Sitting of 7 February 1983

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

    Unemployment Statistics
    Mr. Ioan Evansasked the Secretary of State for Wales what are the latest unemployment figures expressed numerically and as a percentage in Aberdare, mid-Glamorgan and Wales; and how they compare with those for May 1979.
    The Secretary of State for Wales (Mr. Nicholas Edwards): On 13 January 1983, unemployed claimants in Wales totalled 180,664 or 17·5 per cent., in mid-Glamorgan; 34,102 or 17·0 per cent., and in Aberdare 4,021 or 18·3 per cent. In May 1979, unemployed claimants totalled 77,177 or 7·0 per cent. Comparative figures on this basis are not available for Aberdare and mid-Glamorgan, but in May 1979 unemployed registrants totalled 1,961 or 8·9 per cent. and 15,471 or 8·2 per cent. respectively.
    Mr. Evans: In view of the massive increase in unemployment—the real figure today is perhaps more than 200,000—will the Secretary of State re-examine those areas that have lost their special development area status? Does he agree that, in my constituency, where there has been a massive increase in unemployment, restoration of special development area status would help the National Coal Board to give the pilot scheme to the phurnacite plant? Will the Secretary of State examine that urgently?
    Mr. Edwards: The hon. Gentleman will realise that a major review of that type might lead to upgradings in areas other than Wales, which might damage Wales. The fact that we have such a massive factory building programme and are attracting so many new allocations shows that present policies are benefiting Wales. Although the hon. Gentleman did not say so, I am sure that he will welcome the National Coal Board's decision to go ahead with the Ancit development in his constituency for which he has pressed so often and for so long.
    Mr. Wigley: Does the Secretary of State agree that the fact that 36 unemployed people are chasing every job in Wales shows that the Government's employment policy has sunk to rock bottom and that there must be a change of policy if we are to see better times?
    Mr. Edwards: Of course I share the hon. Gentleman's worry. That is why we have such a massive programme
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    of special measures. We are spending about £1½ billion on special measures in Britain during 1982–83. In the light of the problem that the hon. Gentleman has described, I am sure that he will recognise the importance of the new youth training scheme, on which we plan to spend nearly £1 billion next year.
    Sir Raymond Gower: Does my right hon. Friend agree that the evil of unemployment is affecting centralised states such as France, and devolved ones and even small independent states such as southern Ireland equally and greatly? Does that not show the immensity of this international problem and evil?
    Mr. Edwards: Everyone recognises that unemployment is a major international problem that has got worse and is getting worse in many countries. I am sure that my hon. Friend will welcome the fact that some of the indicators, not only in Britain but in the United States and elsewhere, show signs of growing optimism for the rest of the year.
    Mr. Alec Jones: Although most of us accept that unemployment is a major international problem, why is it so much worse here than anywhere else? Why is it that countries that have fewer advantages than we are better off? Does the right hon. Gentleman agree that the greatest tragedy in the figures that he gave is for school leavers and that there are 321 unemployed school leavers in Aberdare, 2,000-odd in mid-Glamorgan and nearly 8,000 in Wales as a whole? What hope of a permanent job can he offer those young people?
    Mr. Edwards: I am sure that the right hon. Gentleman will agree that many of those school leavers are getting jobs and/or training under the programmes that we have announced. A high proportion of them are getting jobs in the time scale that was laid down by the Manpower Services Commission. I am sure that he will especially welcome the new youth training scheme and all the opportunities that it provides for the proper training of our work force. That must be one way in which to improve our competitiveness the lack of which is, perhaps, the essential reason for our loss of many markets and the fact that our position is worse than that of some other industrial countries.

    Storm Water Overflows
    Mr. Wardellasked the Secretary of State for Wales how many applications his office has received from the Welsh water authority for storm water overflows to be diverted into the public sewers; and how many have been approved.
    The Under-Secretary of State for Wales (Mr. Wyn Roberts): The water authority is not required to seek my right hon. Friend's consent for the connection of storm water overflows to public sewers.
    Mr. Wardell: When the current dispute in the water industry is over, will the Secretary of State investigate the adequacy of the Welsh water authority's assessment of the action necessary to stop raw sewage flooding into the homes of my constituents in Clydach?
    Mr. Roberts: We shall not have to wait until the end of the current dispute, because I understand that short-term alleviation has been undertaken and a thorough investigation to decide the optimum measures for

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    improvement is being put in hand by the Welsh water authority's sewarage agent, which is the Lliw valley borough council.

    Job Losses
    Mr. Andersonasked the Secretary of State for Wales how many jobs were lost in Wales by redundancy or closure in each of the last four years.
    Mr. Nicholas Edwards: The information is not available in the form requested. Redundancies involving 10 employees or more were reported as due to occur as follows: during 1979, 11,663; during 1980, 45,215; during 1981, 36,432; and during 1982 provisionally 23,577.
    Mr. Anderson: Do not those figures show how much deindustrialisation there has been in Wales? Is the Secretary of State not aware that all the reputable economic forecasters agree that if present Government policies continue there is bound to be a substantial increase in unemployment? What will he do about that? Does he accept that if there is, as there will be, an increase in unemployment, the effect on Wales will be greater than that on any other region because of our dependence on steel?
    Mr. Edwards: The hon. Gentleman will realise that those figures do not show how much deindustrialisation there has been, because one has to strike a balance between jobs lost and jobs created. A large number of jobs have been created. The figures do not include jobs among the self-employed, for example. The hon. Gentleman suggested that Wales would be worse off than any other region. That is not true. During the present recession, despite the steel losses, unemployment has risen less severely in Wales than in the United Kingdom as a whole. The improved infrastructure and the greater diversification of our industrial base mean that in the future, we will do better than we have done relatively in the past.
    Mr. Hooson: Does my right hon. Friend have any confidence that the policies that would revive inflation would contribute anything to the defeat of unemployment in Wales?
    Mr. Edwards: I am sure that they would not. One of the weaknesses of many of the policies advocated by the Opposition and others is that they involve not only inflation but some control over prices and incomes, without a guarantee or expectation that the desired effect can be delivered.
    Mr. John Morris: In his quieter moments, does the Secretary of State recall the way in which he used to attack the Labour Government when unemployment was a fraction of what it is now—and abused me personally, although I did not mind that? Is he proud of his stewardship of Wales during the past few years, or has he given up the ghost and has no idea of when unemployment will come down?
    Mr. Edwards: No Secretary of State who has been in office when unemployment has risen massively, as it did under my predecessor and in my period of office, can be proud of that fact. However, I can be proud of the fact that, despite the severity of the recession and the economic difficulties that we face, we have probably carried out a
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    greater improvement in the industrial infrastructure and attracted more new jobs than in any previous period in modern Welsh history.
    Mr. Alec Jones: There seems to be a difference between my right hon. and learned Friend and the Secretary of State. Does the Secretary of State not agree that the net job losses under the Government have been the worst in Wales since the war? Will he confirm that, in 1979, when the Labour Government were in office, 1,022,000 people were in employment in Wales—an all-time record high—while in June 1982, under the Conservative Administration, the total had fallen to 877,000, an all-time record low? How many of those job losses does he accept as being at least partly his responsibility?
    Mr. Edwards: We all know that the numbers of unemployed have increased and that there are fewer people in work than there were when the Labour Government left office, just as employment deteriorated during the period of office of the Labour Government. Unemployment more than doubled under our predecessors. However, all of us can take comfort from the knowledge that, despite those facts, during the past two years we have allocated an all-time record amount of new factory space—nearly 1·6 million sq ft in 1981, and nearly 2 million sq ft in 1982. It is remarkable that, despite the recession, we are being so successful in attracting new jobs and the new industries that will provide the jobs of the future to which we all look.
    Mr. Alec Jones: I am sure that the Secretary of State would not want to mislead the House.
    Mr. John Morris: Hear, hear.
    Mr. Jones: The facts clearly show that the numbers of people in employment in Wales rose from the time when the Labour Government took office in 1974 until they left office in 1979, which is the complete opposite of what has happened under the Conservative Administration.
    Mr. Edwards: If the right hon. Gentleman looks tomorrow at what I have said, he will see that I in no way misled the House and that, in giving my answer, I was careful to refer to the fact that unemployment more than doubled under the Labour Government.

    Welsh Development Agency
    Mr. Wigleyasked the Secretary of State for Wales whether he proposes to make any changes to the guidelines issued by him to the Welsh Development Agency; and if he is satisfied with the performance of that agency.
    Mr. Nicholas Edwards: New guidelines have recently been issued covering the agency's land reclamation function, and a copy is available in the Library. I do not propose to make any major changes in the guidelines for the agency's other main functions at the moment, although this is kept under review. I am satisfied with the agency's achievements to date, but I am having discussions with the recently appointed chairman and the board about its future strategy.
    Mr. Wigley: Does the Secretary of State accept that, if any of the guidelines are to be changed, it is those for the creation of new jobs in Wales that should be changed? That is where the most patent failure of the agency is evident. Is he not aware of the consultants' report—the

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    Larsen Sweeney report—which was published a few months ago, which referred to the Welsh Development Agency as being the subject of anecdotal amusement? Does not the right hon. Gentleman feel that there is something drastically wrong, which needs to be put right?
    Mr. Edwards: It is not just to say that the performance of the WDA is the subject of amusement when, since it was set up, it has constructed about 8 million sq ft of factory space, 5 million of it under the Conservative Government, and has occupied much of that factory space in the middle of a recession. There is a change in future strategy. There has been a sharp increase in the approved investment portfolio from £10·5 million to £15 million during the recent past. It is developing the investment activities of Hafren, its new investment subsidiary. The new chairman is carrying out an urgent review of its strategy with the board. I am about to have a meeting with the board to discuss its future policy.
    Mr. Tom Ellis: Does the Secretary of State recall that last May he told the House that he had asked the agency to reconsider its long-term strategy? Has the agency now embarked on a new course? If so, in what direction is it going?
    Mr. Edwards: Since then, Hafren has been established and there has been an upturn in the investment porfolio. A new strategy document was prepared, but the former chairman, Mr. Stephen Gray, died during the preparation of the report. I thought it right to allow the new chairman time to consider the report before meeting the board, which I intend to do within the next couple of weeks.
    Sir Anthony Meyer: Is it not true that the best hope for jobs in Wales lies increasingly not so much in manufacturing as in service industries? Should not that fact be reflected in the guidelines that are given to the WDA? Might not such tourist projects as a theatre in Rhyl, in which the WDA should begin to interest itself, be taken into account?
    Mr. Edwards: The present guidelines give a good deal of flexibility to the agency. It can support non-manufacturing industries. I agree that there should be a proper balance, and I am seeking to achieve it. The Rhyl sun centre is an example of how a service project can give substantial job opportunities to the area. We want to have a proper mix in every part of Wales.
    Mr. Barry Jones: Does the Secretary of State agree that to achieve its finest potential the agency would require the Government to reflate the economy drastically, albeit in a controlled way? May I remind the Secretary of State that in Clwyd and Gwynedd manufacturing jobs in the pipeline over the next four years total only 3,750? When does he think there may be news of the Finnish pulp paper mill at Shotton?
    Mr. Edwards: I believe that we shall have a decision on that matter before much longer. I am sure that the hon. Gentleman will welcome the recent annnouncement by the Welsh Development Agency of a £6 million-plus reclamation project in the area. Whatever the hon. Gentleman's views of reflation, most people in industry would think that low interest rates and the keeping down of industries' costs are perhaps rather more important for future job creation.

    A55 (Bodelwyddan)
    Sir Anthony Meyerasked the Secretary of State for Wales when he expects to provide short-term alleviation of the dangers to motorists and pedestrians arising from the configuration of the A55 Bodelwyddan.
    The Under-Secretary of State for Wales (Mr. Michael Roberts): As I told my hon. Friend on 22 November, the county council has been requested to improve the junction between Ty Fry lane and the trunk road. Its investigations show that the necessary diversion of underground services would cause a substantial delay in completing the work. A simpler scheme which could be implemented quickly is now being prepared.
    Sir Anthony Meyer: I thank my hon. Friend for that informative reply, but is he aware that it is now 10 weeks since he undertook to study carefully a constructive suggestion that I made for the immediate improvement of the position at Bodelwyddan by painting double white lines along the road? Can he give me any news of that?
    Mr. Roberts: The initial report from the county surveyor does not show that the use of double white lines would improve safety. However, I am studying that point carefully. I know how strongly my hon. Friend feels and I can assure him that agreement about remedial measures will be reached quickly and action to implement such measures will follow immediately.
    Dr. Roger Thomas: Further to the development on pedestrian safety on trunk road development in Wales, will the Minister consider sympathetically the welter of protest about pedestrian crossings and underpasses, particularly on the Carmarthen southern bypass at Pen-sarn?
    Mr. Roberts rose—
    Mr. Speaker: Order. That does not arise on this question.

    Welsh Development Agency
    Mr. Knoxasked the Secretary of State for Wales how many new factory units and how many square feet of factory space have been built by the Welsh Development Agency since its inception.
    Mr. Nicholas Edwards: Between January 1976 and December 1982 the Welsh Development Agency completed 1,022 advance factory units, 11 bespoke factory units and 66 factory extensions, totalling in all just over 8 million sq ft.
    Mr. Knox: How many of those factory units are occupied? Is my right hon. Friend satisfied that the supply is sufficient to meet the demand, particularly if there is an upturn in the economy?
    Mr. Edwards: The vacancy rate has risen to about 15 per cent. but in view of the scale of the factory building programme that has been carried out, that is not surprising. We expect those figures to fall if allocations continue at anything like the rate of the past couple of years.
    Mr. Hudson Davies: Although one wishes to recognise the work of the Welsh Development Agency, does the Secretary of State concede that it is in the end occupancy rather than buildings that matters? How much of the 8 million sq ft already built is at present unoccupied, either through having been vacated or through failure to obtain tenants?
    Mr. Edwards: I cannot give an immediate answer, but I shall write to the hon. Gentleman and give him the present exact unoccupied square footage. The vacancy rate at present is approximately 15 per cent., which is by no means unreasonable in present circumstances. I remind the hon. Gentleman again that in 1981 in Wales in Government factories generally, including those of the WDA, we allocated about 1·6 million sq ft of factory space. In 1982 the figure was nearly 2 million sq ft. Individual agencies are also doing well. One of our problems in Cwmbran is that it has done so well that there is a shortage of factory space.
    Mr. Alec Jones: May I remind the Secretary of State that the vast majority of Opposition Members wish to see the WDA move from one success to another? Many of us, therefore, were somewhat disturbed to see a recent HTV programme which contained wide discrepancies between the figures for job creation given by the WDA and those given as a result of the HTV research. We were somewhat dismayed to hear that the WDA had refused to take part in the programme. Will the Secretary of State assure us that no pressure was put on the WDA not to take part in the programme? Will the Secretary of State invite, if not direct, the WDA to publish a leaflet giving the facts so that we can all see and judge the true position?
    Mr. Edwards: I was about to tell the right hon. Gentleman that the matter was entirely one for the WDA, when he asked whether any pressure had been put on it. I confess that I never heard about that broadcast, and I am certain that no pressure was applied to the WDA. It is entirely up to the WDA whether it chooses to be represented in a particular broadcast. I shall certainly draw the board's attention to the right hon. Gentleman's points. I am sure that it will consider responding.

    Unemployment Statistics
    Mr. Roy Hughesasked the Secretary of State for Wales what is the latest figure of the number of males unemployed in Newport, Gwent; and what percentage of the male working population in Newport this represents.
    Mr. Nicholas Edwards: On 13 January male unemployment in the Newport travel-to-work area totalled 10,650, or 18·8 per cent.
    Mr. Hughes: As the Secretary of State read out those appalling figures, should he not have been hanging his head in shame? Does he appreciate that he is talking about Newport, which is literally the industrial capital of Wales? It has a favourable geographical position and excellent communications, but it has been brought to its knees solely by the Government's monetarist policies. Should not the Secretary of State resign?
    Mr. Edwards: I share the hon. Gentleman's anxiety about unemployment problems in the area. However, one would not have gathered from his question that the area is particularly well placed to attract new industry. At present, Mitel is recruiting absolutely flat out at Caldicott; Inmos is also recruiting flat out; AB Electronics has recently taken an investment decision that is of importance to the area; Avana Bakeries is also engaged on a major expansion project, and most recently we have information of interest from a continental high technology company for
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    the Gilwern site in north Gwent. Gwent is particularly well placed at the moment and there are a great many exciting projects building up to full employment.

    Welsh Development Agency
    Mr. Ellisasked the Secretary of State for Wales what proportion of the Welsh Development Agency's total expenditure in each of the past three years has gone towards (i) providing business premises to let and (ii) purchasing holdings in assisted companies in (a) manufacturing and (b) service industries.
    Mr. Nicholas Edwards: In 1979–80, 63·3 per cent., 5·5 per cent. and 0·5 per cent. respectively; in 1980–81, 71·8 per cent., 0·7 per cent. and 0·1 per cent. respectively; and in 1981–82, 69·6 per cent., 2·3 per cent. and 0·2 per cent. respectively.
    Mr. Ellis: Does the Secretary of State agree that there is an urgent need for the agency to undertake a much more direct entrepreneurial role in Welsh industry? Does he further agree that the figures that he has given show that virtually no progress has been made in that direction? Will he undertake to have a word with the chairman of the board with a view to moving in that direction?
    Mr. Edwards: I partly answered the hon. Gentleman's question in earlier answers. He should recognise that the figures do not represent the take-up of the net approved portfolio investments made during the past year, during which there has been a sharp upturn. As a result, the agency expects to make 100 new investments, including Hafren Investments, in the current financial year. That represents a significant change of direction by the agency. It is precisely those points that I shall discuss when I meet the board.
    Mr. Anderson: Does the Secretary of State recall that when, in 1980, we had the shocking news about the steel redundancies throughout Wales, he came to the House and made a bold prediction of the job effects of the increased allocation by the WDA and the Cwmbran development corporation? How has reality measured up to his prediction in 1980?
    Mr. Edwards: We built more factory space than we had planned. We have certainly allocated more factory space during the past few years that I would have forecast then, and I am confident that when all those jobs materialise, which will happen over two or three years, our forecast will be amply justified.
    Mr. D. E. Thomas: Can the Secretary of State confirm that the number of empty factory premises belonging to the agency is nearer 40 per cent., and not 15 per cent. as he quoted in answer to an earlier question?
    Mr. Edwards: No, I cannot confirm the information given by the hon. Gentleman. I have given him the vacancy rate. It is also fair to say that, apart from the WDA agencies, many private factories are available in Wales. We should look not only at Government factories but increasingly at Government and private factories together to get a true picture of the availability of factory space and our success in getting that factory space occupied.

    Water Rates
    Mr. Geraint Howellsasked the Secretary of State for Wales what representations he has received from farming organisations in Wales regarding water rates; and if he will make a statement.
    Mr. Wyn Roberts: None during the past year.
    Mr. Howells: Does the Minister believe that those who live in Wales should pay a higher water rate than those who live in Birmingham or London? If he does not, what are his plans?
    Mr. Roberts: The hon. Gentleman understands the system that resulted from the Water Act 1973 and that which is proposed in the Bill before the House. It provides for different charges to be levied in different areas. The way to reduce those charges, as we have repeatedly said, in Wales as elsewhere, is by increased efficiency and productivity. We are trying to achieve that through a new, more businesslike authority.
    Mr. Wigley: Will the Minister link up with both the farmers organisations and the Welsh water authority to discuss leaking pipes on farms? Is the Minister aware that a farmer in my constituency received a bill for £800, which is about 10 times his normal bill, because a pipe was leaking on his land and he was charged for the water that had disappeared without anyone noticing? Will the hon. Gentleman raise that point with the authorities?
    Mr. Roberts: The maintenance of a water supply pipe beyond the water authority's communication pipe is the responsibility of the owner or occupier. Regular checks of the meter and the supply pipe should lead to early detection of leaks.
    Sir Anthony Meyer: If the water workers, in threatening to endanger the health of the public, can obtain for themselves the substantial pay rise for which they are striking, will that make it any easier for the Welsh water authority to keep down water charges?
    Mr. Roberts: This question relates to representations from farming organisations in Wales. There is another question about the strike, to which I hope my right hon. Friend will reply.
    Dr. Roger Thomas: What financial relief is available to hill and upland farmers whose costs for piped water connections are more prohibitive than ever?
    Mr. Roberts: We have had no representations on that point, but I should be happy to consider the matter.

    Unemployment Statistics
    Mr. Ednyfed Daviesasked the Secretary of State for Wales what is the current level of unemployment in Wales; what percentage increase this represents since the same date in 1979; and what are the corresponding figures for mid-Glamorgan.
    Mr. Nicholas Edwards: On 13 January 1983 unemployment claimants in Wales totalled 180,664 and in mid-Glamorgan 34,102. In Wales this represents an increase of 109·1 per cent. since January 1979. A comparable figure for mid-Glamorgan is not available.
    Mr. Hudson Davies: How can the Secretary of State blandly state those figures without expressing horror at the
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    enormity of the unemployment problem in Wales, which has been created by the Government's policies? Is he aware that, in human terms, the 34,102 unemployed in mid-Glamorgan equate with only 752 vacancies? For every 45 people unemployed, there is only one vacancy. In Bargoed in my constituency the comparable figures are that, for every 57 people unemployed, there is only one vacancy. Is it not time that the Secretary of State made his personal protest against the effects and implications of the Government's policies?
    Mr. Edwards: It may be characteristic of the party that the hon. Gentleman represents that it is more interested in expressions of emotion and protest than in practical alternative policies. His constituents are looking for policies that will improve the position, but they will look in vain to his party.
    Sir Raymond Gower: As my right hon. Friend has made it clear that he is anxious to promote any means of greater employment, provided that it does not induce the return of inflation, will he pay special attention to the assurances of the house building organisations in Wales that, with modest expenditure—far less than the expenditure on manufacturing industry—they could create many jobs with a moderate increase in production?
    Mr. Edwards: My hon. Friend will be aware that almost every real expansion of private house building that has ever taken place has been on the basis of low interest rates, which are a prime objective of Government policy. He will also be aware that, at present, substantial resources are available to local authorities in Wales for house repairs, renovation and building that are not being fully utilised.
    Mr. Ioan Evans: Is the Secretary of State aware that the Labour party, the TUC and the CBI have put definite proposals to the Government on how to reduce this massive unemployment? Do the Government realise that they must reverse the policies that they have put forward while in office, which, although there is a world recession, have added to the recession by the deliberate creation of unemployment?
    Mr. Edwards: All those organisations have put forward massive inflationary packages and, linked to them, proposals for controlling prices and incomes without a demonstration of how they would be more likely to succeed now than they did in the past.

