cardiff, North (Mr. Grist), on overmanning, demarcation disputes, shoddy work, failure to deliver on time, strikes and poor management that are trotted out year after year by those who, by and large, have no experience of industry. The hon. Member for Chippenham pointed out that both Front Benches in that debate had virtually no experience of industrial management. The same seems to apply in today's debate.
    The hon. Member for Chippenham also pointed out that productivity—a key issue—is affected not only by overmanning and demarcation, and all the other hackneyed phrases that one could use, but by plant utilisation, building up of stocks and greater confidence in the fact that regular orders will flow. The Welsh economy has to be regarded within the context of this greater British economy. That is the real challenge at the door of the Government. Despite what the Secretary of State says, the Government are not really assisting industry to achieve the productivity that they claim is essential.
    I wish to refer specifically to the Welsh economy within the context of the British economy. There are certain objectives that are fairly obvious. First and foremost is the need for real answers to the immediate political necessity of dealing with unemployment; that must be the top priority. Within that lie all sorts of things, including not only policies for Wales but policies—I think here that I shall have the support of the hon. Member for Brecon and Radnor (Mr. Hooson)—for Mid-Wales, North Wales and South Wales, and urban Wales and rural Wales.
    There is also the need, to which the Secretary of State referred, to give a positive view of Wales as an attractive region for the future. Another important point is to see that, whatever policies are produced, they are within the context of EEC regulations. I should like to say to the official Opposition that I find the opportunities within the EEC to achieve what I would call a structured economy and what the West Germans call a social market economy—not a pure free market but a mixed economy—is there for the taking. If, at any time, I had been offered a portfolio in the Community, I would have leapt at the competition portfolio. This gives the opportunity to develop the structured market economy.
    Dr. Roger Thomas rose——
    Mr. Ellis: I cannot give way because time is limited and there have been some long speeches.
    There has undoubtedly been a transformation of the Welsh economy since 1945. However, the transformation has been nowhere near radical enough, adequate enough or good enough. The plain fact is that we, in Wales, continue to lag behind the more prosperous areas of England on the basis of all kinds of economic criteria such as per capita income, GDP per capita and so on. All the time, we have had a consistently higher unemployment rate than in England.
    The question is whether there is something inherently wrong with Wales. I believe that there is. Leaving aside the historical development of Welsh industry, the inherent deficiency is the lack of political clout. That is my brief

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    answer to the scornful reference of the hon. Member for Brecon and Radnor to the proposals of my party to alter the political structure of the United Kingdom. This is essentially a question of trying to spread political clout more equitably across the whole of the territory of the United Kingdom.
    Another feature of the Welsh economy that is worth mentioning is that over half of all employment in Wales derives from what I might call governmental activity—that is to say, national Government, local government, nationalised industries, public corporations and agencies. This excessive dependence in Wales on the public sector is aggravated by the lack of adequate regional Welsh influence on the decision-making, administrative and political framework based in London. I say that without any disrespect to the right hon. Gentleman. Indeed, the right hon. Gentleman certainly fights for his corner as well as any of his predecessors.
    Another obvious feature of the Welsh economy is the fact that it is still excessively dependent on nineteenth century primary industries such as coal, steel, agriculture, and forestry. It is still heavily dependent on a nineteenth century communications system. Of the modern industries that have come to Wales, few are labour-intensive. I keep making the point, and I shall go on making it, that it is extraordinary that the Government have about 100 large research establishments in the physical and biological sciences, employing about 15,000 graduates, but not one of those establishments is in Wales. It is crucial to introduce that sort of high quality industry into Wales.
    Taking all those factors into account, the SDP in Wales has been having a number of meetings to discuss the problem. An estimate has been made of the number of jobs required in Wales to attain relatively full employment in the next 10 years. Taking into account the growing population, the increased number of women looking for work, existing unemployment, future structural redundancies, the increased capitalisation of manufacturing industry, and so on, we have concluded that 300,000 jobs will be needed in Wales over the next 10 years. That is far in excess of anything that any Government have achieved. That is why I believe the prospects are bleak. I do not seek to make a party point, but as many male jobs were lost in Wales between 1960 and 1970—a decade of world economic boom—as were lost between 1971 and 1981. That is a remarkable fact.
    Dr. Roger Thomas: Will the hon. Gentleman say whether the new jobs would be under a devolved Parliament in Wales or under Westminster?
    Mr. Ellis: I am sorry that I gave way. That is a point that the hon. Gentleman and I could discuss later.
    Dr. Thomas: It is important that we know some part of SDP policy.
    Mr. Ellis: I shall not expound on SDP policy on the political structure of the United Kingdom in a 10-minute speech on the Welsh economy and its prospects. There are enormous difficulties ahead in seeking an adequate solution. For all the encouraging news that the Secretary of State peppered into his speech, the outlook seems pretty bleak.
    The unemployment problem can be met only by solving other problems, of which unemployment is the symptom.
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    It is difficult to guarantee extra employment from reflation, particularly without an incomes policy. Those are very real and difficult problems for which there is no short-term solution and which will be extremely difficult to solve in the long term. The policies need to be a compromise between the social necessity of providing prospects in the short term, and planning to achieve long-term solutions.
    In that context I give the example of the package produced by my right hon. Friend the Member for Glasgow, Hillhead (Mr. Jenkins). He specifically geared up, costed and worked out a programme that would produce, he claimed—and we believe—about 1 million jobs within two or three years. My right hon. Friend announced that package during the Hillhead campaign. Six days after it had been published the Chancellor of the Exchequer visited Hillhead to do some electioneering. However, it is interesting to note that the Chancellor made no reference to what was obviously a key plank in my right hon. Friend's campaign. I found that a fascinating commentary.
    One of the obvious moves that I imagine most hon. Members would agree with is to concentrate first on the infrastructure that is so sadly lacking—housing, roads, railways, harbours, airports, water, sewerage, education, training and many other aspects. For the full solution to the problems of regional infrastructure in all areas of the country—not merely Wales—all Government departmental expenditure should be geared to achieve agreed regional objectives in an integrated way. The interests of the regions must be more fully represented at all stages of Government decision-making. That is one of the points that concerns us in this issue of political structure.
    I welcome the initiative taken by some of the local authorities in the North that are mounting a campaign against the location of what we now call the third London airport. In the North of England there is a gathering together of political forces in local government. I welcome that because it emphasises my point about the need, if we are serious about regional prospects, to get away from the over-domination of London and the South-East.
    I refer now to investment. The SDP will not get into the sterile arguments about nationalisation or free enterprise. We are clearly committed to a mixed economy and to an objective assessment for each particular industry. Steel has been referred to. It is sickening to hear hon. Members talking a great deal of humbug and using the steel industry as a political football, as they have for many years.
    There is talk of free enterprise, nationalisation, denationalisation, renationalisation, rationalisation, review, cash limits and "wash your hands of it". In the last Session we had what was, in effect, a further denationalisation Bill. Whatever the other problems, that sort of political approach has made the steel industry's problems almost intractable. The SDP are committed to getting away from that.
    Investment is needed within Wales. Most Welsh investment comes from overseas. There is the consequential disadvantage of the branch factory syndrome—the subcontracting element of Welsh industry. Of some 4,000 industrial enterprises in Wales, 3,600 are, in effect, subcontractors. That is the great weakness in the Welsh economy. To put that right means that in the initial stages—one might say decades—a much greater public

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    involvement is necessary. That is one of the key roles for the future development of the Welsh Development Agency.
    I pay tribute to the WDA. It is currently the largest factory developer in Western Europe. That is a remarkable achievement for a small country in the United Kingdom with about 20 million sq ft of factory space. I congratulate the WDA.
    I welcome the noises made, so to speak, by the Secretary of State because I should like to see the WDA developing further along the lines he appeared to be hinting at—that is, acquiring a greater enterpreneurial role with a finely balanced relationship with the Government. It should be at arm's length to the politicians. That can be done. For the first time in a long while we have an instrument that will lead to successful entrepreneurial investment in Wales. I shall read carefully tomorrow what the right hon. Gentleman said, but I hope he takes the point and tries to push the WDA. I am sure that the WDA, with its arm's length relationship with the Government, will be only too happy to develop along those lines.
    7.50 pm
    Sir Anthony Meyer: As usual, the hon. Member for Wrexham (Mr. Ellis) has talked a great deal of sense. I hope that he will forgive me when I say that occasionally he reminded me of a story which the late Ernest Marples used to tell of the mouse painfully gnawing its way through the forest while an eagle flew overhead. The eagle said to the mouse "I cannot understand why you set about things so laboriously by gnawing your way through the forest. Why do you not fly over it as I do?" The mouse replied "Yes, but how?" The eagle answered "Do not bother me with the details. I deal only with general principles".
    I wish to raise two constituency matters with my right hon. Friend the Secretary of State. They are crucial, but not directly within my right hon. Friend's sphere of competence. I am asking for his help in making approaches to the appropriate Ministers. The first issue concerns the future of the Point of Ayr colliery. The hon. Member for Flint, East (Mr. Jones) has already mentioned the anxieties which are felt because of the announced closure of the Connah's Quay power station.
    This morning brought substantially worse news. One of the most hopeful prospects in my constituency has been the pilot plant to be built for the extraction of oil from coal. Today, I read the dismaying news in the Financial Times that BP, which was to have provided a substantial proportion of the capital, has withdrawn from the project. The article in the Financial Times states that the project is
    "on the brink of collapse following the decision yesterday by British Petroleum … to withdraw from the project.
    The coal board said last night that it was 'disappointed' with BP's decision but it was intent on maintaining the project. 'We remain committed to the national importance of coal as a source of liquid fuels'.
    It was being emphasised last night within the Board that the cancellation of important synthetic fuel projects abroad made it more important that UK continue its coal liquefaction development. That would enable the NCB and others in the UK energy industry to gain a lead in synthetic fuel technology."
    I wish to echo as loudly as I can the words of the NCB.
    I have said in speeches in other debates that, considered as a purely British project, the plan to develop the extraction of oil from coal may be highly marginal in view of our large reserves of oil in the North Sea. However, if
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    it is considered as a European project, as surely it should be, given Europe's desperate need for a sure supply of liquid fuel, the economics of the project are transformed. It seems that the withdrawal of BP now puts an onus on the Government to say to the EEC "This project may fail altogether and leave Europe without the possibility of extracting desperately needed oil from the huge reserves of coal in Britain and, to a large extent, on the Continent of Europe. If this project fails, the much needed flexibility of fuel supplies will be denied to Europe."
    I hope that my right hon. Friend will support me in the approaches that I shall be making to my right hon. Friend the Secretary of State for Energy to try to ensure that the scheme is put fair and square to the European Community and that it is made to face its responsibilities.
    Mr. Nicholas Edwards: The Government have offered financial support for the scheme, but we have always taken the view that commercial and technical assessments are much better made by those with expertise, which the Government do not have on the scale possessed by the private sector. That is why we were so anxious to have the involvement of BP. In BP's judgment, the scheme does not have the prospects that it would wish. It is now for the National Coal Board to ascertain whether it can find sufficient backing. If it can, the Government will continue to give the scheme their support.
    Sir Anthony Meyer: I accept what my right hon. Friend says. I accept also that the Government's contribution should indicate their confidence in the scheme's long-term viability. I am saying that the scheme is probably not commercially viable as a United Kingdom project. It should be considered as a European project and we should consider its strategic implications. Given the extent to which Europe is dependent on outside sources of energy, the sums are quite different from how they appear in the board rooms of BP and Phillips Petroleum.
    One of the most disreputable Acts passed by the previous Government was the Dock Work Regulation Act 1976. We all know why it was put on the statute book. The dockers' section of the TGWU put a half-nelson on Jack Jones, who put a half-nelson on the TUC, which put a half-nelson on the then Labour Government, who put a half-nelson on Parliament. That meant we were landed with an iniquitous Act. I am sorry to say that even the present extremely tough Secretary of State for Transport has not repealed it. If an order is made under the Act, any port: can be reduced to the shambles to which the dockers' union over the years has reduced the once great port of Liverpool.
    The dockers are threatening strike action to force the Government to make orders under the Act to drive out of business small non-scheme ports, such as Mostyn in my constituency. Mostyn keeps going without any of the immense natural assets of the port of Liverpool, because it employs workers, many of whom are part-time, who, whenever there is a ship to be unloaded, will turn out and stay on the job until it is done. Therefore, owners go to Mostyn with their small cargoes in the knowledge that their ships will not be held up by strikes or demarcation disputes. I hope that my right hon. Friend the Secretary of State for Employment will stand rock firm on the issue. He has only to study recent history to learn what happens once we start to give way. If he has to make concessions to the dockers, let him not offer the non-scheme ports as

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    a sacrifice. The trouble is that the dockers have resisted change for so long. Now they are having it forced upon them at a pace that is causing them genuine distress.
    In a way, that has been the sad history of Wales. The loss of jobs in our traditional industries may be for our good in the long run, but it is intensely painful in the short run. One new job is better than hanging on to one old job in an obsolescent industry. That is why I cannot agree with some of the comments made by Labour Members. However, we are getting one new job to replace two old ones. There is a terrible discrepancy in time between the jobs that are lost in obsolescent industries, or in firms that are no longer competitive, and the jobs that are created in industries of the future, such as electronics, communications and service industries generally, especially the leisure and tourist industries which Wales is so well placed to sustain.
    I believe that the discrepancy is such that we cannot rely exclusively on market forces to fill the gap. That is why I was especially pleased to hear what my right hon. Friend said about the increased entrepreneurial role of the Welsh Development Agency. There is a continuing and probably slowly growing role for State intervention. Having said that, I hasten to add that, in my view, all subsidies should be in the nature of pump primers and shaped to taper to zero as rapidly as possible. The last thing that I want to see is quasi-permanent State subsidisation of jobs in industries which cannot meet overseas competition.
    That brings me to Wales and the EEC. The Select Committee on Welsh Affairs will have as its next subject of inquiry an in-depth consideration of the impact of the EEC on Wales. Nothing could be more timely or useful. For far too long we have been dependent on highly selective statistics that have been thrown by each side at the other. There has been a poor stock of anecdotal evidence from firms in Wales, most of which seem far too frightened for some reason to say anything on the subject. We shall now have a mass of evidence on this vital issue. There will be the opportunity to examine and cross-examine each witness.
    It would be absurd for me to pretend to have objectivity in this matter. I recognise the threat to many jobs in Wales from the free importation of European goods which are directly competitive with goods made in Wales. However, it is not unfair to point out that this competition will be in no way diminished if we replace the Treaty of Rome by a free trade area. Nor is it in any way unfair to tax the opponents of the EEC with their failure to produce a coherent and credible alternative. Mere wishful thinking, as of a free trade area without a common agriculture area, or with a let-out clause allowing us to exclude any goods which compete with our own, is not worthy of a supposedly mature legislature.
    I believe that I am entitled to make use of the statistic that was quoted yesterday to the Select Committee by officials of the Welsh Office industry section—namely, that Britain is the most popular overseas base for United States electronics companies. Nearly one-third of those planning overseas investments gave Britain as their first choice, but 43 of the 53 firms in question said that Britain would no longer be suitable, or would be less suitable, if it left the EEC. That statistic, which could probably be applied more strongly to the incoming Japanese electronics companies, is important because it is precisely
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    on firms such as these that the Welsh economy will depend if it is to lay the foundations for a revival which will carry us through not just the next decade, but the first half of the next century.
    In the light of that evidence, it is not surprising that the TUC and the Wales TUC are resiling from the bravado with which they declared their wish for Britain to quit the EEC, and to hell with the consequences. I look forward to questioning Mr. George Wright, who is a thoughtful man, and his colleagues to find out exactly how their minds are moving behind the facade of politically-motivated hostility to the EEC. I suspect that they have gone a long way towards making the kind of calculations about the future of jobs in Wales, if we pull out of the EEC, which the CBI is now, rather belatedly, beginning to make.
    We in Wales have to face the fact that, on many of the usual criteria, other parts of the country have as strong or stronger claims to regional aid as we do. The debate has been full of demands that we should resist any change or seek any improvement in regional aid.
    In my constituency, both in the Rhyl area and in the Mold area, unemployment is now as high as anywhere else in the country, but the increase in unemployment has been—and we must face it—substantially higher in areas such as the West Midlands, which hitherto have been regarded as areas of over-full employment. We also should acknowledge that we have the special advantage of the Welsh Development Agency and the Development Board for Rural Wales which other parts of the country, particularly the North-East, already enjoying the benefits of development area status, would give their eye-teeth for. Hon. Members from the North-East are extremely vocal on this issue.
    It seems to me, therefore, that we in Wales should think in terms not so much of upping our assisted area status, or even fighting to preserve existing categories of assisted area status, as of trying to get a better infrastructure and, above all, better road communications. In my case, that means keeping up and intensifying the pressure for accelerating still further the dualling of the A55. I acknowledge with gratitude the immense achievements that have already been made, but in my constituency there is still the bottleneck of the interminable tragi-comedy of the Holywell bypass. Even now, the route has not been finally settled. Each successive month seems to bring a fresh landslide or subsidence on the existing road to make it impassable. Some of the difficulties have arisen because of bickering between the Clwyd county council and the Delyn borough council. I sometimes wish that there were an effective way of knocking heads together in such cases.
    The same thing is happening over the road pattern in and around Mold. I have kept out of the dispute between the two councils in that case, although I have my own views on some of the disputed proposals. I believe that I can give support to both parties by urging an altogether higher priority for the A494 Mold bypass. I confess that it has taken a long time to convince me that this bypass deserves a high priority. However, now that most of the A55 decisions have been taken, apart from the Holywell bypass, I believe that the Mold bypass should be moved up in the queue. I give my right hon. and hon. Friends notice that I shall press continuously for that both in and out of the House.
    I know the importance that my colleagues from Mid-Wales attach to a high-grade link with the English

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    motorway system. I know also the anxious interest which South Wales colleagues take in the Severn crossing. All Welsh Members have a common interest in improving communications between the Principality and the rest of the country, and we would do well to concentrate perhaps more of our attention on that—if need be, at the expense of other, more direct forms of aid.
    I said that the leisure and tourist industries were particularly well adapted for exploitation in Wales. Clearly I have a special constituency interest. Rhyl has sometimes been amiss in fully exploiting its tourist potential. There is still a huge amount to be done in improving the harbour and cleaning up the beach. That work is labour-intensive. There could be big dividends for the environment and for local prosperity if ways could be found of making still more imaginative use of the various youth opportunities schemes.
    However, I must pay homage to the courage and imagination of Rhuddlan borough council, which has equipped Rhyl with its triumphantly successful, all-weather suncentre. That was done in the face of every possible discouragement. Many obstacles were erected in its path by the Labour Government, and notably by the right hon. and learned Member for Aberavon (Mr. Morris). I am proud to be able to say that I backed the scheme from the first. It cost me many votes, but I believe that a Member of Parliament who sticks to what he believes to be right does not necessarily lose out in the end. The suncentre, after a few hiccups, has turned out to be a money spinner for Rhyl.
    The other day the Select Committee heard evidence from Lord Parry and his colleagues on the Wales Tourist Board. It emerged clearly from that hearing that there is considerable potential for new jobs in tourism, and that the cost of creating jobs in that industry compares favourably with manufacturing industry. However, a number of shackles still need to be struck off, and a good bit of adjustment to political thought is required.
    The upper limit of investment by the Wales Tourist Board, at £50,000, is precisely the lower limit for a single intervention by the Welsh Development Agency. In my view, there is a strong case for giving the Wales Tourist Board more flexibility. Surely it no longer makes sense to make a tourist project eligible for aid by virtue of its situation in an area requiring industrial aid. Of course, it would be impossibly expensive to give grants or tax concessions to all tourist projects in all areas. However, many areas of high unemployment, which are ineligible for industrial aid, would benefit enormously from aid to the tourist industry. It is well outside my area, but I think that many such projects are to be found along the Welsh-English border, notably in the Mid-Wales canal system.
    I have tried to be brief. It is not easy to be cheerful. The Government have chosen a hard path back to national prosperity. Unpleasant and painful though some of the consequences may be, I believe that they are right. I do not believe that, despite superficial attractions, there is any credible alternative.
    8.7 pm
    Mr. Leo Abse: As I listened to the speech of the hon. Member for Flint, West (Sir A. Meyer), I noted his emphasis on the dilemma of the gap that arises as a consequence of two jobs being lost and one job being created. That is why he and I and all the other members of the Select Committee, when we directed our attention
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    to the problem of unemployment in Wales, came to the conclusion that there was a job chasm, that there was a much greater need than was then realised by the Government, and that the Government would need to make a greater financial contribution if they were to close the gap which he and I pointed out and which he has re-emphasised today. Indeed, he does not lack the political courage to say that, whatever his long-term view of the shape of our society, there is an immediate need for public intervention. The hon. Gentleman advocated that as a temporary aid to stabilise society.
    However, whether that view or my view that society needs to find the sense of communality that is missing in a private enterprise, laissez faire economy is advocated, the Government repeatedly give the same answer. Indeed, they gave that answer in response to the Select Committee's report, and the same view was expressed today in the Neanderthal politics of the hon. Member for Cardiff, North (Mr. Grist). The Government ask where the money is to come from. They ask how such schemes can be funded. The Government admonished the Select Committee saying
    "the Committee has not paid adequate attention to the necessity to contain public expenditure … The Government believes that additional expenditure on the scale required"——
    clearly implying the scale prompted by the Select Committee's very modest demands——
    "would seriously prejudice the reduction of public sector borrowing which is essential to the general economic recovery that provides much the best means to the creation of fresh jobs."
    The Government said that they had major reservations about the Select Committee's proposals.
    It is asked where the money will come from and how it can be found. However, the Government have different views about different situations. When we discuss employment in Wales we are entitled to take account of the past week's tragic events and to test the validity of the proposition that money is not available. A few days ago, the Chancellor of the Exchequer addressed the Periodical Publishers Association conference, and is reported to have said
    "The cost of the Falklands operation would not affect the Government's central economic strategy. The cost should be seen in the perspective of the Government's £14,000 million a year spending programme … 'There is no doubt at all that we shall be able to keep … to our central economic strategy'."
    There is a great contrast between the consequences claimed by the Secretary of State for Wales of the comparatively unambitious proposals agreed by members of the Select Committee to meet the job chasm and the Chancellor of the Exchequer's insouciant attitude towards the consequences of the Falkland Islands adventure. The Tory Government have no difficulty in finding money for death and destruction. The Government's blunders have caused the crisis, because they miserably and stupidly left the islands quite defenceless.
    Today, Wales can contrast the Tory Government's churlish response towards expenditure on life-enhancing programmes with the way in which they claim that they can deal with the mounting cost of the Falkland Islands expedition. What is that "modest" cost? It is bound to be considerable. We are aware of the cost to our reserves, which dropped in April by £451 million. Some think that the Government have massaged the figures to mask the effect of the Falkland Islands crisis. However, even those who do not take that view acknowledge that at least £219 million was lost in April. How could they do otherwise given the fall in sterling in relation to the other major

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    currencies? Those less credulous in the City say that up to £700 million was spent supporting the pound during the month.
    We are told that it is absurd to have a programme that demands public expenditure to cope with the problems of unemployment. However, what about all the other costs that are apparently easily borne in order to deal with the Government's blunder in provoking and creating—by their initial lack of stance—such events? Last week, the Treasury—on the basis of what some of us would regard as highly dubious assumptions, tailored to minimise the price being paid for the Government's initial blunder—leaked to the economics correspondent of the Financial Times the figure of £100 million as the price for sending the task force to the Falkland Islands.
    Since then, we have lost HMS "Sheffield". The Ministry of Defence has admitted that it will cost £120 million to replace it. From bitter experience we know the cost of weaponry and, therefore, the figure of £120 million must be a gross underestimate of the cost that would be incurred if we were so foolish as to rebuild such a tragically ill-equipped destroyer. With defence inflation running at 14 per cent., the replacement of such a vessel would cost £180 million, exclusive of the replacement cost of £6 million for a Harrier.
    With the current cost of supplying the war effort at £12 million a day, it is not surprising that the economics editor of The Guardian should tell us today that so far the expedition might have cost as much as £1 billion. The Government are blatantly trying to damp down alarm.
    Mr. Delwyn Williams: Does not the hon. Gentleman recall that the Labour Government spent exactly £1 billion on updating Polaris? Did he not support that policy?
    Mr. Abse: Let us consider the events that have caused this additional expenditure. Unhappily, we can now reckon the costs of the adventure. Let us consider the effect on the economy of squandering so much public money and the Government's response when they are asked to spend similar sums on conquering unemployment. The economics editor of The Guardian—no doubt repeating what he has been told—states:
    "The Government's overall finances are considered to be in good shape at the moment. Even if the eventual cost turned out to be as much as £3 billion this would"—
    say the cooing voices from the Treasury—
    "be less than the £2·4 billion already set aside for contingencies … This helps to explain the comparatively relaxed stance being adopted in the City to the financial side of the war."
    My point is simple and clear. It is that the Government, by their initial blunder, have created a situation in which at least £1 billion is to be spent, perhaps even £2 billion or £3 billion. There are costs that we cannot count. We all know that we cannot measure in material terms the tragedy of the families of those who have lost their lives. In concentrating on the material costs, I do not forget that there are immeasurable costs as a consequence of that initial blunder that allowed this situation to arise.
    I may be challenged to say where the money will come from or to explain how the Labour Party schemes can possibly work without creating inflation or causing more money to be printed. Today, Wales will be asking how the Government can claim that without affecting their
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    economic strategy they are able to contemplate with equanimity costs of perhaps £1 billion or £2 billion on this Falklands adventure.
    The Under-Secretary of State for Wales (Mr. Michael Roberts): I appreciate that the hon. Gentleman places the greatest importance on the non-material costs of the Falklands episode. However, does he put any price at all on the defence of freedom?
    Mr. Abse: Not only on the defence of freedom but also on the rights of man. The major right of the men and women of Wales is a right to work. Political liberty without economic freedom is an utter farce. I need no lectures from the hon. Gentleman about defending freedom.
    Mr. Ray Powell: According to the tapes, two more Harrier jets have been shot down. Perhaps my hon. Friend will comment on that and on the expense to the nation——
    Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. Five hon. Members are still waiting to catch my eye, and I understand that they have been here throughout the debate. There are 50 minutes left before the Front Bench spokesmen reply. I remind the House that interventions merely prolong speeches.
    Mr. Powell: I merely mentioned that, Mr. Deputy Speaker, because it is of such importance.
    Mr. Abse: If that is the tragic news, it adds another £12 million to the material costs. I trust that the news proves to be false. It is not possible to count the cost of the lives of those pilots and what it means to their families. As a lawyer who must often take cases to obtain so-called compensation for people killed or injured in industry, I know only too well that no money can compensate the families or individuals for the losses that they have suffered.
    My hon. Friend's intervention clearly underlines what I have said. The Government do not seem to have any difficulty facing up to the billions of pounds involved. Is it true that there is no difficulty, or are they masking their blunder? I shall accept them at their word and so shall Wales. The people of Wales will ask why the Government remain so grudging and parsimonious when hon. Member after hon. Member has been pleading for money for his constituency. The hon. Member for Brecon and Radnor (Mr. Hooson) pleads for crumbs for Mid-Wales. The hon. Member for Flint, West also pleads. There are not only pleas from Labour Members. Yet each time the Government say "The economy cannot stand the strain". Wales will not believe that.
    Is the Under-Secretary surprised at the fact that at its conference last week the Wales TUC vigorously reacted to the Falklands expedition? Is he really surprised that that was the response of the 400 delegates? It should not be a surprise. On the one hand, they see the worst unemployment that Wales has ever endured and, on the other, the readiness with which money can be expended on so-called defence. Is it surprising that they react in the way that they do? Is it surprising that every local council has said that it wants to become a nuclear-free zone? When they hear of the billions to be spent on Trident, is it any wonder that they ask "Why cannot we have it for work?" There is such a pacific reaction from Wales because of the

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    contrast between what has been spent and squandered on arms—the blunder caused by the Government necessitating billions to be spent on the Falklands dispute—and the demand to implement the Labour Party's programme.
    We have been challenged in the miserable speech of the Secretary of State, who evidently ran from the Chamber before I rose to speak. As other hon. Members have said, his speech will not be forgotten either for its length or for its meanderings, lack of contribution and the divisiveness that it expressed.
    In our debate in January, the Secretary of State affirmed the principle of collective responsibility. He did so because he denied that the Welsh Office was a lap dog with regard to decisions affecting Wales. Let the right hon. Gentleman accept the principle of collective responsibility with regard to the blunder that has caused the squandering of billions of pounds in the Falkland Islands dispute, as he must. How dare he say to the House that we cannot afford the expenditure for which the Labour Party has asked.
    We have also been challenged about the missing element that has been hinted at as a consequence of the Treasury model. The Government believe that the way to deal with wage claims is not through free collective bargaining but by the threat of unemployment. As long as that is so, we shall never get the consensus that is required if the national interest is to be taken into account in any wage-related problem.
    There is no ineluctable mystery within the Labour Party programme as it has been put forward. It is based, with sensitivity, upon the understanding that if we give a sense of reassurance to the people we shall be able to gather them in, in a belief that we can within the national interest steer towards policies relating to wages which are not tooth and claw.
    The Under-Secretary must acknowledge that there was a fierce debate inside the Wales TUC as to the possibility, within the environment created by the Tory Government, of having restraints or understandings on wages. That is what happens as a result of the Government's absurd monetarism and their savagery——
    Mr. Michael Roberts rose——
    Mr. Abse: I shall not give way again. The Minister has his own speech to make. I am coming to my conclusion.
    When the people of Wales realise the billions now being spent to remedy the blunder of the Government, I ask them not to believe that it is impossible so to organise society that we can have the funds to provide the infrastructure which Wales needs to bring its industries up to date and to make them competitive, with the investment of public capital.
    I ask the people of Wales not to believe that unemployment is determined by a destiny that men cannot control. There was a lack of dignity in the speech of the Secretary of State, but it comes not only from the temperament of the man; it comes from the nature of a policy which says that there is no answer to unemployment and that we have to submit passively to vague, predestined, economic forces that we cannot control. With a miserable lack of dignity, the Secretary of State is saying that man cannot control his economic destiny. That is why we have had such a wretched speech from him. That speech, and the blunders that the Government are making all along the line, will in due course be answered at the polls by a people who will more and more understand that this is the most disastrous Government of the century.
    8.30 pm
    Mr. D. E. Thomas: The hon. Member for Pontypool (Mr. Abse), in a powerful speech, has made the connections that need to be made between the international situation and the national situation in Wales.
    There is another connection of which many of us, as constituency Members, are keenly aware. Many of the young men who have already found their way—or are about to find their way—to serve in the South Atlantic joined the forces because of the level of unemployment in large parts of Wales. It should concern us all that young men should find themselves driven into military action as a result——
    Mr. Delwyn Williams: Is the hon. Gentleman aware that most of our major neighbours in Europe have compulsory conscription for periods ranging from eight to 15 months?
    Mr. Thomas: I shall not respond to that intervention. I am making the point that hon. Members who have had Service men in their constituencies killed on active service must be aware that the failure of this House to pursue correct policies has led to the deaths of those Service men. [Interruption.] I am not taking any sedentary interventions from the hon. Member for Anglesey (Mr. Best).
    I turn to the major subject of the economic and employment prospects within Wales. We have had speeches that have tended to deal with the short-term trends, and I shall say something about those trends. The Secretary of State has stressed yet again the advance factory programme of his Government. I understand that 15 per cent. of the factory stock is now standing empty, as compared with 6 per cent. a year ago. For example, a factory at Bala in my constituency has been empty since 1977.
    The strategy of advance factory building is a kind of sweeping-up strategy, which fails to take into account the sectoral policy pursued by the Government. This is where our whole debate about regional policy is, in a sense, bedevilled. We tend to talk about regional policy as though the regions control the policy. It is the regions that are controlled by the overall movement of capital and the overall ebb and flow of the economy, which is ultimately controlled not by the State or by the Government—and certainly not from within Wales by any Government agency—but by the dictates of multinational companies.
    We have in Wales an economy that is divided roughly into a 10 per cent. indigenous sector, mainly controlled by self-employed persons, small businesses and so on; we have 25 to 30 per cent. of the economy directly controlled by multinational capital; and lastly we have the large public sector. It is that sector that ought to be the democratic determining force of the future of our economy.
    The Government have emphasised once again their strategy of building small-scale advance factories and of looking to Wales as a location for multinationals to invest because of our membership of the EEC. Our membership of the EEC, in fact, perpetuates the uneven development that has characterised the Welsh economy throughout the years since industrialisation. The peripheral regions of Wales—and the peripheral regions of Western Europe generally—are still being maintained at a lower level of performance in comparison with the core regions. That process has quickened as the Community has developed and since the accession of Wales to that Community.

