Sitting of 29 November 1982

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

  HAMPSHIRE BILL [Lords]
  Order for Second Reading read.
  To be read a Second time upon Thursday.

Oral Answers to Questions
  INDUSTRY

    Steel Industry
    Mr. Hal Millerasked the Secretary of State for Industry whether he has received the corporate plan for 1983 of the British Steel Corporation.
    Mr. Canavanasked the Secretary of State for Industry whether he will make a statement about the future of the steel industry.
    Mr. Eggarasked the Secretary of State for Industry if he will make a statement on the future of the British Steel Corporation.
    Mr. Hooleyasked the Secretary of State for Industry when he expects to receive a revised corporate plan from the chairman of the British Steel Corporation.
    17. Mr. Teddy Taylorasked the Secretary of State for Industry when he next plans to meet the chairman of British Steel to discuss the future of the steel industry.
    The Secretary of State for Industry (Mr. Patrick Jenkin): I am currently discussing with BSC the basis on which its corporate plan for 1983 to 1986 should be drawn up. I hope to make a statement before the Christmas Recess.
    Several Hon. Members rose——
    Mr. Speaker: Order. I propose to call first the five hon. Members whose questions are being answered.
    Mr. Miller: Will my right hon. Friend give an assurance that the discussions relate to the steel industry as a whole, not just to the BSC? Will he ensure that the interests of the private steel industry, in particular, are considered and that a basis of competition is established which means that those interests will not be put out of business by subsidies from the taxpayer to the BSC?
    Mr. Jenkin: I have absolute sympathy with what my hon. Friend says. The immediate purpose of our discussions is to agree the assumptions on which the British Steel Corporation's plans should be based. In looking at the market and the future disposition of Government funding, we are paying the closest possible attention to the needs of the private sector.
    Mr. Canavan: Is the Secretary of State aware of the total opposition in Scotland to the closure of Ravenscraig, which would destroy at least 13,500 jobs and devastate the whole Scottish economy? Is the right hon. Gentleman further aware that any shabby compromise involving partial closure is also not acceptable?
    As the Secretary of State for Scotland put his job on the line over the future of Ravenscraig and as the chairman of the Scottish Tory Party can stand up in public and say that closure is not acceptable to his party, will the Secretary of State now make a similar statement that he, too, would resign rather than see the closure of Ravenscraig?
    Mr. Jenkin: I assure the hon. Gentleman that no decisions have been taken about the future of Ravenscraig or any other of the four major integrated plants, despite some press speculation to the contrary. Of course, we are having to look in the medium term at the appropriate

    3
    configuration of the British Steel Corporation's steelmaking capacity. I do not think that the hon. Gentleman would expect any less. I assure him that we are taking full account of all the factors that bear upon what, by any standards, is an important complex of decisions that need to be taken.
    Mr. Eggar: Was not the contraction that has taken place in the British steel industry inevitable given the complete lack of competitiveness of the British Steel Corporation from the start?
    Mr. Jenkin: Part of the difficulty over the past two or three years within the British Steel Corporation arose from the long delay that occurred under the Labour Government when contraction plans, which should have been put forward in the mid-1970s, were repeatedly delayed. When the Conservative Government took over, they faced a corporation that had substantial overcapacity. It was substantially overmanned, totally bankrupt and in need of huge sums of public money to save it. It is great credit to the management of the British Steel Corporation that so much progress has been made.
    Mr. Teddy Taylor: Does my right hon. Friend not feel entitled to resist further steel closures in Britain until other EEC countries show some sign of matching these with cuts of their own? Is it not outrageous that since 1979 more steel jobs have been lost in Britain than in the rest of the Common Market put together?
    Mr. Jenkin: My hon. Friend is right. I have made this point not only to the Commission but to my colleagues on the Industry Council. There is no question but that there has been a very uneven response to the Commission's plans for linking State aids with the reduction of capacity. We have done a great deal. We now look to our partners to play their part.
    Dr. Bray: Will the Secretary of State confirm that the assumptions that he is discussing with the British Steel Corporation include its competitiveness, output and productivity and the output of steel-consuming industries for the next 10 or 20 years? If not, how can the right hon. Gentleman reach a decision on the major capacity that exists?
    Mr. Jenkin: The talks cover all the items to which the hon. Gentleman has referred. It would be beyond the wit of mankind to look 20 years ahead. It is as much as one can do to look five or six years ahead to see what the market will be like in the light of productivity trends, the trends of user industries and the world-wide trend of simply using less steel as other materials supplant steel in the manufacture of a wide range of artefacts. We are struggling to do our best. There has been delay because we want to ensure that we get the assumptions right.
    Mr. Michael Brown: After all the sacrifices and courage shown by the Government over the past two or three years in trying to make the British Steel Corporation efficient, would it not be a travesty if all that were to come to nothing because the British Steel Corporation was not given a chance to implement the full corporate plan involving the 14·4 million tonnes that was envisaged two and a half years ago by the chairman?
    Mr. Jenkin: The market prospects for steel have changed markedly in the past two and a half years, and even more recently than that. In 1981 the British Steel
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    Corporation produced 13·6 million tonnes of liquid steel with a plant capacity of 21·3 million tonnes a year. Recently, output has fallen to 10 million tonnes a year. There are comparable figures for the private sector. There is a wide margin for flexibility. We have to consider what the market for steel is likely to be three, four or five years ahead. It is sensible to plan upon that basis.
    Mr. Roy Hughes: Is it not wrong to keep our vital steel industry perpetually on tenterhooks? Does that not have a grave effect on morale in the industry? The industry now deserves a substantial vote of confidence. Could not the Secretary of State best do that by restricting imports? I should like him to look at the 67 per cent. of imports coming in from the Common Market. The Government could do a great deal to stimulate growth in the economy.
    Mr. Jenkin: I understand the problem for those who work in the steel industry. We are trying to reach decisions as soon as possible. I need no lectures about imports from the hon. Gentleman. We have imposed anti-dumping duties on imports from Spain and Brazil. We have imposed quotas on imports from Czechoslovakia and Bulgaria.
    Mr. Hughes: What about the EC?
    Mr. Jenkin: Anti-dumping investigations have been started recently against Canada, Argentina, Venezuela and Brazil. That is why I have been pressing the Commission, with some success, to take a much tougher line in enforcing article 58 quotas and adhering to the Community's steel price regime. That is the way to prevent the disruption of the steel market in this country.
    Mr. Maclennan: What steps is the Secretary of State taking to stimulate demand for steel? How has he responded to Ian MacGregor's proposals for the Channel bridge and tunnel project?
    Mr. Jenkin: The amount of steel that would be involved in the Euro-route project that Mr. MacGregor is championing would make only a small dent in the problem that we face. It may have merits in its own right, but that is not for discussion today.
    With regard to demand for steel generally, I hope that the hon. Gentleman will applaud, as I do, the 26 per cent. increase this year in capital investment in nationalised industries.
    Mr. Ward: When my right hon. Friend listens to special pleading for various parts of the steel industry, will he bear in mind that any money made available can come only from profitable industries? If he takes more money from those industries, it will not be available for investment in the real world.
    Mr. Jenkin: That is a factor about which my Treasury colleagues remind me regularly.
    Dr. John Cunningham: Is the Secretary of State aware that although the Labour Administration were reluctant to have massive unemployment from steel closures—we make no apology for that—other European Governments have shown even more reluctance to go along the path that he recommends? As the Secretary of State has said that there is to be a review of both the public and private steel industries, will he reiterate his commitment not to take decisions on any short-term considerations about the steel market? Will the right hon. Gentleman assure us that there will be no further closures while that review is going on, such as those at Roundoake and Craigneuk? Will he also

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    ensure that the evidence being collected by the Iron and Steel Trades Confederation about cheating on quotas and prices will be fully examined?
    Mr. Jenkin: Of course we are not taking decisions on purely short-term considerations. I have made that point many times.
    With regard to individual plant closures, I made it clear to the House when I made my statement on 9 November that the current review of the British Steel Corporation's strategy cannot be allowed to hold up necessary cost-saving measures that do not involve the closure of any of the five integrated steelworks. The corporation needs to take urgent action to restore its commercial and financial position. Those are matters for the corporation's judgment and do not require authorisation by Ministers.
    Cheating was in the forefront of our discussions at Elsinore. I received a ready response from the Commission when I demanded more effective measures to police the regime to prevent what the hon. Gentleman described as "cheating".

    Regional Development Grants
    Sir William van Straubenzeeasked the Secretary of State for Industry what progress has been made in clearing moneys payable to industry by the ending of the four-month deferment in the payment of regional development grants.
    The Minister of State, Department of Industry (Mr. Norman Lamont): I am pleased to be able to report that all the deferred RDG payments have now been posted to applicants. That represents nearly 10,000 payments and £150 million paid within three weeks. That is 10 days earlier than the Department's target date of one month from the announcement; that is, by 9 December.
    Sir William van Straubenzee: Will my hon. Friend accept warm congratulations from all those interested for the efficient repayment of moneys which are a welcome injection for hard-pressed British industry?
    Mr. Lamont: I am grateful to my hon. Friend. I am sure that industry shares his appreciation.

    Advance Factories
    Mr. Lennox-Boydasked the Secretary of State for Industry what is the average cost per square foot of constructing small advance factory units.
    The Under-Secretary of State for Industry (Mr. John MacGregor): I regret that I have information only for the English Industrial Estates Corporation, which builds factories and workshops for the Government in assisted areas of England. Its average cost per square foot for factories under 2,500 sq ft is £18·20, including cost of land and site preparation.
    Mr. Lennox-Boyd: Will my hon. Friend confirm that commercial rents are charged for such premises to give a reasonable return and that that has had the beneficial effect of encouraging a great deal of private sector investment in that sphere?
    Mr. MacGregor: I confirm that there is now considerable private sector investment in small factories in assisted areas. The new commercial guidelines have resulted in a substantial success for EIEC. It is more in
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    tune with the market needs of tenants, because premises are being taken up, and of investors, as shown by my hon. Friend's question.
    Mr. Adley: Will my hon. Friend reconsider the position whereby assistance is available for new factories but not for companies wanting to move to existing premises?
    Mr. MacGregor: I believe that my hon. Friend is thinking about tax allowances, which are the responsibility of my right hon. and learned Friend the Chancellor of the Exchequer.

    New Businesses
    Sir David Priceasked the Secretary of State for Industry how many new businesses have been created since May 1979; and how many new jobs have followed.
    Mr. MacGregor: We have estimated from information in VAT records that approximately 240,000 new businesses were created in the United Kingdom in 1980 and 1981. Similar statistics are not available for earlier years. We do not have figures for the resultant new jobs, because this information is not collected.
    Sir David Price: Interesting though those figures are, does my hon. Friend agree that in an age of continuous change it is to new rather than to old ventures that we should look for pace setting in the economy and thus for job creation?
    Mr. MacGregor: Certainly in many cases new industries, often created by new businesses will be very important for the future of the economy and for achieving structural change, but I am sure that my hon. Friend will agree that there are many older firms taking advantage of new technologies and new products which make just as big a contribution to job creation and economic activity.
    Mr. Geoffrey Robinson: Is not the probable reason why the Minister has no figures for the jobs created that, in the period in question, 1·5 million jobs have been lost in the manufacturing sector alone, which represents a reduction of 22 per cent.? Will he confirm that those figures are higher than those of any of our major competitors and are a complete condemnation of the Government's policies?
    Mr. MacGregor: The reason why I do not have the figures is that the best way of assessing the number of new businesses created and, incidentally, of deaths of firms that we have been able to find is through the VAT system. Under the VAT system, information on jobs is not collected.
    Mrs. Kellett-Bowman: Is my hon. Friend aware that three weeks ago the Commission of the European Communities put forward proposals to help those areas very badly hit by the decline in the textile trade, including proposals for the conversion of mills into new units? Would not these proposals provide precisely the sorts of new jobs to which my hon. Friend refers? Will he give them his utmost support?
    Mr. MacGregor: I shall have to look at these proposals. However, my hon. Friend will know that conversions of mills are undertaken, not least by the English Industrial Estates Corporation, and that very often they create good new businesses because they provide just

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    the kind of small staff facilities that new businesses need, but one always has to consider whether there is an economic case for the conversion of some older mills which are not suitable for this purpose.
    Mr. John Garrett: Will the hon. Gentleman acknowledge that official statistics for the period in question show that the birth rate of small businesses is roughly in balance with the death rate and that businesses tend to employ more at their death than at their birth?
    Mr. MacGregor: We discussed these matters in the debate on Friday. We have been working through a period of world-wide economic recession. An interesting indication of the amount of activity and buoyancy in the small business sector is that in 1980 births and deaths were roughly in balance, but last year there were 15,000 more new businesses than deaths. That is one reason why we are putting such emphasis on helping and encouraging small businesses, including start-ups.

    West Midlands
    Mr. Winnickasked the Secretary of State for Industry what steps he is taking to improve the industrial position in the West Midlands; and what increase in industrial activity he expects thereby.
    Mr. Norman Lamont: Recent announcements of cuts in the national insurance surcharge, freezes on gas and electricity prices and increased local authority capital spending will provide further help to industry. In addition, as a consequence of our economic policies, lower inflation and interest rates are providing a better climate for industry. Between 1982 and 1983, total output in the economy is expected to increase by 1½ per cent.
    Mr. Winnick: Facing the real situation, is the hon. Gentleman aware that, despite the reassuring noises made by Ministers, the industrial position in the West Midlands is as bleak as ever, with numerous plants closing? When is it likely that industrial activity in the West Midlands will be the same as it was when the Government took office?
    Mr. Lamont: The Government's expectation is that GDP and output will grow this year. That is a view shared by outside forecasts. The consensus of outside forecasts is that GDP will grow by 2 per cent. in 1983 compared with 1982, and the national insurance surcharge reduction will give £1·5 billion aid to industry. Of course industry has had a difficult time. What the hon. Member has to tell the House is whether the Labour Party's plan for a 30 per cent. devaluation, higher public spending, higher inflation and higher interest rates will do other than add to unemployment. It is little wonder, therefore, that the Shadow Foreign Secretary disowned the Labour Party's plan.
    Mr Stokes: Is my hon. Friend aware that industry in the West Midlands does not want handouts from the taxpayer, but expects parity of treatment with other regions, which it has not had in the past, and looks forward to further reductions in taxation and, we hope, in rates and all the other imposts which bear so heavily on the private manufacturing sector?
    Mr. Lamont: I am sure that my hon. Friend speaks for many business men in the West Midlands, and that is why they support our changes in regional policy which have
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    reduced the area of the country covered by regional policy from 44 to 27 per cent. That has lessened the comparative disadvantage that the West Midlands suffered.
    Mr. Park: Will the Minister reconsider his arm's length relationship with the further shrinkage of the machine tool industry in Coventry? I notice that the hon. Gentleman is frowning. He duck-shoved it when I wrote to him about it. In view of all the wonderful achievements of the Government, about which the Minister has told us, how does he explain the loss of 4,000 jobs in Coventry in the past month?
    Mr. Lamont: As regards the machine tool industry, we shall consider any applications for help made under section 8 of the Industry Act. A number of firms in Coventry have been helped in this way. I repeat that firms in the hon. Gentleman's constituency will benefit from the cuts in national insurance and in the interest rate. That is what industry wants. It wants help on costs.
    Mr. Hal Miller: In March 1979 the chairman of the West Midlands economic planning council pointed out all the consequences that would flow unless the region adapted to new and innovative industries. In view of that, will my hon. Friend not weary of making propaganda for all the assistance available from the Government for innovation and new technology? Will he also explain why the region has made only 10 per cent. of the applications from the whole country for assistance under the microprocessor application scheme, for example?
    Mr. Lamont: My hon. Friend has made a good point. Although applications from his area for the microprocessor application scheme have been disappointing, on other schemes, such as the small firms engineering scheme, a great deal of the aid has gone to the West Midlands. I am sure that that will be the case with other schemes put forward by the Department.

    Manufacturing Output
    Mr. John Grantasked the Secretary of State for Industry what has been the overall percentage reduction in British manufacturing output since mid-1979; and what are the comparable figures for each of the other European Economic Community countries, the United States of America and Japan.
    The Under-Secretary of State for Industry (Mr. John Butcher): In the third quarter of this year the index of production for manufacturing was 15 per cent. below its average level in 1979. A table containing comparable figures for other countries will be published in the Official Report.
    Mr. Grant: Does not that answer in effect represent an utter condemnation of Government policy? Will the Minister confirm that the country is heading fast for its first peacetime trade deficit in manufactured goods for more than a century? Are not Ministers ashamed to be presiding over that state of affairs?
    Mr. Butcher: The condemnation should go back more than the last three years. The hon. Gentleman will be aware, for example, that in 1976 his erstwhile colleagues in the Labour Party published a confidential report which extracted the trends for the 12 years up to that period and said that there could be 2·5 million people unemployed in 1980. The hon. Gentleman will know why that projection

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    was made. We have developed a mismatched economy over the past 20 years, producing goods for which there is low demand and not producing enough goods for which there is high demand. It will take a very long time to solve that problem, but I believe that, with a second term of office, this Administration will do it.
    Mr. Chapman: If the reduction in our manufacturing output is worse than in the other countries mentioned in the original question, is not a significant reason for that the fact that our output per man is much more inefficient? How has output per man increased in, say, the last three years? If it has increased appreciably, does that not augur well for British industry when the recession ends?
    Mr. Butcher: No doubt my hon. Friend will be aware of what has happened to the French and British economies since President Mitterrand took office. He will know, for example, that unit labour costs in France increased by 13 per cent. in the first year of the President's term of office, and that in the United Kingdom the comparative figure was 5½ per cent. I ask the House to consider the effect of those trends when mirrored under a Wilsonian Administration for a long time and their effect on our economy. My hon. Friend is right when he says that unit labour costs in this country have been a sad story for a long period.
    Dr. John Cunningham: After listening to the Under-Secretary's answer one would think that the Government had only just taken office, not that they had been in office for three and a half years. As investment and orders, particularly export orders, are still going down, will the hon. Gentleman tell us when he expects to see a reversal of that disastrous industrial decline?
    Mr. Butcher: The hon. Gentleman should not pretend that things that take place in macroeconomic policy have an immediate effect. I assume that he has never pretended that. The hon. Gentleman should also remember that the development of our mismatched economy has been two decades in the making, and he and his colleagues cannot disclaim all responsibility for those developments.
    Following is the table:

    Indices of Production for Manufacturing

    Percentage change: latest three months on 1979

    United Kingdom

    -15

    France

    - 4

    West Germany

    - 5½

    Italy

    + ½

    Belgium

    - 2½

    Netherlands

    + 1

    Luxembourg

    -11

    Denmark*

    + 2½

    Ireland

    + 1½

    Greece

    - 5½

    United States of America

    -10

    Japan

    +11

    * Index of volume of sales.
    Source: CSO and OECD (Monthly Economic Indicators).

    Industrial Growth
    Mr. Adleyasked the Secretary of State for Industry which industries have shown the greatest growth in the last five years.
    The Minister for Industry and Information Technology (Mr. Kenneth Baker): The high technology sectors, notably information technology, computing services, and aerospace, are prominent among the industries to have shown the greatest growth in the last five years.
    Mr. Adley: I welcome the principle of assistance to industry and congratulate my hon. Friend, particularly on what he is doing on telecommunications. Is he satisfied, however, that we devote to modern growth industries a sufficient percentage of the national resources that we allocate to assistance to industry, compared with the huge sums that we have to pour into some of the older industries merely to maintain them in their present position?
    Mr. Baker: Both my right hon. Friend the Secretary of State and I have said on several occasions that it would be sensible to shift the balance of support from the older to the newer industries. I am glad to say that under this Government the amount of money that is available for research and development and grants available to companies in the private sector in these new industries has grown from about £50 million a year to about £200 million this year.
    Mr. Foster: What has the Minister to say to people in the Northern region, where we have less than our fair share of the fast-growing industries to which he refers? Has he seen the report in today's Financial Times, in which the Northern region director of the CBI says that that region has the lowest number of small business start-ups in Europe?
    Mr. Baker: I am as anxious as the hon. Gentleman is to ensure that all regions, particularly the North, the North-West and the North-East, have more high technology companies. I try to promote our schemes in those areas, because I appreciate that many of the new jobs in our economy will come from the new companies and the new industries.
    Sir David Price: Does my hon. Friend agree that the industries for which he and his Department are responsible have a far higher utilisation of capital in relation to output? Does he not therefore also agree that the old industries, in so far as they wish to and must bring in new technology, should get the same utilisation of capital? What is happening in Fleet Street shows the bad example that is being set by the media.
    Mr. Baker: I do not want to give the impression that this new technology is just for new technology companies. It is essential that traditional and older industries in the Midlands and the North should also use it, or they wall not be in business within the next five years. Many of these newer industries are labour-intensive. The service industries in technology tend to employ infinitely more people in relation to the capital employed than do manufacturing industries.
    Mr. John Grant: Is not the real answer to the question the lawyers and liquidators?
    Mr. Baker: No. If that is the SDP's net contribution to industrial policy, that party will have an even worse result at the next election than we expect. It is typical. Too many people are selling this country short in achievement and in the potential of the new technologies. My job and that of my colleagues is to ensure that we capitalise and build on that success.
    Mr. Robert Atkins: Does my hon. Friend agree, in mentioning aerospace as a growth industry, that there is an urgent requirement, sooner rather than later, for the Government to support the building of the A320 airbus, to safeguard the jobs and future of this high-technology aeroplane?
    Mr. Baker: I am well aware of the importance of this project, and I assure my hon. Friend that we are considering it.

    Industrial Competitiveness
    Mr. Ioan Evansasked the Secretary of State for Industry to what extent the competitiveness of British industry has changed since May 1979.
    Mr. Patrick Jenkin: According to IMF figures, United Kingdom manufacturing industry's unit labour costs were 23 per cent. higher relative to our competitors in the second quarter of this year compared with the second quarter of 1979. However, this figure is misleading, because it conceals the important fact that there has been a 15 per cent. improvement in competitiveness in the last two years. This progress must be sustained.
    Mr. Evans: Is it not true that we are more than 30 per cent. less competitive than when the Government were elected? As this issue has been the main thrust of Government policy, does it not show that Government policy has been an abject failure?
    Mr. Jenkin: The hon. Gentleman will remember that it was the pay explosion in 1978–79 that wrought havoc with industry's competitiveness and that it took time to get that under control. Since 1980, rising productivity and much lower inflation have begun to restore our competitiveness. We must not throw it away by profligate public spending and soaring inflation, which would be the result of his party's policies.
    Mr. Kenneth Carlisle: Is my right hon. Friend aware that many firms in engineering have increased their ability to compete by getting rid of restrictive practices and accepting realistic wage settlements? Is he further aware that that will result in better sales when the world recession is over?
    Mr. Jenkin: My hon. Friend is quite right. During the past two or three years that industry has shown how much can be done to improve productivity by getting rid of outdated restrictive practices, introducing new methods, getting rid of overmanning and bringing in new products which are better designed and more up-to-date. That is what we should encourage. We have shown that we can do it. Let us not throw it all away now.
    Mr. Orme: As the exchange rate plays such a large part in the competitiveness of British industry, will the Government now come clean on their policy for the exchange rate? We have heard contradictory statements from the Prime Minister and the Chancellor of the Exchequer. The Government have created panic in this area. Will they now make a statement?
    Mr. Jenkin: It is nothing like the panic that would be created if the right hon. Gentleman's policy ever came into being. This is a serious matter. If a small misunderstanding by markets during the past few weeks has led to the fall in the pound that it has, what would happen if Labour
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    policy were ever put into practice? I repeat the Government's position, so as to make it absolutely clear. There is no exchange rate target. It should be beyond doubt in the markets that the Government have no ambition to depreciate sterling, whether by 3 per cent., 7 per cent. or 10 per cent., and certainly not by the Labour Party's 30 per cent.
    Dr. Mawhinney: Does my right hon. Friend agree that one of the elements in competitiveness is an adequate supply of skilled manpower? Is he satisfied that when the recession ends this country will have a sufficient supply of skilled manpower to meet competitive targets?
    Mr. Jenkin: I must tell my hon. Friend that I am not so satisfied. In my opinion there is a real danger of shortages of skilled manpower, particularly in the newer expanding industries. That is why my right hon. Friend the Secretary of State for Employment, with the Manpower Services Commission, has embarked on a major programme to increase people's skills and training. I believe that my Department has a role to play. We must become more of a people-oriented Department, and perhaps spend less on things.
    Mr. Straw: Has the Secretary of State seen the survey of business men in The Times today, in which they seek to get the exchange rate down to $1·50, which would amount to a 15 per cent. devaluation in the dollar rate during this year—exactly what the Labour Party has called for? If the Government do not have an exchange rate target, why have they intervened in the market to force up interest rates and industry's costs, so as to maintain the pound at a higher rate than is necessary?
    Mr. Jenkin: The hon. Gentleman should read The Times more carefully. The actual results showed that while 17 per cent. wanted sterling to be devalued to $1·50, 63 per cent. agreed with the Government's policy of allowing the pound to find its own level.

    Girobank
    Mr. Allan Robertsasked the Secretary of State for Industry if he will bring forward proposals for further developing the National Girobank.
    Mr. Butcher: As the National Girobank is part of the Post Office, the responsibility for its further development rests with the Post Office board. Such development is, of course, also dependent on Girobank's ability to compete effectively in the environment in which it operates. The House will no doubt have noted that the Select Committee on Industry and Trade said in its recent report on the Post Office:
    "We are pleased to learn of the continued expansion in the activities of the National Girobank".
    Mr. Roberts: Will the Minister use his influence with the Post Office board to ensure that future development in regional policy does not take jobs away from Merseyside? Will he take action to set up Girobank as a truly national bank by amalgamating it with the National Savings Bank? Will the hon. Gentleman intervene with the Post Office board to stop the practice of giving free banking to high balance customers, while making excessive charges to low balance customers?
    Mr. Butcher: The hon. Gentleman's last two questions are, of course, matters for the Post Office board. I am

    13
    informed that the National Girobank has given assurances to employees on Merseyside that there will be no compulsory redundancies arising from its move, as a result of a recent report, towards greater efficiency. The move towards regionalisation has benefited Merseyside, where a regional office has been set up.
    Mr. Eggar: Will my hon. Friend confirm that there will be no form of subsidy from the Government to the National Girobank? Will my hon. Friend also confirm that when setting the external financing limit for the Post Office, no account will be taken of any possible losses that the National Girobank may make?
    Mr. Butcher: I give my hon. Friend an assurance on his first point and an assertion that we shall pursue his second point. The National Girobank, as a bank, must compete with other banks on its merits in providing services to its customers.

    Cable Television
    Mr. Aitkenasked the Secretary of State for Industry what representations he has received following the publication of the Hunt report on cable television.
    Mr. Warrenasked the Secretary of State for Industry if he will make a statement on the progress of the development of cable networks in the United Kingdom.
    Mr. Kenneth Baker: I have received representations from many interested parties since the Hunt report was published, and my right hon. Friend the Secretary of State for the Home Department, who is responsible for broadcasting policy, has also received comments.
    As I told the House on 20 April, the Government intend to announce the outlines of their policy towards wide band cable systems before the end of this year.
    Mr. Aitken: Is my hon. Friend aware that the mood among potential investors in cable television is one of increasing caution, due to the figures and market research that are being produced concerning costs and consumer response? In order to overcome that caution, will my hon. Friend consider sugaring the investment pill by considering the possibility of extending the franchise beyond the 10 years recommended by Lord Hunt?
    Mr. Baker: Whenever I have spoken about cable television I have always made it clear that I do not regard it as an area for the "quick-buck merchants". Those who are thinking of coming in to make a lot of money from cable television will be ill advised in seeking to do so. Investment in cable television must be for a long period of years.
    My hon. Friend's point concerning the length of the franchise or the licence for the operator and the provider is important, and we are giving active consideration to it.
    Mr. Warren: I welcome my hon. Friend's statement, but will he give an assurance that he will look at the legislation governing the rights of cable users and operators to lay cables? Will he ensure that the rights are there and that those concerned can use the rights of British Telecom and public utilities which already exist, to lay cables expeditiously?
    Mr. Baker: Yes, I can give my hon. Friend that assurance. It is a very important matter, because it could involve a great deal of digging up of streets and
    14
    establishing telecommunications cable systems across the country. I assure my hon. Friend that our plans in that area are well advanced.
    Mr. Frank Allaun: Does the Minister agree that with four channels already functioning there is enough television and that many people will not want to spend £20 a month for a bit of cable television?
    Mr. Baker: When it was decided to introduce independent television, the same argument was adduced—that there was one channel already and that it was adequate. I remind the hon. Gentleman that much more than entertainment will be offered on broad band cable systems. It will be an electronic grid capable of taking a wide variety of services—educational services, remote education, services involving the local community, and services for the ethnic minorities——
    Mr. William Hamilton: Come off it.
    Mr. Baker: It will be a great opportunity for the people of Britain, and I am surprised that the Labour Party—if the hon. Member for Salford. East (Mr. Allaun) speaks for it—is so negative and so unappreciative of the opportunities.
    Mr. Forman: Is it not unfortunate that comparatively little attention has so far been devoted to the interactive services and to that side of the technology? Will my hon. Friend ensure that his Department gives all necessary support to the technologies of the future, such as fibre optics and lasers, which are relevant here?
    Mr. Baker: I assure my hon. Friend that in our proposals for cable television we shall give every opportunity to the new technologies. I shall have something to say about it when I reply to the debate on Thursday.
    Mr. Golding: Will the Minister tell us now what he intends to say on Thursday? Is it not important that the House should be informed, before the debate takes place, of the Government's intentions for the long-term cabling of Britain?
    Mr. Baker: I think that that would be a discourtesy to the House. It is important that on Thursday the House should be given an opportunity to express its views on some of the technological matters. I hope then to give a clear indication. I do not think that there is much dispute between us. I am sure that all hon. Members will welcome the opportunity to express their views on the broader issues of bias and the absence of political bias in broadcasting, and on the issues of pornography, public broadcasting and so on.

    Industry Education Unit
    Mr. Colvinasked the Secretary of State for Industry how many schools were visited by his Department's industry education unit during the last 12 months.
    Mr. Patrick Jenkin: About 15. School visits are not the most effective way of using the time of this small but very important unit in my Department.
    Mr. Colvin: Does my right hon. Friend agree that Britain has been somewhat backward in business and industrial education? Does he agree also that it would not

    15
    be unrealistic to imagine that if the gap were filled—his remarks seem to imply that the Government are doing that—youngsters might be persuaded to set up in business on their own rather than wait for someone to employ them?
    Mr. Jenkin: I am sure that my hon. Friend will applaud what the small unit in my Department is doing. It is supporting the Schools Council's industry project, which is precisely designed the help schools to set up their own companies. It supports the "Young Engineer of Britain" project. Youngsters are producing some staggering inventions. Recently we have made and are now circulating the film made by Anthony Jay, one of the authors of "Yes Minister", to demonstrate the value of youngsters setting up in business on their own. Already 2,000 secondary schools have requested and received copies of the film, which stars John Cleese. That is very good progress.
    Mr. Christopher Price: I welcome the very good work of the unit and the fact that the Department is putting useful equipment into schools, but will the Secretary of State co-ordinate a little more with the local education authorities and the Department of Education and Science? There is a danger of putting equipment into schools when the schools are not able to meet the costs involved in making proper use of it.
    Mr. Jenkin: I understand the hon. Gentleman's point, but there is already close co-ordination on these matters with the Department of Education and Science. Obviously, there is no point in providing schools with equipment if the teachers are not trained in how to use it and teach with it. The Department is running its own programmes of in-service training so that those who are involved, particularly with the micros in schools programme, have the means with which to teach the subject properly.
    Mr. Greenway: Does my right hon. Friend agree that most school courses concerned with this subject start in the fourth year and continue in the years above this? Would my right hon. Friend like to see technical courses of this kind starting much earlier, say in the first year of secondary education, and continuing into the second, third and fourth years?
    Mr. Jenkin: With regard to micros, there is everything to be said for primary school children having such courses. There is a remarkable picture in The Times this morning of children of six and seven. Recently at a secondary school I said to the head boy "You know all about this", and he said "Oh no, I am far too old".
    Mr. John Garrett: How can Labour Members help the Minister in his continuing struggle with the Department of Education and Science—a matter that is becoming increasingly public? Everybody knows that the micros in schools programme is being undermined by that Department's refusal to provide extra funds to enable schools to buy software. We all know that the strategy for information technology in Britain is being undermined by massive cuts in universities and in higher and further education. How can we help the Minister defeat the Department of Education and Science in this crucial battle?
    Mr. Jenkin: The hon. Gentleman is being wildly unfair to my right hon. Friend the Secretary of State for Education and Science. My right hon. Friend is showing
    16
    the maximum co-operation with the programme, which he launched when he was Secretary of State for Industry. It is absurd to imagine that a distinguished Cabinet Minister would, in his new Department, work against what he started in his old Department.
    The hon. Gentleman knows—if he does not, he should—that under the recent allocations by the University Grants Committee there is a 2 per cent. increase in places for engineering students and, indeed, extra money for what my right hon. Friend refers to as "new blood".

  ATTORNEY-GENERAL

    Mr. David Somes
    Mr. Palmerasked the Attorney-General what representations he has received from the Law Officers of the Government of South Africa about David Somes, a British national and a former South African police officer wanted in connection with the murder of four black South Africans.
    The Solicitor-General (Sir Ian Percival): Somes was arrested on Saturday and charged with the murder of a black South African national. He was brought before a magistrate at Bow Street on Saturday and remanded in custody. The case is now sub-judice.
    Mr. Palmer: Is the hon. and learned Gentleman aware that that answer will give general satisfaction, in the knowledge that justice will now be done?
    The Solicitor-General: Yes, Sir.

    Shoplifting
    Mr. Campbell-Savoursasked the Attorney-General how many cases of shoplifting over the last six months have been referred to the Director of Public Prosecutions.
    The Solicitor-General: The Director compiles his records on an annual basis and therefore the figures for the last six months are not available. However, since 1 January 1982, the nearest identifiable date, 26 allegations of shoplifting have been referred to him.
    Mr. Campbell-Savours: Is it not true that there are many reported cases of persons being charged but not convicted of shoplifting who, under stress, commit suicide? Will the hon. and learned Gentleman review the national policy for prosecutions, particularly in the light of demands that psychiatrists be allowed to intervene before prosecution decisions are taken?
    The Solicitor-General: Every time a person commits suicide under stress of prosecution of any kind it is a serious and unhappy event. The hon. Gentleman is not right to say that there is a high number of suicides in cases of pending prosecutions for shoplifting. Nor is it right for him to suggest to the House that psychiatric evidence is denied to anybody. In many cases a person does not want the factors to which the hon. Gentleman is referring to come out until the trial or after it.
    Mr. Adley: My hon. and learned Friend must know that there has been an increase in such tragic suicides. Does he not accept, as the Home Office does, that the trading methods of self-service stores are largely responsible for the massive increase in shoplifting in the past few years?
    Sir William Clark: Do not be silly.
    Mr. Adley: My hon. Friend the Member for Croydon, South (Sir W. Clark) says "Do not be silly", but I am afraid that what I said is true. When will British law recognise that shoplifting in the modern world is a separate and different crime from ordinary theft?
    The Solicitor-General: I know of my hon. Friend's great interest and concern in this matter, and he knows of mine. It is idle for anybody to suggest that there is a simple substitute for the present system that will solve all the problems. Shoplifting is just another form of theft. It is essential in any prosecution for shoplifting that all the ingredients of theft are established. The most useful course that we can take is to ensure that that is understood in all cases. That will prevent many people pleading guilty when they are not, as is said to happen.
    Mr. Greville Janner: Does the hon. and learned Gentleman not understand that shoplifting is not the same as any other case of theft, because so many innocent people are charged with it? Does he not recognise the vast danger, particularly at Christmas, of honest but careless people being charged with shoplifting, and of ill and elderly people being so charged when their right place is in hospital, not in the dock?
    The Solicitor-General: The hon. and learned Gentleman must surely realise after this time that I understand all those factors. I said that the ingredients are the same. One of the complaints that is made is that many people who are not guilty plead guilty, thinking that shoplifting is different from theft and that being found in possession of the goods is enough. I cannot make it sufficiently clear that that is not so.
    However, there are a thousand and one different cases for the authorities to cope with. In some cases, ill-health would present a good defence and would even result in there being no prosecution if it were brought to the attention of those concerned in time. The hon. and learned Gentleman shakes his head. A case was referred to the Director of Public Prosecutions, but because the defendant was suffering from ill health proceedings were not taken. We are trying to deal with a thousand and one different cases, and it is idle to suppose that any one system will cope with all of them.
    Mr. Neubert: Is it not time that my right hon. and learned Friend the Attorney-General introduced a better balance in the law to impose greater responsibility on shops and stores, because the merchandising methods of many of them positively invite shoplifting and contribute to their heavy losses, which are then passed on in higher prices to the honest shopper?
    The Solicitor-General: My hon. Friend will recall that I have previously referred to a study group that was set up by the Ministers responsible for these matters. Yes, those matters need looking into by those who are responsible. We should implement any practical suggestions that might avoid the difficulties to which my hon. Friend referred.
    Mr. Anderson: Does not public disquiet partly arise from the fact that the decision to prosecute rests with a multiplicity of bodies who may rely on differing criteria? Does the Solicitor-General think that guidelines should be issued to ensure uniformity of prosecution? When will the Home Office working party report, and will that report be made public?
    The Solicitor-General: There have been questions about guidelines before, and my answer must remain the same. I do not think that any set of guidelines would solve the problems. Nobody has yet put forward a convincing answer to those problems. I cannot give a date when the working party will report, but I shall ensure that the hon. Gentlemen's question is referred to those responsible.
    Mr. Campbell-Savours: On a point of order, Mr. Speaker. In view of the wholly unsatisfactory nature of those replies, both to Labour and Conservative Members, I beg to give notice that I shall seek to raise the matter on the Adjournment as soon as possible.

    Births, Marriages and Deaths (Records)
    Mr. Newensasked the Attorney-General if he will make a statement on the progress so far made by the study group set up by the Lord Chancellor, as announced on 8 December 1980, to investigate, inter alia, the possibility of making microfilms of 100-year-old records of births, marriages and deaths, at present held by the General Register Office, available for general research by members of the public.
    The Solicitor-General: The study group proposed to transfer all Public Records Office facilities to Kew, including those records. As the hon. Gentleman will know from his interest in these matters, on 30 April I informed the House that while the full scheme is in abeyance separate consideration would be given to the future of the General Register Office records. The Public Records Office is exploring ways of providing the additional microfilm readers and storage space needed to meet the expected demand.
    Mr. Newens: Has the microfilming of the 100-year-old records been completed? If it has, surely it is a waste that these should not be made available to researchers at the earliest possible moment. Can the hon. and learned Gentleman give us any idea of the time scale before researchers can have access to those most valuable records? Will they be at Kew or in London?
    The Solicitor-General: If the filming is not complete, it is nearly complete. The main difficulty is the provision of accommodation. It is thought that it would he for the convenience of those concerned if the documents or films were made available either in central London or at Kew. Accommodation that would meet the requirements has not yet been found in central London, and, as the hon. Gentleman knows, it is not available at Kew. Therefore, the answer to the last part of the hon. Gentleman's question is that the records will be made available as soon as solutions have been found to those practical problems. I assure the hon. Gentleman that those concerned are not dragging their feet in trying to find an answer.
    Mr. Cormack: Will my hon. and learned Friend try to give us a slightly more precise idea of the time scale involved?
    The Solicitor-General: No, I cannot, as it would be misleading to do so. However, I have not tried to fob off the hon. Member for Harlow (Mr. Newens). I know of the concern shared by the hon. Gentleman and by my hon. Friend. However, there are practical difficulties. We must find somewhere that is convenient to those who want to use the new service, that is within the right price range, and so on. That place simply has not yet been found.

Fast Reactor Programme
3.30 pm
Mr. Robert Maclennan: On a point of order Mr. Speaker. After the Business Statement on Thursday I put a specific question to the Leader of the House——
Mr. Speaker: Order. The hon. Gentleman gave me notice, indirectly, that he intended to raise a point of order. However, we usually take points of order after statements. I hope that the hon. Gentleman does not mind.
Mr. Maclennan: Further to that point of order, Mr. Speaker. I understand that that is the usual practice, but I wonder whether it would be possible, on this occasion, for you to hear the point of order before the statement is made, because a written question is due to be answered at 3.30 pm. If the point of order is postponed, it may be too late.
Mr. Speaker: The hon. Gentleman may proceed.
Mr. Maclennan: After the Business Satement on Thursday I asked the Leader of the House whether the Government had reached a decision on the future of the fast reactor programme. I also asked the right hon. Gentleman for an undertaking that an oral statement would be made in the House so that questions could be put to the Minister responsible. The right hon. Gentleman gave a positive assurance and said:
"That statement will be a most important decision that will merit a statement in the House."—[Official Report, 25 November 1982; Vol. 32, c. 1017.]
The following day a question for written answer was tabled by the hon. Member for Edinburgh, South (Mr. Ancram), the chairman of the Scottish Conservative Party. He asked whether the Secretary of State for Energy would make a statement about the fast reactor policy. Given that that question might be answered this afternoon, I wonder Mr. Speaker, whether you have any intimation that the Minister responsible would seek to make an oral statement.
Mr. Speaker: I have not received such notification.
The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): The House may feel it appropriate for me to comment on the point fairly raised by the hon. Member for Caithness and Sutherland (Mr. Maclennan). I am certain he will realise that he requested not an oral statement, but a statement. I apologise to the hon. Gentleman, because when I gave that answer I was not aware that a written answer would be given today. However, I do not feel it appropriate for the written question to be withrawn, as I thought that the House would wish to be in possession of information on the Government's policies. As today is the first day for tabling questions to the Department of Energy for oral answer, I suggest that it might be productive for hon. Members to go to the Library, to ascertain Government policy and to ensure that it is properly monitored when the Secretary of Stae is next available for Question Time.

GATT (Ministerial Meeting)
3.34 pm
The Minister for Trade (Mr. Peter Rees): With permission, Mr. Speaker, I shall make a statement about the ministerial meeting of the General Agreement on Tariffs and Trade at Geneva, which concluded its proceedings at 5 am today. A copy of the declaration and decisions of the meeting will be placed in the Library as soon as possible.
The ministerial meeting was the first for nine years and was attended by more than 80 signatories which account for more than 90 per cent. of world trade. The purpose of the meeting was not to revise or amend the general agreement but to reaffirm support for existing obligations and to seek agreement on the examination of certain important issues that might form the basis of future negotiations.
After five and a half days and nights of negotiation—[HON. MEMBERS: "Ah!"]—the meeting adopted by consensus a document which constitutes a realistic commitment by the signatories to maintain the existing obligations of the GATT that have underpinned the open trading system since the war and to strengthen their observance in the future. The document does not prevent contracting parties from adopting safeguard measures, under the GATT, or measures with a similar effect.
In particular, the document provides for: a study to cover ways and means of achieving the acceptance by newly industrialised countries of increased obligations under the GATT and of an increase of trade with them; a study of the problems of international trade in services; a study covering agricultural trade issues in their entirety; a study of how best to combat trade in counterfeit goods and an improved procedure for the settlement of disputes.
Throughout the meeting the countries of the European Community consistently emphasised the need for conclusions and decisions to be expressed in realistic terms. For that reason, the European Community entered a reserve on a proposal to link the study of agricultural trade with a wide commitment to renegotiate the fundamental structure of that trade. The European Community, in common with a number of other signatories, made certain other interpretative declarations.
Even with those reservations, the outcome of the negotiations—undertaken against the background of a world recession—must be regarded as an encouraging recommitment to the maintenance of the open trading system, on which the prosperity of the United Kingdom as a great exporting nation depends, and has helped to focus the attention of the world on the consequence of a breakdown of this system. It was, I think, recognised that the United Kingdom, through the European Community, made a full and constructive contribution to this outcome without, however, compromising its right to safeguard its essential national interests.
Mr. K. J. Woolmer: The Minister will know that the Opposition had not minutes, but seconds, in which to consider the statement before he rose to address the House. Nevertheless, we are grateful to him for letting us see the statement.
On 19 November the Minister said that agriculture was not a crucial issue for Britain, and added:
"We are not uncritical supporters of the CAP".

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Has the Minister supported the interests of British consumers, taxpayers and industrial workers in the attitude that he has adopted in the negotiations towards agricultural trade and the CAP? What steps are to be taken to control unfair competition from newly industrialised countries such as Brazil and Korea and to reduce the trade barriers that they erect against our exports? What progress has been made on improving and speeding up GATT disputes procedures and on ensuring that other countries, as well as Britain, abide by the rules of the game?
In particular, what pressure is to be put on Japan to open its markets, just as we frequently open our market to Japanese goods? The Opposition welcome any move to open up international trade in services, but does the hon. and learned Gentleman recognise that manufacturing industry in Britain is bearing the full brunt of the Government's deflationary economic policy, of unfair competition and of dumping from abroad? Does he recognise that a growth in banking and insurance services is no substitute for the decimated manufacturing industries, such as steel, vehicle production and textiles?
Does the hon. and learned Gentleman recognise that the Opposition share the anxiety that the world should not drift into "beggar your neighbour" policies of trade restriction and cumulative unemployment? Does he also accept that such protectionism stems from the problems of unemployment and excess capacity, whose basic causes lie in the economic policies of cutback and despair that are promoted by his Government?
Finally, what steps are being taken by the world's political leaders to co-operate to expand demand, production and employment, so reducing the very fear that is leading to a threat of protectionism? What is to be done about increasing the borrowing capacity of the developing nations which still provide vital markets for our industries? What does the Minister wish to see done about the generalised chaos of the foreign exchange markets, which leaves British and American exchange rates so badly out of line that it is precious little wonder that the unemployed suffer from the threat and fear of protectionism?
Mr. Rees: I recognise that trade issues cannot be divorced from economic and monetary issues. It was not, however, within the remit of the GATT to conduct quite such a wide-ranging review, although there were perceptive contributions by the representatives of the International Monetary Fund and the World Bank.
As the House will recognise, the common agriculture policy is a particularly sensitive European Community issue, and I emphasise that in practically every country agriculture is treated as a special case. It was for that reason that it was thought wise in the first instance to conduct a far-ranging review.
I have emphasised that it is important that the newly industrialised countries should recognise their obligations as well as their rights, not only to the developed countries, of which the United Kingdom is one, but to the less developed countries, which are desperately anxious to have access to their markets.
We would like to see a rather sharper procedure for the settlement of disputes. I hope that that will result from the meeting.
Of course Britain has difficulties with various countries. The hon. Member for Batley and Morley (Mr. Woolmer) mentioned Japan, but he will recognise that in an international forum of this type, which was concerned
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with the establishment of general principles by which the conduct of individual countries could be judged, it would not have been appropriate for me to enter into a series of bilateral meetings to discuss these individual problems, although we are conscious of them. I assure the House that we shall follow them in other forums.
I should certainly not assert that trade in services should assume a primacy over our concern with trade in manufactured goods. However, I remind the House that three out of every five employed people in this country are employed in service industries, not only in banking and insurance, but in consultancy services, shipping and so on. It is important for Britain's well-being that we should try to liberalise trade in services as well as in manufacturing.
Mr. J. Enoch Powell: Does not this ill-disguised fiasco make it clear that the Government's justified attachment to an open trading system is fundamentally incompatible with membership of the European Economic Community, to which they are also, unfortunately, disposed to cling?
Mr. Rees: I leave the House and the outside world to judge whether the word "fiasco" would be appropriate in this context. It would be better to judge by the consequences that flow from the decisions taken on this occasion than to anticipate them. I find no inconsistency whatever between Britain's adherence to the European Community, which, as I have said, demonstrated that it is an outward looking organisation which plays a substantial role in underpinning the open trading system.
Sir Julian Ridsdale: Is my hon. and learned Friend aware of how many hon. Members appreciate the Government's determination, in spite of the difficulties, to continue their policy of an open trading system? With regard to Japan, will my hon. and learned Friend continue the industry-to-industry talks which have been taking place, as it is on this basis particularly that help can be given to remedy the present large imbalance in trade?
Mr. Rees: I am grateful to my hon. Friend for his views. The Government recognise the importance of the industry-to-industry consultations, and nothing that took place in Geneva would prevent such agreements being concluded.
Mr. John Horam: Is the Minister aware that a limited and unsatisfactory agreement such as this is certainly better than no agreement at all? First, is the Minister confident that the EEC is still seeking to expand world trade as much as it should be during this phase of world recession? Secondly, will the hon. and learned Gentleman expand on the studies in international services which have been agreed by the signatories? In particular, what factors do they cover, and is Japan to be included, because the Japanese market is extremely difficult for British companies wishing to sell services? As the Minister said, three out of five people are now involved in services and it is an extremely important sector in this country.
Mr. Rees: I assure the hon. Gentleman that the European Community, as a community, is concerned with the expansion of world trade.
With regard to the study of services, the first need will be to identify obstacles in each particular country and then to meet again to consider what steps can be taken to deal with them. Certain of the less developed countries entered

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reservations on that matter. Japan, however, entered no such reservation, and therefore any obstacles that are found to the trade in services of that country would certainly be within the purview of the examination.
Mr. Barry Jones: If the conference was not a fiasco, will the hon. and learned Gentleman categorically state that the future for steel workers and textile workers, whose jobs have been destroyed by cheating imports, is now more assured?
Mr. Rees: I cannot assure the House that their future will be more assured, but I can say that nothing that emerged from this conference will prejudice their future. Indeed, they ultimately will have an interest in a system of free but fair trade.
Mr. Michael Grylls: I congratulate my hon. and learned Friend on his stamina at a marathon conference. Does he agree that the important thing is to maintain not only free trade but fair trade, and that the House will expect, within GATT, to undo these non-tariff barriers that are making it so difficult for British firms to export to countries such as Japan and Korea?
Mr. Rees: I am grateful to my hon. Friend for his kind opening remarks. Perhaps one develops a certain stamina in Committees on controversial Bills which stands one in good stead at these meetings. I hope that it will emerge from the declaration of the meeting that the identification and removal of unfair tariff barriers should play a major part in the GATT system.
Mr. Douglas Jay: Since it is wholly in the British national interest to give full support to the United States' opposition to EEC export subsidies which are a breach of GATT principles, why did the Government not do so?
Mr. Rees: The United States must speak for and explain its own position. Although the United States' representative was careful to express his country's views in moderate terms, by contrast with some of his legislators who turned up at Geneva, there is no sign that a trade war in this area will break out. I should deprecate it, and I should hope very much that the United States' Administration would also do so. It would not be to the advantage of the world as a whole if a conflict on the issue of subsidies were to break out and any country, particularly one in a dominant position, were to flood the agricultural markets with subsidised exports. The casualties would be the smaller countries, and particularly our friends in New Zealand.
Mr. Russell Johnston: As the Minister has a reputation for clarity, does he agree that this is a somewhat dense statement, even for five o'clock in the morning? Does he believe that it will result in a decrease in protectionism? Will he be so kind as to explain what he meant by saying that the European Community made certain other interpretative declarations?
Mr. Rees: I leave the House to judge whether my statement was vital or moribund. It is not for me to say. I shall endeavour to provide the clarification that the hon. Gentleman requires. An interpretative reservation was entered on roll back. As I have said, a reservation
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remained on agriculture. There were one or two matters of triviality which arose largely because of the haste in which it was necessary to draft the final declaration.
Mr. Anthony Nelson: I understand that last year, for the first time, Britain's earnings from invisible trade amounted to more than those from visible trade. Given that significant fact, will my hon. and learned Friend explain the main reasons for the partial failure of the section of the GATT talks dealing with service agreements and name the main culprits? An agreement in this area is vital for the industries concerned and for our future.
Mr. Rees: Both the European Community and the United States attach importance to progress in this sphere. I should not like to suggest that there are any culprits. However, a number of the less developed countries entered formal reservations.
Mr. Michael Meacher: What precise means have been established to ensure that the grossly unequal tariffs in many sectors between the United Kingdom and the so-called newly industrialised countries will be equalised within a reasonable period?
Mr. Rees: I cannot suggest that there was any guarantee, but the relationship between the developed world, the less developed world and the newly industrialised countries featured in our discussions and a programme of work is envisaged.
Mr. Nigel Forman: May I add my tribute to the work that my hon. and learned Friend did in Geneva? Will he tell the House a little more about the study that is to be launched into the settlement of disputes, which was clearly one of the most important topics to be discussed? Will he assure the House that UNCTAD will not have an important implementation role in a sphere which should properly belong to the GATT?
Mr. Rees: To be realistic, one must recognise that the initial process in the settlement of disputes should be one of conciliation and consensus. Emphasis was laid on that. It is regrettable that there have been occasions when countries have blocked the conclusion of the panel. I hope that the conclusions that have been reached will discourage countries from using that type of technique. I cannot predict the outcome of UNCTAD's consideration of the agenda. That is a separate matter. The GATT is possibly a better forum, because it concentrates exclusively on trade issues while UNCTAD has a wider remit.
Mr. Ron Leighton: Will the Minister accept that one of the major reasons for the failure of the conference is the EEC's rigid agriculture protectionism? Is it not true that Mr. Anthony of Australia left the conference early, having called the whole thing a fiasco, because of the EEC's attitude? Does he agree that the common agricultural policy fouls our relations with Australia and the United States and undermines the economies of the Third world?
Mr. Rees: In every country agriculture is treated as a special economic activity.
Sir Peter Mills: Quite right, too.
Mr. Rees: I even discovered that our Swiss friends support agricultural activity to a minor extent. I regret the statement of Australia's Deputy Prime Minister. For

25
reasons that I understand, he had to leave the conference early on Saturday morning. The text of his statement was circulated before the final declaration, and perhaps it did not reflect the conference's ultimate conclusion. It might have had a different tone—this is for him to say, not for me—had he remained to the end.
Mr. Robin Maxwell-Hyslop: Does my hon. and learned Friend agree that agricultural output depends on the weather, over which producers have no control? Surely it is better to have regulations so that surpluses do not ruin producers than to have shortages, in which event people starve.
Mr. Rees: My hon. Friend perceptively draws attention to the crucial distinction between manufacturing and agriculture, which naturally bears on different countries' approaches to the problem.
Mr. Doug Hoyle: Will the hon. and learned Gentleman accept that, whatever he says about service industries, Britain's prosperity and employment prospects depend upon a buoyant manufacturing industry? His statement, which was like one of Scrooge's, has brought little cheer to our manufacturing industry, especially to the automobile, steel, electronic and textile industries. Why did he not do more about unfair competition, and especially dumping? Such action has been further delayed by our membership of the EEC.
Mr. Rees: Nothing that took place at the GATT conference will prevent the most rigorous application of anti-dumping procedures. I should not like to assert as confidently as the hon. Gentleman that Britain's prosperity depends upon any one economic sector. Naturally it is the Government's desire that Britain should have a bouyant manufacturing sector. That depends on its being as competitive as possible.
Mr. Jonathan Aitken: My hon. and learned Friend will recall that the Gracious Speech included the premise that Britain would take action at the GATT to try to remedy the unfair trading practice that means that British-manufactured cars exported to Spain are subject to a tariff nine times greater than that which Spanish cars attract when they are imported into Britain. What happened on this issue at Geneva? What other unfair trading practices that discriminate against Britain were remedied?
Mr. Rees: I mentioned this problem—there are others between Britain and Spain—to the Spanish Minister for Trade, who is about to hand over his portfolio in a matter of weeks to a member of the incoming Spanish Government. As I have explained, it was not exactly the forum at which to pursue to a conclusion bilateral negotiations and problems, even such important problems as motor car tariffs.
Mr. Ian Mikardo: If we are to assess the results of the conference realistically and not through rose coloured glasses, was it not condemned to ineffectiveness and ridicule on the very first day when the Japanese Government's representative put his tongue firmly in his cheek and claimed that Japan was one of the most open markets in the world?
Mr. Rees: I assure the House that my spectacles were not rose coloured at any stage while I was at Geneva. I listened with great care to the Japanese Foreign Secretary's
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statement. Each country has its own perception of the advantages and disadavantages for its own markets. We shall continue to press on the Japanese the necessity to open their markets still further to British exports.
Mrs. Elaine Kellett-Bowman: Will my hon. and learned Friend accept that I am much relieved that the consensus does not prevent the use of safeguard measures when vital national interests are involved? May I thank him for his robust efforts on behalf of the textile industry in trying to get a fair deal for newly industrialised countries and for our textiles?
Mr. Rees: I am grateful to my hon. Friend for her statement. I assure the House—especially hon. Members representing textile constituencies—that nothing in the declaration will prevent a firm MFA.
Mr. George Park: When I asked the hon. and learned Gentleman about tariff disparities on the import-export of vehicles on a previous occasion, I was told that he would deal with the issue at the GATT meeting. Following the debacle at Geneva, what does he propose to do?
Mr. Rees: I do not accept that there was a debacle at Geneva. I assure the hon. Gentleman that bilateral problems will be pursued as vigorously as they were before I went to Geneva.
Mr. John Townend: Does my hon. and learned Friend agree that we have been talking to the Japanese for years about opening up their market to British goods and services and that the results have been minimal? Is the time not approaching when we should tell the Japanese that they are to open their market quickly, or the talking will cease and retaliation will have to begin?
Mr. Rees: The Government have taken a robust attitude, as has the European Community, on trade with Japan and a complaint had been made under article 23 of the GATT long before the Geneva meeting.
Mr. Ioan Evans: In his discussions with the representatives of the Third world and the Commonwealth countries, did the Minister reiterate that it is this country's intention to reform fundamentally the common agricultural policy or to pull out of that part of the EEC, or did he put the point of view of the EEC?
Mr. Rees: The negotiation on behalf of the European Community was undertaken by the Commission. I assure the House that there was a considerable British input to the Community position before the Commission representatives went into the council chamber. Because the CAP is essentially a Community issue, although its effects go outside the Community, there could be no question of a renegotiation of the CAP at Geneva.
Mr. Tony Marlow: Do the Government wish to move to a freer and fairer trading system in agriculture products, as in other products? If that is so, is it permitted by that foreign institution in Brussels to have a national view on the subject?
Mr. Rees: I do not know how my hon. Friend defines "foreign". There is an institution, the headquarters of which are situated in Brussels, of which we are members. That gives it a British complexion, although it may also give it a French, German and Benelux complexion. The negotiation, renegotiation or transformation of the CAP is a question for the Community and did not arise at Geneva.
Mr. D. N. Campbell-Savours: How does the Minister expect the United States to react to Europe's inflexibility on the CAP? In the light of what he said, is he not disturbed by the prospect of American legislators returning to the United States and publicly propagating the view that Europe is now highly protectionist, particularly in agricultural activity?
Mr. Rees: Naturally, I should not like American legislators to go back to Capitol Hill and put about that view, because it is not true. However, they must speak for themselves. They were not part of the United States negotiating team at Geneva.
Mr. Hal Miller: I endorse my hon. and learned Friend's vigorous pursuit of our vital interest in keeping open the channels for exports of services, but will he say, without an interpretative note, whether anything took place at the GATT meeting that made it more difficult—or easier—to deal with the disparities in our tariffs with Spain on the vital trade in components and vehicles?
Mr. Rees: Nothing that occurred at Geneva will make it more difficult for us to deal with that problem.
Mr. Derek Foster: Does the Minister recognise that the virulent growth of protectionist forces is the inevitable result of the vicious cycle of contraction throughout the international world, caused by similar orthodox financial policies pursued by Governments such as the Minister's? Would not the Minister be better employed using his time to persuade the major countries of the OECD to begin to boost their economies?
Mr. Rees: It was not part of my responsibilities to raise that question or to pursue it with the other signatory countries at Geneva. We were primarily—indeed, essentially—dealing with the problems of trade, but, as I hope I made clear in an answer to an earlier question, one recognises that trade cannot be divorced from economic questions. However, I hope that nothing in my answer can be construed as acceptance in any way of the strictures by the hon. Gentleman on the Government's economic policy.
Several Hon. Members rose—
—
Mr. Speaker: Order. I propose to call the three hon. Members who have been rising.
Mr. Richard Shepherd: Is it not curious that the Government have abandoned the belief in free trade in agricultural produce which was the basis of our attachment to free trade, originally and historically? Is my hon. and learned Friend not alarmed at the division that that is causing with our historic allies, the United States and our most important allies, the British Commonwealth nations?
Mr. Rees: The party to which my hon. Friend and I belong has moved on a little since the repeal of the corn laws.
Mr. Shepherd: To our benefit?
Mr. Rees: I emphasise that I kept closely in touch with both United States and Commonwealth representatives. I went to a special meeting of Commonwealth Ministers the afternoon before the conference opened.
Mr. Allen McKay: Is the Minister aware that my constituents will believe that what he said, particularly about the steel industry, fell peculiarly from his lips, bearing in mind that it has just been announced that at the steelworks in my constituency, Stocksbridge, and in the constituencies of my hon. Friends the Members for Rotherham (Mr. Crowther) and for Sheffield, Attercliffe (Mr. Duffy), 1,709 jobs are to be shed, after years of job shedding? When will the Government take effective, urgent and, if necessary, unilateral action to support our steel industry?
Mr. Rees: I know of the hon. Gentleman's anxiety, which is shared by many other hon. Members, but I emphasise that long before the meeting at Geneva, which was not the forum at which to raise such a precise issue, this country took a robust position at Brussels, particularly in respect of the United States' countervailing and anti-dumping duties.
Mr. Teddy Taylor: As a written answer last week showed that Common Market food prices, on average, were more than twice as much as world prices and sugar was three times as much, did not my hon. and learned Friend, as a supporter of open trade, feel justified in persuading his colleagues to make a tiny move towards the reduction of the absurd protectionism that involves tariffs of over 100 per cent. and export subsidies of £7 million a day, which are not only causing hardship here but are wrecking the economies of some of the poorest countries in the world?
Mr. Rees: Many countries and trading groups in the world subsidise their agriculture and agricultural exports. My hon. Friend is wrong to concentrate too much—although I know his view—on this problem of the European Community. As I emphasised, agriculture featured in our discussions, and there will be a study. I have no doubt that there will be some useful and constructive conclusions. Perhaps I am over-optimistic, but they may even satisfy and reassure my hon. Friend.
Mr. Woolmer: The Minister referred to entering a reserve on the proposal to study agricultural trade and to certain interpretative declarations. Will he throw more light on those cautious words? Will he recognise that the House regards his statement and the conference as, to say the least, extremely disappointing, and, at best, believes that he has won a breathing space against the forces of reducing trade rather than increasing it? What use will the Minister and the Government make of that breathing space to protect our industries from unfair dumping and to open up other markets to our exports, and what will the Government do on the world scene to make the world economy expand again?
Mr. Rees: The reserve was not on the proposition that there should be a study of agricultural problems but on an unrealistic commitment to a fundamental reform of the structure not only in the European Community but in the world, which we felt could not be observed and would therefore only discredit some of our conclusions. Of course I recognise that a breathing space has been achieved. Perhaps we cannot say that the principles of GATT have been carried forward far, but I have indicated one or two areas where they can be carried forward, which will be of definite benefit to the United Kingdom, its economy and its manufacturing and service industries.