    National Parks Authorities (Membership)
    Mr. Hoosonasked the Secretary of State for Wales what information he has as to the proportion of members of national parks authorities in Wales who are resident within the park areas; and whether this proportion has varied significantly since May 1979.
    Mr. Nicholas Edwards: The proportions are 56 per cent. for the Brecon Beacons, 33 per cent. for the Pembrokeshire coast and 44 per cent. for Snowdonia. The corresponding proportions in 1979 were 41 per cent., 33 per cent. and 33 per cent.
    Mr. Hooson: Will my right hon. Friend ensure that as many as possible of his appointees to the authorities are people who reside in the national parks, so as to ensure greater responsiveness to the interests of local people?
    Mr. Edwards: My hon. Friend will be aware that two-thirds of the appointments to national park committees are the responsibility of county and district councils and that in making my appointments I am primarily concerned with the skills and expertise that individuals will bring, rather than with local representation. None the less, my hon. Friend will be glad to know that, during this Government's term in office, appointments by both the local authorities and myself have represented an increase in the number of those who reside within the national parks.
    Mr. Roy Hughes: May we have the same criteria established for having local people appointed to our public bodies, because it is noticeable that there have been some grave exceptions in the appointments made by the Secretary of State? One example is the unknown Ross solicitor who suddenly found himself chairman of the health authority in Gwent.
    Mr. Speaker: Order. That does not arise on this question.
    Mr. D. E. Thomas: Will the Secretary of State explain the criteria for the selection of his nominees to national park authorities, because some nominees who have been approved by the Countryside Commission are then turned down by the Welsh Office, whereas members of some political parties are nominated by the Welsh Office?
    Mr. Edwards: There is no truth in the hon. Gentleman's allegation. I discuss the appointments with the Countryside Commission. The hon. Gentleman will find that I have appointed a wide variety of interests to the national parks committees and that I have included members from several political parties.

    Forestry Commission (Manpower)
    Mr. D. E. Thomasasked the Secretary of State for Wales what was the total number employed by the Forestry Commission in Wales in 1960, 1970, 1980 and at the latest date for which figures are available.
    Mr. Nicholas Edwards: In 1960 the number of employees was 3,410; in 1970 - 1,809; in 1980 - 1,350 and at the end of January 1983 - 1,195.
    Mr. Thomas: Does the Secretary of State accept that the cash limits policy being imposed by his Government on the Forestry Commission is now leading to a substantial reduction in the living standard of forestry workers? Will he confirm that the Treasury has told the Forestry Commission that there will have to be a pay rise of under 3 per cent. to forestry workers in the next financial year?
    Mr. Edwards: I cannot agree with the hon. Gentleman. There has always been a relationship between the pay of forestry workers and that of farm workers, but account must also be taken of the pension and other associated benefits that are available to forestry workers. These were taken into account in the recent round of pay negotiations and will no doubt be taken into account in the next round.

    Council House Sales
    Sir Raymond Gowerasked the Secretary of State for Wales what is his most recent estimate of the numbers of tenants of local authorities and of housing associations in Wales, who have purchased their dwellings since May 1979; and if he will make a statement.
    Mr. Wyn Roberts: Between May 1979 and September 1982, 22,293 local authority dwellings and 12 housing association dwellings were sold to tenants in Wales. A further 1,181 dwellings were sold by the Cwmbran development corporation and the Development Board for Rural Wales. These figures amply demonstrate the strong desire among public authority tenants to own their own homes. They underlie the Government's proposals in the Housing and Building Control Bill to extend the right to buy to others who have been excluded hitherto.
    Sir Raymond Gower: Is my hon. Friend aware that this is much better than the report he gave me some months ago? Does he expect this good progress to continue?
    Mr. Roberts: Certainly. By the end of September about 43 per cent. of the total number of applications had resulted in sales. We are, of course, continuing to monitor authorities to ensure that steady overall progress is made in Wales.
    Mr. Anderson: Does the Minister recall the terms of a recent written reply to the effect that each local authority receives just over £3,000 for each unit of accommodation sold, yet has to spend in excess of £23,000 to replace that unit? How does that possibly make sense, and what lessons does the Welsh Office draw from this discrepancy?
    Mr. Roberts: The hon. Gentleman knows, because I have told him and the House on many occasions, that simply because a council house is sold it does not mean that it is removed from the total housing stock. Of course, local authorities gain revenue from the sale of council houses that can be applied to meet housing needs.
    Sir Anthony Meyer: Is my hon. Friend aware that I am receiving an increasing number of complaints from tenants who have tried to buy their council houses from the borough of Rhuddlan? If this authority is experiencing particular difficulties in maintaining the programme, will my hon. Friend arrange for it to receive advice and help as necessary?
    Mr. Roberts: My hon. Friend is absolutely right. There is certainly room for improvement by a small number of authorities. I am afraid that I have to say that Rhuddlan is among those authorities.

    Water Industry (Dispute)
    Mr. Gristasked the Secretary of State for Wales if he will detail the effects of the water workers' strike in Wales; and if he will make a statement.
    Mr. Nicholas Edwards: A large number of people in Wales have been made to suffer anxiety and inconvenience by this strike. Currently, almost 1 million people in the Welsh water authority's area are having to boil water, while 3,700 properties—that is, about 10,000 people—are without a piped supply. A substantial offer—7·3 per cent. over 16 months—is on the table and is available immediately, and the independent mediator's report presents clear opportunities, given genuine improvements in productivity, for increased earnings. The way is open, and I hope that the water workers will return to work immediately so that negotiations may continue and bring to an end a needless dispute that is causing great distress to the sick, the disabled, the elderly and the general public.
    Mr. Grist: Will my right hon. Friend confirm that Wales is the area worst hit by this shameful strike, that the position is getting worse, and that private contractors and, if necessary, troops will be used wherever necessary?
    Mr. Edwards: I am not sure that it is right that the position is getting worse, although the number of those having to boil water has certainly increased. The number without piped supplies has been reduced. The right way forward at the moment is to deal with each problem as it arises. I am sure, however, that it is right to urge workers to go back to work and to continue to negotiate in those circumstances, and not while they are still causing so much widespread inconvenience, on the arrangements that offer the genuine possibility of further increases.
    Mr. Alec Jones: Has the Secretary of State seen today's Western Mail, which shows that a grade I waste inspector who produced a pay packet of £85·85 is expected to believe from the television and wireless that his £85·85 has mysteriously become the much publicised figure of £135? Does the Secretary of State agree that the use of average figures does not help the average worker understand the problems? Does he further agree that the best place to settle the strike is around the negotiating table and not on television chat shows?
    Mr. Edwards: The figures that are being quoted are from the new earnings survey, which is being used by the unions in their comparisons in support of their claim. I entirely agree with the right hon. Gentleman, however, that the proper place to settle is around the negotiating table. As there is a very reasonable offer on the table of 7·3 per cent. for 16 months, and as paragraph 8 of the mediator's report has revealed the opportunities that are available for further increases, I hope that workers will go back to work, will negotiate and will not continue to cause inconvenience. They will, apart from anything else, of course, be losing substantial earnings so long as they remain out.

    Unemployment Statistics
    Mr. Barry Jonesasked the Secretary of State for Wales by what amount unemployment has increased in the Deeside travel-to-work area, Clwyd and Wales since May 1979; and if he will make a statement.
    Mr. Nicholas Edwards: Between May 1979 and January 1983 the number of unemployed claimants in Wales increased by 103,487. In the Shotton travel-to-work area and Clwyd between May 1979 and October 1982 the number of registered unemployed increased by 5,837 and 13,779 respectively; between October 1982, when the new basis was introduced, and January 1983 the number of unemployed claimants increased by 360 and 1,584.
    Mr. Jones: Will the right hon. Gentleman do his utmost to speed up the tactical and strategic road improvements that are required in my constituency to hasten industrial regeneration? Does he know that the Plough Lane district distributor road is unlikely to be started until late in the 1980s? In a strategic sense, what help will he give to Clwyd county council to bring about the third crossing of the River Dee, which will give a major boost to industrial estates in Flint and on Deeside?
    Mr. Edwards: I agree about the importance of the proposals for a third Dee crossing. I discussed the report
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    of the Clwyd county council and the Alyn and Deeside district council at an interesting and useful meeting on 19 January. They agreed that it was necessary to provide much more detailed information about the proposals, and discussions will continue on that basis.

  CHURCH COMMISSIONERS

    Vicarages and Parsonages
    Mr. Greenwayasked the hon. Member for Wokingham, as representing the Church Commissioners, if he will make a statement on the condition and suitability of vicarages and parsonages.
    The Second Church Estates Commissioner, Representing the Church Commissioners (Sir William van Straubenzee): There are at present 8,800 official parsonage houses, of which 7,200—82 per cent.—are regarded as providing suitable accommodation. Whilst the commissioners make substantial grants to dioceses to assist with the cost of repairs, maintenance is a diocesan responsibility.
    Mr. Greenway: I thank my hon. Friend for his reply. Is it not a fact that too many incumbents are still required to live in unmanageably large houses and that some dioceses could be more punctilious in the maintenance of these houses? Is it not also a fact that some parishes still treat their vicar's parsonages as though they were meeting places rather than the home of the incumbent?
    Sir William van Straubenzee: Substantial progress has been made in the matter raised by my hon. Friend. For example, during the past five years some 1,076 parsonage houses have been replaced, by building or by purchase, at a cost to the Church Commissioners of £9·2 million in grants. If my hon. Friend has a specific case in mind in which a diocese has not performed as he thinks it should with regard to maintenance, if he will give me if e details I shall gladly pass them on.

    New Church Buildings
    Mr. Murphyasked the hon. Member for Wokingham, as representing the Church Commissioners, what guidelines are provided for the erection of new church buildings.
    Sir William van Straubenzee: In 1975 the Council for the Care of Churches published a document entitled "Procedure for new Church Buildings: Guidelines". I am sending my hon. Friend a copy.
    Mr. Murphy: I should like to thank my hon. Friend, as I am sure that the reply will be most helpful. Will he say whether it is the practice of the Church Commissioners to take soundings as to the use of new church buildings for a wider local community use?
    Sir William van Straubenzee: It is not generally understood that the commissioners become involved only if it is proposed to erect a consecrated building. I am sorry that that is such a narrow point, but it is one I have to make. I am perfectly certain, however, that in modern days both the commissioners and, in cases where they are not involved, other Church authorities, would today always have regard to the wider, more general use of a church building than purely for public worship.

  EDUCATION AND SCIENCE

    Museums and Galleries (Touring Exhibitions)
    Sir David Priceasked the Secretary of State for Education and Science what steps he is taking to assist the national museums and galleries in organising touring exhibitions for the benefit of the provinces.
    The Minister for the Arts (Mr. Paul Channon): The national museums and galleries already have extensive arrangements for loans to the regions, which I hope will be maintained. In addition, the Government indemnity scheme can provide cover for loans, and the Arts Council operates travelling exhibition services and an information bulletin.
    Sir David Price: I thank my right hon. Friend for that reply. Does he agree that the more that the national museums and galleries centred in London can take selected parts of their massive collections around provincial Britain, the more we shall be able to bring together the entire nation in its enjoyment of the arts? Is this not part of the one-nation concept?
    Mr. Channon: I agree. The national museums do a great deal already in taking their collections to the provinces. I hope that that will continue and, if possible, increase. If my hon. Friend is interested, I shall send him a list of all the exhibitions and loans that are taking place from the national museums.
    Mr. Greville Janner: When considering how to help touring exhibitions, will the right hon. Gentleman please bear in mind the need for exhibitions of decorative arts and history and not merely exhibitions of paintings? Areas and centres such as the Leicester New Walk art gallery are already well served by the Arts Council's provision of painting exhibitions.
    Mr. Channon: Yes, I agree. I think that there are exhibitions of the sort that the hon. and learned Gentleman has in mind. He makes a fair point.
    Mr. Jessel: Would the provinces not further benefit from the permanent loan of some of the surplus stocks—my hon. Friend the Member for Eastleigh (Sir D. Price) referred to "massive collections"—and large quantities of works of art which the national museums do not have room to display?
    Mr. Channon: Some of the national museums display everything that they own. That is done, for example, by the National gallery. The Tate gallery and other galleries have pictures that they do not show. This problem would be resolved at the Tate gallery to some extent if the Tate gallery north were to go ahead. There are other permanent exhibitions, but I take my hon. Friend's point.

    Royal Opera House and Royal Shakespeare Company
    Mr. Blackburnasked the Secretary of State for Education and Science if he will give further details of the special financial scrutiny which he announced on 20 December 1982, Official Report, c. 665.
    Mr. Murphyasked the Secretary of State for Education and Science if he will make a statement about the proposed scrutiny of the finances of the Royal Opera House.
    Mr. Channon: The terms of reference for the financial scrutinies will be:
    "To examine the financial affairs and prospects of the Royal opera house and the Royal Shakespeare company and to make recommendations"
    The study team will be led by Mr. Clive Priestly, undersecretary in the Management and Personnel Office, and comprise an independent consultant, Mr. David Allen, and an accountant, Mr. Ian Trumper.
    Mr. Blackburn: I congratulate my right hon. Friend on the increased support for the arts and on the assurance that he has given this afternoon. Does he accept that the financial scrutiny of the Royal opera house and the Royal Shakespeare company should be in line with that of other national companies and with overseas companies such as La Scala, Milan?
    Mr. Channon: I thank my hon. Friend for his kind remarks. With the Royal opera house it will be necessary to make some comparisons with what happens at other great international opera houses. These organisations receive large sums of public money and from time to time there should be special financial scrutiny. This is what we have arranged.
    Mr. Murphy: May I also congratulate my right hon. Friend on introducing these financial scrutinies? How long will the study team take to present its report? Secondly, will the staff be consulted?
    Mr. Channon: Yes, the staff will certainly be consulted at all stages of the scrutinies. I hope that the studies will take about six months.
    Mr. Eastham: Has the Minister's attention yet been drawn to a letter that I sent him on 5 January? It dealt with correspondence that I had received purporting to have come from a political adviser at the Department of the Environment, Mr. Ed Berman. He advised arts associations in the north-west that there was £1·5 billion sloshing about and that they had only to apply to local authorities for the money? Will the Minister please make a statement on this?
    Mr. Channon: I must confess that I do not recall the hon. Gentleman's correspondence. I shall check immediately. It seems that a very surprising remark was made. I shall look into the matter urgently.
    Mr. Nicholas Baker: Will my right hon. Friend adress his financial scrutiny of the Royal opera house to the charging and ticket issuing policy of that body? Is he aware that many of us feel that its policy has restricted the number of people who have been able to obtain tickets, and that now, in changed financial circumstances, few people apply for tickets because they believe that the number of those who obtain them is very small?
    Mr. Channon: Ticket prices and box office policy will be among the matters that the scrutiny team will consider. It has always been the policy of the Royal opera house to offer comparatively cheap tickets in addition to very expensive ones so that people of modest means can go to the Royal opera house.
    Mr. Whitehead: In view of the Rayner connections of this group, will the right hon. Gentleman urge it not to follow the unhappy precedent of the recent Rayner report on the Victoria and Albert museum, and to visit the various institutions that it is surveying while they are open? Will

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    accountants' or consultants' fees that stem from this exercise come only after tendering for the work that has to be done?
    Mr. Channon: No. I think that it has been decided who will undertake the scrutinies, as is the normal practice. Without accepting what the hon. Gentleman said about the scrutiny of the Victora and Albert museum, I can assure him that the scrutineers have every intention of making exhaustive visits to both organisations.

    Arts Council (Touring Budget)
    Mr. Silvesterasked the Secretary of State for Education and Science whether any changes have been made by the Arts Council in the touring budget following his statement of 20 December 1982, Official Report, column 664–65.
    Mr. Channon: The current allocation for touring in England in 1982–83 is £7·5 million, including an additional sum of £400,000 provided from the supplementary grant announced on 20 December 1982. The touring budget for 1983–84 is £7,865,000.
    Mr. Silvester: I congratulate my right hon. Friend on his care about touring. Does he recognise that one of the distressing aspects of the saga of the visit of the Royal opera house to Manchester was its on—and-off nature, despite the great deal of investment and commitment that the operation received? Is he prepared to say that with the new arrangements people will be able much more to rely upon the visits taking place, instead of the previous rather doubtful prospect?
    Mr. Channon: I understand my hon. Friend's concern. I am pleased to say that the Royal opera company has been able to announce that its visit to Manchester will take place later this year. We must all hope that it will be a tremendous success. Future plans will be discussed in detail with everyone concerned, including the Greater Manchester council and the city of Manchester. I hope that we can avoid future uncertainties in this way.
    Mr. Whitehead: Bearing in mind the outrage in Greater Manchester when the Royal opera house originally called off its visit, does the right hon. Gentleman agree that we should say publicly in the House that we think it should be an annual obligation on the national companies to tour in this way, and that they should not merely return to touring when they have been bailed out by the payment of a one-off sum?
    Mr. Channon: Most of the national companies tour extensively. The Royal opera house has special problems, including enormous costs. There are those who consider that the money could be better spent than on tours by the Royal opera house. I accept that the national companies have an obligation to tour.

    Arts Council (Theatre Grants)
    Mr. Greenwayasked the Secretary of State for Education and Science what was the total Arts Council grant to theatres in the last year for which figures are available.
    Mr. Channon: The Arts Council estimates that its grants to theatres in Great Britain in 1982–83 will total just under £26·3 million compared with the previous year's total of nearly £23·1 million.
    Mr. Greenway: I welcome the increase that my right hon. Friend has mentioned and I thank him for it. Does he agree that the Royal Shakespeare company has given outstanding service to the arts in both London and Stratford on Avon and in tours around the world? What specific help is the Arts Council giving the company in grants this year?
    Mr. Channon: I agree entirely with my hon. Friend about the Royal Shakespeare company. This year it received an extra settlement of £850,000 from the supplementary grant that I announced on 20 December 1982. It is to receive grant next year of £3·6 million as opposed to £3 million last year. Extra money has been made available to it, exceptionally, of nearly £1½million.
    Mr. Campbell-Savours: Is it not true that there is a clear emphasis in allocation of Arts Council grants towards the more affluent areas, leaving the industrial areas very often culturally deprived? What will the Minister do to redress that imbalance, particularly as the quality of life is so closely linked to the pursuit and support of the arts?
    Mr. Channon: I do not accept the hon. Gentleman's premise. He may be interested to know that this year the basic grant for the northern area was £1·72 million, which was a rise of 11 per cent. over last year, and that in addition it received a further £60,000 in supplementary grants. There has thus been a substantial increase for the north.

Telecommunications Policy
3.30 pm
The Minister for Industry and Information Technology (Mr. Kenneth Baker): With permission Mr. Speaker, I will make a statement about telecommunications policy.
After privatisation, British Telecommunications should be able to develop and diversify in a dynamic manner not only in the area of existing telecommunications services but in the new information technology systems on a worldwide basis. This should benefit the customer, the country, investors, BT and its staff. The Government recognise the public concern that there should be no opportunity for BT plc to fix excessive charges to customers in the areas where it has a virtual monopoly for the time being. To this end my right hon. Friend the Secretary of State announced Second Reading of the Telecommunications Bill the appointment of Professor Stephen Littlechild of Birmingham university to carry out a study of these issues. Professor Littlechild's report is being published today and copies are available in the Vote Office. The Government are grateful to Professor Littlechild for undertaking this important task.
Professor Littlechild has made two major recommendations concerning the price regime after privatisation and the extent of competition. As regards pricing policy, he recommends that BT plc should be obliged for five years to keep below the increase in the RPI any increase in its prices for domestic rentals, local calls and other services of particular concern taken together. The Government accept this approach but will want to give further consideration to the range of services to be included within the price limitation, for example charges for installation and trunk calls. We shall also be considering the period for which it should apply. It will be important that the precise formula should be seen to be soundly based and fair both to the consumer and to BT. BT will be obliged to observe the arrangement finally determined and the powers of the Director General of Telecommunications under the Bill are adequate to ensure that it is complied with. These arrangements are aimed at securing a continuing improvement in BT's efficiency and a continuing reduction in the real cost of telephone services to the consumer across the country.
Professor Littlechild also says that competition is by far the most effective protection against monopoly. He sees his price limitation proposal as a safeguard that is required only until competition develops. The Government accept this approach and accordingly I can now announce further initiatives to promote competition.
First, customers who have standard BT sockets will be free to purchase from any supplier the first telephone for connection to direct exchange lines. I shall table an amendment to the Telecommunications Bill to give effect to this change. BT and the manufacturing industry need time to adjust, but I intend that by the end of next year all customers who want to exercise this choice will be able to do so.
Secondly, the maintenance of all new call routeing apparatus will be opened to competition by persons approved by the Secretary of State. BT itself will remain free to offer a maintenance service, but on a fair, commercial basis. I intend to introduce an amendment to the Telecommunications Bill to provide for licensing of
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those maintaining call routeing apparatus. I shall also be consulting BT, the industry and other interested parties on the phasing in of these arrangements, which I expect to be completed within three to four years. The ending of the prime instrument monopoly and of BT's monopoly over the maintenance of all call routeing apparatus, means that the entire market for new telecommunications apparatus will be open to competition.
Thirdly, the Government accept that the current restrictions on Mercury's supply of international services should be eased. This will require discussions with other Governments. A study on the provision of international services is nearing completion and after consultation with interested parties I shall make a further statement. I would hope to be able to do so by the end of April this year.
Fourthly, the Government accept the principle of reducing restrictions on the resale of capacity on private telecommunication circuits leased from BT and other public telecommunications operators, but I recognise that this could have considerable implications for BT's revenue. I shall want to consider the terms and timing of introducing the changes after consultation with BT and other operators.
Fifthly, the Government believe that competing public networks should have the right to interconnect on appropriate terms with BT's networks. In return, BT must have the right to charge operators such as Mercury and the two cellular radiophone networks access fees on a non-discriminatory basis, which will contribute towards the cost of providing the national asset of our country-wide local networks. BT's own trunk and international divisions should also be subject to access fees on the same basis. These access fees will generate a significant revenue for BT to cover emergency 999 services, which are free, and any losses incurred on call boxes and other services, particularly those in remote and rural areas. The access fees will safeguard the continued provision of these services without subsidy from the taxpayer, thus maintaining the universal service.
The Government recognise the importance to the national economy of BT's vital role in telecommunications. We are phasing in these new measures of competition in step with progress towards moving BT out of the public sector and out of the present web of Government controls. This is an expanding and rapidly changing market, and the greatest benefits to Britain, the consumer and the telecommunications industry will come from fuller and fairer competition. The arrangements that I have announced today will help achieve this.
Mr. Stanley Orme: The Minister's statement has been made against the background of the Telecommunications Bill—a major measure—clause 3 of which is being debated in Committee. We were promised a draft licence by the Government but did not get it. We were given only an outline. We have had three publications from the Government, called "Ringing the Changes", which have added confusion to the debates on the Bill. Does the Minister not think that to introduce Professor Littlechild's report in the middle of our consideration of the Bill is unprecedented in parliamentary terms?
The foreword to the report says that Professor Littlechild
"shall study and evaluate proposals to regulate BT's profitability, having regard to the objectives set out in Clause 3 of the Telecommunications Bill".