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    I hope that when the Select Committee on Welsh Affairs looks at the relationship between the Welsh economy and the European economy it will consider comparisons between other regions and will look in detail at EEC regional policy and identify the mechanisms that lead to further uneven development within Europe. We have higher youth unemployment and higher aggregate unemployment, and the trend has been accentuated by the over-specialisation of the Welsh economy.
    Successful job creation must concentrate on advanced forms of manufacturing and developments in the service sector. Major changes have taken place in the Welsh economy over the past 35 years. Since 1946 there has been a massive decline in the primary sector, with a reduction in the number of jobs from 225,000 to 110,000. The number of manufacturing jobs has increased in the same period from 134,000 to 300,000 and there has been a massive tripling of the number of jobs in the service sector, from 175,000 to 500,000. We have not taken account of those changes in the development of our regional policy.
    Wales has suffered a decline in its heavy industry and we have not been able to make up the loss by additional manufacturing and service jobs. Generally, there has not been a replacement factor and even where there has been such a factor it has failed to provide for a balanced choice of jobs. It is the branch factory syndrome to which a number of hon. Members have referred.
    We have never asked why branch factories are located in peripheral regions such as industrial South Wales. If we consider the history of Cardiff and its immediate area, we see the de-industrialisation of the area, a massive reduction in the numbers employed in manufacturing industry and the collapse of the steel industry. In the coalfield areas, the valleys and, to a lesser extent, Clwyd, there has been an intensification of the branch office economy, which has also spread into Gwynedd and Mid-Wales.
    The result has been a de-skilling process. Many parts of the manufacturing system that require a lower-wage, lower-skill work force have been located in Wales. The reason why many multinational and British industries moved into Wales in the 1960s, at a time of relative growth, was that they were able to take advantage of a pool of labour that was available at relatively cheap rates.
    There has been a decline in the number of men employed in the economy and an increase in the level of female employment, particularly in low order service jobs in both the public and private sectors. Substantially more women are employed part-time in such jobs in Wales than in any other country or region in the United Kingdom. That is a reflection of the high male unemployment in Wales and the preparedness of women to accept poor wages and conditions because of oversupply in the labour market.
    When examining incoming investment in Wales, we have to look at the sort of investment and jobs that are being created and at the failure of regional policy and Government policy to match the overall decline in the basic industries by ensuring replacement jobs. We have had not replacement jobs, but new jobs that have not filled in the gaps created by the collapse of the heavy end of our industry.
    That process has resulted in the de-skilling of our labour force. It is not redundant coal miners or steel workers who are being re-employed in great numbers, but their wives
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    and daughters. I do not object to women taking their place in the labour force, but the reason for the increase in the level of female employment is that companies find it cheaper to employ women.
    As we look at the pattern of economic development within Wales we see within the sector of capitalist-controlled industry a failure to replace jobs, and a failure to provide a level of jobs and wages that is adequate to the needs of the people of Wales. Therefore, we have to look to the public sector and to the democratic public control of the economy for expansion and stabilisation within the Welsh economy. This is where the Conservative Party is unable to look, because of its ideological position. It believes not in economic planning, but in allowing Wales to operate at the mercy of market forces. That is why we have had the massive increase in unemployment during the period of this Government.
    However, neither is the Labour Party, either in Government or in Opposition, capable of producing a democratic public sector strategy that answers the needs of Wales. So far, all that we have had from the right hon. Member for Rhondda (Mr. Jones) on the issue is a 5 per cent. United Kingdom version of the Labour Party's alternative economic strategy. It is an attempt to bring in an economic strategy that is not sectorally suited to the needs of the Welsh.
    One of the most frightening predictors was the recent NEDC study, which showed that Wales had a greater number of declining industrial sectors than any other part of the United Kingdom. Once we see that, we need to go well beyond the reflation through public sector spending or investment that was outlined in Labour's alternative economic strategy. We need to grapple with the basic issues of what causes regional imbalances and what the role of the State ought to be, whether it is the British State, a Welsh State or the European State that so many hon. Members seem to believe in, although it is evident from their activities in the past three weeks that they do not believe in an international State.
    The intervention of the State at whatever level is a key mechanism in the operation of the Welsh economy because we have such a large public sector economy. There has been a failure by the Labour Party to take initiatives in Wales. I speak as an ordinary Labour voter in this morning's local elections for London. In the Labour Party in London, Sheffield and the West Midlands there is a commitment to local enterprise boards, to an interventionist role, to sectoral planning and to setting up co-operatives through local enterprise and through support in local government planning.
    However, there is no policy of that sort in Labour authorities in Wales. Although I vote Labour in London, I do not do so in Wales. In the Labour party's policy for Wales there is no attempt to grapple with the regional problems. This why the Labour Government presided over the collapse of the Welsh economy that has been made substantially worse—twice as bad—by the policies of the present Tory Government.
    Therefore—finally, in view of the time—the argument I deploy is that we need to examine the structure of the Welsh economy, identify the sectors of the economy that are potential growth areas and within them provide levels of investment that can ensure an adequate level of jobs and wages for people in Wales. We need to examine the structure of the Welsh economy in relation not only to the

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    British and European economies but to the whole world-wide movement of capital and of economic demand. We need to see regional policy not as a separate policy for each region but as one for all regions which is related to the sectoral changes that take place in the wider economy.
    Mr. Deputy Speaker: I am grateful to the hon. Member for Merioneth (Mr. Thomas) for being so brief at this time of night. There are three or four hon. Members trying to catch my eye. Therefore, I appeal for brevity.
    8.44 pm
    Mr. Delwyn Williams: I regret that the hon. Member for Pontypool (Mr. Abse) is not in the Chamber. When he spoke he hypnotised me with his rhetoric, as he always does. When I came out of the trance I remembered the Wales of 1976 and the Government of which he was a member. At that time there was no recession, no war, oil prices were low and there was low unemployment. I remember the generosity of that Government towards Wales when they wiped off £30 million of regional employment premium at one stroke. They also put Powys county council into such a state that it came near to shutting down. That was the generosity of that Socialist Government at a time when there was no war or threat of war.
    I shall concentrate on youth unemployment. Unemployment in the 15 to 19-year-old bracket is not just a Welsh problem but a problem in every advanced European nation, Canada, America and even Japan. The Japanese youth unemployment figures are distorted because of their system of family undertakings.
    World recession, combined with the baby boom of the 1960s, technological advance, increased labour cost and competition from new emerging manufacturing nations have added to the problem. In Wales the young unskilled worker tends to seek short-term employment. Employers, faced with adults and young people with equal qualifications, tend to employ the adult. Most important in the short term, the wages expected by young persons are higher than they can justify. Since 1973 youth wages in Britain have risen by 446 per cent., which is way above what the market will stand and higher than in the rest of Europe.
    How can we solve or alleviate the problem of youth unemployment? Conscription is one possibility. All our larger EEC neighbours have compulsory military service. In France, a survey showed that the average cost of conscription was lower than the average cost of unemployment benefit and associated social security payments. However, the effect of conscription on youth unemployment was marginal. In France in 1978 there were 266,000 conscripts, yet there were over 4 million people aged between 15 and 19. If the cost of barracks and equipment is added, conscription looks a less attractive option, bearing in mind that our population in that age bracket is nearly 5 million.
    Voluntary repatriation of immigrant workers could reduce youth unemployment. That measure has had some success in France. In this country it would be a sensitive political issue, but the nettle must be grasped because both white and coloured young people would benefit.
    Mr. D. E. Thomas: Will the hon. Gentleman give way?
    Mr. Williams: I shall not give way. I am bowing to Mr. Deputy Speaker's wishes.
    Mr. Thomas:I do not want a racist in the House.
    Mr. Williams: I thought that we already had one in the House. One has only to read the hon. Gentleman's ramblings in the Welsh press to know why one is almost afraid to go home to Wales and the valleys these days.
    Early retirement is being encouraged all over Europe but one drawback that I fear is that many people will become bored and seek fresh employment. Work sharing is another method, but it must be responsible work sharing. In 1976 many people thought that British industry was overmanned by about 4 to 5 million. That lost us our competitive edge and was work sharing of the worst possible kind. Work sharing based on sensible shifts and cost effective production targets is an eminently sensible aim for all industrial sectors.
    I now come to a less controversial matter. In some regions of Wales and the United Kingdom we should give more grant aid to the service industries. International events are overtaking us. Our traditional industries of cars, textiles and consumer durables can no longer compete in the world markets. Some 60 per cent. of the working population is engaged in the service industries. In my constituency only 37 per cent. of the working population is engaged in the service industries, whereas in Wales as a whole 60 per cent. is so employed.
    The definition of a manufacturing industry should be relaxed to include many fringe industries that at present do not qualify, or the office and service industries scheme should be expanded and the qualification requirements relaxed. At the moment in Wales only 10·3 per cent. of all section 7 grants is devoted to the service industries. When one notes the qualifications that must be satisfied, that is understandable.
    Many petty planning restrictions still frustrate small businesses. My good friend, John Emberton, still fights a lone battle for the right to erect a bed and breakfast sign near a traffic island in Welshpool. When he put up the sign, his business boomed. He built six more chalets. The planning office stepped in and said that he must take down the sign. Now business has slumped and his daughter and several local people are becoming redundant.
    Another of my constituents, a small farmer, employs six men in agricultural contracting, yet he is haunted by an enforcement officer who worries about whether he uses his diesel tanks for his farming or contracting business. Does that matter when jobs can be created?
    Another local firm, Del Renfrew of Newtown, have just lost an industrial tribunal case because it sacked one man in an attempt to save the jobs of 40 others. Beaten by the system, it now informs me that it will not expand any more, despite its ability to do so, because the directors feel that they are not working in a benign industrial climate.
    I am sure that these three examples in my relatively small constituency can be repeated many thousands of times across the country. Many statutes passed in the last 10 years stifle commercial enterprise, although they were passed with the best intentions. I refer to the oft-quoted example of the effects of the anti-pollution legislation on the Detroit car industry. There, because of the amount that well-intentioned law put on the cost of the product, Detroit car workers now walk to the dole office in extremely clean air.
    One of the problems in the Principality is that of our identity abroad. We heard from Lord Parry that in America everyone knew of Scotland because they had heard of the

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    bagpipes—it appears that bad sounds travel as well as good music in that respect. A business location file study in 1979 showed that only 4·6 per cent. of businesses were interested in Wales. This was before the Government decided not only to tighten up on assisted areas but to relax industrial development certificates. This relaxation was another nail in the Welsh coffin, because only 13 per cent. of the 3,000 firms in that survey wanted factories of over 50,000 sq ft.
    I generally commend the youth agenda of the Manpower Services Commission, but I wish it would look more towards the German model, which has 60 per cent. of school leavers in apprenticeships in more than 460 different types of work. It has apprenticeships of from one to three years and the apprentices receive 12 hours a week vocational training in other skills and learn about trade, politics, culture and religion. The wages are 20 per cent. of the adult wages in the first year and 30 per cent. in the third year. Even unemployed youths are required to attend vocational courses—and what is wrong with compelling young people to learn skills that will make them better citizens and help them to rear their families decently? In Germany the parental attitude leads to apprentices staying with their firms. In times of recession they are switched to other jobs, which many can do as a result of their vocational training. In the United Kingdom our schemes so far have led into blind alleys.
    In Japan, the same paternal attitude leads to the lifetime employment system, whereby apprentices are given a contract for life and their promotion and wages depend on length of service.
    We need in this country a young, educated, trained and flexible work force. In Japan, instead of being made redundant, people are switched to different departments, using their previous vocational training.
    Even in the depths of our recession the CBI found 3,000 key skilled jobs unfilled in the North-West of England and 44 per cent. of companies were limiting production because of these shortages. In short, every skilled or multi-skilled youngster generates work for others.
    I end on a note of caution. Increased production and increased national welfare will not necessarily lower unemployment for youngsters. Any meaningful growth will come from high technology industries and not from the old traditional consumer durables area, which has always absorbed surplus labour in previous booms.
    In the meantime, as I have said, I commend the efforts of the Manpower Services Commission, but I still believe that 12 months work experience under the youth opportunities programme, due to be extended in 1983, will lead only to temporary work for youngsters in the absence of the long-term paternal attitude shown by Germany and Japan. I also believe that our education syllabus should be drastically altered, but that is a matter for another debate.
    I wish to support what my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) said about Mid-Wales. In Newtown, male unemployment is nearing 18 per cent. and will be even higher when, sadly, Dowty closes down in two months' time. I beg my right hon. Friend the Secretary of State for Wales to use his best endeavours to convince the Department of Industry that, at least, Newtown, as a travel-to-work area, must retain its present status, and indeed should be upgraded if that area is to prosper.
    8.55 pm
    Dr. Roger Thomas: I fear that Welsh Office Ministers are open to the same criticism as the chairman of the CBI recently made of the Chancellor of the Exchequer. They concentrate on a few bright spots and ignore the general gloom of the total picture in Wales. That was shown par exellence by the Secretary of State's long speech.
    In three years of reactionary Toryism what a setback the promotion of moral integration in our urban industrialised society has received. At the same time, elements of authoritarian repression have appeared. There is now more than ample evidence of accelerating and, at times, frightening social conflict.
    In Wales we have more than our share of the needy and disadvantaged. We need increased social sensitivity and growing prudence and foresight among the privileged and the leaders who come from that strata. Unless we have that, the Welfare State will begin to crumble and safeguards for the poorer people against old age, accident, illness and other threats will disappear.
    We are going through an economic depression. Its consequences lower social stability. We are suffering from policies that are cutting more deeply and cruelly into the public sector economy than is necessary. Hence the disillusionment, particularly if the misery is felt to be part of an overall scheme to control the working classes. The Government show their lack of compassion by using ever-increasing unemployment to cut wages and the standard of living of those fortunate enough still to be in work. That policy is admitted by the Chancellor.
    There is great disappointment as the number of people unemployed long term mounts to over 1 million, with the misery, ill health, frustration and apathetic futility that accompany the widespread and despicable situation. Fully 25 per cent. of that 1 million are between 18 and 24 years of age; many are married with small families.
    The Manpower Services Commission could not contain its disappointment at the minuscule expansion of the community enterprise programme announced by the Secretary of State for Employment last December. In March the Chancellor decided to expand community work by using the frustrated unemployed on the cheap. He proposed temporary jobs to benefit the community. The determination to use the unemployed and thus force down public sector wages was more callous than one could imagine.
    The psychological consequences of unemployment are under-researched and inadequately understood. Little work has been done to discover what special help and support are needed. Satisfactory and constructive use of leisure time would counter the tendency to depression and the feeling of not being wanted or able to contribute to the family and society.
    Rising youth earnings relative to those of adult workers is blamed for increasing youth unemployment. But it results from the same conditions as the general high rate of unemployment when the local economy is depressed. Youth unemployment just fluctuates to a far greater extent. The young workers scheme, in which the Government will subsidise only firms prepared to take on young workers and pay them low wages, is an example of how the Government are keeping young people's wages down. The unemployed are now being drawn disproportionately from

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    the ranks of the lower paid. Accepting low wages or wage cuts to protect jobs and prevent unemployment is a piece of fiction—a governmental sleight of hand.
    There has perhaps been an over-emphasis on the plight of unemployed school leavers. The problems of the older worker who has been laid off for ever longer periods have been overshadowed. Some believe that withdrawing older workers from the labour market and releasing jobs for younger people has merit. Those who are over 55 who lose their jobs are probably more disadvantaged than those who are in early middle age. Once unemployed, the older worker has much less chance of being re-employed. For many older men, becoming unemployed is, in reality, retirement. It is the end of the road. But financially they are severely disadvantaged. When they get work, it is often consistent with a far lower paid job.
    Even the elderly in work are vulnerable. They work less overtime and are more likely to suffer periods of sickness—sometimes prolonged—although older workers are more active and healthy than in past generations. As unemployment has risen swiftly in the past two or three years, the aim has become more explicit and more generally acceptable. Nevertheless, too many workers find that retirement comes too soon and they are unprepared for it.
    The resort to premature retirement and the increased incidence of unemployment after the age of 55 cannot be allowed to continue unchallenged. We must not continue to 'discriminate against older workers. They will become generally poorer and less able to deal with inflating living costs. Britain is behind in making provision for their needs.
    The culture and values of the privileged classes are still far too often characterised by social insensitivity and irresponsibility. The suffering of the low-paid and the less fortunate are far too frequently treated as inevitable and therefore unimportant. That does not mean that some younger and more progressive members of the privileged strata do not produce some effective reform and prevent the destruction of social changes that have already been substantially consolidated, but they are usually small groups in the Conservative Party and they are often politically isolated within it. Power holders strive to get rich and the rich strive, even in adverse conditions, to hold on to their status. Far too often, such people possess power because of family connections or because they are members of an ideological clique.
    The development of the Welfare State has been resisted periodically, but it goes on. Those who are responsible for inter-regional disparities bear a heavy penalty such as we find in Wales now. Although Wales may not be suffering most, it suffers greatly.
    9.2 pm
    Mr. Ray Powell: I shall continue the theme developed by my hon. Friend the Member for Pontypool (Mr. Abse) in an excellent and logical speech. He dealt with the farce of the Government's policies.
    People throughout the country will be wondering why Parliament is today debating Welsh affairs when there is a war raging in the Falklands. Fathers, sons, grandsons and daughters are out there in the perils of the Antarctic winter seas fighting a war that has been escalated by Tory warmongers while we sit here in the comfort of the House pontificating about the problems in Wales.
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    The Scottish debate earlier in the week was adjourned. This debate should also have been adjourned to provide time for a full debate of the issues that affect everyone in Britain and others abroad. How any hon. Member can switch his attention to matters domestic when the nation is at war is beyond my comprehension.
    Men, women and children, innocent of any crime against this or any other country and trapped by the actions of politically motivated Mad Hatters, should not be sacrificial lambs committed to the Falklands slaughterhouse by the total incompetence of the first woman Prime Minister and her Cabinet of millionaire warmongers. If there is a war, there will be no negotiations for the 100, 1,000 or 10,000 who will be killed. They will not come back. Who can negotiate for lives already lost?
    The total financial allocation for all services in Wales throughout the disastrous period that this bunch of mad monetarist warmongers has been in office will have been spent 10 times over in the suicidal exercise in the Falklands. History is repeating itself. In the Boer War, the First World War, the Second World War and even today, the Tories have not changed their attitudes. They still think in terms of 1902, not 1982.
    The complete development of the new Bridgend hospital could not be afforded and had to be phased over a period of years due to lack of Government funding. Local government cuts have been imposed throughout Wales due to lack of financial support by the Government. Industries are collapsing in Wales and throughout the country for a multiplicity of reasons, but the main reason is the lack of Government funding.
    What could we do if we decided to plan for peace? What could we do with the £10 billion to be spent on Trident missiles? We should concentrate our minds on that. What could we do with the money in Wales? We could expand and develop public services, and create thousands of jobs. We could improve roads, renew sewers, build new schools, re-establish our social services as they were in May 1979 and provide home helps, meals on wheels, school meals and school books, improve hospital services to reduce the waiting lists and reintroduce free prescriptions.
    We could stop the outflow of capital. We could spent' more money on the Wales coalfield and develop the new mine at Margam. We desperately need more investment in the Welsh coalfield. What are the Government's plans to meet that desperate need? We should be planning our industry and trade. There should be strict regulations on imports, investment in areas of need, more help to retain existing jobs in industries that are failing because of Government policy and the recession. We should create a fairer society and redress the inequalities between the rich and the poor. Voluntary retirement at 60 should be our aim, with pensions sufficient for people to enjoy their usual standard of living. In that way, we could create one million jobs for the young people of this country.
    Where is the money to come from? I suggest that it should come from the bottomless contingency fund that the Financial Secretary has tucked away. Or is that money to be used only for war? The Secretary of State, in his miserable 63-minute speech, said that the Labour Party had not spelt out its alternative economic strategy. The Labour Party in Wales and throughout this country is united in its policies for economic and industrial change. We have already announced policies which will deal with the appalling state of the economy, with the differences

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    and divisions created by monetarist policies, with the problems of those in employment and those at present unemployed, and with the problems between black and white communities, between working men and women and between public and private enterprise. Our alternative Socialist policies will put the nation's resources to full productive use.
    I referred the Secretary of State to a document that I held up in an intervention when he would not allow hon. Members to question him. It was a document about Labour's plans for jobs. If he wishes, I shall send him a copy. The right hon. Gentleman cannot possibly expect my right hon. Friend the Member for Rhondda (Mr Jones), in half an hour, to go into great detail about Labour's alternative economic policies. The right hon. Gentleman's reply to a question that I put to him about the Welsh Development Agency was merely that the agency would give me the details that I wanted. That was a fortnight ago. I am still awaiting the reply.
    9.10 pm
    Mr. Donald Coleman: During recent weeks, the attention of hon. Members and that of many people outside has been mainly focused upon the aggressors and their aggression, reports of diplomatic activity, negotiations, the collecting together of the task force and other military preparations for the possibility of war. In their speeches in this debate, my hon. Friends the Members for Pontypool (Mr. Abse) and for Ogmore (Mr. Powell) have concentrated on the events that have exercised the minds of all hon. Members over recent weeks. It should be remembered in this difficult situation that young men and young women from our Principality of Wales are involved. We pray that the spirit of negotiation will break out and that it will succeed so that those young people can come back to the land that they love.
    Today's debate has brought us back to earth. Despite our recent preoccupations, the inescapable fact is that the problem of unemployment remains as severe as ever and its impact on our people is undiminished. Unemployment in Wales today blights the lives of 171,349 people directly and many more when we take into account their families. The level of unemployment represents 16·1 per cent. of the working population of the Principality, who now find themselves discarded.
    The Secretary of State has again today exuded confidence about the prospects for the future, assuring us that the bad times are over and that from now on the future for Wales is one of unbounded prosperity. We are glad to hear these tidings as, no doubt, are the people of Wales. The trouble is that we have become accustomed to the Secretary of State saying these things. What the right hon. Gentleman says does not wipe out the fact that 171,349 people, a figure that ranks among the highest in Britain since the last war, are unemployed in Wales today.
    The industrial editor of the Western Mail wrote on 3 February this year
    "More job losses are on the way—despite a small glimmer of optimism about the long-term future—a survey of Welsh industrial trends showed yesterday."
    The writer of the article went on to point out that
    "At the time of the survey 86 per cent. of firms in Wales were working below a satisfactory full rate of operation—this is a worse situation than the last check in October 1981."
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    The survey, it is reported, also showed that investment intentions had become weaker, and that there were indications that prices would increase over the next four months. That sort of article by a respected and knowledgeable journalist, and the results of the survey carried out by the Confederation of British Industry, on which he was commenting, are not supportive of the right hon. Gentleman's confidence in the argument that he expects Wales, and us, to swallow today.
    On 10 April the Financial Times reported that the Christie-Tyler Furniture manufacturing group is to make almost 300 people redundant at Bridgend and Cardiff because of falling sales at the cheaper end of the market.
    Mr. Ray Powell: The firm of Christie-Tyler had a meeting at which 1,000 of the staff agreed to a 10 per cent, reduction in wages to save their jobs. Within three weeks the company had to declare 300 redundant as a result of a factory closure.
    Mr. Coleman: My hon. Friend shows great knowledge of the situation—the factory is in his constituency—and underlines my point.
    Again referring to my hon. Friend's constituency, Avon Rubber is to close its Bridgend factory in July, making 260 people redundant. The company blames the closure on the recession in the automotive and tyre sectors and on cheap imports.
    The South Wales Echo reported that figures produced by Trade Indemnity, a leading credit insurance underwriter, show that about 15 per cent. more businesses collapsed in the first quarter of 1982 than in the same period in 1981.
    The Government must recognise that the policies they, have pursued since coming to office have brought about the unemployment that has so sorely afflicted Wales. Those policies will have to be abandoned if there is to be any hope of unemployment in Wales being reduced and if the Welsh people are to have confidence in the economic future of Wales. With the high unemployment in Wales that has persisted during the right hon. Gentleman's term, of office, neither he nor his right hon. and hon. Friends can expect the Welsh people to have much conviction in his optimism for the future.
    I turn now to the problem of teenage unemployment. One of the Opposition's favourite items of reading is the 1979 Conservative Party manifesto for Wales. That document passionately expressed the thoughts of right hon. and hon. Conservative Members. It stated:
    "There can be no more depressing start for these young people than to go straight from the classroom to the dole queue."
    The Opposition fully agree with that statement because there is no monopoly on holding that view. In April 1979, when this document was being pressed upon the electors of Wales by the then indignant Conservatives, the number of school leavers going straight from the classroom to the dole queue in Wales was 2,092. In April 1982 that tragic journey was being made by 7,973. With such a state of affairs persisting in Wales, can we expect any other newspaper headline than the one which ran
    "Job crisis 'makes teens lose hope.'"
    That headline was over a report to the education vocational committee which Mr. Hugh Loudon, director of education for Gwent, made on the county's careers service. In his report Mr. Loudon said:
    "fewer than half the youngsters leaving school can expect to find jobs within nine months."

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    It would appear that some teenagers have virtually given up hope after being disappointed so often in their search for a permanent job.
    We must not blind ourselves to the fact that without special employment and training measures the situation for young people in Wales would have been even worse. The Government must not be complacent about the schemes. The effect that they are having upon youth unemployment figures, valuable as they might be, is no substitute for real jobs. Obviously these special measures are of importance and we welcome them as far as they go in giving work experience to the young, provided that they do not become the means of enabling exploitation to take place. Unless they lead to permanent work, the disappointments and frustrations that will arise will lead to a no-hope atmosphere among young people and to a resistance on their part to participation in further schemes.
    I turn to the proposals published this week by the Manpower Services Commission. These are proposals to give all 16-year-old school leavers and unemployed 17-year-olds a full year of training and work experience. The scheme that it has put forward is designed to replace the youth opportunities programme and other special measures from September 1983. The report is the work of a task group representing employers, trade unions and educators and has been endorsed by the MSC. It makes clear that any scheme, if it is to succeed, must be voluntary both for employers and for those taking part. It makes clear also that young people taking part should not be made ineligible for supplementary or unemployment benefits.
    The MSC chairman, Mr. David Young, has said that the report must stand on all fours. However, knowing the Secretary of State for Employment, we are not surprised to hear that he is likely to reject the scheme—possibly on the ground of paying youngsters £25 a week, which will be adjusted to keep its real value, as against £15 a week for his own scheme. We hear that he is likely to reject it also because it lacks the element of compulsion. However, the MSC scheme, including the subsidy of £1,850 to employers for every trainee covered, will fall within the £1 billion that the Government plan to spend. We hope that the Secretary of State for Wales will use his influence to counter that of his right hon. Friend the Secretary of State for Employment.
    Last weekend the Wales TUC talked of the activities of the Secretary of State for Employment and his attacks on the trade unions, which it described as Tebbit's law. I urge the Secretary of State for Wales to make it quite clear to his right hon. Friend that his rejection of the MSC scheme is not on. If his right Friend gets away with rejecting the MSC scheme, we shall soon hear from young people that Tebbit's rule is not OK.
    I come now to the industrial scene. The trials of the steel industry under this Government have been a cause of great anguish to the people of Wales, and the upheaval that has taken place will not be forgotten by the people in the steel towns of South Wales. However, time has passed, and it is to the future that we must now look. There is clear evidence at both Port Talbot and Llanwern that the morale of both management and workers has been restored. In the plants there is now a better spirit, and that is bringing better results in the steel plants of South Wales.
    Mr. MacGregor, despite our earlier reservations about him, can take credit for the leadership that he is giving the industry, which is making its contribution to the revitalised atmosphere in the South Wales steel plants, in particular.
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    This success can be maintained only if the industry receives the investment that is needed. Enthusiasm alone will not ensure the future.
    There is a need for investment. Because of lack of time this evening, I shall not go into the details of what is required, but I note what the Secretary of State said earlier about the steel industry. I ask him, or the Minister who is winding up the debate, to assure us that Mr. MacGregor will get the Government's support in making the investment that must be made in the steel industry in Wales if we are to remain at the top in steel making.
    A matter that is related to the steel industry arid that is of particular concern in Wales is the sale by BSC of Redpath Dorman Long to the Trafalgar House group. If that sale goes through, the future of the establishment in Kenfig in the constituency comes into question and there will be serious redundancies. My right hon. and learned Friend the Member for Aberavon (Mr. Morris) has been very active in this connection. In addition to the activities of my right hon. and learned Friend, yesterday a group of trade unionists came to see members of the parliamentary Labour Party's steel industry sub-committee to discuss this problem.
    A number of problems have been put to us by the workers who are involved. I should like to put them to the Minister. I do not necessarily expect him to give me the answers this evening, but I hope that he will use his endeavours to find the answers to the questions that are of concern to those who work in the plants. For instance, is the proposed selling price of £10 million a fair reflection of the value of the company? Inevitably, people working in that establishment are concerned about the sale of other national assets at knock-down prices. Again, they wonder whether the takeover serves the best interests of the workers in particular, and of taxpayers in general. How does the takeover encourage the healthy competition that the Government are constantly urging upon us' Has an undertaking been extracted from Trafalgar House that asset-stripping and further redundancies at Redpath Dorman Long will not take place? The people have a right to know the answer to such questions. I hope that the Government will endeavour to find an answer to the problems that are causing those people such great anxiety.
    In Wales, as in other parts of the country, another matter gives rise to concern. On Sunday, The Observer reported:
    "Tories to make Jobcentres redundant."
    When I read that I thought that the Government had turned over a new leaf and had wiped out the unemployment that they had created. What is more, I thought that they had discovered how to wipe out unemployment altogether. But, no, the headline means that the Government are still stuck with their party dogma, which is now wrapped up in the new-found expression "privatisation". What an ugly word.
    In a debate on Wales, it is appropriate that that latest nasty Raynerism should be challenged. It was a Welsh politician, David Lloyd George, who first brought the Government into the business of finding jobs. Everyone has the right to a job. We will not accept that the quality of the job found for an unemployed person should depend on the size of the fee that he can afford to pay for having a job found for him.
    We warn the Secretary of State and his colleagues that the bitterest opposition will be brought to bear if there is any likelihood of that latest disgraceful example of greed

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    being implemented. There is to be no profit-taking by anyone from unemployment. We make it clear to the Government that the people of Wales will have none of that.
    The Secretary of State keenly quoted The Guardian. I, too, will quote from that newspaper. On 26 April it carried the following headline:
    "Mrs. Thatcher on course for over 4 million unemployed."
    The report beneath that showed that in continuing the Thatcher policies the country would eventually have 4,478,000 unemployed, while under Labour's strategy there would be 2,582,000 fewer unemployed. If we accept what The Guardian says—as the Secretary of State obviously does—Thatcher policies will lead to 4·5 million unemployed in the United Kingdom. Wales' share of the misery will be about 250,000 people out of work. We will not accept that. Wales will not accept that. If there were elections in Wales today, as there are in the rest of the United Kingdom, the Secretary of State and his colleagues would be made forcefully aware of that fact.
    9.33 pm
    The Under-Secretary of State for Wales (Mr. Michael Roberts): The hon. Member for Neath (Mr. Coleman) has put his case clearly. However, he misrepresented—no doubt unintentionally—my right hon. Friend the Secretary of State when he said that he had painted a euphoric picture of the Welsh economy and had said that everything was fine. That is not what my right hon. Friend said, although I can understand why the hon. Gentleman made that mistake. A barrage of noise was coming from Opposition Members which I am sure on reflection they will regret.
    Quite reasonably, the right hon. Member for Rhondda (Mr. Jones) said that we often hear about closures but rarely about extensions and openings. Quite rightly, my right hon. Friend responded to his argument and gave a reasonably long list of openings and extensions since 1979. We all wish that it were a longer list, but I do not think that anyone can complain when my right hon. Friend responds so quickly.
    The hon. Member for Neath asked about investment in the steel industry in Wales. The revised corporate plan is still under discussion, and clearly I cannot go further than saying that. He also asked about the sale of Redpath Dorman Long. This is a matter for the commercial judgment of BSC, which does not need the approval of the Secretary of State for Industry to make the deal. It is Government policy to encourage the nationalised industries to privatise activities which, like Redpath Dorman Long, are outside their mainstream activities. In these circumstances, there is no reason for the Government to intervene.
    The hon. Gentleman paid Mr. MacGregor a notable tribute. I suggest that we can leave this matter to the commercial judgment of Mr. MacGregor, which I suspect is better than the hon. Gentleman's or mine.
    Mr. Coleman: I am worried not about Mr. MacGregor, but about the Trafalgar House group.
    Mr. Roberts: This is a commercial judgment that Mr. MacGregor and the corporation will make.
    In a recent speech to the Birmingham chamber of commerce, my right hon. and learned Friend the
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    Chancellor of the Exchequer said that in the long run the only way to achieve higher sustainable growth and more jobs that are secure is by competing successfully on quality, efficiency and productivity.
    The signs for British and Welsh industry in improving performance are reasonably encouraging. Output per man in manufacturing industry rose 10 per cent. last year. It is now higher than its previous best figure. Industrial companies increased their profits by about a quarter in the second half of 1981. That must be good for investment and, at a later stage, for jobs.
    As my right hon. and learned Friend the Chancellor pointed out, there are solid signs that modest and reasonably broadly-based economic recovery is under way. Contrary to what has been suggested tonight, the latest quarterly survey of the Wales CBI is also moderately optimistic. I am talking of a slow but strong and mounting recovery. No one is suggesting that there will be a dramatic change overnight. The results of the survey show that optimism is increasing in Wales.
    Over the next four months, a slight rise in both output and orders is expected. I share the view of the chairman of the Wales CBI that the results are encouraging, and I also share the view that continued restraint on wage claims will be of crucial importance to our hard-earned and continued recovery which it would be a tragedy to jeopardise now.
    Mr. Alec Jones rose——
    Mr. Roberts: I hope that the right hon. Gentleman will excuse me, but I am trying to reply to a number of hon. Members and to develop a theme of my own and I do not have much time—[Interruption.] It would waste less time if the hon. Member for Merthyr Tydfil (Mr. Rowlands) contained himself occasionally for five or 10 minutes. I do not ask him to do so every time, just occasionally.
    The right hon. and learned Member for Aberavon (Mr. Morris) made a number of points and we shall try to answer them by letter. I believe that the statistics were taken from a selective list and I should like to try to put the matter properly in perspective. I know that he agrees that that would be a satisfactory way of dealing with it.
    The hon. and learned Member asked whether I could say something about the relationships and the negotiations between the British Transport Docks Board and the British Steel Corporation. There is a long history to this, as he knows, and it is a commercial dispute which it is better for the two parties to resolve together. The Government are taking an interest in the argument, but they are not seeking to impose an answer. My right hon. Friends the Secretaries of State for Transport and for Industry are very much in touch with the issue and there are hopes of an early solution. I am sorry that I cannot go any further than that, and I am sorry that I cannot give the right hon. and learned Member a more detailed reply.
    Mr. John Morris: Does that mean that litigation is to be allowed to proceed, despite the tenor of the Chancellor of the Exchequer's answer the other day?
    Mr. Roberts: I can make no further comment on that. I shall make certain that the right hon. and learned Member is kept immediately informed of all developments, but there is hope of a solution to this difficult problem, which has existed for a considerable time.
    My right hon. Friend the Secretary of State has covered the issue of the Development Board for Rural Wales in

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    detail in his speech, as did my hon. Friend the Member for Conway (Mr. Roberts) last night in the Adjournment debate, so I shall not take the time of the House further, except to re-emphasise that the review is under way and that no decisions have yet been taken.
    The right hon. Member for Rhondda, my hon. Friend the Member for Cardiff, North (Mr. Grist) and the hon. Members for Flint, East (Mr. Jones) and for Neath all raised the important question of training. As my right hon. Friend said in his opening remarks, we are to debate education and training at another time, but with the publication on 4 May of the Youth Task Group's report it would be wrong of me not to say a few words. In any case, I feel that I ought to respond to the points that were made forcefully by the hon. Members to whom I referred.
    As I said, the task group's report has only just been published, and it is too early to say anything specific about its proposals. Obviously my right hon. Friends will study the report very closely. I am sure that the House will accept that there is little I can say specifically about its recommendations at this stage, but I hope that too much will not be made of the differences between what the Government proposed in their White Paper last December and the present report. In my judgment, the similarities are much more important. Although I know that there are things that divide us, let us unite—and unite very firmly—on the things on which we are agreed.
    I remind the House of the radical departure in thinking about training that we have adopted, and which is embodied in the White Paper. In so doing, I must again emphasise the great similarities between the White Paper and the task group's report. Certainly the House should not minimise the commitment that the Government have already made towards the training of young people. Indeed, our conclusions on the content and duration of training courses for young people have been fully reflected in the scheme devised by the task group, completely endorsing the Government's attitude towards the training needs of young people.
    I am sure that all hon. Members will agree that major investment in new plant and equipment—particularly in new technology—is essential. If industry and commerce are to become more competitive and take advantage of the opportunities created by the new technology and provide services which can capture a ready market, a skilled and adaptable work force is essential. But we in Britain have one of the least trained work forces in the industrial world, particularly among young people, and it certainly applies in relation to our major competitors. The Government are determined that that should not be allowed to continue. That is why we are not talking about another programme of short-term temporary measures designed to alleviate unemployment, although the White Paper and the task group's report contain a commitment to give priority to unemployed. Rather we are concerned about a programme of genuine training intended to equip young people to adapt successfully to the demands of employment by developing basic and valuable skills which employers will recognise and require in the future. Already the basis for that programme is being laid down with YOP. About 100,000 of the new places being provided this year will be new training places of a year's duration. About 8,000 of those will be in Wales. The places will provide good quality training of the type envisaged in the White Paper.
    Mr. Rowlands: Is not the saddest and most tragic sacrifice of the immediate recession the destruction of automatic training within firms? Within companies such as Hoover and BSC Dowlais, natural apprenticeship schemes and training were provided. Those schemes have been closed down, although they were more important than the YOP and all the MSC schemes that one could devise. When will the Government address themselves to that issue?
    Mr. Roberts: The Government have been considering that problem seriously all the time. The Manpower Services Commission supports apprenticeships, the traditional form of British training within industry. to a very large extent. In the United Kingdom the support amounts to £56 million. I am aware of the problems and I am aware of the personal tragedies involved, but that does not diminish—I hope that the hon. Member for Merthyr Tydfil recognises this—the importance of a new and imaginative training scheme which is long overdue. Of course, we want to sustain the traditional methods of apprenticeship, but do not let us denigrate the moves that should have the support of the whole House. I give an illustration.
    A new scheme started recently at Fords in Swansea. There it has a training workshop which offers training in a wide variety of skills—electrical, welding, woodworking, vehicle maintenance, paint, decorating, catering and administration. All the trainees will receive proper induction training, basic skill training, planned work experience, integrated relevant further education as well as life and social skills training and personal guidance and support. In addition, the workshop is assisting in piloting and evaluating a trainee profiling system developed by the Manpower Services Commission in conjunction with the City and Guilds of London Institute. It is hoped that this profiling system will enable the development of a record of achievement which can be given to young people when they leave the scheme and which will be recognised by potential employers and by the young people.
    There is one other point that I ought to make about both the White Paper and task group proposals. It is the extent of support that will be needed if a training scheme is to have the beneficial effects that we have envisaged. The whole community must give its support—employees, trade unions, local authorities, local education authorities, the careers service, voluntary bodies, and, not least, the trainees themselves and their parents.
    Nor should we forget that, in the meantime, we shall be improving the provision of training places. The YOP is still being developed and it is expected that 46,000 young people will enter the programme in Wales in 1982–83. There is, too, the provision of more traditional forms of training for young people. In 1982–83 the MSC will continue to provide financial support for 35,000 apprentices at a cost of £56 million in Great Britain.
    Mr. Alec Jones: Will the hon. Gentleman give way?
    Mr. Roberts: I apologise to the right hon. Gentleman, but I have already given way to his hon. Friend the Member for Merthyr Tydfil and I have only 12 minutes Left in which to make some important points.
    I had hoped to have time to mention achievement in our secondary schools, but I shall not be able to develop that theme. The hon. Member for Neath said that it was not much of a transition to go straight from school to the dole

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    queue. I recognise that, but our schools can do a great deal if they take full advantage of the available facilities to give school leavers better opportunities to acquire skills. Perhaps some pupils do not take advantage of those facilities or are not given all the opportunities that they deserve. Within the existing resources we could do much more, but perhaps we can develop that theme in the Welsh Grand Committee. The Government are taking other initiatives. First, there is the urban programme. For 1982–83, the Secretary of State has approved urban programme resources for Wales of £15,294,000—over 30 per cent. more than originally planned—and the additional premium has been allocated mainly to new schemes associated with economic regeneration and job creation.
    As part of the programme for 1982–83, over £8 million has been allocated for new nursery factory units, workshops, and other job-creating schemes providing 3,500 job opportunities, and £2·4 million for new environmental improvement projects and schemes to alleviate social problems. The programme is widespread in the Principality.
    I had hoped to be able to refer to some of the details of the programme, but I have time to refer to only one, which is a modest but nevertheless welcome scheme. I am happy to announce that my right hon. Friend has approved for grant aid all the 1982 summer holiday projects put to him by local authorities under the urban programme.
    There are 211 projects, costing £205,000, of which 75 will be run by voluntary organisations. Together with the £45,000 announced earlier this year for Easter schemes, the holiday programme in Wales this year will be by far the largest ever undertaken as part of the programme. That is a good use of money, because it brings in local authorities and voluntary workers and provides holidays for many children who would not otherwise have them.
    A second Government initiative is the enterprise zones. I am glad that the early experiences of zone authorities in Swansea and elsewhere are encouraging. [Interruption.] The hon. Member for Merthyr Tydfil keeps interrupting from a sedentary position. Clearly he does not approve of the scheme, and I wish that he would appreciate reasonably good news.
    It is too early to draw firm conclusions about the impact of designations in areas that are dissimilar and where projects were designed to be experimental. Nevertheless, the Swansea zone has already attracted 34 firms since designation and there have been 375 inquiries. More than a quarter of the inquiries were from outside Wales and eight new ventures have occupied, or expressed commitment to, the zone since designation. That is encouraging for the future and I shall continue to keep in close touch with the city council to ensure that the early progress is maintained.
    Thirdly, there is the enterprise allowance scheme, which was devised to examine the scope for overcoming the alleged deterrent effect of the loss of benefit on unemployed people thinking of setting up their own business. The scheme provides for the payment of an "enterprise allowance"—£40 per week taxable—for up to 52 weeks to unemployed people who set up their own business and are employed full time in it. One such scheme is operating in Wales covering Wrexham Maelor, Alyn and Deeside and Delyn in Clwyd.
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    The Clwyd scheme opened for applications on 1 April 1982. At the end of April 110 applications had been received with 55 accepted and 34 still in the pipeline, but likely to be approved.
    A number of hon. Members referred to the EEC. It is vital to make correct judgments whenever we talk about employment in Wales and in the United Kingdom in relation to our membership of the EEC.
    Mr. Alec Jones: We have heard examples of all the progress that is being made by the Government. Will the Minister answer a simple question? As a result of the progress, does he envisage that the figure of 171,000 unemployed will increase or decrease in the coming year?
    Mr. Roberts: The right hon. Gentleman knows that when he spoke from the Dispatch Box he never made forecasts. I intend to follow his example. The projects that I have announced are of value to Wales and will be appreciated there. I said that they were modest, but they were worth reporting.
    There has always been considerable prejudice and feeling against our membership of the EEC both in the country and in the ranks of the Labour Party. When the matter was put to a referendum the misgivings disappeared, as I suspect they would if the people were again asked to vote.
    I do not know where the SDP in Wales stands. I know where the hon. Member for Wrexham (Mr. Ellis) stands in relation to the EEC. We shared a platform many years ago on that issue. I am not so sure about the hon. Member for Caerphilly (Mr. Hudson Davies) and the hon. and learned Member for Abertillery (Mr. Thomas). Perhaps they are both late gatherers in the vineyard, but they are welcome. However, whenever we discuss jobs and future employment in Wales we cannot ignore our membership of the EEC, the threat to end it, and what would result if our membership were ended.
    It is difficult to quantify the number of jobs involved. In 1980 the eight other Community States were among the 12 most important export markets for this country. Some 42 per cent. of our exports go to the EEC. Germany is now our largest customer. In 1980 Britain got 59 per cent. of all United States investment in Europe, worth over £14 billion. Some 50 per cent. of Japanese investment came to the United Kingdom. The EEC offers an unrestricted market of 270 million customers with money to spend. Much United States and Japanese investment comes to Wales.
    We must ask the simple question: would withdrawal have any effect on those investments and the jobs that they create and sustain? We have much to offer—we have good labour relations and good communications—but we and Opposition Members should not underestimate the importance of the unrestricted EEC market, which is attractive to inward investors.
    In the House we frequently invite Nissan to come to the Principality. Barely a week goes by without the hon. Member for Flint, East showing his enthusiasm for the project coming to his area. The hon. Member for Neath said the the project's proper home should be in West Wales. There is no guarantee that Nissan will come to Europe, let alone to the United Kingdom or the Principality, but it is certain that it will not come if we are not a member of the EEC. That applies to many inward investors. Hon. Members can draw their own conclusions.