GATT (Ministerial Meeting)
  BILL PRESENTED
    CIVIL AVIATION (EUROCONTROL)
    Mr. Peter Rees, supported by Mr. Secretary Pym, Mr. Secretary Nott, Mr. Secretary Younger, Mr. Secretary Edwards, Mr. Leon Brittan and Mr. Iain Sproat presented a Bill to make further provision with respect to the European Organisation for the Safety of Air Navigation known as Eurocontrol and to amend section 73(4) of the Civil Aviation Act 1982: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 17.]

Statutory Instruments, &c.
Mr. Speaker: By leave of the House, I shall put together the Questions on the motions relating to Statutory Instruments.
Ordered,
That the draft Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1982 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Veterinary Surgeons Act 1966 (Schedule 3 Amendment) Order 1982 be referred to a Standing Committee on Statutory Instruments &c.
That the draft Welfare of Livestock (Prohibited Operations) Regulations 1982 be referred to a Standing Committee on Statutory Instruments, &c.— [Mr. David Hunt.]

British Telecommunications
Mr. Stanley Orme: On a point of order, Mr. Speaker. I wish to raise a matter of great importance before we proceed to the Second Reading, of the Telecommunications Bill. There is a report in The Times this morning, headed
"Pension fund threat to Telecom sell-off".
The article states that there is a £1,200 million shortfall dating back to 1969, when the Post Office was established as a corporation. Should we proceed with the Bill, which is about to have its Second Reading, when there is no mention in it of how that £1,200 million deficit will be funded? Will it be funded by the investors? Will it be funded by the Government? I have frequently raised the matter of pensions with the Secretary of State, who has said that there was no problem to worry about and that there was no issue. We are now told that there is a colossal deficit. The House is entitled to an explanation if we are to proceed with the Bill and if there is to be no reference to the circumstances in 1969. If we do not have an explanation, we should not proceed with the Second Reading of the Bill.
The Secretary of State for Industry (Mr. Patrick Jenkin): Further to that point of order, Mr. Speaker. I am astonished that the right hon. Gentleman, who knows something about these matters, should have allowed himself to be bamboozled by a journalist who simply did not know what he was writing about. The pre-1969 deficit was debated at length during the proceedings on the British Telecommunications Act 1981. British Telecom has a statutory obligation to make annual payments to liquidate the pre-1969 deficit, which arose because the employees were originally civil servants and the pension scheme was non-funded. The Bill expressly provides for the transfer of those obligations to the new company. Mr. Gareth David simply did not attempt to do his homework. He does not know what he is writing about. The right hon. Gentleman has fallen flat on his face.

Orders of the Day

  Telecommunications Bill
  Order for Second Reading read.
  Mr. Doug Hoyle: Further to that point of order, Mr. Speaker. In view of the Secretary of State's unsatisfactory reply and his lack of concern for the employees and their pensions, is it not even more obvious that we should not proceed with the Bill today?
  Mr. Ian Mikardo: Further to that point of order, Mr. Speaker. Irrespective of what the Secretary of State may think about journalists of The Times, I draw attention to the fifth report of the Industry and Trade Select Committee for the Session 1981–82 which was published seven months before The Times report. The Committee expressed considerable anxiety about pensions. That unanimous report said:
  "Following the separation of the Post Office from British Telecommunications, each Corporation has established its own pension fund … the … fund has an actuarial deficiency that is being amortised over the period to 1992 by a contribution equal to 3·5 per cent. of earnings. The Corporation has the responsibility for making good deficiencies in the pension fund, and this liability is not, in law, underwritten by the Government.
  We note the uncertain nature of the Corporation's liability".
  Is it not clear that, notwithstanding what the Minister said, there is an area of doubt—I put it no more strongly than that—that ought to be resolved?
  Mr. Speaker: That is not a matter for me. It is clear that I cannot rule in that matter.
  4.14 pm
  The Secretary of State for Industry (Mr. Patrick Jenkin): We are getting a taste of debates to come. I assure the hon. Member for Bethnal Green and Bow (Mr. Mikardo) that I shall deal with pensions during my speech.
  I beg to move, That the Bill be now read a Second time.
  The Bill will empower the Government to convert British Telecom from a nationalised corporation into a Companies Act company with shares like any other company. It will allow members of the general public to buy shares. That will start after the next general election. When half the shares have been sold, BT will no longer be a nationalised industry; it will become a private sector company.
  I can understand that the Bill may be controversial in the House, but, as there are fewer than one dozen Labour Members present, one wonders how serious their opposition will be. It is clear that the Bill will be widely welcomed by millions of people. They know that competitive free enterprise is a far better system than State monopoly. The Bill also stands as a clear testimony to the Conservative Party's determination to roll back the frontiers of the State and to give people a real stake in the economy. That is what I call real public ownership.
  The Bill follows logically the measures that we are already taking to bring competition into telecommunications. Before the Conservative Government came to power, apart from the city of Kingston upon Hull, BT was the sole supplier of telephone services and most telephone equipment. That monopoly was bad not only for customers, but for BT. Any growing business, such as BT, needs the discipline of the market place to meet the needs
  32
  of its customers effectively. It needs the right to raise its own finance, the freedom to invest and the freedom to manage the business.
  The British Telecommunications Act 1981 was a first step towards greater competition. I have already licensed Mercury Communications Limited to compete with BT. It is the first such competitive network in Europe. Moreover, an ever-widening range of equipment is being opened up to competition. The market is increasingly free to sell what are called value added services over the BT and Mercury networks. We also hope to have competitive national radio telephone networks soon.
  Full credit is due to Sir George Jefferson, the chairman of BT, to the board and to the staff of BT for the way in which they have begun to transfrom what was until recently a Government Department into a commercially oriented business. I hope that we shall hear from the Opposition whether they favour the opening up of telecommunications to competition and the widening of consumer choice or whether they prefer State monopoly. I hope that the right hon. Member for Salford, West (Mr. Orme) will come clean on that.
  We prefer competition. So long as BT is nationalised, and therefore subject to the web of controls that stifle its commercial freedom, and can obtain capital for investment only from the customer through higher charges or from the taxpayer, it will face growing competition with its hands tied. I want BT to become a major force in the world telecommunications market, such as American Telephones and Telegraph. For that to happen, BT needs the financial freedom that a nationalised industry does not and can never have. As a nationalised industry, BT does not have direct access to financial markets. Its borrowing is controlled by the Government and it counts against the PSBR.
  That was true under the Labour Government, so much so that they cut back the amount of investment year by year in real terms because they could not afford to fund it from the PSBR. Successive Governments have faced an awkward choice. If they want to hold prices down, investment needs are starved. Under the Labour Government, between 1975 and 1979, investment declined in real terms year by year because they recognised that they could not fund it out of the PSBR.
  If, like the present Government, one attaches much higher importance to investment in growing industries, such as BT, higher customer charges are inevitable. The only alternative, which has been rejected by both main parties and by the Social Democrats when they were members of the Labour Party, would have been vastly greater borrowing from the national loans fund and consequent charge on the PSBR.
  Under the present Government, BT's network is being modernised. New digital switching is being installed and optical fibres are now being used, but the customer has had to dig deeper and deeper into his pocket to pay for that modernisation. That does not have to be so. It is a self-imposed Hobson's Choice, dictated by the brute facts of nationalisation.
  When, after the next election, the majority of shares in British Telecom are held by the public, BT will be able to look to the market for most of its external financing. That will give the management greater flexibility and put less pressure on customers and taxpayers. It will subject BT to proper market disciplines and allow it to respond to

  33
  the needs of customers as they change, just like the privately-owned telephone companies in the United States.
  Mr. Nigel Forman: I support the broad arguments for this form of privatisation, but can my right hon. Friend assure us that one of the unintended consequences of the Bill will not be that marginal services will have to attract marginal prices to achieve a realistic level of pricing?
  Mr. Jenkin: I shall come to that question. I know that it has caused some anxiety. There is no reason why BT, given the freedom, should not be able to respond to the market, just as privately owned telephone companies do in the United States. British Telecom, the unions, the Select Committee and the NEDC have all asked that BT should have access to the financial markets. The Bill opens the way.
  Could BT get access to the capital markets without a change in ownership? That case may be made by the Opposition, and the Government looked carefully at what the press christened the Buzby bond—a performance-related bond, with returns to bond holders depending on the organisation's results.
  Such a bond would not begin to meet BT's needs. The maximum sum that was ever envisaged to be raised by the Buzby bond was about £150 million in the first year. Set against a current investment programme running at nearly £1½ billion a year and growing, it can be seen that the bond would never have solved the problem. The only way is to free BT from Treasury control and allow it to raise capital on the market, as do other major businesses. That is what BT has welcomed. It is, therefore, hardly surprising that after I made my statement on 19 July British Telecom said:
  "The Board can say … that, given the right conditions, it would welcome freedom from what the Secretary of State has described as the web of Government control and interference."
  Those who want to see more competition in telecommunications and to see BT become a major world force in information technology, competing in the rapidly-growing market for telecommunications, must accept that the Bill offers the only way forward. Wanting those things and voting against the Bill would be dotty.
  Of course, we must discuss the details of the Bill, but let us do so in the recognition that, for the customer, competition is better than monopoly, that if BT is to be free to compete it must be free to raise capital, and that the only way in which that can be done is to convert BT into a private sector company. That is what the Bill does.
  Mr. John Browne: My right hon. Friend knows that I fully support the Bill and much admire his general thrust, particularly with regard to British Telecom. He mentioned monopoly and competition as opposed to mere privatisation. Companies in the telephone business are having to get approval for their equipment and are being asked to pay between £20,000 and £30,000 to get each item approved. Approvals for four telephones will cost four times that amount. That is cash up front, with no guarantee that the items will be approved. Does my right hon. Friend believe that such guidelines are an encouragement to private enterprise and competition?
  Mr. Jenkin: I am sure that my hon. Friend agrees that in the requirement of approvals—this happens under many pieces of legislation—it is right that the fees should cover the cost. I know that there have been difficulties as we
  34
  have moved out of an era when all approvals were given by BT into an era when approvals are given by independent bodies—initially by the Department and now by the British Approvals Board for Telecommunications. It has resulted in delays and difficulties, but my hon. Friend the Under-Secretary has devoted considerable attention to speeding up the process and I hope that we can make it more economical.
  We have been accused by some of going breathtakingly fast in the process of liberalisation. It is sometimes difficult to be accused of going too slow.
  The Bill is, perhaps, not as formidable as it looks. Of the 149 pages, 25 comprise schedule 2, which is a re-enactment and updating of the Telegraph Acts. Another 50 pages comprise schedule 4, embodying minor and consequential amendments. Clauses 66 to 75 amend the Wireless Telegraphy Acts to strengthen the enforcement provisions for dealing with radio interference and the illegal use of radio equipment.
  The heart of the Bill is in the first 65 clauses and schedule 1. Rather than take the House through each clause, which would weary hon. Members unbelievably, I shall explain the Bill's main provisions. Parts I to III provide for the appointment of an independent Director General of Telecommunications and for the creation of an Office of Telecommunications. They also establish the new regulatory framework, entrust the licensing of telecommunications operators to the Secretary of State, set out the functions and duties of the Secretary of State and the Director General and provide for the regulation of telecommunications operators.
  Mrs. Elaine Kellett-Bowman: Clause 3(1) (a) refers to the need to secure
  "such telecommunication services as satisfy all reasonable demands for them including, in particular, public call box services, emergency services and services in rural areas".
  However, the catch appears in paragraph (b), which refers to the need
  "to achieve a return on capital employed sufficient to enable them to finance the supply of such services".
  That could make the provision of such services in rural areas jolly expensive.
  Mr. Jenkin: In my speech, as in the process of liberalisation, I am not going fast enough for my hon. Friend. I shall be coming to the point that she has raised.
  The new regulatory system established by the Bill is a major reform. It is a recognition of what has been happening in the market. Until now, BT has had what has been known as exclusive privilege: only BT has had the right to run telecommunications systems and anyone else had to be licensed. In most cases BT was the licensing authority.
  With competition, that has become entirely inapproriate. BT has, in effect, been licensing its own competitors. The 1981 Act made a number of changes to permit wider competition, but the Bill finally removes from BT both the exclusive privilege and the power to license others. The power will be vested in the Secretary of State, and BT will need a licence, just like any other telecommunications operator.
  Licences will contain conditions about how systems are to be run and what services are to be provided. It will be the duty of the Director General to monitor how licensees implement the conditions.
  Whatever view may be taken about the proposals for privatisation—I understand the controversy surrounding

  35
  that—the new licensing system should command general support. It cannot be right for any commercial enterprise to have the power to strangle its competitors.
  Clause 3 sets out the guidelines that require both the Secretary of State and the Director General to have regard to
  "the need to secure … the provision throughout the United Kingdom of such telecommunication services as satisfy all reasonable demands … including, in particular, public call box services, emergency services and services in rural areas".
  When I issue a licence to BT under the Bill, it will require BT to provide these services, as at present, where it is practicable to do so.
  Last July, when I announced our proposals, I gave the House a firm assurance that anyone who can obtain a telephone under the present arrangements will be able to do so under the new arrangements. I reaffirm that today.
  In its press notice of 19 November, BT itself states that it has
  "accepted a continuing responsibility for services to the community including those in rural and outlying areas."
  I am sure that the whole House will welcome that. It is, in fact, a logical assurance in commercial terms. The value of a telephone network is commensurate with the number of people connected to it. If BT were to neglect areas already provided for or opportunities that may become available in the future, that would devalue its own network.
  I have gained the impression that the argument about availability of the network has now been resolved and that, as my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) suggested, the controversy has turned to the question of pricing. I remind the House that there are already differences between one customer and another in connection charges for new subscribers. Connection now costs more in remote rural areas than it does in the towns. The Director General will ensure, however, that the licence conditions about avoiding undue discrimination in connection charges are observed. That will be covered by the licence, and the duty to enforce it is laid down in the Bill.
  On the cost of calls, at present BT does not account separately for services to rural areas. However, once the initial installation has been carried out, there is no evidence that the cost of telephone services is higher in rural areas than in towns and cities. Indeed, some operations are significantly cheaper away from densely populated areas. It is cheaper to install wires overhead than underground. Exchange equipment is normally simpler, land and buildings are usually cheaper and labour costs are often lower. These factors go a long way to balance the less intensive use of the rural network and should of themselves provide substantial reassurance for those in rural areas who have expressed anxiety about the future cost of these services.
  Sir Peter Mills: I am grateful for what my right hon. Friend has said, but we need more reassurance in view of what has happened in other spheres. For instance, the big petrol companies have certainly withdrawn from rural areas, making petrol far more costly. There is great anxiety in rural areas that the same will happen again.
  Mr. Jenkin: I understand that fear. That is why I have dealt with this at some length. However, I counsel my hon. Friend not to draw parallels between such very different businesses.
  Mr. John Golding rose— —
  Mr. Jenkin: So far as one can ascertain, as BT does not at present keep separate accounts, once the network is there the cost of calls should be no greater.
  Mr. Anthony Nelson: Many of us will be reassured by what my right hon. Friend has said. We hope that the changes will not lead to substantial differentials in cost per unit for rural areas. If my right hon. Friend's hopes are not realised, however, will there not be implications for the extent to which we have to provide assistance through the social security system for those unable to afford telephones and those worst affected by the charges?
  Mr. Jenkin: That opens much wider questions. I am grateful for what has been said about our intentions, which are absolutely clear. I should reassure my hon. Friends that the licence will spell out the obligations very clearly and will include a provision about avoiding undue discrimination in pricing.
  Mr. Golding: Will the right hon. Gentleman give way?
  Mr. Jenkin: If the hon. Gentleman will forgive me, I will first finish replying to my hon. Friend the Member for Chichester (Mr. Nelson).
  The Director General will have the power to amend licences. I shall come to the details of this later. If the licence does not bring about what is clearly the intention of Parliament, there is power to amend the licences to ensure that the powers are effective.
  Mr. Golding: In the legislation and advice "reasonable charges" are enumerated. Does the Secretary of State think it reasonable to charge people in rural areas the full cost of installing telephones in outlying dwellings?
  Mr. Jenkin: As the hon. Gentleman knows, because he knows a great deal more about these matters than I do, differences already apply in rural areas. If the hon. Gentleman does not agree, he should go and find out. Differences exist, and they are intended to reflect some difference in costs.
  Several Hon. Members rose——
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am confused. Is the right hon. Gentleman giving way?
  Mr. Jenkin: I was thinking, Mr. Deputy Speaker, that I had already given way enough. I should like to continue my speech. Hon. Members will no doubt catch your eye later. I wish to move on to the subject of emergency services.
  Mr. Stanley Orme: The right hon. Gentleman has asked for evidence. There is evidence in the constituency of my hon. Friend the Member for Whitehaven (Dr. Cunningham), where a farmer recently received an estimate of £5,000 for the installation of a telephone. That is the price quoted since the 1981 Act. What has the Secretary of State to say about that?
  Mr. Jenkin: The short answer is that there are differentials. I have no means of knowing whether the

  37
  price quoted in that instance was reasonable. That is being done, although BT is still a wholly owned State monopoly and a nationalised industry.
  Mr. Orme: It has happened since the Government "liberalised" it.
  Mr. Jenkin: It has nothing to do with being liberalised. Presumably, that is the price that BT quoted. However, I offer the right hon. Gentleman this consolation. Under the existing legislation, POUNC—the Post Office Users National Council—has done a very good job in consumer protection, but it has no teeth. It can do nothing to affect the way in which BT carries out its obligations. Under the Bill, however, consumers will have a contract. At present they have no contract, so they cannot sue in contract and they often cannot sue in tort. Moreover, the Director General will have powers to ensure that the terms of the licence are properly observed. Protection for the consumer will therefore be much stronger than it is at present.
  Mr. Bob Cryer: Will the right hon. Gentleman give way?
  Mr. Jenkin: No. I must get on.
  Clause 3 also deals with emergency services. The 999 service is essential, and I cannot imagine it not being provided. It, too, will be safeguarded by the BT licence. The approximately 77,000 kiosks in the present network are also important as they provide access 24 hours a day for the public, especially those who cannot afford a phone or are away from home. Even more important, the kiosks provide access to the emergency services. Indeed, the majority of 999 calls are made from coin-box phones. Although they account for only 3 per cent. of BT's costs, the kiosks and emergency services are important features of the network. Under clause 3, the licence will require BT to provide these services. We intend that the existing arrangements, whereby BT and POUNC agree guidelines about the provision of kiosks, will continue, although POUNC's function will be transferred to the Director General.
  Clause 3 also recognises the need for operators to earn a proper return on capital, sufficient to finance the supply of rural and other services and the development and use of new techniques. The Bill ensures that BT will have the money to do that and safeguards BT's remarkable research and development effort. In this context, one thinks particularly of the establishment at Martlesham.
  Clause 3 also provides for the promotion of competition and consumer interests. As I have said, consumers at present have no contractual rights and they often cannot sue in tort. We wish to change that. They will therefore have enforceable contracts. The Director General will exercise the role of POUNC, but with real powers—to ensure that licence conditions are properly observed, to intervene if they are not, to amend licences, to encourage codes of conduct, and so on.
  Mr. Cryer: The right hon. Gentleman has laid great emphasis on licences. Is it true that the licences cannot change the primary legislation and that that legislation relates to the provision of services "as far as practicable"? Do not the courts interpret "as far as practicable" as meaning "so far as it is possible within cost", which, in turn, means that rural services and so on will be prejudiced?
  Mr. Jenkin: The phrase "so far as practicable" comes from existing legislation and represents no change.
  As well as having the advantage of growing competition, consumers will have substantially increased rights and protection.
  I come now to the Office of Telecommunications, which will be known as Oftel. A new regulatory system is necessary, because, for practical reasons, telecommunications cannot be a free for all. There must be a framework. BT's exclusive privilege and monopoly role has done that in the past. The regulatory system will do it in future.
  Along with the Bill we published one of the documents in our series "Ringing the Changes", which sets out in some detail the way we envisage that the regulatory system should operate. One of the most important factors that has coloured our approach is the inevitable market dominance of BT for many years ahead.
  Understandably, BT sees the regulatory system as primarly aimed at it, but Oftel will monitor and regulate all telecommunications operators, all of whom must have licences. Mercury, the Hull network and the Radio Phone network will be regulated in the same way. Oftel will also monitor licences granted to private systems and to the providers of the value-added network services. Although the Secretary of State will grant the licences in the first place, the Director General will be able to amend them. He will do that either by agreement with the licensee under clause 10 or, if the change is not agreed, he can make a reference to the Monopolies and Mergers Commission under clause 11. The decision of the MMC will take account of the public interest and of the criteria spelt out in clause 3.
  In its brief to hon. Members, which I have seen, BT has expressed anxieties about the comprehensive nature of the powers in the regulatory system, but I have been pressed by hon. Members from both sides of the House to make sure that the powers are effective.
  Mr. Orme: Hear, hear.
  Mr. Jenkin: The right hon. Gentleman now says "Hear, hear" when I voice BT's fears that the powers may be too effective. With respect, he cannot have it both ways. I have discussed these anxieties with BT, and I believe that I have gone quite a long way to reassure the board.
  We intend that BT shall have the maximum commercial freedom to operate in the market. We intend that the licensing and regulatory system shall, as it were, constitute a light rein and that there should be the minimum of interference with legitimate commercial decisions. BT contrasts that intention, which it accepts, with the powers set out in the Bill and what we have indicated will be in the licences.
  I understand BT's concern, but in the last resort the Government must ensure that the criteria set out in clause 3 are met, and the legislation must contain sufficient powers to ensure that this can be done.
  There is, of course, no presumption of guilt. For the ordinary citizen, statute and common law may represent an impenetrable mesh of legal duties and prohibitions, but, happily, most of us can get through our lives without any overt enforcement of those provisions against us. So it will be with this regulatory system. It provides a framework, states the duties and constraints and provides the powers

  39
  to see that they are observed. However, in practice the BT board will be free to conduct its affairs with a minimum of interference and control.
  In this respect, there is an absolutely cardinal point. The more competition there is, the less need there will be for regulation. However, as a dominant enterprise, BT must be subject to some constraint on the profits that it can earn. We envisage that the licence will establish a regime based on the concept of a maximum real rate of return on assets, with a sliding scale to ensure incentives to greater efficiency and enterprise. If in any year the maximum return is exceeded, there will be an obligation on BT to refund to customers, through their next bills, the major part of any excess profits that it may have earned.
  There are, of course, other methods of ensuring that a dominant role is not exploited in the market place, and the Government have commissioned Professor Steven Littlechild of the University of Birmingham to report on a possible alternative arrangement.
  Mr. David Penhaligon: Will the right hon. Gentleman give way?
  Mr. Jenkin: I must proceed. I have been on my feet for a long time. I hope that the hon. Gentleman will forgive me.
  Part IV of the Bill provides for the future privatisation of BT. I expect the regulatory system, including the Director General and Oftel, to be established soon after the Bill becomes law, but neither the transfer of the assets and obligations to the new company nor the issue of shares to the public will take place before the next general election. We are content that the public should decide whether or not this important step should be taken. I suspect that the flotation is at least 18 months ahead, but I have already asked BT to start the necessary preparations and I have appointed merchant bankers to advise me.
  Before the issue, we shall want BT plc to have a proper capital structure, and clauses 54 to 56 provide the necessary powers. Clause 58 is important. It will establish by statutory instrument the maximum proportion of shares which may be owned by the Secretary of State or his nominees. To allow the issue of more shares to the public, that limit may be reduced by a further order, but once reduced it may not be increased. In other words, if, after privatisation, a future Government should decide to reverse this process, they would have to come back to the House for the necessary legislative powers. Somehow, I do not think that will happen.
  We all remember the rows when the BBC's monopoly was broken by independent broadcasting in 1954. At the time, the Labour Party vowed that it would restore the monopoly, but by the time it got the chance to do so even it realised that it was absurd. So it will be with BT.
  Two scares about pensions and jobs have been worrying some BT staff. I am sorry that the right hon. Member for Salford, West lent his considerable voice to exaggerating those scares. I am in no doubt that there is a great deal more support among BT's staff for freeing BT from Treasury control and giving it commercial freedom than was evident on the so-called day of action by the POEU. Some of the threatening letters then sent to individual union members to persuade them to stop work were pretty disgraceful. Indeed, the extent of the misrepresentation by the POEU in its journal and leaflets is a measure of the
  40
  weakness of the case that it makes. However, as scares about pensions and jobs have been put about, the truth must be restated.
  I have already given a clear assurance that existing pension obligations will be fully honoured. The Bill clearly provides in clause 53(1) and paragraph 12(b) of schedule 5 for BT's pension obligations to be handed on to the successor company. Paragraph 12 states:
  "It is hereby declared for the avoidance of doubt that—(b) section 53 is effective to vest the rights and liabilities of British Telecommunications under any agreement or arrangement for the payment of pensions, allowances or gratuities in the successor company along with all other rights and liabilities of British Telecommunications".
  That is as plain as a pikestaff.
  Mr. Douglas Jay rose——
  Mr. Jenkin: Perhaps the right hon. Gentleman will allow me to develop the argument.
  Moreover, the trustees of the pension fund have the duty of providing pensions and holding pension contributions in trust. The benefits paid to existing pensioners are governed by the pension fund trust deed. Under rules established by this trust deed, BT's pensioners are entitled to periodic increases in their pensions in line with those enjoyed by most civil servants. The trust deed prohibits changes which would reduce the benefits of any person already entitled to the receipt of a pension. It would not therefore be open to the successor company, even if it wished, to reduce this entitlement.
  Mr. Jay: If this large pension liability is to be laid on the new organisation, will it not be less easy for it to raise all the private capital that the Minister has talked about?
  Mr. Jenkin: I have already made clear that one option open to the Government would be to use some part of the proceeds to fund either in whole or in part the pre-1969 liability that was laid upon BT because it was an unfunded liability. We have taken no decision on that. It is an option open to the Government. The right hon. Gentleman clearly sees the advantages.
  Existing employees are generally members of the pension scheme by virtue of their contracts of employment. As they retire, they benefit from the scheme's rules relating to its pensioners. Any change in those rules relating to employees retiring in future would require the agreement of all the trustees, including those nominated by the trade unions. All trustees are required by law to act in the best interests of the trust beneficiaries.
  While no one can ever give unconditional guarantees about the future, any more than if BT were to remain a nationalised industry, there is substantial protection for BT's pensioners and its employees under the trust arrangements. I wish to emphasise that there is nothing in the Bill to change that protection when BT is turned into a public limited company. I hope that the unions, which have done so much to propagate the scare about pensioners, will give as much publicity to my statements as they have given to their scare stories.
  On jobs, there is ample scope for increased efficiency in BT, as BT's management recognised when it called last year for a 25 per cent. increase in productivity. I have no doubt that if BT stayed a nationalised industry, with all the constraints on finance and commercial freedom, higher productivity and new technology would steadily reduce the number of staff as fewer peple would be required to man the new equipment.

  41
  With the new commercial freedom that the Bill provides and with the new opportunities that financial freedom confers, there is no reason why employment opportunities in telecommunications should not expand in Britain as they have been expanding, for instance, in the United States. If it is really jobs that worry the unions, they should embrace the Bill. This measure is the best guarantee of expanding job opportunities that they have.
  Mr. John McWilliam rose—
  Mr. Jenkin: I read the hon. Gentleman's speech in the debate on the Gracious Speech. I have asked questions about the document from which he quoted at such length. That document does not represent the policy of the Government or of BT. It was a document that had been circulated, but does not represent the policy. I hope that the hon. Gentleman recognises that. I give way to him.
  Mr. McWilliam: I am grateful to the Minister for making that point. I am still puzzled by a figure that he gave at the Conservative conference—employment being 25 per cent. lower than the existing employment figure.
  Mr. Jenkin: The hon. Gentleman should recognise that when I talked about 20 million subscribers and some 200,000 employees, those were precisely what they sound like—round figures. There are rather less than 20 million subscribers and rather more than 200,000 employees. The hon. Gentleman knows that, on large public platforms, one does not give figures to the nearest digit. It may be that if BT remained nationalised jobs would have decreased, as has happened in virtually every other nationalised industry. But with the freedom to compete, expand and diversify, which this Bill provides, there is no reason why there should be a reduction in jobs. BT could be an expanding, advanced technology company, once it is given freedom.
  The case for the Bill is overwhelming. The new technology now available means that State monopoly is not only unnecessary but that it has become a significant brake on progress. At a time when most of the world is in recession and when new job opportunities are hard to identify, it cannot be right to keep this growing industry in the straitjacket of nationalisation. The public issues of Cable and Wireless and of Standard Telephones and Cables showed that the market is ready to finance the fast expanding world of telecommunications. So long as BT remains in the public sector, that finance cannot be tapped, that expansion cannot take place and those jobs cannot be provided.
  The Bill will give BT the freedom to compete, the freedom to diversify and the freedom to expand which, as a nationalised industry, it could never have.
  I ask the House to support the Bill in the Lobby tonight.
  4.55 pm
  Mr. Stanley Orme: The Bill is yet another of the Government's privatisation measures, and it is by far the largest and most far-reaching such measure ever proposed. The Government have no electoral mandate for the Bill, which is irrelevant to the problems facing British industry. If implemented, it will have a devastating effect upon one of our most modern industries and services.
  The Secretary of State spoke about the Bill commanding widespread support. There has been more criticism of it in most of the financial press and other
  42
  newspapers of his political persuasion than he cares to admit. BT has net assets in the region of £15 billion to £20 billion, which are all publicly owned. BT receives no grant or subsidy from the Government. It has been profitable for the last seven years. All its loans from the State are at market rates of interest.
  BT is not a burden on the taxpayer. On the contrary, profits earned by the corporation are reinvested in the business unless the Government insist on special payments to the Treasury. The loan facilities and borrowing requirements of BT should be extended in order to allow for the major development that will take place in information technology and telecommunications. It is absurd that the French telecommunications authority, through a financing subsidiary, is currently able to raise money in the London market while the United Kingdom's telecommunications corporation cannot. The French authority is a Government-owned body.
  The Secretary of State has referred to the PSBR. What is needed is a redefinition of the PSBR and the use of flexible financing instruments which would give BT, as currently structured, the flexibility it needs. There is no need for privatisation in any form.
  The Bill will create chaos and uncertainty where planning and expansion should be the order of the day. It will take from the British people a national asset that they have owned and to which they have contributed. We shall now see 51 per cent. of this national asset transferred to a minority of shareholders whose only criterion will be profit, not giving a national service.
  I wish to deal with some of the achievements of BT. I am aware of past criticisms and of the need for improvement. However, a spectacular advance has been made in previous years which shows BT and its work people in a very good light.
  For domestic consumers, the telephone has become not just a useful addition to the home but an essential utility, like electricity. However, the United Kingdom still has a considerable way to go before every household has a telephone. This should be one of the major priorities of BT. Yet, in the current depression, people are having their telephones taken out because they cannot afford to keep them.
  What will be the position under privatisation? The Secretary of State talked in round millions, but it is worth noting that in 1971 there were over 9 million subscribers, and that figure doubled to 18½ million by 1981. That impressive record was achieved by an addition of only 14,000 employees to the work force. There has been a willingness to work with change and a minimum of disruption in an industry of changing technology. That has been accomplished within a settled policy of providing telecommunications services for all with the benefit going not just to selected customers.
  British Telecom has had to find at least 85 per cent. of its total annual capital needs from its own resources. It needs an annual investment programme of £2 billion at current prices if it is to catch up with the legacy of past under-investment and meet the demands for new information technology-based services. I prefer that the money that comes from consumers is reinvested rather than, as the Secretary of State will make possible, goes into shareholders' hands.
  Mr. Patrick Jenkin: The right hon. Gentleman has missed the point. He talked about British Telecom having

  43
  the money from its own resources. Where does he think that British Telecom gets that? Ninety per cent. of that investment goes directly on to customers' charges. What other business, growing at that rate, would finance its investment in that absurd way?
  Mr. Orme: That is why we are saying that the limit should be lifted and extended. The PSBR should be altered and then British Telecom could borrow in the market.
  Mr. John Garrett: The Secretary of State is the one who does not understand it.
  Mr. Orme: Last year, British Telecom made a record profit, and the Secretary of State knows that, apart from the reduction in prices, that took place, every penny went into investment.
  I want to look at British Telecom's international record. There has been a great deal of criticism of British Telecom. If we look at the provision of services to the business community—taking 100 as a figure—the only countries cheaper than the United Kingdom are Japan, the United States of America—New York only—and the Netherlands. Italy, West Germany and France are all much dearer. Taking the same figure of 100, the Netherlands is cheaper for the private consumer than the United Kingdom. West Germany, France, Italy, Japan and the United States of America—New York—are dearer. That illustrates the service that British Telecom provides at present.
  Channel 4 was implemented in record time with the assistance of British Telecom. We all remember the long delays in the introduction of commercial television and Channel 2. British Telecom has made a magnificent effort in a few months.
  Every United Kingdom telephone consumer can dial abroad direct to 121 countries—440 million calls which represent 93 per cent. of the world's telephones. That is the type of service that has and is being developed by British Telecom under public ownership and democratic control.
  We believe that the proposals of the Secretary of State and the Government will be unhelpful and destructive. I shall deal with the Government's approach to the crucial issue of essential services. The Government have now admitted that British Telecom's competitors will ignore British Telecom's existing obligations with regard to rural and emergency services, telephone kiosks, and national security and defence. While the Bill places an obligation on British Telecom to provide those services, we are not told at what cost, quality and standard of provision. It has already been made clear that the Government will not provide any direct subsidy for that type of service as happens with British Rail and its loss-making services.
  Compare that with project Mercury, which has identified the most profitable parts of British Telecom's network and will concentrate Mercury services around them. The linking of 26 major cities, between which the most profitable parts of British Telecom's services operate because they are intensively used by business at premium rates, has nothing to do with providing a national service. Mercury will take the cream and the essential services will be left to British Telecom. In our opinion, that will be at an ever-increasing cost. We shall finish up with an ever more costly two-tier service.
  44
  Hon. Members on both sides of the House have every right to be worried about the provision and cost of rural services. The competition that the Secretary of State talked about is not competition to provide telephone kiosks in the North of Scotland; it is competition for the most lucrative part of the service, and I cannot see any alternative to the consumer paying for that.
  Mr. Cryer: My right hon. Friend will have noted that the primary legislation includes the qualifying words that services for rural areas and telephone kiosks shall be provided only so far as practicable. The Secretary of State admits that that is in the existing legislation because it places a charge on the service. If the service is too expensive in British Telecom's view, it will not be provided, and the legislation provides the excuse.
  Mr. Orme: I accept that. The telecommunications body that will be set up will come under pressure to jettison those services. No doubt there will need to be consultations, but the pressure will be to jettison uneconomic services.
  Mr. Donald Stewart: Is the right hon. Gentleman aware that in my constituency, which includes some of the most remote communities in the British Isles, the telephone service is often literally a matter of life and death? Nobody at present, whatever his political persuasion, believes that that social obligation will be maintained if the Bill goes through.
  Mr. Orme: I accept what the right hon. Gentleman said. I raised with the Secretary of State the matter of the Brown family of Cold Fell, Cumbria. That arose since liberalisation and the British Telecommunications Act 1981. My hon. Friend the Member for Whitehaven (Dr. Cunningham) said that the figure in question was an estimate and that the farmer could not afford to pay.
  Mr. Roger Stott: It is some time since I climbed a telegraph pole, and I am one of the few hon. Members who has done that. As I understand it, British Telecom has calculated that any work done in excess of 100 hours will be charged at the appropriate level. I spent three days at the top of a Pennine fell in the snow connecting a farmer's telephone at lambing time. If these proposals are enacted, that farmer would have to pay British Telecom a great deal to be connected. Before he was charged a nominal fee for connection to the telecommunications system in such circumstances.
  Mr. Orme: I take my hon. Friend's point. He speaks from personal experience in these matters.
  Another major provision in the Bill sets up the Office of Telecommunications, which will be known in the future as Oftel. This is a major development. This body will have far-reaching powers.
  The Government's double standards are made quite clear. BT is to be freed from existing Government controls simply for them to be reimposed under another name with even greater force. Government assurances that a privatised BT will be set free from control and political interference are deliberately misleading. Not only BT, but the Secretary of State for Industry, the Monopolies and Mergers Commission and the Office of Fair Trading will come under the direction of Oftel. This type of interference and control could have a major effect upon the

  45
  future of BT to the advantage of its competitors, because obviously this straitjacket will not apply on the same level to Mercury.
  It is interesting to note that in paragraph 10 of the Government's publication "Ringing the Changes", it is recognised that the introduction of private capital and increased commercial influence on BT will not be sufficient to ensure that

  "(a) BT continues to provide services such as those to remote and rural areas, emergency services and telephone kiosks;

  (b) BT continues to provide the systems and services necessary for national security."

  Therefore, powers have to be taken, if BT does not comply, to force it if necessary. Once again there is no financial support to maintain these crucial services. They will have to be paid for by the consumer and after the shareholder has taken his share.
  As a nationalised corporation, BT has a statutory obligation to maintain its excellent research and development facilities. This obligation disappears under the Bill. The potential loss of BT orders in its research and development facilities could seriously damage British telecommunications manufacturers and could lead to more jobs being lost.
  Mr. Patrick Jenkin: The right hon. Gentleman must not mislead the House. We have provided specifically in clause 3(1) (b) the need for there to be a sufficient return on capital to finance the supply of services and the development and use of new techniques. I drew specific attention to it, and I have told the staff at Martlesham that we regard Martlesham's continuation as the research and development arm of BT as being of the highest importance.
  Mr. Orme: That is not written into the Bill, and the Secretary of State's words do not carry the weight of legislation. The holder of Secretary of State's office can change. At the moment, there is a statutory obligation. That is now being removed. The Secretary of State has not met that point.
  Government policy will cut back BT in three key areas—in the network, in the provision of services and in the provision of apparatus and equipment. If such a reduction takes place, it can only mean that jobs as well as the service will go.
  BT has 235,000 skilled and dedicated employees and an excellent industrial relations record. Privatisation will alter dramatically already agreed arrangements. The Bill excludes the very important conditions contained in schedule 1 of the British Telecommunications Act 1981 which were intended to protect the staff. There are crucial omissions from the Bill. There is no requirement to establish negotiating arrangements with the staff or to come to agreements on conditions of employment, arbitration, training, safety, health and welfare. Alongside this, the staff are already aware of an internal senior management document forecasting the possibility of 45,000 redundancies.
  The pensions position has still not been clarified by the Secretary of State. The right hon. Gentleman may make an order so that the existing pension scheme is carried over to the new company. But what happens after that? What about the future? What about the pre-1969 deficit? The Secretary of State has been very categorical today. We want to see that spelt out—[Interruption.] The right hon. Gentleman says that some of the money raised may be
  46
  used. In other words, no decisions have been taken. It could go to shareholders. It could go to costs. It could go to the Government. Means could be found by other action to provide this money. The fact remains that the money has to be provided. Employees are also worrying that the provision does not include present employees and their future service. If BT is privatised, it will reflect the values, including the pension arrangements, of the private sector.
  Clause 38 is a violently anti-trade union provision. The Secretary of State did not refer to it, but I have a specific question about it to which we want an answer before the Bill goes into Committee.
  Clause 38 provides:
  "(1) A person engaged in the running of a public telecommunication system who otherwise than in the course of his duty—

  (a) intentionally prevents, delays or interrupts the transmission or reception of a message sent by means of that system; or

  (b) intentionally modifies or interferes with the contents of a message so sent,

  shall be guilty of an offence."
  Does that affect the right to strike? If people strike, are they preventing, delaying, interrupting, modifying or interfering with the sending of a message? Will the Secretary of State give a categorical assurance that that provision does not affect the right to strike?
  The Minister for Industry and Information Technology (Mr. Kenneth Baker): I shall deal with that.
  Mr. Orme: I am glad to hear that, because there is great concern among the staff—all six unions, including the management unions—about this provision, which could be used against them. I have no doubt that others of my hon. Friends will have more to say about it.
  The "Buy British" policy of British Telecom is an integral part of its current role as a public corporation. However, if BT is privatised, no such constraints need apply. In fact, the Secretary of State said this afternoon that there could be open competition, that equipment could be brought anywhere and that it need not necessarily be British equipment. Currently, more than 95 per cent. of BT"s equipment comes from United Kingdom based companies. Most of the 70,000 jobs in British telecommunications manufacturing industry depend upon BT orders. This is sensible and essential if the United Kingdom telecommunications manufacturing industry is to be provided with a means of fighting international competition.
  We are aware that large multinational companies based outside the United Kingdom are boasting openly that the newly liberalised United Kingdom market is one of their main targets for new business. Some of the most vociferous supporters of liberalisation—some of them in this House—and privatisation are importers and importers' agents, rather than British manufacturers. As the Secretary of State is aware, there has been a dramatic decline of jobs in manufacturing industry. It would be disastrous in a technology-based industry if open competition were to give these jobs to overseas manufacturers. Imports are steadily increasing, and in 1980 the increase was about 45 per cent. in general technology.
  The public are entitled to know on what basis the massive flotation of shares will take place. We are possibly talking here of a share capital of £5 billion or £6 billion. What criteria will be used? How can an assessment be made? We have already had the scandal of Amersham

  47
  International and the fiasco of Britoil—both created by this Government. I remind the Government that we are dealing with assets at present owned by 55 million people. There is great public concern about the Government proposals. "Ringing the Changes" states that privatisation will
  "give the man and woman in the street a stake in owning an important national asset".
  What nonsense. Privatisation will put profits into the hands of financiers, put controls into the hand of this Government's friends in the City, and take from the British people what they already own.
  Consumer rights will be phased out and replaced by a bureaucratic alternative. The Government are simply hoping to make money in the short term, through a sell-off of State assets, and at the same time will reassign the care of the national telecommunications network to private companies that are more concerned with making deals with big companies than with meeting the needs of domestic subscribers. They are jeopardising a vital national utility.
  After privatisation, scrutiny by Parliament over a vital national service will also cease. Privatisation will mean the Government giving away the means of effective control over, for example, personal bank accounts, credit ratings, and other areas which we need to protect and which can be protected through legislation.
  Labour will have none of that. "Labour's Programme 1982", carried at our party conference this year by an overwhelming majority, states clearly:
  "We will thus return all industrial assets sold off by the Tories into public ownership at the earliest opportunity. We will restore the public monopoly in the field of post and telecommunications and return Project Mercury to British Telecom".
  That is our policy and that is what a future Labour Government will carry out without equivocation. We promise the Government a long, hard fight on this Bill, and as the issue will be finally decided at a general election, we look to the good sense of the British people to see that this destructive action is never carried out.
  5.23 pm
  Mr. Barry Henderson: I listened with care to the right hon. Member for Salford, West (Mr. Orme), but he was not on his best form today. There were times when his brief was shot out from under him and he staggered from one fallen hurdle to another.
  The right hon. Gentleman spoke about the employees of British Telecom. We had a useful and interesting debate on this issue during the British Telecommunications Bill. If I recall correctly, some of his hon. Friends got into difficulties on that occasion when, in an effort to avoid telephone tapping, they proposed horrendous penalties on British Telecom employees who intercepted calls. Some of the right hon. Gentleman's other hon. Friends pointed out to the Committee that British Telecom employees often, and quite properly, could intercept calls in the course of their duties and that it would be wrong to impose criminal sanctions on them. Thus the subject was substantially debated during the Committee stage of the previous legislation, and the Bill is very much a logical extension of the modest measures of liberalisation in what is now the British Telecommunications Act 1981.
  That legislation has been immensely beneficial to all customers, both large and small, but as yet we have not seen the widespread benefits that can and will flow from
  48
  the liberalisation of private products and services. In fact, the most remarkable advances have come from the notable improvements in British Telecom's own performance since that measure came into law. I was glad to hear my right hon. Friend pay credit to Sir George Jefferson and the nearly quarter of a million staff who work in British Telecom, who have taken a positive view of their future and improved BT's performance, in many ways out of all recognition from what it was before.
  I have evidence of that improvement in two respects. Last week saw the conference at Coventry of the Telecommunications Managers Association, at which my hon. Friend the Under-Secretary of State spoke eloquently and relevantly of progress in telecommunications. The members of that association provide a substantial proportion of the total revenue of British Telecom. I heard figures ranging from one-quarter to one-half of the BT revenue coming from the few hundred members of that association. Clearly, those men, who work every day in the business of telecommunications, were impressed by the substantial improvement in BT's performance. The company has provided much better customer satisfaction than ever happened before what we might call BT 1.
  When I was first elected to the House, people in my constituency had been waiting for up to 18 months for telephones. Hundreds of people were on waiting lists. Today, hardly anyone in my constituency is waiting for a telephone.
  Mr. Golding: Perhaps the hon. Gentleman should bear in mind that when he was elected there had just been a Government under whom they could afford to have telephones. Today, they cannot afford them.
  Mr. Henderson: The hon. Gentleman has got it the wrong way round. When I was elected, we had come to the end of a period of Labour Government during which the amount of money put into British telecommunications was substantially less than the amount put into the system by this Government. The notable improvement in services has taken place since this Government came to office, and particularly since the British Telecommunications Act. I welcome that, and I congratulate British Telecom and its employees on the improvement.
  British Telecom is moving in the right direction now, but progress needs investment, and that costs money. Here we come to the heart of what will probably be the greatest controversy over the Bill. During the Committee stage of the last measure, the Committee was united in its concern at the strain on British Telecom's finances from the need to extend the network, to update the technical quality of lines and exchanges, and to provide new facilities and services. Despite the increased external financing limit and the loosening of traditional constraints on BT borrowing, which occurred under this Government, I believe that there is still an irreconcilable difference between the need to invest hundreds—perhaps thousands—of millions of pounds and the need to control the public sector borrowing requirement.
  There is also a difference of the same kind between the interests of BT and its customers about how much the current telephone accounts are to be loaded to pay for the investment programme which BT must undertake. That is why I believe that the introduction of private share capital is practical and essential if we are to see the kind of growth of the business of BT which I am sure all hon. Members want to see.

  49
  A British business man is said to have gone to North America not long ago, having heard about the better telephone service there. The morning after he arrived he rang the telephone company and said "I want a telephone immediately. It is very important. I want to get going with my business." He was a little put off when the man at the other end of the line said "I am sorry, but I cannot provide you with a telephone right away." The business man said "I thought that you were rather faster over here than we are at home." The reply was "I am sorry, but it is impossible to give you a telephone right away. Will this afternoon do?" That is the kind of service that I hope BT will start to provide as a regular feature.
  Until the provisions of the Bill are implemented—I wish that they could be implemented even more rapidly than the Government envisage—the vital new investment by BT will have to be paid for by the customers, or by borrowings, to be repaid with interest. In future, borrowings need be limited only by commercial prudence, and much of the capital can be invested by shareholders, who do not need to be repaid and require only to be provided with a dividend, probably at a lower rate than the interest on borrowings that might otherwise have accrued. In that way we can fuel BT's acceleration into the next century and provide new opportunities for the whole telecommunications industry, with immensely important employment consequences. The Bill will also ensure that the general public and industry in Britain can have a top quality service in an area that is fundamental for the growth of the British economy.
  Opponents of the Bill, with very few worthwhile arguments on their side, have tried to foster a fear that in some mysterious way people in rural areas will suffer from the provisions of the Bill. I am disappointed that the Convention of Scottish Local Authorities has accepted that kind of propaganda at its face value, so that its constituent local authorities have started to get anxious about it.
  Mr. Donald Stewart: Would the hon. Gentleman like to state his belief that rural services will be maintained as well as they are at present?
  Mr. Henderson: If I did not believe that, I should not support the Bill with such enthusiasm. That is exactly the sort of thing that was said last year about the British Telecommunications Bill. My rural constituents have benefited substantially from the services that they have had since that measure was enacted.
  The Minister, with great clarity, specified his attitude in providing licences to BT to operate its business. He also mentioned the mandatory provisions, which will ultimately be laid down in statute form, requiring him to provide licences to allow BT to operate and to provide those very services in the rural areas about which the right hon. Member for Western Isles (Mr. Stewart) and I are equally concerned. There are at present similar provisions laid upon BT, but there is no method as effective as those proposed in the Bill to ensure that BT sticks to its mandate. Not only is the rural customer likely to benefit from the Bill in many other ways; there is in particular much better provision for the future of telephone services in rural areas and much better protection for the rural customer than there has ever been before.
  I should not dream of talking about the various aspects of cabling—usually thought of in the television
  50
  context—that will be covered by Thursday's debate on the Hunt report, but paragraph 102, on page 34 of the Hunt report, says:
  "We were not therefore concerned with the cable technology to be used or with the provision of services on cable which would have no impact on broadcasting policy."
  From the definition of a telecommunications system given in the Bill, one could imagine that the licensing and monitoring system proposed in the Bill—particularly in the establishment of Oftel—could be equally relevant in coping with the non-broadcasting elements of cabling. Will the Minister say whether the Government have that in mind?
  In the age of optical fibres, non-technically minded people such as myself might be surprised to find that there is no mention of transmission by light in the definition of a telecommunications system in clause 4. Perhaps the Minister will shed an electromagnetic ray on the subject. Even if he does not, I shall support him in the Lobby tonight in advancing the cause of an extremely worthwhile Bill.
  5.36 pm
  Mr. Charles R. Morris: I preface my contribution by explaining to the House that I have spent a number of years employed in the inland telegraph service of the Post Office, and currently I am a Member sponsored by the Union of Communication Workers.
  I am delighted and privileged to follow the speech of the hon. Member for Fife, East (Mr. Henderson). I listened very carefully when he paid a well deserved compliment to the staff of British Telecommunications, but I thought that he went a little too far in attributing the progress and advance made in that industry to the passing of the British Telecommunications Act last year and to the introduction of Sir George Jefferson as chairman of British Telecommunications. The hon. Gentleman seems to be unaware of the progress that has been made in technology. That in itself has made a signal contribution to the increasing productivity of BT.
  The Bill has been represented in a variety of ways by many people. The Secretary of State described the Bill as offering new opportunities in British telecommunications. The Government have suggested that, by allowing the financial speculator access to the BT network, they will, in effect, be providing for greater commercial freedom. Having examined the Bill and listened to the Secretary of State, I cannot see how he can come to the conclusion that the Bill will be a great step forward in providing new opportunities or can be said to be a dash for freedom. Indeed, the Bill may very well prove to be a leap in the dark.
  I have heard hon. Members on each side of the House describe the Bill as a measure of privatisation. It is not It is a measure of piratisation. The Secretary of State and the Director General of Telecommunications will be the pirates in chief. Their role will be to plunder BT' s assets for the Government's financial supporters. The Bill heralds one more episode in the Government's policy of public asset stripping for the private speculator.
  In his statement to the House on 19 July the Secretary of State said that the Director General of Telecommunications' job would be to ensure fair competition and prices. How can we ensure that if the Bill creates a basically unfair situation? To illustrate the point,

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  what degree of fairness will exist between the new British Telecommunications company and Project Mercury when the former will be burdened with existing staff pension liabilities and providing essential but uneconomical rural services and telephone kiosks, while the latter will be exempt from any such responsibility? The Bill is unfair.
  What fairness is there in allowing Project Mercury access to the national telecommunications network and limited access to the international telecommunications network with no obligation to make a meaningful financial contribution to either? The Mercury consortium has restricted its system to 26 towns because, as my right hon. Friend the Member for Salford, West (Mr. Orme) said, they represent the most profitable trunk telecommunication lines in Britain. The Government have encouraged Mercury in a cream-skimming exercise. When Mercury is fully established, it will employ only a handful of administrators and executives. The maintenance of national and international telecommunication networks will remain the obligation of the British Telecommunications company.
  Mr. Cryer: Mercury will be making use of yet another public utility, because its cables will run along British Rail docks. That is the first time that a public transport industry has provided such a facility. Therefore, Mercury will yet again be making use of a vital national asset.
  Mr. Morris: I accept that. However, the real difficulty in the future development of Mercury is that it will be allowed full access to domestic telecommunication systems and limited access to international telecommunication systems. Inevitably, Mercury's first demand to a future Secretary of State will be for greater access to the international telecommunication network. That is where mercury will make the real money.
  There is even greater cause for concern in the Bill's impact on jobs in BT's equipment manufacturing industries. Hitherto, successive Governments have rightly put constraints on BT in relation to where it can purchase its services and equipment. United Kingdom based companies supply 95 per cent. of BT's equipment. Most of the 70,000 jobs in BT's equipment industries depend on BT's orders. A firm home market is vital for export success. However the privatisation of BT will inevitably mean a move to a world-wide sourcing system as pressure to maximise profits increases. For evidence of that one needs only to look at what happened after the so-called liberalisation of telephone equipment supply under the British Telecommunications Act 1981. Only two of the 96 telephone handsets from other than BT sources which were submitted for approval were made in Britain. The Bill will encourage that.
  Irrespective of the importance that we attribute to financial and employment considerations, the Bill will lead to the breach of a principle which, over the years, has characterised the British telecommunications service—availability for all.
  Everybody in Britain now has access to a telephone. However, given the pressure to maximise profits to maintain shareholders' dividends, how long will it be before a telephone is denied to those to whom it is a lifeline? I was rather surprised to hear the Secretary of State dismiss such people as the 2 per cent. or 3 per cent. of BT's account payers. The elderly living alone and the
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  disabled in rural areas are heavily dependent on telephones. As that delightfully entitled document "Ringing the Changes" says, they are the people in need who will be subject to the pressures of the market place.
  One fascinating objective has been advanced to justify the Bill. In the words of the Secretary of State, it will free BT from the existing web of Government controls. At present, BT is accountable to the Department of Industry and the Secretary of State and, in the long term, to the Treasury. Henceforward, there will be the Secretary of State, the Director General of Telecommunications, the Monopolies and Mergers Commission and the courts. It is difficult to understand how one can equate that catalogue of new regulatory controls with removing BT from the existing web of Government controls.
  At a time when the nation is confronted by major economic difficulties and unemployment problems of frightening proportions, the Bill is a political irrelevance, and it is bound to cause anxiety to the 235,000 members of staff of British Telecom who have invested their livelihoods in the provision of a telecommunications service for Britain. If the Bill is not rejected now, I trust that the British people will reject it, before its implementation, at the forthcoming general election.
  5.50 pm
  Mr. Richard Page: Regrettably, the Opposition's contributions so far show all the signs of the mentality behind the trench warfare of the First World War, because they resist any form of change and block any ideas. They do so at a time when change is occurring at a rapidly increasing rate.
  Mr. Golding: Is the hon. Gentleman aware that the British troops in the trenches won the war for Britain?
  Mr. Page: The hon. Gentleman may be happy with the manpower cost, but I am not. That was not a very good example to quote.
  I used that analogy to demonstrate the unsatisfactory basis of the Opposition's case. [Interruption.] I hope that the hon. Member for Keighley (Mr. Cryer) can understand that. Sometimes it is necessary to spell out to him the telecommunication difficulties that face the world. Hon. Members should consider the philosophy behind the Bill. The ambition to set society in a particular mould is not part of the Conservative philosophy. Such social engineering is the prerogative of the Left and of the Opposition. At the most charitable, their actions are symptomatic of heavy-handed paternalism, and at worst they are a form of social engineering that leaves individual choice to the firm control of the State's diktat.
  The Government's efforts to expand the private sector of our mixed economy—exemplified by the Bill—are made more in response to public wishes than to any particular ideology. The change of emphasis in the past few years represents an evolution of the national mood and is in direct opposition to the Labour Party's concept of near universal public ownership. Indeed, that helps to explain the Labour Party's position in opinion polls even at a time of very regrettable high unemployment. Although we do not wish to fashion society, but rather to set it free, it is incumbent upon the Government to give the creators and providers the instruments and tools to take advantage of any change that is thrust upon us. The Government should loosen the restraints upon them so that they can provide the people of Britain with the services that they deserve.