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We have been discussing clause 3 for several sittings of the Committee, and the Minister now has the effrontery to introduce the report in the middle of those discussions.
The Minister probably saw the report yesterday in one of the Sunday papers about the confusion over pricing policy and whether the consumer might be subsidising sections of industry. We wish to discuss pricing and Professor Littlechild's complicated and detailed proposals in some detail. We feel it is wrong for the Minister to produce this report today and expect the Committee to go ahead tomorrow.
By breaking the prime instrument monopoly the Minister is, in effect, allowing outside contractors to provide the prime instrument, while still using the network. Will this not create confusion over breakdowns and repairs? Who will be responsible? What about the effects on jobs for thousands of workers in BT? Will not imports flood in? What has the Secretary of State to say about that? This measure is an open invitation to imports to flood in.
What effect will allowing Mercury on to the international market at this early stage have on BT's finances and future prosperity? May we have more details about the resale in relation to private telecommunications? Will someone be able to buy a series of outlets and relicense them? Will there be any control of those prices? How will the Government monitor that? A major change to the Bill is proposed. The Minister says that he will move amendments in Committee. This measure will further dismantle a crucial part of the public sector, and we see Professor Walters' sticky fingers all over this document. Indeed, he was probably the motivating force behind Professor Littlechild's appointment.
We want parliamentary time to discuss the Littlechild report, and therefore we ask that consideration of the Bill be suspended so that we can discuss this issue. It involves a major British industry and affects 250,000 workers. It also affects the telecommunications system of the United Kingdom. The hon Gentleman has dropped this report on the House when the Bill is in the middle of its Committee stage, and he therefore has no right to proceed with the measure. We ask him to withdraw the Bill.
Mr. Baker: The right hon. Member for Salford, West (Mr. Orme) has pressed me consistently in Committee for more information, and I have assisted the Committee by providing an almost unparalleled amount of information for our discussions upstairs. Only last week he demanded that I publish the Littlechild report. On Second Reading my right hon. Friend the Secretary of State for Industry said that we had asked Professor Littlechild to report and that we would publish the report.
I remind the right hon. Gentleman that there have been more than 80 hours of debate in Committee. We have been subjected to speeches lasting as long as five, four and three hours. An outrageous filibuster has been going on upstairs. So far we have debated only three groups of amendments to clause 3. There are another 20 groups of amendments to clause 3 to debate. It so happens that we are approaching the pricing part of clause 3, and so it is entirely appropriate that the Committee should meet tomorrow to debate this subject further.
The right hon. Gentleman says that this measure represents a major change of policy, but it is an extension
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of the policy that my right hon. Friend the former Secretary of State for Industry announced in July 1980, and which I extended in July 1981.
The right hon. Gentleman asked me various questions about the prime instrument. After the Bill has been enacted, the choice available to consumers will become greater as more sockets are fitted by BT. Consumers will be able to choose whether to buy or rent, and they will be able to buy from whomever they want. I do not see how that can damage our system. Indeed, the measure represents an extension of choice and competition that will benefit the industry.
The right hon. Gentleman asked whether there would be a flood of imports. Since the approvals system was set up 18 months ago there have been about 32 approvals involving 12 companies in relation to telephone hand instruments. The right hon. Gentleman should know that 11 are manufactured entirely in the United Kingdom, that 15 are manufactured substantially in the United Kingdom and that six are modified to be manufactured in the United Kingdom. Therefore, as a result of the policy there will be work for people in the United Kingdom.
The right hon. Gentleman also asked me about Mercury. I shall make a statement by 30 April on the changes on international access for which Mercury has asked and which we shall grant on the international lines. Resale is a very important issue and I shall need time to consider the terms and conditions. However, it is regrettable that the right hon. Gentleman's reaction should be to say that only the public sector and a state monopoly can provide such services. That is just not so. The right hon. Gentleman cannot accept that services can improve as a result of competition and choice. Why should it be the exclusive privilege of BT and its employees to provide such new advanced services? Surely that privilege should be extended to other workers, companies and operations.
Mr. Michael Marshall: Will my hon. Friend accept that his statement is of the greatest importance and that we shall naturally want to study the Littlechild report in detail? At first hearing it would seem that the domestic competition under Littlechild presents the system in this country with a fair and reasonable opportunity to grow and flourish. I declare an interest in Mercury Communications Ltd. Does my hon. Friend accept that international switching is vital if fair and free competition is to be extended into that area as well?
Mr. Baker: I agree with my hon. Friend. For some time—for more than a year—Mercury has been asking for access to switched international services. Professor Littlechild recommends that. I shall make a further statement on that policy within the next three months.
Mr. Geraint Howells: I am sure that the Minister is well aware that those who live in rural areas are very worried about the privatisation of BT. Will the hon. Gentleman give an assurance both to the House and to those who live in rural areas that the service will be kept intact? If the Minister cannot get all the fees required from the access service, what will happen to the rural kiosks?
Mr. Baker: In Committee, the hon. Gentleman's fellow countryman—although not his fellow party member—the hon. Member for Caernarvon (Mr. Wigley), has been very eloquent in representing the views of rural and remote areas. We gave the Committee assurances on

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this issue repeatedly last week. There is an obligation on BT plc to provide a universal telephone service. The obligation goes wider than that and extends to telecommunications services. That is not included in the present Act. That obligation will have to be policed not only by BT—as it is now—but by the Director General of Oftel. Indeed, the Secretary of State also has a responsibility to ensure that that universal service is provided.
The hon. Gentleman asked about services in remote and rural areas, but BT is unable to say whether it makes money—such is the state of the allocation of cost accounting within BT. The latest indication from BT is that the remote and rural areas contribute profits to the centre, because the systems are often easier and simpler to run than complicated city systems. To the extent that money may be lost, the access fees will be set at a level that will ensure that BT's social obligations are met. All those with a telephone or telephone service now can be assured that it will continue. Indeed, I refer the hon. Gentleman to the long debates that were held last week in Committee on this issue.
Mr. Michael Grylls: Does my hon. Friend accept that we cannot move too fast to increase competition in the telecommunications industry, and that the more he does the greater consumer choice will be and the more jobs will be created in new firms?
Mr. Baker: I entirely accept that. The speed with which we are moving should be recognised. In four years we have moved significantly to broaden competition from a position in which BT had total dominance in standard setting, equipment approval, equipment supply and the issuing of licences to would-be competitors. That has had a good effect on BT. It is reported on all sides that BT has become much more conscious of its consumers and subscribers and does not take them for granted. That in itself is good, quite apart from the effect on Britain's domestic industry.
Mr. Ian Wrigglesworth: Professor Littlechild's report recommends that BT should be obliged to keep price increases below the retail price index for five years. The Minister has told the House today that the Government accept that approach. Does that mean that BT's prices will not increase by more than the RPI during the next five years, or do some of the Minister's other words mean that is not the case?
Secondly, will the Director-General of Oftel have any say on prices? When will his office be established? What involvement will he have in considerations of this nature?
Mr. Baker: Needless to say, these matters have been well covered in debate upstairs. The appointment of the Director-General of Oftel and the establishment of the office will depend upon the progress of the Bill through the House.
On prices, Professor Littlechild recommends that the Director-General concentrates on the two areas where there will be a virtual monopoly—domestic rentals and domestic tariffs. For most domestic consumers that is the main part of their bill. Prices should be limited to ensure that they do not increase more rapidly than the RPI. They will increase over five years by RPI minus a certain
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amount. That means that after privatisation the ordinary telephone subscriber can look forward to his bill going up by less than the rate of inflation. There is a real cost reduction.
Mr. Peter Hordern: Will British Telecom have the sole right to test telephone equipment? Has my hon. Friend's attention been drawn to an article in The Economist, which said that one small firm that wanted to try out a PABX system was to be charged £30,000 for it, in contrast to the American system, where about $1,500 appears to be the charge? What is the position?
Mr. Baker: When the approval system was set up, the only test laboratories were those of BT. It had the only testing engineers and the only test approval systems—and, of course, no standards existed. During the past 18 months, with the assistance of the British Standards Institution, we have commissioned a series of standard writing exercises which have now been approved for much of the telephone apparatus. A separate test laboratory is being set up by the independent board to test the equipment, because it is inappropriate for BT to test equipment from its competitors. We are trying to accelerate that process as much as we can. I ask my hon. Friend to appreciate the fact that one cannot overnight end a monopoly that has lasted for 70 or 80 years. We are moving at a very fast pace, and I want to reach my hon. Friend's objective just as quickly as he does.
Mr. Dafydd Wigley: Will the Minister confirm that paragraph 14.7 of the report suggests three specific modifications to the Bill now in Committee, and that one of them concerns the possibility of funds from the Government to help to relieve the costs of
"public call box services, emergency services and services in rural areas"?
As the Government rejected amendments in Committee to that end, will he now say whether the Government are prepared to consider the matter further in the light of this report?
Mr. Baker: The debates that we are likely to reach tomorrow on clause 3(1)(b) will cover both those recommendations and whether there should be an Exchequer subsidy for the social obligations imposed on BT. We believe that the system of access charges, which I briefly sketched this afternoon, will provide a significant and substantial revenue to BT, which will reward BT for the fact that it has extensive local domestic networks. Anyone who wants to plug in to Mercury, Hull, and the radio telephone networks will have to pay that access fee, and the revenues from that will go to meet the social obligations of the call boxes, emergency services, and any other social obligations.
Mr. Timothy Smith: Is it not preposterous that the right hon. Member for Salford, West (Mr. Orme) complains about the length of time that we have spent in Committee on the Telecommunications Bill when he and his right hon. and hon. Friends have been conducting the most outrageous filibuster, and when after 80 hours we have reached only clause 3?
As the main purpose of regulation, according to the Littlechild report, is to protect domestic and small business subscribers against BT's dominant market position, is there not a certain undeniable logic to the local tariff

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reduction scheme as proposed by Professor Littlechild? Will not the Government's proposals restrict monopoly, promote competition, and, above all, protect the consumer in a very effective manner?
Mr. Baker: Yes. My hon. Friend has put it very well. Professor Littlechild's proposals, by concentrating on the domestic area, where there is a monopoly, and by imposing a limitation of price there, is concentrating on the area that affects most people, where there is a monopoly, and where BT must not be allowed to charge what it wishes. The corollary, of course, is that there should be competition in the other services, the trunks and international, and competition has already reduced prices there. Trunk rates were cut in 1981 and in 1982. I do not believe that those cuts would have taken place if we had not pursued the policy in telecommunications that we have pursued since 1980.
Several Hon. Members rose—
Mr. Speaker: Order. If hon. Members are brief, I propose to call those hon. Members who have been rising from the beginning, and then the Front Benches.
Mr. Ken Eastham: As a result of the Minister's statement this afternoon, have any estimates been made in his Department of imports of telephone equipment?
Mr. Baker: The hon. Gentleman is far too pessimistic. If he believes that as a result of competition we shall be flooded by imports, that is a grave reflection on the telecommunications industry in this country. We have a substantial telecommunications industry, but because of the rather cosy relationship between that industry and BT it has not been as forceful and competitive as it could have been. However, during the past 18 months it has responded vigorously. It has introduced new models, which have been competitively priced, and the market is beginning to take off again.
Mr. Richard Page: I congratulate my hon. Friend and his Department on their positive reaction to the Littlechild report. On the matter of opening up the market to international competition, will the negotiations be undertaken by his Department, Oftel, BT, or the companies involved?
Mr. Baker: They will be undertaken by my Department in discussions with BT and Mercury.
Mr. D. N. Campbell-Savours: Despite the fact that the Minister said that there is a weighting in approval, will he assure us that the weighting in terms of imports is the reverse of what he said before? Will he also say what downstream support he is giving to telecommunications equipment producers in the form of sectoral aids, over and above what is already available from the Department of Industry?
Mr. Baker: The answer to the hon. Gentleman's latter question is that the telecommunications operators, the major companies in this country, qualify for general support under our support for innovation. For example—here I speak from memory—they applied for support in the development of fibre optics and optoelectronics. On the question of weighting in favour of domestic manufacturers, because three or four years ago BT had such a grip on the market and the approvals procedures, we had to set up an interim approvals
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procedure, which has been regulated by my Department. In that interim approvals procedure we have given precedence wherever possible to those pieces of equipment that either are made or will be made in this country.
Mr. Tim Eggar: I give a particularly warm welcome to the decision to provide increased competition for supply and for BT. Is my hon. Friend satisfied that the provisions relating to price increases and the RPI are right? Is it not possible that BT is already getting too high a return? Is it not further possible that there will be technological changes that will decrease the costs of providing the service? Therefore, should not the Director-General have a right to look at costs as well as to expect increases below the RPI?
Mr. Baker: Yes, indeed. In setting the access fee, the Director-General will have the right to look at costs and be able to make determinations arising from the costs. The lesson of the American experience in the regulation of public utilities and prices and profits has led me and Professor Littlechild to believe that the system in America is breaking down—and has, in effect, broken down—and that the system of cost allocations and of trying to determine which parts are profitable do not work. Professor Littlechild has devised a new, and, in my opinion historically important, method of controlling the price of what, in effect, is a private monopoly.
Mr. Gerry Neale: I join in the congratulations to my hon. Friend. It is because he refuses to close his mind to new reports and comments that he is earning increased respect on the Conservative Benches. Will he nevertheless be alerted by the fact that following three years of sustained argument from the telecommunications industry that there should be greater competition in prime instrument policy and maintenance, he is now likely to come under immediate pressure to try to make the period of phasing shorter and more definite, to ensure that suppliers can offer immediate choice to the consumer?
Mr. Baker: I appreciate my hon. Friend's impatience. I have tried in this whole area to move as quickly as I can. If one can improve on the period of 18 months or two years in relation to the prime instrument and a completion period of within three or four years on maintenance, following discussions with the industry I shall see what can be done.
Mr. Gary Waller: Does my hon. Friend recognise that the more forward-looking managers within BT are anxious that BT should respond to the new challenges and welcome the opportunities presented to them? Is it not regrettable that a great deal of misleading information is being circulated among employees of BT, leading to unjustified fears?
Mr. Baker: I hope that the fears are unjustified. Many people in BT recognise that this is such a rapidly changing and expanding market that they should seize the opportunities. It is no way to seize opportunities to act in a dog in a manger fashion. We are creating opportunities and choice on an unprecedented scale.
Mr. Richard Shepherd: The Littlechild report specifically says that the prevention of excessive profits to shareholders is not a relevant consideration. Is my hon. Friend convinced—I take up the point of my hon. Friend the Member for Enfield, North (Mr. Eggar)—that this is the best way of ensuring the lowest possible prices for consumers, and also that the rate

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of return is reasonable and fair? Should not these duties be laid upon the Office of Telecommunications in the Bill rather than peripherally by way of licence?
Mr. Baker: I am asked whether I consider the Littlechild approach is fair in concentrating price limitation on a local tariff index as opposed to a profit ceiling. My hon. Friend will find that Professor Littlechild deals with this matter in detail. He also deals, in paragraph 14.6, with the possibility of having local tariff index control and profit control as well. He concludes that
"to impose a profit ceiling on a local tariff reduction scheme is both unnecessary and undesirable."
I appreciate that there will be different views on this aspect of Professor Littlechild's report. I believe that he sets out convincing reasons why we should accept his recommendations. I assure my hon. Friend that the Director-General of Oftel will not have a supine role. He will have a monitoring role. The whole purpose of Oftel, apart from improving the consumer interest, is to monitor the licence.
Mr. Orme: Does the Minister agree, following the exchanges on a very complicated report, which hon. Members have not had a chance to read in detail, that, before proceeding tomorrow morning to deal with clause 3 of the Telecommunications Bill we should have time to study the report? Is he aware that clause 3 is referred to in the report and is central to some of Professor Littlechild's recommendations? Does the Minister agree also that he has never talked about a filibuster upstairs and that when my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) made an extensive and well-reasoned speech he congratulated my hon. Friend?
Mr. Baker: I was following the normal courtesies of the House. The right hon. Gentleman has not appreciated the sense of gratitude, expressed in my voice, that a six-hour speech came to an end. I assure the right hon. Gentleman that there will be opportunities tomorrow and in the coming debate on the Bill upstairs to discuss these matters fully. I want them debated fully. I want them debated extensively. We should start tomorrow.

Cross-Channel Electricity Cable
4.5 pm
The Under-Secretary of State for Energy (Mr. John Moore): With permission, Mr. Speaker, I wish to make a statement. In connection with the 2,000 MW cross-channel electricity cable project, the Central Electricity Generating Board sought competitive tenders from a number of British shipping firms for the hire of a vessel to lay cables between England and France. The lowest tender was submitted by a British firm, International Transport Management, of Middlesborough, from which the vessel will be chartered. I would emphasise that the cable-laying barge will not be purchased or owned by the CEGB, but by the British firm concerned.
The CEGB must of course be conscious of its obligations to provide electricity as cheaply as possible. As a nationalised industry, it is also conscious of the Government's wish that, wherever possible, it should buy British.
However, when the CEGB received the first tenders for this project some months ago, the price differences were so great it appeared inevitable that the shipbuilding work would go abroad. The board, naturally concerned over this, then asked the firms to tender again, and expressed a clear preference—other things being equal—for vessels supplied by United Kingdom yards.
Regrettably, the second tenders showed such a huge price difference that the board had no choice but to accept the bid from ITM, involving the construction of a vessel in a Korean yard. Other bids to the CEGB, I understand, were at least 50 per cent. higher.
The Government do, of course, provide financial assistance to help United Kingdom shipbuilding firms to gain orders, but even with Government assistance the difference in bids would have been unbridgeable. Hon. Members who have repeatedly stressed the importance to industry and consumers of low-cost electricity will understand this decision.
Questions on the shipbuilding industry, including matters relating to assistance from the shipbuilding intervention fund are, of course, matters for my right hon. Friend the Secretary of State for Industry.
Dr. John Cunningham: I thank the Minister for making the statement. Is it not astonishing, in the middle of the worst slump in shipbuilding this century, that a British publicly financed board should be involved in a contract to spend British taxpayers' money to build a vessel in a Korean shipyard?
I wish to ask the Minister a number of specific questions. Is it correct that ITM at no time invited British Shipbuilders to make a detailed tender for this work? Is it also correct, notwithstanding what the Minister says about the ownership of the vessel, that the CEGB engaged naval architects to draw a detailed and complex specification for this vessel, which was tantamount to meaning that it was designing the vessel for its own particular purposes? Is it also the case that, in terms of the financial arrangements of the deal, the CEGB contribution will be a capital expenditure contribution? Does this not reinforce the point that it is paying for the vessel to be built?
Will the Minister say what the French utilities are doing to fulfil their part of the contract for the cable laying? Will not all their contracts be placed in France? Will he explain

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why there is apparently no liaison on this matter between his Department and the Department of Industry, which is responsible for the British shipbuilding industry? Is it not industrial policy lunacy that one public board, spending British people's money, refuses to liaise properly with another public corporation, British Shipbuilders, in its desperate attempts to keep men in work and to sell vessels at home and abroad? Is that not insulting to the management of British Shipbuilders? Is it not a stab in the back for the shipyard workers on Tyneside and Wearside who are staring the dole queue in the face?
Mr. Moore: The truth about liaison between Government Departments is quite the reverse of the hon. Gentleman's suggestion. There was liaison on the charter between British Shipbuilders and the Offshore Supplies Office in my Department. It was advised to pursue the matter through the Department of Industry and its officials communicated with the Department of Industry on this matter in December. The chairman of British Shipbuilders was in contact with the chairman of the CEGB but that was at a much later date, on 14 January.
I am not responsible for the French Government's policies in these matters. It is of interest—I do not have the details but I shall pursue them—that at the moment the French are engaged in chartering a Norwegian vessel for their part of the cable—laying. I believe that that vessel will be converted in the yard at Marseilles.
Negotiations between the CEGB and companies such as ITM were conducted perfectly normally. British Shipbuilders was fully conscious in its approaches via my Department—[Interruption.] I am informed by the CEGB on this matter that British Shipbuilders had the opportunity to make its views heard. Officials of my Department advised it to pursue the matter with its sponsoring Department.
I cannot comment in detail on the CEGB's activities in retaining the services of naval architects but I shall return to the House with more detail. The CEGB sought tenders for the project with a view to owning or chartering because whichever was better for the taxpayer was to the advantage of the CEGB. That would clearly have been a presumption in the tendering process. The CEGB, recognising its obligations to the consumer, again sought tenders to ensure that, if possible, the contracts would go to British shipyards.
Mr. David Steel: Have the Government identified the precise reasons for the variations in tenders from overseas and Britain? If so, what were they? Secondly, did the Government take into account in their calculations not just the possibility of funding through British Shipbuilders but also the higher cost of having more shipyard workers on the dole?
Mr. Moore: I must remind the right hon. Gentleman that detailed matters on the shipbuilding fund and the EC directive are for my right hon. Friend the Secretary of State for Industry. As there is to be a debate on this matter later today, there will be an opportunity for that point to be raised. Everyone is worried about the difficulties of the British shipyards. No one would wish to see orders going to non-British yards, all things being equal. I assume that the right hon. Gentleman is aware of the detailed mechanism under which the EC directive controls the assistance fund. In the tenders that were submitted, assistance was assumed under the intervention fund.
Mr. Anthony Nelson: Is my hon. Friend aware that, although many of my hon. Friends feel that the CEGB has a proper responsibility to seek the most competitive tender, his most serious statement this afternoon gives grounds for great anxiety about whether our policies for British shipbuilding are right? What is the length of the charter involved? If it is other than a short one, it would seem to show that the feasibility of the capital purchase by ITM rests on the financing provided by the CEGB. Therefore, one is essentially talking—although it is done through the medium of a charter—about effectively financing the capital cost of the purchase of a ship.
Does my hon. Friend agree that, although Britain often produces the best ships—the most competitive in terms of cost, and the best suited for the job—it is often finance which ensures that orders go to other countries? Does this case give my hon. Friend or my hon. Friends in the Department of Industry cause for concern?
Mr. Moore: As I said, detailed shipbuilding matters are for my right hon. Friend the Secretary of State for Industry. However, I remind the House that, of the £700 million spent in aid to the shipbuilding industry, over £600 million has been spent while the Government have been in office. I also remind the House that this project will cost the CEGB about £250 million gross. We are talking here about 4 per cent. of the overall contract. Ninety—six per cent. of the business involved is related to United Kingdom purchases. The CEGB spends about £1,290 million a year on goods and plant in the United Kingdom, of which about 95 per cent. is spent on United Kingdom goods and services. Surely that is a record of which we can be proud.
I am advised that the charter will last for between 12 and 18 months.
Mr. Frederick Willey: I share the feelings of the hon. Member for Chichester (Mr. Nelson). Is the Minister aware that the lack of effective consultation and consideration of financial matters overall means that Sunderland Shipbuilders has been savaged and that the heavy redundancies it is now suffering will increase? That is in a town which is already spending £2 million a week on unemployment benefit.
When I raised this matter in Committee last week, the hon. Member for Tynemouth (Mr. Trotter) said that he had been to Korea, a country with the most up-to-date capital facilities, and that shipyard workers there worked 73 hours a week for only a fraction of the wages enjoyed in western countries. In those circumstances, it is suicidal to place orders in such a country. It is about time that we shared the view of the chairman of British Shipbuilders that the ridiculous prices being quoted by Korea are intolerable and that it is time we acted against them.
Mr. Moore: I fully understand the right hon. Gentleman's concern for his constituents. [Interruption.] Despite the interventions from the Opposition Front Bench, I fully sympathise with and understand his anxieties for his constituents and the future of the shipyards in his constituency. However, I must utterly reject the suggestion that British Shipbuilders had insufficient opportunity to enter tenders when the CEGB took the trouble to go out to tender a second time. Any detailed questions on shipbuilding and the relative quality of our yards compared with those overseas should not only