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    If the hon. Member for Methyr Tydfil and the right hon. Member for Rhondda take a different view, let them promulgate that view. No one will believe them.
    When we are assessing job prospects, if we were to withdraw from the EEC, we must consider whether the companies that are already here would remain, whether they would expand and whether others would come. Is talk of withdrawal from the EEC already causing overseas companies and investors to look on the Principality and the United Kingdom with disfavour? I ask those Members who express the view, and have always held the view, that we should be out of the EEC to calculate what effect that would have on jobs in the Principality.
    We as a Government are also committed to stimulating the growth of new technology in Britain, and we in Wales, with our need for new and diversified industries, are well placed to benefit from this. The examples of Inmos and Mitel show the potential of this area for new jobs.
    In his Budget speech my right hon. and learned Friend the Chancellor of the Exchequer announced a package——
    It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

British Railways (Engineering Works, Shildon)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]
10 pm
Mr. Derek Foster: I am very glad to be able to use this Adjournment debate to talk about the closure of the Shildon engineering works in county Durham. What we are discussing now is the devastation of a very important town of over 14,000 people in county Durham. This destruction of a town comes hard or the heels of the destruction of Consett, not 20 miles away. I want the Minister to take note that we have lost more jobs in the Northern region in the last three years, since his Government came to power, than were attracted by 10 or even 15 years of positive regional development policy, on which there was a consensus on both sides. That is a shameful matter for his party, to which he really ought to have some response.
Only a short time ago British Rail Engineering announced that it was to close the works in Shildon. It is a profitable works. This works has been described as the most efficient wagon works in the whole of Europe—not by me, not by the workers at the plant, but by the managing director of BREL. Not more than 14 months ago it was described as the jewel in the crown of British Rail Engineering, and now British Rail is saying that it is obsolete. What has happened in the meantime to make British Rail Engineering describe this works—which has been so efficient, so profitable, so valuable to it—as obsolete?
Industrial relations have been absolutely exemplary at this plant. The men have done everything that was required of them and very much more. Indeed, British Rail Engineering has invited leading shop stewards at Shildon to go to all its other plants and show other shop stewards the benefits of flexible working and cost-cutting exercises in making their plants competitive. What do these people get for doing everything that the Prime Minister and the Government say that our work forces should be doing in this country? They get a swift and hefty kick in the teeth. All their co-operation is thrown back in their face. Is it surprising that these men may draw very bitter lessons from this experience?
The commitment to rail in the town of Shildon is absolutely unparalleled. Indeed, one of the first rail engines, which was called the Sanspareil, the great rival of the Rocket in the Rainhill trials, was built there. The Rocket ran from Shildon on its first trip. Timothy Hackworth, who was a great rival of George Stephenson, built the first works in Shildon 150 years ago, and this works is a direct successor. We are talking about the destruction of the very birthplace of the railway. Railways have spread throughout the world and we have taken great pride in our engineering success. This is where they were born. Is this where the death of rail will start, under the jurisdiction of the Government?
The Minister should consider the social consequences of the decision. He cannot tell me that it is a matter for British Rail and nothing to do with the Government. Will they stand idly by, as they did when Consett was destroyed, and see 2,500 workers and their families condemned to poverty? They will not get other jobs in the

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North-East, and long-term unemployment is increasing by the day. If the works close, those workers will join the long-term unemployed.
In the Bishop Auckland employment exchange area the rate of unemployment is 17½ per cent. The closure would push it above 30 per cent. The rate in Shildon is calculated to reach 60 per cent. In Jarrow in the 1930s it was 86 per cent. Even teachers could not get a job. It is a great tragedy that in the 1980s we can talk of rates of 60 per cent.
The local authority will lose about £700,000 in rates. The authorities are already struggling to do the best for their areas. Housing developments have been negotiated with private developers. The Labour-controlled council has been progressive enough to go to the private sector for development. Those developments are under threat because of the closure.
Then there are knock-on effects. Businesses that supply, or are supplied, by the engineering works, will be seriously affected. The cost to the pubs, clubs, leisure facilities and other traders in the small town is incalculable. The south-west Durham training association does a great deal of training throughout the area for small engineering companies. Its biggest client is British Rail Engineering. I shall be surprised if it survives if the works closes. That is another big problem for the Secretary of State for Employment. More public expenditure will be needed to pull that out of the fire.
On the Treasury's figures it costs £5,000 per annum to keep an unemployed person and his family. Having about 2,500 people long-term unemployed will cost £12½ million a year. The other redundancies contemplated in Harwich and Swindon will increase the figure to £25 million a year. That is without the cost to the company of redundancy money.
British Rail Engineering is attempting to save only £18 million on overheads by the rationalisation. The taxpayers, whom the Government pretend to protect, will be at least £7 million worse off each year. We must add the compensation to local authorities for loss of rateable income. The precedent was set in Consett. In addition, there are the industrial development costs of attracting 2,500 jobs. The cost of winning each job to an area like the North-East will be about £10,000 and it will take between seven and 10 years to get the skilled male jobs back into the area.
All of those public sector costs must be borne by the rest of us. British Rail gives its reasons for the closure as, first, the recession. Who can quibble with that? Secondly, it blames the tight financial limits that have been imposed by the Government. Thirdly, it cites its failure to win exports. In that connection, it also blames the over-valued pound. I pin those three factors upon the Tory Government's policy.
British Rail gives another reason—greater efficiency. I accept the argument that British Rail has used its stock much more efficiently. It has higher capacity trucks, higher speed trains that allow a quicker turn-round and greater efficiency of handling, and the TOPS computer programming that enables it to know exactly where all the rolling stock is. We welcome that greater efficiency and the increased utilisation of existing stock, but British Rail says that it must rationalise and integrate the works to achieve greater flexibility.
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The people of Shildon suspect that the Government are trying to create a slimmer, fitter BREL that they hope will become profitable so that it can be sold off to their friends in the City. The people of Shildon suspect that that is the case not merely for their own works, but for all BREL works.
Why has British Rail decided to buy no wagons in 1983? Is that commercially prudent? Even though its fleet has diminished and will continue to diminish, surely British Rail will need to purchase wagons soon. It cannot go on year after year without replacing stock. It says that the reduction in the wagon fleet is not related to the reduction in freight. Indeed, freight traffic increased last year as a result of the greater efficiency that I have mentioned. British Rail says that about the same quantity of freight will be transported in 1986 by about one-quarter of the number of wagons that were being operated in 1980. There were 130,000 wagons in 1980 and there will be 34,000 in 1986. That means that each wagon must bear four times as much wear and tear. Indeed, wear and tear will be greater because of higher speeds and greater braking and the consequent greater load transference. If the wagons have been designed with the greater intensity of use in mind, it has been a secret to us. If that is the case, how long ago were those developments foreseen and why were they not planned? Why was it possible for the deputy chairman of the board and the managing director of BREL in their headquarters in Euston to tell me not 14 months ago that no conceivable restructuring of BREL could possibly undermine the long-term future of Shildon? We were told that if the closure of Ashford were allowed to go ahead, the long-term future of Shildon was guaranteed. That was only 14 months ago. The Under-Secretary's predecessor in Marsham Street also told me that.
May I press the Minister on the important trend of British Rail advising its clients to purchase their own trucks or to lease them? We suspect that most of those privately purchased or leased trucks are being bought from the private sector, not BREL. I have a paper from Mr. Sanderson, the director of freight, who tells me that there are 16,000 such wagons. How many of them have been bought from private manufacturers? Those 16,000 wagons represent 16 years' work for the people of Shildon. How many have been bought from the private sector? Does the fleet of 34,000 in 1986 include those 16,000? If not, will the 16,000 also be severely slimmed down by greater efficiency?
What is happening to the redundant wagons? Could they not be refurbished and sold abroad? If it is so hard for us to compete with South Korea and other newly industrialising countries, why cannot we refurbish those wagons and outbid them in that way? That is exactly the kind of work that could be done at Shildon.
I also want to know, as do the people at the other works, whether, if this kind of development proceeds, there will be further redundancies in a few years' time—for instance, at the works in the constituency of my right hon. Friend the Member for Doncaster (Mr. Walker). The unions are already seriously suggesting that from 1986 there may be as few as four works left. Will the Minister comment on that?
If BREL cannot now compete in its export markets, how long will it be before, due to financial constraints, BR begins to purchase from South Korea? Have any BR clients already bought abroad? If increasing emphasis is placed on purchase in the private sector, how long will it

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be before they begin to do so? Have any of the private manufacturers sold abroad in competition with BREL? We do not have those facts. Are private manufacturers thought to be more competitive than BREL? If it is said that they are, why was I told by the managing director that Shildon is the most efficient wagon works in Europe?
As the Minister knows, less freight is carried by rail in the United Kingdom than in any other European country, for the simple reason that we subsidise our railways much less than any other European country, despite the strong environmental arguments for carrying far more freight by rail. There is less damage to roads and buidings, less pollution, noise and fumes. It is far safer than road carriage from the point of view of accidents—and the cost of accidents must also be borne in mind. There is also the fuel economy argument. It would be far cheaper to carry freight by rail, especially if the electrification work were allowed to go ahead.
There is a tremendous need for investment in rail. In the summary of accounts, Sir Peter Parker said that £500 million per year was needed to take care of essential renewals, which includes wagon renewals, but only £308 million was spent last year—far less than the amount necessary.
There are many other arguments that I should like to advance, but I see that my time is rapidly running out. I believe that the Tories wish to pursue these policies because they despise the nationalised industries. They do not wish to see tham prosper unless they can sell them off. Then they wish to browbeat the unions into accepting far greater increases in productivity than are humanly possible within the time span.
There is, then, the barren and now utterly discredited argument that public expenditure crowds out private investment. That is the kind of argument that allowed the Prime Minister's personal economist to intervene and prevent the electrification scheme from going ahead in the way that it should have done.
I see that the Minister is straining at the leash to answer all of the questions that I have put. I look forward to some very straight answers.
10.18 pm
The Under-Secretary of State for Transport (Mr. Reginald Eyre): I wish to say first that I appreciate the seriousness with which the hon. Member for Bishop Auckland (Mr. Foster) has described the problems created by the British Rail proposal to close its Shildon works. This is, indeed, a serious matter. I shall do my best, in the limited time available to me, to reply to the points that the hon. Gentleman has raised. I understand fully the importance of the proposals especially to the people of Shildon and to the people of Horwich and Swindon who also are affected by the British Rail Board's closure proposals.
The hon. Gentleman has concentrated understandably on the effects that the closure will have on the local community. He has drawn attention to the particular circumstances of Shildon as a town. I shall return to these worrying aspects. The hon. Gentleman also touched upon the efficiency of Shildon as a workshop and the impressive performance of the work people. I should like to be associated with those remarks which are generally accepted as true and justified.
What therefore are the reasons that the British Rail Board gives for these proposals? To understand them, it
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is necessary for me to describe the situation at British Rail Engineering Ltd. and the rail freight business. British Rail Engineering Limited, or BREL, is a wholly owned subsidiary of the British Railways Board. It manufactures British Rail's rolling stock and carries out all its heavy maintenance. It also carries out some work for outside customers.
BREL is a big organisation. It has 12 operative workshops throughout the country employing some 35,000 men. The company's turnover in 1981 totalled £441 million of which about £25 million represented work for outside mainly export customers. Those were exports in a very competitive world. But the main reason for BREL's existence is to meet British Rail's legitimate needs for new rolling stock and maintenance services. Its work must be related to demand from British Rail and BREL's outside customers combined. Over a period of years a situation has developed whereby BREL has considerable excess capacity. In relation to freight wagons, demand has fallen rapidly. As the main workshop engaged in the building and repair of freight wagons, Shildon is regrettably, but naturally, worst affected.
There are a number of reasons why the railways are now obliged to reduce their requirements for wagons. For several years, the British Railways Board has been pursuing a strategy intended to bring the freight business up to date. This is against the background that it has been required, quite properly, by successive Governments of either party, to operate the rail freight business on a commercial basis without public subsidy. In practical terms this has meant that the board has moved out of the old style, low quality, high cost traffic in favour of the movement of bulk, long distance traffic for which rail can provide a more efficient and economical mode.
This total change in the size and use of the wagon fleet has been dramatic and continuous. In 1976, the railways carried 176 million tonnes and in 1981 carryings had reduced to 154 million tonnes. But, at the same time, the number of wagons owned by British Rail was reduced from 180,000 in 1976 to 88,000 in 1981. Future building plans are, of course, related to future fleet size. The continuing reduction in wagon numbers reflects the scrapping of old fashioned wagons which have come to the end of their life. I fear therefore that they are not available for successful sale as the hon. Gentleman suggested. Also, they are subject to modern adjustments in technical and operating conditions. Nevertheless, some new building for replacement has been needed.
Following a reappraisal of freight business plans, the board has necessarily revised downwards its future requirements as originally foreseen. Indeed, I have to emphasise that because of the continuing pace of technical change the board's latest forecast is that its total fleet requirement will, by 1986, be only about 34,000 wagons while still carrying the same or even higher levels of traffic as today.
There are three main reasons why this change has been brought about so suddenly. First, modern wagons have been developed in such a way as to have greater carrying capacities and higher operating speeds than their predecessors. So wagon productivity has increased. Secondly, the development of the total operations processing system means that it is now possible for British Rail to increase the utilisation of individual wagons much more efficiently. These are therefore the consequences of investment in new technology. British Rail invests and

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continues to invest in new technology to achieve those very purposes of increased efficiency in the total interest of the railway business.
The third reason relates to future forecast carryings. These forecasts have unfortunately had to be revised downwards in recent time.
In 1979, the board carried 169 million tonnes of freight. In 1980, however, carryings were down by 10 per cent. to 153 million tonnes as a result of the steel strike. Despite some improvements in particular areas, including steel, carryings in 1981 stayed about the same at 154 million tonnes.
The amount of freight carried by rail is inevitably affected by changes in the industrial structure generally in a world trade recession—I emphasise in world trade recession—and also by technical changes in industries that are predominant movers of bulk traffic. Present forecasts by BR now suggest that it will take until the end of the decade before rail freight can return to the position that it was in in 1979.
The implications for BREL as a whole are clear. Shildon has the capacity to build wagons at the rate of 1,200 to 1,500 a year. This year it has orders from British Rail for 780 wagons. Next year, British Rail requires no new wagons. BREL's wagon repairs, which totalled about 64,000 in 1976, were down to about 15,000 in 1981.
These are big adjustments with serious implications. British Rail recognises that the consequences of its proposals are serious, and the decisions involved have not been taken lightly by the board. Indeed, I have been in touch with the British Rail Board and I understand it would be more than willing to arrange for Members of Parliament concerned a presentation of the technical details involved in the decision.
It has been argued that an alternative approach would be to slim down all 12 of the British Rail workshops rather than close down any one. There are, of course, aspects of this approach that seem attractive, and it has been seriously considered by the Board. However, I am informed by British Rail that in practice the effect of such a proposal would be to endanger the economic justification for the continued existence of all 12 workshops, and it can be seen at once that the ultimate implications of this would be extremely serious.
Therefore, the board was compelled to recognise that there was no solution to be found in the idea of equal sacrifice all round. Nor is it realistic, I am informed, to think in terms of converting Shildon or Horwich to other types of railway work. There is simply not enough to go round.
The hon. Member referred to the use of private wagons on the network. I must say that British Rail is absolutely right to encourage as far as possible the private ownership of wagons, so that its customers are committed to the use of the railway.
An argument which has been raised, and which I can quickly show to be without foundation, is that the problem is caused by the Government not allowing the railways sufficient support. I have to emphasise that direct support from central and local government to British Rail is at its highest level ever.
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The board has not, I emphasise, held back investment in the freight business. It is, indeed, investment in new technology that has brought about the change in the type and number of wagons needed by British Rail, and it is this increased efficiency which means that the continued supply of older, unwanted wagons cannot be maintained.
I can well understand the feelings of all those involved in the closure of Shildon and the reductions at Horwich and Swindon, and I sympathise with them, but I have to stress that these are British Rail proposals about which it is consulting the unions. There are wider, serious implications, as the hon. Gentleman said, and I now turn to these.
First, the hon. Gentleman has mentioned the effects of the closure on the levels of unemployment in the area. He mentioned some high rates, to which I must come later.
The Government are as concerned as anyone about levels of unemployment throughout the country, and especially about closures, such as that at Shildon, but we must compare levels of unemployment in different areas on a fair and consistent basis. The smallest of such areas for this purpose are the Department of Employment travel-to-work areas made up of one or more employment office areas.
The Shildon works lie in the Bishop Auckland employment office area, which is part of the Darlington and south-west Durham travel-to-work area. It is the effect on unemployment in that area that must be considered. The latest available figures for Darlington and south-west Durham indicate that 11,500 people are without work—a rate of 13·9 per cent. Thus, as the House can see, if the addition of 2,500 people to this list over the two-year period involved in closure took place, although much to be regretted, it would not increase those figures to the rates that the hon. Gentleman suggested. They would be about 16½ per cent.
Although it is important to put the effects of the closure in perspective, the Government are very conscious of the effects that the closure may have on the people of Shildon and its immediate vicinity. Our concern is clearly demonstrated by the presence in the House tonight of my hon. Friend the Under-Secretary of State for Industry whose responsibilities include regional industrial policy. I am sure that he will keep the situation in Shildon, and the travel-to-work area of which it is a part, very much in mind as the situation develops.
I should like to make it clear at this stage that, under current plans, Shildon is to remain an assisted area when many areas are due to lose their assisted area status. As an intermediatre area it will continue to benefit from regional aid through regional investment incentives, with which the House will be familiar.
Since the Government took office, £20 million has been committed for projects in the Darlington and south-west Durham travel-to-work area——
The Question having been proposed at Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at half-past Ten o' clock.

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Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Portsmouth): The LORD CHANCELLOR on the Woolsack.

The Construction Industry: Stimulus
Lord Gainford: 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 measures they are taking to stimulate activity in the construction industry.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, we have taken a great number of measures to assist the construction industry, particularly in the fields of planning, land, taxation and low cost home ownership, and in his Budget statement on 9th March, which was well received by the industry, my right honourable and learned friend the Chancellor of the Exchequer announced a £240 million package of measures specifically aimed at stimulating construction activity. Those included an extra £100 million for home improvement grants and home insulation, a substantial increase in the level of stamp duty thresholds, and a brand new capital allowance for houses built under the assured tenancies scheme. He also announced on that occasion the Government's plans to spend £10·3 billion on construction in the public sector in 1982–83, which represents a 14 per cent. cash increase on what was spent last year.
Lord Gainford: My Lords, I thank my noble friend for that very encouraging reply. Is he able to give any information on the figures of housing starts, which I understand are being published today?
Lord Bellwin: My Lords, in the first quarter of 1982, total starts, on a seasonally adjusted basis, were up 45 per cent. on the fourth quarter of 1981 and 33 per cent. higher than the first quarter of 1981. In the public sector, making similar comparisons, starts were up 40 per cent. on the previous quarter and 67 per cent. higher than a year ago. Private sector starts were up 47 per cent. on the previous quarter and 24 per cent. higher than a year earlier. I hope my noble friend and the House will be as pleased with that news as I am.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that the greatest stimulant would be a reduction of interest rates? Is he further aware that if some of the schemes, which sounded very attractive as he presented them, have the effect of increasing inflation and not encouraging a reduction of interest rates, that might have the opposite effect? The priority should be that if we want to stimulate the construction industry or indeed any other industry.
Lord Bellwin: My Lords, a key part of the thrust of Government policies is indeed towards seeing that interest rates come down, so I certainly take the point my noble friend makes.
Lord Cledwyn of Penrhos: While welcoming that information, my Lords, may I ask whether the Minister can confirm that the starts are evenly spread throughout the country? Can he give the House an estimate of the additional number of men who will be employed in the building industry as a result of the acceleration in building?
Lord Bellwin: I do not have those details today, my Lords—the statement has only just been released—but I gladly undertake to obtain it and write to the noble Lord. As for the way in which it is spread throughout the country, again, it is hard to say. I am not sure whether that information will be so readily available but I shall endeavour to ascertain it and send it to the noble Lord.
Lord Cledwyn of Penrhos: My Lords, the Minister will agree that that information is important. Does he agree that it is vital that there should be an even spread, otherwise the increases in building are likely to be in the more prosperous parts of the country, whereas those areas which really need new housing and jobs will not be able to benefit?
Lord Bellwin: Yes, my Lords, and I would in no way quarrel with that. It is just a question of my getting the information so that I am able to give it to the noble Lord, and that I undertake to do.
Lord Orr-Ewing: My Lords, would my noble friend make arrangements to appear on television to give that excellent news on a very special day for most voters?
Lord Bellwin: I fear that that is not within my gift to do, my Lords.
Baroness David: My Lords, may I ask the Minister whether, in the statement, are given the number of houses as well as the percentage increase? If, for example, it is twice as many as one, it does not make all that much difference.
Lord Bellwin: The noble Baroness makes a fair point, my Lords, and of course the numbers are important. Any information which is not in the statement would readily be available to her if she wished to press for it.
Viscount Eccles: My Lords, could the Minister give any information about do-it-yourself building? Is that increasing and do the Government favour it?
Lord Bellwin: My Lords, I touched on that when answering a Question yesterday. I assume by his supplementary that my noble friend is referring to homesteading. We are doing everything we can to encourage it. There are some encouraging signs and I hope that all local authorities—because it is, after all, they who have to make the decisions about it—will

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look at some of the houses that are empty and require work of that kind and will perhaps make them available, on any kind of price basis, to people who are willing to do what my noble friend calls do-it-yourself building: "homesteading" is the term we use and we want very much to encourage it.
Lord Bowden: My Lords, as there are nearly half a million unemployed workers in the structural and civil engineering industry, may I ask whether the figures which the Minister gave for total expenditure have made appropriate allowance for the savings which would flow were those people no longer on the dole but properly in work? It seems to me that if the figures were so adjusted, they would dramatically decline. Secondly, the Minister will recall the last time I discussed in this House the question of the main sewage system, in fact the whole infrastructure, of the city of Manchester, which is fast decaying. He may recall that when I told him of the enormous expense, he said it was a mind-boggling situation. Does he not realise that to the average motorist—
Several noble Lords: Speech!
Lord Bowden: I was about to ask the noble Lord—
Several noble Lords: Order!
The Lord Privy Seal (Baroness Young): My Lords, would the noble Lord be good enough to ask a question and not make a short statement about a former speech of his?
Lord Bowden: I was just coming to the question, my Lords. Does the noble Lord realise that to the average motorist the thought that the Minister's mind has been boggled is, of itself, of no very great importance?
Lord Bellwin: My Lords, I can make no comment on what motorists think of my statements. I understand very much what the noble Lord is saying and his concern, which we share. In fact, we are specifically making available a figure of, coincidentally, some £240 million, for the kind of work to which he referred, because there is undoubtedly a problem in terms of what is under the surface as well as what is above it. As to his point about workers on the dole perhaps doing some of the work, I understand the short-term attraction of the option, but the fact is that the average wage of a construction worker is, as he will know, substantially higher than the level of unemployment benefit, and the difference becomes even greater when non-wage factors are brought into account. Thus, the extra borrowing that would then be involved would, in the longer term, lead to higher inflation, higher interest rates and higher taxes, and that is a direction away from which we want to go.
Lord Glenamara: My Lords, is the Minister aware that we are delighted with the increase he has announced today but that a 40 per cent. increase on the lowest levels for over 60 years is still not very much to crow about?
Lord Bellwin: I did not make the statement in order to crow, my Lords, but in response to a question that was put to me. What the noble Lord says is correct, but I am sure that he, too, will be as pleased as I am that there has been an upward trend of some significance.

Housebuilding: Publicly-owned Land
3.9 p.m.
Baroness Trumpington: 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 they have done to encourage the release of publicly-owned land for private housebuilding.
Lord Bellwin: My Lords, the Government have taken several initiatives in this field. First, they have introduced in England registers of publicly-owned unused and underused land more than one acre in size. Those now cover 350 districts in which has been identified a total acreage of over 83,000. Many sites are suitable for housing development. Secondly, at the Government's instance, the House Builders' Federation have made regional presentations to local authorities on low-cost starter homes with a view to getting land released for low-cost housing in partnership ventures. In structure plans, the aim is to provide for a five-year supply of land that is genuinely available.
Baroness Trumpington: My Lords, in thanking my noble friend the Minister for his very informative reply, may I ask him how much land has been sold and how much remains on the registers, since the registers' introduction?
Lord Bellwin: My Lords, within the first 35 authorities with land registers, over 3,000 acres of land have been identified for housebuilding, and I understand that so far 700 acres have been disposed of, albeit for a variety of purposes. The other registers have been published only recently: 270 on the 1st April, and 45 last Tuesday, 4th May. So we shall have to wait and see what is forthcoming.
Baroness Fisher of Rednall: My Lords, is the Minister satisfied that the new derelict land regulations are not hindering those local authorities which are looking very seriously at derelict industrial land to develop, but feel that they are hampered by the regulations? Is this not in opposition to the Government's policy of trying to get the land on the market for potential housebuilders?
Lord Bellwin: My Lords, I am not aware of the problem to which the noble Baroness refers, and I should be very glad to discuss it with her later. We are in fact making available £45 million—I think that is the figure—for derelict land grant this year, and that is the highest such figure ever. We are extremely anxious to ensure that it is spent, since in the past amounts intended for the purpose have not always been spent. We will gladly work together with

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authorities who want to bring forth land that can be brought back into use.
Lord Wallace of Coslany: My Lords, will the noble Lord please advise the House whether he will persuade local authorities not to increase allotment rents to such a level that plot-holders are forced out, in order that the council can sell the land for housing? Secondly, since so much land is available, will the Minister encourage local authorities to acquire it for allotment gardens and gardening activity generally? This is an activity which, with all due respect to the House, I would suggest would he good for the health of noble Lords.
Lord Bellwin: My Lords, I am well aware of the interest of the noble Lord, Lord Wallace of Coslany, in allotments, and I am quite sure that he knows a darned sight more about them than I do. On this point I would say only that I should not have thought that authorities were at all short of land, and the information coming from the registers supports that view. Whether or not authorities wish to make land available for allotments is for them to decide. I am sure that they will all read carefully what noble Lords have said today.
Lord Taylor of Gryfe: My Lords, in view of the rather small, limited amount of land that is disclosed in the registers, is it the intention of the Minister to provide a local authority register of privately-held land which might be suitable for development?
Lord Bellwin: My Lords, I should have thought that the amount of land to which I have been referring—83,000 acres—was anything but small. I should have thought that your Lordships would have considered that to be an enormous amount; I certainly do. The great "trick" (if I may use the word) is to see how we can bring it back into use, whereas hitherto it has not been used. If we were to achieve that even in part, it would make an enormous difference throughout the whole country. I rather feel that that puts into perspective the point that the noble Lord makes about the private sector. If we can get the public sector right, everything will flow.

The Middle East: Peace Settlement Negotiations
3.14 p.m.
Lord Chelwood: 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, now that the Camp David process is exhausted, they will take the lead in the European Community aimed at a joint initiative with the United States to achieve Israeli security and recognition by her Arab neighbours within the pre-1967 armistice lines, as well as Palestinian self-determination.
Lord Skelmersdale: My Lords, while the Israeli withdrawal from Sinai has been successfully completed,
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the autonomy talks based on the Camp David Agreements continue. The United States clearly have an important role to play in the next stage of the search for peace. We and our partners in the Ten are ready to work with the United States, and all the parties concerned, towards a comprehensive settlement, which we believe should be founded on the Venice principles.
Lord Chelwood: My Lords, has my noble friend had an opportunity to study two interesting American reports recently produced? I refer, first, to The Path to Peace, whose four signatories include Mr. Philip Klutznik, President Emeritus of the World Jewish Congress, which flatly stated that until the Palestinian right to statehood has been fairly faced there is no prospect of peace. Secondly an equally important report, which reached similar conclusions, was written by Senator Charles Percy, the chairman of the Senate Foreign Relations Committee, who, after visiting 14 Arab countries, including Syria—and of course going to Israel—found a widespread willingness to recognise Israel's right to exist behind secure and recognised borders, which in his opinion would have to exclude all land occupied or annexed in 1967, or since then.
Lord Skelmersdale: My Lords, I must confess that I have not seen in the flesh the two reports to which my noble friend refers. However I have read synopses of both of them, and in the main the Government agree with them, with of course the everlasting proviso that both sides recognise one another in this dispute.
Baroness Llewelyn-Davies of Hastoe: My Lords, is the noble Lord aware that the House will very much welcome his statement that Camp David is not exhausted and that negotiations are proceeding between Egypt and Israel about Palestinian autonomy? Is the noble Lord also aware that in all parts of the House there will be great sadness that this particular subject should be discussed on the day, and at the time, of the funeral of Lord Janner, who contributed so much to our knowledge of the Middle East?
Lord Skelmersdale: Yes, my Lords, we on these Benches would certainly like to echo the sentiments of the noble Baroness opposite. For my part I find it very strange to be discussing this subject without the benefit of the noble Lord's advice.
Baroness Gaitskell: My Lords, is the Minister aware that the Camp David agreement is not exhausted and that negotiations are continuing between Israel and Egypt regarding Palestinian autonomy? In fact, the negotiations that are going on are very healthy and very strong.
Lord Skelmersdale: My Lords, I am sorry if I have been misunderstood. I did not mean to give the impression that Camp David was not continuing. It is by no means finished, it is still going on.
Lord Paget of Northampton: My Lords, is the noble Lord aware that we are not any longer a Middle Eastern power, that the European Community are not any longer a Middle Eastern power, and that

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we shall earn the gratitude of the Middle East and of our American ally if we mind our own business and leave them to mind theirs?
Lord Skelmersdale: I would not agree with that, my Lords.
Lord Mayhew: My Lords, is the noble Lord aware that the Camp David autonomy talks have been going on for several years and that no progress whatever has been made? Is he also aware that the Foreign Ministers of the Community will be meeting this weekend to discuss the report of their president on his return from a visit to the Middle East? Will he give the House the assurance that the British Government will take an initiative, so that peace can be achieved in the Middle East?
Lord Skelmersdale: My Lords, as I think I have already made clear, we and the Ten stick very firmly to the Venice principles, and fresh ideas from all the parties concerned are, I would agree, now needed if progress is to be made towards a comprehensive peace settlement. We and our European partners are ready to play our part in this, and we keep our policy constantly under review in the light of developments. However, as I said at the beginning of the Question, we continue to believe that the principles of the Venice declaration provide the best option at the moment.
Lord Molloy: My Lords, bearing in mind the remarks of my noble friend on the Front Bench, is the noble Lord aware that in all the lands of the Middle East that are involved there are very many people who would welcome, and indeed support, the submission made in his supplementary question by the noble Lord, Lord Chelwood? If we can get this point on the agenda for talks between the Government and the EEC, and if the endeavours of all people who think along these lines, in all the countries involved, and in Europe, can be combined, that would help us to move towards the ultimate achievement, which is peace for all in the Middle East.
Lord Skelmersdale: Yes, my Lords, I would agree with that, but of course the great problem is that politics and people all over the world do not necessarily go together.
The Earl of Onslow: My Lords, could my noble friend give some encouragement to a revival of the Prince Fahad proposals? It appears possible that they could be revised and that seems to me an implicit recognition by the Arab side of the State of Israel provided that Israel, in turn, recognises some rights of the Palestinians.
Lord Skelmersdale: My Lords, yes. We are delighted that the Fahad principles ever came about. As a Government, we are very pleased that diplomatic activity should come from the area concerned; and this is right. I would say to my noble friend that any reconvening of, for example, the Fahad Conference is a matter for the Arab States themselves.
Lord Brockway: My Lords, would not the noble Lord agree that, while we have had our minds on the Falkland Islands, serious dangers to peace have arisen in the Middle East? While welcoming any action by the European Community to secure the double object of security for the Israel frontiers and self-determination for the Palestinian people, would the Government now consider whether it is not desirable to recall an international conference on this subject where world pressure, both West and East, could be exerted to reach a solution on these lines?
Lord Skelmersdale: My Lords, I am not sure that the time is yet ripe to call a world conference in the conditions the world is in at the moment. I will take advice on the point raised by the noble Lord.
Baroness Gaitskell: My Lords, is the Minister aware that under Article A.I, Israel, Jordan and the representatives of the Palestinian people should participate in negotiations on the resolution of the Palestinian problem in all its aspects? The current negotiations between Israel and Egypt are clearly in line with this arrangement and are aimed at negotiating the details. Is the noble Lord aware that these negotiations—
Several noble Lords: Reading!
Baroness Gaitskell: My Lords, am I going to be allowed to speak at all?
Lord Peart: Carry on.
Baroness Gaitskell: The current negotiations between Israel and Egypt are clearly in line with the arrangement and are aimed at negotiating the details for a transitional arrangement on the West Bank for a period not exceeding five years.
Lord Skelmersdale: Yes, my Lords, I am aware of that; but I think the noble Baroness has come to rather greater conclusions than the facts warrant in this matter.

The Barrowmore Village Settlement Hospital
3.24 p.m.
Lord Mowbray and Stourton: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what are their plans with regard to the disposal of the 170-bed hospital in the Barrowmore Village Settlement near Chester.
Lord Cullen of Ashbourne: My Lords, this hospital will be surplus to NHS requirements following the opening of a new hospital in Chester later this year. The normal rules governing disposal of surplus NHS land would require that the property is disposed of on the open market for the highest possible price. However, we are conscious of the Barrowmore Village Settlement's historic interest in the hospital and my

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officials will be meeting the trustees shortly to discuss the situation.
Lord Mowbray and Stourton: My Lords, I thank the noble Lord for his reply. Does the noble Lord appreciate the fact that this hospital was built by a small charity, the Barrowmore Village Trust, with help from the Order of St. John and the Red Cross and that they had it removed from them without compensation in 1948 and that now, because it is not wanted, they are being asked to buy it back at an inflated price? Does this not leave the noble Lord with an ugly taste in his mouth?
Lord Cullen of Ashbourne: My Lords, that was a surprising finish to the supplementary question. I do not feel that I have a bad taste in the mouth nor, I hope, an ugly one. It is true that this hospital was taken over without compensation by the NHS under the 1946 Act, but this Government were not responsible for that Act which applied to a very great many hospitals, either taken from local authorities or from charities. As I have said, we are aware of the historic interest of the Barrowmore settlement in this hospital.
Lord Wells-Pestell: My Lords, is it not true that there is an agreed procedure which must be followed in matters of this kind as outlined by the noble Lord? Is it not desirable that we should keep to those procedures; for, otherwise, if we are going to make an exception in one case, we may have to make exceptions in others?
Lord Cullen of Ashbourne: My Lords, the noble Lord is right. If it is not possible for the Government to sell surplus properties after more modern hospitals have been built, that would very much inhibit the growth of the National Health Service—which we support as well as does any party.
Baroness Hylton-Foster: My Lords, is the noble Lord aware that it was the funds of the joint committee of St. John and the Red Cross and that they used their capital to rebuild and extend the hospital which was knocked down by a land mine in 1940? Is he further aware that they now need those buildings for sheltered workshops and to expand the craft employment which is now being done there in collaboration with the local authority? Would the Minister agree that the Government save a great deal of money when voluntary organisations work for the disabled and do work which otherwise the Government would have to do and to pay for?
Lord Cullen of Ashbourne: Yes, my Lords, I am aware of the background and the money spent by the settlement in repairing the hospital in 1943. We, too, are very much in favour of the development of this craft village. My right honourable friend has a duty to try to get the full market value for any properties which become surplus. The valuation placed on this property for use as a private hospital or an educational establishment is £500,000. It may be that we will not succeed in getting that sum. In that case we shall be pleased to have further discussions with the settlement with a view to making some concessionary arrangements.
Lord Elwyn-Jones: My Lords, in view of the proposed use of these premises as sheltered workshops and for craft employment—which is a valuable public service at this time—should not that weigh heavily in the negotiations by way of effecting a considerable reduction in what is asked for in respect of this property, which was originally purchased with the charitable funds of the Barrowmore Village Settlement, with the help of the Red Cross and St. John? Surely there is room for a most generous approach to this matter?
Lord Cullen of Ashbourne: My Lords, the noble and learned Lord always has a persuasive way of making his point. I am sure that he would be the first to agree that, if this £500,000 could be obtained, it would be extremely valuable in enabling the local regional health authority to deal with many matters with which they should like to press forward for the benefit of NHS patients.
Lord Paget of Northampton: My Lords, but surely when the National Health Service took this over without compensation it was under an implied obligation to use what it took over without compensation for National Health purposes—that is, a hospital? If it ceases to do so, surely it is under a moral obligation to hand it back to somebody who will use it for health purposes as a hospital? To do otherwise is dishonest.
Lord Cullen of Ashbourne: My Lords, the reason why the hospital is being closed—there has been virtually no local opposition to its closure—is because a larger, more modern hospital is being built in Chester at a cost of over£11 million. That is going to take over the job which is being done in this hospital and one or two other similar health activities in the area.
Lord Mowbray and Stourton: But, my Lords, does not the Minister realise that while he says that the new hospital will take precedence over this one—which I accept—the Cheshire County Council and all the local people have no sympathy with the Government in their obdurate views on not being willing to give concessionary terms—as the noble and learned Lord, Lord Elwyn-Jones, pointed out—to this small charity? Is the Minister not aware that this charity and the Order of St. John and the Red Cross are doing enormous good to a small number of people? I find it quite extraordinary that there is no measure of compassion in the noble Lord's voice.
Lord Cullen of Ashbourne: My Lords, the noble Lord is being rather difficult, is he not? First, he says I have a rather nasty, ugly, taste in my mouth and then that I have no compassion in my voice. I have no ugly taste in my mouth, I do not think—and I certainly feel thoroughly compassionate. I also think that there are two difficult choices to make here: one is the duty that the Secretary of State has to get the best possible price for surplus property; and, secondly, if he cannot get it—and I have said quite clearly, "if he cannot get it "—he will certainly consider making concessionary arrangements with this hospital. I cannot say more than that.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that I fully appreciate the difficult position

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in which he is placed as I was in a similar position when I was on those Benches? My noble friend Lord Wells-Pestell pointed out that there were certain procedures to be gone through. Could the noble Lord advise the House whether those procedures have been gone through? Secondly, in view of the feeling of the House—and there is obviously a great deal of feeling—would he advise his right honourable friend of the strong feeling here and at least pass the message on to be a little more generous and understanding?
Lord Cullen of Ashbourne: My Lords, of course my right honourable friend will read with great interest all that is being said today. I cannot obviously go any further than I have on this point.