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  I was glad to notice that three strands were included in the Gracious Speech. First, there is the commitment to return some nationalised industries to private hands. Secondly, the Government recognise the importance of the chips and cables and of the technological revolution within our society. Thirdly, there is a continuing commitment to the small business sector. I appreciate that that last point has little to do with the Bill, but I can hardly resist an opportunity to put in a plug for that sector.
  Holding those strands together is the Government's dedication to create an economic framework in which it pays more to invest in our industry than in the slightly sterile area of gilts and deposit accounts. That is why I welcome the Bill. It demonstrates a dedication to denationalisation and simultaneously recognises that with the changed rate of techonology we must have a more flexible and speedy approach to communications and that any change will automatically deeply involve British Telecom.
  When that change comes, or, to put it more accurately, when the rate of change increases, as it surely will, it will be natural for those who have had a stress-free and protected existence to express worry and concern. That concern is usually expressed in the reflex reaction of resistance to change in any shape or form. However, like it or not, there are great changes in communications, and we can either try to dictate the course of change or we can have it thrust upon us.
  There are those who have pledged themselves to fight to the last rural telephone and vandalised kiosk, but the use of that ultimate tariff barrier—the State monopoly—has not proved to be a springboard from which British Telecom or its supply and manufacturing industries can sweep the export markets or even give the inhabitants of Britain the services enjoyed by those in so many other industrialised nations. For example, the security of an unchallenged home market has led to the delayed selection of the type of digital exchange to be used and so we have continued with the old Strowager for far too long. Although that may have given our telephone manufacturing companies the opportunity to export in the late eighteenth and early nineteenth centuries, it does not offer them such opportunities today.
  Mr. McWilliam: If the hon. Gentleman is arguing about the need for Brtish Telecom manufacturing industry to be outgoing and to seek export markets, will he tell the House when BT had the right to manufacture anything for export?
  Mr. Page: If the hon. Gentleman had followed my remarks, he would know that by having an unchallenged home market BT has not chosen its equipment as quickly as it should have done. Manufacturers need the strong home base that Opposition Members have mentioned, but they have not known which digital exchange equipment to produce and have consequently lost in the export markets. That is my point.
  Behind the resistance to change is the fear that jobs will be lost. That is natural and understandable. However, a glance at the experience of the United States of America shows that in the past decade there has been a considerable increase in the number of those involved in telecommunications, whereas the number of those involved in BT has barely changed in the past decade. The Bill should lead to a substantial increase in the number of jobs in
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  telecommunications, and it should therefore be supported by the Opposition. However, at this stage, no one should try to predict exactly where the increases in jobs will occur.
  There is an overwhelming duty to ensure that competition within telecommunications takes place on an equitable basis. To put it bluntly, BT must be seen to be on all fours with the newcomers that wish to operate under licence. Equally, with that same spirit of equity, I hope that the licence that we issue to British Telecom will not only note the loss-making operations, such as some rural telephones and kiosks, but that the point will be accounted for in the calculation of the licence. It is also fair to say that if telephone kiosks are continually vandalised in a particular area, British Telecom should be able to look to that local area to pay for the cost of that vandalisation rather than spread it over the costs of all the particular suppliers.
  Loss-making operations will now be far easier to isolate because British Telecom has moved to regionalised accounting. I, as well as a number of my hon. Friends., could not believe the lack of sophistication in British Telecom's bookkeeping methods when we examined this matter five years ago. I could best describe its operation, as the big pot theory—one threw in all the costs and all the revenue and one hoped that a profit floated to the surface or regretfully, sometimes, perhaps a loss. However, I am glad to say that there is greater sophistication coming and that a far closer accounting procedure is being introduced.
  I am worried by the suggestion that British Telecom should be relieved of certain interest charges if it is to pay dividends to shareholders. I wish to resist that suggestion, because it would build an inherent advantage for British Telecom against its competitors. I thank my right hon. Friend for issuing that very helpful document on the role of Oftel entitled "Ringing the Changes." The function of that office will be crucial to the success of this liberalisation measure and, while it will no doubt be probed in greater depth in Committee, Oftel will have to build up considerable expertise in a short time. In addition, there is the difficulty of finding a suitable candidate to occupy the position of Director General.
  In the early stages the Director General will have to exercise the judgment of Solomon and to establish as well the essential character of Oftel as an independent body and not one that will be a creature of any faction, whether that faction be political or commercial. That wisdom will have to be there, because on examining the Bill one finds that my right hon. Friend has powers under clauses 7 and 8 to issue licences, but under clause 10 the Director General is given almost equally wide powers to modify those licences, subject only to certain circumscribed powers of veto by my right hon. Friend. I see a possible area of conflict there.
  It also appears that the Director General has discretionary powers, but not a duty to enforce licensing conditions. If the Director General decides not to go ahead and act on those powers, there appears to be no right of appeal for any injured third party.
  In addition, and looking ahead, I can see the impact of cable and cable television on Oftel's areas of authority. I hope that my right hon. Friend the Secretary of Slate for Industry and my right hon. Friend the Home Secretary are already addressing their attention to this possible problem.
  Another matter which I hope will arise in Committee or will be probed by Oftel is the position now occupied by

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  British Telecom on the various overseas and international bodies, and whether that role is to be continued by British Telecom or be taken over by Oftel. I make a small plea to the Minister about the setting up of Oftel. I should like one of the people appointed to it to have a specific function to examine the role of small businesses and to ensure that their interests are adequately represented on that body.
  This will be a challenging step forward. I welcome the opportunity presented by the Bill, and I suspect that it will waken the sleeping giant British Telecom, which is already stirring as a result of the British Telecommunications Act 1981. I look forward to the Bill being enacted, and I congratulate my right hon. Friend on bringing it forward.
  6.4 pm
  Mr. David Penhaligon: At debates such as this one I am often struck by how a casual aside means and tells one more about the Minister's real intentions than does the prepared script, the prepared speech and the prepared message to the House. I recall particularly the moment when the right hon. Member for Salford, West (Mr. Orme) drew attention to the plight of the constituent of the hon. Member for Whitehaven (Dr. Cunningham) who was invited to pay £5,000 to have a telephone installed. I wished to intervene then and ask the Minister whether he approved of such bills, because whether he does or does not approve of such bills is the key to the issue for rural areas.
  It is true that British Telecom is justifying such charges, because of the British Telecommunications Act 1981, but there is no reason for charging that man so much, even though the measure was enacted last year. The sheer unwillingness of the Minister to answer that obvious question at that moment worries me and, I assure him, will worry many hon. Members.
  By chance, I have looked up the constituencies of Ministers in the Department of Industry. There is the Secretary of State's constituency—Wanstead and Woodford—the rural part of which has a park in the middle of it. Other constituencies are St. Marylebone, Kingston upon Thames and Coventry, South-West. Our sole hope is the Under-Secretary of State the hon. Member for Norfolk, South (Mr. MacGregor). If he believes that he represents a rural part of the country, I suggest that the hon. Members for Cornwall, North (Mr. Neale) or Devon, West (Sir P. Mills), who spoke earlier, should take him on a tour of their constituencies, and even I could make a contribution in my particular part of the country. What matters is not only whether an area is rural but whether it has remoteness at the same time. That is the reason for a great number of the worries about the Bill.
  Clause 3 is totally contradictory. It says that the Secretary of State and the Director General shall have regard to
  "the need to secure so far as practicable the provision throughout the United Kingdom of such telecommunication services … in particular, public call box services, emergency services and services in rural areas".
  That is a good clause provided that one does not read paragraph (b), which states that the Secretary of State and the Director General shall also have a responsibility to ensure that those services can provide a reasonable return on investment. That is a direct contradiction. The Minister
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  knows it, the Opposition Front Bench spokesman knows it and anyone who has spent 15 minutes in a rural area will know that that is true.
  What will happen to one of my remote constituents who is lucky enough already to have a telephone installed—this is relevant to the constituents of the hon. Members for Fife, East (Mr. Henderson) and Cornwall, North—when one of our shocking winters strikes and the whole system is demolished, which happens virtually every winter in some parts of the country? At the moment, the system is that a message is somehow given to the Post Office and enormous efforts are made to re-connect that person. It is recognised how remote and how vulnerable he is in inclement weather conditions. What will be the new position? Will a bill be sent for repairing the line? The Minister is usually not so unwilling to take his feet off the Table to answer a question. What will be the position in those circumstances? If the circumstances are as I have described, we will see a steadily declining service to people in remote rural areas because they will not be able to pay the bills for carrying out the repairs to services.
  Clause 42 has not yet been mentioned. If it has, I apologise to those hon. Members who have mentioned it. I call clause 42 the "on the rates clause", because I am confident that that is what the Bill is about. It is about a system whereby those who live in the remoter parts of the country will have the whole social fabric of the Post Office stuck on their rates or have no public service at all.
  Clause 42 makes it clear that if a local authority is not happy with the Director General of Telecommunications' recommendation, it can pay for something better. That is not parliamentary language, but it boils down to that. Who will the Director General be and what will be his job? If the Minister offered the job to me, I suspect that there would be a great boost of confidence in the rural areas.
  Mr. Kenneth Baker: We have in mind that the Director General will occupy an office of profit under the Crown. Is the hon. Gentleman making an oblique announcement to his constituents in Truro that he is prepared to resign his seat if he is offered the position? That is the message that will get through to his constituents, irrespective of whether they are connected to a telephone.
  Mr. Penhaligon: I shall examine the salary. This is the only way in which the Conservative Party will have a chance of regaining Truro.
  Mr. McWilliam: I am grateful to the hon. Gentleman for referring to clause 42. Will he contemplate the possible view of the Comptroller of Audit on the fiduciary duty of councils providing moneys under the clause, given the courts' attitude to the fiduciary duty of a council giving grants to public transport enterprises?
  Mr. Penhaligon: I hope that the Minister will answer that question.
  If it is not practical to appoint me as the Director General, I suggest that someone else from the West Country should be appointed. The people of Cornwall may well think it sensible and rational to compel the licence holder to install kiosks at 100-yard or 200-yard intervals throughout my constituency and that of the hon. Member for Cornwall, North. That would be satisfactory for the person laying down the rule, and I do not suppose that there would be great objections from the constituencies.

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  However, there would be objections from the private investor. His investment will have been made on the understanding that the company will be run reasonably and at a profit and will give a return on his investment.
  If the Director General lays down conditions that are far too onerous and too wide-ranging for a business to carry, investors will not be prepared to come forward. Even if they are willing to make an initial investment, they will certainly not be willing to provide the further astronomical sums the Minister has said are required because British Telecom will not be profitable. This is why so many people are worried in areas such as the one that I represent.
  Mr. Barry Henderson: I understand that straightforward Socialist Members will assume that private enterprise will necessarily be less effective in providing telephone boxes. Will the hon. Gentleman, who is a Liberal, recognise that in the United States telephone boxes are more numerous and far better maintained?
  Mr. Penhaligon: I voted for the liberalisation of British Telecom 12 to 18 months ago, but I think that BT does a rather good job with the telephone network and the provision of telephone kiosks in rural areas. I find the network satisfactory. However, I and many others in the remoter areas are worried that the Bill will cause it rapidly to decline. We are well aware of BT's ambitions to get rid of part of it. It is only the constant outcry from those in the rural areas which has prevented that happening.
  The Director General, who will be given the job of laying down responsibilities, will have pressure put on him to recognise that losses are being made and to accept closures. That will happen unless the hon. Member for Fife, East can provide evidence that some of the remoter telephone kiosks in my constituency will be profitable under private enterprise.
  Before I was elected to this place, my wife was a sub-postmistress. My wife and I used to empty some of the coin boxes of rural kiosks. It did not take us long to count the money that was in them. In the days when we had pennies we found that the boxes had not collected much more than £2 or £3. Admittedly, I am talking about 10 years ago. However, the kiosks provided an important social service in the area and assisted those who faced emergencies. I recognise that there are often large capital investment costs in providing a basic facility. I am aware also that rural areas will be in difficulty in future. We do have a telephone service in rural areas, and there will be enormous pressure from those areas for a much stronger and firmer commitment to keep it than the one given today. I and other hon. Members will want to pursue this issue in Committee or on Report.
  There seems to be some panic about the Bill and I do not know why. It was extremely kind of the Minister's office to send me by special post a copy of the Bill. Unfortunately, it sent it to the wrong address. However, the effort was made and I thank him for ensuring that that was done. The Bill was printed as recently as 17 November and it is a massive piece of legislation.
  In an earlier debate I backed the Government indirectly by saying that I was critical of some of the Post Office unions for launching an enormous amount of criticism before the Bill's publication. I now say "Thank goodness that they did". They have had just 12 days since the Bill's publication to comment. That is unsatisfactory. There has been insufficient time for Members to canvass interests
  58
  within their constituencies. I managed to meet some regional representatives of the Post Office unions in my constituency and I found the meetings interesting and enlightening. The National Farmers Union has made its view known. The NFU is extremely worried about the effect that the Bill will have.
  District councils, county councils and chambers of commerce—I am talking about those that are centred in the area that I represent, because I have not contacted the national networks—have found it impossible to examine the Bill in detail in the 12 days that have been allowed. This is unsatisfactory. I cannot believe that the pressure of parliamentary time is so great that the Government have been forced so rapidly to introduce the Bill, especially when they have said that the Bill, when enacted, will not be implemented in this Parliament.
  When enacted it will be implemented only if the Conservative Party succeeds in gaining once more an overall majority in the House. There is precious little support for the measure on the Opposition Benches. If the Conservative Party wins that overall majority, I accept that the then Conservative Government will be entitled to implement it. But what is the rush? Why could we not have a few more days in which to discuss it with our constituents and interested parties before Second Reading?
  I do not understand why the Bill has been introduced in this Parliament. If the Conservative Party is able to win an overall majority in the next Parliament, it can be processed then. That Conservative Government would have a full five years in which to enact the measure. It is almost inevitable that there will be 100 new Members in the next Parliament even if the Conservative Party returns to power. The Government are denying them the opportunity of making any input into this detailed legislation.
  Mr. David Myles: Does the hon. Gentleman accept that this is a more honest way of introducing the Bill? It means that its proposals will be before the electorate and that it will know for what it is voting. The details of proposed legislation are not always so explicit in manifestos.
  Mr. Penhaligon: I accept that that is arguable. If there were two months or six weeks after the printing of the Bill during which opinion could be canvassed before Second Reading, I agree that the hon. Gentleman's suggestion would be at least an arguable alternative means of presenting legislation. However, it is unacceptable that we are discussing for implementation after the next general election a Bill that is complex, detailed and long, when only a miserable 12 days have passed since it was printed. However, this is not the first time that that has happened. I would not say that the Conservative Government are the only Government to have been guilty of that.
  I have made some general criticisms. I shall now get down to the basics of the Bill. The Minister went through the old argument—I do not expect him to come up with a new one every time—that greater liberalisation and greater access to markets would improve British Telecom in a mysterious way. However, he should do better and be more precise. He dismissed the Buzby bonds in two or three lines as being capable of producing only £150 million. I should like more details on why the Minister reached that conclusion. It is an important conclusion, as it is the alternative put forward by some people who

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  recognise that British Telecom has a problem raising investment capital. Some others argue that there is nothing to stop British Telecom, as it is, going to the market and raising money. The Minister claims to have investigated that and to have concluded that only £150 million could be raised.
  I can only presume that the Minister's justification for that conclusion is that he believes that the market would not be prepared to invest large sums in British Telecom while it was still under Government control, the assumption being that if it is under Government control it is subject to ministerial direction, and if it is subject to ministerial direction it does not make a good capital investment.
  That may be true and right, but if the Minister thinks that he will succeed in raising £1½ billion a year, which is the figure that is suggested, because the controls will have been taken away, how much assurance can we get on the amount of control that will be operated by the Secretary of State and the Director General, as referred to in the Bill? Will they control the industry or not? If it is possible, because of the current controls, to raise only a miserable £150 million, I cannot see why it will suddenly be possible to raise £1½ billion a year, especially when we are assured that the control of the Director General will maintain many of the services that are extremely marginal or obviously unprofitable.
  It is clear that the Bill has been introduced by reason of dogma. I take a pragmatic line on whether industries are nationalised. If the Government care to look at the record, they will see that they have received quite a lot of support from the Liberal Benches during this Parliament on various measures of privatisation or denationalisation. They will not receive support for this Bill, mainly because we believe that no good reason has been advanced for the change.
  The Bill fits in with Conservative paranoia for always knocking nationalised industries.
  At times, they have deserved knocking. At times I have knocked them myself. However, I have never once heard Conservative Ministers say anything good about any nationalised industry in Britain since I have been a Member of Parliament. If the record was a little more even-handed about nationalised industries and Ministers had detailed some advantages for this legislation, even if they were difficult to specify, we might be able to give the Bill some credibility. However, the Liberals will not support the Bill on Second Reading. We shall oppose it as it meanders its way through the procedures of the House.
  We have no intention, given that the Bill will, if the Conservatives win, come into force after the next general election, of voting to implement it, if our votes are depended upon for that. That is clear and firm. I give the House that pledge now. However, a lot of fear and concern could be removed if the Minister could improve the protection offered to some of the remoter parts of Britain.
  6.25 pm
  Mr. Gerry Neale: I listened with great interest to the hon. Member for Truro (Mr. Penhaligon). I believe that he has completely misjudged the view put forward by my right hon. Friend the Secretary of State and my hon. Friends at the Department of Industry. It is because they feel that British Telecom has
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  done well enough to be put into the private sector and that remaining under Government control will hold it back that they want to give it that opportunity to operate more freely. Perhaps my hon. Friend the Minister will confirm this. I understood my right hon. Friend the Secretary of State to say that the part of the Bill relating to Oftel would be implemented shortly after Royal Assent and that we would not have to wait until after the general election for that to happen.
  Mr. Kenneth Baker: I confirm my hon. Friend's point. When the Bill reaches the statute book, it is the intention that different parts of it will be implemented at different times. We have said that we will wait until after the general election to implement the parts of the Bill dealing with the sale of British Telecom, but we intend that the parts on Oftel, for example, will come into force shortly after Royal Assent.
  Mr. Neale: I am grateful to my hon. Friend for that information.
  Having listened to the right hon. Members for Salford, West (Mr. Orme), and Manchester, Openshaw (Mr. Morris), and the hon. Member for Truro, and having read various reports about nations which, years ago, embarked on a liberalised regime in telecommunications, I have found that all the same arguments were advanced, and when I examined what happened afterwards I found that all the fears proved groundless. It is interesting to note that the use of the established network goes up dramatically in some cases, so the revenue that is derived by the public networks enables them to have more money for investment in further equipment.
  I shall refer principally to two issues raised by the Bill—competition and regulation—but before doing so I congratulate my right hon. Friend the Secretary of State and his predecessor, now the Secretary of State for Education and Science, and Ministers who have been in the Department of Industry since the election. In 1979 they made plain what they had in mind. Despite tremendous pressure from various sections of British industry—not only British Telecom, but other sections—they moved towards the British Telecommunications Act 1981. They brought forward a process of liberalisation that has done a great deal to open up the market.
  Since then there has been the introduction of Mercury and the announcement of cellular radio. Ministers have realised that there were errors in and parts of the 1981 Act that could be improved. I welcome the Bill. It will increase the potential of the telecommunications scene in Britain. The prospects in the industry, both in BT and outside, are good.
  The part of the Bill that offers the greatest prospects is that bringing in fairer competition and more sensible regulation. I declare my interest in the industry. I am well aware of how much potential the Bill will bring to British industry, which is contrary to what has been said by Opposition spokesmen.
  Mr. Penhaligon: The hon. Gentleman and I know each others' constituencies well. Does he believe that it is to the advantage of his constituents and those who farm in the remoter areas to be threatened with the risk of a bill of several hundred pounds winging its way through their letter box if a storm brings down their connection to the telephone system? When I asked the Minister about that,

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  the possibility was not denied. Would the hon. Gentleman vote for the Bill if he thought that it would have that consequence?
  Mr. Neale: The scares that have been put about will not be anything like as dramatic as the hon. Member for Truro (Mr. Penhaligon) supposes. People in rural areas realise that it is much more costly to provide a service to those areas than elsewhere. The acceptance of that principle is well known. Despite the scare stories that the hon. Member for Truro is putting about, that is a principle that the Minister has taken into account.
  Mr. Henderson: Does my hon. Friend recall that many people believed for a long time that British Airways' operation of the Highlands and Islands air service could be done better by private enterprise? British Airways always resisted that on the grounds that no one could make a profit and that it was losing £6 million a year on the service. Under the pressure of the possibility of going into private enterprise, BA has suddenly found that it can run the service at a profit with substantially fewer people and provide a better service. Does my hon. Friend agree that accounting is often not as sound as it should be?
  Mr. Neale: Indeed. The hon. Member for Truro may recall the small town in my constituency where all the wiring was laid in a property that comprises six flats for elderly people. There was cabling in the street that served adjoining properties. They were equipped with wiring and telephones, and the people who moved in had had telephones in their previous houses. Nevertheless, they were each charged £55 for the connection simply because a man from British Telecom came along with a handset and connected the telephone to the wiring and sockets that were already in the flats. Therefore, the reverse can apply in constituencies such as mine.
  Several hon. Members have mentioned the cash aspect. The right hon. Member for Openshaw described the accounting and purchasing power of BT. BT kindly let part of an exchange site in one of the villages in my constituency to the local parish council for 5p a year for a bus shelter. When, as a matter of convenience, the parish council tried to pay 10 years in advance by sending a cheque for 50p, BT sent the cheque back saying that it wanted a payment of one 5p postage stamp each year. That is a clear case of there being some room for improvement.
  I shall now deal with competition. Although the private sector of British industry welcomes the Bill and realises that the time for some form of regulatory authority has passed, it would still like two questions answered. First, how soon will the commendable process of regulation and the sale of BT be completed? Secondly, how determined are the Government to minimise the remaining damaging defects of the British Telecommunications Act 1981?
  Private industry fears that the advantages that BT enjoys, and which private industry believes is unfair, will be included in perpetuity in the new licence that BT is to be given. Private industry also fears that that licence will arrive on the regulatory scene before Oftel has got off to a start and before BT is privatised. I have in mind the elements of monopoly or part monopoly that BT has over maintenance, the prime instrument and manufacturing rights.
  There can be no doubt that the consumer has a restricted choice in the interregnum before the Bill comes into effect. Moreover, private sector manufacturers and suppliers
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  must operate with one hand tied behind their backs. I see that the right hon. Member for Openshaw has returned to the Chamber. I listened to him in Committee or the previous Bill. He always advanced his views sincerely. He found it difficult to hide his pain when his hon. Friends supported the division of BT from the Post Office, while he stoically tried to keep the two together.
  Mr. Charles R. Morris: The hon. Gentleman has rightly remembered the view that I held about the separation of the Post Office from the telephone system. I honestly believe that history has proved me right. Separation was only a prelude to privatisation.
  Mr. Neale: My point on seeing the right hon. Gentleman was that he referred to the danger of jobs being lost in the private sector if the Bill was allowed to proceed. The private sector's view is quite the contrary. Its view is that the Bill will unlock many opportunities to expand and that the greater freedom will bring more jobs.
  Mr. Richard Page: Does my hon. Friend agree that since the British Telecommunications Act 1981 BT has improved its service and that this next step will enable it to improve that service still further?
  Mr. Neale: There is no doubt that BT has woken up to a whole range of possibilities for supplying consumers with what they want. Maintenance, supply, monopoly over the prime instrument and manufacturing swing the licence terms round to BT. No doubt they will be formalised on the first day that Oftel is established. Before the licence is determined, it must be discussed as widely as possible. Its terms are matters of public policy. I urge my hon. Friend the Minister not to include in that licence any monopolistic rights for BT in the maintenance of attachments.
  The statements that my right hon. and hon. Friends in the Department of Industry have made on behalf of the Bill are highly commendable in terms of greater competition, but that competition is in direct conflict with leaving monopoly rights for the maintenance of analogue equipment with BT. The same applies to the terms of reference for Oftel. There are many reasons for reexamining this provision. What is the limit of BT's monopoly rights of maintenance? Does it stretch into the realm of cellular radio to be operated by private sector operators when BT wants access to equipment attached to its own lines?
  In the Second Reading debate on the Energy Bill, which gives rights to private sector generators of electricity to connect to the public grid, the Secretary of State for Industry was seeking power to approve generation plant that is to be connected to the grid, but it was not suggested that electricity employees should maintain the private sector equipment.
  I see no reason for the BT monopoly over the prime instrument remaining in force. By all means include a right for BT to supply the prime instrument, but not as a monopoly. Prime instruments are becoming much more sophisticated and it is much more difficult to define them. It is not fair that, under the new regime of competition, BT should retain its rights over the prime instrument.
  It is interesting to see what has happened in the United States. Efforts have been made to divest American Telephones and Telegraph of the local operating companies. There is understandable anxiety about the fact

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  that only the Hull operating exchange is to be outside the BT arena. I should have preferred the Secretary of State to retain the right to sell a few other exchanges, so that we could make a comparison of performances throughout the country.
  I congratulate the Government on the provisions in the Bill dealing with regulation, but I doubt whether the terms of tariff structure and monitoring will be effective. I am aware of the powers of BT to furnish so much detail to Oftel that it could be almost impossible to monitor it all.
  It is clear from the Bill that certain cellular radio equipment will be included in the definitions in clause 52. My right hon. Friend the Secretary of State said that Oftel would be responsible for the licensing of radio telecommunications systems. Will he clarify how far the licence will go? Will it include a radio licence?
  Mr. Kenneth Baker: Oftel will not be a licensing authority. It will issue only those licences for which it has delegated authority from the Secretary of State. That is an important distinction between Oftel and the Federal Communications Commission.
  The power of licensing, especially for such important matters as radio telephone licences, will remain in the hands of the Secretary of State. Oftel's job will be to police and monitor licence conditions and the operation of the market.
  Mr. Neale: One matter over which Oftel should have greater control is the areas presently covered by the Home Office's radio regulation department. It would be better to combine those areas of telecommunications within the one organisation, linked to the Department of Industry. It is becoming increasingly difficult in these days of advancing technology for the two elements of telecommunications technology to be separated. It would be much simpler for radio telecommunications operators in the civil area—not broadcasting—if Oftel took the responsibility.
  Will the Minister for Industry and Information Technology be more specific about the role of Oftel in international representation? Private industry is worried about the nature of BT's role and wishes to play a greater part in the various international committees.
  I am also worried about the ability of Oftel or the Department of Industry to call for indemnity bonds when issuing licences. Private industry is worried about the delays that are occurring in obtaining specification standards and approvals for equipment on which much research has been carried out and which would benefit the consumer.
  Will the Minister consider allowing manufacturers and suppliers to give an indemnity bond to a telecommunications system operator and, having applied for approval of the equipment or submitted detailed specifications to the British Standards Institution, immediately to connect the apparatus to any telecommunications system, on the understanding that they will carry out any amendments required by the approvals board or the BSI?
  Will the Secretary of State have the power, under the Bill or through Oftel, to license providers of telecommunications services, as opposed to providers of telecommunications systems or apparatus? Some people are involved only in the provision of services.
  The publication of the Bill and the declared aim of the Secretary of State to achieve open and fair trading are
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  commendable, but the private sector wishes those highly commendable aspirations to be applied from today, rather than having to await the Bill's becoming law.
  I assume that consultations are taking place and will continue during the preparation of the draft BT licence, which, I understand, will be submitted to the House. I hope that the unfair advantages that BT enjoys—monopoly rights of maintenance and supply of prime instruments—will be reconsidered. They ought not to be included in the licence.
  If the Secretary of State accepts that case he will open up the market in telecommunications, create far more competition and choice, which the consumer deserves, and create the sort of environment in telecommunications which he deserves after all the time and effort that he has put into producing the Bill.
  6.49 pm
  Mr. John Golding: The hon. Member for Hertfordshire, South-West (Mr. Page) mentioned the trenches. When the Bill dropped through my letter box—at the right address—I remarked to my wife "This will mean a winter in the trenches and a spring offensive." Conservative Members who have spoken so eloquently this afternoon will regret having done so when they are in Committee. Their Whips will keep them quiet while we make our points. Public service, not private profit—that is the banner under which the BT unions are defending their members against privatisation, which is just a new word for denationalisation.
  Why does the staff of BT oppose privatisation so strongly? Why was the one-day strike against the Bill by Post Office Engineering Union members on 20 October so successful, despite all the efforts of the Government and BT to frustrate it? POEU strikes are a rarity. Since I became a full-time union official in 1960—that is one way of declaring an interest—we have had only one day off on the question of pay, half a day in support of the shorter working week, and two or three half-days in support of other union campaigns, apart from very rare and limited local stoppages.
  Given that extremely moderate background, why was the strike called and why was there such a massive response to the call? The answer is that the Bill cuts at the heart of what BT employees expect from their jobs: security both before and during retirement, reasonable pay and conditions settled in a civilised manner, fair systems of recruitment and promotion and the satisfaction of providing a service to the public. POEU members have obtained all these things from public ownership, and they know they are threatened by privatisation.
  Job security has always been of paramount importance. Many of our members, particularly those who joined before 1969 when we were still in the Civil Service, joined because there was a pension and job security. The job security agreement is of the highest value. This Japanese-style lifetime employment has brought great advantages to both the staff and the business.
  Mr. Henderson: I have listened to the hon. Gentleman with respect, as I always do on such subjects. However, does not real job security come from the expansion and development of the whole business, and is that not more likely to be achieved in the environment proposed in the Bill?
  Mr. Golding: The answer is "No"—an emphatic "No" which will be heard by all our members. POEU members have obtained all those things from public ownership, and they know that they are threatened by privatisation. Lifetime employment has produced great dedication and loyalty among the staff, to which successive Tory Ministers have paid tribute. It has brought craft flexibility and productivity bargaining that have been more than a passing whim.
  Both lifetime employment and pensions, for which staff made sacrifices in the past, are at risk under the Bill. Private management in this country does not believe in security. It does not believe in lifetime employment for manual workers. It still believes in the harsh Victorian regime of hire and fire, and it is demonstrating that day by day. It even rejects the minimal constraints of the Employment Protection Act. Workers in the privately owned telecommunications manufacturing industry have suffered greatly in recent years. Only last weekend, I read that Standard Telephones and Cables Ltd. intends to cut jobs yet again on withdrawing from system X.
  For evidence that jobs will be lost, however, we need only read about the leaks to the effect that BT itself intends to cut 15,000 jobs, and the nods, winks and nudges from civil servants that 45,000 job losses would be more acceptable, so that BT could be sold off more easily.
  The excuse given by the Secretary of State today—at the Conservative Party conference he rounded the figure down to 200,000—was pathetic. He did not even have the decency to look as though he believed it. If he treats the Conservative Party conference like that, how will he treat the House? It is clear that the Secretary of State let the cat out of the bag at the Conservative Party conference. He simply took the brief from the civil servants without understanding its implications and without realising that people like my hon. Friend the Member for Blaydon (Mr. McWilliam) would read the speech and draw the correct conclusion—that the Government intend to cut staff so that their friends can purchase BT and make a profit out of it.
  Mr. Neale: I have listened to the hon. Member for Newcastle-under-Lyme (Mr. Golding) many times—he had perhaps more opportunity to speak during the Committee proceedings on the British Telecommunications Bill than I was given—and he always advances his views very clearly and cogently. How does he rank the priorities in the mind of a person having a new telephone installed at his home or business? Is the prime objective in paying for BT's bill to have and to use a telephone or to provide jobs for telecommunications workers?
  Mr. Golding: Of course, when a person pays a sum of money, it is to have a telephone. I note, however, and I hope that the hon. Gentleman's constituents in North Cornwall will note that he believes that they should expect to pay more for the telephone service if they live in the country. That attitude is not shared by the Opposition. We hope that the electors in the rural areas will get that message.
  I am entitled to speak for the staff of BT. The Secretary of State seems to think that he knows better than we do what our members think. He dismisses the arguments about jobs and pensions with a wave, but they are crucial issues for our members. Our members believe in giving
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  service, but they are also interested in their jobs. Anyone must be concerned about job protection in the present circumstances.
  Government officials should stop playing the dangerous game of whispering numbers to people in BT, because it is causing a great collapse of morale among staff. Officials should beware of picking numbers out of a hat and bandying them around. They are talking about men's jobs and about the livelihoods of many women in the UCW as well as members of the POEU. They should not play around in this way. In no way will the membership of the unions be used as pawns in this manner.
  There is still great concern about pensions. I listened to the Secretary of State dodging, weaving and ducking the questions that the staff and pensioners have put. It so happens that, by chance, I opened my copy of The Veteran, the journal of the National Federation of Post Office and British Telecom Pensioners, and saw on page 2 a letter signed by the Under-Secretary of State. One would not realise that it came from the same Government, because in that letter the Under-Secretary states:
  "The future of BT's pension scheme is a commercial matter between BT, its workforce, and the trustees of the pensions scheme, and the Government cannot give any guarantees about future pension arrangements."
  Mr. Charles R. Morris: Shame.
  Mr. Golding: Having listened to the Secretary of State this afternoon, one would not think that that was the attitude of the Government. The Under-Secretary continues:
  "This would be so whether BT remains a nationalised industry or has private equity introduced. You will know, however, that the Secretary of State undertook in his speech to the House of Commons to safeguard existing pension obligations".
  What does that mean? If the Under-Secretary can give no guarantees about future pension arrangements, what notice are we to take of the Secretary of State's words? We shall find out more about the Government's intentions, because we shall table amendments in Committee that will test them to the full. POEU members want a guarantee that their pensions will continue to be index linked and that in the future there will be no worsening of their pension provisions.
  Today, the Secretary of State relied on the fact that the trustees came from either side. What he did not say—what the Under-Secretary had the decency to acknowledge—is that pensions, both contributions and benefits, are settled by collective bargaining. Whether the employer is in the public or private sector will, therefore, make a great difference. The POEU members know that it makes a difference. That is why many of them opted for the public service. They knew that the treatment they got from public employers would be different from that of private employers.
  So far, direct assurances on pensions have not been given. I hope that the Minister will tell us tonight that they can and will be given in Committee. If not, we shall argue about this for a long time in the Committee trenches. As I have explained on more than one occasion, the pension of POEU members is one of their cherished assets. The Government can monkey around all they like with some other industrial assets, but they should not do so with the pensions of BT staff.
  The settlement of pay and conditions has been extremely orderly. Only one and a half days have been lost through strikes in the history of the industry. Not for us

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  the bitter telecommunications industrial disputes of Canada, Japan, the United States, Australia, France, Italy, and so on. The Government are always saying how much better industrial relations are overseas. They are always saying that they will improve industrial relations here. I believe that they are wrong in general, but with regard to telecommunications and the Post Office there is no comparison between the strike record of public sector telecommunications workers here and their counterparts overseas. Strikes abroad are commonplace, but here only one and a half days have been lost since 1912. That is what the Government are putting in jeopardy.
  National negotiations on defined principles, including productivity, sometimes followed by arbitration have removed the need for constant resort to industrial action. Unfortunately, private employers in Britain do not seem to know how to live in peace. They will be tempted by local bargaining, payment-by-results schemes and all the other elements of private pay bargaining that have been so disruptive in Britain. They will no doubt try to abandon the sophisticated joint consultation that has been developed over the years, because British private management still believes that an assertion of managerial prerogative—its divine right to rule—is more important than achieving results through harmony. The POEU members prefer civilisation to the jungle.
  As part of that civilisation, they insist that recruitment and promotion be on merit. That is largely true of BT, thanks to its Civil Service origins and the vigilance of the trade unions. That should be contrasted with what happens across much of British private industry.
  British private industry has never consciously provided for the promotion of all its staff. It has never put in the effort not only to provide training facilities and to encourage them but also to ensure that there is machinery to remove unfairness. In private industry, who one knows and what group one belongs to are often still completely decisive. That is not good enough for the POEU.
  I am appalled at the waste of talent within British industry. I am appalled by the lack of training and the lack of promotion facilities. I am appalled by the class barriers within British industry that inhibit the development and the potential of all those working in it. For all its faults, British Telecom does not suffer from those disadvantages. It is possible for working people to rise within BT. It is possible for them to utilise fully their talent. One loss in going private would be the adoption of private industry standards in recruitment and training. "Who you know", not "What you know" would become paramount. At the moment, within British Telecom, it is, in general, what you know and not who you know that is important.
  Our members want to continue to provide a national public service based on meeting the needs of people rather than meeting the demand for profit by City financiers, determined to distribute it to shareholders. The POEU wants profits, but profits that are used to modernise and expand a public service. It wants to provide a service that brings the telephone within reach of all our people. Even in the early 1960s, we were campaigning for a phone in every home. In 1982, the cost of a residential telephone in Britain is, on average, lower than in West Germany, France, Italy, Japan and New York. The staff wish to keep things that way.
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  Those hon. Members who talk about the speed of fitting telephones in New York must remember that in that city, as over much of the United States, a shared service is the norm. It is much easier to tell those who ask for a telephone that it can be added to the switch being used for eight other telephones. Public resistance to a shared service in this country has made it more difficult to provide a rapid service. I do not believe that the British public are prepared to go American. They do not wish to share their telephones with seven or eight other people. Getting rid of the shared line was a big issue in the early 1960s. I also recall that the New York telephone system almost collapsed through neglect and had to be saved.
  One feature of the United States that has not been mentioned by Conservative Members is the great difference in the quality of service given in the remote rural areas compared with the cities One gets what one pays for from private enterprise. That is what happens in the United States. Unfortunately, Conservative Members do not visit remote parts of the United States to test the telephone service.
  Mr. Myles: My son returned yesterday after spending five months in the United States as a delegate of Scottish young farmers. He visited the remote areas and informs me that one of the matters that impressed him was the efficiency of the telephone service.
  Mr. Golding: I must meet the hon. Gentleman's son and discuss the issue wth him. The National Farmers Union will be interested to hear what the hon. Gentleman says. The NFU opposes the Bill. It is the first time that I have known the farmers line up with the radicals on the Opposition Benches. I am grateful to the hon. Gentleman for drawing attention to that.
  Those who defend the United States system will know that all hell is now let loose in Congress because of proposals to increase still further the charges—they are already higher than those in the United Kingdom—for many residential subscribers because of the ending of cross-subsidisation. Conservative Members also want the ending of cross-subsidisation—the principle that business tariffs are higher than necessary in order to ensure that residential subscribers pay less. Tariffs in the City of London are higher than is necessary in order that charges in the Highlands and Islands can be subsidised. I am a firm believer in cross-subsidisation. Even in the United States, however, when electors and representatives in Congress are confronted by the pure theory of competition, they get as upset as Opposition Members in this House over the introduction of the Bill.
  Under public ownership, our members will go on increasing productivity. Between 1971 and 1982, the number of telephones installed per BT employee has gone up from 65 to 112. I am not talking about what has happened since the British Telecommunications Act 1981. Conservative Members wish people to believe that there has been a sudden conversion on the part of BT. That is not true. The figures to which I have referred are for the years between 1971 and 1982.
  If private industry had been able to match this record, there would be no problems. What other industry has doubled its output in 10 years with only a 5 per cent. increase in staff while improving the efficiency of the system? The problem is that British Telecom has become the victim of the propaganda of Conservative Members

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  who are more concerned with trying to hand over the future profitability of telecommunications to their greedy friends in the City than telling the truth about the virtues of British telecommunications.
  The staff have co-operated fully. Indeed, over modernisation they have often taken the lead. They will be more than bitter if the advantages of this co-operation fall to private profiteers rather than to the public good. One can imagine what they say to union leaders who have talked them into acceptance of productivity bargaining in the interests of the system and into acceptance of rapid modernisation. They say that what they have been talked into accepting is to be given away to private profiteers. They argue that their sacrifice and their ready acceptance of change should be used for the common good.
  It is clear to our members that privatisation threatens jobs, rewards from jobs and job satisfaction. On these grounds, our membership opposes the Bill strongly. It is not ideological opposition. Nor is it politically motivated. We are, however, bound to oppose it by political means. We could not carry our members on the ideological argument. We could not carry them if our argument was politically motivated.
  Our members have a broad spread of political opinion. We could not carry them if it were thought that our opposition to the Bill was blind opposition to a Conservative Administration. We carry our members because they see that the Government are threatening their legitimate industrial interests. The POEU will take political action. We do not take kindly to the Secretary of State's snide remarks. I was bitterly upset in the House the other day when the Secretary of State accused the POEU of telling lies. He has talked in disparaging terms today of our campaign. We have not resorted to vulgar abuse. We shall argue the case. In Committee I hope that Ministers decide that they will also argue the case rather than call us names.
  We have matured as a public sector union. We have attracted 95 per cent. membership on a voluntary basis. The POEU is an efficient, effective union. It has looked after its members' interests while taking a responsible attitude to the business.
  During my 22 years with the union I have felt that we have sometimes put more thought and effort into achieving an admirable telecommunications system than has management. The POEU leadership does not want British Telecom to go into the private sector or see orderly conduct in industrial matters jeopardised and replaced by private enterprise, conflict and greed.
  We do not wish to go into the jungle, but if we are forced, make no bones about it, we shall adopt methods of jungle warfare to look after our members' interests. I hope that will not be necessary. I am used to, and proud of, operating within a civilised industrial relations system well away from the nineteenth century. I am worried that the Government are turning the clock back to before 1912 when the telecommunications system came into public ownership. However, I am an eternal optimist and hope that this bad, mad scheme will never come to pass.
  Mr. Dan Jones: Does not my hon. Friend think that it is too late?
  Mr. Golding: It is never too late. I am the sort of character who still believes that it is not too late when going down for the fourth time. If we stick to order and
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  reason and the hope for the future that long-established public ownership can provide, I believe that we can persuade Conservative Back-Bench Members—their unhappiness showed on their faces when the Secretary of State spoke—as we have almost persuaded them about the iniquity of the 5 per cent. unemployment benefit cut, to get the Government off the hook. I hope that Conservative Members who represent rural constituencies—if they have no other occupational interests, as has the hon. Member for Devon, North (Mr. Speller—will finally say to the Government "Enough is enough. Drop the Bill. Let us have public service, not private profit."
  7.24 pm
  Mr. Gary Waller: When the right hon. Member for Salford, West (Mr. Orme) presented the case against the Bill, he contrasted the position that will exist after the enactment of the legislation with that which existed in the past. He talked about an industry that people own. I wonder to how many people the right hon. Member for Salford, West has talked about the matter, and how many, if asked if they feel that they own the telephone service, would answer in the affirmative.
  The Bill will permit an element of genuine public ownership. I hope that British Telecom's employees, of whom the hon. Member for Newcastle-under-Lyme (Mr. Golding) spoke, will have a preferential opportunity to invest in their industry. I believe that those who have a financial stake in the company or organisation for which they work have a greater incentive to do their best for that undertaking.
  Research on that subject in the United States of America has shown that where employees have a right to invest in their firms, those firms have grown much faster than others. About 25 per cent. of the population of the United States has an equity stake in companies, and generally in their own firms. In this country the comparable figure is about 4 or 5 per cent. I believe that that is one of the reasons why growth in the United States and many of our competitor nations has been so much faster than here.
  The Bill is a step in the direction of providing meaningful public ownership to people in a way that has not existed in the telephone service in the past.
  The hon. Member for Newcastle-under-Lyme spoke about jobs. He was right to say that they should figure high in our calculations when we consider making changes in the industry's structure. The Opposition's antipathy to the Bill, as expressed by the hon. Member for Newcastle-under-Lyme and other Opposition Members, derives from their belief that nationalised industries are the fount from which jobs flow and are created, while the private sector spells doom to employment.
  Mr. Dan Jones: There is truth in that.
  Mr. Waller: The hon. Gentleman says that there is truth in that. I want him to consider the position that existed in nationalised industries in the past. A similar view was expressed by the hon. Member for Manchester, Blackley (Mr. Eastham) when, in the debate on the Loyal Address, he said:
  "Experience shows that every time so-called privatisation takes place, thousands of jobs disappear."—[Official Report, 3 November 1982; Vol. 31, c. 99.]

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  I suggest to the hon. Member for Blackley and those hon. Gentlemen who have expressed similar views in this debate that experience shows no such thing.
  We do not have many examples of privatisation on which to go, but if jobs disappear, as my right hon. Friend the Secretary of State said, it is because of the demand for greater efficiency and productivity. I should expect far more jobs to be created in an expanding industry, like telecommunications. How many of these jobs are in British Telecom will depend on the competitiveness that, as a public limited company, that organisation is able to demonstrate.
  It is significant that small companies provide the best prospects for future jobs. I have to say that, looking at the large companies in my constituency, in the past two or three years many have reduced the numbers of people whom they employ. I have also to say that, as the revival of the economy comes, unfortunately many of those jobs will not be replaced, because those companies have managed to bring about greater efficiency in their working operations and in many ways will be well placed to compete internationally when the recession ends. But it is to new small companies that we have to look for an expansion in the number of jobs. In telecommunications, the scope is unlimited, so it is not only British Telecommunications but also many of the small companies to which we must look for this expansion in future.
  It may be instructive to examine the employment records of certain nationalised industries since they were taken into public ownership. For example, the National Coal Board, at the time of nationalisation in 1947, employed 703,000 persons. By 1981–82, the comparable figure was 218,500, or 31 per cent. of the figure at the time of nationalisation. I do not blame the National Coal Board for that—I welcome the efforts that it has made to achieve increased productivity—but I am afraid that the NCB hardly stands out as a pillar of the nationalised sector when it comes to increased employment opportunities.
  It may be argued that the National Coal Board is not a typical example. That being so, I ask hon. Members to consider British Railways. At the end of 1948, excluding the staff of the British Transport Commission's central services, British Railways employed 673,000 persons. By the end of 1981, only 227,000 worked for British Railways. It will be seen that, as a proportion of the former figure, it was similar to that of the National Coal Board—33 per cent. I suggest that experience points in a different direction from that suggested by those hon. Members who are worried about employment prospects in British Telecom following privatisation.
  The reduction in British Railways' total track mileage in the intervening period has been considerable. I doubt whether a privatised British Telecom will move in that direction. The hon. Member for Newcastle-under-Lyme spoke about the great expansion which has occurred in the network in the last 10 years. I should expect that in future a competitive, privatised British Telecom, with access to new sources of finance for investment, would have unlimited opportunities to expand its operations and hence the employment that it could offer.
  Some people will be surprised to hear that the hon. Member for Newcastle-upon-Lyme is held up as a figure of moderation in the Labour Party, because the world that
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  he presented to us was not one which many Government supporters recognised. He spoke of a world in which the nationalised industries provided every kind of benefit and asset for their employees, at a time when there was tyranny and exploitation in the private sector. The hon. Gentleman may have a great deal of knowledge about the Post Office, for which he worked, but I suggest that he does not know very much about the private sector. Of course, just as in the public sector, there are variations. There are many working practices in the private sector which I do not defend, just as there are in the public sector, but I suggest that the impetus for expansion that exists in the private sector is one from which the public sector ought to gain.
  Some people, though not many, believe that all private enterprise is, ipso facto, wrong, and that the State should not only provide for all but manage at least the bulk of all industrial activity. Other people argue that everything about nationalised industries is unacceptable and that all that is necessary to bring about the best of all possible worlds is to return the nationalised industries to private ownership.
  I believe that that approach is equally misguided. It takes no account of the many other factors that we also need to consider, but there is no doubt that enterprises in the public domain suffer from severe disadvantages, to which I shall come later.
  One detects in the utterances of unions in the telecommunications business that their members see their personal commitment to the part that they play in their industry as being under attack in some way. The same applies to other nationalised industries—transport, for instance. It comes not only from the trade unions, but to some extent from management, which often instinctively adopts a defensive posture. I believe that this posture arises out of a misunderstanding.
  I am glad that my hon. Friend the Member for Fife, East (Mr. Henderson) spoke about the progress which British Telecom has made, because I believe that the majority of those who work for it go about their jobs in a conscientious way. Our attack should be reserved not for the employees of British Telecom, but for State monopoly. We should attack monopoly wherever it occurs, and, ever since they came to office, this Government have led an attack on monopoly and restrictive practices wherever they have occurred.
  Mr. John Garrett: Where?
  Mr. Waller: The hon. Gentleman has only to look at the commitment that we made in our last manifesto to ensure not only the elimination of monopoly but an expansion of competition. We have looked not only at the negative side of the equation but at the positive side. We have already dealt with competition in legislation. I remind the hon. Gentleman of the Competition Act, passed early in the Government's period in office.
  The absence of competition has a stultifying effect wherever it occurs. Beneficial effects are already flowing from the British Telecommunications Act 1981 and the enhanced level of competition which that legislation permitted.
  As my hon. Friend the Member for Fife, East said, the Bill is a logical extension of that Act and will have beneficial effects not only for British Telecom but for its subscribers in both the business and private sector. The fact that subscribers can buy their own extension

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  telephones and other apparatus instead of having to rent them from British Telecom is a benefit that subscribers in both sectors can already count to their advantage.
  The Bill is about widening consumer choice in terms of the network, services and apparatus. Before the passing of the British Telecommunications Act 1981, a subscriber had the opportunity to rent equipment for answering and recording messages, at an enormous cost. Since the passage of the Act, the subscriber—a business man or a domestic consumer—can purchase that equipment at a fraction of the cost envisaged previously. The fact that value added network services are available and are benefiting business and the domestic subcriber is something of which we can be proud, although the Labour Party's opposition to the Bill, if it had been carried into effect, would have denied those benefits to those people. Now we are offering yet more choice, and that is something that the whole House will welcome.
  The world has changed since the time about which many Labour Members have spoken. The telephone is no longer the exclusive benefit of a few. Most people today have access to a telephone.
  The domestic market is clearly approaching saturation point. Growth must come from second or third telephones and the add-on equipment to which I referred. On Thursday this week, the House will debate changes in cable. In the coining years we shall see developments in telecommunications of which we can hardly dream today. There are great opportunities for British high technology firms to develop their home markets and provide a jumping-off point for exports to the enormous markets that are available throughout the world, and those opportunities will be greater after enactment of the Bill.
  Fear has been expressed from all quarters about the loss of the public service element—for instance, the loss of public call boxes in rural communities. The Government gave certain assurances, to which unfortunately many Opposition Members appear deaf. The Office of Telecommunications will provide safeguards. It is right to provide safeguards, because for many years to come, even without its monopoly, British Telecom will continue to have a dominant position in the market.
  My right hon. Friend spoke of certain limitations which may have to be applied to profits. I believe that the Government want to promote competition and avoid monopoly in both the private and the public sectors. In the commitment that my right hon. Friend gave, he demonstrated the Government's intention in that connection.
  As I said, the world has not stood still. The need for call boxes still exists, but it is not as great as it was now that the vast majority of people have access to telephones of their own. Of course, emergency services are important. The hon. Member for Truro (Mr. Penhaligon) told us about some call boxes which took a limited amount per week. Some call boxes take small amounts, even in a year. British Telecom closed down pay telephones in some areas long before this legislation, recognising that the world has changed. This legislation will not change that. It is ridiculous to require BT to keep available every pay telephone in the country. British Telecom has not done so in the past; nor should it do so in future.
  Nevertheless, the management of BT has some justified worries, which it has communicated to hon. Members. It needs, for instance, to know at an early stage about regulatory control. I hope, therefore, that assurances will
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  be given as soon as possible, so that BT and other organisations and companies in telecommumications can plan ahead with as much certainty as possible.
  I do not underestimate the difficulties of British Telecom's inability to borrow on the commercial money market. Clearly a return on the cost of borrowing in this industry is undeniable. The fact that BT is constrained by the PSBR is, and always has been, nonsense, when the extra costs of borrowing have had to be passed on to existing subscribers. Companies in the private sector would not dream of imposing on their existing customers the costs of borrowing for future investment. British Telecom, which is in a growth sector, should have the same advantage. I was opposed to the constraint before, and I remain opposed to it. The Bill will rid BT of that constraint for good.
  Future prospects can lead to an expansion of services and jobs in telecommunications. Many of those new jobs will be in BT's own organisation, if it can compete in price, speed of service and quality. In my opinion, BT is willing to accept the challenge. I regret that so many Opposition Members have little faith in BT's ability to compete in this new growth sector.
  The Post Office Engineering Union, in the letter that it wrote to hon. Members, said that the present structure of the telephone service was established in 1911. Things have changed somewhat since then. The Bill provides the framework for the industry now and for its expanding future, not only in the 1980s and 1990s, but in the twenty-first century. I therefore welcome it wholeheartedly.
  7.46 pm
  Mr. John McWilliam: I declare my interest as a Member sponsored by the Post Office Engineering Union.
  The hon. Member for Brighouse and Spenborough (Mr. Waller) sought to draw a parallel with employment trends in British Rail and the National Coal Board, where, in both instances, demand is reducing. Unfortunately, I do not have time to give him a lecture about the basic economics of employment. In answer to the other beliefs that he evinced this evening, may I hand him this admonition:
  "Blessed is the man who expects nothing, for he shall never be disappointed".
  I was also disappointed by the remarks of the Secretary of State. He accused my trade union—and me, because of some of the remarks that I made in the debate on the Gracious Speech—of scaremongering. I take it ill that a Conservative Member should accuse me of scaremongering, when he produces a document of this size without adducing arguments for why such a change is necessary. Instead, the Secretary of State spent his time castigating Opposition Members and making assertions about the merits of private enterprise and the shortcomings of public enterprise without supporting his statements with figures. That was unfair to me, to my trade union, and to the House.
  I shall deal with the Bill. The last hon. Member to do so was the hon. Member for Truro (Mr. Penhaligon), when he spoke about clause 42.
  I asked a rather awkward question about fiduciary duty, and all the Conservative Members ducked. They can duck as much as they like but they should remember that there will be a Committee stage. Even if the Bill becomes law, the first time that some local authority, under clause 42, tries to subsidise a telephone service, there will be a

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  complaint to the district auditor. Then some successor to Lord Denning will say to the local authority "It is outwith your fiduciary duty. You have an overriding duty to the ratepayers". It is the same argument as applies to transport subsidies. It will be no more legal for a local authority to subsidise a telephone service than to pay a transport subsidy. The clause is not worth the paper that it is written on.
  Clause 48 refers to the functions of the Office of Telecommunications. It also deals with fair trading, the maintenance of competition, and the avoidance of monopoly. The Office of Telecommunications has to ensure that cross-subsidisation from business profits to other services shall not take place because that will be unfair competition under the Bill and also under the British Telecommunications Act 1981. Yet we hear constantly from Conservative Members that that will not be so. Evidently, they have not read their own Bill. Cross-subsidisation from one service to another within BT will constitute unfair competition.
  If an existing service is unprofitable, it has to be cut, or there has to be some kind of subsidy from somewhere. As the Government have steadfastly refused to give any kind of commitment to subsidy, we can only deduce that the service will have to be cut in order to make it profitable.
  Hon. Members should be aware that business customers provide 60 per cent. of BT's income, and most of its profits. If it is not permissible to cross-subsidise from those profits into other areas, the consequences will be grave. It appears from clause 48 that it will be illegal so to do. I shall be interested to hear the Minister's comment about that.
  The Government argue that the licence given to BT will require it to provide service in the rural areas, not only in the form of kiosks but for the purposes of defence and security. At what price will the rural services and the kiosks be protected? There is to be no cross-subsidisation. The services have to be profitable.
  The Secretary of State has suggested that a letter that I quoted did not represent Government or BT policy, but in November 1981, when the tariff increases were introduced, the average residential increase was twice as much as the average business increase. The same discrimination exists in regard to the proposed new increase which has had to be postponed.
  There are the regulations about cross-subsidisation for which provision was made in the 1981 Act, the new provisions in clause 48, and the instructions that are quietly being given to BT by the Department of Industry. Already services to customers are being affected adversely.
  If the policy of no cross-subsidisation is to be carried out, it is highly likely that in tariffs alone there will have to be a differential. In seaside towns summer is the only time when there is any business so the costs in those towns are much higher. In rural areas the line distances are longer and line usage is smaller. All the various factors combine to make those areas unprofitable, and it is highly likely that, in order to avoid cross-subsidisation, there will have to be differential tariffs.
  The current average cost of installing a telephone in the United Kingdom is £540. That cost covers the instrument, the line to the telephone exchange, the overhead wires, the
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  cabinets, the cables, the equipment in the telephone exchange, the connection to the telephone exchange, the administrative cost, the entry in the telephone directory, the record cards, and so on.
  Notwithstanding what was said earlier by my hon. Friend the Member for Westhoughton (Mr. Stott), in the West Country last year a farmer applied for a line and the cost of the installation was £2,000. The farmer paid £70. I am well aware that when any installation takes more than 100 manhours an additional charge can be levied. My hon. Friend the Member for Whitehaven (Dr. Cunningham) will no doubt have a great deal to say about one of his constituents who was heavily clobbered by that regulation. Hon. Members who represent rural areas know how many cases of that sort they deal with. At present, the additional charge is not frequently levied, but if we have the requirement of profitability, it is highly likely that the regulation will be strictly enforced. It is also highly unlikely that it will operate at a level as high as 100 manhours. That figure is likely to be reduced significantly, so that any installation that is a shade above the average number of manhours will involve an extra charge. That is what will happen if, as the Bill says, cross-subsidisation must be avoided.
  When the Secretary of State tells the House that no person who has access to the telephone services at present will be denied access to them in the future, that assurance rings very hollow. It will ring particularly hollow when constituents of my hon. Friend the Member for Whitehaven are offered a line for £5,000. Of course, anyone can have a telephone—just as anyone can have a Rolls-Royce—as long as he has the money, but that is not what the Minister said.
  There are other aspects of telecommunications with which the Bill does not deal adequately, and with the Government's attitude to profitability it is not possible for the Bill to deal with them. The telephone is a vital lifeline, particularly for the elderly and the chronically sick and disabled.
  Mr. Dan Jones: And the medical profession.
  Mr. McWilliam: And the medical profession. My hon. Friend will be interested to know the number of times that I have been called out in order to attend a doctor's telephone. I remember an occasion at 10 pm on Christmas Eve when I was trying to get back to my wife and children. I phoned in to say that the last emergency fault had been cleared. I was then sent to a doctor's telephone. I knocked on the door of his house and went in. The lady of the house told me where the telephone was. I asked if there was anything wrong with it and she said that there was not. I picked it up just in time to hear the receiver being replaced upstairs. When I put the phone down and picked it up again, I heard the dialling signal. I had been kept away from my family for yet another hour when I could have been at home.
  Mr. Henderson: That is a sad story. I am sorry to hear that the hon. Gentleman was kept out of his bed. I hope that that will not happen to any hon. Members during the passage of the Bill. However, there are oddities in BT's pricing policy. A friend of mine who lives in a remote rural area wanted an extension between a farmhouse and a cottage a few hundred yards away. BT's pricing

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  mechanism was such that it was cheaper to the consumer to instal a brand new line which stretched over five miles rather than providing the desired extension.
  Mr. McWilliam: That must have been before the days of the 100 manhour installation, because in those days it would have been cheaper.
  Mr. John Grant: On a point of order, Mr. Deputy Speaker. Would it not be a good idea if the hon. Member for Fife, East (Mr. Henderson), who has made a speech and who has intervened in every speech since, let hon. Members get on with the debate?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Mr. McWilliam.
  Mr. McWilliam: The telephone is a vital lifeline to the elderly, the chronically sick and the disabled.
  I was involved in initial experiments to obtain home renal dialysis units for people suffering from acute kidney disease. That meant that such people did not need to stay in hospital because they could be treated at home and lead a reasonably normal life. However, it is vital that such people have a telephone to hand at all times when they are connected to the dialysis machine. The telephone is for their safety. It is a matter of life and death.
  What will that cost under the cross-subsidisation arrangements and who will pay for it? Will it reduce the amount that is available within the National Health Service.
  I should like to acknowledge the assistance given by the members of the Post Office Engineering Union to the chronically sick and disabled over the years. I worked voluntarily with a man who finally received the MBE in developing devices to enable disabled people to use the telephone. We made those devices in our own time, although we pinched the parts from the Post Office. We did not really pinch them, because the Post Office knew what we were doing and what we were using the parts for.
  When the Labour Government introduced important legislation for the chronically sick and disabled, Post Office engineers installed telephones, in their own time, without payment, and BT charged the local authority half the installation charge. Under that arrangement, twice as many chronically sick and disabled people received a telephone than would otherwise have been the case. How will such an arrangement continue under the Bill?
  The Bill means that rural services and services to the chronically sick and disabled will be drastically reduced. The only kiosks that are profitable—I know, because I used to be in charge of the installation and maintenance of telephone kiosks for eastern Scotland—are those in the major airports, railway and bus stations and post offices. The vast majority do not make a profit. One hundred and twenty-one kiosks have been removed because they proved unprofitable. A few others are supported by local authorities. However, if they must all be profitable, their future is bleak. Either local authorities, whose expenditure is already overstretched, will have to subsidise them, or some kiosks will have to go. Twenty-five per cent. of British households do not have a telephone at the moment, despite what has been said. There can be a high concentration of areas with few telephones and a high concentration of areas with many telephones. That vital emergency service is bound to disappear under the Bill.
  There is no mention in the Bill of a nationally guaranteed standard of service, either in terms of the grade
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  of service—the number of failures per call—or for repair, installation or anything else. The old system provided a service without fear or favour. It did not matter who one was or where, the Post Office provided the best service. As my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said, productivity was increased 100 per cent. over 10 years, which meant that the desired improvement in service had to go by the board. There will be a marvellous service for those who work in the City of London, in Edinburgh, Newcastle or Birmingham, but God help those in a cottage three miles out of Consett or the man trying to run a new factory in a development area in the North-East, Scotland or Wales.
  The Bill is a charter for big business in major city centres. The service for the vast majority of consumers, whether business or private, in other areas—let alone the rural areas—will be provided at increased costs and at a lower standard. It is not the Bill's intention to maintain and improve services in Britain. Indeed, the opposite is the case. It is no more than a charter for the city centres and vested interests. The Bill has everything to do with narrow vested interests, and nothing to do with the national interest. If hon. Members are to support their constituents—at least, the vast majority of hon. Members who do not represent the City of London or the centre of Newcastle—they should, in all honesty, reject the Bill.
  8.8 pm
  Mr. Richard Shepherd: Before I was elected to this honourable House I believed that Luddism was a historical term. However, after hearing Labour Members speak in many debates I realise that it is a central theme of their policies and it is to that that they address themselves, rather than to the challenges of modernising and advancing the interests of our major and modern industries, such as telecommunications.
  I accept the contention that the intellectual, as opposed to the dogmatic, argument for transferring the major part of the ownership of a near-monopoly from the State to institutions and individuals must be pretty compelling to induce support for such a move. Regrettably, I am not entirely sure that the arguments adduced by my right hon. Friend the Secretary of State, which are reflected in the Bill, demonstrate that the public interest is particularly advanced by the mere transference of ownership of 51 per cent. of BT.
  It is clear from the Bill that British Telecom will continue to enjoy an effective monopoly of telephone services for as far ahead as one can see—unless the Government permit cable operators substantially to provide an alternative service. All the sensible moves in the Bill to make BT more sensitive to consumer needs could, in truth, be applied to a British Telecom plc 100 per cent. owned by the State. The criteria of efficiency could be established by splitting this State-owned near monopoly of telephone services into local operating companies. Why is that not proposed in the Bill?
  I start from the premise that the consumer should be king and with the observation that monopolies rarely accede to that. I take it that the Opposition would argue that a State-owned near monopoly might be more altruistic than a privately owned one. That may indeed be so, but it is not unknown that State monopolies, secure in their genesis, act more belligerently and less covertly than those privately owned, which may be subdued by the very vulnerability of their privilege.