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be addressed to my right hon. Friend the Secretary of State for Industry but be raised in a later debate in the House and in the Standing Committee which will meet again tomorrow morning.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call the five hon. Members who have been rising to ask questions throughout.
Mr. Tom McNally: Is the Minister aware that the introduction of the idea of keeping down electricity prices will bring a horse laugh from both the domestic consumer and British industry on his Department's record? It is no use the Minister coming to the House, making a statement and then shuffling the responsibility off onto other Departments. Has there been any liaison between his Department and others about the national interest in this decision? Will he read the Official Report of the debate on trade which asked for a vigorous Government policy of public purchasing to help British industry? Has the Minister or any of his right hon. and hon. Friends studied the Korean Government's practices of hidden subsidies and distortions to trade? Is he sure that British shipbuilding is competing on equal terms in such tenders?
Mr. Moore: I know that the hon. Gentleman was not a Member during the previous Labour Government's term of office. Had he been, and had he been able to study electricity prices, he would have seen a far greater percentage increase than has taken place under this Government. He has probably not had the opportunity either to study the Monopolies and Mergers Commission's report for 1981.
The hon. Gentleman may be interested in what the commission stated when it examined the policies of the CEGB:
"The board has also pursued a 'Buy British' policy in its procurement of plant; with only small exceptions it has placed its orders with the home industry".
It concluded:
"We conclude from the foregoing that the board's procurement costs could have been lower. This arises not from lack of efficiency in use of its existing resources but from concern on its own or the Government's part for the interests of major suppliers".
The interests of the nation have clearly been in the mind of the CEGB, just as they have been in the minds of the Department of Industry and the Department of Energy.
Sir Albert Costain: Is the Minister aware that the converter station for this cable has now been built for more than a year? In view of the rapid progress that has taken place, why has it taken so long to place an order for the ship? In view of the delay, is he satisfied that the ship will be finished on time?
Mr. Moore: My hon. Friend is quite right to draw the attention of the House to the key factor involved in such tenders and contracts—the time and the ability of tenders to show that there is no time delay. That is clearly a crucial part of the contract which relates to the £250 million and not the amount that we are talking about, which is approximately 4 per cent. of the whole contract.
Mr. Don Dixon: Has the hon. Gentleman read the report of the Select Committee on Industry and Trade, which studied British Shipbuilders? Paragraph 43(v) states:
"the Government should remind all public authorities of the desirability of buying British materials and components and also ships built in British yards."
Where is the public saving when it costs £5,000 a year to put a British shipbuilding worker on the dole? Is it not about time that the Government gave the same support to our shipbuilding industry as other countries give to theirs?
Mr. Moore: The hon. Gentleman clearly did not listen earlier when I outlined the policies of the Government in terms of their wish that nationalised industries and corporations should, where other things are equal, follow a "buy British" policy. He is also not aware, as I said earlier, how large a percentage of all CEGB contracts are placed in the United Kingdom. He is obviously not aware that, all other things being equal, every effort is and has been made to ensure that, where possible, contracts go to Britain.
Mr. Tim Eggar: Have we not been listening to the most extraordinary doubletalk from the Opposition Benches? Do not Opposition Members, most of the time, complain about raising electricity prices, particularly for industry? Are they not now arguing directly for an increase in electricity prices? Will they get their facts straight for once?
Mr. Moore: My hon. Friend reminded us of the crucial need to ensure economic pricing of our basic fuel products, especially electricity, if we are to ensure that British industry stays competitive.
Mr. Arthur Palmer: Does the hon. Gentleman agree that, in the past, the CEGB has had an excellent record, as it should as a nationalised enterprise, of buying British? In this case, will he tell the House something about the future of this cable ship, because the interconnection between the British and French grids is a one-off job? The CEGB is not likely to have much use for the ship once this job is completed. Will it not have a considerable resale value which could be used to provide a financial arrangement to assist British Shipbuilders?
Mr. Moore: The hon. Gentleman has a large and extensive knowledge of the electricity industry and is very conscious of the way in which the CEGB has tried to carry out this public duty by trying to help British industry. I remind him that the ship is being chartered from British industry. However, the ship will be owned not by the CEGB but by ITM. The CEGB does not own it. The 12 to 18 months for which the vessel is needed had a significant impact on the CEGB decision in terms of analysing tenders to follow that route rather than one of ownership.
Dr. John Cunningham: I assure the Under-Secretary that, although we realise that he is not responsible for shipbuilding, my right hon. Friend the Member for Sunderland, North (Mr. Willey) is correct. No market forces are operating in the shipbuilding sector at present. Is not the CEGB providing the capital for this vessel to be constructed in a Korean yard? Will not the Under-Secretary, even at this late stage, talk to his hon. Friend the Minister of State, Department of Industry and call in

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the chairmen of the CEGB and of British Shipbuilders to see whether this order cannot be saved for British industry?
Mr. Moore: We are not talking about the expenditure of money via a public corporation in terms of its specific construction of the vessel. ITM will own the vessel. The CEGB is chartering for an amount under £10 million. The CEGB has advised me that a formal contract now exists with ITM.

BILL PRESENTED
  COMMISSION FOR THE NEW TOWNS (ABOLITION)
  Mr. Christopher Murphy, supported by Mr. Anthony Steen, Mr. John Wheeler, Mr. Denshore Dover, and Mr. David Gilroy Bevan, presented a Bill to abolish the Commission for the New Towns: And the same was read the First time; and ordered to be read a Second Time upon Friday 11 February and to be printed [Bill 69].

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House, I shall put together the Questions on the four motions relating to draft statutory instruments.
Ordered,
That the draft Export Guarantees (Limit on Sterling Commitments) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Export Guarantees (Limit on Foreign Currency Commitments) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Export Guarantees (Extension of Period) (No. 5) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Export Guarantees (Limit on Overseas Investment Commitments) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Archie Hamilton.]

Statutory Instruments, &c.

  INTERNATIONAL TRANSPORT CONVENTIONS BILL [Lords]
  Ordered,
  That the International Transport Conventions Bill [Lords] be referred to a Second Reading Committee.—[Mr. Archie Hamilton.]

  Ordered,
  That the Plant Varieties Bill [Lords] be referred to a Second Reading Committee.—[Mr. Archie Hamilton.]

Orders of the Day

  Consolidated Fund Bill
  Order for Second Reading read.
  Question, That the Bill be now read a Second time, put forthwith pursuant to Standing Order No. 93A (Consolidated Fund Bills), and agreed to.
  Bill accordingly read a Second time.
  Question, That the Bill be now read the Third time, put and agreed to.
  Bill accordingly read the Third time, and passed.

  Crime (Social Consequences)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
  4.28 pm
  Mr. George Cunningham: The new procedure on the Consolidated Fund Bill gives freedom to discuss issues in more general terms, and is less artificially restrictive than the old procedure. My colleagues and I in the Social Democratic Party decided that it would be useful to devote some time to a discussion of the increasingly worrying problem of the intensifying prevalence of crime on our streets and in our housing estates, especially in the inner cities. The most worrying feature is that it is getting worse, and the residents of those areas ask themselves, "Where will it all end?"
  There are classes of crimes. It is important to recognise that I am talking about what some people might call "petty crime", although it is better defined as that class of crime that excludes major organised activities such as drugs rings and train robberies.
  The term "petty crime" is not a correct description, because muggings in the street and robberies in houses impinge most immediately and most severely on the quality of life of our people. If train robbers manage to walk off with £1 million, that is a terrible thing, but that does not affect the immediate lives of many people. The subjects that I am talking about in this debate affect many people. I am talking of muggings, thefts in the street, burglaries and vandalism.
  These days, hundreds of thousands of people live in constant fear. They fear that a knock on the door after dark will be a knock not from a friendly neighbour but from somebody who, once the door is open a fraction, will bash his way in to mug and rob. They fear that, when coming back from the Post Office after picking up their pension, if they are lucky they may not be injured when robbed, but if they are unlucky, they May be robbed and injured. They fear that their windows will be smashed by petty acts of wanton vandalism. They fear that the appalling attacks on usually elderly people by very young boys and girls—evidence of which they have seen in the newspapers and on television—will happen to them. On many of our housing estates, caretakers fear that they will be attacked, whereas in days gone by they were able to control some of the anti-social behaviour of youths.
  Several months ago, I visited a housing estate in South London. A resident showed me the inside of his front door. There was the usual array of bolts and chains, but the

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  chains were of a strength that would allow a vehicle to be towed along the road. They were fastened to enormous clamps to the walls and the door—on both sides in case the attacker took out the hinges.
  When I was shown this Fort Knox type of prevention, I concluded that that resident must have exaggerated the danger. His next door neighbour showed me the inside of his door, which was festooned with a similar array of protective devices, including two electric bells which, when switched on, were designed to ring sirens inside the flat, in the hope that if something happened, help would come.
  That happened, characteristically, on the first floor of a tower block—a location that is particularly subject to this kind of crime. The fear that exists among these people did not exist to anything remotely like the same extent even 20 years ago. I am not suggesting that, compared with the historic past, the level of crime is worse today. Of course it is not, if we go back to 150 years ago, when it was much worse. However, in this century, we now have a level of such crime that is wholly unprecedented and is getting worse. That justifies the House and the Government taking a co-ordinated look at the subject instead of looking at it piecemeal.
  Younger and younger youths are taking part in such attacks. Far more girls are now participating in this kind of behaviour than in the past. Many parents are completely unable to control their offspring. In other words, there is an underlying table of this kind of relatively petty crime. That is not only bad in itself, but that pool of crime is the pool from which lifelong major criminals are recruited.
  Attitudes and tolerance of crime in what people say is part of the contributory cause. There is too much tolerance of petty crime. I am not talking about penalties but about what people say. There is too much tolerance of anti-social tenants on housing estates. There is an attitude of mind that we should not be too hard particularly, if there are children in the family. Many councils, including the Islington borough council, do not take sufficiently into account the fact that if mildly bad social behaviour is tolerated, other people will imitate it. As a result, we create more anti-social behaviour among people who would otherwise behave properly if we do not come down fairly hard against those who break tenancy conditions.
  At the time of the disturbances in Brixton and Bristol, much of the comment was, if not designed, at least calculated to have the effect in the minds of those who took part in the disturbances that the cause was not in themselves but in something in society. I take an old-fashioned view which, nevertheless, is right. If a person mugs someone else, breaks a window or throws a firebomb, that is not the fault of the victim. It is not the fault of the parents of the offender. It is not my fault, nor is it the fault of society. It is the fault of the person who commits the offence. I realise that that is an unfashionable view, but if we could move back towards that attitude, we might cease creating in the mind of the offender, and sustaining in the minds of potential offenders, attitudes that are hostile to the termination of this kind of behaviour.
  It goes without saying, and it should normally go without being said, that a large pool of unemployment will lead to more crime, but the unemployment does not justify the crime. It goes without saying that if there is racial prejudice against black youths—and there is—that will
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  result in more crime, but it does not justify the crime. We must first recognise the severity of the problem and the fact that it is getting worse. We must realise that in this sphere it is difficult to achieve anything, but it will at least be easier to stem the trend than to reverse it if it goes even further than it has at present.
  Let us compare the United States and Britain. Visitors from the United States frequently express their admiration and envy of the relative peacefulness of British streets. It will be easier to prevent ourselves going as far as the Americans have gone than to reach the condition that the Americans are now in and then to try to scramble back to where we are now. Violence in schools is an example. We in Britain have very little violence within schools, certainly compared with the United States, but over the last three or four months, there have been many stories on this subject. The likelihood is that if present trends continue a larger number of teachers will be afraid of being attacked in the classroom or on the school premises.
  If that becomes established, it will be difficult to reverse. Better that we stop, pause, look at the matter and consider what we can do to prevent that further trend than to let it happen and then try to reverse it.
  What we do about it is more difficult. The first stage is to diagnose accurately what is wrong. The police are in the front line in the prevention of this kind of behaviour. Too often—all too often in this House—there are two groups of people. There are those who attack the police for transgressions and who say very little on the other side of the argument, and those who invariably support the police and believe that we should do so if only to balance the unbalanced attitude of the others.
  It is obvious to everyone outside that there must be a two-handed approach to the police. They are on our side against the criminals, but when the police—given the strength that a police force now has in modern society—transgresses we must come down on it like a ton of bricks, all the more so because of the special position it occupies.
  The present strategies of the police for the control of crime are no ideally suited to the kind of crime I have been talking about. The strategies are well directed towards large-scale organised crime and to some of the more melodramatic forms of crime. Street crime, petty burglaries and so on are a much more difficult problem and present police strategy is not directed towards it. It is good that the new Commissioner of Police of the Metropolis recognises that in his provisional strategy plan. He has taken some steps and intends to take more, to shift the emphasis from the activities with which the police have normally been concerned towards the forms of crime that I have mentioned.
  A lot of rubbish is talked about so-called community policing. Those words ought to be banned. They are a substitute for thought rather than an aid to thought. We need more home beat officers, and more home beat officers who stay on a beat for longer. We need more of what, in London, were called for a time protected home beat officers. They are home beat officers who are not removed from their beat to look after a football match or a demonstration.
  However, a handful of protected home beat officers could not solve the problem. We need more contact between the local police and organisations such as tenant's associations, schools and social clubs. We need to eradicate the last traces of the reluctance of the police to

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  patrol private estates, including council estates. There are some problems, but they can usually be overcome if the council and the residents are willing to receive the police into those estates. About two thirds of my constituents are council tenants. I have never encountered one who was reluctant to see the police patrolling the estates, although I have encountered many who complained that there was not enough patrolling of council estates by the police. At one time we were daft enough to build our streets up into the air instead of along the ground. Those who live in the vertical streets called tower blocks should not receive less policing than those who live in normal horizontal streets.
  On police numbers, I have knowledge only of the Metropolitan police. It is time to review the numbers of that force. In the past few years there has been a significant increase in the strength of the force. The Commissioner himself has recently shown, however, that those additional numbers have gone into central functions and not into patrolling. The number of policemen on the streets has scarcely increased.
  There has also been an increase in the number of police who are distracted from such work to do other work, some of which is not police work. I give an illustration from my borough. In Highbury Corner magistrates court there are cells which have to be used for Home Office prisoners. Those prisoners have been before the court and are remanded in custody. In the normal way they would be held in prison, but, because the Prison Officers' Association refuses to take them into prisons, they have to be farmed out all over London and held in one police station or another or, more usually, in one court building or another. In Islington, three sergeants and more than a dozen police constables per day are used exclusively as gaolers for Home Office prisoners. That is not police work, and it is a massive drain on resources. What does the Home Office intend to do about it? It has already been going on for about three years and it cannot continue. We need the police to do police work, not prison warders' work.
  Mr. John Wells: I am loth to stop the hon. Gentleman at such an interesting point in his speech. He said that the police have been used in this way for about three years. Have the numbers increased? In other words, is the situation becoming worse or has it remained static?
  Mr. Cunningham: I am not sure that it can get worse in any particular district. At Highbury Corner, for instance, only a limited number of cells are available for that purpose, and I imagine that the number of police required is roughly the same whether the cells are being fully used or not. I do not know whether there has been an increase in the number of court buildings being used as temporary prisons, but my impression is that for the past three years a fluctuating number of unaccommodatable remand prisoners have had to be accommodated in that way.
  It is argued that the solution to that problem is to send fewer people to prison for shorter periods and I agree entirely that that is a desirable end. In considering why people are sent to prison when we think that they should not be, or go to prison for longer periods than we believe to be right, however, the position is more difficult. Some people, particularly in the Labour party, have the bright notion that a half remission of sentence would solve the problem, but that would create an even greater gulf
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  between what the penal system appears to be doing and what is actually done. For that reason, I am against that view. On the whole, if one says that a person is to be sent to prison for two years that is what the sentence should mean. There should be some possibility of remission, but a two-year sentence should not mean only about eight months in prison.
  In this respect, we are too critical of judges and magistrates and we are unfair to them in not providing alternatives. The number of people sent to prison as a percentage of the number of offenders is in fact lower than in the past. It is a smaller percentage of a larger number of offenders. That is the first thing to be said in defence of the benches. Moreover, judges and especially magistrates do not have sufficient bail hostels available. There is also insufficient accommodation for alcoholics and similar offenders to avoid the need to accommodate them in prisons.
  The feature of our penal policy to which I especially wish to draw the Minister's attention is what I regard as the serious gap in the spectrum of penalties and treatments available. Judges and magistrates frequently send people to prison because they feel that the most severe non-custodial sentences available are not severe enough. Prison involves complete supervision 24 hours per day and seven days per week, but if the offender does not quite warrant that treatment there is virtually no supervision.
  There are community service orders and the facilities of the probation service where they apply. However, there is an enormous gap between any of the non-custodial sentences and the least severe of the custodial sentences. That has happenened because we approach the problem piecemeal. We invent community service orders and we invent other things, but we never look at the whole issue and endeavour to provide a total quiverful—a total spectrum—of penalties from the slight to the severe. Especially, we have never given our attention to how one manages to make fines and other financial penalties work. In other words, how do we get the money from the person against whom the penalty has been awarded?
  We need to think of prison for some offenders—especially the offender about whom I am speaking—as a first step in a more prolonged period of supervision. If we had a good penal policy, there would be some people for whom a very short period in prison was no more than a reception into intensive care, which then tailed off into less intensive care outside prison. We do not remotely have the attitude of mind, nor do we have the facilities, to do that. Our prisons are not suited for that. That is one reason why the Home Office must maintain its prison building programme. That is not to say that, instead of 40,000 in prison, we want 80,000 in prison. It is in part to say that we want them not in the present old-fashioned prisons, but in prisons where there can be treatment of the kind that I am suggesting. Therefore, we should go for a more intensive form of supervision outside prison in the community.
  There, we hit a problem. With great affection for and respect to the probation service, we must remember that it grew out of the prisoner's friend movement—a role that it believes it should continue to play. It is resistant to the notion of the probation officer being the warder in the community, yet that is exactly what we need—warders in the community who can supervise those outside prison to a greater or lesser degree, according to the circumstances.