Business
Lord Denham: My Lords, I hope that the House will not take it amiss if I point out that we have a great deal of business before us this afternoon, and perhaps noble Lords may bear this in mind when they come to speak. It may be for the convenience of the House if I say that it is proposed that the debate on the Motion standing in the name of the noble Lord, Lord Cledwyn of Penrhos, will begin no later than 7.30 this evening. If the Report stage of the Administration of Justice Bill should not be completed by that time, it will be continued on Thursday, 13th May.

Business of the House: Short Debates
Baroness Young: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, that Standing Order 34 and paragraphs 10, 11, 12 and 13 of the Rules for the Conduct of Short Debates set out in Appendix D to the Companion to the Standing Orders shall apply to the Motions in the names of the Lord Davies of Leek and the Baroness Ewart-Biggs set down for debate on Wednesday, 12th May.—(Baroness Young.)
On Question, Motion agreed to.

Epsom and Walton Downs Regulation Bill [H.L.]
3.35 p.m.
Lord Henley: My Lords, I beg to move that this Bill be now read a second time. This Bill has been promoted by the Epsom and Ewell District Council, which is the local authority which covers Epsom and Walton Downs. This Bill deals with those Downs and it is necessary owing to the provisions of Section 262(9) of the Local Government Act 1972, which causes the existing legislation—the Epsom and Walton Downs Regulation Act 1936—to lapse at the end of 1984.
Epsom and Walton Downs cover an area of approximately 600 acres. Epsom Downs and part of Walton Downs belong to a company named Metropolitan and Country Racecourse Management and Holding Limited
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and are subject to a lease in favour of United Racecourses. The remainder of Walton Downs is owned by Mr. Stanley Wootton and subject to a lease between him and the Horserace Betting Levy Board.
Before the 1936 Act, which is the existing legislation, the Downs were subject to conflicting interests. The interests of the public were represented by the council (that is, the predecessor of the Epsom and Walton Downs District Council), and the interests of the predecessors of United Racecourses and Mr. Wootton lay in the use of the Downs for racing and training. The council's problem was that it had only limited powers to safeguard public interests. They could make representations and resist any permanent enclosures. Generally they were dependent on the goodwill of the others.
The 1936 Act therefore set out to do the following: first, to give statutory recognition to the rights of the public to air and exercise over the Downs. Secondly, to set up a body known as the conservators. The conservators are 10 in number and at present they consist of six appointees of the local authority; three appointees of United Racecourses; and one appointed by Mr. Stanley Wootton. The conservators were charged with the duty of preserving the Downs in their natural state of beauty, and were armed with the necessary powers. Thirdly, the 1936 Act was to define the rights of predecessors of United Racecourses and Mr. Wootton over parts of the Downs essential to the continuance of the racing industry, and to safeguard other users.
As I have already said, the 1936 Act will expire at the end of 1984 unless extended by the Secretary of State for the Environment under the powers he has in the Local Government Act 1972. Because it is expiring, the council set up a working party to consider the replacement of the 1936 Act. It was felt on the whole that the 1936 Act has stood the test of time quite well and that the new Bill should be on more or less the same lines, making changes deemed necessary only by the passing of time and what might be necessary in future. This I think the new Bill attempts to do.
Since the 1936 Act, there has been a considerable increase in the local population, with, I would have thought, a resulting increase in the ownership of cars and horses for hack riding. People also now have more time for recreation. The proximity of the Downs to the Metropolitan area has led to greatly increased pressure on their use. It is obvious therefore that some balance must be struck between the various different and conflicting users of the Downs, and it should be pointed out that during the consultative process the working party consulted all interested parties and, with one significant exception, all reached a considerable level of agreement. I shall come to that exception later.
The Bill seeks some new powers to make by-laws to prevent nuisance and damage and to preserve order so as to ensure that the visitors to the Downs behave themselves and do not interfere with the rights of others in their enjoyment of the Downs. In addition to the existing by-laws the Bill covers metal detectors, noise from radios and musical instruments, model aircraft, hang-gliding and dogs. A power to charge for parking is also sought, and also various regulations to control residential caravans at the Derby meeting.

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About all these there is really no dispute. All the appropriate bodies have been consulted. For example, with regard to the caravans, the National Gypsy Council and the police have been consulted, and on these matters no petitions have been lodged.
Epsom has a worldwide reputation as a training and racing centre. Epsom and Ewell District Council regard racing as their most famous industry. But it is not only that: it also provides considerable local employment. I think there are some 14 licensed trainers and one permit-holder operating on the Downs, with something in the region of 400 horses in training: the figure can vary from day to day.
Training on the Downs at present, although fairly satisfactory, is not nearly as convenient as at, say, Newmarket, where there is considerably greater space; and with this in mind and remembering the importance of the employment question, the promoters are seeking powers to regulate hack riding. Failing that, the continuation of training at Epsom would be in considerable jeopardy; and with the demise of training one could possibly argue that racing at Epsom would be threatened. I do not argue this point very strongly, but it is arguable and I imagine that some later speakers will be referring to it. Racing has existed at Epsom since at least the reign of Charles II and I do not think anyone would be prepared to see it go. Certainly the local authority consulted all the local residents and they all agreed that racing at Epsom should survive.
All I would say for the moment is that the promoters are most anxious that training and racing, and in particular the Derby—probably the most celebrated race in the world—should be preserved. This is not merely in the interests of the racing industry but in the interests of the rest of the community in Epsom and round about. It is with that in mind that the promoters seek power to regulate hacks on the Downs. I should mention that the 1936 Act was defective in that it left this matter unclear. It has worked tolerably well in the past, but the increased pressure on the Downs makes this less easy. Further powers are also being sought to erect temporary stands principally for the Derby meeting, to re-develop the present grandstand when necessary—at present it has only possibly 10 years of life—and to impose a limit of 16 days' racing a year. At present there is no limit, though in fact only nine days' racing takes place. Evening and Sunday racing has been anticipated, but only if there should be a change in the general law. Even then safeguards have been added to tighten up the existing regulations in the interests of the conservators and the council, whose consent would be required.
Turning to the question of hacks, concerning whom the noble Lord, Lord Melchett, has tabled an Instruction, and concerning whom a petition has been lodged by the British Horse Society and the Epsom Downs Riders' Protection Society, due to increased pressure on the Downs the promoters feel it is necessary for there to be some greater control over hack riding. Obviously the exact details and the evidence needed must be left to the Select Committee, to whom this Bill would be committed should it be given a Second Reading.
I should like to make only three points. First, this is not, as I think some would like to see it, a dispute purely between the liberties of the hack riders
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and the alleged privileges of the racing industry. There are a great many other users of the Downs whose rights ought to be considered. People walk there; they go on cross-country runs; they have picnics there and the Downs are used for charitable events. Model aircraft flying takes place there and the local school cadet force meets there for its field day events. Obviously some balance must be struck between all those different users. The hacks are not the only users other than the racing and training industry.
Secondly, I cannot really emphasise too much the importance of the training at Epsom in terms of employment. This is of benefit to the area, and nobody wants to see training disappear if that would result in considerable loss of jobs. Thirdly, it is fair to point out that the trainers pay large sums for maintaining the various gallops and training areas on the Downs, while the other users do not. I do not know how many there are, but certainly some of the other users are not necessarily local residents or ratepayers.
Lastly, I turn to the Instruction in the name of the noble Lord, Lord Melchett, which will be moved should this Bill be given a Second Reading. I am not terribly happy with it; I do not particularly like the wording, but I shall leave it at that. I do not myself oppose it. If the noble Lord, Lord Wigg, moves his amendment to that Instruction, I feel I should have to support him, as I would prefer the Instruction of the noble Lord, Lord Melchett, as amended by the noble Lord, Lord Wigg. I beg to move that this Bill be now read a second time.
The Earl of Onslow: My Lords, before the noble Lord sits down, and while I realise I shall be speaking later, could he say how many jobs would be involved? This would be very helpful to those who are going to speak in the debate later.
Lord Henley: My Lords, I do not think I can say how many jobs would be involved. I certainly do not have the exact figure. There are about 400 horses in training and that will give some idea, because quite a lot of people are needed to look after that number of horses. Again, this is a matter of detailed evidence and I think it is the job of the Select Committee to look into that rather than for it to be dealt with on Second Reading.
Moved, That the Bill be now read a second time. —(Lord Henley.)
3.48 p.m.
Lord Melchett: My Lords, the noble Lord, Lord Henley, has given your Lordships an admirable introduction to this Bill and I should like to say at the outset that I entirely support a Second Reading being given to the Bill and for it to go to a Select Committee. I entirely agree with him that it is the Committee's job and not one for your Lordships this afternoon to look into the merits and the arguments on one side or the other.
Before I make my speech, may I apologise profusely to your Lordships for the fact that I have to leave the Chamber at 5 o'clock to attend a meeting of your Lordships' Select Committee on unemployment. This is the last meeting of that Committee, which has been sitting for nearly three years now, and it is

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impossible for me to miss even a minute of its final meeting. Unfortunately, the timing of this debate was changed without providing any opportunity for me to comment on it. I believe it was altered to suit, in particular, my noble friend Lord Wigg and others of your Lordships who wished to speak this afternoon. As your Lordships will know, it was originally on the Order Paper for the end of Business yesterday when it would have been fairly late; but I am afraid it means that I shall not be able to stay until the end of the debate. The noble Earl, Lord Onslow, has very kindly agreed to move my Instruction formally when the time comes, and I hope I can save time by speaking to it now and therefore shall not need to speak for a second time, even if I were in a position to do so.
If I may add very briefly to a couple of points on the history which the noble Lord, Lord Henley, so admirably sketched out, before the 1936 Act the Downs were common land and were used for a wide variety of activities—as indeed they still are—racing, training racehorses, hacking, the grazing of sheep, golf, walking and so on. As the noble Lord said, more recently there have been more modern pursuits, such as model aircraft flying, added to the list. But in 1936 the number of horses in training had risen to over 1,000 and, due to the pressure which that and other activities were putting on the Downs, there was dissension between trainers and representatives of other users. The object of the 1936 Act was to maintain the Downs in a state as near as possible to the natural one, to their natural beauty, and to ensure that no particular interest group, no particular set of users, obtained more than their fair share of access to the Downs and use of them, and certainly that they did not do so to the detriment of other interests or members of the public.
The number of racehorses being trained has declined somewhat since 1936. As I said, then there were about 1,000; I understand that in the 1950s there were about 850 and that now the figure is around 350. The noble Lord, Lord Henley, quite rightly said that a number of jobs are tied up in this, but I do not think anybody who objects to the part of the Bill which changes the rights of hack riders would wish in any way, or even to suggest, that training should be limited or should disappear from Epsom. Quite the contrary—the argument is whether the changes in the Bill are needed to ensure that training continues. Just as a first point, it seems to me that if the numbers have declined from around 1,000 to around 350, while the area available for training has certainly not decreased, and has in fact increased, there are at least some prima facie arguments for saying that a change in legislation of the sort that this Bill would introduce is not needed.
But there are other economic interests and employment interests involved. For example, six local riding schools and their clients, together with a large number of private riders, use the Downs and employment will be involved in those riding schools, just as there is in the training. It is estimated that the Downs are used by about 40 hacks per day on a weekday and 100 per day at the weekend. Of course, those figures are subject to considerable seasonal variation, but I think they illustrate the degree of public interest among a large number of people in the use of the Downs for the purpose of hacking.
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As the noble Lord, Lord Henley, said, the Act needs to be brought up to date and, as I said, I certainly support the Second Reading of this Bill, but changes have been taking place in advance of a change in legislation. Over recent years, hacks on the Downs have been more and more confined to certain limited tracks and paths, by signs and barriers which have been erected across traditional riding grounds. These tracks are also used by racehorses going to and from the gallops, and by tractors and other vehicles of the racing interests. The result of this has been that the tracks have become very badly churned up in wet weather, even impassable, and one or two are completely unusable in any safety in bad weather. This has caused considerable problems for the hacks, but also considerable damage to the Downs themselves, and it illustrates the dangers of confining people to particular tracks when they are riding on horseback, particularly if those tracks are also used by tractors in bad weather.
For example, a sand track was constructed on the area at the top of Walton Downs where hacks used to ride. That soon became churned up and unsuitable, and a further track was built on the uphill side of the first. That track drained into the first one, which has become completely impassable, and worsened its already poor condition, and when the upper track was rebuilt all the unwanted material was spread on the lower track, making that into nothing more than a bog in wet weather.
I do not think I want to go any further into the arguments on either side. On that point, I simply want to emphasise that the petitioners to this Bill certainly have absolutely no intention of threatening racing or the training of racehorses on Epsom Downs. They would suggest that the 1936 Act has worked well and that it would be wrong, without serious consideration, to change its provisions. In addition, I wanted in the first few remarks that I made to illustrate that there is a very considerable public interest on both sides. I agree entirely with what the noble Lord, Lord Henley, said about the importance of racing and training racehorses at Epsom, but I hope that others of your Lordships, and he indeed, will agree that there is considerable public interest in the general recreational use of this area, particularly given, as he said, the increasing population and the decreasing amount of green space that is available, especially for people living near Epsom.
To turn to the legal position very briefly, the 1936 Act substituted for rights to ride over the Downs at will, which were claimed under common law, statutory rights to ride at will, but restricted in the sense that the public were not allowed to ride on the golf course, the racecourse or the training gallops. So the 1936 Act removed, of itself, very widely claimed and held common law rights, and substituted more restricted rights in order to balance, as the noble Lord said, the different interests involved. Section 4 of the Act, to which my Instruction draws attention, gives this right of access for air and exercise on the Downs, subject to a provision that nothing in that section shall authorise any interference with racing or the training of racehorses—that is quite clear in the existing Act—or, of course, the general right of access on foot or on horses, which is confirmed in later sections of the Act.

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The problem with this Bill and the point of public importance, and the reason why I suggest your Lordships agree to the Instruction which I have put down, is that the Bill before your Lordships this afternoon amends Section 4 of the Act, because it would restrict the general right of access to the Downs to those on foot only. It would therefore remove the general right of access, subject as I have said to the safeguards for racing and training, from those on horseback. I suggest to your Lordships that that is an important matter, a matter of public interest, and one to which it would be useful for the Committee to give particular attention.
To sum up the arguments of those who object to the change which is in the Bill, they would say that it is unacceptable that the public's statutory right to ride at will over the Downs should be exchanged for permission to ride on certain tracks and areas only. They would say that it is unnecessary to restrict the public's use of the Downs, because the Act limits this general right, as I have said, to the extent that it was necessary originally to train 1,000 racehorses on the Downs to provide a sufficient area of training gallops for that purpose; that now there are only 300 or 350 horses in training and it should not, therefore, be necessary to increase the size of the training gallops at this point in time. But the third argument against the change which is in the Bill would be that it is detrimental to the conservation of the Downs to restrict and channel riders in very narrow tracks used by a large number of horses, including racehorses and vehicles, because that damages the surface of the Downs and is in nobody's interest at all.
Finally, those who object to this change in the Bill would say that there is no evidence in the official report, which was published in 1981 by the borough council, of any conflict between riders and members of the public exercising their rights of access on the Downs. As I understand it, those with considerable experience of training racehorses—indeed, one trainer recently wrote to the Horse and Hound to this effect—say that there has not been a single accident in all the years of training racehorses on the Downs. That, I hope, is sufficient to suggest that there is a matter of public importance and public interest here, and I should now like to turn very briefly to the effect of my Instruction and to the amendment of my noble friend Lord Wigg.
First, the effect of an Instruction is not to settle the matter under debate; as the noble Lord, Lord Henley, said, and I strongly agree with him, that is a matter for the Committee. The effect of an Instruction is twofold: first, to underline the importance of a point. I suggest to your Lordships that the number of people who put their names down to speak this afternoon does not allow anyone to argue that this is not a matter of general interest and importance. Therefore, on that ground alone, it seems to me right that your Lordships should agree to my Instruction and ensure that the Committee gives particular attention to this point.
The second thing which an Instruction ensures is that the Committee gives reasons if it disagrees with what is said in the Instruction or agrees with what is said in the Bill—either way. It seems to me, given the public interest in this subject, the number of interests involved and the degree of interest in your Lordships' House, that it would be advisable to ask the Com-
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mittee, by way of agreeing to my Instruction, to give its reasons for either agreeing with what is in the Bill, or deleting what is in the Bill and remaining with the provisions of the 1936 Act. That again will be the effect of passing the Instruction. It does not determine the outcome of the Committee's deliberations one way or the other. I would suggest to your Lordships that on those grounds the case for an Instruction is overwhelming. I was delighted to hear the noble Lord, Lord Henley, say that he would not object, although he was not entirely happy with my wording, to this Instruction being agreed to, and I hope that that will be the view which your Lordships will take generally.
Finally, as I shall not be speaking again, may I deal with Lord Wigg's amendment. It seems to me that it does not make a great deal of difference in practice which version of the Instruction is agreed to, because both will have these two effects: that the Committee will give particular attention to this point and, if they follow their normal practice, will give their reasons for either agreeing or disagreeing to the change made to the Bill. My only quarrel with my noble friend is that my wording is, I think, rather clearer and simpler than his and, secondly, addresses itself to the point in the Bill which is the focus of public concern. For that reason, it is a preferable form of words.
I say that because the reason for the concern which I have mentioned to your Lordships is that the 1936 Act is being amended in one important respect: to make it a criminal offence for people on horses to ride at will over the Downs where previously they had a statutory and before that a common law right to do so. That is the change which is causing concern. I suggest that logically this is the change to which the Committee's attention should be drawn and that they should give their reasons for either agreeing or disagreeing to that change. This is what my Instruction quite specifically does. If one reads it very carefully, Lord Wigg's does much the same thing, but not nearly so explicitly. It does not seem to me that my noble friend gains very much by his words, but it does seem to me that the Committee will gain something from the greater degree of clarity of my drafting.
Therefore, I hope that your Lordships will agree to this Instruction being passed to the Committee, taking into account the very considerable degree of public interest and concern. This very small change—the inclusion of the words "on foot"—which will make, as members of the British Horse Society, local riders, local riding schools and so on believe, criminal offenders out of people who previously had a general right at law to ride over the Downs, so long as they did not interfere with the racing and training interests, is a matter of considerable importance. On that basis, when it comes to the Bill—as I hope it will—being given a Second Reading, I hope that my Instruction can also be moved formally and will be accepted by your Lordships.
4.3 p.m.
Lord Wigg: My Lords, may I begin by congratulating the noble Lord, Lord Henley, on the excellent way in which he introduced the Second Reading. He saved me a great deal of trouble and I think that perhaps he saved your Lordships some boredom, because much

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of what he had to say is what I intended to say—although I do not think that I should have said it as ably as did he.
Naturally I listened with great care to what the noble Lord, Lord Melchett, had to say. The great difference between us is that obviously he is interested in preserving the rights of those on horseback to go where they like, when they like and how they like, whereas I, for my sins, became involved in this problem in a practical way. My interest arises in the first instance from the work of the late Lord Chuter-Ede—my old friend Jim with whom I was closely associated in another place in connection with the legislation which the then Home Secretary, the late Lord Butler, placed on the statute book. The late Miss Ellen Ede and the Mayor and Corporation of Epsom did me the honour of asking me to deliver the address at his funeral service. I remember very well that The Times paid tribute to him by saying that he was among the most sensible men of his generation. He was essentially a sensible man and a man who commanded wide respect. Although a lifelong Socialist and a member of the Labour Party, he became Charter Mayor of Epsom and the chairman of Surrey County Council. I do not think that the political opponents of anybody could pay a greater tribute than was paid to Chuter Ede.
It was Jim Chuter Ede who was the author of the 1936 Act. I sat, as it were, at his knee and listened to him dealing with some of the problems and some of the chaos that existed before the 1936 Act. Of course there were many more horses in training then, but training then was very different from training today. The situation in Epsom before the 1936 Act was passed was as about near chaos as anybody can imagine. May I remind your Lordships that when I became chairman of the Levy Board in 1967, at the Derby one had the unique spectacle, by the Downs Hotel, of racehorses which were worth hundreds of thousands of pounds being mixed up with motor-cars, the public, ice-cream cars, bicycles, motor-cycles. Of course it is generally accepted that the winner of the Derby in 1970 was worth £1 million. When it pulled up, it could have pulled up in conditions which might have involved the end of the horse.
We had to tackle a problem which had been left over. Nothing had been done about it. We had to find the money to put in an underpass and tackle the problem. Between the 1970 Derby and the next Derby the Langley underpass was built. It is perfectly true that great quantities of chalk had to be excavated, that this was put on the Downs and that it made some parts of the Downs soggy. But there are problems all the time, which either can be left or can be controlled. What Chuter Ede set out to do, sensible man that he was, was to compromise. The 1936 Act, which has lasted from then until today, was based upon a compromise which worked very well.
The noble Lord, Lord Melchett, was very kind and very fair in what he said, but I do not think that he could have read his own Instruction because what he is asserting there is that there is an explicit right at all times, which should be continued, for hack riders to go, as I say, where they like, when they like and how they like. What Chuter Ede set out to do by setting up the conservators was to bring into practice a compromise which has, basically, worked. If the Bill is
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given a Second Reading and the amendment which I am going to move is accepted, to establish here the right of the trainers, under properly controlled conditions, I believe that training will continue, that racing will continue and that money will be available for the development and conservation of the Downs, free of any charge upon the public. May I remind your Lordships that one of the things which we managed to do was to take Epsom and Walton Downs out of private ownership, leaving the kind of problem I have mentioned at the Downs Hotel, and bring them into public ownership in order that they could be developed in the interests of the community as a whole: pedestrians, hack riders, trainers, the continuation of the Derby, and the family who want to go there for a picnic. It is not only Epsom that is involved. This is an open area available to the metropolis as a whole. If this can be developed then it will be a very important public asset, which I am proud to say that I helped to bring into public ownership so that it could be developed in that way.
Can I just tell a story? There was a difference of opinion concerning Mr. Stanley Wootton, the owner, as he is described in the Act, of Walton Downs. The future of Epsom came into doubt because the Grandstand Association, as it then was, under the chairmanship of the late Sir Brian Mountain assisted by Mr. Evelyn de Rothschild, was quarrelling with Mr. Wootton. It got almost to the point of litigation. Stanley Wootton asked me to meet him on Walton Downs on a lovely June morning in 1969. He said, "Look, over there is Headley Church. Wouldn't it be wonderful if we could come to an arrangement whereby, 200 years from today, someone standing on this spot could see what we can see today while enjoying the glorious sunshine of a June morning?" I replied, "Two hundred years? Why not a thousand years?" He responded, "Why not? "So he agreed to give a lease to United Racecourses. In that lease he did not lay down the law or impose stringent conditions, and I know that because I have a copy of it here. He merely expressed the hope that in granting the lease he would guarantee the future of the Downs as a training centre for racehorses and for the continuation of the Derby. That is my interest.
I was committed in honour to do what I could to undertake what Stanley Wootton had asked me to do. A few days ago he wrote to me from Australia. Like me, he is now getting near the end of the journey and spends much of his time in his native Australia. He writes:
"Dear Lord Wigg, I understand that a petition has been lodged for hack riders to be given official authority to use some portion of Walton Downs. I am entirely opposed to this suggestion and trust that the Levy Board are of the same opinion. When I handed over the management of Walton Downs to the Levy Board, I did so upon their agreeing that the training of racehorses should always have priority over all other uses of the Downs. We must on no account give away the rights of the owners of the Downs to manage these within their authority. I am not opposed to a continuation of the friendly arrangement with the Hack Riders' Association, whereby they have somewhere to ride on the Downs".
He goes on to tell me how I may get in touch with his solicitor.
It is not only Mr. Stanley Wootton who is worried. I have received a letter from Mr. Benstead, the chairman

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of the Epsom Racehorse Trainers Association, in which he writes:
"Dear Lord Wigg, I am writing on behalf of all trainers in the Epsom area to ask if you will render assistance in preserving the training grounds on Epsom and Walton Downs for the training of racehorses. As chairman of the Levy Board when Mr. Wootton leased Walton Downs and other parts to the Levy Board, you are best qualified to understand Mr. Wootton's intentions. During the preparation of this new Act, we were under the impression that the interests of United Racecourses and the trainers were one and the same. Recent events have indicated that this may not be so".
The point is this. Here are these Downs and there are, I would suggest, some 400 racehorses. What the noble Lord, Lord Melchett, does not understand is that a considerable capital outlay has been undertaken to improve the quality of the gallops. I would like to pay tribute to Mr. J. S. Hall, who for many years was responsible for those gallops and for putting in all-weather gallops. These are maximum capital outlays and they are bringing their reward. Only last Saturday, the third and fourth in the 2,000 Guineas were horses trained at Epsom. The number may have gone down but the quality has increased. If Epsom is to continue as a racing centre, it will continue to provide employment not just for those who work in the stables; because it is like a brick being dropped into a pond, sending ripples out wide. There are also secretaries, saddlers, people who provide refreshments and all sorts of other people whose numbers must run into hundreds.
However, I would not base my argument on the question of employment, important though that may be. My argument concerns an event of world importance. It is the most important race in the world. If Epsom ceases to be a training centre it will be the end of the Derby. The training of racehorses and the continuation of the Derby are the heads and tails of the same penny. Others may not agree, but that is my firm view. I struggled to find the money to buy United Racecourses at a time when there was a restriction on credit. But I did so with the support of a very able board—and I pay tribute to my colleagues on the Levy Board at that time, particularly the noble Lord, Lord Kilmany, and certainly the late Lord Crathorne, who backed me up in buying United Racecourses with Deutschmarks.
Why did we do so? Because it was not only Epsom that we were concerned about. We were concerned about rebuilding the stand at Sandown Park, which was in danger of falling down. That was done, and the idea was to roll over part of the cost against gravel extraction at Kempton, and then to develop the 1¼ mile down to the 7 furlong start at Kempton and then to sell it. Negotiations were in progress which would have produced very large sums of money. But times change and those policies were not carried through. Nevertheless I believe that they were soundly conceived. But one cannot legislate for posterity. One can only do the best one can today, in the hope that it will hear fruit for tomorrow. That is what has happened.
It is also of tremendous importance that one should understand the part played by the local authorities. It was the view of my board, and certainly my own view, that we should bring the local authorities—Epsom Council, Esher Council and Sunbury Council—into
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association for the development of these racecourses. That was done; but in March 1974, without a word of warning, the local authorities got slung off. Notice was given by the late Sir Brian Mountain that they had served their purpose and must go. I was not very happy about that, and I am not very happy about it now. But with regard to Epsom Council, to whom I pay tribute because it has been a pleasure to meet Councillor Newton and the Chief Executive, Mr. Grimes, who are very pleasant colleagues, I have every confidence in their ability to sustain policies in the interests not only of Epsom but also of the continuation of the Derby.
I intended to put down an Instruction which would secure the appointment of Epsom Council on to the board of United Racecourses, but Epsom Council are satisfied with something less than that. They have sent me copies of correspondence with the Levy Board in which they say that the Levy Board are prepared to give an assurance to this House (although I do not know what the value of an assurance given to this House is, except that it is a way of expressing intent to follow policies through) to ensure that Epsom and Ewell Borough Council will be represented on the grandstand company and will be kept informed of all activities which involve Epsom.
That is a matter between the Levy Board and Epsom. I hope it works out. It has not worked out very well so far as the Grand National is concerned, because, although I have done my best to secure continuance of the Grand National, in my judgment unless something is done very quickly to put the stands right at Aintree there is not going to be another Grand National. If it is left to next November, when the option that the Racecourse Holdings Trust have with Mr. Davis will expire, and the money is not available, then I am afraid the 1982 Grand National is curtains.
I was afraid about the same thing happening at Epsom. The original stand was built in 1830. It is interesting to notice that the cost was £13,000. The present stands were built in 1927, and it is estimated that they have 10 years' life. But of course if you wait till the stands are about to fall down, and if you have had a policy of spending all your money on prize money or interest free loans to the Jockey Club, there will not be any money available to rebuild the stands. In my view, a survey ought to be undertaken now, getting the best advice available as to how rebuilding should take place, because of course, even today, the existing stands are not really up to modern standards. These problems have to be tackled in advance. If they are left, at the end of the day you can say, "Well, of course we are wholeheartedly in favour, we would do it all if we could, but we have no money."
I now come, under the pressure of time, to the point of Lord Melchett's amendment. What he does in his amendment is to give the right to the public on horseback to exercise the powers which he says they have always had. Well, I am not going to argue about whether they have always had them. All I would say is that they have not practised them. It has been done on the basis of co-operation. I believe the Epsom Council and the Epsom trainers have leant over backwards to do everything they can to meet the hacking interests, but you cannot have all-

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weather gallops being used by valuable racehorses running within a few inches, or a yard or so, of people on hacks. To do that is to invite disaster.
Lord Melchett: My Lords, I am sorry to interrupt the noble Lord and I do not want to prolong the proceedings, but he has now said twice that I have an amendment down. In fact it is an Instruction. My noble friend has also said twice that the effect of the Instruction would he to continue a generally and totally unrestricted right of access by hacks to the downs. Neither of those statements is correct. My Instruction asks the Committee to make sure that they are satisfied that it is in the public interest that the rights available under the 1936 Act should be removed. It does no more than that. The Instruction does not tell the Committee what decision to reach; it simply asks them to make sure that it is in the public interest that the rights given under the 1936 Act should be removed by this Bill—no more than that.
Lord Wigg: My Lords, may I say this, with great respect: that is a lawyer's argument. It has no validity in fact at all. What the noble Lord is saying is that under the 1936 Act there was this right. I am saying it was an academic right and it was never put into practice. When it was, it brought the conflict between Mr. Wootton and United Racecourses which led Mr. Wootton, first, to threaten litigation, and then to say, "Look, I am prepared to give Walton Downs provided the training of racehorses should continue". I am saying to your Lordships that if you go and look at these gallops, these hack rides, they have 14 miles of hack rides. The trainers have leant over backwards. They offered not to use their gallops after midday. They have done everything they can. They offered to put in another strip to the top of Six Mile Hill.
This was all thought to be accepted, and then they found this. The trainers suddenly woke up to find that the Levy Board representative and the conservators representative, without a word from them, were going out measuring strips for hack riders within a yard or so of the gallops. At the end of the day, either you have the hack riders or you have the gallops; you cannot have the two. I am obliged to the noble Lord, Lord Melchett. He says he wants to leave it to the Select Committee. So be it. I think this matter of such importance that your Lordships should say to the Select Committee, "Yes, be fair-minded, listen to the evidence, come back and say what you like; but in our view it is of prime importance that all users of the Downs—hack riders, trainers, pedestrians, picnickers—all have a right and somebody has got to balance those rights, and that should be the Epsom Council, the elected representatives." That is what I am saying.
If that is done, you will then get, in our peculiarly British way, in the tradition set out for us in the past by Lord Chuter-Ede, a working compromise. But if your Lordships accept Lord Melchett's advice, and if the Select Committee then come down and say that there is the inherent right here, as a legal right, for the hack riders to go where they like, or, as he puts it, the public on horseback have a right to go where they like without any restriction being imposed, without any restriction that the council in the interests of the users
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of the Downs may impose, then you have said goodbye to training at Epsom and you have said goodbye to the Derby. That is my view. I have put it to your Lordships as fairly as I can, and I would ask your Lordships to give the Bill a Second Reading and to support my amendment as against the original Instruction moved by Lord Melchett.
4.27 p.m.
Lord Crawshaw: My Lords, I want to say a few words in support of my noble friend Lord Henley, who so ably moved this Bill, and of the Bill itself. First of all, I am extremely pleased to see that the local council, the Epsom Council, and the racing authorities are in pretty well total agreement over this Bill, because I think that augurs very well for the future of racing and training at Epsom. As I understand it, in point of fact all this Bill is doing is to put on to the statute book practices which are going on at present. We have had many instances of this sort of thing in the past; we had one last summer on the Bill to do with bookmakers' contributions, simply to put what is a current practice on to the statute book. That is how I understand it.
On the whole I have found that the mutual respect among those engaged in equestrian pursuits is very fundamental. It seems to me this is especially the case when it comes to, so to speak, leaving the floor. There is a great camaraderie between those engaged in steeplechasing, point-to-point, show jumping, hunting and so on; perhaps it is the common extra risk which is the unifying factor. This was all exemplified in the result of this year's Grand National. That was what sport, or steeplechasing or racing, is all about. Therefore, I regret that there is some conflict here between the equestrian interests. Fundamentally, there appears to be a need for the extension of the mutual respect about which I have just been talking.
As we have heard, there are 417 horses in training at Epsom which form a very important and welcome local industry. That must put Epsom in the top five or six training centres in this country. Such centres as New-market, Lambourn, Malton, Epsom, et cetera, can only be established over very many years—old turf has to come simply by age as well as the even ground, freedom from rabbit holes and ruts and hoof prints, particularly hoof marks which are, so to speak, going in the wrong direction. There is also the question of loose horses. Seeing my noble friend Lord Onslow here today I cannot help being reminded of an occasion when he rode one of my horses on a hack and I am afraid it came back with an empty saddle. However, that was a few years ago and I am sure that he is much better at it now.
In any event, those are all factors which are essential for highly-trained and corned-up horses travelling on very fragile limbs at speeds of anything up to 40 miles an hour. After all, to use a parallel, we would not expect Sebastian Coe to do his training for his running around Trafalgar Square or Piccadilly Circus. I think that that is a genuine parallel because the training of horses is a very precise science and it is practised as well at Epsom as anywhere else in the country. As the noble Lord, Lord Wigg, has said, we did witness that the third and fourth in the 2,000 Guineas were trained at Epsom and came in front, if I may say so, of all the Newmarket horses on their own ground. So it seems