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  Surely those of us who accept that premise that the consumer should be king should ask not so much for transference of the ownership of some of the shares of British Telecom plc as for the breaking down of the monopoly and for competition to be widened to a far greater extent than the Bill envisages. As I suggested earlier, to pursue the first, ought we not to argue that BT should be broken down into local operating companies whose licence to operate would be subject to review? To pursue the second, should we not encourage cable operators to provide a competitive service via fibre optic links between television sets?
  I am no seer, but it takes little imagination to envisage a near future in which the television will be the link between homes and offices, and that will have a considerable impact on the nature of British Telecom plc, if allowed. The impact that alternative systems could have on the half publicly owned company proposed by the Government is tremendously important, and I hope that the Government accept that.
  It was as a presage of competition that I greatly welcomed the Government's encouragement of Mercury last year. I should have welcomed just as much a more radical spirit in the Bill which embraced a greater acceptance of the urgent need to permit greater competition. It seems to me that the issue was not ownership of this near monopoly, but competition. That is not to say that I do not welcome the limited advances promised in the Bill for making BT more sensitive to consumer demand. Given the course that the Secretary of State has chosen, the Government should regulate the rate of return of British Telecom plc and the basis should be spelt out in advance of the sale of shares. If present profits were restated on a more conventional basis, they would be approaching £1 billion. Even the Americans regulated the rate of return of AT and T until it was recently split up.
  I regret that this is a lesser Bill than I had looked for from the Government. It is less imaginative and much less of a stimulus to competition than I had hoped for. I wish that the Government had not bogged themselves down on what they see as the importance of transferring mere shares to the public. There is much justice in what some Opposition Members have said. The public interest in terms either of competition or of the benefits entailed by some of the Bill's details could equally well have been achieved by retaining 100 per cent. ownership of the company. I urge the Government to open up as many opportunities as possible to the new technologies and to accept that it might be reasonable for the whole basis of the near monopoly of telephone services—whether in the form of BT as a publicly owned authority or as a half-owned public limited company of the future—to be challenged by fibre optics through television sets. Indeed, that subject may be under discussion in Thursday's debate.
  8.13 pm
  Mr. John Grant: The Bill raises an extraordinary number of questions. My first question is: why has the time of the House been taken in this way to debate a measure that will not become effective, if at all, until after the general election? The Government admit that they have no mandate and that the Conservative Party's election manifesto in 1979 contained nothing about British Telecom. Indeed, Ministers candidly say that the
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  proposals will be an issue at the general election. They could be described as the sale of the century. I believe that the Government's decision to privatise BT in this way is profoundly mistaken. However, given the doctrinaire and dogmatic insistence that has been the hallmark of so many of the Government's actions, we cannot complain if the electors are eventually asked to judge.
  To a considerable extent, the verdict will have been preempted because the new regulatory body will presumably be in place well before the next general election. Much of the groundwork for the sale will have been done. It is fair to say that it could be unscrambled, but in that case all our valuable parliamentary time, all the administrative and executive effort and quite a lot of public expenditure will have been recklessly and unnecessarily wasted.
  The Bill could easily have been introduced in the first Session of a new Parliament if the Conservative Party were to gain—as I certainly hope that it will not—another disastrous term of office. There is no sense in causing upset, uncertainty and confusion now. There is no good reason for the unseemly and remarkable haste that has been demonstrated in pushing the Bill through Parliament. Recently, The Times reported:
  "The drafting of the new legislation, which will convert British Telecom into a private company before any share sale, has taken a very short time and as a result is expected to be subject to substantial amendment as the Bill goes through the House this session."
  The leader in today's edition of The Times underlines that point.
  We are entitled to ask whether this will prove to be another case of monumental Government incompetence, in line with the sale of Britoil. Presumably well-briefed journalists have concluded, in advance of the legislation, that we shall have to amend the Bill substantially as we go along, and that suggests that the Government have rushed their fences for all the wrong reasons. The legislation is both massive and complex, and there is no reason to force it down our throats in such an unwarranted fashion.
  Indeed, I understand that the Bill has been cobbled together with such extraordinary speed that, even now, officials are busily at work drafting the changes that the Government will have to introduce later. Perhaps the clearest example is that it is inevitable that the House will debate the Bill without the benefit of knowing anything about the detailed terms of the licence that the Secretary of State or the Director General of Telecommunications will issue to enable the system to operate. I understand that the first draft is not even available. It is unlikely that it will be in any presentable form for at least another two months. The Minister may care to comment on that. The licence may be said to be only a guide, but it is a vital aspect of the legislation.
  The result of the headlong rush to enact the Bill is that we are being asked to buy a pig in a poke in that respect. The Bill is bad. It is another unfortunate example of the Government's obsession not with improving an economy that has been laid to waste largely as a result of putting into practice their damaging and irrational economic theories, but with meddling in the ownership of British industry to fit yet another set of their preconceived and outdated theories.
  When the director-general of the National Economic Development Council, Mr. Geoffrey Chandler, recently called for a truce over the frontiers of industrial ownership

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  and urged, instead, concentration on competitiveness and efficiency. he was immediately rebuked by the Prime Minister and by her pet poodles at the Institute of Directors. However, it is worth repeating what he said. He commented:
  "Since the war, changes of Government have imposed changes on industry that were irrelevant and damaging to industrial success and unnecessary to the preservation of democracy."
  He said that that had been nowhere more evident than in the "obsessive debates about ownership". I believe that he was spelling out a self-evident truth. We have had nationalisation, denationalisation and re-denationalisation, and so it continues. We are promised a further huge dose of this assault on the public sector if the Government are returned to power after the next election.
  We can properly argue about how best to maintain the balance in a mixed economy, but the Government seem to be uninterested in balance. They are seeking to rip apart the whole public sector structure. They do not always find it so easy. The Britoil fiasco, to which reference has already been made, underlines that point.
  We also hear that the privatisation of British Airways, which is so dear to the Prime Minister's heart, will be put off until after the election. It is said to be unattractive to investors. British Airways does, of course, carry huge capital debts. Perhaps the Government thought that they could use the money from the sale of Britoil to pay off those capital debts to make British Airways attractive to investors. They may even now be turning their thoughts to using British Telecom cash for that same purpose in due course.
  How do we know? The leading article in The Times of 22 November considered that the Britoil episode was pertinent to the British Telecom disposal and warned against haste, as it has again today in its leading article. It said that the Government and their advisers should think very hard particularly about the method of sale. We have heard nothing about that today. One can read elsewhere that the Government appear to be thinking about the method. We are told that they are considering issuing what have been called "free shares" or there might be a public "phone-in" for what have been called "teleshares". One dials a special number to get shares. The House should be able to share the Government's thinking on these matters. The hon. Member for Aldridge-Brownhills (Mr. Shepherd) underlined that point. We should know how the shares are to be sold, and we should know now.
  We are told that the British Telecom board will be fully responsible for the first time for running the business and that it will be free from Government control. It appears to me that pretty much the same corporate management will be in charge as now. There will be a great deal of control in one way or another, and some of it will be Government control.
  We are told that British Telecom will remain a single entity with no hiving-off of the profitable parts. Sir George Jefferson, the chairman of British Telecom, earlier this month said:
  "Our first big job was to fight to keep British Telecom together. I don't think many people realise just how strong the pressures have been to break up British Telecom. We've won that battle so far but the pressures are still there."
  Those pressures, of course, were largely Government pressures. Sir George Jefferson said that they are still there. That hardly offers confidence for the future of
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  British Telecom as a single entity, particularly when we know the type of predatory creatures who lurk in the Government undergrowth.
  A mass of questions arise from this omnibus Bill. The British Telecom board is anxious about the powers of the Director General. They will enable him to interfere with the day-to-day activities of the enterprise. Those powers can be applied arbitrarily with only a limited appeal available. The Secretary of State did not deal with that point in his opening remarks.
  British Telecom fears that the regulatory regime may turn into a heavy-handed bureaucracy to the detriment of the customer and of new technological development. It is interesting that the Post Office Engineering Union appears to have reached much the same conclusion.
  There are worries at British Telecom that the financial structure to be imposed will not take sufficient account of commercial realities—particularly to safeguard long-term investment and to ensure a rate of return which will allow for expansion. The Secretary of State said nothing convincing about the rate of return.
  For how long will the licence run? Nothing has been said about that. If the licence makes it obligatory for British Telecom to provide a universal telephone service, including the uneconomic rural and emergency services and kiosks, how will that be paid for in a commercial undertaking? The Secretary of State has not filled us in on that point. How can we be assured that British Telecom will not concentrate on the profitable areas and run down or increase the price of other services? Are we not risking a socially divisive position which would only add to the Government's "two nations" approach?
  The Secretary of State has been remarkably vague about the licence. Why do we not have what might be called a "model licence" before us as we debate the Bill?
  The Bill refers to providing services. The phrase "so far as practicable" has already been mentioned. We are not let into what that phrase means. The Minister, when he comes to reply, must try to make those matters clearer to the House.
  Purchasing policy has already been raised. I shall not dwell on it, but it is a fact that 95 per cent. of British Telecom's purchases are made in the United Kingdom, with all the jobs that that implies. What will happen to that policy under the new set-up? How much of the telecommunications network do the Government envisage will end up under British Telecom control? How much will be subject to competition rather than, in effect, a continuing monopoly, unless there is further hiving off?
  Ministers referred to 95 per cent. of the United Kingdom market for British Telecom for the foreseeable future. Are we to believe that this great wad of legislation—an 84-clause Bill—is about a 5 per cent. share of the market? Do Ministers contend that there can be a competitive market in the provision of a central telecommunications network? Do they believe in that central network? What is the Government's response to the little Neddy report on electrical engineering which stresses British Telecom's experience with optical fibres and other developments which could significantly cut cabling costs? It would be interesting to hear the Minister's view on that matter.
  Some hon. Members touched briefly on the immensely important issue of cable and on the implications of the Bill for British Telecom as a cable provider and, in particular, as the national common carrier. The issue is relevant to

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  today's debate and will be dealt with in more detail on Thursday. Do the Government accept that British Telecom is ideally placed to supply an integrated national network and to keep British technology in the forefront? Do they accept that that will allow large orders to be placed with United Kingdom suppliers with economies of scale which would put us in a better position in terms of cost to penetrate export markets?
  What is the Minister's view about an article written by Lord Weinstock in the Financial Times last week? We are entitled to know whether the Government will take Lord Weinstock's advice. He is not normally found to be critical of the Government, so perhaps they will accept his advice.
  Does the Minister accept that for sound technological and commercial reasons, as well as the essential need not to blunder into undermining existing broadcasting standards—he referred to that briefly at Question Time today—it is crucial that a wrong rushed decision should not be made?
  I underline what the hon. Member for Newcastle-under-Lyme (Mr. Golding) said about staff cuts. The Secretary of State was less than convincing about that matter. There had been suggestions that the Department of Industry proposed a cut of 45,000 by 1986–87. A specific date was mentioned. Now we hear from the Secretary of State that he was talking only in round figures at the Conservative Party conference. What is the real story?
  With regard to the pension fund deficiency, the Secretary of State talked about options. Why cannot we be told which option he favours at this stage before the legislation goes any further?
  On the customer side, will Oftel be able to deal with communities and individuals at local level? What sort of regional consumers' network can we ultimately expect? Clause 47 is extremely loosely drawn. It appears that the suggested advisory bodies will be unable to initiate action on their own account. It seems that they will have to wait for the Director General to refer matters to them. That is highly unsatisfactory. As for the changes in legal liability, why cannot customers with complaints use independent arbitration as an alternative to the courts if they wish to do so?
  Ministers say that they want to give British Telecom the freedom to react to market forces and to remove it from the political arena. That is to stand the consequence of the Bill firmly on its head. The Bill will ensure that British Telecom becomes a shuttlecock to be batted to and fro all the way to the general election, and probably beyond it. That is not the way to treat the customers, the work force of British Telecom or the public generally. It is not the way to produce an enterprise that will match the communications needs of the age.
  I expect that the Social Democratic Party, like the Liberal Party, will want no further truck with this measure. The Bill will reach the statute book in its entirety only by the force of Conservative votes. Once it reaches the statute book, it will require a Conservative majority to ensure its implementation after the general election.
  I end with what I hope will be a positive and constructive suggestion to the Government and the official Labour Opposition. This massive and complex Bill may require much amendment as the Government use their majority to steamroller it through the legislative process.
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  I am sure that in the end the Government will get their way. I noted what the hon. Member for Newcastle-under-Lyme said about trenches. I fought in the trenches in many Committee Rooms over the years. It will do the Government, the customers, the workers, the industry's managers and British Telecom's potential competitors no good if the House approves legislation that has been inadequately considered, ill-digested and in which there are loopholes and gaps which subsequently need plugging. It will do the reputation of the House as a legislative workshop a good deal of damage if that happens. However, that is precisely what happens with all too much of the legislation that finds its way on to the statute book.
  The Bill, for the reasons that I have given, promises to be particularly faulty and a clear-cut example of what is wrong. I expect that, in common with other Bills of major weight and controversy, the early clauses of the Bill will be discussed ad infinitum and that a great deal of boring and often irrelevant rubbish will be dragged in while the later clauses—some of them extremely important—will be subject to a guillotine. Many of them will have little or no proper consideration by the House. We all know the futile ritual on such occasions. We all know the hackneyed, partisan and phoney arguments that are employed by both sides in Committee. I have been involved in advancing them—I do not pretend that I have not—and in maintaining the ridiculous system.
  I suggest that the Government should open prompt discussions with the official Opposition and minority parties with a view to agreeing a sensible, reasonable and generous—I stress "generous"—timetable for the Bill that will ensure that it is properly scrutinised in Committee and during its other stages. There is a chance to set a worth while precedent. I believe that the Bill should be dropped. However, with the arrogant rigidity which typifies this Administration, I do not believe that that will happen.
  This unfortunate Bill deals with a high technology industry in a technological age. I should like to see the House do its best sensibly to eliminate the worst of its technical faults, which do no credit to any of us or to the democratic system if they are enshrined in an Act of Parliament.
  Mr. Kenneth Baker: I am sure that the hon. Gentleman's remarks on the Bill's timetable must be addressed principally to the Opposition Front Bench. It will be much in their hands whether the House responds to the constructive suggestion that he has made. The hon. Gentleman has criticised the Bill in many different respects but he has not offered an alternative. Is he content with the status quo? Is he content that British Telecom's investment programme should remain within the sphere of the PSBR and that it should be denied the advantages that we are claiming will result from enactment of the Bill? What is the SDP's policy in respect of British Telecom?
  Mr. Grant: The SDP is not in favour of this measure, the effect of which is called "privatisation". The old-fashioned word was "denationalisation". A number of ways have been suggested in which British Telecom could raise its funds. Several hon. Members have suggested that it could go to the market, but it is not necessary to do it in this way. I subscribe to that argument. I accept that the timetable is primarily for the Opposition, but I stressed the word "generous". No purpose would be served in having discussions if the Minister did not acknowledge that the

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  Bill should be closely scrutinised. It is a massive measure. It will take a long time to consider. I am arguing that it should be properly considered.
  The Secretary of State for Industry is not usually the sort of person to use hobnailed boots to try to keep people in line, as does the Secretary of State for Employment, whom I am more used to. However, the Secretary of State for Industry managed to upset the hon. Member for Newcastle-under-Lyme. He was foolish to do so. It is unlike the right hon. Gentleman to be caught without his trousers, like the Chancellor of the Exchequer, as he is a smooth operator, yet he has presented the House with a Bill that is full of more holes and raises more questions than any Bill that I can recall. The debate has revealed his naked political condition. It is not a pretty sight. The Bill is extraordinarily confused and ill-devised. It will mean continuing uncertainty and speculation. It is a doctrinaire measure that will not help to give British industry the shot in the arm that it badly needs because of the effects of the Government's policies. My right hon. and hon. Friends and I will vote against it.
  8.35 pm
  Mr. David Myles: In "To a Mouse", Burns says:
  "An' forward tho' I canna see, I guess an' fear!"
  We have heard all sorts of guessing and fearing from the Opposition Benches. We have heard about the Social Democratic Party's trembling indecision from the hon. Member for Islington, Central (Mr. Grant). The members of that party do not know quite what they want. We heard from the hon. Member for Truro (Mr. Penhaligon) that the Lib-Lab pact was not yet dead.
  I am pleased to contribute to the debate as a very rural Member and to speak in the interests of rural Members. There are exciting prospects in the telecommunications business—not ones to guess and fear, but ones to look at. There will be exciting developments in technology.
  How best can we harness the new technology and get the best out of it? The only way to investigate and to find the best systems is to open up competition. When other countries had adopted better systems than ours our monopoly industry was afraid to adopt such systems or did not have to. In a monopoly it is difficult for the management to decide just where to step in. In the development of the new technologies in telecommunications that was never more true.
  When there is a monopoly people do not know whether they should hold back and save public money by not going for optical fibres. They do not know whether they should wait for the satellite and do away with wires. Such matters are difficult for the management. I am not criticising in any way the past service that has been given to rural areas by British Telecom, the Post Office and telephone staff. We have been well served by many dedicated trade unionists. The hon. Member for Newcastle-under-Lyme (Mr. Golding) adequately defended their interests. We need free competition.
  The industry should expand. The telecommunications manufacturing industry has lost 40,000 jobs in the last 10 years. The hon. Member for Newcastle-under-Lyme underlined his concern for jobs. He does not have the monopoly of concern. That loss of jobs shows that the mixture of monopoly and protection does not pay. Since liberalisation—that may be a good word—the prospect of an expanding industry has been to hand. I know that the
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  National Farmers Union has its worries. That is quite right. Nevertheless, I do not share the view that that worry warrants outright opposition to the Bill. The NFU is merely highlighting the difficulties and problems that it believes may crop up in the future—guessing and fearing again. It is important that strong lobbies such as the NFU should voice those fears and worries. Governments depend strongly on the support of members of the NFU and, if I dare mention it, the Scottish NFU. Their views roust be listened to in Committee.
  I apologise for not being present when my right hon. Friend the Secretary of State opened the debate. My absence was unavoidable. He stilled some of the worries that are felt in rural areas. I hesitate to repeat myself in front of the present audience but I live in one of the most remote areas in the east of Scotland.
  I have a shepherd's house that has a telephone Many telephone poles are used to serve that telephone. I am sorry to say that many of my cows, bulls and others do not respect public property much and occasionally rub and scratch themselves against the telephone poles and shake and break the line. The line is broken often and repaired with admirable alacrity. I admire the trade unionists who come out in all types of weather to repair it.
  Nevertheless, competition can improve matters in those remote areas. I have tried to tell the body in charge of that line that it would be better to make it far shorter. I tried to persuade the relevant people that it would be sensible to put the line underground where no bulls or cows could damage it. Nor are there any ploughs to damage it.
  Mr. Robert Maclennan: I rival the hon. Gentleman in the remoteness of my dwelling in my constituency. Would be acknowledge that there are extremely uneconomic operations that are vital to the survival of communications in such constituencies? There are in my constituency 42 kiosks that BT considers are uneconomic. It is inconceivable that anyone could run them at a profit. Such kiosks require the cross-subsidisation that is possible within a national enterprise such as BT. Does the hon. Gentleman recognise the reality of that fact?
  Mr. Myles: I accept the hon. Gentleman's point wholeheartedly. I also believe that the Government, knowing the people on whom they have to depend, will also recognise that fact. Nevertheless, I do not agree that services cannot be provided as efficiently in rural areas as in urban areas by competition.
  Unlike the hon. Member for Truro (Mr. Penhaligon), I believe that this is a bold step that will prove to be a wise one at this stage of a Parliament. It was and is a bold step to introduce this type of legislation at this stage. There is no doubt that the Government's intentions will be judged by the electorate before the Bill is implemented.
  I am surprised that the Liberal Party opposes the Bill. Obviously the Lib-Lab pact holds in the desire to maintain the public ownership of the telecommunications industry. I believe that it will prove to be an electoral mistake, but it is not the first such mistake that the Liberal Party has made, and I am sure that the SDP will soon be making many similar mistakes.
  Nationalisation has been increasingly unpopular since the 1950s. A survey by National Opinion Polls n August this year showed that 63 per cent. of the electorate—we do not need 63 per cent. of votes to gain an overall

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  majority in the next Parliament—opposed further nationalisation. Indeed, 35 per cent. of Labour supporters and 68 per cent. of alliance supporters said that they were against further nationalisation. Therefore, I am surprised at the line being taken by the Liberals and the SDP who wish to walk with the media and the public down the middle of the road.
  Mr. Tom Ellis: Is the hon. Gentleman aware that the alliance is not proposing further nationalisation?
  Mr. Myles: I am delighted to hear that. It is marvellous; we have had two interventions from alliance Members and I am pleased to have agreed with both. However, we are talking about an existing monopoly. Telecommunications is probably changing faster than any other industry and it can harness more new technology than any other industry. Yet the alliance says "We shall oppose".
  I hope that adequate guarantees will be given in Committee to quell the fears of rural dwellers and small businesses. A few large users constitute the major usage of the telecommunications system. Small business users and individuals in rural areas fear that the major users may get maximum benefit from the Bill, but I wonder why their fears should be greater because of the Bill than they are under the present system. Given the monopoly power and the trade union pressure that exist at present, why should big users not achieve unfair advantages under the existing system?
  The hon. Member for Newcastle-under-Lyme (Mr. Golding) made an impassioned speech and frequently used the word "we". I tried to interpret what he meant by it, and it seemed that he meant exclusively the trade unionists who work in the telecommunications industry. My concern is not just for the workers in the industry, but for the consumers who use the telecommunications system. I trust that the Bill will ensure that they are well served.
  8.50 pm
  Mr. Bob Cryer: It is clear that even Conservatives have reservations about the Bill. The Secretary of State said that millions of people support it, but he produced no evidence to give credence to that claim and Opposition Members have received only criticisms of it.
  For all the simple-minded jokery of the hon. Member for Banff (Mr. Myles), the fact remains that the House must deal with the words in the Bill. Clause 3 provides that the guidelines
  "shall have regard to …the need to secure so far as practicable … public call box services, emergency services and services in rural areas".
  The phrase "so far as practicable" has a certain meaning. It means, for example, that if British Telecom decides to refuse a rural service and the decision is challenged in the courts, the courts will interpret that provision as meaning that the cost was too great. That is why those words are used—not by chance, but to allow for the plea that the cost is too high to provide rural services, telephone kiosks or whatever. That is why the National Farmers Union, for once, opposes the legislation. It can see the practical consequences, which the Secretary of State has not yet spelt out, and almost certainly will not spell out in the future.
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  The Secretary of State—or the runner up, the Minister for Industry and Information Technology, who is to wind up the debate for the last half hour—will talk about licensing. They know full well that licensing will make no difference, because when licensing is discussed the Secretary of State will say that he has to follow the primary legislation, which provides that such services are to be carried out "so far as practicable." The licensing provisions can in no way usurp or change the primary legislation now before us.
  I shall deal briefly with other aspects of the Bill, notably clause 49. Certain areas of public ownership provide a degree of security in their operation. For instance, although I have strong reservations about nuclear power, the fact that it is in the hands of public enterprise provides some additional security, because we know that the public service is expected to observe, and generally conforms to, higher standards and that there will be no cost cutting to obtain higher profits.
  The Bill hands over massive powers to private enterprise without any safeguards and is a considerable extension of the corporate state. It is difficult enough, in all conscience, for the House to deal with these matters, because the Government regard our democracy as such a fragile flower that discussion and debate on telephone tapping cannot be permitted—I do not mean the giving of names and addresses—as part of general accountability. We are not allowed to discuss it and the Home Secretary dodges all parliamentary questions on the subject.
  The Bill hands over virtually unfettered powers to the Secretary of State in this respect, because British Telecom provides a telephone tapping service for the nation. On 1 February 1980, in an article entitled
  "Big Buzby is watching you",
  the New Statesman said:
  "Britain's national telephone-tapping service appears to operate from a building concealed behind the Industrial Tribunals Central Office at 93 Ebury Bridge Road, SW1, just opposite Chelsea Barracks. This is the organisation which is known in police lore as 'Tinkerbell'. Here thousands of telephone lines up and down the country are monitored every year, and the results supplied to the spy 'customers'—chiefly MI5, Scotland Yard's Special Branch, and the C11 squad."
  A massive operation is already carried out by BT, and the POEU has expressed deep concern about it. It has published a document entitled "Tapping the Telephone" and has made four proposals. It states that
  "there must be legislation to provide an express legal authority for the official interception of communications. We accept the need for mail to be opened and telephones to be tapped on limited occasions by specified authorities … However, we believe that the present lack of an express legal provision for official interception which we have described is unacceptable in a democratic society … Second, there should be stricter criteria for the issue of warrants … Third, there needs to be an independent check upon the judgment of the Home Secretary in deciding upon applications for a warrant or alternatively, the decisions should be taken elsewhere … Fourth, there should be annual published reports to Parliament detailing the number of interceptions authorised in the previous year and commenting on the effectiveness of the interceptions and any changes in policy or procedure. We believe that the present lack of any meaningful kind of political accountability for the interception of communications if fundamentally wrong and that the minimum requirement is that all MPs know the broad picture as it unfolds from year to year."
  The Labour Party has expressed exactly the same concern, yet the Under-Secretary, who professes adherence to some sort of liberal view inside the Conservative Party, does not produce an ounce of protection for this massive operation which at present is

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  undertaken by a public body. To that extent it is accountable in a limited sense, yet it will be handed virtually unfettered powers.
  Clause 49 wants some reading to be believed, because the Secretary of State can tell the new Director General, who will be a powerful man indeed:
  "If it appears to the Secretary of State to be requisite or expedient to do so in the interests of national security or relations with a government"
  and so on, he can or cannot do "a particular thing".
  Clause 49(3) states:
  "The Secretary of State shall lay before each House of Parliament a copy of every direction given under this section unless he"—
  the Secretary of State—
  "is of opinion that disclosure of the direction is against the interests of national security or the commercial interests of any person."
  In other words, the Secretary of State decides in secret to give secret instructions to the Director General, who by virtue of clause 49(4) is not allowed to reveal those directions. This is a massive power to the Secretary of State, and on that ground alone the House would be right to reject such a handover of power.
  It means that a quasi-private enterprise organisation, which in due time the Secretary of State wishes more and more to hand over to private enterprise, will be operating in total secrecy without any accountability to the House of Commons. That is totally and utterly wrong in any sort of democracy. I am pleased that my hon. Friends will be joining me in the Lobby against the Bill. We shall be voting against the erosion of a public service, the erosion of facilities for rural areas and increased charges for the rural areas.
  The hon. Member for Banff talked about his beasts knocking down telephone poles. He will certainly be charged when the Bill comes into force. It will not be a question of trade union members going out in the snow in deepest midwinter to carry out repairs as part of a service—they will certainly go out, but there will be a bill as long as a roll of wallpaper for the sort of services that the hon. Gentleman described.
  The legislation puts profit before service. That is the biggest principle upon which hon. Members will be voting. All this business of competition is so much nonsense. What is happening is that the Tory Government are handing over to their backers the juicy bits of the public enterprise sector.
  The legislation will not be brought into effect before the next election. This is to encourage those Tory business men who are a little reluctant to contribute to the party coffers to mount a bigger campaign for the return of the Conservative Government and so benefit from the plums offered by privatisation. Subsidiary to the main principle is the fact that the House is being deliberatly denied its proper and due accountability. In a democracy, we demand nothing less.
  9 pm
  Dr. John Cunningham: In yet another privatisation debate—this time on the proposed privatisation of a corporation that has been in public control for more than 70 years—the arguments in favour of the measure have proved no more convincing than on previous occasions.
  The debate has completely divided the House. Apart from one or two questions to the Secretary of State by the
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  hon. Members for Chichester (Mr. Nelson) and for Devon, West (Sir P. Mills) who expressed concern about rural areas, Conservative Members have dutifully supported the proposals. They have adduced the argument that, although the Bill represents a drive towards a more commercial approach, the loss-making services of British Telecom will nevertheless be safe, and services to people in remote rural areas will be secure. That is not a very convincing argument. Needless to say, we on the Opposition Benches do not accept it.
  Nor do we accept the arguments advanced about the jobs and the pensions of those people who work in telecommunications. My right hon. and hon. Friends, the Liberal Party and the Social Democratic Party have expressed good reasons for opposing the measure. The arguments and assertions heard from Government Front Bench and Back Benches alike are the same as those heard on previous occasions. The case for the Bill is broadly that privatisation will bring better, cheaper and more efficient services to Britain, that existing consumers' interests will be protected, that new technology will be forced in by competition and that the ending of BT's exclusive privilege will bring no danger and no risk to the quality, level and extent of existing services.
  In addition, it is argued that British Telecom. freed from Government control, will be more flexible, more responsive to the market, more enterprising and more able to raise capital by some mysterious method. It is also argued that the corporation will have complete freedom to act in the market. Whatever else the Bill says about, and intends for, British Telecom, it is certainly not the case that, if it becomes an Act, British Telecom will be free. On the contrary, it will be more hedged around with controls both by the Secretary of State and by the Director General whom he proposes to establish than it ever has been.
  The hon. Member for Fife, East (Mr Henderson) argued that British Telecom would be better able to raise finance and that the market would somehow respond. The hon. Gentleman must have been absent when the Britoil launch took place. He can have taken no cognisance of what happened in that instance. He needs no reminding, I am sure, that this is a much bigger corporation and that there is much more at stake.
  My right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) put his finger more accurately on the key issues—the threat to existing services and consumers. He talked of the creaming-off, as instanced by what Mercury proposes to do by going for the major trunk routes which will damage British Telecom and its income from such routes. He stressed the fears of the Telecommunication Equipment Manufacturers Association that imports will damage jobs both inside British Telecom and in its supplying industries.
  Every Conservative Member without exception seemed to argue that, whatever else privatisation would do, it would somehow almost magically ensure that existing services would survive and that the problems faced by British Telecom would go away. The hon. Members for Hertfordshire, South-West (Mr. Page), and Cornwall, North (Mr. Neale) expressed similar views. I enjoyed the greater reality of the speech by the hon. Member for Truro (Mr. Penhaligon) who pointed out, as I know well, that services in rural areas are already under considerable threat. It is axiomatic that if British Telecom, as a result

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  of this measure, has more commercial forces placed on it, the likelihood is that those threats to rural communities will increase. The evidence leads us to that conclusion.
  Mr. Richard Page: It is obvious that the hon. Gentleman has not had to wait for 18 months for a standard PABX 7 system to be installed as my company has. That is the real world and the reality of British Telecom service.
  Dr. Cunningham: The hon. Gentleman is dealing with a separate point to which I shall refer later. At the moment we are discussing services to consumers in rural areas.
  My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) made a forceful speech dealing with the strong fears of members of the Post Office Engineering Union. My right hon. Friend the Member for Openshaw expressed similar views which are held by members of the Union of Communication Workers. Those views were supported by my hon. Friend the Member for Blaydon (Mr. McWilliam). If Conservative Members do not think that that anxiety is shared elsewhere, I refer them to the News Digest of POUNC. One of the latest issues is headed:
  "An Uncertain Future for British Telecom—and Telecom Users."
  There is no doubt that the statutory watchdog for consumers' interests in British Telecom shares our fears. Those fears are shared also by Rural Voice, an association of nine organisations representing rural communities. They all be eve, as we do, that services will be threatened.
  The Secretary of State asserted that private enterprise was better by definition. He admitted honestly that the real problem faced by the Government with regard to British Telecom was that they do not like public ownership. He said that monopoly had been bad not only for customers but for British Telecom itself. He went even further. He said that he wanted to see British Telecom become more like American Telephones and Telegraph. Of course, if anything, AT and T had a bigger monopoly and a bigger control of the market than British Telecom. The Secretary of State let the cat out of the bag in his reference to what he said at the Tory Party conference about job loss in British Telecom.
  Mr. Patrick Jenkin indicated dissent.
  Dr. Cunningham: The right hon. Gentleman may shake his head, but he was singularly unconvincing when that question was put to him.
  Mr. Jenkin: I can assure the hon. Gentleman that he will study that speech from beginning to end and find nothing in it about job loss in BT.
  Dr. Cunningham: The idea that somehow, by a slip of the tongue, he was able to lop off almost 20 per cent. of the work force of British Telecom—a Secretary of State for Industry making a mistake of that magnitude—and then have us believe that that was just what it was is not in the least convincing.
  On the other hand, the right hon. Gentleman did not take time to give us any idea about what the licences will look like. Nor did he give any description of the regulations that will surround the operators who obtain those licences.
  What the right hon. Gentleman says in one of his handouts entitled "Ringing the Changes" is:
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  "BT plc will not be singled out for special controls but, since BT runs what is by far the largest and most important network"
  —so far the only network—
  "and since its activities are so vital to the nation, its licence will need to be negotiated with particular care."
  What does that mean? It implies that the British Telecom licence will be different from other operators' licences. The House would like to know why and how different regulations and controls should be placed upon British Telecom in the future.
  What is happening now contradicts what the Secretary of State and his right hon. and hon. Friends have been saying. As my hon. Friend the Member for Blaydon pointed out, rates to domestic users have risen more than twice as fast as rates to commercial users. My right hon. Friend the Member for Oppenshaw said that Mercury was intent on creaming off the most profitable routes for communication, and, of course, British Telecom is being forced to respond and to put even more investment into those areas, to the detriment of other less well serviced areas.
  I remind those hon. Members who say that the situation in the United States of America is somehow better, that the impact of network liberalisation there has not been minimal. It is causing concern about unresolved issues on pricing and the financing of the national communications infrastructure. There are real concerns about threats to existing services in the United States of America as a result of what has been happening there.
  No one fought harder than A T and T to prevent the erosion of its monopoly position on the same argument that British Telecom has been using and that we are using now—that the threat to its less profitable services would not be containable if the highly profitable routes were taken from it.
  The assurances of the Secretary of State carry little conviction. The threat to rural areas, including the Highlands and Islands, Devon and Cornwall, is well emphasised by the example in my constituency. Some of my constituents, living between two villages which already have telephone services, have been asked to pay £5,000 for a telephone. It is unbelieveable, but it has happened. The Secretary of State said that it has been going on for some time. That is not the point. How does he expect people in rural areas to afford a connection charge of that size? Is he happy that they should be given such a quotation? Does he believe that privatisation will improve that situation, or does he agree with us that it is bound to make the situation worse?
  Are not the examples of the loss of rural buses, the loss of petrol stations in rural areas, and the threat of sub-post offices disappearing evidence of what is likely to happen to telephones in rural communities if privatisation and market forces prevail? If the Secretary of State does not believe that, he should understand that there are many people who do. The Post Office Users' National Council says that not only is that likely to happen, but that the consumers' case will fall, because of the conflict in the office of the Director General between the need to observe proper commercial competition and at the same time to look after consumer interests.
  It says:
  "However, the Office of Telecommunications as proposed … is clearly intended to have far wider powers than those envisaged by POUNC including responsibility for all British Telecom matters including tariffs and consumer complaints.

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  POUNC does not consider that the regulatory body can effectively safeguard the consumer interest and the monopoly areas of the network whilst at the same time overseeing BT's move into a commercial environment where profits will be needed in order to attract investors.
  Therefore, POUNC expresses grave concern.
  It is not true that privatisation is likely to bring the advantages of new technologies to the rural areas and small towns and communities as quickly as would be likely to happen if British Telecom remained as a State public service. As my right hon. Friend the Member for Salford, West (Mr. Orme) said, it is not as though the track record of British Telecom is bad. In the decade 1971 to 1981, the number of subscribers doubled, with only a 6 per cent. increase in employment by the corporation. It has a major programme on digital systems. Today, more than 100,000 miles of advanced digital systems are working. In a few years, BT will add an extra 100,000 miles of digital systems every year at an annual estimated investment of £350 million in the foreseeable future. British Telecom seems to show litle concern about raising finance for new technology. It also has an agreement with an American organisation on satellite communications. It is a world leader in optical fibre technology. Even Lord Weinstock, commenting on cabling, which is important to British Telecom. said that the quick buck option would be bad for British industry and for the country as a whole, and it should be rejected. We agree with that.
  British Telecom has a world lead in research based on its research establishment at Martlesham. We were told by a number of Conservative Members that, after privatisation, BT would raise more money by borrowing rather than by financing its investment out of retained profits, as it has done up to now. We are sick and tired of being told by the Prime Minister that we cannot finance our industries through borrowing, and that the reason why we cannot attack unemployment more aggressively and why investment has collapsed is that borrowing is bad for us. That is what we are told. We are given lessons about household economics. We are told to run inside our budget. That is exactly what BT has been doing for several years. Now, apparently, to suit the privatisation argument, running inside one's budget is out and borrowing is in. How two-faced can the Government be?
  BT's buying policy has meant that 95 per cent. of its purchases have been made from the private sector of British industry, with an annual expenditure of about £2·2 billion. Will not that kind of business with the private sector be threatened by privatisation? Are not the commercial forces that will be let loose likely to mean that BT and others will go abroad for some of that business and place more and more of those contracts abroad? We already know that many contractors abroad are looking with great interest to see when their opportunity will come.
  All the development of BT in the last few years has been done at no cost to the taxpayer. The reality is that if the proposals in the Bill go ahead BT will be left with a distorted business—with more of the loss-making business and less of the profitable lines, and with less income. That is likely to force it into a far less healthy financial state than it now enjoys.
  My hon. Friend the Member for Newcastle-under-Lyme is right when he says that the policy set out in the Bill is bound to result in a threat to jobs and employment
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  in the industry. We do not need measures that w ill unsettle and destablise BT and lead to a major—perhaps a prolonged—period of uncertainty.
  We are told that privatisation will come. We are not told when it will come—perhaps just after the next election. This is at a time when the people managing the industry face the challenges of the re-cabling of Britain and the need to introduce more and more new technology, optical fibres, more data transmission systems, and more international communications by satellite—a major investment programme by any international test. At a time when all those challenges face the corporation, we are told that it must now be privatised.
  I listened with a wry smile to several Conservative Members saying that the major advances which have been taking place in BT, and building up for almost a decade, have resulted from the 1981 measure, taken through the House by a Conservative Government. What a load of nonsense. What absolute drivel. The challenges of the new technology and the opportunity for many managers, perhaps for the first time in their careers, to get to grips with new ideas and new challenges, have brought about those advances, and they have nothing whatever to do with the argument about privatisation.
  Far from enhancing the performance of the management or the work force, the threat and uncertainty are likely to cause worry and to be de-motivating. That is the reality of the threat now hanging over the corporation. We would like to see BT as a flagship for information technology and telecommunications, instead of having massive uncertainty and further upheaval coming so soon after the 1981 Act.
  The House should be in no doubt that a future Labour Government will act quickly to prevent organisations, such as Mercury, creaming off profitable business and damaging BT.
  We want BT to maintain a national network and to be responsible to customers, whether they are the multimillion pound organisations in the City which want electronic exchanges or ordinary people in small towns or rural villages who simply want a telephone. A telephone in the home should not be dependent upon a person's ability to pay large and increasingly outrageous sums for connection. [HON. MEMBERS: "Ah!"] Conservative Members may say "Ah", but for the disabled, the chronically sick and the blind a telephone is a major part of their lives which broadens their existence and horizons.
  Mr. Myles rose——
  Dr. Cunningham: No, I shall not give way.
  For Conservative Members to respond as they do shows how little they care about many disadvantaged people in the community.
  This massive Bill, selling off £15½ billion worth of public assets, at an as yet unspecified date, will reflect no credit on the Government. How can the Government believe that the quarter of a million people employed in the industry and its suppliers who are threatened by these proposals will think that the Bill is in their interests or the national interest? The present period of rapid change demands maximum performance from any manager. No manager in any industry would want to be confused and undermined in the way that the management—indeed, the whole work force—will be by the Bill.
  The Bill begins with the creation of a massive quango—the Office of Telecommunications. No doubt a

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  person with considerable powers will be appointed, answerable only to the Secretary of State for Industry and not directly to the House, and set loose with tremendous powers over a major growth industry.
  The Bill has 84 clauses providing new powers, controls and directions. It lists new criminal offences and describes those powers mentioned by my hon. Friend the Member for Keighley (Mr. Cryer) to intercept calls, tap telephones and pass information to other Governments. Then follow 87 pages of schedules. All that is done in the name of setting the industry free.
  As ever with the Government, there is no attempt to define a clear stable strategy for the growth of the British telecommunications industry. The Bill, which we shall oppose, will serve only to confuse BT, its suppliers and users alike. It could well lead to large job losses within BT and its suppliers.
  Even now, if we are to believe the newspapers, offers are being made—presumably behind the back of the Telecommunications Equipment Manufacturers Association—to let in the Japanese information technology industry. Yesterday, The Sunday Times, under the heading "Jenkin plans to woo Japan", said:
  "Industry Secretary Patrick Jenkin is planning his first trip to Japan next January in a move to speed up talks on collaboration between British and Japanese firms … But Miti also has an eye on the moves by the British Government to liberalise the United Kingdom telecommunications market by breaking up British Telecom's monopoly of supply".
  It would be very interesting to learn what the constituent members of TEMA have to say about that.
  This privatisation measure, like all those before it, has no place in a modern industrial society. It will further divide and disadvantage British industry and the British people. It deserves and will get our total opposition.
  9.29 pm
  The Minister for Industry and Information Technology (Mr. Kenneth Baker): Tonight we have begun what will clearly be a long process of debate. [HON. MEMBERS: "It will be."] I note what Opposition Members say, but I found the suggestion of the Social Democratic Party spokesman, the hon. Member for Islington, Central (Mr. Grant), that there should be an agreed timetable for the Bill very attractive. [Interruption.] I just wanted Labour Members to confirm that they will not approach the Bill in such a constructive way.
  Several questions have been raised and I shall deal with as many as possible. The right hon. Member for Salford, West (Mr. Orme), and the hon. Members for Newcastle-under-Lyme (Mr. Golding) and for Blaydon (Mr. McWilliam) raised points about the pensions of BT's existing pensioners and the pension entitlements of BT's existing employees. I appreciate that there is considerable anxiety, and I should like to set some of it at rest. As regards the existing pensioners, the trustees of the Post Office and BT pension funds have the duty of providing pensions to BT and Post Office pensioners and of holding in trust the contributions paid by BT, the Post Office and past and present employees.
  The benefits paid to pensioners are governed by the pension fund trust deed. Under rules established by that deed, BT's pensioners are entitled to periodic increases in their pensions in line with the increases enjoyed by most civil servants. The trust deed prohibits changes which
  96
  would reduce the benefits of any pensioner below the entitlements for Civil Service pensioners. Therefore, it would not be open to the successor company, even if it wished, to reduce that entitlement.
  Mr. Charles R. Morris: Is the Minister aware that British Airways' employees were given a similar undertaking by the Government at that time?
  Mr. Baker: I assure the right hon. Gentleman that I have given the correct legal position for BT's existing pensioners.
  I come to the pension rights of BT's employees who are not drawing a pension at present. BT's current employees are members of the pension scheme, by virtue of their contracts of employment. Any change to the rules in relation to employees retiring in future would require the agreement of all the trustees—I stress that-including those nominated by BT's trade unions, and all the trustees are required by law to act in the best interests of the trust's beneficiaries.
  Therefore, although I cannot offer any guarantees about the future—any more than I could if BT were to remain a nationalised industry—I can assure the House that there is substantial protection for BT's employees under the trust arrangements. That protection will be preserved in full when BT is turned into a public limited company. I hope that those clear undertakings will set aside the anxiety and unrest that have been expressed. As regards new recruits to BT, I cannot bind the future pensions policy of BT, whether it is a public limited company or a nationalised industry. The pensions policy of BT plc in future in relation to new recruits must be a matter for it to determine in consultation with its work force.
  Questions have been raised about the pension fund deficiency. There are two deficiencies: the post-1969 deficiency, which is being met partly by BT and partly by the Post Office, and the pre-1969 deficiency. As matters stand, BT is under an obligation to make good the pre-1969 deficiency by 1992 by means of payments under a deed of covenant. As my right hon. Friend the Secretary of State said, under the legislation that obligation is to be handed on to the successor company, BT plc. As my right hon. Friend also said, it might be possible to reduce the burden on BT plc by arranging for part at least of that deficiency to be liquidated out of proceeds from a sale of shares. I can offer no commitment, but clearly that is one of the options. I wish to make it clear that that obligation will be met, and the Bill ensures that it will be.
  The right hon. Member for Salford, West asked me a specific question about clause 38. He said that the clause could possibly eliminate the right of British Telecom employees to strike. Clause 38 does nothing to remove or alter the right of anyone employed by British Telecom to strike. During the Committee stage of the British Telecommunications Bill—now the British Telecommunications Act—on 3 March 1981 my right hon. and learned Friend the Attorney-General advised that under the existing law a total withdrawal of labour would not be an offence, although other forms of industrial action might be.
  The existing law is contained in three Acts, the relevant sections of which are being repealed and replaced by the Bill. The Bill merely seeks to update those provisions without affecting the right to strike. I can clarify that point further in Committee if the right hon. Gentleman wishes.
  Mr. Orme: Will the Attorney-General attend the Committee to give clarification on this issue?
  Mr. Baker: The Law Officers are always at the service of the House. If the right hon. Gentleman wants confirmation that the Law Officers will attend, I shall convey that matter to my right hon. and learned Friend. He appeared during the Committee stage of the British Telecommunications Bill and on Report. If the right hon. Gentleman requires that, I shall let my right hon. and learned Friend know.
  My hon. Friends the Members for Hertfordshire, South-West (Mr. Page) and for Cornwall, North (Mr. Neale) asked about British Telecom's international obligations when it becomes a public limited company. I should like to make the position clear. British Telecom has hitherto taken the leading role in representing British interests internationally at the technical and operating level. The passage of the Bill, the sale of shares and the issue of the British Telecom licence will put British Telecom on the same basis as other telecommunications operators. The other operators will have a legitimate interest in our international agreements. I emphasise that in this role British Telecom acts as an agent of Her Majesty's Government. We are considering carefully the implications of the change in the status of British Telecom, of the progress already made in liberalisation and whether the Government should take a more active role in representation in the future.
  Several hon. Members, including the hon. Member for Whitehaven (Dr. Cunningham), and the right hon. Member for Salford, West, said that one of the dangers of the Bill is that a liberalised, and now a privatised, British Telecom would start buying goods and equipment on a massive scale from overseas suppliers. One must first appreciate that at present 95 per cent. of all purchases come from British sources, and I can see no reason why that should suddenly change.
  British Telecom naturally looks to United Kingdom suppliers, because it is advantageous for the operator and the supplier to be close geographically. It is up to British companies to respond to that challenge. One of the consequences of the liberalisation measures that we have taken through the House with the British Telecommunications Act has been a vigorous response by many British manufacturers. Opposition Members must appreciate that we were faced with a sharply declining share of world markets for British telecommunications manufacturers.
  In 1950 we had 25 per cent. of the world market, and we now have less than 5 per cent. The arrangements that brought about that massive decline are the ones that we decided should be changed. As a result, I am glad to say that British companies are beginning to obtain significant orders in overseas markets. GEC is selling business exchanges to New Zealand and in the Far East. Plessey is selling business exchanges in Europe, and there will be more opportunities for that. So I deny completely that liberalisation is an importers' charter, as some hon. Members have claimed.
  Mr. Charles R. Morris: Will the Minister accept the point that I made, which was that following the liberalisation of the manufacture and approval of telephone equipment, of 96 telephone handsets submitted for approval, 94 were not made in Britain?
  Mr. Baker: The right hon. Gentleman reinforces my argument. History led us to the point where our manufacturers were not stimulated to produce a wide range of equipment. I am glad to say that we were able to give approval to three telexes and teleprinters in July of this year, all of which were made in Britain. My right hon. Friend has been chided for going to Japan with a view to establishing co-operative ventures. As my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller) said, there is nothing wrong with joint ventures when they involve manufacturing in Britain.
  I remind Labour Members that as a direct result of our liberalisation policy the Canadian company, Mitel, is building a factory in Gwent. An American company, GTE, is linking with Ferranti. That will lead to more equipment being made in Manchester. Motorola, an American company, has already announced a substantial expansion to its factory at Basingstoke in anticipation of the liberalisation of the radio telephone market. Redifon and NEC—NEC is a Japanese company—are making pageing equipment in Britain. Fujitsu will tie up with EMI on disc drives. ICL is tying up with Fujitsu to help make larger computers in this country. What is wrong with all of that? All these developments will produce more jobs, more wealth and more prosperity.
  Many hon. Members expressed concern about services in rural areas. The hon. Member for Truro (Mr. Penhaligon), the Liberal Party's spokesman, my hon. Friends the Members for Cornwall, North, for Brighouse and Spenborough and for Banff (Mr. Myles), and the hon. Member for Whitehaven, all expressed anxiety on this score. I shall try to set some of these anxieties at rest. The continued provision of services to rural areas will be guaranteed by the obligation under British Telecom's licence to provide services throughout the United Kingdom subject to its being reasonably practicable to do so.
  Whenever "reasonably practicable to do so" is uttered, there is a sigh from Labour Members. The phrase comes from existing legislation and we shall improve upon that legislation in two respects. At present it is up to BT alone to decide whether the provision of services across the country is reasonably practicable. That is BT's decision. Under the Bill, the Secretary of State and the Director General of Oftel have to be involved. That is an improvement.
  In clause 3(1)(a) there is, for the first time in our statute law, an obligation to take into account
  "the need to secure … throughout the United Kingdom … such telecommunication services as satisfy all reasonable demands for them including, in particular, public call box services, emergency services and services in rural areas"
  That is a clear guarantee that the services will be provided.
  Mr. Penhaligon: I ask the Minister to answer the question that I posed three and a half hours ago. If there is a storm in a rural area and an individual telephone line is put out of action and the repair bill is £1,100, £1,200, £1,500 or £2,000, who will pay it? Who will pay for the repair to a single telephone line on isolated property?
  Mr. Baker: The maintenance of the network and the making of repairs of that sort will remain with the network provider, which will be BT.
  Mr. Penhaligon: What sort of guarantee is that"
  Mr. Baker: It is clear that under the Bill there is a more specific and fuller obligation than has ever appeared in legislation before to provide the services that I have described.
  I deal now with connection charges. The hon. Member for Whitehaven (Dr. Cunningham) made great play of the fact that a fee of £5,000 has been quoted to one of his constituents. I asked that inquiries should be made about that case. I understand that the constituent to whom he referred is an ex-university lecturer who lives on the top of a fell in Cumbria. Originally he did not want a telephone, but when his wife became pregnant he went to the local office to inquire about the installation cost. He has not submitted a formal application, but never mind. He was quoted the figure for 100 hours at the flat rate, because BT quotes that figure. That has been the arrangement for some time. It has not changed recently. There was another estimated 200 hours of extra work at commercial rates, because apparently the area in which the hon. Gentleman's constituent lives is one of great natural beauty and the lines would have to go underground.
  Either the hon. Gentleman or I can take up the matter with BT. I gather that there has been no response from his constituent or a formal application. However, the point is that that is the present arrangement. Such arrangements have been operating since BT has been a nationalised operation.
  Dr. John Cunningham: The Minister said in answer to the hon. Member for Truro (Mr. Penhaligon) that in remote areas costs arising from storm damage or damage by bulls, or whatever the hon. Member for Banff (Mr. Myles) keeps near his telephones lines, must be met by BT. However, the measures are likely to reduce BT's income and it will end up with a higher percentage of that kind of financial responsibility than organisations such as Mercury. People in rural areas such as a national park will not be able to afford the economic costs for a telephone to be installed.
  Mr. Baker: That is no different from the present position. The example that the hon. Gentleman quoted exists now. The management of BT decides on such matters every day. Both the hon. Gentleman and I can take up the case and see whether the quotation is fair.
  I refer next to the other costs for people living in rural areas. BT does not account separately for rural services within its accounting system, but it has a large rural network. It is not in BT's interest to withdraw from running that network. It wants to capitalise on that network. It has invested in it and it wants to stimulate businesss. It will not do so by jacking up the prices on the rural network. That is not the intention of BT.
  The movements in modern technology—microwave, satellite, small dish services and cellular radio—will reduce radically the price of telecommunications in remote areas over the next decade. That is what my hon. Friend the Member for Banff, with his earthy common sense, said so clearly. I am sure that BT will not want to lose that opportunity. That is why the BT board has accepted its role of maintaining services in the rural areas and the emergency services without demanding special subsidies.
  Some points were made about BT's licence. The draft licence will be made available to the Committee. We are still discussing it with BT. It has not asked us to make it
  100
  openly available, but it will be made available in plenty of time for the Committee. I appreciate and accept that it will be an important document in the Committee debates.
  I was asked about the duration of the licence. That is being discussed with BT. I have been asked whether it will be published. It will be a public document. There will be a register of licences granted under the Bill. I make it clear that it is not the Government's intention to issue licences for more national networks in the foreseeable future. The existing ones—BT, Hull and Mercury—will suffice.
  Mr. Charles R. Morris: Will the Minister give way?
  Mr. Baker: Not again. Not to the right hon. Gentleman.
  Other licences will be issued. There is a competition at the moment for mobile radio telephones. The successful consortia in that competition will need licences. Some anxiety has been expressed about the level of fees. They are being set at a low level just to cover the issuing, monitoring and amending of licences.
  I deal next with the Office of Telecommunications. We have been accused of setting up a quango and a huge bureaucracy. We envisage that a staff of about 50 will suffice for Oftel's works. I am aware that the argument that we do not need that body is being put about. BT is doing that. It is doing a great deal of lobbying.
  I suggest that those who discuss the matter with BT on a pleasant occasion when they are having their minds teased or their palates tickled will appreciate that BT is making a special case. They must appreciate that even after liberalisation and privatisation about 90 to 95 per cent. of the telecommunications network in Britain will be conducted by BT.
  With that level of market dominance, it is right that the market should be regulated, and it must be regulated much more effectively than it is now. It is not acceptable to set up either a public body or a private company—which is what BT plc will be—which has such market dominance, without regulation. That is the basic and substantial reason for having Oftel.
  BT is privileged. It has the right to grant licences or not to grant them to its competitors. It does everything. It is the policeman, the prosecutor, the judge, the jury, the prison officer and the executioner. That is why we receive complaints from many companies saying that BT has far too much power. We are removing those powers under the Bill. Oftel's functions will be to police all licences, to ensure that there is no undue influence, to police practices, to ensure that BT does not abuse its circumstances to push its own equipment rather than that of its competitors and similar matters.
  Oftel is not a licensing authority. The Secretary of State will retain the power to license. It will not, therefore, grow into a body such as the American FCC. It will regulate and control competition. That role is needed. BT will not operate in too restricted an area. I utterly refute the argument that it will. The conditions will be known in the licence. That is what Oftel will have to promote.
  One area of activity that has hardly been mentioned today is the Bill's significant improvement of the circumstances of consumers. POUNC has an advisory role. Its duties will be taken over by a statutory body—Oftel—that will have teeth. Oftel will ensure that licence obligations are implemented. That is a firm safeguard. It will take over POUNC's functions of

  101
  agreeing performance targets with BT. It will deal with all customer complaints about BT, Mercury and Hull. We are introducing the right of the telephone holder to sue BT for non-performance. We have often been asked to do that.
  Mr. Charles R. Morris: Will the hon. Gentleman give way?
  Mr. Baker: Everything will be equal in that respect.
  Mr. Morris: Which system will the Government use?
  Mr. Baker: I shall now deal with telephone bills and how the consumer will be affected. We expect BT and other operators to introduce new metering systems and to itemise bills as technology allows. In Committee I shall introduce proposals for independent checking of design and metering systems of BT's operators. That will lead the way to the possibility of itemised bills. That is one of the matters about which my Department has received a tremendous amount of correspondence in the past few years.
  I emphasise that we do not intend to offer shares for sale until after the next general election, but we will set up Oftel when the Bill has received Royal Assent.
  I should like to examine the views of the various Opposition parties. I had always believed that the Liberal Party stood for freedom and choice, and particularly for wider share ownership and employee participation. Indeed, I looked up the Liberal Party's manifesto to refresh my memory and to make sure that it stood for wider share ownership and employee participation. It is no good the Liberal Party's spokesman saying that he and his colleagues believe in those things. They have the chance to vote for both and they intend to vote against both. So wide is the Liberal's definition of wider share ownership that it comes down to one share owned by the State.
  Mr. Charles R. Morris: Get back to the Bill.
  Mr. Baker: I eventually teased out of the hon. Member for Islington, Central (Mr. Grant) the policy of the SDP. Roughly speaking, it is that the SDP would abandon Treasury orthodoxy and allow BT to go to the market and to take its investment out of the PSBR. It would strike the shackles off.
  I would have found it acceptable if the Liberals had put forward that view, because they have not had to defend Treasury orthodoxy for the past 66 years. It is that long since they had a Chancellor of the Exchequer at No. 11 Downing Street. However, that is not the case with the hon. Member for Islington, Central. Three and a half years ago he was sitting on the Government Front Bench, which is called the Treasury Bench, defending Treasury orthodxy. There has been a complete reversal and change of policy. I do not know at what stage on the road to Damascus the light flashed in the eyes of the hon. Member for Islington, Central, but I suspect that he changed his view not because he thought that his ideas were better, but because he could not stand his former colleagues and they could not stand him.
  Mr. Charles R. Morris: Get back to the Bill.
  Mr. Speaker: Order. The right hon. Member for Manchester, Openshaw (Mr. Morris) must not keep shouting from a sedentary position. It is enough to put anyone off.
  Mr. Morris: On a point of order, Mr. Speaker. I accept your rebuke, but when I sought to intervene the Minister refused to give way.
  Mr. Baker: This has been a happy day for the Labour Party, because the Bill is an issue on which it could unite. The militants and the moderates could come together and vote against the Bill, because it is the biggest measure of denationalisation ever brought before this or any other Parliament. The issue is stark. Black is black and white is white. It is so stark that even the right hon. Member for Salford, West (Mr. Orme) got it right. I congratulate the right hon. Gentleman and his Front-Bench colleagues on being reappointed as the Shadow industry team. I have some sympathy with the Leader of the Opposition when he has to shuffle the shadows.
  The Labour Party has time and again said that BT would be safe in a Labour Government's hands. But when a Labour Government were responsible for it, they cut investment—in 1976, 1977 and 1978. What reason has anyone to believe that if a Labour Government were responsible for BT and it were still a nationalised industry it would be able to go the market and be free from Treasury control? That is not the case.
  The Bill provides the possibility of BT going to the market. We want BT to have the complete freedom that a private company has. Only in this way can the needs of the country and of British Telecom be met.
  The Bill creates freedom from Treaury and ministerial control. It also given freedom to BT to grow, to operate overseas and to make acquisitions. The Bill is necessary because the market is growing so quickly that BT can expand only by becoming a free, independent company. I commend the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 281, Noes 237.