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  That is the aspect of our penal policy about which I hope the Home Office will start to think. It is very difficult for the Home Office because we do not have a proper Department of State looking after that area. The Lord Chancellor's office is partly responsible, as are the Attorney-General, the Director of Public Prosecutions and the dear old Home Office. For practical purposes—and we understand that—the Home Office divides responsibility for those spheres between two different Ministers, and we all know that that creates a problem.
  There is no one to pull the whole thing together. I am asking the Home Secretary, as the most obvious Minister, to try to pull it all together, especially with regard to penal policy, and that he should try to secure that complete spectrum of penalties that will be more likely to fit the needs.
  We need to find ways to apply fines and have them collected. That may mean that some form of custody—not necessarily prison—should have a measurement in money terms so that a person earns the money to pay the fine or to pay compensation, according to the number of days that he spends in custody.
  We have a final difficulty, which is the vitiation of the subject by the attitudes of the two main parties. At the moment, the Conservative party attitudes are perhaps the less serious. We are all familiar with the hanging and flogging brigade in the Conservative party. However, a new ingredient in our political scene is the party attitude that people in the Labour party, who should know better, find themselves obliged to adopt. They feel that they must pay at least lip service to the dominant trends within the Labour party.
  That is relevant to the business of the control of the police. If the police are to adopt the type of community work to which I have referred, they must have close relations with local authorities. In London and in some other areas at least, that is made extremely difficult for the police while the Labour party argues that county authorities should be in a position to control the police.
  The whole business of the post-Scarman links between the police, the local authorities and the community in London is vitiated by the dominance of the Livingstone attitude to the relationship between the police and local authorities. What should happen is terribly obvious. Outside London, local authorities do not control the police. In theory they do to a certain extent, but in practice they do not. When the trouble in Bristol occurred, no one went running to the police authority for that area to say that it must do this or that. They went running to the Home Secretary. When the Northamptonshire police were vetting juries, contrary to the guidelines issued by the Attorney-General and the Home Secretary, nobody went running to the police authority and asked it to correct the problem. They went to the Home Secretary and, with a bit of huffing and puffing in excess of his legal powers, he fixed the chief constable for Northamptonshire. I am glad that he did. That is right.
  The police in modern society are too powerful, and the issue is too important, for control to be in the hands of county councils. County councillors do not have the necessary clout. Moreover, if control—in so far as control is in order at all—is in the hands of county councillors, plastic bullets will be permissible in one part of the country, but not in another. There will be one area in
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  which the police will go the whole hog on pornography and another where they will concentrate on petty burglary. That is preposterous.
  We need to have a co-ordinated effort and co-ordinated criteria on a national level. We should, therefore, look to control of the police by the Home Secretary and the Home Office, where it will be carried out in a politically restrained manner. That is political not in the bad sense. but in the good sense that it is democratic control. The advice tendered to the Home Secretary will be decent and professional. We do not think all of the time that the advice given to the Home Office is decent and professional, but it is a lot better than the advice tendered by the latest chap recruited by an advertisement in The Guardian by the GLC police committee. Therefore, we should have control of the police by national Government, in so far as there is control at all, and we should have consultation at local level. If one does that elsewhere, it can be done in London also. A common system should apply to the whole country, no doubt with some amendments on the consultation system according to the nature of the area.
  Mr. Tom McNally: I am sorry to interrupt my hon. Friend's fine speech. Does he think that the political balance would be enhanced if individual chief constables saw themselves much more as civil servants rather than as political and media figures? There is a need to get the balance right on that side of the equation also.
  Mr. Cunningham: I understand my hon. Friend's difficulties and views on that. Chief constables should see themselves not as television personalities and the like but as statutory figures who are responsible to the courts and, to some extent, to the Home Secretary for their activities. If they were not wholly independent in law of any control such as that, chief constables would revert to their previous behaviour and, some of them would stop behaving as prima donnas.
  This sensible development, by which the police could be controlled in consultation with the police, is vitiated by the attitude of the Labour party. The most serious thing about some of the remarks from the Labour party on this subject is not that their spokesmen think that it would be a good idea to hand the Metropolitan police over to Mr. Livingstone. It is much more serious than that. It is that they do not think that it would be sensible to hand it over to Mr. Livingstone, but they feel obliged to say that it would be. That is the nature of the Labour party at the moment. It is no good kidding ourselves. In London, the most important part of this problem—the whole business of tackling crime—is now vitiated by the present attitudes of the Labour party.
  To sum up, we have a serious problem. It is getting worse. If we do not stem the prevalence of crime now it will be harder to correct it in future. Present priorities in policing strategy are not directed at that. There is a gap in our range of penal weapons which must now be filled for this type of crime. The Social Democratic party exists to bring common sense to British politics. I suggest that this type of diagnosis and these prescriptions are so common sense that they are obvious to members of the public who do not spend all their time in political meetings. They do not appear to be obvious to the Conservative party, and they are certainly not obvious to the Labour party in its present condition. I hope that the Minister has listened to what I have said and will move in that direction.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Paul Dean): Order. I remind the House that this series of debates is taking place under the new procedure for the Consolidated Fund Bill. The effect is that most debates, including this one, are limited to one and a half hours. That means that this debate must finish by 5.56 pm.
  5.2 pm
  Mr. John Wells: The whole House has enjoyed the excellent, intelligent, charming and enjoyable speech of the hon. Member for Islington, South and Finsbury (Mr. Cunningham), but it was marred by two deplorable sentences at the end. Until he got to that little spoil it was admirable stuff.
  I should like to make four points briefly. First, the hon. Member for Islington, South and Finsbury touched on violence in schools. I wish to examine another aspect of school life, or non-life, and that is the sharp growth in truancy. The hon. Gentleman rightly said that people—he implied that hon. Members were among them—are too critical of judges, and magistrates, sentencing policy. I agree. I shall criticise magistrates and education authorities for a moment for being dilatory in their pursuit of truants and their parents. A sharper and tougher attitude to truants would instil a better attitude to petty crime at an early age.
  Secondly, we are guilty parties in that we churn out Bill after Bill, whether it be on seat belts or something else, which brings the law into disrepute. I am ashamed to say that I have not worn a seat belt much in my life. I do not think that that is clever and I am rather ashamed of it. I do not want to break the law and I do my best to wear one. I am a law-abiding citizen, but sooner or later it is inevitable that I shall forget to wear my seat belt. I shall remain a law-abiding citizen and I shall not regard myself as a miserable sinner. I shall have to apologise to the police officer who will catch me in the crime that I shall inevitably commit but do not wish to perpetrate. The same will probably happen to most other hon. Members. It is an example of bad legislation. There is too much of it.
  The House and its agencies should promote attitudes on subjects such as seat belt wearing rather than produce nanny legislation. I know that the medical profession and doctors made a good case for the seat belt legislation. I hear what they say, and I try to conform with it, but we should not make laws that are difficult to enforce and make things that most people do not consider as terrible sins into a crime.
  I shall now make a fairly parochial point. I am delighted that my hon. and learned Friend the Minister of State, who shares the garden of England with me with regard to our constituencies, is to reply to the debate. Some people may say that the gipsy problem is insoluble and of no interest to hon. Members from many other parts of the United Kingdom, but it is a real problem.
  I remind my hon. and learned Friend of the clergyman in the borders in the 1890s, who was the incumbent of a parish called Kirk Yetholm. He was a tough, autocratic old chap in the way that clergymen could be then. He impounded all the gipsy children and sent them to a school. Their parents could roam around the countryside, but the children were corralled into a boarding school. That may be considered autocratic, high-handed and unacceptable nowadays—and I agree that it is—but unless we can break the vicious circle of gipsy children not
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  attending schools and breeding, I am afraid frequently below the age of consent, they will perpetuate the cycle of non-school attenders and petty criminals.
  All too often, offenders, not only gipsies but other modest offenders who are broke, are fined. The fine is then paid by the social security system. You, Mr. Deputy Speaker, and I, the Minister and the shadow Minister and the rest of us pay the fine. That is absurd. We are also called upon to pay court costs and so on. We must pay close attention to what the hon. Member for Islington, South and Finsbury said about the need for something that is unpleasant but short of a custodial sentence.
  5.7 pm
  Dr. Shirley Summerskill: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) has raised an extremely important subject that deserves careful attention from anyone who is worried about the serious rise in crime. The Social Democratic party policy on law and order has been unveiled, but we do not know whether the Liberal party agrees with it and whether there is a true alliance. No doubt the Liberal party will be present at some future debate and we shall hear then whether the two policies are allied.
  As for the Conservative party, there is no evidence to suggest that it has any justification for claiming to be the party of law and order. Under the present Government, burglary and crimes of violence have increased, the detection rate has decreased and the conditions that provide fertile ground for criminal behaviour have flourished. There have been cuts in local authority funds for housing, cuts in social and community services, and cuts in opportunities for training and further education. The cuts will create the environments in which criminal behaviour is most likely to be found.
  Homelessness among young people is increasing rapidly. There is clear evidence that that group of people are especially vulnerable to delinquency and that those who leave institutions and have nowhere to live are more likely to commit offences. Yet there is no statutory agency with responsibility to provide for these young people.
  Mr. George Cunningham: What does that extraordinary phrase "vulnerable to delinquency" mean? Does the hon. Lady mean that they do it?
  Dr. Summerskill: As I shall show in a few minutes, I mean that certain conditions, if they are not the reason for crime, certainly tend to encourage crime.
  The most destructive of all the problems is unemployment. Here, the hon. Gentleman will be in agreement with what I shall say. About 52 per cent. of all young people between the ages of 16 and 18 and on the labour market are without work. Unemployment usually leads to monotony, idleness, frustration, family tensions and low income. Therefore, those people have little to lose by committing crime. The chairman of the chief probation officers, Mr. Michael Day, said that
  "the connection between crime and unemployment is beyond any doubt."
  As the hon. Gentleman said, unemployment is not an excuse or justification for crime, but an explanation for it. The Prime Minister has asserted that there is little or no connection. She said that at the time of the Brixton riots. However, the Home Secretary has wisely agreed that there is. In a much-quoted speech in the House he said:
  "There has been a dramatic rise in unemployment among boys and girls. That is the responsibility of this Government Let no

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  one have any doubt about the danger that that has created in terms of crime of all sorts, violence and vandalism."—[Official Report, 27 February 1978; Vol. 945, c. 40.]
  The Home Secretary appreciated the clear link between unemployment and crime. Those people get caught up in a vicious circle. Unemployment can lead to criminal activity, and a record of criminal activity can lead to long-term unemployment.
  One of the most difficult but essential tasks of the probation officer is to find a job for the person in his charge, which will help to keep him or her from committing further crimes. About 50 per cent. of men imprisoned for over three months commit a serious offence within two years of their discharge. If there is no job available, it is essential that such people should be found some sort of occupation, whether it is a training scheme, a day centre or evening and weekend supervision. Therefore, the role of the probation officer today is more important that it has ever been. The probation service deserves all the support that it can get in the form of finance, and man and woman power. I emphasised that during the passage of the Criminal Justice Bill.
  The victims of the increase in crime, especially violent crime, are often the elderly, women, low-income families, members of ethnic minorities and vulnerable groups such as transport workers. The effects of crime spread to all those who fear that they will become a victim, when their neighbour or relative has become a victim. They are frightened, not only in the streets, but even in their own homes.
  In our preoccupation with finding ways to reduce the crime rate we must not neglect to help its victims, and we must continue to examine ways in which the offender can be required to make reparation for an offence direct to the victim, in the form of money or community service. Perhaps the Minister will say whether the Government have any plans for encouraging victim support schemes.
  A more efficient and effective police force is one of the keys to reducing the crime rate. I say "efficient and effective" because I know that the Minister will say, rightly, that the numbers of police have increased. That is all to the good, but it is essential that as well as there being adequate numbers, the police who are in operation should be effective and efficient. Everyone would like to see more police on foot patrol. For the whole town of Halifax—my constituency—the maximum number of policemen on foot patrol in any part of the day is 12. There are only 12 policemen on foot patrol between 6 pm and midnight. That seems to be an inadequate number for a large industrial town with a closely confined population. We would like to see a reduction in the size of police authority areas and a reduction in the incidence of crime through a higher rate of detection, because the greatest deterrent is the fear of being caught.
  The control of crime is a social and community problem. Therefore, it should be of concern to every local authority and Government Department, not just the Home Office. Every Government Department such as Environment and Education and Science, should analyse how its duties and responsibilities relate to crime. The control of crime should be the responsibility of every television programme maker, every teacher, every parent and every citizen. Criminals are influenced by the environment in which they live. That is where crime starts.
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  Ordinary members of the public must become far more vigilant, observant and suspicious and not simply mind their own business. They should be on the lookout for potential crime and report to the police if necessary.
  There is no evidence that long prison sentences or short, sharp shocks reduce crime or prevent recidivism. It is clear that it is a job not only for the Home Office, the police, the courts and the prisons to tackle crime, but for the whole community to do so. This debate might help to inspire every member of the public to be a crime prevention officer in his daily life.
  5.17 pm
  Mr. Peter Bottomley: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) has done the House and and the country a service by choosing this subject in this new-style Consolidated Fund Adjournment debate. I hope that during the next year, probably after the election, it will be possible to have a fuller debate on the Adjournment so that we can bring out ideas and try to hold Ministers to account on the limited things that the Government can do to help to reduce both the amount and the impact of crime and to search for more effective punishments and deterrents for those who are caught.
  One of the problems, as was shown in the introductory remarks of the hon. Member for Halifax (Dr. Summerskill), is the great temptation to drag in irrelevant party political issues. There are some relevant issues. I agree with the comments of the hon. Member for Islington, South and Finsbury about partisan stereotypes. However, the fact remains that even when the hon. Gentleman was a member of the Labour party he talked the same amount of common sense. I hope that, while I remain a member of the Conservative party, which I suspect will be a long time, I shall do the same thing.
  Much as I admire what my hon. Friend the Member for Maidstone (Mr. Wells) says in other parts of the building, I thought that what he said about seat belts was tosh.
  We have learnt a great deal about what is associated with crime. I shall not go along the simple lines that we have just heard. Harriet Wilson carried out studies in Birmingham of what family behaviour tends to be associated with crime. Among families of the same social class and circumstances, it may occur because of different child behaviour and most of all because of different parental behaviour—for example, some parents do not chaperone their younger children. It is as plain as a pikestaff. That is well known among those who give evidence, yet it is not shouted from the rooftops and it is not part of common wisdom in every locality.
  We know that most schools and police authorities are aware of the incidence of different types of crime and what numbers of crimes there are for each school, parish and so on. The figures should be published year by year so that people can identify with them locally and work towards improving them. It might be a matter of providing more distractions for children, or by bringing back some "old-fashioned informal control"—I use an expression that Sir Kenneth Newman used at an all-party meeting at the House a month ago.
  I believe that two or three other matters are also essential. First, I suggest a review of our magisterial system. It is all very well having as juvenile magistrates the best people that can be found in an area, but there is no substitute, on an estate of 2,000 people or more, for

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  having people from that estate reviewing the behaviour of local people. I know there are problems with so-called people's courts, but people who live among the failures and the crime and who see the opportunities for improvement locally, bring more common sense to the problem than outsiders who come in to dispense justice. Justice could be more immediate, if more informal, and could achieve social disapproval as well as approval within a locality.
  It is essential also to learn from the kind of work sponsored by the Church of England Children's Society for the past few years. I declare an association with that society. I should like to mention Bob Holman and his work, which has been published in part in "Kids at the Door". There is also a tracking scheme, which provides chaperonage by probation officers and similar bodies in addition to families. It is a scheme which tries to control those children who are at risk of committing crime. They have to report many times during the day. It reduces the time available during which a child can go missing.
  The most important way to reduce crime is to make people aware that they have something to lose when they are found out and also to increase the risk of detection. There are too many people who feel that they have nothing to lose. Too few parents are aware of the impact that slipping into truancy, petty vandalism and more serious crime as they move up the ladder of criminality can have on a child's life. I believe that more people will accept their responsibilities and recognise the influence that they can have on young people when they realise how serious it is for the child, and also that such behaviour is too dangerous for society to tolerate.
  I have been associated for some time with Family Forum. It is an organisation which brings together a large number of voluntary bodies which are trying to bring the family perspective into social and economic policy.
  I believe that the Home Office should give serious consideration to working with the various voluntary bodies, not just in the area of crime and police, but to see what can be done, possibly with a pilot scheme, to make more parents aware of their potential effectiveness in bringing up their children. I shall not go into issues of morality, values and standards and the fact that people can make such choices for themselves, because I believe that the Minister can do that. I want to emphasise that there is potentially an enormous alliance between those who will benefit from getting crime under control.
  Although the hon. Member for Halifax says that increased unemployment is associated with a rise in juvenile crime, and that is statistically correct, it is also correct to say that the incidence of crime per 100,000 people rose more dramatically when this country's standard of living was rising more dramatically. For example, if there are more car radios to steal, more get stolen.
  We could reduce the amount of juvenile crime year by year if we started taking the right action. It is how we do things that matters. Perhaps the Minister could at some stage estimate the savings to the community of a reduction in juvenile crime of 10 per cent. a year for five years instead of the increase of 5 per cent. a year that we have had for many years. Will he, perhaps, consider making an extrapolation—not a forecast—of the reduction in crime if crime were to reduce at the same rate as the reduction in numbers of adolescent boys? We know we are moving towards having fewer teenage boys. That reduction should
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  be associated with a reduction in juvenile crime. What can we look forward to if there is in fact an association between the number of teenage boys and the amount of crime? We must then see what we must do to ensure that that reduction occurs.
  Enormous benefits can be gained by having a more effective policy. Hon. Members cannot detail all the action that needs to be taken. We should worry away at the Government to persuade them to do the limited things that they can do. We should also draw the problem to the attention of the public to show them that we are more worried about it than we are about new control of the police. We need more control of ourselves and we need to control our children more effectively. If we could achieve that we could pat ourselves on the back and vote ourselves a pay increase.
  5.26 pm
  Mr. Ian Wrigglesworth: I congratulate my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) on introducing the debate and raising a most important topic and one about which many people are anxious and upset, particularly in inner city areas. I congratulate him also on his speech, which contained a useful and perceptive analysis of the problem and some good suggestions of how it could be tackled.
  I disagree slightly with one thing that he said, but I believe that his comments generally hit the nail on the head. I hope that they will be marked and understood by a great many people in Government and outside.
  I agree with much that the hon. Member for Woolwich, West (Mr. Bottomley) said. There has been plenty of research and evidence into the kernel of the problem that we face. However, before I discuss that I want to deal with his comments on the political problem posed by this subject. The House must face the change to which my hon. Friend the Member for Islington, South and Finsbury referred which has taken place recently in what has effectively been a bipartisan approach to the administration of the police. I refer to developments that have been taking place within the Labour party and its proposals, which I understand have now been adopted by the Front Bench, for substantial changes in police administration. In my view, and that of my right hon. and hon. Friends it would lead to the most damaging politicisation of the police.
  I hope that wiser counsels will prevail within the Labour party and that the proposals that are being pressed by Mr. Livingstone and those associated with him will not become the Labour party's nationally adopted policy. If they do, I believe that we shall see increased political interference with the running of the police as well as increased accountability to elected representatives. It could have consequences more disastrous than any we have had to contemplate before.
  The hon. Member for Woolwich, West referred to the core of the problem that gives rise to crime. During the next few weeks, we shall hear that serious crimes in Britain have risen for the first time above 3 million, as have the unemployment figures. Mugging, burglary and vandalism—crimes that affect people's lives—are increasing and have not been deflected by the policies that have been pursued in recent times. If we are to succeed in reversing the trends, we must go to the core of the problem. Essentially, that means tackling people's

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  attitudes and values and changing public standards and perception. The House has an important role to play in doing that, as do all politicians.
  One cause of the decline in public standards has been the behaviour and the utterances of some politicians, not only in Britain but in other countries, during the past two decades. The bear garden that the public hears in the House from time to time does not help to mould public standards and values in the way that hon. Members would wish. It is a terrible influence upon young people to hear hon. Members, and Ministers, shouting and bellowing at each other in such a disreputable way. I hope that the House will soon agree to allow television cameras to record our proceedings, so that the public can see what is going on. That will help them to understand a little better, and it may make some hon. Members who are the cause of some of the noise rather more responsible and responsive to public opinion.
  The hon. Member for Woolwich, West mentioned the research that has been carried out into deprived families and families who live in poor circumstances, and the circle of deprivation, as it has been called, from which crime seems to grow. I agree with my hon. Friend the Member for Islington, South and Finsbury that those circumstances do not excuse the commission of irresponsible and illegal acts, but any one with experience in schools or social agencies can identify those areas and families in which there will almost certainly be crime.
  In many of the inner urban areas where such crimes are committed we must introduce policies that will bring about a greater sense of responsibility within the community in which those families live that can be achieved only by decentralising some of the administration and some of the policies that are pursued to a much more local level. I am sure that one reason why people commit the crimes about which the public are so worried is that the community in which they live does not impress upon the individual any sense of responsibility to the community. Many large housing estates are administered remotely. Many facilities and properties apparently do not belong to anyone. There is no sense of belonging to the community.
  For about one year, I used a waiting room in a south London railway station. It was much vandalised, but a student at a local art college painted one wall and put up a notice to explain what he was trying to achieve. The painting made the waiting room a personal place, and I was interested to note that there was no graffiti on that wall because one had the feeling that the wall belonged to someone and that it had some character. It was no longer the dirty, impersonal waiting room in which one used to sit. There is an important message in that. If there is a sense of responsibility in communities, where the people care and deplore acts of violence, we can make some progress in reducing acts of crime. All of us in public life, including Ministers, have a responsibility to try to bring that about.
  After the experience of the past few years, it is clear that the penal system and the police can play only a limited role in reducing crime. Of course we cannot ignore the penal system or the police. I and my colleagues wish to see the strength of the police maintained and the number of police officers increased, and we do not wish to weaken the role
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  that they play. But, at the end of the day, they will not stop the increase in crime. The community is the only body that can do that.
  Recently I visited Japan, where there is a strong sense of community, and I was very interested to note the low incidence of the crimes about which most people in the House and in Britain are worried. One never saw chains fastening radios to the shelves in Japanese electrical shops. That would be almost unthinkable to the Japanese, because public, personal and community standards there are so different. We must try to achieve those standards in Britain.
  My hon. Friend made several suggestions about how we might improve the penal system and the police service. My one slight worry about his comments was on the changing role of police administration. I would not go down the road—I am not sure that my hon. Friend suggested it—of having a national police force. However, there must be co-ordination of police activities and we must face up to the modern reality that that will be increasingly necessary. However, if we could change the voting system in local authority elections, we would probably have very different local authorities with less partisan to-ing and fro-ing. It would make local authorities more acceptable. Police authorities have many powers, but very few of them are exercised. If people are worried about the way in which the police are controlled, police authorities as at present constituted have many powers, although they are not used now.
  I refute the recent suggestion of the Home Secretary at Question Time that when my right hon. Friend the Member for Glasgow, Hillhead (Mr. Jenkins) was Home Secretary, there was a reduction in the police force. During my right hon. Friend's term of office, police numbers increased more greatly and faster than under any Home Secretary for the past 30 years. It is palpably untrue to suggest that the reverse is the case. My hon. Friends and I firmly believe that there is a need to sustain the numbers of the police and, indeed, to increase them so that they can carry out the type of activities to which my hon. Friend referred.
  We are facing a most serious crisis with crimes rising almost certainly during the current period over the 3 million a year figure. I hope that we shall hear from the Minister some suggestions as to how we might improve not only the effectiveness of the penal system and the police service, but also some suggestions and some words that might help to change public values and community standards so that we may all see being brought about the reverse of the trend of recent years.
  5.40 pm
  The Minister of State, Home Office (Mr. Patrick Mayhew): We have enjoyed a very interesting debate, which I thought was all too short. I am grateful, as are all hon. Members who heard his speech, to the hon. Member for Islington, South and Finsbury (Mr. Cunningham), both for the quality of his speech and for the opportunity that it gave us to discuss this pressing and important subject.
  We are all agreed that crime has increased, is increasing and ought to be diminished. More than half the recorded notifiable offences are theft and related offences. Burglaries amount to nearly one quarter; criminal damage to one eighth. The other offences—robbery, sexual offences and offences of violence against the person—are of much smaller proportions.

