Sitting of 13 December 1983

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

    Mental Health Act 1982
    Mr. Proctorasked the Secretary of State for Social Services if he will make a statement on the progress of the implementation of the Mental Health Act 1982.
    The Minister for Health (Mr. Kenneth Clarke): The Mental Health (Amendment) Act 1982 was consolidated with the 1959 Act into the Mental Health Act 1983, almost all of which was implemented on 30 September this year. The various orders and regulations that were required under the Act were made in the early summer and a full memorandum of guidance, new forms and leaflets for patients and their relatives were distributed during the summer. The Mental Health Act Commission has commenced work and has been undertaking visits, investigating complaints and providing second opinions required under the Act.
    Mr. Proctor: As, on 29 September, 316 people were in prison and yet, under the definition in the Act, were suffering from mental disorder, will my hon. and learned Friend try to achieve speedy implementation of sections 35 and 36, which relate to remands to hospitals for reports and treatment, and of section 38, which deals with interim hospital arrangements?
    Mr. Clarke: I share my hon. Friend's anxiety about the problems to which he has drawn attention. The Government are anxious to implement those parts of the Act. We shall consult the relevant authorities about the appropriate procedures to do that in the near future.
    Mr. Kilroy-Silk: Does the Minister agree that it is utterly inappropriate that, at any one time, some 200 mentally disordered offenders are in prison when they would more appropriately be dealt with in hospital? What progress does he expect to make in removing them from prison and removing from special hospitals people who are awaiting transfers to National Health Service psychiatric hospitals?
    Mr. Clarke: The prison medical service and the Government are trying to achieve an improvement in both respects. I entirely share the anxiety that is felt about the matter. It is wrong that there are people in prison who should be receiving treatment in hospital. We have already brought into effect the provisions which oblige regional
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    health authorities to help courts which want to place a mentally disordered offender. We must now implement the other provisions which my hon. Friend the Member for Billericay (Mr. Proctor) mentioned.
    Mr. Janner: Will the Minister take note of section 2 (2), which excludes drug abusers? Will he amend the Act, or introduce new legislation, to ensure that the appropriate penalty, which was imposed on the Scottish brothers yesterday for pushing glue solvents, will be available in the rest of the United Kingdom, so that the evil merchants of death can be dealt with? Does he agree that young people should not be sent to hospital because other people are not in prison where they belong?
    Mr. Clarke: The problem of what is known as solvent abuse—glue sniffing—falls outside the legislation. My hon. Friend the Under-Secretary of State for Health and Social Security has been studying closely the problem of glue sniffing and hopes to make a statement in due course. I share the hon. and learned Gentleman's anxiety about the problem.

    NHS (Abuses)
    Mr. Tim Smithasked the Secretary of State for Social Services if he will estimate the level and cost of patient abuse of the National Health Service.
    The Under-Secretary of State for Health and Social Security (Mr. John Patten): No, Sir. Responsible use of the Health Service helps us all by enabling it to work more effectively. I am sure that most people understand that, but there is at the moment no objective definition of abuse on which an estimate could be based.
    Mr. Smith: Is my hon. Friend aware that there is a growing problem with patients not turning up for appointments at hospitals? Does he agree that that is a serious problem, which results in the waste of consultants' time and valuable Health Service resources? Has he any plans to deal with it?
    Mr. Patten: I appreciate my hon. Friend's point. It should be pointed out there are some 37 million outpatient appointments in hospitals in any one year and it cannot be doubted that people not turning up for appointments cause inconvenience and waste money. At the moment, the problem is best dealt with by local initiatives in hospitals where the consultants and those who make the appointments can draw the attention of patients to the importance of keeping their appointments.
    Mr. Meadowcroft: Does the Minister accept that one technical abuse of the NHS in urban areas is the use of casualty departments in general hospitals by homeless persons as a form of general practitioner service? Will the hon. Gentleman examine the Leeds experiment of providing a general practitioner service for homeless persons in the city and apply the lessons learnt elsewhere?
    Mr. Patten: I shall consider the lessons that we can draw from Leeds. Many people, particularly in inner city areas, tend to use accident and emergency facilities rather than those of the general practitioner. That is one of the reasons why my right hon. Friend the Secretary of State recently announced an initiative to provide better standards of care in inner city areas where they are much needed, which has been broadly welcomed in the House.
    Mrs. Jill Knight: Is my hon. Friend aware that some foreigners who come into Britain and use the NHS try hard to pay for the service that they receive but are prevented from doing so by the hospital administrators?
    Mr. Patten: My hon. and learned Friend the Minister for Health is actively reviewing the situation.
    Mr. Dobson: Will the Minister accept that a more important form of abuse of the NHS is the abuse of its facilities by private hospitals? Was not the Prime Minister involved in the worst form of abuse by giving the impression, when she had her eye operation, that only the private sector could provide the necessary treatment, and not disclosing that the private hospital that she attended had to borrow vital equipment from the King Edward VII NHS hospital nearby?
    Mr. Patten: That is a thoroughly silly question. The Government are bent on providing a better standard of health care for all. If that can be achieved in co-operation with the private sector, so much to the good.

    NHS (Catering)
    Mr. Fatchettasked the Secretary of State for Social Services what recent representations he has received in relation to the privatisation of catering services in the National Health Service.
    The Secretary of State for Social Services (Mr. Norman Fowler): We have received a number of inquiries from firms interested in NHS catering contracts since our health circular on competitive tendering for support services was issued in September.
    Mr. Fatchett: Apart from the fact that some firms are looking for easy pickings from the contracts, will the Secretary of State note the recent comment by the vice-chairman of the Yorkshire regional health authority that the privatisation of catering services would lead to a reduction in standards and a loss of patient care? Given the disastrous experience of privatisation in local government, is it not about time that the Minister changed his policy of enforced privatisation and put patients first rather than profits for private companies?
    Mr. Fowler: The whole purpose of the policy is to put patients first. The Government's policy is that the private sector should be given the opportunity to tender for a range of services on a fair comparison basis. The whole point of the policy is that if savings are made they go to patient care. I should have thought that the hon. Gentleman would support such a policy.
    Mr. Leigh: Does my right hon. Friend agree that if we are to fulfil our pledge to cut taxes we must reduce NHS spending and reduce also the largest work force in western Europe, and that the only way to do so is to pursue vigorously a policy of privatisation?
    Mr. Fowler: No, Sir, I do not agree with all that my hon. Friend has said. The Government stand by the NHS. We wish to make the Health Service more efficient and effective. The NHS is a concept which the Government entirely support.
    Mr. Meacher: Is the Secretary of State aware that Trust Houses Forte Ltd. and Town and City Properties Ltd. are the two principal companies hoping to pick up the catering tab from the privatisation of the NHS, and they
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    have shareholder lists that read like a roll call of the Tory party, including the former chairman of the Tory party, a host of Tory Members of Parliament, both past and present, and some Tory Ministers?
    Does not privatisation mean forcing down the pay of some of the lowest paid in the NHS in order to enhance the profits of greedy Tory shareholders, many of whom are the colleagues of the Secretary of State?
    Mr. Fowler: I can hardly compete with what my hon. Friend the Under-Secretary said, because that is another thoroughly silly question from the Opposition Front Bench. The point is that the money from savings by contracting-out is spent on patient care. I wonder what the hon. Gentleman thinks the Health Service is all about. It is a user. It is a service that is provided not for the providers but for patients.

    Disabled Persons
    Mr. Patchettasked the Secretary of State for Social Services how many staff in his Department have been involved in investigating cases of discrimination against disabled people which have been reported to him since the beginning of 1983; and if he will make a statement.
    The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): The bulk of the work on cases of alleged discrimination is handled by four staff in the Department, along with their other duties. But a number of other staff both in DHSS and other Departments have been involved in pursuing inquiries on particular cases which were relevant to their responsibilities.
    Mr. Patchett: What action can the Minister take when cases of discrimination against the disabled are reported to him? To be more precise, what powers does the Department have to deal with discrimination?
    Mr. Newton: The main action that we take is to make further inquiries among those against whom discrimination is alleged. We then consider their response, and may follow it up with the person who made the complaint in the first place. I cannot lay down absolute rules, but we have sufficient scope for conducting effective inquiries.
    Sir David Price: Is my hon. Friend aware that, unfortunately, there are still far too many district general hospitals which do not have adequate toilet facilities for patients in wheelchairs and that the parking facilities offered by local authorities — particularly around city hospitals—are inadequate for disabled outpatients?
    Mr. Newton: I am sure that my ministerial colleagues in the Department will have heard that. The Department of the Environment is now consulting on building regulations directed at that sort of problem in all new public buildings.
    Mr. Alfred Morris: In a recent reply I was told that the Minister and his predecessor had looked at 18 cases of discrimination since 11 February. At the last meeting of the all-party disablement group in the House it was reported that The Spastics Society alone was in contact with between 500 and 600 serious cases of discrimination against disabled people. Why is it that The Spastics Society knows of so many cases while the Minister knows of so few?
    Mr. Newton: The answer is that The Spastics Society has not passed on details to us or asked us to look into the matter.

    Disabled Persons
    Mr. Wareingasked the Secretary of State for Social Services what measures are being taken by Her Majesty's Government to combat discrimination against disabled people; and what has been the cost of the measures taken to date.
    Mr. Newton: The main thrust of Government policy is to promote the integration of disabled people, and in that way to help overcome the obstacles they often face. I recently placed a lengthy list of the Government's activities in this field in the Library of the House following my reply to my hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) on 18 November. It is not possible to identify the cost of all the Government's activities relating to this.
    Mr. Wareing: Given the Government's now stated objection to legislation which would outlaw discrimination against the disabled, will the Minister promise that there will be a programme of education and persuasion of the general public on the need to avoid such discrimination? Will he ensure that it is much more cost-effective than previous Government campaigns, such as the very expensive propaganda campaign to persuade people to wear seat belts when in the front seats of cars?
    Mr. Newton: I hope that I made it plain during the debate on the hon. Gentleman's Bill that I am suspicious of generalised undertakings. The Government will continue to press ahead with what they are doing with regard to social security benefits, access, transport, employment and education, and to deal with specific practical problems which affect specific disabled people. We are making significant progress that goes far beyond any generalised undertakings that I could give to the House.
    Mr. Cowans: On a point of order, Mr. Speaker.
    Mr. Speaker: I shall take points of order after Question Time, as to deal with them now would lessen the time available for Questions.
    Mr. Cowans: It is a real point of order.
    Mr. Speaker: I shall take it after Question Time.
    Mr. Boyes: During the debate on the Bill introduced by my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) I suggested that deaf people were also discriminated against because there were too few programmes on television which used CEEFAX and other means of putting words on the screen, although the deaf still paid a full licence fee. I asked the Minister to look into that. Will the hon. Gentleman assure the House that he is looking into it, and what progress has been made?
    Mr. Newton: I cannot give the hon. Gentleman a progress report now, but I shall certainly look into that. Although we would all like to see more being done, the extent to which the television companies, in particular, have developed their ability to add subtitles to programmes is very encouraging and is greatly welcomed by the deaf.
    Mr. Alfred Morris: Leaving aside the Minister's implied criticism of The Spastics Society, he says that he
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    is more interested in a campaign of education and publicity in this area than in legislation. How much is he prepared to spend on education and publicity? When shall we see the colour of his money?
    Mr. Newton: I made no criticism, implied or explicit, of The Spastics Society. I simply stated the fact that we had so far received—the number has gone up by three since the debate—21 complaints of discrimination. One or two of those came from The Spastics Society, but we have certainly not had 500 or 600 complaints from it. As to the colour of my money, I wish to make one simple point. I said in the debate that I thought any money available would be better spent on direct help to disabled people. Since the debate I have announced proposals for a new social security benefit which will put £20 million more into the hands of 20,000 disabled people. That is what I mean by practical and flexible steps.

    Wessex Health Region
    Sir David Priceasked the Secretary of State for Social Services what are his current plans for current and capital allocation, respectively, of moneys to the Wessex health region over the next five years.
    Mr. Kenneth Clarke: Wessex regional health authority will continue to benefit over the next five years from this Government's policy of redistributing revenue resources to regions which have in the past been less well funded or which face high growth in population. Wessex can also expect to receive a higher than average capital allocation per head over the same period.
    Sir David Price: I thank my hon. Friend for that most encouraging reply. Do I take it, and may I put it to the people of Wessex, that there is no question of any National Health Service cuts in Wessex?
    Mr. Clarke: Yes, my hon. Friend can certainly do that. The growth in revenue in the region since 1979–80, the year that we came to office, has been 8·4 per cent. After making provision for Health Service pay and prices, 1·1 per cent. growth was given to the region in 1983–84. We have no intention of making any cuts in Health Service spending in the area to which my hon. Friend referred.
    Mr. Corbett: While the Minister is looking at cuts in Wessex, will he also look al the cuts in the west midlands region?
    Mr. Speaker: Order.
    Mr. Corbett: It is nearby.
    Mr. Speaker: It is not as near as all that.

    Disabled Persons
    Mr. Hannamasked the Secretary of State for Social Services what further progress is being made by his Department in improving access for the disabled.
    Mr. Newton: The Department is funding an independent Access Committee for England which will be based at the Centre on Environment for the Handicapped, a voluntary organisation with great experience in this area. The centre is consulting interested organisations on the precise membership and functions of the committee and expects comments back early in the new year.
    Mr. Hannam: I welcome my hon. Friend's setting up of the Access Committee for England. Will he ask the

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    committee to consider the situation at DHSS offices, where there is often a lack of toilet facilities for the disabled and often access problems as well?
    Mr. Newton: I shall certainly consider asking the committee to look into the problem. Meanwhile, I assure my hon. Friend that I am looking into it myself. The point was raised with me in relation to one office which I visited recently, and I have asked for inquiries to be made about that. We are anxious to do everything that we can to deal with the problem.
    Mr. Carter-Jones: May I ask the Minister to treat this as a matter of great urgency? Is he aware that people not normally classified as disabled could benefit by better access, for example, those with arthritis, pregnant ladies and women wheeling prams? They would all gain. If that is so, and if millions stand to gain, will he intensify his efforts to make access readily available at all public places?
    Mr. Newton: We are concerned to move as rapidly as we can. The access committee is only part of that effort. I have referred to what the Department of the Environment is doing on building regulations. The Department of Education and Science will follow that with design guidance for schools. The Home Office is considering a number of points on buildings with which it is concerned, and we have just referred to social security offices. What is needed is a co-ordinated effort, using every weapon that we can find.
    Mr. Maxwell-Hyslop: Will my hon. Friend say something about the other part of the problem, which is to get an allowance that can be spent on wheelchairs most suitable to the needs of the disabled people concerned? Is this the committee that will have terms of reference covering that aspect?
    Mr. Newton: It is not quite the same committee. I thank my hon. Friend for his interesting letter to me on this matter. As he knows, we have recently announced the establishment of a review of the artificial limb and appliance centres. That is very much the type of point that the review team will want to consider.
    Mr. Alfred Morris: How many benefit offices that are used for appeals and tribunals are accessible to disabled people? Moreover, will the Minister take seriously the point that many outpatient departments of hospitals are inaccessible to the disabled?
    Mr. Newton: I cannot give the figures, but I am conscious of the problem, which we are anxious to remedy.

    Hospital Waiting Lists
    Mr. Kilroy-Silkasked the Secretary of State for Social Services what was the number of persons awaiting urgent in-hospital treatment at the latest available date (a) nationally, and (b) on Merseyside.
    Mr. John Patten: On 31 March 1983, 49,123 cases were classified as urgent awaiting admission to National Health Service hospitals in England, and a total of 1,032 such cases in the health districts on Merseyside.
    Mr. Kilroy-Silk: Is it not a scandal and a disgrace, and a commentary on the competence and compassion of the Government, that so many thousands of people in agony
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    and distress should be waiting for urgent hospital treatment, or dying on the waiting lists, when there are unused new beds and unemployed doctors and nurses as a consequence of the Government's mismanagement of the Health Service?
    Mr. Patten: Since 1979 waiting lists have been reducing on Merseyside and nationally. Between 1974 and 1979, waiting lists increased by 52 per cent. on Merseyside. We have been struggling since then to bring the waiting lists down. The hon. Gentleman would have helped that progress if he had intervened with his trade union colleagues and friends on Merseyside during last year's industrial action.
    Mrs. Currie: In view of the national waiting list, will my hon. Friend confirm that the most difficult to tackle is the orthopaedic waiting list? In view of the recommendations of the Duthie report, will he undertake to have a close look at the proposed closure of the Bretby orthopaedic hospital in my constituency, which closure is being considered by the southern Derbyshire health authority?
    Mr. Patten: The picture varies regionally. I shall examine my hon. Friend's submission.
    Mr. Skinner: If, as the Minister says, the number of people on waiting lists is falling, why did he not tell the Prime Minister of that massive advance so that she could use the National Health Service?
    Mr. Patten: The hon. Gentleman has followed an earlier silly question by his hon. Friend on the Front Bench, the hon. Member for Oldham, West (Mr. Meacher), with another silly question.

    Family Practitioner Services
    Dr. Mawhinneyasked the Secretary of State for Social Services if he will make a statement on his plans for the family practitioner services.
    Mr. Kenneth Clarke: Proposals for changes in the general ophthalmic services and in the status of FPCs are included in the Health and Social Security Bill now before the House. My right hon. Friend announced on 17 November the planned level of expenditure on the family practitioner services in 1984–85.
    Dr. Mawhinney: I thank my hon. and learned Friend for that answer. Is he aware that the Government's determination to improve the cost-effectiveness of the family practitioner services is welcomed? In that regard, is it at least a possibility that the drug-prescribing habits of general practitioners will be audited annually?
    Mr. Clarke: We certainly intend to try to improve the drug-prescribing habits of general practitioners. We continue to encourage economy in the quantity of drugs prescribed and a greater use of generic prescribing. I agree that we must continue our efforts, because there is still considerable potential for savings to be made.
    Rev. Martin Smyth: I thank the Minister for his answer to the hon. Member for Peterborough (Dr. Mawhinney). Does he agree that the lists could be further reduced by a process of directives for doctors when dealing with patients who need drugs?
    Mr. Clarke: There has been a steady increase in the number of practitioners and a reduction in list sizes, but

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    that must be judged as part of an overall policy for general practice, mainly determined by the interests of the patients and the improved service which we want to provide.
    Mr. Colin Shepherd: Will my hon. and learned Friend maintain the greatest possible pressure to achieve accountability in the family practitioner service? Does he agree that every time family practitioners overrun what might be called projected expenditure the rest of the Health Service, such as the hospital sector, suffers and we experience problems of the kind facing us today?
    Mr. Clarke: With respect to my hon. Friend, that is not so, although some people interpreted the changes in July in that way. What happened in July was that cash limits for all programmes, not just the Health Service, were reduced to bring planned public spending within previously agreed levels. Part of the reason was that at the same time non-cash limited programmes were running ahead of the budgetary estimates. That included the family practitioner services.
    On balance, within the Health Service we acquired rather more money than we lost by that process, and overall spending on the Health Service has not been reduced. We are avoiding any fixed relationship. When deciding on spending on one or another part of the Health Service, we must judge the level of spending for both services in the light of economic conditions and the needs of the Health Service.
    Dr. Roger Thomas: Will the Minister come to the assistance of those committees that run deputising services and tell them exactly what he means by "excessive" use? Why is he now so pessimistic about deputising services, compared with when he spoke in Committee in March of this year on health services?
    Mr. Clarke: I hope shortly to come forward with our proposals for improving the monitoring of the deputising services. I find it difficult to divine the hon. Gentleman's views from his question, but there is widespread public and parliamentary concern about the way in which the present guidelines are being applied. I believe that there is general acceptance in the medical profession that there is some room for tightening up the deputising services.
    Mr. Couchman: My hon. and learned Friend will be aware that much of the administration of family practitioner services involves routine clerical work and that progress towards computerising patient records has been painfully slow. Will he undertake to speed up that process, because that would have a beneficial effect on expenditure on administration in the family practitioner services?
    Mr. Clarke: We have engaged the consultants Arthur Andersen and Co. as advisors on improving methods of administering all the family practitioner services. We have asked the consultants to look especially at the way in which we can speed up the application of computerisation and modern office techniques. I take my hon. Friend's point. It is important that we act promptly once the report from Arthur Andersen and Co. is at hand.
    Mr. Meacher: On what grounds does the Secretary of State justify arrogating to himself in the Health and Social Security Bill the right to appoint all the members of each of the 90 family practitioner committees? Is he not content with sacking all the non-compliant chairmen of the regional and district health authorities and packing the
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    membership of those bodies with his own placemen? Is it not a monstrous perversion of patronage that he should reserve to himself the power to hand-pick all of those 2,700 appointees so that he can steamroller through his policies and blot out further resistance?
    Mr. Clarke: The hon. Gentleman has as ready a source of adjectives as of bogus statistics, but he is getting overexcited about a fairly simple change. The Secretary of State must represent the public interest and cannot just accept nominees. It is important that the family practitioner committees, which dispose of enormous sums of money, should be answerable to the House, amongst other places, through my right hon. Friend the Secretary of State.
    It is untrue to suggest that we have changed the leadership of any health authorities on party political grounds. I could cite regional and district chairmen who are or have been active members of the Labour party. Contrary to the hon. Gentleman's belief that patronage exists, we are appointing the right people to run the services efficiently.

    Seat Belts
    Mr. Deakinsasked the Secretary of State for Social Services if he will estimate the savings to the National Health Service which have resulted from the reduction in injuries since the wearing of seat belts was made compulsory.
    Mr. John Patten: We do not yet have the information needed for a reliable estimate, but I welcome the reduction in deaths and serious injuries which my hon. Friend the Minister of State, Department of Transport, reported in her reply to my hon. Friend the Member for Harlow (Mr. Hayes) on 5 December.
    Mr. Deakins: Do not the trends that the Under-Secretary has given show the importance of the Government spending money on the prevention of disease and injury, as that affects the National Health Service? In those circumstances, is it not unfortunate that, because of the many cuts in the Health Service, including those in my area of Waltham Forest, there is a serious danger of a disproportionate and adverse effect on the preventive services?
    Mr. Patten: I do not accept that. We have shown our interest in prevention by, for example, increasing the sums of money made available to the Health Education Council. It is not doubted that the introduction of seat belt legislation has led to a reduction in deaths and injuries. We shall not know most of the full picture until next summer when we shall have the results of a report headed by the distinguished consultant, Mr. W. H. Rutherford of the Royal Victoria hospital, Belfast, which will bring together the experiences of 15 different accident and emergency services in the year before and the year after the introduction of the legislation.
    Mr. Maxwell-Hyslop: Are the Government taking any action on the other half of the problem—the continued fitting in new cars of toughened rather than laminated windscreens, which is what people's heads go through if they come out of their seat belts? Or is that being left entirely to the Department of Transport?
    Mr. Patten: That is indeed a matter for my right hon. Friend the Secretary of State for Transport.
    Mr. Dubs: Although the trend in the figures is encouraging, does the Minister agree that there is still a need for publicity to reinforce the law, especially in relation to the all too frequent practice of front seat passengers wearing seat belts but carrying small children or babies who are not protected?
    Mr. Patten: The hon. Gentleman is absolutely correct, although it is heartening to note from police reports that between 95 and 96 per cent. of all front seat passengers wear seat belts regularly.

    NHS (Expenditure)
    Mr. Knoxasked the Secretary of State for Social Services what percentage of the gross domestic product was spent on the National Health Service in the most recent year for which figures are available; and how this compares with the percentage in 1978.
    Mr. Fowler: The most recent year for which figures are available is 1982, when 5·4 per cent. of the United Kingdom gross domestic product was spent on the National Health Service. That compares with 4·8 per cent. in 1978.
    Mr. Knox: Does my right hon. Friend agree that those figures show clearly the higher priority given to the National Health Service by the Conservatives than by the Labour Government?
    Mr. Fowler: Yes, they show exactly that. They show that we are spending more on the National Health Service than any other Government in history, and also treating more patients.
    Mr. Pavitt: How does the Secretary of State reconcile the success stories with which he continually regales the House with the facts that we all know from our own areas? Is he aware that the North-West Thames health authority is seeking fully or partially to close 30 hospitals, including the House of Commons hospital—Westminster hospital? Is he further aware that £1·2 million allocated to the Central Middlesex hospital in my area nine months ago has been stopped, with the result that the hospital is now taking only emergency cases for acute beds? How does the Minister reconcile the success that he claims with the terrible impact of his cuts on patient care?
    Mr. Fowler: Any closure proposals by the North-West Thames authority would have to come to Ministers. Nothing in any strategic document could possibly alter that. As for the figures, I am sure that the hon. Gentleman, with his customary fairness, will acknowledge that the Government have increased spending on the Health Service and that spending is now 17 per cent. higher than the level that we inherited in 1978–79.
    Sir Anthony Grant: I welcome the increased spending on the Health Service, but does my right hon. Friend agree that the benefit would be greater if more hospitals followed the example of the Hinchingbrooke hospital, which serves my constituents, in privatising cleaning services, thus saving £200,000 per year, which can then be spent on essential medical services?
    Mr. Fowler: As I said in answer to an earlier question, we favour the policy of contracting out and competitive tendering because we believe that it will make the Health Service more effective.
    Mr. Dobson: Does the Secretary of State accept that health spending has increased as a proportion of GDP because GDP itself has decreased? Does he agree that health spending in this country still represents a lower proportion of GDP than in most other developed countries and that, despite all the Government's statistical waffle, throughout the entire country — including the areas represented by Ministers—hospitals and wards are being closed, new hospitals are left empty and nurses and doctors are unemployed?
    Mr. Fowler: The hon. Gentleman's assumption about GDP is just plain wrong. Between 1978 and 1982 GDP rose by 0·4 per cent. while the NHS share rose by 0·6 per cent. Health spending by virtually all European countries is between 5 and 6 per cent. of public spending. The proportion of GDP is increased by private spending on health in those countries. I thought that the hon. Gentleman was foremost among the opponents of private health spending.

    Death Grant
    Mr. Kirkwoodasked the Secretary of State for Social Services whether he will now make a statement on the level of death grant.
    The Minister for Social Security (Dr. Rhodes Boyson): I shall make a statement as soon as possible.
    Mr. Kirkwood: Is the Minister aware that his answer will condemn thousands of elderly people who are worried about burial costs to yet another Christmas of apprehension? Is it not a disgrace that the period for consultation on the Government's document ended 18 months ago, in July 1982? When may we expect an answer to the representations that have been made?
    Dr. Boyson: The hon. Member will get an answer as soon as possible. It is important to get a scheme whereby the money that is available — because vast sums of additional money are not available—can be used to help the families that need it to cover their funeral expenses.
    Mr. McCrindle: Can my hon. Friend confirm, before the statement is made, that the Government are at least considering moving in the direction often recommended whereby, in return for those of us who do not need the £30 death grant sacrificing it, we have a rising scale payable on the basis of need?
    Dr. Boyson: I am very grateful to my hon. Friend. The suggestions that were put up some 18 months ago were exactly along the lines referred to by my hon. Friend—a grant of £250, £200 or £150 to people on supplementary benefit, FIS or war pensioners. It is from something along those lines that the solution is likely to come.
    Mr. Frank Field: Will the Minister renew the pledge of his predecessor and seek the agreement of the Opposition before introducing any change to the benefit?
    Dr. Boyson: I was not aware that my predecessor made that pledge, but if he did, that pledge will be fulfilled.

    General Managers
    Mr. Maudeasked the Secretary of State for Social Services when he expects the system of general managers at authority and unit level recommended in the Griffiths report to be established.
    Mr. Fowler: I have written to Health Service chairmen asking for views by 9 January on the implementation of this and other recommendations. I will issue guidance to authorities when I have considered their response.
    Mr. Maude: Is my right hon. Friend aware of the anxiety about the lessening degree of managerial efficiency in the Health Service, as is very well evidenced in the pamphlet produced by my hon. Friend the Member for Norfolk, North (Mr. Howell)? Will he ensure that steps are taken as soon as possible to increase efficiency so that resources in the Health Service are used where they are most needed?
    Mr. Fowler: I must confess that I do not agree with all the suggestions put forward in the pamphlet to which my hon. Friend refers. However, where we clearly do agree is that the management process in the Health Service must be improved, and that is what the Griffiths report is all about.
    Mrs. Renée Short: Where does the right hon. Gentleman expect this new layer of management to come from? Will it be from the hospital administrators, who are already receiving redundancy pay?
    Mr. Fowler: The hon. Lady is wrong. It is not a new layer of management. The people who will become the general managers at district or regional level will probably be drawn in the main from the officers who are already employed.

    NHS (Productivity)
    Mr. Marlowasked the Secretary of State for Social Services whether he has any targets for productivity in the National Health Service.
    Mr. Kenneth Clarke: Increases in productivity, to make the most of past and planned increases in resources, are a central part of Government policy towards the NHS. We have not set a national target figure, but specific objectives for individual authorities are set through annual accountability reviews. Those agreed by Ministers with regional health authorities are recorded in the regional action plans, of which copies are placed in the Library of the House.
    Mr. Marlow: Can my hon. and learned Friend explain why it is that, at a time of large increases in productivity within the wealth-producing sector of the economy, the number of people employed by the Health Service over the past 20 years has gone up by 750,000 and the number of people required to service one hospital bed has trebled? Can my hon. and learned Friend say what the Government will do, and do urgently, to stop the country from sweeping money into a hole in the ground known as the Health Service?
    Mr. Clarke: With respect to my hon. Friend, the Health Service is a person-to-person service, so that when one improves the service one inevitably increases the numbers of some employees. It is also the case that we look not at staff per bed but at staff per patient. As we increase the use to which beds are put, more patients are treated by fewer staff even though this is not reflected in the number of beds. Having said that, I accept my hon. Friend's point that much more could be done to improve the efficiency with which manpower is used in the National Health Service. Our first modest steps towards
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    this end attracted some controversy earlier this year, but I think it is essential that we press on in that direction if the patient is to get the full benefit from the extra resources the Government are putting in.

    NHS (Recruitment Advertising)
    Mr. Fallonasked the Secretary of State for Social Services whether he will now reduce the costs of National Health Service recruitment advertising.
    Mr. John Patten: We are currently considering the report of a Rayner style scrutiny of NHS recruitment advertising, which suggests various possibilities for reducing expenditure.
    Mr. Fallon: Is my hon. Friend aware that a recent edition of the Nursing Times contained more than 56 pages of NHS advertising for 500 or 600 vacancies? Is there not a cheaper way of circulating these vacancies than providing a public subsidy for a commercial paper?
    Mr. Patten: Health authorities subsidise some of these journals to the tune of £7 million a year. That sum must be scrutinised closely to make sure that we are getting the best value for money, and that is what we are doing.

    Deputising Services
    Mr. Galley askedthe Secretary of State for Social Services if he will make improvements to the working of deputising services; and if he will make a statement.
    Mr. Kenneth Clarke: Deputising services are not part of the NHS and family doctors may employ their services only with the consent of the family practitioner committee, which is advised on the professional and ethical aspects of services by professional advisory committees. I am considering ways of strengthening existing arrangements and shall shortly be issuing revised guidance for consultation.
    Mr. Galley: Will my hon. and learned Friend indicate what response he received to his letter of July to family practitioner committees? Has he extended those consultations to community health councils?
    Mr. Clarke: The response to my letter to family practitioner committees confirmed the response from members of the public and hon. Members of this House and satisfied us that something needed to be done to improve the monitoring procedures and to re-write and improve the guidance. I hope to make an announcement shortly. We have included community health councils, and they too have urged on us the need to improve present arrangements.
    Mr. Cowans: On a point of order, Mr. Speaker.
    Mr. Speaker: I will take the hon. Gentleman's point of order now because he has alerted me to the fact that it is highly urgent. I shall allow injury time for Prime Minister's Questions.
    Mr. Cowans: My point of order is vitally important to every hon. Member of the House, Mr. Speaker, and I am not raising a political issue. We are informed by the annunciator that the Secretary of State for Trade and Industry will make a statement this afternoon on the Government's regional economic policy.
    At 2.46 this afternoon I went to the Vote Office—as any hon. Member wanting to keep himself informed would

    831
    —to ask for a copy of that statement. I was informed that it was lying on the shelf, presumably gathering dust, and that it could not be given to hon. Members so that we might read it, fully to appreciate the comments that the Secretary of State will make.
    I seek your protection, Mr. Speaker, because these papers should be available so that we may ask questions when the Secretary of State makes a statement. Or does the right hon. Gentleman not want us to know what is in it? [Interruption.] Is that the purpose behind it?
    Mr. Speaker: The hon. Member has been here long enough to know that statements by Ministers are never circulated to Back Benchers.
    Mr. Bowen Wells: Why not?
    Mr. Cowans: I am talking about the White Paper, Mr. Speaker. Why is that not available?
    Mr. Speaker: Order. Why not is not a matter for me. Statements are not circulated. I understand that they go to the Front Bench spokesmen concerned but not to Back Benchers.

  PRIME MINISTER

    Engagements
    Mr. Eggarasked the Prime Minister if she will list her official engagements for Tuesday 13 December.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Eggar: Does not the news that the NGA is to picket again at Warrington challenge the whole basis of our democratic values? Surely all of us in this House have the right and duty to protect employees' decisions as to whether they should join a closed shop. If we do not do that we shall see our democracy undermined.
    The Prime Minister: I am not quite certain whether the NGA has decided to picket again, but I wholly agree with my hon. Friend that the employees at the Warrington Messenger Group have exercised their right by ballot to reject a closed shop. They must be protected in the exercise of that right, and this dispute is about the NGA attempting to intimidate them to make them, nevertheless, join a closed shop. That is totally and utterly wrong and the law must be seen to protect those employees.
    Mr. Kinnock: Will the Prime Minister now welcome the decision of the NGA to suspend its strike? Will she use the pause that that has now made available to exercise her powers to bring the various parties together to produce a settlement? Will she, for instance, ask ACAS to convene a committee of inquiry?
    The Prime Minister: No. ACAS was set up by the Labour Government. It is there to conciliate. That is its job and it is not for the Government to intervene.
    Mr. Kinnock: Does not the Prime Minister recognise that if others such as ACAS are effectively prohibited from exercising their function of conciliation by the straitjacket legislation that lies at the source of this conflict, she has a direct and absolute responsibility to accept that the buck
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    stops with her? She should exercise her power. If she will not do so, will she give way to allow others to get power so that they can fulfil that responsibility?
    The Prime Minister: The right hon. Gentleman makes it clear that what the Opposition really want is for the Government to force Mr. Shah to give in to the union's unreasonable demands. That we shall not do. On the Government side we shall uphold the right of employees to reject a closed shop—a right given to them by the law.
    Mr. Kinnock: What the Opposition want is the resolution of a dispute that has been turned by Government legislation from a local problem into an industrial volcano. That is the direct responsibility of the Government. The Opposition and the country want the Government to fulfil their responsibilities to end this dispute now.
    The Prime Minister: What I believe the people want, and what I believe they voted for, is for the law to uphold the right of employees to reject a closed shop. Does the right hon. Gentleman condemn the NGA for contravening the law? Will he uphold the right of the individual to reject the closed shop?
    Mr. Kinnock rose——
    Mr. Speaker: Order. The Leader of the Opposition has had three opportunities to put his case.
    Mr. Kinnock: May I have your indulgence, Mr. Speaker? I am fed up with a Prime Minister who has power trying to dodge it by trying to award obligations to me — dodging all the time. I have no intention of condoning breaks of the law and no intention of being a drill sergeant for divisive and ruinous Tory legislation, either.
    The Prime Minister: Will the right hon. Gentleman condemn intimidation of employees and companies?
    Mr. Dobson: The right hon. Lady should do the job for which she is paid.
    The Prime Minister: Will he wholly and utterly condemn it and therefore uphold their rights to reject the closed shop?
    Mr. Gareth Wardellasked the Prime Minister if she will list her official engagements for Tuesday 13 December.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wardell: Will the Prime Minister undertake to read last week's report by an anonymous group of Welsh HMIs entitled "Home School Links"? If she considers that this report is fatuous, complacent, lacking in substantiated detail and academic rigour, and that it fails to give any guidance to parents on the crucial issues of glue sniffing, under-age drinking and smoking, will she ensure that in future these HMIs are more suitably and sensibly employed?
    The Prime Minister: I believe that Her Majesty's inspectorate does a very good job and that its work is almost universally welcome. The Government will be making a statement later on glue sniffing. We are watching the Scottish case carefully.
    Sir Hugh Rossi: Is my right hon. Friend aware of the report in today's newspapers that the Government propose to send a British astronaut into space? Will she confirm or deny that?
    The Prime Minister: I know nothing about such a report. It is not true, but there are certain hon. and right hon. Gentlemen whom I should not minding sending there.
    Mr. Pavitt: Will the Prime Minister accept my sincerity when I say that I deprecate the events that led to the premature closure of a Brent council meeting last week? At the same time, will she consider those events less emotionally today? Is she aware that I attended that meeting and that there was no "Rentamob"? There were 300 people present, many of whom I have served as Member of Parliament for 24 years, and many of whom came from the local Methodist church, pensioners' associations and others. Will the Prime Minister accept also that it was an offensive break from democratic practices in an area where I canvassed for Mrs. Neil, because I was known and she was not? There have been 1,100 local voters, including Conservatives, who have asked Mrs. Neil to resign. The Prime Minister talked about gagging procedures last week, but the gagging procedures in Brent were no worse than when my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) had the payroll vote used against him in gagging procedures here.
    The Prime Minister: It is strange that the power was not transferred peaceably from Labour to Tory-Liberal control. It was not. I do not know whether it was "Rentamob", but the reports were of a mob preventing the peaceful transfer.
    Mr. Andrew MacKay: Does my right hon. Friend agree that, despite Mr. Len Murray's advice, it is gross intimidation of innocent workers for Mr. Colin Barnet, the north-west region general secretary of the TUC, to promise that tomorrow's demonstration will be the largest that Warrington has ever seen?
    The Prime Minister: I understand that there is to be a demonstration tomorrow, but that it will be away from the place of work. There is a right of peaceful demonstration. If there is a demonstration I trust that it will be peaceful. I am certain that the police will do everything to protect the right of ordinary workers to go about their ordinary business peacefully and without hindrance.
    Mr. Steel: Will the Prime Minister give a general welcome to the report on Northern Ireland published this morning by the European Parliament by Mr. Haagerup? Will she pursue the suggestion that the Government have been considering, namely, a parliamentary forum in which Members of the House, the Northern Ireland Assembly and the Dail will discuss Northern Ireland problems?
    The Prime Minister: The right hon. Gentleman will be aware that I take the view that the European Assembly has no business to discuss the internal political affairs of a member state. That is the view we took at the outset and to which we adhere, and to which I believe every state of the European Community must continue to adhere. An Anglo-Irish parliamentary body is a matter for the parliaments concerned and not for the Government.
    Mr. Dormandasked the Prime Minister if she will list her official engagements for 13 December.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Dormand: Will the Prime Minister reflect today—it is an appropriate time for her do do so—on the divided society that her Government have created. It is one in which the poor have become poorer, the rich have become richer, employee has been set against employer, and the sick are not recieving the attention that they could reasonably expect from a civilised society. Having done that, will she re-read the words from St. Francis which she uttered to the nation in 1979, and having read them, decide that it is time for her to go?
    The Prime Minister: In reply to the hon. Gentleman may I point out that in the latest dispute it is the employees who are backing up the employer, not the other way round? With regard to many other aspects of society, we have over 60 per cent. owner-occupation—opportunities that would never have been given under Labour. With regard to the National Health Service, the amount spent on it each and every year has continued to increase. The Labour party in two years reduced the amount spent on the National Health Service. Further, the pension is at its highest ever level.
    Mr. Michael McNair-Wilson: In the course of her busy day has my right hon. Friend had a chance to read further reports about the demonstration at RAF Greenham common on Sunday? Is she aware that 1,257 policemen had to be on duty that day from eight forces, that the cost of policing was £250,000, that 30 policemen sustained injuries and that 60 people were arrested? Despite the violence, and the huge cost of policing, which I hope my right hon. Friend will agree belongs perhaps more to a national charge than to a local one, is she aware that we in west Berkshire are determined that Greenham shall fulfil its role as a NATO defence establishment?
    The Prime Minister: I am grateful to my hon. Friend. I think that the demonstration we witnessed there on television the other day will only have strengthened people's view that we must keep our defences in this country. We will not allow that kind of demonstration, far from peaceable, with many policemen injured, and, at one stage, barbed wire used to scar the side of a horse, to intimidate us. Indeed, it will strengthen us in standing for everything that we believe in, which is the upholding of the rule of law and freedom in this country.
    With regard to cost, we have considerable sympathy with Thames Valley police about the extra cost; 60 per cent. is actually borne by the Government. Nevertheless, Thames valley police are having to bear substantial costs for reasons through no fault of theirs. They are doing an excellent job and we shall consider whether there is any extra contribution that we can make.
    Mr. Soley: Is the Prime Minister aware that many of my constituents have received no post for nearly two weeks, that they will probably receive no Christmas mail at all, let alone any serious and important letters such as pension books, business orders, hospital appointments and so on, largely because the Post Office has refused to accept arbitration from ACAS? Will she use her influence to get the Post Office to go to ACAS, as the trade union has agreed? Or is it the intention of her Government to underplay the role of ACAS so that she can continue her war against the trade unions?
    The Prime Minister: There is a recognised procedure for conciliation. It is essential that that procedure is followed and the Government will not intervene.
    Mr. Yeo: Does my right hon. Friend agree that the action by the TUC leadership to discourage the National Graphical Association from proceeding with its strike is not only most welcome but shows a concern for NGA members which the NGA itself has not shown, and a respect for the law? Does she further agree that in this respect the TUC general secretary is setting an example which the Leader of the Opposition would do well to emulate?
    The Prime Minister: I agree with my hon. Friend. The TUC believes in upholding the law. That is right in a democracy. The law is absolutely indivisible. People cannot choose which parts of it they uphold and which parts they flout. It must all be upheld. I believe the TUC has made that clear in the stand it has taken.
    Mr. Wigley: Will the Prime Minister find time today to study the words of Mr. McNamara on a television programme last Saturday night, when he said that there were no military justifications for cruise missiles, only political ones? In the light of this, will she now reconsider whether cruise missiles are necessary?
    The Prime Minister: No. We watched the Soviet Union deploy many, many warheads, some 800 or 900 SS20 warheads. We asked the Soviet Union to take them down. We negotiated with it for nearly four years, asking it to take them down. In the absence of the Soviet Union going to zero option, we must put our own deterrent in place. We have done so and we shall continue with the programme of deploying cruise and Pershing missiles to protect the people of this country.

Cruise Missiles (Greenham Common)
Mr. Dennis Skinner: On a point of order, Mr. Speaker. You will recall that a few weeks ago the Secretary of State for Defence made a statement later backed up by the Government during questions, to the effect that Members of Parliament and others would not be allowed inside the Greenham common camp to visit the installations. As Olga Maitland got inside the camp last week, would it be in order for the Secretary of State to make a statement on why Members of Parliament and others are not allowed to view the installations when she is allowed inside the camp?
Mr. Speaker: I am absolutely certain that that has nothing to do with me.

Regional Industrial Policy (White Paper)
Mr. Robin Corbett: On a point of order, Mr. Speaker. You earlier responded to a point of order from my hon. Friend the Member for Tyne Bridge (Mr. Cowans). You may have had difficulty hearing him, but he wanted to know why hon. Members were denied copies of the White Paper on regional industrial development — not the Secretary of State's statement. Do you now feel it appropriate to advise Back Benchers that they are entitled to copies of the White Paper on the same basis and at the same time as other persons in the House who are not hon. Members?
Mr. Speaker: I apologise to the hon. Member for Tyne Bridge (Mr. Cowans) if I misheard his point of order——
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Norman Tebbit): Further to that point of order, Mr. Speaker——
Several Hon. Members rose——
Mr. Speaker: Order. I call the hon. Member for Huddersfield (Mr. Sheerman).
Mr. Barry Sheerman: Further to that point of order, Mr. Speaker. On many occasions there have been long debates and numerous points of order on the availability of literature to hon. Members that is freely available in the Press Gallery. There are times when hon. Members demand the right to see such papers and to study the information available to prepare themselves for debate, but that does not always happen. May I ask for a general inquiry to be made into this matter?
Mr. Speaker: The hon. Gentleman and the whole House know of my strong opinion that Back Benchers should have as much information as possible, but the Secretary of State wishes to say something about this.
Mr. Tebbit: Further to that point of order, Mr. Speaker. Today we have followed the same practice that has been followed for many years by successive Governments. Copies of the White Paper are in the Vote Office and will be made available when I am called to make the statement to which the White Paper relates.
Mr. Bowen Wells: On a point of order, Mr. Speaker.
Mr. Speaker: Is this a different point of order?
Mr. Bowen Wells: It is a related point of order, Mr. Speaker.
Mr. Speaker: I hope that it is not too related.
Mr. Bowen Wells: First, Mr. Speaker, I apologise to you and the House for uttering the words, "Why not?" when you were on your feet just now. I submit that to you in true humility.
Secondly, I ask you to use your influence on Ministers to make certain that papers available to the press are also available to hon. Members on both sides of the House before a statement is made, otherwise it is a gross abuse of the democratic rights of the House.

Hospital Cleaning Services
Mr. Willie W. Hamilton: On a point of order, Mr. Speaker. You may recall that during a supplementary question to question No. 11, the hon. Member for Cambridgeshire, South-West (Sir A. Grant) suggested that it might be desirable to extend the privatisation of hospital cleaning services. It is well known that the hon. Gentleman has a direct private vested interest in these matters.
I understand that under the convention of the House hon. Members do not declare such interests during supplementary questions or, indeed, during Question Time, but, in view of likely continued abuse in this regard, will you consider urging hon. Members who ask supplementary questions to declare their private interests?
Sir Anthony Grant: Further to that point of order, Mr. Speaker. On the assumption that the hon. Member for Fife, Central (Mr. Hamilton) is referring to me, may I remind him that if he had been present to hear me speak in the House over some years he would have heard me declare my interest and say that it is declared in the Register of Members Interests.

Regional Industrial Policy
3.41 pm
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Norman Tebbit)rose——
Mr. Harry Cowans: On a point of order, Mr. Speaker. I seek your guidance on an important matter. Would you accept a motion that the House should adjourn for five minutes so that hon. Members can be as well equipped as the press to deal with the statement about to be made by the Secretary of State?
Mr. Speaker: Before we become too excited about the matter, I remind the House that we have already heard what the Secretary of State has to say. It appears to be a long-standing practice, and I think that we should now proceed.
Mr. Tebbit: With permission, Mr. Speaker, I should like to make a statement on the Government's review of regional economic policy. I have today laid before the House a White Paper entitled "Regional Industrial Development", and my Department will publish shortly a factual background paper on the effectiveness of regional policy and other regional issues. The Government remain firmly committed to an effective regional policy. Although the economic case for regional industrial policy today is not clear cut——
Mr. Eric S. Heffer: Oh!
Mr. Tebbit: If the hon. Gentleman will listen, he may find out what I mean, if he is able to absorb it. —[Interruption.].
Mr. Speaker: Order. The Secretary of State has barely started.
Mr. Tebbit: Although the economic case for regional industrial policy today is not clear cut, and the economic costs of such policies must be set against the benefits, there remains a social case for regional industrial policy to reduce regional imbalances in employment opportunities.
Mr. Heffer: You can say that again.
Mr. Tebbit: I will say it again, if the hon. Gentleman tempts me.
The Government believe that there is scope to increase the effectiveness of regional policy and to achieve better value for money in the regions, with less adverse effects on the economy as a whole.
The White Paper sets out a new structure for regional industrial incentives, involving major changes to the regional development grants scheme. At present, RDGs overconcentrate on capital intensive projects and manufacturing industries. In future, we propose that they should be aimed more precisely at job creation. The new RDG scheme will be widened in scope to cover parts of the service sector, in addition to manufacturing. However, RDG will be payable only towards projects that provide, or modernise, capacity. Simple replacement investment will not qualify for RDG.
Grant will be payable as a proportion of capital expenditure, or as an amount for each new job created by a project, whichever is more advantageous to the investor. However, where grant is paid in respect of capital
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expenditure, it will be limited by a cost-per-job ceiling. For the sake of simplicity, small firms will be exempt from that limit.
These changes shift the payment of automatic grant assistance to projects that create jobs. In addition, the importance of selective assistance relative to RDGs will be increased. Relocation projects that offer no net increase in jobs will not normally be eligible for regional selective assistance.
Industry attaches great importance to the automatic and predictable nature of the RDG scheme. Therefore, grant will continue to be paid at standard rates, and by reference to published criteria. To avoid disruption or uncertainty arising from these changes, there will be a 12-month transition period from the introduction of the scheme before they take full effect. For projects that have already been offered selective assistance, RDG will continue to be paid under the old rules, not the new. The old rules, not the new, will apply for projects for which application has already been made, or is made before 31 January 1984, provided that an offer is made before changes to the legislation are brought into effect.
The regional investment role of the British Technology Group—which does not relate to its primary task of encouraging the transfer of technology — will be discontinued.
The White Paper invites views on number of issues: in respect of grant, which activities should qualify for RDG, what the rates of grant should be, and what the balance should be between automatic and selective assistance. On the assisted area map, views are invited on both the criteria for designation and on map coverage. The Government also welcome views on whether special measures should be taken in the assisted areas to encourage innovation and new firm formation. I would welcome written submissions before the end of May 1984 in order that they may be considered before decisions are reached.
Consultation has its price. A number of important decisions about regional policy will remain to be taken until after the consultation period. In particular, it is not possible now to announce the future geographical coverage of regional assistance or the amount of future regional expenditure. So far as coverage is concerned, the new map, when it is published, will be based upon more up-to-date data concerning travel-to-work areas now becoming available from the 1981 census returns.
The Government will introduce legislation as soon as possible to provide for the new scheme of RDGs outlined in the White Paper. Once the consultation process is complete, and the remaining decisions taken, the Government propose to lay the necessary orders, implementing all the changes simultaneously in autumn 1984.
In short, the new policy will ease the present unjustified bias against service industries, it will end the unjustified payment of expensive aid to projects that create few jobs in the assisted areas, it will minimise mere job shifting at taxpayers' expense and it will concentrate on better value for money in job creation in the areas of greatest need.
I am confident that the new framework will provide a firm basis for a more cost-effective regional industrial policy, benefiting the assisted areas more effectively with less adverse effects elsewhere.
Mr. Peter Shore: The Secretary of State will be aware that it is nearly four and

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a half years since his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), when he was Secretary of State for Industry, made a major statement on Government regional policy. Will the right hon. Gentleman confirm that there is not one region or sub-region in the whole of Britain where unemployment problems have not either trebled or doubled since his right hon. Friend made that statement? Is he aware that in July 1979, when his right hon. Friend last spoke, the worst unemployment in Britain, in the northern region, was about 8 per cent., but now in the region where there is least unemployment, the south-east, the figure is well over 9 per cent?
Does the right hon. Gentleman therefore agree that there can be no solution to the problem of regional unemployment and decline unless and until there is a major change in Government national economic policy? Within the framework of a changed national economic policy, the case today for a strong regional policy is greater than it has ever been. Will the right hon. Gentleman therefore assure us that, whatever changes emerge from the consideration and consultations on which he is about to embark, the level of regional assistance will not be reduced?
We shall consider carefully what the right hon. Gentleman said in his statement and the White Paper about changes in regional development grants. It is odd that the factual background paper that the right hon. Gentleman referred to at the beginning of his statement, which is about the effectiveness of regional policy and other regional issues, is not available now. I assume that it is precisely on the basis of that factual background paper that his proposals for making changes in regional development grant find whatever support there may be for them, which encouraged him to make his statement. There are many questions that we shall need to ask, but now I shall confine myself to four.
First, what value does the Secretary of State put on regional development agencies such as those which Scotland and Wales have most successfully used in the past few years? Does he intend to extend or have any proposals to extend them to regions in England where there is undoubtedly a great need, as unemployment is at a similar level?
Secondly, what part does the Secretary of State envisage local government playing in regional development, especially through local government enterprise boards? Thirdly, what thought has he given to the regional pattern of public expenditure? I refer to roads, railways, water supply and a range of other forms of public infrastructure, expenditure on which has a major impact on the prosperity of regions. Fourthly, does he intend to integrate major urban development and inner city policies with development aid policies? Does he intend to retain the existing structure of assisted areas, intermediate areas, development areas and special development areas?
The Secretary of State has come a little way since he expressed his philosophy about the regions in that famous phrase in which he advised people to "get on their bikes." The reality of his policy will be judged when we have studied carefully and debated, as I hope we shall have an early opportunity to do, the statement and the White Paper.
Mr. Tebbit: I shall try to respond to all of the right hon. Gentleman's points. First, of course I can confirm
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that, like other countries which experience a world-wide recession, we have had increased unemployment in the past four years. I imagine that the right hon. Gentleman knew the answer to that question.
The right hon. Gentleman was entirely right to imply that the best form of aid for regional economies is a healthy national economy. That is precisely why we intend that the new regional policy should be more effective than that which we have used until now and that it should operate at a lower cost to help the progress of the national economy.
The right hon. Gentleman asked about the background paper. I hope that it will be available shortly.
Mr. Heffer: How many jobs will that mean?
Mr. Tebbit: If the hon. Gentleman wants a job, I suggest that he goes and finds something constructive to do rather than just sit there yacking.
Mr. Heffer: How many jobs will that mean on Merseyside?
Mr. Tebbit: It would hardly have been sensible to publish all of the material that the Government have been considering recently.
The right hon. Gentleman asked whether we intend to introduce to England agencies on the Scottish or Welsh model. The answer is no.
The right hon. Gentleman asked what part local government would play. Its prime role is to keep down its expenditure and rate demands on businesses and to stop taxing businesses out of existence.
The right hon. Gentleman knows that the regional pattern of expenditure is not the subject of the White Paper. We hope that inner city policies will become more closely aligned with our other economic policies, but the most important thing to remember is that industrial regeneration is seldom started in the inner cities where urban aid is being used most. The prime purpose of urban policy is to restore the environment so that it is more attractive to business and residents.
We would welcome observations on the three tiers of aid structure from those who take part in the consultative process.
Sir William Clark: Does my right hon. Friend agree that most of our right hon. and hon. Friends would welcome a general debate on regional aid? Does he also agree that in many cases regional aid has not be as effective as it would have been had industrial aid been given throughout the country?
I am delighted as, I am sure, are most hon. Members that emphasis has been placed on the service industries as they are more labour-intensive than manufacturing industry. Will my right hon. Friend impress upon the Chancellor of the Exchequer the fact that, whereas we give 100 per cent. grants to manufacturing industry, the same amount of fiscal aid is not given to the service industries? Is it not high time our service industries enjoyed the same amount of capital assistance and tax allowances as manufacturing industry?
Mr. Tebbit: My hon. Friend is correct. We were wrong to have discriminated in our regional economic policies against the service industries. Of course, not all service industries will qualify for regional grants. [Interruption.] If the Leader of the Opposition thinks about it, there would be singularly little point, for

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example, in subsidising new greengrocers to come into an area in which there was already an adequate number of them. On the other hand, there would be good reason to assist, through regional policy, the setting up, for example, of software industry houses as a service industry in the assisted areas.
I am sure that my right hon. Friend the Chancellor of the Exchequer will listen carefully to all that my hon. Friend the Member for Croydon, South (Sir W. Clark) said about the tax structure relating to manufacturing and service industries.
Mr. Gordon Wilson: Is the Secretary of State aware that from 1977, when the Labour Government conducted a review of regional policy, Scotland's share of regional aid has declined by 40 per cent. in real terms? Although the right hon. Gentleman has not come to any specific decisions, there must be considerable worry underneath that cloak that Scotland will lose out. Will the right hon. Gentleman give a categorical reply to assure the Scottish people that in no circumstances will Scotland's share of regional aid be further reduced?
Mr. Tebbit: I could not possibly give an undertaking that anybody's share of aid would not decline further. It depends on the economic circumstances of the region. The hon. Gentleman knows perfectly well that Scotland has benefited enormously from the oil industry in recent years, which has eased its problems relative to those in many other parts of the country.
Sir Hector Monro: Has my right hon. Friend considered the relationship between European aid grants and regional policy? Is he aware that in my constituency, which is probably the most afforested in the United Kingdom, forestry infrastructure grants are not available because it is not an assisted area? Is that logical?
Mr. Tebbit: The logic of the policy is that European regional aid is available in areas designated as assisted areas in this country. Such a policy seems to have a certain logic to me, as I think it probably will when my hon. Friend reflects upon it.
Mr. Robert Sheldon: Is the Secretary of State aware that his remarks will be tested against the results that will be produced by the White Paper? Is he further aware that he had better be careful about manufacturing industry because in Tameside, which I represent, one quarter of manufacturing jobs were lost and more than 20 per cent. of the firms closed in the first two years of the previous Conservative Administration? We are dealing with a serious matter, and I hope that the right hon. Gentleman will consider the problems of manufacturing industry when he makes his final decisions.
Mr. Tebbit: Yes, indeed. I am sure that the right hon. Gentleman will also accept that, in all probability, there is a long-term trend towards a reduction of jobs in manufacturing industries because of technical change.
Equally, it seems that employment in the service sector will expand. To have a regional policy which acts only to assist manufacturing industries and not service industries is perverse.
Mr. Anthony Steen: Does not my right hon. Friend agree that instead of continuing to put public
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money into declining areas that private enterprise has left, in an attempt to reverse market forces, we should put the money where there is growth potential? That would he better than losing it in the ailing urban inner city areas.
Mr. Tebbit: I am sure that my hon. Friend noticed that at the beginning of my statement I said that we should be well aware of the cost of regional policy, and that we should now see it primarily as a social policy that is designed to ease the problems of those areas with the highest unemployment and to do what we can to reverse the imbalances. All social policies have their costs, and this policy has, too.
Mr. Eddie Loyden: Is the Secretary of State satisfied with the progress made by the enterprise zone on Merseyside in regenerating industry and creating jobs? Will he take it from me that small businesses will not resolve the problem of mass unemployment on Merseyside? About 100,000 jobs have been lost on Merseyside, and they will not be mopped up by small businesses, or by tinkering with the economy.
Mr. Tebbit: I must agree with the hon. Gentleman in that, while the local authority in Liverpool behaves as it does, hardly any regional policy will solve Liverpool's problems.
Mr. Jim Lester: May I assure my right hon. Friend that his statement is most welcome and timely? It represents a far more intelligent basis for Government involvement in regional policy, provided that the net funds available do not differ from the practice of perhaps the past six years? Hon. Members will be aware that the net funds will greatly help job-related schemes, and will reduce the budget of the Secretary of State for Social Services.
Mr. Tebbit: The more people that we can get into work the more the problems of the budget of the DHSS are eased. If we can eliminate the excessive costs, particularly of some of the very capital intensive projects that have generated very few jobs, it will help to control costs. If we sharpen all the instruments needed, we can achieve our objectives at a lower cost. If we can do that, and so borrow and tax less, there will be a bonus for everybody, and not least for the unemployed.
Mr. Paddy Ashdown: I welcome many aspects of the right hon. Gentleman's statement, and particularly the element that relates to an increased emphasis on job creation, as well as the extension of the system into the service sector. Indeed, I also welcome the White Paper, which this time gives us sufficient time to consult properly. However, the Secretary of State declined to give a commitment about the size of regional aid in each region. Will he then give a commitment about the global budget, and confirm that the Government do not wish the global resources that have been put into the support system to be diminished?
In the last major review, many rural areas with high unemployment were taken out the system and were removed from access to EEC grants. Will the right hon. Gentleman assure the House that rural areas with high unemployment will be more sympathetically considered when the new map is drawn?
Mr. Tebbit: I am not sure in what way the hon. Gentleman seeks to draw a distinction between expenditure on regional economic policy and what he

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called "global" support. I should make it absolutely plain that I expect the total cost of our regional economic policy to be lower in future than it has been in the past. [HON. MEMBERS: "Ah!"] That is the second time that I have said that, so I do not see why Opposition Members should be surprised. Like all other areas, rural areas will fall to be considered for inclusion or exclusion as the new map is drawn up, and in the light of our consultations.
Sir Peter Mills: Is my right hon. Friend aware that some of us in the south-west are very glad that he is continuing the regional aid policy? From experience, we know that it has been of tremendous benefit. Is he further aware that we welcome the extension into the service industry? Will he make it clear that he will hold the widest consultations about what needs to be done, as experience on the ground in the remoter areas can greatly help?
Mr. Tebbit: I am grateful to my hon. Friend for his remarks. Of course we want to consult widely, and that is why we shall receive comments until May. I understand, of course, that the regional policy is welcomed in the south-west. That is not surprising, as it is a beneficiary in cash terms. Of course those who are not beneficiaries but who are primarily financers of the policy—that is, those in the non-assisted areas—may look at the policy with a slightly more jaundiced eye, but I am sure that they will accept that there is a cost to every social policy.
Mr. Tom Pendry: Is the Secretary of State aware that if he had met the deputation from Tameside council today, which he cancelled in view of his statement, he would have heard a very powerful case being made for assisted area status? He would have heard that unemployment in Tameside is as high as in the west midlands, that one in four children is in receipt of free school meals, and that one in four householders is in receipt of rent or rate rebates. As the Government have described Tameside as the most deprived area outside London not to be in receipt of assisted area status, what comfort will his statement give the people of Tameside?
Mr. Tebbit: The comfort that my statement should give to the people of Tameside is that, if they find themselves eventual beneficiaries of the policy, by being included within the area of coverage, they will find it more finely tuned to job creation than the previous policy. If, on the other hand, they still find themselves outside the area, they will at least have the consolation of knowing that the whole policy is being operated at a lower cost, and thus at a lower cost to them as well. Like most people, they stand to gain either way.
Mr. Fred Silvester: Does my right hon. Friend recall that on a previous occasion his hon. Friend the Minister assured us that, when the review was undertaken, all Departments would be considered, and that it would not simply be a matter of that part of regional policy which was on his vote? That is particularly important in respect of inner city policy, for example, where patches of aid lead to great local dislocation. Can my right hon. Friend assure me that all Departments have participated in the review, and that the Government are prepared to consider a regional policy across the whole range of activities, rather than a policy that is confined simply to the Department of Trade and Industry?
Mr. Tebbit: I think that I can best answer my hon. Friend by being short. Yes.
Mr. Bernard Conlan: Is the Secretary of State aware that for many years all responsible opinion in the north of England has recognised the need for a development agency? Did that view play any part in his consideration of the matter? Will the right hon. Gentleman accept that many of us are suspicious when he talks about getting value for money, because that term, when it comes from this Government, is synonymous with a cost — cutting exercise, which would lead to fewer jobs not more?
Mr. Tebbit: The hon. Gentleman misunderstands the extent to which regional policy in the past has been a policy of moving jobs from one part of the kingdom to another rather than of creating a net additional number of jobs. Of course the methods that we have used through regional policy to attract inward investment have undoubtedly brought about a net increase in jobs. But I doubt whether many people today, particularly those who belong to the body which the hon. Gentleman calls "responsible opinion", believe any longer that jobs are created by public expenditure. The former Prime Minister, the right hon. Member for Cardiff, South and Penarth (Mr Callaghan), gave up that proposition a long time ago when he was in office.
Several Hon. Members rose——
Mr. Speaker: I fully appreciate that the statement covers virtually every constituency. I should like to call as many hon. Members as possible, and so I propose to allow questions to continue until 4.30 pm. I hope, however, that that will contribute to shorter supplementary questions.
Mr. Nicholas Winterton: While I welcome many of the aspects of my right hon. Friend's announcement this afternoon, may I refer to the comment made by the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) about the importance of manufacturing industry, which creates the real wealth of this country? Will my right hon. Friend pay particular attention in his package to the needs of the textile and clothing industry, which is the fourth largest employer in this country? It could well be that much funding will be required by that industry merely to maintain its existing work force, if it is to remain competitive, rather than to add to the work force, which seems to be the fundamental basis behind his announcement today.
Mr. Tebbit: My hon. Friend will see that the statement is not based on sectoral aid to industry and it is nondiscriminatory between one aspect of manufacturing industry and another. I want it to be less discriminatory between the manufacturing and service industries. It is not immediately obvious to me at any rate that it is necessarily more virtuous or more wealth-producing to manufacture ladies' home-perm sets than to run a ladies' hairdressing salon.
Mr. Dafydd Wigley: Does the Secretary of State accept that many of us in Wales will see his statement as a curate's egg. Will not the good parts, such as the extension to the service industry, be diluted to some extent if, as in paragraph 49 of the White Paper, the Government are looking for opportunities to reduce public expenditure? We find it difficult to see how there can be

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an extension into all those other new areas if the overall amount of money is to be cut. Will the Government include consideration of the principle of additionality with regard to EC funds to ensure that there are additional benefits for those areas that receive them? In applying his mind to the issue of the relocation of industries, will he appreciate that a company employing 200 people in an area with 30 per cent. unemployment may be of greater benefit overall than one in an area where there is only 4 per cent. unemployment?
Mr. Tebbit: On the latter point, the hon. Gentleman should try to convince the 200 people who lose their jobs in the area with 4 per cent. unemployment. They are 100 per cent. unemployed at the time they lose their jobs and they might not think that his point was terribly helpful.
On overall expenditure, if the hon. Gentleman takes the view that one can never get better value for money, he might be right. I take the view that one can get better value for money. The hon. Gentleman will notice when he reads the White Paper that we have put a cost-per-job limit on aid, which is extremely helpful in getting better value for money. We have also excluded from aid mere replacement projects, which again is helpful. There are ways of saving money as well as new ways — for example, in the service industry—of spending it.
On additionality, we have a satisfactory arrangement that is working extremely well.
Mr. William Powell: Is my right hon. Friend aware that, as a result of decisions taken by Opposition right hon. Members, unemployment in my constituency rose to about 25 per cent. and that, as a result of the policies of the present Government, it has been steadily falling so that it now stands at 18 per cent.? May I assure my right hon. Friend that his statement will be welcomed in my constituency and among my constituents and that the emphasis that he has placed on the social policy in providing jobs will be particularly welcomed?
Mr. Tebbit: I am grateful to my hon. Friend. Of course I am well aware of the effects of Government policies—the previous Conservative Government's policies as well as those of the present Government—on employment in Corby in particular. It is not just Government policy that has been helping to bring jobs back to Corby. It is in very large part due to the initiative of all the people of Corby who have shown what can be done by a city or a town which goes out determined to sell itself and the quality of its people. They have brought the jobs back to Corby and they deserve every congratulation on their success.
Mr. Derek Foster: If the Secretary of State believes that there is no economic case for regional policy, is that not because his Government's policies have made the whole country into a development area? Does he appreciate that all the jobs gained under regional policy during the 15 years up to 1979 were wiped out in the first two years of the Government's first term of office? Does he appreciate that people in the northern region will be deeply suspicious of his statement because they will understand that it is a cloak of respectability for spending less money on the regions and for disbanding the regions altogether?
Mr. Tebbit: If the hon. Gentleman checks, he will see that I have said that the case is less clear cut on economic
848
grounds and that it is now seen as being primarily on social grounds. The hon. Gentleman said that previous gains had been wiped out, but I must remind him that under the Labour Government there was a fair amount of wiping out while unemployment was being doubled. I must also remind the hon. Gentleman that, since 1979, the whole world has been through a severe recession and the extent to which we have suffered more greatly than many others is not least because of the accumulated inefficiencies of British industry and commerce, the excessive rates of taxation which have been imposed, and the excessive rates of inflation which had been caused by the Labour Government's spending policy.
Mr. Hal Miller: Will my right hon. Friend accept that in the west midlands, which has the fastest rising rate of unemployment in the country, the lowest wages per head, the lowest output per head and the highest dependence on manufacturing, the welcome for his White Paper will be conditioned by the extent to which it reduces discrimination against the west midlands and help for the modernisation of our industry?
Mr. Nicholas Winterton: My right hon. Friend does not want to maintain jobs in manufacturing industry; he wants to open hairdressing salons instead.
Mr. Tebbit: In response to my hon. Friend the Member for Macclesfield (Mr. Winterton), I should say that not only do I have no intention of opening a ladies' hairdressing salon but I would be precluded from taking an interest in such an operation while I was a member of the Government.
I fully understand the points made by my hon. Friend the Member for Bromsgrove (Mr. Miller). He, like me, will have taken some encouragement from the early signs of the recovery in the west midlands as noted by the unemployment figures which were issued in the past week or two.
Mr. Ken Eastham: Is the Secretary of State aware that the Government's aid strategy has been a complete disaster for the north-west, where assisted area status has been taken away from places such as Manchester and Salford? Is he further aware that even today a deputation is visiting the House from GEC, Trafford Park, where there now remain about 5,000 or 6,000 workers where once there were 25,000 workers? The work is now going down to Rugby and Stafford, and the Trafford Park industrial estate, the first one in Britain, is now an industrial desert. What will the Secretary of State do about that?
Mr. Tebbit: The answer to the hon. Gentleman's first question is no. The answer to his last question is that the Government will continue with their economic policies. I hope that the hon. Gentleman will ask himself what more he can do to help reduce our costs in industry to make industry more competitive with those abroad. The hon. Gentleman could conceivably be more helpful than he sometimes is.
Mr. Robert Hicks: Does my right hon. Friend agree that the nation as a whole has a social and economic responsibility to the less well endowed parts of our country? In that context, while acknowledging the importance that my right hon. Friend

849
places on the link between aid and job creation, may I ask whether he agrees that regional aids can play as important part in job maintenance as it can in job creation?
Mr. Tebbit: Yes, of course aid can play a part. That is why there will be provision through the regional aid system to assist companies in the regions, or those going to the regions, to finance new processes, new equipment and so on. I find myself in agreement with my hon. Friend, as ever.
Mr. Nicholas Winterton: Why did my right hon. Friend not give me that answer earlier?
Mr. George Foulkes: Will the Secretary of State confirm that since the global amount is to be reduced, and since the present criteria which favour Scotland are to go, today's statement is very bad news for Scotland? As the right hon. Gentleman is against spending public money just to move jobs around, can he tell the House exactly how he will prevent firms like Gomba, after two years free rent at public expense, from moving Stonefield truck production from Cumnock where unemployment is extremely high, down to the enterprise zone in Rochester in the south-east of England? How will he prevent that?
Mr. Tebbit: When regional aid is paid and the conditions are not adhered to, a clawback operates for five years. I understand that the company which the hon. Member mentioned felt that it had been badly treated locally in a number of ways, particularly by the local authority.
Mr. Foulkes: That is nonsense.
Mr. Tebbit: I am not saying what the facts are, but what I understand the company feels. The hon. Member cannot say that he knows better than I what I understand. He should consider whether the area should have tried to make itself as attractive to that company as the area to which it has moved. I cannot understand which criteria are being altered so that they are damaging to Scotland.
Mr. Michael Hirst: Is my right hon. Friend aware that his statement will be widely welcomed in Scotland, where much concern has been expressed about the indiscriminate use of money for regional development grants? Is he further aware that the CBI in Scotland has called for a positive policy of cost—effective selective regional assistance, which includes aid to service industries, which have an impressive record in job creation? Does my right hon. Friend agree that the proposed consultation process on regional policy is infinitely preferable to the damaging changes of policy such as the Labour party pursued when it precipitately cancelled the regional employment premium?
Mr. Tebbit: Yes, indeed. It is clear that the Government have set about making changes in policies in a more constructive and considered way than the last Labour Administration, with their chopping and changing. I am well aware of the wide welcome that is likely to be given to the proposals by responsible opinion in Scotland.
Mr. David Penhaligon: Is tourism a service industry in terms of the White Paper? Does the Secretary of State recall exchanges in the House during which he said that mines in my constituency did not qualify for regional development grant because they were not mobile?
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Does the mobility clause in the White Paper mean that in future mines in Cornwall will receive regional development grant?
Mr. Tebbit: Not necessarily. Technology goes a long way, but the concept of mobile mines is not yet with us. There are reasons why extractive industries are not usually supported in the same way as other industries. I have said that certain classes of service industries will attract support. Which classes are included is a matter for consultation.
Mr. John Watson: Can my right hon. Friend confirm that the present system of regional development grants and selective assistance has not only had the effect of subsidising the transfer of jobs from one part of the country to another, but sometimes the transfer of jobs from one development area to another? Is he aware that his intention to change that will be welcome? Can he say a little more about how that intention will be put into effect?
Mr. Tebbit: Principally, in future selective financial aid will not normally be paid in respect of mere transfers when no net increase of jobs is involved. Secondly, in future RDGs will not be paid when there is merely a movement of jobs from one assisted area to another. I hope that that will be helpful in reducing the amount of job shuffling at public expense.
Mr. Roy Hughes: I appreciate the need to obtain value for money, but is it not rather callous to try to cut regional aid when between 3 million and 4 million people are unemployed? Does the Secretary of State not appreciate the traumatic experience of areas such as south Wales where many thousands of redundancies have occurred, particularly as a result of steel closures? Is the right hon. Gentleman not aware that such areas are still desperately trying to pick up the pieces and need a bit of continuity?
Mr. Tebbit: I do not think that the policy is callous, because a substantial number of the 3 million unemployed are not in areas which are in receipt of regional aid, but are in paying and job-exporting areas. One must consider them as well. We must maintain a balance. Surely it is right to ensure that we spend our money with care arid seek the best value for it.
I note what the hon. Gentleman says about south Wales. It has been through some extremely difficult times with the decline of the Welsh mining industry, particularly because of the narrow seams which are no longer economic to exploit. We must remember that south Wales has had a spectacular success in attracting inward investment, not least because of the great efforts by my hon. Friend the Secretary of State for Wales, who was on the Bench beside me until a few moments ago.
Mr. John Ward: Is my right hon. Friend aware that his answer about job-exporting areas will be welcome in constituencies such as mine? Is he further aware that many of us believe that regional economic aid does not create jobs, but represents a net cost to the taxpayer rather than a bonus?
Mr. Tebbit: I note what my hon. Friend says. Many hold the view, as he rightly says.
Mr. Michael McGuire: I had given up all hope of being called. Is the Secretary of State aware

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that his reply to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) means that the Government intend to perpetuate the disadvantages experienced by the English regions? Is he further aware that it is not quite true to say that jobs are shifted only within the United Kingdom? Does the right hon. Gentleman agree that the regional policy means that the Scottish and Welsh Development agencies have the funds to attract jobs from abroad? Those agencies often take full-page advertisements in our national newspapers describing their spectacular successes. If those funds are not available to the English agencies—I am speaking for the northwest region—they are at a considerable disadvantage. Will the Minister look at the position?
Mr. Tebbit: I shall certainly examine what the hon. Gentleman has said, but he should not underestimate the amount of inward investment that is brought into England as well as Scotland and Wales by use of RDGs, selective financial assistance and the efforts of those who go abroad seeking to persuade foreign companies to invest in Britain generally. There are regional development agencies, including the North-West Industrial Development Association, which receive Government assistance.
Mr. Shore: I believe that the Secretary of State realises that these exchanges have brought out and confirmed the central piece of bad news that the Government, at a time when regional unemployment is at its highest level for 50 years, are to cut regional employment aid. That is the Government's message. [Interruption.] The Secretary of State has said that there is to be a further cut beyond the £100 million to £200 million cut that was announced in 1979 by his predecessor.
The Secretary of State said a great deal about cost effectiveness, and in principle applied cost effectiveness to particular items of regional aid. We have no objection to that, provided that it is done thoroughly and honestly. I encourage the Secretary of State to apply cost effectiveness to Government expenditure generally on unemployment. Is he not aware that he was talking about a sum of about £900 million on regional development aid of all types, as opposed to the direct and indirect costs of about £17,000 million a year to sustain the army of unemployed in idleness? In those circumstances, is it not simply nonsense and a disgrace even to be contemplating further reductions in the amount of regional aid?
Mr. Tebbit: In short, I do not. It is imperative that we receive the best value for our money and that we do not spend more than the economy can afford on any of those items.
My hon. Friend the Minister of State has said to me that he thought that at one stage in an answer I used the letters "RDGs" as opposed to "selective financial assistance" in referring to the limits on what could be paid when projects were moved between one region and another. I shall check the Official Report and ensure that I have used the correct expression.
Mr. A. E. P. Duffy: On a point of order, Mr. Speaker. As a new regional policy statement has just been made, will you explain why not one Opposition Member or, so far as I can recall, one Conservative Member, representing the Yorkshire and
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Humberside region has been called, whereas five Opposition Members from the north-west region have been called?
Mr. Speaker: The hon. Member knows that this is an extremely difficult task. He is really saying that he has not been called. I do my best to balance questions.
Mr. Foulkes: On a further point of order, Mr. Speaker. In answer to my question the Secretary of State attacked the Cumnock and Doon Valley district council. I know the facts about Gomba. The company's only quarrel was not with the Cumnock and Doon Valley district council, but—
Mr. Speaker: Order. That is not a point of order, but an argument with the Secretary of State.

European Human Rights Convention
4.34 pm
Mr. Robert Maclennan: I beg to move,
That leave be given to bring in a Bill to give effect to the European Convention for the Protection of Human Rights and Fundamental Freedoms and to Protocol No. 1 and Protocol No. 4 thereto and to give to the rights and freedoms guaranteed thereby the force of law in the United Kingdom.
The European convention on human rights was ratified by the United Kingdom more than 30 years ago. The United Kingdom was the first country to ratify it. There is a distinctly British feel about the European convention. That is not surprising, because it was drafted largely by the late David Maxwell Fyfe, Lord Kilmuir, as chairman of the Legal Committee of the Assembly of the Council of Europe. The convention was ratified by the Labour Government, led by Clement Attlee and Ernest Bevin. Subsequently, in 1965, the then Labour Government agreed to give effect to what had always been understood to be the intention — to give to these within this country's jurisdiction the right of individual petition to the European Commission of Human Rights.
In Parliament and across parties there has been broad support for the view that the final step — the incorporation of the provisions of the European Convention on Human Rights into our domestic law—should be taken by the enactment by Parliament of a Bill to give effect in the United Kingdom to the convention's provisions to secure the fundamental rights and freedoms guaranteed by the convention. The provisions, which constitute an international legal responsibility, would then be able to be the subject of proceedings in our domestic courts to ensure that our citizens enjoy a domestic remedy for an alleged infringement of the European convention.
The convention enables those within the jurisdiction to complain about the application of legislation, the decisions of Ministers or public officials and the judgments of United Kingdom courts. The convention has been invoked in a number of cases brought before the European Commission against the United Kingdom.
A subsidiary purpose of the Bill is to seek to ensure that the United Kingdom and its authorities are not so frequently brought before an international tribunal for alleged breaches, as has been the case since 1965 when the right of individual petition was granted. In that period, no fewer than 80 cases have been taken against the British Government and public authorities. That is more than twice as many cases as have been taken against any other Governments who are signatories to the European

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convention. Those cases have covered matters such as alleged inhuman treatment of suspected terrorists in Northern Ireland, inadequate safeguarding of personal privacy against telephone tapping by the police, unfair discrimination against British wives of foreign husbands under the immigration rules, alleged inhuman conditions in cases of solitary confinement and segration, corporal punishment in Scottish schools, ineffective judicial protection for detained mental patients and would-be immigrants, dismissal of workers because of the oppressive operation of a closed shop, nationalisation of aircraft and shipbuilding companies without adequate compensation, denial of equal citizenship rights to British passport holders from east Africa and interference with free expression by the law lords in extending the common law offences of contempt of court and blasphemy. Many other important matters of public law have been brought before the commission.
It is my view, and that of the many people who support the proposed incorporation into our law of the convention's provisions, that these matters are more properly dealt with in this country by our courts. The courts are capable of doing that job. It is a peculiarity that a convention that was largely devised by British lawyers, judges and Ministers should not have been incorporated into our domestic law.
It is strange, too, that this country, and this Parliament, which has legislated for the independence of so many former colonies and dependent territories and made provision that such rights as are enjoyed under the European convention shall be enjoyed by those newly independent countries, has not made similar provision for itself. Indeed, I believe that, save for New Zealand, we are the only country in the democratic Commonwealth which has not so secured the fundamental rights and freedoms of its citizens.
It is not only in the Commonwealth that we are the odd man out. The European democracies, too, mostly enjoy the benefits of a bill of rights and the provisions of the convention incorporated into their domestic law. The United States of America, with its Bill of Rights as part of its written constitution, has long enjoyed this important protection for the individual citizen.
It has sometimes been wondered whether the judges of this country are capable of deciding these matters, which are frequently of a political nature. Since the setting up of
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the independent countries of the Commonwealth, however, these provisions have been adjudicated upon time and again by British judges in the Judicial Committee of the Privy Council. Our judges have demonstrated their expertise and capacity to deal with these matters. Indeed, Lord Scarman, in his Hamlyn lecture in 1974, gave the first resounding call for the incorporation of these provisions into our domestic law.
It has been argued that Parliament cannot bind its successors and, because of its sovereignty, is supreme over any such bill of rights. That is true, but the Bill that I seek leave to introduce would ensure that Parliament would not seek to bind its successors by the incorporation of the European convention. The Bill would also specifically retain to Parliament the power to overrule the convention in express terms. Otherwise, the provisions of Parliament would be construed to be in conformity with those of the European convention.
In the absence of this action by the House and Parliament, I believe that we have an incomplete and defective system of public law which may operate more as a shield for public authorities than as a protection for the rights of individuals. I believe that the Bill will command wide support throughout Parliament. A similar Bill has already twice gone through all its stages in another place and been approved by a Select Committee of the House of Lords, recommended by the Standing Commission on the Constitution of Northern Ireland and backed by many of the highest judges in the realm I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Robert Maclennan, Mr. Donald Anderson, Mr. A. J. Beith, Mr. Alex Carlile, Sir Edward Gardner, Mr. Terence Higgins, Mr. Roy Jenkins, Mr. Roy Mason, Mr. Geoffrey Rippon and Mr. Norman St John-Stevas.