  Division No. 20]

  [10 pm

  AYES

  Adley, Robert

  Browne, John (Winchester)

  Aitken, Jonathan

  Bruce-Gardyne, John

  Alexander, Richard

  Bryan, Sir Paul

  Alison, Rt Hon Michael

  Buchanan-Smith, Rt. Hon. A.

  Amery, Rt Hon Julian

  Buck, Antony

  Ancram, Michael

  Budgen, Nick

  Arnold, Tom

  Bulmer, Esmond

  Aspinwall, Jack

  Burden, Sir Frederick

  Atkins, Rt Hon H.(S'thorne)

  Butcher, John

  Atkins, Robert(Preston N)

  Carlisle, John (Luton West)

  Baker, Kenneth(St. M'bone)

  Carlisle, Kenneth (Lincoln)

  Baker, Nicholas (N Dorset)

  Channon, Rt. Hon. Paul

  Beaumont-Dark, Anthony

  Chapman, Sydney

  Bendall, Vivian

  Churchill, W. S.

  Benyon, Thomas (A'don)

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

  Benyon, W. (Buckingham)

  Clark, Sir W. (Croydon S)

  Best, Keith

  Clarke, Kenneth (Rushcliffe)

  Bevan, David Gilroy

  Clegg, Sir Walter

  Biffen, Rt Hon John

  Colvin, Michael

  Biggs-Davison, Sir John

  Cope, John

  Blackburn, John

  Cormack, Patrick

  Blaker, Peter

  Corrie, John

  Body, Richard

  Costain, Sir Albert

  Bonsor, Sir Nicholas

  Cranborne, Viscount

  Bottomley, Peter (W'wich W)

  Critchley, Julian

  Boyson, Dr Rhodes

  Crouch, David

  Braine, Sir Bernard

  Dickens, Geoffrey

  Bright, Graham

  du Cann, Rt Hon Edward

  Brinton, Tim

  Dunn, Robert (Dartford)

  Brittan, Rt. Hon. Leon

  Dykes, Hugh

  Brooke, Hon Peter

  Eden, Rt Hon Sir John

  Brotherton, Michael

  Edwards, Rt Hon N. (P'broke)

  Brown, Michael(Brigg & Sc'n)

  Eggar, Tim

  103

  Elliott, Sir William

  Luce, Richard

  Emery, Sir Peter

  Lyell, Nicholas

  Eyre, Reginald

  McCrindle, Robert

  Fairbairn, Nicholas

  Macfarlane, Neil

  Faith, Mrs Sheila

  MacGregor, John

  Farr, John

  MacKay, John (Argyll)

  Fenner, Mrs Peggy

  Macmillan, Rt Hon M.

  Finsberg, Geoffrey

  McNair-Wilson, M. (N'bury)

  Fisher, Sir Nigel

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

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

  Madel, David

  Fletcher-Cooke, Sir Charles

  Major, John

  Fookes, Miss Janet

  Marland, Paul

  Forman, Nigel

  Marlow, Antony

  Fowler, Rt Hon Norman

  Marten, Rt Hon Neil

  Fox, Marcus

  Mates, Michael

  Fraser, Rt Hon Sir Hugh

  Mather, Carol

  Fraser, Peter (South Angus)

  Mawby, Ray

  Gardiner, George (Reigate)

  Mawhinney, Dr Brian

  Gardner, Edward (S Fylde)

  Maxwell-Hyslop, Robin

  Garel-Jones, Tristan

  Mayhew, Patrick

  Gilmour, Rt Hon Sir Ian

  Mellor, David

  Glyn, Dr Alan

  Meyer, Sir Anthony

  Goodhart, Sir Philip

  Miller, Hal (B'grove)

  Goodhew, Sir Victor

  Mills, Iain (Meriden)

  Gorst, John

  Mills, Sir Peter (West Devon)

  Gow, Ian

  Miscampbell, Norman

  Gower, Sir Raymond

  Moate, Roger

  Gray, Hamish

  Monro, Sir Hector

  Greenway, Harry

  Montgomery, Fergus

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

  Morgan, Geraint

  Griffiths, Peter Portsm'th N)

  Morris, M. (N'hampton S)

  Grist, Ian

  Morrison, Hon C. (Devizes)

  Grylls, Michael

  Morrison, Hon P. (Chester)

  Gummer, John Selwyn

  Murphy, Christopher

  Hamilton, Hon A.

  Myles, David

  Hamilton, Michael (Salisbury)

  Neale, Gerrard

  Hampson, Dr Keith

  Needham, Richard

  Hannam, John

  Nelson, Anthony

  Haselhurst, Alan

  Neubert, Michael

  Hastings, Stephen

  Newton, Tony

  Havers, Rt Hon Sir Michael

  Onslow, Cranley

  Hawksley, Warren

  Oppenheim, Rt Hon Mrs S.

  Hayhoe, Barney

  Page, Richard (SW Herts)

  Heddle, John

  Parkinson, Rt Hon Cecil

  Henderson, Barry

  Parris, Matthew

  Heseltine, Rt Hon Michael

  Patten, Christopher (Bath)

  Hicks, Robert

  Patten, John (Oxford)

  Higgins, Rt Hon Terence L.

  Pattie, Geoffrey

  Hogg, Hon Douglas (Gr'th'm)

  Pawsey, James

  Holland, Philip (Carlton)

  Percival, Sir Ian

  Hooson, Tom

  Peyton, Rt Hon John

  Hordern, Peter

  Pink, R. Bonner

  Howe, Rt Hon Sir Geoffrey

  Pollock, Alexander

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

  Prentice, Rt Hon Reg

  Hunt, David (Wirral)

  Price, Sir David (Eastleigh)

  Hunt, John (Ravensbourne)

  Proctor, K. Harvey

  Hurd, Rt Hon Douglas

  Pym, Rt Hon Francis

  Irvine, Rt Hon Bryant Godman

  Raison, Rt Hon Timothy

  Irving, Charles (Cheltenham)

  Rathbone, Tim

  Jenkin, Rt Hon Patrick

  Rees, Peter (Dover and Deal)

  Johnson Smith, Sir Geoffrey

  Rees-Davies, W. R.

  Jopling, Rt Hon Michael

  Renton, Tim

  Joseph, Rt Hon Sir Keith

  Rhodes James, Robert

  Kaberry, Sir Donald

  Rhys Williams, Sir Brandon

  Kellett-Bowman, Mrs Elaine

  Ridley, Hon Nicholas

  Kimball, Sir Marcus

  Ridsdale, Sir Julian

  King, Rt Hon Tom

  Roberts, M. (Cardiff NW)

  Kitson, Sir Timothy

  Roberts, Wyn (Conway)

  Knox, David

  Rossi, Hugh

  Lamont, Norman

  Rost, Peter

  Lang, Ian

  Royle, Sir Anthony

  Langford-Holt, Sir John

  Rumbold, Mrs A. C. R.

  Latham, Michael

  Sainsbury, Hon Timothy

  Lawrence, Ivan

  St. John-Steves, Rt Hon N.

  Lee, John

  Scott, Nicholas

  Le Marchant, Spencer

  Shaw, Giles (Pudsey)

  Lennox-Boyd, Hon Mark

  Shaw, Sir Michael (Scarb')

  Lewis, Kenneth (Rutland)

  Shelton, William (Streatham)

  Lloyd, Ian (Havant & W'loo)

  Shepherd, Colin (Hereford)

  Lloyd, Peter (Fareham)

  Shepherd, Richard

  104

  Shersby, Michael

  Trotter, Neville

  Silvester, Fred

  Van Straubenzee, Sir W.

  Sims, Roger

  Vaughan, Dr Gerard

  Skeet, T. H. H.

  Viggers, Peter

  Smith, Tim (Beaconsfield)

  Waddington, David

  Speller, Tony

  Wakeham, John

  Spence, John

  Waldegrave, Hon William

  Spicer, Jim (West Dorset)

  Walker, Rt Hon P. (W'cester)

  Spicer, Michael (S Worcs)

  Walker, B. (Perth)

  Sproat, Iain

  Walker-Smith, Rt Hon Sir D.

  Squire, Robin

  Wall, Sir Patrick

  Stanbrook, Ivor

  Waller, Gary

  Stanley, John

  Walter, Dennis

  Steen, Anthony

  Ward, John

  Stevens, Martin

  Warren, Kenneth

  Stewart, A.(E Renfrewshire)

  Watson, John

  Stewart, Ian (Hitchin)

  Wells, Bowen

  Stokes, John

  Wells, John (Maidstone)

  Stradling Thomas, J.

  Wheeler, John

  Tapsell, Peter

  Whitelaw, Rt Hon William

  Taylor, Teddy (S'end E)

  Whitney, Raymond

  Tebbit, Rt Hon Norman

  Williams, D. (Montgomery)

  Temple-Morris, Peter

  Winterton, Nicholas

  Thatcher, Rt Hon Mrs M.

  Wolfson, Mark

  Thompson, Donald

  Young, Sir George (Acton)

  Thorne, Neil (Ilford South)

  Thornton, Malcolm

  Tellers for the Ayes:

  Townend, John (Bridlington)

  Mr. Robert Boscawen and

  Townsend, Cyril D, (B'heath)

  Mr. Anthony Berry.

  Trippier, David

  NOES

  Abse, Leo

  Dormand, Jack

  Allaun, Frank

  Dubs, Alfred

  Alton, David

  Duffy, A. E. P.

  Anderson, Donald

  Dunnett, Jack

  Archer, Rt Hon Peter

  Dunwoody, Hon Mrs G.

  Ashley, Rt Hon Jack

  Eadie, Alex

  Ashton, Joe

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

  Atkinson, N.(H'gey,)

  Ellis, Tom (Wrexham)

  Barnett, Guy (Greenwich)

  English, Michael

  Barnett, Rt Hon Joel (H'wd)

  Ennals, Rt Hon David

  Beith, A. J.

  Evans, Ioan (Aberdare)

  Benn, Rt Hon Tony

  Evans, John (Newton)

  Bennett, Andrew(St'kp't N)

  Ewing, Harry

  Booth, Rt Hon Albert

  Field, Frank

  Bottomley, Rt Hon A.(M'b'ro)

  Fitch, Alan

  Bray, Dr Jeremy

  Fitt, Gerard

  Brocklebank-Fowler, C.

  Flannery, Martin

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

  Foot, Rt Hon Michael

  Brown, Ron (E'burgh, Leith)

  Ford, Ben

  Buchan, Norman

  Foster, Derek

  Callaghan, Rt Hon J.

  Foulkes, George

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

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

  Campbell, Ian

  Freeson, Rt Hon Reginald

  Campbell-Savours, Dale

  Freud, Clement

  Canavan, Dennis

  Garrett, John (Norwich S)

  Cant, R. B.

  George, Bruce

  Carter-Jones, Lewis

  Gilbert, Rt Hon Dr John

  Cartwright, John

  Ginsburg, David

  Clark, Dr David (S Shields)

  Golding, John

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

  Graham, Ted

  Cohen, Stanley

  Grant, John (Islington C)

  Concannon, Rt Hon J. D.

  Grimond, Rt Hon J.

  Conlan, Bernard

  Hamilton, James (Bothwell)

  Cook, Robin F.

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

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

  Harman, Harriet (Peckham)

  Crawshaw, Richard

  Harrison, Rt Hon Walter

  Crowther, Stan

  Hart, Rt Hon Dame Judith

  Cryer, Bob

  Hattersley, Rt Hon Roy

  Cunningham, G. (Islington S)

  Healey, Rt Hon Denis

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

  Heffer, Eric S.

  Dalyell, Tam

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

  Davies, Rt Hon Denzil (L'lli)

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

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

  Home Robertson, John

  Deakins, Eric

  Homewood, William

  Dean, Joseph (Leeds West)

  Horam, John

  Dewar, Donald

  Howell, Rt Hon D.

  Dixon, Donald

  Howells, Geraint

  Dobson, Frank

  Hoyle, Douglas

  105

  Huckfield, Les

  Roberts, Allan (Bootle)

  Hudson Davies, Gwilym E.

  Roberts, Ernest (Hackney N)

  Hughes, Mark (Durham)

  Roberts, Gwilym (Cannock)

  Hughes, Robert (Aberdeen N)

  Robertson, George

  Hughes, Roy (Newport)

  Robinson, G. (Coventry NW)

  Janner, Hon Greville

  Rodgers, Rt Hon William

  Jay, Rt Hon Douglas

  Rooker, J. W.

  John, Brynmor

  Roper, John

  Johnson, James (Hull West)

  Ross, Ernest (Dundee West)

  Johnson, Walter (Derby S)

  Ross, Stephen (Isle of Wight)

  Johnston, Russell (Inverness)

  Rowlands, Ted

  Jones, Rt Hon Alec (Rh'dda)

  Ryman, John

  Jones, Barry (East Flint)

  Sandelson, Neville

  Jones, Dan (Burnley)

  Sever, John

  Kaufman, Rt Hon Gerald

  Sheerman, Barry

  Kerr, Russell

  Sheldon, Rt Hon R.

  Kilroy-Silk, Robert

  Shore, Rt Hon Peter

  Lamond, James

  Short, Mrs Renée

  Leadbitter, Ted

  Silkin, Rt Hon J. (Deptford)

  Leighton, Ronald

  Silkin, Rt Hon S. C. (Dulwich)

  Lestor, Miss Joan

  Silverman, Julius

  Lewis, Arthur (N'ham NW)

  Skinner, Dennis

  Lewis, Ron (Carlisle)

  Smith, Cyril (Rochdale)

  Litherland, Robert

  Snape, Peter

  Lofthouse, Geoffrey

  Soley, Clive

  Lyons, Edward (Bradf'd W)

  Speller, John Francis (B'ham)

  Mabon, Rt Hon Dr J. Dickson

  Spriggs, Leslie

  McCartney, Hugh

  Stallard, A. W.

  McDonald, Dr Oonagh

  Steel, Rt Hon David

  McKay, Allen (Penistone)

  Stewart, Rt Hon D. (W Isles)

  McKelvey, William

  Stoddart, David

  MacKenzie, Rt Hon Gregor

  Stott, Roger

  Maclennan, Robert

  Strang, Gavin

  McMahon, Andrew

  Straw, Jack

  McNamara, Kevin

  Summerskill, Hon Dr Shirley

  McTaggart, Robert

  Taylor, Mrs Ann (Bolton W)

  McWilliam, John

  Thomas, Dafydd (Merioneth)

  Marks, Kenneth

  Thomas, Jeffrey (Abertillery)

  Marshall, D(G'gow S'ton)

  Thomas, Mike (Newcastle E)

  Marshall, Dr Edmund (Goole)

  Thomas, Dr R.(Carmarthen)

  Marshall, Jim (Leicester S)

  Thorne, Stan (Preston South)

  Mason, Rt Hon Roy

  Tilley, John

  Maxton, John

  Tinn, James

  Maynard, Miss Joan

  Torney, Tom

  Meacher, Michael

  Varley, Rt Hon Eric G.

  Mikardo, Ian

  Wainwright, E.(Dearne V)

  Mitchell, Austin (Grimsby)

  Wainwright, R.(Colne V)

  Mitchell, R. C. (Soton Itchen)

  Walker, Rt Hon H.(D'caster)

  Morris, Rt Hon C. (O'shaw)

  Wardell, Gareth

  Morton, George

  Watkins, David

  Moyle, Rt Hon Roland

  Weetch, Ken

  Newens, Stanley

  Wellbeloved, James

  Oakes, Rt Hon Gordon

  Welsh, Michael

  Ogden, Eric

  White, Frank R.

  O'Halloran, Michael

  Whitehead, Phillip

  O'Neill, Martin

  Whitlock, William

  Orme, Rt Hon Stanley

  Wigley, Dafydd

  Owen, Rt Hon Dr David

  Willey, Rt Hon Frederick

  Palmer, Arthur

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

  Park, George

  Wilson, Gordon (Dundee E)

  Parker, John

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

  Parry, Robert

  Wilson, William (C'try SE)

  Pendry, Tom

  Winnick, David

  Penhaligon, David

  Woodall, Alec

  Pitt, William Henry

  Woolmer, Kenneth

  Powell, Raymond (Ogmore)

  Wrigglesworth, Ian

  Prescott, John

  Wright, Sheila

  Price, C. (Lewisham W)

  Young, David (Bolton E)

  Race, Reg

  Radice, Giles

  Tellers for the Noes:

  Rees, Rt Hon M (Leeds S)

  Mr. Frank Haynes and

  Richardson, Jo

  Mr. Lawrence Cunliffe.

  Roberts, Albert (Normanton)

  Question accordingly agreed to.
  Bill read a Second time.
  Motion made—[Mr. Harrison]—and Question put, That the Bill be committed to a Committee of the whole House:——
  The House proceeded to a Division:
  Mr. Speaker: Hon. Members must not stand this side of the Bar of the House.
  The House having divided: Ayes 199, Noes 312.

  Division No. 21]

  [10.15 pm

  AYES

  Abse, Leo

  Hart, Rt Hon Dame Judith

  Allaun, Frank

  Hattersley, Rt Hon Roy

  Anderson, Donald

  Haynes, Frank

  Archer, Rt Hon Peter

  Healey, Rt Hon Denis

  Ashley, Rt Hon Jack

  Heffer, Eric S.

  Ashton, Joe

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

  Atkinson, N.(H'gey,)

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

  Barnett, Guy (Greenwich)

  Home Robertson, John

  Barnett, Rt Hon Joel (H'wd)

  Homewood, William

  Benn, Rt Hon Tony

  Howell, Rt Hon D.

  Bennett, Andrew(St'kp't N)

  Hoyle, Douglas

  Booth, Rt Hon Albert

  Huckfield, Les

  Bray, Dr Jeremy

  Hughes, Mark (Durham)

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

  Hughes, Robert (Aberdeen N)

  Brown, Ron (E'burgh, Leith)

  Hughes, Roy (Newport)

  Buchan, Norman

  Janner, Hon Greville

  Callaghan, Rt Hon J.

  Jay, Rt Hon Douglas

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

  John, Brynmor

  Campbell, Ian

  Johnson, James (Hull West)

  Campbell-Savours, Dale

  Johnson, Walter (Derby S)

  Canavan, Dennis

  Jones, Rt Hon Alec (Rh'dda)

  Cant, R. B.

  Jones, Barry (East Flint)

  Carter-Jones, Lewis

  Jones, Dan (Burnley)

  Clark, Dr David (S Shields)

  Kaufman, Rt Hon Gerald

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

  Kerr, Russell

  Cohen, Stanley

  Kilroy-Silk, Robert

  Concannon, Rt Hon J. D.

  Lamond, James

  Conlan, Bernard

  Leadbitter, Ted

  Cook, Robin F.

  Leighton, Ronald

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

  Lestor, Miss Joan

  Crowther, Stan

  Lewis, Arthur (N'ham NW)

  Cryer, Bob

  Lewis, Ron (Carlisle)

  Cunliffe, Lawrence

  Litherland, Robert

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

  Lofthouse, Geoffrey

  Dalyell, Tam

  McCartney, Hugh

  Davies, Rt Hon Denzil (L'lli)

  McDonald, Dr Oonagh

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

  McKay, Allen (Penistone)

  Deakins, Eric

  McKelvey, William

  Dean, Joseph (Leeds West)

  MacKenzie, Rt Hon Gregor

  Dewar, Donald

  McMahon, Andrew

  Dixon, Donald

  McNamara, Kevin

  Dobson, Frank

  McTaggart, Robert

  Dormand, Jack

  McWilliam, John

  Dubs, Alfred

  Marks, Kenneth

  Duffy, A. E. P.

  Marshall, D(G'gow S'ton)

  Dunnett, Jack

  Marshall, Dr Edmund (Goole)

  Dunwoody, Hon Mrs G.

  Marshall, Jim (Leicester S)

  Eadie, Alex

  Mason, Rt Hon Roy

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

  Maxton, John

  English, Michael

  Maynard, Miss Joan

  Ennals, Rt Hon David

  Meacher, Michael

  Evans, Ioan (Aberdare)

  Mikardo, Ian

  Evans, John (Newton)

  Mitchell, Austin (Grimsby)

  Ewing, Harry

  Morris, Rt Hon C. (O'shaw)

  Field, Frank

  Moyle, Rt Hon Roland

  Fitch, Alan

  Newens, Stanley

  Fitt, Gerard

  Oakes, Rt Hon Gordon

  Flannery, Martin

  O'Neill, Martin

  Foot, Rt Hon Michael

  Orme, Rt Hon Stanley

  Ford, Ben

  Palmer, Arthur

  Foulkes, George

  Park, George

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

  Parker, John

  Freeson, Rt Hon Reginald

  Parry, Robert

  Garrett, John (Norwich S)

  Pendry, Tom

  George, Bruce

  Powell, Raymond (Ogmore)

  Gilbert, Rt Hon Dr John

  Prescott, John

  Golding, John

  Price, C. (Lewisham W)

  Graham, Ted

  Race, Reg

  Hamilton, James (Bothwell)

  Radice, Giles

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

  Rees, Rt Hon M (Leeds S)

  Harman, Harriet (Peckham)

  Richardson, Jo

  Harrison, Rt Hon Walter

  Roberts, Albert (Normanton)

  107

  Roberts, Allan (Bootle)

  Thomas, Dafydd (Merioneth)

  Roberts, Ernest (Hackney N)

  Thomas, Dr R. (Carmarthen)

  Roberts, Gwilym (Cannock)

  Thorne, Stan (Preston South)

  Robertson, George

  Tilley, John

  Robinson, G. (Coventry NW)

  Tinn, James

  Rooker, J. W.

  Torney, Tom

  Ross, Ernest (Dundee West)

  Varley, Rt Hon Eric G.

  Rowlands, Ted

  Wainwright, E. (Dearne V)

  Ryman, John

  Walker, Rt Hon H. (D'caster)

  Sever, John

  Wardell, Gareth

  Sheerman, Barry

  Watkins, David

  Sheldon, Rt Hon R.

  Weetch, Ken

  Shore, Rt Hon Peter

  Welsh, Michael

  Short, Mrs Renée

  White, Frank R.

  Silkin, Rt Hon J. (Deptford)

  Whitehead, Phillip

  Silkin, Rt Hon S. C. (Dulwich)

  Whitlock, William

  Silverman, Julius

  Wigley, Dafydd

  Skinner, Dennis

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

  Snape, Peter

  Wilson, Gordon (Dundee E)

  Soley, Clive

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

  Spellar, John Francis (B'ham)

  Wilson, William (C'try SE)

  Spriggs, Leslie

  Winnick, David

  Stallard, A. W.

  Woodall, Alec

  Stewart, Rt Hon D. (W Isles)

  Woolmer, Kenneth

  Stoddart, David

  Wright, Sheila

  Stott, Roger

  Young, David (Bolton E)

  Strang, Gavin

  Straw, Jack

  Tellers for the Ayes:

  Summerskill, Hon Dr Shirley

  Mr. George Morton and

  Taylor, Mrs Ann (Bolton W)

  Mr. Derek Foster.

  NOES

  Adley, Robert

  Channon, Rt. Hon. Paul

  Aitken, Jonathan

  Chapman, Sydney

  Alexander, Richard

  Churchill, W. S.

  Alison, Rt Hon Michael

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

  Alton, David

  Clark, Sir W. (Croydon S)

  Amery, Rt Hon Julian

  Clarke, Kenneth (Rushcliffe)

  Ancram, Michael

  Clegg, Sir Walter

  Arnold, Tom

  Colvin, Michael

  Aspinwall, Jack

  Cope, John

  Atkins, Rt Hon H.(S'thorne)

  Cormack, Patrick

  Atkins, Robert(Preston N)

  Corrie, John

  Baker, Kenneth(St.M'bone)

  Costain, Sir Albert

  Baker, Nicholas (N Dorset)

  Cranborne, Viscount

  Beaumont-Dark, Anthony

  Crawshaw, Richard

  Beith, A. J.

  Critchley, Julian

  Bendall, Vivian

  Crouch, David

  Benyon, Thomas (A'don)

  Cunningham, G. (Islington S)

  Benyon, W. (Buckingham)

  Dickens, Geoffrey

  Best, Keith

  du Cann, Rt Hon Edward

  Bevan, David Gilroy

  Dunn, Robert (Dartford)

  Biffen, Rt Hon John

  Dykes, Hugh

  Biggs-Davison, Sir John

  Eden, Rt Hon Sir John

  Blackburn, John

  Edwards, Rt Hon N. (P'broke)

  Blaker, Peter

  Eggar, Tim

  Body, Richard

  Elliott, Sir William

  Bonsor, Sir Nicholas

  Ellis, Tom (Wrexham)

  Bottomley, Peter (W'wich W)

  Emery, Sir Peter

  Boyson, Dr Rhodes

  Fairbairn, Nicholas

  Braine, Sir Bernard

  Faith, Mrs Sheila

  Bright, Graham

  Farr, John

  Brinton, Tim

  Fenner, Mrs Peggy

  Brittan, Rt. Hon. Leon

  Finsberg, Geoffrey

  Brocklebank-Fowler, C.

  Fisher, Sir Nigel

  Brooke, Hon Peter

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

  Brotherton, Michael

  Fletcher-Cooke, Sir Charles

  Brown, Michael(Brigg & Sc'n)

  Fookes, Miss Janet

  Browne, John (Winchester)

  Forman, Nigel

  Bruce-Gardyne, John

  Fowler, Rt Hon Norman

  Bryan, Sir Paul

  Fox, Marcus

  Buchanan-Smith, Rt. Hon. A.

  Fraser, Rt Hon Sir Hugh

  Buck, Antony

  Fraser, Peter (South Angus)

  Budgen, Nick

  Freud, Clement

  Bulmer, Esmond

  Gardiner, George (Reigate)

  Burden, Sir Frederick

  Gardner, Edward (S Fylde)

  Butcher, John

  Garel-Jones, Tristan

  Carlisle, John (Luton West)

  Gilmour, Rt Hon Sir Ian

  Carlisle, Kenneth (Lincoln)

  Ginsburg, David

  Cartwright, John

  Glyn, Dr Alan

  108

  Goodhart, Sir Philip

  Mates, Michael

  Goodhew, Sir Victor

  Mather, Carol

  Gorst, John

  Mawby, Ray

  Gow, Ian

  Mawhinney, Dr Brian

  Gower, Sir Raymond

  Maxwell-Hyslop, Robin

  Grant, John (Islington C)

  Mayhew, Patrick

  Gray, Hamish

  Mellor, David

  Greenway, Harry

  Meyer, Sir Anthony

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

  Miller, Hal (B'grove)

  Griffiths, Peter Portsm'th N)

  Mills Iain (Meriden)

  Grimond, Rt Hon J.

  Mills Sir Peter (West Devon)

  Grist, Ian

  Miscampbell, Norman

  Grylls, Michael

  Mitchell, R. C. (Soton Itchen)

  Gummer, John Selwyn

  Moate, Roger

  Hamilton, Hon A.

  Monro, Sir Hector

  Hamilton, Michael (Salisbury)

  Montgomery, Fergus

  Hampson, Dr Keith

  Morgan, Geraint

  Hannam, John

  Morris, M. (N'hampton S)

  Haselhurst, Alan

  Morrison, Hon C. (Devizes)

  Hastings, Stephen

  Morrison, Hon P. (Chester)

  Havers, Rt Hon Sir Michael

  Murphy, Christopher

  Hawksley, Warren

  Myles, David

  Hayhoe, Barney

  Neale, Gerrard

  Heddle, John

  Needham, Richard

  Henderson, Barry

  Nelson, Anthony

  Heseltine, Rt Hon Michael

  Neubert, Michael

  Hicks, Robert

  Newton, Tony

  Higgins, Rt Hon Terence L.

  Ogden, Eric

  Hogg, Hon Douglas (Gr'th'm)

  O'Halloran, Michael

  Holland, Philip (Carlton)

  Onsolw, Cranley

  Hooson, Tom

  Oppenheim, Rt Hon Dr Mrs S.

  Horam, John

  Owen, Rt Hon Dr David

  Hordern, Peter

  Page, Richard (SW Herts)

  Howe, Rt Hon Sir Geoffrey

  Parkinson, Rt Hon Cecil

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

  Parris, Matthew

  Howells, Geraint

  Patten, Christopher (Bath)

  Hudson Davies, Gwilym E.

  Patten, John (Oxford)

  Hunt, David (Wirral)

  Pattie, Geoffrey

  Hunt, John (Ravensbourne)

  Pawsey, James

  Hurd, Rt Hon Douglas

  Penhaligon, David

  Irvine, Rt Hon Bryant Godman

  Percival, Sir Ian

  Irving, Charles (Cheltenham)

  Peyton, Rt Hon John

  Jenkin, Rt Hon Patrick

  Pink, R. Bonner

  Johnson Smith, Sir Geoffrey

  Pitt, William Henry

  Johnston, Russell (Inverness)

  Pollock, Alexander

  Jopling, Rt Hon Michael

  Prentice, Rt Hon Reg

  Joseph, Rt Hon Sir Keith

  Price, Sir David (Eastleigh)

  Kaberry, Sir Donald

  Proctor, K. Harvey

  Kellett-Bowman, Mrs Elaine

  Pym, Rt Hon Francis

  Kimball, Sir Marcus

  Raison, Rt Hon Timothy

  King, Rt Hon Tom

  Rathbone, Tim

  Kitson, Sir Timothy

  Rees, Peter (Dover and Deal)

  Knox, David

  Renton, Tim

  Lamont, Norman

  Rhodes James, Robert

  Lang, Ian

  Rhys Williams, Sir Brandon

  Langford-Holt, Sir John

  Ridley, Hon Nicholas

  Latham, Michael

  Ridsdale, Sir Julian

  Lawrence, Ivan

  Roberts, M. (Cardiff NW)

  Lee, John

  Roberts, Wyn (Conway)

  Le Marchant, Spencer

  Rodgers, Rt Hon William

  Lennox-Boyd, Hon Mark

  Roper, John

  Lewis, Kenneth (Rutland)

  Ross, Stephen (Isle of Wight)

  Lloyd, Peter (Fareham)

  Rossi, Hugh

  Luce, Richard

  Rost, Peter

  Lyell, Nicholas

  Royle, Sir Anthony

  Lyons, Edward (Bradf'd W)

  Rumbold, Mrs A. C. R.

  Mabon, Rt Hon Dr J. Dickson

  Sainsbury, Hon Timothy

  McCrindle, Robert

  St. John-Stevas, Rt Hon N.

  Macfarlane, Neil

  Sandelson, Neville

  MacGregor, John

  Scott, Nicholas

  MacKay, John (Argyll)

  Shaw, Giles (Pudsey)

  Maclennan, Robert

  Shaw, Sir Michael (Scarb')

  Macmillan, Rt Hon M.

  Shelton, William (Streatham)

  McNair-Wilson, M. (N'bury)

  Shepherd, Colin (Hereford)

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

  Shepherd, Richard

  Madel, David

  Shersby, Michael

  Major, John

  Silvester, Fred

  Marland, Paul

  Sims, Roger

  Marlow, Antony

  Skeet, T. H. H.

  Marten, Rt Hon Neil

  Smith, Cyril (Rochdale)

  109

  Smith, Tim (Beaconsfield)

  Vaughan, Dr Gerard

  Speller, Tony

  Viggers, Peter

  Spence, John

  Waddington, David

  Spicer, Jim (West Dorset)

  Wainwright, R.(Colne V)

  Spicer, Michael (S Worcs)

  Wakeham, John

  Sproat, Iain

  Waldegrave, Hon William

  Squire, Robin

  Walker, Rt Hon P.(W'cester)

  Stanbrook, Ivor

  Walker, B. (Perth)

  Stanley, John

  Walker-Smith, Rt Hon Sir D.

  Steel, Rt Hon David

  Wall, Sir Patrick

  Steen, Anthony

  Waller, Gary

  Stevens, Martin

  Walters, Dennis

  Stewart, A.(E Renfrewshire)

  Ward, John

  Stewart, Ian (Hitchin)

  Warren, Kenneth

  Stokes, John

  Watson, John

  Stradling Thomas, J.

  Wellbeloved, James

  Tapsell, Peter

  Wells, Bowen

  Taylor, Teddy (S'end E)

  Wells, John (Maidstone)

  Tebbit, Rt Hon Norman

  Wheeler, John

  Temple-Morris, Peter

  Whitelaw, Rt Hon William

  Thatcher, Rt Hon Mrs M.

  Whitney, Raymond

  Thomas, Mike (Newcastle E)

  Williams, D.(Montgomery)

  Thompson, Donald

  Winterton, Nicholas

  Thorne, Neil (Ilford South)

  Wolfson, Mark

  Thornton, Malcolm

  Wrigglesworth, Ian

  Townend, John (Bridlington)

  Young, Sir George (Acton)

  Townsend, Cyril D, (B'heath)

  Trippier, David

  Tellers for the Noes:

  Trotter, Neville

  Mr. Anthony Berry and

  van Straubenzee, Sir W.

  Mr. Robert Boscawen.

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

  Telecommunications Bill

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the motion relating to Ways and Means may be proceeded with, though opposed, until any hour.—[Mr. David Hunt.]

    TELECOMMUNICATIONS [MONEY]
    Queen's Recommendation having been signified—
    Motion made—[Mr. Patrick Jenkin)—and Question put,
    That, for the purposes of any Act of the present Session to provide for the appointment of a Director General of Telecommunications and to confer functions on the Director General so appointed, to abolish the exclusive privilege with respect to telecommunications conferred on British Telecommunications by section 12 of the British Telecommunications Act 1981 and to make new provision with respect to the provision of telecommunication services (hereinafter referred to as "the Act"), it is expedient to authorise—

    (1) the extinguishment by order of all or any liabilities of the successor company to the Secretary of State in respect of the principal of transferred loans;

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

    (a) the remuneration of, and any travelling or other allowances payable under the Act to, the Director General of Telecommunications and any staff of the Director, any sums payable under the Act to or in respect of the Director and any expenses duly incurred by the Director or by any of his staff in consequence of the provisions of the Act;

    (b) any sums required by the Secretary of State for making grants or other payments under the Act or for discharging any liability imposed on him by the Act;

    (c) any expenses incurred by the Secretary of State in acquiring securities of the successor company or of any subsidiary of the successor company or rights to subscribe for any such securities;

    (d) any administrative expenses incurred by the Secretary of State in consequence of the provisions of the Act;

    (e) any increase attributable to the Act in the sums payable out of moneys so provided under any other Act;

    110

    (3) the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans under the Act;

    (4) any payments into the National Loans Fund or the Consolidated Fund;

    and for the purposes of this Resolution "successor company" has the meaning given by the Act and "transferred loan" means any money borrowed or treated as borrowed by British Telecommunications the liability to repay which vests in the successor company by virtue of the Act.
    The House divided: Ayes 278, Noes 234.

    Division No. 22]

    [10.27 pm

    AYES

    Adley, Robert

    Emery, Sir Peter

    Aitken, Jonathan

    Eyre, Reginald

    Alexander, Richard

    Fairbairn, Nicholas

    Alison, Rt Hon Michael

    Faith, Mrs Sheila

    Amery, Rt Hon Julian

    Farr, John

    Ancram, Michael

    Fenner, Mrs Peggy

    Arnold, Tom

    Finsberg, Geoffrey

    Aspinwall, Jack

    Fisher, Sir Nigel

    Atkins, Rt Hon H.(S'thorne)

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

    Atkins, Robert(Preston N)

    Fletcher-Cooke, Sir Charles

    Baker, Kenneth(St.M'bone)

    Fookes, Miss Janet

    Baker, Nicholas (N Dorset)

    Forman, Nigel

    Beaumont-Dark, Anthony

    Fowler, Rt Hon Norman

    Bendell, Vivian

    Fox, Marcus

    Benyon, Thomas (A'don)

    Fraser, Rt Hon Sir Hugh

    Best, Keith

    Fraser, Peter (South Angus)

    Bevan, David Gilroy

    Gardiner, George (Reigate)

    Biffen, Rt Hon John

    Gardner, Edward (S Fylde)

    Biggs-Davison, Sir John

    Garel-Jones, Tristan

    Blackburn, John

    Gilmour, Rt Hon Sir Ian

    Blaker, Peter

    Glyn, Dr Alan

    Body, Richard

    Goodhart, Sir Philip

    Bonsor, Sir Nicholas

    Goodhew, Sir Victor

    Bottomley, Peter (W'wich W)

    Gorst, John

    Boyson, Dr Rhodes

    Gow, Ian

    Braine, Sir Bernard

    Gower, Sir Raymond

    Bright, Graham

    Gray, Rt. Hon. Hamish

    Brinton, Tim

    Greenway, Harry

    Brittan, Rt. Hon. Leon

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

    Brooke, Hon Peter

    Griffiths, Peter Portsm'th N)

    Brotherton, Michael

    Grist, Ian

    Brown, Michael(Brigg & Sc'n)

    Grylls, Michael

    Browne, John (Winchester)

    Gummer, John Selwyn

    Bruce-Gardyne, John

    Hamilton, Hon A.

    Bryan, Sir Paul

    Hamilton, Michael (Salisbury)

    Buchanan-Smith, Rt. Hon. A.

    Hampson, Dr Keith

    Buck, Antony

    Hannam, John

    Budgen, Nick

    Haselhurst, Alan

    Bulmer, Esmond

    Hastings, Stephen

    Burden, Sir Frederick

    Havers, Rt Hon Sir Michael

    Butcher, John

    Hawksley, Warren

    Carlisle, John (Luton West)

    Hayhoe, Barney

    Carlisle, Kenneth (Lincoln)

    Heddle, John

    Channon, Rt. Hon. Paul

    Henderson, Barry

    Chapman, Sydney

    Heseltine, Rt Hon Michael

    Churchill, W. S.

    Hicks, Robert

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

    Higgins, Rt Hon Terence L.

    Clark, Sir W. (Croydon S)

    Hogg, Hon Douglas (Gr'th'm)

    Clarke, Kenneth (Rushcliffe)

    Holland, Philip (Carlton)

    Clegg, Sir Walter

    Hooson, Tom

    Colvin, Michael

    Hordern, Peter

    Cope, John

    Howe, Rt Hon Sir Geoffrey

    Cormack, Patrick

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

    Corrie, John

    Hunt, David (Wirral)

    Costain, Sir Albert

    Hunt, John (Ravensbourne)

    Cranborne, Viscount

    Hurd, Rt Hon Douglas

    Critchley, Julian

    Irvine, Rt Hon Bryant Godman

    Crouch, David

    Irving, Charles (Cheltenham)

    Dickens, Geoffrey

    Jenkin, Rt Hon Patrick

    du Cann, Rt Hon Edward

    Johnson Smith, Sir Geoffrey

    Dunn, Robert (Dartford)

    Jopling, Rt Hon Michael

    Dykes, Hugh

    Joseph, Rt Hon Sir Keith

    Eden, Rt Hon Sir John

    Kaberry, Sir Donald

    Edwards, Rt Hon N. (P'broke)

    Kellett-Bowman, Mrs Elaine

    Eggar, Tim

    Kimball, Sir Marcus

    Elliott, Sir William

    King, Rt Hon Tom

    111

    Kitson, Sir Timothy

    Ridley, Hon Nicholas

    Knox, David

    Ridsdale, Sir Julian

    Lamont, Norman

    Roberts, M. (Cardiff NW)

    Lang, Ian

    Roberts, Wyn (conway)

    Langford-Holt, Sir John

    Rossi, Hugh

    Latham, Michael

    Rost, Peter

    Lawrence, Ivan

    Royle, Sir Anthony

    Lee, John

    Rumbold, Mrs A. C. R.

    Le Marchant, Spencer

    Sainsbury, Hon Timothy

    Lennox-Boyd, Hon Mark

    St. John-Stevas, Rt Hon N.

    Lewis, Kenneth (Rutland)

    Scott, Nicholas

    Lloyd, Peter (Fareham)

    Shaw, Giles (Pudsey)

    Luce, Richard

    Shaw, Sir Michael (Scarb')

    Lyell, Nicholas

    Shelton, William (Streatham)

    McCrindle, Robert

    Shepherd, Colin (Hereford)

    Macfarlane, Neil

    Shepherd, Richard

    MacGregor, John

    Shersby, Michael

    MacKay, John (Argyll)

    Silvester, Fred

    Macmillan, Rt Hon M.

    Sims, Roger

    McNair-Wilson, M. (N'bury)

    Skeet, T. H. H.

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

    Smith, Tim (Beaconsfield)

    Madel, David

    Speller, Tony

    Major, John

    Spence, John

    Marland, Paul

    Spicer, Jim (West Dorset)

    Marlow, Antony

    Spicer, Michael (S Worcs)

    Marten, Rt Hon Neil

    Sproat, Iain

    Mates, Michael

    Squire, Robin

    Mather, Carol

    Stanbrook, Ivor

    Mawby, Ray

    Stanley, John

    Mawhinney, Dr Brian

    Steen, Anthony

    Maxwell-Hyslop, Robin

    Stevens, Martin

    Mayhew, Patrick

    Stewart, A.(E Renfrewshire)

    Mellor, David

    Stewart, Ian (Hitchin)

    Meyer, Sir Anthony

    Stokes, John

    Miller, Hal (B'grove)

    Stradling Thomas, J.

    Mills, Iain (Meriden)

    Tapsell, Peter

    Mills, Sir Peter (West Devon)

    Taylor, Teddy (S'end E)

    Miscampbell, Norman

    Tebbit, Rt Hon Norman

    Moate, Roger

    Temple-Morris, Peter

    Monro, Sir Hector

    Thatcher, Rt Hon Mrs M.

    Montgomery, Fergus

    Thompson, Donald

    Morgan, Geraint

    Thorne, Neil (Ilford South)

    Morris, M. (N'hampton S)

    Thornton, Malcolm

    Morrison, Hon C. (Devizes)

    Townend, John (Bridlington)

    Morrison, Hon P. (Chester)

    Townsend, Cyril D, (B'heath)

    Murphy, Christopher

    Trippier, David

    Myles, David

    Trotter, Neville

    Neale, Gerrard

    Van Straubenzee, Sir W.

    Needham, Richard

    Vaughan, Dr Gerard

    Nelson, Anthony

    Viggers, Peter

    Neubert, Michael

    Waddington, David

    Newton, Tony

    Wakeham, John

    Onslow, Cranley

    Waldegrave, Hon William

    Oppenheim, Rt Hon Mrs S.

    Walker, Rt Hon P. (W'cester)

    Page, Richard (SW Herts)

    Walker, B. (Perth )

    Parkinson, Rt Hon Cecil

    Walker-Smith, Rt Hon Sir D.

    Parris, Matthew

    Wall, Sir Patrick

    Patten, Christopher (Bath)

    Waller, Gary

    Patten, John (Oxford)

    Walters, Dennis

    Pattie, Geoffrey

    Ward, John

    Pawsey, James

    Warren, Kenneth

    Percival, Sir Ian

    Watson, John

    Peyton, Rt Hon John

    Wells, Bowen

    Pink, R. Bonner

    Wells, John (Maidstone)

    Pollock, Alexander

    Wheeler, John

    Prentice, Rt Hon Reg

    Whitelaw, Rt Hon William

    Price, Sir David (Eastleigh)

    Whitney, Raymond

    Proctor, K. Harvey

    Williams, D.(Montgomery)

    Pym, Rt Hon Francis

    Winterton, Nicholas

    Raison, Rt Hon Timothy

    Wolfson, Mark

    Rathbone, Tim

    Young, Sir George (Acton)

    Rees, Peter (Dover and Deal)

    Renton, Tim

    Teller for the Ayes:

    Rhodes James, Robert

    Mr. Anthony Berry and

    Rhys Williams, Sir Brandon

    Mr. Robert Boscawen.

    NOES

    Abse, Leo

    Anderson, Donald

    Allaun, Frank

    Archer, Rt Hon Peter

    Alton, David

    Ashley, Rt Hon Jack

    112

    Ashton, Joe

    Haynes, Frank

    Atkinson, N.(H'gey,)

    Healey, Rt Hon Denis

    Barnett, Guy (Greenwich)

    Heffer, Eric S.

    Barnett, Rt Hon Joel (H'wd)

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

    Beith, A. J.

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

    Benn, Rt Hon Tony

    Home Robertson, John

    Bennett, Andrew(St'kp't N)

    Homewood, William

    Booth, Rt Hon Albert

    Horam, John

    Bray, Dr Jeremy

    Howell, Rt Hon D.

    Brocklebank-Fowler, C.

    Howells, Geraint

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

    Hoyle, Douglas

    Brown, Ron (E'burgh, Leith)

    Huckfield, Les

    Buchan, Norman

    Hudson Davies, Gwilym E.

    Callaghan, Rt Hon J.

    Hughes, Mark (Durham)

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

    Hughes, Robert (Aberdeen N)

    Campbell, Ian

    Hughes, Roy (Newport)

    Campbell-Savours, Dale

    Janner, Hon Greville

    Canavan, Dennis

    Jay, Rt Hon Douglas

    Cant, R. B.

    John, Brynmor

    Carter-Jones, Lewis

    Johnson, James (Hull West)

    Cartwright, John

    Johnson, Walter (Derby S)

    Clark, Dr David (S Shields)

    Johnston, Russell (Inverness)

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

    Jones, Rt Hon Alec (Rh'dda)

    Cohen, Stanley

    Jones, Barry (East Flint)

    Concannon, Rt Hon J. D.

    Jones, Dan (Burnley)

    Conlan, Bernard

    Kaufman, Rt Hon Gerald

    Cook, Robin F.

    Kerr, Russell

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

    Kilroy-Silk, Robert

    Crawshaw, Richard

    Lamond, James

    Crowther, Stan

    Leadbitter, Ted

    Cryer, Bob

    Leighton, Ronald

    Cunliffe, Lawrence

    Lestor, Miss Joan

    Cunningham, G. (Islington S)

    Lewis, Arthur (N'ham NW)

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

    Lewis, Ron (Carlisle)

    Dalyell, Tam

    Litherland, Robert

    Davies, Rt Hon Denzil (L'lli)

    Lofthouse, Geoffrey

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

    Lyons, Edward (Bradf'd W)

    Deakins, Eric

    Mabon, Rt Hon Dr J. Dickson

    Dean, Joseph (Leeds West)

    McCartney, Hugh

    Dewar, Donald

    McDonald, Dr Oonagh

    Dixon, Donald

    McKelvey, William

    Dobson, Frank

    MacKenzie, Rt Hon Gregor

    Dormand, Jack

    Maclennan, Robert

    Dubs, Alfred

    McMahon, Andrew

    Duffy, A. E. P.

    McNamara, Kevin

    Dunnett, Jack

    McTaggart, Robert

    Dunwoody, Hon Mrs G.

    McWilliam, John

    Eadie, Alex

    Marks, Kenneth

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

    Marshall, D (G'gow S'ton)

    Ellis, Tom (Wrexham)

    Marshall, Dr Edmund (Goole)

    English, Michael

    Marshall, Jim (Leicester S)

    Ennals, Rt Hon David

    Mason, Rt Hon Roy

    Evans, Ioan (Aberdare)

    Maxton, John

    Evans, John (Newton)

    Maynard, Miss Joan

    Ewing, Harry

    Meacher, Michael

    Field, Frank

    Mikardo, Ian

    Fitch, Alan

    Mitchell, Austin (Grimsby)

    Fitt, Gerard

    Mitchell, R. C. (Soton Itchen)

    Flannery, Martin

    Morris, Rt Hon C. (O'shaw)

    Foot, Rt Hon Michael

    Moyle, Rt Hon Roland

    Ford, Ben

    Newens, Stanley

    Foster, Derek

    Oakes, Rt Hon Gordon

    Foulkes, George

    Ogden, Eric

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

    O'Halloran, Michael

    Freeson, Rt Hon Reginald

    O'Neill, Martin

    Freud, Clement

    Orme, Rt Hon Stanley

    Garrett, John (Norwich S)

    Owen, Rt Hon Dr David

    George, Bruce

    Palmer, Arthur

    Gilbert, Rt Hon Dr John

    Park, George

    Ginsburg, David

    Parker, John

    Golding, John

    Parry, Robert

    Graham, Ted

    Pendry, Tom

    Grant, John (Islington C)

    Penhaligon, David

    Grimond, Rt Hon J.

    Pitt, William Henry

    Hamilton, James (Bothwell)

    Powell, Raymond (Ogmore)

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

    Prescott, John

    Harman, Harriet (Peckham)

    Price, C. (Lewisham W)

    Harrison, Rt Hon Walter

    Race, Reg

    Hart, Rt Hon Dame Judith

    Radice, Giles

    Hattersley, Rt Hon Roy

    Rees, Rt Hon M (Leeds S)

    113

    Richardson, Jo

    Summerskill, Hon Dr Shirley

    Roberts, Albert (Normanton)

    Taylor, Mrs Ann (Bolton W)

    Roberts, Allan (Bootle)

    Thomas, Dafydd (Merioneth)

    Roberts, Ernest (Hackney N)

    Thomas, Mike (Newcastle E)

    Roberts, Gwilym (Cannock)

    Thomas, Dr R. (Carmarthen)

    Robertson, George

    Thorne, Stan (Preston South)

    Robinson, G. (Coventry NW)

    Tilley, John

    Rodgers, Rt Hon William

    Tinn, James

    Rooker, J. W.

    Torney, Tom

    Roper, John

    Varley, Rt Hon Eric G.

    Ross, Ernest (Dundee West)

    Wainwright, E. (Dearne V)

    Ross, Stephen (Isle of Wight)

    Wainwright, R. (Colne V)

    Rowlands, Ted

    Walker, Rt Hon H. (D'caster)

    Ryman, John

    Wardell, Gareth

    Sandelson, Neville

    Watkins, David

    Sever, John

    Weetch, Ken

    Sheerman, Barry

    Wellbeloved, James

    Sheldon, Rt Hon R.

    Welsh, Michael

    Shore, Rt Hon Peter

    White, Frank R.

    Short, Mrs Renée

    Whitehead, Phillip

    Silkin, Rt Hon J. (Deptford)

    Whitlock, William

    Silkin, Rt Hon S. C. (Dulwich)

    Wigley, Dafydd

    Silverman, Julius

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

    Skinner, Dennis

    Wilson, Gordon (Dundee E)

    Smith, Cyril (Rochdale)

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

    Snape, Peter

    Wilsopn, William (C'try SE)

    Soley, Clive

    Winnick, David

    Speller, John Francis (B'ham)

    Woodall, Alec

    Spriggs, Leslie

    Woolmer, Kenneth

    Stallard, A. W.

    Wrigglesworth, Ian

    Steel, Rt Hon David

    Wright, Sheila

    Stewart, Rt Hon D. (W Isles)

    Young, David (Bolton E)

    Stoddart, David

    Stott, Roger

    Teller for the Noes:

    Strang, Gavin

    Mr. Allen McKay and

    Straw, Jack

    Mr. George Morton.

    Question accordingly agreed to.

  WAYS AND MEANS

    TELECOMMUNICATIONS
    Resolved,
    That it is expedient to authorise the inclusion in licences for the running to telecommunication systems of conditions requiring the rendering of payments to the Secretary of State.— [Mr. Patrick Jenkin.]

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: In order to save the time of the House, I shall put together motions 4 to 10 on the Order Paper.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A(5) (Standing Committee on Statutory Instruments, &c.)

  STATUTORY INSTRUMENTS, &c.

    ANIMAL
    That the Mink (Keeping) Order 1982, a copy of which was laid before this House on 25th October, in the last Session of Parliament, be approved.
    That the Coypus (Keeping) Order 1982, a copy of which was laid before this House on 25th October, in the last Session of Parliament, be approved.

    HOUSING (SCOTLAND)
    That the draft Housing (Percentage of Approved Expense for Improvement Grants) (Disabled Occupants) (Scotland) Order 1982, which was laid before this House on 4th November, be approved.
    HOUSING
    That the draft Grants by Local Authorities (Appropriate Percentage and Exchequer Contributions) (No. 2) Order 1982, which was laid before this House on 4th November, be approved.
    HOUSING (SCOTLAND)
    That the draft Grants by Local Authorities (Percentages and Exchequer Contributions) (Scotland) (No. 2) Order 1982, which was laid before this House on 8th November, be approved.
    CUSTOMS AND EXCISE
    That the Immature Spirits (Rum) Order 1982 (S.I., 1982, No. 1575), a copy of which was laid before this House on 11th November, be approved.

    TERMS AND CONDITIONS OF EMPLOYMENT
    That the draft Employment Subsidies Act 1978 (Renewal) (Great Britain) Order 1982, which was laid before this House on 19th October in the last Session of Parliament, be approved.—[Mr. Lang.]
    Question agreed to.

  STATUTORY INSTRUMENTS, &c.

    ANIMALS
    Ordered,
    That, notwithstanding the provisions of paragraph (3) of Standing Order No. 73A (Standing Committees on Statutory Instruments, &c.), the proposed alterations to the Code No. 1 of the Codes of Recommendations for the Welfare of Livestock, relating to cattle, be referred to a Standing Committee on Statutory Instruments, &c.
    That, notwithstanding the provisions of paragraph (3) of Standing Order No. 73A (Standing Committees on Statutory Instruments, &c.), the proposed alterations to the Code No. 2 of the Codes of Recommendations for the Welfare of Livestock, relating to pigs, be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Lang.]