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  It is rightly the serious offences involving violence which most alarm people. The recorded increase in serious offences involving violence, although of course it varies from year to year, has been 2 per cent. a year over the past two years. Robbery, whether it be attacks on post offices and the like, or muggings in the streets, is a particularly serious threat to the citizen's ability to go about his business in safety. I agree with what the hon. Gentleman said about the fear in which many people, particularly elderly people, live. Although robberies form less than 1 per cent. of all recorded offences, their volume is serious enough, in all conscience.
  So the great mass of crime with which the police have to deal involves the loss of property rather than injury to the person. Sometimes the loss is substantial; often it is very little. Two thirds of recorded property offences involved property valued at less than £100. But in one important respect the value of property taken in a burglary does not matter—the harm that is done is just as great in terms of personal outrage, indignation, fear of recurrence, and, as one so often hears, the feeling that the place has somehow been made unclean by such an invasion of privacy. That is important.
  The picture offered by the statistics is pre-eminently one of widespread dishonesty and of rather less—though all too much—violence. Of course the criminal statistics show only what is reported to the police and recorded by them. It is well known that a good deal of petty offending goes unrecorded. One has only to think of shoplifting and expense fiddling to realise that criminal statistics are no measure of the full extent of crime. The British crime survey which we shall be publishing shortly will offer a new light on the extent of crime and its nature from the point of view of individual victims and households. Meanwhile, the Government's record, both in strengthening the police and promoting new legislation, shows their deep determination to protect people from the criminality that is in their midst.
  The hon. Gentleman does well to draw attention to the social consequences of crime, and I, too, shall discuss them in a few moments. Most crime intimately and immediately hurts people—whether it be offences against the person or offences against property. Therefore it is a social evil, and one against which, accordingly, society as a whole should be prepared to mobilise its forces and fight. If it did so, crime would be greatly diminished. I agree with what the hon. Gentleman and other hon. Members have said about the need to mobilise public opinion against crime. The hon. Gentleman said that he held the old-fashioned view that crime was the fault primarily of the person who committed it. I wish to say a word along those lines.
  Is it not rather strange that, instead of such a mass movement against crime, there is so much indifference to the need for us individually to help to prevent crime? Are the police, for example, really given sufficient help by the public? We know that they are not. There is almost a fatalistic acceptance that curbing crime is the responsibility of somebody else, and that that somebody is bound to fail. We do not have here that which Hitler feared most about the British people, and described in "Mein Kampf" as
  "that broad spirit of the masses which enables it to carry through to victory any struggle that it once enters upon".
  That is not to say that there is not widespread fear of crime—of course there is, and it has been discussed
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  already. It is not to say that there is not indignation about crime; there is, especially among those who have witnessed its cruelty—most crime is extremely cruel. It is certainly not to say that there is any lack of determination in the Government or the police service to protect our people from crime and to take such actions and initiatives as are open to them. Huge additional sums are spent on law enforcement, and continuing thought is given to new approaches as well as to old approaches, whether by means of fresh powers for the courts or by new modes of policing. Yet we find that, of all the convictions and cautions recorded for indictable offences in 1981, no less than 54 per cent. were for offences committed by those aged 10 to 21. In other words, they were committed either by children at an age when their parents were still engaged in their upbringing and responsible in law for it, or by those within a year or two of graduation from that status.
  Nearly one third of all offenders are under the age of 17. Most are under 21. While the rate of offending for adult men is around 12 per 1,000, for boys and young men under 21 it is more than 70 per 1,000.
  I think that a society whose broad mass felt itself personally committed to diminishing the criminality in its midst would have seen a great reduction in the amount of juvenile crime before now. The undoubted rise in juvenile crime coincided with a trend towards permissive tolerance. Some in high places took pride in the permissive society. I wonder whether the rise in crime itself has caused or contributed to this indifference by inducing a weary familiarity with crime in most people. Is it paradoxically one of the social consequences of rising crime that there is individual apathy towards helping to reduce it? I think it is. If so, it is the most serious social consequence of all and must be vigorously corrected.
  As the hon. Member for Thornaby (Mr. Wrigglesworth) and my hon. Friend the Member for Woolwich, West (Mr. Bottomley) said, there is a limit to what judges, magistrates, police officers and Governments can achieve. They must all do their best; Governments to give the police and the courts the powers that are needed; the judiciary to use them with firmness and discretion. The Government have done that. They have improved the morale and pay of the police. They have brought about an increase in the numbers in the police service in England and Wales of more than 9,000 officers. The Metropolitan police force is up by more than 4,000.
  The hon. Member for Islington, South and Finsbury asked about foot patrols. Last year the Commissioner was able to put 1,000 officers on foot patrols—back on to the beat where the public wish to see them. The new Commissioner has said that he will place another 650 officers on the beat in the coming year. The Home Secretary has told the new Commissioner that he can look forward to the establishment of the Metropolitan police being increased to 27,000 by the end of 1983–84. The Metropolitan police is now only 350 officers short of its authorised establishment. It is an enormous achievement.
  Dr. Summerskill: With regard to foot patrols, I realise that the Home Secretary does not have control of other police forces outside London, but will he use his influence on chief constables to try to encourage them to act in the same way as the Metropolitan police?
  Mr. Mayhew: I noted what the hon. Lady said about Halifax. I know that it is the view of the Association of

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  Chief Police Officers that to bring police officers back on the beat is a desirable objective. However, it is in the family homes, and to a lesser but substantial extent in the schools, of our country that the crucial opportunity lies. There is no stronger social unit than the family. Its influence on its younger members has a far greater potential than any that they will meet outside it.
  It cannot cause us much surprise that research establishes a link between criminality in children and indifference on the part of their parents towards discipline, order or supervision in the home. Criminal behaviour by parents, however trivial, is naturally an influential example to their children.
  Nor should it cause us much surprise that so many juveniles who get into trouble come from broken homes. The director of social services for Hertfordshire told me only the other day that last year nearly all the children sent from the courts to his assessment centre had homes from which one of the parents had departed, hence leaving their principal responsibility for their children behind them.
  Neither of those trends of permissiveness or of ready divorce was established in the 1930s at the height of unemployment, yet the 1930s saw no general increase in recorded crime on any scale comparable to today's. It is hard to resist the conclusion that, although rising juvenile crime has grave social consequences of its own, it is itself substantially a consequence of social changes of the sort that I have mentioned. Whether these are reversed, maintained or exacerbated lies only with ourselves in this community to decide.
  Meanwhile, the Government have laid great stress on encouraging parental responsibility. For example, the Criminal Justice Act makes it easier for courts to make parents liable to pay fines and compensation orders imposed on their children. It strengthens the provisions for supervision while working in the community. It produces a night restriction order to keep children at home for a period. We have encourged the use of a formal police caution, which itself adds to the total of criminal statistics.
  We are especially concerned for those who fear that they will become the victims of crime. They are naturally concerned about those crimes that are most likely to affect them in their ordinary business. The commissioner has already come in for praise from several hon. Members who have spoken in the debate, and I am grateful for that. In his recent report to my right hon. Friend the Home Secretary, he made it one of his priorities to improve the performance of the police in dealing with street robbery and burglary. He will be concentrating on improved information gathering, analysis and targeted action to improve the detection of crime. He intends to ensure that areas with a high incidence of street robbery, street disorder and burglary receive priority in the redeployment of manpower. He will also be using the district response units, when on standby, as anti-burglary and anti-rowdyism patrols. Actions of a similar kind to redeploy
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  manpower to the areas where it is most needed, and at times when it is most needed, are being taken by other chief officers.
  Many issues to which hon. Members have referred are of great relevance to the problems that we must face. The hon. Member for Islington, South and Finsbury spoke of too much tolerance of petty crime. I think that my remarks show my warm approval of what he said. It is very much a problem of the attitude of the community in which young people grow up.
  The hon. Member asked about police cells. He has been in recent correspondence with my noble Friend the Under-Secretary of State for the Home Department and he is aware of the action that is being taken to minimise the use that has to be made of police officers' time in the metropolitan area in acting as gaolers for those who have to be accommodated in police cells. The problem is derived from long-term neglect of the prisons and we hope that before too long we shall be able to reduce it.
  The hon. Member asked about the enforcement of fines. In general, enforcement is not inefficient. We were able to make important improvements in the Criminal Justice Act. I parted company with the hon. Gentleman when he said that we lack intensive treatment other than that which is custodial. We can provide supervision that can continue virtually 24 hours a day. This is provided by supervision and probation officers, especially in probation hostels and intensive units such as the Medway unit. I agree that there need to be more of these hostels and units, but supervision is available under the law.
  I agree with my hon. Friend the Member for Maidstone (Mr. Wells) about the importance of curbing truancy. It seems that the conditions that lead to truancy are the same as those which lead to juvenile crime. Undoubtedly, truancy needs to be vigorously curbed. I agree that there is too much legislation that makes criminals out of those who are not regarded as criminally culpable. As someone who voted consistently against the principle of enforcing the wearing of seat belts, I am sympathetic to what my hon. Friend said. However, that is water under the bridge.
  My hon. Friend the Member for Maidstone talked about gipsies and said that some of their children are not attending school. I think that we all agree that such children ought to be chivvied into our schools. I am sure that that view is taken by Kent county council.
  My hon. Friend the Member for Woolwich, West suggested that we publish crime figures area by area. It is a most interesting suggestion and one that we shall wish to consider. I very much agree with what he said about the use of voluntary bodies to raise the awareness of parents to the influence that they can have.
  The hon. Member for Thornaby spoke about a greater sense of responsibility among those who live in a locality, and I agree with that. I must conclude my remarks in about 50 seconds—
  Mr. Speaker: Order. The hon. and learned Gentleman has finished.

  Ilfracombe Harbour
  5.57 pm
  Mr. Tony Speller: In moving the debate rather abruptly from crime in the United Kingdom to the Bristol channel, I trust that the House will allow me to refer to notes rather more frequently than I would normally wish to do. In speaking about development I shall have to choose my words rather carefully from time to time.
  Industrial development and employment have always been assumed to go hand in hand. New factories have been built in areas like north Devon. They have been sited in rural areas and firms have been induced, through grants and rates and rents, to inhabit them. When the winter wind of recession blows, it is not surprising that many of these firms go out of business or withdraw back to their original base.
  Despite this, north Devon, in or around Barnstaple and South Molton, has below the national average of unemployment because the area has new and modern industry. Ilfracombe, which is the key point of my speech, does not have that advantage. It suffers, as all seaside towns suffer, from the problems of holidaymakers going abroad, of having a large, temporary labour force and, alas, of having few permanent jobs. In years gone by the labour force would come down to the west country to work in hotels for the summer and perhaps go to London for the banqueting season. Nowadays, many members of this seasonal work force stay put, and we have 27 per cent. unemployment in an area that has no year-round industry capable of absorbing young people and those who have come to stay among us in, perhaps, early retirement.
  My theme is that Ilfracombe has tremendous potential for tourist and allied industrial development if only we can extend the harbour to take advantage of this uniquely beautiful north Devon location and its available resources. Situated on the Bristol channel, it has no major competition on our side of the water from any harbour for trawlers, roll-on roll-off ferries or coastal and marina-type business. There is no competition anywhere along the north Devon, north Cornwall or Somerset coastline because there is no reasonably safe harbour anywhere along the coast. As a result, there is comparatively little small-boat activity. Small-boat sailors, such as I, fear to go too far out to sea in the absence of a speedily achieved safe harbour for when the weather turns rough.
  Ilfracombe has superb natural beauty with plenty of hotel and catering facilities. In addition, it has full development area status. The north Devon link road from the M5 is at last under way. It is 25 years too late, but at last things are happening and I thank Her Majesty's Government for that. Power supplies are being boosted and both electricity and gas boards are adding new links from Barnstaple to Lynton and Ilfracombe. This means that we shall soon have both roads and power supplies, two of the key necessities for industry.
  Our unemployment rate is probably higher than anywhere in England at the present, not least because of the extremely short summer season, and despite the success of several hoteliers in building up coach connections, and in offering highly competitive terms for the senior citizen end of the package deal market. None the less, it is a depressed area and, in short, Ilfracombe needs an industrial shot in the arm that is more compatible
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  with a location that is distant from mass markets, and that takes account of the available work force and existing facilities.
  Many innovative attempts have been made to provide more jobs. We have thoughts of a ski slope—we have plenty of hills for it. Industrial development committees have been established, and work experience schemes have prospered. I hope to seek, at another time, help from the Government in establishing major projects under the new community programme.
  My scheme is simple in concept and would provide a major stimulus for Ilfracombe and North Devon in particular, and for the whole of the channel coastal ports in general. Mr. Alan Kift, an Ifracombe man, has provided one outline. It may not be the best, and it is certainly not the only idea, but its essence is simplicity itself. He says that we should extend our harbour wall in a curve from its present line by perhaps some 500 ft in total. We have a new flood prevention wall adjacent to the pier, which shows that it is possible to build walls even into our wave swept channel. I hasten to add that this is the Bristol channel, which is not exclusive to Devon.
  What would happen from the provision of one simple wall extension? Initially we thought of the trawlers that have no haven in the winter months when the fish are more bountiful in our waters. We then thought about a marina for the small boats, then about a fishing quay for the trawlers. We went further and considered the advantages for small workshops, for the net-maker and the net repairer, for the small boat manufacturer, for fibreglass working, for the building industry, and for the repair and marine services. We already have hotel and catering establishments. All of these are available but good access to the water is not. It is rather like having a house with no access road. Ilfracombe is beautiful and fine, but at present there is no access by good road nor by good year-round water and we need both.
  I can list some other benefits that would accrue. There would be a safe harbour in a coastal area where bad weather has always been a major hazard. Trawler berths and fish market facilities would be of especial economic value in winter. A roll-on/roll-off facility would reunite us with our friends in Swansea across the water. They have marina facilities and many boating activities which at present we cannot receive with the open arms that we should like. If we take this a stage further there is the prospect not only of the small boats and people crossing to and fro, but of facilities to allow lorries to cross and make their way south from Ilfracombe towards Plymouth and the ferry to Roscoff.
  Better launching facilities for a lifeboat may seem a small matter to raise in a debate on industry, but our lifeboat has to be towed to the sea, which is a slow way to launch a lifeboat in a crisis. The RNLI, before my scheme was even thought of, had been discussing spending a vast sum on providing a safe berth in the water for the lifeboat. It is no secret that every year there are two, three or four new stories of vessels being wrecked, perhaps at Hartland point or further up the channel, because they have no harbour to go to when the weather becomes too much for them.
  If we had the bigger harbour, weekend sailors would maintain their boats and extend the season. They would buy the occasional beer and bring their wives, children or girlfriends along to enjoy the pleasures of the Devon coastline. The season could be extended so that instead of

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  being virtually the school holidays, plus a month at each end, it would extend to six or eight months, which is at least two months more than it is now.
  The service industries would boom for all those associated with the marina, marine activities or tourism. There would be extended business for hotels, restaurants and shops. The scheme would boost our moribund property market. It is fairly well known that along most of the coast, many hotels are for sale at an unreasonably low price. The poor suffering ratepayer will do far better if rateable values and property values increase.
  We have industrial development status, but I would not personally put a factory so far from raw materials and markets. With industrial development status plus the ability to bring in boats and lorries, with the marina and the trawlers, people would take logical advantage of this status. Ilfracombe could once again become the booming and bustling place that it was 50 years ago.
  The scheme would create permanent, temporary and seasonal jobs. There would be major work opportunities as construction progressed, and permanent work would be created in the service industries associated with a busy harbour and port. I hope there would be jobs in an educational spin-off of the outward bound sail training, and all the interesting and pleasant pursuits that at present we have to travel so far to find. Our own family boat is maintained at Dartmouth because it is easier to go 50 miles south to get on a boat that can be at sea in minutes, than it is to wait on the north Devon tides. One simple extended sea wall could help bring all these good things about.
  If I talk about the channel it is because we also have the prospect, I hope, of the Severn barrage. If this comes about, there will be a need for a marine work base. Ilfracombe will not become the Aberdeen of the south but, none the less, those of us who believe that the Severn barrage is a good and sensible idea point out that vessels will need a base and a refuge when working on the barrage because the Bristol channel can be an unpleasant place in nasty weather.
  When asked how such a plan should be controlled, I must tell the House that the whole project is in the hands of the north Devon district council. This is the local authority concerned, and during the next few weeks it will be discussing whether it wants to promote the scheme and, if so, how. With the help of our local newspapers, the weekly North Devon Journal-Herald and our weekly give-away, the North Devon Advertiser, I have been conducting a simple inquiry by questionnaire. Coupons have been put in the newspapers that ask not just "Is it a good idea?", but also "Is it quite a good idea, not a very good idea, or just a waste of time?" We also added a long list of the things that people might like to see in Ilfracombe. It is interesting that I have already received over 300 replies, which is not bad going in a week. Of the replies, 97 per cent. say that the scheme is a very good idea and most of the replies come from the Ilfracombe area, where the people have seen their area declining over past years.
  I was surprised to find that the first preference of the people who replied was roll-on/roll-off ferry facilities. This was followed by more maritime facilities, including those for trawlers. Again, the people of the area were reverting to their old natural position and saying, "We have the sea, let us use the sea." Inevitably, this preference
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  was followed by that of tourism, then light industry, more car parks and, for our occasionally inclement weather, a leisure centre. Three options did not find favour—a big hotel complex, as we have plenty of small ones, language schools or a casino. I am quite pleased that the casino did not find favour. It was a realistic trade and industry reply from sensible citizens.
  At this stage, all I ask of the Minister is encouragement for a sensible project, which will doubtless come to different Ministers for grant aid sooner or later. At least as important, the scheme will need the co-ordination of Ministers and Ministeries to back our search for funds in Europe. We are fortunate in our Member of the European Parliament, Lord O'Hagan. He has already been with me to look at the site and to talk about what we may be able to extract from our friends in Europe and how to extract it.
  We need four specific types of help. First, when the Ilfracombe initiative is further advanced and has been fleshed out to the satisfaction of the appropriate Ministers, will the Minister be prepared to submit an application to the EC regional development fund? I am not asking for a categorical "Yes", but the Minister must know the conditions, and whether the scheme is worthwhile.
  Secondly, can he assure me that the Government would hope to back realistic applications for money for a fishing quay, adjacent to the sea wall and for other allied activities? New funds may be available under FEOGA following the recent fisheries agreement.
  I cannot pronounce the words that the FEOGA initials represent, but these grants are available for agriculture and tourism and my neighbour and hon. Friend the Member for Devon, West (Sir P. Mills) will doubtless explain, as he is well acquainted with how grants are extracted.
  Thirdly, will the Government seek to ensure that the facilities of the European Investment Bank are made available to the scheme? Finally, and perhaps most important, when the applications are ready, will my hon. Friend the Minister let me know in due course which Department will co-ordinate the scheme? It is always the same problem. If one makes a poor application, one gets an unsatisfactory answer. It is vital for my constituents and for those who live along the coast on both sides of the water that sufficient help should be available to get the project started.
  Interestingly, and again surprisingly, I have received telephone calls and letters from major international construction firms, and international and national banks—whose names are familiar to all of us—asking how they can help. They say that the idea is good and viable and want to know how much finance is needed. The project has caught the imagination of many outside our small part of the country. We are not just saying "Please do this for us." We want help along the road. I was sorry that the editor ended his leader in this week's North Devon Journal-Herald by saying
  "Lord O'Hagan and Tony Speller will have to work hard. We shall be watching them."
  There is an inaccurate belief that Members of Parliament are magicians, with better or worse rabbits in the hat, or that we have magic wands. This is a case not for magic wands, but for the local council to think through and to decide how a project should be organised and controlled. The council has yet to agree that it should be organised at all. However, if that is agreed, then the people

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  must have the will to make it work, because without that it will not work. We have no magic wand, much as the Minister should like one.
  I sought general approval from the public through the press; then from Lord O'Hagan, Devon Member of the European Parliament; from the chairman of our district council, Mrs. Freda Avant; and from the the chairman of Devon county council economic development committee, Mr. Michael McGahey. In addition, letters came pouring in from such bodies as the Barnstaple chamber of commerce, the Ilfracombe and district chamber of commerce, Ilfracombe harbour association, the hoteliers association of Ilfracombe, Ilfracombe publicity association, the Royal National Lifeboat Institution and the Ilfracombe sea cadets. Everyone seems to think that this project is a super idea, and so do I.
  The Government spend vast sums on promoting employment in sometimes rather ephemeral ways. I ask only that they should think not so much of a lovely new factory stuck on the edge of Exmoor, where no one wants to go to make widgets, but of promoting the beauty of our country, the extension of our seascape and our old friendships across the channel. Many Devonians live in Wales and many of my friends are of all or part Welsh origin. The sea was our old road and perhaps some time soon it will be the new one.
  6.13 pm
  Mr. Donald Anderson: I offer hands across the channel. From the Welsh side of the Bristol channel I am delighted to extend a hand of welcome and congratulation to the hon. Member for Devon, North (Mr. Speller). Like many Swansea people, I have the happiest memories of Ilfracombe. I also have blissful memories of summer trips across the Bristol channel on the Campbell steamers. As the hon. Gentleman said, there is a thriving Devonian society in Swansea, and I am sure that there is a Welsh society in Ilfracombe and other parts of Devon. Of course there are traditional links. The predecessor of my right hon. Friend the Member for Swansea, West (Mr. Williams) was a Vivian, from the Devon and Cornwall side of the channel.
  We can easily see Ilfracombe and the lights of Ilfracombe from our side of the Bristol channel. Indeed, as you well know, Mr. Speaker, there is a local story that if we can see Ilfracombe it will rain, and if we cannot see it, it is already raining. I am sure that the Welsh side would give the greatest possible support to an investment project that would increase those traditional links, as outlined by the hon. Member for Devon, North. Swansea already has a success story in the new marina and a new lock gate was opened in December last year. That marina—the proud initiative of Swansea city council—is greatly oversubscribed. Therefore, I do not foresee any competition between Ilfracombe and Swansea in that respect, but rather an opportunity for cross-fertilisation between both sides of the Bristol channel.
  Various projects have been considered for providing regular daily services between both sides of the channel, with perhaps a link through from Swansea to an Irish port and a link from north Devon to Plymouth, and from there to Roscoff. With the potential road links to Plymouth, the people of Wales may be provided with a speedy holiday link to France if the project goes ahead and if both sides of the channel are linked.
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  The relevant factors in promoting such links include the high cost at present to commercial vehicles, the tachograph—which means that many operators have to employ two drivers or allow for an overnight stay, which only increases costs—and the possible restrictions on commercial vehicles using the Severn bridge as usage increases over the years. In addition, such a development could save distribution costs, increase business between both sides of the Bristol channel and, as the hon. Member for Devon, North rightly said, increase job opportunities on both sides on the channel.
  One major snag to the development of cross-channel links has been the lack of facilities for roll-on, roll-off vehicles on the Devon and Cornwall side of the channel. Another problem is the high tidal range at several ports. For example, two of the ports mentioned in this context—Padstow and Hayle—would mean an unacceptably long voyage time from Swansea, with consequent high charges and low vessel utilisation. The sailing time to those two ports would be five to six hours, which, with turn round time added, but with no allowance for any time lost through tidal restriction, effectively means one voyage a day. Therefore, that route would not be commercially viable.
  I imagine that the voyage time to Ilfracombe is about two and a half hours. If the project goes ahead, that will be far more viable than the Padstow and Hayle route. Of course, substantial capital investment would be needed. An unproven route is unlikely to attract people unless they are prepared to take a high risk. Therefore, public money will almost certainly be needed. I am attracted by the suggestion that we should tap some European sources and the hon. Member for Devon, North was very up to date on the fishing possibility. I hope that the Minister will respond to that suggestion as positively as possible. At present, the commercial volume would be insufficient to justify a service, so I am attracted by the multifaceted approach of the hon. Member for Devon, North.
  I assure the hon. Gentleman that there is great good will on our side of the Bristol channel and that all the projects for increasing links will be examined sympathetically by the port and local authorities in Wales. I congratulate the hon. Gentleman on his enterprise and initiative, and assure him that we in Swansea and in South Wales wish the launching of his project a fair wind and look forward to an increase in the number of links between the two sides of the channel. I am convinced that such an increase in links will be to our mutual benefit.
  6.19 pm
  Sir Peter Mills: I congratulate my hon. Friend and neighbour the Member for Devon, North (Mr. Speller) on introducing this debate. As we say in Devon, it is a brave idea, and highly suitable for the area. As many of us know, the winds in North Devon are pretty strong, but I wish it a fair wind in the future.
  It may interest you, Mr. Speaker, and the House, to learn that I have Welsh ancestors. My mother came from Cardiff, and one of the delights that she and I experienced was to go from Penarth to Ilfracombe on Campbell's boats, working forward to the marvellous cream teas that we used to have when we reached Devon.
  The idea of a harbour of refuge and a place for seafaring men to go appeals to me very much. My great-uncle was a gentleman called Pilot Evans. He was one of the early pilots who used to go as far as Lundy to pick up the