EUROPEAN HUMAN RIGHTS CONVENTION
Mr. Robert Maclennan accordingly presented a Bill to give effect to the European Convention for the Protection of Human Rights and Fundamental Freedoms and to Protocol No. 1 and Protocol No. 4 thereto and to give to the rights and freedoms guaranteed thereby the force of law in the United Kingdom: And the same was read the First time; and ordered to be read a Second time upon Friday 16 March and to be printed. [Bill 73.]
Orders of the Day

  London Regional Transport Bill
  Order for Second Reading read.
  4.43 pm
  The Secretary of State for Transport (Mr. Nicholas Ridley): I beg to move, That the Bill now be read a Second time.
  The purpose of the Bill is quite simply to improve London's transport. It marks the end of an unsuccessful 14-year experiment. In 1969 the Transport (London) Act passed control of London's public transport to the newly created Greater London council. With hindsight, we can clearly discern the conventional wisdom that made such a move seem a natural one. That was the heyday of the age of corporatism—the mixing up of the commercial and the political. It was the age of "big is beautiful", when everything had to be co-ordinated and integrated with almost everything else, so London Transport was thrown to the mercies of the GLC.
  The GLC was given a duty under the 1969 Act to
  "promote the provision of integrated, efficient and economic transport facilities and services for Greater London."
  Some of us even then were suspicious. Our worst suspicions have been confirmed 14 years later. We now see transport services that are not integrated, not economic and most certainly not efficient. The fashion of the times to confuse the issue of social provision with that of efficiency was, in fact, fundamentally misconceived. There are still those who believe that London Transport should be subjected to what they call "political control", but I believe that it should be run as a business and that where social provision is justified it should be properly identified and paid for separately.
  The GLC has also signally failed in its basic purpose of acting as a strategic transport authority. The Select Committee on Transport described London's roads as a "national scandal". In traffic management the GLC has caused widespread concern to industry and commerce through its proposals for a London-wide lorry ban —which, as the Select Committee said and as the Government have agreed, would damage the commercial and industrial life of the capital. At the same time the GLC has plunged London Transport into the chaos that we are now seeking to bring to an end.
  Let us consider the record of the GLC's stewardship of London Transport from 1970 to the present day. Since 1970 London Transport costs have soared. Unit costs—that is, costs per vehicle mile—rose in real terms by two thirds for the buses and about half for the underground. The reason for this is that passenger demand has declined by about a quarter over the period, while capacity has remained broadly constant. Manpower, at least until 1981, remained level at about 60,000 staff. Since 1973, more than 30 per cent. of LT's staff have been engaged on engineering and maintenance work. The unit cost of bus engineering has more than doubled in real terms. Indeed, the need for much greater efficiency in this area was what led the Government to refer LT's bus maintenance operations to the Monopolies and Mergers Commission last March. As for the underground, however one does the comparison for efficiency, LT comes out near the bottom of the international league table.
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  The inevitable consequence has been a huge rise in the total subsidy bill to London Transport—from some £6·5 million in 1970 to a colossal £370 million in 1982. I know that all public transport operators have found this a difficult period, especially on account of the very rapid rise in real wages in the mid-1970s, but London Transport's record has been worse than most. For instance, the two thirds rise in LT's bus costs compares with only half in the case of other bus operation in this country. For the underground, the figure of more than 50 per cent. compares with British Rail's figure of around 10 per cent. If keeping a particular level of subsidy is seen as an end in itself, there will never be the right incentives to improve management efficiency. If at the same time the aim is to keep fares down and service levels constant, it is the taxpayer and ratepayer who suffer.
  It was this blatant disregard for the providers of subsidy which finally caught out the GLC two years ago. In October 1981 London Transport fares were cut by one third. The GLC itself estimated that the extra cost in subsidy of this policy over four years would be £1·2 billion. Far from attempting to mitigate this enormous cost, the GLC has taken exactly the opposite line. This year LT presented the GLC with its new three-year plan. Among the many sensible features of the plan were proposals for slight reductions in bus mileage and a substantial cut in unit costs. The reaction of the GLC was to move quickly to fill five vacant places on the board with its own nominees, rejecting all the suggestions of the chairman of London Transport. It sought to defend this in a letter to The Guardian and promised that future appointments would be fully agreed by all concerned.
  That undertaking was thrown to the winds only a couple of months later when, in the teeth of further objections from London Transport, two more appointments were made. One was the chairman of the London Labour party, whose membership of the Tribune group and support for the Soviet backed regime in Afghanistan "obviously" fitted him for the difficult job of running London Transport.
  Mr. John Prescott: Cheap.
  Mr. Ridley: The other was the organiser of Mr. Livingstone's unsuccessful attempt to capture the Labour party nomination for Brent, East. When the GLC discovered that this was contrary to the GLC—London Transport long-standing rules about making political appointments to London Transport, it promptly changed the rules by amending its standing orders. I expect the next vacancy will be filled by Arthur Scargill, because at least he has undoubted experience underground. It is totally wrong that the GLC should seek to turn London Transport into a political appendage of itself.
  Mr. Ron Leighton: Is the Minister of the view that, if he does not have a policy, he should go for the man?
  Mr. Ridley: Is the hon. Gentleman seriously suggesting support for putting active political figures on to a managerial board in contravention of the standing orders of that board? If so, I am ashamed that he should even dare to raise the question. It is also a disaster for the long-term interests of Londoners, who want a decent transport system at a decent price.
  Finally, we heard Mr. Livingstone's reported reaction to the Bill. He castigated the Government's aim to run

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  London Transport "as a business". There could be no more revealing insight into the GLC's attitude to the use of public money—money, I might say, the bulk of which is levied by the GLC on London's businesses.
  Even before the Bill was published, expensive posters went up all over London telling Londoners to "Kill the Bill" and suggesting that as a result of the Bill specific services would be cut and fares would rise. The GLC even had the temerity — even though London Transport protested—to include the London Transport symbol on the posters, thus implying that the LTE was party to the campaign, which it categorically stated it was not. The dishonest and reckless use to which the GLC has put £850,000 of ratepayers' money is nothing less than scandalous.
  Mr. Prescott: Dishonest?
  Mr. Ridley: It is lucky that London buses have always been painted red. Otherwise, no doubt the GLC would make the ratepayers fork out more money to do so.
  I have one word of caution for the hon. Member for Kingston upon Hull, East (Mr. Prescott) who will soon be speaking for the Opposition. He made a major blunder in going to County hall to queue for inclusion in the GLC press conference when the Bill was published. He was given leave to speak rather late in the pecking order. I hope that his speech will not be just reading out the GLC brief. I have a copy here and it is neither convincing nor accurate. We have all read it already; I shall be quoting from it freely during the Committee stage. The hon. Gentleman would be wiser to follow his predecessors and dissociate himself from the discredited mob on the South bank. The Labour party must learn to develop policies of its own and not just join every passing pressure group.
  No Government that had the interests of Londoners at heart could sit idly by despite these extraordinary events. It is time to bring to an end this 14-year old experiment with London's public transport, and quickly.
  The Government have had the benefit of the advice of the Select Committee on Transport, which published its report on transport in London in July 1982. The report contained an impressive and thorough analysis of the defects of London's transport. We agreed with a great deal of this analysis. We agreed with the Committee that public transport had to be taken away from the GLC and that a major reallocation of responsibilities was needed.
  Where we differed from the Select Committee was with its suggestion of a Metropolitan Transport Authority, responsible for London Transport and for roads and traffic management. It would have carved off a slice of territory from a number of home counties. Some of its members would have been nominated by me, others by the local authorities and others by users. The exact nature of such representatives was a real problem which the Committee clearly recognised, so much so that it was unable to reach a firm view on it. But there are other difficulties with this model. As a solution for London's transport problems as a whole, the MTA smacked too much of the corporatism which was, in our view, an important reason for the GLC's past failures. It would have been horribly similar to the GLC itself without being directly elected by the electors. It was envisaged that the MTA would sit between the Government, as the grant-giving body, and London Transport as the operator of the tube and buses.
  The real need is for London Transport to be allowed freedom to manage its affairs with a minimum of political
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  interference and control, but within clearly stated financial and policy objectives. London Transport is important in a national context, a key point in the Select Committee report. Thus the strategic control, and some of the financial support, should come from central Government. The Bill adopts that objective as its starting point.
  We want the new arrangements to be simple and workable without involving organisational upheaval.
  Mr. David Howell: I agree totally with my right hon. Friend's views about the difficulties of a Metropolitan Transport Authority—I am sure he has that analysis and remedy right — but will he accept that British Rail's surface railways are a vital part of London's regional transport system and that an effective operation in the future will require close co-ordination with and, indeed, supervision by London Regional Transport of the British Rail commuter network? Will he give an assurance that the powers exist in the Bill and will be used to bring that about, even if he has not been able to arrange it so far?
  Mr. Ridley: I am grateful to my right hon. Friend, because I agree with what he says. I shall deal with that point at some length later on.
  We also want, for reasons which I have already made clear, a scheme that could be implemented very quickly. We want a scheme that will allow further changes in due time to meet the various objectives that we have in mind.
  Rather than create a new body for the running of London's transport, with all the complications of the vesting of London Transport's assets which that would entail, we propose, so to speak, to keep London Transport as it is, but simply to transfer control of it from the GLC to the Government. This is achieved by the first clause of and the first schedule to the Bill. The GLC's powers in relation to London Transport are removed with the repeal of parts I and II of the 1969 Act. The schedule sets out the new constitution of the board. The change will occur on a day appointed by me, as soon as possible after the enactment of the Bill. At the same time the London Transport Executive will assume its new name, London Regional Transport, and its new identity while retaining, initially at least, its physical manifestation.
  The GLC is seeking to argue that, with the repeal of part 1 of the 1969 Act, public transport in London will no longer be looked at in the wider context. That is patent nonsense. First, under the provisions of this Bill, LRT will be required to prepare plans and to consult widely on them. It will have to have regard to the objectives and principles I set for it. When the Government have decided on the better planning framework for London that will operate on the GLC's demise, public transport, along with highways, traffic management and all the rest, will certainly 'operate within that wider context. The provisions in the Bill will ensure that.
  In our White Paper we said that LRT's bus and underground operations would be established as separate subsidiaries under LRT as a holding body. This is achieved under clause 4, which requires LRT to establish Companies Act companies for both purposes within a period that I shall specify. This is an important step and in order to develop the approach London Transport Executive has started to break down its monolithic structure. London Regional Transport will look across the field to see exactly what is needed by way of public transport. When it comes to delivering that cost

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  effectively, separate companies will be accountable for their own performance and they will each publish separate accounts and make their own demands for external finance. This further change will occur as soon as the subsidiaries are established with suitable objectives and the right capital structure.
  Mr. Nigel Spearing: Is not that last explanation the opposite of what the Minister said earlier about London Transport remaining, to use his words, much as it was before? Does he agree that the arrangement that he has just explained goes back to before 1912 in terms of the integration of buses and railways? If so, how can he claim that the nature of London Transport will remain what it is now, except that he will take it away from the GLC?
  Mr. Ridley: I was referring earlier to the statutory position. Instead of re-forming a new London Transport, with all the new schedules and legal constitution that that would need, we are simply taking the existing London Transport and transferring it back to the Government. We are taking the opportunity at the same time to make them separate companies, but that does not change its legal entity.
  The main financial provisions are in clauses 15 to 24. LRT will receive grants from the Government under clause 12 in support of its capital expenditure and operating deficits, and those of its subsidiaries. It will operate within a financial break-even duty under clause 15. I shall be able to set specific financial objectives for LRT, or any of its subsidiaries, under clause 16.
  One of the most important long-term reasons for the provisions of the Bill is the need for closer co-operation, in the interests of the passenger, between London's bus and underground services on the one hand and British Rail's services in the London region on the other. Here I come to the point raised by my right hon. Friend the Member for Guildford (Mr. Howell). The Bill will ensure that in future the two major operators in London will be subject to compatible policy and financial frameworks. It will bring the two systems better in tune with each other. It will tackle wasteful duplication between the two systems, seek to achieve the speeding up of improved ticketing systems, better facilities for interchange and better information designed to help the traveller move more easily between modes. I intend to set up a liaison committee consisting of the two bodies under my chairmanship to make sure that this work is carried out as quickly and effectively as possible.
  These new liaison arrangements should secure the changes that we all want to see. If they do not, the Bill contains further important powers that can be activated at any time up to eight years from the enactment of the Bill. These are the provisions in clauses 35 to 38, under which LRT would assume the functions of subsidising authority to British Rail's services in the London region. LRT would then become, in effect, the sole authority responsible for the allocation of resources among all London's major public transport operators, and in particular for the level of service on British Rail's commuter services.
  Mr. Robert Adley: Like my right hon. Friend the Member for Guildford (Mr. Howell), I am concerned about the relationship between British Rail and
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  London Transport, and I agree that the closer their operations can be brought, the better. Is it possible to foresee a situation under the Bill in which, for example—as my right hon. Friend is considering separating the operations of buses and railways in London Transport—British Rail could take over the railway operations of London Regional Transport?
  Mr. Ridley: It is possible to foresee that happening under the Bill — because we have powers in other clauses, to which I shall be referring, to allow other operators to run services for London Transport—but I do not think that that is the sort of solution to the problems that many people have in mind. It is much more a question of liaison and phasing the interchanges among bus, rail and tube terminals in such a way that passengers can move around easily. I should prefer to achieve our aims through the simpler, more informal arrangements of liaison and cooperation to which I have been referring. I assure the House that if more formal arrangements prove necessary we shall bring them in forthwith and we shall have the basic legislative provisions ready in place.
  The 1983 LTE plans envisaged cost reductions of more than 9 per cent. over the next three years. It must be in the interests of everyone that these savings are achieved. Without them, the investment resources that are needed to secure a better, more easily used and more reliable system will be bled away. This will require strong management and firm financial disciplines. The Bill provides the opportunities. The securing of better value for money will be one of the first and most important tasks of the new chairman of LRT and his board. I shall look to the board to achieve this.
  Mr. Prescott: What is the right hon. Gentleman's estimate of the ratepayers' present contribution to the total public support received by London Transport?
  Mr. Ridley: I am coming to that very point.
  The Bill provides opportunities for more efficient and accountable management throughout the new organisation. The main bus company will be encouraged to form smaller subsidiaries to take further the decentralisation of its bus operations already started by LTE; and the ancillary services, such as engineering and maintenance, can, under clause 3(1) be established as subsidiary companies which will sell their services to the main operating subsidiaries in competition with other suppliers.
  The third objective of the Bill is encouraging the involvement of the private sector. The Bill aims to achieve this in several ways. First, under clause 6, LRT will be under an obligation to involve independent suppliers in the provision of public transport and other services wherever this makes economic sense. Its duty is similar to that laid down under section 8 of the Transport Act 1983. Already, under that duty, LT has undertaken a major review of its bus engineering operations and facilities and has concluded that substantial economies can be achieved at its Aldenham and Chiswick bus works. It has secured the co-operation of the unions in examining the details of implementation. Needless to say that progress towards cost-cutting in this area, as in other areas, is being opposed by the GLC.
  This duty can be taken together with clause 3(2), which enables LRT to enter into agreements with other public transport operators for the provision of services and, with clause 3(3), gives LRT the power to pay for such services

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  as appropriate. There are many possibilities in this area, for instance the use of low capacity vehicles in outlying areas or at times of the day—evenings and weekends—where there is a demand to be satisfied but it is not sufficient to justify the use of LRT's own buses.
  Secondly, the new licensing arrangements contained in clauses 42 and 43 will enable, for the first time, independent bus services to be provided in London—exactly as in other parts of the country — through licences granted by the Metropolitan traffic commissioners. Operators will, if they wish, be able to seek to run services through a clause 3(2) agreement with LRT, but they will not be obliged to do that. In this way we shall be seeking, in the interests of healthy competition, to loosen the monopolistic position that London Transport has held since 1933.
  Clause 13 provides that there should be a contribution from the ratepayer towards the cost of Government grants to LRT. The contribution will be in the form of a levy on the rating authorities in London. The Bill lays down that the maximum amount of this contribution is to be two thirds of grants paid to LRT under clause 12. The annual amount to be levied will be expressed as a rate poundage and will be set out in an annual order laid before Parliament and subject to the negative procedure.
  It must be right for London's ratepayers to make a contribution to this body; there is no argument for treating London ratepayers in a more favourable way than ratepayers elsewhere. I suspect that I can rely on hon. Members with constituencies outside London to mount an adequate defence against arguments of this kind.
  Nor do I accept the argument that such a levy is undemocratic. An elected body for the LRT board is simply not workable. A contribution from the ratepayers has, in fairness, to be secured. I will be accountable to hon. Members for the amount levied. We could have done this in a roundabout, complex way, through an abatement of Londoners' entitlement to block grant and transport supplementary grant. It seemed preferable that the amount of the levy and the basis on which it is calculated should be absolutely clear, and that ratepayers should have the means, through their Members of Parliament, to question both the basis of the levy and the amount of the expenditure for which the levy is being raised.
  Under the present arrangements, the actual amount that they are currently providing to public transport has never been clear to London ratepayers. Indeed, the hon. Member for Kingston upon Hull, East (Mr. Prescott) asked me what it was. We decided to express the contribution as a simple percentage of expenditure, rather than a formula derived from the highly complex and opaque workings of the rate support grant. There will be a separately indentifiable item on the ratepayer's rate bill. He can also see the amount of expenditure on LRT, so he can express, through his Member of Parliament, his views on the call that LRT makes on public funds. There is the accountability. It also helps to apply the proper financial pressures on LRT itself.
  I now come to the question asked by the hon. Member for Kingston upon Hull, East, about the actual proportion laid down in the Bill and what it was before. The GLC has claimed that two thirds—the figure in the Bill—is no improvement on what the ratepayers are contributing to their public transport now. However, the GLC cannot bear the thought that something is to be done by the Government for the benefit of ratepayers. Last autumn it was claiming in press advertisements, paid for by the
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  ratepayers, that only 3 per cent. of London Transport's total costs was provided by the taxpayer, which is equivalent to a ratepayer contribution of over 90 per cent. Now, a year later, in its recent publication, the GLC is suddenly saying, because it suits it, that the ratepayer is paying only 60 per cent. Such conjuring tricks will not fool Londoners.
  On the evidence of the GLC's own expenditure plans, cutting the ratepayer's share to two thirds will give ratepayers a far better deal now and will save them from even worse prospects if London Transport were to remain under GLC control. That is the hon. Gentleman's answer—the ratepayer is paying more now than he will in the future.
  Mr. Prescott: That is not the answer. It might do for Aims of Industry, for which the right hon. Gentleman has written many pamphlets, but it will not do for the House. I ask the Secretary of State specifically: what is the proportion of public cost paid by the ratepayer out of the budget for transport this year?
  Mr. Ridley: The hon. Gentleman knows full well that to do that sum one has to go through the whole gamut of the system of local government finance and the fact that the GLC has driven itself into the penalty area of finance, and on any estimate the result is more than the figure in the Bill. There are a number of ways in which one can do the calculations, and any way one does them will show that the ratepayers are getting a better deal out of the Bill
  Mr. Prescott: It is not good enough for the Secretary of State to criticise the GLC for having different percentages for the ratepayers' contribution. If he does not know himself, how can he make a judgment about the GLC?
  Mr. Ridley: I do know.
  Mr. Prescott: Tell us.
  Mr. Ridley: One can derive a whole range of figures, depending on which way one does the calculations, but I defy the hon. Gentleman to produce an answer that is lower than the answer in the Bill, because the Bill represents an improvement for London ratepayers.
  I come now to the question of concessionary fares for the elderly and disabled, which is an important matter, especially for the 1 million—[Interruption.] The hon. Member for Kingston upon Hull, East, may not care about this, but some people do, especially the 1 million pensioners who benefit from the present concessionary fares scheme. Nevertheless, I regret the need to deal with the issue here and now, for the simple reason that it has little to do with the Bill to establish London Regional Transport.
  In the GLC's reprehensible pamphlet "Kill the Bill", of which I have a copy here as a visual aid to help the hon. Member for Kingston upon Hull, East, and which is part of the £850,000 of ratepayers' money which the GLC is spending on a programme of propaganda, it states:
  "If the Transport Bill becomes law your free pass is at risk."
  That is not true. The Bill simply re-enacts existing powers for LRT to deliver a concessionary fares scheme. Until the GLC is abolished, it is and will be responsible for providing money for the concessionary fares scheme. The Bill does not affect that at all.
  Mr. Prescott: What about the future?
  Mr. Ridley: I am talking not about any Bill that may come in the future, but about this Bill, and so was the GLC. The GLC and the hon. Gentleman are suggesting that the Bill kills the concessionary fares scheme, but they know that that is not true.
  Mr. Harry Greenway: My right hon. Friend will know that the concessionary passes are extremely important to the 1 million pensioners who receive them, and succeeding Labour and Conservative administrations at County Hall have used them. Bearing in mind what my hon. Friend the Minister of State said recently in an important Adjournment debate on this matter—that there are two years left for the negotiation of these passes—and the essential need for these passes to continue, will my right hon. Friend say that he will, if necessary, seek power to ensure that they do continue should there be any doubt at the end of the negotiating period?
  Mr. Ridley: I give my hon. Friend a complete assurance that I agree with him about the importance of these passes. However, I am not prepared to say that it would be right for the Government to propose legislation to take away what is properly a function of local government. Moreover, it would be wrong to do so in the Bill, because this is part of the social provision of local government.
  It is proper for hon. Gentlemen to ask what is likely to replace the present GLC scheme after its demise, when the London boroughs, as everyone knows, will take over that responsibility. The London Boroughs Association has already agreed to work out the details of the scheme and to make proposals. Regrettably the London boroughs that are refusing to join these discussions are the same as those that are running a political campaign against the abolition of the GLC, paid for again with ratepayers' money. Those are the boroughs that give me problems.
  Mr. Tony Banks: Will the Secretary of State accept that the London Boroughs Association has no statutory powers to enforce or compel boroughs to join in the concessionary fares scheme? It can only advise the boroughs to do so, but under what seems to be the Government's likely proposal the decision will be discretionary on the boroughs. Some boroughs will have a scheme, and some will not, and that will result in a grave deterioration of the present all-London scheme.
  Mr. Ridley: The hon. Gentleman has a profound and impressive understanding of the constitution of the LBA, on which I congratulate him. Perhaps he will therefore address his entreaties to the London boroughs rather than to me. As he said so clearly, they are responsible.
  My simple message to old-age pensioners is, "Do not be frightened by the GLC." Even the GLC admits in its booklet that the scheme will be replaced. Of course, it has an interest in not being abolished and will try every scare story to save its skin.
  Mr. Hugh Dykes: Will my right hon. Friend accept, although one may not have pleasure in saying it, that he is risking skating lightly over this serious and solemn subject, as my hon. Friend the Member for Ealing, North (Mr. Greenway) implied? This concessionary system is vital to all pensioners in London. Therefore, can my right hon. Friend deal with this matter in all seriousness and show which outer London boroughs have
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  expressed serious reservations about his proposition that they should undertake these duties if the legislation comes into being?
  Mr. Ridley: I do not for one moment think that I failed to give this matter the serious consideration that it deserves. That is not the point. A further principle is involved. This is properly a local government function and it is serious to suggest that one should remove such a social function from local government. The concessionary fares scheme is not part of local government's transport budget; it is part of the social budget. The scheme could not in any event be provided for by a Transport Bill. If it were thought necessary to remove the function, that would have profound implications for local authorities' powers. Those boroughs which have refused to discuss are the Labour-controlled boroughs which are members of the Association of London Authorities. There are some differences of opinion in some Conservative-controlled boroughs over the best method of providing concessionary fares, but not about whether they should be provided.
  I rely upon my hon. Friend the Member for Harrow, East (Mr. Dykes), who, I think, represents a constituency in one of the boroughs which has had doubts, to ensure that his pensioners are protected by his borough.
  Mr. Dykes: To assist it, will my right hon. Friend give the assurance for which my hon. Friend the Member for Ealing, North (Mr. Greenway) asked?
  Mr. Ridley: No, I have no intention of removing control in these matters from the London boroughs, where it properly should lie. It is perfectly right for hon. Members to discuss with their boroughs the best way to fulfil the need, and the boroughs have two years within which they can come forward with a scheme.
  I next come to the subject of LRT's general fares and charges. On 7 December I informed the GLC that its protected expenditure level for revenue support for 1984–85 will be £125 million, the same as for 1983–84. The amount does not make necessary any substantial increase in fares in 1984–85 provided that nothing is done to add further to costs or to block and squander the savings which the executive expects to achieve in 1983–84.
  That is the position for 1984–85. We shall see how the GLC acts in the light of its statutory responsibility to take into account my guidance in approving a plan for LT and making its determination of the amount of revenue grants to be made by it to LT in 1984–85.
  In the longer term the level of fares will reflect the degree of success LRT has in cutting costs and improving efficiency. I see no reason why fares and charges should continue to outstrip the increase in prices generally, given the scope that there is in LRT for substantial cost savings.
  Finally, the new consumer arrangements for public transport in London are dealt with in clauses 39 and 40 and schedule 3. My hon. Friend the Minister of State will say more about these arrangements at the end of this debate if she has the good fortune to catch your eye, Mr. Deputy Speaker.
  Mr. Christopher Murphy: When my right hon. Friend talks about the London Transport consumer, will he bear in mind that many people who live outside the Greater London area will make considerable use of the facilities and ensure that they are always consulted about future services and fares?
  Mr. Ridley: I am conscious of that point. I am grateful to my hon. Friend for raising it. We must ensure that such consultation takes place.
  The proposals create one new consumer body to deal with all public transport provision in and around London, including BR's services in the London region — that might cover the services to which my hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) referred—in place of the two separate existing bodies. This proposal arose from fruitful discussions that we had with the existing consumer bodies during consultation on the White Paper. This is the one material aspect in which the content of the Bill differs from the proposals in the White Paper.
  The purpose of the Bill is to enable us to provide the most convenient, attractive and efficient service possible for London's travelling public. The Select Committee said that London's public transport needed a face-lift. I agree. The Bill provides the way to achieve that face-lift for London's public transport for the first time since the great London Passenger Transport Act of 50 years ago. I commend it to the House.
  5.24 pm
  Mr. John Prescott: The Secretary of State's speech completely ignored many facts about transport which he would know if he were prepared to study them. It reflected more the articles, propaganda and rhetoric associated with Aims for Industry. His speech became a little better when he presumably read from his brief.
  The Opposition are against the Bill for many reasons that will no doubt be made clear during the debate. I want to address a considerable number of my remarks to the two major areas to which we are opposed. First, we believe that the Bill will eventually increase fares and reduce services. Indeed, the Bill is designed to do that. The Bill will reduce public financial resources essential for a modern, integrated transport service in the capital. It meets the Treasury's needs rather than those of Londoners. Secondly, the Bill constitutes a fundamental denial of Londoners' democratic rights and a major attack upon the British tradition of local government.
  It is important to note from the beginning some of the reasons that the Government have given for this dictatorial action. The Secretary of State — London Transport's supremo, or, as has been suggested, commissar —proposes to give London Transport instructions similar to those of some alien, political philosophies that he does not endorse.—[Interruption.] I shall address myself to the arguments, which is more than the Secretary of State has done this evening. We have heard the same arguments advanced by the Secretary of State as those he gave in the White Paper and in press conferences. I am not too concerned about hierarchy or where I appear at a press conference. I like to address myself to the substance of the argument and to be judged on that.
  I am not embarrassed by siding with the GLC in the argument about London Transport's future. I find myself in good company, because the latest poll shows that 90 per cent. of Londoners wish to retain GLC control of transport. The Secretary of State has not suggested anything different today. The Secretary of State rehearsed arguments about how costs have soared. that there has been intolerant, political interference, and that these huge public resources, as they are, can be used to better effect.
  Mr. John Page rose——
  Mr. Prescott: I believe that the hon. Gentleman has only just arrived.
  Mr. Page: I have listened to every word that my right hon. Friend and the hon. Gentleman have said. As always, I am seeking information. What is the poll, and where was it published?
  Mr. Prescott: The poll was produced yesterday and published in The Standard. It was interesting to read the editorial in The Standard about the Bill. It makes clear that a sample survey was conducted comparing the questions asked four months ago with yesterday. The poll asked whether people supported GLC control of the transport system as presently organised, and it showed that support for the GLC has increased.
  The Government's solution to transport problems is to nationalise London Transport. The arguments advanced by the Secretary of State to justify the action are the same as those he used yesterday to justify the privatisation of British Airways. Nevertheless, he feels that by nationalising London Transport he will divorce it from the control of elected representatives and be able to ionstruct London Regional Transport management to have due regard only to London's transport needs, with the overriding change to achieve the Treasury's financial targets set by the Secretary of State. That came clearly from the Secretary of State's statement today and is consistent with what he has said in the past.
  The Secretary of State has added to it, of course, the essential bit of ideological spice—privatisation of buses and now, presumably, rail services as well. In addition, there is the overriding saving of all changes — greater efficiency. I am not convinced by the argument. I am amazed by the Secretary of State, who built up a considerable reputation in the 1970s as someone who was against nationalisation because nationalised companies tend to be dominated by trade unions and interfered with by Whitehall.
  My hon. Friends and I believe that fares will rise and that services will be cut. That belief comes not only from our judgment, but from well proven and observable principles of public transport economics in the evidence available within this country and outside the GLC—for example, in the passenger transport authorities.
  Whether London Transport is run by central Government or the GLC, there will be a requirement to feed pubic resources into it. Indeed, the Minister has made it clear that it will be necessary to give more grants and resources to London Transport. So the argument whether it is run by the GLC or by Government makes no difference to whether it can be run profitably or break even. The argument is simply whether the resources can be managed more effectively, presumably affecting the amount of public resources to be put in.
  Urban transport systems in any modern city, as can be seen not only in this country but abroad—and certainly in huge transport concentrations such as in London—cannot be run at a profit. 'Whatever the jargon about running the system in a businesslike way, that does not mean the profit and loss principles that people normally associate with the operation of business. Until 1970 the responsibility for most of our transport undertakings was to break even one year with another—the terminology that is in the Bill.
  The break—even policy had at its heart the concept that cross-subsidisation took place — that the more

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  profitable services tended to pay for the less profitable. The Transport Act 1980 attacked the very principle of cross-subsidisation. That Act has had catastrophic effects, particularly in rural areas, on the provision of services by the National Bus Company. I do not want to enter into that argument, except to say that up to 1970 the break—even principle and cross-subsidisation were important in the financing of our transport system.
  I recognise, as the Secretary of State recognised in his contribution, that since 1970 there has been a considerable decline in the use of nearly all transportation systems. Some of it is due to the increasing use of cars, some to the decline in population in many inner city areas and some to increasing costs where there has been an attempt to increase fares to meet the extra costs inclined by the massive explosion in oil and fuel prices. It is not simply an argument of efficiency, as suggested by the Secretary of State. There has been an explosion in transport costs since 1970. Wherever there has been an attempt to match it by increasing revenue from the fare box, it has led to people leaving public transport. That has happened in many parts of the United Kingdom and in public transport systems in America and Europe. I do not think that can be contested by any of us.
  As more people have gone to other forms of transportation—in particular the car—so car usage in London has increased, leading to congestion, more problems on the roads and more accidents. That is shown by statistics from the Minister's Department.
  I am not here to defend every operation of London Transport. I would be a fool to do that for any transport system. But the London transport system is different from systems in Yorkshire and other metropolitan areas where it has been possible to implement the one-person operation of buses much more effectively. The judgment in London is that conductor services mean that buses do not stay so long at bus stops and therefore cause less congestion. That is another social cost judgment made by the transport operators. Presumably it will be continued by the Secretary of State in his supremo role. I must point out that it means more costs, because labour is an ever-increasing cost in a transportation system. One has to balance the movement of traffic against fares and public subsidies in the maintenance of a modern, sophisticated transport system.
  The quality of the service — a point to which the Select Committee and others addressed themselves—and the availability of transport can be as important as the level of fares, but that does not mean that the fare can be downgraded as an essential factor in the percentage of ridership that a transport system is likely to acquire. We have considerable evidence of that. The experiments in fares that have been imposed upon London in the last three years by court decisions, GLC decisions or the withdrawal of grants and the imposition of penalties by the Government have led to comparisons between different types of fare systems.
  A low fare system with the same quality, the same buses and the same trains, even if they are painted red, led to more people travelling than when fares were high—for example, at the time when fares were doubled after the court decision. Nobody could doubt that there is an immediate correlation between the price a person pays to
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  travel and the number of people who use the transportation system. That is simple enough economics, but a point not to be ignored.
  The Secretary of State talks about me relying on a London Transport brief, but I must say—
  Mr. Ridley: Not London Transport, the GLC.
  Mr. Prescott: All right, a GLC brief. I am glad the Secretary of State differentiates between officers and what he calls politicians in the GLC. There are officers in the GLC who prepare briefs, and their objectivity can be seen to be as good from the professional point of view as that of London Transport. The Secretary of State showed today that he was not looking at anybody's prepared brief when we asked him for essential information about ratepayers. He should look at the comparisons of metropolitan passenger transport authorities.
  Similar transport bodies carrying out similar services are pursuing different fare policies. For example, one can travel six miles on the south Yorkshire transport system for 11p. In four other passenger transport executives, it will cost 55p to travel the same distance. If we compare similar transport systems operating in a similar way, we will see that those with lower fares have more people travelling on them.
  The Secretary of State had little to say about how efficiency should be measured. Even the Monopolies and Mergers Commission's investigation into the West Midlands transport authority has found difficulty defining efficiency. In the PTEs, whether it is measured by total operating cost per vehicle mile, total vehicle miles per vehicle, stage passenger journeys per employee or however, lower fares do not mean lower efficiency. Indeed, those with lower fares are showing higher efficiency, largely due to a greater utilisation of assets.
  Mr. Jeremy Hanley: May I ask whether business success has followed from the low fare policy in Sheffield or whether businesses have chosen to go to other areas where the rates are not so staggeringly high because of such a policy?
  Mr. Ridley: That is a very important question.
  Mr. Prescott: It may be a very important question, but if I give the kind of answers you give they will not be satisfactory.
  Mr. Deputy Speaker (Mr. Harold Walker): Order. I have not given any answers today.
  Mr. Prescott: I apologise, Mr. Deputy Speaker, particularly as you come from that area of Yorkshire and know the answers better than the Secretary of State.
  Hard work has been done, and it is a matter of controversial judgment in the area about the effect on business. That is not unique to south Yorkshire. It is the argument of rates versus their effect on business operations. I am not convinced that it has the effect that Conservative Members claim. The hon. Member for Richmond and Barnes (Mr. Hanley) should go to south Yorkshire if he wishes to compare the different transport systems. I am sure that the south Yorkshire authority would be only too willing to invite him.
  Mr. Peter Bottomley: Will the hon. Gentleman give way on this point?
  Mr. Prescott: I am trying to be as brief as I can.
  Mr. Dennis Skinner: Will my hon. Friend give way?
  Mr. Prescott: I shall first give way to the hon. Member for Eltham (Mr. Bottomley).
  Mr. Bottomley: I am grateful to the hon. Member for Bolsover (Mr. Skinner) for engineering my intervention.
  If, as the hon. Gentleman argues, there is an economic link between lower fares and more passengers, why will he not accept an economic link between higher rates and fewer jobs?
  Mr. Prescott: Largely because the evidence on ridership is more specific and is statistically stated. I have yet to come across a business man who will state the effects of high rates on his operation. I have asked business men in the Hull area for that specific information, but it is not produced in the same form as evidence on ridership. I can make a more informed judgment about that than I can about the point raised by the hon. Gentleman.
  Mr. Skinner: We hear about high rates in London forcing businesses to move. The same is true of Sheffield and elsewhere. Yet only an hour ago the Secretary of State for Trade and Industry said that, notwithstanding high rates, low rates or any rates at all, regional policy had gone up in smoke. Unemployment is high throughout the country. Tory Members were on their feet calling for special consideration for their areas, which are supposed to be low rated.
  Mr. Prescott: My hon. Friend makes a valuable point, which crossed my mind when I heard the Secretary of State for Trade and Industry deploy his arguments on incentives and disincentives.
  Evidence suggests that low fares lead to greater use of the transport system. Indeed, the South Yorkshire PTE is the only one that has reversed the decline in public transportation, and that has much to do with the quality of its service and the fares imposed. It is clear that public support for systems such as that is greater and results in more use of the assets involved and higher efficiency.
  The essential element of support—subsidy—is not in doubt. Despite the politically motivated action of the Bromley authority, the courts readily accepted that the break—even principle was not a possibility and that subsidy was a requirement for the public transport system. Even the Government accept that subsidy argument in their RSG and TSG statements.
  The dispute is about the level of revenue support. That is at the heart of the matter. Put another way, we are talking about the percentage of costs to be raised in fares. It is true not only of Britain but of the continent that, in certain cases, such as south Yorkshire, the proportion of resources devoted to the maintenance of transport systems is greater than can be achieved by a high fare policy, although not proportionately greater because of the level of efficiency.
  We know that the German cities give about 50 per cent. public support to their systems, as do the Americans, but other major European cities give about 60 per cent. support. That has been increasing. In London, during the operation of "Fares Fair", the amount of support was 50 per cent., but the doubling of fares took it nearer to 70 per cent. At his press conference, the Secretary of State said that he thought that the level was nearer 80 per cent. After his speech today, he is clearly not aware of the percentage of public support, particularly from the ratepayer.
  Mr. Ridley: The hon. Gentleman is mixing two figures. The percentage of support from public funds of all kinds to London Transport is now about 38 per cent. That is a different figure from the percentage that comes from the ratepayer.
  Mr. Prescott: I accept that, but I should like to know what the ratepayer contributes.
  The Times on Monday reported that the man who runs the Paris Metro and transport system—often quoted in the House as a success—said that aspects of the Bill were "absurd" and added:
  "lessons to be learnt from France were the full integration of public bus and Underground and private bus services and a high level of subsidy to passengers: two policies the Government wants to abandon."
  That is the view of an operator, not from this country, whose system is often referred to as a success in the House.
  A greater level of public support in this country is seen as an ideological difference between both sides of the House. It is not viewed as such by monetarist Governments in America and Europe. Their belief is that more resources must be put into public transport as it relieves congestion, conserves energy, reduces accidents and leads to the maximum use of public assets in which investment has already been made. The experiments in London show that much of that is true.
  After the doubling of fares in London, following the court decision, accidents increased by nearly 3,000 in the first four months following the abolition of "Fares Fair" and there were 120,000 more car journeys. However, while cheaper fares were in operation, ridership increased by between 10 and 15 per cent. Some of those figures, particularly the accident statistics, have been endorsed by the Secretary of State's Department. Therefore, a clear social objective is involved in any transport system.
  I accept that under the various plans put forward on London Transport, the break — even principle would result in a 40 per cent. cut in services and fares. But it is equally clear that the system that the Secretary of State will influence by the amount of support that he gives—the permitted expenditure level of £125 million, which is about £90 million less than the support given at present—will lead to service cuts and fare increases.
  London Transport has argued that that could possibly lead to the loss of 6,000 jobs, or redundancies, at a total cost to the Government of £30 million merely to fund those people on the dole. At the end of the day, someone always picks up the tab, be it London Transport in the form of wages or the Treasury in the form of unemployment benefit. It must be recognised that one of the consequences of the Government's policy will be another increase in unemployment in London, which is already more than 350,000.
  Transport users will be the second casualty of the Government's policy. The great majority of those who use London Transport—our our largest transport system—are women. They use it on their way to work, to do their shopping and to visit nurseries or hospitals. That is particularly so of low income groups who have no access to cars. The Opposition will also be pressing for a dial-a-ride scheme for the disabled, most of whom are also women.
  The Secretary of State avoided the argument about concessionary fares, even though the Tory Government gave the GLC powers to enforce a uniform concessionary scheme on all the boroughs. If the right hon. Gentleman

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  takes over those powers when the GLC has been abolished, he should grant concessionary fares, as many local authorities are not prepared to consider introducing such a scheme. The GLC was given power to enforce a common scheme. The Secretary of State cannot escape from his responsibilities. I shall give him the opportunity to reassure Londoners who depend on free passes that, whatever happens, they will still have concessionary travel passes. If that is said tonight, it will end at a stroke the uncertainty about concessionary and free passes being made available to pensioners and the disabled in London. Presumably, we shall hear little enough about that, but let us recognise that that responsibility lies clearly on the Secretary of State.
  Mr. Spearing: Does not the Secretary of State recognise that no Conservative-controlled GLC would ever concede a change in the scheme? It would not be able to stand it at election. The only way for the Secretary of State to break the pensioners' scheme would be to give the option to some of the boroughs, which might introduce it.
  Mr. Prescott: My hon. Friend is right. According to reports that we have had, leaders of several local authorities have talked to the Secretary of State about their press statements on concessionary schemes. I do not know whether those reports are right, but they make it clear that local authorities do not foresee the introduction of the sort of free pass or concessionary schemes that pensioners currently enjoy under the GLC. The Minister could end that uncertainty by taking over the current transport responsibilities of local authorities and making it clear that free and concessionary passes will be made available for Londoners. Those concessions are paid for by a precept on the rates. Indeed, the Secretary of State has said that he will put a precept on the rates. He can end the uncertainty, but he does not seem prepared to do so.
  The Secretary of State believes that he can reduce public expenditure, and hopes that fares will not increase, because of greater efficiency and privatisation. Some improvements have already been made, and no doubt services will become more efficient. We must see what happens. However, when he said that privatisation is the way forward because it will bring new services to commuters and other transport users in London, I was reminded of the Transport Act 1980, which privatised many of the national coach services.
  The Government launched the British coach network, with coaches painted in the union jack colours. The then Secretary of State for Transport, now the Secretary of State for Social Services, waved off the first buses from Victoria coach terminal, and announced a new era in transportation.
  That venture collapsed within 18 months, because the National Bus Company out-competed its services. That was not done without some cost. The Natonal Bus Company had to withdraw services from rural areas. There was greater competition on inter-city coach routes. Even British Rail's inter-city network suffered increased competition and was undermined. The community was far worse off after privatisation.
  The way to manage a modern, integrated public transport system in London is to strike a balance between the social objectives, including the needs of Londoners, and the desire to achieve them at reasonable cost. The
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  social consequences of congestion, service cuts and road accidents, and the need to provide mobility for all at different times of the day, must be judged by the citizens of London, especially as they will be taxed for that privilege.
  The decisions are essentially political. The regional service that is to be provided should be a function of local authorities, not the Government. The Secretary of State has an unbelievably touching faith in Whitehall when one appreciates that the Bill imposes a rate precept and makes Whitehall the master. The Bill sets the financial targets, determines the level of public support — hence the services provided—and gives the Secretary of State the power to direct, if he disagrees, and to privatise.
  The London Regional Transport Board is to be appointed by the Secretary of State with a remit not to "consider" but to "take regard of the needs of London. The 1983 Act required the GLC to produce a three-year plan, saying that a massive amount of information should be made available by the GLC for the Secretary of State's Department. However, the Secretary of State does not impose the same requirement on London Regional Transport or Whitehall to produce a report to be discussed in public. The only obligation on Whitehall and LRT is to produce a report from time to time. That is not the same obligation as he imposed on the GLC through the 1983 Act. Having given the power to his Department, the Secretary of State does not want to give the information that apparently he required of London Transport when it ran the system.
  The conversion of the Secretary of State to the nationalisation of Whitehall is amazing, particularly when one bears in mind some of his arguments in articles on nationalisation—that it was a bastion of union power on a feather bed provided by the Government. All those rhetorical flourishes came out in the right hon. Gentleman's articles. The conclusion of one of the articles that he wrote in 1977 was:
  "What is needed is a new system altogether, a system fit for a more affluent society of more responsible people, and smacking less of 'the gentleman in Whitehall knows best.' We know now that he does not."
  There has been an amazing conversion of the Secretary of State. In the Bill he is doing precisely what he said was wrong in 1977. Apparently what he is doing now is relevant for Londoners. He should read some of his articles when he now talks about his faith in the efficiency of Whitehall. He talks as if Whitehall has no political influence, but coming from the Treasury, as the Secretary of State does, he knows all too well about its power and influence on local authorities and so on.
  Why has the Secretary of State chosen that road? I think that it is primarily because he wants political control to set the standard and to determine the resources that he gets. He wants to acquire the political control that he so often condemned in the mid-1970s when he was out of power. The Secretary of State's justification for some of his actions, given in the White Paper and in statements today, is to quote the Select Committee on Transport. I believe that he read only the first page of that report, or completely misrepresented its case. It said that London Transport should be a national priority. That is why there was the suggestion of handing it over to the metropolitan authority. The Select Committee made it clear that we need a modern transport system and low fares. It also made it clear that

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  the system should not be handled by the Department of Transport. In its fifth report, in paragraph 6.10, the Committee stated:
  "such a transfer of responsibility would be a major departure from the British tradition of local authority involvement in transport matters, and we do not believe that the transport problems of London are so acute as to justify depriving London's elected representatives, and London's electorate, of a major role in transport decision-making for their area."
  The Secretary of State might have read the first few lines of the Select Committee's report, but he read no further than that.
  In another part of the report, the Committee set out the general objectives of London Transport. One was that
  "local government should retain a major role in transport planning and policy decisions".
  The Secretary of State should not use the Select Committee to try to make the Bill respectable. The Secretary of State for the Environment, presently thinking of streamlining the cities, also made it clear in 1979 that the GLC's transport and strategic functions should be kept as one, so there was a need to retain it. His mind has changed quickly in the past few years. Some of the reasons given for the Bill cannot be established. All the political parties in the GLC deplore the action that the Secretary of State for Transport is taking today in removing political control of London Transport. The poll to which I have referred shows that the electorate also thinks that.
  It is far from clear how ratepayers will be affected. It is assumed that they will somehow enjoy a saving. The two documents, which I acquired on the day that the Bill was published, showed that the ceiling on the cost to the ratepayer would be raised from 50 per cent. to today's 66 per cent. That is no coincidence. It is clear that ratepayers might have to pay considerably more for the new transport system than was originally envisaged.
  If the Minister has not calculated the size of ratepayers' contribution, I can enlighten him, as an official in the GLC—not a politician—has compiled a report which spells out all the detailed expenditure. I shall leave the Minister to examine that document so that he can learn exactly what ratepayers will be asked to pay. I do not have sufficient time to give all the figures now. We shall do that in Committee. It is clear, however, that the ratepayers' contribution is likely to increase as a result of the Minister's policies, especially if this means that the present penalties of £30 million are to continue under the LRT.
  The transport system which the Secretary of State envisages will be supported to the tune of about £125 million. If public support is reduced by about £90 million, which is provided by the GLC there should be a reduction in the ratepayers' contribution. In reality, however, there will be no such reduction. Last year, the GLC achieved a surplus of £30 million because of greater efficiency, productivity and a larger return on the travel card. At the moment, that money goes back to the GLC and therefore to the ratepayer in the form of a lower precept. I am alarmed that the Ways and Means resolution provides that that money will go to the Treasury. I hope that hon. Members who represent London constituencies will bear in mind that that is what they will be invited to vote on later.
  We shall oppose the Bill tooth and nail. We shall not waste time, but we intend to examine every one of its 61 clauses and seven schedules in detail. The Bill will have the effect of increasing fares and reducing services. It will
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  threaten old age concessionary passes and put greater burdens on women, the low paid and disabled who use our transport system. It will increase unemployment and lead to more deaths, accidents and congestion. It will remove London's democratic control of its transport system and increase the cost to ratepayers by introducing a transport tax. It will produce a Whitehall-directed quango which will be instructed to observe a Treasury financial requirement which meets the needs of the Treasury rather than those of London's transport.
  6.3 pm
  Mr. Edward Leigh: should like to take up the final point made by the hon. Member for Kingston upon Hull, East (Mr. Prescott) about democratic accountability. Between 1977 and 1981, I was a member of the GLC and a member of its London Transport committee which is the main board on London Transport responsible for all policy decisions. I was al the centre of the issue about accountability.
  When I first joined that committee I was a firm believer in the GLC having control of London Transport. Within about three years it had become clear that, despite the successes of the then Conservative administration of the GLC in other respects, the leader of the GLC, Sir Horace Cutler, admitted that London Transport was the most intractable problem facing the council. With the possible exception of the administration of Sir Desmond Plummer, now Lord Plummer of St. Marylebone, which took over London Transport after Barbara Castle had wiped off its capital debts, every GLC administration, Labour and Conservative, has failed with London Transport. I hope that the hon. Member for Newham, North-West (Mr. Banks), who is still a member of the GLC, will agree with that.
  Mr. Peter Snape: I am grateful to the hon. Gentleman for giving way. My intervention will give him an opportunity to examine his next point. I am sure that it will be just as interesting as his previous one. What is the unique peculiarity of London which makes its elected body, Tory or Labour, unable to run its transport system when similar ones are run by virtually every other large conurbation in Britain and by many other large conurbations throughout the world?
  Mr. Leigh: I am grateful to the hon. Gentleman as he has put his finger on the central issue. The GLC was put in an impossible position by Barbara Castle through the Transport (London) Act 1969. It was given the same powers as most Ministers are given in regard to the running of nationalised industries, but the GLC, as the quasi-Minister in control of London Transport, did not have the authority of Parliament.
  I do not blame the GLC, but for the past 13 years it has been caught in impossible circumstances. The Government have had control of the purse strings through the transport supplementary grant, the GLC has supposedly had control of policy matters but the London Transport Executive has had operational control. That has resulted in confusion and underinvestment, especially in regard to capital spending. To that extent, much of the speech made by the hon. Member for Kingston upon Hull, East was irrelevant. Whatever view people hold about the need for injection of more capital into London Transport, the GLC, bearing in mind the limitations of its powers, has palpably failed to provide such capital.

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  The facts speak for themselves. Real unit costs have risen by 67·1 per cent. on the buses and by 47·8 per cent. on the underground since 1970. Fares rose by 85 per cent. in real terms between 1970 and 1982 and the subsidy increased threefold in real terms from £6·5 million in 1970 to £369·8 million in 1982. Under successive administrations, the GLC has simply failed. It now takes five and a half people to run one London Transport bus as compared with the three people who are required to run a National Bus Company bus and the one person who is required to run a private bus.
  Whatever we believe about the need for more or less capital investment, there is no doubt that the GLC has failed—perhaps through no fault of its own—and that therefore London Transport must be taken out of its control if London is to have a satisfactory transport system.
  Subsections (2) and (3) of clause 3 distinguish the Bill from the classic Morrisonian measure such as Herbert Morrison tried to introduce in 1933. As it is now drafted, the Bill puts insufficient urgency on the need for privatisation and competition. Subsections (2) and (3) of clause 3 give London Regional Transport the power to enter and carry out agreements. It does not enforce a duty on it to find ways in which that might be done. I hope that the Committee will consider that.
  Until today a sign has appeared at the front of Herbert Morrison's building—County hall—showing the number of London's unemployed. The sign has not shown the number of people who have lost their jobs caused by the monopoly practices of the GLC in forcing out free enterprise from London. The spirit of free enterprise can and must be regenerated in London transport. In pursuit of that spirit, the new bus company must regard itself eventually as a more regulatory and not operational company, overseeing the creation of new routes.
  We have heard about the disgraceful GLC advertising campaign, especially the advertisement "Come in No. 9". I have lived on the No. 9 route for 17 years. I shall not be disappointed when that route—which has not changed for 100 years—is finally reformed and moves with the times.
  Considerable success has been experienced in America by private operators providing new bus routes for shoppers and commuters and luxury buses, which we failed to persuade London Transport to introduce between 1977 and 1981. London Transport refused to proceed with the suggested changes. It is wedded to the existing routes, many of which have been in operation for 100 years and which no longer meet the needs of Londoners.
  For too long the GLC and London Transport have been discussing the formulation of plans whereas only the consumer knows what is required and not the planners at 55 Broadway or County hall. We cannot reproduce in one mind that which the market forces create and recreate a million times.
  London Transport is too producer-oriented and not oriented towards the consumer and the free market. If clauses 3(2) and (3) of the Bill are developed, we will create, for the first time in 50 years, a London Regional Transport Bill of which London can be proud.
  6.12 pm
  Mr. Nigel Spearing: I am pleased to follow the hon. Member for Gainsborough and
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  Horncastle (Mr. Leigh) as I, too, use the No. 9 bus. Perhaps it has not occurred to the hon. Gentleman that the reason why many London bus routes have remained the same in the central area is that the roads and the shops have remained the same. The No. 9 and No. 11 routes are prime examples. Those who do not understand that much of London's inner area transport is based upon a built-up area that existed prior to the motor car have misunderstood the issue.
  I agree that it was not easy for the GLC to take over London Transport in 1969. In its earlier emanation as the London county council, the authority ran a magnificant and successful municipal transport service — probably the biggest tramway network in western Europe—under various administrations including the Conservatives who masqueraded by using the term "municipal reform", and who subsidised the tramways. In 1933 the London county council backed a Bill as a result of a deal between the powers in London, which gave municipal control to a public board, and the Croydon corporation and the West Ham corporation. The deal had great significance.
  The Minister said that London Transport would continue, and when I challenged him he admitted that it would continue only in its legal sense. Paragraph 16 of Cmnd. 9004 entitled "Public Transport in London" states:
  "The Government has decided that control of the London Transport Executive should be transferred as soon as possible from the GLC to the Secretary of State for Transport. It will then be reconstituted on the pattern of a small holding company, with its bus and Underground operations established as separate subsidiaries. The holding body, which will be re-named London Regional Transport (LRT), will be responsible for the strategic control of its operating subsidiaries and for securing the cost-effective provision of bus and Underground services from these and other operators."
  To do that will put the clock back to prior 1933. It will destroy the Act introduced by Herbert Morrison and passed by a Conservative Government and the arrangements between the municipal authorities, the trade unions and the shareholders who said "We have had enough of chaos in London. We will come together and create the London Passenger Transport Board." Should any Liberal hon. Members consider themselves left out, the Bill was finally piloted through the House by the right hon. P. J. Pybus, who was a Liberal member of the then national Government.
  The Bill destroys an Act which had all-party support, which went through the hybrid procedure, and which created one of the best known public transport corporations in the world. I protest about what is happening because the people involved know little about public transport or the history of London transport.
  The Bill purports to produce some form of integration. In 1912 the bus and underground services of the capital were integrated because the underground services could not sustain profitability as most of it was built on a promoter's trick. It was kept alive by the increasing bus services. Such was the position until the late 1960s. The bus services subsidised the underground. Since the underground has been carrying people to work and buses have faced competition from the car, the underground has supported the bus services. The Bill proposes to divide the two transport systems into two companies and to introduce private capital. I suggest that that is not integration but disintegration.
  The Secretary of State said that the services of British Rail and London Transport will be co-ordinated. In so

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  doing, the Secretary of State will create another bureaucratic layer between the management of British Rail and the services for which it will be responsible into Victoria, Cannon Street, Waterloo, Charing Cross, Paddington and so on. The bureaucracy at 55 Broadway will be a new animal.
  I wish to show how integration was effected before the war and could be effected again. It will not be effected by clauses 7 and 8, which refer to co-ordination. Coordination does not occur merely by the passing of an Act or by setting up a committee chaired by the Secretary of State for Transport. If the Secretary of State and his hon. Friends cannot do better than they did in dealing with concessionary fares for pensioners, I do not think that they will succeed in persuading the officials of British Rail and London Transport to work well together.
  I agree with the hon. Member for Gainsborough and Horncastle that officials of London Transport and British Rail are not the easiest people with whom to deal. I have been criticising them for years. I understand, to some extent, some of the problems faced by Sir Horace Cutler and his successors in dealing with those at 55 Broadway. My admiration for Mr. Frank Pick, Lord Ashfield and Herbert Morrison exceeds my admiration for some of their successes.
  Why will there be wholesale destruction of the 1933 machinery? There may well have been difficulties, but they were due not to the statutory provisions, but to difficulties of personality. It is the Bill's provisions that will cause the disintegration and problems. Let us consider some of the provisions. First, clause 6 puts an obligation on the new holding company to contract out as many services as it can. Secondly, there is an obligation to create subsidiary companies. Thirdly, there is a hint about the disposal of property. London Transport owns a lot of property, and I envisage many people licking their lips wondering how many houses can be built on spare land in the suburbs. Fourthly, there is a threat, which has hitherto not been mentioned, to the wages and conditions of those who are involved in public transport. They are not the best paid workers, and do not enjoy regular and easy hours. However, under London Transport they generally enjoy reasonable conditions of service, and a certain degree of co-ordinated recreational and health provision, which in its day was held up as a model. I do not see how those standards can be maintained when there is wholesale contracting out and a disintegration of the unitary services of London Transport.
  Indeed, one of the reasons for contracting out is to reduce costs. However, all too often that is achieved by reducing the wages of those who do the work, and possibly reducing safety standards at the same time. There is an obligation on the Minister—I see her shaking her head—to tell us why that will not happen. Indeed, I hope that she will say today that it will not happen so that we can prevent the taking of steps in that direction.
  Although the 1933 Act was not perfect, it was created by two men who should be mentioned on the day that their creation will be destroyed if the Bill is given its Second Reading. They both started right at the bottom. One was a grocer's boy in Lambeth, and the other was an odd job man and tram conductor in Detroit. They both became Members of Parliament, and members of the other place. They both served in Cabinets in two world wars. It was they who created London Transport. Of course, I refer
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  again to Herbert Morrison, later Lord Morrison of Lambeth, and to Albert Stanley, who became Lord Ashfield.
  In the years up to 1933, those men managed to get together the diverse interests of the shareholders in the then so-called combine of the underground group, and the big municipal operators of the LCC, West Ham, Croydon and so on. Although they were aided by others, it was through their efforts and largely as a result of the personalities that London Transport, as we know it today, was created.
  I understand that I can quote a speech from the other place, as it was not made in this Session. In his maiden and only speech in the other place on this issue, Lord Ashfield spoke about fares. There were fears that when the London Passenger Transport Board was created fares would be increased to meet the requirement to pay off the shareholders. Lord Ashfield said:
  "the group of companies over which I preside has been based, firstly, upon what may be described as low fares—in any event, fares which have a direct relation to the economic position from time to time—and secondly, upon the provision of a service which attracts the maximum number of riders. It is a policy of low fares and (shall I say?) an efficient service which brings the largest measure of success."
  That is in tune with what the GLC's administration says today.
  In his peroration, Lord Ashfield said:
  "It is only by complete fusion of all the interests concerned in this area and by establishing a common management which will have a common policy, directed towards the proper and orderly development of this great system of transport, that it will be found possible to provide the facilities the public require." —[Official Report, House of Lords, 2 March 1933; Vol. 86, c. 1004–7.]
  Those two men were born in this country, although one of them emigrated to north America but later returned. They both ended up on different sides of the House. They put together some of the better aspirations of both parties to create a model organisation that may have seen better days than at present, but which at least formed the basis of a fused and integrated administration of public transport. That is now under threat.
  The Bill has little to commend it to Londoners. It breaks up an organisation that was founded 50 years ago, and despite some recent criticisms it has been held up as a model worldwide. Despite the legal shell, London Transport as we know it today will be broken up into a pattern similar to that which existed prior to 1933, and even prior perhaps to 1912 when pirate buses were rampant. The pattern may be Victorian, but the finances will not be. Any short-term profits that are obtained by those who lend money to the new contracting companies or who become contractors to London Regional Transport will be made from passengers' fares or from the subsidies that are compulsorily provided out of the precept on the rates. Profits, in the Victorian sense, do not exist.
  In 1933, Lord Ashfield wanted fusion, but this Bill will bring only confusion, and it will not work.
  6.27 pm
  Sir Philip Goodhart: The hon. Member for Newham, South (Mr. Spearing) has given us an absorbing discourse on the history of London Transport. Indeed, I could go back even further than he did. My constituency was built on a firm foundation of good public transport. In the latter part of the 1850s Beckenham was a hamlet of about 2,000 people. However, there was a

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  tenfold increase in the population in the 30 years that followed the arrival of the trains. Since then, my constituency's prosperity has been wholly dependent on good transport links to the centre of London.
  In the past 20 years, under successive Governments and administrations at County hall, the quality of the service provided by public transport in my constituency has steadily deteriorated and become ever more costly. We have never had, and never will have, an underground railway system. Our commuter trains offer a constantly diminishing service, while the local bus service is a source of constant complaint.
  I welcome the fact that when the new transport executive comes into being there will be greater coordination between British Rail and the managers of London's buses. That will help with one specific but important point. Over the years, we have had a steady cutback in late night and weekend rail services. When I first became the Member for Beckenham we had such good late night services that a large number of members of the NGA came to live in my constituency. Over the years those late night services have disappeared. There can be no doubt that if the managers of British rail were to have their way there would be still further cutbacks in all the services provided at the weekend and after the evening rush hour had come to an end. The managers make the valid point that when one is dealing with a small number of passengers using a specific service it is cheaper and more convenient to carry them by bus from station to station, using the road rather than rail.
  If and when there are cutbacks in the remaining late night services to my constituency, I hope that there will be a proper co-ordination with those who manage London buses to ensure that there is a provision of a bus service or a minibus service. I do not believe that improved coordination between the bus managers and British Rail managers will provide us with as many dividends as some of my colleagues would like to think.
  The problems facing the London and south-east commuter rail services are well summed up in chapter 7 of the report of the Monopolies and Mergers Commission presented to Parliament in October 1980. Paragraph 7.36 said that on average, by division, drivers spent 3–6 hours per eight hour shift or 45 per cent. of the time actually operating trains.
  It said:
  "Our analysis of work programmes for individual depots has shown that most crews allocated to suburban services are at or below this average."
  Improved co-ordination will not affect this, which is the central problem of productivity. I should be glad if the Minister who is to reply would tell us whether any further checks have been made since the Monopolies and Mergers Commission report on productivity in the London and south-east commuter services was published and whether that productivity has improved.
  The major benefit that will flow from the Bill for my constituents is the potential that will soon open up for partnership between public transport and private enterprise. The public bus service in my constituency is wholly inadequate, and in much of suburban London. Of course, it is a difficult problem. I am aware that the spread of use of the private car has done much to damage bus services in the suburban areas, but one third of my
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  constituents do not have cars. Part of this problem has been met by the proliferation of minicab companies, which are the unsung and largely unmeasured heroes of suburban travel. I believe that a middle way should be available to the suburban public — halfway between the few lumbering buses which run from one traffic jam to another and the flexible but expensive minicabs. This gap can best be filled by the widespread use of minibuses, which I have recently seen in operation in Hong Kong, where they carry about 10 per cent. of the passengers who use public transport.
  Recently an application was made to London Transport to start a minibus service in London. This is neither the time nor the place to discuss the merits of that application, but London Transport's reaction was an automatic reflex action. It was opposed to the application and it was opposed to competition. I hope that the new London Transport Executive that will be formed after the Bill is enacted will encourage potential operators to develop workable schemes for the introduction of minibus services.
  Mr. Tony Baldry: My hon. Friend mentioned the Amos inquiry. In fairness to London Transport, it appointed an independent inspector to hear the Amos inquiry—a solicitor completely independent of London Transport—who found that the statistics and facts given to him at the hearing were little better than works of fiction.
  Sir Philip Goodhart: I am not here to defend the Amos application. All I am suggesting is that minibuses can provide a valuable service in the suburban London area and that it would be helpful if London Tranport, instead of opposing applications because it does not like the Amos figures, were to encourage other people to enter the field. I hope that the new executive will look on the private operator as a partner and as a provider of scarce capital equipment rather than as a competitor who must be resisted and thwarted at every turn.
  Mr. Prescott: Does the hon. Gentleman know of any other business, public or private, which would invite a competitor to join it knowing full well that that competitor wished only to be involved in the most lucrative parts of the business and would wish to keep the profits from those lucrative parts of the original business for himself rather than put them into the common pool and share them?
  Sir Philip Goodhart: That is precisely the attitude that I hope the new executive will not take. One will see private enterprise operators not as competitors who are trying to scoop off the cream at the top of the bottle but as true partners who can bring new capital equipment to those parts of suburban London where there are no adequate services at present and where London Transport can hardly be called a competitor because the services do not exist.
  Finally, I should like to deal with the issue of concessionary travel for pensioners. Like many of my colleagues, I have received scores of coupons about concessionary travel for London's pensioners. They were sent as part of an expensive scare campaign whipped up by the GLC. Politically I deplore the waste of money involved, but I am not frightened by the coupons. Indeed, to some extent, I welcome them because history shows that when scare campaigns are whipped up without foundation they tend to rebound upon those who start them. There is

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  no doubt that the scare campaign has worried many pensioners. I hope that we can quickly put their fears at rest.
  The Minister of State made a speech on 28 November and my right hon. Friend used similar words this afternoon. The Minister of State said:
  "The London Boroughs Association has agreed in principle to work out further details of the scheme for concessionary fares and to put forward proposals. This is not something which can be done quickly, but the London boroughs have two years in which to devise a workable scheme."
  I urge my hon. Friend the Minister of State and her colleagues to do everything possible to tell the London Boroughs Association that they do not have two years to bring forward a scheme and that the sooner they get on with it so that reassurances can be given to pensioners in our capital city, the better it will be. I believe that the Bill should not be an object of fear to the inhabitants of our capital city. It should give hope for better transport.
  6.42 pm
  Mr. Stephen Ross: I am delighted to follow the hon. Member for Beckenham (Sir P. Goodhart) whose constituency is associated with Bromley. I wonder what the reaction of Bromley will be to his views on concessionary fares. The Bromley council took the GLC to court over the "Fares Fair" scheme. I am not an apologist for Mr. Livingstone or the GLC, but that was one measure of which the GLC was proud. Even Sir Horace Cutler told me that he thought Bromley was wrong to take that line. More people returned to travelling on the buses. The number of passengers increased by between 3 per cent. and 4 per cent. I am a regular user of buses in London, but I doubt whether the Secretary of State often boards a bus. I thought that a considerable improvement was made.
  I seem to remember that the hon. Member for Gainsborough and Horncastle (Mr. Leigh) was elected to the GLC on a ticket which promised a great improvement in London's transport but it became steadily worse. It is a pity that the "Fares Fair" scheme failed.
  My colleagues and I believe that the Government should never have asked the House to give the Bill a Second Reading. The Bill is ill timed, wrongly conceived and a recipe for muddle, meanness and ministerial incompetence. I have no doubt that the patronage and privilege of the current Administration will flourish, but for those of us who still have faith in local democracy it is a sad day.
  I accept the need for further reform in local government, but we should widen its role, not castrate it. Surely we should have learnt from experience that the first step is to reform local government's financial base. Shortly and simply, we should implement the recommendations in Layfield, the committee set up in 1975 to examine the question of financing local government. It produced a full and detailed report which made sensible recommendations for local income tax and rating based upon capital value. Let us implement those proposals and reduce local government's dependence on central funding to about 30 per cent.
  By all means, let us consider the roles of the GLC and the metropolitan and shire counties. My shire county considered a transport privatisation application only the other day. We wanted to encourage the scheme and finance it, but the applicant did not have a hope of
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  successfully running a service in the evenings for the people in the rural parts of the island. He could not make any money out of it. Money would have been poured straight down the drain. Exactly the same will happen to private companies in other urban areas. There may be some future in financing certain railway lines — the Gatwick line is a possibility—but I was brought up in north London and I remember trams and Tally Ho corner in 1933. Great strides have been taken since then but the Bill would turn the clock back. Trials will collapse and Londoners will not thank us.
  I think that we should reconstruct local government in favour of regional authorities to take in health and other services, including transport.
  We should elect councillors by proportional representation and so lessen the risk of appalling swings such as that which will occur if the Labour party ever returns to office. A Labour Government would reverse the Bill's provisions. God help the country if that happens. It would be a disaster.
  Let us lessen the risk of sudden policy changes—the true reason for the Bill. That was confirmed In the Secretary of State's speech today. With an elected regional structure with up to 200 unitary authorities we would achieve what should have been achieved in 1972. The Government seem to be hell bent on destroying all local initiative and all the expertise of local government officers which goes with that and has been built up over many years. We should not forget the excellence and knowledge of people who serve local government.
  Personally I would go further. This is my personal belief, not Liberal party policy. I would introduce a directly elected mayoral system for London. We need strong people at the top. London and much of local government need a strong leader with power and influence at the helm to get things done; to sort out the traffic in the metropolis which is a disgrace. Some Metropolitan police reckon that within two years London's traffic will come to a full stop and be jammed. We want someone to speak for London, support commerce and industry and do a great deal more. The anachronism of the Lord Mayor in the city with no powers should go, as should the leader of a council in whose choice the general public has had little say. Mr. Livingstone was never elected as the leader of the GLC. He was appointed after he got in.
  The need today is for powerful personalities with the direct backing of the electorate to stand up to the bloated Ministries, with the benefit of finance and public opinion to support them. It is a waste of time to take a delegation to the Department of Transport hoping for a concession. One is kept waiting knowing damn well that one will achieve nothing. If the person who goes to the Secretary of State has the backing of power and finance, the red carpet will be put down and the Secretary of State will be at the door to greet him. That must happen if we are to have meaningful local government. With such a structure London could look forward to the future with confidence
  The Bill puts the clock back. No one likes it. That is to be expected of Labour-controlled councils, but surely the Secretary of State should listen to the London Chamber of Commerce, the London Transport Passengers' Committee or the Royal Town Planning Institute.
  In the Department of Transport's press notice on the Bill the Secretary of State is quoted as saying:
  "In recent years the level of political interference in London Transport has become intolerable."

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  The Bill is designed solely to allow the Secretary of State, who is nothing if not political, to take control of London Transport out of the hands of an elected body so that he and an unelected group can interfere with it as much as they wish.
  Under schedule 1, paragraph 4, the Secretary of State will appoint the chairman and other members of London Regional Transport—the body that will take over from the London Transport Executive. Clause 13 allows the Secretary of State to make a levy on the rating authorities to collect contributions towards the expenditure on LRT, the amount being subject only to the unacceptable negative procedure. We know how limited is our ability to change measures once they have been accepted by the House.
  Clause 31 empowers the Secretary of State to give general directions to LRT on the exercise and performance of its functions. Clause 10 empowers the Secretary of State to direct LRT to form subsidiary companies with a view to disposing of them. In short, the Bill allows the Secretary of State to appoint the board of LRT, to tell it what to do, to make LRT sell parts of its operations and to decide the level of the rates raised to help pay for it. That amounts to wholesale political interference by the Secretary of State in the affairs of London and Londoners, and it must be condemned.
  The Secretary of State made a controversial and unconvincing speech. Other Tories have a more realistic approach. For example, Mr. Alan Greengross, the leader of the Tories on the GLC, recently said:
  "the Conservative Group believes that to run LT in isolation from local government would be a retrograde step. In the end, no city can or should operate a public transport system without a proper input of directly elected members to represent, as closely as possible, the interests of those we are serving."
  The Bill fails totally to do that. It breaks the link between local services, local taxation and local democracy. No longer, for example, can the tag, "no taxation without representation" be applied to London's ratepayers. Rather than abolish or reform the rating system, as the Conservatives have so often promised, the Bill will complicate it further, and take a substantial swathe of the rates out of the scope of direct local accountability.
  The new LRT will be almost wholly unaccountable. Its finances will not be examined by the Comptroller and Auditor General. It will be almost impossible to find out about LRT's operations via parliamentary questions. It is hard enough to find out about British Rail via the Table Office. Hon. Members must probably be satisfied with an annual one and a half hour debate on the level of rate precept, with a few minutes in the yearly London debate, and the LRT annual report. The total absence of local accountability and the tenuous level of national accountability are perhaps the overbearing objections to the Bill. However, they are only marginally more objectionable than some of its other features.
  There is also the issue of concessionary fares for pensioners. The Bill will abolish the overall scheme which is at present administered by the GLC and replace it with a system of "borough option". At best, that is a recipe for chaos, and it is almost bound to lead to some pensioners having concessionary fares withdrawn merely because they happen to live in the wrong borough. I remind hon. Members who might not be members of local authorities that local authorities are having trouble in keeping within expenditure limits so that they do not incur penalties.
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  Local authorities, especially in rural areas, cannot provide concessionary fares because they do not have the necessary money.
  The vast majority of local authorities, whether Conservative, Liberal or Labour controlled, try to follow Government guidelines. We know that there are exceptions. If local authorities follow the Government's guidelines, they probably cannot provide concessionary fares—no matter how much they may wish to do so—because of Government demands. Again, the GLC Tories have a clearer grasp of the issues than the Government. Greengross said:
  "The GLC took over the scheme in 1973 specifically to ensure a London-wide approach. That is needed as much today as ever."
  The hon. Member for Kingston upon Hull, East (Mr. Prescott) asked about the disabled and the GLC-funded dial-a-ride service. People in my constituency have been trying to help the disabled, but that is very difficult. What is the definition of "disabled"? People in my county are trying to devise a scheme with British Rail and the Sealink boat service to ensure that concessions are given to the genuinely disabled. The dial-a-ride scheme has much going for it, and it would be a great pity if it were lost.
  It is vital that we move towards a more integrated system of timetabling and organisation, with through tickets and so on. Only a start has been made in that direction. That is a typical example of a total mess-up. The Bill merely contains reserve powers in clause 45 to integrate LRT with British Rail, although the financial implications remain unclear. The Bill, therefore, misses a golden opportunity to deal firmly with this important issue. Add to that the proliferation of independent bus companies, which the Bill endorses, and a truly integrated system is further away than ever. We shall return to the pre-1933 conditions.
  Another worrying aspect of the Bill is that it allows the Secretary of State to retain any surplus generated by LRT if it appears to him that the surpluses are not needed for its business. That conjures up two dangers — the Secretary of State failing to invest adequately in London's transport, and the Government forcing up fares as a form of hidden tax along the line of the recent gas and electricity prices.
  The Transport (London) Act 1969, which established the current arrangement, requires the council and the executive to promote services which meet London's needs. That strong public service obligation is badly watered down in the Bill. Clause 2 specifies that LRT—which, by the direction of clause 31, must take the advice of the Secretary of State on matters of overall policy—need only
  "have due regard to—

  (a) the transport needs for the time being of Greater London; and

  (b) efficiency, economy and safety of operation."

  Mr. Simon Hughes: Does my hon. Friend agree that the way in which transport needs are met by appointees of the Secretary of State is similar to the way health needs are met in the Health Service where appointees of the Secretary of State for Social Services have a casting vote? They have just done that in north Southwark and Lewisham in deciding to cut services by 180 beds in Guy's hospital. The sole nominee on the health body took a decision in the "interests" of the service—that is the definition—when the democratically elected members of the authority to a person made a

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  contrary decision which might involve conflict with the Government. That is a recipe that has been a disaster in the Health Service, and it is now being propagated for transport in London as well.
  Mr. Ross: I am sure that my hon. Friend is right. It is not, I regret, likely that as part of their recipe the Government will at some time try to bring the health authorities under local government control. That is a bit of a forlorn hope at the moment, but I trust that it will come. It is certainly something that we want to see happen in a regional elected authority.
  Although we welcome the integration of London Transport and the British Rail consumer affairs boards, the total lack of powers given to the resulting board is to be regretted. Its members will be appointed by the Secretary of State and so will not necessarily represent London. Judging by some of the appointments to the water authority, that is likely to be the case. The board's members will be unable to consider changes or the reduction or closure of services. The body will hardly have sufficient power or status to compensate for the lack of democracy in the rest of the Bill.
  The Bill is motivated by a desire to abolish the GLC, not to improve London's transport provision. There can be no doubt about that, judging by the first part of the Secretary of State's speech. London Transport is not overfunded, as some would like to make out, and the figures make that clear. London Transport's subsidy is about 37 per cent.—the Secretary of State said about 38 per cent. The subsidy in New York is 72 per cent., in Milan 71 per cent., in Brussels 70 per cent., in Berlin 61 per cent. and in Paris 56 per cent. London desperately needs a decent transport system, subject to proper democratic control. The Bill will make it almost impossible to achieve that control, and the sooner it is despatched to the dustbin the better.
  6.58 pm
  Mr. Jeremy Hanley: Transport and traffic in general are probably the greatest problems that my constituents in Richmond and Barnes experience. There is no more sensitive issue than the hell that they have experienced from those twin miseries—living under the flight path of Heathrow, and living on the south circular road at the most inappropriate point. That road in no way serves the community or anyone as a ring road for London.
  In our single lane, tree-lined avenues, juggernauts and double lorries thunder down causing pain and fear, and damage to the environment, and I must stray on to that point for a few moments. Lorries that thunder through my constituency coming from the Channel ports and going to the midlands or to the north have no business to be anywhere near that area. I am sure that when the M25 is completed it will make a difference to the level of lorry transport in my constituency. But we will need a proper London lorry management scheme to reduce the misery to a greater extent. It is not beyond the wit of man to introduce a lorry management scheme whereby those making journeys through London would be directed round London.
  Mr. Snape: Does the hon. Gentleman consider that such a scheme, desirable though it may be, is more, or less, likely to be introduced by London Regional Transport?
  Mr. Hanley: I shall come to that. It may be thought that I am straying from the point, but I am not. There are two reasons why the roads of my constituency are so clogged—lorries and domestic cars. Often, there is a commercial necessity for the lorries to be there. That is why a sensible lorry management scheme must be devised with both industry and residents in mind. The nose-to-tail queues of private cars, however, do not need to be there. The average speed of cars travelling into and out of London is about 11 miles per hour, becoming slower as the day goes on as people less used to road travel take to the roads.
  Why do people travel on the roads so much? Why is the traffic so solid? Why does it encourage people to leap into the side roads of my constituency to follow the antisocial, dangerous and immoral practice of driving rapidly down side roads to achieve a tiny time advantage? That practice is known as "rat running" and it could not be more appropriately described. So many people take to the roads because London Transport has let everyone down. How can we reduce the thousands of cars, many with just one person sitting in them, if there is no decent public transport system in London? The only way to rescue people from the misery of driving into London in the morning and crawling out in the evening is to get them back on to London Transport and British Rail. That is the real way to reduce traffic densities in the suburbs and in the centre.
  Why do commuters not use public transport as they should? The reason is simple. They cannot rely on the transport provided. They cannot rely on the frequency of trains. There is no guarantee that buses will be at the stops on time or that they will not be full. People cannot even budget in the knowledge that fares will be consistent over the year. They do not know whether fares will go up or down. Strikes occur far too often with no warning whatever. We often hear on London Broadcasting Corporation that a tube train may be cancelled due to staff shortages in an area in which there is supposed to be unemployment. The commuter therefore opts out of the risks of public transport.
  For far too long public transport has been a political battleground, the fares being used as weapons of war and the services as ammunition, the expendable front-line troops being the poor old commuters who increasingly believe in conscientious objection and desert the field of battle in their thousands. That is not cowardice. It is common sense.
  Mr. Snape: If the hon. Gentleman can tell us of one rush hour train passing through his constituency without passengers standing in the aisles or of one bus that is empty in the rush hour, not only the House but London Transport will be delighted to hear about it. Commuters are not voting with their feet. Without greater investment in the passenger services there are simply not enough passenger-carrying vehicles to go round.
  Mr. Hanley: The hon. Gentleman will have the opportunity later to explain why traffic in London is the worst that it has been at any time since the war.
  The "Fares Fair" fiasco led to a massive increase in London rates. Thousands of pensioners with free bus passes found their rates bills increased by £60 or £70 to finance reductions that meant nothing to them. Meanwhile, people travelling into London from outside the GLC area found that their fares were slashed but that

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  their rates did not alter by a penny. Where is the fairness in that? Moreover, within a few weeks the fares were doubled again.
  I believe, as I know all hon. Members believe, that reduced fares would bring more people back to London Transport, but the subsidy must be spread generally and not selectively among those who use London Transport, because it is a national asset. I welcome the scheme in the Bill, although I should prefer the Exchequer subsidy to be greater than the one third suggested, but I believe that the London ratepayer has paid enough. Rather than reductions or increases in fares, we need stable fares, and in this context I welcome the statement by London Transport yesterday about stability for the next three years.
  Another abuse in the past few years has been the way in which the GLC has used London Transport as a job protection scheme. Single manning should have been introduced years ago on the Metropolitan and City line. Wage rises and staff increases have been in no way realistic compared with the services provided.
  The worst abuse in the entire political argument has been the cynical and vicious way in which the Labour group on the GLC has used pensioners by scaring them about their free passes. I have received more than 400 coupons and letters about this, all from pensioners who believe that they are to have their free passes taken away and full fares slapped on them any minute now.
  Mr. Tony Banks: Does the hon. Gentleman accept that all the accusations made by Conservative Members against the GLC and the Labour party about scaring pensioners could be instantly dismissed by a statement from the Government guaranteeing that the free pass scheme now operated by the GLC will continue in its existing form when the GLC is abolished?
  Mr. Hanley: I shall make my own pleas about that in a moment.
  Instead of trying to save the GLC, which, with such schemes, daily proves the necessity for its abolition, the Labour boroughs should get together with the other boroughs to work out a sensible scheme for concessionary fares in London as a whole. Real progress might then be made to help pensioners. In this context, I am grateful to my hon. Friend the Minister of State for her statement on 28 November, in Mortlake, which helped greatly in redressing the balance of truth for pensioners. I am also grateful to her for her efforts in London generally. We are lucky to have such a Minister.
  I hope that extremely generous concessionary fares, with free travel for large parts of the day, will be granted by local authorities. I shall certainly press for that in my own borough, as it is one of the most important ways to keep elderly people active, alert and part of the community. I was grateful, too, for the comments of the hon. Member for Isle of Wight (Mr. Ross) about how difficult it is for some councils to keep within the limits of the money that they have to raise and to spend. Members of his party never advanced that argument before they took control of my borough. They simply demanded free fares. I now demand free fares from them.
  If the Government allow local authorities to operate generous concessionary fares schemes, this should not come out of grant-related expenditure such as social service funding for the elderly. If concessionary fares are
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  given with one hand but grabbed back with the other through the massive penalties that my borough would suffer, real misery will be caused to the entire population, including the elderly, of whom we have perhaps the highest proportion in London. I hope that my right hon. Friend the Secretary of State for the Environment will make a statement about that, as it would help not only those in control of my borough council but people in general in the areas of greatest need.
  Another area in which the GLC is to be abhorred for scaring the very people whom it claims to help concerns the posters to be seen all over London, "Come in No. 9, your time is up". When the Mortlake bus garage closed in the summer, I went with a delegation of bus workers to meet Dr. Quarmby at the London Transport Executive. I was greatly impressed by his professionalism, his business sense and his clear commitment to the community. He gave assurances about the continued existence of the No. 9 bus which, due to the closure of Mortlake garage, we believed might be in doubt. He asked us to monitor the change in services and, indeed, the data have been provided for him and, true to his word, he has reacted accordingly in trying to improve any deficiencies that we have spotted.
  I must pay tribute here to many people in Mortlake, especially the Mortlake community association, for their tireless work in monitoring the bus system. I for one am prepared to trust Dr. Quarmby rather more than I am those who try to undermine the confidence of bus users. A poster such as that of the GLC can turn people off using public transport. It does not turn people on trying to save the GLC. It makes people frightened of considering using a bus. When this bus service exists and Dr. Quarmby says it will remain for the foreseeable future, we should trust him and the professionals. We should not trust the amateurs at the GLC.
  While I welcome the great advice and interesting words of my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), I disagree entirely with what he said about the No. 9 bus. If the No. 9 bus has been there for 100 years, maybe it is because it has been needed for 100 years. It is needed now, and I want it continued.
  The Bill is clearly a great advantage to the taxpayer and ratepayer alike to remove the wasteful duplication between British Rail and London Transport and particularly to set up a framework to allow closer co-operation with British Rail's commuter services. I wish that the Bill had gone further in the direction of harmonising British Rail and London Transport. I welcome the clauses to encourage competition of privatisation where it pays to do so. That is not dogma; it is simple responsibility and common sense.
  As to the business principles and profit and loss referred to by the hon. Member for Kingston upon Hull, East (Mr. Prescott), who is no longer in the Chamber, business principles in an organisation such as LRT are not concerned with profit and loss only. They are concerned with acting within the financial disciplines of the real world. Business principles in the real world mean stewardship, looking after the assets and not wasting money. They mean being prudent and avoiding profligacy. That is good business sense.
  On the question of consumer representation, I hope that the new London Regional Passengers' Committee will be

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  drawn from a sufficiently wide area of representation to allow for proper consultation with bodies such as local authorities and local transport user groups.
  I happen to believe that the 84 London Members of Parliament will feel that, with the Secretary of State's direct involvement, this Chamber will be the proper forum for making our constituents' views felt. In answer to the poster across the river, and I hope that those concerned have planning permission from Red Ted, which says that 90 per cent. of the people in London want direct involvement in discussing their fares—incidentally, the poll result on the poster relates not to saving the GLC but to direct involvement by the public—I believe that 100 per cent. of my constituents have a direct involvement through me to question the Secretary of State if any part of the Bill falls flat. That is direct involvement, that is elected responsibility and that is what I hope London Opposition Members of Parliament will feel is their role. I hope that they will not pass this down to their hacks at the GLC. I apologise to the hon. Member for Newham, North-West (Mr. Banks), the hon. hack from the GLC.
  If, therefore, following the Bill there is greater confidence in the professionalism and reliability of London Regional Transport, if the fare structure is at a level that people can afford and would be attracted by and is not subject to the whims of political shenanigans—the rise and fall that we have seen over recent years — if waste and efficiency can be routed out by fully professional management at all levels and if London Regional Transport can be run as a service to consumers on good business principles and not as a sinecure for its staff, people will flock back to it, thus reducing pressure of traffic on the roads, improving our tempers and our blood pressures and making London a happier and saner place in which to work and live.
  7.15 pm
  Mr. Harry Cohen: There is an old story told of the time of the introduction of one-man operated buses. One of the buses crashed and the police were called to the scene. The police interviewed the driver and asked him what happened. The driver said, "I'm sorry, I don't know, I was upstairs collecting fares at the time." The Secretary of State for Transport is doing that in the Bill. He is picking up the pennies while London Transport heads for a crash. It really is pennies, because as The Times on 3 December reported:
  "Ministers indicated that their enthusiasm for ending municipal 'interference' in London Transport took precedence even over cutting public expenditure, an ambition the new system is unlikely to achieve for some time."
  The article goes on to quote the Secretary of State as acknowledging that there will be no massive savings as a result of the Bill. That article which was written before the Bill was published points to the problems of privatisation and the extra costs that will result. The article in The Times explains the reality of the situation. The undue haste with which the Government have brought the Bill in is for purely political reasons, to set in motion their programme to abolish the GLC. It has nothing to do with the travel needs of Londoners. It is dogma overriding transport consequences, financial common sense and even popular opinion.
  Mr. Richard Tracey: Does the lion. Gentleman accept that the spending by the GLC of £850 million of ratepayers' money, allegedly to defend London Transport, is also for overt political reasons?
  Mr. Cohen: The GLC is pursuing its public duty in that respect, bearing in mind that the poll referred to showed that 90 per cent. of Londoners want the GLC to continue to have a say in London Transport and they do not want that democratic right taken away.
  Government dogma in trying to abolish the GLC runs in the face of public opinion. Why else has the Secretary of State refused to publish the responses to his While Paper on the matter? The reason can only be because nearly all those responses were highly critical of the Government's plan.
  There is no recognition in the Bill of the real problems of London Transport. London as a capital city has special needs. The twice-daily massive commuter rush hours affect London more than the provincial areas. Environmental factors must also be considered -inadequate roads, traffic congestion, and all the problems of travelling in central London.
  There is no evidence that the present London Transport is not cost effective within its limited resources. London Transport's costs are obviously higher than those of provincial areas, for the reasons I have already stated. but that is no different from the situation in other capital cities. London does not get as much subsidy as other capital cities give to their transport systems. The real problem is a lack of investment in the transport system. That will be exacerbated by the Bill and the public spending cut proposed by the Government.
  The Bill has been described as a mixture of nationalisation and privatisation. It is both at the same time. Unfortunately, it represents the worst aspects of both. On the nationalisation aspect, it represents the centralisation of power, with the Secretary of State not being properly answerable. The board of LRT will be an undemocratic and unaccountable quango.
  The Tory-controlled Bromley council, which took action in the courts to stop cheap fares, when consulted about the White Paper, commented—
  "It is essential to secure some democratic representation on the board of LRT if ratepayers are to be able to exert control over services for which they will be expected to pay."
  That was Bromley making a plea for democracy.
  Hammersmith and Fulham councils—I am talking not only about Labour councils—in addition to making the same point about local residents not being able to excercise democratic control over decisions directly affecting them, pointed out:
  "Key information, as regards local aspirations and detailed background knowledge, will not be available at a policy formulation stage."
  That is another factor in the democracy argument. The new board will be a quango under the control of the Secretary of State. Its members will be appointed by him. Although he has described the people he wants as being business managers, it smacks of the patronage that has resulted in other quangos being run by retired part-timers— old business men — on a huge salary at public expense.
  The powers of the board will be under the direct control of the Secretary of State, who is even changing the law governing the operations of the transport system. Whereas at present there is an instruction to the GLC to meet the

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  needs of Londoners, the new board will have only to pay "due regard to" the needs of passengers. That represents a great watering down, because having "due regard" could be overridden by other factors, and those other factors will be at the whim of the Secretary of State.
  Even the proposed consumer watchdog body will be a quango. The London Regional Passengers' Committee will be appointed by the Secretary of State, and on it will be no direct representatives of users, staff, taxpayers and ratepayers. Indeed, there will be no such representation on either of the boards involved.
  The Bill extends to public transport the privatisation policies of the Government. It is proposed that there will be private buses on many routes, but that will happen only on the profitable routes. The competing services will curtail the revenue of the LRT, leaving less to finance uneconomic but socially necessary routes. The hiving off to private operators that will take place will make the duty on the LRT to break even further beyond reach. I do not believe that it can be achieved. The only way of trying to achieve it will be more cutbacks in services.
  The Bill even makes provision for grants and loans to be given to private operators—direct handouts. On 3 December the Daily Telegraph referred to the possibility of the Government subsidy to the board being handed over directly to private operators.
  One must not overlook the question of fare levels on private buses. The Bill refers to the LRT determining fare levels. Will the private operators be prepared to operate without having control of fare levels? Before long they will claim, "We run luxury buses. We have the best routes and therefore we are entitled to charge luxury fares." The wrangling will go on and higher fares will be the result. Services will decline as fares go up, and the number of staff employed by London Transport will be cut. The Government's cash limits on the LRT and the fragmentation of services that the Bill will produce will produce declining services.
  There is a lack of an integrated public transport service, but, far from creating integration, the Bill will operate in the opposite direction. It will break up London Transport's business activities, with individual routes being privatised, the underground and buses coming under separate management and services, such as catering and cleaning, being hived off. That will not help integration. Nor are there any real proposals to integrate London Transport and British Rail. It will mean decline.
  In addition, we have the divorce of public transport from other traffic and land use considerations. The strategic link with public transport will be lost. That was pointed out by the Tory-controlled Bromley council, which told the Minister:
  "Londoners would benefit from a transport network which was considered and possibly managed in its totality, including Underground, bus, rail and taxi services, with the maintenance and improvement of the main roads. In this respect, the Government's proposals seem to be particularly lacking."
  The Royal Town Planning Institute added its voice by saying:
  "It is the Institute's considered view that the quality of public transport in London will decline."
  The Bill will affect commuters and workers, who make up half of the 7 million passengers who travel every day on London Transport; it will affect women, who represent
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  two thirds of the bus passengers and who need buses for shopping and to take the kids to and from school; and, of course, it will affect the elderly.
  The Secretary of State is proposing that ratepayers should foot two thirds of the bill for London Transport without having a say in the matter, and the right hon. Gentleman can easily alter the figure. Indeed, it went up from 50 per cent. to 66 per cent. between drafting and publication of the Bill. If the Secretary of State wants total control of London Transport, he should foot the total bill.
  The Observer had an article on concessionary fares on 10 July—the weekend before the Government's White Paper on public transport in London was officially published. The first sentence of that article gave the game away. Presumably, the paper had had a briefing from either the Minister or the civil servants. The article said:
  "Free travel for London pensioners could be scrapped when control of the city's public transport system is transferred from the GLC next year."
  My hon. Friends have asked a series of questions—I have asked three — requesting a guarantee that the pensioners' travel passes in London will be maintained, but none has been given. I wrote to the Prime Minister on 21 November—after a demonstration by 200 Leyton pensioners, which showed the strength of feeling on this matter—asking for a guarantee that during the lifetime of her Government London pensioners' free travel would be maintained. The Prime Minister replied:
  "The London Boroughs Association have now considered this and have agreed that on the setting up of London Regional Transport the boroughs should assume responsibility for concessionary fares on the basis of the existing scheme."
  I was interested in that, because it looked as though we had our guarantee at last.
  However, what is meant by
  "the basis of the existing scheme"?
  If the Bill is the answer to what that phrase means, it does not mean that all London pensioners will keep their passes. It becomes a discretionary matter for individual London boroughs. If they wish to keep the scheme, they will; if not, they will scrap it.
  Most London boroughs have financial problems. They have cash limits, constraints and penalties imposed on their spending by the Government. The rateable resources of the City of London and Westminster were used in the GLC scheme. The effect of keeping discretionary fares in nearly all the other London boroughs will inevitably mean a rate increase. That is the pressure that the Government are putting on London boroughs.
  If the Government want to be a transport authority for London, they must face their obligations. They should write free concessionary fares into the Bill and pay for them as the GLC does. If not, they will be opening the door to charges for the passes, nominal fares on the buses for pensioners, or the introduction of a means test. The leader of the Tory-controlled Sutton council, who said that he favoured this, talked about a 60 per cent. per annum charge for a pass for some old age pensioners on the basis of a means test. That, too, means a restriction on the issue of passes — for example, only to pensioners on supplementary benefit. It could mean not providing passes at all. All those options are worse than the present system. The Bill is a dog's dinner in this respect, and London pensioners will suffer. There should be a legal duty for the passes to be maintained.
  For years, London Transport has faced a vicious circle — poorer services, higher fares, heavier traffic, less