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obvious to me that those people who ride any other sort of horse ought to be prepared to accept some restraints on their movements.
That is why I want to support the noble Lord, Lord Wigg, and his Instruction—a fact which gives me considerable satisfaction this afternoon, because in the past on Bills and debates to do with racing in which we have both been engaged I have not found it possible to be in total agreement with the noble Lord, but at the same time I have always realised that he has a passionate interest and concern for the welfare of the sport and industry in this country. The same sentiments about the importance of training at Epsom were echoed to me also last Saturday by none other than Mr. Scobie Breasley—no finer or more fair-minded a sportsman ever sat astride the pigskin, in my opinion.
I must also stress, and this has again been mentioned by other noble Lords, that in this country there are about 100,000 people directly or indirectly employed in racing and its ancillary industries. There are approximately—and this is only an approximate figure—10,000 horses in training in this country and probably rather more if we talk about the point-to-pointers and so on. If we divide 100,000 by 10,000 we can see that each horse in a way represents employment for 10 people. That is a significant factor and I hope that it may help my noble friend Lord Onslow as regards his query about the employment situation.
I now wish to say a few words about the admirable British Horse Society, which on this occasion represents the hack riders. One of the few explosions that I have welcomed recently has been in the number of people who have been deriving great pleasure and recreation from riding horses. I have witnessed this at first hand in my part of the country, in the Midlands, and where I can I try to help to provide for it. Any purely obstructive treatment of these people by the racing fraternity at Epsom is bound to be counter-productive. In any case, they are all potential racing enthusiasts and I imagine that they would love to be associated, however remotely, with the successes of the Epsom trainers, or at least that is how they ought to view it.
However, as I have said, training grounds are extremely rare, scarce and valuable. On the other hand, it is possible to hack or ride in all sorts of other places. One extremely good outlet for this is to follow the local hounds—considering that I live in Leicestershire I was almost going to say, "even in Surrey", but the noble Earl, Lord Onslow, might not take that too kindly although I think that he will understand what I mean.
Without drawing your Lordships into a totally different argument, I would like to say how much I regret the recent actions and attempts by the Co-operative Society and various local councils to ban hunting on their land. That, in fact, includes at least one council in Surrey. It is an extremely unhelpful attitude, because it is, as I have said, a wonderful outlet for people who want to go riding. In view of the shortage of outlets which has been expressed this afternoon, I very much hope that these misguided councils and the Co-operative Society will change their minds.
Finally, I wish to welcome very much the control over caravans which is provided for under the Bill.
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I drove across Epsom Downs on last Derby Day and was appalled by the amount of rubbish which was lying around and which had been left all over the place. Not only does it constitute an eyesore, but it must be extremely expensive—and I imagine that it is a charge on the rates—for somebody to clear it up afterwards. Therefore, I very much welcome this part of the Bill. That is all that I wish to say. I wish to support the Bill and the Instruction of the noble Lord, Lord Wigg.
4.38 p.m.
Lord Kilmany: My Lords, in following my noble friend Lord Crawshaw I find myself in very great general agreement with what he has said, if there was one part of it that gave me particular pleasure it was to hear my noble friend's reference to the noble Lord, Lord Wigg, with whom he admitted he had sometimes had differences of opinion, but to whom he paid tribute, and I would also like to pay tribute, for the tremendous amount of work that he has put into the preservation of those two great British races the Derby and the Grand National. I believe that this Bill makes it possible to look forward with every good reason to a continuance of the Derby being held at Epsom.
In my view there is no doubt that the Bill was needed. The fact that the noble Lord, Lord Melchett, has seen fit to propose to move his Instruction shows how very necessary it is to have a better Instruction. For my part, I am prepared to support the amendment to Lord Melchett's Instruction because I feel that, in the amendment, the noble Lord, Lord Wigg, is expressing what we really require to make Epsom safe for the great race and safe for trainers, too. I should like to read the relevant words. I shall not weary the House; I shall not talk for long. It says that the Instruction will ensure:
"…the continuance of racing at Epsom and in particular the maintenance of the Derby and the preservation of Epsom as a training centre of race horses is safeguarded".
I think that that is about as far as I want to go in controversy.
I have no particular local connection. I appreciate that the noble Lord, Lord Melchett, has a great deal of local knowledge. Very often I have been to the Derby at Epsom, and I am sorry to say that quite often I have lost a small sum of money. But I think that our point of view should be the national importance of horseracing in general, of the excellence of British horse breeding and of the tremendous status, background and history of the Derby at Epsom.
4.41 p.m.
Lord Robertson of Oakridge: My Lords, I should like to support the Bill so ably introduced by the noble Lord, Lord Henley. I shall not be entering into the argument between the respective claims of cracks and hacks. There are many other noble Lords who have far more experience and knowledge of these two very important national interests. But I should like to pick up the remark that the noble Lord, Lord Henley, made on Sunday racing, when he said that the Bill gave provision for Sunday racing subject to a change in the general law and the approval of the conservators and the council.
On page 9 of the Bill there is a new Section 13A. It says:

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"Race meetings on the Downs shall be held on such days not exceeding sixteen days in any one year, as may be authorised by the stewards of the Jockey Club and may include Sundays".
Then it goes on to say that such racing on Sundays must have the consent of the council and of the conservators.
Those words "and may include Sundays" have caused a certain amount of consternation in and around Epsom, and I have heard from more than 100 people, individually and collectively, on this subject, who have written expressing some alarm and some disapproval at the thought that there might be racing on Sundays. Quite apart from the effects on Epsom Downs and the amenities of the surrounding areas, it seems to me that for Parliament to say specifically that racing might take place at Epsom on Sundays, albeit subject to the approval of the council and the conservators, might well set a precedent, with possibly wide consequences.
Noble Lords will, of course, have their own views on the desirability of racing in general on Sundays, and I do not wish to enter into those arguments. But I think it would be wrong to take some action in this Bill which might affect the general position, this Bill being such a local one. Therefore, it was my intention to move for an act of Instruction to the Committee to study this aspect of the Bill. However, I am glad to say that I have received a firm assurance from the promoters that they agree to the deletion of the words "and may include Sundays", and will therefore ask the Committee to delete these words. On that basis, I am happy to let the matter rest there.
4.45 p.m.
Lord Rawlinson of Ewell: My Lords, I declare an interest, but it is an interest of sentiment, affection and knowledge, because for some 23 years I represented Epsom and Ewell in another place and I have family connections which go back many years, when one was a small country town and the other a small village. I know the area well. I recollect being told by an ancient great-aunt, back in the 1920s, of herself on her pony watching the crowds come down from London for the Derby. In those days the banks shut on Derby Day and Parliament rose on Derby Day; it was a great holiday. The "Pearlies" used to come down in their wagons, brakes and carriages. It was a great national occasion throughout the whole of the sporting calendar.
As I also believe that the whole point of advocacy is to persuade people to do what you want them to do, as has been quite clear from what has been said so far—at least, I strongly suspect that your Lordships will give this Bill a Second Reading—I shall not spend a great deal of time on the Bill. Having, as I said, represented this area for some 23 years, I know the importance of the racehorse training industry to the area. I know the importance that is attached to it, quite apart from the tradition which is attached to it. I know that a great many people are employed in the industry. The noble Lord, Lord Wigg, is perfectly correct, because not only are people directly employed by the industry, but the industry spreads beyond into different interests which arise from the fact that the racing stables are in the area. Indeed, I had a son-in-law who learnt as an assistant trainer in Epsom,
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and I was also glad to see what happened at the Guineas only a few days ago.
The real importance of Epsom remaining as a centre of racehorse training in this country is quite clear to me. That the great race, that great race—which I suppose, much more than any other single race in the world and certainly in this country, represents the interests of every section of our population—should be sure of being able to continue, is something which is very important in the heart of every Englishman and Englishwoman.
The Epsom and Ewell Borough Council has played an extremely responsible part in promoting this Bill and getting the balance right in the Bill. I assure your Lordships that this is believed to be an adequate balance between the different interests. The Epsom and Ewell Borough Council will continue to play its part, which is much accepted and much admired by many people throughout the whole of the borough. Therefore, I can only think that the balance is right and I am glad that the council has, indeed, played the part it has. I am wholeheartedly in favour of the Bill. I do not believe that the Instruction of the noble Lord, Lord Melchett, is necessary. I shall certainly support the amendment which has been proposed by the noble Lord, Lord Wigg.
4.49 p.m.
Lord Plummer of St. Marylebone: My Lords, I too have to declare an interest. I am chairman of the Horserace Betting Levy Board, which is the freeholder of Epsom Downs and the leaseholder of Walton Downs. Secondly, I am chairman of the Epsom and Walton Downs Training Grounds Management Board, which is responsible for the gallops on the Downs. That the Levy Board is directly involved in Epsom and Walton Downs is due in very great measure to my predecessor, the noble Lord, Lord Wigg, who, when chairman of the Levy Board, of course did so much to assist the development of the Downs. The racing and training industries really owe him a very great debt of gratitude. I should like, as others have done, to pay tribute and to record how much the present Levy Board appreciates the contribution that he has made in the past. Therefore, I support the amendment, which I think is crucial to racing and training at Epsom. But I think I must content myself by saying that the noble Lord, Lord Wigg, perhaps strayed rather further from the facts in regard to what he said about Aintree and some other irrelevant matters.
A number of noble Lords have already referred to the way in which the promoters of the Bill, the Epsom and Ewell Borough Council, have at all stages of its preparation gone out of their way to accommodate the many and varying interests and demands of the users of the Downs. T would like to add my appreciation of the way in which the council have, with great skill, tact and diplomacy, discharged this difficult task. The officials of the Levy Board and those of United Racecourses have nothing but admiration for the manner in which the Town Clerk and Chief Executive of the Epsom Council, Mr. Douglas Grimes, has co-ordinated the Bill's preparation.
It is of course a matter of very great regret to me and to the Levy Board, to the United Racecourses and

1283
the Epsom Council, that it has not been possible to reconcile the interests of the trainers and the hacks. I can testify personally to the fact that there have been endless meetings and discussions in an effort to bring about a mutually acceptable solution. I can testify too to the fact that the trainers have bent over backwards to accommodate the hacks' legitimate interests, and with their agreement the council offered to make many worthwhile amendments to the designated areas. I must emphasise, therefore, that any further amendments would seriously damage the training facilities which it is in the interests, I submit, of the whole of the local community to safeguard.
It should also not be forgotten that the lease between Mr. Stanley Wootton and the board, whose generosity will be appreciated by so many people now and in the future, makes it clear that it was Mr. Wootton's expectation and hope that Walton Downs would continue to be used for the training of racehorses, and that of course he has confirmed in his recent letter to the noble Lord, Lord Wigg. The noble Lord, Lord Crawshaw, referred in his speech to the rubbish which is left by the caravans after the Derby, and I support him in his protest about this and the need to control them, because it is not the ratepayers who pick up the bill, but unfortunately it is United Racecourses.
I must refer to another matter. The noble Lord, Lord Wigg, referred to the question of local representation on the board of United Racecourses, which was reconstituted without any such representation over eight years ago. But I think it should be pointed out that no request concerning such representation was received from the council to have the matter reconsidered until very recently. When such a request was made, the Levy Board and United Racecourses responded positively to the Epsom Council by offering them two seats, not on the main UR Board, which we both feel would be inappropriate bearing in mind the fact that it controls three racecourses in three different local authority areas, but on the board of Epsom Grandstand Association, a subsidiary of which specifically deals with Epsom alone.
The council have accepted this offer and discussions are continuing between the parties to tie up one or two loose ends. We all look forward to continuing the close co-operation and collaboration with the council, who themselves are committed to the future of racing and training at Epsom, and the Derby in particular. Although it has been suggested that the Bill might contain some reference to this matter, I feel that it must be inappropriate in the circumstances, not least because it would alter unacceptably the scope of the Bill. I assure your Lordships that both the Levy Board and the United Racecourses will act with the same good faith as I will, and as I am sure will the council. With those words, I have much pleasure in supporting the amendment moved by the noble Lord, Lord Wigg.
4.56 p.m.
Lord Auckland: My Lords, I should first like to thank my noble friend and relative, Lord Henley, for his clear exposition of this Bill. I should state that am not a horse rider, or at least I have not been since
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the end of the last war. Therefore, I am not one of those who have particularly fanatical arguments vis-à-vis the racecourse riders and the hack riders. I shall have a word or two to say about that in a moment. My main purpose in taking part in the discussion on this Bill is that since 1954 I have lived with my family within four or five miles of the Epsom racecourse and I have known, and still know, many of the councillors, the present chief executive and his predecessor extremely well. It is important to point out to your Lordships that the Epsom and Ewell Council are unanimous in their promotion of this Bill. That is something which is not always the case in regard to local Bills. Careful study has been given to producing a Bill which gives a fairer crack of the whip, if I may use that expression, to all concerned.
My wife and children when they were younger, and I have spent many Sundays on Epsom Downs walking with our dog and occasionally picnicking, and I think it ought to be borne in mind that many people come from long distances to use Epsom Downs for these purposes. Of course, it is a paramount fact that Epsom without the Derby would be like Samson without his hair. The Derby and Epsom have grown up together in a tremendous mutual friendship, and even those, like myself, who have no particularly keen interest in horseracing recognise the great value of the Derby in the employment which it gives not only to those who look after the horses but to those employed on conservation of the Common as well. Indeed, last Friday, together with the chief executive, one of the councillors who has a major part to play in regard to this Bill and the conservation officer, I spent two hours going over almost the entire area to see for myself what was involved in this Bill.
I am not necessarily opposed to hack riding. In fact, riding is, I believe, an extremely healthy occupation particularly for children. But one of the problems on a place like Epsom Downs is that the hack riders are not necessarily skilled riders. One of the real difficulties here is that there have been, to my knowledge, one or two near misses when hack riders and trainers have nearly come into physical conflict. That could be extremely dangerous. Moreover, in recent years the local council has given hack riders more use of the land in the area, so it is important to get the matter in perspective.
I might add as an aside that in the area in which I live there is a great deal of riding. Almost on our doorstep is Ashtead Common, where there are many riders. There are properly laid out tracks but alas many of the riders, particularly the young ones, do not keep to the tracks, with the result that in bad weather particularly the common is in an infernal mess, and there is nothing more dangerous in an area such as a common than inexperienced riders and a mount which panics.
However, we are concerned with Epsom Downs. It is clearly for the Select Committee to look into the points made by the noble Lord, Lord Melchett, and others, in his Instruction. But, in the last analysis, Epsom Downs—which I and all who use the Downs have grown to love—is a popular and very much frequented area. It is important to remember that the Epsom Derby is not only a great national institution but that it brings in people from many countries and

1285
has therefore, particularly from the point of view of the balance of payments, an enormous export potential. I believe the Bill will go a long way to giving a fair share not only to those who take part in the Derby and horseracing but to all those who use Epsom and Walton Downs for recreation. The noble Lord, Lord Wigg, who has done so much for racing, put his case very convincingly. In my view, the Bill should be given a Second Reading and should be carefully studied by the Select Committee.
5.3 p.m.
The Earl of Onslow: My Lords, it looks as if I am in a very small minority today in your Lordships' House. The racing community has rallied its ranks with vigour and intelligence, as it always does. I am not in any way suggesting that the Bill should not have a Second Reading: it is a legal necessity, if we are not to go back to the pre-1925 situation, which would be totally unacceptable. The racing fraternity is well represented here, whereas the hack fraternity seems to be represented only by myself, whose ability to fall off horses, I can promise the noble Lord, Lord Crawshaw, has, if anything, increased since I last fell off his more than 20 years ago.
The racing industry is a sport which attracts enormous public interest. It is a sport which attracts the very rich and it is a sport which, were it not for gambling and the gambling instinct, would be a different sport indeed. It is the only sport with the power to tax; it has the power to tax through the Horserace Betting Levy Board, which is given that power by Parliament, whereas hack riders have none of those benefits. They have had to resist the encroachment of the racing fraternity on Epsom Downs for perhaps 100 years. Mr. Buckwell, QC, who was then a Member of Parliament, is quoted as saying:
"If the Grandstand Association do not take care, they will raise questions about their own use of the Downs which it is in their interest to let sleep".
He went on to say that no one could stop him riding or treat him as a trespasser, and added:
"The Epsom Grandstand Association solicitor sent to Mr. Applegarth a letter saying they had no intention of doing anything to prevent anyone using Walton Downs or Epsom Downs for reasonable exercise, but they did object to a person using the Gallops to exercise a horse up and down".
There has been some, I believe totally justified, criticism of people bringing in point-to-pointers or eventers from long distances to train on the Gallops, and that is, of course, an abuse of the privilege of ordinary hacking people to ride gently around Epsom Downs.
The racing industry has on two occasions attempted to change the 1936 Act, but on both it failed. There were two reports which said that the Act was perfectly all right, and the 1981 report by Epsom and Ewell District Council also said that the arrangements had worked perfectly satisfactorily up till now. No one is saying, or even trying to suggest, that racing and training at Epsom should cease. The noble Lord, Lord Wigg, and others have said that if hacking is not regulated it will cease. That flies in the face of all reality; there is no evidence to that effect. In 1936 there were 1,000 horses in training. Surprisingly, there were more livery stables at Epsom then than there are now. There was a dealers' yard on Epsom Downs. At present the number of people thought to be using
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Epsom Downs on a Sunday is about 40, which is not many. On Easter Day, 152 hack riders were counted.
Much has been made, rightly, of the number of people having their horses boxed. Somebody went to the trouble to count the number of horse boxes that came in on the three weekends of the Easter children's holidays. They counted all of seven horse boxes, carrying 15 horses. If Epsom Downs cannot take 2·133 recurring horses per day over a week-end, they should not be allowed to be used for anything. Certainly that is not very many. I am sure that the racing industry is making an enormous fuss over a problem which does not exist. People have had these rights and people's rights should not be taken from them unless there is a very valid case for so doing. The rights were curtailed in 1936, and up till now the Act has worked perfectly well.
The Instruction of the noble Lord, Lord Melchett, is not designed to amend the law but to say that the restricted access by hackers should continue; it says only that the Committee should satisfy themselves whether or not it is in the public interest that the present qualified right of access on horseback should be removed. That is all it says. It is not saying the Bill should be amended. It is not the custom in your Lordships' House to write in instructions to amend a Bill in Committee; at least, that is what I have been told on several occasions when I have been involved in private legislation. We have heard a lot recently about the paramountcy of the wishes of certain inhabitants. Nobody is claiming paramountcy for the hack riders. I am simply suggesting that the Committee should look very carefully at whether it is in the public interest that those rights should be curtailed when the present arrangements seem to be working perfectly satisfactorily.
5.10 p.m.
Lord Westbury: My Lords, I am grateful for the opportunity to congratulate my noble friend Lord Henley on introducing the Epsom and Walton Downs Regulation Bill and on explaining so clearly the intentions of the Bill. I should also like to congratulate the noble Lord, Lord Wigg, on his amendment. The last time that I spoke on the same side as him was over the Green Howards' band, and we won, so perhaps we might win again.
As a member of the Jockey Club, I am deeply concerned to see the future of racing and training at Epsom secured for the long term and, in particular, of course Derby Day, which is so much part of our heritage. I am most encouraged to find that the people of Epsom, as represented by the borough council, share my wishes and those of the Jockey Club to see racing retained at Epsom, and to see that the training of racehorses there remains a commercial proposition. The Bill contains a number of clauses connected with the viability of these enterprises, and I welcome them.
The promoters of the Bill have gone to considerable length in trying to preserve and protect the interests of the many people who use the downs for so many different purposes. Clearly, they have tried to balance fairly these diverse interests, but in the end the Bill must be something of a compromise. The hacking interests are obviously disappointed, but I doubt whether any of the factions have obtained exactly what they wanted from the Bill. I think that my noble

1287
friend Lord Henley has already adequately explained the need for some restrictions on free hacking, but it is my understanding that the trainers have offered concessions which go a long way to meet the claims of the hackers. Further major concessions to the hackers would not only damage the training grounds and thus threaten the viability of training at Epsom, to the long-term detriment of the local community, but would also constitute a hazard to safety. From my own point of view I should perhaps have liked to see more done for the racing and training fraternity, but I recognise that there has been the need for compromise.
I should like to say a few words on the subject of Sunday racing, as mentioned by the noble Lord, Lord Robertson of Oakridge. Having watched the successful passage through the House of the Shops Bill of my noble friend Lady Trumpington, I have detected that the climate of opinion against activities on Sunday is beginning to change, although actual change may not come for some time. Therefore I think it absolutely right that the possibility of Sunday racing at Epsom in the future should not be excluded by the Bill.
I believe that the Bill will make a considerable contribution to preserving racing and training at Epsom, which I look on as part of our national heritage. I know that I speak for all members of the Jockey Club in supporting the Bill wholeheartedly, and I wish it well in its passage through the House.
The Earl of Avon: My Lords, I join in the general appreciation of the House for the way in which my noble kinsman Lord Henley introduced the Second Reading of the Bill and explained it to us. I shall speak very briefly, to give an indication of the Government's views. Being surrounded by so many distinguished experts, whom I am delighted to find in agreement on this occasion, I should not dare to intervene on the subject of horseracing, nor for that matter to expound on the charms of Epsom and Walton Downs, or Ewell, when other noble Lords have such first-hand knowledge. However, it might be helpful if I confirm and endorse what a number of noble Lords have said: that, so far as the Government are aware, racing at Epsom and, in particular the Derby, will continue as it has always done, and that we know of no intention to abandon or disrupt Epsom as a training centre for racehorses.
The noble Lord, Lord Henley, and other noble Lords, mentioned the Bill's proposals to control caravans. These controls will bite mainly on the caravans of gypsies, who visit the Downs in large numbers each year for the Derby meeting, as my noble friend Lord Plummer of St. Marylebone mentioned. The Government are concerned that the proposals in the Bill conflict with the principles embodied in the Caravan Sites Act 1968. Under the 1968 Act local authorities are given powers to control unauthorised parking of caravans only after they have achieved "designation" under the Act by satisfying the Secretary of State that there is adequate accommodation for gypsies in the area. My right honourable friend the Secretary of State will pursue his objections to this aspect of the Bill in the usual way, by means of
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submitting to Parliament a report which can be considered at the Committee stage.
The Government have no objection in principle to the proposals set out in the Bill to control access for horseriders. We are content for matters concerning the management of the Downs to be considered in Committee, when the promoters and the petitioners can put forward their views in detail and the case can be considered fully.
5.15 p.m.
Lord Henley: My Lords, we have spent almost two hours discussing Epsom Downs, which I think is quite a good run for a Private Bill of this nature. In view of the fact that everyone is in agreement that the Bill should be given a Second Reading, I feel that it is unnecessary for me again to go over any of the ground. Therefore I commend the Bill to the House.
On Question, Bill read a second time and referred to the Examiners.
The Earl of Onslow: My Lords, I beg to move the Instruction standing in the name of the noble Lord, Lord Melchett, on the Order Paper.
Moved, That it be an Instruction to the Committee to whom the Bill is committed that they should satisfy themselves that it is in the public interest that the right of the public to have access on horseback to the Downs for air and exercise which was conferred by the Epsom and Walton Downs Regulation Act 1936 should be curtailed as proposed by the Bill bearing in mind the provisions of Section 4 of that Act safeguarding the interests of the racing and training industries.—(The Earl of Onslow.)
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, the Question is, That the Instruction standing in the name of the noble Lord, Lord Melchett, be agreed to.
Lord Wigg: My Lords, I beg to move the amendment standing in my name on the Order Paper to the Instruction of the noble Lord, Lord Melchett.
Moved, as an amendment to the above Instruction, to leave out all the words after "themselves" and insert "that the requirements of Section 4 of the Epsom and Walton Downs Regulation Act 1936, dealing with the Rights of Public over Downs, to preserve and control the use of the Downs for all users are recognised, but that, at the same time, the continuance of racing at Epsom and in particular the maintenance of the Derby and the preservation of Epsom as a training centre for racehorses is safeguarded".—(Lord Wigg.)
The Lord Chancellor: My Lords, the original Question was that there be an Instruction to the Committee to whom the Bill is committed in the terms set out on the Order Paper. Since then an amendment to the Instruction has been moved in the terms also set out on the Order Paper. Therefore, the Question that I now have to put is, That the amendment to the Instruction be agreed to.
5.17 p.m.
On Question, Whether the amendment to the Instruction be agreed to?
Their Lordships divided: Contents, 92; Not-Contents, 33.

DIVISION NO. 1

CONTENTS

Abercorn, D.

Manton, L.

Abinger, L.

Marley, L.

Ailesbury, M.

Melville, V.

Airey of Abingdon, B.

Merrivale, L.

Alexander of Tunis, E.

Mishcon, L.

Allen of Abbeydale, L.

Mottistone, L.

Atholl, D.

Murton of Lindisfarne, L.

Auckland, L.

Newall, L.

Banks, L.

Northchurch, B.

Bolton, L.

Nugent of Guildford, L.

Byers, L.

Ogmore, L.

Caccia, L.

Orkney, E.

Campbell of Alloway, L.

Orr-Ewing, L.

Chelwood, L.

Peart, L.

Colwyn, L.

Peel, E.

Cooper of Stockton Heath, L.

Pender, L.

Crawshaw, L.

Penrhyn, L.

Davidson, V.

Plummer of St. Marylebone, L.

Davies of Leek, L.

De L'Isle, V.

Rawlinson of Ewell, L.

Derwent, L.

Renton, L.

Drumalbyn, L.

Robertson of Oakridge, L.

Elliot of Harwood, B.

St. Aldwyn, E.

Enniskillen, E.

Sandford, L.

Ferrier, L.

Scarbrough, E.

Foot, L.

Sefton of Garston, L.

Fraser of Kilmorack, L.

Selborne, E.

Gainford, L.

Sempill, Ly.

Gormanston, V.

Soames, L.

Granville of Eye, L.

Spens, L.

Gridley, L.

Stanley of Alderley, L.

Hayter, L.

Stewart of Fulham, L.

Hemphill, L.

Stone, L.

Henley, L.

Strathcarron, L.

Hives, L.

Strathspey, L.

Holderness, L.

Strauss, L.

Hornsby-Smith, B.

Swansea, L.

Hunt of Fawley, L.

Terrington, L.

Hylton-Foster, B.

Teynham, L.

Jacques, L.

Trevethin and Oaksey, L.

Kilmany, L. [Teller]

Tweedsmuir, L.

Lane-Fox, B.

Vaux of Harrowden, L.

Lindsey and Abingdon, E.

Vivian, L.

Lucas of Chilworth, L.

Westbury, L.

McFadzean, L.

Wigg, L. [Teller]

Macleod of Borve, B.

Wigoder, L.

Mancroft, L.

NOT-CONTENTS

Beloff, L.

Longford, E.

Boston of Faversham, L.

McCarthy, L.

Brockway, L.

Melchett, L. [Teller]

Brookeborough, V.

Milverton, L.

Bruce of Donington, L.

Monson, L.

Cledwyn of Penrhos, L.

Moyne, L.

Collison, L.

Onslow, E. [Teller]

David, B.

Oram, L.

Elwyn-Jones, L.

Ross of Marnock, L.

Ewart-Biggs, B.

Rugby, L.

George-Brown, L.

Sainsbury, L.

Gosford, E.

Saltoun, Ly.

Hanworth, V.

Stewart of Alvechurch, B.

Hunt, L.

Swinfen, L.

Jacobson, L.

Wallace of Coslany, L.

Leatherland, L.

White, B.

Llewelyn-Davies of Hastoe, B.

Resolved in the affirmative and amendment to the Instruction agreed to accordingly.
On Question, Motion, as amended, agreed to.

Administration of Justice Bill [H.L.]
Further considered on Report.
5.27.p.m.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 7:
After Clause 6, insert the following new clause:
("Non-applicability of s. 2 of Unfair Contract Terms Act 1977
. Section 2 of the Unfair Contract Terms Act 1977 shall not apply to any contract term or to any notice given to persons generally or to particular persons, where the term or notice relates to entry to, or presence on, land for recreational purposes.").
The noble Lord said: My Lords, we discussed this amendment in Committee. Its purpose is to encourage greater access to the countryside and it is supported by the Central Council for Physical Recreation, by the County Landowners' Association and the National Farmers' Union. Both the latter, despite cries to the contrary, wish to encourage as much access as possible to the countryside. I hope that my noble and learned friend, who said that he would give some consideration to this matter, has something to add on what progress has been made. I beg to move.
The Lord Chancellor: My Lords, I beg my noble friend's pardon for having been distracted momentarily. If he noticed the source of the distraction he will realise that I had no alternative but to be distracted. As I said to my noble friend, and on Committee, I promised to make such consultation as I could and I wrote to him, at any rate, as at that stage, on 19th April. But I think that my noble friend is perhaps underestimating the difficulties which are raised by this amendment. To begin with, if one looks at it, it is an attempt to disapply the Unfair Contract Terms Act 1977 to anybody who approaches land or enters on land for recreational purposes. In parenthesis, I notice that the noble and learned Lord, Lord Elwyn-Jones, has just joined the Liberal Party!
My Lords, we all remember that a Labour Government passed the Unfair Contract Terms Act in 1977 and I very much doubt whether the Labour Party would be particularly keen on emasculating one of the clauses of their Bill after so short a period of time, As I have said repeatedly, I promised the Labour lawyers in both Houses that I would not allow this Bill to be introduced for the purpose of introducing controversial matter—in return for which they promised me that they would facilitate its appearing on the Second Reading and Committee in another place. I must be true to my word; I must deliver the goods which I promised to deliver. Unless they say that this would meet with their full approval, I am bound to tell my noble friend that it is something which is more than I can honourably do.
There are two suggestions which were made by him and I have made such inquiries as I can make in the time. I would ask the House to remember the history of this matter. The duty to trespassers has been the subject of judicial controversy throughout my professional lifetime and, on the whole, the most recent pronouncement of the House of Lords on the subject has been more generous to trespassers in the Herrington

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case than was my father when he presided over the House of Lords in the Addie v. Dumbreck case in 1929.
Again, I very much doubt whether the change which my noble friend suggests would meet with the kind of universal approval which alone is appropriate as the criterion for getting into this Act. It may be something which is desirable. I understand that those who are responsible for land, the landowners and the farmers—and I was both a landowner and farmer for about 14 years of my life, so I sympathise with their point of view—are of course concerned with the standard of care imposed on landowners as a result of the case of British Railways Board v. Herrington by the exercise of the judicial powers of this House.
One of the troubles is, of course, that neither of the two suggestions excludes urban land, nor could that be so if one was going to do it at all. The difficulties, both for urban land and urban consumers, are very much greater than for country land and country consumers. The state of play as a result of my inquiries appears to be something like this: I consulted about 40 bodies and individuals, and comments have been received already from a number of these. They are a very diverse group. They include the judiciary, local authority organisations, consumer groups, leisure groups and Government departments.
The state of play I think has varied to date. The consumer bodies, the Consumers' Association and the National Consumer Council—which are of no mean authority—and some water authorities, for instance the Welsh and the Yorkshire water authorities, are strongly against the suggested amendment to the 1977 Act. The noble and learned Lord the Lord Chief Justice thinks the Act could be amended but not in the sense proposed in the amendment, and only in a very limited and specific way. The Thames Water Authority was in favour of an amendment to the 1977 Act but I am not sure in what terms. The Council of Circuit Judges, the GLC and the National Caving Association—which I thought was only peripherally interested—did not comment.
On the statutory duty towards trespassers, nearly all those who commented on the suggestion agreed that a statutory formulation of the duty owed to trespassers would be helpful but they did not all say what it should be. Those who thought it would be helpful included the GLC, the Council of Circuit Judges, the water authorities and a number of Government departments. The noble and learned Lord the Lord Chief Justice thought that the common law position, as disclosed by Herrington is more favourable to occupiers than would be the suggested change in the law. Some of those who think that a statutory formulation of the duty owed to trespassers is needed do not think that criminal trespassers should be excluded from this and they of course form nowadays quite an important group. They include at least one Government department and the Lord Chief Justice. Having said that, I have tried to carry out my obligations to my noble friend; but I hope that, having regard to the peculiar character of this Bill, he will not feel it necessary to press his amendment in the light of the points I have chosen to put to him.
Lord Elwyn-Jones: My Lords, I apologise to the noble and learned Lord and to the House for adding to
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the "Department of Confusion", first of all by interfering with the noble and learned Lord on the Woolsack, which is a most regrettable error on my part, and then adding to the confusion by appearing to join the Liberal ranks by sitting upon their Benches in order to hope to avoid further confusion to the noble and learned Lord. My apologies, my Lords.
Lord Rawlinson of Ewell: My Lords, those of us who might be attracted to my noble friend's proposal I hope will appreciate that what the noble and learned Lord has said is overwhelming and therefore I hope my noble friend will not press this matter although there is much sympathy in many quarters for it.
May I take this opportunity, which is the first one for me of speaking again on this Bill, of withdrawing something that I said on the Committee stage? I say that because I heard what the Chief Whip said about discussion on this Bill ending tonight at half past seven and we may not have reached the subject upon which I wish to direct my apology. Secondly, I have to leave for Strasbourg for a professional engagement.
When I spoke on the Committee stage it was with reference to the new clause moved by the noble Lord, Lord Gifford. He referred to the case of the Home Office v. Harman. I spoke of the conduct of the trial out of which the contempt arose. I referred to the case of Williams v. Home Office. In referring to the circumstances of that case I said that it led me to have grave misgivings about the conduct of counsel in that case. What I said could be taken as a reflection upon counsel for that plaintiff. Since the Committee stage, I have had a private meeting with that counsel. He has shown me his notes and explained the case to me. He gave me his assurance that nothing he did was designed in any way to create a situation wherein the documents could later be made public for another purpose.
I fully accept that assurance. I told counsel that I would make this clear at this stage of the Bill at the first opportunity I had. So I unreservedly withdraw any reflection on the conduct of counsel and I regret that I should have dealt with the points I wished to make by causing a reflection upon him which I wholly accept as being unjustified.
Lord Sandford: My Lord, may I return to the matter of this amendment? I had always thought that the Labour Party were particularly keen to see access to private land increased. If that is so, could not the noble and learned Lord, Lord Elwyn-Jones, say as much and confirm that for those reasons and in this case this amendment in this Bill would be acceptable to the Labour Party? If he could say so, would the amendment therefore be the more acceptable to my noble and learned friend on the Woolsack?
Lord Elwyn-Jones: My Lords, I am invited to intervene in this controversy. I venture to think that it is an additional controversial matter outwith the general purposes of the Bill. I sympathise with the observations of the noble and learned Lord the Lord Chancellor to try to limit, so far as we reasonably can, the content of what goes on under what is admittedly a large umbrella.
Lord Hylton: My Lords, before the noble Lord Lord Stanley, replies, may I say that I feel that this subject is one which needs the very greatest possible care. I say that as being associated with the ownership of a labyrinth of underground caves, not very far away from a large, metropolitan area. I hope that if the law is to be changed we shall make the greatest effort to get it absolutely right.
Lord Stanley of Alderley: My Lords, I thank noble Lords for the remarks that they have made on this amendment. I accept that it has become a controversial matter though, in my opinion there was no need for it to be so. I find it rather difficult to say and if I use the word, "idle" I hope that my noble and learned friend—when I refer to his department as possibly being idle—will treat it in the way that it is treated in the army—in a fairly good humoured way. What happened was that there was a conference nearly a year ago to try to discuss these matters, and the three main parties which I have mentioned—the Central Council and the two main organisations that are responsible for or have affairs with land—agreed. Since then it seems to me that not a great deal was done until these last three or four weeks or so, but perhaps I am being unfair. All I am asking my noble friend, which I think I have got from him, is that he will keep a watching brief on this matter in case things do go wrong. So far they have not gone wrong, I am glad to say, and he will make some progress, which obviously he has, by the large detail he gave to me, in which case I beg leave to withdraw this amendment.
Amendment, by leave withdrawn.
5.42 p.m.
Lord Wigoder Lord Wigoder moved Amendment No. 8:
After Clause 6, insert the following new clause:
("Assessment of damages

ACTIONS FOR DEFAMATION
.—(1)Damages recoverable in actions for defamation shall be by way of compensation only.
(2) As from the commencement of this Act it shall not be competent for a court to make an award of punitive or exemplary damages in an action for libel or an action for slander or an action for defamation, whether any such action was brought before or after the commencement of this Act.
(3) Nothing in this section shall affect the award of aggravated compensatory damages.").
The noble Lord said: My Lords, Amendments Nos. 8, 9, 10 and 11 are for new clauses which deal with certain aspects of the law on defamation. I venture to think they are clearly germane to this Bill and its Long Title. They undoubtedly refer to the administration of justice and matters connected thereto, and actions for defamation are not entirely dissimilar to actions for damages for personal injuries, which are of course covered specifically by various clauses in the Bill.
These four new clauses are somewhat more felicitously drafted than my normal attempts, the reason being that they are in fact extracted verbatim from the draft Bill which was appended to the report of the Faulks Committee on defamation, a distinguished body which reported in 1975 after some three years' hard labour, in the course of which I do not think they were granted parole! Having reported in 1975, their report has been in fact consistently ignored by
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Governments of both parties ever since. What I have endeavoured to do with these four amendments has been to extract four clauses which are important and which are, I hope, the least likely to arouse opposition and which I believe to be of particular importance to the press, who are very susceptible if the law of defamation appears to be bearing somewhat oppressively upon defendants in such actions.
I entirely accept that, with this Bill in its present state in your Lordships' House at this time in the parliamentary Session, if these are matters of controversy I should be placing the Bill as a whole in a difficulty if I were to endeavour to press these matters. I have ventured to indicate to the noble and learned Lord on the Woolsack that I hope one or more of those proposed new clauses might be acceptable and will not be regarded as too controversial. But I have also ventured to indicate to him that, if he takes the view that they are controversial and might therefore imperil this Bill as a whole, I will appreciate that position. I would be very grateful, if that were so, if the Government could give some indicaton of their current thinking on the matters raised by the four new clauses so that they can go back on the agenda for active political discussion. If in due course the noble and learned Lord takes that line, then perhaps I might say now that I shall most certainly ask leave to withdraw the various amendments. As I have said, there are four amendments and I hope it will be convenient if I deal with Amendment No. 8 separately and then, with your Lordships' leave, take Amendments Nos. 9 and 10 together and finally deal with Amendment No. 11 separately.
Amendment No. 8 deals with the award of damages in actions for defamation. Your Lordships will know, of course, that at the present time damages may be by way of compensation, and also in addition may be punitive. Compensatory damages arise under two headings, I think. First, where there is an award made to the plaintiff for injury to his reputation and, secondly, where there are what I think are usually known as aggravated compensatory damages and an award is made to the plaintiff because of injury to his feelings which has been caused by the high-handed and oppressive conduct of the defendant.
This new clause safeguards the award both of compensatory damages and of aggravated compensatory damages, but what it also seems to do is to abolish the present situation in which punitive damages may be awarded. It is perhaps tautologous to say that punitive damages are awarded by way of a punishment. It is clear, I think—although not everything is clear from the decisions of noble and learned Lords—in the case of Cassell v. Broome that these punitive damages may be awarded either where Government servants have somehow behaved in some outrageous way or—which is perhaps rather more frequent—where it appears that the defendants might make a profit on their defamation if all the defendants had to do as a result of the action was to compensate the plaintiff for the loss which he himself had sustained. That means in effect that punitive damages are really a fine, a financial penalty, which does not arise out of the plaintiff's loss in any way but which is ordered, unlike other fines, to be paid not to the state but to the plaintiff.
I do not think I need argue the equity of that matter any further than simply by citing the words in the Cassell v. Broome case of the late noble and learned Lord, Lord Reid, with whose observations very few of your Lordships in this House would ever at any time have wished to disagree. In that case the noble and learned Lord said:
"I think that the objections to allowing juries to do beyond compensatory damage are overwhelming. To allow pure punishment in this way contravenes almost every principle which has been evolved for the protection of offenders".
I should like, if I may, simply to extract one or two phrases from the rest of the judgment:
"there is no definition of the offence…there is no limit to the punishment … it is inflicted by jury without experience of law or punishment and there is no effective appeal against sentence".
The reason for that, as the noble Lord said, is that the Court of Appeal cannot substitute its own award. I venture to think that the arguments in that passage from the noble and learned Lord are irresistible and I hope that the noble and learned Lord on the Woolsack may find it possible to say that this amendment, No. 8, is one which might be included in this Bill as not giving grounds for real controversy. I beg to move.
Lord Rawlinson of Ewell: My Lords, while, on a Bill such as this, some of the comments which the noble and learned Lord has already made—and which I think the noble Lord who moved this amendment anticipated—must be an answer, and while no one is keener than I to see the law of defamation enacted in a proper form, I fear, much as I appreciate the views expressed by the noble Lord, that to introduce just one clause into this Bill would not be wholly appropriate. There is an argument on the other side. The trouble, always, is that juries in libel actions will give these vast damages and even, oddly enough, when the party is not a newspaper. They seem to get into their minds the belief that damages should be greater for an attack upon a person's reputation, because, I suppose, they are offended by it, than almost anything else.
While the control of damages is one of the great problems in the law of defamation, one must also say that the damage which can be done to a human being by calumny is sometimes quite incredible. It is only those people who have experienced it who realise how deep and how grave can be the harm which calumny can do. If your Lordships remember, Beaumarchais said:
"Calumny, calumny, leave me calumny",
and Marie Antoinette said,
My enemies will destroy me, if I calumny".
In a sense, it has a very grave and immensely damaging consequence.
On the other hand, as regards damages which are punitive or exemplary, which have been recommended against by the Faulks Committee, there have been occasions when there has been such conduct and such behaviour purely for the publisher's own profit. He has sought to tell lies, knowing that they are lies, about other people. There are occasions when, perhaps, it is very useful to have this protection. But it is a matter for grave debate and I would say that, interesting as the matter raised by the noble Lord is, I would prefer to see a proper debate about the law
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of defamation, rather than introduce it into this useful Bill, and perhaps jeopardise all the other useful things which we are trying to do in it.
Lord Campbell of Alloway: My Lords, if consideration is to be given to this amendment, then consideration might also be given to one aspect of damage, although, of course, I take aboard the observations which my noble and learned friend Lord Rawlinson has just made. But your Lordships may think that this aspect is rather special, rather odd and extremely unsatisfactory. It arises in the context of subsection (1) of the proposed new clause, which is Amendment No. 8.
I hope it is not out of older—if it is, I hope that I shall be so informed and I shall resume my seat at once—to suggest that in defamation cases, where the only issue on appeal is the quantum of damage, the Court of Appeal should be able to substitute its own assessment for that of the judge or the jury, instead of ordering a new trial with the attendant delay and the attendant expense which, in the case of some private litigants, can defeat justice. This power of substitution should be applicable in cases of misdirection, non-direction, wrongful admission of evidence, wrongful exclusion of evidence and, indeed, where the verdict is unreasonable; such power, of course, being always discretionary for the Court of Appeal and never mandatory. It is so unsatisfactory that I respectfully ask—I hope that it is not controversial; if it is, let it be discarded—that when consideration is given to this aspect, if it is felt that this raises a serious problem, it might nonetheless be right to seek to deal with it on its merits or, as I prefer to put it, on its want of merits.
The Lord Chancellor: My Lords, I should like to thank all three noble Lords who have played their part in this debate. I should also like to thank the noble Lord, Lord Wigoder, for the way in which he introduced the amendment, because I appreciate very much indeed consideration for the personal difficulties in which I stand in the conduct of this Bill.
But I am bound to start by saying this. In my experience—and I shall try to justify what I am about to say—everything to do with defamation is controversial and most things to do with damages are controversial. I can only illustrate that by telling the House what some Members of it present already know very well, which is the history of this issue of punitive damages during my lifetime.
When my father was first called to the Bar, almost every issue in civil cases in the King's Bench division, as it then was, was tried by a jury. The very wide range of cases was such that a judge, in directing the jury, would direct them that it was open to them to find punitive or exemplary damages, which meant just what the noble Lord, Lord Wigoder, said. There came a time, of course, when the civil jury was virtually abolished, in practice, except for a very narrow range of actions, of which libel and slander, the defamation cases, were one and of course fraud was another. The effect of that was very largely to exclude punitive damages in a very wide range of cases, although a judge alone sometimes awarded them on a fairly modest scale.
Then came the case of Rookes v. Barnard in 1963 or