  Oxford Textile Mills
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
  10.40 pm
  Mr. Tom Benyon: I am glad to have the opportunity to raise a matter of general importance, which relates to Oxford Textile Mills, a company in my constituency. It is the type of company that the Government should do everything to encourage. It employs many of my constituents and has a considerable record of entrepreneurial skill in its ability to seek out opportunities during a difficult recession and to maximise them. I am delighted that it should be employing more people in my constituency.
  The issue is of general interest and concerns the way in which my company feels that it has been treated by Her Majesty's Customs and Excise. The debate does not concern the conduct or courtesy displayed by officials of Her Majesty's Customs and Excise. In my view, they have behaved properly throughout according to the guidelines under which they work. It is important that companies and individuals should understand the burden of taxation that they will inevitably suffer. Companies find that the uncertainty of taxation is intolerable. They find it difficult to know whether they can import and sell at the right price, or how to organise their corporate affairs.
  Edmund Burke said:
  "To tax and to please, no more than to love and to be wise, is not given to men."
  I am fully aware of that, and so is my constituent company. However, it at least wishes to know the rate of tax that it is to suffer. The tax law should be clear and concise and should be obeyed. In the circumstance that I am about to relate, the law is unclear, inconcise and open to dispute. My constituent company, Oxford Textile Mills, has been importing Jamaican carpets. The dispute falls broadly into three areas. In 1975 the company imported carpet from Jamaica and was taxed in one way. In 1980, having carried out—as the company believed—the identical procedure, it discovered that it was about to be taxed differently, and retrospectively to boot.
  The company feels that the interpretation that now seems to be given of the rules under the LOME convention is unfair. Oxford Textile Mills commenced the importation of Jamaican carpets in early 1980. Good value for money was offered, not least because of the tariff preference. The company would not have considered making such low-priced carpet itself but was happy to purchase it from a carpet manufacturer in the Caribbean who badly needed the business to support an efficient, happy, but ailing, plant, which employed about 200 people near Kingston. The company was confident that the product complied with the required regulations not only from its experience in 1975 at all stages in manufacture but from Jamaican Customs verification on the export documentation.
  This compliance was later confirmed by the production of a letter from Her Majesty's Customs confirming the fact that back in 1975 the product complied with the regulations. The carpet being imported in 1980 was in one case exactly the same product, and in the other two cases there were style variations of exactly the same manufacture as the carpet imported in 1975 when the
  116
  company had been assured that the circumstances were as it believed them to be. The same civil servant—I do not wish to name him—was the Customs officer throughout.
  The first communication on 17 March 1981 from Her Majesty's Customs questioning the Lomé convention compliance was enough for the company to suspend further orders from Jamaica. This subsequently resulted in the Jamaican carpet mill having to shed three-quarters of its labour force, and there were untold problems of supply replacements for the company. It was, however, confident that this suspension would be only temporary. Very little correspondence took place between the parties—the company, the Customs and, indeed, the suppliers in Jamaica—from May 1981 until April 1982 other than by my constituents to press for clarification of the rules.
  In April of this year, Her Majesty's Customs finally confirmed that it would not allow the tariff preference. Why was there such a delay? The long drawn-out way in which Her Majesty's Customs operated, with little official documentation or detail, gave the company cause for disquiet.
  The second part of the argument concerns the actual duty element. The loss of tariff preference meant that my constituent company was faced with a claim of 23 per cent. duty—some £27,440·73 on this specific consignment, 20 months after the company received it. More than a month elapsed between the arrival of the relevant shipment and the first communication from Her Majesty's Customs. Even before that first communication, most of the carpet was sold with a large amount eventually being re-exported. At that time, the company was confident that the interest of Her Majesty's Customs was only a formality, to confirm the status which the company was confident existed.
  Now, Her Majesty's Customs doubt, even at this stage, whether my constituent company could reclaim this duty on a re-exported carpet as Oxford Textile Mills did not indicate at the time of import that that might be the case. What an incredible state of affairs. One can well understand the surprise of the company as it felt that there was no duty at the time of import, and thus no reason to make such a statement as duty was not expected to be reclaimed.
  The final part of the argument revolves round the interpretation used for Her Majesty's Customs decision, its change of view since 1975, and the total lack of further new supply possibilities from Jamaica with this duty of 23 per cent. being a complete barrier to the continuation of this type of business. These aspects are currently being pursued by the Hon. Hugh L. Shearer, Minister of Foreign Affairs for Jamaica, with the Lomé authorities. I should also mention that before the debate tonight, I had a meeting with Mr. Norman Rae, the Trade Commissioner for Jamaica, who told me that it was difficult for the Jamaican carpet manufacturers to comply with the Customs' authorities wishes—that the backing of the carpet be also made in Jamaica. It is difficult for them to make the backing for the carpet. All they can make is the material which goes on top of the backing.
  Mr. Shearer voiced confidence that steps will be taken and that the carpet will not be liable to duty in future. Mr. Norman Rae has doubts about whether that is possible.
  I should like Her Majesty's Customs to be clear that my constituents are not arguing that it has no right to change its mind on whether a product meets the Lomé requirements. They are arguing about the backdating of

  117
  the decisions to cover imports of 11 February 1981 and the fact that its final decision was not communicated to the company until 28 April 1982. This will cripple the company. It will make it extremely difficult for it to operate. My constituent company has done all that was possible to verify compliance, including checking as hard as it was able with Her Majesty's Customs. It sensibly suspended any additional orders until notice of the final outcome was received. It is unreasonable that anyone should expect that it should incorporate a contingency duty of 23 per cent. in the light of all the firm information that was received at the time.
  I realise the great difficulty under which my hon. Friend operates tonight. He is bound by the rules and regulations under which we all have to suffer. I understand—I am sure that my constituency company does—that if it has been caught up in a quirk in the legislation it is difficult to see how my hon. Friend can turn the legislation on its head. I am sure that we all understand that he can do only so much. However, I hope that he will agree that the situation is unsatisfactory. The company is in great distress. It is in great doubt. In the event of it having to pay what might be upwards of £100,000, it will be in great difficulty. I have every reason to suppose that that is not an exaggeration. I do not want to be alarmist, but job opportunities which might have been created may no longer be created. It could be that unemployment will rise in my constituency as a result.
  I hope that my hon. Friend will do all that he can to help. I know of the characteristic flexibility and humanity which he employs in reviewing these matters and I hope that he will do all that he can to ensure that the position of my constituency company is eased. Possibly he will be able to clarify the re-exporting position with a view to seeing whether he can help the company in that way and, at worst, to say whether any staged payments for the company might be envisaged. I realise how difficult it might be for him to be positive in his answer tonight, but if he can give an assurance that he will do all that he can to help it will be most welcome to me and my constituent company.
  10.53 pm
  The Economic Secretary to the Treasury (Mr. Jock Bruce-Gardyne): I have every possible sympathy with the problems of Oxford Textile Mills to which my hon. Friend the Member for Abingdon (Mr. Benyon) has drawn the attention of the House. I assure him that Customs and Excise fully understand and sympathise with the problems which have arisen. Unfortunately, I am not sure that I shall be able to offer my hon. Friend a great deal of comfort. Oxford Textile Mills has effectively come up against the rules of the Community and their impact on the importation of goods from the so-called Lomé convention countries.
  As my hon. Friend recognised, the carpets which the company imported from Jamaica in February 1981 were admitted free of Customs duty under the terms of the Lomé convention. Otherwise they would have attracted a tariff of 23 per cent. as coming outwith the Community. Goods from Lomé convention countries are admitted into the European Community free of duty provided that they have been either wholly produced or sufficiently worked or processed in qualifying States to satisfy the origin rules laid down in protocol 1 of the Lomé convention.
  118
  The entitlement of such goods to preference treatment is established at the time of importation by production to the Customs of a special certificate known as an EUR 1. That certificate must bear a declaration, signed by the exporter, confirming that the goods have met the requirements of the origin rules. It must also have been stamped and certificated by the Customs authorities of the exporting country. That is what happened with the goods from the factory in my hon. Friend's constituency.
  Preference is granted at the time of importation on production of the document in order not to hold up trade, but the certifying authorities in the exporting country are unlikely to have had either the resources or the time to make a detailed investigation into all the facts before issuing every EUR 1 certificate. They are not expected to do so.
  It is for that reason that the Lomé convention provides for the Customs of the importing country to ask the certifying authority in the exporting country to verify whether the information concerning the origin of the goods is accurate. Those verification inquiries may arise either as a result of random checks, as I am led to believe happened with the carpets that my hon. Friend mentioned, or when the Customs in the importing country— in the United Kingdom in that case—has reason to doubt the accuracy of the declaration.
  Because of the risk that a verification inquiry may show that goods admitted to a preference were not entitled to it, it is the practice of Customs and Excise invariably to inform the importer when an inquiry has been launched and to advise him that if the goods turn out not to be entitled to duty-free admission or reduced rate of duty, he will have to pay Customs duty at the full rate. It then informs the importer of the progress of the inquiry and its result.
  That is the background. I shall now refer to the carpets imported by Oxford Textile Mills. They were admitted free of duty on 11 February 1981 on production of the EUR 1 certificate, completed by the exporter, a company called Jamaica Carpet Mills, to which my hon. Friend referred, and issued by the Jamaica Customs Department. On 17 March, just over a month after the entry of the carpets, Customs and Excise told Oxford Textile Mills by letter that it had decided to open a verification inquiry.
  Of course, under the terms of the relevant Customs documentation, it is spelt out clearly, as the factory must have been aware:
  "Customs have the right to require verification subsequently by the preference country that the goods did originate as claimed. If such verification reveals that the goods did not in fact originate there in accordance with the origin rules, the importer will be required to pay the full customs charges due."
  That should have served as an alert. I think that it did make the people concerned aware, from what my hon. Friend said to the factory, that the goods were under scrutiny.
  Customs and Excise asked the Jamaica Customs Department if it could confirm that the manufacture of the carpets was in accordance with the rules laid down. A reply was received from Jamaica, dated 10 April 1981, which mentioned that imported polypropylene primary backing had been used in making the carpets.
  The Community rules under the Lomé convention do not allow the use of polypropylene that has been woven into fabric unless it has been made in a Lomé country or in the European Community.

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  Customs and Excise sent a second letter on 28 May 1981 to the Jamaica Customs Department pointing out that, on the face of it, the use of polypropylene backing, if imported from a country that is not party to the Lomé convention, made the carpets ineligible for preference.
  Mr. Benyon: My hon. Friend must be aware that, as I understand it from conversations tonight, Jamaica cannot make backing and must import it. Moreover, my constituents feel that changing the duty on the basis of the backing is rather like changing the duty on a car because the wheels are made of a different substance from the rest of the car. They believe that it is the fabric, not the backing, that is imported.
  Mr. Bruce-Gardyne: I am afraid that there does not seem to be any dispute between Customs and Excise and the Jamaican authorities that the incorporation of the backing invalidated the carpets for Lomé convention treatment.
  Perhaps I should deal with the point that my hon. Friend made about other similar or identical carpets that the company had previously imported from Jamaica. There is some doubt about the precise constitution of the backing of the previous carpets that are involved in this case. They may have qualified under the Lomé convention rules in a way that the present carpets did not. They may not have done and perhaps should have been called upon for Customs duty. If they did qualify, they were not rolled out. There was no intention to rake back over history.
  My hon. Friend mentioned the possibility of £100,000 being at risk. I am not sure of the origin of that figure. I can only assume that it relates to the thought that there would be an attempt to back track previous consignments of carpets that might not have qualified under the Lomé convention rules but which were allowed through, free of duty. I should like to make it quite clear that there is no question under our rules of back tracking. Therefore, the £27,000 that has been quoted in correspondence with the company as its liability to duty is the maximum.
  It is freely admitted that a long delay occurred after the letter from Customs and Excise was sent to the Jamaican authorities on 28 May 1981. That was the responsibility of the Jamaican authorities. There was an interminable delay in obtaining any responses from them. They apologised for the delay when, eventually, in March this year, they confirmed that the polypropylene fabric of tariff
  120
  heading 51· had been imported from the United States and that its use rendered the carpets ineligible for preferential treatment.
  Customs and Excise and I accept that there was a long delay in establishing the appropriate treatment of the carpets. Unfortunately, this provision of the Lomé convention rules provides for the post hoc verification of importation.
  I am told that a few years ago an Italian importer challenged the right of the Italian Customs and Excise to reclaim duty in respect of consignments that were subsequently found to be ineligible for Lomé convention treatment. He lost his case hands down.
  There is no doubt that under Community and United Kingdom law, duty is reclaimable where it can be established that the goods were not entitled to Lomé convention treatment. The only alternative would be for the importer to pay a substantial deposit. In the overwhelming majority of cases the deposit would not be forfeited, and we feel that most importers would not thank us for going down that road.
  Customs and Excise is sympathetic to the firm and the problems that have arisen. I understand that it has offered to discuss arrangements for the payment of the outstanding duty by instalments.
  Oxford Textile Mills has said that many of the carpets were subsequently re-exported. Customs and Excise is prepared to consider whether the amount of duty for which the company is liable could be reduced if re-exports to third countries qualify under Community rules for re-export relief. I have asked Customs and Excise to keep me informed on that aspect and we shall look at it with as much sympathy as possible.
  I understand the anxiety and distress that has been caused to the firm. My hon. Friend acknowledged that Customs and Excise has applied the rules of the Community, and there is no dispute between the Jamaican authorities and our Customs and Excise about the liability of the carpets to Community duty.
  I hope that Oxford Textile Mills will be prepared to enter into consultations with Customs and Excise with a view to arranging an acceptable phasing of the duty payments. Customs and Excise will certainly examine carefully the proposition that part of the duty should not be paid because some carpets were re-exported. I hope that we shall reach an acceptable solution.
  Question put and agreed to.
  Adjourned accordingly at eight minutes past Eleven o'clock.

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

Energy Costs: Relief Measures for Industry
The Earl of Lauderdale: 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 estimate to be the likely effect of their measures to give relief on energy costs.
Lord Skelmersdale: My Lords, measures worth over £250 million were announced in the 1981 and 1982 Budgets to help industry with energy costs. They included action on gas, electricity and foundry coke prices. Over 100 of the largest electricity consumers have subscribed to the load management scheme introduced in the last Budget. Savings of up to 16 per cent. are possible and as a result many of the larger electricity consumers are paying little if anything more than they paid last year.
This month the British Gas Corporation has announced that the present price freeze on contracted gas supplies to industry will be extended for another nine months. And, following our review of electricity pricing policy, the Government have agreed with the electricity supply industry that the average level of electricity prices next year to all consumers should be the same as this year. These new measures have been warmly welcomed by industry.
The Earl of Lauderdale: My Lords, I thank the noble Lord for that comprehensive and interesting reply. Would he not agree that this signifies two things? Does it not show, first of all, that the new freezes may well save industry something of the order of £100 million a year and, secondly, that the Government are not as obdurate as is sometimes thought but in fact listen to the public?
Lord Skelmersdale: My Lords, I have never regarded myself as obdurate. However, the benefit of these latest measures which I have described is quite impossible to quantify, nor is it possible to put on them a figure of £100 million, as did my noble friend, as to a great extent they depend on the uptake by the energy concerns. However, energy costs are a significant proportion of many industries' costs and their reduction can only help to make them more competitive-something that we would all wish to see.
Lord Cledwyn of Penrhos: My Lords, would the noble Lord agree that there are some very important industries which, in order to remain viable, need electricity at rather below the average cost? Is he aware
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that the petrochemical industry and the aluminium smelting industry come within this category, and that the aluminium smelting industry is particularly important in terms of import substitution? While the assistance which he has now enumerated in terms is welcome, it is nevertheless not necessarily as magnanimous as his noble friend would wish to point out to the House. Can he say what assistance the Government are proposing to give to the industries I have mentioned?
Lord Skelmersdale: My Lords, help over energy prices is always considered by all Governments on its merits and is given to particular industries at particular times when the need arises. So fas as electricity is concerned, as I said in my original Answer, special electricity load management arrangements are designed to help large users who in return can offer the electricity supply industry some control of their electricity demands. Over 100 of the largest electricity consumers are able to benefit from the latest load management arrangements, which can produce price reductions of up to 16 per cent. The noble Lord must surely agree that this is a great help.
The Earl of Lauderdale: My Lords, would my noble friend agree that, with regard to supplying industries with cheaper electricity, it comes back to the price at which the CEGB can buy coal from the NCB? Does that not come back to the question of the Plan for Coal being fulfilled on its productivity as well as on its investment side?
Lord Skelmersdale: My Lords, large consumers of coal are, generally speaking, under long-term contractual arrangements, so it is not always the prima facie price that the various industries actually pay. However, I take my noble friend's point firmly to mind.
Lord Molloy: My Lords, can the noble Lord say whether or not this relief applies to the steel industry? If the Government are serious about the re-establishment of our industrial base, this would create a demand for British steel, and both the public and private sectors of British Steel could be assisted by the sort of thing that the noble Lord has adumbrated this afternoon. Can he say whether it applies to them?
Lord Skelmersdale: My Lords, I am not sure whether it applies to the steel industry directly, but certainly as a large user of electricity it would apply to them. However, the specific measure applying to the iron industry is of course the foundry coke subsidy, which has gone a long way to make the raw material of steel considerably cheaper.
The Earl of Lauderdale: My Lords, can my noble friend say whether there is any sign of agreement between the Coal Board and the Electricity Generating Board on the Coal Board's requirement that they pay something like 7 per cent. or 8 per cent. more on their next long-term contract?
Lord Skelmersdale: My Lords, I am afraid I have no up-to-date news on that.
Lord Cledwyn of Penrhos: My Lords, would the noble Lord make clear that the monies that are available are in fact to assist industry-and the House would of course agree that that is a good thing-but would he be good enough to answer my original supplementary question? Is he aware that there are very important industries in this country-important in terms of import substitution and important to the economy of this country at this stage-which need electricity at a slightly cheaper rate than the average? Two of them are the petrochemical industry and the aluminium smelting industry. Is the noble Lord able to say now whether or not the Government are making special provisions for those two industries?
Lord Skelmersdale: My Lords, I am not aware of any special provision, over and above the measures that I have outlined, relating to those two industries. However, my original answer to the noble Lord's supplementary still stands, that these matters are treated at the time that they are raised and on their merits.
Lord Irving of Dartford: My Lords, is the noble Lord aware that, welcome though the concessions are, the paper industry and other high energy users are still having to pay more for their energy than industrialists in America and indeed in some parts of Europe?
Lord Skelmersdale: Yes, my Lords. Ever since there has been a Motion on the Order Paper in the name of my noble friend Lord Boardman, I have taken this matter very much to heart.
The Earl of Lauderdale: May I ask my noble friend—
Noble Lords: No!
The Earl of Lauderdale: A final point, my Lords. Would my noble friend say whether the Coal Board, the Gas Corporation and the CEGB are still working on long-range marginal replacement costs as the basis of their decisions on prices?
Lord Skelmersdale: Not without notice, my Lords.
Lord Bruce of Donington: My Lords, would the Minister agree that the concessions which he has repeated this afternoon and which, as he said, were announced in the Budget are in the case of industry still far short of the artificial increases imposed by the Government at 10 per cent. above the rate of inflation? Would he agree that there is still a long way to go before prices are reduced to those which are termed to be within the control of market forces?
Lord Skelmersdale: I assume that loaded questions permit loaded answers, my Lords. The 10 per cent. to which the noble Lord referred was specifically for the gas industry for domestic prices, which has now worked its way through, for which we are all grateful. The reason for it, of course, was that the party opposite sought, rather unsuccessfully, to buy votes by this rather strange mechanism.

Broadcasting of Parliament
2.44 p.m.
Lord Mottistone: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will initiate early action to instruct the BBC to revert to the broadcasting of "Yesterday in Parliament" separately from the "Today" programme on weekday mornings.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, the BBC has editorial responsibility for all its programmes, including its programmes covering parliamentary proceedings. The recent change in the format of "Yesterday in Parliament" and its inclusion as an item in the "Today" programme is, therefore, a matter within its discretion. I understand that the BBC has announced that it intends the new arrangements to run as an experiment for six months, after which they will be reviewed. The corporation will, no doubt, take the views of the noble Lords into consideration in its review of the matter.
Lord Mottistone: My Lords, would my noble friend agree that the "Today" programme on the whole has a reputation quite as much for entertaining as for informing? Would he agree that there have been cases where, on the whole, frivolous aspects of the affairs of Parliament have been conveyed to a rather greater extent than one would hope? As Clause 13(2) of the Charter says:
"The Corporation shall broadcast an impartial account day to day prepared by professional reporters",
would he agree that professional reporters are associated with "Today in Parliament" and were associated with "Yesterday in Parliament", while the preparers of the "Today" programme are not quite in the same category?
Lord Elton: My Lords, I think it is not incumbent on Ministers at the Home Office to pronounce their personal views on the content or standards of work of individual people working within the BBC. I would accept that the extract which my noble friend gave from Clause 13(2) of the Licence is correct, and I would add that that undertaking is currently fulfilled by the corporation by broadcasting the programme "Today in Parliament" each night at 11.30.
Lord Byers: My Lords, when broadcasting was first introduced into the House, it is my recollection that there was a great deal of consultation between the broadcasting authorities and Members of this House and another place. Is it not right that there should be the same sort of consultation before the whole format is changed, and could we not have consultations at least at the end of the experiment?
Lord Elton: As to the existing machinery, my Lords, I understand that the Sound Broadcasting Committee of your Lordships' House exists solely to consider questions arising out of the resolution of the House of

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28th July 1977. That resolution was concerned only with the provision and use of a sound signal and the resultant archive tapes. I believe that consideration of such matters as "Yesterday in Parliament" are, therefore, strictly beyond the terms of reference of that committee, but it is, of course, a matter for that committee to interpret its own terms of reference.
Lord Orr-Ewing: My Lords, is my noble friend aware that now that the "Today in Parliament" programme is so late it has a listening public of only 100,000, whereas the "Yesterday in Parliament" programme in the morning had 1 million listeners? It is therefore particularly sad that that programme should have been cut by 40 per cent. If cuts have to be made, it is understandable that priority is given to major items in the House of Commons, and very little said by Back-Benchers in another place or said in this House is given any space at all. Does my noble friend consider that that is a proper and balanced view of the work of Parliament as a whole?
Lord Elton: As I said earlier, my Lords, this is a policy which the corporation is running experimentally for six months. They will doubtless have regard both to the numbers of the audience and to the views of the audience when they come to review their policy; and the trenchant things which my noble friends and others have said will doubtless form part of the material they consider.
Lord Kennet: My Lords, is it not the case that, in the view of most Members of both Houses who have heard the new programme in the mornings, six months is a quite unnecessarily long experimental period in that it is already clear, after the first two or three weeks, that it is not as good as what went before it?
Lord Elton: My Lords, it really is not for me to answer to the brief of the corporation, but I should think that their assessment of whether or not the noble Lord's view was correct would, in some measure, be guided by the listening figures which result from the change in policy.
Lord Elwyn-Jones: My Lords, to whom will representations be made, either at the end of six months or sooner, in view of the feeling on this matter? Is there any machinery of communication? In this matter the BBC works, or should be working, harmoniously with Parliament; it benefits Parliament in the broadcast of our actual voices, I suppose, but there is a give and take element, is there not? May I ask the Minister to say what the machinery is, and, if none exists, should not some such machinery of consultation be created?
Lord Elton: My Lords, as to the point about the existing machinery, the noble and learned Lord has just been using it. I do not not doubt that everything that he says will be listened to by the editor of the programme and drawn to the attention of the policy formulators in the corporation. As to the question of a more elaborate form of consultation, I should think that I ought to take notice of that and consider it further.
Lord Shinwell: My Lords, could it be arranged for some of the officials responsible for the programmes of the BBC to be made Members of your Lordships' House? Then there would be a possibility, even a probability, that our recordings and deliberations would receive some publicity.
Lord Elton: My Lords, it is within my own experience of watching the process of ennoblement that it rarely makes people more biddable.
Lord Campbell of Alloway: My Lords, would not my noble friend the Minister agree that this subject is really a matter for joint consultation between your Lordships' House and the other place, and that, in view of the form of observation made just now by the noble and learned Lord, Lord Elwyn-Jones, a question of urgency is involved?
Lord EltonMy Lords, I shall take careful note of everything that is said in these exchanges and bring them to the notice of my right honourable friend.
Lord Orr-Ewing: My Lords, will my noble friend bear in mind that, in view of the disquiet there, the Speaker in another place has referred the whole of the question to the broadcasting committee of another place? If the terms of reference of our Broadcasting Committee are too narrow for representations to be accepted, what is the right procedure in order to change the terms of reference, so that we can first consider the matter in this House, and then consult another place, in order to form a joint view about it?
Lord Elton: My Lords, as to what goes on in another place, I cannot have a view on that. As to what goes on in this place, I say to my noble friend what I have said to others of your Lordships—that I shall take careful note of the views here expressed and, if it appears appropriate, I shall then write to my noble friend.
Lord Molloy: My Lords, will not the noble Lord agree that the whole point is simply that when the programme was established it was the result of consultation and co-operation between both Houses of Parliament and the BBC? The BBC has decided unilaterally to make a dramatic change. Ought it not to be pointed out to the BBC that when it is making a change of this character it should adhere to the principle on which the programme was established?
Lord Elton: My Lords, I think the noble Lord is asking me whether we cannot impose editorial policy upon the BBC—
Several noble Lords: Oh, oh!
Lord Elton: If I am wrong I shall apologise-but the answer to what I understand to be the noble Lord's question would obviously be, No. If the noble Lord is anxious that his remarks should be taken elsewhere, in another sense, I can only say that not only shall I bring the content of these exchanges to the notice of my right honourable friend, but I shall see that they are asterisked, as it were, in the programme of consultation involving the corporation.
Lord Cledwyn of Penrhos: My Lords, is not the problem that in another place there is a procedure that can be followed and a reference can be made by the Speaker, whereas, judging from what the noble Lord has said, there is no clear comparable procedure in this House? Therefore, will the noble Lord, in consultation with the noble Baroness, consider referring this matter to the appropriate committee of this House so that, if necessary. we can evolve our own procedure?
The Lord Privy Seal (Baroness Young): My Lords, we have had a long run around this Question. Of course, I have listened with great care to all the points that have been raised. Before the Question I took advice as to what is the correct procedure in this House, and my noble friend gave the answer in reply to another noble Lord who asked a question. However, in view of what has been said, I should like to take further advice on the matter and see what would be the correct way to proceed.

The Western Isles IDP: Magazine Article
2.54 p.m.
Lord John-Mackie: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have seen the remarks of the chairman of the Association of Nature Conservationists that the Western Isles Integrated Development Programme was "an ill-conceived poisonous little plan" and "is a recipe for Britain's first ever conservation disaster of world wide significance," and if so, what they intend to do to counter this damaging propaganda.
Lord Lyell: My Lords, the remarks to which the noble Lord refers appear in an article by the general secretary of the British Association of Nature Conservationists, in the Autumn 1982 edition of ECOS, that association's journal. The article contains a number of ill-founded allegations reflecting an inability, or an unwillingness, to understand what work is envisaged under the Western Isles IDP. I am sure that those who care about the Western Isles and its environment, and who have taken the trouble to study the programme, will appreciate the damage that comments of this nature can cause, not least in provoking a backlash against the general aims of nature conservation. Responsible nature conservationists will, I am sure, wish to dissociate themselves from this article.
Lord John-Mackie: My Lords, I am grateful to the noble Lord for his reply, but it does not really answer the Question. Has the department concerned done anything about the propaganda, or is it, as the noble Lord said, just leaving it to the common sense of people who would ignore the conservation society's remarks? Does the noble Lord know whether the department concerned has done anything about two schemes in the machair areas, which have been held up by the Nature Conservancy? Can he make any reply to the fact that the schemes are being held up? How long will it be before the department concerned is likely to give a reply?
Lord Lyell: My Lords, as I understand it, the department's view is that in regard to the article, with its ill-founded comments, we had best let the matter rest. With regard to the two detailed schemes about which the noble Lord asked me, I am afraid that, without notice, I am unable to give an answer, but I shall make inquiries about them, and, if I may, write to him.
Baroness Elliot of Harwood: My Lords, may I ask the noble Lord why a programme which is being backed by Her Majesty's Government, which is receiving excellent grants from the EEC, and which is approved by everybody, should suddenly be attacked in this way, doing much harm to the work and delaying things very badly indeed? I should like the noble Lord to say what he is really going to do about it, because it is just no good saying, "We aren't going to do anything"; and it is most important that the kind of rubbish that it being written should be stopped.
Lord Lyell: My Lords, I should like to thank my noble friend for her robust support for this very important integrated development programme for the Western Isles which, as she rightly pointed out, has received the wholehearted support of the Scottish Office. I shall take advice on what steps—if any further steps are needed—the department could take to counter the propaganda. However, so far as I am aware, there has been no delay at all to the scheme as a result of the article referred to in the Question of the noble Lord.
Lord John-Mackie: My Lords, I do not think it probable that there is a delay, but if one is in, say, South Uist, or any of the islands that would benefit from the scheme, one would think twice before going into it when this kind of propaganda is being issued. In a debate on the matter a few weeks ago my noble friend Lord Melchett mentioned the frustration that is being felt, and it is this frustration that delays things. I think that the noble Lord knows something about agriculture and, if I may, I should like to put to him a point regarding the effects of delay. One has to plan far ahead. If one puts forward a scheme to reseed a machair area and then perhaps keeps one's lambs to feed in the spring, only to find that the scheme is delayed, one then has a lot of lambs and no pasture.
Lord Lyell: My Lords, as I am sure the noble Lord is aware, none of the improvements that are provided for in the plan is new. He will be aware, and I am sure your Lordships will be aware, that Government assistance for plans of this kind has been available for many years, though we would admit on not quite such attractive terms.

Penal Establishments: Health and Safety Measures
2.58 p.m.
Baroness Masham of Ilton: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made in the field of health and safety in

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penal establishments, especially relating to polyurethane mattresses and smoke masks.
Lord Elton: My Lords, the Government give great emphasis to health and safety matters of all kinds in penal establishments. We have issued smoke protection hoods to all closed cellular establishments, for use by prison officers in rescuing prisoners and others from smoke-filled cells. We are continuing our search for a more fire retardant prison mattress, and recent research leads us to be hopeful of success.
Baroness Masham of Ilton: My Lords, in thanking the Minister for that reply, may I ask whether I heard correctly when he referred to "hoods"? If that is so, what make and what type of hoods are being used? Furthermore, in view of the severe pressures of overcrowding in our prisons, may I ask whether all penal establishments have a fire procedure, so that inmates and prison officers know where to go should there be a fire; and how often do fire drills take place?
Lord Elton: My Lords, the mask is the Draeger Parat, produced by Draeger Safety Limited. There are fire drills in all prison establishments. I could not tell the noble Baroness with what frequency they are put into action, because it will vary from case to case. But this is an aspect of the inspections carried out by Her Majesty's Inspectorate, the reports of which are published. The noble Baroness may have noticed that occasionally this is the subject of comment by the inspectorate, so she may be confident that these matters are taken care of.
Baroness Birk: My Lords, I wonder whether the Minister can assist us further on the remark he made about the mattresses. I think I am right in understanding him to say that research is being carried out into something which is not so inflammable, but is it not true that on the market at the moment there are a great many mattresses which one can buy which are not inflammable? How long a period is this research going to take, and would it not be better, in the meantime, to produce a mattress which is not made of polyurethane and put that to use?
Lord Elton: My Lords, there are at present on the market no mattresses suitable for use in prisons by reason of their non-combustibility. There are a lot of safer mattresses if the people who use them are merely going to drop a lighted cigarette or match on the cover, but prisoners who wish to set fire to their mattresses can tear them apart, and it is the content which also has to be treated. As to the research, I am confident within reasonable limits that tenders will be invited next month for a new specification now in preparation.
Lord Molloy: My Lords, in furtherance of the point raised by the noble Baroness, is the noble Lord aware that, in industry, health and safety is one of the finest examples of joint co-operation between management and skilled artisans and that much has come out of it; and, with particular regard to emergencies, for which drills are practised because of this co-operation, would
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it not be wise, not to say even prudent, that this sort of co-operation should exist in penal establishments and other places of a similar character?
Lord Elton: My Lords, we have a staff of six safety officers at the national headquarters and a safety committee at every prison establishment. I think that that is just as good as what goes on in industry.
Lord Brockway: My Lords, while appreciating the points made by the noble Baroness and the noble Lord's response to them, would the noble Lord not agree that the greatest danger to health and safety in prisons is the appalling overcrowding, leading to grossly unhygienic conditions and to frustration, in turn leading to violence? Will the Government reconsider their refusal to propose an amnesty to many categories of non-violent prisoner in order to relieve this impossible situation?
Lord Elton: My Lords, I will not weary your Lordships with a long, detailed list of what we are doing about increasing the provision for the prison service and improving conditions there, in a very difficult situation. But, no, my Lords, we do not think it is the function of Government to override the decisions of the Judiciary in order to unload the prisons from time to time. There is provision to do this in an emergency, and that is all it is provided for.
Lord Hale: My Lords, is the noble Lord not aware that the Judiciary has been fully occupied for a considerable time in overriding its own decisions and in setting up committees to define words and to investigate? There is in fact a very interesting discussion set down for next week on this matter. Will he also remember that the work he is doing in connection with the prison service also wants tying up with many other forms of public activity, including, for example, hospitals? Will he bear in mind that the use of polyurethane has been exposed as terribly dangerous, and that the necessity for an adequate substitute in many spheres of activity is growing more and more urgent?
Lord Elton: My Lords, as to the first part of the noble Lord's question, I think it was a little wide of that on the Order Paper. As to the second, as I have already said, we have put a great deal of urgent effort into finding alternative materials, and we expect to put specifications out to tender within the next month.

The GATT Ministerial Meeting
Lord Denham: My Lords, at a convenient moment this afternoon my noble friend Lord Cockfield will, with the leave of the House, be making a Statement on the GATT Ministerial Meeting.

Merchant Shipping Bill [H.L.]
Lord Lyell: My Lords, on behalf of my noble friend Lord Cockfield, I beg to introduce a Bill to make further provision in respect of the registration of small

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ships and the appointment of registrars at ports. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Lyell.)
On Question, Bill read a first time, and to be printed.

Highland Region (Banavie Level Crossing) Order Confirmation Bill
Brought from the Commons, read a first time, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read a second time and reported from the Committee.
Epsom and Walton Downs Regulation Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

British Nationality (Falklands Islands) Amendment Bill [H.L.]
3.7 p.m.
Baroness Vickers: My Lords, I beg to move that this Bill be now read a second time. In view of what happened to the amendment that I moved to the British Nationality Bill on 7th October 1981, I hope I shall receive support from noble Lords on all sides of the House, because your Lordships may remember that the voting then was 90–90. It was a tie, but this time I hope it will be unanimous.
I should like to thank Lord Bruce of Donington for kindly withdrawing his Bill, because I think it had one regrettable provision in it (which I think I mentioned to him when I spoke to him, but I am still very grateful to him for not continuing with his Bill) which would have constituted a loophole for people all over the world wanting to enter the islands. For example, if a child was born in the Falklands of Argentine parents, he could apply for British nationality after the age of 10 so long as he had not been absent from the Falklands for more than 90 days at any one time in his 10 years.
In 1592 Captain John Davis discovered the islands uninhabited. He arrived on a ship called "Desire", which led to the island motto "Desire the Right". Since 1766 the islands have been persistently inhabited by Britons, and were peaceful and prosperous under British administration. The islands are largely self-governing. The Legislature is elected. In 1690 there was the first recorded landing, by Captain Strong of the "Welfare", who called the islands after the third Viscount Falkland, who was then a Treasurer of the Navy and later First Lord of the Admiralty. In 1774 the garrison withdrew. However, British sovereignty was not allowed to lapse, because it was maintained by what was then the custom of a lead plaque which was left behind declaring the Falkland Islands to be the sole property of King George III. Then it became a base for British sealing and whaling activities.
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Its economy is dependent on farming, which yields about £3 million a year; and stamps account for about 20 per cent. of the islands' economy. The annual income of the islanders was about £1,400 a head in 1980. It has a well-equipped hospital, with 27 beds, three doctors and 10 nurses, and a flying doctor service. As to education, there are well qualified teachers in primary and secondary schools; and the staff/pupil ratio is very high, 1 to 11 pupils. The standard of life, therefore, has not been neglected. I should like to quote, if I may, from Prime Minister Trudeau of Canada:
"We are supporters of the British. We have been supporters of the British from the beginning and we see no wavering in that, more as a matter of principle than anything else. We just do not want boundaries to be changed by force. If it improves understanding of the Government's position, I am prepared to correct the statement and say that we are 100 per cent. behind the British".
That appeared to be the view of a great many Commonwealth countries.
I should like, if I may, to mention Article 24 (as amended by Article 13 of the Adaptation Decision), by which the United Kingdom was added to the member states of the EEC. Specified in that article as one of the countries and territories to be added to the list, in Annex IV to the EEC Treaty, as associate members was the Falkland Islands and Dependencies. I mention this particularly because I know that the noble Lord, Lord Pitt, was interested in the question of Monserrat. Monserrat, too, are included in this list so that they (as is Gibraltar) are associated members of the EEC. I think that one must remember the magnificent help given during the world wars. In the First World War £50,000 was provided in interest-free loans, as well as monies to the Red Cross and St. Dunstan's. In this case, the petition has been signed by over 1,000 Falklanders. We cannot, I suggest, let them down.
I should like to refer to a letter in The Times written by Mr. George Edinger, a man who started his career as a reporter in the Argentine. Written from the Reform Club, the letter said:
"I can assure … one and all that it will not contribute to friendship between us and any American-Latin country one jot to deliver up the Falkland Islands in the way we delivered up the Czechs to Hitler. These people"—
the Argentinians—
"respect armed strength. By armed strength they won their liberty from Spain and they won their land from the luckless Indians … They are not negotiators".
I suggest that it is our duty to give them what they are asking for—and that is British nationality.
Up to now I have spoken of them particularly. Now I should like to mention something which is beneficial to this country. In World War I Port Stanley provided bunkering facilities for the reinforcement of Royal Navy squadrons. In World War II the Falkland Islands were available as a naval base for the South Atlantic operations, including the Battle of the River Plate. I have just come back from Plymouth and I remember that several of the ships, including HMS "Exeter", would never have got back to this country had it not been for the help they were given in the Falklands. During the Second World War there was a British Army garrison over 1,000 strong stationed there.
Apart from their position as the strategic gateway to the Antarctic, the Falklands are strategically placed in

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the event of any sabotage in peace or war to the Panama Canal. That or any other such incident would result in the use of the Cape Horn route for shipping moving between the Pacific and the Atlantic. The current defence potentials are now being developed on the islands and they are faced with a continual military threat from Argentina. My Lords, I hope I have given, from the point of view of the Falklands and that of the United Kingdom, an idea of the very great value of these islands for future strategy. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read a second time.—(Baroness Vickers.)
3.17 p.m.

The GATT Ministerial Meeting
The Secretary of State for Trade (Lord Cockfield): My Lords, with permission, I will make a Statement about the Ministerial Meeting of the GATT at Geneva which concluded its proceedings this morning at 5 a.m. A copy of the declaration and decisions of the meeting will be placed in the Library as soon as possible.
The Ministerial Meeting was the first for nine years and was attended by over 80 signatories which account for over 90 per cent. of world trade. The purpose of the meeting was not to revise or amend the general agreement itself but to re-affirm support for existing obligations and to seek agreement on the examination of certain important issues which might form the basis of future negotiations.
After five and a half days and nights of negotiation, the meeting adopted by consensus a document which constitutes a realistic commitment by the signatories to maintain the existing obligations of the GATT which have underpinned the open trading system since the war and strengthen their observance in the future. The document does not prevent contracting parties adopting safeguard measures under the GATT or measures with a similar effect.
In particular the document provides for:—a study covering agricultural trade issues in their entirety; a study of the problems of international trade in services; a study to cover ways and means of achieving the acceptance by newly-industrialised countries of increased acceptance by them of obligations under the GATT and of an increase of trade with them; an improved procedure for the settlement of disputes; and a study of how best to combat trade in counterfeit goods.
Throughout the meeting, the countries of the European Community consistently emphasised the need for conclusions and decisions to be expressed in realistic terms. For this reason, the European Community entered a reserve on a proposal to link the study of agricultural trade with a wide commitment to renegotiate the fundamental structure of this trade. The European Community, as did a number of other signatories, made certain other interpretative declarations.
Even with these reservations, the outcome of the negotiations—undertaken against the background of a world recession—must be regarded as an encouraging recommitment to the maintenance of the open trading system on which the prosperity of the United
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Kingdom as a great exporting nation depends and has helped to focus the attention of the world on the consequences of a breakdown of this system. It was, I think, recognised that the United Kingdom through the European Community made a full and constructive contribution to this outcome without, however, compromising its right to safeguard its essential national interests.
My Lords, that is the end of the Statement.
3.19 p.m.
Lord Bruce of Donington: My Lords, the House will wish to thank the noble Lord for the Statement he has just made, a copy of which reached me precisely nine minutes ago. This short time limit does not really permit those in opposition adequate opportunity to study the content of it, and I hope that on the next occasion when we have a fairly complex Statement adequate time will be given to the Opposition and to others interested so that we can respond to the Statement in a constructive manner. Having said that, I sympathise very sincerely with the personal position of the noble Lord. It is quite clear from what he has said that the negotiations upon which he has been engaged have been very arduous, and I can imagine that he must be very tired after sitting up for long periods of the night—I do not know whether the rooms were smoke-filled. We all sincerely appreciate the endeavours that the noble Lord must have made.
Regarding the Statement, once again it is an unsatisfactory feature that the document upon which the noble Lord set such great store is not available at the same time as the Statement and that one has therefore had no opportunity of examining it. It is a little unclear from the Statement whether the contents of the document are going to be worth discussing at all, because it comprises some four studies and a statement of improved procedure. This does not really amount to very much and makes it very difficult to justify the remark in the Statement that it must be regarded as an encouraging recommitment to the maintenance of the open trading system. We have heard these generalities before.
I have some questions to ask the noble Lord. I am sorry that I could not give him notice of them because I have only had very short notice myself. Can he tell the House how long it is going to take to complete these studies to which he has referred? We have a study covering agricultural trade issues, a study of the problems of the international trade in services, a study to cover ways and means of achieving the acceptance by newly-industrialised countries of the existing obligations under the GATT, and so on. Then we have a study of how best to combat trade in counterfeit goods.
Has the noble Lord any idea how long it is going to take these studies to materialise? There have been plenty of studies over the years. Select Committees of your Lordships' House have studied these matters over a long time. How much more study is necessary among a group of people who presumably have their own experts in all these fields and have had for many years, or is it the case that the term, "these matters have been remitted for study", is merely another bromide in order to cover up the fact that no progress was made at all?

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The noble Lord in this Statement probably does himself less than justice. In the light of his previously uttered remarks in this House, many of us on this side are quite convinced that he is doing his very best within his participation in GATT to safeguard the interests of the United Kingdom. This would appear on the face of it to be very little more than a cover-up for what, in the event, has turned into almost a complete failure.
I say "almost" because there may have been some residual benefits. After all, for the various Ministers to meet occasionally on convivial terms and discuss their problems with one another probably brings some slight progress. It will also have given the noble Lord personally the opportunity of meeting many of his opposite numbers whom he may not have met before. All these matters are of advantage to the United Kingdom. We shall need a far more comprehensive Statement than this one and an indication of far more constructive action and intention before we can ever regard a Statement of this kind with the degree of equanimity which its tone expresses.
Lord Banks: My Lords, I, too, should like to join in thanking the noble Lord the Secretary of State for making this Statement this afternoon. It is clear from what he said that a few positive decisions were reached; but we on these Benches have been discouraged during the past week to hear the rumours of deadlock and of the search for a facesaving compromise. One cannot help wondering whether the Secretary of State is perhaps a little too complacent about the result of this conference. I wonder whether he can say with confidence that the protectionist advance will be held up as a result of it.
Will any protectionist obstacles disappear as a result? I should like to ask the noble Lord what happened about the Australian proposal for a cease-fire so far as protectionist measures are concerned? Was that rejected out of hand? Then I wonder whether the noble Lord can tell us about the extent of the discussion on safeguards. Must we expect more and more bilateral agreements outside the GATT? Were textiles discussed in this context? Did the EEC, as reported, refuse any modification of the EEC stance on agricultural export subsidies? What does the noble Lord think will be the attitude of the United States on this particular subject in the immediate future?
Finally, I should like to ask the noble Lord whether he agrees with the expert opinion that was given to the conference, that protectionism is now endangering the prospects of a medium-term economic recovery because developing countries with liquidity problems need an expansion of world trade to service new borrowings.
3.27 p.m.
Lord Cockfield: My Lords, I am grateful to both noble Lords for their comments. I am extremely sorry about the very short notice that was given of the Statement, but the reason, quite simply, was that as I indicated at the beginning of the Statement, the discussions did not conclude until 5 a.m. this morning. Our negotiating team did not arrive back in London until 2 p.m. this afternoon. One therefore faces a
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considerable dilemma: either one gives the House no information until tomorrow—in which event one is naturally criticised on that score—or one gives what information can be given immediately despite the shortage of notice. We felt that, on the whole, the latter was the better course to take.
The document which has been agreed is an extremely lengthy one. I suggest that it would be best for noble Lords to study it in detail and decide to what extent it answers the various anxieties that they have expressed. If I may pick up one or two of the points that were made, the noble Lord, Lord Bruce of Donington, asked how long the studies would take. That is a question that I cannot answer at this stage. There are over 80 signatories to the GATT, and in the end what one is trying to do is to take them all along together to see what improvements can be made in the system. The noble Lord suggested that the conference was in fact almost a complete failure, and he questioned whether sufficient steps had been taken to safeguard the interests of the United Kingdom.
In fact, the position is that, as I indicated in the Statement, this conference was not intended to renegotiate to the GATT itself. What it was intended to do was to reaffirm the general confidence of the world as a whole in the value of an open, liberal trading system of the kind that we have had over the past 30 years. The signatories did in fact reaffirm their faith in such a régime. That in itself is important, I think, in an area in which, as both noble Lords said, there is increasing evidence of people moving down into protectionist paths. At the same time we have ensured—and I give the noble Lord an assurance on this—that it is still open to us to take safeguarding measures in the case of industries such as textiles and footwear and also motorcars and consumer electronics, where our home industry might be seriously affected by a surge of imports from low-cost producers. Our right to take these measures still remains.
Thirdly, we have, with great difficulty I may say—and it is a considerable tribute to our negotiators—secured agreement on studies which will widen the field of international trade. It is not good enough merely to look at those instances where the freedom of trade is being eroded. One also needs to look at those instances where it may be possible to widen the opportunities of liberalising trade. The two directions which are most important here are the services, in which of course this country has a very big stake, and also persuading the newly industrialised countries gradually to assume, not just for our benefit but for the benefit also of the least developed countries, the obligations of the GATT agreements themselves and to progressively open up their own markets. This is a matter on which I spoke at some length in your Lordships' House on 20th October, so there are quite positive advances there.
The noble Lord, Lord Banks, touched upon the question of safeguards. The document which is issued makes significant improvements in terms of what is known as "transparency", so that there is now a new agreement on the way that safeguards should be approached. One would hope that the effect of this would be that safeguards will be invoked only in those cases where there is a strong case for so doing.
The noble Lord asked a number of specific questions about the attitude of other countries and

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instanced in particular the Australian proposal for a "ceasefire", as it has been called. This proposal was not adopted specifically. What matters is to try to get a consensus on actually what you are going to do, rather than merely have general statements of this kind. There is also the point that there are many countries which have very high tariffs—Australia is an example—where progress needs to be seen in the direction of reducing those tariffs.
He also inquired about the attitude of the United States and of the EEC in relation to export subsidies. There has been an agreement, and both the EEC and the United States have gone along with this, that there should be a study into the full range of agriculture. Where the difference has come, and where the EEC has put in a reservation, concerns what happens after the study is completed. So far as the EEC is concerned, that is still an open question. The EEC is not prepared to commit itself to negotiations at this stage.
I hope that I have answered the major points which were raised, but I would suggest that the right thing now is for noble Lords to study this document which, as I say, is a long and complex one, as soon as we are able to put it into the Library. But I do feel, and I should like to emphasise this, that this meeting represents a significant measure of progress. It is not as much progress as we would like to have seen, but it is progress and it is progress in the right direction.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that many people outside, and particularly in the industrial and commercial worlds, have watched with great admiration the struggle which his negotiating team, and notably his very able Minister of State Mr. Peter Rees, have fought over these last few days to preserve the main free trade structure of the GATT, on which the interests in this country so much depend? Is he also aware that many people will look with gratitude on the outcome of the considerable measure of success achieved in that way, despite the rising tide of protectionism which has been generated by the world recession?
Lord Cockfield: My Lords, I am most grateful to my noble friend for his comments. What he says, of course, is entirely true. We are trying to walk along a very difficult path in maintaining an open and liberal trading system on the one hand, while at the same time protecting the interests of our domestic industry where those interests come under unfair and severe pressure. I am most grateful to him for the tribute he has paid to my honourable and learned friend Mr. Peter Rees and the other members of the team, who have not only made a notable contribution to the success of the conference but have also upheld the interests of this country in a very successful manner.
Lord Kennet: My Lords, we will of course study the document fully, as the Secretary of State advises. In the meantime, could he amplify a little something he said in his first answer? He said that of all the studies one of the two most important was that concerning international trade in services. The truth of that is surely obvious to a country, an increasing percentage of whose exports per year are invisible or services. Would the Secretary of State be able to tell us anything now about how he intends to make sure that this
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country takes a very active part in that study and puts on to the job officials, or whoever, who are fully capable of seeing not only the possible advantages to Britain in the increased regulation of this trade but also the possible pitfalls?
Lord Cockfield: My Lords, I am grateful to the noble Lord for what he says. We do in fact recognise the great importance of services and took a leading part in ensuring that agreement was reached upon this study. When I was in the United States I discussed this issue with the American Administration and we make common cause on it. It was largely our efforts and those of the American Administration which produced the present result. We intend following it up with vigour.
Lord Drumalbyn: My Lords, may I congratulate my noble friend on the success that has been achieved, especially bearing in mind the existence of the prophets of doom so far as the imminent breakdown of GATT is concerned? Would he go a little further in the answer he has just given and perhaps tell us what the composition of the personnel engaging in these studies is to be? Will the studies be carried out by the secretariat of GATT or will they be conducted by special bodies to be appointed?
Lord Cockfield: My Lords, my noble friend raises a point of importance. I can assure him that we will watch the method of carrying out these studies very carefully. We will ensure that the United Kingdom plays an active part and makes an important contribution; but, as regards the exact administrative measures to be taken, that is a matter on which agreement still has to be reached.
Lord Hooson: My Lords, does the Secretary of State agree that the weakness of the GATT is that the reservations made by this country, and by all the other 80 signatories, to safeguard their own national interest should trade require it, are such, because a subjective judgment is taken of those national interests, that if they all implemented those reservations we would really be in a protectionist world, despite the GATT, and was no progress made on reducing the reservations?
Lord Cockfield: My Lords, we live in a hard world in which the practical issues need to be borne in mind throughout. Where we, or other people, find a domestic industry very seriously threatened by a rising tide of imports, it is almost impossible to justify taking no action. The important point is to ensure that action of that kind—safeguard action, as it is known under the terms of the GATT; and there is specific provision in the GATT itself, under Article 19, for such action—should be taken only where the facts so demand, where the situation is sufficiently serious to justify the action taken. The fact that the signatories to GATT agreed on a general declaration, that it was in the interests of all of us to maintain a liberal open trading system, represents a matter of very great significance.
Lord Soames: My Lords, I wonder whether I may ask my noble friend a few questions and whether he

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would give us a bit more—I think it is all we can expect from him at this time, so close to the meeting—about his general impressions of the meeting and of what came out of it. First, on the trade in services, does he envisage, for instance, an agreement being arrived at within the Community on the whole question of free trade in services, so that the Community will be enabled in this aspect of the study to speak with one voice? Secondly, where the newly industrialised countries are concerned, was there general agreement among the NICs themselves that they enter this study with a real will to bring something out of it?
Thirdly, on the question of trade in agricultural goods, I perfectly accept, of course, what my noble friend said, in that the EEC did not feel in any way able to commit itself to what might flow from the results of the study. But did he get the impression that the EEC as a whole, including France, is now ready to enter into an international study on trade in agricultural products and, in particular, on the subsidies on trade in agricultural products with the rest of the world outside the EEC? Finally, does my noble friend feel, generally speaking—which we all hope he does—that this ministerial meeting ended with a resolve to hold fast to the principles of free trade and not to increase the danger, which a possibly increasing recession is likely to enforce upon the world, of sliding inexorably into a greater degree of protectionism, with every country saying that it has its own interests to protect?
Lord Cockfield: My Lords, my noble friend will be well aware that, with 87 countries represented at an international conference, there will be a wide divergence of views on a number of matters and that not everybody will take the same view as other people on separate issues. So far as the procedures in the European Community are concerned—and my noble friend raised specifically the case of services—the method of procedure which has always been adopted is for the European Community to endeavour to establish a common line in advance, although individual countries still continue to make their separate views well known.
So far as the newly industrialised countries are concerned, the agreement, of course, related to the whole of the developing world and it is inevitable, with the very large number of countries involved, that there should be a divergence of view between many of them. It was a very considerable achievement that agreement was reached that a study of this kind should be launched, directed to improving the level of trade between the developed world and the less developed world. In the case of agriculture, my noble friend is perhaps even better informed than I am on the tensions and views which exist inside the European Community on this particular matter. There was a reservation put in at the end by the European Community. There has been agreement on undertaking the study, but the European Community is not prepared at this stage to commit itself to negotiations arising out of that study.
Lord Shinwell: My Lords, may I ask the noble Lord this question: In the absence of complete agreement—and he himself has demonstrated that there
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was not complete agreement, except on the general point of the liberalisation of trade—from the point of view of the United Kingdom, and those countries which are convinced that liberalisation of trade is essential, would it not be better to rely on bilateral agreements?
Lord Cockfield: My Lords, while I appreciate the point which the noble Lord makes, I would not, in fact, agree with him. International trade is, of course, by its very nature, multilateral. One has surpluses with some countries and deficits with others, and if one tries to rely entirely on bilateral agreements the effect is, in fact, to limit the total amount of international trade. There is no question whatever that the negotiation of the original GATT itself resulted in a very big increase in the level of international trade to the benefit of the world as a whole, and of this country in particular.
Lord Soames: My Lords, I wonder whether I may press my noble friend the Secretary of State. I was asking him whether he would give his own personal impression. Of course, I know that every individual country in the GATT has its own interests to protect. But the main objective of this conference was, in effect, to aid the freeing-up of trade and to stop the protectionist movement, which has been growing in strength as a result of the increasing recession. Is it his impression that this has been stopped, and that we can look forward to a greater degree of understanding and sympathy among members of GATT towards sustaining a free trade system?
Lord Cockfield: My Lords, the very fact that the ministerial conference as a whole subscribed to a document which expressed their confidence in the value to the world as a whole of the continuation of an open liberal trading system is a matter of immense importance. The amount of progress that could be made while the world is in recession, and while there are very strong protectionist tendencies, is inevitably limited. As I said earlier, the progress that we have made is not perhaps as much as we would have liked, but progress, nevertheless, it is and, as such, is of great value.