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  safety, back to poorer services again. The cheap fares policy was an attempt to break out, but the Bill will exacerbate and intensify that vicious circle. Public choice in transport service is a political matter. The Minister claims that he is taking it out of the realm of politics, but setting up a non-elected quango cannot take transport out of politics. The demand for accountability and a better transport system will only be intensified when the quango fails.
  The Bill means that Londoners will have to pay, but will not have a say in their transport system. It also means increased fares, service cuts and an end to free travel for pensioners in many London boroughs. Londoners must hold tight until we get rid of this Government and get a Government who will defend and improve public transport for Londoners.
  7.35 pm
  Mr. Jerry Hayes: When I was a small boy and harboured some theatrical dreams, I was advised and warned never to work with children or animals and especially never to follow a seal act. After listening to the hon. Member for Kingston upon Hull, East (Mr. Prescott) I suspect that I have done so. He performed particularly well — flapped his little flippers, jumped through the political hoops and even hopped in tune with the Left-wing tune played by the GLC in his praise of the GLC.
  Mr. Prescott: We were saying this in 1970, before the GLC.
  Mr. Hayes: It is clear where the Labour party stands today. It stands four square for the preservation of the GLC. The preservation of the GLC through the back door is what the debate is about this afternoon from the Labour party's point of view and well the hon. Gentleman knows it. The hon. Gentleman must face the political reality. He knows full well that in the not-too-distant future the House will abolish the GLC and then there will have to be another body to deal with and co-ordinate London Transport. What will the hon. Gentleman do then?
  While on seal acts, I should mention the Liberal party. It is typical of the Disney world of Liberal politics that it should choose as its transport spokesman for London the hon. Member for Isle of Wight (Mr. Ross). Where is he, and where is the rest of the Liberal party? Are they hiding in their bunkers? The hon. Member for Isle of Wight raised one or two matters that amazed and mystified my hon. Friends and me. He said that London needed a man with power, vigour and authority. We already have that—we have Ken Livingstone. The Liberal party and its proposals, such as they are, are out of touch with the reality of people and commuters in London, as is the Labour party.
  It must be appreciated that this Bill will take politics out of the London Transport system once and for all. [HON. MEMBERS: "Oh!"] The hon. Member for Leyton (Mr. Cohen) might like to know that my constituency is Harlow.
  Mr. Cohen: I was looking at the Equity records.
  Mr. Hayes: I do not have a card.
  The Conservative party and its GLC members are not without blame, but the commuters are the people who have been suffering squalid and shabby conditions. I am a London commuter, and I know about this, as others do. Let us be fair about the "Fares Fair" policy. In theory, it
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  was a good policy. It benefited the commuter. It went wrong in taking money from the ratepayer. Many people suffered wrongly and unjustifiably as a result.
  I shall deal quickly with concessionary fares. I agree with most of what the hon. Member for Leyton said. I want to repeat the words of my hon. Friend the Minister of State, Department of Transport when she spoke to the Richmond Conservatives. She said:
  "The real issue is not whether there will be a concessionary fares scheme, but the type of concessionary fares scheme that the boroughs choose to operate in two years' time. The LBA has agreed in principle to work out further details of the scheme and to put forward proposals. This is not something which can be done quickly, but the London boroughs have two years in which to devise a workable scheme."
  I emphasis what my hon. Friend said next:
  "Certain London boroughs have refused to discuss the issue. Brent, Greenwich, Hackney, Islington, Lambeth, Lewisham and Southwark have refused to discuss the creation of the scheme for concessionary fares"—
  I emphasise these words—
  "because they are running a political campaign against the abolition of the GLC, paid for with ratepayers' money."
  Mr. Hanley: There was a slight error in the press release. It was not a speech to the Richmond and Barnes Conservative association. My hon. Friend the Minister of State was addressing a public meeting. She does not need to speak merely to the party that she prefers. She dealt fully in public with concessionary fares.
  Mr. Hayes: I am grateful to my hon. Friend for that advice. The hon. Member for Kingston upon Hull, East spoke with crocodile tears pouring down his cheeks. He said that people would become unemployed as a result of the Bill. How on earth can the Labour party honestly say that the Bill will cause unemployment? The boroughs that I mentioned a few moments ago that are raising rates through the roof will cause unemployment in London. One can go to Lambeth and Islington——
  Mr. Chris Smith rose——
  Mr. Hayes: I shall give way to the hon. Gentleman if he undertakes to give me the dustbin for which I have been waiting for the past three months. I am one of his constituents. The Labour-controlled GLC, with its "Fares Fair" policy which in theory is good but in reality has been a disaster, has been raising rates.
  Mr. Chris Smith: Will the hon. Gentleman accept that the provision to him, as one of my constituents, of a dustbin will cost the local authority money? In spending money, it will incur the penalties introduced by the Secretary of State which will cost the borough and the ratepayers additional money. Does he accept that precisely the same will apply to any borough, such as the one that I represent, which attempts to introduce its own concessionary fares scheme? Will he address himself to the point made by the hon. Member for Richmond arid Barnes (Mr. Hanley) about penalties which will be imposed on local authorities which introduce such schemes?
  Mr. Hayes: I concede that what the hon. Gentleman said carries some weight. There will be a debate in the House in the near future on rate capping and targets. I make no bones about saying that the Government will have to review some of their ideas about targets and penalties. I agree also with hon. Members on both sides who have said that the Government should make it clear, despite the

  895
  extract from the speech by my hon. Friend the Minister of State that I read, that if in two years' time, for whatever reason, agreement is not reached in certain boroughs there must be some back-up legislation.
  I want to deal with a matter raised by the hon. Member for Newham, South (Mr. Spearing) who spoke so well about Herbert Morrison. Herbert Morrison would be turning in his grave if he saw how his transport undertaking had been massacred in the way it has been operated by the GLC. There has been waste and inefficiency. Even the hon. Member for Kingston upon Hull, East must accept—I am sure that he will intervene if he does not—that there have been many problems and a great deal of inefficiency at the works in Acton. I am sure that all the readers of The Standard will agree with that.
  Mr. Prescott: I should like to correct a point made by the hon. Gentleman. If he were to study the reports of transport debates back to 1970, when I became a Member of the House, he would see that what I said then about the principles of transport was the same as I am saying now. That was before the GLC came into force. He says that he has read The Standard. Perhaps he did not read it the other night when Mr. Bright, the London Transport chairman, said that 6,000 people will become unemployed as a result of these proposals. The hon. Gentleman should get his facts right. I hope that he deals with his briefs as a barrister better than he has dealt with the arguments tonight.
  Mr. Hayes: I congratulate the hon. Gentleman on at last successfully looking me up in Dod and seeing that I am a barrister. I do not necessarily agree with everything else he has said, but that is another matter.
  Let me return to Herbert Morrison and some of the points that the hon. Member for Newham, South mentioned about wages and conditions. He said that the Labour-controlled Greater London council raised London Transport wages in 1981 above the original proposal of 8 to 11 per cent. when the bus drivers had already accepted 8 per cent. If that is the sort of administration and efficiency that the Opposition want, it will be a sad day for public transport.
  Dr. John Marek: What was the rate of inflation during the period to which the hon. Gentleman was referring?
  Mr. Hayes: I cannot tell the hon. Gentleman the precise rate of inflation at that time. I was comparing the various awards. I was making the point that one set of London Transport workers had agreed to a lower figure while the GLC suggested a larger figure. That cannot be right or be in the interests of London Transport.
  The Bill's provisions which concern me most are those which affect the commuters in my constituency who live outside the London area. They use the Central line, and there is terrible discrimination against the people who use the Central line beyond Woodford. I ask my right hon. Friend the Secretary of State, when setting up the new body, to take into account the fact that those people are paying way above the odds. Unless the Government give a commitment to help those people, the Bill will not be in the interests of the commuter or of a co-ordinated transport policy.
  7.48 pm
  Mr. Tom Cox: This is undoubtedly one of the many debates that we shall have in the coming months on issues that affect London—transport, education and the future of the Greater London council. We know from experience and from what we have heard this evening from the Secretary of State that the Government do not have much interest in the issues that worry London. Their great delight is to use every opportunity when London is discussed to attack the GLC. We must return to the real issues of the needs and services of London and its people.
  The hallmark of the Bill, which is utterly deplorable, is that elected representatives will no longer have the right to take decisions and then answer to the electorate on how those decisions have been taken. There are hon. Members on both sides of the House who have come from a background of local government. The Bill is eroding the understanding of local government held by hon. Members of all parties—Labour, Conservative and Liberal.
  The Secretary of State, or his hon. Friend, should tell us what the position of Members of Parliament will be in regard to putting down questions or seeking debates on London Transport should the Bill become law. My hon. Friend the Member for Newham, North-West (Mr. Banks) raised the question of concessionary fares in an Adjournment debate recently. Will we still have that right or will we be told, as many of us are repeatedly, when we seek to find out from the Secretary of State for Social Services what is to happen to hospital services or local social services within the areas that we represent to take it up with the regional or local health authority? This happens to hon. Members, irrespective of the party to which they belong. Our questions are never answered and we are never in a position to challenge decisions. If the Secretary of State does not wish to answer that question, I hope he will ask his hon. Friend to answer it when she replies.
  There have been many comments this evening about subsidies which are paid in various countries. I do not intend to repeat them. Hon. Members know what they are. Some time ago, when we were discussing the introduction of the GLC's "Fares Fair" policy, there were references time and again to subsidies paid elsewhere. Some hon. Members have studied in great detail the transport services not only in this country but in many parts of the world. They will know that if we are to have an efficient public transport service, not just in London but throughout the United Kingdom, it will come about only when meaningful subsidies are paid by the Government for the development of those services.
  All we have to do is to consider the system in France — not only the Paris Metro, but the general railway system. It is prospering, and more and more people are using the services. We know of the efficiency of trains on the French railway network. French people will tell you that it is possible only because of the subsidy from the national Government, coupled with the general efficiency of those working on the railways.
  Mr. Tracey rose——
  Mr. Cox: With respect to the hon. Gentleman, there are many other hon. Members who wish to speak.
  We heard the pathetic attempt of the Secretary of State to waffle his way through when asked specific questions about concessionary fares. It was interesting to note that

  897
  two of his hon. Friends clearly made it known to him that they did not accept what he was saying. Many hon. Members have said that it is all right, because boroughs will have two years to come up with an acceptable system. It should be remembered that there are 32 London boroughs with different attitudes.
  I came into the House in 1970. One of the first things that I became involved in, along with other London Members, by questions and early-day motions, was to try to get the introduction of a concessionary fares scheme for Greater London. We had problems because of the attitude of some boroughs which did not want any part in such a scheme, but gradually we made progress. Problems arose about the times and the days of the week when people could use their passes. The GLC said that it could not tolerate such a system and that there had to be a system which was usable by all the people of London, whether they lived at one end of London or the other.
  The Secretary of State would not tackle any of the points made about a meaningful concessionary fares scheme such as we now have in London. Some authorities say that they will introduce concessionary fare passes that will cost about £60 per year. There are very few people in my constituency who could afford £60 per year. Other authorities have said that they would introduce a means test. We know what problems that could cause. I understand that the royal borough of Kensington and Chelsea has indicated that it will introduce a scheme, but only for people who live within the borough. What utter confusion that would cause.
  I am a member, as are many hon. Members, of the all-party pensioners group. At meeting after meeting representatives from all parts of the country who come to talk to us about general issues of concern always ask when they are going to get in their respective areas a concessionary fares scheme such as exists in London. The Bill threatens the destruction of that scheme. The Minister knows what will happen if the introduction of a scheme is left to individual authorities.
  I have seen figures. For example, the London borough of Harrow has suggested that it would cost more than a 5p rate to introduce a similar scheme. We know what the attitude of the London borough of Bromley would be. It is not good enough for the Secretary of State to say that boroughs have two years to reach agreement on a scheme. We know what the record of the authorities has been. Their attitude has not changed.
  There are London Members in the Chamber. Over the next two or three weeks, they, like me, will go to many functions where elderly people will be in attendance. I challenge Conservative Members to tell those people, "Do not believe the scare stories that the Labour party has been telling on this issue." No one will believe them, especially after the shoddy performance we have had from the Secretary of State.
  Another matter which has not been given sufficient consideration is the dial-a-ride scheme. Some hon. Members may not be aware of what the scheme does. The scheme is funded, to its credit, by the GLC and it runs in many parts of the Greater London area. It provides transport for disabled people, who in many cases would not be able to leave their homes because they cannot use public transport. Buses have been adapted to take disabled people to any part of London to which they wish to go. In the borough of Wandsworth, where there is only one such vehicle, in the month of October it made 280 separate
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  trips. That shows how important this scheme is to disabled people. I cannot be the only hon. Member who is now receiving many letters from disabled people who are concerned about what will happen' to the scheme.
  I cite an example to emphasise its importance. In the London borough of Wandsworth, 50 per cent. of all those who have used the scheme since its introduction are confined to wheelchairs. I need not say anything more. We all know how important and valuable such a service is to the disabled.
  I understand that the scheme is to be funded only until March 1985. What will happen then? It is no good the Secretary of State saying, "Don't worry, something will be worked out." This scheme, like the concessionary fares scheme, was the result of much thinking and planning. Much opposition had to be overcome. Unless the Minister gives the kind of lead that we expect, both schemes will be destroyed and the people of London who need such services will suffer.
  Conservative Members talk about privatisation, but the Opposition know what that means. It will be the same as selling council houses—the good houses will be sold off, and the poorer estates will be further run down and neglected. If London's transport services are privatised, the profitable services will be taken over and the others will be left to fall into decline.
  Last Friday The Times contained an article on Norfolk. I accept that that is some distance away from London, but the principle is the same. That article stated that villages throughout Norfolk are becoming desolate and deserted because no bus service is available, and that has occurred because the local authority will not grant the kind of subsidy needed to ensure continuity of those services. Unless there is Government action, the same will happen to parts of London. London is an enormous area. If the good parts are privatised, the others, which many Conservative Members represent, will quickly have no bus services at all.
  This is a crucial issue for London. This is only one of the many debates that we shall have in the coming months. Let us hope that Ministers with responsibility for other London issues will show more understanding than the Secretary of State, whose speech was a disgrace.
  8.3 pm
  Mr. Richard Tracey: I am grateful, Mr. Deputy Speaker, for being called to speak on behalf of the ratepayers of Surbiton and the royal borough of Kingston. We heard much about London Transport in major speeches by the hon. Member for Kingston upon Hull, East (Mr. Prescott) from the Labour Benches and the hon. Member for Isle of Wight (Mr. Ross) from the Liberal Bench, even though the Isle of Wight is some way from the metropolis.
  The ratepayers of Surbiton are concerned about the present management of London Transport. Real unit costs have risen by 67·1 per cent. on the buses and 47·8 per cent. on the underground since 1970. Between 1970 and 1982 fares went sky high—up by 85 per cent. in real terms. The subsidy is up thirteenfold in real terms, from £6·5 million in 1970 to £369·8 million in 1982.
  My constituents are interested in an efficient transport service, run on business lines, and they will welcome the Bill.
  Mr. Prescott: What does that mean?
  Mr. Tracey: The trouble is that the present GLC has turned London Transport into a political football. Following the affairs of London Transport has been like riding the former big dipper in Battersea park. Fares have gone up sky high, gone down and gone up again. We are now approaching the water splash, with scare stories from Opposition Members and people across the river about the threat to concessionary fares for old-age pensioners.
  The GLC is simply concerned with scoring political points, hence the expenditure of £850 million of ratepayers' money——
  Mr. Tony Banks: The hon. Gentleman should re-think that figure. It is £850,000.
  Mr. Tracey: I apologise. The GLC has spent £850,000 of ratepayers' money on pure propaganda. It can be seen on street hoardings and comes through our letter boxes. Time after time there is propaganda and scare talk from the GLC about London Transport.
  The latest piece of propaganda is that the GLC has changed the hoardings on top of County hall. For many months it gave the number of unemployed in London. Now — perhaps because it believes that it can score many political points—the GLC tells us that 90 per cent. of Londoners want a direct say in the affairs of London's transport.
  I have investigated the slightly mysterious poll that emerged yesterday. I gather that 562 people were questioned. That information comes from the GLC's public relations officer. I prefer to take note of the views of my constituents and others in London as expressed during the general election, when the Conservative party made it clear that it would take steps to sort out the problems of the GLC and overspending on London Transport, but we are now suddenly told that we must take notice of 90 per cent. of 562 people.
  We must now deal with the mismanagement of London Transport by politicians across the river, and that is what the Bill seeks to do. In 1981, a wage offer of 8 per cent. was accepted by London Transport drivers, but lo and behold the Labour GLC increased it. We are also told that the number of London Transport staff was increased by 500 when there was apparently no need for that to be done. The worst example of interference has been in recent times when purely political appointments have been made to the board. The chairman of the London Labour party was put on the board, although so far as I know he has no expertise in the management of transport, and a 25-year-old councillor from Brent was also put on the board, apparently against the will of the chairman.
  I questioned the Secretary of State about that matter in the House. As I understand it, the chairman of the London Transport board should have been consulted, and his advice noted, before the appointment by the GLC. Of course, the GLC would not take any notice of the professionals, any more than it has taken notice of advice, or considered the true position, in relation to the appointment of the chairman of the London Transport Passengers' Committee. That is an interesting body, of which I was once a member.
  This morning I received a note signed by the chairman, Mr. Nick Lester, saying that the committee opposed the provisions of the London Regional Transport Bill and setting out the ways in which it was opposed to it. However, the chairman did not mention that he is now on the staff of the GLC.
  Dr. Marek: Opposition Members do not need any lessons about who is appointed to quangos and nominated bodies—Conservative members have packed quangos in the past four years with members of the Conservative party. Further, if the hon. Gentleman is worried about London Transport, the clear and simple solution is to wait until the next GLC elections, when the electorate of London will decide who is right or wrong.
  Mr. Tracey: The crux of the matter is not whether the chairman of the London Transport Passengers' Committee is a member of the Labour or the Conservative party. The committee is supposed to be impartial and able to criticise the GLC and London Transport. I was making the point that the chairman of that committee is a staff member of the GLC. That is not right by anybody's standards. He did not declare his interest in the note that was sent to hon. Members. It is impossible for him to hold impartial views about the Bill or any actions of the GLC, which is his employer.
  The GLC has also interfered in the affairs of the London Transport board. The board produced a three-year plan for the period beginning 1984–85. It contained proposals for sensible cost savings. Fares were to be kept constant in real terms, bus mileage would be reduced slightly and tailored to demand, and underground mileage would remain constant. Costs would be reduced by more than 9 per cent. in the period covered by the plan by means of a 2 per cent. reduction in unit costs and a reduction in bus mileage. It also referred to increased marketing and promotion of London Transport's services, and reduced levels of revenue support.
  The GLC has yet again got its fingers into the affairs of the professionals on the board. It proposes to modify the plan in several ways. It wishes to increase bus and underground mileage beyond that necessary to meet demand. It is deferring extension of one-man operated bus services until what it calls a searching, independent appraisal of their advantages and disadvantages has been carried out. It is increasing the level of revenue support.
  I do not need to give more examples of such interference except to say that, yet again, the GLC wants to interfere with hon. Members' opinions of the Bill. I have a bundle of papers that were sent by the director-general of the GLC, putting in summary form the opinions of various local authorities, the London chamber of commerce, and other bodies, on the Bill. The director-general refers us only to pages two and three of the bundle. One should not bother to read the other 100 pages. On pages two and three one finds the most slanted summary of local authorities' views. Those authorities gave considerable thought to their reaction to the Bill, yet their opinions are often summed up in a single sentence. The views chosen are those which appear most to lean towards those of the highly politicised GLC.
  Together with my ratepayers in Surbiton and Kingston, I welcome the Bill, which gives a real opportunity for true liaison and co-operation with British Rail. In my constituency on the edge of Greater London, more services are provided by British Rail than by London Transport. It is important that the British Railways Board and London Regional Transport look to one head—the Secretary of State. That might allow us to look forward, as the London chamber of commerce wishes, to more co-ordinated ticket services for commuters and travellers in London, which

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  would benefit not only the ratepayers and travellers from near London, but the millions of people who come from further afield in the home counties, and even beyond.
  Like many of my hon. Friends, including my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), I welcome the scope for the privatisation of services, which would allow steps to be taken within the next few years so that the transport services of London could progress into the 21st century. There is no doubt that in many parts of London the present conventional form of transport is not entirely appropriate. Giving London Regional Transport the power and scope to privatise services would give many entrepreneurs a chance to come up with original ideas. That might allow us to make good progress into the 21st century.
  The Bill finally brings us out of the localised political world of the people over the river at the GLC. We shall think national. London Transport will become part of the co-ordinated transport network that is so important to the home counties and London. Many Opposition Members have referred to France and other European countries and told us how the transport services are slick and efficient, but I remind them that in France the transport services are closely linked to the national Government. It is not the mayor of Paris, but the Government who run the much-praised Paris services. We are moving London Transport into the same sphere. The Bill takes us forward, and I commend it to the House.
  8.18 pm
  Mr. Tony Banks: The Bill represents a further stage in the Government's amazing fixation with the affairs of the Labour Greater London council. It is yet further evidence of their obsessive determination to eliminate that authority, whatever the cost in terms of local democracy, taxpayers' cash, good sense or administrative efficiency.
  It cannot be a great secret that if County hall were controlled by almost anyone other than Mr. Livingstone the question of the abolition of the GLC would never have arisen, nor would we be discussing this Bill. For the Prime Minister and her blue-rinsed hordes in the home counties, Ken Livingstone and his colleagues appear to represent the end of civilisation as they know it. It is clear that all that is nasty, mean-minded and authoritarian in the Prime Minister—there is lots of it—comes to the surface at the very mention of the GLC.
  Mr. Leigh: Will the hon. Gentleman give way?
  Mr. Banks: No. There was a time, not so very long ago, when wiser counsels from Conservative Members would have prevailed. Gradually, such sensible and independent-minded people have been weeded out in favour of the Central Office clones and the chinless wonders who now give the Prime Minister the type of advice that she wants to hear.
  Mr. Leigh: Will the hon. Gentleman give way?
  Mr. Banks: I shall not give way to that chinless wonder just yet.
  The House is being told that the people of London are to be deprived of any say in the running of our transport system. We are to have yet another unelected, unaccountable quango, which no doubt will be stuffed full of loyal Tory business men who are on the lookout for the odd political honour. The proposal comes from a party
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  which, not so long ago, was talking loudly about giving people more choice at local level. It said that it opposed the idea of setting up quangos. The Government are now taking away local choice and setting up many quangos to replace the GLC. It is not the GLC's services that are being abolished. They will be taken up by quangos. It is merely the elections for the GLC that are being abolished.
  It is not surprising that Conservative members at County hall are so violently opposed to the proposals that are being advanced by their colleagues here. There is no rational or economic basis for taking away control of London Transport from a democratically elected CLC. Conservative Members might not like the views and opinions of that democratically elected council, but they should leave it to Londoners to decide what they want at the ballot box in 1985. That is surely where the decision should come from.
  Mr. John Powley: The hon. Gentleman has talked of democracy. Who pays the bills that the GLC imposes? How much say do industrialists and the commercial sector have? Are they not entitled to a say in who represents them and who imposes the bills on them?
  Mr. Banks: I am grateful to the hon. Gentleman for his late intervention. I wish that he had been here to hear some of the earlier speeches.
  The ballot box must be the place where ratepayers and taxpayers make a judgment. Londoners should be left to decide whether the GLC is so appalling. If they want to kick out Ken Livingstone and put in Tories under Alan Greengross, let them do so. I would much rather County hall were controlled by the Conservatives than have the elections for that important level of local government taken away from Londoners.
  The GLC's transport policy, which has come in for some criticism from Conservative Members, has been splendid. I am biased in that respect, as I still serve as a member of the GLC. Nevertheless, I remind the House that the Labour party won an election in 1981 and one of the central themes of our manifesto was the "Fares Fair" policy.
  Mr. Hanley: Would the hon. Gentleman accept a poll on this subject of the Members of Parliament who represent the Greater London area?
  Mr. Banks: I do not believe in selective and elitist forms of opinion makers. What is wrong with waiting until 1985 and letting the 7 million Londoners who are eligible to vote go to the ballot box and decide? I can only assume that Conservative Members are frightened that the Labour party will win the GLC election in 1985.
  The "Fares Fair" policy was a significant part of Labour's manifesto in 1981. Conservative Members have conceded that the policy was popular. It worked. The GLC made a 32 per cent. reduction in fares. It was a great success for Londoners. Within a short time, travel on public transport increased by 10 per cent., and 6 per cent. fewer people commuted to central London by car. The social and economic effects of that policy were enormous. For example, there was less traffic congestion. I do not know whether Conservative Members are capable of remembering that far back, but there was much less traffic on the roads. Because of that, there was much less pollution and journeys in London were faster. That was

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  good for business, as people were able to get back and forth to their places of work more quickly. Perhaps most important of all was the fact that there were fewer accidents on London's roads.
  All of that progress was put aside when Bromley went to the courts to challenge the GLC's policy. Much has been made of Bromley's argument which ran, "We do not have much in the way of London Transport out here and we do not like paying an undue share of the cost through our rates." Bromley council and Bromley's residents seemed to forget that the rest of us as taxpayers must pay an awful lot of tax to maintain the British Rail commuter system which serves Bromley and the rest of the south-east of London extremely well. We have not run to the Chancellor of the Exchequer complaining about that, insisting that we have our money back because we are subsidising ratepayers in Bromley who are using the British Rail service.
  The Law Lords eventually stepped in with what can only be described as crude interference by politically motivated people to set aside an election manifesto pledge that had been fulfilled. Unfortunately, the Law Lords' decision created a great deal of confusion. The GLC was forced to double fares and in the 12 months which followed the decision there was roughly a 12 per cent. increase in car commuting. Moreover, 6,000 additional people were injured in accidents on the roads. That is not GLC propaganda, but the findings of an independent survey carried out by University college, which also estimated that the increase in the accident rate cost us all rather more that £20 million.
  We are now reaching the point where local government is so strapped around with legal restrictions that every committee paper that appears in County hall and in many borough councils is carried by about three lawyers, all of whom seem to have a different opinion as to the legality of the proposal. The Government have done a great deal for the legal profession. In view of the number of Conservative Members who are members of the legal profession, I should have thought that they would be grateful to the GLC for that extra work.
  After taking legal advice, the GLC was able to reduce fares by about 25 per cent. in May of this year and there has again been an increase in passenger use of London Transport. The signs are encouraging. For example, take-up of travel cards is excellent—it is far better than London Transport or the GLC anticipated. It hardly takes a genius to work out that cheaper fares will mean more passengers. More passengers travelling on public transport means fewer people travelling by private transport. That has a spin-off in terms of social and economic benefits for us all.
  If we are to have a better transport system, more subsidies are needed. My hon. Friends and I believe that the money will be well spent. Several hon. Members have said that London Transport receives a proportionately lower level of subsidy than transport systems in most other European cities. My hon. Friend the Member for Tooting (Mr. Cox) referred to Paris, as did several other hon. Members, as having one of the finest transport systems in Europe.
  The system was largely brought about under the direction of Giscard D'Estaing, not a person noted for being a revolutionary Socialist. The French recognized
  904
  that an enormously powerful economic and social case could be made out for a heavily subsidised transport system which would deal primarily with capital and not just revenue. It provided the essential capital investment for an effective public transport system. The French understood the good social and economic benefits which emanate from a heavily subsidised transport system, as would anyone with an understanding of economics other than those aquired in a Grantham greengrocer's shop.
  The enormous popularity of the GLC's transport policies in 1981 set the alarm bells ringing in Downing street. We heard talk in Government circles about the GLC using London Transport as a political football, an allegation made by Conservative Members more than once in this debate. The intention to remove London Transport from the control of the GLC is to make the case for abolishing the GLC more persuasive. If services are continually taken away from a local authority, the day will come when one can ask, "What is the point of keeping the local authority, as it has nothing to do?". The reason it has nothing to do is that its services have been removed. When the Tories realised how popular were the GLC's transport policies, it was important to do something about them. The result was the intervention of the Law Lords and the plan to take London Transport away from the GLC.
  I do not understand why Conservative Members should get worked up about local politicians discussing and getting involved in politics. The attitude appears to be, "It is all right for us to take political decisions and discuss political matters, but no one else is allowed to do so. If local government becomes involved in politics—tut, tut, what a terrible day for all." I consider the hypocrisy and double standards of Conservative Members to be appalling.
  The Secretary of State referred to the GLC's political interference in the running of London Transport. At the same time, he is proposing to take draconian measures against London Transport, the result being that we will be unable to discuss what is happening either in County hall, in London or in the House.
  The fight involving the "Fares Fair" policy was not sought by the GLC, nor was the confusion which followed, which involved the dismantling of the policy which was said to have been caused by or was the responsibility of the GLC.
  When references were being made to the GLC interfering in London Transport, accusations were also made about the over-generous subsidies to London Transport from the rates. We know that London Transport receives a proportionately lower level of subsidy than transport in most other European cities. The present London Transport revenue subsidy given by the Labour-controlled GLC is not inordinately out of line with that given by the previous Administration. In 1980—the last year of Tory control — the total revenue subsidy to London Transport was £117 million, and the sum this year is £175 million. The GLC is not profligate with its subsidy to London Transport. It recognises that massive social costs must be considered when drawing up a balance sheet for an urban transport system.
  If the Bill is enacted, there is little doubt that the level of subsidy to London Transport will be reduced further, services will be cut, fares will increase sharply and neither Londoners nor Parliament will have any say whatever in the matter.

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  I wish to deal with two specific points in the Bill which are of great concern to Opposition Members and Londoners generally. The first is about the future provision of pensioners' travel passes in London. Ministers continually accuse the GLC of trying to frighten pensioners, but they have had opportunity after opportunity to relieve the fears of pensioners and to state that travel passes will not be endangered because the Government will do something about them. The Government have had ample opportunity to give such an assurance but have ducked the issue every time. Instead, Ministers have caused more confusion about what will happen to these passes should the GLC be abolished.
  The Bill provides a wonderful vehicle for the Government to say categorically what is to be the future of pensioners' passes. Clause 48 refers to concessions for travel which can be made by one or more than one borough. The Bill refers to concessions, but does not specify old-age pensioner travel passes. Even after the Bill was published Ministers appeared to be quite unclear about the Bill's proposal. In a written answer to my hon. Friend the Member for Leyton (Mr. Cohen), the Minister said that the London Boroughs Association had agreed that
  "concessionary fare arrangements…should become their responsibility."—[Official Report, 5 December 1983; Vol. 50, c. 38.]
  The Secretary of State, in reply to a question by my hon. Friend the Member for Newham, South (Mr. Spearing), said:
  "I understand that the London Boroughs Association, at its meeting last Wednesday, announced that it would assume responsibility for the existing GLC scheme for concessionary fares."
  However, on the same day the Minister of State read into the Official Report a letter from the LBA which stated that the LBA
  "considers on the setting-up of LRT the boroughs should assume responsibility for concessionary fares on the basis of the existing scheme."—[Official Report, 24 October 1983; Vol. 47, c. 1–7.]
  So, on the morning of 24 October, the Secretary of State said that the LBA would take over the scheme and in the afternoon the Minister of State quoted from a letter saying that the boroughs would assume responsibility for the scheme. Will the London Boroughs Association take responsibility for the scheme, or will it be the responsibility of the London borough councils? I remind Conservative Members that the London Boroughs Association does not have any statutory power to enforce a scheme. It can devise, agree or discuss the ideal scheme with the boroughs, but it cannot force such a scheme on the boroughs.
  To judge from the Minister of State's remarks in the Adjournment debate on 25 November it appeared that the boroughs would be given such responsibility, but by 5 December the Minister appeared to have changed her mind. Ministers should not continually accuse the Opposition and the GLC of creating fear when the fear emanates from the Government.
  As we are in the time of good will and Christmas is nearly upon us, I wish to assist the Minister by making several suggestions and asking for answers to specific questions. First, do the Government propose that the LBA should be responsible for pensioners' passes covering all 32 London boroughs, or will the responsibility be left to the boroughs? Secondly, do the Government intend to make the scheme compulsory? Thirdly, if the scheme is to be discretionary, what protection will pensioners have
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  against the possibility of boroughs individually opting out or introducing charges, or damaging the present scheme in any way whatever?
  It is no good saying that the boroughs have two years in which to come up with a scheme. We already have a scheme that is operating efficiently, fairly and effectively. Everyone is happy with the old-age pensioners' travel scheme in London, so why interfere with it? The Government should just give pensioners and Opposition Members the assurance that the whole of that scheme will be maintained if the GLC is abolished. Although we have not reached the point at which the GLC has been abolished, the Bill provides Ministers with the opportunity to include such a provision.
  We have heard about several Tory boroughs that have taken decisions, or are considering proposals to modify the pensioners' travel pass scheme if the boroughs are given responsibility. It is for the Government to make the position clear. If they do not do so, speculation and worry will continue. The Committee stage will provide the Government with an opportunity to make the position crystal clear once and for all.
  I am also concerned by the total absence in the Bill of any reference to the provision of transport for people with disabilities. Hon. Members should note that I refer not only to the disabled, but to those with disabilities, such as the elderly and the frail who cannot stand in bus queues for a long time, or who cannot get out. Such people need to be collected. The right to public transport for such people is gradually being recognised, yet the Bill is silent on that. Again, the GLC has made tremendous advances in that sphere, and will be spending about £1·25 million in the current year.
  My hon. Friend the Member for Tooting mentioned the special dial-a-ride schemes. He could have gone on to say that these schemes now operate in 12 London boroughs and involve more than 6,000 users. Another form of assistance to those with disabilities is being organised by the GLC through a special black taxi pilot scheme. It allows those with disabilities to journey in a black cab for 50p per trip. I understand that it is the intention next year to extend the black cab scheme throughout London at a cost of £1·5 million.
  Finally, there is the GLC's special adaptation programme for buses and trains to accommodate those with disabilities, and particularly those in wheelchairs. Thus, progress is being made in providing public transport for the disabled. Such functions are clearly London-wide responsibilities. They cannot be left to the boroughs. In Committee the Minister should ensure that the provision for such schemes to continue is written into the Bill.
  The two examples that I have given, of the old-age pensioners' travel pass and the schemes for those with disabilities, describe the policies of the GLC to look after the elderly, the frail and the disadvantaged. It shows the great advantage of having an elected accountable regional authority for London Transport. Only a large regional authority can carry out such desirable social functions. The Bill is the result of the sheer political spite that has been directed at the Labour-controlled GLC. It makes no economic, social or transport sense. It represents one further attack on local democratic choice in the Prime Minister's squalid little continuing personal war against the GLC.
  8.43 pm
  Mr. Tony Baldry: As a country cousin, I was slightly apprehensive about speaking in a debate on London Transport. However, I do so for two reasons. First, as the White Paper "Public Transport in London" recognises, London's transport is vital to the nation as a whole. Secondly, I seem to have spent most of this year, when I have not been fighting a general election, involved in one way or another in various public inquiries about transport in London and applications to the traffic commissioners under the Transport (London) Act 1969.
  I suspect that I am going to say a few things now that will almost certainly guarantee that I shall not be asked to serve on the Committee and never again be invited to have lunch at the Institute of Economic Affairs. I am concerned about the attitude of some of my hon. Friends towards privatisation and competition. The difficulty about privatisation and competition is that at first sight schemes always seem to be good news. The idea of having lots of minibuses running round the suburbs at cut rates would seem to mean good value for money. However, it is only when one gets down to the nitty-gritty and examines the scheme that one realises that there are two sorts of buses: those that run at a profit and those that run at a loss.
  The buses that run at a loss in London do not necessarily do so because they are inefficient. One of London Transport's structural difficulties is that almost half of the 7 million journeys made every day in London are made to and from work. Therefore, during the course of the day there is an enormous double peak. The No. 9 bus seems to be the most popular bus, and, as it also passes the place at which I camp out when in London, at Olympia, I shall use it as an example. The No. 9 bus can leave Mortlake with a 100 per cent. load and be full on its journey into London during the rush hour. However, its return journey is quite different. Reports about the efficiency of transport in London rarely take account of such factors as dead running time. A 100 per cent. load may go into London, but the load returning to Richmond or Mortlake may be only 20 per cent., thus making the average far less than 100 per cent.
  There is nothing that any road transport operator can do about dead running time. A service that enables people to travel from the inner suburbs of London to the centre will inevitably involve getting the buses back again, so there is bound to be dead running time. Therefore, the only bus services that people will want to take over and that will be attractive under clause 43 will be those that make a profit.
  Having sat through day after day of inquiries, I am now intimate, I think, with every bus route in London. I have a little list of those routes that make a profit. Therefore, I declare an interest in advance. "Baldry Buses" may well be making an application to the traffic commissioners once the Bill is enacted. Several bus routes in London make a profit. For example, the Al runs to Heathrow airport and always makes a profit, because there is little dead running time. There are always people who want to go to Heathrow airport and there are always those who want to return. Thus, such buses make a profit, and those bus routes are very attractive.
  However, there is a host of other buses on routes that will inevitably make losses, no matter how efficiently they are run, because there is no way that the cost can be covered. No doubt my hon. Friend the Minister will say that, under the Bill, applications will have to be made to
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  the traffic commissioners, which will bring those involved under the same provisions as are in the Public Passenger Vehicles Act 1981. That Act says that the traffic commissioners must grant a licence unless they are satisfied that to do so would be against the interests of the public. That is a laudable sentiment.
  However, I should like to draw the attention of the House to how that operated in one of the public inquiries that I was involved in. Most of the cases were brought under the Transport (London) Act, and as appeals have gone to the Secretary of State they are still sub judice. However, one appeal went to the traffic commissioners.
  The traffic commissioners gave a ruling last Friday. No appeal has yet been lodged, so I think that I am at liberty to draw the attention of the House to the way in which the traffic commissioners interpreted the Public Passenger Vehicles Act 1981 with regard to an application to run minibuses from anywhere in London to Gatwick and Luton airports. The traffic commissioners came to the following conclusion:
  "In view of the lack of detail in these open-ended, applications any measured assessment of implications for operators of other services is virtually impossible to achieve…. The Commissioners cannot say whether on balance they are satisfied or not satisfied that a grant of the licences would be against the interests of the public".
  None the less, having said that, they then went on to grant a licence for a limited period of two years, having accepted that, even on the most modest of assessments, it would mean a loss to other operators of about £127,000 a year.
  If we allow anyone in London who has a bright idea to run private bus services, we will inevitably ensure that they will go for the profitable routes which, in turn, will ensure that the losses on the loss-making routes are even greater. I must tell my hon. Friends that that is the conclusion to which I have inevitably been driven, having spent a large part of this year studying the problems of transport in London.
  We seem to have been round this hoop before, not only in 1933, as the hon. Member for Newham, South (Mr. Spearing) said, but earlier—in 1924. In preparation for the debate I read the Second Reading debate on the London Traffic Bill of 1924. It is sad that the Labour party has still not got a statue of Herbert Morrison sitting on its Benches, because at least he had the national interest at heart—[Interruption.] I shall be voting for the Bill.
  Having heard the speeches of Labour Members, I am convinced that the GLC is not fit and proper to have control of London Transport. I sometimes think that London Transport should have control of London Transport, but that is a different matter.
  Mr. Snape: The hon. Gentleman is making a premature judgment. He has heard neither the Opposition summing up nor the reply of his hon. Friend the Minister of State. He might yet change his mind.
  Mr. Baldry: With respect to the hon. Gentleman, I doubt very much whether his views will have much influence on me, and I know full well, from previous speeches of my hon. Friend the Minister of State, that she will remove any doubts I might have about the Bill.
  We have been down this route before. In 1924, the House was arguing the need not for disintegrated services but for integrated services. That was agreed on both sides of the House. The Conservative Front Bench spokesman at the time said:
  "The heart of the Bill"——

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  the London Traffic Bill——
  "the key to the Bill…is a power to regulate the number of omnibuses, having regard to the congestion existing in a road…It is, I think, a wise thing to have the power to stop that competition when it is not doing any good to the public."—[Official Report, 28 March 1924; Vol. 171, c. 1709–10]
  What we must consider in transport in London is that words such as "privatisation" and "competition" are jolly good slogans, but they must be applied to the totality of what one is trying to achieve by ensuring the best public transport throughout the whole of the London area. If clause 43 of the Bill goes through unamended, there is a danger that it will simply open up a whole series of rag-bag applications to run a variety of private buses throughout the metropolis.
  Lest it be thought that I am arguing a particular vested interest from a brief, I should like to make it clear that I was not briefed either by London Transport or by anyone directly affected by the Bill. I was briefed by the hackney carriage trade, which is the paragon of private enterprise, never receiving 1p of public subsidy. In every Second Reading debate of every Bill on traffic in London, whether it be the London Traffic Bill of 1924 or the London Passenger Transport Bill 1933, a number of hon. Members have asked why the Bill does not include provision for helping the hackney carriage trade in the metropolis.
  It is one of the anomalies of transport in London that 17,000 licensed black cab drivers are doing sterling work within the metropolis but have no relationship with the Department of Transport. They come under the Home Office under various Acts of Parliament, which go back to the middle of the last century when hackney carriage drivers could be sentenced to hard labour if they abused their fares. The drivers, as a trade, are concerned that they have no relationship with the Department of Transport at a time when many bus operators and others are coming along wanting to take over bus routes and to institute new schemes. The cab drivers do not have the ability to come forward with schemes which they think might help transport in London, because they are limited by various Acts of Parliament passed in the middle of the last century.
  I say to my hon. Friends that the Bill is worth supporting, but they should not be surprised if, under the banners of privatisation and competition, in the next couple of years a large number of people apply to the traffic commissioners for licences to run private bus services throughout London. Those applications may well have as much content in them as the original application that was heard by the independent inspector on the Amos inquiry—a solicitor from the west country, who had no vested interest one way or the other—who described the details put before him as little better than works of fiction. I believe that the people and transport in London deserve better than works of fiction. If we are to have competition and privatisation, we must ensure that any scheme which is introduced really is in the public interest. The evidence so far of the adjudications that the traffic commissioners have made under the Public Passenger Vehicles Act 1981, in so far as they have applied to schemes in London, do not give me much confidence that that is how the law will be applied.
  8.58 pm
  Mr. Chris Smith: Logically the speech by the hon. Member for Banbury
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  (Mr. Baldry) should have led him to the conclusion that he should vote against the Bill. Unfortunately, he did not come to that conclusion.
  The Bill is politically motivated. It is ill considered, rushed and fundamentally flawed. I shall briefly explain why. Lack of time prevents me from making all the points that I should like to make.
  For example, the Bill removes any direct say about transport for Londoners except through this House. We know how indirect that say is. The Bill removes any direct say in the level of fares, service and operating schedules of London Regional Transport, as London Transport will become. The Bill adds to the unelected, unaccountable bodies which already impose taxation on Londoners, such as the Thames water authority and the Metropolitan police. The Bill grants enormous and worrying powers to the Secretary of State. For example, clauses 10, 31 and 45 dramatically increase the Secretary of State's powers, without reference to Parliament, to make directions on the disposal of assets, powers and functions of the London Regional Transport Corporation and British Rail without their concurrence.
  I hope that the Minister of State will draw the attention of the Secretary of State for the Environment to the provisions in clause 28. Why has the Secretary of State for the Environment refused permission under the partnership scheme for the funding by the GLC and the borough of Islington of the bus route through my constituency which was much valued by my constituents until it was closed a year or so ago? My constituents have expressed great anxiety about the reinstatement of that service. The borough and the GLC are willing to contribute under the partnership scheme. The Secretary of State has refused to allow that, but clause 28 appears to provide for such an arrangement.
  I shall concentrate on three main issues. The Bill represents a lost opportunity for the proper integration of transport services in London and beyond. We would all support a Bill which brought about integration between transport services within London and outside; that brought about a proper integration of rail, bus and tube services and taxis and hire cars. The Bill offers only the possibility of integration in the future. It does not offer that integration now because it has been rushed. If the Government had taken time to consider proper integration, they might have been able to propose a better co-ordinated transport systern for the capital and its surrounding area. The Bill does precisely the opposite to providing integration by encouraging and, in some cases, forcing London Regional Transport to privatise bits and pieces of its operation.
  The Bill does not only lose an opportunity but it rules out the possibility of integrating the planning of transport and its infrastructure in London. That is important because it must be sensible for the body that plans road networks and other infrastructure around the capital — which should continue to be the GLC—to have a direct impact and say on the provision of services.
  My third point is so crucial that I make no apology for mentioning it again in the debate. I refer to the provision of free travel for pensioners. It is an important issue for pensioners. Time and again the Government and Conservative Members have missed the opportunity that we have afforded them to set at rest the mind of every pensioner in London. The reason why they failed to do that is revealed in an article in the Sutton and Cheam Advertiser

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  of 24 November. Sutton council is a member of the London Boroughs Association. Dr. Trafford, the leader of the council, is reported as saying:
  "There could even arise the absurd situation…whereby they could be 'fined' by the Government for spending on travel passes the £900,000 that the Government insisted they spend."
  Dr. Trafford went on:
  "If the Government did not make adequate funds available then the passes would have to be means tested when the GLC was abolished".
  That was not the GLC or me speaking, but the leader of Sutton council.
  The crucial point is the provision of adequate finance. Will the Minister of State guarantee that when local authorities are encouraged by the Government, the LBA or any other source to bring in concessionary fares—or, even better, free fares—the amount spent on the scheme will be exempt from block grant penalty? Will extra finance be made available through rate support grant? Will the needs indices be adjusted according to the number of elderly people in the area so that the schemes can be implemented? If that guarantee is not given, any sympathy shown by Tory Members for pensioners' travel in London would not be worth the paper on which it was written.
  The Bill will impose suffering on all Londoners, including my constituents, and I cannot accept it. It is badly conceived and even more badly executed.
  9.6 pm
  Mr. Peter Snape: The groundwork for the Bill was laid earlier this year in the Government's White Paper "Public Transport in London", Cmnd. 9004. It was asserted on page 6 in paragraph 18 that one of the tasks of the London Regional Transport will be
  "to reduce costs and the call on the taxpayers' money".
  The White Paper contained no detailed examination of how subsidies were used, nor did it make any attempt to assess the implications of how a reduction in subsidy might conflict with other objectives, especially another initial task of LRT which, according to the White Paper, is
  "to improve bus and Underground services for London".
  The Bill is part of a cost-cutting exercise devised without any serious consideration of the realities of public transport finance.
  It is expensive to run public transport in London, but that does not necessarily mean—although we would not realise this from some of the Conservative speeches—that London Transport is inherently inefficient or that the ratepayer in London gets poor value for money. In fact, to run public transport in any large city imposes a cost on the locals. No public transport system in the industrialised world can provide an efficient service and yet be economically viable without financial support. In any country and under any administration, subsidies are regarded as essential.
  Far from being generously subsidised, public transport in Britain, especially in London, receives much less capital and revenue support than in most comparable countries. The hon. Member for Mitcham and Morden (Mrs. Rumbold), who serves as a parliamentary private secretary to the Minister, chuckles at that. If she had been present for most of the debate——
  Mrs. Angela Rumbold: I was present.
  Mr. Snape: I apologise. In that case, she will have heard some of her hon. Friends making similar comments. All the studies have shown that, while British Rail receives only 29 per cent. of its total costs from the Government, the average Government contribution in no fewer than 10 other railway systems that were recently examined—I know that the Secretary of State is not good at reading such documents, still less at comprehending them—received on average 47 per cent. in subsidy.
  The Department's Transport and Road Research Laboratory 1980 report on the subsidisation of urban public transport in 15 Western countries found that the subsidy in Britain was only 30 per cent. of operating costs, compared with an average for Western cities of 50 per cent. The Select Committee on Transport, in its recent report on transport in London, drew attention to the fact that in 1981 London Transport received 32 per cent. of its operating costs in subsidy, whereas the subsidy for the Paris underground was 54 per cent., and for the Brussels and Milan systems 76 per cent. Of the nine European cities mentioned in the report whose transport systems were funded on a basis comparable with ours, only one — Munich—approached the low level of subsidy received by London Transport, and even then its subsidy was significantly higher at 40 per cent.
  All those investigations show that the consequence of low subsidies in Britain has been a vicious circle of higher fares and service cuts, resulting in declining patronage, leading in turn to still higher costs, thus setting off the chain of fare increases once more. That is the road on which we shall embark yet again if the Bill becomes law.
  The Government's aims are patently contradictory. They cannot have both an improvement in services and a reduction in subsidies. It will certainly take more than a speech from the Secretary of State today to convince us otherwise. If the Government really wish to improve services, greater capital and revenue support is essential.
  The Paris underground has been much mentioned today. When Conservatives talk about publicly owned industry they always talk about productivity—by which they mean redundancies. It is true that the Paris metro has 40 per cent. fewer employees than London Transport and carries 200 million more passengers per year, but those facts do not embarrass us. The reduction in the number of employees was the result of a decade of high investment in the system. The Conservatives, however, want it both ways. They talk about inefficiencies and the desirability of redundancies in London Transport, but they withhold the very capital investment that would make more economical operation possible. They have taken a truly Jekyll and Hyde attitude to this debate.
  I had intended to congratulate the hon. Member for Banbury (Mr. Baldry) on an eminently sensible speech, but having led up to the obvious conclusion that the Bill was nonsense he then behaved like other Conservative Members who can only be described as chocolate soldiers. Having marched to the top of the hill with fixed bayonet, he threw down his rifle at the first whiff of grapeshot in the shape of the first angry glance from the Government Whip and announced that, despite the views that he so expertly expressed, he intended to vote for legislation which would cause even greater problems and take us even further down the dark road that he described.
  On the whole question of public transport subsidies there has been — I hesitate to use the term but I can

  913
  think of no more suitable phrase—something of a cover-up at the Department since the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) took over as Secretary of State. A magazine which does not normally favour higher subsidies for public transport, and which does not normally express much opinion on these matters —Motor Transport—published an article on 13 August this year under the heading:
  "Department of Transport Backs Higher Subsidies".
  The content of the article may seem somewhat odd, but it was certainly interesting. It said:
  "Subsidies for public transport in major urban areas give good value for money and should even be increased, according to Department of Transport research. Details of this potentially embarassing result"—
  they were not wrong there—
  "were given to the annual planning and transport research computation conference at Brighton last week. The Department of Transport is currently trying to reduce public transport subsidies and is building a new computer model to divide the subsidy money between London and the other metropolitan counties."
  No wonder my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) could not get a reply to his question. He asked the Secretary of State about the amount of the subsidy in London. Either the computer has not yet arrived, or the right hon. Gentleman cannot change the plug, because he failed abjectly to give a straight reply to that question.
  However, I must not keep regressing, if that is the right word, to the right hon. Gentleman's speech, because the article from which I quote is much too interesting. It went on to say:
  "The model has also produced results on the value of transport subsidies. It shows that subsidies in south Yorkshire, already the highest in Britain, are worth increasing and suggests cutting fares by up to 25 per cent. in Greater Manchester and west Yorkshire."
  It added:
  "The results support the fares cut in London Transport introduced by the Greater London Council earlier this year, but suggest a 28 per cent. rather than the 25 per cent. cut implemented".
  The report concluded:
  "But the Department of Transport is not going to use its computer model to increase public transport subsidies."
  There is a waste of public expenditure for a start! The computer is probably the biggest one that we have at present and it will probably be changed for an Atari which will come up with something different.
  The article said that it was just going to compare the value of subsidy in different counties. In other words, it seems to the Opposition, after looking at the article and listening to the speech by the right hon. Gentleman, that in this matter, as in many others dealing with the public sector, the one thing the Government cannot stand is too many hard facts. The Government are not very good when faced with the truth. They simply ignored the results of that exercise because the results did not conform to the well-known and long-held prejudices of the Secretary of State. If the Government want stability in public transport, which is what they repeatedly claim, they should let their policies be guided by examination, by analysis and by reason and not by the right hon. Gentleman's prejudices, no matter how long-standing those prejudices happen to be.
  During the debate we have heard the typical war cry from the intellectutally bankrupt Conservative Benches that the problems of London Transport are all due to the inefficiency of those who work in the industry. I must
  914
  confess, as somebody who used to get up fairly early in the morning to help operate a railway system, that I am not too tolerant when I listen to fairly well-heeled and well-cosseted Conservative Members talking about productivity. The House will have a chance to see how much Conservative Members believe in productivity on Friday afternoon when we tackle another restrictive practice in a profession to which many Conservative Members happen to belong. But I must not digress. Let us deal with this myth of inefficiency in the public transport industries of the country in general and London Transport in particular.
  The most familiar complaint in the debate and elsewhere lies in the allegedly slow process in the introduction of one-man, or perhaps I should say in these enlightened days one-person, operation of buses and underground trains—OPO if I may use the shortened phrase without causing any offence. The fact of the matter is that over half of London's bus services—53 per cent. to be precise — are now one person operated, and virtually all suburban services throughout Greater London are so operated.
  Where crew operation of buses continues to exist, it is on services in inner and central London areas. The reason for two-person operation in inner and central London is simple. It has nothing to do with trade union opposition to change. It has everything to do with the need to encourage traffic flow, as we have heard from Conservative Members on numerous occasions in the debate, in the circumstances of chronic congestion found particularly in the central London area.
  Chronic congestion in London appears to be the least of the Secretary of State's worries. Not once as he ploughed tardily through his brief earlier in the day did he mention the question of chronic congestion. I do not know whether Conservative Members have enough wit or imagination to consider the problems that one-person operated buses would cause in the central London area. The Select Committee on Transport quoted in its report "Transport in London" the fact that on a weekday evening at peak time about 25,000 passengers were picked up by buses in Oxford street alone.
  I presume that the Secretary of State knows what a bus looks like. Can he imagine 25,000 people trying to board buses in Oxford street and the congestion that would be caused if they were one-person operated buses? I wish that he and his colleagues had reflected for a moment—before they peddled their ignorance about inefficiency in London Transport—on exactly what the switch to one-person operation would mean on public transport in the centre of London.
  The reasoning on this issue was accepted by the Select Committee on Transport, an all-party body. It is a pity that some of the Conservative Members who signed that committee's report are not present today to give us the benefit of their enlightened views on London Transport. All the members of that Committee accepted the situation as I have outlined it, and the report, which was unanimous, said:
  "It is not our impression that union intransigence is a major factor in persuading London Transport to continue to run the majority of their central area buses with two-man crews."
  I regret that the hon. Member for Richmond and Barnes (Mr. Hanley), who made a somewhat confused speech and immediately left the Chamber, is not here, because we could have pointed that out to him.

  915
  It is possible to argue, in view of the recent progress with fares simplification, that it may be possible to achieve a further limited movement towards more one-person operation on London's buses. It goes without saying that the conversion of more buses to one-person operation and the building of more buses is an expensive business. The existing crew operated buses cannot be converted for one-person only operation, and the currrent price, for example, of a Metrobus—manufactured, incidentally, not far from my constituency — is over £80,000. That is a lot of capital investment if we are to go in for a wholesale changeover in operation from the present system. It is that very investment that the Secretary of State, by the Bill, is seeking to deny to London Transport. He cannot have it both ways.
  The Select Committee made precisely that observation in connection with the system of two-person operation on London's underground trains, when it said:
  "This situation"—
  that is, two-man operation—
  "is bound to continue so long as rolling stock is designed for this method of operation, and improvements in this direction"—
  towards one-person operation—
  "are critically dependent on capital investment funds."
  Again an obvious truth, but one which appears to have escaped the notice of Conservative Members.
  Mr. Baldry: As a chocolate soldier, may I ask the hon. Gentleman to say where the Bill prohibits the board of LRT from raising capital to buy new buses or whatever it wishes to do?
  Mr. Snape: The hon. Gentleman is not just a chocolate soldier. Only the original Milky Bar kid could have asked a question like that. The Bill specifically restricts the amount of money available for London Transport. It cannot operate the system on the amount of money that it gets now. I am sorry to be laborious over this—dealing with Conservative Members is like knocking a nail in a mattress — but if that amount of money is restricted further there will be even less available for capital investment by LRT, or whatever fancy name the Secretary of State cares to give it and whatever colour he wants to paint the buses, deep Tory blue or chocolate coloured.
  Mr. Baldry: There is no statutory prohibition.
  Mr. Snape: One does not need a statutory prohibition to strangle somebody. One merely cuts off the supply, which in this case is money. I should have thought that this was obvious to every hon. Member, and particularly Tory Members, but obviously I made a mistake and overestimated their intelligence.
  The essential consideration on public transport is safety, for passengers and staff alike. For London Transport, safety and the change in working practices depend on the installation of such things as automatic train stops, because in the event of difficulties it is plainly necessary for the train to stop automatically. Again, that comes out of capital investment, and if that is denied the improvements will not take place and the inherently inefficient—in the eyes of Tory Members—system will continue.
  When investment for innovation has been forthcoming on the Continent and in this country, for example on the Tyne and Wear metro, one-person operation of the system
  916
  has been possible. It has not been possible in London because the investment has not been forthcoming, and there will be no investment if the Bill goes through. It has been only the willingness of the Labour GLC to invest in underground modernisation that has permitted consideration of the implementation of one-person operation on many rail lines.
  It is against the background of the £50 million investment programme to install radio telecommunication between underground drivers and control centres that the National Union of Railwaymen is now on the point of reaching an agreement with London Transport on the implementation of one-person operation on the Metropolitan and City line, the line specifically referred to by the hon. Member for Richmond and Barnes. There is every reason to believe that this agreement will be signed in the next few days, and again it depends both on investment and co-operation between management and unions, which is taking place.
  That is just one aspect of the considerable co-operation on efficiency and savings measures that has occurred between unions and management in London's underground and bus services in the past few years. The management has fully acknowledged that the unions have contributed well over half of the looked-for savings on such things as a reduction in the working week. It has acknowledged that the unions have contributed by way of agreements on manning both buses and trains. If Conservative Members wish to have a serious debate on these matters, they should take the trouble to learn about the subject properly.
  Mr. Ridley: The hon. Gentleman is reading a brief.
  Mr. Snape: Without being modest, if I am reading a brief, I am doing so a damned sight better than the Secretary of State did when he opened the debate.
  Mr. Prescott: My hon. Friend understands his brief.
  Mr. Snape: The Secretary of State did the House a grave disservice by the casual and laconic way that he went through what was, to start with, an extremely bad brief. The right hon. Gentleman is certainly a broad brush man, and is good at it—we have seen some of his exhibits in the Upper Committee Corridor. His broad brush is better when it is used on oils and canvas or even on watercolours than when it is used on the sort of approach that he adopted this afternoon.
  When they talked about the ratepayers' contribution, we heard a great deal from some Conservative Members about the poor oppressed ratepayers of London. It seemed to me that the more they talked about the oppressed ratepayers the less they had read the Bill. If the Bill does anything, it guarantees that the contribution that the ratepayers make to their transport system will increase, despite the fact that the efficiency and frequency of that service are likely to deteriorate fairly quickly.
  Another question that the Secretary of State could not answer was how much expenditure he desired on London Transport, and the best example of what this might be lies in the protected expenditure limit announced for the GLC last Wednesday. In this, the Secretary of State recommends a level of subsidy on London Transport revenue account for 1984–85 of £125 million. I do not know whether he is aware of that, but it is another figure

  917
  that he could not give this afternoon, although it is in a press release from his Department, which he was kind enough to lend me, dated 7 December.
  Mr. Ridley: The hon. Gentleman did not listen to me.
  Mr. Snape: The right hon. Gentleman keeps digging pits and jumping into them. That figure, issued in the press release, is £70 million less than London Transport requires to operate at current fares and service levels, and £90 million less than would be required if the GLC's proposals for greater integration with British Rail and enhanced bus services were to be implemented. Hon. Gentlemen have demanded greater integration with British Rail, but integration costs money and it is not available under the Bill's provisions. Even if capital were available overnight, the cost of redundancies, investment in new rolling stock and the difficulty of disposing of large assets such as bus garages would make it impossible to bridge the £70 million gap in the myth perpetrated by the Secretary of State and the reality of running London Transport.
  The Opposition all know, and Conservative Members if they would he honest enough to admit it know, that there will be a massive increase in London bus and underground fares as a result of the Bill. If the Minister of State can find an alternative to that increase and match the figures that I have given, I hope that she will do so when she replies. Figures were sadly lacking from the Secretary of State's speech. Millions of London ratepayers would like to see a hefty cut in their rate burden. I live in London for most of the year and I should like to see a hefty cut in my rates—but at what cost? Would the average Londoner wish to see his bus and tube service decimated to receive a rate reduction? The Bill will not give him a reduction in his rates.
  Mr. Ridley: This is all very boring.
  Mr. Snape: The right hon. Gentleman says that it is boring. He should have listened to himself this afternoon. It may be boring, but my speech does not come from a departmental brief given to me by a bunch of civil servants. It comes from my heart. If the right hon. Gentleman does not believe that, he should not be doing his job.
  We all know that there are two main reasons why the right hon. Gentleman is Secretary of State for Transport. First, he is one of the few remaining Conservative Members—I am not talking about the Members elected in June whose enthusiasm for Government policies is understandable and will die fairly quickly—one of the older intake, who entered the House in 1959, who believes that this monetarist madness works. It is not because of any interest he has expressed for transport matters during his parliamentary career. He gave the impression that his transport knowledge was confined to plugging in the odd Hornby 00 in his younger days. Secondly, the Department of Transport has for too long been seen as just another step along the road to greater political fame and fortune.
  The right hon. Gentleman is the third Secretary of State for Transport that we have had in a year. The Opposition will agree when I say that on today's performance he is undoubtely the worst, and thinking of some of his predecessors that is saying something.
  We believe that public transport in London and elsewhere is too important to be left to the right hon. Gentleman's cynicism. The Opposition will not filibuster
  918
  in Committee. We shall study the Bill clause by clause and hope that the right hon. Gentleman will explain the odd clause here and there before he takes off for more important meetings. On today's performance, we doubt whether he will be able to give any explanations. We urge him to pack the Committee, if necessary, not with hon. Members who have spoken today, because willing and enthusiastic though they were, their desire to be loyal overcame any great interest in London's ratepayers. The Secretary of State is in for a long and hard battle in Committee. We reiterate a long-held belief in democracy at any level. As was said earlier, we would rather see London Transport under a Tory-controlled GLC than left to the tender and inadequate mercies of the Secretary of State.

  London Regional Transport Bill
  9.35 pm
  The Minister of State, Department of Transport (Mrs. Lynda Chalker): It has been an interesting and highly predictable debate. Before I deal with detailed points, there is one thing we should get clear about London's public transport. By anybody's standards it is a very big business. It has an annual turnover of £850 million. Only 24 private companies in the United Kingdom employ more staff than London Transport. That is why the Bill, as my right hon. Friend has made clear, starts from the view that running an enterprise as large and as complicated as this requires, first and foremost, management skills of the highest order. We cannot expect to find or to retain such skills if they are constantly to be subject to political and bureaucratic interference. It is to get away from the day-to-clay interference that the Bill proposes to take the responsibility from the GLC, which daily spends more and more ratepayers' money on expensive documents like "Kill the Bill" produced at ratepayers' expense to try to hide what it is really after — to avert its own abolition by a different piece of legislation.
  It is no good if accountability of any public body is clouded by divisions of responsibility between endless committees and line management itself. We brought forward the Bill because we are set on simplification. We will have proper and adequate safeguards, but until we leave the managers of London's public transport free to take the management decisions on their own we will never improve the standard for the traveller in London. That is what we intend to do through the Bill.
  There are no complications in the Bill of new supervising authorities or watchdog bodies. I shall come back to this in a few minutes. We must have a structure which will develop under the powers of the Bill to meet the needs of the traveller in London, but it must have the object of maintaining clear lines of accountability within the broad objective that London Regional Transport will be set by my right hon. Friend.
  The Bill caters for change and development. It will create new services where these are needed by passengers and encourage new forms of interchange between different modes of transport—coach to rail, underground to bus and even perhaps new passenger services on the river— but it is an approach which is simple and above all practicable and workable.

  919
  The hon. Member for West Bromwich, East (Mr. Snape), who described my hon. Friend the Member for Banbury (Mr. Baldry) in various chocolate terms, is more like a well-known mint. He has a very firm exterior, but there is an awful lot of air in the middle. That is exactly what we had this evening.
  The hon. Member was very concerned about investment, as are we. Under the Bill, London Regional Transport will continue to receive grants for revenue support for depreciation and renewal and for capital investment, as it does now, but it will at last have the chance to borrow on short-term for overdrafts for its own cash flow and long-term for more profitable capital investment. There is no limit on grant in the Bill, because there is no need to provide a special opportunity to debate London Transport finances. We shall have an annual negative order on the ratepayer contribution which can be debated in the House.
  The hon. Member for West Bromwich, East said that there was a limit on borrowing in the Bill. There is a £100 million limit but that can be raised by order, and a £100 million limit ought to be enough to last London Transport for some years.
  We heard a lot from various hon. Members about democracy and accountability. First, we should look at what is proposed in the Bill. I got the feeling that many hon. Members have not done so, particularly some of those who made some extravagant claims about what now takes place under the GLC. The Bill gives London Regional Transport specific duties, including the preparation of plans on which there should be full consultations with local authorities and the users' consultative committee. It creates a clear and accountable financial regime. As a result, there will be proper transparency of cost, something we have not had in the past. The Bill also requires annual reports on how LRT's performance has measured up to the plans.
  Secondly, we shall establish a powerful new watchdog committee — a single committee — to look after the interests of consumers. There is no question but that this committee will clearly scrutinise the way in which customers' needs have been met on London Regional Transport and British Rail alike.
  Thirdly, there is accountability to this House. Some Labour Members have argued that the present accountability of the GLC is satisfactory.
  Mr. Tony Banks: Through the ballot box.
  Mrs. Chalker: I should point out to the hon. Member for Newham, North-West (Mr. Banks), who was shouting in his normal way, that the ratepayers who finance the bulk of what the GLC spends have no vote in local elections. They provide London's jobs. In fact, the non-domestic ratepayer provides more than 62 per cent. of London's rates. In addition, London's visitors and commuters are in no way represented by the GLC. That is why I and the Government believe that GLC decisions should be patently clear and should not, as at present, be taken in a closed party caucus.
  Mr. Prescott: What is the Cabinet?
  Mrs. Chalker: Time and again, opposition councillors do not see papers until late in the day, if they see them at
  920
  all, and time and again public transport expenditure in London has never been properly revealed, least of all to that 62 per cent.
  Mr. Simon Hughes rose——
  Mr. Spearing rose——
  Mrs. Chalker: I cannot give way, as I have only a short time in which to reply.
  The packing of the LT board has been designed to blur the facts and suppress the options. That, among other things, has above all shown how unfit the GLC has become to run London Transport.
  By contrast, the Secretary of State will set out clearly and publicly the objectives and principles for LRT. He is required to do so by the Bill. LRT policies will be debated in this House, and the amount of subsidy will be clearly stated and debated annually. Those are all aspects of accountability against which the Opposition have no reason to argue, however much they may try.
  Mr. Spearing: Will the hon. Lady give way on the question of accountability?
  Mrs. Chalker: I very much regret having to say that I cannot do so at present.
  There has been much interest in the new consumer body. A number of questions have been asked about it, and I wish to place something clearly on the record. When my right hon. Friend mentioned the proposed new arrangements for consumer representation, he said that the proposals for a merger originated with the consumer bodies. I am grateful to those bodies that we met, and we are now able to give the London Regional Passengers' Committee an important status in the Bill.
  The London Transport Users' Consultative Committee wrote a letter only today saying how encouraged it is by our proposals. There has also been a welcome by the London Transport Passengers' Committee, the present London Transport consultative committee. The London Regional Passengers' Committee in future—the single consumer body—will be consulted on London Regional Transport policy statements under clause 7 of the Bill and informed about current plans under clause 29. The arrangements mirror one of the Bill's main objectives, which is to achieve liaison between British Rail and LRT, which the passengers of London not only want and need but deserve.
  Fares were mentioned by several hon. Members. The role of the new consumer body in relation to fares is important. At present consumer bodies dealing with transport — the Central Transport Consultative Committee, the area transport users' consultative committees, and, in London, the LTPC—all have fares and charges specifically excluded from their statutory remit. In December last year the Government published a document called
  "The Nationalised Industry Consumer Councils: A Strategy for Reform".
  In the document we said that we were considering whether that exclusion should continue.
  We gave careful consideration during the preparation of the Bill first to the general principle and second to the possible use of the Bill as a vehicle in which to incorporate any change to the existing law in this respect. The general principle is that the industries must work to the financial objectives set by Government and determine the level of

  921
  fares without being subject to specific directions. However, we accept that within that framework there is a role for the consumer bodies in relation to the structure and relativities of fares.
  On the second point, it would not be appropriate to make such a change in a Bill the scope of which is limited to the London region. However, the Government intend to deal with the matter on the above lines if and when a suitable legislative opportunity arises.
  Meanwhile, I am glad to say that the chairman of British Rail, Mr. Bob Reid, has agreed that his board will consult both the Central Transport Consultative Committee and the new London Regional Passengers' Committee about fares and charges on an informal basis, in advance of any new legislation. I am sure that the board of LRT, when appointed, will agree to do the same thing in relation to the LRPC. I hope that when hon. Members read what I have said about fares, they will understand the depth of what I have said.
  Mr. Prescott: The Minister of State will be aware of the brief that was sent to every hon. Member from the National Consumer Council, which says that in the Bill the LRPC lacks
  "rights to consultation and to access to the information essential for the effective representation of passengers' interests."
  That is missing from the Bill.
  Mrs. Chalker: That is the reason why I said what I did about fares just now. If the hon. Gentleman reviews what I said when he reads Hansard, he will understand its import. We have taken the advice of the TUCC for London and the LTPC. We got them together, which was the first change from the White Paper to the Bill. We are seeking at least to give them some access to discussions on an informal basis until such legislation is passed.
  Mr. Prescott: So the Bill is like a mark 3 Bill.
  Mrs. Chalker: It is in no way a mark 3 Bill. A House of Commons that refused to amend a Bill would not be doing the best thing and listening to other people.
  In the debate we heard that there is a banner at County Hall across the river. I have not yet seen it. The hon. Member for Kingston upon Hull, East (Mr. Prescott) said that 90 per cent. of 562 people who were asked felt that the GLC should carry on being responsible for London Transport. The hon. Gentleman might remember that I am a statistician. I worked for 13 years in market research. It is interesting that only 562 people were interviewed. I should like to know where they were interviewed in their quota sample and what questions they were asked. I bet the hon. Gentleman a small amount of money that if he and my right hon. Friend the Secretary of State were asked, "Would you like fares to be kept down?" they would both answer, "Yes". Of course, much of a sample such as that depends on the question that is asked.
  Mr. Prescott: If the hon. Lady cannot accept that poll, will she at least accept the verdict of the GLC election when that transport policy was put to the London electorate and it voted overwhelmingly in favour of it?
  Mrs. Chalker: I seem to remember that when the Labour party went into the GLC election in 1981 it was under a quite different leadership and had a different manifesto. A great deal has changed in Greater London because of that.
  The hon. Member for Kingston upon Hull, East asked me to explain some of the figures about ratepayer
  922
  contributions that he handed to the Secretary of State. Many figures have been bandied about. I hope that he will listen closely as the subject is complicated. He might remember that, last autumn, the GLC claimed in press advertisements — which again were paid for by ratepayers, of course—that only 3 per cent. of London Transport's costs were provided by the taxpayer. In January this year it used a combination of assumptions to claim that the ratepayer contribution for 1983–84 would be more than 90 per cent. It has now used a different set of calculations to arrive at a ratepayer contribution of 62 per cent.
  I could show the House, by using equally judicious methods and assumptions, that the ratepayer contribution is more than 100 per cent. by taking hold-back and taper into account. I do not wish to puzzle the hon. Gentleman any more. Nevertheless, I do not doubt that he will want to delve into this matter in Committee. We have examined the figures in some detail and made calculations. I do not wish to mislead anyone, least of all the House, by attaching too much weight to the calculations which the hon. Gentleman mentioned or the ones that I am about to mention. However, in 1983–84 the GLC budgeted to spend £235 million on revenue support and £155 million on capital grant. That represents a total of £390 million. On the neutral assumption of attributing transport supplementary grant pro rata to accepted expenditure, the Government provided £104 million of that grant. That represented 27 per cent. of the GLC's support to the London Transport Executive. On that basis the ratepayer contribution is 73 per cent. That is precisely why my right hon. Friend said that by having a maximum of two thirds set in the Bill ratepayers will be better off.
  Our main objective has been to achieve progressive reduction of costs and the associated level of subsidy. There is nothing sacrosanct about the two thirds maximum and I hope that there will be scope for reducing it if all goes well.
  I was also asked for a simple explanation of protected expenditure levels. That is not the easiest thing to do in the time that is available to me. I shall simply say that we are quite confident that setting the figure which was announced last week will not necessitate substantial fares increases in 1984–85, provided that nothing is done to add to the costs which are borne by the London Transport Executive or to squander the savings which the executive expects to achieve in 1983–84. That is the substance of the press release which London Transport has released this evening.
  Concessionary fares are a vexed issue. It is typical of the GLC and its supporters that they continue to arouse needless anxiety about something that is not directly affected by the Bill. I should like to make it clear once again that the Bill merely maintains the powers of the GLC and the boroughs to fund concessionary fares on any operator's services. After the abolition of the GLC in more than two years' time, concessionary fares will be a matter for the boroughs. The London Boroughs Association has already agreed that the boroughs should assume responsibility for concessionary fares on the basis of the existing scheme. I see no reason why any pensioners should be alarmed by the GLC's scare stories, although in all probability such is the extent of the GLC's advertising that many will be worried needlessly. Only a few months ago we heard that it was not possible for the boroughs to get together as to the funding of voluntary organisations.

  923
  but they have now got together voluntarily to discuss that subject. From my conversations with leaders of different London boroughs and the leader of the LBA, I have no doubt that they will get together to produce a workable scheme to maintain concessionary fares—[Interruption.] The hon. Member for Kingston upon Hull, East can shout all he likes. The London boroughs must themselves decide the scheme. The pensioners of London need a workable scheme which can benefit those who need the concessions.
  As hon. Members know, I take a special interest in services for the disabled. The funding and accountability for the costs of special services such as "dial-a-ride", subsidised taxis and the concessions on buses and tubes must be left with the local authorities. I understand the great anxiety faced by many disabled people as to the future provisions to meet their special needs. I give the House the assurance that we shall consider carefully their needs. I shall shortly be meeting the Federation of London Dial-a-Rides, the Joint Committee on Mobility of the Disabled and the Greater London Association of Disabled People to seek their views.
  Among the principles which we will require LRT to work to will be for it constantly to improve the design and facility not only for the disabled but for all those with problems using conventional public transport—the frail, elderly, those with shopping, small children and so forth.
  The hon. Member for Newham, South (Mr. Spearing) took us back to 1933. I examined the proposals of the Labour Government of 1929, who set up the London Passenger Transport Act 1933 which was taken over by the national Government in 1933. It is interesting to note that all of the proposals accepted in the House were based on four points, first, unification under public control; secondly, management by a non-political body; thirdly, participation by the main line railway without transfer of ownership, and, fourthly, a self-supporting and subsidised system to be run commercially. We differ only on the fourth point, in that we believe that subsidy is needed to maintain services.
  Mr. Spearing rose——
  Mrs. Chalker: I shall write to the hon. Members to whom I am unable to reply or I shall deal with their questions in Committee.
  portThe bus licensing provision of the Bill enables us to bring flexibility into the provision of services which we have hitherto not had in the capital city. Many areas of the capital city are not served as they deserve by some form of transport, as has been mentioned by many of my hon. Friends. We shall use the Bill to improve the position.
  Opposition Members have accused the Government of making a politically motivated attack on the GLC. I assure the House that the decision to create London Regional Transport was independent of the Government's decision to abolish the GLC. We would have proceeded with the Bill in any event. The Bill, above all, seeks to apply modern management and commercial disciplines to the provision of public transport in London. In this way, the huge experience and expertise that London Transport has accumulated can be harnessed to provide improved standards and better services for London's travellers, free from the day-to-day increasing political interference as seen in the past few months. It provides a coherent and constructive plan to take public transport in the nation's
  924
  capital well into the next century. It also gives a clear and accountable remit to the business men who will be appointed to the board of LRT to carry out compatible financing for London Transport and British Rail.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 341, Noes 196.

  Division No. 94]

  [10 pm

  AYES

  Adley, Robert

  Dorrell, Stephen

  Aitken, Jonathan

  Douglas-Hamilton, Lord J.

  Alexander, Richard

  du Cann, Rt Hon Edward

  Alison, Rt Hon Michael

  Dunn, Robert

  Amery, Rt Hon Julian

  Durant, Tony

  Amess, David

  Edwards, Rt Hon N. (P'broke)

  Ancram, Michael

  Eggar, Tim

  Arnold, Tom

  Emery, Sir Peter

  Ashby, David

  Evennett, David

  Aspinwall, Jack

  Eyre, Reginald

  Atkins, Rt Hon Sir H.

  Fairbairn, Nicholas

  Atkins, Robert (South Ribble)

  Farr, John

  Atkinson, David (B'm'th E)

  Favell, Anthony

  Baker, Nicholas (N Dorset)

  Fenner, Mrs Peggy

  Baldry, Anthony

  Finsberg, Geoffrey

  Banks, Robert (Harrogate)

  Fletcher, Alexander

  Batiste, Spencer

  Fookes, Miss Janet

  Beaumont-Dark, Anthony

  Forman, Nigel

  Bellingham, Henry

  Forsyth, Michael (Stirling)

  Bendall, Vivian

  Fowler, Rt Hon Norman

  Bennett, Sir Frederic (T'bay)

  Fox, Marcus

  Berry, Sir Anthony

  Fraser, Peter (Angus East)

  Best, Keith

  Freeman, Roger

  Biffen, Rt Hon John

  Fry, Peter

  Biggs-Davison, Sir John

  Gale, Roger

  Blaker, Rt Hon Sir Peter

  Galley, Roy

  Body, Richard

  Gardiner, George (Reigate)

  Bottomley, Peter

  Gardner, Sir Edward (Fylde)

  Bowden, A. (Brighton K'to'n)

  Garel-Jones, Tristan

  Bowden, Gerald (Dulwich)

  Gilmour, Rt Hon Sir Ian

  Boyson, Dr Rhodes

  Glyn, Dr Alan

  Braine, Sir Bernard

  Goodhart, Sir Philip

  Brandon-Bravo, Martin

  Goodlad, Alastair

  Bright, Graham

  Gorst, John

  Brinton, Tim

  Gow, Ian

  Brittan, Rt Hon Leon

  Gower, Sir Raymond

  Brooke, Hon Peter

  Grant, Sir Anthony

  Brown, M. (Brigg & Cl'thpes)

  Greenway, Harry

  Browne, John

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

  Bruinvels, Peter

  Griffiths, Peter (Portsm'th N)

  Bryan, Sir Paul

  Grist, Ian

  Buchanan-Smith, Rt Hon A.

  Ground, Patrick

  Buck, Sir Antony

  Grylls, Michael

  Budgen, Nick

  Gummer, John Selwyn

  Bulmer, Esmond

  Hamilton, Neil (Tatton)

  Burt, Alistair

  Hampson, Dr Keith

  Butcher, John

  Hanley, Jeremy

  Carlisle, John (N Luton)

  Hannam, John

  Carlisle, Kenneth (Lincoln)

  Hargreaves, Kenneth

  Carttiss, Michael

  Harvey, Robert

  Chalker, Mrs Lynda

  Haselhurst, Alan

  Chapman, Sydney

  Hawkins, C. (High Peak)

  Chope, Christopher

  Hawkins, Sir Paul (SW N'folk)

  Churchill, W. S.

  Hawksley, Warren

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

  Hayes, J.

  Clark, Dr Michael (Rochford)

  Hayhoe, Barney

  Clark, Sir W. (Croydon S)

  Hayward, Robert

  Clarke Kenneth (Rushcliffe)

  Heathcoat-Amory, David

  Clegg, Sir Walter

  Heddle, John

  Cockeram, Eric

  Henderson, Barry

  Colvin, Michael

  Heseltine, Rt Hon Michael

  Conway, Derek

  Hickmet, Richard

  Coombs, Simon

  Hicks, Robert

  Cope, John

  Higgins, Rt Hon Terence L.

  Corrie, John

  Hill, James

  Couchman, James

  Hind, Kenneth

  Crouch, David

  Hirst, Michael

  Currie, Mrs Edwina

  Hogg, Hon Douglas (Gr'th'm)

  925

  Holland, Sir Philip (Gedling)

  Morris, M. (N'hampton, S)

  Holt, Richard

  Morrison, Hon C. (Devizes)

  Hooson, Tom

  Morrison, Hon P. (Chester)

  Hordern, Peter

  Moynihan, Hon C.

  Howard, Michael

  Mudd, David

  Howarth, Alan (Stratf'd-on-A)

  Murphy, Christopher

  Howarth, Gerald (Cannock)

  Needham, Richard

  Howe, Rt Hon Sir Geoffrey

  Nelson, Anthony

  Howell, Rt Hon D. (G'ldford)

  Neubert, Michael

  Howell, Ralph (N Norfolk)

  Newton, Tony

  Hubbard-Miles, Peter

  Nicholls, Patrick

  Hunt, David (Wirral)

  Norris, Steven

  Hunt, John (Ravensbourne)

  Onslow, Cranley

  Hunter, Andrew

  Oppenheim, Philip

  Hurd, Rt Hon Douglas

  Osborn, Sir John

  Irving, Charles

  Ottaway, Richard

  Jenkin, Rt Hon Patrick

  Page, John (Harrow W)

  Johnson-Smith, Sir Geoffrey

  Page, Richard (Herts SW)

  Jones, Gwilym (Cardiff N)

  Parkinson, Rt Hon Cecil

  Jones, Robert (W Herts)

  Patten, John (Oxford)

  Joseph, Rt Hon Sir Keith

  Pattie, Geoffrey

  Kellett-Bowman, Mrs Elaine

  Pawsey, James

  Kershaw, Sir Anthony

  Peacock, Mrs Elizabeth

  Key, Robert

  Pink, R. Bonner

  King, Roger (B'ham N'field)

  Pollock, Alexander

  King, Rt Hon Tom

  Porter, Barry

  Knight, Gregory (Derby N)

  Powell, Rt Hon J. E. (S Down)

  Knight, Mrs Jill (Edgbaston)

  Powell, William (Corby)

  Knowles, Michael

  Powley, John

  Knox, David

  Prentice, Rt Hon Reg

  Lamont, Norman

  Price, Sir David

  Lang, Ian

  Proctor, K. Harvey

  Latham, Michael

  Pym, Rt Hon Francis

  Lawler, Geoffrey

  Raison, Rt Hon Timothy

  Lawrence, Ivan

  Rathbone, Tim

  Lawson, Rt Hon Nigel

  Rees, Rt Hon Peter (Dover)

  Lee, John (Pendle)

  Renton, Tim

  Leigh, Edward (Gainsbor'gh)

  Ridley, Rt Hon Nicholas

  Lennox-Boyd, Hon Mark

  Ridsdale, Sir Julian

  Lester, Jim

  Rifkind, Malcolm

  Lightbown, David

  Rippon, Rt Hon Geoffrey

  Lilley, Peter

  Roberts, Wyn (Conwy)

  Lloyd, Ian (Havant)

  Roe, Mrs Marion

  Lloyd, Peter, (Fareham)

  Rossi, Sir Hugh

  Lord, Michael

  Rost, Peter

  Lyell, Nicholas

  Rowe, Andrew

  McCrindle, Robert

  Rumbold, Mrs Angela

  McCurley, Mrs Anna

  Ryder, Richard

  Macfarlane, Neil

  Sackville, Hon Thomas

  MacKay, Andrew (Berkshire)

  Sainsbury, Hon Timothy

  MacKay, John (Argyll & Bute)

  St. John-Stevas, Rt Hon N.

  Maclean, David John.

  Sayeed, Jonathan

  Macmillan, Rt Hon M.

  Shaw, Giles (Pudsey)

  McNair-Wilson, M. (N'bury)

  Shaw, Sir Michael (Scarb')

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

  Shelton, William (Streatham)

  McQuarrie, Albert

  Shepherd, Colin (Hereford)

  Madel, David

  Shepherd, Richard (Aldridge)

  Major, John

  Shersby, Michael

  Malins, Humfrey

  Silvester, Fred

  Malone, Gerald

  Sims, Roger

  Maples, John

  Skeet, T. H. H.

  Marland, Paul

  Smith, Sir Dudley (Warwick)

  Marshall, Michael (Arundel)

  Smith, Tim (Beaconsfield)

  Mates, Michael

  Soames, Hon Nicholas

  Maude, Francis

  Speller, Tony

  Mawhinney, Dr Brian

  Spence, John

  Maxwell-Hyslop, Robin

  Spencer, D.

  Mayhew, Sir Patrick

  Spicer, Michael (S Worcs)

  Mellor, David

  Squire, Robin

  Merchant, Piers

  Stanbrook, Ivor

  Meyer, Sir Anthony

  Stanley, John

  Miller, Hal (B'grove)

  Steen, Anthony

  Mills, Iain (Meriden)

  Stern, Michael

  Mills, Sir Peter (West Devon)

  Stevens, Lewis (Nuneaton)

  Miscampbell, Norman

  Stewart, Allan (Eastwood)

  Mitchell, David (NW Hants)

  Stewart, Andrew (Sherwood)

  Moate, Roger

  Stokes, John

  Monro, Sir Hector

  Stradling Thomas, J.

  Montgomery, Fergus

  Sumberg, David

  Moore, John

  Tapsell, Peter

  926

  Taylor, Teddy (S'end E)

  Waller, Gary

  Tebbit, Rt Hon Norman

  Walters, Dennis

  Temple-Morris, Peter

  Ward, John

  Terlezki, Stefan

  Wardle, C (Bexhill)

  Thatcher, Rt Hon Mrs M.

  Warren, Kenneth

  Thomas, Rt Hon Peter

  Watson, John

  Thompson, Donald (Calder V)

  Watts, John

  Thompson, Patrick (N'ich N)

  Wells, John (Maidstone)

  Thorne, Neil (Ilford S)

  Wheeler, John

  Thornton, Malcolm

  Whitfield, John

  Thurnham, Peter

  Whitney, Raymond

  Townend, John (Bridlington)

  Wiggin, Jerry

  Townsend, Cyril D. (B'heath)

  Wilkinson, John

  Tracey, Richard

  Winterton, Mrs Ann

  Trippier, David

  Winterton, Nicholas

  Twinn, Dr Ian

  Wolfson, Mark

  van Straubenzee, Sir W.

  Wood, Timothy

  Vaughan, Dr Gerard

  Woodcock, Michael

  Viggers, Peter

  Yeo, Tim

  Wakeham, Rt Hon John

  Young, Sir George (Acton)

  Waldegrave, Hon William

  Walden, George

  Tellers for the Ayes:

  Walker, Bill (T'side N)

  Mr. Carol Mather and Mr. Robert Boscawen.

  Walker, Rt Hon P. (W'cester)

  Wall, Sir Patrick

  NOES

  Adams, Allen (Paisley N)

  Douglas, Dick

  Alton, David

  Dubs, Alfred

  Archer, Rt Hon Peter

  Duffy, A. E. P.

  Ashdown, Paddy

  Dunwoody, Hon Mrs G.

  Atkinson, N. (Tottenham)

  Eadie, Alex

  Bagier, Gordon A. T.

  Eastham, Ken

  Banks, Tony (Newham NW)

  Edwards, R. (W'hampt'n SE)

  Barnett, Guy

  Evans, Ioan (Cynon Valley)

  Barron, Kevin

  Evans, John (St. Helens N)

  Beith, A. J,

  Fatchett, Derek

  Bennett, A. (Dent'n & Red'sh)

  Faulds, Andrew

  Bidwell, Sydney

  Field, Frank (Birkenhead)

  Blair, Anthony

  Fields, T. (L'pool Broad Gn)

  Boothroyd, Miss Betty

  Fisher, Mark

  Boyes, Roland

  Flannery, Martin

  Bray, Dr Jeremy

  Forrester, John

  Brown, Gordon (D'f'mline E)

  Foster, Derek

  Brown, Hugh D. (Provan)

  Foulkes, George

  Brown, N. (N'c'tle-u-Tyne E)

  Fraser, J. (Norwood)

  Brown, R. (N'c'tle-u-Tyne N)

  Freeson, Rt Hon Reginald

  Brown, Ron (E'burgh, Leith)

  Garrett, W. E.

  Bruce, Malcolm

  Gilbert, Rt Hon Dr John

  Callaghan, Rt Hon J.

  Godman, Dr Norman

  Callaghan, Jim (Heyw'd & M)

  Golding, John

  Campbell, Ian

  Gould, Bryan

  Campbell-Savours, Dale

  Hamilton, James (M'well N)

  Carlile, Alexander (Montg'y)

  Hamilton, W. W. (Central Fife)

  Carter-Jones, Lewis

  Hardy, Peter

  Clark, Dr David (S Shields)

  Harman, Ms Harriet

  Clarke, Thomas

  Harrison, Rt Hon Walter

  Clay, Robert

  Hattersley, Rt Hon Roy

  Cocks, Rt Hon M. (Bristol S.)

  Haynes, Frank

  Cohen, Harry

  Healey, Rt Hon Denis

  Coleman, Donald

  Heffer, Eric S.

  Concannon, Rt Hon J. D.