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1964—I cannot remember the exact date. Then a united House of Lords almost entirely restricted the application of punitive damages to two cases. That was not of course a defamation case but it applies equally to defamation in particular. The two cases come from the judgment of the noble and learned Lord, Lord Devlin, when he said:
"The first category is oppressive, arbitrary or unconstitutional action by the servants of the Government".
I do not believe that to abolish that at this present stage would be uncontroversial. On the contrary, I think that oppression by persons in an official position under the Government is very much in the mind of the ordinary person on the Clapham omnibus, and I do not think that the straightaway abolition of that category would prove uncontroversial. I shall come back to libel in a moment, because I have a little to develop on this argument. The second category was cases where the defendant's conduct has been calculated by him to make a profit for himself which might well exceed the compensation payable to the plaintiff.
Of course, the first case does not affect the press at all; it affects servants of the Government. The second case can affect the press and, in particular, it did affect a publisher, though not the press, in the subsequent case of Broome v. Cassell, to which I shall come in a second. I think that juries believe—and they are, after all, supposed to be the man or woman on the Clapham omnibus—that there are cases when people will deliberately commit defamation, in order to make a profit for which mere compensation would not be a sufficient deterrent. Although I agree with much of what Lord Reid said—and I think he was backing up the decision of the noble and learned Lord, Lord Devlin, in that case, in spite of his devotion to his own discipline of Scottish law to which he was more accustomed by upbringing—I do not think that the man and woman who are concerned with oppression by publication of this kind (Broome v. Cassell was such a case) would treat the abolition of the second category as uncontroversial. I must say to the noble Lord, Lord Wigoder, that I very much doubt whether the issue of defamation is so different from the other rather narrow ranges of cases where punitive damages are still applicable that it deserves special treatment. I find that to be a very strong argument the other way.
I now come to Broome v. Cassell which I had the traumatic experience of presiding over in the House of Lords. To illustrate how everything to do with defamation or damages is controversial, I should like to recount the nature of the trauma to which I was then subjected. In Broome v. Cassell there was an action for defamation arising out of the operation of the PQ17 convoy in the Northern Waters. The publisher and the author had attacked the honour of a naval officer who was plaintiff in the action. At all events, the jury, pursuing their line under Rookes v. Barnard—that is the restricted line of cases—were directed by the judge that they could bring in punitive damages. In fact, they brought in £40,000, which may or may not have been a good thing. But that is what they did.
When the case reached the Court of Appeal, a united and enthusiastic Court of Appeal, led by the formidable figure of the noble and learned Lord the Master of the Rolls himself, decided not merely that the jury were entitled to bring in £40,000 on the restricted
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grounds given by Lord Devlin but that the House of Lords had been entirely wrong to restrict them in any way. So Lord Denning, with two members of the Court of Appeal, overruled the House of Lords on the ground—which obviously, if I may say so firmly, was wrong—that the House of Lords had done it by mistake, per incuriam. Lord Devlin then came to me privately and, as perhaps he would permit me to say, complained of his treatment by the Court of Appeal. He said that this would not do. So, greatly assuming —I was then a young and enthusiastic Lord Chancellor—I summoned a House of Lords, consisting of no fewer than seven Law Lords, over which I presided because I realised that matters of great constitutional importance arose. We divided on every issue in that case: 4 to 3 and 3 to 4. In every instance I was happily one of the majority. Otherwise they were quite differently constituted majorities. But whatever else was true, all of us said that Rookes v. Barnard was a valid authority, and so it has remained ever since.
To show how differently people approach this problem—I am only illustrating the point because it is rather controversial—Lord Dilhorne agreed in effect with Lord Denning that we ought never to have gone down the restricted line in Rookes v. Barnard. Lord Reid, being brought up as a Scotsman where damages are called solatium, which is a word not known to English law, did not like punitive damages, although he was prepared to go along with his English colleagues, it being English law. Others took different views about different degrees of it. So the original award of the jury stood. Having described how seven Law Lords divided on about five questions, each with a differently composed majority except that in each case the majority included the Lord Chancellor, I can only say that I think I have established the point that anything to do with defamation partakes of controversy.
This brings me to the interesting suggestion which has been made by my noble friend Lord Campbell of Alloway about the powers of the Court of Appeal to substitute their own award of damages for that of a jury. This again will arouse the ire of Lord Devlin. I do not know whether it will be accepted or not, but he has written a book saying that in criminal cases, at any rate, juries should be respected and never interfered with by the Court of Appeal. I am not particularly in favour of jury trials for defamation. I will tell the House, frankly, that that is my private opinion. But to try to take away the right of trial by jury for defamation, which would be one of the most constructive things one could do with it, would create a parliamentary furore. So there we are. Everything is controversial in this field. That is why I must say to the noble Lord, Lord Wigoder, that I cannot accept this as a mild, uncontroversial amendment.
There is only one other point I ought to make. I am rather in dust and ashes. To the late Sir Neville Faulks, whom I appointed to the disagreeable task of reforming the law of defamation, I owe a public apology, despite his sad and premature demise. Not only did I appoint him to that task but when I was in Opposition I promised him that I would try to draft a Bill which gave effect to some of the provisions of his defamation report. This was a very difficult thing to do because there were five minority reports on different

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topics—again illustrating the difficulty of legislating on defamation without controversy. In the end I did not redeem my promise. I became Lord Chancellor again before I had had the opportunity to do so. When I sat down to try to draft (because there was no draft Bill attached to his report, so far as I remember) and put together a Bill which gave the meat of the law on defamation in its revised form, I found that it was beyond my powers to do it.
Having said this and having made my own apology in my own way, I agree that the law of defamation and the law of damages probably need to be reformed. However, I am quite sure that I cannot take it on board in this Bill. I welcome very much both the subsequent debates which will take place and the debate which has taken place because these are very important topics. I am very glad that your Lordships' House has had the opportunity to hear three such valuable speeches from noble and learned friends and from the noble Lord, Lord Wigoder, but I must ask the noble Lord not to press the matter at the present time. I am so sorry.
Lord Wigoder: My Lords, I am grateful for the observations which have been made on the amendment: the interesting suggestion of the noble Lord, Lord Campbell of Alloway, the very helpful observations of the noble and learned Lord, Lord Rawlinson, who has very wide professional experience of litigation of this nature, and of course the most interesting and helpful observations of the noble and learned Lord on the Woolsack. I think that a draft Bill was in fact appended to the Faulks Committee's report. If not, I am wondering where I got the four draft clauses from which are the subject of these various amendments. I am persuaded by the noble and learned Lord on the Woolsack that perhaps there is just the slightest element of controversy about this amendment and, in accordance with the indications I gave when I tabled it, I ask for your Lordships' leave to withdraw it.
Amendment, by leave, withdrawn.
6.9 p.m.
Lord Wigoder Lord Wigoder moved Amendment No. 9:
After Clause 6, insert the following new clause:
("Limitations of actions. 1939 c. 21.
.—(1) At the end of the proviso to subsection (1) of section 2 of the Limitation Act 1939 (which subsection provides, among other things, that there shall be a limitation period of six years for actions founded on simple contract or on tort) the following proviso shall be inserted:—
"Provided further that in the case of actions for defamation, this subsection shall have effect as if for the reference to six years there were substituted a reference to three years".
(2) In the case of actions for defamation, section 22(1) of the said Act of 1939 (which extends the period of limitation in certain cases of disability) shall—

(a) have effect as if for the words "six years" there were substituted the words "three years"; and

(b) not apply unless the plaintiff proves that the person under the disability was not, at the time when the right of action accrued to him, in the custody of a parent.

(3) Where, because the plaintiff did not know the relevant facts, an action for defamation has not been brought within the period of three years mentioned in subsection (1) or (2) of this section, such an action may with the leave of the court and on notice to the proposed defendant be brought within the period
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of 12 months from the date on which the plaintiff acquired knowledge of such facts; and the court shall have absolute discretion in deciding whether or not to grant leave under this subsection.
(4) Nothing in this section shall affect any cause or right of action which accrued before the commencement of this Act.").
The noble Lord said: My Lords, may I try again, in the hope that this is even less controversial than the previous amendment, and ask for your Lordships' leave to move Amendment No. 9 and with it to speak to Amendment No. 10. I hope very much that that leave will be granted, because if I am compelled to speak to Amendment No. 10 separately I shall find myself having to talk about various terms of art in Scottish law which are wholly unintelligible to me personally.
The position is that the two clauses—Amendment No. 9 relating to the situation outside Scotland and Amendment No. 10 relating to the situation in Scotland —are an attempt to reduce the limitation period which at present exists for defamation actions of six years to a period of three years. The position is that the six-year period within which actions must be commenced was imposed by the Limitation Act 1939. In 1975 that period was reduced to three years for actions for personal injury but, perhaps for some rather strange reason, was still left at six years for actions for defamation. I leave aside the slightly technical matters which do not concern the principle with which I am involved.
There is dealt with in subsection (2) of the first new clause a situation where the plaintiff may be under a disability at the relevant time. There is dealt with in subsection (3) a situation where relevant facts may come to the notice of the plaintiff only after the relevant period has expired. The real issue is whether the limitation period ought not to be reduced from six years to three years to bring it into line with actions for personal injury.
This again was the proposal of the Faulks Committee and indeed it might perhaps be arguable that three years, if anything, is still on the long side. The arguments in favour of halving the present period from six years to three years in line with personal injury actions are, I would have thought, self-evident to your Lordships. There is the first proposition that if a plaintiff is concerned about the damage done to his reputation, he should seek to vindicate it as quickly as possible, or at any rate within a reasonable period of time, and not wait until almost six years have elapsed before beginning proceedings affirming that his reputation has been seriously damaged.
Secondly, justice may perhaps require that the defendants should not be prejudiced, as they are at the moment, by what is an excessively long period. I accept that the situation was at one time somewhat worse, when any writ for defamation was regarded as having a "gagging" effect and prevented all comment by the press for the full period during which the writ was in existence. The situation is still that where a writ has been issued, the press in particular have to be extremely careful about such comments as they may make on matters which are subject to the writ.
The real problem, which not only the press but all defendants face where the period is as long as six years, is that in that time witnesses and journalists may move away, or may change from one newspaper

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to another; records may not be kept for the whole of that time; copy might be destroyed; notes might be lost and memories might fade. It becomes extremely difficult for the defence to conduct a case properly, fairly and competently if the events which are complained of are not in fact complaned of for a period of almost six years from the date of the particular incident. I hope that in those circumstances the noble and learned Lord might find this amendment a shade more acceptable than the previous one. I beg to move.
6.13 p.m.
Lord Rawlinson of Ewell: My Lords, I react to this amendment in a very similar way as to the last amendment, attractively as the noble Lord, Lord Wigoder, presents it. I think that there is a very strong case for the substance of what he said and the substance of this particular amendment. But again, would it not look a little strange to make this alteration in the law of defamation in the middle of this Administration of Justice Bill? The noble Lord may say that this Bill deals with damages for personal injuries and so we can include too a little bit about defamation. However, I believe it would look odd and strange, and I think it merits much fuller consideration.
May I also say to the noble Lord that he always uses journalists in his illustrations, whereas a great deal of defamation has nothing to do with newspapers. It often concerns individuals, neighbours and other people who are not journalists. Therefore, one has to look at the subject of defamation not only from the point of view of the press—either as a defendant or plaintiff—but also from the point of two individuals where an alleged tort has been committed by one of them. I personally would like to see in a defamation Bill the period of three years substituted for the period of six years, but I do not feel that this is the right time and the right Bill.
Lord Elwyn-Jones: My Lords, I feel that I should join with the noble and learned Lord in what he said, while remembering fondly the memory of the noble and learned Lord, Lord Justice Faulks. The sense of wearing sackcloth and ashes that I have arises because during my years on the Woolsack, owing to various reasons which it would not be appropriate for me to go into now but mainly a failure to reach an agreed position, we did very little about this. I believe it is right that this whole problem of the law on defamation and all its complications should be reconsidered legislatively, and the noble Lord, Lord Wigoder, has rendered a service in opening the matter again in this clause—subject, however, to my view that perhaps this is not the appropriate vehicle. Whether he thinks that the matter would be furthered by putting down a Motion to draw attention to the Faulks Report is a matter for him to consider, but it ill becomes me to make any suggestions in view of my own inaction. I am very sorry.
The Lord Chancellor: My Lords, again I think that the noble Lord, Lord Wigoder, has performed a public service by ventilating this particular recommendation. I am grateful to him, although I tend to take the view of the two noble and learned Lords who have contributed to the debate on this amendment. The noble Lord, Lord Wigoder, could have said that not only did
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the Faulks Committee decide in favour of a three-year period of limitation but so did the Law Reform Committee in effect, because although it made no precise recommendation, it did point out the analogy which the noble Lord, Lord Wigoder, himself used, between personal injury cases and defamation cases.
I believe there is a case for this change, although I also believe that we would be making a mistake by inserting it into this Bill. Incidentally, if the noble Lord, Lord Wigoder, wanted to put down a Private Member's Bill to test opinion, I will just point out that he will have to substitute references to the Limitation Act 1980 to the Limitation Act 1939 contained in his draft clause, because that is in fact the correct vehicle for amendments at the present time.
In addition, I should like to apologise to the noble Lord, Lord Wigoder, for my stupid mistake in saying that there was no draft Bill attached to the Faulks Report; It was a stupid mistake and there was really no justification for my lapse. Since the noble Lord has reproduced parts of that draft Bill in his three draft clauses, I can only thank him for treating me so tenderly.
Oh the whole, I am not at all sure whether this amendment would make the Limitation Act 1980 even more complicated than it is at the moment. But, at any rate, I cannot say that I have any strong objections at some stage to a reform of limitations law, although I think this is unlikely as the Act was passed so recently as 1980. I cannot say that I have any violent objections to such a change in the law, but I would rather the noble Lord did not try to insert such a change in the present Bill, for reasons I have given already. Almost anything connected with defamation, and a good many things connected with the law of limitations, tend to be controversial. It may very well be that if this thing was launched, either by the noble Lord or by someone else, as a Private Member's Bill one could see whether one could give it a fairer wind than one has been able to give this particular amendment. That really is my answer to the noble Lord.
Lord Wigoder: My Lords, I am much encouraged by the consensus of opinion expressed by three very distinguished lawyers who have spoken on the subject of this amendment. I would like, if I may, to express my particular gratitude to the noble and learned Lord on the Woolsack for his helpful suggestion that it might be possible to proceed in another way in order to secure an amendment which is clearly regarded in all parts of the House as desirable. I would like to reflect on that, and in the meantime I ask your Lordships' leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 10 not moved.]
Lord Wigoder Lord Wigoder moved Amendment No. 11:
After Clause 6, insert the following new clause:
("Striking out and dismissal of actions
.—(1) If an action for defamation has been struck out or dismissed, no further writ in respect of the same cause of action shall he issued without the leave of the court.
(2) Where at any time the plaintiff in an action for defamation has not taken any step in the action for a period of 12 months, the action shall, on the application of the defendant, be dismissed for want of prosecution, unless the court on cause shown otherwise orders.").
The noble Lord said: My Lords, this is a matter I can take, if I may, with even more brevity. The present position, as I understand it, is that if a writ is issued in an action for defamation the decision in Birkett and James leads to the conclusion that whatever delay then follows the issue of the writ it is not possible for the defendant to move to strike the action out until the limitation period has expired, whether it be three years as I was proposing in a previous amendment or six years as it is now. This would appear to be a quite intolerable situation so far as defendants are concerned. Therefore, all this proposed new clause provides is, first, if the plaintiff goes to sleep, as it were, for a period of at least 12 months between any of the stages of an action, then the defendant shall have the right to have the action struck out, unless there are special circumstances in which the court may decide to the contrary. Secondly, because it must be complementary to that right, if an action is thus struck out it cannot simply be set down again the next day, as I believe it can at the moment, unless leave of the court is given that a writ should be issued for the same cause of action. I hope that the proposals in Amendment No. 11 are self-explanatory. I beg to move.
The Lord Chancellor: My Lords, there being no great enthusiasm to speak on either side, may I say to the noble Lord, Lord Wigoder, again thanking him for what he has done in raising this subject, that here I am a little less favourable to what he has said, on its merits. I do not see that, as regards striking out or dismissal for want of prosecution, a defamation case is entitled to any preferential treatment over any other kind of proceeding. That tends to be my opinion. There was a time, certainly when my father was practising at the Bar, when the practice at the Bar was practically never to apply to strike out or to dismiss for want of prosecution. I think that has had a salutary effect on gave me when I went to the bar; he said, "You will only succeed in resurrecting the action".
Since then the Court of Appeal has taken a rather more robust view and has said in effect that where there has been an inordinate and inexcusable delay the action shall be struck out or dismissed for want of prosecution. I think that has had a salutory effect on dilatory plaintiffs. I suspect that that is the right line, to leave it not on a statutory basis but subject to the discipline imposed by the court, which takes into account the interests of the defendant and the interests of justice on behalf of the plaintiff before it exercises the rule. I do not see what the case is for taking the law of defamation out of the general principles relating to striking out or dismissal for want of prosecution and giving it preferential treatment. So I am rather less favourable to this amendment on its merits than I have been to the other two amendments.
Lord Wigoder: My Lords, I am grateful for those observations. I think, if I may say so, the problem largely with defamation writs which does not arise with writs in other causes of action is the, now rather more limited, gagging effect, but nevertheless the gagging effect which the issue of the writ may in certain circumstances have. However, I would like to reflect on what the noble and learned Lord has said. Clearly
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this is again not a matter which it is the feeling of the House would be appropriate to proceed to include in this Bill. I ask your Lordships' leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Award of provisional damages for personal injuries: Scotland]:
The Lord Advocate (Lord Mackay of Clashfern)The Lord Advocate (Lord Mackay of Clashfern) moved Amendment No. 12:
Leave out Clause 12 and insert the following new clause:
("Award of provisional damages for personal injuries: Scotland.
12.—(1) This section applies to an action for damages for personal injuries in which—

(a) there is proved or admitted to be a risk that at some definite or indefinite time in the future the injured person will, as a result of the act or omission which gave rise to the cause of the action, develop some serious disease or suffer some serious deterioration in his physical or mental condition; and

(b) the responsible person was, at the time of the act or omission giving rise to the cause of the action,

(i) a public authority or public corporation; or

(ii) insured or otherwise indemnified in respect of the claim.

(2) In any case to which this section applies, the court may, on the application of the injured person, order—

(a) that the damages referred to in subsection (4)(a) below be awarded to the injured person; and

(b) that the injured person may apply for the further award of damages referred to in subsection (4)(b) below,

and the court may, if it considers it appropriate, order that an application under paragraph (b) above may be made only within a specified period.
(3) Where an injured person in respect of whom an award has been made under subsection (2)(a) above applies to the court for an award under subsection (2)(b) above, the court may award to the injured person the further damages referred to in subsection (4)(b) below.
(4) The damages referred to in subsections (2) and (3) above are—

(a) damages assessed on the assumption that the injured person will not develop the disease or suffer the deterioration in his condition; and

(b) further damages if he develops the disease or suffers the deterioration.

(5) Nothing in this section shall be construed—

(a) as affecting the exercise of any power relating to expenses including a power to make rules of court relating to expenses; or

(b) as prejudicing any duty of the court under any enactment or rule of law to reduce or limit the total damages which would have been recoverable apart from any such duty.

(6) The Secretary of State may, by order, provide that categories of defenders shall, for the purposes of paragraph (b) of subsection (1) above, become or cease to be responsible persons, and may make such modifications of that paragraph as appear to him to be necessary for the purpose.
And an order under this subsection shall be made by statutory instrument subject to annulment in pursuant of a resolution of either House of Parliament.").
The noble and learned Lord said: My Lords, this amendment seeks to leave out the existing Clause 12 and substitute a new clause for it. The actual effect of the amendment is not perhaps as drastic as might appear at first sight. We sought the view of the Lord President of the Court of Session on the form of this provision, and this amendment is proposed in the light of the views which he very kindly supplied to us, and we have also taken the opportunity to make some drafting improvements.
Perhaps the principal change that has been made can be characterised as putting on the face of the primary legislation what had been intended to be left for rules of court. The amendment substitutes the word, "risk", for the word, "chance", in the first line of subsection (1)(a); the categories of responsible person to which Clause 12 applies are specified; "on the application of the injured person" is inserted, so that it is entirely up to the pursuer whether he goes for a final settlement of his claim or chooses to apply for provisional damages in the first instance with the possibility of a second instalment later. There is also provision for the court to stipulate a time limit. Redrafting of subsections (2) and (3) has been made in order to bring out the sequence of events and to make it clear that the two amounts of damages are not to be determined at the time of the original inquiry, but that at the original inquiry it is only the first award which is quantified and an application made to postpone the balance, the balance to be assessed when that application is made. There is also provision for the list of categories of responsible persons to be changed by the Secretary of State. These thoughts, as I said, were intended to be given effect to in any event, but it was thought by the Lord President advisable that they should be made on the face of the legislation. I beg to move.
On Question, amendment agreed to.
Clause 14 [Amendment and repeal of enactments]:
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 13:
Page 11, line 1, leave out ("the Damages (Scotland) Act 1976") and insert ("that Act").
The noble and learned Lord said: My Lords, Amendment No. 13 is a purely drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Mackay of Clashfern Lord Mackay of Clashfern moved Amendment No. 14:
Page 11, line 18, at end insert—
("(3) Notwithstanding section 66(5) of this Act, where an action to which section 5 of that Act applies has been raised and has not, prior to the commencement of subsection (2) above been disposed of, the court shall not dismiss the action on the ground only that the pursuer has failed to serve notice of the action as required by subsection (6) of the said section 5.").
The noble and learned Lord said: My Lords, this is a technical amendment to ensure that actions which have been raised can benefit from the repeal of Section 5 of the Damages (Scotland) Act 1976 immediately this Bill comes into force. It means that the burden of notifying all the relatives imposed by Section 5 need not be pursued to the bitter end in such a case in view of the change in the law. I beg to move.
On Question, amendment agreed to.
6.29 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 15:
After Clause 16, insert the following new clause:
("Certain contract debts to carry interest.

STATUTORY INTEREST ON CERTAIN CONTRACT DEBTS
.—(1) A relevant contract debt shall carry simple interest by virtue of this section and in accordance with sections
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(Relevant contract debts etc.) to (Assignments etc.) below.
(2) In this Act "statutory interest" means interest carried by virtue of this section.").
The noble Lord said: My Lords, with the permission of the House, I will speak to Amendments Nos. 15 to 23 inclusive. Your Lordships discussed and gave support, except for the Government, to a similar amendment in Committee. I am therefore moving this slightly different amendment today hoping for similar approval, and maybe just some sympathy from my noble and learned friend the Lord Chancellor. I shall not repeat what I said in Committee for I know that those interested will have studied Hansard. But I would like to draw the attention of the House to the following points that have caused me or perhaps the House concern; most of them were kindly pointed out to me in a massive letter from my noble and learned friend the Lord Chancellor and, indeed, in his reply to me in Committee.
The first point that I noted was the concern that my original amendment would still allow the large firm to opt out of paying interest. I hope that this amendment has put that right, and, in particular, subsections (2) and (3) of my Amendment No. 16.
The second point is that there has been concern that this amendment would make the consumer more liable to pressure in two particular ways—and, of course, I look at my noble friend Lady Trumpington as regards this matter: first, by keeping interest on a consumer unable to settle, say, his or her gas bill or electricity bill, and secondly by depriving the right of nonpayment if the product is unsatisfactory to the consumer—a well known, I shall not say "trick", but a justifiable method of getting the product up to standard. The last point about bad products appearing on the counter is taken care of by subsection (2) of Amendment No. 21, and the first point, I suggest, could be covered very easily by delaying the commencement date of this part of the Bill until suitable consumer protection is arranged.
Thirdly, it has been said that statutory interest would put firms that are in financial problems into a worse position. If a firm cannot honour its debts, then in my opinion the sooner it goes to the wall the better because it will, in the end, cause less damage to those with whom it trades.
Fourthly, it has been said that my amendment will cause more paperwork. There is no need for any more paperwork at all because, as I must remind your Lordships, my amendment does not insist on a firm claiming interest.
Fifthly, my noble and learned friend the Lord Chancellor said in Committee that my amendment is controversial and would endanger his Bill. All I can say is that as far as the small trader, or indeed, the farmer is concerned, the Bill in its present form is controversial. It is not only noble and learned Lords who find things controversial: I find things controversial also.
I must repeat that it is the taking of just half of the Law Commission's suggestions that I dislike so much and, despite my noble and learned friend's appeal to the contrary, I really would rather have the whole of Clause 15 out than this, if I can call it, abortion of half of it. Although I appreciate that Clause 15 appears to give the small trader exactly the same advantage as the large one, it does not do so, because the Government I think have failed to understand what the small

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trader or farmer thinks. As a result of this—although his method of thought may be somewhat cussed, I suppose—Clause 15 will in practice mean that only the large trader will use the powers in this clause. Blackmail will enter into it, sadly maybe, but then I suppose most of life has an element of blackmail in it. But there is no need to encourage any more, which I believe Clause 15 does.
I therefore hope that the Government will accept my amendment or, if they cannot do that, then at some stage they will remove the whole of Clause 15. I beg to move.
Lord Mottistone: My Lords, I am advised in commenting upon this amendment by the CBI. It seems to us, as a basic point, that these amendments seek to reverse the decison of the Government which my noble and learned friend who sits on the Woolsack gave in a Written Answer to a Question by my noble friend Lord Chelwood on 18th December 1980, at column 1278.
In 1980 the CBI considered the question in depth, taking particular care to consult the smaller firms—the ones to which my noble friend Lord Stanley of Alderley referred. It was agreed that the proposal should not be supported. It would be ineffective unless contracting out were prohibited, but it would then be necessary for the Government to set the interest rate at a very high level; otherwise those seeking loans would find their trade creditors the easiest, possibly the cheapest, an entirely involuntary sources. It would in practice prove necessary to standardise payment terms throughout business, cutting across many traditional arrangements. The argument that the interest payment need not be enforced can be countered by the argument that there is nothing to prevent interest terms being included in a contract, or discounts allowed for proper payment. The CBI deprecates the practice of extending credit beyond the period provided for by contract and has made this view clear on several occasions.
It seems strange to me that my noble friend Lord Stanley proposes these amendments because the interests of small farmers, for whom I imagine he mainly speaks, are probably similar to those of small businessmen. Indeed, in his speech he seemed to say that he was talking for small traders, although the CBI would question whether that was so. However, we do consider that the subject requires further study. But we think that it is wrong in principle to introduce at a late stage in a miscellaneous provisions Bill a reform which has been rejected after extensive consultation and careful consideration in the relatively recent past, particularly when the consequences could be far-reaching. Thus I hope that my noble friend will not pursue this amendment. But, equally, I hope that the Government will agree that this is a matter which should not be allowed to drop but should be further studied by those who are most interested.
Baroness Trumpington: My Lords, my noble friend Lord Stanley of Alderley was indeed right when he said that I would wish to speak on behalf of consumers, and I wish to speak against these proposals because I certainly can foresee difficulties, particularly in distinguishing between the genuine and the fraudulent defaulter. A scheme such as that envisaged in this new clause would particularly discriminate against
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poor consumers, especially those already suffering from debt problems often arising from unexpected sickness or unemployment—and the unemployment aspect is very important. Creditors who seek interest already have the freedom to make this a term of the contract. This should continue to be the case without the need for statutory intervention.
Prices, which often already include an element in respect of anticipated late payment, would be unlikely to fall on the introduction of such a scheme. Even in the longer term there would be no guarantee that prices would be restrained. The statutory interest would simply represent an extra cost to some consumers with no guarantee that the benefit would be passed on to prompt payers. As I have said before, a statutory scheme cannot distinguish between the wilful defaulter and the debtor who is unable to pay. Statutory interest will represent an additional burden on the latter, for whom it will certainly not be an incentive for prompt payment.
Some of the practical problems which would be faced by consumers in calculating and paying interest are formidable. Consumers involved in a genuine dispute about the goods or service in question, may be dissuaded from pursuing complaints by the self-help remedy of withholding payments. Comparable problems may result where there is a dispute about the amount payable. A statutory interest scheme would benefit inefficient traders who do not stipulate for contractual interest and who are slow at pursuing debts; and it would be inequitable that consumers should not receive interest when payment is required in advance and that, for example, state benefits would not bear interest when paid late.
Therefore, on balance, I believe that a statutory scheme would have extremely undesirable implications for consumers. It would not be effective in those cases where there is genuine difficulty in paying. Existing court procedures, particularly with a wider discretion for courts to award interest on debts, should be used to deal with wilful defaulters. Moreover, the most effective method for achieving prompt payment would be to encourage the use of cash discounts for those who pay promptly. I hope that my noble friend Lord Stanley of Alderley and the other movers of this proposed new clause will take it back, have further discussions of the whole matter, and will not press it to a Division today.
Lord Wise: My Lords, in a Bill such as this it is with some considerable trepidation that I put my name to any amendments. But I do so to these amendments because I am certain that a scheme for statutory interest undoubtedly has great attractions for the smaller firms. As I understand them, these amendments would implement a scheme and, therefore, the smaller firms would be placed in a more beneficial position.
Although Clause 15 introduces changes of considerable benefit to creditors, enabling them to obtain judgment for interest in respect of any debt at date of commencement of proceedings, as my noble friend Lord Stanley has said, it is by itself not a very real help to small firms. There are a number of reasons why they could be reluctant to involve themselves in litigation. So obviously the right to obtain interest on overdue debts without undergoing the process of

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court proceedings must be a great benefit to all small businesses, particularly those engaged in agriculture, of which I have most knowledge.
I understand that there is concern that a scheme for statutory interest could place creditors in a position whereby debts owing to them would be ever increasing with no hope of recovery. But obviously this happens now and cases have to be dealt with as best they can; for the inability to pay arises from any number of reasons, entirely unrelated to the payment or not of statutory interest. I cannot envisage the new clauses creating any new problems in this respect.
My noble and learned friend the Lord Chancellor has said that these amendments could create controversy and they are controversial. I must admit that even as a layman I have one or two small reservations. For example, Amendment No. 22, dealing with the rate of statutory interest, would surely seem to be much simplified by declaring that the rate of interest should be made X per cent. above the bank base rate standing at the relevant date. Perhaps my noble and learned friend would be kind enough to clarify this for me when he replies.
Nevertheless, now that he has further considered them, I hope that these amendments will commend themselves to my noble and learned friend on the Woolsack and I hope that, to use his own words, he will be able to take these amendments on board in this Bill.
Lord Bruce of Donington: My Lords, these amendments will attract varying views among the party opposite, as we have already heard, and indeed my own views. They are, of course, completely non-party questions that are raised by this. This is fundamentally concerned, as the noble Lord explained in introducing his amendment, with putting into effect the draft legislation that was incorporated in the Law Commission Report on the Law of Contract, a report on interest. So far as I can see, the amendments that have been put forward by the noble Lord correspond almost exactly to the recommendations of the Law Commission.
I shall make this comment, which is indeed in no way intended to imply any disrespect to the members of the Law Commission who considered this. I regret to say that they did not include any accountants. Accountants, of course, are marginally concerned with matters of this kind, because fundamentally interest is also a matter of account and in my profession we have an opportunity of observing its effects at all levels, whether they be the effects on the debtor or on the creditor.
I am bound to say, and I speak for myself personally —and there are other views on the Benches behind me which are of equal validity—that I incline to the views of the noble Baroness, Lady Trumpington. At the lower end of the scale, the lower end of the income groups, there will be no doubt as to who suffers by the imposition of this particular piece of legislation which the noble Lord seeks to enshrine in this particular Bill.
However, I pass from that for just a moment to consider the whole impact of interest on our society. Interest now appears to be a dominant consideration. By the mere possession and deposit of funds, inert
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capital can now earn money at a far greater rate than anybody who is concerned in productive industry. If productive industry could earn a rate of some 15 per cent. of the capital employed in its business, it would indeed at the present time, under the present Administration, consider itself to be extremely fortunate. In this day and age we are becoming so interest obsessed that the mere possession of inanimate funds is a guarantee of income which then makes demands upon diminishing resources. This is a tragic commentary on our times: the fact that the mere possession of funds can now attract to its owners a far greater accretion of money than can be earned by people in the ordinary and honest exercise of their occupations and professions. I put this forward purely as a marginal comment, but it is, indeed, one which we at this time should certainly bear in mind.
Speaking on behalf of the Consultative Committee of Accountancy Bodies—with whose views I broadly concur, and this represents the accountancy profession in the United Kingdom—that committee takes the view, which I would commend to the House, that there should be no legislation of this kind unless there is a general public demand for it. This is a solution that may not commend itself to members of the legal profession because members of the legal profession, by training and by inclination, like to have a tidy solution to all the legal problems that arise. But my profession takes the view that such a change should not be embarked upon unless there is some widespread general public demand for it.
We note that of the 42 respondents listed as having commented on the Law Commission's working paper, 14 appear to be individuals, five firms, and the remainder from trade and other organisations. The CCAB say:
"We have some reservations as to whether this amounts to the substantial general public demand to which they have already referred".
Moreover, there is the firm view held within the accountancy profession, which is not wholly isolated from what happens in industry and commerce, that a scheme of statutory interest could have the effect of institutionalising slow payment of debts rather than accelerating their discharge. They say that, given that under the proposals it is open to the parties concerned to contract out of statutory interest, it seems that the cost of borrowing will not necessarily be placed on those that are enjoying credit.
I would commend to the noble Lord the following further observation that has been made by the consultative committee. They say this:
"We doubt that small firms would find the scheme of much assistance in practice. A small firm dealing with a large supplier of raw materials, and a large customer for its finished goods, might well find itself at a disadvantage. On the one hand the supplier may insist that his contract with the small firm should include a statutory interest, while on the other the customer may insist that his contract should exclude a statutory interest".
For these reasons, I trust that the noble Lord will withdraw his amendment so that it may receive further and possibly wider consideration than that which has been given by the Law Commission which, as I have shown, received representations from only a limited number of people and bodies. In general at this time we should refrain from adding further to the difficulties of the noble Lord, Lord Cockfield, or his successor at the Treasury. It has been demonstrably proved that