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  steamers coming into Cardiff and Barry docks. Unfortunately, in a howling gale off Lundy, he drowned, along with all hands. So I have some connections with the area, apart from being a Devonian, and with the people on the other side of the water. I am also proud of my Welsh ancestors. Perhaps that is why I have some little ability to speak, which I know comes from the Welsh rather than the Devon side.
  I fully support my hon. Friend's proposal. It will greatly benefit north Devon. I am particularly attracted to the idea of the marina. Boating and sailing are "in things" at the moment, and I see no reason why north Devon should not have facilities for them, as well as roll-on, roll-off facilities for more important industrial matters.
  One only has to consider the Plymouth-Roscoff ferry, as a result of which there has been tremendous growth of business between the two countries. The same thing could happen with this project in north Devon. I only hope that the lessons of the Plymouth-Roscoff ferry will be learnt, and that British ferry firms will seize the initiative.
  Mr. Tony Speller: I spoke only this afternoon to the retired managing director of the Campbell line, and he said that a decade and a half ago his company surveyed both Swansea and Ilfracombe and decided that Ilfracombe harbour could well serve a British ferry, but the problem was that there was nowhere on the Welsh side at that time to receive it. In fact, the Welsh have now jumped over us with their Swansea marina.
  Sir Peter Mills: That shows that there has been some advance in the plan, which I welcome.
  Moreover, the spin-off would be important, all along the coast, down the length of the Bristol channel towards Cornwall. My hon. Friend will know Appledore, which would have ship repairing facilities for any ships using Ilfracombe and the coast. I played a small part in getting Appledore Shipbuilders off the ground a few years ago, when I was the Member for that area, and that would be a plus for the scheme.
  The spur road from the motorway to Barnstaple, which will eventually be built, will open up the whole area. We need something at the end of it, and my hon. Friend's proposal would help in that respect. In my opinion, industry would use its speedy access to the United Kingdom's motorway system. The spur road will help the plan, too.
  This is a brave and useful idea, which I support not only because of my connections with Wales but because I want progress in the Bristol channel, particularly in north Devon, both economically and for the tourist industry. I hope, therefore, that Ministers will give it a fair wind.
  6.25 pm
  Mr. Alan Williams: Since this brief debate started, I have noted the Minister's face paling. He is facing that most dangerous and unusual phenomenon in the House of Commons, a consensus across the Floor. It is a matter on which the Government Whips will have to act.
  Our links in south Wales are well established with Ilfracombe on the Devon and Cornwall side of the channel. That part of my constituency is the Mumbles. The fishing communities are intermingled, and there is considerable intermarriage between the two sides of the channel. My
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  hon. Friend the Member for Swansea, East (Mr. Anderson) spoke of blissful recollections of crossing the channel on the Campbell steamers. My recollections are best summed up in an unhappy alliteration—nautical but nauseous. Little fits less into my recollections of that crossing than an Ilfracombe cream tea.
  However, we welcome the development of a roll-on, roll-off facility between south Wales and the south-west peninsula. We commend the imagination of those who developed the idea. I hope that the Minister will view it favourably and see what can be done to help. There is little doubt that it would qualify, in terms of infrastructure, under the EC regulations. Regional fund money and social fund money would be available for a project of this nature, if it were given the appropriate Government backing. For us in south Wales it has the attraction, as my hon. Friend said, that it would represent a shortening of the transport times between the two areas. That would benefit both sides, because the markets would be more accessible to industry on both sides of the channel, and we would welcome the cross-trade that that represents.
  The proposal would also benefit our two holiday industries. The Conservative Members who have spoken in this debate are justifiably proud of their tradition in the tourist industry, but with the Gower peninsula and the lovely stretches of south-west Wales that are easily accessible from Swansea, we, too, would benefit from holidaymakers coming in our direction.
  In welcoming this proposal—I hope that what I shall say will not be seen as an attempt to undermine its objective—we do not want it to be thought of as an alternative to the ultimate recognition of the need for a second bridge across the Severn. For many technical reasons, which I shall not go into, it is well known that there is an urgent need for such a project. I hope that the Government will not view this proposal as a low-cost alternative to a different transport need, meeting a totally different requirement.
  Finally, the hon. Member for Devon, North spoke with optimism of the benefits that would accrue to Ilfracombe from improved road access. I warn him of the sad fact, which we in Swansea are learning, that roads have a strange habit of going in both directions. We have just learnt of the departure of Dragon Computers, which was seduced away from Swansea by the Government through the use of grants. As I say, access can be a way out. We have lost jobs because of that factor.
  However, we would not want to appear to be impeding the project. We hope to be kept informed of its development. Any help that we can provide in developing a project that we believe might also benefit our side of the channel will be available.
  6.30 pm
  Mr. Arthur Palmer: The House is greatly indebted to the hon. Member for Devon, North (Mr. Speller) for raising this subject. I have close personal knowledge of his constituency. A story often told against me in my family, which causes me to blush to this day, is that when I was aged about six or seven I was heard thanking God that I had been born a human being, secondly that I had been born a Briton, thirdly, that I had been born an Englishman and, fourthly, that I had been born a Devonian. I did not at that stage particularise

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  between north and south Devon. I was, in fact, born in north Devon, between Bideford and Appledore, and spent much of my boyhood there.
  The hon. Gentleman is right in what he says about the economic situation of the peninsula. In Bristol, we have more than our fair share of unemployment and the figure is increasing. Further west, as the hon. Gentleman stated, unemployment mounts to greater heights. I am sure that the hon. Gentleman's figure of 27 per cent. in north Devon is right. The difficulty is that much of the employment is seasonal. The area depends, as it has always done to a great extent, on tourism. An area of considerable natural beauty, it is attractive to visitors but seriously lacks industrial employment to add to agriculture where employment has steadily fallen, as elsewhere, over the last 100 years due to mechanisation and other changes.
  The difficulty is how to add to the stock of industrial investment without detracting from the natural charm and amenity of the south-west and its appeal to tourists. For a number of years, the south-west regional council of the Trades Union Congress, at one time under the leadership of Mr. Brian Bailey, now Sir Brian Bailey—knighted for his public service and service to trade unionism—has given attention to these matters. I do not claim that efforts to promote employment have made much impression on Governments of either party.
  It can perhaps be stated in defence of the Labour party that we have little south-western parliamentary representation in the House apart from in Bristol itself. Hence, Bristol Labour Members see themselves as the trustees of the Labour cause in the south-west until we can win back constituencies such as Exeter, Falmouth and Camborne, Taunton and Plymouth that we once held.
  I am glad that the hon. Member for Devon, North raised the issue of more industrial activity and better harbour facilities at Ilfracombe. There has been reference to Appledore. However, judged by the statement made in the House today, the hon. Gentleman will not get far with present Ministers. It is bad news that the cable-laying ship required by the Central Electricity Generating Board to help provide the cross-Channel connection between the British and French electricity grids is to be built in Korea. There were protests from both sides of the House today. Like my hon. Friend the Member for Swansea, East (Mr. Anderson), I wish the hon. Member for Devon, North a fair wind and all success in his representations. There is a common interest among all hon. Members representing the south-west.
  The hon. Member for Devon, North mentioned the Severn barrage briefly. If the barrage were constructed, it would be a source of employment not only in the southwest but all the way along the Bristol channel on both the Welsh and English sides. It would also be a considerable source of employment for the whole of British industry. A vast amount of engineering work—mechanical, civil, and electrical—would be involved. The project would embrace the whole range of British engineering.
  If constructed, the barrage would be one of the engineering wonders of the world. The Severn estuary is one of the best sites for tidal power anywhere in Europe and probably ranks third or fourth in the world, due to the physical nature of the estuary. In my view, as an hon. Member who takes a close interest in energy matters, it is the only practicable renewable energy source that will provide electricity on a truly large scale. It has been talked about for half a century. Before the war, there was the
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  Brabazon report. However, had the barrage been constructed at that time, it would have now proved so small in relation to the total electrical load of the country that we would have to be thinking about a second barrage.
  Today, the output from the barrage, if it was constructed to full capacity, in tidal terms of the estuary, would match the total output of the electrical grid. In the 1970s, the Select Committee on Science and Technology, of which I had the privilege to be Chairman, recommended an up-to-date study of the subject. The suggestion was adopted by the then Labour Government. Sir Hermann Bondi, a distinguished scientist and a man of all-round technical knowledge, was appointed as chairman I was appointed by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) as a member of the Bondi committee.
  We worked hard for two years and reported 1981. Our proposal was and is that there should be a barrage from near Weston-Super-Mare on the English snore to Lavernock point near Cardiff on the Welsh shore. That barrage will give an electrical output of between 7,000 and 8,000 MW, which is equivalent to the output of about four large modern power stations, whether they be coal-fired, oil-fired or nuclear stations. We had much expert assistance and were able carefully to calculate the Arming costs. Without giving the exact figure, the cost per unit would fall at a point between that of producing electricity by nuclear power and that of producing it by coal. It would be less expensive than coal and rather more expensive than nuclear power.
  The barrage would be a great power station driven by tidal power. The intention would be to feed the electricity into the national grid, producing in this way between one sixth and one eighth of Britain's electricity needs.
  Mr. J. F. Pawsey: Is the hon. Gentleman aware that many Conservative Members endorse what he has said and believe that such a project would be a valuable source of jobs and provide much pollution-free power? Many Conservative Members would like to see the Severn barrage scheme go ahead as soon as possible. I hope that the hon. Gentleman will touch upon the fact that a consortium exists which even now is looking into the prospect of building a Severn barrage. I mention that because, as I am sure the hon. Gentleman knows, the General Electric Company in Rugby, which produces turbine generators, is very much involved in that project.
  Mr. Palmer: I am grateful to the hon. Gentleman for his support and I hope that he will join me in prevailing upon the Government to take some action.
  There is of course a problem, in that tidal power moves according to the lunar cycle, which means that its unit output relative to capacity is not so good as that of, say, a nuclear station or a large coal-fired station that can be kept continuously on the base load. However, we need not go into that here.
  The scheme would create much employment throughout British industry. We are not dealing here with some difficult new technique. There are undoubtedly serious civil engineering problems to be solved, but, generally speaking, a barrage would use well established and understood techniques. It would give the electricity supply industry—I declare my interest here through my trade union and industrial connections—an extra security of supply because, in addition to coal, oil and nuclear fission, we would have a fourth primary source.

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  The Bondi committee proposed further technical studies, costing, I think, between £12 and £14 million, without necessarily a commitment to proceed with the barrage, though I think that the two would go together. The House and the country—certainly the west country—are still awaiting the Government's decison. It will soon be two years since the Bondi committee reported and we were once promised a decision or a statement within six months.
  The financing of such a project with its enormous initial cost is a difficulty, which I do not minimise. It requires a great effort of political will to make the decision. I appreciate that. I do not think that the CEGB would want to put up the money because it would adversely affect its public sector borrowing requirement. I favour the creation of a Severn barrage authority, a public corporation, uniting both sides of the channel with some general amenity and social obligations in addition to its primary task of generating electric power through the barrage. It would need to have the right to raise capital from both private and public sources which could be done by means of Treasury guarantees as the original bridge scheme was financed in the 1970s. The operation of the barrage would be best organised under contract to the CEGB, which would purchase the output, of course.
  I hope that the Minister will say, if he can, when the Government will make up their mind. As I have said, a scheme of this size and potential would create a vast amount of work, certainly in the Bristol channel area and, in engineering contracts, for the rest of Britain. It would also provide a fine new area of water for recreational purposes. The Government should not dither any longer. They should at least decide to go ahead with the next stage, as Bondi recommended.
  6.47 pm
  The Under-Secretary of State for Industry (Mr. John MacGregor): I congratulate my hon. Friend the Member for Devon, North (Mr. Speller) on raising this matter this evening. I know that it is, or could be, one of great importance to his constituents. Therefore, I shall confine my remarks to his proposal rather than deal with the speech made by the hon. Member for Bristol, North-East (Mr. Palmer), which ranged more widely, and I hope that the latter will forgive me for so doing. However, I shall ensure that his remarks on the Severn barrage are drawn to the attention of my right hon. and hon. Friends.
  I shall concentrate my remarks on the four questions asked by my hon. Friend the Member for Devon, North. I am sure that he will be grateful for the support that he has received from all hon. Members tonight. I would tell the right hon. Member for Swansea, West (Mr. Williams) that I was in no way paling before his remarks; I was simply reflecting on the fact that, like every hon. Member who has spoken in the debate, I know the area of Ilfracombe extremely well. As my hon. Friend the Member for Devon, North knows, my family when younger always, holidayed in Ilfracombe and we have many happy memories of that town. Indeed, we return to it from time to time even now. I recognised all the spots that he showed me on the map that he gave me earlier with the harbour proposal on it. Therefore, I appreciate what an attractive spot it is, as do all the other hon. Members who have spoken, and I understand the hazards of tides and
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  winds and the problems of communication for industry on the land side of Ilfracombe. I understand why my hon. Friend has made his proposal and I recognise the town's considerable tourist potential.
  Although I do not want to suggest that the unemployment problems of Ilfracombe are as severe and intensive as those of other parts of Britain, I recognise that Ilfracombe has an unemployment problem, particularly a seasonal one. Therefore, I understand that as one of the reasons for my hon. Friend's proposal.
  My hon. Friend's proposal for the development of Ilfracombe harbour is interesting and imaginative. It is worth a close examination—first, locally. I cannot comment tonight in detail, having just seen the proposals. The north Devon district council, as the harbour authority for Ilfracombe, will wish to give these ideas the closest attention. My hon. Friend will be the first, I have no doubt, to agree that such an important and potentially costly project will have to be approached with a keen sense of realism. The proposal is still very much in embryo, and wide-ranging considerations will need to be examined before the local authority can reach any firm decision to proceed. These are considerations which must be pursued locally, and I would not presume to comment tonight on the merits of a project in so far as it must first be considered locally. I am pleased that my hon. Friend is taking extensive soundings of his constituents about the scheme.
  Although capital investment projects such as these can naturally bring welcome relief on a short-term basis to the pervading problems of local unemployment, it is important always to look to the longer term to ensure that today's scarce resources are sensibly directed into projects that will bring lasting benefits to the economy of the local community.
  Ilfracombe is an historic town and resort lying in a beautiful corner of the South-West. Its harbour is one of its attractions to visitors, including my family, who appreciate the scenic qualities of north Devon—an area of outstanding natural beauty.
  Any development of the harbour would clearly have to be undertaken sensitively to ensure that its attractions were not lost but enhanced. I have little doubt that the local authority, as harbour undertaking, will wish to take the best possible advice on the range of viable development options that may be open to it. The local authority, and Devon county council as highway authority, will also want to consider fully the implications of major development on the town's traffic and general environment.
  I wish to be as helpful as I can to my hon. Friend in giving guidance as to the various considerations that he will have to take into account.
  Beyond that, the district council will no doubt appreciate that fresh statutory powers may be needed to authorise the extension of its harbour; and any project costing over £3 million will require the authorisation of my right hon. Friend the Secretary of State for Transport under section 9 of the Harbours Act 1964. Officials of the Department of Transport are naturally always ready to advise on these matters if required.
  Assistance towards the cost of important new infrastructure works that contribute to the economic development of assisted areas is available from the European regional development fund. Ilfracombe is a development area in recognition of its unemployment problem.

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  As my hon. Friend knows, the Mullacott Cross industrial estate in Ilfracombe and the reinforcement of the Barnstaple-Ilfracombe gas main have both received 30 per cent. grants. My colleagues in the Department of the Environment will be happy to consider further applications for qualifying projects at Ilfracombe, consulting as necessary with other Departments that may be involved.
  I make it clear that port undertakings in assisted areas may apply for grants towards infrastructure projects, usually at 30 per cent., from the fund. To qualify, the project needs to be viable and in line with the regional policies for the area.
  The north Devon district council will not need to be reminded that it would require a capital allocation under the Local Government, Planning and Land Act 1980 before it could embark on a major capital project of this kind.
  It might be appropriate to say a few words at this juncture about the Government's general policy towards the development of ports in this country. The central theme is that the port and harbour authorities should manage and develop their undertakings on a clear commercial basis. The Government are also encouraging ports to look to the private sector for capital finance and to be less dependent on Government loans. The main type of development, which in part is what my hon. Friend is proposing, could well be suited to financing as a commercial venture rather than as a charge on the ratepayers.
  I was interested in what my hon. Friend had to say about the response in terms of inquiries that he has already received from banks and others since this project was mooted. I hope that the local authority will consider this as a possible approach among the options open to it in developing such a proposal.
  The Government have already recognised the need for improved communications in north Devon. The north Devon link road will bring relief to several routes in north Devon, especially in the summer months, and will contribute to removing one of the major barriers to further development in the north Devon area. The link road will eventually replace the A361 as the trunk road from Taunton to Barnstaple. As my hon. Friend knows only too well, and as I know from time to time, the present A361 is a very tortuous and narrow route, not capable of improvement except at great cost; hence the decision that a new corridor route would be a more viable solution.
  Stage 1 of the link road from the motorway to Tiverton is now under construction, with completion expected in
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  the spring of 1984. The Department of Transport is about to publish the statutory orders for the first phase of stage 2.
  On my hon. Friend's comments about the fishing potential in the Ilfracombe area and his question about FEOGA, I am informed by my right hon. Friend the Minister of Agriculture, Fisheries and Food that he has no knowledge at present of significant unexploited fisheries potential in the Bristol channel area. If commercial assessments of such a potential suggested a need for harbour development in north Devon, a grant might be considered for approved costs under fisheries legislation to the extent that it could be demonstrated that there would be a benefit to the fishing industry. Any aspects of the development involving marketing and processing activities could be eligible for consideration for the FEOGA grant. Further information on this aspect can be obtained from the Ministry of Agriculture, Fisheries and Food.
  My hon. Friend asked me about the European investment bank, and the viability of EIB funds for the Ilfracombe scheme. It will be for the local authority, as harbour undertaking, in the first instance, to decide whether the EIB could be an appropriate source of finance. He obviously would not and could not expect me to give him an answer at this early stage on whether that would be the procedure to employ.
  I turn finally to the question which Department would co-ordinate the applications towards European Community sources. I think that that depends on the shape that the proposal ultimately takes. If it is fundamentally an environmental proposal or an infrastructure proposal on the port side, it would be a matter for the Department of the Environment. Other Departments will be involved as well. If my hon. Friend will see me when he is ready, I will be willing to guide him to the correct Department.
  I congratulate my hon. Friend on his initiative. I do not have a magic wand in my kit on this occasion. He himself said that there were no magic solutions for most of the issues we face as politicians. His suggestions, I am sure, will be given serious consideration by the local authorities and others concerned for the future well-being of the Ilfracombe area.
  I have outlined some of the considerations which need to be taken into account, which I hope will be helpful to my hon. Friend. I am sure that my colleagues and their Departments stand ready to offer what advice and assistance they can in their respective spheres of responsibility.