British Nationality (Falkland Islands) Amendment Bill [H.L.]
Second Reading debate resumed.
3.49 p.m.
Lord Elton: My Lords, in returning to the British Nationality (Falkland Islands) Amendment Bill, I should like to congratulate my noble friend Lady Vickers on her continuing advocacy of the cause of the Falkland Islanders. My noble friend Lord Boyd-Carpenter was, I think, the first to raise the matter in this House when he tabled a Question on the matter in July. The noble Lord, Lord Bruce of Donington, then brought in a Bill on similar lines to the one we are debating today, though there was insufficient time left to consider it in what remained of the last Session. Today's debate, therefore, provides our first opportunity to debate the matter thoroughly. We do so

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on the basis of my noble friend's Bill, which seeks to ensure that all the Falkland Islanders become British citizens.
As things stand, about three-quarters of all Falkland Islanders will become British citizens when the British Nationality Act 1981 comes into force on 1 st January next year. That will be the case whether my noble friend's Bill becomes law or not. But the remainder, about 400 people in all, may not do so because their ties are mainly with the Falkland Islands, while their connections with the United Kingdom are more distant. Those 400 would therefore hold the important parallel citizenship which is called British Dependent Territories citizenship. That citizenship was deliberately designed to reflect, not a distancing of the holders from the United Kingdom but a recognition of the fact that the holders' connections are with a dependent territory rather than the United Kingdom itself.
The new citizenship arrangements now set out in Part II of the British Nationality Act 1981 in no way weaken the constitutional relationship of the United Kingdom with the Falkland Islands or any other dependency. The Government have always made that absolutely plain. The White Paper we published in July 1980 contained the outline of our proposed legislation. In it we said, in paragraph 16:
"The establishment of a separate citizenship for the British Dependent Territories would in no way alter the relationship of those territories and the United Kingdom, nor the Government's obligations and commitments to the dependent territories and to their citizens".
My honourable and right honourable friends who spoke for the Government during the passage of the subsequent legislation lost no opportunity of repeating that assurance. I gladly repeat it today.
It must also be recognised that the passage of the British Nationality Act 1981 has not changed the immigration position of people from the dependencies. People from our dependent territories who do not hold certain specified links with the United Kingdom have been subject to immigration control ever since the passage of the first Commonwealth Immigrants Act in 1962. The controls were confirmed in the Commonwealth Immigrants Act 1968, passed by the party of the noble Lords opposite, and by the Immigration Act 1971.
All that the 1981 Act did was to change the title of the citizenship held by people who did not have the right of abode in the United Kingdom. This change of citizenship title was essential if one of the main aims of the new nationality legislation was to be realised. That aim was to define as British citizens only those people who had the right of entry here. This, my Lords, finally brought to an end the misleading and unsatisfactory situation whereby people were called citizens of the United Kingdom and Colonies even though they had no right under our immigration law to enter the United Kingdom.
My noble friend's Bill would make an exception for the Falkland Islanders. The Falkland Islands are only one among 15 dependent territories listed in Schedule 6 to the Act. But it would only be their inhabitants who would automatically become British citizens as well as British Dependent Territories citizens. Before I come to the question of whether such exceptional and preferential treatment may be
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justified, I feel that I should mention briefly one other matter.
My noble friend's Bill sets out to bestow British citizenship upon all Falkland Islanders, regardless of whether they are entitled to it by other means. Before I turn to the merits of the aim of doing this, I think I should briefly point out the defects in the way in which the Bill sets out to achieve it.
First, the Bill refers to the Falkland Islands only, although the dependent territory is described in Schedule 6 as "Falkland Islands and Dependencies". Even though they are for the most part uninhabited at present, the Bill would probably be better able to avoid future controversy if it included the dependencies. Next, the new Section 11A(1)(b), which Clause 1 would insert into the parent Act, confers British citizenship on a citizen of the United Kingdom and Colonies who was ordinarily resident immediately before commencement. But it does not say for how long he or she must have been ordinarily resident. It may be thought odd that the ordinary residence could be as little as one day. It is in fact unnecessary to have this criterion in the Bill at all, since the people whom my noble friend wants to cover can probably be described rather better in a different way. Thirdly, the new section also refers to people whose parents were settled in the Falkland Islands before commencement, apparently in order to give them British citizenship by descent. But they would be British citizens otherwise than by descent, since no amendment has been suggested to Section 14, which sets out who is to be a citizen by descent.
These defects are of course purely technical. They can readily be corrected in Committee. But I felt it right to indicate that there were drafting deficiencies in the Bill. They were one of the reasons why the Government did not feel that it would have been right to allow a Bill in these terms to pass undebated through another place when it was introduced there by Mr. Kilroy-Silk.
I now pass to the merits of the Bill. I must stress that the Government believe that they have already, in other ways, taken very full account of the special needs of the Falkland Islanders. Indeed, we have consistently undertaken to bear their special circumstances in mind. This was so, even when we felt obliged to recommend that no exception be made in the citizenship area when the relevant amendments to the British Nationality Bill were debated in your Lordships' House last year.
We have all along given specific assurances to the Falkland Islanders. The first pledge was given in December 1979 by my honourable friend Mr. Nicholas Ridley when he was Minister of State at the Foreign and Commonwealth Office. This assurance was repeated at all appropriate stages of the Bill, and we kept our word. As your Lordships will recollect, on 8th April—very soon after the outbreak of the conflict with Argentina—my right honourable friend the Home Secretary announced that no Falkland Islander would have any difficulty over admission to the United Kingdom, whether he had a right of abode or not. That remains the position. In merely practical terms, it is very difficult to see what my noble friend's Bill offers the Falkland Islanders which they do not already have available. Indeed, it is because the Government have acted generously and sympathetically that it is

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possible to argue that, having gone this far, really it is only a small extra step to take to confer British citizenship on everyone connected with the islands.
It is not a small step. It has significant implications for the whole scheme of new citizenships created by the British Nationality Act 1981. That Act for the first time put our citizenship law on to a clear and rational footing. Citizenship of the United Kingdom and Colonies, which is what we have under the 1948 Act, gives a confused and imprecise idea of where people belong. It confers citizenship without regard to immigration laws which, by controlling entry to the United Kingdom, seem inconsistent with a citizenship title which includes the United Kingdom.
The 1981 Act gets away from this confusion by creating one citizenship, British citizenship, for those who belong to the United Kingdom; a second, British Dependent Territories citizenship, for those who have connection with a dependent territory; and a third, British Overseas citizenship, for those citizens of the United Kingdom and Colonies who have no continuing connections with either the United Kingdom or our remaining dependent territories. These new citizenship titles reflect what has for a long time been the reality of the situation.
To the extent that exceptions are made, the position will remain misleading and unsatisfactory. It is contrary to the scheme of the 1981 Act to describe people as British citizens if their connections are actually with a dependent territory and not with the United Kingdom. We must therefore be very clear that to make one category of former citizens of the United Kingdom and Colonies a special case must not establish a misleading precedent.
I must make it plain that the Government take the view that on immigration grounds it is quite out of the question to alter the citizenship categories of either the other British Dependent Territories citizens or of British Overseas citizens. British Dependent Territories citizenship is an important citizenship parallel to British citizenship. It indicates that citizenship is firmly linked to one of the British Dependent Territories. British Overseas citizens, where eligible, enjoy the special benefits of the special voucher scheme, which is in itself a recognition, appropriate to the circumstances, of their particular situation. I would suggest that the special steps taken by the Government (to admit the Falkland Islanders to this country whether they have the right of abode or not) are an equally appropriate way of responding to the special circumstances of their particular situation.
I now turn to the basic point, which seems to me to be this. In October last year, your Lordships voted—by the narrowest possible majority, it is true—to reject an amendment sponsored, among others, by my noble friend Lady Vickers, which would have had precisely the same effect as her present Bill. Indeed, my noble friend's Bill is very closely based on her amendment. A lot has happened since then, but events have not necessarily changed the force of the argument which the Government advanced against the amendment when it was put. To grant the islanders British citizenship even where their connections lay with the Falkland Islands alone would still be contrary to the
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logic of the Act, and it is to logic that I have so far addressed myself.
But it is not only logic with which we have to deal. There are other things in life of profound importance and almost equal reality, and I am fully aware of the extent to which those lie behind our present arguments and the extent to which they influence your Lordships' House. The Government accept that, in the circumstances of the Falkland Islanders, logic is not enough. A lot has happened that has not only served to emphasise the close bond that unites the people of the British Isles with those of the Falkland Islands but that has amply demonstrated the loyalty and commitment of our Government and our people to preserving them; and my noble friend has referred to many of them. But when the Royal Fleet Auxiliary "Sir Bedivere" docked at Southampton a fortnight ago, she bore a more eloquent testimony to that which either my noble friend or I can ever do. It may well be, therefore, that your Lordships will consider that the case for granting British citizenship to all the islanders should be conceded because it is wholly exceptional.
I cannot promise Government time in another place, but I shall not ask your Lordships to resist my noble friend's Bill. If your Lordships do decide to give the Bill a Second Reading, I am glad to be able to tell your Lordships that the Government will be prepared to assist my noble friend with the drafting of amendments to remove from the Bill the defects which I have already listed.
I hope that I have now made plain the Government's views on the matter. We are by no means unsympathetic to the position of the Falkland Islanders. On the contrary, we have gone to great lengths to respond to their special needs and claims in the immigration and nationality area. Their special position has been amply recognised by my right honourable friend the Home Secretary's speedy decision that the islanders should all be freely admitted to the United Kingdom whether or not they hold the right of abode. I thought it right to draw your Lordships' attention to the implications of making an exception for the Falkland Islands alone among the dependent territories. That said, we will none the less help with the drafting of the Bill if your Lordships give it a Second Reading. May I conclude by once more expressing my gratitude to my noble friend Lady Vickers for giving your Lordships this very valuable opportunity to debate the question in depth.
4.3 p.m.
Lord Bruce of Donington: My Lords, on behalf of those who sit behind me, I too would like to congratulate the noble Baroness, Lady Vickers, on bringing forward her Bill. It is true that the Bill bears substantial similarities in text with the one which I had the honour to put before your Lordships at First Reading shortly before the Recess. That is of small consequence; what is of consequence is that, as the House well knows, the noble Baroness had fought consistently, aided from time to time by her noble friend Lord Boyd-Carpenter, for the principles involved in this Bill. For our part we are very grateful to her, as will be the remainder of the 90 Peers of various parties who sought to sustain the noble Baroness in the Lobby and who did not, regrettably, include many noble Lords

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opposite—principally, those on the Government Benches.
The intention of the Government was leaked in The Sunday Times yesterday. I was uncertain at that time as to how to regard the leak that it was the Government's intention to support the noble Baroness, because one normally prefers to hear items of considerable importance first of all from the Front Bench rather than from reading in the columns of the press beforehand, authoritative reports emanating, perhaps, from some of the noble Lord's colleagues or even from his department. Nevertheless, it is very welcome news.
I was a little puzzled by the noble Lord's speech. It seemed to me that he spent about three-quarters of the time which he took to address us in seeking to justify all that had been done before. Perhaps that was a little unwise in view of the significance of what was said by his noble friend Lord Trefgarne during the course of the debate on 7th October 1981, when the noble Lord was quite adamant—and the Government with him—as to what was happening. This is what the noble Lord, Lord Trefgarne, said:
"But whatever may have happened in the past there is no argument in equity or in logic"—
and the noble Lord added the word "equity" to the word "logic" which the noble Lord has already used—
"that a British citizen of whatever generation in the Falkland Islands should be able to transmit his citizenship to his children born there but that a British citizen in any other dependency or in any other country of the world should not".
Then he made the point which the noble Lord, Lord Elton, has made this afternoon:
"It is not as though the Falkland Islands is the only place overseas where people of United Kingdom descent have settled. There must be in the other dependencies alone many more people of United Kingdom descent living there than there are in the Falkland Islands".
That rejection of the arguments put forward on that occasion by the noble Baroness, Lady Vickers, was delivered by the noble Lord, Lord Trefgarne, in his usual very decisive fashion, and it was certainly most emphatic.
The noble Lord has given as a reason for his general support of the measure a reversion to sentiment in the special case of the Falkland Islands. I wonder why sentiment was not expressed before. When Mr. Kilroy-Silk's Bill was presented in another place for Second Reading it was objected to and there was no case that it would pass through without debate or anything of that kind. Why, then, was there objection in another place, if there are going to be considerations of sentiment or emotion—which are very laudable things for people to experience? Why was there not an immediate reaction when the Bill was presented in another place? The noble Lord, I thought, sought refuge in the possible technicality that the Government were not prepared to allow a Bill through at that time without debate. There is no question of there being no debate.
With the Government's agreement—now, we must say, very reluctantly expressed, and I do not believe that the noble Lord can accuse himself of being wildly enthusiastic about the Bill introduced by his noble friend—is it perhaps because the Government have to anticipate the results of the Franks Committee Report and want, if they can, to clear the decks before then? I say that because there appears in the current issue of
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the Economist a very interesting feature which expresses in more temperate terms the sentiments which I might otherwise be tempted to express. The feature, which appeared in last week's issue, says this:
"Before the Argentine invasion, the British Government was sending out a series of unintentional signals to Buenos Aires suggesting a reduced commitment to British possessions in the South Atlantic. These signals had little to do with the Foreign Office—supposedly the custodian of the Falklands 'policy'. They included the proposed withdrawal of 'HMS Endurance' from the South Atlantic (Ministry of Defence); the giving up of the survey base on South Georgia (Department of Education); the removal of full British citizenship from most of the Falklanders (Home Office); the lack of enthusiasm for the Ridley leaseback initiative (Overseas Defence Committee)".
Can it be that the reluctant agreement that we have heard of from the noble Lord today now acknowledges that perhaps the Home Office's insistence upon the British Nationality Bill, applying the full rigours to the Falkland Islands, may have constituted, together with the other factors I have mentioned, a signal to the Argentines which eventually resulted in a gross miscalculation? Perhaps it is clearing the decks for that.
What is certain, in the light of the events that have taken place since the resignation of the noble Lord, Lord Carrington, whose departure from office is regretted by many from all sides of the House, is that his resignation was possibly not the only resignation that was called for in those circumstances, bearing in mind the responsibilities of the other departments of State and of their co-ordinator, through the Overseas Defence Committee, no less than those of the right honourable lady the Prime Minister herself. Well, is this support reluctantly dragged from the noble Lord possibly in anticipation of adverse criticism as a result of publication of the Franks Report?
Or, alternatively, is it due to the Prime Minister herself? I had the pleasure of seeing the Prime Minister on television on a Saturday afternoon a fortnight ago and she was discussing matters of this kind. With the utmost clarity—and nobody can accuse the Prime Minister of lack of clarity in her diction or of directness in her expression—she made the following observation in her usual pugnacious style in terms of real force and eloquence. This is precisely what she said:
"The Falklanders are British and will remain British".
Evidently the Prime Minister was unaware of the defects in the British Nationality Bill. Doubtless soon after she made the observation, which can be verified from the transcript, there was a fluttering in the dovecots in the Home Office because the Prime Minister had said something which according to the Home Office was not strictly true. Can it therefore be that this reluctant amende honorable has been made in order that the Home Office may bring itself into conformity with the position that the Prime Minister has publicly adopted?
I felt it wise to go into rather greater detail in this matter than the content of this Bill might seem to justify. But I think it is important on occasion, particularly when one is dealing with the Home Office, if I may say so, to have the utmost clarity as to exactly what the position is. The noble Lord will forgive me if I say that the example he has given this afternoon, of proving that the whole thing really was not necessary anyway and that the Government's position was

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perfectly clear from the beginning, necessitates perhaps a more detailed examination into Home Office motives, as one gives to Home Office actions. So, we will, of course, give every conceivable support to the noble Baroness when the Bill comes up at Committee, and we are glad that the noble Lord himself has offered to give technical assistance in the drafting. In the light of the Home Office's whole attitude towards this question from the beginning, which the noble Lord himself has seen fit to emphasise once again today, may I assure him and may I assure the noble Baroness that we shall examine this in Committee with the utmost care, to make quite sure that the purposes which the noble Baroness had in mind when putting down this Bill are in fact carried into legal effect.
4.15 p.m.
Lord Tordoff: My Lords, may I begin by doing three things; first of all, to congratulate the noble Baroness on having had the opportunity and the wit and the perseverance to bring this Bill before your Lordships today; secondly, to apologise to your Lordships since, because of the lateness of the hour and the number of Members down to speak and owing to a previous engagement, I may not be able to stay till the end, much as I would have wished to; and thirdly, to commiserate somewhat with the noble Lord, Lord Elton. I think he has done his best in a difficult situation. As the noble Lord, Lord Bruce of Donington, has said, he has perhaps not got quite the same didactic approach to these subjects as his predecessor Lord Trefgarne. He has indeed allowed logic to be bent or to be put aside for a minute, and I am quite sure his predecessor would not have allowed that.
It would be very easy to have a considerable amount of fun this afternoon at the Government's expense, but the situation is much more serious than that, and I will try to confine my remarks to those items where I believe the Government have made serious mistakes and where this simply underlines those mistakes. The noble Lord, Lord Bruce of Donington, has already touched on the general situation with regard to the Falkland Islands: the question of the removal of "Endurance"; the removal of the rights of the Falkland Islanders by the Nationality Bill. May I add to the list that he gave the removal of the foreign language broadcasts. All noble Lords on this side of the House and some on the other side gave very clear warning to the Government that in doing what they did they were creating great dangers for this country's overseas activities. Only a very limited amount of notice, although some notice, was taken of that; but of course the Spanish broadcasts were among those that suffered.
Like the noble Lord, Lord Bruce of Donington, we on these Benches await with great interest the result of the Franks Report to see what other mistakes are going to be revealed. I do not perhaps go quite so far down that road with him in suggesting that this is a cosmetic exercise, but I do agree with him that it is all part of a package. I was somewhat worried to see in the newspapers a suggestion that the Prime Minister is going to do everything in her power to keep as much
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as possible of the Franks Report secret. I hope that that is not another leak from any Government department.
I am sure very few of the Government's supporters can feel happy about the situation with regard to this Bill. It underlines the weaknesses of the Nationality Act. Some very clear statements were made both on the Gibraltarian issue and on Hong Kong during the passage of that Bill through Parliament. It seems to me that the logic of that has now been exposed at a number of points, as we remove one exception after another—and be assured that people will continue to try to remove other exceptions. I am sure the noble Lord, Lord Geddes, will say something this afternoon on Hong Kong. I think that we again through the popular print have information on certain assurances being given to Hong Kong when the Prime Minister visited there recently, and apparently, according to the Daily Telegraph, the word "British" will appear on Hong Kong passports.
I quote from today's Daily Telegraph which states that:
"the Foreign Office emphasises that British is used entirely descriptively and Hong Kong citizens will continue to be tightly restricted by Britain's immigration laws".
I suggest that "entirely descriptively" might be replaced by "entirely deceptively". If we are to use the word "British", let it mean what it means. Let us not try to fool people in other parts of the world in the same way as we have been trying to fool ourselves with the British Nationality Act.
I do not intend to spend more than a very few minutes on the Bill. It is an important step forward. It removes an unfortunate anomaly which was present in the British Nationality Act, but, sadly, it exposes many other anomalies and makes it more and more clear that the Government are occasionally prepared to give way on those matters where white citizens of the world are concerned. Would that it were prepared to give way more graciously, even occasionally, in cases where coloured citizens of the former Commonwealth are involved. The trouble, as I have said previously, is that the Government behave like Humpty Dumpty. They always want words to mean what the Government say they mean and not the generally accepted meaning. The intellectual consistency of the Act is destroyed if the Bill is passed by your Lordships, as I very much hope it will be.
4.21 p.m.
Lord Balfour of Inchrye: My Lords, may I, I think for the first time in nearly 40 years, ask for your Lordships' indulgence and express an apology to the Minister and to the House for my inability to be here at the end of the debate if it continues for very long. I should like to condone that apology by saying that my remarks will be very brief indeed. I congratulate the noble Baroness, Lady Vickers, and the Government on the outcome of the Bill that she has promoted and the promises that Her Majesty's Government have made. I think that the Bill, or the amendment to the British Nationality Act, which gives the Falklanders the same status as those who live in the Channel Islands or in Gibraltar is laudable and will please your Lordships in all quarters of the House. I was fascinated to listen to the Minister. His delivery was very rapid, quick, and, for me, difficult to take in, skipping over

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the British Nationality Act and the technicalities of this Bill. I am reminded of a man who, on being asked to describe an elephant said, "I don't know. I cannot describe one, but I know one when I see it". I, too, know a full British citizen when I meet him.
This issue cannot help but be related to the Falkland ordeal of aggression and invasion which the inhabitants have overcome so determinedly and bravely over the past few months. The Bill should not pass without our paying a tribute to the courage and resistance of the Falklanders. If the Bill had not come forward and if everyone had to prove who their grandparents were, or where they were born—I doubt whether I could—we would have divided the Falklanders into the sheep and the goats. About 1,400 of them would have been the sheep, possessing full British citizenship rights, and 400 would have been the goats, with restricted citizenship. I am glad to say that we shall not hear any more of that in the future. What a reward that would have been for those who faced aggression, and just a few months after they had been through their ordeal.
Her Majesty's Government have had another escape. Their attitude could have been likened to the situation in Mr. George Orwell's Animal Farm—
"All men are equal, but some are more equal than others".
Fortunately, in future all the Falkland citizens will be equal with full rights of citizenship.
Finally, resentment in this, country and in the Falklands would have grown and grown if the Government had not had the courage to turn back on an error and misjudgment which they made earlier. I hope that the Government will feel that they are rewarded by the feelings of those who objected very much to the division of the Falklanders into two, and will wish all those Falklanders who are from January to be full citizens of Britain the very best of futures for their bravery which justifies that wish.
4. 27 p.m.
Lord Maclehose of Beoch: My Lords, I, too, congratulate the noble Baroness, Lady Vickers, on introducing the Bill. I intervene briefly on one point. The Bill discriminates against other dependent territories and the question arises as to what extent that is an obstacle. I accept that it was the Government's intention that in its treatment of dependent territories the British Nationality Act should be neutral. But there is an enormous difference between legalities and human feelings. The fact is that the British Nationality Act was bitterly resented in the dependent territories, including Hong Kong. It is true that, as the noble Lord said, the door to the United Kingdom was closed to residents of dependent territories in 1962, but the British Nationality Act appeared gratuitously to double lock the door. Similarly, the change in the name of citizenship was regarded as explicable—I repeat, regarded as explicable—only as an act of political disengagement. As the situation developed the then Governor of Hong Kong exhausted himself in explanations, and indeed in epithets, but with only marginal success, in moving Her Majesty's Government; and I do not intend to repeat them this afternoon. However, I should acknowledge the recent administrative change authorised in Hong Kong passports, which is helpful and
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welcome, as far as it goes, since it may facililtate travel in third countries.
I mention all this because there is still very deep bitterness in Hong Kong, and for all I know in other territories, on this subject and that is an unhappy background to the Bill. One reaction will certainly be that the Bill will be criticised in Hong Kong and other territories as discriminatory. I sympathise with that reaction, but I do not wish to oppose the Bill on that ground because there are other, deeper considerations which I hope will be apparent in Hong Kong, and if the Bill appeals to your Lordships on balance of other grounds I do not think that the situation I have described should be regarded as an obstacle.
In the first place, I do not think it would be in the interests of Hong Kong or of any other dependent territory to appear to stand in the way of a benefit to the Falkland Islands in which the emotions and policies of the United Kingdom are so deeply involved at this time. Moreover, I do not think that Hong Kong people themselves would wish to carry their resentment to the extent of opposing doing something for the Falkland Islands. Furthermore, if this Bill becomes law, the Government will have accepted, admittedly in this very special case, the need to amend the Act's provisions over a dependent territory, within the limits of what is necessary and numerically possible, when justified by special circumstances. Such a proposition would be welcome. My Lords, on all these grounds I support the Bill.
4.31 p.m.
Lord Aylestone: My Lords, the House is grateful to the noble Baroness, Lady Vickers, for introducing the Bill. It gives those of us on this Bench an opportunity to support her, as we did when she introduced an amendment with the same objective in mind during the passage of what was then the Bill last year. During the passage of that Bill, which now is an Act and comes into force on 1 st January, from all sides of the House and from almost every country associated with Great Britain, the anomalies, the unfairnesses, that might arise once it became law were pointed out. We felt then, as we feel now—and as most people felt—that it was quite wrong that one replaced the automatic right of a child born in this country to be a British citizen by a system whereby the requirement was that the child should have one, or both, British parents.
In the Bill now before us the noble Baroness is seeking to put right a wrong affecting at this stage only about one fifth of the people of the Falkland Islands. I say "at this stage" because the remaining perhaps 1,400 are British and it is true, as the Minister has said, that they all become citizens of a British dependency, but they wish to become full British citizens. Therefore, it is accurate to say that at the moment it is only affecting about 350. But what about the remaining 1,400 as the generations move on? They will become citizens of a British dependency but will lose their full British citizenship unless, of course, now and again, members of the family come here and are able, in one way or another, through intermarrying to restore British citizenship. That is hardly likely to happen.
I should like to quote one case to your Lordships—and I am certainly not going to mention

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the name—of a gallant gentleman, a third generation Falklander, who assisted the British Task Force and was awarded the MBE quite recently. He is British because his grandparents were British. What of his children and their children? They will lose their British citizenship and become again citizens of a British dependency. But it is not enough, and we do not regard it as enough. They feel that they are British, and as British as the people of the Isle of Wight. They feel that they are as entitled to British citizenship as the people of the Isle of Wight. It is true that the Falklands are 8,000 miles away, but they have always shown an unquestioning loyalty to this country. They have never had any need to prove it, but, if proof were needed, we saw it during the Argentinian invasion.
During the passage of the British Nationality Bill last year the citizens of Gibraltar were given British citizenship. There are many others who ought perhaps to have it. I hope that the Government, in looking at this Bill, will widen the whole question, because there is a problem affecting the smaller British dependencies, none of which is really big enough to become an independent country. I have in mind Tristan da Cunha, the Caymans, and the Ascension Islands, with probably not 15 people living there normally. Therefore, if the Government accept this Bill, I hope they will look carefully at all these aspects also, and take an opportunity to put the thing right, because none of the British dependencies feels that citizenship of a British dependency is in any way equal to full British citizenship.
I recall that last year when we were discussing the Falklands amendment in the name of the noble Baroness, Lady Vickers, those of us who supported her—and there were many—were accused of being over-emotional. I hope that after the happenings on those islands a few months ago now no one will ever again be accused of being over-emotional about the Falkland Islands. In fully supporting this Bill we hope that the Government will accept it. We are heartened by what the Minister has said. We hope that if it passes through this House—and he said that he will help whenever redrafting is necessary—the Government will not only assist in redrafting the Bill and give us the opportunity of passing it through this House, but will give an assurance also that they will find time for it in another place as a Government Bill or permit someone, maybe on their own side of the House, to sponsor it and see it safely through that House too.
4.37 p.m.
Lord Buxton of Alsa: My Lords, I should like to add my congratulations to my noble friend Lady Vickers for her persistence in bringing back this Bill. It may be more helpful, as the merits of the Bill have been spoken about by many of your Lordships, if I refer to some of the wider issues which strike me because of my tolerable familiarity with that part of the world. The importance of the Government's response is no longer, in my view, related only to the merits of the Bill, because what has become the paramount issue is what we might call the Argentine interpretation factor, and also the Latin American and United Nations interpretation factor. We are being watched in South America and in the United Nations to see whether Britain means what it said and did. We are being
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watched to see whether the task force was just a flash in the pan, and whether in the future officialdom will one day revert to appeasement of a corrupt régime which is now distrusted within its own borders. All will be watching to see whether one day sovereignty may yet again be up for negotiation.
I must promise you, my Lords, that I am not straying from the issues of the Bill. Everything I have to say relates directly to the Government's decision today. It came as a shock to me when the question of sovereignty and the possible negotiation of it seemed to be clearly implied, after all that has occurred, in a letter from our United Nations representative to the Security Council last August. But I have the impression that the Foreign Secretary has since restored the situation.
Last month I took the opportunity to be in New York during the United Nations' debate and took soundings of both American and Latin American opinion on this. My own impressions were different from most, and personally I welcomed the debate because it was so absurdly premature that nobody would take it really seriously. 1 also welcomed the somewhat irresponsible vote against us because it got certain parties at a very early stage off the hook, especially those countries which have been embarrassed by the Falklands war. On the whole most countries, apart from Argentina and Soviet subordinates and so on, are fairly bored with the Malvinas cause. But obviously the Organisation of American States countries had to adopt a public posture in support of Argentina. Having done so, and having won the United Nations vote, honour may well have been served for those who matter. It will not be served, and they will not be off the hook, if we continue to give any signals at all that sovereignty could ever be negotiated with Argentina.
Regarding the United States, it is ironic and unfair that it was not Britain that was unpopular in South America after the Falklands war but the United States. Britain has restored her credit and prestige and is now widely respected for doing so. But, sadly for America, she is unpopular for not standing shoulder to shoulder with OAS in a typically unprincipled ganging-up during the hostilities. Therefore it should surprise nobody that America seized the first opportunity at the United Nations of winning back a few bonus points.
Most Americans I spoke to after the United Nations debate were at pains to point out that they had given Britain solid support when it mattered, and they had merely voted with the opposition in the United Nations when it did not matter. Nobody from any country seems to expect us to take much notice of that preposterous United Nations debate—premature and unprincipled—and we shall simply lose international respect if we do. The United Nations has, in my view, a lot of reputation and image to recover after such a shameful performance.
The Government's response to this Bill, therefore, will be the second significant milestone in recent times since the Falklands operations. The first was the decision not to axe "Endurance", and this is the second, the sort of signal that can be recognised on the other side of the Atlantic and the other side of the Equator.

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Against that, we must recognise that voices are already being raised at home which are at odds with the nation as a whole, with the Government and, I suspect, with the majority in this House. Nevertheless, they are voices which are making themselves heard more and more—in the media; many writers and members of the establishment, whatever that may be—and there are many stimulating the line that we should not have done it, we could not afford it and who wants the Falklands, anyway? Nor on the official front has one perceived much sign of repentance, and the grapevine seems to indicate a certain smugness; "I told you so. Look at the costs", and so on. I believe that Ministers are being deliberately scared with grossly inflated estimates of future costs, including an unnecessary level of defence. All this will be noted in South America. They are signals which they take in and memorise.
There is also more hopeful talk in party circles of the "Falklands factor" wearing off. Happily, the heroic Falklands operation had a beginning, a middle and an end. The Falklands factor is not something that wears; it is a fact and it will not dim in the minds of the British public, ever. It is encapsulated, so to speak, with all its heroism and drama in the nation's mind and in our history. Those who hope to watch it wearing off remind me of agitators seeking to damage a brilliantly produced film by letting off stink bombs in the auditorium.
The Falklands were always an asset to this country, as Lord Shackleton's first report proved. It was deception when the opposite view was promoted. The Falklands can once again be turned into a thriving asset, but primarily our descendants will not thank us if we weaken our ability (which favours the free world and Latin America) to protect the sea lanes and the gateway to the Antarctic. The Argentine Government are not yet sufficiently stable for the free world to put at risk the sea routes round the Horn. As my noble friend Lady Vickers said, if the Soviets ever had a base in Tierra del Fuego opposite their big Antarctic base, which I have seen, off the Antarctic peninsula, and if the Panama Canal was also closed, that would be game, set and match as regards maritime communications in that part of the globe.
On the question of defence, I am convinced, like most people in Argentina and everyone else in South America, that the Junta would never have invaded British territory if they had thought we would retaliate. There has been much talk about deterrence, "Endurance" and so on. What we have learned in the Falklands is that deterrence is indeed a critical factor but that a deterrent can become a dubious factor unless it implies clearly that one will act decisively when challenged. A deterrent is merely window-dressing if the notion is around that one will not actually use it.
Therefore, this Bill is a signal. Provided Argentina, the rest of Latin America and the United Nations know that we will always protect British territory and British citizens—which, as I understand it, is the disposition of the Government and certainly of the electorate—there will never be another Argentine invasion of the Falklands. Provided that is the case—and that is why this amendment is a vital signal—all that are necessary, in my view (and I have been there many times) for effective deterrence backed by a clear,
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positive Falklands policy, are sophisticated early-warning devices, the smallest trip-wire presence in terms of troops, and immediate airborne access, which was never available before. That will be enough—not only in my view but in that of many others to whom I have spoken—permanently to discourage invasion.
Scaremongering is now being indulged in in reference to Exocet missiles and the danger of sudden air attack. We should tell Argentina now, plainly and fearlessly, that if one single attack is made on a British vessel in the South Atlantic, by Exocet or anything else, we will immediately sink an Argentine ship whether at sea or inside an Argentine harbour. I am not in the least belligerent, but that, in my view, would be a fair, rational and statesmanlike disposition, one which should help the Argentine people themselves and avert further catastrophic follies by their inept oppressors.
I should not like to close by leaving the impression that I am hostile to the Argentine people; what I say here may be repeated. I felt very deeply for Argentine friends in their humiliation, and they included diplomats, people in office and others in all walks of life. They suffered indeed through the stupidity of their pompous régime and through our own misleading and misguided policies over 18 years, which compounded the situation. I have already been in touch with some in Argentina and one prominent citizen who held high office replied within a fortnight:
"I agree with you and I think that independent citizens of both countries should get together and do something for the cause of peace".
Britain has always been, and still is, popular in most of South America. Most countries always believed in our resoluteness and resolution. However, these relations will not rebuild so long as there is any doubt about our intentions and so long as we have the sovereignty issue open at the United Nations. Only when the door has been finally and resolutely closed can everyone relax and move forward again. The Bill, if accepted by the Government, will assist that finality.
It is not properly appreciated after the horrors and hostilities of the war that the inhabitants of Argentina are delightful people, over 40 per cent. Italian, with a large Spanish component and a mixture of Germans, English, Welsh and so on. They are not a race in the accepted sense. Sadly, they have always had an unfortunate faculty of saddling themselves with the most frightful régimes. In the last century, the leaders proved themselves the worst colonialists almost in all history, resorting to genocide of the indigenous population on a huge scale. Today they have a junta who are fearful of handing over power to civilians because they shrink from disclosing what happened to 15,000 Argentine citizens.
I must say in passing how contemptible it is to think that anyone in this country could ever have contemplated even for a moment putting free British citizens under such a repellent rule, and it makes no difference whether their numbers be 18, 1,800 or 18,000. That rule is now distrusted and in many quarters despised by the majority of Argentina's own inhabitants. How incredible also now to think that some people in this country could publicly proclaim likewise. I wonder whether they are seriously prepared to stand up and solemnly declare that not only would they prefer to see those 1,800 British citizens subjugated under junta

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rule, but apparently would also prefer that today the British nation itself should be disconsolate, morose and humiliated, while an endless, ineffectual shouting-match ground on at the United Nations. That is what would certainly have happened, without question, without the task force and its spectacular and historic triumph.
It has always been my aim that understanding and agreement should be reached with Argentina over a broad spectrum of activity—including industry, trade, fishing, defence, conservation, the Antarctic and so on—but not on sovereignty. We are not helping the Argentine people if we encourage their military overlords to think that negotiating sovereignty is ever an option. Everything that we can do to discourage that impression is vital. Therefore the Bill that my noble friend has introduced, and the Government's response to it, are essential as a signal in relation to this particular aspect.
Certainly all Argentinians have been taught about in school, and feel fervour about, the Malvinas fables. Incidentally, it is not widely understood that the very last Buenos Aires settlement in the Falklands, in about 1830, was dispersed by the Americans, not by the British. But the fables, part of an aggressor rule's dream of being the dominant power in the South Atlantic and the Antarctic, are not our fault—we cannot help the fact that they have the fables, teach them in schools, and print them in books—and they cannot therefore be permitted to distort the international jigsaw that has been stable down there for 150 years. After all, it was in far more recent times that the Buenos Aires Government colonised Patagonia and exterminated the Indians.
Finally, I should like to say that the time for talks with Argentina is after military dictatorship has ended—and not before. To refer to the possibility now is a cynical disservice to all parties, including the majority of the Argentine people. To do so is to encourage the junta to hang on. To promise talks on everything except sovereignty, when, and only when, civilian government is restored, is the proper and honourable course. On sovereignty, there could be other options in the long term, in the context of the Antarctic Treaty in 1991, and other possibilities. That is why, in fairness to the Argentine, Latin American countries, the Falkland islanders, and the people of this country, we must be consistent. Therefore we have to support this amendment; the Government have to accept the amendment, and I am delighted to hear that that may be the prospect. To do otherwise would simply confuse the world.
4.52 p.m.
Lord Stewart of Fulham: My Lords, when we first knew the text of the British Nationality Bill I think that there were a great many of us, both in this House and elsewhere, who felt that it was a profoundly unsatisfactory Bill, and that that concept of British dependent territory citizenship was not a satisfactory one. What has now happened is, that for a concatenation of reasons, this particular example of its madness has appeared, and the factors in this case that make us aware of the defects of the Nationality Act are as follows. First, there is the natural feeling that
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everyone by now has about the special rights and claims of the Falkland islanders. The noble Lord argued that there are occasions when logic must be overridden. Well, he need not apologise for that; it is perfectly clear in this case. One could argue until one was black in the face that there are certain legal and practical difficulties about treating the Falklanders as having exactly the same citizenship as we have. One might make that case most eloquently, carefully and logically, and nobody will believe it, either now or later, because in fact it does not make sense. I am glad—very glad indeed—that the Government have realised that, and we must all congratulate the noble Baroness, Lady Vickers, on having been the person in particular who got them into that position.
Another reason why we regard the situation as something that brings out in particular the weaknesses of the Nationality Act concerns the numbers involved. We know what would be the feeling of the Falklanders if the Bill now before us were turned down. As the noble Lord who has just spoken has pointed out, we know also what Argentine Governments, and South Americans generally, might think if the Bill were turned down. Could we possibly do that because of a few hundred people? It would be absurd to run all the risks that are involved in defeating the Bill merely because we feel that these few hundred people ought not to have this advantage. I stress this point the more since it would divide the Falkland islanders themselves between those who would be British citizens and those who would be citizens of a British dependent territory. Again, argue the logic of it, or the historical reasons for it, as much as you like, and at the end of it nobody will believe in the validity of what you are saying.
To that we must add—and here again I would refer to the speech of the noble Lord, Lord Buxton of Alsa—what he called. I think very rightly, the interpretation factor. Quite clearly, we must consider what will the world at large think about the way we handle this issue? If the Bill were rejected, the general conclusion would be that the British Parliament, having had a second opportunity to show its confidence in, and its fellow feeling for, the Falklanders, had for a second time turned down the opportunity of doing so; and I believe that the international effects of that could not but be disastrous.
I know—and here I see that there is a point of substance—that there is a possibility of its being argued that on the basis of treating the Falklanders in this way, the same must happen to every dependent territory. I think that argument was quite decisively dealt with by the wise and generous speech by my noble friend Lord Maclehose of Beoch. He, more than any others, is in the position to speak of what the people of Hong Kong might feel about the matter. He explained to us that the people of Hong Kong are by no means at all happy about the Bill, but that certainly they would not wish us to deny to the Falklanders the advantages that the Bill gives them.
There is only one further point that I want to make, and it is about the future of the Bill. The Government have indicated that they will positively help the Bill in its passage through this House; that they will help the noble Baroness in any amendment that may need framing. They were not quite so explicit about what might happen elsewhere. Here again one can argue

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elegantly and say that a Government spokesman in this House cannot give definite pledges as to what will happen in another place. But I say to the Government that everyone knows that if they really want the Bill to go through another place, it will go through. If it does not, the conclusion will be that the Government have prevented it from doing so; and for that there would be no conceivable excuse whatever.
Just as the Government have been led—I will not say "pushed"—to accept the validity of the argument that the Falklanders ought to have British citizenship, so they must accept the compelling nature of the argument that by doing that they are taking on themselves, whether or not they like it, and whether or not they now admit it, a responsibility for seeing that the Bill becomes law. If in a few months' time we were faced with a situation in which it had not become law, the Government would have very few friends on any side in this House. I hope that they will remember that.
Lord Gore-Booth: My Lords, I have listened—
Several noble Lords: Order, order!
Lord Gore-Booth: I am sorry, my Lords. Am I out of order?
Lord Mottistone: My Lords, unless the noble Lord was going to ask a question of the noble Lord who has just sat down, I think that he is out of order.
Lord Elton: My Lords, the noble Lord, Lord Mottistone, has been kind enough to give way and, if I may intervene, I would say to the noble Lord, Lord Gridley, that his name appears a further four places down the list—
Several noble Lords: No, no!
Lord Elton: I am sorry, my Lords; I meant the noble Lord, Lord Gore-Booth, whose name is not yet on the list of speakers, and I would suggest that he might care to speak when we reach what is commonly called the "gap".
5 p.m.
Lord Mottistone: My Lords, perhaps I may address your Lordships very briefly. My particular reason for doing so is because I misjudged the business of the House in October of last year and so missed being here for the essential vote on my noble friend's amendment, which was lost for the lack of one vote; and I should like to congratulate her very much on returning to the charge. I should also like to make the point, which many other noble Lords have already made but which I am afraid I must make again, that at the time I wished to cast that vote in the direction which would have put this provision into the Bill it was because I was so appalled, as I had tried to say to the Government for six months, that they had made public that they were going to do away with "Endurance", because it seemed to me, exactly as my noble friend Lord Buxton has just said, that the messages going across the Atlantic would give the Argentines the wrong impression. But I must confess that I never thought that they would be stupid enough to act when they did. I did not think it would happen
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quite so soon; I suspected it would more likely come about this winter.
However, this is old history. But the fact of the matter is that signals they were, and signals are terribly important—and not only across the Atlantic to South America. Signals are made which can be misinterpreted in all parts of the world; and I would hope that the Government take good care to ensure that their actions are understood in the light of how other people may interpret them. I rather feel that in the demonstration of our activities overseas we sometimes forget that aspect.
Not to waste your Lordships' time, I am simply delighted that the Government have had the wisdom to override their logic, and I would ask them only one thing. That is whether, having taken that step and having said that they will give support to my noble friend in making her Bill more acceptable in law, they will then accelerate the progress of this Bill through both Houses and ensure that it is as fast as possible, in order that the message and the signal may be clearly understood in Argentina and in the world at large.
5.2 p.m.
The Earl of Dudley: My Lords, I, too, should like to add my congratulations to the noble Baroness on the success of her enterprise and on the introduction of this Bill; and I should also like to congratulate the Government and the Minister on their response to it. I think it is fair comment that in respect of the Falkland Islands the characteristic of the Government's policy has been to respond to events rather than to initiate them. Last summer they responded vigorously and successfully. They have responded sensibly to the noble Baroness; and in respect of the vote in the General Assembly they have responded wisely in having taken the decision not to respond at all.
I think that perhaps the most encouraging feature that emerges from the Government's decision is that their response shows that they propose to stand by the Falkland Islands in the future. I think we can draw that conclusion; and I should like to add this to the point made by my noble friend Lord Buxton and the noble Lord, Lord Stewart, who said that, of course, the eyes of Latin America, the eyes of Argentina, have been on this Bill and on the decision taken by the Government and by this House. I should like to add that had the Argentines been in a position to make any such offer, I am sure they would have been gratified to give the islanders both full Argentine citizenship and the right of abode in the Argentine.
My Lords, one thing is certain. If the future of the islands is to be assured, if the updated report of the noble Lord, Lord Shackleton, is to be implemented, people are going to be needed in those islands. It seems to me very much better that the islanders and those who are likely to join them should receive at least as favourable treatment, if not better treatment, from our own democracy than they would have received from an Argentine dictatorship.
I have never been to the Falkland Islands. I have been to Argentina, and, as I have explained before in this House, I have three children by an Argentine marriage. I have no hostility, either, towards Argentina, although I believe that while they are, as my noble friend Lord Buxton said, a charming and

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delightful people, and a mixture of many races, they have unfortunately proved themselves largely irresponsible in the field of government and in the field of their social relationships. From this point of view I, too, agree that sovereignty should not be negotiable for the foreseeable future.
I should also like to add to the very interesting remarks that my noble friend Lord Buxton made. I must apologise if my remarks are rather wider ranging than perhaps the context of tonight's debate permits, but I think this precedent has already been set and allowed by your Lordships in earlier speeches. I should like to add to Lord Buxton's remarks and also refer your Lordships back to a speech which my noble friend made 18 months ago during the debate on an Unstarred Question in this House, when he said words to the effect that the importance of the strategic position of the Falkland Islands and their dependencies at this point of history should not be in any way underestimated.
I should like to add my personal evidence following a recent visit to the United States, where I met a leading American banker with established South American connections. He told me of the flood, the cataract, of funds flowing from Latin America into the United States, converted at penal rates of exchange and impelled by the fear of Soviet communism and its spread throughout the Latin American continent. I think that a reasonable view of the needs of the West and of our needs as regards our future security should take account of the possibility that in the course of time the Latin American continent, or large parts of it, at least, may fall to Soviet communism. I can visualise circumstances in which the Falkland Islands would represent Europe's only safeguard of free passage between the Atlantic and the Pacific Oceans, at least in those remote areas away from Soviet naval, air and missile-strike capability.
So I would say that I believe that the United States' dilemma, while it is a very real dilemma (whether it is their dilemma or the influence of the attitude of the Latin American section of their State Department, whose head I met in Washington on the occasion of my recent visit to the United States) should not lead them into what I think is a misunderstanding of their true interests, which are the retention of the sovereignty of the Falkland Islands by this country and their incorporation at some later stage into a wider strategic arrangement for the security both of the islands and of the Western free world.
I put forward this view because I believe very strongly that the pressure on the Government from various quarters—from the United Nations, from the liberal world, from those, perhaps, who take the view that we should be more understanding in our attitude towards Latin America—might lead the Government at some point to weaken in their stand, and could lead them into actions which would be prejudicial both to our interests and to those of the United States. I think I have taken up enough of your Lordships' time. Finally, I should like to say how pleased I am that the words of the Prime Minister, repeated so often during the summer and repeated again in this House tonight, that these people are British, will now remain enshrined in the laws of this country.
5.11 p.m.
Lord Geddes: My Lords, my noble friend Lady Vickers has yet again done this House, this country, and the inhabitants of the Falkland Islands a great service by bringing forward this Bill. As my noble friend has observed, it is remarkably similar to her Amendment No. 65 to the then British Nationality Bill. I am sure that all in your Lordships' House most sincerely hope that a similar fate does not befall this Bill to that which befell that amendment. I most warmly support this Bill not only because of recent events in the South Atlantic, to which other noble Lords have referred much more eloquently than I ever can, but also for the reason that I and many other noble Lords expessed in October of last year: that once the Gibraltar amendment had been approved there was little or no logic in withholding British nationality from the other British dependent citizens, of whom the principal were those of the Falklands and Hong Kong.
I am sorry not to see my noble friend Lord Trefgarne in his place this evening, as I am sure he would have expected me to speak also on Hong Kong. I shall not disappoint him nor, indeed, the noble Lord, Lord Tordoff. As the noble Lord, Lord Stewart of Fulham, has said, I am sure that we listened to the comments of the noble Lord, Lord Maclehose of Beoch, with particular interest. He is a very real authority on Hong Kong. I was personally sorry that he was not a Member of your Lordships' House at this time last year. Throughout the, at times, tortuous passage of the British Nationality Bill last year, many of your Lordships, including myself, stressed the vital importance to Hong Kong of the nationality—not the citizenship, but the nationality—of its citizens.
It was with considerable pleasure that I received advice last Thursday that, on the previous day, 24th November, the Chief Secretary of Hong Kong had announced to the Hong Kong Legislative Council:
"Her Majesty's Government have agreed that opposite the word 'nationality' on the first page of all British Dependent Terrorities' passports will appear the word 'British'. Immediately under this description of nationality, there will be a description of the passport holder's citizenship. In the case of Hong Kong, after the British Nationality Act comes into force on 1st January 1983, this description will be, 'British Dependent Territories Citizen, Hong Kong'. These descriptions do not, of course, alter or affect existing law so far as rights of entry to, or abode in, the United Kingdom or elsewhere are concerned, to which reference is made elsewhere in the passport. But the nationality and citizenship will be accurately described in passports, to the great satisfaction, I am sure, of members of this Council and of the Hong Kong community at large".
I think, my Lords, that we should all be most grateful to my noble friend the Minister if, in his summing up, he would confirm that that statement is correct.
After the narrow defeat of Amendment 117 A to the Nationality Bill on 13th October 1981, it is good news, indeed, to hear that perseverance has apparently prevailed, due, so one understands, to a significant extent to the persuasion of my right honourable friend the Prime Minister. Would that her practical touch had had the same effect 13 months ago and that Hong Kong had been spared that period of indecision and—I must say it, my Lords—of bitterness! At the same time let us be quite clear that, even with that concession, Hong Kong will not be on a par with Gibraltar or, if, hopefully, this Bill is carried through, the Falklands. So be it, at least pro tem. Here, we hope, is some good news for Hong Kong which, although I cannot and do

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not speak for that admirable and industrious territory, will surely give pleasure and bring some relief.
In this Bill there is positively good news for the Falkland Islands. How good it has been to hear my noble friend on the Front Bench giving it a fair wind today!—and I do congratulate him upon it. Let us hope that his and my honourable friends in another place continue so to do when it leaves your Lordships' House. How sad, however, that that was not done over a year ago. Who knows—as other noble Lords have said this evening—whether it might not have influenced Argentinian thoughts in April 1982?
5.18 p.m.
Lord Hunt: My Lords, I, too, spoke in support of the amendment moved by the noble Baroness to the Nationality Bill on 17th October last year. I am delighted to have this opportunity to support her in the Bill that she has put before your Lordships today. The point has been made that the House on that occasion—and it was a very numerous House, of 180 Members—divided equally. I regard that as a total vindication of the noble Baroness's amendment on its intrinsic merits, because it must be assumed that some of the votes cast against it on that occasion were cast, very properly, in loyalty by a number of Government supporters. I was glad, as was everyone else who heard the Minister earlier this afternoon, to hear that the Government are now prepared to give favourable consideration to this Bill provided that the case is made out adequately in your Lordships' House. It seems to me that we have been making out the case adequately ever since he said it, but I am encouraged by his words to make a small contribution towards that case.
With other noble Lords, I take the line that the Falklands war has served to illustrate that the Act should have been amended so as to bring in the noble Baroness's amendment before the war occurred, and that, far from removing or even diminishing the need for her amendment, and, hence, for this Bill, the war has actually added force to it. I propose to follow the line taken by the noble Lord, Lord Buxton, but I shall be making a very different argument from his. It will be an unpopular argument—from all that I have heard in your Lordships' House—and, therefore, a difficult line of argument to maintain. I am taking the line from the point where the noble Earl, Lord Dudley, spoke in the context of what he called the foreseeable future. I invite your Lordships to look further ahead into what in a very uncertain world is an unforeseeable future.
Totally wrong though the Argentinian invasion undoubtedly was, it revealed at the time—and it has continued to reveal ever since—the intensity of feeling among the whole Argentinian population and in South America generally—and in some other countries in the world—in regard to the opposing play; and that feeling, I predict, is not going to go away. I fully supported our action to repossess those islands. Indeed, who in your Lordships' House did not? We all did. As an old soldier, I am second to none in my appreciation of and admiration for a remarkable feat of arms.
At the same time, I do not believe—I choose not to believe—that that necessary act of force established for this country a stronger claim than we had before the
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invasion. It may well be that our claim is a very strong one. I do not dissent from that at all. However, to state, as some Government spokesmen—including the Prime Minister—have stated, that the interests of the islanders must be paramount does not establish the incontestable right to the territory. Sovereignty remains to be proved. I stress these words: at some time in the future there may have to be fresh negotiations with a future and different kind of Argentinian Government. As a consequence of those negotiations, a future British Government may renew our earlier offer—and let us not forget that we made that earlier offer—to have our claim to title tested before the International Court of Justice. This means that the future of subsequent generations of islanders beyond the foreseeable future is not secured in the islands for all time. They are, or will be, vulnerable.
If the Government really mean as they have so often said—and I believe them totally—what they said about safeguarding the interests of all the Falklanders—not only the present generation but the future generations—then they should give practical form and shape to that intention by granting full rights of citizenship to that considerable minority, that one quarter or one fifth, whatever it is, of the population, who under the present provisions of the Act are denied it. Sympathetic consideration of applications for British citizenship—the words of Mr. Timothy Raison in another place during the passage of the Bill—by potential applicants from that minority really is not good enough. Nor do I believe that the right of admission which the Home Secretary has assured will be given in certain circumstances to the Falkland Islanders—the undertaking that he made in April of this year—in those words does not amount to permanent residence.
In the years ahead, should any members of that minority—and do not let us forget that that minority is going to increase as the years go by—decide to leave the islands, whether out of personal choice, a change in their personal circumstances, or conceivably because of a future change in status of the islands themselves, then they should have the full right of entry to and residence in this country, if they so desire, and not have to come as suppliants to any future British Government.
5.24 p.m.
Lord Gridley: My Lords, it is with the greatest pleasure that I rise this evening to support my noble friend Lady Vickers with her Bill, which, when and if it is suitably amended, one hopes will pass through the other House and get support there so that full British citizenship will be granted to all the 1,800 British subjects in the Falkland Islands.
Before I continue with my main theme, may I refer to the speech of the noble Lord, Lord Hunt? I am afraid that I cannot agree with his arguments about sovereignty. I think that these people in the Falklands have been subjected to a form of aggression and they have stood up steadfastly for the principles in which we all believe and which were the principles on which we went to attack those islands, to defend the charter of the United Nations. That is something which we owe to them in perpetuity. This is something that we should not forget. I have been more impressed, if I may say so, by the speeches of my noble friend Lord

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Buxton and also my noble friend Lord Dudley, who obviously speak from great experience and knowledge of the actual situation as they have found it on the spot.
Tonight a certain amount has been said about the Falkland islanders and their links with Britain. So far as I am concerned, they have greater links with Britain than any other colony or former colony which we once possessed and which has now become an independent nation. I therefore feel that what we desire and what it is desired to achieve in this Bill is more than justified. I am also justified in what I have just said by the loyalty that these people of the Falkland Islands showed to Britain, its institutions and its principles, and, moreover, by the fact they stood steadfast when, in defence of the United Nations charter, we mounted the attack to which I have referred.
I suppose that there are going to be certain criticisms of the position which we are about to adopt and which may be voiced when this Bill, suitably amended, becomes law. I suppose that there are many who may well see in what this Bill tries to achieve that it is we British who are endeavouring to perpetuate a form of colonialism. That view may well predominate in the United Nations and from some of its members with their double standards. It may also be a view expressed by some politicians, by some academics and by those who in the post-war years saw no good in anything that we as a nation were endeavouring to achieve with our Empire and the bestowing of independence upon our former territories.
All this, I feel, must be refuted. Have we forgotten that the Secretary-General of the Commonwealth made an official release that every nation in the Commonwealth supported us when we set out to liberate the Falkland Islands? It is rather extraordinary—is it not?—that if there had been anything in the oppression that has been alleged against us in former years, the whole of the Commonwealth should have stood beside us when we went to liberate these people who had been the subject of aggression.
I hope that the Government will take note of what has been said this evening in what has been a most useful debate. I would make one final point about the reaction of people for whom we are responsible and who were deprived of their liberty by the aggression of others. If anything we have ever done in our association with people overseas was objectionable or oppressive to them, why is it that when they lose their freedom—that freedom that they enjoyed in our association with them—they do not lose their affection for this country, Britain, or its institutions and the principles which we represent?
Let me give an example which is my personal evidence. I spent four years of the last war as a guest of the Japanese. I spent that four years in Changi gaol. Malaysia was invaded. I was an overseas colonial officer. If there was a modicum of truth in that despised word "colonialism", how is it that I, a former colonial officer, am here this evening? I cannot give the whole story; it is too long. But I and others owe our lives to the efforts of those we served, those who under colonialism kept us alive in the situation in which we found ourselves. The pundits would have you believe
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that it is a period in our history that we had better forget for ever, but we have nothing to be ashamed of. On the contrary, the evidence is that we were welcome and achieved much.
That is all I have to say this evening. I feel that the situation I have depicted is not dissimilar to that which we now face with this Bill in our future attitude to the Falkland Islands. I wish this Bill well, and thank my noble friend for her industry and for her achievement in introducing it. I hope it is successful.
5.30 p.m.
Lord Mishcon: My Lords, I have the privilege tonight to wind up this debate on a Bill moved, with her usual grace and ability, by the noble Baroness. Lady Vickers. I had a similar privilege of winding up the debate on the Second Reading of the British Nationality Bill and I remember that debate so well. I can remember those who, from various sides of this House, pointed out that the Bill which was then before us was ill-considered and that there had been no proper consultations with the dependent territories, of which the Falkland Islands was one. It was said that there was much misunderstanding as a result of a lack of public relations work even if the provisions of the Bill were right. I can remember the speeches made by the most reverend Primate and by some of the right reverend Prelates on that occasion.
I gladly join with all those who have spoken in the debate tonight in supporting this Bill. I am obviously glad to know that from the Government Front Bench the noble Lord, Lord Elton, a distinguished and much respected Minister in this House, has said that the Government will aid the Bill in this House and also, one assumes, in another place. But I would be less than honest if I did not say at this moment how clumsy we have been in what we have done in regard to the British Nationality Bill. In that Second Reading debate I can remember the noble Lord, Lord Boyd-Carpenter—and I am so sorry he is not in his place: I pay him a tribute and therefore am not in any way "stabbing him the back" in his absence—talking of Gibraltar being slapped in the face by the Government's presentation at that stage of the British Nationality Bill. He was answered, as were others who spoke of Gibraltar, by the clear statement that Gibraltar could not be made an exception. There was much hard feeling in Gibraltar—loyal, good old British Gibraltar.
Then there was a vote and your Lordships spoke with that fortitude which is very much a part of the tradition of this House; and the vote was against the Government. There was no immediate proclamation on behalf of the Government after that vote and that debate so that Gibraltar could be reassured and the feelings of discontent could be dispelled; it was not said that the Government were behind Gibraltar and, in view of the debate, would immediately confer full British nationality on the people of Gibraltar. It was not done. It took some little time and a great deal of consideration before the statement was made in another place: "Yes, those in Gibraltar, as a result of all parts of the House of Lords joining in, and not because of the benevolence or wisdom of Her Majesty's Government, will receive British citizenship".

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We argue the case of the Falkland Islands, and when we talk of these places 1 hope that your Lordships will not think that I forget the general argument which was so eloquently advanced by my noble and learned friend Lord Elwyn-Jones, apart from others of my colleagues. We felt there was very much a case against this business of selection. We felt there ought to be one treatment for the dependent territories. We thought we could get over the problems of Hong Kong—and when I select just the two cases of the Falkland Islands and Gibraltar it is only because we are considering such cases today and not because I am forgetting the others who have been forgotten by her Majesty's Government.
In regard to the Falkland Islands we pleaded the case—and I am not talking politically—from all parts of the House. "No", said the Government, "Quite impossible; it is not logical, not constitutional; there would be great difficulties; no citizenship for the Falkland Islands". The effect, from a public relations point of view, upon those islanders can well be imagined. But the fight did not end there. The noble Lord, Lord Boyd-Carpenter, unfortunately had not voted in regard to the Falkland Islands amendment but had he voted then, quite apart from the noble Lord, Lord Mottistone, who regretted his absence on that occasion, the amendment would have been carried. But the noble Lord, Lord Boyd-Carpenter, voted the other way for, I have no doubt, very good reasons. I would say in his absence that I am sure he had very good reasons for voting in the way he did. But there was an equally good reason for the Question he posed in your Lordships' House on 29th July last. I am reading from col. 353 of the Official Report for that day. He asked this Question: whether Her Majesty's Government,
"will introduce legislation to amend the British Nationality Act 1982 so as to make citizenship of the United Kingdom available to citizens of the Falkland Islands on the same basis as it is available under that Act to the citizens of Gibraltar".
The noble Lord, Lord Elton, with his usual ability, answered the Question and, if I may paraphrase him—I hope perfectly fairly—pointed out that they had been promised sympathetic consideration in regard to their entry into the United Kingdom. I say in parenthesis that the Falkland Islanders are deserving of more than our sympathy in consideration; they are entitled to full legal rights which, happily, they will have if this Bill goes through.
The noble Lord, Lord Boyd-Carpenter, then pointed out something which has been forgotten in your Lordships' debate. Some of your Lordships have been dealing with the question of sovereignty and the whole argument in relation to the Argentine. I do not intend to depart from what I think ought to be the proper tenor of this debate. I do not think this is the occasion for us to argue that matter, although I was personally very interested in the very good speeches made on that theme. There is no doubt that the Argentinian debate will continue in the United Nations, and, it may be, by direct negotiation after a certain passage of time, with a different régime. The noble Lord, Lord Boyd-Carpenter, asked the following question of the Minister on 29th July:
"Is my noble friend aware that when a group of wealthy Argentines during the recent conflict took advertising space in the press, they attached considerable weight to the allegation that under
1102
the British Nationality Act the Falklanders were not given the fullest rights of citizenship? Would it not be a very proper acknowledgement of the loyalty and devotion of these people under desperately trying conditions for Parliament now to confer this on them?"
The noble Lord, Lord Elton, replied as follows:
"My Lords, while I always have the highest regard for what my noble friend suggests, I do not think that it is proper to use legislation as an instrument of propaganda warfare."
The Official Report thereupon continued:
"Several noble Lords: Oh!" [Col. 354.]
I am one individual noble Lord who tonight wishes to say "Oh" to that concept as well.
With all that information, with all that background—if the Home Office were not mixed up with the Foreign Office—and with all this propaganda being put out as to what the British Nationality Act had done to the Falkland Islanders and as to how we were interested in defending them as a matter of territory, but not in defending them as a matter of individuals, someone in the Government could surely have had the intelligence to say, "Look, we faltered the first time. Let us, now this has been pointed out to us, come forward quickly with our own Bill and announce to the Falkland Islanders This is the Government's wish. This is a Government Bill. All right, we made a mistake. We have considered it. We are conferring nationality upon you—the 400 as well as the 1,400'." No, my Lords, it had to wait for my noble friend Lord Bruce of Donington to put down a Bill, for Mr. Kilroy-Silk in another place to put down a Bill and then, with her usual courage, for the noble Baroness, Lady Vickers, to put down a Bill, the Second Reading of which we are considering tonight.
So I think we come to the conclusion that the Government have seen the light, but in seeing the light they have not walked along the road to Damascus. They have stumbled on the road to Damascus. That is the sense of sorrow that one has, because—if I may finish upon this note—how odd we are as a nation if we are prepared to sacrifice national blood and treasure for the Falkland Islanders but have not been prepared before now to spend 40 lines of legislative ink on conferring upon them the nationality which we, and others, have said in the past they so richly deserve.
5.43 p.m.
Lord Elton: My Lords, I begin, as I began before, by congratulating my noble friend upon the persistence of her pursuit of the cause of the Falkland Islanders. I do so now, strengthened in the knowledge of the eloquent sympathy of so many Members of your Lordships' House. By your Lordships' leave, I shall try to reply very briefly to points which were raised after I spoke, the first of which was made by the noble Lord, Lord Bruce of Donington, who is as keen as any of us on getting this Bill adopted. But he received the news that the Government would not obstruct it with no more enthusiasm than did the noble Lord, Lord Tordoff. Its arrival on your Lordships' Table was greeted by him not with applause or gratitude, or even with any very lengthy approval. He treated us instead to a fascinating exercise in exegesis, in which he sought to divine what, possibly, could have caused Her Majesty's Government to be less at variance with his own and his party's views than usual. He mined every possible seam in search of material, and the noble Lord, Lord