  Hogg, N. (C'nauld & Kilsyth)

  Conlan, Bernard

  Howell, Rt Hon D. (S'heath)

  Cook, Frank (Stockton North)

  Howells, Geraint

  Cook, Robin F. (Livingston)

  Hoyle, Douglas

  Corbett, Robin

  Hughes, Mark (Durham)

  Cowans, Harry

  Hughes, Robert (Aberdeen N)

  Cox, Thomas (Tooting)

  Hughes, Roy (Newport East)

  Craigen, J. M.

  Hughes, Sean (Knowsley S)

  Crowther, Stan

  Hughes, Simon (Southwark)

  Cunningham, Dr John

  Janner, Hon Greville

  Dalyell, Tam

  John, Brynmor

  Davies, Rt Hon Denzil (L'lli)

  Jones, Barry (Alyn & Deeside)

  Davies, Ronald (Caerphilly)

  Kaufman, Rt Hon Gerald

  Davis, Terry (B'ham, H'ge H'l)

  Kennedy, Charles

  Deakins, Eric

  Kilroy-Silk, Robert

  Dewar, Donald

  Kinnock, Rt Hon Neil

  Dixon, Donald

  Kirkwood, Archibald

  Dobson, Frank

  Lamond, James

  Dormand, Jack

  Leadbitter, Ted

  927

  Leighton, Ronald

  Rees, Rt Hon M. (Leeds S)

  Lewis, Ron (Carlisle)

  Richardson, Ms Jo

  Lewis, Terence (Worsley)

  Roberts, Allan (Bootle)

  Litherland, Robert

  Roberts, Ernest (Hackney N)

  Lloyd, Tony (Stretford)

  Robertson, George

  Lofthouse, Geoffrey

  Robinson, G. (Coventry NW)

  Loyden, Edward

  Ross, Ernest (Dundee W)

  McCartney, Hugh

  Ross, Stephen (Isle of Wight)

  McDonald, Dr Oonagh

  Rowlands, Ted

  McGuire, Michael

  Ryman, John

  McKay, Allen (Penistone)

  Sedgemore, Brian

  McKelvey, William

  Sheerman, Barry

  Mackenzie, Rt Hon Gregor

  Sheldon, Rt Hon R.

  McNamara, Kevin

  Shore, Rt Hon Peter

  McTaggart, Robert

  Short, Ms Clare (Ladywood)

  McWilliam, John

  Short, Mrs R(W'hampt'n NE)

  Madden, Max

  Silkin, Rt Hon J.

  Marek, Dr John

  Skinner, Dennis

  Martin, Michael

  Smith, C.(Isl'ton S & F'bury)

  Mason, Rt Hon Roy

  Smith, Rt Hon J. (M'kl'ds E)

  Maxton, John

  Snape, Peter

  Maynard, Miss Joan

  Soley, Clive

  Meacher, Michael

  Spearing, Nigel

  Meadowcroft, Michael

  Steel, Rt Hon David

  Michie, William

  Stott, Roger

  Mikardo, Ian

  Strang, Gavin

  Millan, Rt Hon Bruce

  Straw, Jack

  Miller, Dr M. S. (E Kilbride)

  Thomas, Dr R. (Carmarthen)

  Mitchell, Austin (G't Grimsby)

  Thompson, J. (Wansbeck)

  Morris, Rt Hon A. (W'shawe)

  Thorne, Stan (Preston)

  Morris, Rt Hon J. (Aberavon)

  Tinn, James

  Nellist, David

  Torney, Tom

  O'Brien, William

  Varley, Rt Hon Eric G.

  O'Neill, Martin

  Wallace, James

  Orme, Rt Hon Stanley

  Wardell, Gareth (Gower)

  Park, George

  Wareing, Robert

  Parry, Robert

  Weetch, Ken

  Patchett, Terry

  Welsh, Michael

  Pavitt, Laurie

  White, James

  Pendry, Tom

  Wigley, Dafydd

  Penhaligon, David

  Williams, Rt Hon A.

  Pike, Peter

  Woodall, Alec

  Powell, Raymond (Ogmore)

  Young, David (Bolton SE)

  Prescott, John

  Radice, Giles

  Tellers for the Noes:

  Randall, Stuart

  Mr. Lawrence Cunliffe and Mr. John Home-Robertson.

  Redmond, M.

  Question accordingly agreed to.
  Motion made—[Mr. Michael Cocks]—and Question put, That the Bill be committed to a Committee of the whole House:—
  The House divided: Ayes 195, Noes 339.

  Division No. 95]

  [10.16 pm

  AYES

  Adams, Allen (Paisley N)

  Callaghan, Rt Hon J.

  Alton, David

  Callaghan, Jim (Heyw'd & M)

  Archer, Rt Hon Peter

  Campbell, Ian

  Ashdown, Paddy

  Campbell-Savours, Dale

  Atkinson, N. (Tottenham)

  Carlile, Alexander (Montg'y)

  Bagier, Gordon A. T.

  Carter-Jones, Lewis

  Banks, Tony (Newham NW)

  Clark, Dr David (S Shields)

  Barnett, Guy

  Clarke, Thomas

  Barron, Kevin

  Clay, Robert

  Beith, A. J.

  Cocks, Rt Hon M. (Bristol S.)

  Bennett, A. (Dent'n & Red'sh)

  Cohen, Harry

  Bidwell, Sydney

  Coleman, Donald

  Blair, Anthony

  Concannon, Rt Hon J. D.

  Boothroyd, Miss Betty

  Conlan, Bernard

  Boyes, Roland

  Cook, Frank (Stockton North)

  Bray, Dr Jeremy

  Cook, Robin F. (Livingston)

  Brown, Gordon (D'f'mline E)

  Corbett, Robin

  Brown, Hugh D. (Provan)

  Cowans, Harry

  Brown, N. (N'c'tle-u-Tyne E)

  Cox, Thomas (Tooting)

  Brown, R. (N'c'tle-u-Tyne N)

  Craigen, J. M.

  Brown, Ron (E'burgh, Leith)

  Crowther, Stan

  Bruce, Malcolm

  Cunliffe, Lawrence

  928

  Cunningham, Dr John

  Madden, Max

  Dalyell, Tam

  Marek, Dr John

  Davies, Rt Hon Denzil (L'lli)

  Martin, Michael

  Davies, Ronald (Caerphilly)

  Mason, Rt Hon Roy

  Davis, Terry (B'ham, H'ge H'l)

  Maxton, John

  Deakins, Eric

  Maynard, Miss Joan

  Dewar, Donald

  Meacher, Michael

  Dixon, Donald

  Meadowcroft, Michael

  Dobson, Frank

  Michie, William

  Dormand, Jack

  Mikardo, Ian

  Douglas, Dick

  Millan, Rt Hon Bruce

  Dubs, Alfred

  Miller, Dr M. S. (E Kilbride)

  Duffy, A. E. P.

  Mitchell, Austin (G't Grimsby)

  Dunwoody, Hon Mrs G.

  Morris, Rt Hon A. (W'shawe)

  Eadie, Alex

  Morris, Rt Hon J. (Aberavon)

  Eastham, Ken

  Nellist, David

  Edwards, R. (W'hampt'n SE)

  O'Brien, William

  Evans, Ioan (Cynon Valley)

  O'Neill, Martin

  Evans, John (St. Helens N)

  Orme, Rt Hon Stanley

  Fatchett, Derek

  Park, George

  Faulds, Andrew

  Parry, Robert

  Field, Frank (Birkenhead)

  Patchett, Terry

  Fields, T. (L'pool Broad Gn)

  Pavitt, Laurie

  Fisher, Mark

  Pendry, Tom

  Flannery, Martin

  Penhaligon, David

  Foot, Rt Hon Michael

  Pike, Peter

  Forrester, John

  Powell, Raymond (Ogmore)

  Foster, Derek

  Prescott, John

  Foulkes, George

  Radice, Giles

  Fraser, J. (Norwood)

  Randall, Stuart

  Freeson, Rt Hon Reginald

  Redmond, M.

  Garrett, W. E.

  Rees, Rt Hon M. (Leeds S)

  Gilbert, Rt Hon Dr John

  Richardson, Ms Jo

  Godman, Dr Norman

  Roberts, Allan (Bootle)

  Golding, John

  Roberts, Ernest (Hackney N)

  Gould, Bryan

  Robertson, George

  Hamilton, W. W. (Central Fife)

  Robinson, G. (Coventry NW)

  Hardy, Peter

  Ross, Ernest (Dundee W)

  Harman, Ms Harriet

  Ross, Stephen (Isle of Wight)

  Harrison, Rt Hon Walter

  Rowlands, Ted

  Hattersley, Rt Hon Roy

  Ryman, John

  Healey, Rt Hon Denis

  Sedgemore, Brian

  Hogg, N. (C'nauld & Kilsyth)

  Sheerman, Barry

  Howell, Rt Hon D. (S'heath)

  Sheldon, Rt Hon R.

  Howells, Geraint

  Shore, Rt Hon Peter

  Hoyle, Douglas

  Short, Ms Clare (Ladywood)

  Hughes, Mark (Durham)

  Short, Mrs H.(W'hampt'n NE)

  Hughes, Robert (Aberdeen N)

  Silkin, Rt Hon J.

  Hughes, Roy (Newport East)

  Skinner, Dennis

  Hughes, Sean (Knowsley S)

  Smith, C.(Isl'ton S & F'bury)

  Hughes, Simon (Southwark)

  Smith, Rt Hon J. (M'kl'ds E)

  Janner, Hon Greville

  Snape, Peter

  John, Brynmor

  Soley, Clive

  Jones, Barry (Alyn & Deeside)

  Spearing, Nigel

  Kaufman, Rt Hon Gerald

  Steel, Rt Hon David

  Kennedy, Charles

  Stott, Roger

  Kilroy-Silk, Robert

  Straw, Jack

  Kinnock, Rt Hon Neil

  Thomas, Dr R. (Carmarthen)

  Kirkwood, Archibald

  Thompson, J. (Wansbeck)

  Lamond, James

  Thorne, Stan (Preston)

  Leadbitter, Ted

  Tinn, James

  Leighton, Ronald

  Torney, Tom

  Lewis, Ron (Carlisle)

  Varley, Rt Hon Eric G.

  Lewis, Terence (Worsley)

  Wallace, James

  Litherland, Robert

  Wardell, Gareth (Gower)

  Lloyd, Tony (Stretford)

  Wareing, Robert

  Lofthouse, Geoffrey

  Weetch, Ken

  Loyden, Edward

  Welsh, Michael

  McCartney, Hugh

  White, James

  McDonald, Dr Oonagh

  Wigley, Dafydd

  McGuire, Michael

  Williams, Rt Hon A.

  McKay, Allen (Penistone)

  Woodall, Alec

  McKelvey, William

  Young, David (Bolton SE)

  Mackenzie, Rt Hon Gregor

  McNamara, Kevin

  Tellers for the Ayes:

  McTaggart, Robert

  Mr. James Hamilton and Mr. John Home Robertson.

  McWilliam, John

  929

  NOES

  Adley, Robert

  Fallon, Michael

  Aitken, Jonathan

  Farr, John

  Alexander, Richard

  Favell, Anthony

  Alison, Rt Hon Michael

  Fenner, Mrs Peggy

  Amery, Rt Hon Julian

  Finsberg, Geoffrey

  Amess, David

  Fletcher, Alexander

  Ancram, Michael

  Fookes, Miss Janet

  Arnold, Tom

  Forman, Nigel

  Ashby, David

  Forsyth, Michael (Stirling)

  Aspinwall, Jack

  Fowler, Rt Hon Norman

  Atkins, Rt Hon Sir H.

  Fox, Marcus

  Atkins, Robert (South Ribble)

  Fraser, Peter (Angus East)

  Atkinson, David (B'm'th E)

  Freeman, Roger

  Baker, Nicholas (N Dorset)

  Fry, Peter

  Baldry, Anthony

  Gale, Roger

  Banks, Robert (Harrogate)

  Galley, Roy

  Batiste, Spencer

  Gardiner, George (Reigate)

  Beaumont-Dark, Anthony

  Gardner, Sir Edward (Fylde)

  Bellingham, Henry

  Garel-Jones, Tristan

  Bendall, Vivian

  Glyn, Dr Alan

  Bennett, Sir Frederic (T'bay)

  Goodhart, Sir Philip

  Berry, Sir Anthony

  Goodlad, Alastair

  Best, Keith

  Gorst, John

  Biffen, Rt Hon John

  Gow, Ian

  Biggs-Davison, Sir John

  Gower, Sir Raymond

  Blaker, Rt Hon Sir Peter

  Grant, Sir Anthony

  Body, Richard

  Greenway, Harry

  Bottomley, Peter

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

  Bowden, A. (Brighton K'to'n)

  Griffiths, Peter (Portsm'th N)

  Bowden, Gerald (Dulwich)

  Grist, Ian

  Boyson, Dr Rhodes

  Ground, Patrick

  Braine, Sir Bernard

  Grylls, Michael

  Brandon-Bravo, Martin

  Gummer, John Selwyn

  Bright, Graham

  Hamilton, Neil (Tatton)

  Brinton, Tim

  Hampson, Dr Keith

  Brittan, Rt Hon Leon

  Hanley, Jeremy

  Brooke, Hon Peter

  Hannam,John

  Brown, M. (Brigg & Cl'thpes)

  Hargreaves, Kenneth

  Browne, John

  Harvey, Robert

  Bruinvels, Peter

  Haselhurst, Alan

  Bryan, Sir Paul

  Hawkins, C. (High Peak)

  Buchanan-Smith, Rt Hon A.

  Hawkins, Sir Paul (SW N'folk)

  Buck, Sir Antony

  Hawksley, Warren

  Budgen, Nick

  Hayes, J.

  Bulmer, Esmond

  Hayhoe, Barney

  Burt, Alistair

  Hayward, Robert

  Butcher, John

  Heathcoat-Amory, David

  Carlisle, John (N Luton)

  Heddle, John

  Carlisle, Kenneth (Lincoln)

  Henderson, Barry

  Carttiss, Michael

  Heseltine, Rt Hon Michael

  Chalker, Mrs Lynda

  Hickmet, Richard

  Chapman, Sydney

  Hicks, Robert

  Chope, Christopher

  Higgins, Rt Hon Terence L.

  Churchill, W. S.

  Hill, James

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

  Hind, Kenneth

  Clark, Dr Michael (Rochford)

  Hirst, Michael

  Clark, Sir W. (Croydon S)

  Hogg, Hon Douglas (Gr'th'm)

  Clarke Kenneth (Rushcliffe)

  Holland, Sir Philip (Gedling)

  Clegg, Sir Walter

  Holt, Richard

  Cockeram, Eric

  Hooson, Tom

  Colvin, Michael

  Hordern, Peter

  Conway, Derek

  Howard, Michael

  Coombs, Simon

  Howarth, Alan (Stratf'd-on-A)

  Cope, John

  Howarth, Gerald (Cannock)

  Corrie, John

  Howe, Rt Hon Sir Geoffrey

  Couchman, James

  Howell, Rt Hon D. (G'ldford)

  Crouch, David

  Howell, Ralph (N Norfolk)

  Currie, Mrs Edwina

  Hubbard-Miles, Peter

  Dorrell, Stephen

  Hunt, David (Wirral)

  Douglas-Hamilton, Lord J.

  Hunt, John (Ravensbourne)

  du Cann, Rt Hon Edward

  Hunter, Andrew

  Dunn, Robert

  Hurd, Rt Hon Douglas

  Durant, Tony

  Irving, Charles

  Edwards, Rt Hon N. (P'broke)

  Jenkin, Rt Hon Patrick

  Eggar, Tim

  Johnson-Smith, Sir Geoffrey

  Emery, Sir Peter

  Jones, Gwilym (Cardiff N)

  Evennett, David

  Jones, Robert (W Herts)

  Eyre, Reginald

  Joseph, Rt Hon Sir Keith

  Fairbairn, Nicholas

  Kellett-Bowman, Mrs Elaine

  930

  Kershaw, Sir Anthony

  Percival, Rt Hon Sir Ian

  Key, Robert

  Pink, R. Bonner

  King, Roger (B'ham N'field)

  Pollock, Alexander

  King, Rt Hon Tom

  Porter, Barry

  Knight, Gregory (Derby N)

  Powell, William (Corby)

  Knight, Mrs Jill (Edgbaston)

  Powley, John

  Knowles, Michael

  Prentice, Rt Hon Reg

  Knox, David

  Price, Sir David

  Lamont, Norman

  Proctor, K. Harvey

  Lang, Ian

  Pym, Rt Hon Francis

  Latham, Michael

  Raison, Rt Hon Timothy

  Lawler, Geoffrey

  Rathbone, Tim

  Lawrence, Ivan

  Rees, Rt Hon Peter (Dover)

  Lawson, Rt Hon Nigel

  Renton, Tim

  Lee, John (Pendle)

  Ridley, Rt Hon Nicholas

  Leigh, Edward (Gainsbor'gh)

  Ridsdale, Sir Julian

  Lennox-Boyd, Hon Mark

  Rifkind, Malcolm

  Lester, Jim

  Roberts, Wyn (Conwy)

  Lightbown, David

  Roe, Mrs Marion

  Lilley, Peter

  Rossi, Sir Hugh

  Lloyd, Ian (Havant)

  Rost, Peter

  Lloyd, Peter, (Fareham)

  Rowe, Andrew

  Lord, Michael

  Rumbold, Mrs Angela

  Lyell, Nicholas

  Ryder, Richard

  McCrindle, Robert

  Sackville, Hon Thomas

  McCurley, Mrs Anna

  Sainsbury, Hon Timothy

  Macfarlane, Neil

  St. John-Stevas, Rt Hon M.

  MacKay, Andrew (Berkshire)

  Sayeed, Jonathan

  MacKay, John (Argyll & Bute)

  Shaw, Giles (Pudsey)

  Maclean, David John.

  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 (Aldridge)

  Madel, David

  Shersby, Michael

  Major, John

  Silvester, Fred

  Malins, Humfrey

  Sims, Roger

  Malone, Gerald

  Skeet, T. H. H.

  Maples, John

  Smith, Sir Dudley (Warwick)

  Marland, Paul

  Smith, Tim (Beaconsfield)

  Marshall, Michael (Arundel)

  Soames, Hon Nicholas

  Mates, Michael

  Speller, Tony

  Maude, Francis

  Spence, John

  Mawhinney, Dr Brian

  Spencer, D.

  Maxwell-Hyslop, Robin

  Spicer, Michael (S Worcs)

  Mayhew, Sir Patrick

  Squire, Robin

  Mellor, David

  Stanbrook, Ivor

  Merchant, Piers

  Stanley, John

  Meyer, Sir Anthony

  Steen, Anthony

  Miller, Hal (B'grove)

  Stern, Michael

  Mills, Iain (Meriden)

  Stevens, Lewis (Nuneaton)

  Mills, Sir Peter (West Devon)

  Stevens, Martin (Fulham)

  Miscampbell, Norman

  Stewart, Allan (Eastwood)

  Mitchell, David (NW Hants)

  Stewart, Andrew (Sherwood)

  Moate, Roger

  Stokes, John

  Monro, Sir Hector

  Stradling Thomas, J.

  Montgomery, Fergus

  Sumberg, David

  Moore, John

  Taylor, Teddy (S'end E,)

  Morris, M. (N'hampton, S)

  Tebbit, Rt Hon Norman

  Morrison, Hon C. (Devizes)

  Temple-Morris, Peter

  Morrison, Hon P. (Chester)

  Terlezki, Stefan

  Moynihan, Hon C.

  Thatcher, Rt Hon Mrs M.

  Mudd, David

  Thomas, Rt Hon Peter

  Murphy, Christopher

  Thompson, Donald (Calder V)

  Needham, Richard

  Thompson, Patrick (N'ich N)

  Nelson, Anthony

  Thorne, Neil (Ilford S)

  Neubert, Michael

  Thornton, Malcolm

  Newton, Tony

  Thurnham, Peter

  Nicholls, Patrick

  Townend, John (Bridlington)

  Norris, Steven

  Townsend, Cyril D. (B'heath)

  Onslow, Cranley

  Tracey, Richard

  Oppenheim, Philip

  Trippier, David

  Osborn, Sir John

  Twinn, Dr Ian

  Ottaway, Richard

  van Straubenzee, Sir W.

  Page, John (Harrow W)

  Vaughan, Dr Gerard

  Page, Richard (Herts SW)

  Viggers, Peter

  Parkinson, Rt Hon Cecil

  Wakeham, Rt Hon John

  Patten, John (Oxford)

  Waldegrave, Hon William

  Pattie, Geoffrey

  Walden, George

  Pawsey, James

  Walker, Bill (T'side N)

  Peacock, Mrs Elizabeth

  Walker, Rt Hon P. (W'cester)

  931

  Wall, Sir Patrick

  Wilkinson, John

  Waller, Gary

  Winterton, Mrs Ann

  Ward, John

  Winterton, Nicholas

  Wardle, C. (Bexhill)

  Wolfson, Mark

  Warren, Kenneth

  Wood, Timothy

  Watson, John

  Woodcock, Michael

  Watts, John

  Yeo, Tim

  Wells, Bowen (Hertford)

  Young, Sir George (Acton)

  Wells, John (Maidstone)

  Wheeler, John

  Tellers for the Noes:

  Whitfield, John

  Mr. Carol Mather and Mr. Robeit Boscawen

  Whitney, Raymond

  Wiggin, Jerry

  Question accordingly negatived.
  Bill committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).
  It being after Ten o'clock, MR. SPEAKER proceeded to put forthwith the Questions which he was directed by paragraph (7) of Standing Order No. 19 (Consideration of Estimates) to put at that hour.

  SUPPLEMENTARY ESTIMATES 1983–84
  Question,
  That a supplementary sum not exceeding £1,172,383,000, be granted to Her Majesty out of the Consolidated Fund to defray charges for Defence and Civil Services which will come in the course of payment during the year ending on 31st March 1984, as set out in House of Commons Paper No. 97,
  put and agreed to.

  ESTIMATES 1984–85 (VOTE ON ACCOUNT)
  Question,
  That a sum, not exceeding £38,985,488,000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for Defence and Civil Services for the year ending on 31st March 1985, as set out in House of Commons Papers Nos. 98, 99 and 110,
  put and agreed to.
  Bill ordered to be brought in upon the foregoing resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Peter Rees, Mr. John Moore, Mr. Barney Hayhoe and Mr. Ian Stewart.

  CONSOLIDATED FUND
  Mr. John Moore accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31 March 1984 and 1985; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 62.]

  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.]

  LONDON REGIONAL TRANSPORT BILL [MONEY]
  Queen's recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the London Regional Transport Bill, it is expedient to authorize—
  1. The payment out of money provided by Parliament of—

  (a) any expenses incurred by the Secretary of State under or in consequence of the provisions of that Act; and

  (b) any increase attributable to the provisions of that Act in the sums so payable under any other Act;

  2. The payment out of the National Loans Fund of any sums required by the Secretary of State for the purpose of making loans to the body to be known by virtue of that Act as London Regional Transport;
  3. The payment out of the Consolidated Fund of any sums required by the Treasury for fulfilling any guarantee given by them under that Act of the repayment of, the payment of interest on or the discharge of any other financial obligation in connection with, any sums borrowed by that body from a person other than the Secretary of State.—[Mr. David Hunt.]

WAYS AND MEANS

  London Regional Transport
  Motion made, and Question proposed,
  That any Act resulting from the London Regional Transport Bill—
  1. May authorise the Secretary of State—
  (1) to make levies on the rating authorities for all rating areas comprised in Greater London for the purpose of recovering a contribution from the ratepayers of Greater London towards his estimated expenditure in any year on grants under that Act to the body to be known by virtue of that Act as London Regional Transport;
  (2) to require that body to pay to him any excess of revenues over charges (as determined by that Act) in respect of any accounting year (within the meaning of that Act) of that body, so far as that excess appears to him to be surplus to that body's requirements;
  (3) to require the Greater London Council—

  (a) to pay to that body, in the year in which the appointed day (within the meaning of that Act) falls, such an amount by way of grant as the Secretary of State may determine; and

  (b) to pay interest on any amount, or any part of any amount, required to be so paid which is not paid on or before the date on which it is required to be so paid;

  2. May provide for the payment of sums into the Consolidated Fund or the National Loans Fund.
  In this resolution 'year' (except in the expression 'accounting year') means a period of twelve months beginning with 1 April.—[Mr. David Hunt.]
  10.32 pm
  Mr. John Prescott: I rise to make a number of crucial points on this resolution, which, it is clear, deals with a precept imposed by the Government on the ratepayers of London for transport purposes. As I say, it raises some crucial issues to which London Members at least should pay careful attention. I do not wish to delay the House at this hour, and I shall keep within the narrow terms of the resolution.
  It is clear from the resolution that any excess of revenue over charges required by London Regional Transport will go to the Secretary of State. Presumably that means that when the revenue exceeds the costs in any year, the surplus will be acquired by the Treasury. Let us consider the situation that London Transport faces today. In this year's finances, the outturn is different from that predicted. Earnings from travel cards are £30 million more than was predicted when the budgeting was done for this financial year. With London Transport being governed by the GLC, that money is available to the ratepayers and the GLC may be taken into account in considering the rate precept by the GLC, or it may be used for the improvement of transport facilities.
  The resolution before the House means that, because of the London Regional Transport Bill, any surplus revenues will not go to London ratepayers. It is possible that the figures for a given year will turn out to be different from the projected estimates, and where there is a surplus that money will go to the Treasury. That will represent a transport tax on Londoners.
  Is it fair— is it acceptable to the House — that we should pass a Ways and Means resolution which allows the Government to put a rate precept on Londoners without any accountability at the ballot box, unlike what happens with the present GLC? I note that a similar state of affairs applies to the Metropolitan police, who, I gather, have a right to a separate precept, provided that the Home Secretary agrees. They are obliged to check with the
  934
  borough treasurers, who are forced to pay the precept, but they are accountable also to the Comptroller and Auditor General and to the Public Accounts Committee of this House.
  We are about to "nationalise" London Transport, and the same checks are not available in respect of the transport rate precept which we are considering in the resolution. Clearly, therefore, an important principle about surpluses earned by London Transport arises, namely, whether those surpluses should go straight into the Consolidated Fund and the Treasury, or whether the ratepayers of London should be entitled at least to claim back that proportion of the rate precept that is not spent on transport. It is an important point which cannot be ignored.
  The debate on the Bill did not make clear how much ratepayers will have to pay for transport when it is administered by the Department of Transport. Whether they are paying 50 or 66 per cent. of the cost, ratepayers will be interested to know how that money is spent. Any surpluses should go to the ratepayers. They are to be denied the checks that exist with the present local authority system of challenging councillors or throwing them out al elections. Ratepayers will have only the House, probably under the negative procedure, in which to discuss their right to the provision of a local transport service.
  It is clear that the Treasury will not lose. If the system which the Bill provides turns London Transport, as the Government hope and the Opposition doubt, into a glowing success, presumably there will be a surplus. The resolution makes it clear that the surplus will accrue to the Treasury. If the system is a disaster and the Government's hopes are not realised, as the Opposition believe will be the case, it will cost considerably more, for the reasons that we have discussed this evening. The ratepayers are likely to have to pay the extra because the Secretary of State has the right under the Bill to levy a precept upon London ratepayers. They will be dissatisfied with the system if there is no accountability.
  The Treasury will not lose, because if the system is a disaster and ratepayers have to pay more, the Bill says that the effect on public expenditure will be broadly neutral. Clearly the Government do not envisage the Treasury picking up the tab. If the scheme is a disaster and costs more, the Secretary of State will have only to increase the precept and the ratepayers will have to pay more for the Government's expensive mistakes. The Bill and the resolution are designed to ensure that the Treasury does not gain or lose but that London ratepayers will carry the burden.
  10.37 pm
  Mr. Peter Bottomley: The hon. Member for Kingston upon Hull, East (Mr. Prescott) has raised an interesting point. He did not quote the words of the resolution, which says:
  "so far as that excess appears to him to be surplus to that body's requirements."
  There is no automatic clawback to the Treasury; there is an element of judgment. We should consider the overall effect of the resolution, on the ratepayers about whom the hon. Member seems to be so worried. The GLC did not seem very accountable——
  Mr. Prescott: There are elections.
  Mr. Bottomley: If elections count, the 1983 election when we stood for the abolition of the GLC and the removal of London Transport is the most recent.
  Mr. Frank Dobson rose——
  Mr. Bottomley: There did not seem to be much accountability by the GLC when it took decisions which stopped London ratepayers from having the advantage of the rate support grant, or when fares were reduced and then increased. The GLC's estimate of the number of people who would buy a travelcard was not that brilliant. London ratepayers, travellers and electors will benefit from increased aid from the Treasury towards the subsidies, and as London Transport's costs start to decrease the need for subsidies will decline.
  10.40 pm
  Mr. Nigel Spearing: The motion before us is in the name of a Treasury Minister, but the Minister before us is the Secretary of State for Transport, although perhaps it is most appropriate that he should be the Minister here. If one uses an ancient phrase,
  "The voice is Jacob's voice, but the hands are the hands of Esau."
  His previous emanations and predilections have stamped the Bill and the motion more of the Treasury than of Transport.
  Most of the debate has been about money, whether it be fares, profits, loans, guarantees or now a compulsory return of surplus revenue to the Treasury. We must therefore be very much aware of the extent to which the Treasury is taking direct control of London Transport. Nobody would believe that a future Secretary of State for Transport will be a free agent in the matter. From the Bill and the money resolution it is clear that the Treasury will take a much greater interest in the affairs of London Transport than before. That is where we know only too well a great deal of power lies.
  No fewer than 12 clauses in the Bill relate to finance. The major one, which has been referred to by my hon. Friend the hon. Member for Kingston upon Hull, East (Mr. Prescott), is clause 13, which gives the Secretary of State power to precept on London boroughs which have already received rate support grant from his right hon. Friend the Secretary of State for the Environment. The only thing is that because of this resolution, if there is a surplus at the end of the year, money which has been forwarded by ratepayers and by the Secretary of State for the Environment will be clawed back into Whitehall by the Secretary of State and the Treasury. In other words, that money will not he available to London Regional Transport for putting better bus services in new areas, improving them in my dockland area of Newham, providing better facilities for the disabled, more dial-a-ride schemes or whatever it is.
  Why has the provision to return the money to the Treasury been put in the Bill? The Secretary of State for Transport owes us an explanation. I shall give him an explanation and let him deny it if he can. Of all the other financial constraints and constraints of direction as to policy with which London Regional Transport will be hedged, the final one of finance is here tied up because there will be no possibility for it over the years to create a surplus of money with which to do what it thinks best in the interests of London Regional Transport. In other words, the Treasury and central Government have got virtually complete control. If that is not the reason why this resolution is down, let the Secretary of State say so.
  936
  There is something else to which the Secretary of State may have to reply because I think it is in order to raise it. Under the financial provisions of the Bill the Secretary of State and London Regional Transport, or it with his permission, may provide all sorts of goodies. It may give guarantees, it may make loans, and it may make grants to its subsidiaries, people who are supposed to be operating under private enterprise for the good of the community. Under clause 19 lower interest rates may be charged for moneys borrowed. In other words, the Secretary of State is scattering around financial patronage where he chooses. That is a considerable power.
  It is clear that profits will be engineered. Despite the fact that the money has to come from the ratepayers and from central Government, profits will be made. The Secretary of State will ensure by statute that profits are made: a new concept—profits by statute. How can the ratepayers, the citizens of London and perhaps the House, to which the Secretary of State and his successors will be responsible, check on what is happening to all this money? It may be said that it can be done by the Comptroller and Auditor General and a Select Committee, but under clause 24 the Comptroller and Auditor General is specifically excluded from the operations of London Regional Transport. As this is a finance matter relating to moneys going back — which otherwise the Comptroller and Auditor General could examine if he wished — the Secretary of State owes us an explanation. If he refuses, we can conclude that the objects of the Bill are not the ones he gave but rather the objects of finance to make profits for some and to make the public pay.
  10.45 pm
  Mr. Simon Hughes: It is right that the principle behind the resolution should be challenged most forcefully. As was said by the hon. Member for Kingston upon Hull, East (Mr. Prescott), another totally unaccountable body will levy a tax on the people using a service. There will be a precept from a body which, so far as we know, will be composed of business men to run a business rather than people to run a service. It has long been a principle that local services should be governed by the right of the local people to determine who shall operate them and how they shall spend the money.
  We are talking about 7 million Londoners. This matter is not primarily of concern to the nation as a whole. London is not simply our capital city; it is the home and place of work of the 7 million people who live here. It therefore comes ill from this Government to propose that those people will be denied the chance to have a say in the control of the money that is charged to them for this service.
  For constituencies such as mine and that of the hon. Member for Newham, South (Mr. Spearing), this is the second local government service to be removed from democratic control. Two years ago, democratic control of planning provisions was removed from the docklands authority, and only the other week the Secretary of State confirmed that that body would continue to meet behind closed doors. There was no sign in tonight's debate that this new unaccountable body would open its doors to allow the doubly-paying public—even if they do not use the service—to see what is going on.
  Despite what the hon. Member for Eltham (Mr. Bottomley) suggested, matters such as the raising of levies

  937
  by rating authorities were determined not in June, when people voted on national issues, but by the people of London voting on local issues.
  Apart from the fundamental abrogation of the democratic control by which the country is governed, there is a second provision in paragraph 1(2). It is left totally to the Secretary of State—with no criteria at all to guide him or that will let people know which way he will be guided — to determine the surplus over and above the LRT's requirements. The problem is that the Secretary of State will have to take account of many other considerations, apart from the requirements of the users. If one looks at an underground map of my constituency, one will see that it is a white hole and little else, but the Secretary of State will have to consider more than just whether such areas should have different or expanded services.
  It is wrong that annually the right hon. Gentleman should be able to get away with a quick excursion to the House which will not allow proper accountability. There will be no opportunity for London Members to get more than an answer from the right hon. Gentleman, which he will not even have to justify or explain. He will be able to give as bland and unacceptable an answer as he wishes, because at the end of a one-and-a-half-hour or two-hour debate his hon. Friends will vote in favour of his order.
  That is not the way in which the excesses, surpluses and revenue of London Transport should be debated. We know how big a commercial undertaking it is. The Minister of State said that only 23 bodies in Britain had a larger budget. This is not the way in which to exercise the only democratic and accountable control. A fundamental decision whether the finances should be left with the service or siphoned off to be used elsewhere, although they had been paid to be used for that specific purpose—use in London Transport—should not be left to a one-and-ahalf-hour debate per year.
  That shows the fundamental flaw in the financial management of the Bill and the concept that drives it forward. Londoners will be dissatisfied unless they are given the opportunity, which the Bill does not even hint at and the motion does not suggest, of knowing that they can bring to book the Secretary of State, whose interests, sadly, will be not with the service to Londoners but with his party throughout the country, and particularly not here.
  10.51 pm
  Mr. Peter Fry: The hon. Member for Southwark and Bermondsey (Mr. Hughes) said that a group of business men would make the levy, but the motion states clearly that it is the Secretary of State.
  Opposition Members made one telling point on any surplus that may go back to the Treasury. As a member of the Select Committee that spent 18 months looking at London's transport, I was struck forcibly by the fact that there had been insufficient investment in London Transport for too many years. If there is a surplus in any one year, will my right hon. Friend the Secretary of State take that surplus into account in the next year and see that we can get sufficient investment in future, which perhaps we cannot afford at the moment? In the long run, it is not fares that decide a good public transport system but efficiency and regularity of service. That is what attracts long-term passenger use. Any Government or system that ignores that will have a recurring problem with public transport. That lesson has come from city after city
  938
  throughout the world. Will my right hon. Friend give me an assurance about how those surpluses will be applied in the years after they are exacted from London's fare-paying passengers?
  10.52 pm
  Mr. Frank Dobson: Conservative Members representing Greater London never cease to astonish me by their craven acquiescence to any Government policy that damages both the interests and rights of the people whom they claim to represent.
  The proposition in the Bill, the money order and the Ways and Means Resolution iare a new tax on Londoners. It is totally unprecedented in Britain for a Minister of the Crown to be able to impose a local rate precept on the people in a particular area. There is one example of a non-elected body imposing a precept — the Metropolitan police. Hallowed by time, and with a House of Commons that paid a little more attention to the interests of the people who have to pick up the bill, the House of Commons in former times has come up with a system that provides greater protection for London ratepayers, even over the Metropolitan police, than the Government now propose.
  Through a fairly complicated procedure, the Receiver of the Metropolitan police has to submit estimates to the Home Secretary, who has to approve those estimates. The receiver has to consult a representative body of borough treasurers about the level of the precept that he is proposing. The borough treasurers and the authorities have a right to make representations to the Home Secretary before he approves the expenditure and the precept that goes with it. Moreover, previous Parliaments have wisely insisted that the Comptroller and Auditor General should have a hand in the process and be permitted to investigate what is going on. The Public Accounts Committee is also permitted to look into the matter if it feels like doing so or is prompted by hon. Members.
  There are no such protections in the measures that the House is considering today. The Comptroller and Auditor General is specifically excluded, as is the Public Accounts Committee. The Secretary of State might, if he fancies, consult local authorities. The present Secretary of State probably will not fancy such consultation, bearing in mind the type of person he is. As a result, there will be no consultation, so there is no protection.
  The hon. Member for Eltham (Mr. Bottomley) said that the Secretary of State's proposal has been endorsed by the electorate in London. Nothing could be further from the truth. I have spent part of today ploughing through the election addresses of Conservative candidates in the general election who stood for seats in London. Not one of them said that he intended to introduce a measure which allowed the Secretary of State to impose a rate precept on Londoners instead of rates being levied by local authorities which are locally accountable.
  This is a bad novelty which Tory Members, especially those who claim to represent London, ought strongly to oppose. The fact remains that the Secretary of State, who is prepared to take central powers in these matters, utterly refuses to assuage the fears of pensioners and disabled people in London by refusing to take the necessary powers to provide concessionary fares for them. He has refused to do that because his only interest is in his own job. Perhaps it is only a coincidence that when the London

  939
  Broadcasting Company interviewed him last night, he was introduced as the Financial Secretary to the Treasury. It obviously has his number.
  In the 18th century, the Government were described as oligarchy moderated by riot. The Conservative party learnt to dislike the London mob because it occasionally stopped it from doing just what it wanted. It is clear that the Conservative party now regards most of the people who live in London as a regenerated London mob. We are faced with a proposal which allows the Government, not locally elected people, to levy a rate precept. We shall soon be faced with a proposition that the Secretary of State for Education and Science should be able to run Inner London's education service. We are also faced with a proposition that the Secretary of State for the Environment should determine the level of rates in London's boroughs and the quantity of services that they provide, apparently because the Government think that the ordinary people of London are unfit to elect people to run London and its boroughs. If no Tory Members from London constituencies oppose this disgraceful measure, they will merely confirm what a craven, rotten, lousy lot they are.
  10.58 pm
  Mr. Laurie Pavitt: I wish to follow the point made by the hon. Member for Wellingborough (Mr. Fry) in regard to the necessity for proper long-term investment. I want to make a political point. Under the Conservative administration of Sir Horace Cutler at County hall, there was such a run-down that London buses were not replaced. One of the results was that Park Royal Vehicles Ltd., which has made London's red double-decker buses for 50 years, had to close. It was not until there was a change of administration in County hall that the necessary investment was made. The result was orders for 600 buses to replenish the much-depleted fleet.
  I was pleased that assurances were asked for about investment. The Conservative administration did not provide adequate investment for the replenishment of London's buses.
  11 pm
  The Secretary of State for Transport (Mr. Nicholas Ridley): The hon. Member for Southwark and Bermondsey (Mr. Hughes) said that the Bill removed from local government its planning and transport functions. Throughout the debate, nearly every Opposition Member has urged the Government to remove from local authorities their function of providing concessionary fares for pensioners and the disabled. The Opposition cannot have it both ways.
  Mr. Simon Hughes: If the Secretary of State lived in London, he would realise that many people face difficulties in limiting their lives to one borough. London consists of 32 boroughs. Unlike the position in many other authorities where people move and live in a small community, London does not work in that way. Borough boundaries cross roads between one's house and shopping area. Concessionary fares on a London-wide basis have a logic that does not affect borough decisions.
  Mr. Ridley: The hon. Gentleman, as with all Liberal Members, is trying to have it both ways. When it suits the hon. Gentleman's book to accuse the Government of taking away local government functions, he complains,
  940
  but when it suits his book to ask the Government to take away local government functions and they will not, he again complains.
  The major issue raised by the hon. Members for Southwark and Bermondsey, for Kingston upon Hull, East (Mr. Prescott) and for Holborn and St. Pancras (Mr. Dobson) and my hon. Friend the Member for Eltham (Mr. Bottomley) involved the accountability of the rate precept. The hon. Member for Holborn and St. Pancras said that the Metropolitan police was an example of rate precepting. Once again, the hon. Member for Southwark and Bermondsey was wrong in what he said. LRT does not have a right to precept on the rates. That function will be performed by the Secretary of State—me. The Home Secretary does not have a right to precept on the rates when dealing with the Metropolitan police. More accountability will exist as the Government and not the individual bodies will make the precept.
  The Government will make an annual order in the House on which a debate may take place embodying the rate precept in terms of a rate poundage. That is where the accountability takes place. A greater level of accountability exists for the LRT than for the Metropolitan police. I must bring hon. Members back to reality as LRT will be similar to a typical Herbert Morrisonian nationalised industry. I have no wish to score points in either direction. Some hon. Gentlemen have tried to score points against me. I heard in the debate for the first time Opposition Members scoring points against a standard nationalised industry. Perhaps we can bury that hatchet during the argument.
  A standard nationalised industry is not controlled politically day to day but is given its objectives, about which the statutes are clear. Parliament has the opportunity to debate them when their borrowing limits are raised or, as in this instance, it has an annual debate on the precept. Parliament also has an opportunity to debate this matter on any occasion when the Opposition wish to raise the matter, be it a Supply day or any other available opportunity. Those are the ways in which nationalised industries are accountable, and that is what London Regional Transport will become. It is astonishing that Labour Members, who designed the measures of accountability for all the other nationalised industries, including British Rail, the British Gas Corporation and so on, and thought them satisfactory, should start to complain now.
  I was asked about the resolution by the hon. Member for Kingston upon Hull, East. He pointed out that paragraph 1(2) of the resolution authorised payment into the Consolidated Fund of any surplus that London Regional Transport might make in any particular year. However, it does not compel London Regional Transport to pay over its surplus. That would be a matter for ministerial decision. In practice, the Government may well feel it right to leave any surplus in reserve with London Regional Transport.
  The system will be as follows. In any given year an estimate will be made of the subsidy needed by London Regional Transport which will be based on its own budget and plans. At the end of the year, having levied that amount partly through the rate and partly through taxes, the sum will be determined, and may be slightly more or less than previously estimated, and paid over. Consequently, the figures will be adjusted next year. That

  941
  is how it will work. There is no question of the Treasury making a profit at the expense of ratepayers, or of its pocketing surpluses, as has been suggested.
  That power must exist, because there may be circumstances in which rebates are due both to the Government and to the ratepayer. Rebates to the Government can be made by means of the power in the resolution, while rebates to the ratepayer can be made by reducing the rate precept the following year.
  Mr. Dobson: If it is highly unlikely that any surplus will ever accrue to the Treasury, why is the Secretary of State bothering with this resolution? The Secretary of State can abate his grant or that of the Secretary of State for the Environment to London Transport for the future year, or he can abate the rates in future years. There is no need for the Secretary of State to give himself the power to hand the money over to the Treasury.
  Mr. Ridley: The hon. Gentleman is quite wrong. There could well be circumstances in which it would be right to do so. As with this year, there could be a surplus of about £30 million over the grant provided for London Transport. It might be thought desirable for the Treasury to keep that, and to readjust the sum the following year. In those circumstances, such a power would be necessary.
  My hon. Friend the Member for Wellingborough (Mr. Fry) made an important point. The difference between the present investment position for London Transport and the future under the Bill is that London Regional Transport will borrow to cover its normal investment, just as any other nationalised industry does. It will be subject to an external financing limit but, as with British Rail, that limit will be perfectly adequate for all reasonable investment needs. Of course, there is nothing in the Bill to frustrate proper investment by London Regional Transport. The two should not be mixed up.
  A distressing aspect of the Opposition's case is that they do not seem to distinguish between revenue subsidies and investment — [Interruption.] I wish that the hon. Member for Kingston upon Hull, East had better manners. He has been shouting all afternoon.
  In view of my explanation, I hope that the House will accept the resolution.
  Question put:—
  The House divided: Ayes 309, Noes 165.

  Division No. 96]

  [11.9 pm

  AYES

  Adley, Robert

  Biggs-Davison, Sir John

  Alexander, Richard

  Blaker, Rt Hon Sir Peter

  Alison, Rt Hon Michael

  Body, Richard

  Amery, Rt Hon Julian

  Bottomley, Peter

  Amess, David

  Bowden, A. (Brighton K'to'n)

  Ancram, Michael

  Boyson, Dr Rhodes

  Arnold, Tom

  Braine, Sir Bernard

  Ashby, David

  Brandon-Bravo, Martin

  Aspinwall, Jack

  Bright, Graham

  Atkins, Rt Hon Sir H.

  Brinton, Tim

  Atkins, Robert (South Ribble)

  Brittan, Rt Hon Leon

  Baker, Nicholas (N Dorset)

  Brooke, Hon Peter

  Baldry, Anthony

  Brown, M. (Brigg & Cl'thpes)

  Banks, Robert (Harrogate)

  Browne, John

  Batiste, Spencer

  Bryan, Sir Paul

  Beaumont-Dark, Anthony

  Buchanan-Smith, Rt Hon A.

  Bellingham, Henry

  Buck, Sir Antony

  Bendall, Vivian

  Bulmer, Esmond

  Bennett, Sir Frederic (T'bay)

  Burt, Alistair

  Berry, Sir Anthony

  Butcher, John

  Best, Keith

  Carlisle, John (N Luton)

  Biffen, Rt Hon John

  Carlisle, Kenneth (Lincoln)

  942

  Chalker, Mrs Lynda

  Howarth, Gerald (Cannock)

  Chope, Christopher

  Howell, Ralph (N Norfolk)

  Churchill, W. S.

  Hubbard-Miles, Peter

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

  Hunt, David (Wirral)

  Clark, Dr Michael (Rochford)

  Hunt, John (Ravensbourne)

  Clark, Sir W. (Croydon S)

  Hunter, Andrew

  Clarke Kenneth (Rushcliffe)

  Hurd, Rt Hon Douglas

  Clegg, Sir Walter

  Irving, Charles

  Cockeram, Eric

  Jenkin, Rt Hon Patrick

  Colvin, Michael

  Johnson-Smith, Sir Geoffrey

  Conway, Derek

  Jones, Gwilym (Cardiff N)

  Coombs, Simon

  Jones, Robert (W Herts)

  Cope, John

  Joseph, Rt Hon Sir Keith

  Corrie, John

  Kellett-Bowman, Mrs Elaine

  Couchman, James

  Kershaw, Sir Anthony

  Crouch, David

  King, Roger (B'ham N'field)

  Currie, Mrs Edwina

  King, Rt Hon Tom

  Dorrell, Stephen

  Knight, Gregory (Derby N)

  Douglas-Hamilton, Lord J.

  Knight, Mrs Jill (Edgbaston)

  du Cann, Rt Hon Edward

  Knowles, Michael

  Dunn, Robert

  Knox, David

  Durant, Tony

  Lamont, Norman

  Eggar, Tim

  Lang, Ian

  Evennett, David

  Latham, Michael

  Eyre, Reginald

  Lawler, Geoffrey

  Fairbairn, Nicholas

  Lawrence, Ivan

  Farr, John

  Lawson, Rt Hon Nigel

  Favell, Anthony

  Lee, John (Pendle)

  Fenner, Mrs Peggy

  Leigh, Edward (Gainsbor'gh)

  Finsberg, Geoffrey

  Lennox-Boyd, Hon Mark

  Fletcher, Alexander

  Lester, Jim

  Fookes, Miss Janet

  Lightbown, David

  Forman, Nigel

  Lilley, Peter

  Forsyth, Michael (Stirling)

  Lloyd, Ian (Havant)

  Fowler, Rt Hon Norman

  Lloyd, Peter, (Fareham)

  Fox, Marcus

  Lord, Michael

  Fraser, Peter (Angus East)

  Lyell, Nicholas

  Freeman, Roger

  McCrindle, Robert

  Fry, Peter

  McCurley, Mrs Anna

  Gale, Roger

  Macfarlane, Neil

  Galley, Roy

  MacKay, Andrew (Berkshire)

  Gardner, Sir Edward (Fylde)

  MacKay, John (Argyll & Bute)

  Garel-Jones, Tristan

  Maclean, David John.

  Glyn, Dr Alan

  Macmillan, Rt Hon M.

  Goodhart, Sir Philip

  McNair-Wilson, M. (N'bury)

  Goodlad, Alastair

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

  Gow, Ian

  Madel, David

  Gower, Sir Raymond

  Major, John

  Grant, Sir Anthony

  Malins, Humfrey

  Greenway, Harry

  Malone, Gerald

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

  Maples, John

  Griffiths, Peter (Portsm'th N)

  Marland, Paul

  Grist, Ian

  Marshall, Michael (Arundel)

  Ground, Patrick

  Mates, Michael

  Hamilton, Hon A. (Epsom)

  Maude, Francis

  Hamilton, Neil (Tatton)

  Mawhinney, Dr Brian

  Hanley, Jeremy

  Maxwell-Hyslop, Robin

  Hannam, John

  Mayhew, Sir Patrick

  Hargreaves, Kenneth

  Mellor, David

  Harvey, Robert

  Merchant, Piers

  Haselhurst, Alan

  Meyer, Sir Anthony

  Hawkins, Sir Paul (SW N'folk)

  Miller, Hal (B'grove)

  Hawksley, Warren

  Mills, Iain (Meriden)

  Hayhoe, Barney

  Mills, Sir Peter (West Devon)

  Hayward, Robert

  Miscampbell, Norman

  Heathcoat-Amory, David

  Mitchell, David (NW Hants)

  Heddle, John

  Moate, Roger

  Henderson, Barry

  Monro, Sir Hector

  Hickmet, Richard

  Montgomery, Fergus

  Hicks, Robert

  Moore, John

  Higgins, Rt Hon Terence L.

  Morris, M. (N'hampton, S)

  Hill, James

  Morrison, Hon C. (Devizes)

  Hind, Kenneth

  Morrison, Hon P. (Chester)

  Hirst, Michael

  Moynihan, Hon C.

  Hogg, Hon Douglas (Gr'th'm)

  Mudd, David

  Holland, Sir Philip (Gedling)

  Neubert, Michael

  Hooson, Tom

  Newton, Tony

  Hordern, Peter

  Nicholls, Patrick

  Howard, Michael

  Norris, Steven

  Howarth, Alan (Stratf'd-on-A)

  Onslow, Cranley

  943

  Oppenheim, Philip

  Stevens, Lewis (Nuneaton)

  Osborn, Sir John

  Stevens, Martin (Fulham)

  Ottaway, Richard

  Stewart, Allan (Eastwood)

  Page, Richard (Herts SW)

  Stewart, Andrew (Sherwood)

  Parkinson, Rt Hon Cecil

  Stokes, John

  Patten, John (Oxford)

  Stradling Thomas, J.

  Pattie, Geoffrey

  Sumberg, David

  Pawsey, James

  Tapsell, Peter

  Peacock, Mrs Elizabeth

  Taylor, Teddy (S'end E)

  Percival, Rt Hon Sir Ian

  Tebbit, Rt Hon Norman

  Pink, R. Bonner

  Temple-Morris, Peter

  Pollock, Alexander

  Terlezki, Stefan

  Porter, Barry

  Thomas, Rt Hon Peter

  Powell, William (Corby)

  Thompson, Donald (Calder V)

  Powley, John

  Thompson, Patrick (N'ich N)

  Prentice, Rt Hon Reg

  Thorne, Neil (Ilford S)

  Price, Sir David

  Thornton, Malcolm

  Proctor, K. Harvey

  Thurnham, Peter

  Pym, Rt Hon Francis

  Townend, John (Bridlington)

  Raison, Rt Hon Timothy

  Tracey, Richard

  Rees, Rt Hon Peter (Dover)

  Trippier, David

  Ridley, Rt Hon Nicholas

  Twinn, Dr Ian

  Ridsdale, Sir Julian

  van Straubenzee, Sir W.

  Rifkind, Malcolm

  Vaughan, Dr Gerard

  Roberts, Wyn (Conwy)

  Viggers, Peter

  Roe, Mrs Marion

  Wakeham, Rt Hon John

  Rossi, Sir Hugh

  Waldegrave, Hon William

  Rost, Peter

  Walden, George

  Rowe, Andrew

  Walker, Bill (T'side N)

  Rumbold, Mrs Angela

  Walker, Rt Hon P. (W'cester)

  Ryder, Richard

  Wall, Sir Patrick

  Sackville, Hon Thomas

  Waller, Gary

  Sainsbury, Hon Timothy

  Walters, Dennis

  Sayeed, Jonathan

  Ward, John

  Shaw, Giles (Pudsey)

  Wardle, C. (Bexhill)

  Shaw, Sir Michael (Scarb')

  Warren, Kenneth

  Shelton, William (Streatham)

  Watson, John

  Shepherd, Colin (Hereford)

  Watts, John

  Shepherd, Richard (Aldridge)

  Wells, Bowen (Hertford)

  Shersby, Michael

  Wells, John (Maidstone)

  Silvester, Fred

  Wheeler, John

  Sims, Roger

  Whitfield, John

  Skeet, T. H. H.

  Whitney, Raymond

  Smith, Sir Dudley (Warwick)

  Wiggin, Jerry

  Smith, Tim (Beaconsfield)

  Winterton, Mrs Ann

  Soames, Hon Nicholas

  Winterton, Nicholas

  Speller, Tony

  Wood, Timothy

  Spence, John

  Woodcock, Michael

  Spencer, D.

  Yeo, Tim

  Spicer, Michael (S Worcs)

  Young, Sir George (Acton)

  Squire, Robin

  Stanbrook, Ivor

  Tellers for the Ayes:

  Stanley, John

  Mr. Carol Mather and Mr. Robert Boscawen.

  Steen, Anthony

  Stern, Michael

  NOES

  Adams, Allen (Paisley N)

  Campbell-Savours, Dale

  Alton, David

  Carlile, Alexander (Montg'y)

  Archer, Rt Hon Peter

  Carter-Jones, Lewis

  Ashdown, Paddy

  Clark, Dr David (S Shields)

  Atkinson, N. (Tottenham)

  Clarke, Thomas

  Bagier, Gordon A. T.

  Clay, Robert

  Banks, Tony (Newham NW)

  Cocks, Rt Hon M. (Bristol S.)

  Barnett, Guy

  Cohen, Harry

  Barron, Kevin

  Coleman, Donald

  Beith, A. J.

  Concannon, Rt Hon J. D.

  Bennett, A. (Dent'n & Red'sh)

  Cook, Frank (Stockton North)

  Bidwell, Sydney

  Cook, Robin F. (Livingston)

  Blair, Anthony

  Corbett, Robin

  Boyes, Roland

  Cowans, Harry

  Bray, Dr Jeremy

  Cox, Thomas (Tooting)

  Brown, Gordon (D'f'mline E)

  Craigen, J. M.

  Brown, Hugh D. (Provan)

  Crowther, Stan

  Brown, N. (N'c'tle-u-Tyne E)

  Cunliffe, Lawrence

  Brown, R. (N'c'tle-u-Tyne N)

  Cunningham, Dr John

  Brown, Ron (E'burgh, Leith)

  Dalyell, Tam

  Bruce, Malcolm

  Davies, Ronald (Caerphilly)

  Callaghan, Jim (Heyw'd & M)

  Davis, Terry (B'ham, H'ge H'l)

  Campbell, Ian

  Deakins, Eric

  944

  Dewar, Donald

  Mikardo, Ian

  Dobson, Frank

  Millan, Rt Hon Bruce

  Dormand, Jack

  Miller, Dr M. S. (E Kilbride)

  Douglas, Dick

  Mitchell, Austin (G't Grimsby)

  Duffy, A. E. P.

  Morris, Rt Hon A. (W'shawe)

  Dunwoody, Hon Mrs G.

  Morris, Rt Hon J. (Aberavon)

  Eadie, Alex

  Nellist, David

  Eastham, Ken

  O'Brien, William

  Evans, Ioan (Cynon Valley)

  O'Neill, Martin

  Evans, John (St. Helens N)

  Park, George

  Fatchett, Derek

  Parry, Robert

  Faulds, Andrew

  Patchett, Terry

  Field, Frank (Birkenhead)

  Pavitt, Laurie

  Fields, T. (L'pool Broad Gn)

  Pendry, Tom

  Flannery, Martin

  Penhaligon, David

  Foot, Rt Hon Michael

  Pike, Peter

  Forrester, John

  Powell, Raymond (Ogmore)

  Foster, Derek

  Prescott, John

  Foulkes, George

  Radice, Giles

  Fraser, J. (Norwood)

  Randall, Stuart

  Garrett, W. E.

  Redmond, M.

  Gilbert, Rt Hon Dr John

  Rees, Rt Hon M. (Leeds S)

  Godman, Dr Norman

  Richardson, Ms Jo

  Gould, Bryan

  Roberts, Allan (Bootle)

  Hamilton, James (M'well N)

  Roberts, Ernest (Hackney N)

  Hardy, Peter

  Robertson, George

  Harman, Ms Harriet

  Robinson, G. (Coventry NW)

  Harrison, Rt Hon Walter

  Ross, Ernest (Dundee W)

  Hogg, N. (C'nauld & Kilsyth)

  Ross, Stephen (Isle of Wight)

  Home Robertson, John

  Ryman, John

  Howells, Geraint

  Sedgemore, Brian

  Hoyle, Douglas

  Sheerman, Barry

  Hughes, Mark (Durham)

  Sheldon, Rt Hon R.

  Hughes, Robert (Aberdeen N)

  Shore, Rt Hon Peter

  Hughes, Sean (Knowsley S)

  Silkin, Rt Hon J.

  Hughes, Simon (Southwark)

  Skinner, Dennis

  John, Brynmor

  Smith, C.(Isl'ton S & F'bury)

  Kaufman, Rt Hon Gerald

  Smith, Rt Hon J. (M'kl'ds E)

  Kennedy, Charles

  Snape, Peter

  Kirkwood, Archibald

  Soley, Clive

  Leadbitter, Ted

  Spearing, Nigel

  Leighton, Ronald

  Steel, Rt Hon David

  Lewis, Ron (Carlisle)

  Stott, Roger

  Lewis, Terence (Worsley)

  Strang, Gavin

  Litherland, Robert

  Straw, Jack

  Lloyd, Tony (Stretford)

  Thomas, Dr R. (Carmarthen)

  Loyden, Edward

  Thompson, J. (Wansbeck)

  McDonald, Dr Oonagh

  Thorne, Stan (Preston)

  McGuire, Michael

  Tinn, James

  McKay, Allen (Penistone)

  Varley, Rt Hon Eric G.

  McKelvey, William

  Wallace, James

  Mackenzie, Rt Hon Gregor

  Wardell, Gareth (Gower)

  McNamara, Kevin

  Wareing, Robert

  McTaggart, Robert

  Welsh, Michael

  McWilliam, John

  White, James

  Madden, Max

  Williams, Rt Hon A.

  Marek, Dr John

  Young, David (Bolton SE)

  Martin, Michael

  Maxton, John

  Tellers for the Noes:

  Maynard, Miss Joan

  Mr. Don Dixon and Mr. Frank Haynes.

  Meadowcroft, Michael

  Michie, William

  Question accordingly agreed to.
  Resolved,
  That any Act resulting from the London Regional Transport Bill—
  1. May authorise the Secretary of State—
  (1) to make levies on the rating authorities for all rating areas comprised in Greater London for the purpose of recovering a contribution from the ratepayers of Greater London towards his estimated expenditure in any year on grants under that Act to the body to be known by virtue of that Act as London Regional Transport;
  (2) to require that body to pay him any excess of revenues over charges (as determined by that Act) in respect of any accounting year (within the meaning of that Act) of that body, so far as that excess appears to him to be surplus to that body's requirements;

  945
  (3) to require the Greater London Council—

  (a) to pay to that body, in the year in which the appointed day (within the meaning of that Act) falls, such an amount by way of grant as the Secretary of State may determine; and

  (b) to pay interest on any amount, or any part of any amount, required to be so paid which is not paid on or before the date on which it is required to be so paid;

  2. May provide for the payment of sums into the Consolidated Fund or the National Loans Fund.
  In this resolution 'year' (except in the expression 'accounting year') means a period of twelve months beginning with 1 April.

  European Community (Transport Infrastructure)
  11.21 pm
  The Minister of State, Department of Transport (Mrs. Lynda Chalker): I beg to move,
  That this House takes note of the European Community Document No. 8922/83 setting out proposals for financial support for a multi-annual programme for transport infrastructure; and welcomes the views set out in the Secretary of State for Transport's Explanatory Memorandum of 14th October.
  We are glad to debate this measure. The proposal on which the Scrutiny Committee has asked for a debate has, as the House knows, three main aims. First, it seeks to settle the distribution of 15 million ECU — about £8 million — allocated to transport infrastructure support from the 1983 budget. Secondly, it proposes the Council's agreement to a list of projects for possible support from 1984 funds, from which the Commission would later make selections. Thirdly, it provides machinery for the Council to agree lists of projects in the years 1985 to 1987, from which the Commission would also make choices. If accepted, the proposal would give the Commission the right to decide the form and level of aid for each project it supported, subject only to this not exceeding 70 per cent. of the total cost for each project helped.
  In short, this is a mixed measure. It is less ambitious than the earlier proposals of 1976, which would have bound EC members indefinitely to spending of this kind and settled appropriate procedures and criteria. But it is considerably more far-reaching than the one-year regulation agreed in 1982, which settled the spending of 10 million ECU — about £5·5 million — from budget funds for that year but made no attempt to legislate for the future.
  There is a strong case against a five-year regulation. The motion invites the House to note these proposals arid to support the Government's views on them as set Out in the explanatory memorandum of 14 October last.
  The most important point was our firm opposition to any provisions looking beyond 1984. Neither the level of funding nor the projects which the Council would wish to support in 1985 to 1987 can possibly be known with any certainty for some time ahead. The Government see no point in legislating to cover so very uncertain a future when other incidents may cause us to give different priorities closer to the dates concerned.
  The Select Committee on Transport has adopted a guarded approach which I think all hon. Members understand. When it reported on this subject in May 1980 it urged the Government to proceed with great care and, in particular, to enter into no binding commitments which might work to this country's long-term disadvantage—a view with which the Government agree.
  The Select Committee also saw the potential merit of new non-agricultural funds but was deeply sceptical about the prospects of containing and proportionately reducing spending on the common agricultural policy. It therefore thought—rightly, as events have since proved—that the total Community funds likely to be available in the next few years would be far too small to contribute significantly to reducing our net contribution to the EC budget. It therefore saw no advantage in rushing into an early agreement, especially as the terms then proposed were far too cryptic and opaque to make it clear how the balance

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  of benefits to members was likely to be distributed. The Government agreed with the Select Committee on all those points.
  With the Athens summit fresh in all our minds, I need hardly remind the House how very much more acute the wider problems to which the Select Committee pointed have since become. So long as effective solutions to those problems are not found, the availability of significant funds for transport infrastructure in future years must be seen as even more uncertain and unpromising than before. From a transport point of view I personally find that hard, but we must get our priorities right, as I suspect the hon. Member for West Bromwich, East (Mr. Snape) will agree.
  The Government's view is therefore that we must continue to resist any EC proposal on transport infrastructure support which seeks to bind member states further ahead in time than makes sense in the light of the Community's current political and financial realities. In other words, we wish to adopt a step-by-step approach, confirming only so far as we have some direct feel ahead. I am glad to say that most other EC members are of the same mind and that the Transport Council discussion which my right hon. Friend the Secretary of State attended on 1 December showed little support for provisions covering 1985 to 1987. I hope that the House will welcome that realistic approach as much as I do.
  I must also mention certain other important issues. First, the Select Committee was especially keen that the criteria for selection of projects and appraisal of Community interests should be better defined. It wished to secure inclusion of sea and air as well as inland schemes and to guard as far as possible against disturbance to our national spending priorities, which it saw as acceptable only when it offered clear overall national advantage. The Government agree closely with the Select Committee's view on minimising the disturbance to national priorities and we shall keep this steadily in view in considering any particular case that we might propose for support.
  We have been able to make useful progress in the past couple of years on methods of project appraisal. We especially welcome the fact that there is now general agreement to concentrate support on cases from which substantial economic benefit can be expected. We also start from national appraisals of particular schemes, adjusted as appropriate to secure consistency in the methods operated by the various member states.
  Appraisal can be complete only when we all understand what we mean by "Community interest". Unless, as in 1982, the selection of the cases and the levels of aid for each can be settled pragmatically, some clear-cut criteria are needed to establish what constitutes so-called "Community interest", and this is not particularly easy to do.
  The Commission has attempted to do this in the proposals now before the House. The attempt is a good deal closer to satisfying the objectives than the 1976 text, though, as the explanatory memorandum of 14 October indicates, we have a few, though significant, reservations. The criteria nevertheless are vague and the present draft would allow a large amount of discretion to the Commission on the schemes it could select. We do not find this satisfactory and we would like to see decisions firmly in the hands of the Council of Ministers.
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  The House ought to know that, although we have pressed at every opportunity for firm agreement on the inclusion of sea and air schemes and, indeed, secured the sustained support of several other members on this issue, there is a tenacious minority view in favour of confining support to inland schemes. There is a need to have legal unanimity. Therefore, since this tenacious minority has not yet been shifted from its view, we are unlikely in the short term to progress to our point of view.
  Mr. Teddy Taylor: My hon. Friend said that the Government would like the Council of Ministers to make the determinations on these matters. Can she tell me what resources, what expert advice and what facilities are available to the Council of Ministers to make a value judgment on the respective merits of road schemes in Greece and roadways in Britain?
  Mrs. Chalker: Each country has its own assessment of importance. While one sometimes believes in looking at the presentation of schemes when they are discussed, and this may be a little subjective rather than objective, there is a general review by the Commission of what achievement in economic terms such a scheme might make. That one would accept the view of the Commission without debate is, I think, very unlikely, but I for one, on any of the schemes with which we have had anything to do, have tried to ask the questions that would fit the economic benefit of such a scheme into the same sort of criteria as we apply in the House to our own schemes. The ability of the Commission to do that work for itself without sharing the knowledge with members of the Council is what we are questioning. That the Council of Ministers may make more progress on some of these Community matters than the Commission seems to be making in transport matters at present is something which we all believe to be very important.
  Mr. Taylor: If this proposal goes ahead, my hon. Friend may shortly have to sit down in the Council of Ministers and make a decision on whether more importance should be given to the road link from Athens to the Peloponnes or to the improvement of the Nuremberg marshalling yards. I wonder how she and the others sitting round the table get the information to make an assessment on whether the improvement of the Nuremberg marshalling yards is more important to the Community than, say, the road link from Athens to the Peloponnes.
  Mrs. Chalker: We are fairly thoroughly briefed on such matters before we attend the Council of Ministers meeting. We are briefed by our own civil servants, who may not in all cases be experts in what goes on in the Peloponnes, but, from the criteria which each country uses for its own schemes, they may have a better chance than a Minister without the aid of a fairly thorough briefing of reaching a judgment.
  There is always the possibility, through our permanent representatives, of finding out more about the schemes if insufficient information was provided initially. As my hon. Friend will know, we must rely to some extent on the briefing by officials, but, having done something of that nature once, we learn whom to ask and what questions to ask. Sometimes we do not make progress because we do not receive the right answers, and so we do not agree to schemes going ahead.
  The Government will try to register the point on project appraisal with all members. Simply because we do not

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  agree common criteria, we could not oppose any short-term proposals that offer a net benefit. I am sure that the House would not wish me to turn down a net benefit for Britain simply because all the nations had not agreed watertight criteria.
  Because we are looking for net benefits in the short term, we have spent a long time discussing the years 1983 and 1984. Current discussion in Brussels is firmly focused on provisions for 1983 and 1984, and not beyond. We shall certainly not agree to any criteria which would prejudice the prospects for that. It is especially important to secure wording which reflects, as does the text before us tonight, the interests of peripheral members and the need to link the whole Community more closely together.
  We have not always taken sufficient account of the role played—sometimes negatively for the older members of the Community—by some of the newer members. The newest member obviously has special problems.
  We shall be resuming discussion at the next Transport Council on Tuesday 20 December. While we will not necessarily complete the discussion, we believe it right to pursue our current objective to achieve as firm a decision as possible for 1984, as well as for 1983, on the basis that we should then be making some progress that would supply us with a net benefit over the two years taken together.
  We shall also be working, in broad agreement with most other members, for a considerably lower percentage ceiling of support for each project than the Commission has proposed, towards concentrating decision-making much more substantially in the hands of the Council, and pressing the case for unanimity at that level. I believe that we shall achieve that, but we must talk about it in the Council and have the full facts before the Council first.
  Beyond the short term, we shall continue to approach Community transport infrastructure support as constructively as we can in all the current circumstances, but our policy must also, as it has done hitherto, pay close regard to the national interests—very much in the spirit of the Select Committee's valuable report in 1980.
  I hope the House will conclude that it can support tonight's motion on the basis of this account of the main factors that influence our current policies.
  11.38 pm
  Mr. Peter Snape: The House is grateful to the Minister for her customarily lucid explanation of the motion before us. Her remarks about the future drift of Community policy were uncharacteristically pessimistic. There was a typically robust intervention from the hon. Member for Southend, East (Mr. Taylor). As it is fairly late at night, we do not want to fight the battles that were fought in the previous debate on the London Regional Transport Bill.
  I thought that the Minister's reply to her hon. Friend was, for her, less than satisfactory.
  Mrs. Chalker: It was honest.
  Mr. Snape: The fact that it was honest did not make it any more satisfactory. I was not implying that it was anything but honest; it is just that I thought that the hon. Lady was uncharacteristically pessimistic about future Community projects.
  I approach this debate in the hope that our deliberations will enable the Secretary of State to gauge the views of
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  hon. Members before his meeting with other EC transport Ministers on 20 December. The Opposition take no great exception to the proposals outlined in this measure. The expenditure that is proposed, at least for the Community, is on a comparatively small scale and there could even be marginal benefits for the United Kingdom resulting from it. Any influence that the Minister can exert to expand those benefits for this country will be heartily welcome.
  At the same 20 December meeting the Council of Transport Ministers will, I understand, discuss Commission proposals for the liberalisation of road haulage. The Commission's long-standing objective, the House will be aware, has been to carry forward that process of liberalisation, and that position will doubtless be supported by the British Government. To be fair—I trust that hon. Members will agree that I like to be fair in these matters — that attitude, though I may not have agreed with it, has been adopted by successive British Governments, Labour and Conservative, though without this House giving that policy a great deal of scrutiny.
  I shall return to the question of the general drift of Community policy on the road-rail balance later in my remarks. First, dealing with the proposals before us, I have a few tentative recommendations to make to the Minister about the way in which their application could be improved.
  Last year the Community was able to spend 10 million ECU—a dreadful word that does not mean anything to the majority of people—or about £5 million on three projects: contributing to the construction of marshalling facilities, to road projects in Greece, and to a feasibility study into means of financing the Channel tunnel. Now the Commission is proposing expenditure of 15 million ECU in respect of the 1983 budget, although regrettably—the hon. Member for Southend, East made this point—no United Kingdom projects are included in the proposals. Why do projects in other countries seem to command greater priority than projects in the United Kingdom?
  Without wishing to open old wounds, I must say that, as Britain is the greatest net contributor to the EC, it is not unreasonable to expect that this country might be included in some of the projects. That has not been the case in 1983. Meanwhile, in 1984 greater expenditure, of 60 million ECU, is envisaged for a pool of projects which included things like the development of north-south road ard rail links in Greece, the European north-west, south-east transit axis—that scheme being dependent, I understand, on the conclusion of negotiations with Austria— and a number of road, rail and waterway projects elsewhere in the Community.
  From the British point of view, those could involve expenditure on the M25 London orbital motorway or improving rail access to Harwich and its port installations. But, as we heard from the Minister, there are no guarantees that the expenditure will be made in the United Kingdom. One reason for that may be the approach that the Government adopt. While the Minister properly says that we look at short-term rolling programmes for such projects, it is surely not unreasonable for the Opposition to ask that the Government — being the committed member of the EC that they are—should pursue sonic long-term projects on transport infrastructure and have a debate with our fellow members of the Community about the long-term desirability of some projects, including their long-term financing, from the allocation of expenditure on transport infrastructure within the EC.

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  I shall refer to the Commission's policy paper of earlier this year on transport infrastructure investment, Command (83) 58 final, in which the Commission announced that it would be
  "in accord with the recommendation of the European Parliament and the Commission's policy if the use of criteria for the application of Community instruments gave emphasis to proposals designed to transfer traffic from road to rail where this is economically justified."
  In the short term that surely argues in favour of the Government staking a claim for expenditure on improving rail access to the port of Harwich. If the hon. Lady replies, will she tell the House whether the Government intend to pursue that project at the meeting next week?
  The Government must not neglect the longer-term potential for Community investment in Britain's railways. The Commission, through Mr. Frohnmeyer, recently identified three areas in which it sees an important future role for railways. On 26 September, Mr. Frohnmeyer of the EC transport commission spoke at a transport 2000 conference on "The future of Community railways" in London. He set out the three areas. They are, first, social and regional passenger mass traffic in densely populated areas, secondly, inter-city passenger traffic between major centres up to distances of about 300 to 400 miles, and, thirdly, bulk goods traffic on long-distance international routes.
  The first two areas have an obvious application to the United Kingdom, and the House deserves an assurance from the hon. Lady that she and her Department will consider that in any future discussions. It is possible that Community investment could be justified in Britain with regard to rail electrification and to infrastructure renewal in our larger conurbations. Both are desperately needed but are unlikely to be achieved under the present financial constraints imposed upon British Rail. As the hon. Lady made clear, in the light of the budget crisis now gripping the Community, it is admittedly difficult to peer too far into the future. I understand that it is unlikely that any agreement will be reached on a transport infrastructure programme going beyond the next two years. The reasons for that are apparent and understandable.
  Nevertheless, if the Community has a future beyond the next two years, it is vital that Britain should derive some tangible benefit from membership. A practical contribution to railway development would be one. It would be helpful if the Government were to cease their sleight of hand with the United Kingdom's budgetary rebates. Where rebates are allocated to transport, they should go to transport instead of being swallowed in the Treasury's maw in a bookkeeping exercise.
  Mr. Teddy Taylor: Why?
  Mr. Snape: I should have thought it obvious that when rebates are made by the Community for transport projects, that is how they should be spent. At present they are not. They are used as part of general taxation. If the hon. Gentleman agrees with that, no doubt he will say so in his normal forthright manner. He will not be surprised to learn that I completely disagree. The Opposition take the view that when these rebates are made for specific transport matters, that is how they should be spent.
  I wish to deal with the Community's general policy as it applies to road and rail transport. British Rail and the
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  railway unions have made recent representations to the Secretary of State. Deep misgivings exist about the bias in Community transport policy towards road policy and, on the continent at least, inland waterways. It is felt, we believe justly, that the effect of Community policy has been to gear the conditions of competition in the transport market in favour of road transport in particular.
  The Commission's recent document "Progress towards a Common Transport Policy", with its renunciation of the need to proceed on the basis of a global approach to transport, is seen as confirming a policy which preserves the advantages enjoyed by road transport over the railways.
  The EC rail undertakings and the railway unions within the Community are therefore asking the Community authorities to take steps to bring competition into line and are making some specific requests. I hope that these requests will be acted upon by the Government, because my hon. Friends and I believe they are justifiable.
  The first request is for the introduction of an infrastructure cost allocation system in which the real cost of each transport mode is properly quantified. It is impossible to quantify it throughout the Community. They are asking for the abolition of distortions in the conditions of competition resulting from inadequate regulations in road and inland waterway transport. Because of the lateness of the hour I will not attempt to detail the inadequate regulations or, indeed, the equally inadequate enforcement of some of the regulations in this country at least, particularly on the overloading of heavy goods vehicles coming from the Channel ports.
  The EC rail undertakings and railway unions are also asking for greater strictness in monitoring the application of the regulations, combined with stiff penalties for noncompliance. Again, it is well known that the penalties, for example, for overloading heavy goods vehicles are laughably inadequate. They are seeking, too, the retention of the current road quota system, pending proper harmonisation of transport competition, a point that I hope the hon. Lady will pass on to her right hon. Friend before the meeting next week.
  These are the wider objectives that the Secretary of State should be pursuing at his meeting on 20 December. If he does so, I assure him of the Opposition's support. In the meantime, he can surely take a small step towards allaying the anxieties of the railway organisations throughout the Community by getting the right result in the negotiations on the draft regulation and, unlike 1983, getting some return for a very large outlay for the United Kingdom.
  11.52 pm
  Mr. James Hill: We must thank the Select Committee on European Legislation for bringing this dangerous draft legislation before the House. As my hon. Friend will know, I was chairman of transport for Europe in the first European Parliament delegation. At that time, not only on lorry quotas but on the fulfilment of the ideals of Europe, the transport infrastructure to make possible the free passage of goods throughout Europe was uppermost in our minds.
  Where the draft regulation is perhaps moving out of line is that it is going too far ahead in Community terms to 1987. We are asked to take note of this. We must say plainly to my right hon. Friend the Secretary of State for Transport that when he attends the meeting on 20

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  December he must beware of Greeks not bearing gifts. If we look at the draft legislation we see that it is signed by a member of the Commission, obviously the commissioner for transport, a Mr. Contogeorgis, who I assume is a Greek, and that it will be sent to a Mr. Yannis Haralambopoulos, who is president of the Council.
  One of the things I most fear is that the draft to the Council says:
  "Whereas, as the European Council stressed at the meeting of 17 to 19 June 1983, a special financial effort is required in 1983 and 1984 to modernize the main transport routes in Greece".
  It may be that Greece, as the most recent member, is in need of greatest help on transport infrastructure. Nevertheless, two more worthy countries are likely to join the Community before 1987.
  The draft regulation contains a graph of the amount of money that will be needed, even for the present limited programme. Page 2 of the financial record shows that we start off very slowly at 10 million ECU, but by 1987 that will rise rapidly to 200 million ECU, a total expenditure over the next five years of 530 million ECU, equivalent to about $600 million. That is not a small amount.
  One of the great things about such regulations is that a little something should be given to the United Kingdom. I am not sure how we missed out in 1983, but the Minister will probably tell me that we put forward several schemes, none of which was accepted by the majority. However, in 1984, we have put forward two miserable schemes. The M25 is fairly near completion. I am not sure about the access railway to the port of Harwich, but, when compared with some of the 1984 projections put forward by other members, it is clear that we shall merely be given crumbs from the table.
  One of the dangers, of which I am sure the Secretary of State is well aware, is that article 4 refers to
  "The Council, acting by a qualified majority upon a proposal from the Commission'.
  Therefore, regardless of all our protests, we could be easily out voted on any of these projects. As a result, article 4 should be feared.
  Article 8 states:
  "The Commission"——
  this has nothing to do with the Council—
  "shall take decisions to grant financial support on the basis of the lists referred to in Article 4."
  Again, the majority on the Council will vote for the list, in whatever priority it wishes to assess it, and the Commission will grant the money. I can see no provision for restricting the Commission on what it can spend on any project.
  We should also beware of article 11, which reiterates what I have said about articles 4 and 8. It goes on to outline the possible projects for 1984. What about the possible projects for 1985, 1986 and 1987? If the Community spends more on peripheral roads, railways and waterways, the whole emphasis of transport infrastructure will be destroyed.
  Those of us who take an interest in Europe know that transport infrastructure has hardly moved since we joined in 1973. The Transport Commission is not high up in the list of priorities. The job of the commissioner for transport is generally a dead end job. People try to avoid it.
  Mr. Snape: It is a dead end job here.
  Mr. Hill: It is not like the view that we have here of transport. In the Community, transport never has enough
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  budget and there is too much to do. Even on projects over the years such as lorry quotas and railway modernization——
  Mr. Roger Moate: Will my hon. Friend explain how any organisation can have far too much to do with no significant budget? Is not that a contradiction?
  Mr. Hill: I should have said that apparently there is too much to do. I left out that important word.
  Mr. Moate: But what is being done?
  Mr. Hill: Exactly. What is being done? Sometimes, even in my two and a half years in the European Parliament, I have wondered what they were all doing in the Commission.
  There is a great deal of danger in the regulation. I know that my hon. Friend the Minister is on top of the matter and that my right hon. Friend the Secretary of State for Transport will be forewarned. Majority voting on the matter is to be avoided.
  12.1 am
  Dr. John Marek: Article 5(c) is about the improvement of traffic links between the outlying member countries and the rest of the Community by trunk routes. I shall illustrate that by talking about north-east Wales and giving an example of how the article might be brought into practice.
  The roads to north-east Wales come from two areas—the north of England and abroad, from countries such as France and Germany. Roads from the latter areas go via London and come up through the midlands. If one wants to go to north-east Wales from the midlands, one goes via Whitchurch, which many heavy lorries do. They then go either to Wrexham or carry on to north-east Wales.
  Recently a motorway was opened to the Telford bypass. Some traffic will now go by the Telford bypass up through Chirk and Rhosllanerchrugog to Wrexham, either stopping at Wrexham or going on to the other industrialised areas in north-east Wales.
  The Department of Transport and the Welsh Office have made plans for that road. The Ruabon bypass will be dual carriageway. South of that, the Newbridge bypass will be a 7-metre road, and south of that the Chirk bypass will be a 10-metre road. Then we go into England. In England will be the Gobowen bypass and the Shrewsbury bypass. There will be a bit of dual carriageway between Shrewsbury and the motorway, but the rest of the road between Shrewsbury and the Welsh border will be exactly as it is now, although it will be upgraded in parts.
  Many people find it unsatisfactory that there is a hotchpotch of road schemes, some wider and some a little narrower, and some dual carriageway. Traffic that has not used the road going through Whitchurch has to get round Wrexham. There is no propel' way to do so, with the result that heavy lorries go through residential areas. Lorries have been so high that on one occasion men on top of a lorry lifted up telephone lines so that the lorry could get through the recommended route round the town.
  Two authorities are responsible. The Welsh Office is responsible for roads, and on the other side of the border is the Department of Transport. If only one authority were responsible, I am sure that there would be a better system and a better overall plan to provide the road infrastructure

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  between this part of industrialised Wales — north-east Wales—the midlands and the centre of the Common Market.
  We should also examine railway connections to the area. In the summer, someone proposed that the railway line between Wrexham and Chester should be made single rather than double track. That line carries much freight to many parts of the country.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman must remember that we are discussing the funding of transport infrastructure by the EC.
  Dr. Marek: I am dealing with that matter as this is a scheme for infrastructure which the EC could consider funding. If I am out of order I shall certainly accede to your judgment, Mr. Deputy Speaker.
  I wrote to the Welsh Office and asked why the Wrexham to Chester line was to be single track. The Secretary of State said that he did not know anything about it. I therefore wrote to the Department of Transport, which also knew nothing about it. I went back to the Welsh Office, which told me that British Rail must be responsible. I therefore tried British Rail and was told that the Welsh Office had asked it to propose the matter. The Minister is laughing but I have the letters with me and am prepared to show them to her. The deputy divisional general manager, Mr. Gibbins, wrote a letter to the press saying that the Welsh Office had asked British Rail to bring the matter forward. The Welsh Office wanted to save money by building road bridges over single track rather than double track.
  Mr. Deputy Speaker: Order. I am having difficulty in relating what the hon. Gentleman is saying to the document before the House.
  Dr. Marek: The relationship is that there are schemes in the document and there are schemes which could be but are not in it. I shall conclude by saying that the Government should consider north-east Wales with a view to formulating a general view of the area's infrastructure to see whether a scheme which involves the area can be submitted to the EC in connection with the document. However, I must explain the background before doing that.
  Welsh Office Ministers then found out what their civil servants were doing. I am not blaming the Ministers, as it is the civil servants who are at the back of many such schemes. The Ministers then said that it was true that they wanted to save a little money by building a road over only a single-track line. The point is that civil servants in England in the Department of Transport did not know what civil servants in Wales in the Welsh Office were doing. Moreover, Ministers in England did not know what Ministers in Wales were doing.
  Mr. Deputy Speaker: Order. The hon. Gentleman must not abuse the rules of the House. We must stick to the document.
  Dr. Marek: I honestly think that what I am saying is pertinent to the document. It will take a great deal to convince people that, if liaison between civil servants in different Departments and between Ministers is bad in Britain, it will be good on a Community-wide basis. The
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  European Community has a role to play in the sphere of transport infrastructure by providing the necessary mechanism or finance to get projects such as the tunnels under the Channel or the Alps or between Italy and Sicily under way. I doubt that the European Community can decide whether it is correct to provide money for a project in Harwich, Wexford, Nuremberg or Mulhouse as it does not have the intimate knowledge necessary to make value judgments between such projects. Of course, the Commission may say that it will try to divide the available finance, thereby keeping all the applicants happy. However, the Common Market Commission should not operate in that way. It should be trying to form a co-ordinated transport infrastructure policy, but I doubt whether it can.
  North-west Wales is a prime example, as the border intervenes, to show that the transport infrastructure for roads and railways has not been examined on a sufficiently wide basis so that a coherent plan can be formed for the area. Will the Government examine whether more liaison can take place between the different Departments? If so, I urge the Government to consider including a project from the area as part of the regulations.
  12.12 am
  Mr. Teddy Taylor: Having listened to many ridiculous orders being discussed, I can say that the Minister's speech was one of the most encouraging that I have heard as regards the extension of European interference into our national affairs. She said, first, that we will not allow such a programme unless the United Kingdom receives a net benefit; secondly, that these matters should be dealt with not by the Commission but by a unanimous decision by the Council of Ministers; and thirdly, that we should not consider any scheme until we can assess the budget measures. I hope that that is a fair assessment of the Minister's speech.
  It is high time that all hon. Members ceased pretending that a grand master plan exists for European transport. The Minister made it clear that we are discussing a nonsensical device that could be used to redistribute funds and to compensate for the nonsenses of the CAP which badly affect the United Kingdom.
  Why on earth does such a programme exist? Surely it is nonsensical to establish a rigmarole of having European civil servants rushing round Europe making value judgments or assessments on whether there will be any benefit in having a road link from Athens to the Peloponnese, the Shankhill-Brai bypass or the renewal of the railway line to Plati? European Community civil servants would have grave difficulties in understanding the merits of such projects. It is obvious that such judgments can best be made by national Governments.
  Clearly there will be no such programme unless an increase is made in the Community's resources. Much as I would like a major reform of the CAP to take place, the Government clearly have not asked for that. At best, we are looking for a holding of the position on resources. These silly transport and energy programmes can be implemented only if there is an increase in resources and if we try to match some of the spending on the CAP. But are we not in danger of throwing out the baby with the bath water and of setting up a whole lot of Euro-wide schemes to provide regional, social, transport and energy help at a

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  time when Britain is being sensible enough to cut out all those Socialist planning nonsenses and to seek less interference and less public spending?
  I would find it difficult to explain to my constituents that the Government had to cut spending on health and housing benefits because of a cash shortage and at the same time explain why more money had to be spent on the extravaganza of Europe and on financing railway lines between Lorissa and Plati, and so on. Whatever happens in the negotiations, I hope that we shall give our hard-pressed Minister, who has spoken so ably tonight, a little more time to consider Britain's transport problems instead of going through the nonsense of sitting round a table trying to make value judgments about the respective merits of, for example, the Nuremberg marshalling yards. The Minister has enough to do without going through a charade that is simply a device to try to get back some cash for the nonsenses of the CAP.
  My next point is very important. Many of us are aware that county and district councils are overworked. However, I am worried by the number of them who are spending a lot of cash on jaunts to Europe to try to obtain what they call "European money" for transport projects. It is clear from the paper that the schemes have to come from our Government. We then send them to the Commission, which decides which ones to put forward. The Council of Ministers or the Commission will decide which schemes are all right. However, some silly people have regrettably been encouraged by some of the so-called European Assembly men, or Members of the European Parliament, to spend a lot of ratepayers' money on jaunts to Brussels to see important people. They then start talking about their need for roads, bridges, sewers, and goodness knows what. It is all nonsense. It is right that Whitehall should put forward any projects, and I am sure that if the Minister has her way value judgments will be made solely on the basis of how the cash is allocated between the Governments. We should discourage local authorities from going through such nonsense. I appreciate that some of them are doing it for publicity. Sometimes people do that, because they want to give the impression that they are fighting for their areas. Local authorities, Members of Parliament and even Governments do that.
  However, if we disregard some of the nonsensical populists, such as the hon. Member for West Bromwich, East (Mr. Snape), and consider the merits, it is clear that some district and county councillors and others genuinely think that a trip to Brussels or Strasbourg will advance the transport needs of their area. It would be much better if such people contacted our Department, where the decisions are made about what is put forward for consideration by the Commission or the Council of Ministers. I hope that my hon. Friend the Minister will reconsider the desirability of having a quiet word with or sending out a circular to all councils telling them not to waste their money on jaunts to Strasbourg or Brussels, because they will not help. However, it will help if people keep in touch with the Government.
  The speech of my hon. Friend the Minister was splendid, and the Government's approach is commendable. I shall be happy if we do away with the nonsense of so-called European policies, which are simply nasty devices to try to redress the CAP's injustices. It would be much better if we could—as my right hon. Friend the
  958
  Prime Minister rightly said — begin to face up to problems instead of creating silly devices of no practical value whatever.
  12.19 am
  Mr. Roger Moate: If my hon. Friend the Minister of State was not completely and sufficiently heartened by the support she received from my hon. Friend the Member for Southend, East (Mr. Taylor), I will fill her cup to overflowing by also offering her complete support for the attitude that she and the Government have adopted in response to this regulation.
  The motion before us suggests that we should welcome
  "the views set out in the Secretary of State for Transport's Explanatory Memorandum".
  If one actually reads the memorandum, one finds that the Government have expressed the position superbly. Wherever the document asks for nothing, we give nothing. I support that completely. Where it suggests that something should be slightly strengthened, the Government accept it, and I think that I can go along with that proposal. They are opposed to any provisions covering 1985–87, and I completely accept that. The explanatory memorandum says:
  "The Government would be ready to support any short-term scheme which provided clear net benefit for the United Kingdom; but, taken together"
  the present proposals
  "fall a long way short of this."
  So the Government are opposed to that too.
  In a splendid statement, the memorandum continues:
  "The Government's attitude to these proposals will also be broadly affected by the course of negotiations".
  That is a fairly acceptable statement. Broadly, the Government are asking for nothing from the House and I will gladly support them in that attitude.
  Mr. Snape: The hon. Gentleman's speech and, for that matter, the speech of the hon. Member for Southend, East (Mr. Taylor) show all the long-term strategy of—I do not know what the right term is. If they take their heads out of the sand, they will see that, whether they like it or not, this is the reality. The hon. Gentleman is saying that the Government are asking for nothing. Like the rest of the Community, the Government are contributing to the schemes included in the motion. What the Minister is saying is that Britain should have something to say about this expenditure from the outset rather than when the money has been committed.
  Mr. Moate: The Government are being very realistic in their approach. If the hon. Gentleman will bear with me for a few moments, I will elaborate.
  My hon. Friend the Minister of State, in her statement, was being realistic. She was exposing from the Front Bench, in a slightly more polite and charming way than perhaps is the case when people speak from the Back Benches, the farce of this document and the so-called transport policy. It is a farce, and in any other circumstances it would be a monstrous joke, but in these circumstances it is more of a tragic joke.
  All the grand words that wrap up this great document and all the ambitions it contains—
  "a multi-annual programme for transport infrastructure"
  — mean, in terms of improvements to our transport infrastructure, nothing at all. Seldom has the European ideal been expressed more optimistically and more ambitiously in our constituencies than by Members of the

  959
  European Assembly saying that they will get support for this project or for that project and that there will be boards up supporting this great Euro-infrastructure scheme. Nothing has happened, nothing will happen, and nothing should happen. This document gives it all away. For all the great list of schemes and for all the grand words, how much are we talking about for 1983? The document says £7·5 million for the whole of this great continent. It is a joke and we all know that it is a joke. The Department knows that it is a joke but it is the Department's job to go along and try to demonstrate some way of getting back some of the money as part of the refund to which this country is entitled because of the excessive amounts we are paying to the Community. It is not about infrastructure but about reclaiming some of the money due to us. It is an elaborate farce.
  Even if the funds increase a little—even that is in some doubt because it depends very much upon the budgetary proposals — it still will not be of any significance in terms of rail, road, sea and air infrastructure throughout the continent of Europe. I will go further—it should not.
  The schemes are submitted by the respective Governments. The Government of this country decide that a particular project is worthy of support. That is the way it should be. It is nonsense to suggest that we should be competing with other countries for funds for access to the port of Harwich. What nonsense that is. Are we really to submit to decisions by President Mitterrand, Mr. Karamanlis or anybody else about the merits or otherwise of improving the road and rail links with the ports of Harwich or Sheerness? We know that that is a farce, and yet we go round in circles producing documents with the panoply of Euro-language pretending that it is significant. Surely it is more intelligent to say that such decisions should not be part of the Euro-strategy but that they should be for the national Governments.
  Let us go further and examine what is happening. If we did concede, the money would not be available. It is worth looking back at the 1983 budget. The second largest item in the Euro-budget was not transport, as we can tell from the figures. It was not the social or regional fund. The biggest item was agriculture and the second biggest item was the administration cost of the whole Community, including all the institutions.
  How much has been spent on spending the £7·5 million? My hon. Friend the Member for Southampton, Test (Mr. Hill), in a helpful intervention based upon his experience in the European Assembly — which he misnamed the European Parliament—told us about the vast amount of work that its Members had to perform and of their spending on real improvements to our transport system of £7·5 million. What has that cost in terms of Commission manpower; in terms of our Secretary of State for Transport and the Minister of State? How often has the Minister had to go to Brussels to fight for our share of this tiny, pathetic road programme? How much of our civil servants' time has been expended? That is never costed. A vast amount of time—from that of the Prime Minister to all the civil servants— is taken up on this type of Euro-farce.
  The document has nothing to do with the ideals of hon. Members in their attempt to produce a better Europe. We would do far better if we got rid of this nonsense and ended
  960
  the type of debate that we are having tonight. We all know that it is farcical. My hon. Friend the Minister of State has made an honourable, clear and lucid defence of what she is doing. She is not asking for much, but she is approaching the matter with scepticism—indeed, with an element of cynicism which is appropriate—with no great expectation of any major contribution to improving the United Kingdom's transport arrangements. On the basis of what she has asked for, I am delighted to give my support.
  12.28 am
  Mrs. Chalker: With the leave of the House, I should like to make some brief remarks in response to the debate. I am not sure how I should judge the complimentary remarks by my hon. Friends. I welcome their support, but I shall always try to be a realist. I still believe that it is right for us to work with our European partners. If understanding each other's transport problems is one way of maintaining the relationship in good order, I shall do my best to ensure that that relationship is maintained.
  It is I who will be going to Brussels next week, not my right hon. Friend the Secretary of State. I shall do my best to ensure that the agenda is decided with Britain's view more than adequately represented.
  The hon. Member for West Bromwich, East (Mr. Snape) seems to have spoken a long time ago. I realise that having no United Kingdom projects in the 1983 list seems to mean to him that we have not been doing our homework, but that is not so. As long ago as January or February of this year, a very full list was sent to the Commission. I was not able to go to the transport meeting because it was on 9 June, when I was busy doing something else. My noble Friend Lord Lucas attended it in my absence.
  Following that meeting, I took up the whole question of transport infrastructure projects with Commissioner Contogeorgis, who is a Greek, and I shall refer to our Greek partners later. I took that action because I believed that Britain's view should be clearly put by the Minister who has had perhaps the most responsibility in the European discussions on this subject during the past two years. I was heard with much understanding, and some of the projects—I should not like to say that this was due to that discussion, because I know that it was not—that are listed for 1984, and some of the projects that will be undertaken if we proceed with the regulation, will be, I hope, the fruit of some of the work done by the Committee of Permanent Representatives, by my officials and by myself during summer of this year.
  I should point out to the hon. Member for West Bromwich, East that the projects listed for 1984 include not only two sections of the M25 but the road and rail access to Harwich and the rail electrification project for Colchester to Harwich. There are a number of projects which represent important exports for British firms and which, therefore, have a high economic benefit. I made the point that the only projects that would succeed were those that would bring high economic benefit.
  Mr. Moate: I am trying to put this matter into context. My hon. Friend mentioned part of the M25 project being put on the list. How much money will come back to this country as a contribution to road works in relation to the whole project?
  Mrs. Chalker: I cannot give my hon. Friend that answer off the top of my head. When I have looked up my detailed papers, I shall write to him. He is right in saying that it is not a substantial amount but, as I believe he will know, we have given this project the highest priority in all our transport spending. I do not want to stray from the regulation, because I should not like to incur Mr. Deputy Speaker's displeasure.
  We take fairness between modes of transport extremely seriously. Many of the discussions that I have had round the table in Brussels and elsewhere have been about the balance between modes of transport.
  The hon. Member for West Bromwich, East referred also to the liberalisation of road haulage, and over the years we have regulated road haulage more elaborately than rail haulage. We have also made sure — partly because of an initiative in the summer — that the Community regulations on drivers' hours and tachographs are properly enforced. I put on record the fact that in the stringency of enforcement of regulations the United Kingdom yields to no one. We are already enforcing at a much higher level than many of our partners, and one of my efforts has been to get our European partners to put the same efforts into enforcement as we have.
  The hon. Member for West Bromwich, East asked that we should look ahead as far as possible and make it clear that we are ready and willing to put forward rail proposals. When these measures have a strong community interest we shall do that, and I have already mentioned the Colchesterto-Harwich line project.
  I do not believe that the position is anywhere as dangerous as my hon. Friend the Member for Southampton, Test (Mr. Hill) started by saying. He said that he feared the Greeks bearing gifts. I agree that enlargement means that we must be careful about the development of infrastructure, and I have always taken a cautious view. The Government are prepared to move only one step at a time and in a direction that seems to us not only to be beneficial to this country but to represent the ideals for which we joined Europe.
  As I have said, we are well represented in the 1984 list. My hon. Friend said that the schemes were miserable, but they compare well with the Greek share if they are supported at a reasonable rate. On the other aspect that worried him, I should point out that the draft regulation includes a ceiling on aid which will stop any one or two projects taking too much of the cake. We shall keep a close watch on what happens there. I agree that the selection from the 1984 list is crucial. That is why we believe that decisions should be unanimous and not on a qualified majority basis, so as to protect the United Kingdom interest. That I hope to achieve.
  Perhaps I might now reply to the hon. Member for Wrexham (Dr. Marek). I know the stretch of railway line between Wrexham and Chester and the proposal for a Gresford-Pulford bypass. Had the hon. Gentleman written to me he would certainly have received the information that he sought. My office and the Welsh Office are in constant communication about anything concerning the border between Wales and England. Although I have no responsibility for the A55 in north Wales, the hon.
  962
  Gentleman will know that that is a prime project in the Welsh Office road building programme. I should point out, however, that none of the roads in that area comes into the same class of economic benefit as roads and other projects competing for Community infrastructure funds. They are generally far smaller projects and do not bring the level of economic benefit attaching to the projects qualifying so far.
  I was somewhat taken aback at the prospect of a Scotsman bearing gifts when I heard the initial comments of my hon. Friend the Member for Southend, East (Mr. Taylor). He asked me earlier about the advice available to the Council of Ministers. I hope that I did not mislead him when I said that we depended on and received specialist advice. There are two formal advisory committees on which member states sit—the Transport Infrastructure Committee and the Advisory Committee on Transport—but those committees act only under instruction from the member states through the Council machinery. They provide the dossiers to which I referred, which are available to all member states so that adequate comparisons may be made.
  My hon. Friend the Member for Southend, East also spoke at some length about those who decide to visit Europe to make the claims of their area known. I think we agree that some of them go with too high hopes. Nevertheless, a great deal of education is still necessary about the differences and similarities across Europe and the problems that each country faces. Unlike my hon. Friend, I certainly should not douse the idea of greater exchange and understanding of projects, from which mutual benefits may be gained.
  My hon. Friend the Member for Faversham (Mr. Moate) depicted the entire scenario as very small and insignificant. One is tempted to wonder why he wished to enjoy our company at this hour if the whole matter was as downbeat as he suggested. Certainly our hon. Friend the Member for Harwich (Sir J. Ridsdale) would take a very different view. I suggest to him that he talks to my hon. Friend the Member for Faversham about Sheerness, because that port has great hopes for the future. I tease my hon. Friend when I so tempt him, because I believe that we cannot do better than to make our approach clear to the House. This I tried to do earlier.
  I listened to the debate with close interest. I am glad that I appear to have the support of all hon. Members who have participated in it. Most of the views seem broadly to have converged, but I shall not neglect to make clear in Brussels what the House feels about the Government's approach.
  Although it is very late, I am glad that hon. Members have been given the opportunity to tell me their views before I attend next week's Council of Transport Ministers. I thank hon. Members for their support in the debate.
  Question put and agreed to.
  Resolved,
  That this House takes note of the European Community Document No. 8922/83 setting out proposals for financial support for a multi-annual programme for transport infrastructure; and welcomes the views set out in the Secretary of State for Transport's Explanatory Memorandum of 14th October.