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the extremely high interest rates over the last three years have not subtracted from, but have contributed to inflation. I do not think that this House at this time should take any steps to aggravate the position beyond the appalling situation which exists now.
Lord Mishcon: My Lords, I promise your Lordships looking at the clock as I do, that I wish to speak briefly. Your Lordships will have noticed that I receded in regard at all events to the place where I was sitting only a few moments ago. I did so because, as my noble friend Lord Bruce has said, there is a difference of view here within parties, as this is very much a non-political point. On the previous occasion, speaking from a row in front of the one from which I speak now, I supported the amendment. Personally, I still wish to do so. I did so because, in spite of all that has been said this afternoon, my chief regard was for the small trader who is paying the very interest to which my noble friend Lord Bruce referred, at a very high rate, lacking capital, and shutting down his business. We read week after week of liquidations and bankruptcies assuming a figure which is quite alarming.
I say briefly that I think it is so unfair for the big firm so often to hold that little man to ransom, and merely say to him, looking at the Bill as it now stands, "If you care to sue us you of course would get interest from the court. But if you haven't got the pluck to sue us because you want to keep our custom, you won't be able to serve a notice and get statutory interest." I stay where I was last time in my opinion on this amendment, and I warmly support it.
The Lord Chancellor: My Lords, we have only a few moments, but I must beg the House to believe me when I say that this is a highly controversial amendment, and on that ground alone I cannot accept it at all. I know that there are those in the Law Society who favour it, and so there are in the British chambers of commerce, the National Farmers' Union, the Association of District Councillors, the Union of Independent Companies, the Agricultural Suppliers Trade Association, the Institute of Credit Management, the Consumer Credit Association and the Finance Houses Association; but ranged on the other side are the consumers, as we have heard from my noble friend Lady Trumpington, the Confederation of British Industry, the Consultative Committee of Accountancy Bodies, the National Chamber of Trade, the Federation of Civil Engineering Contractors, the Greater London Council, the Local Authorities Management Services Committee, the Association of Independent Businesses, the National Water Council, the Law Society of Scotland, the Institute of Chartered Accountants of Scotland, and, I have no doubt, the Labour Party as well.
I really hope that my noble friend will take some pity on a poor Lord Chancellor who is trying to get through a piece of uncontroversial legislation. I have been here provided with a long speech in which I was going to point out the various defects in this particular amendment even from the point of view of the small trader. But I will not at this hour. I simply confine myself to two observations. The
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first is that I simply do not understand why my noble friend should have said that with Clause 15 in it, it is less favourable to the small trader than without it. It is simply not true, from the soundings I have taken, that there is any opposition to Clause 15 as it stands, which gives the court the right in its discretion to award interest. I hope that my noble friend will at last come to see that he has at least got half a loaf, and that what he is asking for is no bread.
Having said that, I make only one other point. The noble Lord has made matters much worse by the change which he has effected in the Law Commission's recommendation. The Law Commission's recommendation was that there should be an opting out clause. This has been effectively emasculated from their recommendation in the series of clauses which my noble friend has introduced. There are an infinitely large number of arguments here which would bear against even the advantages which he claims to exist in the amendment, but I hope he will at least have some pity on me when I tell him that it is controversial and therefore I cannot take it on board.
Lord Stanley of Alderley: My Lords, I hope that my noble and learned friend will have some pity on me, rather than that I should on him. I make one or two points before we leave the matter. One of the remarks that my noble friend Lord Mottistone made was that traditional terms would be upset. It is the traditional terms, many of them, that we dislike so much, because there are, unfortunately, unscrupulous traders—and the noble Lord, Lord Mishcon, brought this out—who keep us out of our money. It is those that we are going for.
Here I come to my noble friend Lady Trumpington. I am not getting at her and her consumers; the whole purpose of the amendment has nothing to do with consumers. We are getting at the, perhaps I may call them, evil people who are keeping me or my small trader away from our money, money at which we are trying to get, and 1 am sure there are ways to avoid us making the consumers' problems any more difficult. Indeed, the fact that there could be interest added on for somebody who cannot pay does not make it any more difficult; there are terms in the courts in relation to how to pay a sum off, and no doubt the terms are, as usual, very generous.
The noble Lord, Lord Bruce, made some interesting points. Like the noble Lord, Lord Mishcon, I took a totally different view from his argument. I take the point that it is better for me to sit on my backside and invest my money than try to work, because I should find it difficult to earn the same as I could get in interest. That is exactly why I want the amendment. I do not want the large firms keeping my money away from me when it could be put into productive work, I hope, albeit I cannot earn the rate of interest which Lord Bruce says I cannot and which, indeed, sometimes I cannot.
My noble and learned friend listed a large number of firms on my side and a large number on the other side. I hope he understands that, so far as I am concerned, all those on the other side are wrong. I take the view of the noble Lord, Lord Mishcon, particularly in relation to Clause 15. He pointed out to my noble and learned friend why we do not like that clause, and I dealt with that in my original speech. I do not want to

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repeat why I would rather have Clause 15 removed.
It appears that tonight, as opposed to the last occasion, I do not have the same amount of support among noble Lords, and I said on that occasion that I would probably miss the boat, and obviously I have. Nevertheless, I would strongly make the point to my noble and learned friend that everybody is agreed that the matter needs further thought. I accept that it is controversial. I hope the Government will give it further thought so that it may be possible for an acceptable amendment, possibly in the other place, to be tabled. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 16 to 23 not moved.]
Clause 17 [Relaxation of formal requirements for making wills]:
7.3 p.m.
The Lord Chancellor The Lord Chancellor moved Amendment No. 24:
Page 12, leave out lines 31 to 33 and insert—
("(d) each witness either—

(i) attests and signs the will; or

(ii) acknowledges his signature,

in the presence of the testator (but not necessarily in the presence of any other witness),").
The noble and learned Lord said: My Lords, I hope we can get through one or two more amendments before my noble friend Lord Denham moves me out of business, as it were. This amendment replaces the existing paragraph (d) and makes it clear that the two witnesses do not both have to carry out the same action, either signature or acknowledgment, at the same time for the will to be validly attested. This carries out an undertaking I gave to the noble Lord, Lord Mishcon, in Committee and I hope is an improvement in parliamentary draftsmanship, for which I modestly claim credit which I do not deserve.
Lord Mishcon: My Lords, I am most grateful to the noble and learned Lord.
On Question, amendment agreed to.
Clause 18 [Effect of marriage or its termination on wills]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 25:
Page 13, line 42, at end insert (" and if it was contingent upon the termination of the life interest, as if it had not been so contingent.").
The noble and learned Lord said: My Lords, this is highly technical, but I can explain it in great detail if called upon to do so, and I think it is the right solution to a highly technical problem. It deals with the situation where a life interest is terminated by divorce. The amendment makes it clear that where the life interest of a divorced spouse lapses by virtue of the earlier provisions of the clause, then any interest in remainder which is contingent on the termination of the life interest is to be treated as if it had not been so contingent at all. The main clause provides that it shall be treated as if the person with the life interest has died, but there is the possibility, which has been pointed out to me by the Law Commission and the Holborn Law Society, that supposing the gift were to my wife for life and then to such of our children as are alive at her
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death; if she was divorced while she was still alive, that might have a startling and improper effect. The amendment, which has been seen by the Law Commission and the Holborn Law Society, is designed to put that right.
Lord Mishcon: My Lords: I am happy to agree that the Holborn Law Society, as a result of the courtesy of the department of the noble and learned Lord, is completely satisfied with the amendment. My expression of gratitude continues.
On Question, amendment agreed to.
Lord Denham: My Lords, I beg to move that further consideration of the B ill on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

ECC 7th Report: State Aids to Agriculture
7.7 p.m.
Lord Cledwyn of Penrhos Lord Cledwyn of Penrhos rose to move, That this House takes note of the report of the European Communities Committee on State Aids to Agriculture (7th Report, 1981–82, H.L. 90).
The noble Lord said: My Lords, the subject of state aids to agriculture is one of the most important our committee—that is, Sub-Committee D—have examined and, given the obvious limitations imposed on us, I think we have produced the useful report. It may also be thought that we have performed a practical service, if only in providing a readable guide which explains the way in which the system works, with its complexities and defects. That is discussed in the report under the heading "Evidence and Analysis" in paragraphs 17 to 95.
I must thank all those who have co-operated to produce the report. I refer to my colleagues on the sub-committee, who devoted a great deal of time to it and who are all expert in some aspect of agriculture. It is a splendid committee. We are grateful to our clerk and specialist adviser for their invaluable contribution and of course to all the witnesses on whose thoughtful evidence the report is based.
Some of us visited the Commission in Brussels and we much appreciated the help we received there from DG IV, DG VI, the United Kingdom delegation and COPA, as well as the legal division of the Commission. We had the impression that officials there were glad that we were undertaking the task. But why did we undertake it? At the start, we wondered whether we would be able to accumulate sufficient material to justify the exercise. There was an element of the unknown about the scene as we surveyed it. But we were encouraged to take the plunge not only because of the importance of the subject but also because we hoped to dissipate some of the mystery which surrounds it. We know of course that many farmers in our country harbour a deep suspicion that their counterparts in other countries are more favourably treated, and when we were examining fruit and vegetables in the last session we came to the conclusion that aids in that sector might confer a competitive advantage upon the countries concerned.
It was at that time also that we experienced some frustration when it was brought home to us that the register of national aids, which Article 93 of the treaty enjoins the Commission to prepare and keep up to date, is unavailable to all save Commission officials. Our concern became more acute when we were studying the common agricultural policy and discovered that member states were providing in the aggregate more funds for national aids than the whole cost of the CAP. That is something to be pondered. How, we asked ourselves, can people be satisfied that the system is equitable, that competition is fair, as laid down in the treaty, if the information about national aids is not made publicly available? It was in that spirit that we embarked upon our study.
Perhaps at this point I should deal with the Commission's inventory because we achieved some success in our efforts to penetrate this inner sanctum. This voyage of discovery is dealt with in paragraphs 43 to 52. In the course of our inquiries, during our visit in Brussels, we discussed the inventory. It was clear to senior officials there that it was of central importance to us, and it was agreed that it should be made available to the Committee. We felt that that was a significant breakthrough, and we are very grateful for that gesture. The inventory is available in a certain form in the Ministry of Agriculture here in London and it is, as may be imagined, a formidable document. It comprises nine volumes dated September 1977, and covers state aid to agriculture and fisheries granted in 1974.
The volumes in respect of Denmark, France, Germany, Ireland and Luxembourg are supplemented by the latest available updating, while four in respect of Belgium, Italy, the Netherlands and the United Kingdom have been superseded by more recent, self-contained "own language" inventories. I must refer the House to our criticisms in paragraph 50 and our comments in paragraphs 101 and 102. We strongly urge a policy of greater openness and the availability of the inventory for public scrutiny.
As the House will note in the report, state aids can be divided into different categories, but I want to look briefly at a fairly basic division—namely, and in the first instance, aids which are both legal and reasonable; secondly, aids which are legal, but which, for one reason or another, are distortive; and, thirdly, and lastly, aids which are illegal and in contravention of the treaty.
On the first point, there are allowable aids, some of which have continued since the Community came into existence; they meet special circumstances, conditions, or hardships. In an ideal world total harmonisation would be possible, but this is not an ideal world, and although there are some who point out that all aid is distortive, there is no practical possibility that all aid can be abolished. We state in our report that the formal position under the Treaty of Rome, whereby any aid granted to a member state
"which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods",
is incompatible with the Common Market. This is why there are a range of exceptions to the rule. What we say, and what we believe, is that all steps must be taken to ensure that the exceptions are absolutely necessary and absolutely fair; that no country moves
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stealthily to give an aid which will place the farmers of another country at a disadvantage. We know that there are political pressures, but if the system is to work, then Governments must try to be fair.
The House will also note that in paragraph 97 the committee stresses that, even in the improbable position that total harmonisation were to be achieved, distortions to competition would still arise from,
"national differences in such matters as taxation, credit facilities, wage and other input costs and land ownership systems".
Those are differences which can be expected to change only over a very long period.
The report further remarks that:
"an aura of suspicion, characterised by much emotive and uninformed comment, surrounds the whole area of state aids".
It attributes this in part to the,
"ambiguity in the provisions of the Treaty of Rome relating to the rules of competition and their application to agriculture".
Paragraph 98 poses the problem clearly, and ends by saying that,
"a balance has to be struck between the distortive effect of a particular aid on the one hand and its … furtherance of the objectives of the common agricultural policy on the other".
We found this to be difficult territory to traverse.
I come to my second point; namely, that there are aids which are perfectly legal, but which are also distortive. The Guiscriff turkey plant case, referred to in paragraph 95, is relevant in this context. It raises issues of wide-ranging significance in that, while each individual aid to the plant is probably admissible under the treaty, taken together they could have a serious distortive effect on competition. If the Guiscriff case were to be copied in other sectors of agriculture, you would have an impossible situation. We urge the Commission most strongly to consider how this type of distortive effect can be contained and avoided.
The Ministry memorandum on page 125 of our report is very interesting, especially in its comparison between French aids and British aids, and I hope that if noble Lords have not studied this part of the report, they will do so. Although the Ministry states that it is difficult to make comparisons, it adds, on page 127, that French aids are,
"considerably higher than those normally likely to be available to turkey processors in the UK".
When he replies, the Minister may wish to comment on that, and tell the House whether there has yet been a response from the Commission itself on the problem.
The other main national aids brought to our attention include the package of aid to farmers granted by the French Government at the end of 1980, a similar package of measures announced in December 1981 by the French Government, and the preferential tariff for heating fuel available to hot house growers in the Netherlands. Paragraphs 86 and 87 describe the action taken by the Commission and the reaction of the French Government to the action of the Commission. I am bound to say that one has to admire the ingenuity of the French from time to time.
As to the Dutch hothouse case—a highly contentious one—I understand that it is still sub judice, and perhaps when he replies, the Minister can inform us of the latest position.
At this point 1 should say to the House that notwithstanding the general concern at the alleged proliferation

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of national aids, the only cases brought to our attention were the four cases that I have dealt with, and there is dubiety about the alleged illegality of two of them. Of course, other cases may exist, and we should not overlook the aids given by regional Governments, which are rather more difficult to trace, as noble Lords may imagine.
In our judgment the disquiet is due in the main, however, to state aids which are not regarded as illegal, but which are nevertheless distortive in their effect. We are also aware that some Governments react more sensitively to the pressure of farming lobbies than do our own—or they certainly give the impression that they do. The French packages are illustrative of this.
All these things taken together, as well as the deficiencies of the common agricultural policy, create suspicion that matters are not as they should be. As paragraph 29 shows, it is a complex area. But the hard evidence of numerous illegal state aids is just not there, and we must accept this in all fairness; we have no alternative. I say again that more frankness and openness would go a very long way to allay the fears which do exist.
I must pass rapidly over several points of substance, and I apologise for doing so, but time is against me. For example, "aids through taxation and social security systems" as well as "interest rate subsidies and capital grants" are of particular interest and importance. I hope that my colleagues on the Committee and other noble Lords will fill the gaps in my speech.
What should be done? The House will note our recommendations. We welcome the upgrading of the unit in Brussels which deals with state aids but we also think that the Commission's manpower resources need to be strengthened to enable them to do their job properly. The monitoring investigation and en-enforcement of new or altered aids is a huge task, as we confirmed when we met the legal division during our visit to the Commission. During that visit I was greatly impressed with the Commission's legal service although one felt that these very able people were being stretched to the limit of their capacity. Again, we suggest that the possibility of establishing inspectorates in member states might be considered carefully. A great deal could be done fairly quickly and without undue expense to create a much better atmosphere.
The NFU have issued their observations on our report and I should like to thank them for their generous remarks that our "recommendations are valuable and constructive". There are also some criticisms—life would be very dull without them—but I do not propose to go into much detail at this stage. I understand that my noble friend Lord Sainsbury, a member of our committee, will be addressing himself to the question of marketing aid raised by the NFU. I have received a letter of apology from representatives of the Liberal Party who because of prior engagements are unable to be present at this debate but, certainly, the noble Lord, Lord Mackie of Benshie, and others are very distressed at their missing the opportunity to participate in the debate.
Finally, I come to the Ministry of Agriculture itself. The Minister, Mr. Peter Walker, has emphasised the
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need for greater effort to bring state aid under more effective control. We welcome and support his initiative and hope that the Minister can tell us what further steps are now proposed to make progress. The committee propose that our agricultural attaches in the Community might play a bigger role in identifying and publicising the emergence of aids in the Community. They are in a position to do so. My experience of them is that they are very able and competent officers. I think that they can play a bigger part than they do at present.
We rely on our Government to maintain constant pressure on the Commission to maintain its current concern with state aids. I believe that there is a lively interest and concern in this subject throughout the Community and now is the time to take action. The representatives of other countries whom we met were on the whole, interested and pleased that we had undertaken this task. I think they are ready to receive these recommendations and to co-operate with us. The members of the committee hope that this report will help bring about the changes that are necessary to this end. I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on State Aids to Agriculture (7th Report, 1981–82, H.L. 90).—(Lord Cledwyn of Penrhos.)
7.24 p.m.
Lord Mottistone: My Lords, I welcome this debate and wish to thank our chairman, the noble Lord, Lord Cledwyn, for leading us so well during the preparation of this report. It is a great honour to succeed him in the batting order in this debate. The only thing that worries me is that he sits on the Front Bench opposite and I cannot really tackle him because I am in agreement with everything that he has said. It is so disappointing! I must declare an interest, of which, I think, noble Lords will be aware, in my being employed within the food processing industry; and this will have a slight bearing on what I have to say. I hope to concentrate on a fairly narrow front because of the time factor.
We must start by saying that the report reveals that state aids are an entrenched and extensive feature of European agriculture. I think that, in accepting that, we must welcome it because if properly controlled—this is the key feature—state aids can be a useful way of supplementing the common agricultural policy financing methods to meet real local needs within the member states. I think it is most disappointing that, although adequately provided for in the Treaty of Rome (as is seen in the report), after all these years the Commission's information on this subject is so patchy and inadequate. It is quite remarkable. I think that they have got to admit to a grave dereliction of duty in this area. Every effort must be made to see that they make this good.
As our chairman has said, it is helpful to see the Commission setting up a more powerful unit to look after this particular function; but I think that they must give special thought to this for I believe that it needs to be one of their more important duties. Whether it needs always to be so is another matter. They have to make up for a lot of lost ground. The evidence that we got from them was three or four years out of date.

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There was a big gap there and there seems to be no meaningful way of accelerating the filling of the gap and taking us through to the future. I believe that they must analyse and categorise all the information they have, following the line suggested in paragraph 102 of the report. I have been giving a lot of thought to how we might get it more accelerated. It seems to me that one of the problems is in getting the member states to report. In some cases this may be because they are genuinely wicked; but, on the whole, I do not think they are. I think that the member states are dilatory and, because they do not get pressure from the Commission on this point, they do not bother to put high-priced bodies to collecting information and passing it on to the Commission.
I should like to suggest to the Government and to the House that, as a stopgap to supplement the old information, the Commission might give thought to having a press cuttings account in each of the member states to produce cuttings of all the press, and, in particular, the local press, which give announcements of financial aids of all sorts to farmers and processors. If there is a new aid—as, for instance, the turkey one—that probably will come to light first in some announcement in a local paper which it will be boasting about in order to keep the farmers in that part of the country happy, because they are usually grumbling about something. Although this would not be authoritative information, one could get a permanent pointer from such a press service which would enable one to provide incentives for member states' own Governments to accelerate the provision of what might be called the real information. It is a means of "putting a bomb" under the member states which should not cost the Commission very much money, particularly in view of the amount of money that it wastes on food surpluses which they are encouraging even more, day by day.
This would have the effect, I hope, of accelerating the official reports and, if it were successful, it could be discontinued after two or three years, but with a threat of reintroducing it, so that it need not be a tremendous burden. I would suggest that the cuttings when produced within the Commission should be circulated immediately to the national delegations of the EEC in Brussels so that they, too, have all the information. This is to meet the other main need, which is to allay the suspicion that is aroused because, as the report makes clear, the information is lacking. If we have the information there for all the countries, they need not have that suspicion.
Further—I suggest this particularly to my noble friend Lord Ferrers—if the Commission, having had this point suggested to them, are dilatory in setting up the press cuttings service, the United Kingdom Government are not as "broke" as all that, they can do it for themselves. Whether they then circulate that information to the other member states is another matter. But they would have a bargaining counter. The important aspect is that the Commission could be threatened with it. There it would have all this information as up-to-date as maybe as a background to get some type of circulatory details which can be used to solve this problem. To divert slightly on to a special point: in a brief, which I imagine has been circulated to most of those speaking by the NFU, they have called for more United Kingdom aids
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comparable with other member states. They criticise the Select Committee for not making this point in the report.
Although I do not always find myself sympathetic to the National Farmers' Union, on this occasion I do; but I suggest that if we are to have comparable aids in this country, they should be extended to food and drink processors as well as to the farmers. However, without the information to know what is being provided in the other countries, how can we possibly expect our own Government to dole out these aids even if they wanted to and had the money to do it? You cannot give comparable aids when you do not know with what you are comparing it. It comes back to the fact that what we must have is up-to-date information and we must find a trigger to make the Commission realise that this is important. Every effort should be made by our own Government to accelerate action by the Commission.
I should like to conclude as I found myself concluding in the debate on the price proposals and the guidance. There is a great danger that a cynicism is creeping in in relation to the CAP which spreads further into the Community because of the fact that there are so many difficulties that are not tackled or that things are tackled, rather as the price proposals seem to be, on a convenience basis rather than a practical one to help the Community forward. Because of this cynicism, of which the suspicion of state aids in other countries is but an example, the CAP—and indeed the Community—are at risk. I hope very much that our own Government can make this point most clearly to the Commission and to the Council of Ministers because if they do not start doing something soon we shall find that it will collapse about our ears and governments and countries—not just ours—will get out of the EEC as being "a no-good thing".
7.34 p.m.
Lord Walston: My Lords, I too join in the thanks and congratulations to the noble Lord, Lord Cledwyn of Penrhos, for his chairmanship of our sub-committee, for the able way in which he has always conducted our investigations and also for his introductory speech this evening.
I shall deal with only three points tonight. The first is to remind your Lordships of one of the main objectives of the common agricultural policy. We frequently hear about one of its objectives being to improve the lot of the farmers of the Community, to bring their living standards up to those equivalent to people working in industry, and also to ensure the food supplies of the Community. We also frequently hear criticisms of the surpluses.
We hear less frequently—and it is important to remember—that one of its objectives is to ensure that over the years agricultural production within the Community is directed to those areas where a particular product can most efficiently be produced, where the soil, climate and labour is most suitable for producing a particular commodity. That, to my mind, is the main reason why it is very important that we should not have an undue quantity of aids to agriculture, whether community aids or national aids, that distort the natural pattern of agriculture.
Undoubtedly, the national aids are more distortive

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than are those which come from the Community itself. But I suggest that ideally our aim should be for a CAP where there are no national aids of any kind whatsoever and, what is more, where there are no specific production aids designed to single out particularly disadvantaged areas. Of course we have to give help of one kind or another to disadvantaged areas. But, as has been said from time to time in the House and elsewhere, that is primarily a matter for social expenditure rather than for economic expenditure.
The ultimate aim must be for an agriculture where those areas which are most suited to a particular type of production produce that without being impeded in any way by artificial aids, whether they stem from the Community or from specific national aids. One has to admit that we in this country have a good many of such national aids for special areas such as, for instance, the hill farming subsidy, something admirable and necessary to have at the present time but which undoubtedly distorts the pattern of agriculture both in this country and throughout the Community. I suggest this should be our ultimate objective; to abolish all forms of artificial stimulation of agriculture in different areas. It will be a very long time before we get there. That is an ideal to be aimed at and certainly not to be forgotten.
At the present time we are dealing, quite rightly, with the narrower subject of national aids to agriculture, and particularly those which are not officially approved by the Community itself. During the course of our investigations we came across many examples. As is mentioned in the report, and as was touched upon by the noble Lords, Lord Cledwyn and Lord Mottistone, we also came across a lack of knowledge and misinformation about these aids. This is only natural, particularly when there is an aura of secrecy surrounding these aids. We have heard of the vast volume—some 3,000 pages—which the Community has in Brussels, which is not allowed to be seen by the public at large and is indeed very difficult for your sub-committee to see. Naturally, when there is this secrecy surrounding these aids there is a great deal of suspicion and misapprehension.
English farmers—and, as your Lordships know, I am one of them—all believe that other countries have far more aids than we do. The French, I happen to know, and the Germans believe that in this country we have far more aids than they have. That suspicion does no good to anyone: it engenders distrust and engenders a form of competition and an increase of this form of pressure on Governments to give these national aids. I believe it is extremely important that these aids should be far more widely known, and 1 very strongly support the recommendation in the report that an abbreviated form of an updated list of aids should be published, and speedily every year there should be a supplement to that publication, showing the fresh national aids which have been adopted in each member state.
The noble Lord, Lord Cledwyn, referred to the role that our agricultural attaches should play. I am glad he did so because I believe there is a large and useful role for them in this respect. I have to say that my impression from the evidence that we listened to from the Ministry of Agriculture was that the forcefulness within the Ministry on this particular point was not all that I would like it to be. I will not read the evidence
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to your Lordships, but if you turn to pages 11 and 12 and read questions and answers Nos. 11, 12 and 13, 1 think you will receive confirmation of the general attitude within the Ministry. They do not give any overall directions to the agricultural attaches, saying, "We want you to tell us every month of every new national aid that has taken place in your country". They simply ask them specific ad hoc questions from time to time, and as long as there is that attitude at the centre you cannot expect the agricultural attachés to go out of their way in order to collect this information. I hope that is something which the noble Earl will look into in due course.
I turn now to the third point I want to make, which is a much more general one concerning the importance of national aids and the abolition of distortions to competition between the member countries of the Community. National aids are of some importance, although I suspect that if they were all added up in a completely accurate and objective fashion we would find that the distortion caused by them as between different member countries was not all that significant. That does not mean to say that they should persist. I do not believe that they should; and I support the recommendations of this report very strongly in that respect as in others.
But there are so many other factors which distort competition between the countries in a very much greater way than any of these we have been studying here. For instance, there have been considerable differences in the cost of inputs into agriculture. That is not a very big problem but it is still significant. At one time not so very long ago it was clear that the cost of agro-chemicals, for instance, in Belgium was over 30 per cent, cheaper than for identical chemicals in this country. The cost of tractors was 20 per cent. cheaper, the cost of combine harvesters 30 per cent. cheaper and so on. Nothing can be done about that. No governmental action can alter these prices. It is up to the farmers and, as they become conscious of this, they are beginning to buy these inputs, if they can, in other countries. Some farmers are better placed than others to do this, but I understand there is now quite a trade between Belgium and this country for tractors. They can be bought in Belgium cheaply and resold in this country. That is a factor of considerable importance which affects farmers' costs and distorts competition.
Secondly, there is the question of currencies—green currencies, fluctuations of currencies, rates of inflation and so on, which vary greatly from one country to another. In an ideal world, a country with a higher inflation rate than a neighbouring country would have a lowering of its currency, and eventually everything would equalise itself out. Because of the prevalencies of green currencies now, that does not exist at present and so we have a grave distortion of competition as a result of currency movements.
Then we have the question of land ownership, which even in our own country has a very considerable influence on distortions. Take three farmers: one of them will have bought his land or inherited it many years ago and such mortgages as there may have been have been paid off. He has no rent charges to pay. The second farmer is a tenant and he pays the going rate—£20, £30, £40 or £50 per acre maybe. The

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third farmer has fairly recently bought his land with a substantial mortgage, with the very high mortgage repayments that he has to pay, well over the normal rate, even on high rents. So in this country, because of the structure of our rents and rent charges, we have enormous variations in profitability. And when you look at the whole of the Community, with its different forms of land ownership, its peasant occupancy, sharecropping and so on, you have a very wide range of costs which inevitably distort competition.
Finally—and Governments eventually can do something about this—there is the very vexed question of taxation. Those of your Lordships who have read the report carefully will have noticed on pages 100 and 101 or 102 some very interesting evidence given to us by Mr. Ian Reid, who is the director of the Centre for European Agricultural Studies at Wye College.
I must make it perfectly clear that he very freely admitted that his calculations were open to a great deal of argument and discussion, and indeed subsequently in the report there is an assessment on them from the Inland Revenue, which casts a great deal of doubt on the detailed accuracy of the figures. But the differences that he puts forward are so great that I believe it is worth drawing attention to them. His calculations, inaccurate though they may be on his own admission, show that the Danish and British farmer may have to pay anything up to 70 per cent. of his total income in various forms of taxes—capital taxes, income taxes and other forms of taxes, direct and indirect—whereas on average the French farmer on the same-sized farm pays something of the order of 20 per cent.
Even if those figures are extremely inaccurate, I put it to your Lordships that there is still a very wide divergence in the actual cost of production, in the amount of retained profit, in the ability to invest and in the standard of living solely as a result of differences in taxation. We need to progress—and this also will take a very long time—to a far more unified system of taxation between all the countries of the Community. Regarding the relatively smaller differences which occur as a result of certain national aids, even if those were to disappear the problem would not be solved.
I do not want to give the impression that this report is not a useful one or that it does not deal with a very important problem. It does that very fairly and with a great deal of accuracy. My only reason for mentioning these final points is that we must not go away with the idea that if only we can solve the problem of national aids to agriculture there will be perfect competition as between all member states of the Community. That is far from the case, but it is still worth making every effort we can to ensure that these national aids are minimised. I believe that the recommendations contained in this document are a valuable contribution to that problem.
7.50 p.m.
Baroness Elliot of Harwood: My Lords, I must apologise to your Lordships for the fact that this is the third speech that I have made in two days in the House. I promise that I will be brief. But I could not possibly not take part in this debate, because I want to express my thanks to the noble Lord, Lord
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Cledwyn, for the splendid way in which he chairs this committee, for the enormously interesting subjects that we consider and for the way in which those subjects are handled by the chairman and the committee. This report is of great importance, and is one which nobody else could have produced as skilfully as he and our committee have produced it.
I must declare an interest, in that I am a recipient of state aid, because I farm in what is technically known as a less-favoured area. I do not find it in any way unfavourable, but the fact is that that is how the area is described in official documents. I shall say one word about something which the noble Lord, Lord Walston, said, but I will wait a minute or two before doing so.
I should like to quote from the governing text of the report. It states:
"State aids are an entrenched and extensive feature of European agriculture".
As such, they will not be given up by any nation. We must accept that, and I am sure that it is true. But the point is that these aids should be known to other EEC countries—that point was stressed by the noble Lord, Lord Cledwyn—they should be restricted and governed by EEC agreement and kept to a minimum. I am sure that that is right, and that that is one of the recommendations which will be strongly pressed as a result of this debate.
I may be wrong, but I think that the main influence over the amount of state aid in European countries is the proportion of voting strength of the agriculture industry. Your Lordships may think that that is a little cynical, but I do not believe it is. We see pictures in the papers of tractors being driven down the Champs Elysées, in order to stop the traffic and to protest against the policy of the French Government. We have never reached that point here. I have been told that someone has seen a tractor in Trafalgar Square, although I never have. But that shows how powerful and strong the French agriculture industry is.
The many thousands of farmers, farmworkers, people employed on the manufacturing side of farming and people supplying machinery and other agricultural needs, such as fertilisers, seeds and so on, which go into agricultural production, all have votes and the Government of the country concerned is greatly influenced by their numbers. The voting strengths of the agriculture industries in other European countries is between 8 and 18 per cent. But, as we all know, the number of people engaged in the agriculture industry in the United Kingdom varies between 2½and 3 per cent. of the voting population. So our political influence—I am speaking now as a farmer—is much less in this country than in any other European country, but our efficiency in production and our trading powers put us very high in the membership of the EEC's farming industry.
If I remember rightly, nearly all the people and organisations whom we interviewed were in favour of state aids, so long as they were fair and above board and not used to destroy anyone else's agriculture industry. Our committee would press the Commission to publish the new regulations, which we believe they are drawing up, so that the EEC countries may have some guidelines as to what aids are considered appropriate and legal. At the same time, we thought it

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important that information about the aids being given in EEC countries should be made public, and that the Commission should publish a short report at the end of each year listing the new aids in each country. That would complement the fuller inventory which is known to the Commission, but which is not necessarily known to the other nations; hence our recommendation that there should be no secrecy about state aids.
The noble Lord, Lord Walston, made some suggestions about state aids in this country, and he thought that the state aids for hill farmers—of which, as your Lordships know all too well, I am one-could very easily be reduced. I can only tell your Lordships from long experience that, if state aids were refused on some parts of our agricultural production, the price of mutton and so on would instantly rise. It has been known for a great many years that state aids keep down the price of food in the shops of this country. That is one reason why I am in favour of state aids, although I agree that they should not be exaggerated. But I should like to put in a little protest—
Lord Walston: My Lords, may I interrupt the noble Baroness for one moment? I certainly did not say that the hill farming subsidy could very easily be reduced. I know that it would be extremely difficult to reduce it. I said that there should be substituted some other form of aid, to keep the noble Baroness and her friends in the style of life to which they have become accustomed.
Baroness Elliot of Harwood: My Lords, I can tell your Lordships, quite honestly, that if, in Scotland, where 42 per cent. of our land is designated as less favoured, anything were done to reduce the assistance which goes to farming in those areas, it would be very unpopular. That land cannot be used for anything else and it would become derelict which, in itself, would be a disaster. Also, I take some pride in the fact that in Scotland we have a very efficient sheep and hill cattle industry. That is a great help to farmers who want to buy store animals and fatten them on rich land, which, as I know from my delightful experiences, the noble Lord, Lord Walston, farms in England. However, that is by the way and I hope that your Lordships will forgive me for making that slight digression.
In our report, we mentioned the French Government's enormous subsidies, particularly in connection with the production of turkeys. The concession is being inquired into at this moment, and it will be interesting to learn the result of that inquiry when the report is published. I should like to draw attention to the subsidies given in Holland to the suppliers of cheap gas for the glasshouse industry. If the Dutch Government are brought before a court on this matter, it will be very interesting to know whether they are cleared of giving this heavy subsidy or whether they are prosecuted. Our glasshouse industry has been badly affected by the increase in oil prices and in Scotland—in the Clyde Valley and elsewhere, where the glasshouse industry is extensive—enormous increases in heating costs have crippled the producers who do not, of course, get subsidies. I do not suppose that the position can be altered, but it has been a great blow to that part of Scotland.
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I should like to say one word about the memorandum circulated by the NFU. There is a comment about the working party on competition in agriculture recommending that this should be revived and made more effective. We had many meetings and took much evidence, but I do not recollect that any witness spoke about this. Nobody had much enthusiasm for this particular committee, and we did not feel that it could play a very important part. Whether we were right or whether the National Farmers' Union were right, I do not know. However, I do not remember any particularly strong demand from the witnesses who gave evidence to us that this committee should be revived.
I have said enough. Once again I should like to thank our chairman for the way he conducts our investigations. I hope that this report will be considered favourably by the Agriculture Commission in Brussels and that the noble Earl, Lord Ferrers, will feel that we have done an adequate and, I hope, a good job.
8.1 p.m.
Lord Dunleath: My Lords, I must start by making an apology. I am already late for another engagement. I did not realise that the business of your Lordships' House today would extend to this length. Unfortunately, therefore, I shall be unable, with permission, to stay for the winding-up speeches.
Reference is made in this report to the less favoured areas. They have also been referred to by speakers in our debate. I would suggest that there are two types of less favoured area. I am now talking in the context of Northern Ireland, which is the boring context in which I tend to speak. The first type is the obvious one: the moorlands, the hillsides, the mountain sides, the wetlands which can only be grazed during the summer months. Though these are less productive than the arable lands, and less capital is invested in them, they provide a most useful source of supply for maintaining the Province-wide beef herd. I used to single suckle on my farm, but I cannot bend the arithmetic to make it a viable operation now.
The same applies to people in the non-arable areas. In 1973 there were 325,000 beef cows in Northern Ireland, but by 1981 this figure had gone down to 205,000—a reduction of 37 per cent. in a Province where unemployment is at a disastrous level. The people who were breeding beef in these less favoured areas are living in districts where virtually no job opportunity is available. Agriculture accounts for 13 per cent. of the total employment in Northern Ireland and is our biggest single industry. So it is a calamity that this is the case.
Turning to unemployment, I adhere to the rather simplistic view that it is better to pay people for doing something than to pay them for doing nothing. If more of these people are put out of work they will have to sell their land. If they cannot make their business viable, this is going to be a drain on national resources, quite apart from being a human tragedy.
The second category of less favoured area is, I would say, the intensive farm, whether it be arable or whether it relies on poultry and beef production. A considerable amount of capital is involved. For the most part, that capital can no longer be serviced. I must declare