1103
Tordoff. joined him in some of the more distant galleries, in which I shall not join him, in the territory of the Franks Committee.
The noble Lord also sought to persuade me that what I said earlier in this debate was inconsistent with what my noble friend Lord Trefgarne said on an earlier occasion. I must tell him, with a suitable degree of regret, that he has not persuaded me. I do not think there is great substance in that allegation. Indeed, I think it is borne out by the noble Lord's remarks about my own speech, because I made it clear, for what I think he said was about two-thirds of it, that there is still force in the arguments which my noble friend advanced; and the noble Lord, Lord Bruce of Donington, thought that I ought to have spent two-thirds of the speech in outlining the Government's position and one-third in explaining that it was not inconsistent with what my noble friend had said. Circumstances most obviously affect judgments, and the circumstances have changed dramatically since my noble friend made his Statement last year. But, as I said earlier, logic cannot be paramount in this consideration.
May I confirm to my noble friend Lord Geddes that Her Majesty's Government have recently agreed that dependent territories, including Hong Kong, may insert the word "British" opposite the printed words "national status" in all British dependent territory citizen passports? The noble Lord, Lord Maclehose, made a speech of great importance and interest, and I welcome, as will other noble Lords, the wise advice of the noble Lord, whose knowledge of Hong Kong and its people is so extensive, and whom I had the pleasure of meeting briefly out there some years ago.
Her Majesty's Government are fully aware of the strong feelings that the British Nationality Act aroused in Hong Kong. However, as I said earlier, the Act involves only a change of nomenclature. It does not take away from citizens of dependent territories any rights which they possessed previously as citizens of the United Kingdom and Colonies. Together with the noble Lord, I believe that the people of Hong Kong will realise that their situation is not similar to that of the Falkland Islanders, and will not wish to deny the latter the benefits proposed under this Bill. I welcome the noble Lord's view that the Bill should be considered on its merits, without regard to Hong Kong or the other dependent territories, since the situation of the Falkland Islands is, indeed, unique.
My noble friend Lord Buxton mentioned the question of negotiations and the recent vote at the United Nations General Assembly. The Government have made their view perfectly clear. We cannot be expected to negotiate with a country which will not renounce the unlawful use of force, which will not take account of the wishes of the islanders and which insists that negotiations shall lead only to the transfer of sovereignty. The General Assembly resolution is totally unacceptable to Her Majesty's Government. That is all the answer I can afford to the noble Lord, Lord Hunt, glad though I am to acknowledge the support that we received from the Commonwealth, as my noble friend Lord Gridley underlined with all the depth of his personal experience and with great restraint.
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I was, indeed, glad to receive the commendation of the noble Lord, Lord Stewart of Fulham, for the position we have taken up, though not as glad as I was to receive that of my noble friend Lord Dudley, because, unlike my noble friend, the noble Lord prefaced it with an attack on the position which Parliament took up on the passing of the British Nationality Act. The noble Lord, Lord Stewart of Fulham, raised the question of time to be given in the House of Commons to this Bill, and many other noble Lords did the same, particularly in the context of the Argentine dimension; that is to say, the signal that would be seen to be sent out by the proceedings of Parliament to places abroad, particularly in South America. That is true of my noble friend Lord Buxton, among others. The question has been raised as to whether Government time might be made available in the other place and, as the noble Lord, Lord Stewart of Fulham, conceded, this is, in fact, a matter for my right honourable friend the Leader of the House in another place. But I acknowledge the importance of not giving the wrong signals to Argentina, and I shall draw to his attention the strong feelings which have been expressed by your Lordships on this matter.
In a very graceful speech, the noble Lord, Lord Mishcon, regretted that your Lordships' trenchant views expresed in the debate about Gibraltar had not resulted in my noble friend Lord Belstead rising from this Bench at the end of the debate, almost before the tellers had sat down, to announce his own conversion—and that of his department, the Secretary of State, the entire Cabinet and the Prime Minister—to a new point of view as a result of that Division. That may be a travesty of what he intended to say, but it is fair to say that changes of policy take time to deliberate. Therefore, I should have hoped that he might have been a little more generous in acknowledging that, in this debate, the change of heart came at the beginning, not at the end.
The noble Lord, Lord Mishcon, also referred to an exchange between my noble friend Lord Boyd-Carpenter and myself on 29th July. He was a fraction less than his usual fair self. He referred to a reply. I shall always remember the reception which it received—the loud cries of "Oh!" which are recorded in Hansard, to which he has now added his own. As I made clear in the next column, I gave that reply under a misapprehension. It appeared to me from what the noble Lord to whom I was replying had said that it was suggested that we should pass a law in answer to an advertisement. That seemed to me to be an absurd proposition. In fact it was not the proposition which had been advanced. The noble Lord will find my correction at col. 355 of Hansard, and any noble Lords who doubt me will find it as well.
The noble Lord, Lord Mishcon, referred also to the offer only of sympathy to the Falkland Islanders who might not be British citizens and who might wish to come to these shores. The noble Lord has not taken on board what it was that my right honourable friend said. He announced that they were able to come here if they wanted to, whether or not they had the right of abode, and to settle. And settlement eventually brings nationality.
Lord Mishcon: My Lords, I specially did not interrupt the noble Lord the Minister when he dealt with another of my points, to which I shall not refer. I do not believe that the House would like me to do so.However, regarding the point to which the noble Lord the Minister is now referring, may I remind him of the very clear statement which I made to which he has not referred?
Lord Elton: My Lords, I am not quite certain to which clear statement the noble Lord is referring. Whatever it is I did not refer to, I shall refer to it tomorrow; and if it is what I think it is, it will entirely bear out what I have just told your Lordships.
This has been a valuable debate. I have striven not to give a lengthy and therefore a weighty reply to it. I made our position clear at the beginning. I think it was broadly welcomed, although almost everybody treated it very much as a curate's egg. I am confident that the position which the Government now occupy is the right one. I am grateful to my noble friend for giving the opportunity to your Lordships and to the Government to make this clear. In the light of what has been said, it seems to me that your Lordships will very probably give a Second Reading to the Bill. Thereafter I shall abide by the undertaking I gave at the beginning of this debate. I think that that is as much as your Lordships would wish me to detain you with at this stage.
Baroness Vickers: My Lords, I thank noble Lords for a very interesting and informative debate. I am sure that we have all learned a great deal from it. I am delighted by the support which the Bill has received. I am grateful to the Government for the change of mind. My noble friend is expert at seeing both ways, which is very clever of him. It will stand him in great stead. He will be liked by everybody on all sides if he finds that he can give his consent to the various points which are made.
May I refer to two telegrams which I have received? In their telegram to me, the Falkland Islands Sheepowners' Association say that they support me in my efforts on behalf of the Falkland islanders, and the General Employees' Union say in their telegram that they support me. I thought that your Lordships might like to know about those two telegrams.
Let me first say that I shall be delighted to accept my noble friend's advice. I hope that it means that he will put me on the right, not the wrong track in the future. With regard to getting the Bill through the other place, may I point out that there will shortly be a ballot for Private Members' Bills? Perhaps we ought to find out whether a Member of the other place can take up this Bill.
I thank the noble lord, Lord Bruce of Donington, for his very powerful speech and, in view of the circumstances, for being very kind to me. I also thank the noble Lord, Lord Tordoff, for his kind support from the Liberal Benches. I hope that my noble friend will consider the question of language broadcasts in the future.
It was splendid of the noble Lord, Lord Balfour of Inchrye, to speak. He is one of our oldest and most revered Members. It took him some time to make up his mind. He really thought out whether or not he
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would support the Bill. I thank the noble Lord, Lord Maclehose of Beoch, for coming specially all the way down from Scotland to put his very adequate point of view. He made an excellent maiden speech and now he is supporting very worthwhile causes. The noble Lord has also put us on the right track regarding the future. I hope that he will convey to the people of Hong Kong that we are still intensely interested in them.
I next thank the noble Lord, Lord Stewart of Fulham, and the noble Lord, Lord Aylestone, for being present at both debates, for putting their name to the amendment in our previous debate and for giving their usual helpful advice. To the noble Lord, Lord Buxton of Alsa, and to the noble Earl, Lord Dudley, may I say that I am delighted whenever they speak. The noble Lord, Lord Buxton of Alsa, and the noble Earl, Lord Dudley, have real knowledge of the area. I did not agree with my noble friend's slightly unkind words. I do not know nearly as much as either of these noble Lords about the area, and their support has been very well worthwhile.
The noble Lord, Lord Geddes, was very doubtful at one time, but he has given a great deal of thought to the matter and now supports the Bill. I did not agree with all that the noble Lord, Lord Hunt, said. However, I did agree when he said that it was a remarkable feat of arms by the task force. I know what my noble friend Lord Gridley went through in Malaysia, and about the work which he did for the Colonial Service. He feels as strongly as I do about our great Commonwealth of Nations. To the noble Lord, Lord Mishcon, who always makes delightful speeches, may I say that his speech today was not out of the usual strain?
We ought all tonight to pay a special tribute to the task force and to the magnificent job which they did. This debate has been about the support of human rights. I hope that this country will always be ready to support human rights, in whichever continent help may be needed.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Motor Vehicles (Construction and Use) (Amendment) (No. 7) Regulations 1982
5.58 p.m.
Lord Underbill Lord Underbill rose to move, That an humble Address be presented to Her Majesty praying that the regulations [S.I. 1982 No. 1576], laid before the House on 16th November, be annulled.
The noble Lord said: My Lords, noble Lords will appreciate that the regulations are extremely technical and complicated. To a non-engineer such as myself even the memorandum does not put the points in a way which I can readily understand. Therefore, I am particularly grateful that the Government have issued a further memorandum which sets out some of the points in a very much more understandable form.
I must congratulate the Government on their publicity for their proposals. These are just some of the department's many statements, many of them reporting speeches by members of the Government, particularly Ministers, in support of the Government's proposals regarding heavy lorries and their general

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package. The Government have recognised quite clearly that they must lessen public concern about the heavy lorries proposals. There is general recognition that there is public resentment even of the present lorries because of their noise, their dirt, their speed, their intrusion and the congestion which they cause.
In saying that, I want to make it absolutely clear that I appreciate to the full the importance of road haulage. My comments are in no way an attack upon road haulage. Road freight is vital to the nation's economy, for some 80 per cent. of the total freight tonnage is carried by road—often with door-to-door advantage. At the same time we must recognise that road traffic uses three times more energy than rail; rail has the capacity to take more freight and its use would help to relieve congestion on our roads. Another point I wish to make perfectly clear is that, of course, there will be general welcome for some parts of the Government's package. The proposals in the regulations to provide for maximum length, maximum height, for rear under-run protection and for sideguards are all welcome—as are the steps proposed towards reduction in lorry noise, albeit vaguely limited, improved braking standards and possible development of spray suppression.
Most of those items are essential even if we had no proposal to increase lorry weights. One of the important points put forward by the Government is in relation to heavy lorries. We are told in particular that this increase is essential in order to save the haulage industry £150 million a year. Incidentally, I note that Ministers frequently prefer to use the figures £ 1 ½ billion over 10 years to put greater emphasise on the saving. Of course, savings are important, but we must recognise that a £150 million a year saving is only a fraction of the some £14,000 million which is spent each year on consumer costs for road haulage. This, I am told, is just one-tenth of a penny in the pound. Does that justify this saving, important though it may be? Does it justify the other factors which are involved in the proposals for heavy lorries?
The assurance is repeated by Ministers time and time again that heavier lorries will mean fewer vehicles. Past experience—and Armitage makes this clear—is that, whenever heavier lorries have been introduced at various stages through the years, that has never been the way things have worked out; heavier lorries have come and there has been an increase in the number of vehicles. Many organisations in this country just will not accept the assumption that heavier lorries will mean fewer vehicles.
I must ask, why the increase to 38 tonnes? The present maximum is 32½ tonnes. The EEC propose up to 44 tonnes on six axles. That was accepted by the Armitage Report published in December 1980. The Government White Paper published in December 1981 proposed an amendment to 40 tonnes on five axles. The present regulations propose 38 tonnes on five axles. I must ask, why this move from the original concept? I am not suggesting that we should revert to 44 tonnes but we shall be interested to hear the Government's arguments. Arguments have been put forward time and time again that heavier lorries do not mean larger lorries and that heavier lorries with
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additional axles would mean less damage to roads. Armitage saw no reason for excluding 44-tonne lorries. Paragraph 404 of Armitage stated:
"The 44-tonne lorries which we propose would do no more damage to the environment than lorries between 32.5 and 40 tonnes, would cause less damage to roads and no more damage to bridges and would give greater savings in transport costs."
The noble Lord, Lord Bellwin, speaking for the Government in our debate on Armitage on 19th April this year, said that the Government had seen some need to fit the Armitage proposals to our circumstances and for that reason had rejected proposals for 44-tonne lorries. I would ask the Minister to explain in his reply today what were the circumstances in which the Government had to change their original intentions in the White Paper, which itself was a reduction in that which was proposed by Armitage. The Government White Paper proposed an increase to 40 tonnes and the accompanying note by the department justified that proposal on the basis of fourth power law, to which I will refer later. Yet the Secretary of State, on the Second Reading of these regulations in another place on 25th November, stressed that 38 tonnes is the maximum that the Government can accept. In col. 1026 of the Official Report I find that the Secretary of State said:
"We also reject the higher limits on our axle weights, because they would not be acceptable on our roads".
Yet the White Paper published earlier had said that 40 tonnes would be acceptable on our roads. The same point was made by the Under-Secretary of State in reply to that debate in another place (col. 1097); she said:
"I believe that we were right to reject the increase to 40 tonnes in view of the public concern".
But there is public concern about the proposed increase to 38 tonnes, so perhaps the Government will listen to what is being said and will not proceed with a maximum of 38 tonnes.
Local authorities and their associations have expressed in varying degrees their concern at the Government's proposals. I have a note dated 26th November from the Association of Metropolitan Authorities in which the following is stated:
"The Association of Metropolitan Authorities is totally against any increase in permitted lorry weights. We are not convinced that the benefits, if there are any benefits, would outweigh any damage to the environment, to living conditions, to our roads and bridges."
In a note which accompanied that statement, I find the following:
"The Association believes that heavier lorries will cause increasing damage to people's homes and privacy, added danger to pedestrians and further damage to roads, services and buildings".
It would appear that Armitage, the Transport and Road Research Laboratory and the Government all base their acceptance of heavier lorries on tests carried out by the American Association of State Highway Officials—which, if I have to refer to it again in the course of my remarks, I will call AASHO—between 1958 and 1960. This point was raised in the debate we had on the 19th April and I do not want to repeat all those arguments. But even Armitage expressed some uncertainties and I will paraphrase what Armitage said. Paragraph 377 said there was some controversy about measurement of damage by axle weights. Paragraph 379 stated that the fourth power law had been criticised by operators. Paragraph 382 said that

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assessments of damage made by fourth power law were approximate and that there was still much uncertainty as to how axles damaged roads. Nothing the Government have said has cleared away all these doubts and uncertainties. In the debate to which I referred, the noble Lord, Lord Bellwin, said that the TRRL had examined the AASHO tests and concluded that they were well-designed. From my reference to the TRRL Report 590 it seems that it was an analysis of the position based on the acceptance of the AASHO tests and of the fourth power law. A digest of Report 590 states:
"The report is a contribution to the assessment of heavier vehicles but does not attempt to evaluate road damage in money terms nor are effects on bridges, road safety, traffic or the environment considered".
In fact, Report 590 of the TRRL states in chapter four:
"There is considerable debate about the applicability of the fourth power law for certain types of vehicles and road construction, but it has been taken as the best means of calculating the overall damage effects of a changed axle spectrum. There is also uncertainty about the best method for calculating the effects of heavier vehicles on bridges".
We know that many local authorities and their associations have expressed concern in particular about the possible effects of heavier lorries on bridges. The paragraphs I have referred to from Armitage leave room for considerable doubts, and the remarks of Ministers in the other place upon these regulations hardly give grounds for full acceptance of the case.
There do not appear to have been comprehensive tests on road damage by lorries undertaken in this country. The AASHO tests were undertaken between 1958 and 1960 in America. I am wondering whether the EEC before issuing its directive had given any thought to carrying out proper tests on an international basis on this question of road damage. Armitage was very definite in stating that lorries create 15 per cent. additional costs of road construction and that 90 per cent. of damage to roads is caused by lorries.
On one thing there is general agreement, Armitage included; there is insufficient knowledge about the effects of lorries on underground services, pipes, sewers and water mains, and about the effect of vibration by lorries on buildings and road furniture. This matter was raised in a Question in your Lordships' House on 20th October. In a supplementary question, I referred to the need for more research to be carried out into these matters. Armitage had stressed the need for research to be conducted on these matters. Following that Question, the noble Earl, Lord Avon, with his usual courtesy and efficiency, wrote to me and said there was no need to hold up Armitage recommendations for heavier lorries for further research to be carried out. I would say that there is no need to hold up safety and environmental proposals in Armitage in order to get through any proposals for heavier lorries.
A report, which noble lords may have seen, appeared in the Guardian on 24th November, which pointed out the limited use of existing articulated tipper vehicles, and that the experience has been that their use has been unsafe and uneconomic. With the Government's proposals in these regulations, a possible change to a 38-tonne articulated tipper could lead to a substantial shift of bulk freight from rail to road. This would be against the Section 8 provisions
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which the Government seek to encourage. The report also said that this could lead to a considerable increase in heavy lorry traffic in areas where there are coal mines, gravel pits, quarries or steelworks. This was brought up in the debate in another place on 20th November. I am sure that anyone reading that debate would agree with me that the Minister's replies on that particular point were somewhat unconvincing.
The noble Lord, Lord Bellwin, said in our own debate on 19th April—and with this I agree, and I think all noble Lords would agree—that the first requirement is to take lorry traffic away from the places where people live and work. The Government argue that their plans for by-passing towns and villages will help to do this. But many of the places that need to be by-passed will not be dealt with by 1990. What is the position of other communities, smaller communities, on other than trunk roads? A recent Civic Trust survey stated that only a quarter of communities with more than 500 persons on roads used extensively by lorries were actually by-passed, and that 55 per cent. of those communities which have not yet been by-passed had no plans whatever for bypassing. Incidentally, in our debates, the noble Lord, Lord Bellwin, referred to the M25 and how, when completed, that would relieve through traffic. But Armitage made absolutely clear that the M25 would only relieve some 5 per cent. of the lorry traffic now going through London, because all the rest—95 per cent—had business somewhere in the London area.
That leads on to the general problem of lorries coming into towns, something that will not be resolved by lorry routes. Lorries seek access to towns, often using narrow, congested roads for access, for delivery, for collection and for overnight parking. That will not be solved by by-passes. Those vehicles will still need to have access. Neither will it be solved by lorry routes. While lorry routes can be useful, noble Lords will appreciate that what some lorry routes will do will be to transfer the problem from one area to somebody else's doorstep. Also the Government have said nothing in their proposals about possible development of transhipment or break-bulk depots. If we are to have the heavier lorries, surely they will be essential if those same lorries seek to have access to our overcrowded areas.
My Lords, there are many points on which questions have not been fully answered by the Government, and while we want to see the package to civilise the lorry in many ways carried through, this should not be in order to get through at the same time heavier lorries, with all the accompanying menaces for our environment.
6. 17 p.m.
Lord Lucas of Chilworth: My Lords, I am sorry that the noble Lord, Lord Underhill, should have taken time this evening largely to repeat the arguments that he laid before us in our debate on 19th April. He has added nothing new, whereas the Government and the media generally have answered many of those questions. Of course, the real reason is that those who are opposed to lorries will remain implacably opposed to lorries, whatever is done. But, of course, they cannot escape the fact that lorries are part of our life without which we would not survive. The noble Lord, Lord

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Stone, shakes his head; he shook his head in April. I do not know how he thinks he can compulsorily transfer freight from road to another mode if we live in a free society, because at the end of the day it is the consumer who chooses the mode, and consumers have progressively chosen, for a variety of reasons, the road mode. That British Rail should succeed in increasing their share of the market I hope most fervently—and I really do mean that—because there are undoubtedly a great many substances and varieties of goods which might be better carried by rail. But they will have to alter their practices, their pricing, their mode of operation, to suit the customer who pays.
This is the first complete package of proposals brought before the country in, I think, post-war years. As such it is to be welcomed. We have had two attempts before, the Dykes Act and the Foster Report, but neither of those in fact attempted to make any kind of balance between on the one hand the "no lorries at any price" lobby, and those who want to go all the way. This package, I believe, does.
The noble Lord, Lord Underhill, spoke about public resentment against the existing lorry. Of course, there is resentment against the existing lorry; it does intrude into our lives and has done so progressively. This is precisely why in 1979 this Government set up what is now known as the Armitage Inquiry. There are those who say that Armitage started off by being biased. I do not accept that at all. Armitage produced a whole range of options, of which the Government have selected those most beneficial to meet both sides of the argument.
The measures might perhaps be described as being those against the lorry or, it might be truer to say, to improve the lorry itself—braking, under-run guards, splash guards, silencing, and so on—for which the industry itself will have to pay. To ensure that the industry pays its fair share of track costs, because there is no subsidy any more, the licensing fees have been quite dramatically altered. In fact, if one takes a typical 32-ton 4-axle articulated vehicle, prior to the March 1982 Budget an annual licence cost £1,200. Since October of this year, with the introduction of gross vehicle weight taxing, it is £ 1,820—a net increase of about 40 per cent. on licensing alone. Do not let anyone be persuaded that the industry is not going to pay for the improvements which the environmentalists are, quite rightly, asking for and even demanding.
The noble Lord, Lord Underhill, asks why we have not gone to a 44-ton 6-axle lorry which, as Armitage points out, will do even less damage? Probably the real reason is that the various benefits that might accrue could easily be offset by the non-benefits. The noble Lord talked about the numbers of lorries. He will recognise, I am sure, that the biggest increase in the number of lorries always ends up at the heavier end of the spectrum. The figures that I have taken out show that between 1960 and 1979 there was a net reduction in the number of lorries on our roads, although it must be admitted that in 1965 there was a slight increase. There is no doubt that, unless alternative modes of transport are sufficiently competitive, when there is an upturn of business and when the factories are churning out more goods, road transport will play the appropri-
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ate part that it has always played in being an extension of that production line and there may well be a return to larger numbers.
Having said that, there is no doubt that as Armitage and the Government have made abundantly clear, there are huge cost benefits to be gained to two or three elements. The first is to the consumers of goods because if road transport costs, which are a significant part of the end product price, can be reduced, halted or curtailed that will be reflected in the price in the shops. There is no doubt about that. There will be benefits to the industry itself. Those benefits will pay for the improvements that we are looking for. It is estimated that reducing the decibel rate of noise can progressively cost the industry up to £120 million a year. That is £1.2 billion over 10 years, to use the phraseology of the noble Lord, Lord Underhill, and is a considerable amount of money. The improvements in braking, under-run guards, and so on, are estimated to cost about £40 million. All those improvements must be paid for and it is not unreasonable to suppose that the money should be earned by increased carrying capacity and increased efficiency.
I asked a colleague of mine in the transport industry to conduct a short and very small survey. Yesterday he gave me the result of a visit to South Wales where he talked to 80 operators. Of those 80 operators, only four said that their kind of business would warrant going into the 38-ton, 5-axle vehicle. People do not jump into this size of vehicle for the fun of it. A tractor unit alone costs about £40,000. A refrigerated trailer costs about £45,000. The cheapest all-purpose trailer, other than the platform-to-container, costs about £25,000 and one must bear in mind that the life of such a piece of equipment is not much more than five or six years. People do not buy heavier vehicles to carry heavier loads just for the fun of it. They do so because there is a need. The British Chamber of Shipping reminds us in a broadsheet issued a few days ago that,
"current road restrictions in the United Kingdom apply only to the first or last few miles of a journey that may be of many thousands of miles since containers are shipped all over the world. United Kingdom exporters are therefore forced to use more containers than necessary with a consequent unnecessary increase in freight cost and are disabled from competing with their continental rivals on the same terms".
Therefore, they are looking for this benefit. The last area of benefit, of course, is for manufacturing industry. I know that my noble friend Lord Montgomery has something to say about that.
These things are for the benefit of all of us. There is no doubt that a quieter vehicle, with the additional axle, better braking, splash guards and all the other things that are contained in the regulations and the other proposed regulations, is of benefit to the community. So at the end of the day there has to be a balance. Whether noble Lords who oppose these regulations feel that the balance has not been fairly struck is entirely up to them. They will form their own opinion. I think, perhaps in my heart of hearts, that the balance has not been fairly struck. I should have liked to see a bigger lorry, but not bigger in size because the Government have made it clear that, apart from the half-metre on the tractor unit only, the lorry must not be bigger. In this context, when I say bigger I refer to the load-carrying capacity. I should have liked to go

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further, but one cannot always have it all one's own way.
The Government have proposed—it is in the regulations and quite clear—for the very first time ever that trailer lengths may not exceed existing lengths. Therefore, there will be nothing bigger there. For the first time the Government have set out width and height limits. So lorries cannot get bigger. I say to my friends in the haulage industry that it is now for them to make sure by the general appearance of their vehicles that they are less obtrusive than hitherto. That is the area from where most of the argument comes. A friend of mine told me the other day that one seldom hears a complaint about an articulated lorry in the Guinness livery, or in a petrol company livery, because people can identify with the need for the goods to arrive at a certain destination; their petrol station, their home-heating plant or the local pub. Where the intrusion to the eye occurs is with that unidentifiable box on an unidentifiable vehicle that is dirty; that has waste paper, perhaps—I make no criticism of that industry, I just use that as an example—spilling out of it. That is where the intrusion comes in.
For those who argue, yes, but, they should not go through towns and villages, of course they should not go through towns and villages. I hope that my noble friend the Minister is going to remind the House of exactly how many miles of new lorry routeing, motorway or otherwise, of how many bypasses, and so on, are going to be constructed perhaps before the end of this decade. The relief comes in moving them away as well as in lessening the numbers. The noble Lord, Lord Underhill, made some play with this fourth power rule, and he quoted the TRRL reports and Armitage, as indeed he did in April. He then asked why there had not been comprehensive tests in the United Kingdom. I cannot see the point of embarking on an exercise to confirm what the AASHO tests have shown. These tests, however imperfect one body or one group may see them to be, have worldwide acceptance. Until somebody produces something better, we should go along that route.
There is one particular point on which the noble Lord touched, and I think the noble Lord, Lord Tanlaw, also raised it in our April debate—that is, as regards large, heavy lorries going into towns, where are the proposals for the transhipment, break-bulk depots?—because we have not heard too much about them, although I think that the noble Lord opposite will remember that I mentioned the Penrith depot. There have been two others since April; one in the West Country, and the other escapes me at the moment.
If perhaps British Railways with some of their surplus land could be brought together with some local authority and some central Government help, and with private sector finance, we could easily see these depots being built, though again there are objections to where they are going to be built, because they have to be built near the towns. Then we might get away from that problem. That would enable local authorities to implement more effectively the proposals contained in the so-called Dykes Act.
If the Government have not gone quite as far as everybody would wish, there are two sides to that point. I believe that these measures go a tremendously
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long way towards meeting the complaints against the large lorry. I believe that it is up to the railways—they have the Section 8 grants, and some have been made already—and they have the opportunity. I do not believe that in our kind of society an opportunity should be provided by denying other people their opportunities. At the end of the day, such denial would appear in our housekeeping bills. That, I suggest, is what nobody in your Lordships' House wants. I believe that the Government have gone as far as at this moment in time they could reasonably go. I should like to see some changes in another five or six years' time when we have assimilated this package. I hope that your Lordships will reject the Prayer in the name of the noble Lord, Lord Underhill.
6.35 p.m.
Lord Tanlaw: My Lords, it is always difficult to follow the noble Lord, Lord Lucas of Chilworth, in his homage to the heavy lorry. I feel that the lorries versus people argument is often wrongly put—not by the noble Lord, but in front of the general public. That is why I am particularly grateful to the noble Lord, Lord Underhill, who has sought in his Motion to annul the regulations to allow us all to question the Government about these regulations in this more general context of lorries and people.
We accept that 90 per cent. of the regulations are necessary, and indeed are welcome. Also, there are factors that will, hopefully, create more employment as a result of them. The position that we take from these Benches is one of whether the considerations of conservation, environment and quality of life are going to be protected by these regulations and are not just given a sort of blessing by them in words only. It may be worth a moment to say that anyone who talks about the environment, the quality of life, is classified to be on the side of the righteous, and anyone who puts arguments against is considered to be on the distaff side. It is not quite like that when it comes to these regulations.
As I see it, it is in the form of a balance sheet: a balance sheet where on one side the environmentalists are—and I think that is where a majority of sensible people are—requesting more by-passes, and indeed the Government have recognised this, and asking for more heavy lorry parking. We are indeed asking for more depots of transfer in big cities. We are asking for more strengthening of bridges, more safety, more inspectors, more weighbridges, and more heavy rail freight. That is on one side of the balance sheet. On the other side, we want to see whether these regulations are going to produce less damage to pavements, sewers, water pipes, underneath the streets, and to historic buildings which are damaged by vibration, and noise, of which we also want less. We also want less pollution.
In the debate in another place these points were raised by many Members of Parliament. But interestingly enough, having read it, I could not find a single Member of another place who went so far as to welcome these regulations. I think that this was an oversight. They went really to question how it would affect their constituents, who were frightened by heavy lorries. This is a general feeling which is difficult to quantify. There is no doubt on looking at that debate that members of all parties—and most of them seem

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to have been from the Minister's side of the House—were considerably worried about the effects that these regulations might have.
There was one exception which came from the honourable Member for Hove, Mr. Tim Sainsbury. He argued that the new regulations should improve the flow of baked beans from Wigan to all points south. I am well aware of this feeling of relief that we all have that at least there is one good side to these regulations. The point that the honourable Member was making was not only about the flow of baked beans, but that the flow of this kind of freight would not be affected by the regulations. The load would be evenly distributed over all the axles.
One of the doubts raised by the noble Lord, Lord Underhill, and by many Members of another place, is this: when there is a mixed cargo on one of these heavy lorries, how is one to ascertain whether the loading is correctly distributed over the axle? That can only mean more weighbridges. I believe that of the 800 weighbridges now installed in the country, 200 are not suitable for that kind of assessment. Thus, my first question—this follows the queries raised by the noble Lord, Lord Underhill—is whether the new regulations, when they become effective, can be tested at all weighbridges, and how many of the present weighbridges contain equipment for assessing whether the load in a closed container is properly distributed.
To paraphrase an intervention in another place by Mr. Michael McNair-Wilson, the Member for Newbury, a study by Cambridge econometrics suggested that an increase of £500 million in civil works, such as road, water and sewerage works, would produce 40,000 jobs in construction and 20,000 in the construction supply industry. Those jobs could be achieved at a cost of £2,300 each, compared with £3,100 for a job through equivalent spending on employment subsidies, or £5,000 for an unemployed person. Will the regulations do anything to progress the very necessary civil works which are now outstanding throughout the country, and which are directly related to the increased density or increased weight of traffic which will occur as a result of the regulations?
The Minister of Transport, Mr. David Howell, said in another place that since the Armitage Report we had added by-passes to the trunk Toad programme to the value of £200 million and approved transport grants of £245 million for local by-passes, and the Minister said he hoped to approve an extra £154 million for 1983–84. "This is big money", he said. By my arithmetic, that comes to about £600 million. I would like your Lordships to bear that figure in mind because the Under-Secretary of State for Transport, Mrs. Chalker, said that the 38-tonne lorry would, from the outset, cover 100 per cent. of the road track costs. My question is: will the £600 million in works specified by the Minister of Transport be covered by the duties and road taxes imposed on heavy lorries?
I ask that question because the Under-Secretary was categoric that the regulations would pay for themselves and there would be no subsidy element in road track costs. I find that difficult to accept, although 1 should be pleased if the Minister would confirm it for me. I would go further and hope that this is not just the
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end of the number of by-passes that require to be built. There remain outstanding a great number for which plans have been made but for which no allowance has been made on the financial side. I understand, further, that another £ 100 million is required for the strengthening of bridges. Is that also covered by the taxes paid by the road haulage industry?
Is it possible, as Armitage implied, that a 4 to 5 per cent. switch of heavy freight traffic from road to rail would solve many of British Rail's freight problems and, indeed, bring about its profitability? Bearing in mind that about 70 per cent. of all heavy freight on the Continent is carried by rail and only 44 per cent. of heavy freight is so carried in this country, it seems that a very small change in policy is needed—with, I imagine, only a small incentive—to bring about a loss-to-profit situation, as put forward by the rail industry.
I wish to finish with a generalisation, one which may extend the thoughts of the noble Lord, Lord Lucas. I spent two weeks in the great city of Los Angeles, a city dedicated to and designed around road transport. They are now faced with the immense problem of installing a railway; they wish to run one from the airport to the centre of the city and a railway from the city centre to San Diego. The wayleaves or rights have gone; there is nowhere in that great city where they can put a railway system which they now find they require.
My worry is that if the enthusiasm which Her Majesty's Government now seem to have for road transport goes too far, the time may come, as the rail system and routes are closed down and the tracks are used for other purposes, when they may be required again. I would give, as only the one example, the line from Stranraer to Dumfries, which I fought to keep open in 1959 when I first stood as a candidate in Galloway. Once the systems are shut, they are unable to be reopened. If Los Angeles is now thinking of installing a rail system, rather late in the day, I am wondering whether our Government will protect the rail system in this country for the future, or whether they will go further with the roadification, if I may use that word, of rail routes.
In The Times today I read that the Government's Centre for Policy Studies, or Think Tank, has taken on a Mr. Ibbotson, a retired railway chairman—of Southern Region, I believe—mainly, it seems, because he has written a book in which he has suggested that the railways should be converted into roads for highspeed buses and lorries travelling at about 80 m.p.h. with specially trained drivers. May I ask the Minister to indicate the terms of reference of the Centre for Policy Studies with regard to plans for using railways for more roads? Is it the Government's intention to use the new 38-tonne lorries on converted rail tracks?
Would the Minister also give some advice about speed limits? I am interested to note Mr. Ibbotson's suggestion that high-speed buses and lorries should travel at 80 m.p.h. down converted railway lines. The present speed limit on motorways for heavy lorries is, I understand, 60 m.p.h. Would the Minister confirm that? Would he also confirm that it is the same limit for long-distance buses? Why was it that during the rail strike, when I had to drive to Scotland, between the Preston and Carlisle section of the motorway I had great difficulty in overtaking buses doing in excess of 100 m.p.h.?
Noble Lords: Oh!
Lord Tanlaw: Perhaps I may have temporary leave to exceed the speed limit, my Lords. What is the speed limit for long-distance buses on such routes, and how well is it monitored? I ask that because it is difficult for private vehicles to proceed along motorways, often in difficult conditions, when, as I say, buses are travelling in excess of 100 m.p.h. The Minister will perhaps give consideration to those points when replying to the debate.
6.49 p.m.
Viscount Sidmouth: My Lords, the regulations which are the subject of this debate have been presented by the Government as though they were a long-needed charter for the proper control of heavy lorries, with the hope, no doubt, that any dissentient voice will either be silenced or else dismissed as being opposed to a package so desirable from an environmental point of view. Without doubt, most of us would agree that reduction in noise, better safety regulations, more by-passes, and taxation related to damage caused, are very desirable objectives. But they are all very much required in relation to the large fleet of existing 32-tonne lorries, to which in fact very few of the provisions of the package would apply. What we are actually being offered are some declarations of intent to sugar the pill of the introduction of the 38-tonne lorry.
Of course, the Minister has for some time been under pressure to increase the maximum permitted weight of lorries in this country by up to 35 per cent., and he has yielded to this to the tune of about 17 per cent. Since the size of the trailer is very rightly not to be increased, the extra traffic to be won for road transport will be largely the kind of tonnage loads which are currently transported in the main by railways and waterways, and of which, most people would agree, less, not more, should be carried by road.
There is a suggestion that the introduction of heavier lorries would mean fewer such vehicles on the roads. It might be so temporarily if 38-tonners could overnight be substituted for existing 32½-tonners. But by the time that the changeover could be completed, the only effect would be that any possible reduction in numbers would have been overtaken by the further transfer to roads of traffic from railways and waterways.
In introducing the regulations and the so-called package, the Government admit that the environmental cost of road transport is already too great and must be reduced. They do not really spell out the material cost of doing that, but it will be high. Most of the items listed are already overdue at the present rate of traffic. Research into noise reduction has been in hand since 1971, and prototypes halving noise levels to 80 decibels were demonstrated four years ago. Noise tests for lorries could, and should, be introduced now, and certainly not await the "further research" advocated by the Government.
Improved braking performance to conform to EEC standards is also long overdue, bearing in mind that a 38-tonner, at a speed of 50 m.p.h., which is recommended in the Armitage Report, will generate an increase of 71 per cent. in impact force, as compared with an existing 32½-tonner at 40 m.p.h.
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Sideguards and rearguards are also welcome improvements, though they will not effect existing lorries. Finally, in this regard the need to do something about spray is acknowledged, but presumably this, too, will have to await "further research". Enforcement of the new regulations will have to be strict, and will entail increases in the establishment.
Turning to the question of access, I would say that the addition of 20 by-passes is welcome. However although some 200 are, I believe, under construction or in the pipeline, even this total is less than half the number which, it has been estimated, are urgently required. In my opinion it will certainly be the end of the century before they can all be completed. Even so, the problem of access will remain. As the Armitage Report made clear, the essence of road transport is its door-to-door facility, without the need for transhipment. If this is to be maintained, the heavy lorries will still require access not only to towns and cities, but also to villages and country lanes. "Taking the lorries away from the people", for which the report also called, however desirable, can be achieved only through a drastic rethinking of the whole basis of road transport.
Finally, we come to the vexed question of damage to existing roads, bridges and underground pipes and sewers, as well as houses and structures. It seems difficult for experts to reach agreement in quantifying the damage, probably because in addition to the axle load, there come into the equation a number of other factors, such as speed, springing, load distribution, and many others. However, it seems reasonable to suppose that bridges—certainly those over 20 metres in length—will be adversely affected by increased lorry weight, and many will need strengthening. Vibration, which affects underground services as well as structures, must also have a correlation with weight.
It should be borne in mind that the specification for the new 38-tonner yields a "standard axle" of 1·96, which is 25 per cent. more than the "standard axle" of the existing 32½-tonner. Furthermore, the amendment permits an increase in axle weight to 10·5 tonnes, despite the assurances that no increases would be allowed. It is difficult to believe that the increases will not lead to greater damage.
All in all, the heavier lorries will place a heavy burden on the public purse in the form of structural damage or the improvements necessary to prevent it. In the past this element appears to have been underestimated, or played down. A current case in point—there are several cases that one could quote—is that of the premature and costly repair programme which has been found necessary for the Severn Bridge. While it is true that some of the programme is due to an underestimate of the amount of traffic using the bridge, I understand that there has also been a failure to appreciate the amount of damage that it would actually cause. I believe that the raising of the maximum weight of lorries to 38 tonnes has not been justified and that its cost in material and environmental terms has not been fully spelt out. Therefore I am grateful to the noble Lord, Lord Underhill, for bringing forward the Motion, and I support it.
6.56 p.m.
Baroness Stedman: My Lords, we are grateful to the noble Lord, Lord Underhill, for giving us the

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opportunity to press the Government on some of the points arising from the regulations. Speaking as a predecessor of the noble Earl, Lord Avon, in the Department of Transport, I personally am convinced of the economic arguments for heavier lorries, but in the absence of any real indication by the Government of much speedier implementation of the necessary environmental improvements, I cannot at this stage give my unconditional support to the regulations.
I accept all the arguments put forward by the manufacturers and the road haulage interests, but I believe that the environmental impact also must be considered. We are worried about the inadequacy of our existing roads to carry the larger vehicles and the heavier loads. We believe that there will be a need for massive public expenditure on the reconstruction of some of our existing roads, and since the Government's philosophy is one of minimum public expenditure, how can we be sure that they will cope with the problems—and cope with them quickly?
We need many more bypasses before the heavier lorries ought to be approved. I accept that this is an integral part of the package now being offered, but why cannot we have more bypasses before the weight is increased? We should like to see more freight moved on to the railways, and we welcome the increase in the greater availability of the Section 8 grants. We should also like to see our major rivers and our inland waterways used much more for freight transport, and thus take some of the juggernauts out of our cities and villages.
What about the timescale for all the environmental projects that really are needed? The noble Lord, Lord Lucas of Chilworth, referred to the noise element. We used to talk about having quieter lorries in the 'eighties. It seems to me that we are now beginning to talk about having quieter lorries in the 'nineties. Can we really expect determined action from the Government on noise levels—and quickly—and are the Government willing to give even financial help, if necessary, for more research into noise levels?
When are we to have more weighbridges and more traffic examiners? All three of the major local authority associations have said that they are against the regulations, and in one of its documents the AMA has suggested that 25 per cent. of the vehicles that are now inspected are overloaded. Will there necessarily be less overloading with the increased weight limit? Will the future enforcement procedures be better than those that we have at present? Will the required staff be trained—and quickly—and will the money be found to do that?
We are also concerned, all of us, about the effect of the juggernauts and other heavy traffic through our inner cities, through our historic town centres, and through our lovely old villages. We are worried, too, about damage from vibration—not only to our historic buildings, but to the homes of people who live on the lorry routes. Lorry action areas have been referred to, but how long will it be before we get them? As I understand it, consultations are only just beginning.
Meantime, how do we prevent the heavy lorries finding their own alternative routes through residential areas when the main routes are congested? What help is going to be given to the local authorities to provide
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parking facilities for lorries? Too often they park outside the home of the driver and, because of their size, outside his neighbours' home as well. They wake everybody up when the lorry starts off in the early hours of the morning; and sometimes, if they are refrigerated vans, they keep everyone awake at night. It is not possible to implement an overnight parking ban for lorries until the local authorities are able to provide conveniently situated lorry parks.
These are problems that have been with us for a long time, and they are not going to go away; but I think the Government have to accept that if these regulations are approved then, to be sure of having public support for the heavier lorries, they must come up with a much more convincing programme of environmental protection and safeguards than we have seen or heard to date.
7.1 p.m.
Viscount Montgomery of Alamein: My Lords, I must first apologise to the noble Lord, Lord Underhill, for not being in my place when the debate started. I understand there was a somewhat rapid change in the tempo of the previous debate, and my intelligence on the subject was clearly quite inadequate. That is by way of explanation rather than being an excuse; but it means that I did not hear all that he said, and I shall naturally read it tomorrow with interest.
It is difficult to follow the noble Baroness, Lady Stedman, as she is a considerable expert on environmental matters. Indeed, I have listened to her previouly in this House on this subject, and even earlier, when I was concerned with local government. But I think that there are still misconceptions about lorries and the damage they do. The fact of the matter is that lorries are here to stay; we cannot halt the wheel of progress. This was put much more eloquently than I can put it by my noble friend Lord Lucas of Chilworth.
Furthermore, one does not need to look at lorries totally in isolation. Of course railways are important. The fact of the matter is that rail freight in Europe is on a massive scale, but this has not precluded a major development in road freight transport as well. These things can, and indeed do, run in double harness; and in the sort of society that we are trying to create in this country it is, as my noble friend Lord Lucas said, ultimately the consumer who will make the decision.
I was also interested in what the noble Lord, Lord Tanlaw, had to say. I think I ought to point out to him that Los Angeles is rather a different proposition from Stranraer; and however optimistic may be the projections about Stranraer, I do not think it will equate with Los Angeles until well into the 22nd, if not the 23rd, century.
Lord Tanlaw: My Lords, I thank the noble Viscount for giving way. The point is that it has already happened in Stranraer. There is no railway between Stranraer and Dumfries.
Viscount Montgomery of Alamein: That may be, my Lords, but it does not mean that there could not be in the future. As to the other point which the noble Lord made—and I think that perhaps this is a personal matter—it may be he should take to flying. I appreciate, of course, that, if he does take to flying, at

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its present speed it will actually be slower, but it might be safer.
For my part, I welcome these regulations, and I should like to congratulate my noble friend Lord Avon on their introduction. As he will remember, ever since the debate on the Armitage Report initiated by Lord Underhill in April, I have been pressing him, by means of both oral and written Questions, that something should happen, and it is very gratifying that the egg has finally been laid. Of course, the egg may not appeal to everybody—nothing ever does—but it will certainly be welcomed very widely by manufacturing industry. It will be welcomed, not only by the heavy goods vehicles manufacturers; it will be welcomed also by the suppliers of parts and components, and all the many ancillary industries which are part of the heavy goods and transport industry.
In this context, of course, 40 tonnes would have been more desirable than 38. Forty tonnes is the maximum weight allowed on the Continent, and it would have been more sensible to go for the same regulations as are in force in the EEC. But 38 tonnes is very acceptable, and it is at least a decision. In fact, what industry wanted was decision on this matter, and decision we have finally had. For that reason, I hope the Government will reject the Motion moved this evening by the noble Lord, Lord Underhill.
7.6 p.m.
Lord Teviot: My Lords, I shall be even more brief than I thought I was going to be. I think your Lordships have listened to a very high standard of debate so far. I cannot consider myself in any way technically minded so as to be able to enter into some of the arguments that have been put forward, and there is very little room for original thought. But I believe this order to be sound, comprehensive and sensible, and the reasons are simple. For one reason, the distribution costs in relation to the overall cost of a manufactured product are high. Perhaps I am oversimplifying this, but, surely, allowing lorries to carry heavier weights will, hopefully, mean that prices can be held and, therefore, that inflation can be kept down, especially concerning food prices, in which respect, undeniably, I think, this Government have a very good record.
Before one gets on to the subject of roads, surely one has to take account of pollution. With these more modern lorries, the risk of pollution is very much less. I think that we as a nation have a fear, or anybody has, really, of anything being big or larger than ourselves. It is a sort of psychological paradox. What is more, people have always become terribly fussed and worried about lorries. In fact, I think one feels a jolly sight safer crossing a road when there is a lorry coming, rather than a car, because one knows that it is going to stop. On the whole, the drivers are better; and the modern lorry is less likely to stink than the average car.
One is also delighted to see the higher priority given to by-pass schemes. If we err as a nation, we do so by trying so hard to please everybody, which is impossible. One can think of many towns and villages where a by-pass is so overdue and where one would have gone ahead if there had not been endless complaints, some petty complaints, by some people. I think people always agree that there is a need for a by-pass, but never that it should be anywhere where it
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can affect them. In the end, when by-passes or motorways have been built, there have been few grumbles because, on the whole, they are constructed with taste and, in some cases, even with elegance, especially when it comes to bridges.
It is not necessarily lorries which make for congestion; it is still, I am afraid, the private car. Furthermore, as to transferring things to another mode of transport, to rail, that is a very old argument. When you consider the number of railways being closed, in consequence there are very few left, and they are not the ones which would be terribly suitable for freight, anyway. They are generally branch lines, which would not carry much freight. Therefore, I would agree with most of your Lordships tonight in supporting the Government, and I regret, on this occasion, not to agree with the noble Lord, Lord Underhill.
7.10 p.m.
The Earl of Avon: My Lords, in speaking to these Regulations, S.I. 1982 No. 1576, perhaps I may thank the noble Lord, Lord Underhill, for giving the House the opportunity to discuss them, and also for his presentation, which was very modest and very equal-handed at the beginning. At the same time—something which I confess I forgot to do last week—may I congratulate the noble Lord on his appointment as Deputy Leader and say how nice it is to have him in that capacity?
My Lords, emphasis this evening has been placed on the need to protect people, buildings and the environment from lorries and, particularly from annoyance, as well as on capacity—and the noble Lord, Lord Tanlaw, and the noble Baroness, Lady Stedman, made this point. The Government share that concern. The whole community has been worried and is worried, and recognition of the seriousness of the problem and of the fact that action is needed has been the basis of the Government's approach throughout. That is why I look this afternoon for support for this package, which, for the first time, makes a comprehensive, practical attack on the problem.
The Government are determined to control lorries and to grapple with what was threatening to become an intolerable situation. What we are talking about is the quality of people's lives: the choice to live relatively free from danger, dirt, damage and disturbance. Almost every Member of this House knows the problem from his own experience. Disturbance by traffic generally and lorries in particular is a matter of consuming concern in many communities throughout the land. The problem has not been evenly spread. Fortunately, many of the lorries have gone by motorway and high quality roads away from residential areas and shopping streets. Nevertheless, too many people have been badly affected.
All this has happened with existing lorries. This is the key to the whole lorry situation. Lorry problems are here with us now. They are not some figment of the future which will be created by heavier lorries. It is the failure to understand it which has put so many people, people committed to protecting the environment, on the wrong side of the argument. The noble Lord, Lord Tanlaw, spoke about the balance sheet. I hope that, as I go through my remarks, he will see that the pluses really are the commitment which we intend to fulfil. If

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I may explain, first, the Government set up the Armitage Inquiry. It is worth going back to that report. It was Armitage which first authoritatively described the causes and consequences of the growth in lorry traffic and the effect on people and the environment; and the committee mapped out a way forward. They concluded that there must be improvements to cope with the effects of existing lorries. They made 58 detailed recommendations. We have accepted, in whole or in part, 51 of them and gone beyond some of them. Armitage did not make the mistake of concentrating on the weights issue. It produced a comprehensive package of measures, covering the whole spectrum of the environmental, safety and economic effects of lorries.
But this debate has, rightly, paid attention to the weights issue. It bears repetition perhaps that Armitage saw an updating of our outmoded weights regulations as helping the environment. I should like to quote the final paragraph:
"We strongly believe that the measures which we recommend provide a way of significantly reducing the effects of lorries on people and the environment without putting at risk the vital rôle of road freight transport in our economy. They enable us to gain economic advantages and substantial environmental advantages. They considerably reduce the effects of heavy lorries on people and the environment. Heavier lorries help in the improvement. Heavier lorries, even when considered in isolation from the wider changes affecting all lorries, would bring both economic and environmental benefits."
The validity of that conclusion, and the supporting evidence for it, have not been seriously challenged. And the Government accept the fundamental analysis and main recommendations of this distinguished inquiry. But I submit that there has been much more to it than that.
In the light of the Armitage Report, the Government published last December their White Paper, Lorries, People and the Environment, which set out their basic approach. But, since then, we have very substantially improved on our package of measures. We really have listened to and responded to the representations which have been made. When I say "responded to", the sheaf of press notices which the noble Lord produced might have some relation to this. The package deals with three main themes: improving the lorries themselves; controlling and influencing where they go; and enforcement of standards.
We have reduced the proposed increase in the maximum weight of 5-axle articulated lorries from 40 tonnes to 38 tonnes. My noble friends Lord Lucas and Lord Montgomery reflected the opposite view to this. However, I am sure that this is the prudent course. The great bulk of the economic benefits, the cost savings, from heavier lorries can be obtained from 38-tonne lorries. British industry has relatively little call for 40-tonne, as opposed to 38-tonne, lorries. Individual 38-tonne lorries on 5 axles are no more damaging to the roads than existing 32·5-tonne lorries, and overall will mean there is less damage done to the roads to carry the same amount of freight.
We have abandoned altogether the proposal to increase the weights of 4-axle articulated lorries to 34 tonnes. This has disappointed many hauliers who wanted to use their existing lorries at higher weights without alteration. But the Government are not prepared to allow any lorries which will do more damage to the roads than existing lorries. We have
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abandoned any suggestion that there should be an increase in the weights of drawbar trailer combinations—that is, lorries pulling trailers. These are little used in Britain, in contrast to the Continent. Nor is there any question of our accepting lorries which would cause substantial additional repair costs to bridges. One or two noble Lords quoted from the AMA. Perhaps I may quote from the Association of County Councils, a major bridge owner. They have accepted that 38-tonne lorries, as proposed, cause no additional damage to bridges overall, and that where problems do exist, these are generally caused by existing traffic. I might add that the ACC, which represents the great majority of highway, traffic and planning authorities in the country, has welcomed broadly the Government's package of measures.
We are making lorries safer. From last month, higher braking standards were required. Sideguards and rearguards are to be mandatory. We have gone beyond Armitage in committing ourselves to a mandatory requirement to cut down spray, as soon as a standard is agreed in BSI. Lorries are being made quieter. From April the limit for the heaviest lorries will be reduced from 91dbA to 88dbA. This will be followed by a stricter test method in 1984 which will require all new models to be quietened by up to a further 3 decibels; 38-tonne lorries will have to meet exactly the same, fast improving, standards as 32.5-tonne lorries. And tighter noise limits will also reduce low-frequency emissions, which cause most vibration. There will be further substantial reductions in lorry noise. We are pressing for the fastest possible action by the European Community on this, and putting some £5 million into research contracts as part of the Quiet Heavy Vehicle 90 Project. Even though we improve the lorries, we should do all we can to get them away from people and I think my noble friend Lord Lucas made this point.
So we have taken action on many more bypasses. In the last year design work has been started or resumed on bypasses for nearly 40 more communities. The whole bypass programme is now very large indeed. Altogether 220 towns and villages will have relief from traffic in the next 4 to 5 years. And these are not empty or vague promises. Work is under way. This year, for example, Government financial assistance should enable counties to go ahead with 35 bypasses—and a further 35 next year. By the end of the decade virtually all towns on trunk roads that need bypasses should have them. Since Armitage, we have added bypasses to the trunk-road programme and the noble Lord, Lord Tanlaw, quoted the figures so that I shall not do so now. I shall come back to the point that he raised about it later.
We have taken a tougher line on lorry routeing, backing up advice and encouragement and circulars to local authorities—who rightly have the responsibility because only they have the local knowledge—with financial incentives through a transport supplementary grant. We have also accepted the novel idea of lorry action areas to help especially badly affected places, where re-routeing is not possible. Local authorities have responded enthusiastically. We hope to support 60 schemes in the next TSG settlement, which will be made soon.
We have strengthened the grants to get freight on to the railways and canals where that makes environ-

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mental sense. The maximum fate of these "Section 8" grants has been increased to 60 per cent. The grants have also been extended to waterways and to Sealink and Freightliner, just as both British Rail and Armitage wanted.
Some people say we should not introduce our package of measures because of the possible effect on BR. But no one, least of all BR, wants artificial protection. What we all want is free and fair competition. We shall tax the 38-tonne lorries fully to cover road track costs from the outset. This will ensure fair competition. And BR envisage that the more generous Section 8 grants will bring them substantial extra business.
We have stepped up enforcement, recruiting more traffic examiners and increasing expenditure on weighbridges by 50 per cent. Many more lorries are being checked now—and perhaps this is the figure that we all ought to look at; 25 percent. more than in 1980. Enforcement authorities can and do detain vehicles and prevent them moving on until their load has been reduced to the proper limits. This is a big deterrent.
It could be argued that all our proposals are desirable and that we should have all of them except for the proposed increase in weights. The noble Baroness, Lady Stedman, put that point herself. I am afraid that we do not accept this. The increase in weights, as Armitage made clear, itself contributes to improving the environment by reducing the number of lorry journeys for a given amount of freight: fewer journeys to cause disturbance, noise and accidents.
British industry, too, will make big economic savings. The whole of industry agrees. Many individual examples have been given, and those who read Hansard of the other place last week will have seen some. Incidentally, rather than what the noble Lord, Lord Tanlaw, suggested, I think that the point which the honourable Member for Hove was making was that there would be fewer lorries coming down from Wigan with baked beans on them. A 38-tonne lorry can offer 20 per cent. or more payload than a 32.5 tonne lorry. How can we in one breath tell industry that it must become more competitive and in the next say that it cannot have the means to do so? There will also be a boost for United Kingdom trailer and lorry manufacturers.
If I may now answer one or two points made during the debate, to take the point made by the noble Lord, Lord Underhill, about the articulated tipper lorries, we expect most of the new and modified tippers to measure within the range 12 to 12½ metres. Although that is marginally longer than the present 11 metres, longer vehicles would still not be necessary to carry the load. This I understand is the view of industry. By having these longer tippers, there will be a reduction in their number; and a quarry, for example, could despatch its product with 23 per cent. fewer 12½-metre articulated tippers at that limit.
The noble Lord, Lord Underhill, also produced the fourth power rule. If I may, I shall in response confine myself to two points, as my noble friend Lord Lucas mentioned this matter. First, this is an internationally recognised way of calculating road damage used by highway administrations in many countries and, in the opinion of the Transport and Road Research Laboratory, gives the best representation of the damage caused by axles of different weights. Secondly, whether
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the fourth power rule is exactly right—whether it should be, for example, a fifth power rule—is not critical to the question of whether the 38-tonne vehicle will cause less damage. The fact is that the 38-tonne vehicle has one axle that is very slightly—3 per cent.—heavier than at present, balanced by substantially lighter trailer axles. However the calculations are done, the saving in road damage from the trailer with the extra axle is far more significant than the additional damage from the heavier drive axle on the tractor. Armitage concluded that the fourth power law is the best single approximation there is and is universally used by authorities responsible for road design and lorry weights.
The noble Lord, Lord Tanlaw, made a point about the higher proportion of freight going by rail in Europe. This is mainly because of international traffic which is not available to British Rail. Armitage studied this point. I quote from paragraph 46 of his report:
"International traffic accounts for over 20 per cent. of all rail tonnage in France and West Germany, compared to 2 per cent.in this country. Indeed, excluding this international traffic, British Rail have the same share of all freight traffic in terms of tonnage as the railways do in France and West Germany and a greater share than on other European railways".
The noble Lord, Lord Tanlaw, also spoke about vehicle taxes. The vehicle excise duty, like other taxes, goes into the general expenses of the Exchequer. The point is that heavier lorries of 38-tonnes will have to pay for all of their allocated road track costs thus ensuring we believe fair competition. The noble Lord also quoted from Mr. Ibbotson. I feel that I cannot comment on an article which was written today in The Times. He also questioned the speed limits on motorways. I must say to him that if he is trying to overtake buses going at 100 miles per hour, he is confessing to something and I hope that parliamentary privilege will allow him to escape from the judges! Next time he sees a bus travelling at over 70 miles per hour he will know that that bus is disobeying the law. The speed limit for lorries is 60 miles per hour on motorways.
The noble Lord spoke about weighbridges. All dynamic weighbridges allow one to weigh individual axles, even of a closed container lorry, so one knows how well the load has been distributed inside the lorry. The modern weighbridges are being installed quickly. We already have 35; we shall have five more soon, and we are looking at sites for a further 80.Ihope that that will give the noble Lord some confidence.
The noble Viscount, Lord Sidmouth, in his interesting speech, suggested at one stage that we had no regulations now on European Community braking standards or their noise. But of course in fact we do because last month we introduced higher European Community braking standards. The present noise regulations will be substantially strengthened next April. The noble Viscount also mentioned standard axles of 38 tonnes and 32.5 tonnes. They produce almost exactly the same pressure.
The standard axle of a vehicle is of course a number representing the amount of damage that vehicle does to the road. It is calculated by adding the fourth powers of each individual axle and dividing by 10,000. If I may give an example, 64+104+84+84equals approximately 21,000. Therefore standard axles from

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such a four-axled 30-tonne vehicle have a value of 2·1. Noble Lords who have studied Armitage will find that in paragraph 377.
We are debating this evening not only the general issues affecting lorries, people and the environment but also a specific Motion to annul Statutory Instrument 1982 No. 1576. Perhaps I may therefore tell the House very briefly what this contains. It deals with four aspects of the construction and use of heavy goods vehicles. These are: maximum weight, maximum dimensions, the fitting of rear underrun protective devices and the fitting of side guards. I have already gone over the reasons why we have decided to permit an increase in weight. We have also decided, for much the same reasons, that detailed control is necessary of the spacing between adjacent axles. This is achieved by the table set out on page 17. The maximum weight on wheels and single axles are set out in the table on page 13.
The new figures for the length of articulated vehicles and semi-trailers are in the table on page 3. The figure of 15·5 metres is an increase of 0·5 metres on the existing legal limit which, as I have explained, is incompatible with the slightly longer and improved tractor units that have come into use during the past 10 years.
The figure of 12.2 metres, which is 40 feet, controls the length of new semi-trailers to ensure that the increase in permitted total length does not result in any increase in the semi-trailer part of the articulated vehicle. Rear underrun protection is dealt with on pages 4–6.
The provisions on sideguards in regulations 46C and 46D are set out on pages 6–9. This requirement breaks new ground as there is at present no international standard, and only a few countries have the most rudimentary provisions designed to cover the space at the sides of vehicles, to prevent pedestrians and cyclists from getting trapped under the vehicle. Rear underrun protection and sideguards will be a requirement on all new trailers manufactured after 1st May 1983 and all new motor vehicles manufactured from 1st October 1983 and first used on or after 1st April 1984.
Taken together, these provisions will result during the coming years in a progressive reduction in the number of fatal and serious accidents in which heavy lorries are involved. The regulations will reduce the number of heavy articulated vehicles and increase their safety through the fitting of sideguards from next May. Over a longer period all lorries, regardless of weight, will become safer as sideguards and rear underrun protective devices are fitted by the manufacturers. Improved braking standards on new lorries from last month will also help sustain the reduction in accident rates which we have seen over the last decade.
I recognise the genuine concern of your Lordships about the environment. As I said, the Government share it. The regulations, with all our other measures, show that this is one instance where we can serve industry and the environment at the same time. In every single measure in our heavy lorry package the environment has been considered. The package as a whole will be good for British industry, let the lorries run fuller and add an extra axle to make sure there is
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no extra damage to the roads. In this way we can help industry, jobs, costs and have fewer of the lorries which caused the trouble in the first place. I commend these regulations, my Lords.
7.31 p.m.
Lord Underhill: My Lords, as the noble Lord, Lord Tanlaw, said, the Motion has provided an opportunity for noble Lords to question the Government, and various noble Lords have taken advantage of that opportunity. I want to comment on just one contribution, that of the noble Lord, Lord Lucas of Chilworth, because I must reject what he said—that moving this Motion was opposition to all lorries at any price. I thought I had made that position absolutely clear in the opening words of my speech, but I wish to stress that what many noble Lords and myself seek to ensure is that the lorry is made more acceptable; and a number of speakers emphasised that point as well. There was general agreement, as I expected, to the proposals in the regulations which lead to safety improvement and to environmental improvement. But, as many noble Lords have said, there is a long way to go yet, particularly in dealing with improvements in the environment.
I am grateful to the noble Earl, Lord Avon, for his detailed reply, which I am certain other noble Lords as well as myself will study with keen interest when we read Hansard in detail tomorrow. I hope the Government will take serious note of some of the expressions of concern that have been voiced this evening. I hope the Government will monitor the developments, and I am certain that other noble Lords will themselves monitor what happens when these regulations and other proposals in the Government's package come into effect.
I adhere quite firmly to the criticisms of and objections to the heavy lorries which have been supported by other noble Lords, but I shall not be pressing the annulment of the regulations, which after all have been approved in the other place. I believe the debate has been helpful and I should like to thank all noble Lords who have taken part. I stress again my hope that the Government will recognise the serious points of concern which have been expressed. I beg leave to withdraw my Motion.
Motion, by leave, withdrawn.
House adjourned at twenty-six minutes before eight o'clock.

  FARM CAPITAL GRANTS: PROSECUTIONS
  FARM CAPITAL GRANTS: PROSECUTIONS
  EUROPEAN PARLIAMENT: ELECTORAL PROCEDURES
  EUROPEAN PARLIAMENT: ELECTORAL PROCEDURES
  METROPOLITAN POLICE: TRANSFERS TO ROYALTY PROTECTION BRANCH
  METROPOLITAN POLICE: TRANSFERS TO ROYALTY PROTECTION BRANCH
  LEEDS CIVIL SERVANTS: ETHNIC SURVEY
  LEEDS CIVIL SERVANTS: ETHNIC SURVEY
  THE ROYAL MARSDEN HOSPITAL: DIAGNOSTIC UNIT
  THE ROYAL MARSDEN HOSPITAL: DIAGNOSTIC UNIT