  Industrial Training
  12.42 am
  The Minister of State, Department of Employment (Mr. Peter Morrison): I beg to move,
  That the draft Industrial Training Levy (Construction Board) Order 1983, which was laid before this House on 2nd December, be approved.
  As the House will be aware, about this time last year I introduced a similar order concerning the construction industry training board. It was debated and approved unanimously in Committee. The present order similarly requires parliamentary approval.
  Hon. Members will be aware of the importance of the construction industry to the economic growth of the country. Output is beginning to rise, and I emphasise the need for higher quality training and more skilled workers. That is particularly so in this industry, with a total work force of 1,500,000.
  It is important to ensure that all firms except the very small contribute to costs. We must not be bedevilled by skill shortages as we were in the past. That is one reason why the board was retained. The House will be aware that the employers wanted it to be retained.
  The levy is expected to raise more than £42 million and it will be used for the very necessary training in the industry. The levy that covers the period to 31 March 1984 can be seen in three parts. There is the occupational levy of a fixed amount for each occupational group employed, subject to an overall maximum payment limit of 1 per cent. of total payroll. There is the 2 per cent. levy on payments made to labour-only subcontractors, such payments being the amount by which a company's payment to such subcontractors exceeds payments to the company for labour-only subcontracting work that is performed. Finally, there is the 0·2 per cent. levy on brick manufacturing employers which is estimated to cover the sector's share of the board's operating costs for a period of 26 months from the sector coming into scope in October 1982. As the House will be aware, a levy return is completed by every employer in scope each year.
  The 1982 Act, as did the previous legislation, allows exemption from levy to be given according to training performance. The board, however, operates a levy not tied to exemption and for this it must have evidence of the industry's support. This has been obtained regularly for a number of years. For small firms there is a small firms exclusion that applies to those with an annual total payroll of less that £15,000. They pay no levy, but they are able to claim grants from the board subject to a reduction of their claim by £150 which is equivalent to approximately a 1 per cent. levy. The payroll limit has not been increased for some years.
  At the board meeting on 24 March 1983 there was unanimous support for the levy, and this included all the employers' representatives present. All the employee representatives at the meeting supported the levy. Letters of support had been received from, for example, the National Federation of Building Trades Employers, the Federation of Civil Engineering Contractors, the Electrical Contractors Association and the National Association of Shopfitters.
  I recommend the proposals to the House. They have been the subject of detailed consideration and wide consultation and they are widely supported in the industry.
  964
  I am sure that the board will continue to play a significant role in the industry's training needs. The proposals will also play a significant role in the Government's new training initiative.
  12.45 am
  Mr. Barry Sheerman: At first sight, the order is quite unremarkable. As the Minister said, other than the fact that it provides for the inclusion of the brick industry the order is identical to those laid in previous years, and especially last year.
  However, this year we are faced with the stark and unpalatable fact that there has been a serious decline in the number of young men and women being trained in the various branches of the construction industry. Although the Minister may boast about the recovery in the industry, the facts are rather different — as evidenced by the decline in industrial training.
  A tragic decline in apprenticeships has taken place during the past five years. In 1979 there were 155,000 industrial training apprentices; in 1980, 149,500; in 1981, 147,600; in 1982, 123,700, and for 1983 the figure has fallen to 99,000. In the construction industry, the figure for 1979 was 12,431; for 1980, 14,035; for 1981, 11,435; for 1982, 9,291, and for 1983 the figure is down to 7,971. Those figures belie the Minister's attitude tonight and illustrate the fact that the work of the construction industry training board faces great difficulty because of the background of decline. The figures echo and highlight the Government's appalling record on training at every level.
  I spent many years in higher education, and I have knowledge of what some Conservative Members like to call the education and training industry. At whatever level we look—whether universities, polytechnics, colleges of further education, technical colleges or comprehensive schools — there is not a segment where the Government's influence has been beneficial. Indeed, for every aspect of training, especially the industrial training boards, the Government's record since 1979 has been a disaster.
  I represent the textile industry, and I feel strongly about the decline in industrial training boards. There are lessons to be learnt from the order. It applies to one of the few remaining industries that have training boards. I was present in the House when the dagger that pierced the heart of the textile industry industrial training board was delivered by the Minister from the Government Dispatch Box. We must learn from the demise of our industrial training boards. The CITB which has survived is doing a good job in difficult circumstances.
  Hon. Members should take the opportunity to peruse the CITB's guide to its work, edition No. 5, 1982–83. They cannot but be heartened by a group of men and women left to carry on the industrial training of their industry against the background of economic collapse, who are trying to pursue in any way they can means to keep the heart beating in the construction industry. One only need read some of the CITB's recent press releases to realise how problematic survival is in the construction industry today. In many ways the CITB has illustrated what, even in poor circumstances, an industrial training board can do and what a potential for innovation this board has. The record of——
  Mr. Deputy Speaker (Mr. Paul Dean): Order. I am sorry to interrupt the hon. Member, but he is going rather

  965
  wide. I am assuming that his remarks are a preamble, but the order is about the levy and the method by which it is assessed. I hope that he will come to that quite quickly.
  Mr. Sheerman: I can quickly tie up the subject of the levy with the record of the CITB, which has been one of great enterprise; and the levy, which has been increased over the years, has been used to embrace developments in Government strategy and in moves by the Manpower Services Commission to produce new training initiatives. When we remember that the levy has been used to produce the largest single youth training scheme, we see what benefits can be achieved, in co-ordination with the MSC.
  It is a pity that all the industrial training boards are not still in existence; they have been savagely struck down by the Government. Were they still in existence, they would be able to achieve the same results. The Government must face the fact in respect of this levy—and, naturally, the Opposition will not oppose them in this matter—that if those boards were still around, we should stand a better chance, even with a Conservative Government, of salvaging what was left of a proud industrial training heritage.
  We can detect some real problems at the heart of the CITB and the way in which the levy is being used. It has been rather frustrated in the use of its levy by the decline in the construction industry in the last four years. It has used the levy to try to stem the catastrophic drop in apprenticeships and training that has taken place in what I call the regular training side of the industry.
  Consequently, out of frustration, the CITB has thrown itself into initiatives involving the youth training scheme. I would not gainsay that initiative, but I ask the Minister to note a problem that is emerging, a problem that occurs when a body like the CITB is given a job to do and, as with many industrial training boards, uses the levy to train for skills for the industry as the board knows it, so to speak. When one examines the dilemma that that produces, one cannot be surprised at the terms of a press release dated 22 November from the chairman of the CITB entitled "Hands off Construction YTS. Warning to Manpower Services Commission." That gentleman, who has been entrusted with the chairmanship of the CITB and responsibility for the levy, said:
  "Training a craftsman in the construction industry involves training in a wide range of skills, and in this context I would like to know exactly what the MSC are talking about when they ask us to bring in broad-based training in 1984."
  He went on:
  "I have seen broad-based training in Europe and I am certain it is not what the British building industry wants and would stand for."
  He continued:
  "Under some European systems, trainees do not know until the end of the last nine months of a three-year apprenticeship exactly what craft they will specialise in."
  Then he said pointedly:
  "I ask you: what builder wants that? To my mind, a builder wants a bricklayer who is a bricklayer, a carpenter who is a carpenter, a plasterer who is a plasterer, and so on. He wants a craftsman who can do his work efficiently and effectively and has been properly trained to the standards which will enable him to do so."
  Finally, he said tellingly:
  "I can tell you what the builder does not want for the standard of work required today. He does not want the MSC's idea of a general handyman expensively trained by the taxpayer turning up on site and giving the service of a Jack or Jill of all trades and a master of none and incompetent at his so-called craft."
  966
  We can see some difficulties if the levy is to be used in that way. An industrial training board is traditionally geared towards training for skills, but out of frustration it is increasingly involving itself in a different programme which will provide a different product.
  There is conflict in the case of the CITB, and I hope that the Minister will turn his attention to that aspect, which puts the CITB and any traditional training body in a dilemma. I believe that the type of bitter exchange between Mr. Leslie Kemp and the MSC is something to which the Minister should turn his attention.
  The chairman of the CITB wants trained, skilled men for his industry, and as he cannot achieve that by normal methods he is attempting to do so through a powerful commitment to the YTS. There is bound to be a conflict, and I believe that it underlines the lack of precision and coherence in the Government's industrial training strategy. I believe that the MSC rightly sees the YTS as a general non-specific training scheme whereas the CITB wants to continue training for the skills that the construction industry must have if there is to be a recovery within the industry.
  Mr. Andrew Rowe: Does the hon. Gentleman agree that there is room for compromise? For too long there has been a belief that specialist training in a narrow craft must take a long time. The MSC is trying to introduce a broader-based training which will provide an effective base for a more rapid training skill. If one studies the work done by the armed forces in my constituency, one sees the high level of skill that they achieve within a short time. The MSC's operation is overdue and worth having.
  Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will not stray into the question of training. This is a comparatively narrow order which deals with a levy and the way in which it should be assessed.
  Mr. Sheerman: I have been guided, Mr. Deputy Speaker, by the way in which the debate on this levy has gone during the past four years. I do not want to stray into a general debate on training, but I believe that it is important to point out that the levy goes towards a training system in an industry that is vital to our economic recovery. If the levy is being used in a way which does not further the CITB' s interests, it is of concern to the House and the country.
  As the hon. Member for Mid-Kent (Mr. Rowe) suggested, there are some interesting paradoxes. I am sure that we both agree that there is a lack of coherence in the Government's attitude towards training about which the Government should think carefully.
  If you would allow me, Mr. Deputy Speaker, there are two points of detail about which the industry is worried and which I should like to draw to the attention of the Minister. The first is that the levy is per capita rather than being a percentage of the payroll. There are voices in the industry who think that this bears down unfairly on the smaller firm; I am not referring to the small firm that is excluded because it is under the £15,000 limitation mentioned by the Minister in his introduction but the small to medium firms which believe that payment on a per capita basis in terms of skilled men works against them and in favour of the largest employers, the big builders and particularly the civil engineering side of the industry which employs fewer skilled men and more unskilled labourers.

  967
  I understand that in regard to the contract side of the levy that is met to some extent, but some in the industry would say there is not enough consideration of it.
  There is also a belief that the construction industry training board should use its levy to widen its powers specifically to organise, register and even indenture the apprentices and that it would be logical to use the levy and the CITB as the focus of the apprenticeship system and even for the modernisation of that system rather than leave it with the Building and Allied Trades Joint Industrial Council, which, according to some people in the industry, seems to be living in the past.
  We support the work of the CITB and its role in training over 100,000 people. It operates for 48 firms within the industry, and the levy is used well. It is another example of a training board which could not operate without the close co-operation of trade unions and employers. Much of the industrial fabric of the country, which so many people in the Government wish not to reveal to the public, could not work without the close co-operation of the modern trade union movement. We see this embodied in the construction industry training board and in the trade unions' co-operation in the Manpower Services Commission and their very great commitment to the youth training scheme and to training schemes for the future.
  Lord Carr talked about the desperate need for a better vocational training system and the great lack of that system in the past. We must turn our attention to that. The Government should reflect on the success of and the prospects for the CITB and consider bringing back the other industrial training boards so that they can produce levies for them, too, in late-night motions like this.
  1.4 am
  Mr. Peter Morrison: I am grateful to the hon. Member for Huddersfield (Mr. Sheerman) for supporting the order. I am particularly grateful to him, as I am sure the construction industry training board will be, for the praise which he heaped on both the board and its staff for the amount of work which they have done over the years. As he will probably be aware, I keep closely in touch with the chairman of the board and the staff and I know that their commitment to training in the industry is very strong.
  If I got the hon. Gentleman's figures wrong, I apologise. He said that the number of apprenticeships in the industry had dropped. I agree. I was slightly at sea about the figure of about 7,000 which he gave for the year 1982–83. The figure available to me is 13,704. Perhaps the hon. Gentleman has drawn his figures from a different source.
  The hon. Gentleman also referred to the method of raising the levy. He will be aware that all members of the
  968
  board, including the Federation of Master Builders, agreed to the method of raising the levy this year. I appreciate that other points may be made in future, but this year all the members totally agreed.
  The hon. Gentleman commented on how the apprenticeship system within the industry should be focused and organised. I hope that he agrees that it is better that the industry, with the construction industry training board playing an integral and important role, should make up its own mind about the best way to proceed in the future.
  I entirely agree with my hon. Friend the Member for Mid-Kent (Mr. Rowe). We want to get away from time serving and the age of entry and concentrate on standards. That is also the wish of the CITB. I am, Mr. Deputy Speaker, aware of your warnings about straying outside the remit of the order, but the interrelationship between the youth training scheme and the apprenticeship system under the CITB is important to what both are trying to achieve.
  The youth training scheme is a flexible foundation course on which further skill training can be built. Despite what the hon. Gentleman said about the press release from the chairman of the CITB, I have no doubt that the board and the Manpower Services Commission are at one on what they wish to achieve in terms of initial skill training built upon the youth training scheme. I assure the House that I shall be working towards that in the next few months.
  I am grateful to the CITB for the important part it plays as the managing agent for more than 20,000 places on the youth training scheme. The youth training scheme is at an early development stage and is, therefore, something on which we can build and from which we can all learn. Nevertheless, it is flexible — an attitude which the industry and managing agents should adopt.
  I am grateful to the hon. Gentleman for his support. I am sure that the CITB and the Manpower Services Commission will be grateful to him for his constructive attitude to the methods by which both bodies are pursuing youth training. I therefore commend the order to the House.
  Question put and agreed to.
  Resolved,
  That the draft Industrial Training Levy (Construction Board) Order 1983, which was laid before this House on 2nd December, be approved.

  JOINT COMMITTEE ON CONSOLIDATION, & c., BILLS
  Ordered,
  That Mr. David Ashby, Mr. Tony Blair, Mr. Richard Body, Sir Nicholas Bonsor, Mr. Greville Janner, Mr. Ivan Lawrence, Mr. Humfrey MalMs, Mr. John Morris, Mr. Barry Porter, Mr. John Ryman, and Mr. Gary Waller, be members of the Joint Committee on Consolidation, & c., Bills.—[Mr. Cope.]
  Message to the Lords to acquaint them therewith.

  Law of the Sea (United Nations Convention)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]
  1.9 am
  Mr. Dick Douglas: At this early hour of the morning, I feel a little hesitant about raising the important subject of the United Kingdom's attitude to the United Nations Convention on the Law of the Sea, but that is the way in which the House works, or fails to work.
  My interest in the matter is well known to the House. I served on the Committee dealing with the Deep Sea Mining (Temporary Provisions) Act 1981. I have consulted a large number of people on the matter. However, the views that I express are mine and thus unencumbered by departmental or other interests. I do not wish to be personally offensive to the Minister, but I doubt whether he will express views that are as unencumbered or whether he will express the views of the majority of Government Departments or involved United Kingdom interests. I suspect that the House will hear not the Minister's views but the views of the Prime Minister and one or two individuals supported by some mining groups.
  As the House knows, on 10 December 1982 the United Nations Convention on the Law of the Sea was opened for signature. The Prime Minister remarked recently on the difficulties of getting 10 nations to see eye to eye. How much more difficult it is, therefore, to obtain agreement among over 100 nations. It is a measure of the achievement of the United Nations that on the first day when the treaty was opened for signature, 119 nations signed—a record in international legal history.
  However, among the nations withholding signatures were the United Kingdom and the United States and some other industrialised nations, including the Soviet Union. In a statement to the House on 2 December 1982, the Minister made it plain that the Government's major objection related to part XI of the treaty, dealing with the regime for seabed mining. Countering the point that I made, the Minister said:
  "American and British companies must speak for themselves. I am not aware of any public statements that they have made in the United States, in Europe or elsewhere in which they have called for the proposals of the law of the sea convention to be accepted by nation States." — [Official Report, 2 December 1982; Vol. 33, c. 408.]
  The operative word is "public". The Minister must have known or been aware of a closed meeting that took place at Lancaster House in early November 1982. I suspect that he attended it.
  The minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): I chaired the meeting.
  Mr. Douglas: Such are the guarded statements of lawyers, particularly Scottish lawyers.
  The minister said that he was not aware of any public statements. That is true—there was no public statement. At the meeting, which the hon. Gentleman chaired, a number of parties were invited to put their views to a committee of Ministers drawn from the Foreign and Commonwealth Office, the Department of Energy, the Department of Trade and the Treasury. A reliable commentary on the proceedings suggests that both Shell and British Petroleum, which have relationships with
  970
  consortia associated with investigations of the ocean bed's mineral resources, were in favour of the United Kingdom signing the treaty. Also in favour were the General Council of British Shipping and the Advisory Committee on the Pollution of the Sea, and, although less prominently involved, Brindex also supported the general line. Opposing, it is suggested, were Rio Tinto Zinc, Consolidated Goldfields and organisations representing British patent holders' interests. Last but not least was British Steel, in the person of Mr. Ian MacGregor. It seems that virtually all the Departments, including the Foreign and Commonwealth Office, the Department of Energy and the Ministry of Defence, were in favour of signing. It appears that the major stumbling block came from the then Department of Industry, the views of which reflected mining interests and those of Mr. MacGregor
  Mr. MacGregor is a Scot by birth but an American by choice. His views on this matter reflect doctrinaire United States opinion rather than the wider concerns of the United Kingdom. It is perhaps surprising that he has such a ready listener in the Prime Minister. A possible reason for that is that they share a detestation of possible enterprise and thus consider that the International Sea Bed Authority, as proposed by part XI of the treaty, would be public enterprise writ large on the international scene. I shall not suggest that the International Sea Bed Authority and other provisions of part XI are perfect. Some aspects of it might be altered but I am willing to go into more detail on that when time permits.
  The prime Minister has expressed doctrinaire views on the matter in the House. The suggestion that opposition to the treaty arises because of the seabed mining provision does not gel when we consider the whole treaty. We see from the introduction that the United Nations regards the treaty as a package deal.
  Perhaps wiser spirits are guiding the Government as they have adopted a much more cautious approach The line seems to be that we have signed the final Act and therefore we can take part in the work of the preparatory commission, albeit without a vote, and, at all events, the treaty remains open for signature for two years. We have a two-pronged or dual approach to the problem.
  Commercial and defence shipping will obtain the necessary protection through customary law. That will protect non-contracting states. However, the General Council of British Shipping, the views of which ought to weigh heavily with the Government, does not share that view. It lists the provisions on freedom of navigation and pollution and agrees that they are considerably in advance of the present regime for several reasons. First, it establishes the width of the territorial sea at 12 miles. Secondly, it defines innocent passage and makes it clear that coastal states cannot make regulations with regard to design, construction, and equipment and manning which affect foreign ships in innocent passage unless they are implementing international agreements. Thirdly, it sets up a regime for straits. Fourthly, it establishes a regime for archipelagos. Fifthly, it provides sanctions for pollution offences to financial penalties except in circumstances of wilful and substantial pollution in the territorial sea. Sixthly, it imposes duties on states to preserve the marine environment.
  The council concluded that, while some aspects of the treaty might take an international norm, most of the important points that I have mentioned would nor. It said:

  971
  "If there is no convention, there will be no beneficial development and we can expect unilateral legislation, lacking the balance obtained by negotiation."
  The council
  "strongly recommends signature and eventual ratification of the Treaty."
  Enlightened opinion in the United States is that that country is making a mistake in not signing the treaty. Elliot Richardson, former United States ambassador to the United Kingdom, said recently:
  "The real importance of the Law of the Sea Convention cannot be found either in the sum of its parts or in its extraordinarily comprehensive whole. It lies rather in its demonstration of the capacity of 160 sovereign states to work out accommodations among vital competing interests. This is an achievement whose significance will loom even larger as the world increasingly finds itself forced to come to grips with its own inseparability."
  Both Elliot Richardson and, in his own way, Leigh S. Ratiner, have unique experience of these negotiations, and, as the latter said:
  "the guardians of pure conservative ideology may have won a battle when the United States stood alone at the Law of the Sea Conference, but the United States may lose a very important war."
  My concern is that the United Kingdom, through the Prime Minister's adherence to such ideology, may involve us also in the loss. This is a package deal, and the Government must answer the following questions. First, why are we alienating international opinion? The vast majority of Commonwealth members have signed the convention, and may move towards ratification. We are alienating international and political opinion.
  Secondly, what are the advantages attached to our trying to go it alone, albeit proceeding towards a mini treaty for seabed mining operations, based on ourselves and other nations having independent legislation? I have asked several questions about the legislation, and I have received cryptic and corrected answers.
  A letter dated 17 November from the Overseas Development Administration states:
  "Applications for licences have been received under this Act. But for the time being, both for technical and for economic reasons, no one is commercially exploiting the seabed either under national legislation or under the Convention."
  Although I recognise that we are dealing with future developments, I do not envisage any company risking economic, financial and technical resources to exploit the deep ocean bed purely because of the legislation of individual nations. We are aligning ourselves with the United States for reasons that are difficult to grasp. I argue that it is against our national advantage to do so.
  We are alienating international opinion and proceeding in a way which is inimical to our economic position. Moreover, we are a major maritime nation, and there is no guarantee that we would continue to enjoy the so-called customary and conventional rights of passage which we have enjoyed, especially the passage through various straits, if we did not sign the convention.
  I appreciate that the Minister will argue and suggest that we are doing well in the preparatory commission, and that we are influencing events, but it would be much better if we signed the convention and took a full part in the preparatory commission. In those circumstances, our persuasive voice would be heard all the more.
  To sign the treaty would be to the United Kingdom's best advantage. Much has been heard from the Prime
  972
  Minister and from Conservative Members about adhering to the domestic rule of law. I challenge the Government to adhere to the international rule of law, to support the principles of international law and the common heritage of mankind and to sign the convention and thus ratify the treaty.
  1.18 am
  The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): I congratulate the hon. Member for Dunfermline, West (Mr. Douglas) on his good fortune in having this subject chosen for debate, even if it is at such an unfortunate hour.
  The hon. Gentleman began by expressing interest as to whose views I would be putting forward. The views that I shall express will be mine. It so happens that they coincide with the views of the Government, and perhaps the hon. Gentleman is entitled to assume that they coincide with the views of my right hon. Friend the Prime Minister. I am sure that the House would take great pleasure in such a happy combination of circumstances.
  The hon. Gentleman referred to a remark that I made when making the statement to the House on 2 December 1982. He questioned my justification for saying that I was not aware of any public statements that had been made in support of signing the convention. He then chose to quote from what he perceived to be a discussion at Lancaster House. He will appreciate that that is an important location for great occasions.
  However, if the hon. Gentleman re-reads what I said on 2 December 1982, he will see that I was saying that no deep seabed mining companies had shown any enthusiasm for the convention or any desire to see it signed. I was not suggesting then, and am not suggesting now, that there are not other interests, and possibly other companies not involved in seabed mining, that might wish to see the convention signed for their own reasons. However, there is no reason to qualify in any way at this stage what I said then, which was that that does not apply to those companies that might be or have been involved in anything connected with seabed mining.
  Mr. Douglas: The Minister should not be so evasive. Which seabed mining consortia were present at Lancaster House?
  Mr. Rifkind: I am not prepared to give the hon. Gentleman details of private meetings, and he should not expect me to do so. If he thinks that he has good sources of information on the subject, he can quote them. I shall be even more explicit. I am not aware of any companies involved in deep seabed mining that have said either publicly or privately that they wish to see the convention signed. I have made that clear to the hon. Gentleman.
  The Government's view has been quite clear from the beginning. We would have liked to see a convention that not only met our own requirements and which we could have signed but which would attract an international consensus and could therefore have been endorsed by the international community. However, that did not prove possible, not just because of ourselves or the United States of America but because a very significant number of countries felt unable to sign the convention.
  The hon. Gentleman made various references to particular interests that have shown their support for the convention. That does not come as a surprise to me or to

  973
  the House. I mentioned that in the statement that I made on 2 December 1982. I said that there was a significant number of provisions in the convention that were acceptable to the United Kingdom, and that parts of the convention, for example those relating to navigation, the continental shelf and pollution, were helpful. I ended my initial remarks by saying:
  "I should emphasise to the House that we could not participate in the seabed regime on the present terms and for that reason we could not ratify the convention unless the provisions for the deep sea mining regime become satisfactory."—[Official Report, 2 December 1982; Vol. 33, c. 404.]
  Therefore, the Government have made it abundantly clear from the beginning that we do not in any way question that there are parts of the convention that are helpful and are certainly acceptable. If that was all that we had to decide about, we would have been happy to sign the convention. However, we have made it clear that the provisions on deep seabed mining do not fall into that category, are fundamentally unacceptable and unattractive to the Government, and that as we have no choice but to sign the convention as a whole—we cannot sign parts of it and decline to accede to others — and attach importance to the seabed mining provisions, we have been unable to sign.
  I am sure that the hon. Gentleman is already aware of those aspects of the seabed mining regime that we found unattractive. There are several of them, but I shall briefly mention one or two. The provisions involve the establishment of an international seabed authority. It is a substantial and expensive bureaucratic structure that would involve particularly industrialised countries such as the United Kingdom in very substantial initial capital expenditure and continuing expenditure on items that relate not to the enterprise's profitability but simply to the creation of a major international organisation that would no doubt provide large-scale employment for those administering it but which would not have any direct impact on the profitability of deep seabed mining. That is a major problem. Thus the bureaucracy and the expense should be borne in mind.
  It has been clearly demonstrated by the relatively small number of companies and countries that would take part in deep seabed mining that they regard the provisions as being a profound disincentive to making the massive investment required if deep seabed mining is ever to become a reality.
  The hon. Gentleman made great play about the large number of countries that had signed the convention. He will be aware that a high proportion of them are either landlocked, with no direct interest in the law of the sea as such——
  Mr. Douglas: India.
  Mr. Rifkind: —or they are countries which, for the most part, do not have either the will or the ability to involve themselves——
  Mr. Douglas: New Zealand.
  Mr. Rifkind: The hon. Gentleman should allow me to finish my remarks as I allowed him to finish his—or they are countries which, for the most part, do not have either the will or the ability to involve themselves in deep seabed mining. They have no price to pay. They would be the beneficiaries of the activities of other countries' companies and industrial structures.
  Mr. Douglas rose——
  Mr. Rifkind: If the hon. Gentleman wishes to intervene, he knows the normal procedure for doing so.
  Mr. Douglas: We have heard these arguments before. We heard them during the debate on the Deep Sea Mining (Temporary Provisions) Bill. The countries preparing the convention in a way covered them because in terms of initial investment massive compensation and "privilege" is given to the consortia and the nation states which embark on the technological innovation of deep-sea mining. That is the provision of the treaty at present.
  Mr. Rifkind: I am sorry that the hon. Gentleman thinks that I should apologise for the fact that he has heard the arguments before. The hon. Gentleman has put his case before. I plead guilty to consistency because it would be rather astonishing if I gave completely different answers from the ones that he has had before to exactly the same questions. I do not think that he would consider that a more satisfactory response than the one he is presently receiving.
  These are factors of major importance which have led to most of the countries concerned—even some of those that have signed the convention—making it abundantly clear that they have not the slightest intention of ratifying it unless there are major changes. The United Kingdom Government, as a matter of general principle, do not believe it right and proper to sign an international agreement unless they expect to be able to ratify it at the end of the day.
  Mr. Douglas rose——
  Mr. Rifkind: The hon. Gentleman may intervene if he wishes, but he should let me make my speech in my own way.
  A number of other Governments do not approach these matters in the same way. They feel able to sign conventions or international treaties even when they have come to a view that it is improbable or impossible that they will ultimately ratify unless there are major changes. We believe it wrong to approach matters in that way. We believe it right to sign a convention only if we expect to ratify when ratification becomes appropriate.
  Not only the points that I have mentioned led o the Government's decision. There are also the provisions on the transfer of technology which are unattractive to industry and which the hon. Gentleman appears to acknowledge as being an important and relevant consideration. There is the provision about the review conference after 15 years that could lead to even some of the safeguards and some of the concessions that were made during the convention being overruled and replaced irrespective of the wishes of those countries that will be involved in deep seabed mining operations. This adds up to a package of disagreeable and unattractive provisions, unnecessarily bureaucratic and extremely expensive for those countries that will be involved. That is an important consideration which we have had to bear in mind.
  Both this evening and on previous occasions the hon. Gentleman has suggested that the United Kingdom, in deciding not to sign the convention, was motivated solely by its desire to be in step with the United States of America and that this is the sinister explanation, irrespective of the arguments that may be used. Not only the United Kingdom but a total of 37 countries have refused or declined to sign the convention. Although some of them are allies of the

  975
  United States, I think that the hon. Gentleman would be unwise to suggest that this is the dominant criterion. He may like to know that among the countries that have so far declined to sign the convention are Albania, Libya and Syria—not countries that one automatically thinks of as being anxious to appease the United States and to be in step with its foreign policy.
  As I have said, 37 countries have declined to sign the convention. They include half the European Community — major countries such as the Federal German Republic, Belgium, Luxembourg and Italy. These countries have not decided irrespective of the arguments to be in step with the United States.
  I am sad to say that there is no consensus. A number of countries have concluded — some because of the seabed provisions and some because of other considerations relevant to them—that they cannot identify with the convention in its present form.
  The hon. Member for Dunfermline, West asked why we were alienating international opinion. There is no single international opinion on such a matter. The hon. Gentleman would be the first to criticise the United Kingdom if we took the view that what he calls international opinion was more important than the United Kingdom's national interest. Each country which signed the convention perceived that it was in its national interest to be in favour of such action.
  Mr. Douglas: How does the United Kingdom get the advantages of the major provisions in the treaty, particularly in relation to the seagoing aspects, without signing the convention?
  Mr. Rifkind: Signing the convention does not give any rights. Only when the convention is ratified are rights given. It is an important distinction. There is no question of the convention being ratified for some time. About 60 countries must ratify the convention before it comes into
  976
  force. So far, fewer than a dozen countries have ratified. The countries which ratify will have to take into account the major financial burden that will fall upon them. That will be an important consideration. A number of countries which have signed the convention have said that they are unlikely to ratify unless major changes are made.
  We do not lose any opportunities, even if substantial, unless and until the convention is ratified. That is not likely to be in the immediate future. Customary provisions continue to apply not only to the United Kingdom but to the international community.
  There are some doubts about the question of navigation. We find the convention helpful in that it clarifies the provisions and removes the doubt. If that could be taken in isolation, it would justify signature, but it is not the end of the world if we are unable to take advantage of the provisions because the customary law will continue to apply. For the most part it meets our requirements.
  We have not boycotted the convention, unlike the United States, which has refused even to send observers to the preparatory commission in which we are playing an important part. We hope that in time states which have signed the convention will show a willingness to consider significant changes to the seabed mining regime. Perhaps we are aiming at an unrealisable objective, but that is our objective. The United Kingdom, half the Community and many other states are hoping that this is the best way to make progress.
  I do not disagree with much of what the hon. Gentleman said about the other aspects of the convention. If that is his only case, he is knocking at an open door and there is no disagreement. We must either accept the convention in full or decline to accept it. For the reasons that I have explained——
  The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-two minutes to Two o'clock.

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  Nuclear War (Health Care)
  Neonatal Intensive Care Cots
  Neonatal Intensive Care Cots
  Solvent Abuse
  Solvent Abuse
  Disablement Benefit
  Disablement Benefit
  Social Security Advisory Committee
  Social Security Advisory Committee
  REGULATIONS MADE WITHOUT PRIOR REFERENCE TO SSAC UNDER SECTION 10(2)(a) OF THE SOCIAL SECURITY ACT 1980, AS AMENDED
  REGULATIONS MADE WITHOUT PRIOR REFERENCE TO SSAC UNDER SECTION 10(2)(a) OF THE SOCIAL SECURITY ACT 1980, AS AMENDED
  Hearing Aid Services, Nottingham
  Hearing Aid Services, Nottingham
  Fluoridation
  Fluoridation
  Private Health Insurance
  Private Health Insurance
  Committee on Safety of Medicines
  Committee on Safety of Medicines
  Deaths (Industrial Disease)
  Deaths (Industrial Disease)
  Unemployment and Para-suicide (Research)
  Unemployment and Para-suicide (Research)
NORTHERN IRELAND
  Salmon
  Salmon
  Caugh Hill (Chemical Spillage)
  Caugh Hill (Chemical Spillage)
  Primary Schools (Pupil Numbers)
  Primary Schools (Pupil Numbers)
  Construction Industry
  Construction Industry
  Border Crossings
  Border Crossings
  Terrorist Activity
  Terrorist Activity
  Public Expenditure
  Public Expenditure

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.
Viscount Tenby—Sat first in Parliament after the death of his brother.

Prisons: Standards
Lord Hunt: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the state of progress towards publishing a code of standards for prisons.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, my right honourable and learned friend wishes to proceed with this matter in the context of his new policies for improving the amount and quality of prison accommodation. He proposes to begin by publishing next year an account of the standards used in building new establishments.
Lord Hunt: My Lords, while thanking the noble Lord the Minister for his Answer, may I ask whether he recalls that 18 months ago—on 22nd June last year—during the Committee stage of the Criminal Justice Bill, he informed the House that his right honourable friend the Home Secretary had asked the prison department to prepare a draft code of standards as a basis for discussion; and that he anticipated it would be published in the currency of this year—in 1983? Does the Minister further recall that his honourable friend Sir Patrick Mayhew in another place, in replying to a Written Question by Mr. Kilroy-Silk, also anticipated that the code of standards would be available in 1983? Is it not high time that your Lordships' House should have an opportunity to see that document and to approve it, in view of the scandalous conditions which persist in many of our prisons, as illustrated by a recent BBC film on conditions in Brixton?
Lord Elton: My Lords, I recall the exchanges in this House quite clearly, and I am aware of the exchanges in another place. We have decided that the best way to proceed is the one I have described; but because we have changed the method, it will take a little longer than intended. We intend to publish the exact details of what we are now doing, and the noble Lord's views on those will be welcome.
Lord Donaldson of Kingsbridge: My Lords, is the noble Lord the Minister aware that it is generally thought by people who are interested in these affairs that the present standards as maintained in Her Majesty's prisons are well below the standards
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demanded in the European Community, and therefore that any delay is really not acceptable? This sounds far too slow a method of progress.
Lord Elton: My Lords, what makes a difference is money and activity. We are launching the biggest prison improvement and building programmme of any Government this century. We are reducing the length of time it takes to create a new prison by up to 18 months. These factors will alleviate the conditions in prisons. That does not mean that I do not think the standards are important or that the views of the noble Lords should not be known as soon as they are available.
Baroness Sharples: My Lords, can my noble friend assure the House that thought will be given to the wives and children when they visit prisoners?
Lord Elton: Yes, my Lords. Every prison has a visitors' complex and our experience with the old prisons gives us a clear indication of the mistakes to avoid in the new prisons.
Lord Avebury: My Lords, can the noble Lord the Minister confirm, as he told me in a recent answer to a letter about the floor area of cells in dispersal prisons, that the floor area has in fact been reduced in prisons constructed most recently, and that there was no reason for this in terms of the standards which prisoners should enjoy? Will the Minister also say what he considers should be the minimum temperature which is experienced by prisoners in the dispersal system, and why he recently suggested to me in a letter that if prisoners did not like the cold in the strip cells at Parkhurst they should put on more clothes?
Lord Elton: My Lords, I cannot agree with the noble Lord's first two allegations. I should like to reflect on what it is that he is implying. I am not clear about that, but the noble Lord seems to be saying that the standards of provision we now have in view are lower than those we have had in the past; and that is not so. As to the temperature and other details, they will be for discussion later when the standards are published. As to the individual case mentioned by the noble Lord, it seemed to me sensible that as the prisoner in question had clothing available, if he thought the cell was too cold he might have worn it.
Lord Mishcon: My Lords, does the noble Lord the Minister realise that the anxiety of this House on all sides exists because of the lamentably low standards that at present exist? Does he remember not only the discussion at Committee stage—as the noble Lord, Lord Hunt, reminded him—but also the resistance to an amendment regarding standards which was answered by the promised publication of the standards? Lastly, may I ask the Minister whether he does not realise that the excuse given—namely, that of expense—may apply to the application of standards, but does not apply to the publication of those standards with reasons being given why they cannot be implemented at once? Will the Minister therefore try to expedite the matter?
Lord Elton: My Lords, I am not in the business of making excuses. I am acutely aware of what conditions are like in prisons because I visit a great many of them. I do not need your Lordships' urging to realise that this is a serious, important, and, in many cases, a tragic position in which we find ourselves. Perhaps I ought to remind your Lordships of the very large programme we have now initiated at a time of financial stringency, when other departments are cutting back, to rectify the situation in terms both of physical provision and of manpower. Anything I can do towards expedition I will do.
Lord Mishcon: My Lords, may I just ask the noble Lord the Minister whether, with his usual courtesy, he will answer my last question: why must there be any delay in the publication of what the standards should be? One would accept thereafter the reason for not implementing those standards for some time.
Lord Elton: My Lords, I am grateful to the noble Lord, Lord Mishcon, for reminding me of his last supplementary question. The material from which we have decided to draw the publication is voluminous and complex and will have to be reduced to manageable terms for the public. I had the same reservations as the noble Lord when I found that we could not publish as soon as I wished. I can assure him that it will be done with the greatest despatch at my command.
Lord Hatch of Lusby: My Lords, the noble Lord will recall that I recently asked him a question about Holloway and he very courteously offered to have private discussions about this, which I hope to take up at a suitable time. May I ask the noble Lord one question about Holloway? Is he aware that, as I understand it, padded cells are not allowed to be used in Holloway Prison? Can he explain why that is, particularly in view of the fact that the evidence seems to suggest that a number of prisoners in Holloway have damaged themselves because of the lack of protection on the walls?
Lord Elton: My Lords, I do not wish to seem in any way discourteous or unfriendly to the noble Lord, but the Question is about the state of progress towards publishing a code of standards for prisons. The noble Lord obviously has particular cases in mind. I wonder if we could discuss this point at the same time?
Lord Hunt: My Lords, would the noble Lord accept that I understand that he is personally imbued with this sense of urgency which has been expressed from all sides of your Lordships' House? Would he further accept that I acknowledge that this is not a sin of omission of this particular Government, but that successive Governments over many years have failed to conform to the minimum standard rules laid down in the United Nations in 1955 and by the Council of Europe in 1973? In the light of that, would he bear in mind the additional urgency and urging that have been imparted to him during this exchange that we should expedite the action to conform with those two sets of rules, to both of which we are signatories?
Lord Elton: My Lords, of course I will take away the added sense of urgency the noble Lord wishes to
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impart. I should say that there are differences between European SMRs and those that we propose, in that ours will be rather more precise.

The Civil Service: Administration Trainees
2.45 p.m.
Lord Rochester: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the position regarding the recruitment of graduates as administration trainees in the Civil Service.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, not altogether. Although nearly twice as many administration trainees have been recruited this year compared with 1982, a shortfall remains. The Civil Service Commissioners are, however, accelerating the selection process, strengthening their graduate liaison arrangements and publicising the competition more widely, in order to improve the position.
Lord Rochester: My Lords, I thank the noble Earl for that reply. Does he agree that the management of change, and in this case of contraction, calls for special skills and qualities of leadership? If graduates of the required potential are not coming forward in sufficient numbers to achieve the Government's objectives, what is being done to identify the reasons and to put things right?
The Earl of Gowrie: My Lords, there are two points at issue here. Part of the shortfall, in spite of the improvement I mentioned, is, I think, welcome to this degree: that it is a product of increasingly keen competition among employers for able graduates as the economic position is improving. Of course, we would not want it to be otherwise. In terms of our reponse, we are, of course, implementing Sir Alec Atkinson's report, which was received earlier this year and which is designed to gain wider publicity for the scheme and to improve our liaison in universities, particularly in the newer universities.
Lord Glenamara: My Lords, can the noble Earl say how many graduates have been recruited from the polytechnics? They produce graduates as well as the universities.
The Earl of Gowrie: My Lords, I am grateful to the noble Lord, Lord Glenamara, for that correction. In fact Sir Alec Atkinson did recommend vigorous efforts at the polytechnics, and that is taking place.
Lord Beswick: My Lords, is one factor in this the low morale of the Civil Service generally, and the fact that the reputation, spirit and idea of public service have been denigrated so much in the last two or three years by the present Government? Is not that having an effect upon recruitment?
The Earl of Gowrie: My Lords, I think that is a most extraordinary suggestion. The Government

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enormously value the contribution of civil servants and admire their professionalism. That the Government should be putting its own house in order in terms of manpower and other costs is in no way a denigration of the efforts of those who work in the Civil Service.
Baroness Fisher of Rednal: My Lords, may I ask the noble Earl whether he can give us the percentage of female graduates included in graduate recruitment?
The Earl of Gowrie: My Lords, as I am sure the noble Baroness will be aware, there is no bias against women in the selection process. My advice is that over the last decade women have filled something like one-third of the administration traineee vacancies. This proportion is roughly in line with the proportion that women form of newly qualified graduates generally, and therefore the position is equitable, though we should of course like to see it improve.
Lord Leatherland: My Lords, if the Government have such a very high opinion of civil servants, why are they at present engaged in the wholesale sacking of them?
The Earl of Gowrie: My Lords, if the noble Lord, Lord Leatherland, would care to parade in front of me a lot of sacked civil servants I shall be delighted to deal with the issue. I think he will find them hard to find.

Heating Benefit
2.50 p.m.
Baroness Gardner of Parkes: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the present sum claimable as a "heating addition", and what are the criteria for eligibility; how many people received additions in 1982–83 and what was the corresponding figure for 1978–79.
Lord Lucas of Chilworth: My Lords, the principal rates of heating addition paid to people on supplementary benefit are £2·05p or £5·05p. The circumstances in which these additions are paid are contained in Schedule 4 to the Supplementary Benefit (Requirements) Regulations 1983. Broadly speaking, heating additions are paid to supplementary benefit claimants who need extra warmth because of age or because they are in poor health; to those who consume more energy because their homes are hard to heat; and to those who have central heating in their homes. This is all set out in the simply-written leaflet, Help with Heating Costs, which is available from the DHSS and also from post offices. In 1978 about million people received these heating additions. In December 1982 the figure was 2½ million.
Baroness Gardner of Parkes: My Lords, I thank my noble friend for that Answer. Can he tell me how this increase in the heating addition compares with the rise in the cost of fuel prices in that same period since 1978?
Lord Lucas of Chilworth: My Lords, supplementary benefit heating addition rates are now at the highest real level that they have ever been. Since 1978, fuel prices have risen by a little under 100 per cent., while heating additions have gone up by 140 per cent. They were recently increased, in November of this year, in line with the 8·6 per cent. increase in the fuel element of the retail price index in the year to last May. The sum of £350 million is being spent this year on heating additions.
Baroness Jeger: My Lords, can the noble Lord say whether, in view of the muddle and delay over housing benefits, there is some delay for certain people in receiving their heating allowances because of the processing of the housing benefit claims? Can he tell the House who is supposed to assess the heating needs of people at a time when the Government are telling local authorities to cut their staffs? What is the delay between the application from a person for such an allowance and actually receiving it? How many claims are still waiting in this cold December and have not yet been processed? Would it not be a good idea for the Government to keep the charges down for everybody and spend more money on insulation and other housing improvements?
Lord Lucas of Chilworth: My Lords, I do not think that I can agree with the tenor of the series of questions put by the noble Baroness. The housing benefit scheme was introduced in 1982 through 1983, and there are few claimants now who do not have knowledge of what is their entitlement. There is an adjudicator within the Department of Health and Social Security who makes an assessment of the need. From January of next year there will be an application form (which, incidentally, has had a Clear English Award), and which can be used through the post. This will certainly reduce the amount of time it takes for a claimant to receive an authority. If the claimant is not satisfied with the adjudicator's decision, there is an appeal process. I regret I cannot tell the noble Baroness how many people are currently waiting for a confirmation. My understanding is that it is not very many.
Lord Banks: My Lords, can the noble Lord say whether it is correct that the current heating additions at the two rates he mentioned are only enough to keep a two-bar electric fire on for two-and-a-half hours and six-and-a-half hours respectively?
Lord Lucas of Chilworth: My Lords, I am not able to confirm that as I am not an electrical engineer.
Lord Kilmarnock: My Lords, the noble Lord mentioned spending the amount of £350 million on heating additions, which is the same sum given by the noble Earl, Lord Avon, to my noble friend Lady Burton of Coventry recently. I have just received a letter from the noble Lord, Lord Glenarthur, saying that the abolition of standing charges for pensioners would cost only £300 million, which is £50 million less. Are the Government looking into this to see what is the right balance and the best way of achieving help to old people in their homes?
Lord Lucas of Chilworth: My Lords, I can confirm the figure given by my noble friend Lord Glenarthur to

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the noble Lord that the abolition of standing charges would cost £300 million. I can also confirm that, if the standing charge were removed, the £300 million would have to be recovered from other people and undoubtedly that would be the other consumers. It would be the rich who would benefit from such an abolition and not the poor. We believe that a better way to help the poor is through the supplementary benefit scheme and those additions to which I have referred.
Baroness Gardner of Parkes: My Lords, will my noble friend confirm that this is a heating addition and that it is not intended to bear the total heating bill? I ask that question in relation to the comment from the other Bench on how long it would run a fire. Will my noble friend also tell me how the Government's record compares with that of previous Goverments? What proportion of people on supplementary benefit obtain heating additions now compared with 1978?
Lord Lucas of Chilworth: My Lords, I can confirm to my noble friend that the addition is, in fact, an addition. There are basically two rates: £2.05p and £5.05p per week. That is in addition to any other benefit which might be received. There are, of course, certain criteria that must be met.
As regards the Government's record in this matter, this Administration introduced these additions for those over 70 years of age and under five years of age and the total rate has increased from, I think, 75 pence to the minimum figure of £2.05p, which is considerably more than has been achieved by any other Administration.
The last part of my noble friend's Question referred to numbers. In November 1978, 53 per cent. of all claimants received heating additions. This figure has now risen to 60 per cent. The proportion of pensioners and other persons on supplementary benefit receiving heating addition has risen from 70 per cent. in 1978 to 90 per cent. in 1982.
Lord Hale: My Lords, did the Minister say in replying to a previous question that he does not know anything about electricity and that therefore he cannot answer a perfectly reasonable question about the heating of a house? Does this mean that the whole of his staff knows nothing about electricity or other forms of heating? If so, would not another Minister who is fully informed serve the House better, if not the Government?
Lord Lucas of Chilworth: My Lords, I am sure that if the noble Lord, Lord Hale, reads Hansard tomorrow he will see that in answer to the question put by the noble Lord, Lord Banks, who asked me whether I would confirm that £2·05p would allow a two-bar electric fire to burn for, I think he said, two hours, I said that I did not know because I was not an electrical engineer. I do know something about electricity and I do know something about the costs. I can tell the noble Lord, Lord Hale, that those officials in my department know all about this. That they did not write that particular formula down for me is regrettable. I will certainly confirm whether the noble Lord, Lord
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Banks, is correct and advise the noble Lord, Lord Hale.
Lord Mishcon: My Lords, before the noble Lord the Minister gets too irate, will he acknowledge that the House was delighted to learn that a letter which is being sent out has received a Clear English Award? In view of the Question asked earlier by the noble Lord, Lord Rochester, would he care to inform the House whether this admirable letter was drafted by a graduate civil servant or a non-graduate civil servant?
Lord Lucas of Chilworth: My Lords, I assure the noble Lord, Lord Mishcon, that I am not irate but that if I am to be quoted I should like to be quoted correctly. Perhaps I should tell the noble Lord, Lord Mishcon, that I did not refer to a letter but to a claim form for supplementary benefit.
Lord Kilmarnock: My Lords, may I confirm that the figure of £300 million given by the noble Lord's colleague was for the abolition of standing charges for pensioners only and would not have the effect of spreading this benefit among people who did not need it?
Lord Lucas of Chilworth: My Lords, I regret that I have not seen the letter that the noble Lord has received from my noble friend. I shall certainly look at that and be happy to confirm the matter to him.
Lord Bishopston: My Lords, in answer to the Question asked by his noble friend Lady Gardner of Parkes regarding the records of this Administration and the previous one, why did the Minister not tell her that, thanks to the levy on gas and electricity, something like £1,000 million has been added to the bills paid by everyone, including pensioners? Does he agree that his concern to help the poor is hardly consistent with the proceeds of such a tax going to the Government and being designed eventually to help higher income groups by reducing their income tax?
Lord Lucas of Chilworth: My Lords, first of all, I did not mention the matter because it is not true, and neither did I think that it was relevant to the series of questions that my noble friend Lady Gardner of Parkes addressed to me.
Baroness Fisher of Rednal: My Lords, would the Minister look into the question of deaths from hypothermia and make sure that a study is made to see that those people who are entitled to the heating addition are taking up the benefit? Is it also possible for the department in some way to be more helpful to those who do not understand the system?
Lord Lucas of Chilworth: My Lords, during the debate on 8th December my noble friend Lord Avon gave figures with regard to deaths from hypothermia. It is regrettable that any death should be caused by hypothermia. I am assured that the department takes note of causes of death, particularly among elderly pensioners, especially those who live alone.
Baroness Ewart-Biggs: My Lords, will the noble Lord say whether the level of heating additions for

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which the citizens of Northern Ireland are eligible is the same or higher than that in Great Britain, as I believe heating prices are higher in Northern Ireland?
Lord Belstead: My Lords, this is an absorbing Question but I think that the next Question on the Order Paper is equally absorbing. Perhaps when my noble friend has answered the noble Baroness it will be time to move on.
Lord Lucas of Chilworth: My Lords, to my great regret I have to tell the noble Baroness that I am not able to answer that question; but I shall certainly find out and write to her.

The Falkland Islands: Records s
3.2 p.m.
Lord Avebury: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government for how long they have kept documents relating to the question of sovereignty over the Falkland Islands, borrowed from the Public Record Office; when they intend to return these documents, and why they have refused either to publish a list of the papers abstracted or to allow access to them in the Foreign Office where they are now being held, notwithstanding the fact that none of the documents was classified.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, matters relating to the question of sovereignty over the Falkland Islands continue to require the detailed study of records. To publish a list of records as requested would involve disproportionate expense. When records are no longer required they are returned to the Public Record Office.
Lord Avebury: My Lords, if it would involve disproportionate expense to publish a list of the records, does that mean to say that there is a vast number of them held in the Foreign and Commonwealth Office? Is the noble Baroness aware that when I spoke to the records administration office of the PRO yesterday I was told that a number of documents were still being retained but a decision was expected to be made shortly on their continued retention by the Foreign Office, depending on the political situation? Will the noble Baroness say what changes in our relationship with Argentina have to be accomplished before these documents will be returned to their rightful place?
Baroness Young: My Lords, on the first part of the noble Lord's supplementary question, I can confirm that in any one year about 5,000 documents are withdrawn from the Public Record Office by the Foreign Office and up to 1,000 may be held at any one time. To keep a record of all that would involve disproportionate public expense. As I have indicated, the documents are returned when they are no longer required.
Lord George-Brown: My Lords, is the noble Baroness aware that the Question relates to documents which the Government have borrowed from the Public Record Office and the reply that she has just made refers to documents in the Foreign Office? Therefore, am I not right in saying that there is no reason to borrow from the Public Record Office documents of which there are copies in the Foreign Office? As one who as a Minister was involved in all this over the years, may I ask her seriously to represent to the Secretary of State for Foreign and Commonwealth Affairs—who was erroneously referred to in the Daily Telegraph this morning as "Mr. Howe"—that the Foreign Office could return to the Public Record Office the documents borrowed from there and rely upon the documents in its own department?
Baroness Young: My Lords, I am sorry to tell the noble Lord, Lord George-Brown, that he has misunderstood the position. The documents to which I have referred were originally in the Foreign and Commonwealth Office. They were sent to the Public Record Office and have subsequently been withdrawn from the Public Record Office because they are required in the Foreign and Commonwealth Office. When they are no longer required, they will be returned to the Public Record Office.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness be good enough to say, first, whether these documents are at the present time classified? Why are they not being returned? What is the reason? Secondly, will she be good enough to clarify what she said about sovereignty in reply to the original Question? Did she intend to convey the fact that the question of sovereignty is now being considered by Her Majesty's Government against the background of those documents which are at the Foreign and Commonwealth Office?
Baroness Young: My Lords, all the documents that are referred to in the Question are documents which are not classified. The answer to the second part of the noble Lord's question is that, on a subject as complicated as the history of the Falkland Islands, it is inevitable that individual officials will have differing and, in some cases, conflicting views. Successive British Governments have made it clear that they have no doubts about our sovereignty over the Falkland Islands.
Lord Cledwyn of Penrhos: My Lords, would the noble Baroness be good enough to go a step further and say why, then, are Her Majesty's Government considering the question of sovereignty? What does she mean when she says that different officials have differing views? Is she saying that officials in the Foreign and Commonwealth Office have differing views on the question of sovereignty? It is absolutely essential that she makes this matter abundantly clear at this time. Otherwise, there could be great difficulty. If there are differing views, is it the view of Her Majesty's Government now that the matter should go to the International Court for arbitration? Would the Government consider finding out from the new Argentine Government whether they are prepared to join in going to the International Court to find out whether it is possible to achieve a solution?
Baroness Young: My Lords, I gave the original Answer that I did in reply to the terms of the Question asked. Secondly, I cannot go wider than what I have already said.
Lord Monson: My Lords, does the noble Baroness agree that in a civilised world self-determination should be the main consideration to be taken into account when determining sovereignty, and that whatever happened or did not happen 150 years ago does not alter that principle?
Baroness Young: My Lords, this Question is being widened into something quite outside its subject, which is the matter of records.
Lord Mishcon: My Lords, would the noble Baroness agree that a lot of misunderstanding can be created by the answers given to the original Question of the noble Lord, Lord Avebury? Does she realise that the implication of her answers might be that the documents that are being retained at the Foreign and Commonwealth Office are not being released because they are harmful to the case that we wish to present on sovereignty? Does she realise that the Government might be accused of taking up a position of deception? Does she therefore wish to clarify her response in order to make it quite clear that we have nothing to hide and are not trying to deceive?
Baroness Young: My Lords, I have nothing further to add to the supplementary answer that I gave to the noble Lord, Lord Cledwyn of Penrhos. The noble Lord, Lord Mishcon, may like to know that as early as January 1983 a similar answer was given in a Foreign and Commonwealth Office memorandum.
Lord Mayhew: My Lords, can the noble Baroness tell us who has the right to remove records from the Public Record Office? Do all Ministers have the right to remove these records? If so, should we not know which Ministers have removed which records?
Baroness Young: My Lords, other departments withdraw and return records to the Public Record Office in the way that I indicated in my original reply and my first supplementary answer.
Lord Avebury: My Lords, would the Minister not agree that with as few as 5,000 records withdrawn from the Public Record Office it would not be a very significant job, with the aid of computers, to keep an up-to-date list which would be available for inspection by any member of the public who is unfortunate enough to trundle all the way out to Kew only to find that the documents are missing? Is this not an occasion which the Government are using for reclassifying documents that have already been released to the public, in some cases many years ago? Since documents such as document 371/134635324 have been withdrawn in this manner by the Foreign Office, does that not indicate that our case is not as strong as we should like the world to believe?
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I am sure your Lordships would wish me to remind the
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House that we are very nearly a quarter of an hour over the length of time which our own Companion recommends should be taken for Question Time. Therefore, I should like to suggest that after my noble friend Lady Young answers the noble Lord, we should perhaps proceed to the next business.
Baroness Young: My Lords, I could not comment on one particular document on the basis of its reference number. As I have indicated, around 5,000 records are withdrawn for one reason or another in the course of a year, and it would be expensive—and disproportionately expensive—to keep a list as described. In answer to the noble Lord's last point, I would confirm what I have already said in answer to the noble Lord, Lord Cledwyn.

Business
3.11 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Cockfield will, with the leave of the House, repeat a Statement that is to be made in another place on Regional Industrial Policy.
It may be for the convenience of the House if I announce that dinner will be available at the usual time of 7.30 this evening. The Committee stage of the Agricultural Holdings Bill will be adjourned for a time at about 7.30 p.m. During the adjournment the Appropriation (No. 3) (Northern Ireland) Order 1983, the Northern Ireland (Emergency Provisions) Act 1978 (Continuance) (No. 2) Order 1983 and the Fisheries (Amendment) (Northern Ireland) Order 1983 will be taken. Because of the nature and importance of the business to be taken, the break may be rather longer than the usual hour.

British Shipbuilders (Borrowing Powers) Bill
Read a third time, and passed.

Judgments Enforcement (Attachment of Debts) (Northern Ireland) Order 1983
3.13 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I rise to beg to move that the order which is mentioned on the Order Paper, a copy of which was laid before the House on 14th November, be approved. The House will be aware that among the most useful remedies available to a judgment creditor are the garnishee order or the order for the attachment of debts. It is this form of order, for example, which enables the judgment creditor to get his hands on his debtor's bank account. Until the Supreme Court Act 1981, the scope of garnishee orders in England and Wales was limited to bank accounts. Section 40 of the Supreme Court Act 1981 widened the scope of the remedy to enable other forms of account, including, in particular, accounts with building societies and trustee savings banks, to be attached in this way. The purpose of this Order in Council is to make the remedy equally available in Northern Ireland.

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The law in Northern Ireland relating to the attachment of debts is found in the Judgments Enforcement (Northern Ireland) Order 1981. Article 72(2) of that order provides that attachment in Northern Ireland is not to be available to accounts in the National Savings Bank, a trustee savings bank or, in effect, a building society. The effect of the draft order now before the House will be to bring into the field of attachment all those forms of account.
There is also now, in the Supreme Court Act 1981, covering England and Wales (that is by Section 40A, inserted by Schedule 4 to the Administration of Justice Act 1982) provision for garnishees—that is to say, the banks and building societies affected by these provisions—to have a standard allowance in respect of their expenses. A similar provision for Northern Ireland is contained in the draft order.
The Northern Ireland court service has consulted the legal profession, the Building Societies Association, citizens' advice bureaux, and the Department of Finance and Personnel at Stormont. The general view is that the draft order contains a welcome enlargement of the powers of the Enforcement of Judgments Office.
I intend to make judgment enforcement rules to provide, as in England and Wales, that attachment will be available only in respect of judgments or orders for £50 or more. I also intend to make an order under what will become Article 72A of the 1981 order, authorising deposit-taking institutions to deduct the clerical and administrative costs of complying with an order made under the new legislation.
I do not think that your Lordships will require me to go through the order in detail. It is perhaps sufficient if I add that Article 5 corrects two minor errors in Schedule 1 to the Bankruptcy Amendment (Northern Ireland) Order 1980, and that Article 1 provides that the main provisions of the order, contained in Articles 3 and 4, shall come into force under an appointed day provision. My Lords, I beg to move.
Moved, That the draft order laid before the House on 14th November be approved. — (The Lord Chancellor.)
Lord Prys-Davies: My Lords, the noble and learned Lord the Lord Chancellor has given the House a full explanation of the major provisions of the draft order which is now before us. We understand that there have been consultations with the institutions in Northern Ireland, including the citizens' advice bureaux, which will be affected by the order, and that in general they welcome it. We on these Benches think it is important that we should see the problem as it is perceived in Northern Ireland, and the fact that the order is acceptable to such organisations is in itself a good reason for approving its terms.
Nevertheless, perhaps the noble and learned Lord the Lord Chancellor will explain the absence of discussions with the Northern Ireland Assembly. We should have thought that though they may be, and indeed are, unglamourous and dry, the principles embodied in the order should where possible have been discussed by the appropriate committee of the Assembly at the pre-draft stage.
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The noble and learned Lord the Lord Chancellor has explained that the draft order enlarges the powers of the Enforcement of Judgments Office, thus bringing the law of the province of Northern Ireland into line with relevant law in England and Wales, which is contained in Section 40 of the Supreme Court Act 1981, and it therefore closes a gap. One appreciates that the 1981 order was approved a few months before the Supreme Court Act was passed by Parliament. Your Lordships will know that I am a new Member of your Lordships' House and this may well explain my difficulty. It is this. Why were not the provisions of Section 40 of the 1981 Act anticipated and incorporated in the 1981 order? Why has it taken two years to close the gap between the law on this subject in Northern Ireland and the relevant law in England and Wales, which does not appear to be a complicated procedure? However, that may be deceptive.
Again, the noble and learned Lord the Lord Chancellor has explained that it is the Government's intention that sums of less than £50 shall be exempt from the attachment of debts procedure and that this is to be provided for in another order. Why should the draft order now before the House not contain a reference to this minimum sum? And when approximately will the new order be laid before Parliament? While we on these Benches approve the draft order, we would nevertheless be glad to have answers to the few points that we have raised.
Lord Donaldson of Kingsbridge: My Lords, we welcome the order as bringing the law in Northern Ireland into line with the law in this country. We bear in mind that it is particularly suitable in Northern Ireland because there, much more than here, the nonpayment of dues has been used as a political weapon. Any strength that we can give to the law to enforce payment of judgment debts should be supported. I should also like to welcome to the Dispatch Box the noble Lord who has just spoken.
The Lord Chancellor: My Lords, I am glad to think that this is not likely to prove a bone of very great contention this afternoon. If the noble Lord, Lord Prys-Davies, whom I should also like to welcome, in conjunction with the noble Lord, Lord Donaldson, will study the list of organisations which were consulted, he will see that they really consisted of the users of this type of instrument and method of attachment. I know of no reason why the matter should not be debated in the Northern Irish Assembly if it wishes to take the matter up. I am not experienced in the constitution of the Province and there may be some private reason for the Assembly not wishing to take it up.
I agree that the process of consultation takes some years, but it is common throughout our relations with the Province that having established a legal system in England and Wales. it does from time to time wish to make its own observations on its application to the six counties. I can only think of the survival of the civil jury as an example of where its practice is wholly different from ours. I have never been able to see why, but it attaches enormous importance to this.
As regards the £50 limit, it is not contained in the order because it is going to be included in the rules—a different form of instrument that I shall be making

109
myself. The order requires affirmative resolution of this House. The rules will not. I think that deals with all the questions of the noble Lord, Lord Prys-Davies, but I am also grateful to the noble Lord, Lord Donaldson, who gave general support.
On Question, Motion agreed to.

Petroleum Royalties (Relief) Bill
3.25 p.m.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Avon.)
The Lord Chancellor: The Question is that the House do now resolve itself into Committee on the said Bill. Did the noble Lord, Lord Stoddart of Swindon rise? I am so sorry. Does the noble Lord wish to speak?
Lord Stoddart of Swindon: No.
The Lord Chancellor: It is always rather difficult. Sometimes, I get into trouble.
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord ABERDARE in the Chair.]
Clause 1 [Royalty exemption for petroleum from certain new offshore fields]:
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 1:
Page 1, line 5, at beginning insert—
("Subject to subsection (1A) below").
The noble Lord said: This amendment, standing in my name and that of my noble friend Lord Bishopston can be taken, if it is for the convenience of the Committee, with Amendment No. 2:
Amendment No. 2: Page 1, line 11, at end insert—
("(1A) This Act shall apply only to a field with production below 20,000 barrels per day.").
I gave notice on Second Reading that we should seek to improve the Bill. These amendments would do so, in our view, by seeking to specify what fields would qualify for relief and thus remove the open-ended nature of the relief which will undoubtedly cost the taxpayer dear over the next few years. I also made it clear on Second Reading that, in the view of the Opposition, the complete remission of royalties was of fundamental importance and that the right to royalties was basic to the concept of ownership and control of North Sea oil.
Certainly, North Sea oil royalty has until now been considered not as a tax but as a right to operate in, or as payment for a right to operate in and extract oil from, the North Sea at a handsome profit—profit, that is, from property owned by the nation. That is a
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reasonable and respectable stance to take. This was confirmed by the Minister of State at the Department of Energy Mr. Buchanan-Smith, who said during the Bill's Committee stage in another place that, on the question of royalties, a fundamental approach was involved and that it was a question of judgment about which approach was right. We have it then from the Minister of State himself that a fundamental change of policy is involved in this Bill.
We, on this side, believe that whatever other approach may be right in encouraging further development of marginal and not so marginal fields in the North Sea, the one adopted by the Government of abolishing royalties is the wrong one. In fact, so far as one can gather, no other country in the world has renounced or is proposing to renounce oil royalties in their entirety. It is extraordinary that our own Government should embark upon this course at this time. In doing so, they are the odd man out in the world.
I have already mentioned that the commitment is open-ended. If the Labour Party was thinking of making an open-ended commitment to the trade unions or any other particular industry, the Government Benches, I think, would be jumping down our throats. But here we have the present Government proposing an open-ended and unlimited commitment in respect of new fields outside the southern basin. What is completely disconcerting is the inability of the Government to cost, even in approximate terms, the loss of revenue to the Exchequer involved in the total remission of oil royalties in accordance with this Bill.
The Committee is surely entitled to know what loss is involved to taxpayers, who are, after all, the owners of North Sea oil. Is it not possible for the Government to give some sort of estimate, even to the nearest thousand million pounds, of the loss of revenue from this remission of royalties? I should have thought so. I should have thought that we were entitled to that information in considering this Bill.
With the very limited resources at our disposal, the Opposition is unable to make any assessment of the full extent of the cost of remission of royalties. It is possible, however, on the basis of certain fields not yet in production, and with total recoverable reserves estimated to be 2,300 million barrels, to estimate the possible loss of revenue. On this basis (assuming a price of 30 dollars a barrel and a dollar exchange rate of $1.50 to the pound), the total loss of royalties over the lifetime of these fields would amount to some £5,750 million. That is an enormous amount of money by any standards, and I should be interested to know whether the Department of Energy would confirm that losses of this order over the next 10 or 20 years are in contemplation as a result of this Bill.
There is, of course, a further serious point which must give cause for concern. Having conceded the principle of royalties outside the southern basin, how is the Government intending to justify the continuation of royalties in respect of all future developments including those in the southern basin? Having conceded the principle in one area, how can it be justified in another? Or has the Government already decided to remit royalties in developments outside the scope of this Bill? I hope the noble Earl, when he comes to reply, will be able to give us some reassurance on that particular point.
We have heard the argument for this Bill put in this House and in another place. It is that the remission of royalties, together with other measures contained in the 1983 Finance Act and the Oil Taxation Act, are essential to the future development of the North Sea, and that exceptional concessions need to be given to encourage the multinational oil companies to develop marginal fields.
The Labour Party, no less than the Government, wishes development to continue, but we wish that developments should proceed on an orderly and planned basis, and that cognisance should be taken of future as well as present needs. Our aim has been to adopt a policy which will give the longest possible period of self-sufficiency compatible with the reasonable cash flow needs of the oil companies. That has been our stance and it will continue to be our stance; but I fear that that has not been the perceived approach of Her Majesty's Government over the past four and a half years. Their approach has involved the maximising of revenue in the short term to bolster up their misguided medium-term economic strategy at the expense of a long-term strategy for oil depletion which would provide the country with good oil supplies over a much longer period of time.
We thus have a situation where North Sea oil is being extracted at its peak potential during the period of oil glut when prices are depressed, and under further pressure from a satiated market. According to a report published yesterday by the Institute of Fiscal Studies, North Sea tax revenues will fall steeply after peaking in 1986. The drop in revenues will not be halted until the mid-1990s, even if new oil fields are discovered. This dreary forecast assumes that oil prices will remain constant; but even that is by no means certain in today's oil market conditions.
It is, of course, this scenario which provides the rationale—if one can call it that—for Government policy. They are now desperate to speed up development of marginal fields to make up for the maximisation of production over the past few years which has provided over £20,000 million of tax revenue to the Exchequer; most of which, unfortunately, has been wantonly wasted in keeping three million people on the dole.
What this Bill does is to provide a blank cheque to the oil companies; it does not form part of any coherent policy. Such a policy would have embraced a depletion policy, taxation and the encouragement of development over a properly co-ordinated time scale. That is not evidenced by this Bill; indeed, quite the reverse is evident. There has been none of the planning which we in the Labour Party advocated. Instead, there has been a series of lurches in oil taxation which has kept the oil industry frustrated and bewildered, and it was this which led the oil companies, in fact, to drag their feet over future development plans.
The oil companies themselves certainly did not demand an end to royalty payments: indeed, the amendments before the Committee this afternoon are based on suggestions made by the United Kingdom Offshore Oil Association for royalty exemption on fields producing less than 20,000 barrels a day and a sliding scale up to 60,000 barrels a day. The Commons
112
Select Committee on Energy, in their report on oil depletion policy dated 7th May 1982, were certainly critical of the Government's policy on oil taxation in spite of the Department of Energy's defence of the then current taxation policy. But, although the Select Committee were critical of the existing tax regime and recommended significant changes, including, under certain circumstances, a system of royalty banking, they did not even consider—let alone recommend—the complete remission of oil royalties in any part of the North Sea at all.
Under all these circumstances, it is difficult to see where the Government plucked this proposal to abolish oil royalties from or, indeed, why. The fact is that the proposals go much further than anyone has so far recommended. That includes the oil companies themselves.
The Petroleum and Submarine Pipelines Act 1975 does, as noble Lords know, give the Secretary of State discretionary powers to remit oil royalties under certain circumstances. We consider the existing powers quite adequate and fair to both the taxpayer and the oil companies. Under that existing legislation it is possible to remit oil royalties: all the oil companies have to do is to make out their case for remission. The Government, however, claim that the procedures under the Petroleum and Submarine Pipelines Act is too cumbersome and bureaucratic, and for this reason the oil companies will not use it. Certainly, there have been no applications so far for remission under that Act; but the reason for the absence of applications could have little to do with bureaucracy and everything to do with the fact that the oil companies are not confident of making out a case for remission.
The beauty of the amendments which I am proposing to the Committee this afternoon is that, while they provide automaticity for relief of royalty up to 20,000 barrels a day, they also enable the Government to limit and control the extent of relief in fields larger than 20,000 barrels a day. They will, therefore, provide the Government with flexibility in dealing with North Sea exploration and development; surely at this critical period it is flexibility which the Government need and there is no flexibility contained in this Bill. Indeed, the risk is that in due time the Government will introduce the remission of oil royalties for the whole of the North Sea and that, so far as the taxpayer and the nation are concerned, would be a disastrous course indeed.
The amendments certainly define the nature of marginal fields and the Government have said a great deal about the development of them. If the Government claim that the Bill is designed to assist the development of such marginal fields, they should have no difficulty at all in accepting the amendment.
As the Bill stands, it provides royalty relief for unmarginal and even prolific oil fields as well as marginal ones, and there can be absolutely no justification for that. This is an important Bill and I believe that these amendments are very important indeed. They are important to the country; they are important to the future revenue which the Government will achieve from the North Sea. Therefore, I commend the amendments to the Committee.
The Earl of Avon: I note that the amendment proposed by the noble Lords would mean that the Bill provided for royalty exemption only up to broadly the same level of production as that for which the oil allowance is given for PRT. Indeed, I can see why it might be argued that, if fields with production below this level are the ones to be helped by the PRT oil allowance, it is only logical to apply the same limit in the case of royalty exemption. However, the matter is not so simple as that.
To begin with, there is not a precise correlation between size and profitability. To base reliefs on the level of production certainly does tend to help the less profitable field more than the more profitable field: in fact, that is why we have increased the PRT oil allowance. But it would be wrong to go too far in basing the fiscal system on the size parameter. That is why, for example, there also needs to be the safeguard provision for PRT. Other factors that can affect profitability include depth of water; geology; the need artifically to increase reservoir pressure; and timing and rate of production. If those factors all work in one direction, they can make large fields marginal or, in the other direction, small fields highly profitable. We found it impossible to devise a practicable formula that relates all factors, duly weighted, to profitability. In any case, last winter's review suggests that this is an academic question, since the fields studied were generally not only smaller than most existing fields, but also were in deeper water and were geologically more difficult.
It is really necessary to look at the effect of the fiscal regime as a whole. We felt that the proper balance of effect was only achieved by granting full exemption from royalty whatever the level of production. This is not just because there could be some larger less profitable fields with production well in excess of this level. It is also because the production profile of certain relatively small fields could well be such that in one or two years the proposed limit would be breached even though the field was only a marginal one. The economic impact of this could well be greater if the excess production were subject to royalty than if subject to PRT. This is because such peaks could well be early in field life, when royalty would normally bite and PRT would not.
In summary, the risk of depriving some small marginal fields of the full benefit of royalty exemption, together with the more general disincentive to looking for larger fields that would arise, we believe would be too high a price to pay for the possibility of securing some relatively small additional Government revenue.
The noble Lord, Lord Stoddart, mentioned the loss to the Treasury. As both my right honourable friends the Secretary of State for Energy and the Minister of State for Energy explained in another place, such a costing is not possible because no one can predict which developments would have gone ahead without this year's package of fiscal concessions, of which this Bill is but one part.
The noble Lord made a point about royalties. I should like to suggest—as I did on Second Reading—that a royalty payment is not a tax but is part of a consideration for the grant of a licence. The noble Lord asked whether the Government propose to
114
remit royalties elsewhere on the continental shelf. We keep the profitability of the continental shelf fields under continuing review. As the noble Lord is aware, a review of the southern basin is now being conducted. If that review or, for that matter, any other review shows that fields which were viable before tax become unprofitable afterwards, we shall, of course, bring proposals before Parliament. But I assure the Committee that any such action would very much depend on the evidence.
The noble Lord also spoke about blanket relief. The noble Lord suggested that concessions to marginal fields should have been made through the use of the Secretary of State's existing powers to remit royalties. There are a number of problems here. First, a prospective developer could have no certainty that his field would receive discretionary relief until that relief was given or committed, which, or course, might not be until royalties were due. Secondly, existing powers are for refunds, not relief, and refunds are not taxable; so the marginal rate of tax would fall by 12½ per cent., not by the 1½ per cent. that we are contemplating. Thirdly, refunds require the extra work of collection and paying back.
The noble Lord mentioned the recent report of the Institute for Fiscal Studies. In its press release, it states that:
"The future is likely to be dominated by small, high cost fields. If they had been developed in the last 8 years, they would have faced very harsh tax burdens."
The report goes on to say:
"There was a 2 year gap until 1982 when no new developments were announced.
The biggest problem in the tax system has been Licence Royalties, which are based on revenue, not profit, and therefore ignore high costs."
I am sure noble Lords will agree that the fiscal regime is already quite complex enough. Rather than further complicate it, we prefer to cut the Gordian knot by doing away with royalty, as in effect an extra tier of taxation, for all future fields. I believe that the Bill as it now stands is to be recommended, and I hope that the Committee will not agree to these amendments.
Lord Bishopston: I am sure that the Committee is disappointed with the Minister's reply. There are several aspects to which the noble Earl has referred which make one wonder to what extent the Government have really made a proper appraisal of the whole situation of the balance of taxation, royalties and so forth. During the Second Reading debate in another place on 4th July last the Secretary of State said:
"The measure will mean that substantial benefit from any other discoveries and developments will come to the nation as a whole…the marginal tax rate for a field paying petroleum revenue tax will be reduced from 89.5 to 88 per cent."
The Secretary of State went on to say:
"Therefore, I hope that the House will get into perspective the dimension of the changes that will result from the Bill." [Official Report, Commons, 4/7/83; col. 22.]
The Minister has just repeated to the Committee the statement made by his right honourable friend the Minister of State on the Third Reading and, indeed, at other times during the passage of the Bill in the other place. When questioned the Minister said, as indeed the noble Earl has just said, that he had no idea of the amounts involved because it would be far too difficult

115
to calculate. It is difficult to believe that the Secretary of State for Energy and the Treasury as well—because these two departments are involved—have no idea whatever of the effect of a percentage change on revenue, or about the amount they will get and how much is needed to finance spending when required.
As my noble friend said, there could hardly be any other department of Government where the Government are saying that a concession will be given regardless of need, and, in this case of course, without any qualification or criteria. As we all know, even the most socially deserving areas of Government have been deprived of Government help. But here we have one of the most profitable areas and in that sector the Government will not be applying the legislation passed by the previous Labour Government to which he has already referred, which would give help according to need. They will, in fact, be throwing a subsidy where there is no need for it or where there could possibly be no need for it. The Committee ought to be able to assess whether the Government's policy will stimulate oil development in the North Sea—and that is, of course, the whole point of the change and the Government seek to justify it on those grounds—or whether the development will take place anyway.
The Minister has just mentioned that royalty is not a tax. That, of course, is precisely the point we are making. It is not a tax; it is a payment for something which is being given for the exploitation—and the proper exploitation—of national resources. The Government say that you can have this great concession without the payment which the nation has a right to demand.
The Minister has also rightly mentioned the legislation to which I have referred, the Petroleum and Submarine Pipe-Lines Act 1975. Under that Act a company had to establish that remission of royalties was necessary for the development of an oilfield. The Minister goes on to justify not using that legislation, which many would have thought was ideal to help those in the greatest need while not throwing away royalty concessions on those who have no need. He speaks about the collection of royalties, the paying hack and so forth. But, as my noble friend said, to date I believe we are right in saying that no big claim has been made, so it is not a matter of an enormous amount of paperwork going into the Treasury or the Department of Energy asking for help under this legislation. As there has been none to date is the Minister saying that there would be an enormous amount—and I do not want to misquote him—or that there could be a substantial amount of claim, and that this would be rather tedious, to say the least? If he thinks that that is the case, then he might give that as a justification for the measure he is proposing to the Committee.
He goes on to say that the fiscal régime is complicated enough already. One accepts that there are complicated aspects of tax collection and royalty collection, and other fiscal measures, but here the Government might go through the process, as they have with a great degree of investigation, to see whether the situation can be relieved. I should have thought that the existence of the Petroleum and Submarine Pipe-Lines Act 1975 is the kind of ideal
116
legislation which would certainly not justify the handing over of these enormous sums of money, or possibly large sums of money—we do not know, and the Government do not know—to a sector which does not need them.
I do not know what representations have been made by the United Kingdom oil operators' association or others in this field. The Minister has not brought that in aid on this occasion, although of course it may have come up during other stages.
The Earl of Avon: I think that we talked about the United Kingdom Offshore Operators Association quite extensively at Second Reading.
Lord Bishopston: I accept that. I know that there has been mention of that. But the noble Earl has not really given any reason why the Government should give away what could be a massive sum of money. Various quotations have been made about what the effect would be. I believe on Second Reading that the Minister mentioned the decrease in payments from 89·5 per cent. to 88 per cent., and he said that he was willing to give an illustration of a field with 55 million tonnes of reserves. There was a benefit there of 3 per cent. which on a £4·5 billion or £5 billion field would be worth about £120 million of relief.
Various estimates have been given at different stages of the measure because the Government do not have any figures whatsoever, and so we do not know to what extent the industry will be affected by these concessions, or what amount of revenue is going to be lost. We have no idea about the profitability that we can expect from oilfield development in the future. There have been forecasts—and the Minister touched on this a few moments ago—about the geological difficulties of working in smaller fields, and so on.
With some of the Ministers in the Cabinet, and indeed some sitting on the Front Bench opposite, this woolliness which appears to have been the outcome of not knowing what revenue would be expected, what amount of revenue may be lost by these concessions, surely is not the way in which we expect the present Government, with their monetarist approach, to proceed. I feel that in the circumstances the Minister has not given the Committee any satisfactory answer to the amendment which your Lordships are discussing at the present time.
Lord Stoddart of Swindon: I should like to press the amendment.
3.55 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 61; Not-Contents, 134.