1327
an indirect interest. I am a director of a bank and know that in almost every case either the farmer has to sell land, which makes his enterprise less viable, or, if the bank still has sufficient confidence in him, the interest accrued is added to the existing overdraft. As an example, the total indebtedness of farmers in Northern Ireland to the banks was £98 million in 1978. The interest paid was £13·5 million. In 1981, their indebtedness had gone up to £186 million and the interest had doubled to £26·5 million. Another indicator is that the number of new tractors registered in 1978 was 2,421. In 1981, that figure was down to 970. This shows the extent to which the industry has declined —this our biggest and most important industry.
With regard to the more intensive farms to which I referred where a considerable amount of capital is entailed, the fact that they are experiencing this difficulty is not due to inefficiency. Various indices show that particularly with grassland management and the utilisation of grass for livestock production and milk, we are as efficient as anybody. In fact, in many instances, we are more efficient. The indices to which I refer quote gross margins and the efficient utilisation of capital. Indeed, for the last two years running we in Northern Ireland have won the premier award for silage-making throughout the entire United Kingdom. This takes into account not only the quality of the silage as analysed but its utilisation, the efficiency of its handling and the deployment of the capital involved. Modesty precludes me from saying who was the winner this year, but as an innovative cook I can say that I am working on new recipes: silage au gratin, silage flambé au poivre and things like that.
In comparison with France, which the noble Baroness, Lady Elliot of Harwood, mentioned, we are very much more efficient. I went to France on a mineral water study tour—to the Lyon area. I could not help noticing the deplorable inefficiency of the farming. People were driving herds of goats along narrow roads, and there was one horse in a five-acre field which was growing more thistles than grass. I am very interested in horses, but I am interested in them for an entirely different reason from the noble Viscount, Lord Brooke-borough, who is not listening at the moment. I am interested in keeping out of the way of horses. They kick at one end and bite at the other, and they smell and are incontinent. But even I could recognise that these were the most loutish horses I had ever seen. When we inquired, in broken French, for what purpose they were being bred the answer was, looking at us as though we were stupid, "Pour l'abattoir". They were just being bred for meat. So I cannot help thinking that the common agricultural policy is subsidising inefficient farming at the expense of those of us who are more efficient. In my view, as the noble Lord, Lord Walston, said, the purpose of the CAP ought to be to encourage enterprises which can best be undertaken according to the climatic conditions, the attitude of the farmers in that particular area, and the nature of the soil—rather than subsidising the inefficient at the expense of the efficient.
In Northern Ireland, we have to run faster than anyone else to stay in the same place, because we have to pay more for our supplies and we receive less for our products. In the old days the remoteness which
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causes this imbalance was recognised because there was a "remoteness grant" but that is no longer the case. This is the sort of thing that the CAP ought to be doing. A promise was made that this problem would be looked at, and we shall welcome such help when it comes. Farmers in Northern Ireland are efficient and, unlike the subsidiaries of multinational corporations which can close down just like that because of a boardroom decision in America or Europe, they carry on. Farmers do not go on strike. They have a stake in the land. They are tenacious and will work a 15-hour day if necessary to tide themselves over a rough period. If the common agricultural policy is going to do any good at all, it must recognise where enterprises are efficient and then encourage those enterprises to flourish, rather than prop up inefficient operations elsewhere.
8.12 p.m.
Lord Stanley of Alderley: My Lords, of all the papers I have read emanating from Sub-Committee D I must say that I found this one on national aids by far the most interesting. May I thank the noble Lord, Lord Cledwyn of Penrhos, and his sub-committee for it and for trying to explain to me what an important problem national aids are and, worse still, what a difficult problem they are to solve. I am certainly no nearer to solving it—well, perhaps just a little nearer—than when I started reading the report.
In paragraph 96, the sub-committee accepted that state aids are entrenched, as my noble friend Lady Elliot of Harwood said earlier. This may be so and it may have to be accepted—I would accept it—but what really worries me is that state aids are inclined to undermine the principle of the CAP, which is that each area and country produces what is most economical for that particular country or area. That point was very ably brought out by the noble Lord, Lord Walston. In fact, I believe—and so does the report—that state aids are inclined to turn the common agricultural policy into a welfare policy.
At that point I step out of the argument except to ask the sub-committee and the Government to think very carefully about this problem and to consider the effect on the individual farmer of making him dependent on a social or welfare policy. You may find that you actually destroy the farmer and that, as a result, you destroy what you hoped to achieve with that particular state or national aid. Having said that, I must say to my noble friend Lady Elliot of Harwood that I, and I believe the noble Lord, Lord Cledwyn of Penrhos, have been trying to be less favoured for many years but have so far failed to achieve that. But we hope to be less favoured, like my noble friend Lady Elliot of Harwood.
I will conclude by asking if the Government will take action for once (perhaps that is being unkind) on the recommendation in this report, as was suggested by my noble friend Lord Mottistone and by the noble Lord, Lord Cledwyn of Penrhos. The Government certainly should do that because the report is full of good, meaty stuff. In particular—and perhaps here I will not agree with my noble friend Lady Elliot of Harwood and the noble Lord, Lord Cledwyn of Penrhos—they should think very seriously about putting to work again (I do not think it has ever been to work) the working party on conditions of competition in

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agriculture. I noted very carefully what was said by the noble Lords, Lord Cledwyn of Penrhos and Lord Walston, about the agricultural attachés doing this monitoring job. They may be able to do it, but it seems to me that it wants a more organised situation or committee to look at it in greater detail. The only committee I could find in the book was this working party on conditions of competition in agriculture.
If they do that, and we get some idea of what is happening, which is most important because suspicion is the worst thing in life, we must then think about the punishment. As far as I can see, the punishment comes in paragraph 63 of the report. I know that the sub-committee was not particularly thrilled about this, but maybe it is a start that can be worked on. Certainly when the punishment is thought out it must be quick and must relate immediately, if possible, to the farmer in question.
8.16 p.m.
Lord Sainsbury: My Lords, once again we are indebted to the noble Lord, Lord Cledwyn of Penrhos, for his chairmanship of Sub-Committee D and for his usual thorough summary of the report. Owing to the lateness of the hour I will cut my speech and confine my brief remarks to one form of State aid—namely, aid to marketing, packing and processing, which seem to be free of restriction save that the Government concerned must submit product sector programmes to the commission. Sir Richard Butler, President of the National Farmer's Union, in evidence to the sub-committee expressed the view that—and I quote:
"our Government should take more advantage of the opportunity to give aid to British agriculture and horticulture for marketing".
I agree most emphatically. Mr. Riley, a well-known agricultural economist, in most interesting evidence to the sub-committee, said that in other countries of the Community, but not in Britain, there is a concept of industrial unity between raw material, the consuming animal, processing industry, and customer sale. In other words, there is a relationship based on collaboration and co-operation rather than the idea, which certainly existed in the past in the United Kingdom, that the other fellow is trying to "do you down" and taking too big a share of the cake.
Producing crops and raising livestock is only the first link in the chain. That may be a very obvious remark, but it is not always fully realised. A lot happens before the primary product reaches the consumer in its final form. This is the point I wish to emphasise. Legally constituted bodies exist in Holland and France which represent all aspects of production, processing, marketing and selling. Mr. Riley gives us an example of aid to one part of the chain, the French egg industry, where grants have been made to modernise their packing stations. Though their production cost was not significantly different from our own, they were able to undersell us because they were able to pack and market more efficiently than our own packing stations. England's biggest egg packers, who incidentally are the biggest in Europe, told Mr. Riley that they would like to modernise their plant but could not afford to do so. There would have been no such problem, I suggest, in France. What this emphasises is
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how aid at one link in the chain can help all parts of the chain.
In conclusion, may I say that I agree with Mr. Riley that it is in practice impossible to harmonise those aids which affect agriculture which have already been mentioned by other speakers, such as taxation, credit facilities and energy costs. But that does not mean that more manpower resources should not be devoted to the unit of the Commission responsible for state aids. I believe the report serves a very useful and important purpose by its thorough investigation of state aids to agriculture. I hope it has a wide readership in Brussels and among the Members of the European Parliament, and I pay my tribute to those who drafted it.
8.22 p.m.
Viscount Brookeborough: My Lords, like other noble Lords, I would like to join in the congratulations to Lord Cledwyn of Penrhos. For those who have not served under his chairmanship it is a pleasure they will certainly look forward to, as his handling of this committee is really absolutely first class. I should like, also, at this point to pay tribute to our specialist advisers and the clerks for producing such a readable and sensible report out of such a very complex matter and from such very complex evidence as is produced. Those who read that evidence will understand their ability when they have managed to produce such a concise, readable and intelligent report. The noble Lord, Lord Stanley, said that he was not sure how much wiser he was on the direction he should go, but I am jolly sure he is a great deal wiser on the problems than he was before reading the report.
I think it an honour to follow the noble Lord, Lord Sainsbury, and I would endorse very much what he said about this question of the food industry starting at the farm and ending at the counter. I think in one or two cases in Northern Ireland we have had aid to the processing industry, in the pig processing industry, and in eggs, and in the meal processing industry. I would feel that a start has been made, and no doubt my noble friend Lord Ferrers will be able to tell us that, enthused by the success—and it is a success—of the areas where it has been used in Northern Ireland, his Ministry will go to it and bring all the threads together to make sure that the maximum aid is obtained.
The Treaty of Rome, under Article 39, sought to require the Community to provide, among other things, a fair standard of living for agriculture, and this to be achieved in free and genuine competitive trading not distorted by national aids. I start off by saying—because people may think at the end that I am not a supporter of the EEC—that I am a supporter of the EEC, though not of the CAP. I have said in this House before that, so far as Northern Ireland is concerned, the CAP is a disaster. I believe, after the last price review, that it is fast going to be a disaster for the EEC. I can see no sign of the real following of the guidelines, the mandate, and when we deal with the question of national aids and the suspicion that arises as a result of national aids, unless there is a very radical look at the whole CAP I believe we are going to disaster.
I feel it is a question of going right back to the drawing board. I do not disagree with the conclusions

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of the committee, except that I go further than they do and say that while all the recommendations we have made are being looked at and carried out we should go back much further and see whether the original concept of the EEC and the CAP is really being met.
Reference has been made to paragraph 98 on the question of the aura of suspicion. In all affairs of the EEC suspicion is what is going to break up the EEC, if anything does. The CAP at the present moment has favoured large arable farms. My heart bleeds for the noble Lord, Lord Walston, in his poor small farm in East Anglia. But there is an area, and everybody has said so, where national aids cannot be harmonised because it means giving up sovereignty, and that is on taxes, social services and everything like that. That is an area which can never be harmonised.
I think it was the noble Lord, Lord Walston, who spoke about the question of green currency. The aims of the Commission, in their recommendations on the price review, have been nullified by green currency fluctuations. This decision is a Government decision which sometimes is in opposition to the Commission and sometimes is with their agreement. As a result of all this the CAP has increased the disparity between regions in the EEC.
The noble Lord, Lord Dunleath, raised the question of agriculture in Northern Ireland, and your Lordships will know my views about the effect on the intensive industry, which is going to be further penalised with limitations on maize gluten and on manioc and duties on wheat feed. Agriculture in Northern Ireland is what it should he in the terms of the EEC; that is, it is efficient and it does use the best of its natural resources. But without state aids agriculture in Northern Ireland would cease to exist. There is no alternative employment in Northern Ireland; therefore, national aids are absolutely vital.
The problem of the national aids for Northern Ireland is that they are negotiated over a long time nationally, and sometimes the aid is not agreed until halfway through the season. It is for that reason that I would ask my noble friend the Minister why he has not referred the case for the extension of the less favoured areas in Northern Ireland to the Commission for separate decision, separate from the extension of the less favoured areas in the rest of the United Kingdom. I envy my noble friend Lady Elliot; I am not in a less favoured area, although the main road divides me from a less favoured area; it is as near as that. In one case the middle of the river becomes less favoured, but on my side it is supposed to be a better area.
I mentioned this question of MCAs and currency fluctuations. In 1978 the net income for farmers in Northern Ireland was judged to be £64 million and in 1979, £33 million. But in order to deal with the currency fluctuation at that time, the Government had to provide £34 million in 1978 and £42 million in 1979. This was a national decision on the part of the Government to change the valuation of the green pound. The aid was given—the Government must receive due credit for it because it was part of what the noble Lord, Lord Sainsbury, was talking about—to the processing part of the meat and pig industry.
While that was going on the consumer was, in fact, benefiting in the whole of the United Kingdom, but we, because we have a land frontier, would have
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lost our industry had it not been for that particular Government aid. I have a slight beef about that, in that when it comes to the accounts for Northern Ireland this is shown as being part of the aid that is given to Northern Ireland and comes out of our budget in a fight between it and maybe milk or some other part. But this is a United Kingdom decision and the rest of the United Kingdom is defended by the Channel from having the same problems which we have with our land frontier. I believe that it ought to be carried on the national budget.
The United Kingdom obeys the rules of national aids. But there is absolutely no doubt from having looked at the whole matter throughout this investigation that the French approach is quite different. The French are legalistic to the extreme. They go to the very end of the law, and we know that on many occasions they go beyond the law. They exploit every rule that they can. I think that we must face the fact that the French are going to go on doing that; they are determined to be the larder of Europe, and to that end there will be no stopping them.
Like the noble Lord, Lord Sainsbury, I was most impressed by the evidence of Mr. Riley. In discussing his evidence I feel that we should go back to the drawing board and see what was the original intention of the CAP. First, it wanted to have a Community preference within Europe, and that I am quite sure we should retain. Secondly, it tried to have free and competitive trading. It is quite impossible for that to be undistorted in some way or other because as others have said, the control over taxation, social security, and interest rates is something that no country whatever will allow to go over to Brussels. Therefore, I feel that in the long run—it should not be too long a run because the suspicions as regards the behaviour of various countries in Europe is growing—we should eliminate any intention of controlling national aids; we should establish minimum internal trading prices on a rolling basis to prevent dumping from one country to another; we should then transfer the responsibility for the disposal of surpluses created in a country to that country and that could be done either by consumption subsidies or by export subsidies.
One of the problems that I see at present about these enormous surpluses which are building up, is that the cost is diffused and the taxpayer in the country which is producing those surpluses does not feel that they have hit his pocket. In fact we all know that Germany and ourselves are paying for the export of materials from France and no doubt the French would not enjoy that. But I believe that we should somehow or other bring home to those who produce the surplus exactly what it is costing. That would leave each country to decide the relative importance of its own industry and at what level it wishes to support agriculture. The transfer price mechanism which would operate from Brussels—there is already a mechanism by which it can be done—would prevent dumping within the EEC, and the problem of export rebates would be borne by the countries and not by the EEC. This is very important because I do not believe at the present moment that we understand the absolute hornet's nest that we are stirring up by proposals on the part of the EEC to limit maize gluten and other products coming in. Finally—and this is the most

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important point of all—this would free huge funds to the EEC to be used for proper social purposes. In my view this is a most important report and I should like to conclude by congratulating once more the noble Lord, Lord Cledwyn of Penrhos.
8.36 p.m.
Viscount Sidmouth: My Lords, at this hour and at this stage of the debate I have no intention of making a speech. However, I could not sit down without adding my tribute to the chairmanship of the noble Lord, Lord Cledwyn of Pen rhos. To my mind, there is an element of Welsh wizardry about the dexterity with which he handles a spirited but not always unanimous team. The drafting of the report is a model of its kind.
In my two minutes I wish to make two points. The first is that when the committee started on this inquiry there was a widespread feeling in this country—I think that there still is—that national aids were a very serious matter of suspicion and dispute between the various countries. That is undoubtedly true. But the result of our inquiries is certainly not to confirm what one o our witnesses said to us before starting out for Brussels —namely, that when we got there we would discover a can of worms. The report sets out what we did discover. Obviously, there are weaknesses which need putting right and fences which need to be mended in this particular field. But I do not think that the estimate of a can of worms was justified and I say that although, as a glasshouse grower, I am involved in one of the instances which have been highlighted in the report.
Secondly, I should like to support the noble Baroness, Lady Elliot of Harwood, who pointed out that state aids as such are not necessarily dirty words. They are common practice in agriculture in many states—not only in the EEC but worldwide—and, indeed, were common in this country before we joined the EEC. The Treaty of Rome makes it quite clear that a number of national aids are quite acceptable in principle, and when each country joins the Community its existing practices are very carefully vetted—that process is going on now with Greece—to see whether they are compatible with the principles set out in the treaty. Therefore, one starts out reasonably clean. Thus it would be a great pity if there were a dirty label attached to national aids which not only, as the noble Baroness, Lady Elliot, rightly said, keep down the price of food—indeed, that was the main purpose for which they were used in this country before membership of the Community—but also, for members of the Community, I think it right to point out that they contribute to keeping down the cost of the CAP itself, which is a very important point.
My Lords, those are all the comments that I wish to make, except to say that I commend the report to your Lordships' notice.
8.40 p.m.
The Earl of Selborne: My Lords, like others who have spoken, I should like to say how grateful I am to the committee for this very timely report, which draws attention to the concerns and suspicion, which is very widely held throughout the Community but
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particularly perhaps we are aware of it in this country, at the extent of national aids. Some two years ago I found myself chairing a committee made up of apple growers and others involved in the apple industry, at a time when we were particularly concerned about what appeared to be unfair competition from French production. Indeed, there is still grave concern in that respect and it is fuelled by a lack of ability to get hold of the relevant information—exactly the same problem as is quite apparent in other sectors of agriculture.
It was no surprise, therefore, that the first recommendation that the committee I chaired put forward to the Ministry of Agriculture some two years ago was to ask that the Ministry should commission a study:
"on relative degree of support available from all sources to French and U.K. growers respectively".
Although this report was received most sympathetically by the Minister—and, indeed, some of the other recommendations were given very full support—that particular recommendation defeated them. I can appreciate that it is a great problem not just to list but to quantify the degree of support which growers get in a similar situation. But I still think that this is a problem which must be faced, if not by our own Minister, then by the Commission itself. It is a problem which must be faced very widely on a whole range of holdings; for example a typical sample of arable holdings, stock farms, dairy farms and horticultural holdings.
Agricultural economists will certainly point out the complications of getting a valid sample, bearing in mind the different structure of farming in different countries. That is quite true. It will not be an exact science; these exercises never are. But the result of it will certainly be much more effective than I think Table 60, referred to in the ECC's own report, which is really a travesty of the Commission's responsibilities, and demonstrates just how necessary it is for this exercise to be undertaken.
My noble friend Lord Mottistone has suggested that there should at least be press cuttings and lists drawn up of national aids, as reported in local papers. Although I would go along with him, I still think that that is no substitute for an attempt to quantify on an average holding the actual value of that support. It is quite easy to establish the value of a production grant or an input grant. It gets a little harder when you start to quantify the banking arrangements, the low interest rates or other such arrangements. It gets very much more complicated, and I am not even sure that it is possible, to quantify the fiscal arrangements—derating and the other exercises that come in this bracket. It is probably quite impossible to quantify the value of support on the holding to a commodity which is given beyond the farm gate: for instance, in marketing, processing and exporting.
But it must still be done, and I suggest to my noble friend the Minister that the Commission should be urged to undertake just such a wide-ranging review in all member states. I suggest that it should be undertaken by a firm of accountants who are already operating throughout the Community. There are plenty of such accountants and no doubt, although the exercise would be far from complete, it will be rewarding.

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Having agreed, as we must all agree, with the report, that the main concern is the suspicion generated by national aids, nevertheless, unlike my noble friend Lord Stanley, I find that I derive at least one other lesson from this report. It is quite clearly that the French have the political will and probably the means to dominate agricultural production in Northern Europe. Here I think that I must part company with the noble Lord, Lord Walston, who, while most unhappy at national aids, nevertheless tended to feel that they were perhaps overstated in their influence. I cannot agree with him. I think that the French, in the case of eggs—and I go back to my own hobbyhorse of apples—have determined on sectors of production in which they are quite capable of monopolising the market over a 10-year period. It will be those areas where marketing will show a particular critical role, and I think that the committee's report, demonstrating the case of the turkey unit in Brittany, has just shown how easy it is by national aids to distort production in first one commodity and then another.
Make no mistake about it, the French have an extremely sophisticated and, I think, successful policy which does not always, by any means, transgress the rules of the CAP; and as they have—and they have demonstrated it so often—the political will to implement it. If we cannot stop it, then we must surely emulate it. Here I agree with the noble Lord, Lord Sainsbury, that we must hope that we can get further and highly specific support towards improving our marketing. I know that the Minister has had long discussions—they have been going on now for some months: in fact, I think that I could say for almost years—on the formation of a body, perhaps to be called a co-ordinating council. When eventually this organisation sees the light of day, I hope that the example of the French will be very carefully taken note of. Indeed, I hope that the figure which is quoted by the report as to the value of the subsidy will also be borne in mind when the case is taken to the Treasury.
Lastly, the report draws attention to yet another lesson. Almost in brackets it says in the same paragraph, paragraph No. 96, which has been quoted elsewhere, that:
"In the United Kingdom the improvements in productivity in recent years owe much to the effectiveness of the Government's research and advisory services".
Here, as it happens, is a national aid which has not been questioned. It is a perfectly legitimate national aid and, indeed, one could say that research budgets transgress boundaries and are available to all in the Community who might wish to take advantage of them.
It is ironic, therefore, to realise that in the present climate of Government cuts both the advisory service and particularly the experimental husbandry and horticultural stations are at least at risk in some respects. The Agricultural Research Council, of which I am a member, has certainly found it necessary to reduce its research commitment. My noble friend will say—and he will be quite correct—that this is not something which is the responsibility of the Ministry of Agriculture, which it is not. It is the vote of the Department of Education and Science which is in danger of contracting as regards the Agricultural Research Council rather than at present the vote of the
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Ministry of Agriculture on research.
Nevertheless, my point is that as we are seeing these very far-reaching cuts in the offing—not just at the two research stations which have already faced them, but probably elsewhere in order that the Agricultural Research Council can live within its means—surely here is an example of a national aid which should not be so curtailed.
The remedy is for the science vote, which is divided between the other research councils, to be given a specific instruction by the Government to protect, in this case, the Agricultural Research Council's budget on the science vote. I am quite clear that the other research councils would also make their own pleadings. That in no way invalidates the need tonight to ask my noble friend to assure us that he will put every pressure on his colleagues in the Government to make sure that the cuts which are anticipated in the Agricultural Research Council budget will be forestalled, and that this very valuable national aid, which the committee emphasises has been of such importance in increasing our productivity, is maintained.
8.49 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, the House will be grateful to the noble Lord, Lord Cledwyn, and to the whole of the European Community's Sub-Committee D for their report. It has been an interesting debate this evening. One of the remarkable things about it is that it has not been particularly contentious. It was one of my noble friends, Lord Mottistone, who said that he was so upset to see the noble Lord, Lord Cledwyn, sitting opposite him that he had to agree with every word the noble Lord said. That is a happy position to be in and, if I may say so, only reflects upon the natural stature of the noble Lord, Lord Cledwyn, for good common sense.
I think that the committee which he chairs with such distinction has undertaken a Herculean task in trying to take on such a complex matter as state aids, and trying to disentangle the intricacies of agricultural support as applied in 10 different countries—even if those countries have themselves a commonality as being member states of the Community. The task would have daunted many a less assiduous group of people. There are of course no easy answers, but the report identifies the major problems with astonishing clarity, and it makes a number of useful proposals for remedying the matter. My noble friend Lord Stanley, who is not here—
Lord Stanley of Alderley: Yes, he is.
Earl Ferrers: Yes, he has had the courtesy to return, and I am grateful to him for that. He said in a slightly derisory way, I thought, that he hoped that the Government would take action for once. Such charming support from behind one.
Lord Stanley of Alderley: I must interrupt my noble friend. I did correct myself on that.
Earl Ferrers: If my noble friend had had the patience to retain his seat a little longer I would have told him that the very mouthing of his words made himself choke, so that he corrected himself. But the responsi-

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bility for making any alteration to these state aids is essentially a Commission responsibility, but it is one in which of course the Government and the United Kingdom as a whole have a vital interest, and one in which we would like to see action taken. Indeed, my right honourable friend the Minister of Agriculture has frequently pressed for this.
My noble friend Lady Elliot said that she hoped that I would think that the committee had done an adequate and worthwhile job, which would have been unbelievably discourteous if I had used those words myself. It rather reminded me of the fact that it took me a long time to realise that when in your Lordships' House somebody was accused of making a moderate speech, that was a compliment. At school if one was told that one's essay was moderate, it usually implied disaffection on behalf of the reader, but of course in the terms of your Lordships' House it is the accolade of approval.
The committee have made a valuable contribution to an important subject which is of major concern to the Government, to the farming community, and to the whole of the United Kingdom. My noble friend Lady Elliot apologised for having made three speeches in two days. All I can say is that as one whose brother-in-law was Prime Minister in 1908 she learnt the game very young and has had much experience at it, and she need make no apology for making three speeches in two days.
The one thing that has emanated is that every noble Lord, and indeed noble Baroness, is concerned about national aids and the distortion which they can create. The noble Lord, Lord Walston, went a little wider when he referred to land ownership, taxation, and vehicles, tractors, coming into this country at different prices. I would not wish to go down that route this evening, other than to say that of course those are not national aids, but they are nevertheless an indication of the way that it is difficult to get pure commonality between all the countries. Much of that is due to the marketing policies, not of countries, but of individual companies. Of course, they all tend to distort, but they are not state aids.
The noble Lord, Lord Walston, and the noble Baroness, Lady Elliot, disagreed with each other on the abolition of state aids. The noble Lord, Lord Walston, said that he thought this would be a good thing. The noble Baroness said that she thought it would not be. All I can say is that if there was even that scintilla of discord in this House, with the courtesies of this House, just imagine what there would be in the Community and in the farming community were that particular action taken. There is nothing wrong with national aids as such; what is wrong is their not being cleared with the Commission, or if there is any form of subterfuge. In a perfect world there would be no national aids, but of course we do not live in a perfect world. The report indicates the reasons for this concern. The noble Lord, Lord Cledwyn, said that farmers were suspicious. The noble Lord, Lord Walston, did too, and I think my noble friend Lord Selborne did. I think that is perfectly true. People are suspicious. I should like to come to the reasons in a few minutes why that may be so.
I was a little disturbed that my noble friend Lord Brookeborough should refer to the fact of state aids
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possibly being the cause of the break-up of the common agricultural policy of the European Economic Community—not just state aids, but the contention that the common agricultural policy was not working as he felt that it should. I think that such talk is dangerous. Of course the Community is going through a difficult time, and of course we have to build on successes. It will not be easy. You cannot expect automatic success straight away, and particularly is this more dangerous when you go through a period of recession when each country tends to have a more nationalistic attitude than it might have had were conditions different. It is important that the Community should operate together, and this is what we seek to do.
Both my noble friend Lord Brookeborough and the noble Lord, Lord Dunleath, referred quite correctly to the problems of Northern Ireland, which I accept are peculiarly difficult. My noble friend Lord Brookeborough said that we ought to apply for the extension of the less favoured areas for Northern Ireland only. But I would remind him that in Europe we act as the United Kingdom, and it is correct that if we wish to seek an extension of the less favoured areas we should do it corporately and not piecemeal. Ministers are at present considering the best method of the presentation of our case.
The noble Lord, Lord Sainsbury, said that he thought that there should be greater collaboration between processors, producers, and retailers. I agree very much with that. Each is dependent upon the other, and as a country we could achieve much more for our industries both internally and for export if the various parts of the production and processing and retailing chain could work together and could be more co-operative in marketing together. My noble friend Lord Selborne agreed with that and referred to the initiatives which my right honourable friend is taking. My right honourable friend is particularly concerned over this aspect, and we want to see more moves in this direction, and he is working hard to achieve this.
Part of the reason for problems with regard to state aids is that people become suspicious that some other country is doing something which others do not know about. I think it can be summarised in three ways. Firstly, unregulated aids to agriculture distort competition between member states, and this not only causes resentment on the part of farmers and growers who are not receiving this assistance but brings the common agricultural policy itself, as my noble friend Lord Brookeborough said, into disrepute.
Secondly, these unregulated aids clearly undermine the decisions which are taken by Agriculture Ministers collectively, and thereby they threaten the whole operation of the common agricultural policy.
Thirdly, unregulated aids almost always, but not always, exacerbate the Community's existing surplus problems. The costs of disposal are then borne, not by the country which has given the additional aid, but by the Community as a whole, and often by the countries which have not given the aid.
It is no accident that the two countries who are the most concerned about the state aids are the United Kingdom and Germany, and they are, of course, the two who are most concerned about the Community budget because they are the two who pay. It is an insular and non-communitaire attitude for those coun-

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tries which are recipient countries from FEOGA to give additional aid to their own farmers, to stimulate the output from their own farmers and therefore the income to their own farmers and then let others pay the bill.
State aids should be, and are, agreed with the Commission, but the noble Lord, Lord Cledwyn, and my noble friend Lady Elliot, referred to the aid to the French turkey processors. Last year my right honourable friend referred that to the Commission. The estimated cost of the plant to which Lord Cledwyn referred is understood to be between £6 and £7 million, with an annual processing capacity of about 100,000 tonnes, which is not far short of the output for the United Kingdom's entire turkey processing industry. It is understood that the assistance included direct cash grants, subsidised loans, tax concessions and the provision of a site at a discount, worth in aggregate about one-third of the total capital cost of the project.
The price of 39p to 41p per pound at which French processors were offering turkeys in the United Kingdom last summer is estimated to be below the production cost and suggests that some further assistance towards operating costs might also be available. The matter was referred to the Commission, which took the view that none of the aids which we had referred to them was incompatible with the Common Market. But given the size of the plant, it underlines the danger that aids which individually may be technically legal can, because of their size, or when given in conjunction with other aids, have a very disruptive effect.
Then we had the problem of the state aids which France gave in 1980. In December 1980 they announced a measure worth about £380 million. That comprised a variety of measures but over half, about £210 million, consisted of direct income aid related to the turnover. The United Kingdom and other member states urged the Commission to investigate the package and take effective action to prevent the payment of the illegal aids. On 28th February 1981 the Commission instituted Article 93(2) action against the income element of the package, and by a formal decision dated 8th July 1981, they declared that aid to be incompatible with Article 92 of the treaty. The decision also instructed the French Government to abolish the measure. But by that time the money had been paid. That is another example of the distortion which can be created.
An issue of a similar nature which was raised by the noble Lord, Lord Cledwyn, was the aid package announced by the French Government in December of last year. That was not the same one; they had one in December 1980 and now we come to another in December 1981. That package consisted of some 30 individual measures with a total value of about £510 million. My right honourable friend the Minister of Agriculture has urged the Commission to investigate those aids promptly for legality and to take effective action to prevent the payment of any aids which are illegal.
The Commission's response has been hampered by a lack of information from the French Government. At one time the Commission were unable to obtain information from the French Government, despite the fact that details had been published in France, and
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French farmers had already been in receipt of forms inviting them to apply for aid within a specified date. So the information was available, but the Commission did not have it. However, the Commission have now initiated action under Article 93(2) of the treaty, which is the first step towards a reference to the European Court. The Government's comments have been invited and, in our reply, we have made clear our doubts about the legality of many elements of the package, and we have urged the Commission to take prompt and effective action against it.
We have also commented on the involvement of the Credit Agricole, an involvement which leads me to question the committee's view that its activities are not incompatible with the treaty. Certainly the existence of Credit Agricole is not incompatible with the treaty, but we question some of its activities. For instance, when the French Government provided those additional national aids last December, we understood that some of them were financed not by the French Government but, under direction from the French Government, by Credit Agricole. That blurs the distinction between the activities of a Government and those of a banking organisation, which thereby lays the workings of that organisation at least open to question—only, of course, in so far as the Community's state aid rules are concerned.
The other aid which is of major concern is the gas tariff which is paid to Dutch glasshouse growers. The Commission have for a long time declared that the tariff distorts competition and is therefore contrary to the Community's state aid rules. My noble friend Lady Elliot said the Dutch had been taken to the European Court for that. That is not in fact true. Rather than say it is not true I should say it is an inaccuracy. Last December the Commission issued a formal decision requiring the elimination of the preferential tariff. My right honourable friend has consistently and persistently urged the Commission to take action to remove this serious threat to growers which occurs throughout the Community, and in that he has been supported by every other member state. We expect the Commission to indicate very soon exactly what is to happen. Meanwhile, we are, of course, paying our growers the maximum aid which is permitted under the Commission guidelines towards their heating costs this year, as we did in 1981. It is much better if we can get these problems resolved within the Council of Ministers rather than taking various countries to court. We hope that there will be a resolution of this problem, which has distorted horticulture for far too long.
The Government have also been pressing for action on state aids generally. In his speech to the Council of Ministers at the beginning of the United Kingdom's Presidency, my right honourable friend drew attention to the difficulties and the inequities which are created by state aids and to the need to bring them under effective control. The noble Lord, Lord Cledwyn, asked, well, what is going to happen now, since my right honourable friend is no longer president? I think it fair to say that the Community as a whole is now much more aware of the problem than it was previously, and I think it equally fair to say that the United Kingdom can take much of the credit for this.
The Commission certainly recognise the need for

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more effective control, and in their recent Guidelines for European Agriculture they called for stricter discipline in the matter of national aids. They pointed to the importance of prior notification and they emphasised their determination to enforce the rules by requiring reimbursement of illegal aids or by refusing FEOGA cover for expenditure by member states. The Commission also proposed to clarify the rules on notification and to specify those aids which are prohibited and those which are authorised. I can assure your Lordships that we shall with great vigour continue to urge the elimination of unfairness, and this the noble Lords, Lord Walston, Lord Cledwyn, and my noble friend Lord Mottistone urged us to do. We shall do it.
The Ministry's attachés in the Community's capitals already have standing instructions to keep us informed of developments, especially in respect of aids which may have implications for United Kingdom farmers and growers, and these efforts will be maintained. I thought that the noble Lord, Lord Walston, was slightly unfair when he said that the attaches should have instructions to ferret out all of this information. The attachés are well aware of concern about state aids, not least because some of them have provided the information for the Committee, and I am sure that in the light of the Committee's report, they will increase their vigilance. But, my Lords, they have other duties to perform, and we must also bear in mind the fact that their effectiveness depends in large measure on official contacts. This means that excessive curiosity about state aids could prove to be counter-productive. But the Committee suggests that we should:
"continue to bring pressure on the Commission to maintain its current concern at the growth of state aids and to implement its expressed intention to bring them under more effective control".
I can tell your Lordships that we shall do this. I am sure that this will be met with approval by the Commission and I am sure, too, that the recommendations in your Lordships' report will be welcome to them.
I should however sound a note of caution, because the Commission, like our own Civil Service, are subject to tight limits on staff numbers. This could influence their approach to the suggestion that manpower resources should be strengthened, and it could also affect their view of a possible "state aids inspectorate". In any event the Commission may believe, as indeed the Government believe, that the answer to the whole problem depends upon the political will of member states, rather than on changes in organisation and personnel.
The Government agree with the Committee that the Commission's inventory on state aids is unsatisfactory in several respects, and the same certainly applies to the discontinued summary table. A number of your Lordships referred to this and were concerned about it. There is of course an inventory, which the noble Lord. Lord Cledwyn, referred to as, I think, a voyage of discovery. That was a delicious phrase, I thought. The inventory extends to some 3,000 pages, and the imagination does not have to be greatly distended to realise the physical problems which would be involved if it were to be translated into seven different languages. The Committee have described the document as:
"lengthy, detailed, obscure and out of date".
Frankly, I am not surprised at any of those adjectives.
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The difficulty is that if the document is truncated, then so is the information, and if the information is complete, then one may fall into the trap of the document becoming indecipherable.
I agree with the Committee and with many of your Lordships that it would be of immense help if there were some form of a more concise summary, but one which must nevertheless be accurate. I would not envy the Commission in this task, but I hope that they will consider the suggestions which have been made by the Committee. I think that it was my noble friend Lord Selborne who said that the Commission ought to set some outside body, some accountants, on to the problem.
The Commission have themselves announced the fact that they are aware of their shortcomings in the inventory, and they have recently commissioned a series of studies. They did not take my noble friend's advice and use accountants, but they have used management consultants. This is designed to establish whether the inventory is as comprehensive as it should be and to evaluate the effect of aids upon Community agriculture. We must not underestimate the practical difficulties of producing a comprehensive and up-to-date account of what is happening in 10 member countries. One must remember that the Commission's normal function is a regulatory one. We shall continue our efforts to achieve a situation in which British farmers can compete on fair terms with farmers in other member states of the Community. On the whole, that is all that British farmers have asked for. On the whole, that is all that they have the right to ask for. On the whole, that is the right which they have the right to expect.
In the longer term, our success depends on the recognition by all member states that unregulated aids are a disruptive force in the Community, and that the best long-term interests of each member state lie in observing both the rules and the spirit of the treaty. It is difficult enough to get it fair, when the whole variety of national aids which are available through the Community are legal, but if member states are going to play ducks and drakes with illegal national aids, then equity and commonality become a mirage and a source of disharmony and disunity.
An important factor is the attitude of the Commission, and they must demonstrate their determination to enforce the rules effectively and impartially. The Government, of course, will take up with the Commission any instances where any other member state is operating an aid which appears to be illegal, and which is to the detriment of United Kingdom interests, provided that we have sufficient evidence on which to base our representations.
I should like to conclude by saying that the committee chaired by the noble Lord, Lord Cledwyn, has done a valuable and monumental task in producing this report. I hope that the debate we have had this evening will galvanise and direct the Commission even more into realising the importance that we in this country attach to having fair, legal and just state aids for the benefit not just of the countries involved but also of the other countries upon which those national aids have an impact.
9.16 p.m.
Lord Cledwyn of Penrhos: My Lords, may I express my appreciation to all noble Lords who spoke in the debate, which has been helpful and comprehensive. As she is the only Baroness in our committee, may I refer specifically to the noble Baroness, Lady Elliot, and thank her for her contribution which was full of common sense and knowledge of the problems. The noble Baroness spoke of the working party on the conditions of competition in agriculture. She will recall that the working party was discussed by the subcommittee and we were told a little about its work by a senior Ministry official—perhaps noble Lords would refer to Questions Nos. 37 and 38—where the official quoted the Minister as saying that it might become more of an investigative body. I am not sure that the Commission share that view at present.
Every contribution to the debate was valuable and, I am sure, of assistance to the Government in their study of these problems. It is significant that two noble Lords from Northern Ireland, the noble Viscount, Lord Brookeborough, and the noble Lord, Lord Dunleath, contributed. Their speeches showed a deep concern about agriculture in the Province and we must share that concern. I am grateful to the noble Earl, Lord Ferrers, for his full reply and his characteristically courteous remarks about the report. It will encourage the sub-committee that the Minister is generally in support of their approach. The noble Earl's remarks about the Breton turkey plants and the other French packages were particulary interesting.
I am glad that the noble Earl believes that state aids are under better control at present. I hope that this is true. On his point about excessive curiosity, I would say that the committee's view is that it is only greater openness that will remove excessive curiosity. We have had a valuable session and no doubt we shall return to these matters in due course.
On Question, Motion agreed to.

British Waterways Bill [H.L.]
The Bill was reported from the Select Committee without amendment and recommitted to an Unopposed Bill Committee.
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