DIVISION NO. 1

CONTENTS

Annan, L.

Cledwyn of Penrhos, L.

Ardwick, L.

Collison, L.

Barnett, L.

Cooper of Stockton Heath, L.

Bishopston, L.

Crowther-Hunt, L.

Blyton, L.

David, B.

Boston of Faversham, L.

Davies of Penrhys, L.

Brockway, L.

Denington, B.

Carmichael of Kelvingrove, L.

Donnet of Balgay, L.

117

Elwyn-Jones, L.

Lockwood, B.

Ewart-Biggs, B.

Longford, E.

Fisher of Rednal, B.

Lovell-Davis, L.

Fitt, L.

Milford, L.

Gallacher, L.

Mishcon, L.

Galpern, L.

Molloy, L.

Glenamara, L.

Nicol, B.

Gormley, L.

Northfield, L.

Graham of Edmonton, L. [Teller.]

Oram, L.

Paget of Northampton, L.

Hatch of Lusby, L.

Ponsonby of Shulbrede, L. [Teller.]

Houghton of Sowerby, L.

Hughes, L.

Prys-Davies, L.

Irving of Dartford, L.

Ross of Mamock, L.

Jacques, L.

Serota, B.

Jeger, B.

Stallard, L.

Jenkins of Putney, L.

Stewart of Alvechurch, B.

John-Mackie, L.

Stoddart of Swindon, L.

Kilbracken, L.

Strabolgi, L.

Kirkhill, L.

Underhill, L.

Leatherland, L.

Wells-Pestell, L.

Lee of Newton, L.

White, B.

Listowel, E.

Wootton of Abinger, B.

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Airey of Abingdon, B.

Henley, L.

Allerton, L,

Holderness, L.

Alport, L.

Home of the Hirsel, L.

Ampthill, L.

Hylton-Foster, B.

Auckland, L.

Ilchester, E.

Avon, E.

Inglewood, L.

Balfour of Inchrye, L.

Ingrow, L.

Bauer, L.

Kilmany, L.

Beloff, L.

Kinloss, Ly.

Belstead, L.

Kitchener, E.

Bessborough, E.

Lane-Fox, B.

Boyd-Carpenter, L.

Lloyd of Hampstead, L.

Buccleuch and Queensberry, D.

Lothian, M.

Loudoun, C.

Burton, L.

Lovat, L.

Caccia, L.

Lucas of Chilworth, L.

Caithness, E.

Luke, L.

Campbell of Alloway, L.

Lyell, L.

Campbell of Croy, L.

McAlpine of Moffat, L.

Carnegy of Lour, B.

Mackay of Clashfern, L.

Cathcart, E.

Mancroft, L.

Cockfield, L.

Margadale, L.

Cottesloe, L.

Marley, L.

Craigavon, V.

Marshall of Leeds, L.

Cullen of Ashbourne, L.

Merrivale, L.

Dacre of Glanton, L.

Mersey, V.

Daventry, V.

Middleton, L.

Davidson, V.

Monk Bretton, L.

De Freyne, L.

Morris, L.

Denham, L. [Teller.]

Moyne, L.

Devonport, V.

Murton of Lindisfarne, L.

Dilhorne, V.

Nelson of Stafford, L.

Drumalbyn, L.

Newall, L.

Eccles, V.

Norfolk, D.

Effingham, E.

Norwich, Bp.

Elliot of Harwood, B.

Nugent of Guildford, L.

Elton, L.

Onslow, E.

Erne, E.

Orkney, E.

Fortescue, E.

Orr-Ewing, L.

Fraser of Kilmorack, L.

Pender, L.

Gainford, L.

Penrhyn, L.

Gardner of Parkes, B.

Peyton of Yeovil, L.

Gibson-Watt, L.

Plummer of St. Marylebone. L.

Gisborough, L.

Glanusk, L.

Rankeillour, L.

Glenkinglas, L.

Reilly, L.

Grimston of Westbury, L.

Renton, L.

Grimthorpe, L.

Ridley, V.

Hailsham of Saint Marylebone, L.

Rochdale, V.

Rodney, L.

Halsbury, E.

Romney, E.

Hankey, L.

Rugby, L.

Harvey of Prestbury, L.

St. Aldwyn, E.

Hawke, L.

St. Davids, V.

Hayter, L.

Saint Oswald. L.

118

Salisbury, M.

Suffield, L.

Saltoun, Ly.

Swinton, E. [Teller.]

Sandys, L.

Terrington, L.

Savile, L.

Thomas of Swynnerton, L.

Selkirk, E.

Tranmire, L.

Sempill, Ly.

Trenchard, V.

Shaughnessy, L.

Tweedsmuir, L.

Skelmersdale, L.

Vaux of Harrowden, L.

Soames, L.

Vivian, L.

Stamp, L.

Waldegrave, E.

Strathcarron, L.

Westbury, L.

Strathclyde, L.

Wynford, L.

Strathspey, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 2 not moved.]
Lord Skelmersdale: I beg to move that the House do now resume for Statement.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Regional Industrial Policy
4.5 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, with permission, I will repeat a Statement made in another place by my right honourable friend the Secretary of State for Trade and Industry. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the Government's review of regional economic policy.
"I have today laid before the House a White Paper entitled Regional Industrial Development, and my department will publish shortly a factual background paper on the effectiveness of regional policy and other regional issues.
"The Government remain firmly committed to an effective regional policy.
"Although the economic case for regional industrial policy today is not clear-cut, and the economic costs of such policies must be set against the benefits, there remains a social case for regional industrial policy to reduce regional imbalances in employment opportunities.
"The Government believe that there is scope to increase the effectiveness of regional policy and to achieve better value for money in the regions with less adverse effects on the economy as a whole.
"The White Paper sets out a new structure for regional industrial incentives involving major changes to the regional development grants scheme.
"At present regional development grants over-concentrate on capital intensive projects and on manufacturing industries. In future we propose regional development grants should be aimed more precisely at job creation.
"The new regional development grant scheme will be widened in scope to cover parts of the service sector in addition to manufacturing. However, regional development grants will in future be

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payable only towards projects which provide or modernise capacity, and simple replacement investment will not qualify for regional development grant.
"Grant will be payable as a proportion of capital expenditure, or as an amount for each new job created by a project, whichever is the more advantageous to the investor; but where grant is paid in respect of capital expenditure, it will be limited by a cost per job ceiling.
"For the sake of simplicity small firms will be exempt from this limit.
"These changes shift the payment of automatic grant assistance to projects which create jobs.
"In addition, the importance of selective assistance relative to regional development grants will be increased; and re-location projects which offer no net increase in jobs will not normally be eligible for regional selective assistance.
"Industry attaches great importance to the automatic and predictable nature of the regional development grant scheme. Therefore, grant will continue to be paid at standard rates and by reference to published criteria.
"To avoid disruption or uncertainty arising from these changes there will be a twelve-month transition period from the introduction of the scheme before they take full effect. For projects which have already been offered selective assistance, regional development grant will continue to be paid under the old rules, not the new.
"The old rules, not the new, will apply for projects for which application has already been made, or is made before 31st January 1984, provided an offer is made before changes to the legislation are brought into effect. The regional investment role of the British Technology Group—which does not relate to its primary task of encouraging the transfer of technology—will be discontinued.
"The White Paper invites views on a number of issues: in respect of grant, which activities should qualify for regional development grant, what the rates of grant should be, and what the balance should be between automatic and selective assistance. On the assisted area map, views are invited on both the criteria for designation and on map coverage.
"The Government also welcome views on whether special measures should be taken in the assisted areas to encourage innovation and new-firm formation. I would welcome written submissions, before the end of May 1984, in order that they may be considered before decisions are reached.
"Consultation has its price. A number of important decisions about regional policy will remain to be taken until after the consultation period. In particular, it is not possible now to announce the future geographical coverage of regional assistance or the amount of future regional expenditure.
"So far as coverage is concerned, the new map when it is published will be based upon more up-to-date data concerning travel-to-work areas now
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becoming available from the 1981 census returns. The Government will introduce legislation as soon as possible to provide for the new scheme of regional development grants outlined in the White Paper. Once the consultation process is complete and the remaining decisions taken, the Government propose to lay the necessary orders, implementing all the changes simultaneously in Autumn 1984.
"In short, the new policy will ease the present unjustified bias against service industries; it will end the unjustified payment of expensive aid to projects which create few jobs in the assisted areas; it will minimise mere job shifting at taxpayers' expense; and it will concentrate on better value for money in job creation in the areas of greatest need.
"I am confident that the new framework will provide a firm basis for a more cost-effective regional industrial policy, benefiting the assisted areas more effectively with less adverse effects elsewhere".
My Lords, that completes the Statement.
4.14 p.m.
Lord Stoddart of Swindon: my Lords, the House will be grateful to the noble Lord the Minister for repeating this very important Statement. Is it not the fact that the background against which this White Paper must be set is the economic problem that we have faced since 1979? Unemployment has more than doubled, more than 40,000 firms have gone into liquidation in England and Wales alone, and the equivalent of about one-fifth of our manufacturing industry has completely disappeared. A number of our regions have been very badly hit over the last few years. One of them, the West Midlands, in particular, formerly one of the most prosperous areas in Britain, has been appallingly badly hit.
In fact, industry there has been decimated. Indeed, it might be said that the Government's tepid attitude to a regional policy results from the fact that their policies have brought major unemployment problems to every region—not just to one but to every region in the country—including the southern region where the unemployment rate has more than doubled over the last four and a half years.
Can the Minister let us have assurances that the Government do not intend to reduce the current levels of regional aid expenditure; that is, of the total expenditure? They are hardly adequate at the present time. Given the present state of the economy, anything less would be a serious blow to our already hard hit industry. Clearly we are not opposed to the White Paper's aim to get better value for money spent; but we do not want less money spent and, indeed, to relate regional aid to job creation. But, without any indication of resources, we are really faced by a kind of "Hamlet without the prince".
The factual background paper promised in the Statement would have assisted us today in assessing the policy changes foreshadowed in the White Paper. What role do the Government envisage for local government enterprise boards and local government generally in job creation? May I ask the Minister, finally, to give us an assurance that the consultation promised in the Statement will be real consultation,

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that the Government have not taken final decisions and that when they get the views of local government and other organisations they will take these views very seriously into account before announcing their final decision?
Lord Ezra: My Lords, we welcome from these Benches this review of regional economic policy. We also welcome the publication of the White Paper, look forward to studying it, and appreciate the time given for consultation. We also welcome the greater emphasis being put on job creation and the extension of such aids as may be available to the service sector as well as to the manufacturing sector. I should like to put to the noble Lord the Minister a question for elucidation. First of all, he mentioned that regional development grants will in future be payable only towards projects which provide for modernised capacity and that simple replacement investment will not qualify. We feel that this could be a very subjective judgment as to what is replacement and what is new investment. We consider that if there is a good replacement project which will maintain, or possibly even improve, employment prospects in a given area, this also should rate for grant.
Secondly, we agree entirely with the view expressed by industry that the procedures in future should be predictable so that industry can plan ahead. We would like an assurance that, quite apart from the transitional areas to which the noble Lord referred, the final outcome of these deliberations will be that there will be a very clearly determined set of criteria upon which business and industry can judge their future investment plans. Thirdly, we should like to draw attention to the particular problem of the rural areas. We feel that certain rural areas which might be remote from the designated areas suffer particularly from unemployment. We feel that special regard should be paid to the problem of those areas; and we should like some assurance on that point.
Fourthly, there is the question of additionality as applied to the social grants from the European Community. This is a subject which has been raised in debate in this House before and my noble friend, Lord Banks, raised it in a debate on 30th June 1982. In view of the great importance of assisting these difficult areas, we feel that a reappraisal of the policy towards additionality should be stated. We consider that, in addition to what the Government may be prepared to make available from British resources, anything that can be obtained from the Community should be additional. We put that proposal to the Minister.
Finally, I should like to associate myself with the point raised by the noble Lord, Lord Stoddart, in saying that, although at this stage the Government clearly cannot indicate what the total amount of regional grant may be after the deliberations and consultations proposed, nevertheless we should like to have an assurance that, whatever may be the outcome, the amounts available will not be less than they are at present.
4.20 p.m.
Lord Cockfield: My Lords, I am grateful to both the noble Lord, Lord Stoddart, and the noble Lord, Lord Ezra, for their general welcome to the Statement and
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the publication of the White Paper. I do not think it is appropriate at this stage to debate with the noble Lord, Lord Stoddart, the general question of the Government's economic policy. The simple truth of the matter is that the world as a whole has been very seriously affected by the recession and in addition the roots of our present economic difficulties go back a very long way. Those of your Lordships who have been privileged to listen to the speeches of the noble Lord, Lord Kaldor, will fully appreciate how very far back our difficulties in fact do go.
One of the reasons why a review of regional policy is essential is the nature of the very big changes which have taken place in this country, not only in recent years but over a considerable period of time. The object of the White Paper is to set down the Government's views on this and to invite consultation. Perhaps I might give both the noble Lord, Lord Stoddart, and the noble Lord, Lord Ezra, a clear assurance that the process of consultation is a very genuine one and the fact that the new assisted areas map cannot be produced until the autumn of next year means that the period available for consultation and for consideration of the representations that are made is longer than normally might be the case. This will contribute to a very clear and thorough examination of all these problems.
So far as the level of expenditure is concerned, the position was made quite clear by my right honourable friend—and I just quote these words because they were in the original Statement:
"It is not possible now to announce the future geographical coverage of regional assistance or the amount of future regional expenditure".
I must stand by that statement. The reason in fact is perfectly simple. The object of the White Paper is to set up a new structure for regional assistance. What we want to do at this stage is to get that structure right and to ensure that better value for money is obtained. The actual level of expenditure is one of those issues which are decided year by year in the public expenditure survey.
The noble Lord, Lord Stoddart, also referred to areas of particular economic difficulty and, as an example, he mentioned the West Midlands. He will find this particular issue discussed in detail in paragraph 40 et seq. of the White paper. And, among others, there are two issues which are specifically set down as matters for consultation. One of them concerns the criteria to be adopted in deciding the areas, and the other one is the actual decision on what areas should be included in what categories. So there will be full consultation on these matters and the particular issue of the West Midlands is specifically touched upon in the White Paper in that connection.
The noble Lord also raised the question of local government's job in the role of job creation. That again is a matter that I do not want to follow too far because regrettably the position is that in some areas the excessive increase in rates has led to job destruction and not to job creation. But obviously any help that genuinely results in a better level of job creation is something to be welcomed. We have collaborated with various local bodies, and particularly bodies which are representative of various private sector industries, to try to improve matters in particular areas.

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The noble Lord, Lord Ezra, raised the question of simple replacement expenditure not qualifying for grant. I agree with him that the definition of exactly what simple replacement expenditure is does raise considerable problems. In fact, the European Community rules require us not to pay grants on simple replacement expenditure. But the question of the definitions to be applied is a matter that can be covered by the consultations. I entirely agree with him—and this has been set down very clearly in the Statement—that so far as regional development grant itself is concerned the criteria need to be set out very clearly, because it is one of our objectives to ensure that industrialists will know in advance exactly where they stand. Selective assistance is rather a different matter because that has to be decided by reference to the facts of the individual case.
The noble Lord also raised the question of rural areas. That, of course, is also tied up with the assisted areas map and at this stage I do not think I can do more than say I note the point he has made. He also raised the, frankly, very difficult issue of additionality. The Government's policy on this has been explained on many occasions. The receipt of grants of this sort from the European Community, which are very much welcomed of course, is one of the factors taken into account in determining the level of Government expenditure. Therefore, the grants are reflected in what expenditure the Government think can be devoted to particular objectives. But there is no question, once the level of expenditure has been set, of their simply adding a grant from the European Community, because that would be covering the same point twice.
Finally, may I say this. The White Paper will, of course, be available in the Printed Paper Office. It covers the issues raised in very considerable detail and we welcome any views that may be expressed on it either by your Lordships or by a wider public outside this House.
Lord Glenkinglas: My Lords, will my noble friend agree with me that a Statement which is as important and complicated as the one he has made, and which some of us have not had the privilege of reading beforehand, is difficult to understand at one go? May I ask him whether he is certain that supporting the service industries (which is something with which I very much agree) will not to some extent conflict with the problem of getting enough jobs in many of these areas on the map? Is not one of the problems the fact that one does not want to back failure? On the other hand, the service industries, which have been the great success of the last ten years, have employed mainly women.
Lord Cockfield: My Lords, I note the points made by my noble friend. I agree with him that it is very difficult to absorb a Statement of this complexity in the few minutes which are available while it is being made. The important thing is the publication of the White Paper, which people will be able to study at leisure.
So far as the service industries are concerned, there has been a widespread feeling that the present system
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is biased against them, and it is that kind of bias that we wish to correct. I would not want to enter into a discussion at this particular point about the merits of providing job opportunities for men as opposed to providing them for women. If I embarked on that matter I am sure that I should get into difficulties with various Members in your Lordships' House. May I make just this one comment: all job creation, of course, is a good thing, and to the extent that we can help the service industries that must be a net gain.
Lord Ross of Marnock: My Lords, will the Minister tell us exactly what effect this will have on the likes of the Scottish Development Agency and the Welsh Development Agency? Will he tell us—he was asked, and he did not give a reply—what effect this will have on the enterprise zones, and whom he will consult in relation to the redrawing geographically of the assisted areas map? I do not know how long he has been at this subject, but I have lived with it since 1946, and every time we have had a depression the areas that have been hardest hit have always been those that were needing assistance in the first place. They come out of a recession even worse than any other place. So I should like to know whom he will consult about this.
Also, does this mean that Section 7 of the Industry Act and Section 8—Section 7 is selective assistance, and Section 8 is more automatic assistance—are both to be scrapped?—because as I see it, one of the important things for anyone trying to attract industry is that industrialists will know what they will get and that a package can be prepared, be it by the local authority or the SDA. But we just do not know. It is like buying a pig in a poke. We do not even know the size of the poke until we find out which areas are to be assisted. It will not be as simple as it has been, and simplicity is required here.
Lastly, can the Minister tell me whether there has been consultation to ensure that this does not conflict with EEC policy? He will remember that the most important aspect of regional policy for a long time, directly related to jobs, was the regional employment premium, and that had to be scrapped because of the EEC.
Lord Cockfield: My Lords, the whole purpose of publishing the White Paper, in which these proposals are set out in some detail, is to enable consultation to take place on the widest possible basis. Nobody is precluded from making his views known, and, in fact, there is a general invitation in the White Paper to all people interested to write to the Secretary of State expressing their views. So it is a very wide-ranging consultation. It is perfectly clear from the Statement that the regional grants and the selective grants will both be continued. The important question will be the precise rules which will apply to each, and these, again, are matters for consultation. As to the precise impact of this on the Scottish Development Agency and the Welsh Development Agency, I am frankly not in a position to answer that question immediately, but I will write to the noble Lord and deal with it.
Lord Ross of Marnock: My Lords, what about the enterprise zones?
Lord Cockfield: My Lords, the enterprise zones are, of course, an entirely separate project with rules of their own. They are beginning to show important advantages. It is impossible yet to measure the degree of success, but we hope there will be an important degree of success emerging from them.
Lord Taylor of Gryfe: My Lords, I very much look forward to this clear definition of what is modernisation and what is replacement of plant. This will certainly be carefully examined by all industrialists who try to get some assistance from the new regional fund. May I ask the Minister whether it is the intention, in calculating job creation, to calculate simply the actual investment? Is he aware that some very large investments are in themselves very expensive in terms of support? Nevertheless, they create jobs for three to five years in the construction industry by the building of these factories. I have one in mind by Hoffman La Roche in Ayrshire. Also, local suppliers have benefited very considerably from this particular investment, although it is not a direct result of the investment.
Will the Minister assure us that in securing inward investment, which is critical to the bringing in of new advanced industries, the new regional policies will not in any sense prejudice or jeopardise the prospects of inward investment, compared with many of our competitors who are looking for this kind of support? Finally—this is a point made by the noble Lord, Lord Ross of Marnock—shall we have to harmonise this policy with EEC policy, or is there any possible conflict in our new-look regional policy and the conventions governing the EEC at the moment?
Lord Cockfield: My Lords, I note what the noble Lord says about the difficulty of distinguishing between modernisation and replacement and this is one of the areas which will require a very great deal of consideration. I note also what he says about the indirect benefits that flow from schemes involving substantial capital investment. But of course he will be aware, just as I am, of cases which have attracted great criticism because substantial amounts of grant have gone to projects which have involved very high expenditure but virtually no job creation at all. Therefore, the precise criteria are a matter which need the most careful consideration.
On the question of inward investment, our aim is to secure a proper balance between inward investment and domestic investment. Inward investment will qualify in exactly the same way as domestic investment for the regional development grants. It will also be considered in the same way as domestic investment for selective assistance. It is quite wrong to try to introduce a bias either in favour of inward investment against domestic investment, or in favour of domestic investment against inward investment. Both of them create jobs and both of them, therefore, are welcome on that account. On the question of harmonising with EEC policy, I entirely agree that this is an important point. We have had it very much in mind and some of the changes that we are proposing are, in fact, to ensure that we keep in line with EEC requirements.
Lord Renton: My Lords, can my noble friend say to what extent it will be possible for regional development grants to be used for the restoration of derelict land, urban or rural? This is something which can sometimes be done when other purposes of development grants are being fulfilled and can therefore be taken in their stride.
Lord Cockfield: My Lords, I can only say to my noble friend that I shall be happy to have that point looked into and I will write to him.
Lord Northfield: My Lords, the noble Lord said—and I strongly agree with him—that consultation has its price. The price is delay now in concrete changes to the system of regional assistance. So will it not be something like a year before there are any real changes to announce? If I am right about that, I wonder whether the noble Lord would care to comment on, and at least convey to his right honourable friend, the problems of this interim period.
If we take the areas just outside the present assisted areas—the ones that very often have higher unemployment levels than inside the assisted areas—these are the ones that need some flexibility in this interim period if they are not to suffer even worse and if they are to receive some help. In particular, would he care to comment on whether in this interim period the discretionary grants under Section 8 of the Industry Act will be more flexibly administered to take care of these areas outside the assisted areas that are suffering?
Secondly, could the sort of arm-twisting—if I may put it in that way without offence—that goes on to direct incoming industry from abroad into the assisted areas be slightly slowed down if some of these suffering areas have some chance of getting it? At the moment, if a non-assisted area gets a foreign investment in prospect, the noble Lord's department or the Department of Trade and Industry does its best to persuade that investment to go to the assisted areas instead, and very often that really is quite wrong in view of the high unemployment level in these areas. Thirdly, could we not submit changes in the map to the EEC, so that we show that areas wider than the assisted areas are suffering and should not be caught by the present £5 million limit on projects for which grants can be given within the EEC rules? If we submitted a different map, it would be possible for the EEC to let through without comment some of the projects into non-assisted areas which deperately need them.
Lord Belstead: My Lords, may I suggest that after my noble friend replies to the noble Lord, Lord Northfield, perhaps the House would wish to pass on to next business.
Lord Cledwyn of Penrhos: My Lords, I am obliged to the noble Lord, Lord Belstead, for what he has just said but this is a Statement of the utmost importance. It is one that affects virtually everyone in the country, and no opportunity has yet arisen for a question to be asked about Wales. I most earnestly beseech the noble Lord to relax on that point at least.
Lord Belstead: My Lords, I am in the hands of the House, but the Companion is quite clear that, when we have Statements, it is not desirable to hold up the business of the House for longer than necessary. On the other hand, of course, Wales always has preponderance in these matters and I feel sure that my noble friend will wish to answer one question about Wales, because I know that the noble Lord, Lord Prys-Davies, wants to get in. I believe that the House would then wish to pass on to next business.
Lord Diamond: My Lords, is it not the case that the importance of the way in which we run our affairs—which is much to be respected—is that the senior representative on the Government Front Bench has to interpret the wishes of the House because, of course, the business is in the hands of your Lordships and not in the hands of the Government?
On an important Statement such as this when—although I may be quite wrong—there seems to be no evidence that there are people on this side of the House who are anxious to return to the previous business but who, on the other hand, are very anxious to deal with a most important and very long Statement, would it not be open to the noble Lord, Lord Belstead, to reconsider his interpretation of the wishes of the House?
Lord Belstead: My Lords, at the risk of wearying the House, I have made it quite clear that the Government—and that means myself on behalf of the Government—are in the hands of the House. I have also reminded your Lordships that the Companion to Standing Orders is explicit on this matter. I feel sure that, after we have taken the question on Wales which I feel sure the House would wish to take, then will be the moment to go on to next business.
4.42 p.m.
Lord Cockfield: My Lords, I wonder whether I may make a general comment which I hope will be helpful. We have published a White Paper dealing with the matters in some detail, and that is because we realise that it is quite impossible to deal adequately with all the points which are likely to be raised in the compass of a Statement. The White Paper itself specifically invites comments and is open to consultation on a large number of very important matters—some of which are quite specifically set out.
In other words, the White Paper is not trying to gloss over those important issues. In many instances, it does in fact set them out in the form of questions; we feel it is important that we should know people's reactions and how they feel about those questions. It is quite genuinely an exercise in what might be described as government by consultation.
Lord Diamond: My Lords, will the Minister allow me to intervene?
Lord Cockfield: Of course, my Lords.
Lord Diamond: My Lords, the Statement has already made it clear that there will be no alteration in the attitude which the noble Lord, on behalf of the Government, has already taken up in giving no
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indication whatever of whether this is an attempt to save the Treasury money or whether it is an attempt to improve regional grant procedure. He has given no indication of the level of grant. Therefore, we are unable to come to any conclusion by considering the Statement further, and we need to press the Government at Question Time or on this occasion.
Lord Cockfield: My Lords, I hope that the noble Lord, Lord Diamond, will forgive me if I say that the most important point is to go through the White Paper itself, where many of the issues are specifically spelt out. In fact, the issue of the level of grant is one specifically set down in the White Paper as a question of consultation.
The noble Lord, Lord Diamond, has immense experience in these matters and he will realise that consideration of policy of this sort does tend quite genuinely to fall into two areas. There is, first, the shape of the policy—that is, the framework into which the policy falls. Secondly, there is the amount of money which one puts into that framework. Those are both immensely important questions. and I am not in any way trying to avoid the issue. The long-standing practice has been that one deals with the framework in a document of this sort—which is what we are trying to do—and then the question of the expenditure which is incurred in a particular year is dealt with as part of the Government's annual public expenditure survey, the detailed results of which are published each year at approximately the time of the Budget. That explains the Statement made by my right honourable friend the Secretary of State on the question of cost.
In making the general comments that I did, I was genuinely trying to be helpful in spelling out the extent to which we have set out the proposals in considerable detail in the White Paper itself. As the Statement indicates, there will be a further background paper, which will also be published. Most of the specific questions raised by the noble Lord, Lord Northfield, really related to the assisted areas map. There is a very real problem there. There have been big changes in the travel-to-work areas, and they are one of the major determinants of the map itself.
The Department of Employment is currently working on the results thrown up by the 1981 census, so that we can draw up a new map on the basis of known, factual information. I believe it would be wrong—let alone impossible—to make changes in the map ad interim. Frankly, I do not consider that the period of time between now and next Autumn, when we think that the proposals will be brought clearly into their specific form, is an undue length of time to wait.
Lord Prys-Davies: My Lords, ever since the 1920s the case for regional investment in an area such as South Wales has always rested on an admixture of economic and social reasons. Indeed, the steel plant was located in Ebbw Vale in the 1930s primarily for social reasons. But South Wales is today faced with the very difficult task of rebuilding its economic foundations. Therefore, we shall be grateful if the noble Lord the Minister will assure the House that the new criteria will pay proper regard to social considerations as well as economic considerations; and, secondly, that the Government accept that they have a continuing

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responsibility for the old ninteenth century growth areas wherever they may be in this country. Those communities cannot themselves alone rebuild the basis of their life.
Although I agree very much with the need to harmonise our regional policies with those of the EEC, because it is often the case that their problem is our problem, will the review also consider to what extent we are effectively integrating in the regions the EEC policies, the United Kingdom policies, and the local authority policies? Finally, when the noble Lord the Minister considers how the review will influence areas such as Wales and Scotland, and the Welsh Development Agency, and when he writes to my noble friend, will he also be good enough to send a copy of his letter to me?
Lord Cockfield: My Lords, I am grateful to the noble Lord for his comments. I believe it is accepted that regional policy has in general been very successful in Wales. We have made it absolutely clear that the social considerations are extremely important. In fact, the view could be taken that the social considerations may in some instances be more important than the economic ones; considerable doubts have been raised from time to time on the effectiveness of regional policy in economic terms, but it certainly has a most important social role to play.
The Government are fully committed to the maintenance of an effective regional policy. That comes out very clearly in the Statement that I repeated, made by my right honourable friend the Secretary of State. The precise impact of the policy on Wales depends, first, on the assisted areas map—I am sorry to continually come back to this, but it is the crucial element in the whole of this. That is one of the reasons why in paragraphs 40 to 45 of the White Paper we have specifically set down that there are two crucial issues which need to be answered. The first is what criteria are to be applied, and the second, what is the effect of applying those criteria on individual areas. This is clearly of first line importance in the case of Wales. I am grateful, therefore, for the contribution the noble Lord has made. We will, of course, keep a very firm eye on EC policies in this as indeed in other areas.

Petroleum Royalties (Relief) Bill
4.52 p.m.
House again in Committee on Clause 1.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 3:
Page 2, line 7, leave out from ("1934") to end of line 10 and insert—
("

(3A) Subject to subsection (3B) below, in this section "relevant new field" means an oil field—

(a) no part of which lies in a landward area, within the meaning of the Petroleum (Production) Regulations 1982 or in an area to the East of the United Kingdom and between latitudes 52° and 55° North; and

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(b) for no part of which consent for development has been granted to the licensee by the Secretary of State before 1st April 1983; and

(c) for no part of which a programme of development had been served on the licensee or approved by the Secretary of State before that date.

(3B) In determining, in accordance with subsection (3A) above, whether an oil field (in this subsection referred to as "the new field") is a relevant new field, no account shall be taken of a consent for development granted before 1st April 1983 or a programme of development served on the licensee or approved by the Secretary of State before that date if—

(a) in whole or in part that consent or programme related to another oil field for which a determination under Schedule 1 to the principal Act was made before the determination under that Schedule for the new field; and

(b)on or after 1st April 1983, a consent for development is or was granted or a programme of development is or was served on the licensee or approved by the Secretary of State and that consent or programme relates, in whole or part to the new field.

(3C) In subsections (3A) and (3B) above "development" means—

(a) the erection or carrying out of permanent works for the purpose of getting oil from the field or for the purpose of conveying oil won from the field to a place on land; or

(b)winning oil from the field otherwise than in the course of searching for oil or drilling wells;

and consent for development does not include consent which is limited to the purpose of testing the characteristics of an oil-bearing area and does not relate to the erection or carrying out of permanent works.

(3D) In subsection (3C) above "permanent works" means any structures or other works whatsoever which are intended by the licensee to be permanent and are neither designed to be moved from place to place without major dismantling nor intended by the licensee to be used only for searching for oil.").

The noble Lord said: In actual fact, I would have liked to ask many more questions on the last issue, but bearing in mind the Deputy Leader's strictures and the desire of the House to get on with this particular business I refrain from asking them. However, I shall be asking them at some future time. I will try to catch up a little time for the Government, and indeed for the Committee; I will not take too long in moving this particular amendment, which I now beg to move, Amendment No. 3, standing in my own name and that of my noble friend Lord Bishopston.
There can he no quarrel with the wording of this amendment, with the single exception that provides for royalty exemption to start from 1983 instead of April 1982. It seems that the only reason for back-dating is to embrace the Alwyn and Clyde fields, the latter being of course a field belonging to Britoil and fomerly to the British National Oil Corporation. The back-dating of relief is, in our view, a hardly disguised means of giving a handout to the Government's own creature, Britoil. There can be no doubt about our view of the back-dating provisions. The Minister of State, Mr. Buchanan-Smith, confirmed this during Committee in another place, when he said (in col. 65):
"I turn to Amendment No. 7, which is concerned with the date. Its simple practical effect would be to exclude the two fields to which the honourable Member referred".
The honourable Member was my honourable friend Mr. Rowlands and he was referring precisely to Alwyn and Clyde. So we know that the Minister of State himself believes that special dispensation was given to those fields, Alwyn and Clyde.
I believe we are entitled to ask why the Government are seeking to hand out such largesse when it is

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completely and absolutely unnecessary. There can be no claim in the case of Alwyn and Clyde that the oil companies involved needed additional incentives to persuade them to go ahead with the development of those fields. They had in fact decided to do so in December 1982. Indeed, the then Secretary of State for Energy, now the Chancellor of the Exchequer, Mr. Nigel Lawson, announced the fact with great pride and a great flourish on 13th December 1982. So there was no question that these two fields were going to be developed whatever happened, and indeed whatever happens in this particular Bill.
There was absolutely no reason why the Government should back-date the provisions to embrace two fields where the decision had already been taken to develop them, and indeed that decision was announced proudly by the then Secretary of State for Energy. There was no need at all for this gratuitous hand-out to persuade the oil companies concerned to develop those fields.
The proposal to back-date the royalty remission certainly has no friends in Parliament, outside the Conservative Party that is. This was shown quite clearly to be the case in Committee in another place when Mr. James Wallace, the Liberal Member for Orkney and Shetland, not only spoke against the back-dating provisions but voted against them on a Division. He was fully convinced by the arguments put against back-dating by my honourable friend Ted Rowlands, the Labour Member of Parliament for Merthyr Tydfil and Rhymney. He was quite unimpressed by the attempted defence of the proposals put by the Minister of State.
I want now to come back to the cost of these proposals. With regard to the proposals as a whole, the argument of the Government has been that a costing exercise of any worth was not possible because there were too many imponderables. That has been one of the arguments of the Government against giving information which we believe they ought to give to Parliament to enable them to come to a reasonable decision about the provisions of this Bill. But with regard to the back-dating provisions the arguments have changed. The Minister of State during the Committee stage in another place, in reply to requests to give an estimate of the cost of the back-dating provisions, took a different line. It is clear that the Government have sufficient information to give some sort of estimate, but the Minister of State declined to make that estimate on the grounds that to do so would involve information which for commercial purposes is confidential. So in actual fact the Government have the wherewithal, they have the information to make an estimate, but they will not make it available to Parliament.
So how are we to judge the measures before us? Parliament has to make a decision about the likely effects of the measures before us, and indeed to assess the potential loss of revenues to the Exchequer and to this nation. But we are being denied information which is fundamental to our being able to make a decision. How on earth are we to make judgments on this basis? How can noble Lords in this place, or honourable Members in another place, properly carry
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out their duty to scrutinise legislation if proper and available information is witheld from them? We on this side of the Committee are of the opinion that, whatever else may be said for this Bill, there is no justification whatever for the back-dating provisions. I therefore, commend this amendment to the Committee and ask for your Lordships' approval.
5 p.m.
The Earl of Avon: As the noble Lord explained, the effect of the amendment is simple. It would exclude from royalty relief the two fields approved between 1st April 1982 and 1st April 1983. All members of the UKOOA would have been aware from the summer of 1982 of the review we were undertaking in close consultation with that association. It was appropriate, therefore, to include the two fields which were approved after the review had begun: Alwyn North in October and Clyde in December. It would also have been reasonable for the participants to expect that any changes to the fiscal regime taken as a result of that review would apply to their fields. I can assure the Committee that no secret assurances were given to the participants in those two fields that they would receive special treatment.
It is true that the decision to develop the two fields was taken while the review that led to the package was still being undertaken. The licensees of those fields could justifiably have cried "Foul!" if their welcome decision to seek approval for development at that time had resulted in their exclusion from the benefits to which the discussions with industry could reasonably have been expected to lead.
It would be wrong of me to quantify the effect of this Bill on the Exchequer's take, even from those two fields. Any estimate would be based on information about production profiles given in the strictest commercial confidence. That is why in another place my right honourable friend the Secretary of State chose a hypothetical field, which the noble Lord quoted.
What Ministers did make clear was that in their judgment these incentives will increase the flow of oil, and so of revenue, and, by no means incidentally, employment in North Sea-related United Kingdom industries. During the Second Reading debate in this House I referred to estimating the effect of this Bill as a crystal-gazing operation. The noble Lord, Lord Stoddart of Swindon, has looked into his crystal ball and sees only a loss. However, it is the Government's belief that the cost of the incentive, in percentage of take in such fields as would have gone ahead even under the old regime, will be substantially outweighed by receipts in PRT and corporation tax on fields which simply would not have been developed. This belief is based on the detailed review last winter of the profitability of respective developments and is confirmed by the very positive response of the industry since the package, including this Bill, was announced in March. I would prefer that the Committee should not accept the amendment.
Lord Tordoff: I must begin by informing your Lordships that I am a beneficiary from a pension fund of a large oil company; which I suspect has little bearing on what I have to say but I say it just the same.

133
I did not intervene on the previous amendment, but the truth is that we would not have supported the amendment had it been put to the vote, although it perhaps has some marginal merit. Basically we are supporting the Bill in general terms. I waited to hear what the Government had to say on Amendment No. 3 because I wondered whether there was anything I had missed in reading it. However, I find the Government's explanation on why it contains this retrospective element very thin indeed. I am grateful to the noble Lord, Lord Stoddart of Swindon, for the "commercial break" telling your Lordships what a good chap the new Member of Parliament for Orkney and Shetland is, and certainly it is true to say that he supported this amendment in another place.
I can see no excuse, in a Bill which rightly purports to encourage the oil companies to develop smaller and marginal fields—I am sure that will be the effect of the Bill—nor any reason why there should be a retrospective element on fields where the decision has already been taken. That simply does not hang together with the logic and philosophy behind the Bill. Certainly I shall advise my colleagues to go into the Lobbies with the mover of the amendment and I hope he will press it to a Division.
Lord Bishopston: In the previous amendment there was an attempt to prevent, in effect, a subsidy or grant being given to those who did not necessarily need it. I say "did not necessarily need it" because the Government could not, or preferred not to, give any figures to estimate the loss of potential royalty. The North Sea is an asset of vital importance to the nation. Its income is enough to finance the 3 million or more unemployed and who are jobless as a deliberate result of the Government's economic policy. Therefore, the income from the North Sea which the nation so essentially needs for the redevelopment of our industry is being used to finance 3 million people for whom the Government have no need.
We do not know much about the royalty cuts and how much they would have contributed, for instance, to the financing of the vast sum necessary to sustain the number of unemployed. We have no idea of how much it would have contributed to other areas of public spending or what cuts could have been avoided had such money been available. We have no idea of that sum. The Government are not saying.
On speaking to the previous amendment I said that no other aspect of public spending had experienced such generosity. Local government, education, housing, transport, regional grants, publicly run industry, private enterprise, agriculture—all have the task of proving need when any concessions are sought from the Government. One makes no complaint about that, but in this case there is no requirement whatever on these oilfields, which bring in very desirable vast sums of money to help the public purse, to prove need. Otherwise, of course, the 1975 Act to which I referred on the previous amendment would have sufficed to give such help as was necessary. Other sectors have had to demonstrate need to the Government in order to obtain that largesse.
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Not content with giving a subsidy in the future of unknown financial dimension, the Government's generosity to the profitable oil-producing sector goes back into the past. The Government's case for reduced royalties rested on possible need to encourage future development. That is a case which one can accept. Future development would be difficult and we do not want to put off people when they are hesitating as to whether to invest the manpower, money, materials and in other ways in a development of enormous size. But, by backdating, the Government are exposed on their claim that the industry needs help in an uncertain future.
The Government must have some figures which give an estimate of how much pay-back there will be in this period. In this concession the Government should naturally tell us how much is involved. There is no justification based on potential risk, because the risks have been taken. The production has been put into barrels and sold and one presumes that the royalties have been paid. If they have, they will have to be paid back and there must be some figure as to the extent of that. The past developers knew what was expected when they took on the development and they were prepared to accept it. The Minister has given no argument or any reason why this money should be paid back, even though, as I said, we can see justification to some extent—an extent we would not accept—on the future risks. But there is no justification for this concession.
We are grateful for the support of the Liberal Party. In the words of the noble Lord, Lord Tordoff, no case has been made out. As he suggests, the matter should be tested in the Lobbies.
The Earl of Avon: The noble Lord, Lord Bishopston, ranged widely on this particular point, which is only about two oilfields. If I may take him up on his wide exercise. I believe that the incentives which this royalty Bill will produce will give the Chancellor more revenue than the old system.
Lord Bishopston: I was making the point that the last change was a big concession and this one is even less justified on top of that. The Minister has not given the figures which justify the point that he has just made.
Lord Tordoff: I wonder whether I might distance myself from the more general remarks made by the noble Lord, Lord Bishopston. Quite clearly, noble Lords on these Benches do not regard the oil companies as being rogues and vagabonds tucking away vast sums of money untaxed. But on the narrow point of this amendment, which is what I thought we were speaking to, we will support it.
Lord Bishopston: I certainly in no way ascribe to those concerned with oil production the description mentioned by the noble Lord, Lord Tordoff. I believe that the industry has a great record, but I feel that the moves that we have been discussing this afternoon cannot be justified.
5.11 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 124.

DIVISION NO. 2

CONTENTS

Airedale, L.

Kilmarnock, L.

Ardwick, L.

Kirkhill, L.

Attlee, E.

Leatherland, L.

Aylestone, L.

Lee of Newton, L.

Banks, L.

Llewelyn-Davies of Hastoe, B

Barnett, L.

Lloyd of Kilgerran, L.

Beaumont of Whitley, L.

Lockwood, B.

Beswick, L.

Lovell-Davis, L.

Bishopston, L.

Mackie of Benshie, L.

Blyton, L.

McNair, L.

Boston of Faversham, L.

Mayhew, L.

Bowden, L.

Milford, L.

Brockway, L.

Mishcon, L.

Brooks of Tremorfa, L.

Molloy, L.

Byers, L.

Nicol, B. [Teller.]

Carmichael of Kelvingrove, L.

Northfield, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Phillips, B.

David, B.

Ponsonby of Shulbrede, L. [Teller.]

Davies of Penrhys, L.

Diamond, L.

Prys-Davies, L.

Donnet of Balgay, L.

Rhodes, L.

Elwyn-Jones, L.

Rochester, L.

Ewart-Biggs, B.

Seear, B.

Fitt, L.

Segal, L.

Gaitskell, B.

Simon, V.

Galpem, L.

Stallard, L.

Glenamara, L.

Stedman, B.

Graham of Edmonton, L.

Stewart of Alvechurch, B.

Hale, L.

Stewart of Fulham, L.

Hanworth, V.

Stoddart of Swindon, L.

Harris of Greenwich, L.

Taylor of Gryfe, L.

Heycock, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L.

Tordoff, L.

Hughes, L.

Underhill, L.

Irving of Dartford, L.

Wallace of Coslany, L.

Jacques, L.

Walston, L.

Jeger, B.

Wells-Pestell, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Wigoder, L.

Kaldor, L.

Winterbottom, L.

Kilbracken, L.

Wootton of Abinger, B.

NOT-CONTENTS

Airey of Abingdon, B.

Dilhorne, V.

Allerton, L.

Dormer, L.

Alport, L.

Dundee, E.

Ampthill, L.

Eccles, V.

Auckland, L.

Effingham, E.

Avon, E.

Elton, L.

Bauer, L.

Faithfull, B.

Belstead, L.

Fanshawe of Richmond, L.

Bessborough, E.

Fortescue, E.

Boyd-Carpenter, L.

Fraser of Kilmorack, L.

Caccia, L.

Gainford, L.

Caithness, E.

Gisborough, L.

Campbell of Alloway, L.

Glanusk, L.

Carnegy of Lour, B.

Glenkinglas, L.

Cathcart, E.

Greenway, L.

Cockfield, L.

Grimston of Westbury, L.

Cottesloe, L.

Hailsham of Saint Marylebone, L.

Craigavon, V.

Dacre of Glanton, L.

Hawke, L.

Daventry, V.

Henley, L.

Davidson, V.

Hives, L.

De Freyne, L.

Holderness, L.

Denham, L. [Teller.]

Home of the Hirsel, L.

Devonport, V.

Hornsby-Smith, B.

136

Hylton-Foster, B.

Porritt, L.

Inglewood, L.

Portman, V.

Ironside, L.

Rankeillour, L.

Kilmany, L.

Reay, L.

Kinnoull, E.

Redesdale, L.

Lauderdale, E.

Renton, L.

Lindsey and Abingdon, E.

Ridley, V.

Lloyd, L.

Rochdale, V.

Long, V.

Rodney, L.

Lucas of Chilworth, L.

Romney, E.

Luke, L.

Rugby, L.

Lyell, L.

St. Aldwyn, E.

McAlpine of Moffat, L.

St. Davids, V.

Mackay of Clashfern, L.

Salisbury, M.

Macleod of Borve, B.

Sandford, L.

Mancroft, L.

Savile, L.

Mansfield, E.

Selkirk, E.

Margadale, L.

Shaughnessy, L.

Marley, L.

Skelmersdale, L.

Masham of Ilton, B.

Spens, L.

Maude of Stratford-upon-Avon, L.

Stanley of Alderley, L.

Strathclyde, L.

Merrivale, L.

Strathcona and Mount Royal, L.

Mersey, V.

Middleton. L.

Strathspey, L.

Molson, L.

Suffield, L.

Monk Bretton, L.

Swinton, E. [Teller.]

Morris, L.

Terrington, L.

Mottistone, L.

Tranmire, L.

Moyne, L.

Trenchard, V.

Murton of Lindisfarne, L.

Tryon, L.

Newall, L.

Tweeddale, M.

Norfolk, D.

Vaux of Harrowden, L.

Nugent of Guildford, L.

Vivian, L.

O'Neill of the Maine, L.

Waldegrave, E.

Onslow, E.

Windlesham, L.

Orkney, E.

Wise, L.

Pender, L.

Wynford, L.

Penrhyn, L.

Young, B.

Plummer of St. Marylebone, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 1 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without amendment: Report received.

Coal Industry Bill
Brought from the Commons; read a first time, and to be printed.
Town and Country Planning Bill
Brought from the Commons; read a first time, and to be printed.

Agricultural Holdings Bill [H.L.]
5.23 p.m.
Lord Belstead: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD JACQUES in the Chair.]
Lord Howard of Henderskelfe Lord Howard of Henderskelfe moved Amendment No. 54:
After Clause 7, insert the following new clause:
("Appeals to the Lands Tribunal.
In section 77 of the 1948 Act (Provisions as to Arbitration) after subsection I there shall be inserted the following subsection—
"(1A) An appeal by way of application by any party to an arbitration under section 8(1) of this Act (arbitration on terms of tenancies as to rent) shall on any question of law or fact (including the amount of the award) lie to the Lands Tribunal against the award of any arbitrator appointed by the Minister or by the President of the Royal Institution of Chartered Surveyors; provided that any such appeal under this subsection must be brought within one month of the date of issue of the award"."
The noble Lord said: I beg to move the new clause which appears in my name and in the names of other noble Lords. The new clause reflects the dissatisfaction (I shall put it no stronger than that) that was felt on all sides of your Lordships' Committee in many quarters and for many different reasons, with Clause 1 of the Bill as it came before us. The Bill has had a curious genesis. I shall not dwell on that now, but I hope that at a later stage we may be able to improve the Bill in order to achieve the aim which we have all set out to achieve.
Despite the extreme courtesy of the noble Lord who is in charge of the Bill—courtesy for which we thank him—and despite the charm with which he discharges his duty, he has given us virtually nothing. Certainly we have not received in response to our earlier amendments any firm assurances which would enable us to say, "Right, we are very happy, and we know that the Government will duly amend the Bill on Report so that it meets the dissatisfaction which was felt in so many quarters".
Thus we are faced with the Bill as it is printed, and we have to take it as it stands. We cannot imagine something which is not there. Therefore, we have put down the present amendment containing the new clause, which I must at once confess is somewhat unusual in that at present, in general, there is no right of appeal from the decision of an arbitrator save on a point of law, which has to be made by way of case stated in the county court.
The grounds for the new clause are as follows. As the Bill at present stands, there is a new rent formula, and it is highly complex. We believe that it does not have a proper objective, it does not state what it is actually setting forth to achieve. It is certainly much longer and more complex than anything that we now have, and even if it is amended it is likely to remain more complex than any existing provision.
There will be a great deal of scope for discretion on the part of the arbitrator in determining, where there is reliance on the productivity or the profitability of the holding, in what proportions that should be divided by way of rent to the landlord and profit to the tenant; in determining what, in our words, a prudent tenant would pay and a prudent landlord would accept; and in determining what should be knocked off for scarcity value.
We know, for example, that under the Rent Act, if a rent officer decides to knock off perhaps 40 per cent.
138
for the scarcity value of a particular property, then that, however arbitrary it may be, is what the law calls a finding of fact. I am not a lawyer and I have no professional qualification. Therefore, I have to accept the advice that I am given on that point. I should hardly have thought that it was a question of fact, but that is what the law tells us it is. In the present context, any finding of that kind should be appealable.
We do not believe that at this stage, when we are faced with such a complex formula, such a complex way of achieving what has hitherto seemed a relatively simple result, the arbitrator should have an urestricted and an unsupervised freedom to do precisely what he likes. In similar cases there could be results which would vary very widely, not merely from locality to locality but from one farm in a neighbourhood to another farm in the same neighbourhood.
Earlier in today's proceedings we were told of congratulations which had been received regarding the plain English of a Government form. We cannot claim that our new clause is perhaps as eloquent as that, but it is certainly in plain English, and I hope that it says exactly what it means and is not in any way capable of being misunderstood.
The appeal to a court of law by way of case stated depends on being able to separate out questions of fact from questions of law. Where these are, as we believe they are in this particular case, inseparably intertwined, I do not see how you can possibly separate out these two questions. There are some comparable areas, say under the Leasehold Reform Act and, indeed, in rating. In both cases, lands tribunals have done extremely valuable work not only in settling what might be disputed points of law but in laying down acceptable guidelines that extend the areas where the law and discretion are intertwined.
There has been talk in some quarters about the fact that the thing has worked perfectly well up to now because arbitrators have been extremely sensible, have gone on doing what they have always done and have paid no attention to what the law actually says. If this is true (there may be some truth in it), then it is also true that it brings the law into disrepute. I do not think that any of your Lordships would wish to argue that we should do anything further to bring the law into disrepute at a time when this, in another field entirely, is exercising the minds of trade unions, of the other place and of our greatnewspapers. Anything that we can do to encourage those who have to operate the law to operate it according to the law and not according to what they think it ought to be, should be encouraged. The one thing that should not be encouraged is what an eminent arbitrator said about this: that the whole thing was a load of fudge anyhow, he would determine it according to what the rent ought to be and damn what the words actually said! That cannot be good. It is what we are seeking to avoid.
In seeking to avoid fudge and to ensure that the law is observed and is properly carried out, we have put down this amendment, which is not as novel as it may seem. At an earlier time in this Committee stage I declared myself, I think, an unrepentant and an unreconstructed Englishman. I did not say that nothing good came from north of the Border, and in this case I intend, in fact, to cite Scottish legislation as a precedent for what we are doing now. The proposed

139
wording follows closely Section 5 of the recent Agricultural Holdings (Amendment) (Scotland) Act, which gives a full right of appeal against the arbitrator's findings on questions of law or fact and against the award.
It has been suggested that this may lead to a large number of appeals, that appeals waste a great deal of time and that it will lead to great uncertainty. I do not believe that that is the case. I believe that there may be a few appeals but that they will settle into a general framework within which the law can operate properly, as it does now. I have stated previously that there are very few arbitrations, let alone appeals against arbitrations, and valuers, generally speaking, are able to settle the matter amicably. I am sure that by making this provision in the new clause it will lead to the same procedure, whatever we get by way of a new Clause 1. I beg to move the insertion of the new clause.
Lord Prys-Davies: I should like to apologise to the noble Lord, Lord Howard, for not being in my place when he began his arguments in support of his amendment. I understand that the National Farmers' Union is uneasy about the amendment, fearing that it may be a recipe for unnecessary litigation and expense. On the other hand, the resolving of a dispute between landlord and tenant as to the rent payable by referring the dispute to arbitration does, of course, deprive the citizen of his common law right of access to the courts. We should be clear about that. It is therefore arguable that there should be a right of appeal to another source of authority such as the lands tribunal—an authority which has the confidence of the farming community.
One's fear is that if arbitration under the regime proposed in Clause 7 is not seen to be judicial, then the parties may not be satisfied with the status quo, with a system that deprives them of a right of appeal on fact or law and a right of appeal as to the award. We on these Benches therefore consider that there is considerable merit in the amendment that has been proposed by the noble Lord, Lord Howard.
Lord Renton: I would only wish to add that it is a fundamental principle that prevails throughout the whole of our legal system, except at any rate on this one occasion to which the noble Lord, Lord Howard, has referred, that there should be an appeal. Indeed, throughout the civilised world this is regarded as a principle of natural justice. I am therefore another who would wish to support the amendment.
The Earl of Caithness: I sympathise with the thought behind this amendment, and particularly the reservations of the noble Lord, Lord Howard, with regard to Clause 1. I do not, however, like the amendment. Let us take the appeal on matters of law. There is ample provision at the moment under existing law to appeal on a point of law to a court. I do not think that the lands tribunal is the right vehicle for an appeal of this type. As regards an appeal on fact, that is very dangerous. We have a number of other bodies in the industrial world wanting to appeal on fact, and this could lead to all sorts of difficulties for an arbitrator. If an appeal was made on fact, he might be guilty of misconduct in its technical sense while not
140
committing a shameful act. I would have thought that this was a dangerous precedent to follow.
The noble Lord. Lord Howard, mentioned that the Scottish Act had introduced a rent clause on appeal on fact for arbitration. It is worth remembering that in Scotland there are lay members of the arbitration panel whereas in England and Wales they are all professionals, members of the Royal Institution of Chartered Surveyors or the Central Association of Agricultural Valuers. That is the key difference. I do not think, therefore, that a true comparison can be drawn between the Scottish situation and the English situation. For those reasons. I do not think I can support the amendment.
The Earl of Kinnoull: I am encouraged by what has been said by the noble Lord, Lord Prys-Davies, and by my noble friend Lord Renton, I am sure that it is a fundamental principle that there should be a right of appeal. I am surprised that my noble friend Lord Caithness should talk about its being a dangerous principle. He is a fine Scotsman. He did not object, so far as I know, to the Act going through. It has been in Scottish Acts for quite a few years; it has not simply been introduced in this past year. It has been a fundamental principle of Scottish law that there could be an appeal on both fact and law. Nothing has happened, so far as I know, that gives any reason for thinking that that is a dangerous principle. I support the amendment strongly. I hope that my noble friend will be persuaded that it should be accepted by the Government.
Lord Belstead: I think the noble Lord. Lord Howard, laid a considerable amount of emphasis on the new rent formula. Which, of course, we have now left behind us in Clause 1, but I should just like to remind the Committee that the formula is not designed to alter the level of rents. It is precisely because it has been asserted by some noble Lords that the formula, as drafted, could have an effect on rents that I have undertaken on behalf of the Government to take the rent formula away to try to meet the apprehensions which have been voiced; apprehensions with which the Government do not agree, but nonetheless I am very ready to do that.
Rather than concentrate, therefore, as the noble Lord did at the beginning of his remarks, on the rent formula, I would rather ask the Committee to concentrate on the principles which underlie the making of arbitrations in agricultural holdings cases. Those principles are two and they are enshrined in Schedule 6 of the 1948 Act. My noble friend Lord Waldegrave specifically asked for an assurance that Schedule 6 would remain in being when we were originally debating Clause 1 of the Bill.
I think I am right in saying that those two principles of Schedule 6 underline the making of arbitrations in agricultural holdings cases. They are that the arbitration should be quick and that it should be inexpensive. Honestly, the more one extends the arrangements for the making of arbitrations, the further one is bound to get from the ideal and closer to a process of judicial judgment. I think it is fair to say that in a sense an arbitration is an appeal in that the

141
two parties have been unable to arrange their case together and so they look to the professional judgment of the arbitrator to settle the matter. In particular, I really do think we want to take the very greatest care not to add unnecessary costs to the arbitration process which surely must be of primary importance to the tenant whose whole livelihood may be affected by the outcome of an arbitration.
The noble Lord, Lord Prys-Davies, referred to how the system of arbitration would be seen as it exists in Clause 7 of the Bill. The noble Lord said, in effect, that if it was not seen as being judicial then there was need to have an appeal. Of course, the arbitrator is a professionally qualified land agent. Incidentally, the system is different from that in Scotland where there is a facility to appoint unqualified arbiters; I am sure they are admirable appointments, but nonetheless they are not the same as the appeals which are made in England and Wales.
Precisely because the arbitrator in England and Wales is a professionally qualified land agent (but not a judicial figure) then, as the noble Lord who moved the amendment very fairly said, the present procedures provide that if a rent arbitration raises questions of dispute over points of law, the arbitrator can himself refer that aspect of the case to the county court. There is also provision for application to the county court against an error of law which is apparent on the face of the award; so to provide for appeal to the Lands Tribunal would, so far as the legal aspects are concerned, be imposing one appeal system on top of another.
I should like to make a further point, which is that the need for this amendment has not been called for by the industry in England and Wales. I think that although the right of appeal, of course, sounds right in natural justice, the reason why the industry have not requested it has probably two underlying reasons: one, I think, is because of confidence in the impartial performance by arbitrators, which is, of course, a tribute to their profession. I think the second reason is the fear of high costs of litigation to which tenants might be subjected if the facts, or the amount of an award, were to be referred to a higher court.
Then there is one final consideration which I have to lay before the Committee: because of the constant and heavy pressure on the whole system of justice, both civil and criminal, any proposal to introduce new remedies or to increase recourse to the courts or tribunals really does have to be examined with care to see whether it is essential. This is, I know, a matter to which my noble and learned friend the Lord Chancellor attaches great importance. The reasons which I have already tried to give to the Committee lead me to doubt whether it would be essential to create this new demand on the legal system. I therefore put it to the Committee that, whatever the reasons for including a right of appeal in Scotland, it has not been called for by the farming industry in England and Wales, and would be most unwelcome so far as the courts are concerned.
In this country we have a panel composed solely of fully qualified arbitrators, and ever since the 1948 Act the system, without the right which has been called for in the amendment, has worked; and, so far as I know, it has worked very well indeed. I hope, therefore, that
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the noble Lord, Lord Howard, and my noble friend Lord Kinnoull, will feel able not to press this amendment.
Lord Howard of Henderskelfe: It is precisely because the previous system worked well under clearly understood, simple guidelines that we feel that what is now going to be an extremely complicated system needs some method of interpretation which is not dependent upon (I will not say "when" because that will convey the wrong impression) the individual thoughts of a single arbitrator, however highly qualified. I very much regret, therefore, that I cannot ask the leave of the Committee to withdraw this amendment.
The Earl of Caithness: Before the noble Lord divides the Committee, if that is his intention, I would point out that we do not know what the new Clause 1 is going to be. Would it not be more sensible to let my noble friend Lord Belstead bring back the new Clause 1, because that might allay all the fears?
Lord Howard of Henderskelfe: It is precisely because we do not know that I wish to press it at this stage. We have two further stages yet to come. If, in fact, on Report we get a beautiful new Clause 1, it is perfectly open to us to remove the obnoxious new clause which I have moved, on Third Reading. I am afraid I must stick to my decision and divide the Committee on this matter.
5.50 p.m.
On Question, Whether the said amendment (No. 54) shall be agreed to?
Their Lordships divided: Contents, 71; Not-Contents, 134.

DIVISION NO. 3

CONTENTS

Ardwick, L.

Jacques, L.

Barnett, L.

Jeger, B.

Beswick, L.

Jenkins of Putney, L.

Bishopstone, L.

John-Mackie, L.

Bowden, L.

Kagan, L.

Briginshaw, L.

Kaldor, L.

Broadbridge, L.

Kilbracken, L.

Brockway, L.

Kinnoull, E. [Teller.]

Brooks of Tremorfa, L.

Kirkhill, L.

Bruce of Donington, L.

Lee of Newton, L.

Carmichael of Kelvingrove, L.

Lindsey and Abingdon, E.

Cledwyn of Penrhos, L.

Llewelyn-Davies of Hastoe, B.

Collison, L.

Lockwood, B.

Dacre of Glanton, L.

Longford, E.

David, B.

Lovell-Davis, L.

Dean of Beswick, L.

Mcintosh of Haringey, L.

Devonport, V.

Molloy, L.

Dilhorne, V.

Monson, L.

Donnet of Balgay, L.

Nicol, B.

Ewart-Biggs, B.

Oram, L.

Gaitskell, B.

Phillips, B.

Gallacher, L.

Ponsonby of Shulbrede, L.

Galpern, L.

Prys-Davies, L.

Graham of Edmonton, L.

Renton, L.

Hale, L.

Rhodes, L.

Heycock, L.

Ridley, V.

Houghton of Sowerby, L.

Ross of Marnock, L.

Howard of Henderskelfe, L. [Teller.]

Salisbury, M.

Segal, L.

Hughes, L.

Serota, B.

Irving of Dartford, L.

Shackleton, L.

143

Stallard, L.

Taylor of Mansfield, L.

Stewart of Alvechurch, B.

Tryon, L.

Stewart of Fulham, L.

Underhill, L.

Stoddart of Swindon, L.

Wallace of Coslany, L.

Taylor of Gryfe, L.

Wootton of Abinger, B.

NOT-CONTENTS

Airedale, L.

MacLehose of Beoch, L.

Allerton, L.

Macleod of Borve, B.

Alport, L.

McNair, L.

Ampthill, L.

Mancroft, L.

Auckland, L.

Mansfield, E.

Avon, E.

Mar, C.

Barnard, L.

Margadale, L.

Bauer, L.

Marley, L.

Beaumont of Whitley, L.

Maude of Stratford-upon-Avon, L.

Bellwin, L.

Belstead, L.

Mayhew, L.

Bessborough, E.

Merrivale, L.

Burton, L.

Mersey, V.

Caccia, L.

Middleton, L.

Caithness., E.

Molson, L.

Carnegy of Lour, B.

Monk Bretton, L.

Cathcart, E.

Montagu of Beaulieu, L.

Cockfield, L.

Morris, L.

Colwyn, L.

Mottistone, L.

Cornwallis, L.

Moyne, L.

Cottesloe, L.

Murton of Lindisfame, L.

Crathorne, L.

Nugent of Guildford, L.

Cullen of Ashbourne, L.

Onslow, E.

Daventry, V.

Orkney, E.

Davidson, V.

Pender, L.

De Freyne, L.

Penrhyn, L.

De La Warr, E.

Plummer of St. Marylebone, L.

Denharn, L. [Teller.]

Diamond, L.

Porritt, L.

Donaldson of Kingsbridge, L.

Rankeillour, L.

Dormer, L.

Reay, L.

Drumalbyn, L.

Redesdale, L.

Dundee, E.

Rochdale, V.

Effingham, E.

Rochester, L.

Elliot of Harwood, B.

Rodney, L.

Elton, L.

Romney, E.

Faithfull, B.

St. Davids, V.

Fanshawe of Richmond, L.

Sandford, L.

Fortescue, E.

Savile, L.

Fraser of Kilmorack, L.

Seear, B.

Gainford, L.

Shaughnessy, L.

Gisborough, L.

Simon, V.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Spens, L.

Greenway, L.

Stanley of Alderley, L.

Grimston of Westbury, L.

Stedman, B.

Hailsham of Saint Marylebone, L.

Strathcona and Mount Royal, L.

Hampton, L.

Strathspev, L.

Hanson, L.

Suffield. L.

Hanworth, V.

Swinfen, L.

Harris of Grenwich, L.

Swinton, E. [Teller.]

Hives, L.

Terrington, L.

Holderness, L.

Teviot, L.

Homsby-Smith, B.

Tordoff, L.

Hunt, L.

Tranmire, L,

Hylton-Foster, B.

Trenchard, V.

Inglewood, L.

Tweedsmuir, L.

Kilmany, L.

Vaux of Harrowden, L.

Kilmarnock, L.

Vivian, L.

Kitchener, E.

Waldegrave, E.

Lawrence, L.

Walston, L.

Lloyd of Kilgerran, L.

Wigoder, L.

Long, V.

Wilson of Langside, L.

Lucas of Chilworth, L.

Windlesham, L.

Lyell. L.

Winstanley, L.

McAlpine of Moffat, L.

Wise, L.

Mackay of Clashfern, L.

Wrenbury, L.

Mackie of Benshie, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.59 p.m.
Lord Renton Lord Renton moved Amendment No. 55:
After Clause 7, insert the following new clause:
("Rules for conduct of arbitrations:
In section 77 of the 1948 Act for subsections (2) and (3) there shall be substituted the following—
"(2) The Lord Chancellor may by order make rules for the conduct of arbitrations under this Act and. in so far as it may be necessary for that purpose, may vary the provisions of the Sixth Schedule to this Act.
(3) The power to make orders conferred on the Lord Chancellor by this section shall be exercisable by statutory instrument (which shall be subject to annulment in pursuance of a resolution of either House of Parliament) and shall include a power, exercisable in the like manner, to revoke or vary any order made thereunder.".").
The noble Lord said: I beg to move Amendment No. 55. The purpose of this amendment is to give the noble and learned Lord the Lord Chancellor the same power to make rules for agricultural arbitrations as he has for the agricultural land tribunals under Section 73 of the Agriculture Act 1947. The rules for the procedure of the agricultural land tribunals made, as I say, by the noble and learned Lord the Lord Chancellor, give general satisfaction, and they have the advantage that they can be amended by statutory instrument without the need to introduce a Bill; that means, without having to wait some years before a Bill is introduced by chance on this subject.
My noble friend Lord Belstead, in his reply to the last debate, said very properly that the procedures of agricultural arbitration should be quick and inexpensive. I suggest to him that they should also be reasonably informal and flexible and not too rigid, but unfortunately their procedure is at present governed by the Sixth Schedule to the Agricultural Holdings Act 1948, and of course any improvements to that can only be made by amending the schedule by statute. Unfortunately, the present procedure is in several ways unsatisfactory for dealing with the many different kinds of matter which are now referred to arbitration under the Act, including of course principally rent arbitrations.
May I give two examples of the defects in the present statutory procedure. For example, under paragraph 6 of that Sixth Schedule the party in the position of a defendant has to deliver his statement of case without having seen the statement of case of the applicant. That seems to me to be contrary to every rule of justice. It is totally inappropriate to those cases which arise under the Agricultural Holdings (Notices to Quit) Act 1977, Section 2, and particularly under Cases D and E.
Those are cases where possession is claimed on the grounds of the breaking by the tenant of the tenancy agreement. Of course, we all know that such claims give rise to various rather technical and difficult questions: for example, whether the tenant is estopped by his conduct from denying that he is an assignee of his father's tenancy and so bound by its terms. In cases like that it is surely only fair to the defendant that he should know the case made against him and be given a proper opportunity of answering it when he has seen it. which at the moment under the statutory procedure he has not got.
Now another example. Under the Sixth Schedule there is no provision for the relaxation of the time

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limits for delivering the statements of case. They have to be delivered within 28 days of the appointment of the arbitrator. That was increased from 14 days in 1963, and under a schedule to this Bill it is to be increased to 35 days. Fair enough. But so far as I know there is no other court, tribunal, or arbitrator which is confined to a rigid time limit whatever the circumstances, so that if that time limit is exceeded through no fault of his own he is shut out from putting his case forward at all. There is another example of injustice arising from statutory provisions.
I suggest that that sort of rigidity is something which we should get rid of, and this Bill enables us to do so. It is even more important to do so after the defeat of the previous amendment in the last Division, because there is to he no general right of appeal, only the limited right of appeal under the 1977 Act. Surely, is it not absurd that arbitrations—which should, as my noble friend said, he quick and inexpensive, and I say flexible—should be governed by such a rigid statutory procedure while the procedure in the Agricultural Lands Tribunal is governed by rules made by the Lord Chancellor, which is the case with nearly all legal proceedings in this country? They are governed either by rules of the High Court, to which the Lord Chancellor is a party, or by rules made by the Lord Chancellor himself.
This amendment is a probing amendment—I would not wish to divide the Committee at this moment—and I should be grateful if noble Lords on either side of your Lordships' Committee would express your opinions as to the merits of this, and when my noble friend has had a chance to consider the matter further, no doubt in consultation with the Lord Chancellor, perhaps then we may get this matter properly and finally resolved at Report stage. I beg to move.
Lord Pry's-Davies: I have listened with great interest to the noble Lord, Lord Renton, speaking in support of his amendment. Under the existing legislation (that is, Section 77(2) of the 1948 Act) the Minister is empowered to make rules for expediting, or reducing the costs of, proceedings and arbitrations—full stop. That is as far as we go. When I first read the amendment I thought that it was a fairly sweeping amendment; that it gives to the Lord Chancellor, by order, the authority to make rules for the conduct of arbitrations. I was in some difficulty in defining the phrase "conduct of arbitrations", but the noble Lord, Lord Renton, has helped the Committee considerably.
The noble Lord has shown that what he has in mind is that the parties should disclose their case, and that there ought to be a flexible timetable. I should have thought that those are matters which we ought to welcome, certainly in the changed climate if and when this Bill is enacted. I should have thought that the amendment would be helpful to the arbitrator, and indeed helpful to those who have to prepare the cases before they appear, or in appearing, before the arbitrator. We would support the principle of the amendment.
Viscount Dilhorne: I should like to support my noble friend Lord Renton very vigorously. There is only one thing I wish to add, and I shall take a very
146
short time doing it. It concerns the rigid time limit and the appointment of an arbitrator. The current practice is to delay the date at which it can be said that the arbitrator is appointed, to give the longest possible time for the notice to be put in within time. This one might call a purely benevolent contrivance to save the parties from the catastrophic consequences of not serving the notice in time. The Government propose to ameliorate this situation by extending the 28 days to 35 days; but it does not get round, or get rid of, the problems caused by retaining a mandatory time limit.
The purpose of this amendment is to bring these rules which are under the Sixth Schedule under the ordinary rules of the court. There is nothing exceptional about that. It does not propose to amend the Act.What it proposes is to enable the Lord Chancellor to bring in rules concerning arbitrations which enable time to be extended to overcome the rigid application which can only work to the disadvantage of really all the parties concerned. These are the same powers that arbitrators have under the Arbitration Act.
Lord Belstead: The statutory code for agricultural arbitrations has endured substantially unamended since 1948. If I may be forgiven for repeating it, it has served well in the great majority of cases. If there are specific improvements for which a case can be made out there is the opportunity in the Bill to do something about them.
If my noble friend Lord Renton will forgive me, the disadvantage of his amendment is that it would mean that we should have to look in two separate places—first in the Act and then in a supplementary order which was made by the Lord Chancellor—for the full details of the law relating to agricultural arbitrations. That would be the disadvantage if the amendment were made.
The advantage has been clearly explained by my noble friend and supported by the noble Lord, Lord Prys-Davies, and by my noble friend Lord Dilhorne. Indeed, my noble friend, as I should have expected of him, has supported his general case with two specific cases. First, my noble friend complained about the unsatisfactory situation which exists at the moment concerning silence, in so far as the legislation is concerned, on the requirement that cases should be exchanged. It is perfectly true that at the moment nothing is being done about that, though it is a matter to which we could turn our attention in the Bill. The other example which my noble friend gave was the question of the time limit for the period set for the presentation of cases. There, we have done something, because we have extended the time limit from 28 to 35 days.
I realise that that answer does not meet head on the case which my noble friend made, which, in a word, is the need for flexibility. In view of the three speeches which have been made, I ought to, and I do, undertake to approach the Lord Chancellor to see whether it might be possible for the Lord Chancellor's office to consider taking this on. I shall not weary your Lordships with the difficulties that there are in asking any department of Government to take on any additional work, but I shall do what my noble friend

147
has asked me to do and come back and report on it at the next stage.
Lord Renton: I am grateful to my noble friend, to the noble Lord, Lord Prys-Davies, and to my noble friend Viscount Dilhorne. I shall make one quick point. The noble Lord, Lord Prys-Davies, properly referred to the power under Section 77 of the 1948 Act on the part of the Minister to do two very limited things—this is the power of the Minister not of the Lord Chancellor: it must be—for expediting arbitrations or for reducing their costs. That does not deal with the fundamental problems which I mentioned.
It is relevant to what my noble friend Lord Belstead said, when he said that we do not want people to have to look in two places, to point out that they have to look in two places at the moment: they have to look at the Act (and they will have to look at this Act) and they also have to see whether the Minister has made any order.
In the further discussions with the Lord Chancellor's department and the Lord Chancellor himself, I hope that the Minister's powers will be done away with and will be absorbed into the powers to be given to the Lord Chancellor. That will overcome the problem. I am grateful and I look forward to the report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 56:
After Clause 7, insert the following new clause:
("Joint applications.
After section 77 of the 1948 Act there shall be inserted the following section—
"77A. The court may on the joint application of the persons who will be the landlord and thetenant in relation to a tenancy which will be a tenancy to which this Act applies authorise an agreement excluding in relation to that tenancy such provisions of this Act, of the Agriculture (Miscellaneous Provisions) Act 1976, of the Agricultural Holdings (Notices to Quit) Act 1977 or of the Agricultural Holdings Act 1983 as may be specified in the agreement; and the provisions so specified shall have no effect in relation to that tenancy.".")
The noble Earl said: For three days—this is our third day in committee—we have been struggling in all parts of the Committee to find ways to strengthen the landlord and tenant system, to stop the decline and, as my noble friend says, to bring fresh blood and fresh life into the system.
The amendment in the names of my noble friends and myself seeks to do that. It is the principle that I want to discuss. In previous amendments we have had fixed term tenancies, which my noble friend Lord Onslow moved and which sought to encourage landlords to offer tenantsthe possibility of farming. We had the retirement amendment, moved by the noble Lord, Lord John Mackie, and the noble Lord, Lord Northfield, moved in a different form. We then had an important statement from my noble friend when he stated that outside the Bill the Minister intended to increase the period of time for the extension of the Section 2 licences which my right honourable friend can issue under the 1948 Act. This was an important power which my noble friend rightly said he saw as a useful support for the landlord and tenant system.
The amendment concerns the term "contracting out" of the Act. It is taken from the Landlord and Tenant Act, 1954, which deals with commercial tenancies. There the landlord and the tenant can make joint application to contract out of the Act. I am not sure that the noble Lord, Lord Northfield, will agree, but the principle is good so long as it does not drive a coach and horses through the security of tenure. I believe that there are ways to restrict this principle. This is a probing amendment, so the restrictions are not included, but I believe that there are ways which could usefully be considered by my noble friend and the Committee. I hope that my noble friends will support the principle of the amendment. I beg to move.
Lord Walston: I agree with the noble Earl on two things that he said. The first is that there is much to be said for enabling willing tenants and willing landlords to agree to a term of tenancy between them. I also agree with his wish not to drive a coach and horses through the present security of tenure but my worry is that, as this is drafted, it does drive, if not a coach and horses, at least a fairly substantial Victoria or brougham through the present legislation and desired legislation.
As I see it, the sort of situation that might arise if this amendment were adopted would be that when a farm became vacant and the landlord was looking for a tenant, a large number of people applied and he let it be known (either directly or indirectly) that preference would be given to that tenant who was prepared to make use of this clause, even if he had offered a lower rent or his qualifications were not so good. It is obviously in the interests of the landlord to have a term tenancy. Therefore if, out of the scores, or possibly hundreds, of applications for the tenancy, one tenant could be found who was prepared to offer a term tenancy he would be most likely to get it.
If the noble Earl and his noble friends or other noble Lords could, between now and Report stage, evolve a method by which this difficulty could be overcome, I should be far more sympathetic to it and so would my noble friends, but I cannot support it as it stands.
Lord Stanley of Alderley: My noble friend is entitled, if he wishes, to move a wrecking amendment, but he should not hide his light under a bushel. He should say, as I say, that this is a wrecking amendment.
Lord Prys-Davies: On this occasion we are unable to support the noble Earl's amendment. As the noble Earl has conceded, this amendment echoes the opting out provisions contained in the Landlord and Tenant Act 1954 relating to business tenancies, but we cannot compare an agricultural tenancy with a business tenancy. We are not comparing like with like. With a business tenancy which was provided for by the relevant section in the 1954 Act, as amended, the parties have in mind a short-term tenancy. It may be a weekly tenancy, a monthly tenancy or a quarterly tenancy; but it is the firm intention of the parties that the tenancy shall not exceed a period of six months. They have in mind. in general, a short-term tenancy,

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a temporary tenancy, whereas with an agricultural tenancy we have in mind a long-term investment. If this amendment is approved this is a way of by-passing the enactment, and it would be a disincentive to long-term investment.
The Earl of Onslow: As your Lordships know, I am very much in favour of the concept of limited, short-term tenancies. I hope that I shall be able to bring to your Lordships' House at Report stage a fairly detailed amendment (which will be drafted by somebody with knowledge and skill in legal affairs) which will enable the Minister to make regulations in such circumstances as to be definitely limited to short-term tenancies. I really think that this one goes much too far. I tend to agree with the noble Lord, Lord Walston, that it will produce a situation where you can only have a tenancy if you agree to go to the court and ask for this limitation to be put upon it.
I think that at some stage we must go to limited forms of short-term tenancies. Equally, I think that there is force in the argument of the NFU that it should not become a permanent and automatic feature of the landlord and tenant relationship. I think that the idea behind it—to enable short-term tenancies—is a very good one, but it goes much too far. I hope that (with considerable help from others who are cleverer than I) I shall be able to produce an amendment at Report stage which will cover the points raised in the Northfield Report and the points made by the noble Lord, Lord Walston, but will still enable us to update and give teeth to Section 2 rather than to introduce a totally new concept.
Lord Belstead: In moving this amendment my noble friend Lord Kinnoull has reminded the Committee that we have been at this Bill in Committee for three days. I should like to assure my noble friend that it does not seem like that to me. Indeed, when we moved into Committee about an hour ago I was reminded of the humorous monologues of Gillie Potter who, some years ago, I used to hear on the BBC and who started one of his talks with:
"Here we are all assembled, eager, excited and, I trust, sober, to enjoy a periodical ten minutes of edifying uplift tempered with innocuous hilarity".
On this amendment we have certainly seen a certain amount of diversity. My noble friend moved the amendment with the plea that it was a modest little amendment which would make a small but valuable improvement to the Bill. That was followed fairly quickly by my noble friend Lord Stanley of Alderley, who simply said, "It is a wrecking amendment". Finally, the short debate which we have had was wound up by my noble friend Lord Onslow, who used the opportunity to make, with his customary skill, a plea for short-term tenancies.
In replying to the amendment, perhaps I may make a point which has not been made. On this amendment I think that for a second we ought to look back. I am advised that the very first Agricultural Holdings Act, which was of 1875, introduced for the first time a statutory code of compensation on quitting. However, the Act did not prohibit contracting-out, with the result that landlords almost invariably chose to do so. The 1875 Act therefore became largely ineffective,
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because people contracted out. As a result, in 1883 it was followed, so I am told, by a further Act which prohibited contracting out. In a sentence, I do not want to see us go through that again. I think that the noble Lord, Lord Walston, had justice in his assertion that we could see that this would drive a coach and horses through the legislation. When I say "the legislation", let us remember that what we are talking about is legislation which has stretched over the years relating to those vital things: rents, security of tenure and compensation.
My fear would be that, if this amendment were made, we might see that there would be competition between aspiring tenants which might serve only to bid up the conditions which they would be prepared to accept in the interests of obtaining a new tenancy; and that we would end up with a form of key money paid not in cash but in kind. I hope that my noble friend will forgive me if I add the Government's voice to others in criticism of this amendment. I can understand why my noble friend has put it forward, but it really does give us concern and I hope that my noble friend will feel that he does not have to press it.
Lord Monson: Surely this Conservative Government, of all Conservative Governments, purports to believe in the principles of the free market. Why, therefore, do they not allow these principles to apply to agriculture?
Lord Belstead: That is a good question and the answer, fortunately, is readily available. It is available—and there are many noble Lords in the Committee this evening who could answer it so much better than I—within the agricultural holdings legislation which has been built up over the years and which is particularly tailored to the needs of agriculture. The success of farming, after all, depends on the land and the way it is looked after. That is why we have separate legislation for agricultural holdings.
Lord Hylton: Before the noble Earl who moved the amendment makes up his mind what to do with it, may I ask whether he will consider writing into his amendment, perhaps at some future stage, a provision that the tenancy must endure for (shall we say?) 15 years or 20 years, so that the period of security would be quite long but not indefinite and not totally uncertain, as the law has been standing recently?
Earl Waldegrave: If this debate is to continue, I think we should remind ourselves that we are trying to legislate (we are not bound to legislate in any way) to give effect to the so-called package and agreements that were before us and were brought in by the meetings of the CLA, the landowners and the tenants. This would be very far outside the whole basis of what they agreed upon together, and, in that sense, it would justify the term used by my noble friend Lord Stanley of Alderley, "a wrecking amendment". That is from their point of view; although, of course, Parliament is entitled to legislate how it likes. But we are trying (and we have so far succeeded, I think) to keep within the bounds of the agreement made by the two sides of the industry.
Lord John-Mackie: Regardless of what we think of this amendment, the noble Earl, Lord Waldegrave, if he had listened to his noble friend the Leader of the House, would have realised that it is Parliament that is dealing with this, and not the CLA and the NFU. I must make it clear that the noble Earl, Lord Kinnoull, has every right to bring this forward. We have agreed that we are dealing with a Bill in connection with which amendments have to be debated and that the CLA and NFU package has nothing to do with it.
Earl Waldegrave: I entirely agree with every word that the noble Lord opposite has said, if I may say so. I said, though, that we must bear in mind that we were trying, if we could—and I was one of those who would like to, if I could—to legislate within the consensus and not go against it. This would go against that consensus, and I am merely reminding noble Lords of that.
The Earl of Kinnoull: I believe that the CLA and the NFU have made a valuable contribution, but I hope that this Chamber will make an even more valuable contribution to what we are trying to seek, which is, in the words of my noble friend, to meet the needs of the agricultural holdings. I am frightened that we are not meeting those needs. In fact—and this is not being over-dramatic—we are looking today at the fairly rapid death of the landlord and tenant system. The situation will not be helped by the present state of this Bill. My simple amendment was not a wrecking amendment but a probing one. It was intended to encourage Members of this Chamber to express their views, as they have done. I am most grateful to all Members for speaking as they have.
The problem with the short-term tenant is the social and moral problem of turning him out of the house. Turning him out of a house after some 20 years is not easy, socially or morally, whereas if you contract out of the landlord and tenant security system it is, in my view, a much more positive commitment; and it is for that reason that I suggested it to my noble friend. I do not wish to detain the Committee any further on this most important side of trying to preserve the landlord and tenant system. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 57, 58 and 59 not moved.]
6.33 p.m.
Lord John-Mackie Lord John-Mackie moved Amendment No. 60:
After Clause 7, insert the following new clause:
("Sale of smallholdings
No land held by a smallholding authority for the purpose of smallholdings shall be sold by the authority unless the Minister of Agriculture, Fisheries and Food (or the Secretary of State for Wales in the case of Wales) is satisfied after affording opportunity to all persons interested to make representations and objections in relation thereto that the land is not required for the purpose of a smallholding and certifies accordingly.").
The noble Lord said: We have put down this amendment at the request of people interested in the whole question of the sale of smallholdings. As we know, there has been quite a lot of feeling about the fact that several councils, no doubt because of the restrictions put on them by the Government in the way of spending, have taken the opportunity presented
152
when smallholdings have become vacant to sell. I see that one council dealing with a batch of smallholdings to sell has tenanted them. But the main point we have here is that there should be no question of smallholdings being sold without permission from the Minister. I am sure that is something which would satisfy much of the feeling there has been about the sale of smallholdings in various parts of the country. I beg to move.
Viscount Ridley: I hope the Government will resist this amendment with the success it has so far shown this afternoon. I think I am justified on what my noble friend Lord Swinton said on Second Reading, that he will do this and that it is Government policy not to accept this proposal. I am sure your Lordships will not be surprised when you hear me say that local authorities will regard this as a totally unjustified attack on their powers of decision. Quite a lot of powers of local government have been removed by this Government since they came into office. They came into office pledged to a bonfire of controls; the fire went out rather too soon. However, this is a control that I think should not be brought back at any price. If a local authority wants to sell land which it owns, surely that is a decision which it should be entitled to take. If the Minister is tempted to intervene, then I think the Government should be bound by their own logic and buy the land themselves from that local authority.
I do not think it is possible to ask local authorities to make economies and sacrifices at the moment, which definitely does mean selling assets, and then try to prevent them from doing so. Nor can I imagine a more cumbersome and expensive process than, as the amendment says,
"affording opportunity to all persons interested to make representations"—
and so on. That looks like having a public inquiry into the sale of every small parcel of land in future, and surely that would be a bureaucratic nightmare which this Chamber should not countenance.
The power to veto sales of smallholdings disappeared in the 1970 Agriculture Act. To bring it back, I submit, would be making the provision of smallholdings mandatory, which it is not now, and also a retrograde step and a waste of everybody's time.
The only possible exceptions to this rule might be where the tenancy of a smallholding was artificially terminated as it might have been had the Amendments Nos. 46 and 49, which I moved two weeks ago, been accepted where the tenant is, as it were, asked to leave by the smallholdings authority. There should be some protection over the land in that case. It might be of interest to your Lordships to know that there is ony one county council in England with a definite policy of selling smallholdings, and that is Derbyshire. It is hardly controlled by members of this party. It is said to be controlled by the far Left of the party opposite. I do ask the Government not to accept the amendment.
Lord Northfield: I have a good deal of sympathy with the amendment, and I was rather surprised by the remarks of the noble Viscount, Lord Ridley. The fact is, as he says, that the power existed in the Minister until 1970 and was then abolished. It may well be that

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he is right in saying that the Derbyshire County Council want to sell, and there has certainly been pressure in Norfolk and in Shropshire. I would not be surprised if in the years to come there was pressure elsewhere, on the grounds that this is in many cases an asset which is now at historic cost and on which a nice profit can be made and invested elsewhere. There is nothing wrong with that except that we have to set other criteria. One other criterion in judging whether that is a proper decision to make is whether smallholdings are in the national interest and whether they perform a very important function as the gateway (as the Wise Committee called it) in helping people to get into the industry.
I want to make my next point very strongly. My own Committee found that smallholdings provide something like 15 per cent. of the opportunities for new entrants to come into the industry. Fifteen per cent. is not a negligible figure. In other words, it means that if the idea of selling smallholdings gathered pace we would be losing a significant part of entry possibilities for people, whether they are young or old, into the industry. So, if I may say so, the particular interest of particular local authorities is, in my view, overridden by the national policy, which is to try to keep opportunities for entry into farming as open as possible. Therefore, it is important to try to prevent these county sales.
The second point I would like to make is that this is not a burden on local authorities. We examined the figures and found that the investment was worth something like £200 million, taking the country as a whole. That is not getting a bad return. In other words, these are not a drain on the total capital and income problems of the counties, taken as a whole. So there is a second reason for saying, "Go steady on this because wider issues are at stake".
Part III of the Agriculture Act 1970 gave the Minister power to call for further reviews of the progress made by local authorities in reorganising their smallholdings in order to make a better estate of them all; in other words, to make more really viable holdings out of the total that they own. That is a very important power, and the local authorities have been encouraged to carry out these reviews in order to try to get the smallholdings as a whole into a more viable state.
I should like the Minister to tell us whether the department is now prepared, given the lapse of time since 1970, to call for some more reviews. There are powers-1 have just been reading them again in Part III of the 1970 Act—to call for reviews to make sure how our stock of smallholdings is being managed, is being reorganised and is being made more viable. That would give the country as a whole a better chance to bring up to date our thinking about these smallholdings. But I repeat that we really must say to the noble Viscount, and to the local authorities who are behind him, "Please take into account national considerations about the need for farms to let in our community and do not always be influenced by what might well prove to be short-sighted anxiety to make a capital profit." That would he the last way in which we ought to be using this very valuable stock of land, which provides a useful opportunity for young people to enter farming.
Lord Collison: May I briefly support this amendment? I entirely agree with what my noble friends have already said. Of course I, too, have an interest in the existence of smallholdings to which people can go after they have worked in agriculture, maybe for years. I am speaking in terms of agricultural workers. They want to find smallholdings and we want them to be there for them. In fact, the stock is not very large, although, as we have heard, 15 per cent. of the people who go into agriculture go into these smallholdings. It is important that we make sure that they continue to exist. Everything else that could have been said has already been said, so I shall merely say that I support this amendment.
Lord Mackie of Benshie: We, too, should like to support the principle of this amendment, but I shall not go over the arguments about the stock of smallholdings and entry upon the farming ladder, which are extremely important. I should like the Government to accept this amendment, because that would show their bona fides. This Bill is intended to make more land available for letting and to improve entry upon the ladder, and the Government are backing an agreed measure. At the same time, I am afraid about the pressures on local authorities. I do not think that they sell to make a capital profit so much; it is just that they want to sell because they are extremely "strapped" for money due to the other policies of the Government. So, if the Government accepted this amendment, it would raise an interesting situation in which, on the one hand, the Government were trying to reduce the money, and, on the other hand, they would have to accept the responsibility for prohibiting a sale if it was in the interests of the general agricultural industry and of the farming ladder which is so essential to that industry. So this is a very useful amendment and I am sure that the Government will look favourably upon it.
Lord John-Mackie: I think everyone agrees—and certainly the noble Earl, Lord Waldegrave, will agree—that this Bill is meant to retain as many farms, large and small, as possible in the landlord-tenant system, but up gets the noble Viscount, Lord Ridley, and damns it. The amendment may not be very well worded, hut, as everybody has said, it is something that we should look at very carefully. I am obliged to my noble friend Lord Northfield for what he has said, and he put the case very well. As the noble Viscount can see, there is considerable support for this amendment and to damn it in the way he does shows that he is not very keen on the Bill.
Viscount Ridley: Before the noble Lord sits down, will he acknowledge that I made a long speech in favour of statutory county council smallholdings on a previous day, and I do not recall his supporting what 1 said at that time?
Lord Hylton: I hope that local authorities will not be pressurised by short-term financial considerations into selling off their smallholdings willy-nilly. I hope, also, that before they sell off any they will take into consideration the importance that there may be, particularly in remote places, in part-time holdings. I hope that they will not assume that every single smallholding

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must be a full-time one which gives employment to a whole person for a whole year.
I can think of many situations where people who are very valuable in the local rural scene may earn half a living from their smallholding; for example, the man who drives a school bus in the morning and afternoon, and the man who has a part-time milk delivery round or something of that sort. There are all kinds of part-time jobs in villages which can be combined with agricultural smallholdings. This amendment may provide us with the opportunity of asking the Government whether they have any advice to give to local authorities on this point of the part-time holding.
Lord Belstead: I am a little worried that the Opposition Front Bench is becoming fuller. I hope that that does not mean that this is the preparation for a Division on this important amendment, which has given rise to lively debate, but rather that the Opposition Front Bench finds that this is a moment for a pre-prandial period of reflection and mental improvement.
I should like to say "Thank you" to my noble friend Lord Ridley for making the simple point that the Government in May 1979 issued guidance to local authorities, saying, among many other things, that they should have freedom to retain or dispose of any interests in land which they owned, and I must make it clear to the Committee on this amendment that the Government do not intend to go back on that guidance. In our view, the sale of smallholdings is a matter about which local authorities should be allowed to make their own decisions.
But may I add one point which I have not heard made during this short debate? In exercising its own commercial judgment. a smallholdings authority may not necessarily be deciding, simply by selling a proportion of its smallholdings, to relinquish. It may be deciding to rationalise its management by selling some of its land and using the proceeds from that sale to maintain and improve buildings and equipment on existing holdings, in order to promote greater efficiency. Iam grateful to the noble Lord, Lord Northfield, for nodding, because I thought your Lordships might say that that is rather a two-faced way of saying that something is being done when, in fact, something else is being done.
It is right to remember that one of the difficulties of running smallholdings in this country is that it is known that the costs of administration are about 20 per cent. higher than they are for landlords if they are running their own private let land. Therefore, particularly at this time and in the financial situation in which we have found ourselves over the last few years, there are bound to have been calls, from time to time, for local authorities to consult within themselves as to whether they ought to make a rationalisation of that kind.
I am grateful to the noble Lord, Lord Collison, for taking the time not only to attend the Committee but to take part in this debate. His very long experience in these matters, even though I am not agreeing with him on this amendment, is certainly appreciated by all of us. He made the point that there is quite a high percentage of entrants into agriculture who are to be
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accounted for by those who take up smallholdings, and the noble Lord, Lord Mackie of Benshie, made the point that it is hoped that smallholdings provide a ladder. I think that the first point is absolutely right, but regrettably the second point is less so.
The latest figures that I have—and I think that they are not much more than a reflection of what the Northfield Committee discovered—show that, out of a total of some 7,000 tenants in England and Wales in the 10-year period to 1980–81, an average of only 14 tenants per year moved on to other farms in the private sector. I wish, as I am sure all Members of the Committee wish, that that figure was higher.
Lord Mackie of Benshie: Surely it is the purpose of this Bill to provide the farming ladder.
Lord Belstead: It is indeed: I agree with that. But it is not very much good putting forward the argument that there is a long ladder up which tenants of smallholdings are climbing at the present time, because the ladder is short and they are not climbing in very large numbers. I wish those numbers were greater.
I would say on behalf of the Government that we intend to leave to local authorities the decision as to whether they feel that they have to rationalise their holdings at any time. We do not consider that it is a part of central Government's function to "second guess" the decisions of local authorites in that respect. On those grounds, we cannot support the amendment.
Lord Northfield: I hesitate to intervene again but I find the Minister's reply disappointing. Certainly my committee said that we quite understood there should not be a blanket veto on all sales—and that is why I nodded my head—because there was need to rationalise estates and perhaps to sell some land in order to buy other land and make particular units more viable, which is part of the direction given under the 1970 Act.
My committee set out some proposals in respect of that matter. We said that if local authorities want to sell smallholdings, at least they should be encouraged to do so on a sale and lease-back basis; so that if an institution, for example, could be persuaded to buy land and lease it back to a local authority, they would get the capital they were looking for but the land itself would not go out of smallholdings use. That, after all, is the main objective of this Bill—to preserve the opportunity of tenancy.
It is very disappointing that the Minister has not addressed himself to alternatives of that kind. We could find a way of giving the Minister not so much power totally to veto but power to say that certain lands comprised of smallholdings shall remain part of the national stock of smallholdings. If local authorities want to sell land to someone else, all well and good, provided that they do not go out of the national stock of smallholdings.
There are precise proposals about that aspect in our report. If the Minister does not intend to comment on them—which itself is rather disappointing, given that the report has been on the table for four years with those proposals in it—then perhaps we can all return to this matter at Report stage and put down an

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amendment to that end. At least the Minister should be furnished with the power to retain such land in the national stock of smallholdings while leaving certain freedom with the local authorities, if they insist upon that.
Lord Belstead: The noble Lord, Lord Northfield, is being absolutely consistent. I know that he has raised this line of argument earlier in the progress of the Bill, and the points of which he has reminded the Committee were set out in his very valuable report. But I would be misleading the Committee if I did not say that the implications of the guidance which the Government gave to local authorities when we came into office in May 1979 are that we intend local authorities to have freedom of discretion in these matters.
Of course the Government do not wish to see smallholdings being taken out of agricultural use. One of the valuable comments which my noble friend Lord Ridley included in his words this evening was the evidence he gave that local authorities are in the main—indeed, he put it even more starkly than that—not embarking on some kind of wholesale policy involving the sale of smallholdings.
With that comfort, I must also be intransigent so far as that which the noble Lord has put to me about the wish he has to see the Government at least move some way towards becoming more involved in smallholdings matters. We do not intend to do that; we intend to leave it to local authorities.
Lord John-Mackie: I am grateful to my noble friend Lord Northfield for what he has said. We on this side are very disappointed at the reply of the noble Lord, Lord Belstead. I do not know that we have any evidence that a local authority has sold any smallholdings in order to rationalise its estate and use the money for constructing new buildings or buying new land. Certainly I have never heard of such a case.
It is rather peculiar that the noble Lord the Minister is very anxious that the Government give to local authorities the power to sell and to raise money, but not the power to spend it: the Government curtail their spending but are prepared to let local authorities raise money in that way. There is quite a lot of feeling about this matter, and I believe that we should divide the Committee and see what that feeling is.
6.55 p.m.
On Question, Whether the said amendment (No. 60) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 96.

DIVISION NO. 4

CONTENTS

Airedale, L.

Carmichael of Kelvingrove, L.

Alport, L.

Cledwyn of Penrhos, L.

Ardwick, L.

Collison, L.

Barnard, L.

Cornwallis, L.

Beaumont of Whitley, L.

David, B.[Teller.]

Bishopston, L. [Teller.]

Dean of Beswick, L.

Bowden, L.

Diamond, L.

Briginshaw, L.

Donaldson of Kingsbridge, L.

Brooks of Tremorfa, L.

Donnet of Balgay, L.

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Ewart-Biggs, B.

McNair, L.

Gaitskell, B.

Molloy, L.

Galpern, L.

Nicol, B.

Graham of Edmonton, L.

Northfield, L.

Hampton, L.

Peart, L.

Hanworth, V.

Ponsonby of Shulbrede, L.

Heycock, L.

Prys-Davies, L.

Houghton of Sowerby, L.

Rhodes, L.

Howie of Troon, L.

Rochester, L.

Hughes, L.

Seear, B.

Jacques, L.

Shackleton, L.

Jeger, B.

Shinwell, L.

John-Mackie, L.

Stallard, L.

Kilbracken, L.

Stedman, B.

Kilmarnock, L.

Stewart of Alvechurch, B.

Kirkhill, L.

Stewart of Fulham, L.

Lee of Newton, L.

Stoddart of Swindon, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Mansfield, L.

Lockwood, B.

Underhill, L.

Longford, E.

Wallace of Coslany, L.

Lovell-Davis, L.

Walston, L.

Mcintosh of Haringey, L.

White, B.

Mackie of Benshie, L.

Winstanley, L.

NOT-CONTENTS

Allerton, L.

Mar, C.

Auckland, L.

Margadale, L.

Avon, E.

Maude of Stratford-upon-

Bauer, L.

Avon, L.

Bellwin, L.

Mersey, V.

Beloff, L.

Middleton, L.

Belstead, L.

Molson, L.

Bessborough, E.

Monk Bretton, L.

Boston, L.

Morris, L.

Brougham and Vaux, L.

Mottistone, L.

Buccleuch and Queensberry, D.

Murton of Lindisfarne, L.

Napier of Ettrick, L.

Burton, L.

Northbourne, L.

Caithness, E.

O'Neill of the Maine, L.

Carnegy of Lour, B.

Onslow, E.

Cathcart, E.

Orkney, E.

Coleraine, L.

Orr-Ewing, L.

Colwyn, L.

Penrhyn, L.

Dacre of Glanton, L.

Peyton of Yeovil, L.

Davidson, V.

Plummer of St. Marylebone, L.

De La Warr, E.

Denham, L. [Teller.)

Portland, D.

Devonport, V.

Rankeillour, L.

Dilhorne, V.

Reay, L.

Drumalbyn, L.

Redesdale, L.

Effingham, E.

Ridley, V.

Elliot of Harwood, B.

Rochdale, V.

Elton, L.

St. Aldwyn, E.

Faithfull, B.

Salisbury, M.

Fisher, L.

Saltoun, Ly.

Fortescue, E.

Sandford, L.

Fraser of Kilmorack, L.

Savile, L.

Gisborough, L.

Skelmersdale, L.

Greenway, L.

Strathclyde, L.

Grimston of Westbury, L.

Strathcona and Mount Royal, L.

Hives, L.

Holderness, L.

Strathspey, L.

Hornsby-Smith, B.

Swinfen, L.

Inglewood, L.

Swinton, E. [Teller.]

Kilmany, L.

Teviot, L.

Kinloss, Ly.

Tranmire, L.

Kitchener, E.

Trumpington, B.

Lane-Fox, B.

Tweedsmuir, L.

Long, V.

Vaizey, L.

Loudoun, C.

Vaux of Harrowden, L.

Lucas of Chilworth, L.

Waldegrave, E.

Lyell, L.

Windlesham, L.

Mackay of Clashfern, L.

Wise, L.

MacLehose of Beoch, L.

Wrenbury, L.

Mansfield, E.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.3 p.m.
Lord Walston Lord Walston moved Amendment No. 61:
After Clause 7, insert the following new clause:
("National Land Trust.
.—

(1) The Minister may by order establish a National Land Trust for the purposes of acquiring land to let to tenant farmers subject to the conditions prescribed in subsections (2) to (5) below.

(2) The Trust shall not be empowered to cultivate land in its control for more than twelve months after acquisition or the termination of a previous tenancy.

(3) Subject to subsection (2) above the Trust shall let all land within its control to tenant farmers from time to time.

(4) The Trust shall not be empowered to sell any land within its control other than small parcels for which planning permission has been received: and the funds thus generated shall be used for the purchase of further land or for the improvement of existing holdings.

(5) The Trust shall be empowered to borrow funds from the Exchequer and from commercial sources at the best rates available.

(6) The power to make orders under subsection (1) above shall be exercisable by statutory instrument; and any instrument containing such an order shall be subject to annulment in pursuance of a resolution of either House of Parliament.").

The noble Lord said: If I were going to deliver a sermon to your Lordships I would take as my text two statements by the noble Lord, Lord Belstead; the first, in introduction of this Bill, that its object is to promote the number of farms for tenants and to encourage the tenant farming system, and the second, one in which he spoke very wise words very recently to this Committee, when he said that the success of farming depends upon our land and the way it is looked after. Both of those are sentiments with which I think all of your Lordships will be in complete agreement.
This amendment which is now before the Committee is, in my submission, the most—I might almost say the only—positive step in this Bill which is going to promote those two objectives. At worst, if the amendment is, as I hope it will he, accepted by the Government, it will ensure that there is no further diminution in the number of tenanted farms. At best it would over the long term create an ever-increasing number of tenanted farms. If it, or something very similar to it, is not adopted the inevitable result can only be still further erosion of the percentage of farms which come on to the market for tenants and an increasing number of owner-occupied farms. That is something which is inevitable and which must be faced by the Committee, by the House and by the country.
The proposals which are set out very clearly here are to create a land trust, a national land trust, which would in very many respects be analogous to the National Trust, for which we all have such a very high regard. Its object would be to protect a part of our national heritage which is at present subject to very grave threats. It would, incidentally, fulfil the objectives of the movers of the last amendment, to protect the county council smallholdings, even in those cases where the county councils themselves decided it was in the interests of their own counties, their own authorities, to sell off that land. That, I am sure all your Lordships—the noble Viscount, Lord Ridley, and others—would agree, is a far better way of dealing with this matter of ensuring that the county council smallholdings are retained in their present form, as the bottom rung of the farming ladder
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available to tenants, new entrants into the industry, hut in no way interfering with the freedom of the county councils to dispose of their land if they so wish.
There are objections, of course, to these proposals. Several objections have been and will be raised. One objection, which I would describe as an emotive objection, not one based on serious objective study, is that this is nationalisation by the back door. Are those who use that argument objecting to the National Trust because it is nationalisation of our historic homes and beautiful houses by the back door? Is their hatred of nationalisation such that they would rather see those great houses and beautiful houses become derelict empty shells because they dislike the whole concept of nationalisation? No, of course, they do not feel that strongly; they want to see them preserved. Also, if it is looked at objectively, I believe those same people would want to see our form of agricultural holdings, our form of tenant farms that we used to have, and are having to a diminished extent, at least preserved in their present form, and if possible increased. So I would suggest that nationalisation by the back door is not an argument which any serious student of this matter can possibly sustain.
The next objection is, "Ah, but this would lead to a great deal of bureaucratic administration". It could lead to bureaucratic administration, but it need not do so. For many years I had the privilege of being a commissioner of Crown Estates, one of the largest landowners in this country, and I defy anybody—tenants, observers, people involved with it, people on the outside—to say that the Crown Estates are administered in a bureaucratic manner.
The correct way to administer large estates, whether privately owned or owned by institutions, colleges, the Church, the state or the Crown, is to employ specialists. The large body of well qualified estate agents are well equipped to do all the detailed day-to-day work. But in addition, superimposed above them, we need the equivalent of the old-fashioned private landlord. There should be, on a regional basis, a body of people—commissioners, or call them what you will—who are well known to the farmers who are their tenants and who are available on the telephone if there should be any problems or complaints which the tenant does not wish to take to the estate agent or where he thinks he is getting a raw deal. These commissioners would by appointed on an honorary basis, and they would be paid very little. But their job would be to visit, at least once a year, every farm in their region. There is no reason why that should be a bureaucratic organisation.
The third objection, which I freely admit is by far and away the most serious, is that of finance. Where would the money come from in order to finance the purchase? We must remember that the purchase is always freely negotiated; there is no question of compulsory powers. Where will the money come from to make this possible? In the first stages a small amount would have to come from the Treasury. Is that such an appalling idea? Is it such a poor investment? If agricultural land is a poor investment, why do our institutions pay such high prices for it? Why are they so anxious to buy agricultural land? They believe it to be a very sound, long-term investment—and we are talking about the long-term here, not about taking

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over in 1983 and getting out in 1985 because something else becomes rather more attractive.
This is a long-term, permanent investment. Surely the billions of pounds which are coming in and which will be coming in to the Exchequer from capital assets —not just from North Sea oil but from the sale of British Telecom and all the other proposals for privatisation—can be used. Surely it cannot be considered a poor investment. We should put a small proportion of that money into our national heritage and our own land in this country.
I ask your Lordships to cast your minds back to what would have happened had we been doing this 20 years ago, in the early 1960s. Land was bought then for £300 an acre and gave a return of perhaps £10 or £15 an acre at the most. If that land had been owned by the state it would now be worth £1,500 an acre or more, and the rent from it, instead of being £10 an acre, would be £50 an acre or more. That is not such a bad investment. There is no reason to think that it will be very different in the years ahead.
In addition to the Treasury, which I look on primarily as a pump-primer in this enterprise, I believe there would be a very large number of small investors who would like to buy land stocks. After all, again reverting to the insurance companies and the institutions, if they are prepared to do it on behalf of their policy holders and investors it cannot be all that bad an investment for the investor himself if it can be bought in small units of f1,000, £5,000 or £10,000. I believe that money would be forthcoming from those sources once this scheme got under way.
This amendment would not only make a real contribution to the declared objective of the Bill to make more land available for tenants but would also make a very substantial contribution to the environment. One cannot expect the growing proportion of institutional investors to look at land in the same way as did our forbears, who were the creators of the environment that we so love. They considered it to be a permanent asset which they could pass on to their heirs in perpetuity. The policy of the institutions and the insurance companies is that they must look after the shorter term interests of their investors and their policy holders. A National Land Trust would not have that responsibility. It would have the responsibility of maintaining and enhancing the environment. That would fulfil the role that our great improving landlords did in the 18th and 19th centuries.
For example, I quote what is very much in the papers today—Calke Abbey. If we had a National Land Trust there would be no problem. The land around that magnificent house, with its great history and possessions, could be bought by the National Land Trust, the whole estate could be preserved as an entity, and the country would benefit. Financially, the investment would be sound. Many examples of that kind will no doubt come to your Lordships' minds.
Therefore, on all those grounds I ask most earnestly that your Lordships put out of your minds prejudices about land nationalisation, bureaucracy and all the cant phrases which people who have an instinctive opposition, but who do not want to bother themselves to think seriously about these matters, can trot out. Look at this matter objectively and accept that the
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amendment will promote the objectives of the Bill and promote the long-term interests of the countryside. I beg to move.
Lord Prys-Davies: Almost all speakers in these debates, which have extended over many days, agree enthusiastically that it is in the long-term interests of the industry and of the country that there should be a substantial let sector. We have been reminded that the Northfield Committee recommended that it should amount to 15 per cent. or 20 per cent. of the total agricultural area. What has also become clear is that the agricultural case for preserving the let sector merges into the social argument.
However, all this is very difficult to reconcile with the shrinkage of the let sector. We on this side of the Committee consider that it would be naive to believe that the Bill will arrest the decline of the rented sector. We may well be coming up against an obstacle or a defect in the system which has served us well for decades. The obstacle or the defect is that landlords will not let land because they consider it to be against their commercial interests to do so. There is no active market in farms to let. We believe that as the scarcity of let land becomes more pronounced there will be growing support for the kind of proposal contained in the amendment tabled by the noble Lord, Lord Walston, and which is supported to some degree in an important paragraph in the Northfield Report.
On the Second Reading, the noble Earl, Lord Radnor, described the proposal as back-door nationalisation. The noble Lord, Lord Walston, has dealt with that criticism. The noble Earl also made the significant forecast that this solution might produce more tenancies. The whole object of the exercise is to produce more tenancies. The land trust envisaged in the amendment would be a means of selective intervention. Time may well show that only by such means can we preserve a significant let sector. We consider that the amendment is relevant to the problem, and support it in principle.
7.21 p.m.
Lord Northfield: In this country, there has been a long tradition of public and semi-public ownership of land. That is the very first point I want to register with the Committee. Ownership by the Government, Government departments, local authorities and so on, is already 6½ per cent. of the land area of this country. That is a substantial slice of the let sector. In the past, the Church, the Crown, the Oxbridge colleges and other such institutions have performed a valuable function in maintaining the let sector. They have been perhaps almost as important as private landlords in maintaining the tradition of good estate management and the principle of the intimate management of estates.
By a majority, my committee recommended that something along the lines proposed in the amendment of the noble Lord, Lord Walston, should be considered by the Government. That was after many months of trying to find a better way to bolster and retain the let sector. I speak with thoughts about the many months that we spent in consideration. I would guess that the Conservatives on that committee were finally aware, as my noble friend Lord Prys-Davies has said, that

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there is practically no other way to make a real job of trying to keep a significant let sector in this country. That is why on the committee they voted in a majority to try this experiment.
I think that the noble Lord, Lord Walston, was wrong in linking the proposal to the National Trust. I think that the right link is with the Crown Estates Commission. It now manages 250,000 acres of land. It does that to the satisfaction of everyone—the tenants, the State, the Treasury and everyone else. The land is handed over by the Crown and the money goes to the national Treasury, although theoretically it is earmarked for the Civil List—but that has now increasingly become a fiction. This area is now a publicly-owned sector of farms.
The way to proceed with this idea is to give the Crown Estates Commissioners powers to augment their holdings and to hold more land. Perhaps they do not even need the powers. The answer is just to give them the land. We should set about the job of expanding their role steadily and quietly. That should be done in their system of management and with a particular objective in mind.
The Crown Estates Commissioners appoint receivers. They do a very economical job in land management. As the noble Lord, Lord Walston, said, they try to keep very close to the tenants in the traditional way that good landlords do. I am sure that they could continue to do that with a higher acreage than 250,000 acres. In my view, the objective would be to try to provide the missing rung on the ladder. That is the area where we need more tenancies.
On the last amendment the noble Lord, Lord Belstead, said that the problem with farm holdings is that people are stuck in them. There is nothing to move to, there is such a shortage of farms of the intermediate size. The right way to expand the activities of the Crown Estates Commissioners is for the Treasury to get hold of land—I shall say how—from time to time as it becomes available to place in the holding of the Crown Estates Commissioners where the land is suitable and is inside the 200-acre size. I shall come to the funding of this in a moment. That is the missing size which we need in order to keep a realistic and real ladder in existence in agriculture.
I know that the problem is the money. Land today gives a return of 2 per cent. to 3 per cent. Money has to be borrowed at 10 per cent. or more. I see the point, and the noble Lord, Lord Walston, dealt with it effectively. This is an investment for the future. I do not expect any Chancellor of the Exchequer to start finding large amounts of money for this purpose. When capital transfer tax comes along on particular estates, and there is a danger that that estate will be fragmented—sold to the tenants and become owner-occupied—at least there should be the possibility of the Chancellor accepting that estate, particularly if it is suitable and in the 200-acre farm size, in part or complete payment of death duties, or capital transfer tax as it is now called.
There should be the kind of discretion that we have linked with the heritage fund, and so on, and which was the original intention of the National Land Fund.
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I am sure that we should resurrect this and use as a ready mechanism the Crown Estates Commissioners. There is a good deal of evidence from abroad that such schemes are successful. I do not know why we should stand out alone on this matter. Such a scheme has parallels in other European countries, in New Zealand and even in Canada. No one in such countries is getting worked up about the issue of land nationalisation.
I wish to say a final word about land nationalisation. No doubt the main argument that the Minister will refer to will be nationalisation by the back door. For what it is worth, my view is that the idea of nationalisation of agricultural land is a dead duck. No Government, even a Left-wing Government, are likely to go in for the wholesale nationalisation of agricultural land. For a start, nearly 65 per cent.—or perhaps now 70 per cent.—of land is owner-occupied. I cannot see any sense in going through the trauma of extracting land from owner-occupiers. Secondly, of the remaining 30 per cent., or 35 per cent. as it may now be, a large proportion is in perfectly "good" hands—I put "good" in inverted commas. It is in the hands of colleges, the Church, the Government, financial institutions, and so on. There is no particular benefit in nationalising that land. With the other 15 per cent., 20 per cent. or 25 per cent. in the hands of private landlords, I honestly cannot see any Chancellor raising vast amounts of money in one fell swoop—in one nationalisation Act—at 10 per cent. plus in order to buy an asset returning 2 per cent. or 3 per cent. in annual rents.
The Government should stop running away from the issue, fearing that it is nationalisation by the back door. They should look at the perfectly reputable examples of the land in the hands of the Crown Estates Commissioners and similar schemes abroad. They should realise that nationalisation of agricultural land has become a parrot cry now and very little else. It is not really on the cards. Finally, if a Left-wing Government were really intent on nationalisation, none of this would matter. The fact that there had been any movement in that direction in this small attempt to help put right the agricultural ladder would not make the slightest bit of difference. It will not create a precedent that would encourage anyone else along that road. For all sorts of reasons, I think that the amendment is a very good idea, even if I differ slightly from the noble Lord, Lord Walston, on the precise mechanism.
Lord Mackie of Benshie: I should simply like to support my noble friend. I think that the details of the scheme have been put over in a practical way and I believe that the objections to it have been dealt with. However, I look forward with great interest to hearing what new objections the noble Lord the Minister is to raise.
Lord Belstead: I was encouraged to hear the words of the noble Lord, Lord Northfield, on the subject of land nationalisation, but of course there is a lack of credibility between the wise words of the noble Lord and the policies which are pursued by his party. I hope that he, and indeed his noble friends on the other side of the Chamber who I think consistently give good advice to your Lordships on agricultural matters, will

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forgive me for saying that. I do not say it to make a party point; I say it because there is still genuine apprehension in people's hearts and minds, and if we heard from the noble Lord's party the kind of wise words that he has uttered, the apprehension would be dispelled.
I recognise that the new clause moved by the noble Lord, Lord Walston, is not along those lines; indeed the word "nationalisation" does not appear in the brief for my reply. But the basis of the proposal is that the National Land Trust, which the noble Lord told us about when he made his Second Reading speech, and which he has again told us about in moving the new clause, would, so far as one can see, initially be funded by Government; and there is a difficulty about where the money is to come from.
So far as the initial outlay is concerned, the noble Lord suggested that it should be borrowed from the Exchequer or from commercial sources. But if the money were to be borrowed from commercial sources, the proposition need only be taken to the finance houses at this very moment. No doubt they would consider it as they would any other commercial proposition, and it would not need any legislation at all. After all, that is what financial institutions operating in the agricultural land sector already do; and the noble Lord knows that very much better than I do.
However, as the noble Lord made clear in moving the amendment, it would be expected at any rate a very large proportion of the funds would come from the Exchequer. The noble Lord will correct me if I am wrong, but my understanding has always been that institutions tend to buy tenanted land if they possibly can, rather than land with vacant possession. They also enter into sale and lease-back arrangements. Therefore, they are able to buy land relatively cheaply, but in doing that they do not really increase the total stock of tenanted land. Therefore, this so far sounds like an argument in favour of a national land fund, which would increase the stock of tenanted land.
But surely here comes the problem. If the National Land Trust which is proposed by the noble Lord was to buy vacant possession land and then let it, the economics of the transaction would be very different. Land would be bought at a premium and its value would be reduced immediately it was let. In addition to that, the sums involved would not be small when it came to purchasing and establishment and equipment costs, as well as staff salaries, and possibly even the need to run the trust on a regional basis. But above all, the cost of the land, which would of course attract the vacant possession premium, would be a major item of expenditure which would have to be met.
So while I recognise and applaud the noble Lord's aim to make available more tenancies, which I at once concede is entirely in the spirit of this legislation, I believe that the problems attendant upon his proposal would be very formidable indeed, and for the reasons that I have given I think that we must continue to look to the private sector.
7.35 p.m.
Lord John-Mackie: Knowing the Government's attitude to these questions, I thought that the noble
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Lord's reply was predictable. But surely by this time the noble Lord must be seized of the point that has been made. It is that unless at the Report stage the noble Lord is to produce a proposal regarding Clause 1, there is nothing in the Bill that indicates that it will do anything at all to increase farm tenancies. Practically every noble Lord who has spoken has said that and the point has been made in all the lobbying that we have experienced.
I agree with the noble Lord, Lord Walston, that the new clause would at least result in more land becoming available for the tenanted section. On these Benches we are grateful to the noble Lord, Lord Walston, for putting down the amendment, and I hope that it was the remarks that I made on the subject at Second Reading which tempted him to do so. Had we put down an amendment of this kind, as we wished to do, we would straight away have been accused of back door nationalisation. So I am very glad that the proposal has come from the Benches on which the noble Lord, Lord Walston, sits. The noble Lord has argued very well, as has my noble friend Lord Northfield, that this is not back door nationalisation, but is a matter which should be considered very carefully. As I have previously said, and as I wish again to emphasise, it would seem to be the only actual provision in the Bill which would make more land available for the tenanted section.
As I have said, the reply of the noble Lord, Lord Belstead, to the effect that the cost would be too high was predictable. The noble Lord, Lord Howard of Henderskclfe, perhaps twitted me—I was going to say fell out with me—for saying that at present all the land that is changing hands is bought by institutions. It was his experience that farmers were grabbing the land—I think that that was the expression he used—straight away as it came on the market. I am speaking of vacant land, and if farmers can pay the kind of prices that are at present being bandied about, I cannot see how the prices can be regarded as realistic for the purposes of farming. We must also bear in mind the rents that are being offered.
As the noble Lord, Lord Walston. said, a trust could be set up, with people putting money in it, and with some support from the Treasury. I feel that the reply by the Minister did not really demolish the arguments of the noble Lord, Lord Walston, on how to finance such a trust, nor the arguments of my noble friend Lord Northfield.
As the noble Lord, Lord Walston, will be aware, many years ago he and I wrote a discussion pamphlet on land nationalisation, and I then put forward exactly the system which he has suggested for the administration of publicly-owned land. I stand by that today. If it were done in the way in which the noble Lord has indicated in the debate, such a system could be perfectly easily administered without any great bureaucracy at all.
There is only one point that worries me. I hope that we would have quite a lot of private money in the trust and not too much from the Treasury. I say that because since I wrote the pamphlet it has been my experience that if one allows the dead hand of the Treasury to interfere, the administration becomes bureaucratic. I see the Chief Whip on the other side of

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the Chamber scowling at me. I know the time,and he told me— —
Lord Denham: I was not scowling at the noble Lord; I was listening to him with amazement.
Lord John-Mackie: That prompts me to remind the Committee of the time when the then Mr. Snowden, on being accused in the other place of laughing, said, "I wasn't laughing; I was sneering". I think that the noble Lord was listening to me with rapt attention in order to try to find out when I was going to stop.
I close by saying that we support Lord Walston very much indeed. If he cares to put his amendment to the vote, we shall give him all the support that we can.
Lord Walston: I am grateful to the noble Lord, Lord John-Mackie, for his final words and for what he said earlier. However, what he did not mention is that when our discussion pamphlet was written he was in favour of land nationalisation and I was against it. I think that the noble Lord has since somewhat modified his views. I have not, in this case, modified my views.
So far as I can make out from what was stated by the noble Lord, Lord Belstead, who is always a very persuasive arguer in these matters, he has not made the best case that I think he almost might have been able to make, in spite of the paucity of the material at his command. The noble Lord had very little on which to base his arguments. He had only two points to make so far as I understood them. The first was that this was going to cost too much and that no money was available for it. If he tells me that the Government are so concerned with short-term objectives that they are prepared to cash in on national assets of enormous value and not to reinvest, particularly in a project that inevitably and undoubtedly will appreciate enormously in value over the years ahead, and that they are simply concerned with money supply and what will happen in the next two or three years, he is putting the Government in an even worse light than I thought.
However, that appears to be his argument: We have no money. We are selling a great many of our national assets, and privatising them, and we are not prepared to invest in this particularly very sound investment. "What is more", say the Government, "we are not interested. Inevitably, it follows that, in the preservation of the countryside, we pay a lot of lip-service to the protection of the environment, but we as a Government are not prepared to do one of the things that lie easily within our power to do". So how can you expect other people to do it? That follows from his argument.
Secondly, the noble Lord says the institutions will do it well. They buy tenanted land and they let it. Yes, they do. But what they also do is to wait until that land becomes vacant and then sell it at the enhanced vacant possession price.
Lord Northfield: Not true.
Lord Walston: It is true. Many do it, and I can give the noble Lord examples. Private investors do the
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same. That is why the erosion of tenanted land increases. I do not think that the noble Lord the Chief Whip is now looking at me with rapt attention. He is looking at me because he fears that his dinner is getting cold.
Lord Denham: If the noble Lord is going to be very much longer, I wonder if it would be for the convenience of the House that we should adjourn during his speech and return to hear the final part afterwards.
Lord Walston: I think that the noble Lord would be right if I were going to be much longer. I was simply demolishing to the best of my ability, and as briefly as possible, the very poor arguments put forward by the noble Lord, Lord Belstead. I hope, but without much confidence, that the noble Lord will think again about this. I can, however, assure him that in spite of the offered support of the noble Lord, Lord John-Mackie, I shall not divide the House at this stage on this issue. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Denham: I think that this is probably the right moment for us to adjourn for dinner. We shall not re-start this particular Bill before 8.45 p.m. but equally, I think it is highly probable that the business that we are taking in between may take marginally longer than an hour. If your Lordships who are interested in this Bill wish to know, we shall not restart the Committee proceedings until 8.45 p.m.
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Appropriation (No. 3) (Northern Ireland) Order 1983
7.45 p.m.
The Minister of State, Northern Ireland Office (The Earl of Mansfield)The Minister of State, Northern Ireland Office (The Earl of Mansfield) rose to move, That the draft order laid before the House on 23rd November be approved.
The noble Earl said: My Lords, this order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. The purpose of the draft order is to authorise the issue of £ 107 million out of the Consolidated Fund of Northern Ireland in respect of the Autumn Supplementary Estimates of Northern Ireland departments and to appropriate this sum for the purposes shown in the schedule. Noble Lords will recall that sums on account were approved on 14th March and that the balance of the 1983-84 Main Estimates was approved by your Lordships' House on 14th July; together, these amounted to £2,622 million. The present draft order will bring the total Estimates provision for the year to £2,729 million. Detailed information about the provision sought can be found in the Autumn Supplementary Estimates volume, copies of which have been placed in the Printed Paper Office.
The draft order before us covers only seven out of the 42 votes of Northern Ireland departments.

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However, major provision is sought in respect of the housing benefits scheme which is already in operation in Great Britain. This is not all new money since assistance with housing costs was formerly provided through supplementary benefits and rent and rates rebates. There are, however, significant additions to existing services, notably the special aid for agriculture announced earlier in the year, and assistance for Harland and Wolff Ltd. for which only a token amount had been provided in the Main Estimates.
Noble Lords will know that we are endeavouring to keep Northern Ireland in the most favourable position to benefit along with the rest of the United Kingdom from the increase in world economic activity which is expected during the remainder of 1983 and 1984. When the United Kingdom experiences economic revival, there are spin-off results in Northern Ireland. Some reports indicate that Northern Ireland manufacturing industry is now holding up in employment terms and, generally, output and other trends are reported to have improved. We are still doing as much as possible to encourage investment in Northern Ireland and to reinforce the effects of the economic swing. The new economic initiative announced earlier this year should help greatly in our efforts.
In the social field, with the introduction of housing benefits, we are maintaining the common system of social benefits which applies throughout the United Kingdom. The special aid for agriculture, the assistance to Harland and Wolff and other provisions for industrial support are evidence of our willingness to take account of the special needs and circumstances of Northern Ireland even at a time when public expenditure as a whole is under constraint. Taken together, they demonstrate yet again the Government's continuing commitment to Northern Ireland.
When I introduced the order for the Main Estimates on 7th July I reminded your Lordships of the extent of the additional special aid to the Northern Ireland agricultural industry which would be made available in the 1983-84 financial year. I also made it clear that the necessary provision for these special measures would be taken in Supplementary Estimates. The additional provision required is now sought in these Supplementary Estimates for Class I, Votes 1 and 2.
An additional £0.8 million is sought for continued measures to develop beef cattle production. This includes some £500,000 towards subsidies for the liming of grassland and £300,000 for the beef development programme. The main significance of this latter aid has been to allow the charge for artificial insemination to be held much below its full recovery level. I am pleased to say that this had the desirable result of buoyant demand for the service with consequential quality improvements in breeding cattle. £5·5 million is included to provide for the continuation of the milk consumer subsidy which enables a higher wholesale price to be fixed for milk going for liquid consumption, thereby ensuring that consumers in Northern Ireland do not have to pay more than consumers in Great Britain.
A total of nearly £2·4 million is sought for assistance to the intensive livestock sector. Two million pounds of this aid is to cover payments, linked to the level of employment, to operators of licensed pig and
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poultrymeat processing plants and egg packing stations, while continuation of the subsidy on transport costs of egg shipments to Great Britain accounts for some £0.4 million.
A further £2.5 million is required to continue grants for the improvement of pasture under the Grassland Scheme, introduced last year to increase productivity in areas outside the less favoured areas.
The total additional provision sought is partly offset by a decrease in expected compensation payments on the brucellosis and tuberculosis eradication schemes resulting directly from the present favourable animal diseases position. I think it worth reminding your Lordships of the importance that is attached to the "disease free" status of livestock in Northern Ireland. This provides a very important underpinning of the Province's ability to market its produce and requires a considerable input and continuing close vigilance by all concerned with the industry. Their success, in my submission, should not go unnoticed.
A lot of anxiety has been raised in the agricultural industry as a result of the first proposals for changes to the Common Agricultural Policy put forward by the Commission as a result of the Stuttgart summit. It is clear that we must get a satisfactory solution to the problem of the United Kingdom budget contribution to the European Community, and this requires positive steps being taken to deal with structural surpluses in agriculture, as these have been the cause of so much heavy expenditure by the Community.
Some of the Commission ideas have not been finally formulated and, in any case, it is likely that many of their proposals will be amended considerably during the negotiations. It is not possible at this stage to speculate on what changes might be made, but noble Lords will be aware of the statement made in another place on 7th December by my right honourable friend the Prime Minister on the progress of the negotiations. I can assure your Lordships that the Government will be careful to ensure that the agricultural industry in the United Kingdom in general, and in Northern Ireland in particular, is not unfairly disadvantaged compared with other member states. I shall be examining all developments to assess their impact and ensure that any special difficulties for Northern Ireland are taken into account.
I should like to turn now to the industrial support measures covered by Class II, Vote 3, in the Autumn Supplementary Estimates. Under Sub-head B2, there is a provision of £42.2 million for assistance to the Harland and Wolff Shipyard in Belfast, which at present employs some 5,300 workers. This sum is further evidence of the Government's recognition of the company's importance to the Northern Ireland economy, but noble Lords will note that the provision of £42.2 million is some £5 million less than the total level of support required in 1982–83, and, as such, is a welcome improvement.
An increase of some £3.5 million at Sub-head D1 is sought to top up the existing provision of £37.2 million for standard capital grants to industry in Northern Ireland. In particular, a higher than anticipated level of demand has contributed to the requirement for this increase and to the extent that this will improve competitiveness and sustain existing jobs it is

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something in which we should find some encouragement.
The department is also seeking an increase of £2.7 million in the budget of the Local Enterprise Development Unit, of which £0.3 million relates to administrative costs, and £2.4 million to grants and loans paid out to industry.
The reasons for these increased provisions lie quite simply in the dramatic increase which the last two years have seen in the level of Local Enterprise Development Unit's job promotion activities in Northern Ireland's small firm sector. These have resulted in a record job promotion figure of 2,550 in 1982–83.
One of the major new initiatives taken in the Province this year was the recently launched Local Enterprise Programme, which is designed to provide an integrated framework of support to maximise the efforts of local economic development groups undertaking industrial development projects. LEDU will co-ordinate this activity and will work closely with such organisations, providing financial assistance towards their running costs and grant aid on a pound for pound matching basis for the acquisition, refurbishment and sub-division of factory accommodation to encourage small business start-ups at local level.
I move on now to the votes of the Department of the Environment for which supplementary provision is being taken. An additional £3.8 million is required to finance increased expenditure for Class VI, Vote 3, which covers the Consolidated Fund contributions payable to local revenues. The additional grant is needed for two reasons. First, about £1.5 million is necessary to meet the cost of increasing derating for industrial premises from 75 per cent. to 100 per cent., which was introduced from 1st April 1983 as part of the package of aids and incentives to industry which was announced by my right honourable friend the Secretary of State for Northern Ireland in another place earlier this year.
Secondly, £2.3 million is required to meet special circumstances arising this year in relation to the resources element of the general grant. The resources element is calculated by means of a statutory formula, and population levels are a key element in the calculation.
I turn now to Class VI, Vote 4—which covers expenditure on rating, records, registrations, surveys and administration matters. An increase of £14 million is sought mainly to cover expenditure on computerisation of rate collection and additional expenditure on general administration.
Provision is being sought to meet increased expenditure in the Social Security field in Class, X Vote 2, Non-Contributory Benefits, and in Class, X Vote 4, Administration and Miscellaneous Services.
In the field of non-contributory benefits, the increased provision sought is £41 million. Of this, £30.3 million, as I have already explained, is attributable to the introduction of the Housing Benefits Scheme in Northern Ireland from 21st November 1983. Prior to the introduction of the scheme, assistance with housing costs was provided
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mainly through supplementary benefits and through rent and rates rebates or rent allowances provided by the Northern Ireland Housing Executive or Department of the Environment. Some £1.6 million is owing to a rise in the number receiving attendance allowance, and the remaining £9 million falls in the supplementary benefits area and is required mainly because of an increase in the numbers of beneficiaries.
Increased provision sought for administration is £1.8 million and reflects mainly what is required to meet initial and ongoing costs incurred by the Northern Ireland Housing Executive in the administration of housing benefits. With this technical, but I hope reasonably brief, explanation, I commend the draft order to the House.
Moved, That the draft order laid before the House on 23rd November be approved.—(The Earl of Mansfield.)
7.58 p.m.
Lord Underhill: I should like to thank the Minister for his excellent review of this order and for getting through so much information in such a short time. I must stress that, although on this side of the House we readily agreed to discuss these three orders during the interval in the previous Bill, we shall insist that the three orders be fully discussed, in fairness not only to the people of Northern Ireland, but to those of us in this House who have responsibility for various matters. Although the debate is limited to a very few points in this particular order, there are a number of issues on which I should like to raise points and questions to the Minister.
I must say again how useful I find the supplementary booklet, which gives far more detail of the various votes in this particular supplementary estimate. I will deal with two points only arising under Class I in agriculture.
Once again, we welcome the provision of a little over £5 million for the continuation of the milk subsidy, as the Minister has said, to keep down the price of milk to the level of that elsewhere in Great Britain. In addition to the points which the Minister made regarding the problems confronting us in the Common Market, there is obviously concern at the possible effect of UHT milk which we discussed fully in this House a short time ago, and also possibly of the super milk levy, which could have some effect not only on milk sales but on production. This is a point which I am pleased to note the Minister has made quite clear: that if there are any special difficulties in relation to Northern Ireland he will ensure that these are taken into consideration.
Also welcome is the £2½ million grant for the improvement of grassland productivity outside the less favoured areas. I wonder whether the Minister could elaborate on this and give some details of the scheme. These days there is much reference to schemes of cost benefit.Can he indicate the effect of these grants on imports of feedingstuffs into Northern Ireland?
The noble Earl also dealt with the question of animal health. He will recall that we dealt with this in the July appropriation debate, in which I drew attention to the fact that the provision for brucellosis had halved whereas that for tuberculosis had doubled.

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Naturally, I am pleased to note what the noble Earl said about the improvement in animal health, but I note that, in relation to brucellosis, in all there has been a two-third drop from the £1.2 million provided in the 1982–83 estimates, and that the provision for tuberculosis, which in the July estimates doubled that of the previous year, has now been reduced by 40 per cent. since that July appropriation. I am pleased that the Minister has stressed the vital importance of animal health. I hope that these figures in no way suggest that there is any impairment of preventive measures.
I come now to Class II, and I must again refer to some helpful information in the Northern Ireland Economic Council's report for the year ended 31st August this year. I note that when the report was published on 21st October a press statement was issued which included the following:
"While decline in manufacturing production appears to be bottoming out, there is no sign of the substantial upturn needed to reverse the growing problem of unemployment".
The figure which I have for October is approximately 120,000 unemployed in Northern Ireland—about 21.5 per cent. That figure excludes the figures of those who are on training or employment schemes. I fully appreciate that the economic conditions in Northern Ireland are considerably affected by the basic policies followed for the United Kingdom as a whole; but we recognise the special circumstances of Northern Ireland, and that is one reason why we approved the special financial measures brought before Parliament in March this year.
However, unemployment in Northern Ireland is well above the average for Great Britain, and even higher than in the worst region in Great Britain. Some areas have well over 30 per cent. unemployment, which illustrates the hopelessness and the desperation of some people. On previous occasions we have mentioned Strabane, and we must mention it again. It has a 40 per cent. unemployment rate, with male unemployment over 50 per cent. The conditions of desperation are pretty evident in those figures.
The total number in employment is about 9 per cent. below the figure for 1979, with a little over 100,000 employed in manufacturing industry, which is a quarter below the figure of 1979, with manufacturing output down by 12 per cent. In the construction industry only 26,000 are employed. That is down by about 30 per cent. on the 1979 figure, with construction production down by over 16 per cent. This is of considerable importance because, again, the Economic Council's report states:
"Public expenditure is an important determinant of the level of economic activity in the Province."
I hope that the Government will take note of that, because the latest figure I have, which is for September 1982, is that public sector employment in Northern Ireland, including nationalised industries, accounted for 45 per cent. of the working population—round about 213,000. That is a very important statement by the Economic Council as to the level of public expenditure.
On that point, in the July appropriation debate I referred to the policy statement of the Northern Ireland Committee of the Irish Congress of Trades
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Unions, The Trade Union Alternative. I understand that the Secretary of State met that committee on 28th November. I do not know whether the noble Earl the Minister has any points to make about that meeting with the Northern Ireland Committee.
The Minister has referred to the encouraging development in the Local Enterprise Development Unit. We all welcome the record figures which he mentioned. Can the Minister tell the House whether these are all new jobs, or are any of them jobs which have been transferred from elsewhere in setting up the businesses? Do any jobs relate to exports, and how much of the new production will replace imports?
There are two other matters for which there is no reference under this heading, but I am certain that the Minister will readily deal with them if he can. There is no reference to Enterprise Ulster. In the May appropriation, which we discussed in July, there was provision for £8¼ million, which was a £1.3 million decrease on the figure for the previous year. A decision was taken in March to extend Enterprise Ulster for a further three years. Can the Minister say how this is progressing? I hope that there is no intention of running down this important enterprise.
There is also no reference to the youth training scheme. The provision referred to in the July appropriation debate was for 19 million, when it was expected that 8,200 would enter the programme. Can the Minister say what progress is being made, how many places have been taken up to date, and what is the percentage of young people eligible to participate? Naturally, we welcome the £42 million assistance to Harland and Wolff.
All my points so far have asked for information, but I must make a political point here. It is this kind of subsidy, this kind of help and the number of grants which are made throughout various schemes in Northern Ireland which illustrate quite clearly the need for Government intervention to deal with matters of this kind. I hope that the Government will take the same view when we press other issues elsewhere in the United Kingdom.
I note from the supplementary booklet that under Class II provision is made for two important aspects of energy. First, under C6, there is provision for £200,000 financial help to industry and commerce for energy conservation schemes. Can the Minister say what progress is being made and what are the future prospects? There is also provision under C7 for £219,000 for studies on energy matters. In this connection, can the Minister say when the Kinsale pipeline is expected to commence and when gas supplies to Northern Ireland are likely to commence?
Previously, in connection with the studies, we mentioned the viability of lignite as an alternative fuel and the studies which are taking place. Can the Minister say what is the present position? Is there any firm estimate of the lifespan of such supplies? There have been reports of a possible increase in gas prices in Northern Ireland. I would simply comment: is this a wise move before the scheme for the development of Kinsale gas is completed? At least, the agreement exists but the pipeline is not yet completed.
In conclusion I must move to Class X. I note that the Under-Secretary of State, Mr. Patten, who has

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responsibility for health and social services matters, addressed the Assembly on 8th November and said:
"There are undoubtedly higher levels of morbidity and deprivation in Northern Ireland than exist in most other regions of the United Kingdom."
That, of course, is confirmed by numerous surveys from time to time.
The noble Earl referred to the provision for housing benefits, and the supplementary benefits office told us that the number of persons qualifying for rent rebates, rent allowances and rate rebates is a little over 132,000. We had a full debate on housing benefits, so I shall not go into that again now, and it is too early yet to consider what the results will be, because they did not take effect, as the Minister said, until 23rd November this year.
However, is there yet any firm information on the number of persons who will be worse off, remembering that when we debated housing benefits the Minister said that it is a redistribution between those who are not so badly off to those who are really worse off? In other words, those who are worse off in one way will pay to help the others. Is there any information of the numbers who will be worse off?
Is the manpower adequate to administer this scheme properly in light of the criticisms that there have been for the scheme's administration in Great Britain? Is the information coming in satisfactorily in connection with this from the private accommodation? What steps will he taken to avoid any possible bottleneck that may be caused by the Christmas and New Year period?
My last two points are on the attendance allowances, to which the Minister referred, for which we note that there are 1,500 additional beneficiaries. Is this increase due to additional persons needing help, or is the increase due to the removal of a number of persons from hospital who therefore need more home care? The Minister also referred to the estimate for supplementary pensions allowances, again including the increase of 3,000 persons in the number of beneficiaries under those two schemes. I would suggest that this is a further indication of the growing numbers of persons who are below the poverty line, endorsing what Mr. Patten said to the Assembly, and a problem of which all of us would take keen notice.
8.12 p.m.
Lord Donaldson of Kingsbridge: My Lords, I should like to follow my noble friend, if I may so call him that, in two particular ways. First of all, the noble Earl gave us a clear and succinct account of what this paper stands for, and I found it useful. I knew that my noble friend from the Labour Front Bench would ask all the questions I was going to ask, and I thought that I should be lucky if I had any left. I have one or two, but very few.
I want now to follow on his second point, which I should like to put rather more dramatically. In spite of some rather hopeful things that were read to us by the noble Earl, the position of Northern Ireland is rather desperate. The tragedy for all of us is that there is every reason to suppose that the really vile thing, the security problem which we all hate so much and which seemed
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to be exploding around us tonight in a rather disagreeable way, almost certainly could be enormously eased if we could ease the financial problem and this dreadful problem of unemployment which the noble Lord described so graphically.
I want to follow him also by saying how glad I am that the Government have shown great readiness to interfere in Northern Ireland's business affairs, and that their readiness to do this has been increased by the desperate unemployment position rather than decreased by their doctrinaire adherence to the so widely discredited monetarism from which we suffer in this country. Like my noble friend I hope that some of the interfering attitude which is so obviously essential and unavoidable in Northern Ireland might perhaps seep over to this side, because although we are less interference minded on this Bench than the Labour Party, we are still pretty interference minded.
To look to the bright side, we welcome particularly the various things that have been described. The £42 million to Harland and Wolff is the kind of thing we have been doing now year after year, and I suppose will have to go on doing. It is direct subsidy in order to produce work. As such, we have to do it. There is no alternative. However, I should like to ask the noble Earl a nasty little question. Can he tell me, not tonight I am sure, but by letter, how many Catholics are employed by Harland and Wolff? When I was there I think it was eight, but I may be wrong. The noble Earl gave us the figure of 5,300 workers at Harland and Wolff.
The other thing I am particularly pleased about was mentioned by both the noble Lord and the noble Earl. and that was LEDU—the Local Enterprise Development Unit. I am glad that its achievements are such as they are. From a thousand or two thousand it has increased. I think, to 3,000 and 5,000 jobs found and made. This is entirely satisfactory. It is a body to co-ordinate the local enterprise programme, on which the Government are setting a good deal of store, and is a hopeful development. We look forward to some increase in its staff and in its budget. I think I can take not from what the noble Earl said but from what was said in the other place that that is the Government's intention; and we support that.
I have spoken before about the special needs of Northern Ireland for agriculture, and particularly intensive production. The position of the Northern Ireland farmers is that without intensive production they cannot keep up their employment or anything like it, and the difficulty with intensive production is the great cost of bringing in what we call corn and the Americans call maize.
I welcome particularly the AI subsidies, which of course is the way to improve herds and has been going on solidly, and improving solidly, in Northern Ireland. This is thoroughly good. Secondly, I welcome the growth in the disease free area, to which both the noble Lord and the noble Earl referred. This is extremely important because Northern Ireland has to have fine cattle and has to sell them, and you can only do that if you increase your disease free conditions.
Housing and other things have been spoken to. I shall not go over them again. I have one small point which interests me. I do not regard it as a very serious

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point but I am interested in the policy behind it. I see that the present Supplementary Estimates are allowing £800,000 for the computerisation of the rates—I suppose that means rate collection—and that more will be required later.
As the only point of such computerisation is to save labour I wonder whether it is money well spent. Would it not be better to postpone it to preserve the jobs it will destroy, and give the £800,000 to LEDU? This sounds rather a frivolous comment but it is really quite serious. When we have a position of unemployment such as we have in Northern Ireland we cannot really afford to mechanise any more, and we ought to be careful about it. Having said that, it seems to me that the Government are doing quite a lot to try to deal with a desperate situation, and I wish them every Godspeed.
8.19 p.m.
Lord Fitt: My Lords, the House will know that for 18 years I was a Member of another place. During that period of time it was always a considerable disappointment to me that when Northern Ireland was discussed it was always in an almost empty House. I am saddened again tonight because there are even fewer Members in this House at this time than there were in the House of Commons. The problems of Northern Ireland are so intractable, so difficult, and so serious, that it would be in the interests of all noble Lords in this House, and indeed Members in the House of Commons, to sit, listen, and pay more attention to the awful problems which have beset Northern Ireland for so many years.
I am conscious that when this Conservative Administration was first elected in 1979—and, indeed, I have some regrets because I played some little part in bringing about the defeat of the last Labour Government because of the issues I saw as so serious in relation to the security situation—there were 61,000 people unemployed in Northern Ireland. We have just heard the figures quoted by my noble friend Lord Underhill: the figure has now escalated to 120,000—double. That is not the whole story because there are many people, particularly women, who would not qualify for benefits and therefore they do not register as unemployed. So the figure is about 130,000 or 140,000 unemployed in that small area of the United Kingdom.
This figure did not just escalate on its own. We have often heard of the outside effects of world recession. Much of the increase in this figure was due to the monetarist policies of the Conservative Administration between 1979 and the present. However unpalatable those policies may have been to the more affluent parts of the United Kingdom, they were totally disastrous for Northern Ireland. Northern Ireland is different because it has a smaller industrial base. It has been beset by community troubles throughout the period of its existence, since the creation of the Northern Ireland State. Conditions here and in other parts of the United Kingdom are totally irrelevant when dealing with the problems we have in Northern Ireland. I blame the Conservative
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Administration for the more than doubling of the unemployment figure in Northern Ireland.
When I was defeated in the recent election in June this year, after having represented West Belfast for so many years—it would be conceded that West Belfast is one constituency, I think the constituency, in the whole of the United Kingdom that suffers from terrible poverty and deprivation—I was asked by the Prime Minister and the Leader of the Opposition whether I would accept a place in your Lordships' House. After some thought I accepted. My motive for accepting was that I believed that I would be able to continue to speak on behalf of the constituents of West Belfast and those throughout Northern Ireland, because the present representative of that constituency does not attend another place. Indeed, members of the party which I formerly led do not attend the Assembly at Stormont. All the people of West Belfast, Protestant and Catholic, majority and minority, have no adequate voice in the political structures. The present representative for West Belfast spends his time attending paramilitary funerals and supporting murderers, when it could be better spent in coming to the House of Commons to voice the agonies that are daily suffered by the people of West Belfast.
This little order which covers only seven items, covers two of the major items that affect ordinary people—employment and housing. I can only say that I still believe that more could be done by this Government to alleviate the terrible scourge of unemployment as it exists in Northern Ireland.
In answer to a question in another place last week the Minister replied that social security payments in Northern Ireland amounted to the vast sum of £924,536,085. That is a tremendous sum. A large proportion of that figure is paid out in unemployment benefit and in supplementary benefits. I believe that the Government should take the initiative to spend that money in a better way because there is absolutely no return from that vast expenditure. The Government could initiate programmes which would take people off the street, away from the dole queue and put them into productive employment. The construction industry has already been referred to by my noble friend Lord Underhill. The construction industry in Northern Ireland could usefully be employed in building more houses—a matter to which I shall refer later—in buildings of all descriptions and that would take those tradesmen away from the dole queue.
I, too, should like to add my voice to the congratulations and compliments paid to the Government on the £42 million which has been given to the Belfast shipyard. No one can under estimate the psychological importance of the Belfast shipyard. If the Belfast shipyard were allowed in any circumstances to go under, it would be a big psychological defeat for everyone in Northern Ireland irrespective of the sometimes very contentious questions that are asked, and rightly asked, about the religious complexion of all of the employees over the years. The Government are to be complimented in authorising the building of the four ships. But despite the psychological importance of the shipyard, it employs only 5,500 people. I am old enough to remember when the Belfast shipyard employed 30,000 people and to see the sad

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rundown of that once great shipyard cannot be any joy to any political representative of Northern Ireland.
Mention has also been made of the local enterprise development units. I want to repeat to the Minister something I have said repeatedly in another place over many years. This has been one of the success stories of a succession of Governments, both Labour and Conservative. This little idea was germinated in 1971 or 1972. I know the area officers who are employed in the LEDUs. I know how dedicated and diligent they are in travelling all over the United Kingdom trying to attract people who will invest in small businesses in Northern Ireland.
I hope I do not embarrass the individual concerned, but the area officer for West Belfast is a Mr. John Carmichael. He runs himself off his feet to try to attract any small industry to West Belfast. Even ten, 20 or 30 people employed in small factories in that area, which is so utterly deprived, is welcome.
I have recently been speaking to people in the LEDU organisation over this past number of weeks and months. I do not know—and perhaps later on in another debate the Minister will be able to tell us—what representations the present parliamentary representative makes to the noble Earl, Lord Mansfield. I understand that he does not attend the House but he is still permitted to make representations on behalf of his constituents to junior Ministers. I think that perhaps that position should be queried later, because any elected representative who gives succour and support to people who are carrying out a murderous campaign in Northern Ireland should not be allowed inside Government offices.
I believe that the LEDU organisation is seriously under-financed. I have read the report of the debate in the other place, where the Minister seemed to indicate that they were looking into further financing. I would hope that they will arrive at the conclusion that the success story of LEDU—with its figure of over 16,500 jobs since its inception—particularly in the awful economic climate of last year, 1982, when the organisation was able to create 2,500 jobs in Northern Ireland, represents a remarkable achievement and that every assistance should be given to that organisation.
I have already mentioned that I welcome the fact that Harland and Wolff received £42 million. This is an industrial institution which has been in serious economic difficulty from as far back as I can remember over the years. If the Government think it worth while—and I think it is worth while—to keep that industrial organisation afloat, then it is just as important that more money should be put into LEDU with the intention of creating further jobs.
On housing, I keep in touch with housing development even though I am no longer the parliamentary representative. I am the only representative voice for that constituency because the non-attenders do not go to the Assembly or to another place. I keep in touch with housing. I read and listened to the debate in another place last week. I believe that the Government are far too complacent in relation to the housing situation in Northern Ireland. Certainly, the Northern Ireland Housing Executive has done tremendous work in grappling with the terrible problems of bad housing
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in Northern Ireland. It was accepted that, by European standards, West Belfast and County Fermanagh were two of the worst housing areas in the whole of Europe. West Belfast I no longer represent or live in, but I am in almost daily communication with people who live there. I know that there is still a great deal of distress caused because of the lack of housing in that constituency.
One of my friends in the other place who is now the Opposition spokesman on Northern Ireland last week drew the attention of the House of Commons to a report which had been promulgated by the Northern Ireland Housing Executive. The Northern Ireland Housing Executive is not a revolutionary body; it is not an organisation that has all sorts of Trotskyites or trouble-makers in it. It is a rather conservative organisation. On looking into the whole question of housing needs in Northern Ireland, they referred to the fact that the number of people on the waiting list for housing in Northern Ireland is about 23,500 and that there has been a decrease.
The Northern Ireland Housing Executive, in their own report, state in relation to the decrease in the numbers on the waiting list:
"There may be a greater willingness, in very adverse economic circumstances, to tolerate the discomforts of sharing and overcrowding; and there may well be an increasing willingness to endure the low space standards and poorer amenities of older housing rather than face sharply increased rents".
This is their own conclusion. Then they go on to say:
"It does not seem improbable that there is a direct causal connection between the sharp decline in waiting lists for public sector houses and the even sharper increase in public sector rents which has taken place over the same period".
They then come to their conclusion, wherein they say:
"It has been said, and not without evidence to support it, that only those in well-paid jobs, or those on full social security benefits, can now afford the rent of a new Housing Executive dwelling".
This is a report which was commissioned by the Northern Ireland Housing Executive. What it says is that the rents of Housing Executive houses are so high that people do not want to take the tenancy of them. They are prepared to live in inferior, overcrowded conditions; they are prepared to live with their in-laws, because they know that they could not afford the rent of a Housing Executive dwelling if one were to be allocated to them. I think that that is a position that will have to be seriously looked at by the Government in Northern Ireland.
I listened to the debate which took place in another place and it seemed to me that the Government were clapping themselves on the back because of the undoubted success of the Housing Executive situation since its formation in 1970. I would tell the Government that in Northern Ireland there is still a crying need for houses at rents which people can afford. Otherwise, there will be an aggravation of the problem: there will be people living in inferior housing conditions, out of a job—and we have just quoted the unemployment figures—and that can only lead to social discontent.
I would say once again to the noble Earl (and perhaps it has been drawn to his attention) that the right honourable gentleman who represents Down, South, in an interjection last week, said—and it was in reply to the Leader of the Opposition and the Northern Ireland spokesman in another place:

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"The right honourable and learned Gentleman will be interested to know from those who represent constituencies in Northern Ireland that there is absolutely no discernible class or wealth distinction characterising those who purchase their own homes".—[Official Report, Commons, 8/12/83; col. 499.]
I do not know to what constituency he refers, but I do know that he represents Down, South. I represented West Belfast for many years; and there is a great difference in the class structure between the character of the people who own their own homes and those who live in public authority houses.
If I had known that I was going to take part in this debate this evening I should have liked to ask the Minister beforehand whether he could tell me how many people in Ballymurphy, in Turf Lodge, in Divis Flats, in New Barnsley, in the Springfield Road—indeed, on the Shankhill Road—own their own houses. They are, indeed, very very few; whereas in other, more affluent parts of Northern Ireland, where a different class of people live, they certainly own their own houses. I would urge the noble Earl not to take as gospel anything which was said by the right honourable gentleman in another place when he said that there are no class divisions. Indeed, there are quite serious class divisions in relation to home ownership in Northern Ireland.
The other matter which I know has been drawn to the noble Earl's attention is the question of housing benefit. There is such a complicated way of claiming these particular benefits, and many of the people who are entitled to them are people who, to say the least, are not of a very high educational standard. That is certainly no criticism of them, but everyone knows that, when aged persons are faced with forms and the language contained in those forms, they sometimes prefer not to make a claim for benefit rather than go through what they see as the embarrassment of asking a person to fill in a particular form for them.
Again, the figure of £1,500 has been mentioned as an increase in relation to those qualifying for attendance allowance. I have always believed, and I have said it over many, many years, that the criteria for the receipt of attendance allowance in Northern Ireland, and indeed in other parts of the United Kingdom, are far, far too strict. Over the years, there have been far more people in Northern Ireland who have claimed attendance allowance and been refused than those who have been successful in their claim.
I know that the attendance allowance, although it is used and spent by the person who is giving the attendance, is in fact given to the person who is incapacitated. I have always said that before people can qualify for attendance allowance they must be very nearly dead; they must not be allowed to move or get out of bed; and they must need attendance for 24 hours a day. The conditions for the receipt of this and for the mobility allowance have been far too strictly laid down. Many people who would benefit from this financial compensation are being denied it because of the stringency of the laws related to the granting of attendance.
There is also the question of home helps. This has been an ongoing problem. Even when the Labour Party was in power, there were always far too few home helps employed as compared with the number of residences where they would be needed. However,
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one cannot but welcome this order, and indeed there is very little that we can do about it.
I should like to say that, when I first became a Member of this House and in fact before actually being introduced, I was walking around the corridors here on August Bank Holiday this year. I met one of my noble friends from this side of the House. He welcomed me to the House in a very friendly way and told me that your Lordships would be very interested to hear what I had to say on Ireland because I have lived there and I know the problems of Northern Ireland. He went on to advise me that if I did not want to lose any friends I should not speak for longer than 12 minutes. I began to have serious doubts as to whether I should tell your Lordships about Northern Ireland by way of instalments on a Monday, Wednesday and Friday.
However, looking around the Benches here tonight—and I understand there are reasons for it because it is a Tuesday evening and there are certain procedures to be followed—I would say to those of your Lordships who are present and also to those of my noble friends and indeed members of the Government who are absent at this moment, that Northern Ireland is a problem. It is not going to go away. You cannot avoid having to deal with it. Mention has been made this evening of a bomb having been found somewhere in London. That is part of the Northern Ireland problem, however obnoxious a connection it may be.
I would, in conclusion, ask the noble Lord to do what he can with the LEDU enterprise and to look again at the severe restrictions which are placed on the community with regard to the attendance allowance and the very, very short supply of home helps. This is only a very small order: one cannot do a great deal about it, but I certainly welcome the order sc far as it goes.
Lord Hylton: My Lords, I should like to say how very much I agee with the noble Lord, Lord Fitt, about all these vast empty Benches, particularly, if I may say so, on the Government side. Perhaps the Government Whips could do something to bring this to the attention of their supporters, and perhaps the Government themselves could do something to help by trying to arrange for us to have Northern Ireland business earlier in the day at more popular hours. Then the noble Lord, Lord Fitt,—perhaps I may call him my noble friend—will, I am sure, have great success in persuading many Members of both Houses to come to the annual (and sometimes more frequent) gatherings of the British-Irish Association. These are very valuable occasions which bring together not only politicians from both sides of the Channel and from Ireland, North and South, but also academics and people involved in the media, in a very free and informal way and with the benefit of Chatham House rules.
I am grateful to the noble Earl for explaining today's order and I think we can draw just a little encouragement from what he said, first, about manufacturing industry and, secondly, about the many new small businesses of all sorts that are being stimulated with the help of LEDU. The fact remains, however, that the

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overall economic situation is still bad and it continues to aggravate the political situation.
I want to raise only three points, and the noble Earl will be relieved, in that I have given him notice of them and, secondly, two of the points of which I have personal eye-witness experience are ones which will not call for extra expenditure during the course of the present financial year. The first point I want to mention concerns the new prisons at Maghaberry. These prisons, one for men and one for women, are very important because they will make possible the closing of the antiquated women's gaol at Armagh and will reduce significantly the overcrowding among men, which I believe is particularly acute in the remand wings of Crumlin Road prison at the moment. The noble Earl, Lord Gowrie, said in reply to a Written Question of last February that new prisons were expected to open late this year or early in 1984. Can the noble Earl the Minister say by how much this programme has fallen back and what steps Her Majesty's Government are taking to regain lost time and to bring these new prisons into use?
My second point is about public access to the whole of the historic walls of the city of Londonderry. These are of great symbolic importance to both the main traditions in Northern Ireland and they attract visitors from the whole world. Two years ago, when I was last in Derry, the circuit of the walls was blocked at the south-west corner by an Army post which obliges visitors to climb down before resuming the circuit. I understand that the Army post is still there, despite numerous requests for its removal. The Army, it seems, still needs an observation point in that area. Will the Government make sure that every effort is made to find an alternative building or structure that would serve the same purpose? If that can be done, an unsightly blockhouse would be removed from a place of great natural beauty, and access for visitors and local people would be much improved. The noble Earl, as a Scotsman, will readily understand the importance of clan gatherings. I hope, therefore, that he will succeed in getting the walls cleared in time for the international gathering of the clan O'Doherty, planned for June 1985 in Derry.
Lagan College, Belfast, is the last matter that I wish to raise. This school has been discussed on several occasions in your Lordships' House. It came into being solely as a result of parents who formed the All Children Together movement. It is a denominationally integrated, mixed sex and all abilities secondary school—a rare example in Northern Ireland of a shared Christian school which teaches and respects both the Protestant and the Catholic traditions. The college opened in 1981 and now has 161 pupils, almost exactly half and half, Protestant and Catholic, with a further 90 expected next September. Because it had to start as an independent school, very large sums of money have been given not only from Northern Ireland, but from Britain, Europe and America to meet the capital costs and those running costs not covered by tuition fees.
Lagan College has successfully applied to the South-Eastern Education and Library Board for recognition as a grant-aided school. I understand that the final decision on this matter rests with the Department of
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Education. I am sure that Her Majesty's Government will take into account the amazing success of this school, its long waiting list and the fact that it draws its pupils from no fewer than 60 primary schools in three different board areas.
The noble Lord, Lord Elton, replying for the Government in the recent debate on ethnic and religious minorities in Britain, said at col. 1153 of the Official Report for 7th December:
"Much prejudice arises out of fear, and much fear arises out of ignorance. A great deal of both can be dismantled quite easily in our schools where our children can learn not simply from the staff, but from their fellow pupils who are the best qualified teachers of all".
I am sure that the noble Lord spoke from his experience both as a teacher and as a former Minister responsible for education in Northern Ireland. His words apply just as much in Northern Ireland as they do in Britain. That is why I look forward to a favourable reply, if not today then at the appropriate moment before 1st April 1984.
8.53 p.m.
The Earl of Mansfield: My Lords, I should like to thank the noble Lords who have taken part in this debate. I know that it must be disappointing particularly to the likes of the noble Lord, Lord Fitt, who has not been a Member of your Lordships' House for too long, to see the familiar empty Benches when matters pertaining to Northern Ireland are discussed. I have to tell him that when I was in the Scottish Office there was rather the same effect, unless matters were being discussed which would eventually have a British connotation. But if we keep our debates sharp, and, above all, if we keep our speeches concise, we may by our eloquence attract back into the Chamber some noble Lords who might otherwise be away for the whole of the dinner hour.
I am very grateful to at least two of your Lordships for giving me notice of part, at any rate, of what they intended to raise. I shall either reply as fully as I can or if I cannot, or if the reply would be too full, then I shall write to the noble Lords concerned. I prefer not to do it in that way, but we have already taken over an hour for the first of our three orders and there may be what, in some circles would be called consumer resistance if I attempted to reply at too great a length.
The noble Lord, Lord Underhill, first raised the matter of the grassland improvement scheme, and if I tell the noble Lord, Lord Fitt. as I start on this slightly bucolic note, that the present Member of Parliament for West Belfast does not get in contact with me at all regularly, because I understand that there is not much of interest to do with agriculture, fisheries or forestry in West Belfast, I know he will understand. At any rate, the grassland improvement scheme was based on the well understood concept that the production of grass is the most efficient way of feeding stock, and indeed the production of grass is one of the few things at which Northern Ireland excels, particularly in relation to other agricultural commodities. So the aim of the scheme was to encourage producers to improve their grassland and thereby the quality of stock which would be pastured on it. There has been some spin-off, so far as the reduction of imports is concerned, but what is wanted above all is to reduce farmers' inputs.
Then the noble Lord asked me about animal health

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expenditure. The whole of animal health is of supreme importance in Northern Ireland and I agree with the noble Lord. I certainly give him the assurance which he sought in relation to tuberculosis and brucellosis, but, in fact, additional controls in the form of annual testing and full movement controls on all cattle were introduced in mid-1982 in an attempt to reduce the level of tuberculosis infection. It is the success of these measures which has meant that lower infection has led to less slaughter, and therefore less expenditure on compensation, so there has been what I might describe as a happy result.
The noble Lord raised the question of LEDU, as it is called, and other noble Lords have also commented on this. The first thing that I want to do is to contradict the assertion of the noble Lord, Lord Fitt, that LEDU is under-financed. It is not and neither is any agency in Northern Ireland. I am particularly thinking of the Industrial Development Board, which is a very much newer creation than LEDU, but neither of these is under-financed. The job creation activities of LEDU have not been constrained through lack of cash, they will not be constrained through lack of resources, and I think it is fair to say that if anybody in Northern Ireland has any idea as to the creation or expansion of business which is viable on a reasonably optimistic assumption, then there is no lack of public money to develop that idea.
From its inception in 1971 to December this year, LEDU has promoted over 16,500 jobs and over 2,500 jobs in the last financial year. This is the highest number of jobs in any year since the unit was set up. It is a significant achievement. Of course, the Government are not complacent, but in the circumstances of a difficult economic background I regard this as no mean achievement. The prognosis for the current year is encouraging, and I believe that the number of jobs which will be promoted is likely to exceed the record figures of last year. I think it was the noble Lord, Lord Underhill, who asked whether jobs are new jobs and the answer is that they are. It is a condition of firms receiving financial assistance that jobs are new jobs. I am afraid that I cannot quantify which of those jobs are connected with exports.
The noble Lord went on to speak about the training programme. The programme is obtaining a good response from eligible young people. In November there were more than twice as many 16 yearolds—that is, more than 5,000—on the youth training programme as there were unemployed, who number 1,887. Those 16 year-olds who are unemployed still have an opportunity to accept the Government's offer of a place before the end of the year. The programme also provides a range of opportunities for 17 year-olds. Here we find that there are as many in training as there are who have never held employment. Those young people are gaining experience which will improve their job prospects and let them compete against the 2,410 17 year-olds who are unemployed, who have had employment, and who are between jobs.
The noble Lord asked also about Enterprise Ulster, which is not covered, so far as its funding is concerned, by any of the appropriation orders which we are considering this evening. The terms of Enterprise Ulster have been extended until 31st March 1986 and the new job level is designed to protect the viability of
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the organisation, to permit a realistic element of forward planning, to maintain cost effectiveness, and to enable the Government to give a reasonable forward commitment on the funding. The noble Lord asked me about the meeting of the Secretary of State with the Northern Ireland Committee, and I shall have to write to him about that matter, as I have no information about the outcome of the discussions. I will write to the noble Lord also about housing benefits, because that is convenient in itself; and I shall write to him on the other matters after I have evaluated them.
The noble Lord, Lord Donaldson of Kingsbridge, welcomed the measures on the whole, but he suggested that, instead of computerising expenditure so far as local authorities were concerned, we could save the cash, as it were, and put more money into LEDU. I believe that I have answered his point. There is no shortage of resources in LEDU. The expenditure on computerisation is part of the Government's commitment to improved financial management, and it deserves consideration on its own.
Lord Donaldson of Kingsbridge: My Lords, my point was that there is no value in computerisation unless one destroys jobs—and I do not believe that the Government are in a position to destroy jobs in Northern Ireland.
The Earl of Mansfield: But jobs are not being destroyed, my Lords. I believe that even the noble Lord will agree—and unfortunately this is a matter which is occupying many of us today in Britain—that it is no good keeping people on in overpriced work merely for the sake of keeping them on.
The noble Lord, Lord Fitt, widened the debate very considerably—which, of course, he had every right to do. So far as general economic matters are concerned, I said at the beginning of my remarks—and I meant it—that, when an economic upturn comes (and the signs and portents are already there), then Northern Ireland will share in it. If we were to try to do all the things which noble Lords opposite have continuously urged upon us—in other words, if we tried to spend our way out of the recession—then the cure will be worse than the disease. In fact, Northern Ireland—which, I totally agree with the noble Lord, has an extremely fragile economic base—will suffer more that the rest of the United Kingdom in that eventuality.
I believe that the analysis of the noble Lord, Lord Fitt, is somewhat simplistic, if I may say so. Like many parts of Western Scotland, the industries of Northern Ireland have been declining for years and years and years. It is not the policies of this Government which have been applied since 1979 which have done anything, for instance, to reduce the number of jobs in the shipyards. The other point is, one cannot get away from the situation that, unfortunately, the way in which people live and the way in which they comport themselves in Northern Ireland is not exactly conducive to the creation of new enterprises and the promotion of new jobs. The Government are certainly by no means smug or complacent, as even the bare figures which are part of this debate show. We have tried continuously—and we shall continue to try—to

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make Northern Ireland into an attractive place in which people can live and work.
Finally, so far as this end of the debate is concerned, the noble Lord, Lord Hylton, raised three points. So far as Maghaberry prison is concerned, the main building programme has been completed. Certain modifications—many designed to improve security—are under consideration. The prison should be open by late 1984 or early 1985, and it will greatly ease the prison accommodation problems of Northern Ireland. The prison at Maghaberry will house some 450 male prisoners, and there will be places in the female prison alongside for some 56 women.
The noble Lord spoke also about the walls of the City of Londonderry, which place I am afraid I have not yet had the opportunity of visiting. I know that the noble Lord is concerned about the presence of the Army posts along the walls. We have recently consulted Army Headquarters and they have reported that there are overriding operational reasons for them to maintain their present locations in Londonderry. I am sure that the noble Lord, who has a better knowledge of the area than I, will understand why that is so. As soon as the security situation improves to the point where those measures are no longer necessary, the bases will be moved or abolished, or at any rate relocated. We all look forward to that day. I understand that the security forces are engaged in a constant review of the bases in an effort to improve their appearance and blend them with their local surroundings.
Lord Hylton: My Lords, before the noble Earl leaves that point, I wonder if he has taken on board the importance of 1985?
The Earl of Mansfield: My Lords, I hesitate to enter the lists so far as the Northern Ireland clan are concerned, but I very much hope that the clan will use every sort and kind of influence to see to it that these bases or posts are unnecessary by then, or at any rate perhaps that they will arrange their—I was going to say jollifications—their reunion in such a way that they can get by without being too annoyed by the presence of the posts.
We come to Lagan College. If I may put the matter shortly, the noble Lord will know that there is a two month's statutory period from the date of publication in which objections to proposals can be made to the Department of Education for Northern Ireland, and it is only after the expiration of 25th January 1984 that the department is then able to make the decision. So we are in the period of consultation. This is a statutory matter, and therefore it would be wrong for me to make any comment at this stage, and I do not seek to do so.
I shall look at Hansard with interest tomorrow. The many problems that the noble Lord, Lord Underhill, particularly, raised, I will reply to, if I may, by letter. As is my custom in these Northern Ireland debates, I will send copies of each letter to each noble Lord who has taken part so that everybody knows where everybody is.
On Question, Motion agreed to.

Northern Ireland (Emergency Provisions) Act 1978 (Continuance) (No. 2) Order 1983
9.10 p.m.
The Earl of Mansfield: My Lords, I beg to move that the draft Northern Ireland (Emergency Provisions) Act 1978 (Continuance) (No. 2) Order 1983, which was laid before this House on 24th November, be approved. I invite the House to renew for a further period of six months all the provisions of the Northern Ireland (Emergency Provisions) Act currently in force. I do so at a time when terrorism in the Province is never far from the headlines, and I am sure your Lordships would want me to say something shortly about the current security situation.
Your Lordships will be all too conscious of the recent atrocities, including the murder of three church elders at Darkley in November and of Mr. Edgar Graham, a Member of the Northern Ireland Assembly, only last week. There have, of course, been other brutal murders in the last few days. These killings, inflicted on both sides of the community, have inevitably increased tension in the Province. But I think I should say two things: first, we must not play into the terrorists' hands by taking action or making statements which will escalate the tension and encourage sectarianism: and we must look to the security forces, backed by Government, to deter violence and to bring to justice those who perpetrate it. The Government's security policy is quite clear: we will do everything possible within the law to help bring about the defeat of terrorist violence. Neither the Government nor the security forces can achieve this on their own—it requires the support of the whole community. That is the end to which we are dedicated.
It is, of course, the security forces who are charged with implementing this security policy. They take the action, at an operational level, to meet the threat. And as that threat changes, so does the deployment of the security forces change. The chief constable and the general officer commanding continually review and reassess their deployment and tactics to ensure that they are giving the best possible service to the long-suffering people of the Province. In response to the most recent attacks in the border areas, for example, senior commanders have taken charge of operations in key areas of the border, and the number of men deployed and the number of operations carried out have all been stepped up.
Despite recent tragic events, there have been many successes—attacks have been frustrated, arrests have been made and a large number of convictions obtained. The downward trend of violence continues, and I am sure your Lordships would wish to join me in praising the courage and dedication of the security forces in Northern Ireland.
Although Her Majesty's Government are conscious of the undesirability of retaining extraordinary powers to enable the security forces and the courts to counter the terrorist threat, it is regrettable that we have not yet reached a stage where these powers can be abandoned. The powers and procedures in the Emergency Provisions Act, which the draft order before us tonight would continue in force, are in regular use. That is not to say that there is no room for modification to the

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Act, and your Lordships will be aware that Sir George Baker is currently reviewing the legislation to ensure that the provisions are appropriate and that they strike the right balance between powers which are essential to counter terrorism, on the one hand, and for the maintenance of civil liberties, on the other. A deadline cannot be imposed on such important work, but I believe that Sir George Baker may be in a position to report in two to three months' time. The Government will, of course, consider Sir George's recommendations extremely carefully and I hope there will be time for a full debate on the report in this House.
Against that background, my Lords, I do not wish to propose that there should be any change in the provisions which this draft order will continue in force for a further six months. I beg to move.
Moved, That the draft order laid before the House on 24th November be approved.—(The Earl of Mansfield.)
Lord Underhill: My Lords, for brevity, but not because I do not realise the seriousness of the order we are considering, I can say that I agree with practically everything which the noble Earl said about the seriousness of the position. Apart from the stress and the emotion for all the people in Northern Ireland, the actual figures of the dead and injured, and the suffering since 1969, are horrific.
I refer to only one of the official statistics. I understand that in the past 13 years nearly £8 million has been stolen during armed robberies and that in 1982 this involved the largest amount during that period—no less than £1.4 million. Perhaps the noble Earl can tell us if there is any evidence to show how much of this stealing is carried out by the persons who perpetrate the terrorism and whether the security forces have any hope of combating the situation. I know that robberies are of secondary importance when compared with the injuries and the deaths, but, if my surmise is right, the robberies may be a means of encouraging further injuries and deaths in the future.
I agree completely with the noble Earl on the review being conducted by Sir George Baker and that subsequent legislation should keep a balance between what is required for security and what is required for civil liberties. There is always a great danger that we forget the struggles that everyone went through to get our democratic rights and popular representation. These can easily be pushed aside in the interests of security. I know that it is easy for someone living on the mainland to say these things, but it is for that reason that ever since 1981 we have urged that there should be a review of the emergency provisions Act. That is why we have urged, as the noble Earl the Minister said, that there should be no tit-for-tat reprisals and also why on this side of the House—and I am certain everyone will agree—we regret that recent events have caused the withdrawal of some organisations from the Assembly.
While we have certain concerns on some of the provisions in the present Act, because of Sir George Baker's review there is no point in going through those now. We shall await Sir George's review with interest and I am delighted to hear from the noble Earl that it is hoped there will be a full debate on the report before
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the Government consider the introduction of legislation. That is an important point.
I have only two other matters to raise. There have been reports of excellent co-operation between the police forces of the Republic and Northern Ireland, but the recent reports of disagreement between the Chief Commissioner for the Republic and the Chief Constable of Northern Ireland are obviously disturbing. This must not be allowed to interfere with co-operation between the two forces. Perhaps the Minister is in a position to say what steps are being taken to avoid any such possible development.
Finally, a report appeared in the Belfast press on 1st November of a serious allegation by a member of the Assembly that some employers—it was suggested that it was a substantial number—had sacked persons suffering injury or disablement as victims of the terrorists. These actions by employers have been described by the Secretary of the Northern Ireland Committee of the Irish Congress of Trade Unions as callous, cruel and downright immoral. The Minister may have information on this. If so, will he say what steps will be taken to avoid this situation, which will obviously add to the miseries in Northern Ireland?
With those brief words, we obviously approve the order but hope it will not have to be repeated when we have Sir George Baker's review and further legislation.
Lord Donaldson of Kingsbridge: My Lords, each time this order comes up for renewal I say "Yes" without the slightest hesitation. With things as they are today, nobody in his right mind would hesitate to agree to the order. I make only one comment. It has always seemed to me quite wrong that people who openly advocate terrorism should be allowed to elect their colleagues to Parliament or to the Assembly. I was very pleased to read in the newspapers that the Secretary of State was considering how long this privilege should be allowed to Sinn Fein. I have made my views clear several times. I think that its members should not be allowed to take part in democratic assemblies as long as they openly support violence. The IRA was made illegal for that reason. One of the Protestant terror gangs, the UVF, was also made illegal. Both those moves were right, and I do not think that either of them did any harm. It would be a good thing if the same were done with this organisation. Meanwhile, I am happy to approve the order.
9.21 p.m.
Lord Fitt: My Lords, as always, when this legislation comes up for renewal I have a crisis of conscience. I was born and reared in Northern Ireland. Throughout my life I have lived under emergency legislation. The special powers legislation of 1922 was on the statute book for 50 years until it was abolished by a Conservative Government. It was replaced by the Northern Ireland (Emergency Provisions) Act. On top of that, we have the overlay of the prevention of terrorism legislation.
Being born and reared in Northern Ireland, I know the effects of the special powers legislation. The Act was used exclusively against the minority Catholic population throughout its 50 years of existence. I can recall how the Act was used and abused in the interests of the one-party state of Unionism, as it was then.

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Consequently, I have an inherent dislike and distaste for emergency legislation. The special powers legislation lasted for 50 years. How long will the emergency provisions and the prevention of terrorism legislation last?
The fact that they have lasted so long shows that all is not right with the state of Northern Ireland. If we have to have such draconian legislation, it indicates that something is wrong with the very basis on which the state was createdand now exists. Everyone recognises that the existence of this legislation will not lead to victory over the terrorists. There will not be a military solution. Some Unionist representatives in another place, and indeed throughout Northern Ireland, believe that we can restore Northern Ireland to what it was prior to 1972 by the use of this legislation. Looking at the situation, most people would realise that that is not a possibility.
When I voice my opposition to this legislation I have this crisis of conscience. Will I be saying something that will give succour, solace or support to the murderous organisations that exist in Northern Ireland, and particularly to the IRA? In expressing my opposition to the existence of this type of legislation, am I doing something that will help the case of the IRA? That is an awful crisis of conscience.
Last week and the week before I heard of the atrocious Darkley murders and of the murder of young Edgar Graham, whom I had met recently at a British-Irish Association conference in Oxford. That was the last time that I spoke to him. When I heard of those murders I said to myself that I should not object to the emergency provisions; I might go into the Lobby to vote for them. The days that have since elapsed have allowed me to reconsider and once again to say that I am not happy, and shall never be happy, while such legislation remains on the statute book. That is not asking for the repeal of the legislation. One would be a fool even to suggest or to contemplate that, bearing in mind what is happening in Northern Ireland.
But there are certain aspects of the legislation that I believe are wrong and are self-defeating and counter-productive. I have in mind, for instance, the number of arrests that have taken place. Over 17,000 arrests have taken place since the introduction of the legislation. A thousand people have been convicted under it. Sixteen thousand people have been arrested and interrogated. They have been held for short or long periods, and taken to interrogation centres. Those people are bound to feel bitterly resentful, because they have not been guilty of any crime, no crime has been proven against them. It is this counter-productive effect of the legislation to which I am opposed.
I remember that as a Member of another place I was on the committee upstairs when this legislation was going through the Committee stage. With the support of, I think, the honourable Member for Antrim, North, I then suggested that there should not he only a single judge in the Diplock courts. I think that there should be two or three judges, even if it means creating more posts for the legal profession; and I am not particularly enamoured of that profession, because many of them have made themselves millionaires out of the troubles in Northern Ireland.
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Alternatively, if there are not to be two or three judges, there should be one judge with two or three assessors. I believe that in Northern Ireland some people are now coming to the conclusion that if there is only one judge hearing a case under the Diplock courts' regulations, there is inclined to be criticism and suspicion. I am casting no reflection at all on the judges who sit in the Diplock courts. Many of them have devoted their lives to being involved with this type of legislation.
I certainly have no intention of detaining the House, but I want to put forward a suggestion to the Minister. I am not opposed to the "supergrass" system in Northern Ireland. I think that the supergrass system has taken some very dangerous men out of circulation in Northern Ireland, men from both the Loyalist community and the Republican community. There can be absolutely no doubt that many very dangerous men have been taken out of circulation because of information given by supergrasses. Young Edgar Graham said exactly the same thing, and some people believe that that was the reason why he was murdered.
All the paramilitary organisations are very worried about the supergrass system, because it leads to awful suspicion within those bodies. They are not sure whether someone who is their colleague one day will not be a supergrass the next day. So the paramilitary organisations and those who support them will do anything that they can to discredit the supergrass system.
The supergrass system should not be abolished, and the Government should do everything that they possibly can to ensure that it is not discredited. I should like to suggest that where people are arrested on the evidence of a supergrass, there should be absolutely no delay in bringing them before the courts. If people who are arrested on the evidence of a supergrass are not brought before the courts but are incarcerated on remand for 12 months, it is very unfair if, when they go before the courts, the supergrass withdraws his evidence. Those people have spent a year, or possibly longer, in prison.
It would safeguard the supergrass system, if the only evidence used against a person is coming from a supergrass, to brook absolutely no delay and to prepare the case as quickly as possible so that any person who is innocent will have spent the minimum time in gaol. Where a person has been incarcerated in prison on the evidence of a supergrass and that supergrass retracts his evidence, there should be compensation paid to the person who has been so incarcerated on evidence that no longer holds when the case comes to court.
Only recently, I was shown something that I believe would be of inestimable value in relation to supergrass evidence. I have been shown—I am not sure whether the Minister has seen it—a tamper-proof tape, a machine that will record and that cannot be tampered with. If it is tampered with under any circumstances, that will show up on it. A firm in Britain is making these tapes. I believe that such a tape, used when the supergrass is giving evidence, would mean that a supergrass would know that his voice, the manner in which he was speaking, the evidence that he gave to the police, the answers, and the words of the police,

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were there. This would safeguard the police and it would be made far more difficult for the supergrass subsequently to withdraw his evidence. Everything hinges upon the fact that this is a tamper-proof tape. No one can change the tape, edit it or cut bits out of it. It would help in the security battle in Northern Ireland if such a tape were used.
It is most important that there should be absolutely no delay when persons are brought before the courts. This is the one area where there is an awful lot of public feeling at the moment. Even though I am no longer a constituency representative, I have received scores of letters from people in both the Loyalist and the Republican communities telling me that they know of someone or have a relative—I have passed some of these cases to the Minister concerned—who is at present in prison on remand on the evidence of a supergrass. They feel confident that when the case comes before the court those detained will be found not guility.
I do not believe everything that I hear or read in Northern Ireland. But, reading those letters, I am convinced that some of those people who are at present in prison will eventually be found not guilty. That is why I say that I am not objecting to the supergrass system. I believe that it has taken dangerous men out of circulation. I should, however, like the Minister to look at this tamper-proof tape because I believe that it would safeguard the police and the supergrass system.
The present representative for West Belfast is openly, and has openly, associated with the paramilitary organisation, the IRA. My noble friend, Lord Donaldson has already referred to this matter. I think that the Secretary of State is perhaps in the process of changing his mind. I should like to put my thinking on record. I do not believe that, when Provisional Sinn Fein is openly associated with the Provisional IRA, it has any right at all to make representations under any circumstances to any Government Minister. I believe that the Secretary of State should take the decision as quickly as he can to reject any representations coming from such a source. I put on record my opposition to this legislation. I understand that there cannot he a vote—
A noble Lord: Yes, there can, my Lords.
Lord Fitt: My Lords, possibly there might be a vote, but I wish to say that I have an inherent distaste for the legislation, and the sooner it is taken off the statute book the better for everyone concerned.
9.34 p.m.
Lord Kilbracken: My Lords, it is a great pleasure to follow my noble friend Lord Fitt. I agree with every word he has said. We should all appreciate how fortunate we are to have among us someone with such a long personal and intimate knowledge of affairs in Northern Ireland. We last debated the continuance of this Act on the very last day of the last Parliament, when it was more or less smuggled through your Lordships' House on the grounds that it was an inappropriate time to discuss it in any detail. Now, together with the last order. it has been relegated to the
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dinner hour, and that, together with the extremely sparse attendance, although it is now rising slightly—
Lord Donaldson of Kingsbridge: They have had their dinner, which is more than we have!
Lord Kilbracken: They have had their dinner, my Lords, exactly. I think it shows how little importance the Government attach to Northern Ireland affairs in the arranging of business and the lack of interest shown by Members of your Lordships' House.
Lord Denham: My Lords, I hope that noble Lords will not draw that conclusion because we have taken this very important business at this time. I made it clear to your Lordships at the beginning that, although we normally contain the adjournment business in an hour, we were not expecting to do so in this case—and, indeed, had I been expected to do so, I would have been slightly disappointed. The noble Lord must not suggest to the House (he may suggest, but I hope the House will not take it as such) that the Government do not believe this business to be of extreme importance.
Lord Kilbracken: My Lords, the business taken during the adjournment is usually that which is of no interest to practically anybody except the mover of the Bill and, perhaps, one or two other noble Lords. This has proved to be the case on this occasion, when for the greater part of the very important order that we took before this there were fewer than nine or ten Members in your Lordships' House. There were no Conservative Back-Benchers, no Members of the Liberal Party and no Bishops. Indeed, there were only half a dozen of us. I am not saying this in criticism of the Government, but I am saying that it shows how very little interest there is in Northern Ireland affairs—and it cannot be denied—among Members of your Lordships' House.
On the last occasion that the subject was debated, my noble friend Lord Underhill expressed the hope that that might be the last occasion on which we would have to vote for the continuance of this order because he hoped that by now Sir George Baker's review would have been released and, as I understood him, new legislation would have been introduced. We have heard from the noble Earl the Minister that Sir George hopes to complete his review within the next two or three months and there will then be a debate on the subject. I wonder whether he can anticipate this and tell us when he comes to reply whether it is then intended to introduce the new legislation which is so badly needed in the light of the review.
My noble friend Lord Fitt spoke of one of the subjects which has greatly concerned me, and that is the number of persons in Northern Ireland who are arrested under this Act compared with the number who face criminal charges. He mentioned a figure of 17,000. A much higher figure than that was given by my honourable friend Mr. Hume in another place. In any event, it seems certain that, of all those arrested since this Act became law, only some 12 per cent. came to trial, and of those, some 30 per cent. were acquitted. This proves that only eight out of every 100 people arrested under the terms of the Act were found

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guilty of any offence. As far as I am concerned, the inescapable conclusion is that the Act is not being used to counter terrorism but is being used for the gathering of information and for the harassment of innocent people.
I want to refer only to one other matter and that is the part played in the prevention of terrorism by the security forces in the Irish Republic. I think that I am now the only Member of your Lordships' House who lives in the Irish Republic, some10 miles south of the border. I very greatly resent the allegations that are still being made about the Republic being a safe haven for terrorists. The right honourable gentleman, the Member for Down South, to whom my noble friend referred, made it sound as though virtually all the terrorism in Northern Ireland sprang from the Republic and that the security forces were not doing a proper job.
I cross the border frequently on trips to Belfast, to the airport or to Enniskillen to do some shopping. I can assure your Lordships that very much more often I am stopped and questioned by members of the Garda Siochana and the Irish Army before reaching the border than I am when I have crossed it. Again and again I have driven to Belfast Airport and have seen no sign of any representative of the security forces once I have crossed the border. I have said it before in this House and I say it again, if the south is supposed to be such a base for terrorism, why is it that the border is still absolutely wide open so far as the northern security forces are concerned? Why is not any real effort made to check cross-border traffic, even on authorised routes, by members of the security forces?
In conclusion, in my opinion, far from being slandered by the right honourable gentleman in another place, the security forces in the Republic should be congratulated on doing what they have done, and are doing, to assist their opposite numbers on the other side of the border.
The Earl of Mansfield: My Lords, I must thank noble Lords who have taken part in this debate, and I shall reply briefly. The first matter which the noble Lord, Lord Underhill, raised concerned robberies and the acquisition of funds by paramilitary organisations. The Royal Ulster Constabulary has a special squad to deal with this matter. I am afraid that it is not known how much money from robberies finds its way into the coffers of terrorists, but I would imagine, and I do not think that I would be contradicted if I said to the noble Lord, that it must be considerable. Of course, the answer is to stop the robberies, but I am afraid it is part of the very unsatisfactory situation which obtains in the Province at the moment.
Then, the noble Lord asked about the co-operation between the RUC and the Garda. From time to time there are bound to be misunderstandings in the course of dealing with a very sensitive matter such as the co-operation between the police forces of two independent Community partners. Any episode which reduces the level of co-operation, or which produces friction, is much to be regretted. Everything that is done is done to try to ensure that there is no misapprehension on either side, and that nothing is done which would
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affect joint security co-operation between the RUC and the Garda. That, in what is a delicate situation, is as far as I should go.
The noble Lord, Lord Donaldson, and other noble Lords took up the matter of what I might call "dealings with Sinn Fein". My right honourable friend the Secretary of State announced in the other place on 8th December that he would be examining the Government's stance towards Sinn Fein. That review is under way, and all I can say at this stage is that I do not believe for myself that the proscription of Sinn Fein would be the panacea that some might think.
There is a strong possibility that party members would continue very much the same activities under a different flag, and many nationalists and supporters of nationalism would incline to the view that the Government were banning a legitimate political party because its views did not find favour with the Government. Therefore, the best course so far as the criminal law is concerned might be for the security forces to continue to keep a close eye on Sinn Fein members' activities with a view to prosecution where there are breaches of the existing criminal law. An example which comes to mind might be incitement to hatred.
Then I come to the noble Lord, Lord Fitt. He expressed his distaste for the whole arrangements both under the Act and, I think, in relation to what has been described as supergrasses. Anybody who has regard for the due process of law, and for the rights of individuals under the law, would find a lot which fills them with some anxiety about this legislation. But so far as the mechanics are concerned the arrest powers are being examined by Sir George Baker, and I do not think that I can go any further than to say that we must await Sir George's findings. Equally so far as the noble Lord, Lord Kilbracken, is concerned I cannot anticipate those findings until Sir George announces them. Until the Government evaluate them no decision can be made as to what, if anything, should happen.
So far as supergrass trials are concerned, we have to remember the background to this form of legal process. Because of the intimidation of witnesses and potential witnesses there is a severe difficulty about obtaining evidence which can be put before courts in Northern Ireland. So that if a former terrorist offers to give evidence against his former accomplices the Royal Ulster Constabulary, and indeed the Director of Public Prosecutions, would be failing in their duty if they did not at least consider placing such evidence before the courts. But, of course, it is for the courts to say what weight, if any, should be given to that evidence.
There are, as the noble Lord, Lord Fitt, said, delays. These are due to a number of factors, but very often they are occasioned by the preparation of the defence case. I shall consider the points he made both on compensation and evidence obtained by tape recorder. The noble Lord may, or may not, know that there has been considerable experimentation done in Scotland over the last three or four years and certain results will come to hand.
Of course, it is regrettable, if I may finish on this note so far as these trials are concerned, that there are no juries, but that is the result of intimidation and the risk of perverse decisions. I believe that the judiciary in Northern Ireland have maintained very high

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standards, and the evidence which they hear in open court must convince them beyond all reasonable doubt that the case has been proven, and that is the standard of proof which they apply. There are many cases where judges have acquitted defendants where converted terrorist evidence had not satisfied them as to the guilt of the defendant.
The noble Lord, Lord Kilbracken, produced one point which I did not understand about being stopped on his way to Belfast Airport. I travel that way many
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times in every week and I should have thought that the level of stopping and searching is among the most sophisticated in the world both before one comes to the airport and on two occasions when one gets inside it. I refute any contention that one can travel about the Province if one is up to no good without risk being discovered fairly quickly. I commend this order to the House.
On Question, Motion agreed to.

Fisheries (Amendment) (Northern Ireland) Order 1983
9.52 p.m.
The Earl of Mansfield The Earl of Mansfield rose to move, That the draft order laid before the House on 15th November be approved.
The noble Earl said: My Lords, the purpose of the Draft Fisheries (Amendment) (Northern Ireland) Order is to provide a revised structure for the management of salmon and inland fisheries in Northern Ireland by amending the main fisheries legislation —that is, the Fisheries Act (Northern Ireland) 1966.
We now sail into what I hope will be calmer waters. Nevertheless, they are complex and technical and, like most things in Ireland, have a very long history. Indeed there has been a long history of controversy in Northern Ireland over these fishery matters, but I do not intend to relate it. I would say a little about the background to set the scene for those who may not be familiar with the subject.
There is an abundance of unspoilt waterways in the Province capable of sustaining fish stocks. Commercial fishing of salmon, eels and other freshwater fish is currently valued at almost £3 million a year and angling is said to be among the best in Europe—indeed the World Coarse Fishing Championship was held in the Province in 1981.
The 1966 Fisheries Act has worked well in regulating inland fisheries and providing for the control and development of these valuable resources. But by the late 1970s a combination of public concern from certain fishery interest groups about future management and development policies and the recognition by my department, the Department of Agriculture, that some aspects of the legislation were becoming outdated, led to a Committee of Inquiry into Angling being set up in 1979 by the then Secretary of State for Northern Ireland. The Committee, under the chairmanship of Professor Black, was appointed to review how well the 1966 Act was working and was also asked to make recommendations for the future management of inland fisheries. The main recommendation of the Black Report, which was published in March 1981, was that a new Inland Fisheries Board should be set up to absorb the functions of the Fisheries Conservancy Board and much of the inland fisheries work of the Department of Agriculture. However, a minority on the Committee was opposed to this recommendation and reaction from many interest groups showed that there was considerable disagreement on how inland fisheries should be managed. In an attempt to reach consensus, successive Ministers responsible for fisheries conducted further discussions with interested parties during a two-year period subsequent to the publication of the report.
At the end of that time, in the absence of much agreement from any side among the various interest groups, the Government announced new proposals to restructure the FCB and reallocate certain responsibilities for fisheries management. Around the time that these proposals were published, the Northern Ireland Assembly Agriculture Committee undertook a series of hearings at which evidence was given by representatives of most of the groups with an interest
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in inland fisheries. I would like to acknowledge the contribution of the Assembly and of its agriculture committee in particular.
The degree of consensus achieved by the Committee, together with the large volume of representations made during the consultation period, enabled the evolution of the original draft proposal into the form now before the House. These proposals, which I finalised, are the result of prolonged and careful deliberations. They come about as a result of a number of meetings which I held during the summer with the Fisheries Conservancy Board and with representatives of the angling bodies and others concerned. I am confident that my new proposals are well understood and represent a significant step forward in improving the structure of management for these important resources.
So far as the individual articles are concerned, the first two are self-explanatory, Article 3 provides for the revising of the FCB. The Board will retain its present responsibilities for conservation and fishery protection. Some groups wanted the board's functions to be further increased. For example, the Northern Ireland Assembly and others advocated that responsibility for the management of public angling waters, presently under the control of my department, should be transferred to the board. It is my intention, however, that the facilities for independent anglers—that is, those who do not belong to angling clubs—should continue to be managed by the department at least until such time as there is clear evidence that the FCB could undertake the management of these waters in an effective manner and with the agreement of all the various interests represented on the board.
I have explained to the FCB and to the anglers' representatives the basis on which I would propose to monitor the efforts of the new board. I have said that I will establish procedures which will ensure that the board has a regular and effective advisory input to Government. In my view this has not happened in the past to the extent that it should. I hope that the members of the new board will be able to demonstrate a unity of purpose and that the advice which they give will provide evidence of a new consensus among the various interests.
If they can do this and can show that they are sufficiently on top of their primary tasks of conservation and protection to be able to contemplate taking on new responsibilities, then I shall be prepared to look again at this question of public water management to see whether there might not be an agency role for the board. Article 3 has been revised to allow for such a role and it is really up to the various interests on the new board to put their differences behind them and show that they can work together in the interests of inland fisheries. Resource implications would have to be considered afresh in the circumstances prevailing at the time of the reassessment, and any increase in the board's workload would of course be dependent on proper financial arrangements being arranged.
A further provision of this article is that, for the time being, the board will retain its authority for the protection of salmon at sea. However, the draft has been worded so that we may direct the extent of the board's involvement if this should prove necessary at some future time.
Article 4 simply invokes the schedule to the order. Article 5 would enable the Government to introduce a supplementary levy on angling and commercial fishing licences. I should point out that an appointed day order is required to bring this article into effect and I can assure the House that any increases resulting from such an order will, so far as possible, be contained within the limits recommended as acceptable by the Black Report. The FCB will be consulted on the level of any proposed charges and of course the law of diminishing returns will be taken into account. I have no plans for such a levy at present. This is purely an enabling power. Article 6 is included in the draft to allow obsolete parts of the 1966 Act to be removed.
The Schedule details the revised constitution for the FCB. At present, the board is composed of 15 representatives of various fishing interests. In order to maximise the efficiency of the board, the original draft order proposed that the FCB should be reduced to a small team of 4–6 persons. As a result of representation, I propose to expand the board to a maximum of 24 members, bringing in representative of farming, sporting interests, local government and independent angling. The schedule does, however, provide for a small executive committee to be established by the board from among its members, aid this should ensure that the original aim of maximising efficiency in carrying out the boards role is achieved.
The new FCB will be headed by an independent chairman and deputy chairman. I am confident that the proposals in the draft order will attract the support of the great majority of those interested in, and involved with, inland fisheries in Northern Ireland, and that the provisions are in the best interests of all concerned. For this reason, I much hope that all those who have been involved in the long-standing debate on this matter will co-operate in working constructively for the well-being of the inland fisheries of Northern Ireland. I beg to move.
Moved, That the draft order laid before the House on 15th November be approved.—(The Earl of Mansfield.)
Lord Underhill: My Lords, in effect we are considering primary legislation in the form of an order which cannot be amended—a comment I have made in connection with a number of recent Northern Ireland orders. I agree with what the noble Earl has said about the deliberations of the Assembly and the helpful report which was produced.
I will content myself with putting just three brief points to the Minister. As he has said, the proposal is greatly to extend the interests on the board; so we have anglers, commercial fishermen, other relevant commercial operators, fish farming, tourism, sport, recreation, district councils and the CBI. Is there any reason why there is not one direct representative of the trade unions appointed to this board?
Secondly, the noble Earl said that they are retaining the functions. I have looked at the 1966 Act and the functions are put down there as "conservation, protection and improvement". In the order before us it is merely "conservation and protection". I must ask: is there any particular reason why "improvement" has been left out?
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Thirdly, when we had the July appropriation order, I and other noble Lords—I include particularly the noble Lord, Lord Dunleath—expressed concern over the pollution of rivers. The chief executive of the board, while expressing pleasure at some improvement, particularly as regards farming pollution, expressed concern about the increased number of industrial premises, which are causing pollution. He also expressed concern at the greatly increased number of fish killings, although the number of incidents had been reduced. Do the functions which are given to the board include pollution, or is that dealt with in some other way?
Lord Donaldson of Kingsbridge: My Lords, I am happy to support this Motion.
The Earl of Mansfield: My Lords, the noble Lord, Lord Underhill, has asked me three questions. The powers of the board in fact will not be materially altered. I think the maxim is: "The greater includes the lesser". It is certainly the intention of the Government, in drafting this legislation, to give the new and expanded FCB, as it is called, the same role as before but possibly to increase it in due course. Certainly so far as improvement is concerned there is no desire to stop it from doing what it wants in that direction. It is, of course, inhibited by the fact that at the moment it does not have the resources to carry out that role.
The noble Lord also asked why the CBI should be represented on the board and not the trade unions. The reason is quite simple. There is a very considerable industrial and commercial interest so far as users of water in Northern Ireland are concerned for the purposes of fishing. The interest of the trade unions is simply not relevant and therefore they have not been included in the schedule, as the noble Lord has correctly pointed out. However, I would like to say to him that the intention is to appoint individuals to the board, partly because of their position but mostly because of what they can contribute to fishing in inland waters in Northern Ireland, and no reflection is meant so far as the trade unions are concerned.
As to the noble Lord's last point, I will write to him about it as soon as I have looked at Hansard.
On Question, Motion agreed to.

Agricultural Holdings Bill [H.L.]
10.5 p.m.
House again in Committee.
Lord John-Mackie Lord John-Mackie moved Amendment No. 61A:
After Clause 7, insert the following new clause:
("S.I. 1973/1473
(" The provisions of the Agriculture (Maintenance, Repair and Insurance of Fixed Equipment) Regulations 1973 shall apply to am, tenancy granted on or after the date on which this Act is passed.").
The noble Lord said: We have put down this amendment because in the last Budget there was considerable relief given to landlords in relation to

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various financial matters to do with holding agricultural land, and there is pressure—and rightly so—for something more to be done in order to help landlords in running their businesses by taxing them not on investment income but on management income. But if that is the case, then landlords must manage. The present practice, with every new tenancy lease that is made, is to make it a full repairing and insuring lease. In our opinion this is not landlord management at all, and we should like to see landlords taking full responsibility, such as they used to take, and a fair share of the repairing and insuring of buildings with fixed equipment, roads, et cetera, on their estates. That is why we have put down this amendment. I beg to move.
Lord Middleton: I share the noble Lord's disapproval of full repairing leases, and I believe that I am supported in this by the vast majority of private landlords. I am not quite clear about the tax point which the noble Lord was making, but I should like to make another tax point very briefly. Private landlords are under a taxation difficulty, because if a private landlord can recover VAT on his repairs expenditure he will be far more willing to do repairs. Landlords cannot recover VAT, but tenants can. Therefore, landlords are more inclined to arrange with tenants that they should do their repairs. But that is by the way.
I do not think it is necessary to legislate about this, as the noble Lord is seeking to do by this amendment. Under Section 6(2) of the 1948 Act, a tenant can go to arbitration to vary the agreement so as to bring it into conformity with the statutory repair clause, under which the liability between the landlord and tenant is shared in the traditional way. So I do not see that there is any need at all for this amendment.
The Earl of Swinton: I am grateful to the noble Lord. Lord John-Mackie, for explaining the purpose of this amendment, and I am also very grateful to my noble friend Lord Middleton for pointing out the tax disadvantage as regards VAT. I feel that while the 1973 regulations prescribe an allocation of liability between landlord and tenant for maintenance, repair and insurance of fixed equipment, the question of any variation from that allocation of liabilities is a matter for negotiation between landlord and tenant. Also, the terms of the contract of tenancy are a relevant factor which must be taken into account in any arbitration on rent. I am sure that we should not interfere with the provisions in the legislation by a departure from the terms of the 1973 regulations, and I hope that the noble Lord will feel able to withdraw his amendment.
Lord John-Mackie: The noble Lord, Lord Middleton, is probably correct in what he said. When I talked about the taxation point, I was referring to the fact that the income from a tenancy after expenses have been paid is investment income, not management income, and I understand that there is pressure from landlords to have that altered. I can quite see the point about VAT, but that does not alter the fact that I do not know of any recent tenancy agreement which has not been a full repairing and insuring one.
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Sometimes the landlord pays the insurance, but in most cases it is a full repairing and insuring tenancy agreement. If a tenant can appeal against that, then well and good; but I do not think he does. The noble Lord may correct me there; but if that is the case I am willing to withdraw our amendment, though I am not very happy in spite of what noble Lords have said.
Amendment, by leave, withdrawn.
10.10 p.m.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 61B:
After Clause 7, insert the following new clause:
('Institutional landowners.
. Incorporated or unincorporated institutional landowners whose principal business is other than agricultural shall make all agricultural land in their ownership available for letting to a tenant.")
The noble Lord said: The wording of this amendment expresses in an imperfect way part of the evidence we have received, which suggests that there is unease about the role of some of the institutional landowners. I say that the wording is obviously imperfect: for example, we have not defined the meaning of "institutional landowners". There is also a danger, on the evidence we have seen, of generalising.
I recognise that there is an acceptance that many of the institutional landowners such as the colleges, the Church Commissioners and the pension funds are playing an important part in the agricultural industry and that they let a substantial part—if not the entirety—of their land. Some colleges use their farms for research and for experimental purposes, and so obviously there would have to be some exceptions to the principle. But the fear is that among some institutional landlords, there may be speculators who may be tempted to,
"play fast and loose in the countryside",
to use the words employed by the noble Lord in the course of our debates.
I understand that a survey in the process of being conducted by the Tenant Farmers' Association shows that when land ownership passes to new institutions the tenanted farms in their ownership steadily decline in number. It is on the basis of that survey—which may be incomplete—that this amendment is founded. I accept it is not clear—certainly not to my noble friend or myself—whether that is because the institutional landowners pursue a vigorous policy of amalgamation or because they take over the farming business.
It may be that the noble Lord the Minister, when he comes to reply, will be able to assure the Committee that the trend which appears to have been identified by the TFA has been exaggerated. But the principle embodied in the amendment gives expression to something which may be important and of which your Lordships ought to take note. I acknowledge that the amendment may or may not markedly increase the supply of tenancies, but it would give notice to the institutions that the Government want them to continue their policy of letting farms, where they are letting farms: and it would also be a warning to absentee land speculators that if they purchase agricultural land they will have to make it available for letting to working family farmers.
It is not our intention to press this amendment to a Division, but we believe that the Government ought to appreciate that the amendment may be saying something which many farmers believe to be important. I beg to move.
Lord Northfield: Perhaps I might explain briefly the reasons why there will not be much attempt to press this issue? I believe my noble friend is referring mainly to the financial institutions; namely, insurance companies, pension funds, property unit trusts, and property bonds. I believe that any amendment or any debate which adds fuel to the fire about those institutions is to be regretted. The position is that those institutions own only about 1.2 per cent. of land. They are unlikely to own any more than 7 per cent. to 11 per cent., even on recent trends of acquisitions, in another 40 years' time. I would guess that, as there has been some retrenchment, they are unlikely ever to reach that figure now. So any attempt to make them scapegoats is in some sense a mistake.
Not only do they own very little land: they do not bid up the prices of vacant land; it is nearly always the farmer next door who does that. They are mainly buying tenanted land, and they are not buying much—6 to 10 per cent. of the land offered on the market in any year. They are also good landlords, and have in most cases a very good record as landlords. Finally, they do not push up rents any more than anybody else, by and large. So first of all we should try to reduce the hysteria about these owners.
Let us come to the issue of in-hand farming, which is really what my noble friend is raising. It is true that on a survey which we in the Northfield Committee attempted to undertake it looked as if perhaps 19 per cent.of the land they owned was being held in hand. I have to say to the Committee that, along with 23 million other people, I am part of this new ownership. I contribute to a pension fund, and I am delighted that the ownership of let estates is being spread through pension funds and life insurance companies of this kind to 23 million people. What is to be regretted about that? Why, if I am an investor with 23 million other people, should I have rules different from any other private landlord? We can only accept that there should be rules if they are for all private landlords, among whom we in the pension funds—people like myself and many noble Lords who contribute—are numbered. Why should there be special rules for us as compared with the individual private landlord?
The fact is that pension funds, like everybody else, have to assess their position under present law and under present fiscal regulations. If they need to have some land in hand in order to preserve the vacant possession premium on land, or if they need some land in hand in order to learn about farming because many of them are new to it, or if they want some land in hand because they want to avoid the three generation tenancy, why should they not? Every other landlord can—and I am one of the 23 million.
So I have to say, if I may, that this is a slightly misguided attempt. These people are us, all of us in the community. They are not somebody over there; some faceless gang of people who are robbers and speculators. They arc people honestly investing money
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on behalf of the rest of us, and I wish them fair wind in making the best of present regulations, like every private landlord.
Lord Stanley of Alderley: I think that in principle I would support this amendment, and I do not think I agree with a single word the noble Lord, Lord Northfield, has said. I support the principle of resident farmers rather than absentee city farmers. I am particularly concerned at the moment, if I may say so, about the ownership of land encouraged by the Business Expansion Scheme. These schemes are heavily tax subsidised, and I do think, contrary to what the noble Lord, Lord Northfield, said, that these schemes may well push up the price of land, as opposed to the institutional buying.
Lord Mackie of Benshie: I, too, will try to be short. I think that the general intention of the clause might be worthy of some support, but the clause itself is unjust and unworkable, and therefore we oppose it.
The Earl of Caithness: May I very briefly support the noble Lord, Lord Northfield. I think this "institutional bashing" by certain Members of your Lordships' Committee and of another place is not good for agriculture, and we must divorce ourselves from any association to that effect.
Lord Belstead: I think the noble Lord, Lord Northfield, the noble Lord, Lord Mackie, and my noble friend Lord Caithness have really answered this amendment for me. All I would add is that I am advised that the figures are that the financial institutions own only 5 per cent. of all agricultural land, and that 70 per cent. of their holding is let. I think, therefore, that this would be a rather poor return for that record. Having said that, the noble Lord, Lord Prys-Davies, was very fair in making it clear when he moved the amendment that the wording would not do and that it obviously would catch, in its present form, many institutions which it was not intended to catch. Perhaps on those grounds, although I must say there are other grounds as well, this is an amendment which ought to be withdrawn.
Lord John-Mackie: My noble friend Lord Northfield said that we were getting hysterical about—
Lord Northfield: No.
Lord John-Mackie: That was the word he used, and he evidently used it about us, as we put forward the amendment. I would say that he got hysterical at the end of what he was saying about the situation. It is easy to produce figures and say there is 5 per cent. of this and 10 per cent. of that. I also have some figures to point out what is happening. I have knowledge of six estates totalling about 70,000 acres. One had 12 tenants when it was bought less than 10 years ago and now there are none. Another had 11 tenants and now there are only two. Another had 10 tenants and now it has none. Another had 11 tenants and now there are only five. Another had 12 tenants and now has only

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five. Another had six tenants and now there are none. That is what is happening with institutional landlordism.
The noble Lord need not shake his head. I can give him the figures and the places although I do not want to disclose them tonight, as that is not right. I know of many more. Farmers see this happening. These tenants have gone over the years, probably old men retiring, but the people round about see the land being taken in hand and that has a psychological effect, if nothing else. We are not being hysterical but factual about what is happening. These are facts, and I can produce the names of the estates. I visited one not long ago. We are not being hysterical but just putting forward the fact that institutional landlords are doing this and in these particular cases there are 50 tenancies that have gone out in the past 10 years. I do not think that is being hysterical.
However, we know the situation and, with that very firm point, that we are not being hysterical and that I have 50 tenancies in front of me that have been lost, we withdraw the amendment.
Amendment, by leave, withdrawn.
10.23 p.m.
Lord Sandford Lord Sandford moved Amendment No. 61C:
After Clause 7, insert the following new clause:
("Amendment of Schedule 1 to the 1948 Act.
. In Schedule 1 to the 1948 Act (matters for which provision is to be made in written tenancy agreements), after paragraph 10 there shall be added—
(" . Any agreement to modify the management of the holding in the public interest, between—

(a) an appropriate body with a statutory interest in the management of the holding; and

(b) either the tenant or the landlord or both.".").

The noble Lord said: I must disappoint the Committee because there is nothing here to get hysterical about. All this amendment does is to introduce again the issue of agreements to modify the management of the holding in the public interest. This is a concept which we have already discussed on Amendments Nos. 48 and 57. We were grateful when my noble friend the Minister undertook to take away the arguments and points that he had heard discussed and consider them between now and the next stage. We now know, and it is very welcome news, that officials concerned in this matter are meeting with his officials later this week. That is good news and an indication that his undertakings were given in earnest, as we had expected.
On those two Amendments Nos. 48 and 57 we were discussing modifications to the management of a holding in the interests of conservation. The three aspects we were discussing were the conservation of field monuments, conservation of flora and fauna and conservation of the landscape. Those were the issues picked on. I said at the time that I thought any amendment dealing with this matter ought to be rather more widely drafted. It has since been borne in on me by a number of the public bodies involved that this is indeed so.
I have been reflecting on the upland management experiments in the Lake District and Snowdonia in the
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mid-1970s. Looking back, it is clear that the agreements entered into during the experiments covered a number of aspects besides conservation. Perhaps I could give the Committee one or two illustrations. There were in those experiments—and there have been many since—instances where a county council in its highway authority role came to agreements with farmers to move a footpath from one side of a valley to another, or rather to establish a permissive path and to persuade the public to use that rather than the statutory definitive path on the other side. Sometimes it was in the interests of the farmer, sometimes in the interests of the walker.
In other cases a regional tourist board would come to an agreement with a farmer that a building might be taken out of agricultural use and converted to self-catering tourist accommodation. That would be done by the regional tourist board. There were other cases—and there have been many more recently—where the Development Commission (of which the noble Lord, Lord Northfield, was chairman at one time) offered conversion grants to farmers for the conversion of farm buildings to workshops in the interests of creating more employment in the countryside. A fourth example is where a local education authority comes to an agreement with a farmer or a landlord that some part of a holding might be allocated for field studies.
None of those examples—footpaths, self-catering, workshops or field studies—can be described as conservation, but I think that the Committee would agree that they can all potentially affect the management of the holding. For that reason I put forward this amendment, with a view to indicating the breadth that such an amendment would cover. I move the amendment so that my noble friend the Minister can see what I mean in rather more detail when I say that such amendments ought to be more broadly drawn than they might otherwise be if we left the matter merely at conservation. I shall be interested to hear views from other noble Lords. I beg to move.
Lord Stanley of Alderley: I should like to ask my noble friend Lord Sandford a question. Who can the agreement be made with? He has mentioned a number of bodies, but does he suggest that an agreement could be made, for example, with a way-out conservation body? If the agreement is made with such reputable bodies as the NCC or the National Park Authority, I very much welcome the suggestion. I understand that there is evidence that tenants have been somewhat shy of making agreements with those bodies for fear of their tenancy agreement. I should welcome it if my noble friend could confirm who the agreement can be made with.
Lord Sandford: Perhaps I can answer that question before my noble friend the Minister replies. In the discussions which will go on between now and the next stage it may well be necessary to look at paragraph (a) of my amendment to see whether the term,
"an appropriate body with a statutory interest",
needs to be defined in a schedule or in some other, better way. It was not intended to include any bodies other than the kind which I mentioned—the county council as a highway authority, the regional tourist

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board, the Development Commission, the county council, local education authority, district council or the water authority. They are all statutory bodies. It was not intended to include some of the way-out bodies which had perhaps better not be mentioned by name.
Lord John-Mackie: I am rather interested in the points that the noble Lord is making about reaching agreement with various people. As Members of the Committee know, I farm 20 miles from where we are sitting this evening, and many of the footpaths which run through my farm are completely out of date. We have made arrangements with the local people so that, instead of using a footpath, they can go round the field, up a lane, or various other ways, and it seems to work. But there may be an occasion when someone digs in his toes and says, "There is the footpath, it is on the map. You may have made a private arrangement, but I am not having anything to do with that".
I should be interested in a proper system under which proper arrangements could be made, but, if one goes to the county council, one finds that it is years before it will decide on anything. If one goes to the ramblers, they hum and haw because they feel that there is an advantage to the farmer, whereas, as the noble Lord has said, there is probably an advantage to both parties. I am interested in this matter and I look forward to hearing what the noble Lord has to say about it.
Lord Belstead: We come to the Government spokesman and I am afraid that he does not have an answer at all on this particular point. But, secure in the knowledge that in a moment my noble friend will have an answer to the point which the noble Lord, Lord John-Mackie, has put forward, I should like to say two main things. First, if we were to decide in favour of the amendment this evening, there really would be a problem, in that a management agreement between a public body—be it the Nature Conservancy Council, the Countryside Commission, or any other body—with one of the parties to the tenancy—either the landlord or the tenant—could, as I understand the amendment, become a term of the tenancy without the other party's consent. Therefore there is in the proposal an element of compulsion, which one would have to think about extremely carefully before agreeing to.
That leads me to the second point. My noble friend was good enough to say that arrangements have been made for representatives of the Ministry of Agriculture to meet various interested bodies later this week to see whether it is possible to bring forward an appropriate provision or provisions to cover the various conservation matters which we have discussed during the three days of the Committee stage, ranging originally from Amendment No. 11 up to the present amendment, No. 61C.
The second point that I should like to make is that those representing the Ministry will have two questions in mind. First, I think that we should be extremely reluctant to import compulsion into arrangements for conservation in the Bill. I do not want to say that as though my mind is closed about anything, because it is silly, and it is not desirable, to
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sit down with a closed mind to have talks. I think that we should be very reluctant on that point.
Concomitantly with that, the Government do not, of course, want to provide formatters that are already covered. On one of the previous amendments—I now forget which it was—I felt that perhaps we were beginning to discuss matters which are already covered by tenancy agreements.
I thought that I would take the opportunity to make those points about the discussions which are to be held later this week—discussions which I genuinely hope will be fruitful.
Lord Sandford: I am grateful to noble Lords who have spoken. Perhaps I may first answer the point made by the noble Lord, Lord John-Mackie. I think that what the upland management experiments in Snowdonia and the Lake District showed was that there is a halfway house between the purely informal arrangements which the noble Lord described, and which are adequate if the pressures are not too great—though in the Lake District they are too great—and other arrangements. On the other hand, if the farmer has to deal directly with the highway authority, he undoubtedly has a major problem of bureaucracy on his hands.
The problem was overcome in the experiments by the appointment of an ex-ADAS officer to run the experiments. He acted as a broker between the farmer on the one hand and all the authorities on the other hand. That makes it feasible to enter into agreements slightly more formal than those that the noble Lord is used to, but less formal than those negotiated in a legal framework with a highway authority. That is the essence of the art.
I now turn to the points about compulsion raised by my noble friend. I do not think that one can rule out compulsion altogether. In using the very broad term "any agreement", my amendment was designed to cover some arrangements which are the result of compulsion, and others which are not, some which are formal, some which are informal, some which have financial backing, some which are in legal form and some which are not.
As an example of those which are compulsory, there is a statute which requires as a matter of law that field monuments should be protected. I am afraid that the managers of an agricultural holding have no option but to comply with them. If they are enforced, they become the subject of an agreement to manage the holding in a different way from that in which it would be managed if the field monument was not there. So there is an element of compulsion, and there is no getting away from it.
Lord Winstanley: Before the noble Lord leaves this point, I wonder whether he will confirm what I believe to be true, so that there can be no misunderstanding: that is, that in the Lake District upland management scheme, which was so outstandingly successful, there was no element of compulsion, nor was there any need for it.
Lord Sandford: Yes, I was going on to make that very point. The upland management experiments went ahead on the basis of all the agreements being

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voluntary. But I did not want my noble friend to be under the impression that one can totally exclude compulsion, because one cannot. Some of it has the force of law. But the whole intention is that the agreements are entered into freely, and the great majority of them are informal. The largest number now being entered into are those resulting from the notification scheme under the agricultural and horticultural grants scheme of 1980.
I am advised by those whose job it is to enter into these agreements that something of this sort, but not exactly this, would make the operation of these agreements that much easier and would be beneficial to all parties concerned. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.37 p.m.
The Earl .of Caithness The Earl .of Caithness moved Amendment No. 61D:
After Clause 7, insert the following new clause:
("Assignment of tenancy.
.—

(1) If a tenant wishes to relinquish his tenancy he shall be entitled to assign the tenancy by offering for sale that tenancy on the open market following the service of due notice of his intention upon his landlord not less than twelve months prior to the next ensuing term date at which the tenancy could be terminated by a valid notice to quit.

(2)Upon such assignment taking effect the landlord shall be entitled to demand up to 40 per cent. of any consideration received by the tenant in respect of the assignment of the tenancy.

(3)Upon the service of a valid notice to quit by the landlord on a deceased tenant's executors the executors may, within one month of receipt of that notice, serve a counter-notice on the landlord stating their intention to offer the tenancy for sale in accordance with the provisions of the foregoing subsections.")

The noble Earl said: I must first apologise for the fact that this amendment, with which I know your Lordships are aware I am concerned, was put down only yesterday. Many noble Lords have mentioned that this Bill does not get to grips with the landlord-tenant problem. Many of us believe that the patient is terminally ill, and that without major surgery it will die. The Bill will not do enough to preserve a system which has been useful but which does not now serve the needs of the commercial landlord or the commercial tenant. My amendment seeks a radical change in the landlord-tenant system by allowing the tenant to offer his tenancy for sale. This, after all, is permitted in the commercial and residential world, so why not in agriculture? There are a host of reasons why a tenant might wish to assign his tenancy, but he is at the moment barred from doing so by the 1948 Act.
Subsection (1) permits a tenant to assign his tenancy on giving the landlord at least 12 months' notice. The value of the tenancy will be decided by offering it for sale on the open market. As a result, land owners might feel that they are being deprived of a part of their interest in their property, and will therefore justifiably be entitled to some compensation. This can be assessed in a number of ways, but I have put forward one. Subsection (2) allows the landlord up to 40 per cent. of the value of the tenancy, which he can bid for in the open market along with others should he want to take the land in hand. In order for this idea to work properly, it must apply to all tenancies. Thus, those parts of the 1976 Act relating to succession would have to be repealed.
Following the death of a tenant, the old procedure of serving a notice to quit on the executors would be re-established, and subsection (3) permits the executors to serve a counter-notice on the landlord and then to offer the tenancy for sale. I appreciate that the drafting might be imperfect, and probably is, but it is the principle that I feel should be discussed. The advantages are that it would enable a free flow of tenancies, for which there seems, at the moment, to be an insatiable demand. A tenant can get out of farming at any time, not just on retirement or for ill health, and receive a capital sum for his interest. This, I believe, would encourage him to give someone else an opportunity to farm.
There is a concern that the landlord has no control over the charge of the assignee. At present, he has no control over a successor, provided that that successor is eligible and suitable. Furthermore, that concern is only a good argument for supporting my earlier amendment to tighten up the rules relating to notices to quit. I believe that my amendment will reinvigorate and give new impetus to the landlord-tenant system; the industry will attract a steady flow of new entrants, bringing with them more capital, novel ideas and fresh enthusiasm. I beg to move.
Lord John-Mackie: If I can just say a word on this, we studied this amendment very closely and, on the face of it, it has attractions, but we could see great anomalies because of the succession in the 1976 Act. The noble Lord has put us right there: he says that would have to be repealed, in which case that convinces us that we cannot support it at all.
Viscount Ridley: Speaking as a landlord on this Committee stage, the noble Earl, Lord Caithness, said that the patient was terminally ill. I would go further and say that this amendment would put the last nail in the coffin of the landlord and tenant system. I could not conceivably think of a system whereby a tenancy could be sold and a total stranger appear on the farm; the whole relationship would be finished. I hope that this amendment will be speedily withdrawn.
Lord Middleton: I could not agree more with the noble Viscount, Lord Ridley. As my noble friend Lord Caithness has said, this is a brand new amendment and I can only give a very hurried judgment and a very rapid reaction, which is that it would not be welcomed by the industry at all. Certainly under the amendment the landlord could purchase a tenancy, but landowners can do that now anyway; if they want to buy out a tenant, and the tenant agrees, that can be done.
As my noble friend has just said, it seems to provide that a tenancy could be assigned, as of right, by a tenant with whom the landlord had originally willingly entered into a contract, and it could be assigned to someone with whom the landlord might be quite unwilling to enter into a contractual relationship. The choice as to who would farm his land would be taken right away from him, not just for one generation but for three generations possibly; there would be three generations of unacceptable tenants because no new tenancy would have been created to bring it under Clause 2 of this Bill.

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Even the 1976 Act provided that by succession a tenancy had to pass, if it did pass, to a successor as someone with whom the original contract had been made who was, first, an eligible person—that is, a near relation—and, secondly, a suitable person; that is one who is suitably qualified and had sufficient capital, and so on. This amendment would completely take away those safeguards and I cannot believe that from the point of view of the farming community they would welcome it any more, because surely the chief reason why they support this Bill is that it attempts to make tenancies available to applicants who do not have to pay excessive premiums as they might have to do by going through this procedure. I am sorry that I cannot be more enthusiastic.
Lord Stanley of Alderley: I would like to put one more nail in this particular coffin. My noble friend says it would encourage new entrants. I very much doubt it I think that if anybody gets these tenancies they will go to the "agri-business man" helped with my pet hate, the business expansion scheme. I have to tell my noble friend that I really think this is rather a nasty amendment.
Lord Walston: There are many curious bedfellows. It started off with the rather odd combination of the NFU and the CLA and now we find that we have the Labour opposition and the Conservative Benches (possibly even the Conservative Front Bench), even including the noble Lord, Lord Stanley of Alderley, all in the same bed together; and to make it even odder, the Alliance will see if there is any room for them to get in, too.
We feel exactly the same. I am sorry to say so to the noble Earl, but I do not think this is a starter, and it is certainly not a finisher.
Lord Hylton: I am inclined to agree with the noble Viscount, Lord Ridley. The analogy was drawn between commercial and industrial properties and let farms. It might perhaps apply in the case of institutional landlords. I am quite sure that it does not apply in the case of individual private landlords, and particularly resident ones, where the relationship between the landlord and the tenant is of an extremely personal nature. Such people would resist to the last the introduction of total strangers. I do hope that the amendment will be withdrawn.
Lord Northfield: Before I offer just a few words of encouragement to the noble Earl, Lord Caithness, may I say to my noble friend Lord John-Mackie that I apologise if he thought I was accusing him of hysteria? His gentle, restrained and equable character is not one that would attract that sort of accusation at any time. I was really saying that we must not add to the hysteria about institutions that undoubtedly exists outside this Chamber. That is what is worrying me and has worried me for many years.
On this particular amendment, I have a great deal of sympathy with what the noble Earl, Lord Caithness, is trying to do. He is, in fact, challenging a great deal of the basis on which we look at agriculture today. He is asking, "How much longer will we stop it being subject to some commercial forces, in which the market can
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play much more widely and have its effect, its disciplines and some of its rigours as well?" That is a very legitimate question to put to all of us. Why should we treat agriculture rather like housing, with controlled rents, protection and all sorts of things? Why is it not a business?
All the evidence I took in holding this inquiry into land ownership was that farmers were clinging too strongly to these vestiges of the past in wanting to be a sort of protected cottage industry, instead of having the true commercial wind blowing around them and having its good effects.
The noble Lord, Lord Middleton, raised the possibility of assigning to awful people. In the commercial world some people live over shops as well, and the landlord's relationship with people who have shops and homes over them can be quite intimate, just as it is with farming. They do not have any of this sort of protection around them.
But the answer to leases concerning shops is that the lease always says that it is assignable to a proper and respectable person:
"such consent not to be unreasonably withheld by the landlord".
So the landlord always maintains the right to vet somebody taking over a lease of a commercial property, and that sort of thing can be built in as well in the case of agricultural tenancies.
I have enormous sympathy with the noble Earl, Lord Caithness. It is about time that we let a bit more commercial vigour and discipline into this industry, and the noble Earl is on the right track. He will not win now, but I bet he will win in about 10 years' time.
10.48 p.m.
The Earl of Swinton: Until the noble Lord. Lord Northfield, got up, I really thought that I would simply have to get up and say that the Government agree with what everybody else has said. But I see that now I shall have to take a little time. I have, of course, listened most carefully to the reasoning of my noble kinsman, Lord Caithness, in introducing this amendment, but it seems to me—as it does to a number of noble Lords who have spoken in this debate—that the amendment has some highly undesirable features.
I realise that the amendment could stop landlords taking land in hand on the death of a tenant, but against that we must recognise that it would put up considerably the key money element of a new tenancy. This would increase enormously the difficulties for would-be new entrants to the industry and would not make more tenancies available to those without capital. It is thus contrary to the objectives of the Bill.
I think it was my noble friend Lord Ridley who said that he thought this operation would not work. I was going to say that, if this amendment went through, it would probably be a case of the operation being successful but the patient dying. I must agree with other noble Lords that, from the landlord's point of view, this would probably be the absolute death of the landlord/tenant system. It could take away for ever the landlord's right of choice of his tenant. My noble friend said that the landlord could go out and bid to get his own tenancy back. Big deal! Who wants to do that? I certainly should not. To go and buy back something

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that belongs to me anyway would be against all my Yorkshire principles.
There would be no check on suitability—a point that several noble Lords made. The purchaser could be a limited company. The outgoing tenant has no long-term responsibility to the land which would influence his choice of purchaser. All this is certainly not in the interests of farming and would totally undermine the landlord/tenant system. I hope that my noble friend will withdraw his amendment.
The Earl of Caithness: We have had the desired effect of a good debate, anyway. My noble friend Lord Middleton said that this would last for three generations. It would not, because that part of the 1976 Act would be repealed, and therefore it is for the lifetime of that one tenant only. I am grateful for the support of my noble friend Lord Northfield, if I may so call him. He said that the true commercial wind is blowing through agriculture. He is right. It is beginning to happen at long last, but it is going to take some time before they have to face reality. I believe that in 10 years' time something along these lines will have to be brought in. Meanwhile, I withdraw the amendment and look forward to re-introducing it in the next Bill.
Amendment, by leave, withdrawn.
Remaining clauses agreed to.
Schedule 1 [Minor and consequential amendments]:
Viscount Ridley Viscount Ridley moved Amendment No. 62:
Page 13, line 25, leave out from ("following") to end of line and insert ("paragraphs shall be substituted for paragraphs (e) and (f)—").
The noble Viscount said: Perhaps we may get back to the smoother waters of smallholdings. I hope that the two amendments, Nos. 62 and 63, may be taken together.
Amendment No. 63: Page 13, line 40, at end insert—
("(ee) if the holding consists of land held by a smallholdings authority or the Minister for the purposes of smallholdings within the meaning of Part IV of the Agriculture Act 1947 or Part III of the Agriculture Act 1970, and the tenancy was granted by them or him in pursuance of the said Part IV or Part III;".").
The purpose of these amendments is to try to clarify a situation regarding tenancies of statutory smallholdings, to which I have referred before. The 1976 Act intended to make it clear that statutory smallholdings were excluded from the rights of succession to ordinary tenants. I think there is no doubt about that fact. Section 18 of the 1976 Act provides that there shall be no right of succession if a smallholding is let by a smallholdings authority for the purpose of a smallholding in pursuance of the Agriculture Act 1970.
However, there are still in existence smallholdings tenancies—rather more than half—which were let by smallholdings authorities under the legislation which was in force prior to the 1970 Act. It is not sufficiently clear from the provisions of the 1976 Act that these earlier lettings are also to be excluded from succession, although this was the clear intention of the 1976 legislation at the time. Indeed, there have been one or two cases heard in the Agricultural Lands Tribunal which appeared to suggest that on a strict
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interpretation of the law the right of succession in the case of smallholdings lettings prior to 1970 might still arise.
The county councils responsible for smallholdings have over the last two or three years made many representations to the Ministry of Agriculture for suitable amending legislation to make clear that all smallholdings tenancies are outside the succession provisions. The position has been reached that the Ministry agreed to consider the matter when a suitable opportunity arose. I do not think there could be any more suitable opportunity than the present Bill. Indeed, as other noble Lords have said, we might have to wait for ten years for another Bill of this kind.
There was a joint working party consisting of representatives of the NFU, CLA, RICS, MAFF and something called WOAD (which I think is a Welsh Office affair, and nothing to do with the ancient Britons) which put forward proposals for a number of amendments to this legislation which included the very proposal which I am now suggesting. This working party forwarded its report to the Government, suggesting unanimously that all statutory smallholdings should be excluded from the provisions of the 1976 Act; that there was an anomaly in that tenancies granted before the 1970 Act are not now excluded.
In the face of this it was hoped that the Bill would include some provision to take care of this technical point, and it is a pity that it does not do so. I am sure that Ministers wish to avoid complicating this legislation and to avoid stirring the pudding and getting involved in any NFU-CLA dispute. But this is something which I think is agreed by everybody specifically relating to statutory smallholdings only, and I hope that we can look at it in that light.
We had a debate earlier tonight about the farming ladder and the need for statutory smallholdings, all of which I have said before and with every word of which I agree. The noble Lord, Lord Belstead, referred to the need to keep people moving up the smallholdings ladder. But if the succession of three tenancies of smallholdings tenants was to be established, then the farming ladder would cease to exist. Then there really would be serious incentives for smallholdings authorities to sell land, which was the subject of the debate a few hours ago. I beg to move.
Lord Northfield: May I ask a question in the hope that the Minister will reply on this? As I understand the present situation with regard to smallholdings, succession is governed by the Smallholdings (Selection of Tenants) (Amendment) Regulations 1976. What they do is to tell county councils that, although smallholdings are outside the 1976 Act, they should consider certain specified near relatives of the deceased tenant as successors and only to consider other applications when these have proved unsuitable. Is it still the case that the 1976 Act, although not now applying, is continued by these regulations? If that is so, would the amendment overtake the regulations as well? In other words, would we find that those regulations were effectively being annulled? It is important to know where we would end up if the amendment were agreed to.

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I sympathise enormously with what the noble Viscount is trying to do. We want to keep more movement in smallholdings. He is absolutely right, but I direct attention to the sort of recommendations my committee made about compulsory retirement, and all that goes with it, and the possibility of short-term lettings to enable people to make a start on smallholdings. In other words, my second point to the Minister is this. Could we not at Report stage consider all these matters together, and the impact of the general approach of the Bill on the whole of smallholdings? It is a very important issue to include smallholdings in a number of the issues that have been raised in the debates—short-term tenancies, retirement, and all the other matters. It would be right to ask for consultations about the wider impact of the Bill on smallholdings before we reach Report stage.
The Earl of Swinton: If I may deal with the noble Lord, Lord Northfield, first. Basically, yes, he is correct in what he says, but I shall not give any undertaking to consider smallholdings in any great detail before Report.
I am grateful to my noble friend Lord Ridley for proposing the amendment. The question of the possible lack of exemption from three-generation succession on smallholdings tenancies granted under various smallholding Acts prior to the Agriculture Act 1970 has exercised our minds for some time. I hesitated to include in this Bill an amendment to remove the apparent anomaly in this area in view of the fact that, as my noble friend is aware, a case on this very question is currently before the courts. However, I have listened carefully to the arguments put forward by my noble friend and I can confirm that we should be happy to consider his proposal.
I am sure that my noble friend would agree that the wording of his amendment does not go far enough because, although his amendment would close the loophole for tenancies under Part IV of the Agriculture Act 1947, it would leave in doubt the succession arrangements applying to tenancies under smallholdings legislation prior to the 1947 Act. So if he would he happy for us to consider his proposal and to put forward an appropriately worded amendment to cover precisely these points, I hope, perhaps, my noble friend will feel able to withdraw his amendment.
Viscount Ridley: I am extremely grateful to my noble friend Lord Swinton. Did I understand him to say that he would bring forward an amendment at the next stage to cover the technical point I have made?
The Earl of Swinton: Yes.
Viscount Ridley: If that is the case, I am delighted to withdraw the amendment. I beg leave to withdraw.
Amendment, by leave, withdrawn.
[Amendment No. 63 not moved.]
10.58 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 64:
Page 17, line 4, at end insert—
(" ( ) At the end of subsection (1) there shall be inserted the words "and not being a contract of tenancy made after the
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commencement of the Agricultural Holdings Act 1983 under which the said land is let to the tenant by a local authority if the said land was at the date of the said contract held by that authority for the purposes of the Allotments Acts 1908 to 1950".")
The noble Lord said: If I might take your Lordships' minds from smallholdings to allotments, there are many allotments which are administered by parishes throughout the land, and indeed by other local authorities. I am particularly concerned with parishes.
It is the fact that, at the moment, if an allotment is not taken up by the local inhabitants in a given area and is lying fallow, it is convenient for the parish to let it to a farmer to take it on; and that works very well. But if, in due course, somebody comes to live in the parish who would like to take up the allotment—the purpose for which it was originally intended in the arrangements which declared the allotments—then the parish finds it incredibly difficult to get the allotment back from the farmer, who will invoke all sorts of Acts of Parliament—and I am talking very much in shorthand since we have not got much time—so as to hold on to it, in which he is hacked up by the Minister under, particularly, the 1948 Act.
What this amendment seeks to do is, after the passing of this Act—so that it is not retrospective—to remove the definition of allotment from agricultural holdings as described in the 1948 Act. Since I tabled this amendment, there has been an exchange of correspondence both between the secretary for the National Association of Local Councils and my right honourable friend the Minister and also between myself and my noble friend Lord Belstead. My latest letter in this exchange of correspondence with my noble friend arrived yesterday, It is very long and detailed and I have not had time to consult with anybody in the meantime. What I propose to do at this moment therefore is to invite your Lordships to consider that it is really very difficult for local councils—who, one must remember, are quite often officered (if that is the right word) by part-time people who have not got immense experience of administration—to fight their way through against the great bureaucracy which, in local terms, is represented by the divisional officer of MAFF, and to find farmers resisting them and invoking all sorts of things Farmers are much more competent in using bureaucracy than are the clerks of parish councils.
It is really an unfair balance—and I think that my noble friend is aware of this—against the parish which is seeking to carry out the wishes of the original purveyors of the allotments who wanted them to be used for the local inhabitants to till for themselves. It is quite a problem and one to which this amendment is a solution, if it is accepted. I am quite sure it could be improved but I would hope very much that out of this I might get some more relief than undertakings from my noble friend that things will be run better in the future. I should like to see something in this Bill before it leaves us. I hope I shall get a great deal of encouragement but I reserve every right to come back to your Lordships at the next stage of the Bill when I shall have had time to consult with the people who understand these things over the latest letter that I have had from my noble friend, I beg to move.
Lord Hylton: I want to support the principle of this amendment for two reasons. First of all, I know from personal experience that the demand for allotments fluctuates up and down in the most remarkable way. Secondly, where there are occupied allotments next to unoccupied ones there immediately arise problems with weeds. Anything that can be done to control that and make possible interim cultivation is very desirable.
Lord John-Mackie: I have experience of this. I used to rent a farm on the borders of the London borough of Enfield which, at one time, had given off quite a large area for allotments. As the noble Lord, Lord Hylton, says, the demand for allotments goes up and down quite considerably. In this case, more than half of them were not being used. I suggested to the borough officer concerned that I should move the fence back and take into the farm the piece of land that was not being used. He was quite agreeable just to do that without any consideration of the legal side of it, and although I do not agree with the noble Lord, Lord Mottistone, about farmers being better at using democracy than council officials, I could have had that back and probably "played at agricultural tenants" and they would not have got that back. Actually I did not do it, because the demand for allotments started to increase again and it was not necessary. But the noble Lord has a real point in this amendment.
Lord Belstead: I agree with noble Lords who have spoken, and indeed with the noble Lord, Lord Hylton, who specifically made the point that the numbers of allotments which are in occupation seem to increase and decrease in a sort of cyclical way. I have observed that myself. But the problem with this amendment is that, by taking allotment land out of the scope of agricultural holdings legislation, as my noble friend Lord Mottistone proposes, allotment organisations could find it much more difficult to regain possession of their land. This is because the arrangements between the organisations and farmers would then be covered by the provisions of the Landlord and Tenant Acts of 1927 and 1954.
Of course, the interests of tenants are very' well guarded under those Acts, but since agricultural holdings are specifically excluded from that provision none of the special circumstances in which the landlord can regain possession are likely to be particularly helpful to the allotment organisations under that legislation. In particular, it would not be possible to regain possession, which is what the noble Lord would wish to do. I think therefore we really need to tackle this in another way, and my right honourable friend has the power under Section 2 of the 1948 Act to give his approval to the letting of agricultural land, not being a letting of the land of a tenancy under the Act from year to year.
I know perfectly well (and I will speak in shorthand, if I may) that my noble friend is concerned that this has not been perhaps the smoothest of operations in the past. That is my noble friend's contention; and I would like to assure him that if a local authority requests a Section 2 approval from the Ministry of Agriculture to cover the short-term letting of allotment land for agricultural purposes in the future, the request would be sympathetically considered.
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Indeed, I give an assurance to my noble friend that we will issue specific instructions to our local Ministry of Agriculture offices in order to overcome any problems which might arise in connection with allotment land. Therefore, I hope that my noble friend, on reflection—because I think he feels he would like to read this, with interested parties, to see what has been said—will feel that the Section 2 procedure may be the way to proceed.
There is one last thing I ought to say. Where a local authority wishes to make temporary arrangements which are expected to last longer than could be dealt with by the Section 2 procedures, the agricultural holdings legislation still provides a way for them to regain possession if they wish to return the land for use as allotments. This would require them to seek the consent of the Agricultural Land Tribunal for the operation of a notice to quit under the 1977 Act. One of the grounds under which the tribunal is required to give its consent is where the land is required for the purpose of the enactments relating to allotments. I have to say that this means going through a tribunal hearing, but this, of course, is necessary' in the interests of both parties if they are to be properly protected when longer-term arrangements are made. I hope that is helpful. I know that my noble friend will reserve the right to come back again if he feels he needs to. I hope he will not.
Lord Mottistone: I am most grateful to the noble Lords, Lord Hylton and Lord John-Mackie, for their general support of the concept. I am sure my noble friend Lord Belstead will realise that, although I appreciate very much the administrative measures that he will take to try to overcome this difficulty within the existing framework of law—and it goes some way towards what we want—it might be that we shall come back again if we can find a way through that looks more acceptable. There is something to be said for having a provision underpinned by law which could reduce the amount of dealings which part-time clerks must have with officials, who are very experienced in organising things in the direction in which they want to go. So I have a basic underlying feeling that there may be room for doing so here. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.10 p.m.
Viscount Dilhorne Viscount Dilhorne moved Amendment No. 65:
Page 17, line 24, at end insert—
(" . After section 2(1) of the 1948 Act the following subsection shall be inserted—
" (1A) The Minister may on the joint application of the persons who will be the landlord and the tenant in relation to a tenancy of an agricultural holding to be granted for a term of years certain not exceeding five years approve an agreement excluding in relation to that tenancy the provisions of section 3 of this Act, if the agreement is contained in or endorsed on the instrument creating the tenancy; and an agreement contained in or endorsed on an instrument in pursuance of the Minister's approval shall be valid notwithstanding anything in the provisions of this Act".")
The noble Viscount said: I propose to move this amendment in place of my noble friend Lord Renton. And may this amendment be taken with Amendment No. 71, which relates to it?
Amendment No. 71: Page 25, line 23, leave out sub-paragraph (6).
The proposed amendment is totally non-partisan. It merely tries to put on a workable legal basis what is already contained in the Act and the policy statement that is set out in a letter from the Ministry dated 22nd July. The policy, as I understand it, behind ministerial approval to a contract which does not get converted into a tenancy on a year-to-year basis has never been clear and has never been consistently applied.
Furthermore, the attitude of regional offices of the Ministry differs considerably in different parts of the country.
I understand that the policy is that an increase from three to five years in the period for tenancies, granted under the Minister's discretion under Section 2 of the 1948 Act, in relation to trial tenancies or where a landlord's son or daughter is expected shortly to take over a vacated tenancy, can be implemented administratively without legislation. I intend to speak fairly quickly because of the hour, and I have cut down a great deal that I had proposed to say. I submit that it is unsatisfactory that this policy should be kept on an administrative basis, because it has never been applied consistently.
The nub of the legal argument is this. The Minister has power to approve a contracting-out arrangement for a licence of any duration—now up to five years—or a tenancy for an interest of less than a year-to-year basis. That can he seen from Section 2(1) of the Act. But he does not have power under present legislation to approve a tenancy of more than a year, although he can approve a licence of any duration. The difficulty, as a matter of law, is to draft a genuine licence that will last as long as five years. Any documents purporting to be a five-year licence are almost certain to be construed as a tenancy in the courts.
The Ministry is therefore advertising that it is going to adopt a policy of approving five-year licences which it is improbable that any sensible lawyer will advise a client, particularly a landowner, to sign. That is a sincere and real criticism of the present system and one which would be easily overcome by the proposed amendment. We say that the new policy is to allow a contracting-out of tenancies up to five years, with the Ministry's approval. That will enable lawyers to avoid drafting tortuous and convoluted documents in the hope that they will be construed as licences rather than tenancies. They can prepare a straightforward and honest tenancy agreement that can be put before the Minister for his approval as a tenancy. If exemption is to be on a proper basis—a proper basis being, I hope, the one that I am submitting—it will give the landlord and the tenant more confidence in the contracting-out system which the Minister is, I hope, proposing to operate. The word to emphasise is "tenancy". Without enactment, the policy of approving a five-year agreement which claims to be a licence will, in my opinion, lead to much litigation and great uncertainty—which we hope my noble friend the Minister will agree can be avoided by this amendment.
In this debate, various references have been made from both sides of this Committee—and, in fact, from the Division Lobby itself—to the personal interest which lawyers have in legal confusion. I hope this is one of many examples of responsibly-minded lawyers attempting to reduce disputes rather than encourage them. I beg to move.
Lord Prys-Davies: May I just get one point clear? Is the noble Viscount saying that because there are difficulties in drawing up a licence for a five-year duration, that the legislation ought to provide for a fixed-term tenancy of up to five years—because that would get around the technical difficulties of drafting a licence?
Viscount Dilhorne: The noble Lord, Lord Prys-Davies, is absolutely right. At the moment, one cannot really draft an agreement for a five-year licence without it being turned into a tenancy. So, if one has a tenancy for five years, one will overcome that difficulty.
Lord Prys-Davies: So the tenancy for a fixed term of five years drawn under this section would be deprived of any protection given by the Agricultural Holdings Act?
Viscount Dilhorne: I am slightly at a loss to know how exactly to answer the noble Lord's question accurately. What it would do is to give the tenant considerably more security than the tenant would enjoy by having a licence that is in fact a tenancy. It does improve his position under this particular section.
Lord Prys-Davies: In the sense, presumably, that he will have occupation of that land as a tenant for five years, and that will be indisputable?
Viscount Dilhorne: That is right.
Lord Belstead: My noble friend Lord Dilhorne has explained—at least, I think he has explained—that this amendment is designed to introduce much greater certainty where a landlord grants a short-term licence which has been subject to the Minister's prior approval under Section 2 of the Act. The Minister's approval is only given in fairly closely-defined circumstances in which it would be unreasonable to grant a full agricultural tenancy, where the land is shortly to go out of agriculture.
My noble friend's amendment would not change those limited circumstances in which approval is given but, as I understand my noble friend, it would remove the danger that the licence could in law be construed as creating a full agricultural tenancy.
I should like to look very carefully at the drafting of this provision. The reason that I said I believed my noble friend had explained the amendment was not a discourtesy to my noble friend in respect of his opening remarks but because of the quick exchange between the noble Lord, Lord Prys-Davies, and my noble friend, which I should like to read in Hansard afterwards.
If the amendment does indeed have the effect which I am advised we believe it has, I can confirm that the Government have a very great deal of sympathy with the objectives of my noble friends Lord Dilhorne and Lord Renton, in whose names the amendment is. I should like to give my noble friend an assurance that we shall consider very carefully the point which has been made. I feel that I cannot accept the amendment

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as it stands because I should like to study closely the exchange between both noble lords.
Before I sit down, I understood my noble friend Lord Dilhorne to say that he was moving at the same time Amendment No. 71: was he speaking also to Amendment No. 71?
Viscount Dilhorne: That is so. I was speaking also to Amendment No. 71, which would leave out subparagraph (6) on page 25, which reads:
"(6) In paragraph 6, for the word `twenty-eight' in both places where it occurs there shall be substituted the word 'thirty-five' ".
Lord Belstead: I am grateful to my noble friend. With respect to him, I am not entirely sure that Amendment No. 71 really goes with Amendment No. 65. However, as I have the Chief Whip sitting only a few yards away, I think it is almost as much as my life is worth not to take two amendments together, if we can possibly kill two birds with one stone.
I should like to say that this is the period of time which is allowed for the submission of statements of case. The Government thought they were being really rather sensible and generous in extending the period of time from 28 days to 35 days. But earlier on in the afternoon—it may have been before my noble friend came into the Chamber—the noble Lord, Lord Renton, moved an amendment in which he asked that Schedule 6 to the 1948 Act should be subject to rules made by my noble and learned friend the Lord Chancellor: and after parading some of the reasons why the Government were reluctant to agree to that, I finally agreed on behalf of the Government to go away and discuss this with the Lord Chancellor. Therefore, I think perhaps Amendment No. 71 ought to be left there.
Viscount Dilhorne: I am greatly indebted to my noble friend. He is of course completely right. All I can say is that, looking at the hour, I can only hope for forgiveness for having raised the matter. I was here and spoke to the amendment of my noble friend Lord Renton in the same terms as those which he used, so I am guilty of having contradicted myself quite without thought. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 66 had been withdrawn from the Marshalled List.]
The Earl of Swinton The Earl of Swinton moved Amendment No. 67:
Page 18, line 10, after ("Act") insert (" (provisions for securing written tenancy agreements) ")
The noble Earl said: With permission, in moving Amendment No. 67 I should like to speak also to Amendment No. 72.
Amendment No. 72: Page 28, line 3, leave out ("the 1977 Act") and insert ("that Act (reduction of rent where notice is given to quit part of holding) ")
I am sure these amendments are obvious to the Committee. They correct omissions in the text of the Bill. Amendment No. 67 inserts in paragraph 8 of the schedule an explanation of the subject matter of Section 5 of the 1948 Act. which it amends. Similarly,
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Amendment No. 72 inserts in paragraph 44 of the schedule an explanation of the subject matter of Section 10 of the 1977 Act, which is amended by that paragraph. I beg to move Amendment No. 67.
On Question, amendment agreed to.
The Earl of Swinton The Earl of Swinton moved Amendment No. 68:
Page 19, line 14, leave out first ("and")
The noble Earl said: This amendment corrects an error in the text of the Bill by deleting the superfluous word "and" in line 14 of paragraph 10. I beg to move.
On Question, amendment agreed to.
Viscount Dilhorne Viscount Dilhorne moved Amendment No. 69:
Page 19, line 28, at end insert—
(" .—

(1) Section 11 of that Act (tenant's rights as respects disposal of produce and cropping or arable land) shall be amended as follows.

(2) In subsection (4)(a) after the word "or", where it first occurs, there shall be inserted the words "in cases where a valid notice of less than twelve months is given in accordance with section 1(2) of the 1977 Act".

(3)The following subsection shall be inserted after subsection (4) —

"(4A) The landlord shall not unreasonably refuse his consent to proposals by the tenant for the cropping of arable land during the periods of restriction mentioned in paragraphs (a) and (b) of subsection (4) above and any dispute arising as to the reasonableness of a refusal of consent shall be determined by arbitration under this Act.".")

The noble Viscount said: Under Section 11 of the 1948 Act there is freedom of cropping. Freedom of cropping is taken away from the tenant after he has received a notice to quit. As at present worded, the second limb of Section 11 (4)(a) states:
"any period after he has given or received notice to quit which results in his quitting the holding".
Therein lies the question: are the words "any period" to be taken literally? If they are, and no brake is applied in the statute, there is no maximum period for serving the notice to quit. This question has never been resolved, and it has perplexed textbook writers (I am told, I not having been alive then) since 1908.
This amendment works to take away freedom of cropping in the last year only. There are three summarised matters. The first deals with the situation where the landlord has served a long notice, and in the new subsection (4A) it gives the tenant the right to take to arbitration the landlord's refusal to grant consent to the tenant's cropping proposals during the period of notice. The second deals with certain cases where a valid notice of less than 12 months is given. The insertion of subsection (4A) will restrict the freedom of cropping during the period of notice only.
The third point is to enable the tenant to challenge by arbitration a landlord's unreasonable refusal, if it is, to allow cropping where the period of notice is greater than 12 months. These last two matters go very much together and work neatly into the statute as it now stands. If the amendment is read with the statute I submit that what is not very apparent from what I have said then becomes clearly apparent. I shall say no more. It is a complicated legal provision. It is meant to be non-partisan and I hope that my noble friend will consider it. I beg to move.
Lord Stanley of Alderley: All I would say to my noble friend is that he is a lawyer but not a farmer. I suspect that the amendment is totally impractical because by the time one has gone through the process I suspect my noble friend wants us to go through, the tenant will have gone anyhow.
The Earl of Swinton: This amendment has at first sight a good deal to recommend it, and indeed the last part was an agreed proposal of the Ministry-NFU-CLA-RICS Working Party. However, as my noble friend Lord Stanley of Alderley said, on close examination practical difficulties over timing make the realisation of this proposal difficult. In the case of some tenancies, particularly Michaelmas tenancies, there may well be insufficient time for the tenant to make proposals for cropping in the final year, for the landlord to have a chance to consider them and for an arbitration to be arranged and take place (bearing in mind that 28 days must be allowed for delivery of statements of case alone) unless the notice to quit is given well ahead of the beginning of the final year of tenancy. But I believe that the landlord will usually, for the sake of good relations, delay giving notice until the last year is about to begin. It is likely therefore that the crops will often have to be planted—I am thinking particularly of winter wheat, barley and oil seed rape—before the arbitrator can make his award. This leaves the only remedy as monetary compensation for the tenant should his proposals be upheld, which is not a matter referred to specifically in the amendment, and which may seem a rather severe penalty for a landlord who has done no more than rely on the terms of the tenancy agreement (albeit perhaps an old-fashioned one).
Alternatively, a tenant would have to go ahead with his substitute cropping plan without knowing the result of the arbitration. I also feel sympathy with the first part of the amendment, but again I think it may prove difficult in practice not to deal with the last year of tenancy as a whole. While, therefore, I agree that this is in principle a worthwhile amendment, I feel that practical factors make it very difficult to realise in a way which is free from difficulties. May I, therefore, as a practical farmer, beg my noble and nearly learned friend, as a lawyer, to withdraw his amendment.
Viscount Dilhorne: I thank my noble friend for his answer. I should, however, like to have the opportunity to consider it rather more fully when it is published in Hansard. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 70:
Page 19, line 40, after ("(4A)") insert ("Failing mutual agreement")
The noble Earl said: This is a minor amendment to encourage the landlord and tenant to agree matters without any dispute. I beg to move.
The Earl of Swinton: While I applaud my noble kinsman's search for clarity in legislation, I feel that the present wording in the Bill is clear enough. Surely, if the landlord and tenant agree, there is no dispute, and therefore no need for arbitration. I hope my noble friend will withdraw his amendment.
The Earl of Caithness: I certainly will do so. The reason for the amendment was that we regularly have these words in agricultural Acts and I thought that they were suitable on this occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.29 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 70A:
Page 20, line, 1 leave out paragraph 12.
The noble Earl said: I understand from paragraph 12 that, except for ground game, the tenant could claim for any crop damage caused by any other animals or birds whatsoever, unless he has been given permission in writing to kill them. I believe that the working party has missed a point here. What happens when, for instance, a farmer living in Norfolk near the Wash suffers crop damage from geese which have suddenly arrived in large numbers but which move on again a short time later? Is the landlord to be blamed for that? Furthermore, if he raises a large number of greylag geese and they eat the tenant's crop, is the tenant entitled to claim? As I read the Wildlife and Countryside Act 1981, these birds, being reared, are not classified as wild. I beg to move.
Lord Belstead: As the notes on the schedule make clear, we have replaced the word "game" in Section 14 of the Agricultural Holdings Act 1948 with the words,
"any wild animals or birds".
This is because game as defined in Section 14(4) of the Act is restricted to deer, pheasants, partridges, grouse and black game. It is a definition which indeed, as my noble friend has just said, excludes, for example, geese.
My noble friend has given me an example of a tragedy which might occur in north Norfolk. He gave me notice that he would put this point. My answer is this. In the first of my noble friend's examples—the geese arriving as if from nowhere—I think it would be only if the landlord kept the right to take geese to himself that the tenant would be entitled to compensation. If the tenant were free to protect his crops by, for instance, shooting geese, clearly the landlord would not be liable to pay compensation.
In the second example which my noble friend put forward—which is what the remedy would be for the tenant if he suffered damage from geese which the landlord was rearing—I think that the first answer would cover the matter again. Presumably the geese are still wild. However, if they were to be termed domestic in my noble friend's example, of course the tenant could pursue the landlord, or anyone else to whom the birds belonged, for damages under the common law, because that would be a matter for the courts.
The Earl of Caithness: I am grateful to my noble friend for that answer. I am concerned about a landlord being liable for crop damage in my instance of a large number of geese coming in. I think that this is something I should like to look at again from a conservation point of view. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 70B:
Page 25, line 10, at end insert ("who shall immediately notify the parties in writing of the appointment." ")
The noble Earl said: The purpose of this amendment is to record within the legislation what is already standard practice in both the Ministry of Agriculture, Fisheries and Food and the Royal Institution of Chartered Surveyors where they appoint an arbitrator under the Agricultural Holdings Act. Nevertheless, it is no more than practice and I think the provision needs to appear in the legislation for the protection of all the parties. It should be remembered that the Richards v. Allinson county court ruling will no longer apply and the parties now have 35 days from the date of the appointment in which to submit their statement of case. Therefore I regard the amendment as a question of justice being seen to be done. It will not alter the existing practice in any way. I beg to move.
Lord Belstead: These are matters of administrative detail which it would be unusual to enshrine in legislation. Indeed matters have worked perfectly well for many years, as my noble friend very fairly implied in his remarks. But I owe it to my noble friend to give an assurance which will go into Hansard that the Ministry of Agriculture, Fisheries and Food and the Welsh Office agricultural department will continue to notify both landlord and tenant of the arbitrator's appointment. Furthermore, the arbitrator will himself be instructed that on receipt of his letter of appointment he is to notify the parties immediately of the date by which their statements of case are to be submitted. I hope therefore that my noble friend may feel able to leave the matter at this. That is quite a mouthful, and we should prefer not to start putting it all in legislation. I hope that the reassurance which I have given on behalf of the Government, and which will now go into the official record, will satisfy my noble friend.
The Earl of Caithness: I am most grateful for that reply from my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 71 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 71A
Page 27, line 11, leave out paragraph 39.
The noble Earl said: I was more than slightly surprised to find paragraph 39 in the Bill. In fact, my attention was drawn to it by a number of arbitrators and senior members of the RICS, who pointed out how inequitable is the paragraph. Was it really the Government's intention to give further preferential treatment to tenants who are already privileged by succession? Did they really mean to say, "Not only, if you are eligible and suitable, can you inherit a tenancy to the exclusion of others who would like the opportunity, but now you can succeed at a sitting tenant rent rather than at a market rent"?
I believe this to be a ludicrous situation, and there is no more sure way of depressing rents and killing off the landlord-tenant system for good than is contained in the paragraph. I should like to ask my noble friend
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why a successor should not be asked to pay the open market rent on succession, when a third party tendering for a tenancy has to do so?
It was this paragragh which led me to investigate the cost of agriculture and the benefits which a tenant, as a farmer, already receives. I shall not list them, but with the benefits of exemptions from rates, VAT, CTT, as well as new plant and machinery allowances and the net cost of the CAP, I calculate—and this is being generous to the tenant—that we subsidise each tenanted holding in this country to the tune off 15,000 per annum. I consider that to be a rather substantial sum of money. Despite their advantages and subsidies, the tenants are now being further mollycoddled by the Government, who wish to place a burden on the landlord to give a further subsidy by way of rent. I do not think that that is either right or fair. I beg to move.
Lord Belstead: I must disagree with my noble friend that the Bill is in any way giving further preferential treatment to tenants. At present a succession tenant is treated in exactly the same way as any other sitting tenant when he succeeds to a tenancy. The open market rent formula in Section 8 of the 1948 Act is the basis on which the rent is established in both cases, and we are proposing that exactly the same principle should apply when the present Bill is brought into effect. If that is agreed, succession tenants would therefore continue to be treated as sitting tenants.
As I tried to demonstrate in a debate on Clause 1, the purpose of the clause is to do no more than give statutory cover to arbitrators' current practice. Under the present arrangements an arbitrator determines the rent for a succession tenant in the same way as he does for a sitting tenant. If for this purpose the arbitrator disregards any key money element, he is treating both types of tenant similarly.
The new rent formula that we are proposing is not designed to raise or to lower the levels of rent set at arbitration. The paragraph to which my noble friend is drawing attention—paragraph 39—will simply ensure that succession tenants will continue to have applied to them the same rent provisions as will be applied to sitting tenants. Therefore, with respect to my noble friend, there is nothing new in this.
However, the amendment that my noble friend proposes would try to introduce a new concept, though it is a little difficult to see how it would work in practice. The rent formula in Clause I would apply to sitting tenants, but the amendment would seek to apply the existing rent formula to succession tenants. If arbitrators continued with their existing practice, this change would have no effect. But if this amendment was made and provided for two quite different formulae, one for the sitting tenant, one for the succession tenant, because that is what it does, arbitrators might then feel obliged to assess a key money element in the latter case. There would be practical difficulties in doing this but, more importantly, it really would introduce a new and highly contentious principle that would apply in the event of succession. We would therefore be changing the rules on succession and we could be charged with doing so retrospectively. For the reasons that I advanced in debate on Clause 2, which I shall not

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repeat now, I would not wish to do this. I would therefore ask my noble friend to reconsider this amendment.
The Earl of Caithness: I think that I may have misunderstood the purpose of the paragraph. The point that I am not clear about is this. When there is a succession, is that a new tenancy? If it is a new tenancy, why should not the successor pay his first rent open market and then the rent clause apply? If you say to the landlord that he must let the farm, he goes to the market and a tender rent, on the evidence that we have got to date, would be above a sitting tenant rent. It seems to me, therefore, that if the Government are saying that the successor, on the first rent, when he takes over the holding, has to pay a sitting tenant rent and not a tender rent, the landlord suffers. Am I right?
Lord Belstead: The short answer to my noble friend is that it is because this is the way that it has been done. At present, a succession tenant is treated as a sitting tenant for the purposes of rent, but if the arbitrator was to apply the provisions of the existing law with full vigour, this would make no difference. The rent would be the open market rent, key money and all. In practice, however, as we know, because we have said it so many times, arbitrators do not do this. Instead, they have regard to other factors. But if I may come hack to the real answer to my noble friend's question, it is so because it has been so for many years. We do not intend to change this retrospectively.
The Earl of Caithness: I do not wish to prolong this discussion, but I reserve my right to bring the matter hack at a later stage because I think that there is a point here. If we have got it wrong in the past, perhaps now is the time to correct it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Swinton The Earl of Swinton moved Amendment No. 72:
[Printed earlier: col. 223.]
The noble Earl said: I have already spoken to this amendment with Amendment No. 67. I beg to move. On Question amendment agreed to.
Schedule 1, as amended, agreed to.
Schedule 2[Enactments repealed].
[Amendment No. 72A not moved.]
Schedule 2 agreed to.
Schedule 3 [Transitional Provisions and Savings]:
Lord Belstead Lord Belstead moved Amendment No. 73:
Page 30, line 30, leave out ("Subsection (5A) of that section, as so amended,") and insert ("In section 18 of the 1976 Act, as amended by this Act, subsection (5A) ")
The noble Lord said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to
Lord Belstead Lord Belstead moved Amendment No. 74:
Page 33, line 2, leave out ("or 2 to this Act so far as relating") and insert ("to this Act, or in the repeals made by this Act, so far as relating (in either case) ")
The noble Lord said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Schedule 3, as amended, agreed to.
House resumed: Bill reported with the amendments.
House adjourned at a quarter before midnight.

  PARKHURST PRISON: CELL TEMPERATURES
  PARKHURST PRISON: CELL TEMPERATURES
  HM PRISONS: CHECKS ON VISITORS
  HM PRISONS: CHECKS ON VISITORS
  LIFE SENTENCE AND PAROLE POLICY: SCOTLAND
  LIFE SENTENCE AND PAROLE POLICY: SCOTLAND
  "HOME DEFENCE AND THE FARMER"
  "HOME DEFENCE AND THE FARMER"
  GARDEN FESTIVAL: SITE
  GARDEN FESTIVAL: SITE
  FISHING: TERRITORIAL WATERS
  FISHING: TERRITORIAL WATERS
  SHIPS ADAPTED FOR NAVAL SUPPORT: STATUS
  SHIPS ADAPTED FOR NAVAL SUPPORT: STATUS