  West Midlands (Unemployment)
  6.59 pm
  Mr. Geoffrey Robinson: This is the first time that the House has discussed unemployment in the west midlands since December 1981. In other words, during 1982 the west midlands as a specific region was absent from our debates. It would, however, be wrong to infer that hon. Members on either side have been unaware of the growing unemployment crisis, which is now reaching breaking point. All hon. Members will, therefore, I am sure, welcome this opportunity of putting to Parliament and the people their views on this truly desperate situation and on what is required to put it right.
  The manufacturing heartland of Britain has become a wasteland of closed factories. The charge that we lay at the door of the Government is factual, simple and direct. We charge them with the total devastation of the employment structure of the west midlands. We sustain that indictment because in practice the Government's policies have been universally destructive of the west midlands. The charge is total, because the destruction of jobs has been universal and indiscriminate, as the figures will show.
  Unemployment in every area within the west midlands has increased, as it has for every part of Coventry, the city that I represent. There are no geographical bright spots. There is no relief between age or category of worker—between white or blue collar workers. There is no difference between the young and married couples; men and women; or long-serving employees. All of them have seen their legitimate hopes of training, jobs, promotion and properly deserved retirement savaged by Conservative policies.
  Nor has there been relief for categories of industry. Manufacturing has been worst hit, but employment levels in the utilities—gas, electricity and water—as well as in the service industries have declined year in, year out.
  There has been no relief by size of company or institution. Large, medium and small have all declined—with record levels of liquidations in every year of the Government's administration.
  There has been no relief as between ethnic groups. White and black have both suffered, but the percentage of registered unemployed belonging to the ethnic minorities in the west midlands is three times larger than that of Britain as a whole. Worse still, the ethnic unemployment rate is likely to rise even faster—a powder keg threatening social stability in the area that we represent.
  No statistics can adequately represent the human misery that these plant closures, redundancy notices and never-ending dole queues mean for the people they affect, but we must use the statistics to measure and quantify the comprehensive failure of the Tory policies that have caused them.
  We are pleased that the Secretary of State for Employment is present. That is appreciated, even though there is little that we can say in favour of his policies. The right hon. Gentleman's presence is welcome, as it gives us an opportunity to put some straight criticisms to him.
  On the right hon. Gentleman's own "cooked" figures, unemployment in the west midlands has gone up from 111,000 in 1979 to a staggering 367,000 at the end of 1982—a vicious increase of 229 per cent. Frankly, it is
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  difficult to comprehend increases of that magnitude. There has been a trebling of the region's unemployment rate, from 5·2 per cent. in 1979 to 16·1 per cent. at present. That is by far the highest rate of increase in unemployment for any region in Great Britain.
  The figures are worse still in Coventry. In June 1979, 15,000 people were unemployed. In October 1982—and it has gone up since then—there were 45,000 unemployed, an increase of more than 250 per cent. In 1983 the overall level of unemployment in Coventry will rise to 20 per cent. Indeed, male unemployment in the region as a whole is already 20 per cent.
  The results of this tripling in unemployment are to be seen in the tragic loss of material and human resources. In the west midlands as a whole there are now 300 million sq ft of empty factory space. That is a stark reflection of the fact that the west midlands has lost 30 per cent. of its manufacturing capacity, yet the Government still refuse to acknowledge that that represents a structural problem in our industrial performance. Later, I shall comment on the positive recommendations that we shall make to try to get the Government to change their direction and content of policy, to face the misery that they have caused and to embark on a policy of construction rather than one of destruction.
  In Coventry, only 15 per cent. of youngsters gain full-time employment. Of the 85 per cent. who join the combination of training and release schemes that the Secretary of State has grudgingly created, only one in four is thereafter likely to get a permanent job.
  That can only be described as a wasted generation whose hopes have been blasted by monetarist dogma. What chance do the young have? Apprenticeships have fallen from 600 a year two years ago to under 400 today. The skilled man who has completed his apprenticeship, the person approaching retirement age, but still with a few years to go, and the youngster who has just left school can try their luck with the 58 other people who are now chasing every vacancy. There will not be room to park their bikes, let alone get an interview.
  Confronted with a picture as unrelievedly black and desperate as the plight of the west midlands, what has been the Government's response? Under pressure for electoral and other reasons from their own Back Benchers, bombarded by delegation after delegation of local councillors from Birmingham, Coventry and the other districts, and continually subjected to pressure at Question Time, they have done absolutely nothing. Their attitude has been aptly described in other matters of state as "general Micawberism"—hoping that something might turn up.
  The Chief Secretary to the Treasury told us a year ago that the evidence of recovery was all about us. We shall be interested to hear what the Minister says tonight. Who are they trying to kid? Can a Government or a Minister be so out of touch? I ask that, because it is clear that the Chief Secretary is no worse than the rest. The Secretaries of State for Industry and for Employment and the Prime Minister herself are just as out of touch as he is.
  What can one say of the Secretary of State for Employment? We are told that he is a man of courage and principle, yet he even funks a visit to the production line of Jaguar cars and instead sneaks into the styling studio—
  The Secretary of State for Employment (Mr. Norman Tebbit): The hon. Gentleman funked every issue under the sun when he was managing director, which led Jaguar into the troubles from which it is now being pulled out. He knows that it was never proposed that I should visit the production line. I wanted to see the R and D section, because I was the Minister who took the decision to finance the XJ40. I showed some faith in Jaguar, which, under the managing directorship of John Egan, has been more than fulfilled. It is a pity that the hon. Gentleman could not achieve those results in his day.
  Mr. Robinson: Out of consideration to my hon. Friends, I shall not pursue that argument—[HON. MEMBERS: "Ah!"] In that case, I shall.
  Mr. George Park: Will my hon. Friend give way?
  Mr. Robinson: Perhaps my hon. Friend will let me deal first with the Secretary of State's intervention. I am grateful to the right hon. Gentleman for allowing me to put the record straight. He really should not have intervened. Production at Jaguar is now about half the number of cars that it was producing when I left. It inherited the model that I left with it. Its profitability is in real terms barely half what it was when I left—[Interruption.] The Secretary of State may not like the facts, but it is as well that he did not go around the production line, because I do not think that he would have been a welcome visitor.
  In addition, Jaguar's profits and cash flow are not in real terms as good as they were when I was with the company. Having said that, let me add at once that there are Jaguar factories in my constituency, and no one welcomes more than I the progress that has been made. Equally, no one recognises more than I the progress that must still be made before the confidence of the work force is restored. I am sure that the managing director, unlike the Secretary of State, recognises the importance of good industrial relations.
  When the Secretary of State goes to the factory he funks the issue and sneaks into the styling studio. He tries to develop John Egan into the Government's latest pin-up boy in succession to Michael Edwardes. However, it is better to be the Prime Minister's pin-up boy than the Japanese Government's favourite Geisha girl, which is the only title that one could give to the Secretary of State for Employment. When he was at the Department of Industry, there was nothing that he would not do to get the Japanese here. He was crawling on his hands and knees and kowtowing to them in every possible way to persuade Nissan to invest in this country. Has he no faith in British engineers, British skills, British management or British workers? Will he or the Under-Secretary of State answer our questions this evening? Are we to have Nissan, or not? What are we to have by way of investment?
  Mr. Tebbit: Does the hon. Gentleman want Nissan, or does he want to keep Nissan out?
  Mr. Robinson: I shall give the right hon. Gentleman the same answer as I gave him when he made the announcement with such a panoply of glory, only to see the prospect disappear further and further over the distant horizon. I want investment from Nissan on the right terms, but not on the terms which, in his ill-informed and illiterate fashion, the Secretary of State put forward then, when he described his ineffable vision of British workers using and maintaining Japanese-designed robots.
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  If there is to be a real transfer of industrial and technological know-how from Japan to this country, my answer is "Yes, we will have Nissan". However, the conditions laid down by the Secretary of State and inherited by his successor at the Department of Industry have been whittled away to non-existence in the Government's desperate and abject eagerness to get the Japanese here because the Government are unwilling to back British management or British workers.
  That digression was forced upon me by the surprising eagerness of the Secretary of State to come to the Despatch Box, but my main concern is the level of unemployment in the west midlands, which everyone except the Secretary of State agrees to be a very serious problem, and the suffering caused there by the perpetuation of the Government's employment and industrial policy. It is clear from the irrelevant interventions of the Secretary of State for Employment today that we cannot look to him for salvation. Nor can we expect any help from the Secretary of State for Industry. They are two of a kind.
  Moreover, if we study the Prime Minister's famous interview with Mr. Walden on London Weekend Television—it has now been issued as a press release from No. 10 under the title "The Resolute Approach"—we see that we cannot hope for much from the Prime Minister either. She spoke about what will happen
  "if we keep our policies firm and do all the right things, you know,"—
  she may know, but I do not—
  "keep public spending under control, keep the budget deficit low, keep public borrowing down, keep the money supply under control."
  That is all that we have from the Prime Minister.
  What is the relevance of any item on the list that the Prime Minister enumerated with such emphasis and such pride in that interview? It is hard to see how the west midlands will benefit from any of those policies. Indeed, it is in fact hard to see that any of them is being successfully implemented. Inflation came down while the money supply expanded and, even if the money supply is under control, interest rates are now higher in real terms than at any time since the second world war. That took some doing.
  Unlike others, I find some glimmer of hope in the Prime Minister, as she is more of a realist than many of her colleagues. She knows that something must be done in the west midlands if the Tories are to have any chance of retaining key marginals there at the next election. She realises that her party cannot go into an election with unemployment continuing to rise at the rate that it has risen and continues to rise in the west midlands, so she is under pressure to do something about it.
  As we saw last October, the best way to put the Prime Minister under pressure is for a group of industrialists to visit her, as they usually represent companies with handsome contributions to make to the Tory party. It was not enough that 400,000 construction workers were unemployed, 2 million bricks were stacked around the country and the house building programme was at an all-time low. None of that made any impression, but eight good men and true turning up at No. 10 in their building helmets and telling the Prime Minister that something had to be done made quite an impression. Within a week the Secretary of State for the Environment had stood on his head and instead of saying "Cut, cut, cut," was saying, "Spend, spend, spend" and "Build, build, build." That

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  was nothing to do with keeping borrowing under control or not spending Government money. On the contrary, it means spending Government money to help private industry, but that is what the Prime Minister did for the construction industry, and it should have been done two or three years ago. I am glad that the Secretary of State for Employment agrees.
  Let us take the analogy a little further. If that was right for the construction industry, why is it wrong for manufacturing industry? We all know that for every £1 spent by the Government on construction or manufacturing, an average of 70p goes to the private sector for goods and services. The Secretary of State shakes his head as though that were not a fact, but we all know that that is why the expanded public sector spending programme for the construction industry was of such great assistance to the private sector companies, which almost exclusively benefited from it.
  If the Government will recognise that they have as important a role in manufacturing industry in toto as in the construction industry, we may yet reverse trends that will otherwise be terminal for manufacturing industry in the west midlands. The example of the eight construction companies is relevant to the west midlands, because the Government cannot simply pass the buck to industry. The Government have as vital a role to play in relation to manufacturing industry as they have in relation to the construction industry.
  Whether the Secretary of State and the Prime Minister like it or not, the Government are responsible for the devastation of the west midlands manufacturing base and for the increase in unemployment, which is now 355,000, more than 16 per cent. The proportion of that total who have been unemployed for one year or more is now 41 per cent., or almost 150,000 people. In Coventry, 86 per cent. of youngsters leaving school have no jobs. There are 58 people chasing every vacancy and 300 million sq ft of factory space lying vacant and rotting. Worst of all, there is no sign of improvement and every sign that things will continue to get worse.
  To establish what is wrong and to fix responsibility where it belongs is not playing party politics. It is essential to know what is wrong if we are to put it right, but we must not stop at criticism. We must put forward practical and realistic policies to reverse the decline.
  Mr. Anthony Beaumont-Dark: Did not the Labour Government's policies on industrial development certificates from part of the foundations for the decline of industry in the west midlands? If the hon. Gentleman would analyse the past honestly, we might believe in some of his panaceas for the future.
  Mr. Robinson: That is going back a long way. We have had this argument before. I can go back as far as anyone wishes. Let us go back to the 1870s and to 1851 and the great exhibition. Let us go back to the education system that does not produce enough of the engineers, designers and technologists that we need.
  I will admit to one mistake that was made by my party when it was in government. As the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) invites me to put the record straight, I can tell him British Leyland, and especially Jaguar, were adversely affected by the
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  appointment of Lord Ryder and the implementation of his lunatic plan for Jaguar. That was the occasion of my resignation from Jaguar.
  From then on, bad mistakes were made in relation to British Leyland by the National Enterprise Board, which was set up by the Labour Government. Certainly Jaguar's performance after the report suffered greatly and there has been a wider degree of economic decline than need have happened because of the interim period of poor performance by Leyland, following the report. I am prepared to accept that my party made a mistake, both because it is true, and because it gives me the opportunity to tell the Secretary of State for Employment the reason for my resignation, after which the decline in Jaguar's fortunes took place.
  We must be practical and positive. I am aware that many of my hon. Friends wish me to push on. It is a well-attended debate, and time is pressing. I shall compress my speech in a way that will not do it justice to the positive proposals, but I hope to find another occasion to develop the arguments.
  My first specific proposal is one to which I hope the Minister will give a clear answer. The whole of the west midlands metropolitan county should be designated as an assisted area. We have had from time to time some all-party support on the issue. Certainly that is so for Coventry. The figures that I have quoted, and further figures that I could quote clearly show that there is structural decline, by any definition. If the designation of the west midlands as an assisted area is resisted, different criteria must be used from those presently established for such a area.
  The clear recognition of structural decline brings me to the central importance of the motor industry to the west midlands economy and to the country as a whole. It would be a supreme irony for successive Governments and the Secretary of State for Employment—he served in the Department of Industry, where the Secretary of State opposed plans for investing in British Leyland—if, having poured £1 billion into British Leyland to save our one nationally-owned motor car industry for Britain they now preside over the collapse of the component and capital goods supply industries.
  My second proposition is therefore that the Prime Minister should call together the chairman of British Leyland, with leaders of eight major component and capital goods supply industries—as she did for the construction industry—to hammer out a massive and accelerated purchasing programme for British made equipment. Companies that immediately spring to mind are John Brown, Tube Investments, GKN, Associated Engineering, Automotive Products, Dunlop, Lucas and Armstrong Equipment. Nearly all those companies are household names. They are cutting their work force to the bone because of the decline in demand for their goods. If action is not taken quickly, such companies as GKN will turn into vast warehouses for the importation of Japanese and other foreign components.
  The Government can count on the full support of the trade union movement. One hundred trade unionists met in Coventry during the weekend and committed themselves to a co-ordinated campaign to achieve for the capital goods supply and components industries the survival which successive Governments have achieved for British Leyland.

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  Thirdly, the Government must resolve the wretched Nissan project. They have pandered to Japan for long enough. They have lost all self-respect. Let us have the matter tidied up. Is Nissan coming to Britain, or is it not? I know the difficulty, because I have negotiated with the Japanese, as have many hon. Members. But there comes a time when the laughing, the silly behaviour, the chattering, the Secretary of State's behaviour this evening, the trips and the public relations must stop. We must realise that we are dealing with the jobs of real people.
  The investment intentions of other companies could be affected by the project. The Government should take their courage in their hands and tell the Japanese that if they do not put the investment under way within three months we shall reduce the Japanese quota by half. An agreed level of about 11 per cent. has been adhered to and this should be reduced to 5 or 6 per cent. if the Japanese do not proceed with the Nissan plan. They might surprise the Secretary of State by deciding to go ahead with it.
  Fourthly, there should be selective import controls on Spanish and east European manufactured motor vehicles. We should reduce their market share from 6 to 3 per cent. We could then have a nationally co-ordinated investment policy which, together with import restrictions, would ensure an increased market opportunity for British-based producers, and British Leyland in particular, of up to 10 per cent. of the market.
  Fifthly, we must ensure that modern productive capacity is available for that purpose. The £500 million earmarked for the Nissan project—if it does not come to Britain—or an additional £500 million if it does, should be made available to British-based manufacturers under the Government's national selective industrial assistance scheme covering the new science-based and traditional industries.
  Because of the pressure of time I shall not discuss the relationship between the new science-based industries and our traditional industries. However, we must realise that the science-based industries need, as major customers for their products, continuing healthy and thriving traditional industries.
  I do not suggest that such a five-point package will solve all the problems of our tragically depressed area. But I contend that unless some new programme of specific Government-supported measures of recovery is instigated, the trend of decline will continue irreversibly and will be terminal within a matter of years. That need not happen. We can still find and train the skills that we need. Managers, engineers and trade unions are yearning for a lead. We have inventive and adaptive attitudes and abilities second to none. Tonight, the Opposition say to the Government that they must look at the industrial disaster they have created and the human despair they have spread and change their policies before it is too late. They must get monetarism off the back of the west midlands, and get the west midlands back to work.
  7.28 pm
  Mr. Hal Miller: The hon. Member for Coventry, North-West (Mr. Robinson) will understand if I preface my remarks by saying what a pleasure it is for me and my colleagues to see the hon. Member for Eye (Mr. Gummer) on the Government Front Bench. I congratulate him on his promotion.
  I wish to acknowledge the interest taken by my right hon. Friend the Secretary of State, whose presence this
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  evening we all welcome, and also the presence of my hon. Friend the Member for Coventry, South-West (Mr. Butcher) who, although itching to take part in the debate, is debarred by the rule that there should be only one Front Bench spokesman on this occasion. I know that he would wish to make a contribution to the debate, and that he has a great deal to offer.
  I thought that the hon. Member for Coventry North-West, when wrapping up his speech, should have wrapped up his case. It was entirely unworthy of the position in the west midlands. He made some cheap political cracks which bore no relation to the position in the area. Nor did they do justice to the occasion. I shall deal later with the rather sketchily presented specific proposals that the hon. Member advanced.
  I remind the House that I and my colleagues from the west midlands have been seeing all the economic Ministers in the past 12 months about the problems in the region. Because the hon. Member for Coventry, North-West deliberately ignored it, I shall mention the specific assurance that we were given about the import of Spanish cars. We were told that, if agreement was not reached through EC channels, unilateral action would be taken within three months. I take that to be a recognition of the discrimination against Britain through grossly inequitable tariffs, to which my right hon. Friend the Secretary of State for Industry drew the attention of the public in October 1982.
  That assurance is most important to the west midlands. It would also help with the competition from tied imports. Opposition Members may talk about import controls, but the increase in imports, as they should be aware, is largely in tied imports—the so-called in-house manufactures from the big multinationals such as Ford, General Motors and Talbot. In 1975, tied imports represented 1·5 per cent. of registrations, whereas they were 22·5 per cent. last year. That is where the growth of imports has come from. The Spanish action would be a great contribution to that problem, never mind the threat from the new Vauxhall car.
  Mr. John Spellar: As the hon. Member has rightly said, in October, during the Northfield by-election, the Minister said that control of Spanish imports was firmly in the action file. That is now four months ago. When can we expect action?
  Mr. Miller: The assurance was given by the Minister shortly before Christmas. We are still acting in accordance with that timetable. I should be happy to give the hon. Member the reply in the form in which we received it and as it was reported in the press.
  The hon. Member for Coventry, North-West conveniently forgot that the problem of the west midlands was forecast by the economic planning committee and its predecessors as long as 20 years ago. There have been several Labour Governments since then. The unemployment that is now so tragically taking place was forecast because of the region's unique and continuing dependence on manufacturing industry for employment and its concentration on only five industrial sectors. The world recession, accompanied by the change in industrial production patterns and demand, inevitably led to the circumstances that we have been experiencing.
  The region has the lowest output per capita in the country, the most adverse industrial structure and a high proportion of derelict land. Some 33 per cent. of the land

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  earmarked for development in the region is now derelict. All that, coupled with the highest rise in unemployment in the country, means that the region would normally qualify for regional assistance. I am not surprised that the hon. Member for Coventry, North-West put that first in his recommendations, and he will not be surprised that I fundamentally disagree with that recipe. It is a reversion to the old Socialist habit of throwing money indiscriminately at the problem without bothering to get to the root of it.
  I am glad that the Government are undertaking, at long last, a fundamental review of regional policy. The case that regional policy has led the creation of new jobs rather than the diversion of jobs from other regions or that regional policy is a cost-effective way of providing jobs is far from established. I hold the same deep-rooted suspicions about enterprise zones with regard to diversion of businesses and discrimination in competition.
  As we heard the proposals of the hon. Member for Coventry, North-West I remembered the tired old proposal of national planning. No doubt he will recall planning agreements. Perhaps he remembers that which was concluded with Chrysler. It did not stop the onward march of change. It is like King Canute whose advisers imagine that they can turn the tide of change and progress by Government decree. That is absolute nonsense and the Opposition know it. They know that it contributes nothing to the change in the structural basis of the region—which, to be fair to the hon. Gentleman, he came to at last.
  We need new products and technologies in the region. One of the most disturbing things at the moment is the low take-up of the plentiful Government assistance that is available to support the innovation programme in the region. Applicants from our region represent only about 10 per cent. of the whole. In the long term, unless something is done about that by industry—the Government have already made the money available—we shall lag further behind. That is a serious threat, which no amount of planning agreement or regional assistance will solve.
  The innovation package—part of the competition package that I presented to the House some 10 days ago during the debate on regional unemployment—recognises the need to improve our technological base in the region. That is why I strongly welcome the recent announcement by my right hon. Friend the Secretary of State for Education and Science to increase the number of research assistants in science and technology projects in universities. That will go a long way to correcting action that was previously taken—
  Mr. Peter Snape: Like Aston?
  Mr. Miller: Especially at Aston university. Apart from the need to develop our university effort, we must seriously consider the proposals made by the vice-chancellor of Aston university for the institution to bridge the gap that still exists between the university and industry. I hope that that will be considered when it reaches the appropriate ministerial desk.
  We must also increase spending on research and development and improve co-ordination of research and development effort. That has not been as prominent in the region as it should have been. One of the problems with
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  take-up of the schemes and further investment in research and development by firms in the region is the fact that their balance sheets have become weakened to the point where the downside risk is too great.
  I hope that some thought is given to easing the problem by Government participation, either through the tax system or by setting a floor to the down side risk on a research and development project so that the risk can be shared between the Government and the firm. It is better that research and development should be undertaken by firms that have a commercial use for it and a commercial understanding of the possibilities rather than by Government institutions.
  The hon. Member for Coventry, North-West made great play of the needs of the components industry. I also believe that the components industry is in a gravely weakened state and that the Government's assistance so far has been given to assemblers and not to component makers. However, I am glad that, in answer to a question that I asked earlier this year my hon. Friend the Member for Coventry, South-West, the Under-Secretary of State, made it plain that the Government were willing to support applications under the existing product and process development scheme from component firms. I understand that discussions on such proposals have already taken place and that they will be considered favourably if they meet the criteria. Therefore, the Government have moved to meet that problem. We are waiting for a response from firms in the region.
  My right hon. and learned Friend the Chancellor of the Exchequer is about to make his Budget judgment. It will come as no surprise to hon. Members to hear that I believe that the Budget judgment must be in favour of those who work in industry. I should like to see a heavy indexation of the tax threshold, accompanied by a further attack on industrial costs. The discrimination against our industries, which are told all the time to become more competitive, still exists in the shape of the national insurance surcharge. Compared with our competitors abroad, our industry still suffers from an unparalleled rate burden. The councils that are dominated by the Labour party have done a great deal to aggravate that.
  What better example is there of profligate spending and chucking money at the problems than the West Midlands county council bailing out with ratepayers' money foundry industries that have been unable to compete, thereby weakening the industries that are trying to remain in business? The burdens of the firms that are struggling to remain in existence have been increased. That is a typical Socialist solution, which has aggravated the problem rather than provided an answer. Industrial costs need to be attacked further. Our firms are still competing on an inequitable cost basis with those abroad.
  We do not need special measures for the midlands. What is good for industry is good for the midlands. The Government are not yet seen in the country as understanding industrial problems—
  Mr. J. W. Rooker: That is the only sensible thing that the hon. Gentleman has said so far.
  Mr. Miller: Honesty is apparently foreign to Labour Members.
  The Government are not yet perceived as understanding industrial problems, although I have shown tonight that

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  they have taken many measures to meet the problems that I have outlined. That is why my hon. Friends and I have urged the Government to present a competition package putting together all that is being done, which is not yet understood. I am confident that we do not want to run down the west midlands by depicting the situation there as worse than it is, which would only further reduce morale and drive away any hope of investment or improvement.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Ernest Armstrong): In view of the large number of hon. Members who are waiting to speak, I must inform the House that the debate will finish at 9.58 pm, so some restraint would be helpful.
  7.45 pm
  Mr. Gwilym Roberts: I also welcome the opportunity of a further debate on unemployment in the west midlands. It may surprise some of my colleagues when I say that such a debate should be carried out with as little partisanship as possible. The problem is so serious that we need to find as much common ground as possible so that we can see whether we can find a solution.
  There is some truth in the argument that the problems of the west midlands did not start with the present Government. They have grown much worse during their period of office, but we would be foolish if we argued that all the disasters started in May 1979. In the west midlands, underlying problems affected-industries long before that.
  In such debates as this, we return to the same ground. The arguments seem to be the same. The only difference is that the situation is becoming perpetually worse. My constituency has all the problems of the west midlands, only worse. As many hon. Members will know, unemployment is about 22 per cent. in Cannock. There is a small population, but 6,000 people are unemployed. Many school leavers who left school last summer have not yet found real jobs. Many are unemployed and many others are in various schemes. As hon. Members on both sides of the House know, only about one in six of those who embark on those schemes have a chance of finding a real job. Therefore, there are real problems. In a brief debate like this our task should be to try to find some real solutions.
  I shall give Conservative Members one serious word of warning. I accept the argument of my hon. Friend the Member for Coventry, North-West (Mr. Robinson) that the Government's basic policies have made things much worse. The Government's policies, unlike those of their predecessors, have deliberately led to the destruction of jobs and the rundown of industry. There can be no doubt about that. There has been a hope that, by destroying some of the older industries, one can restructure industry. We all accept that, while we have oil, we will have some shelter in these desperate years. It will last perhaps 15 or 20 years.
  There is a desperate need to revitalise British industry, particularly in the west midlands. The Government have tackled one part of the package. They have run down some of the older and less efficient industries. However, the sad thing is that they have failed to produce the alternative employment and sunrise industries to replace them. The output of British manufacturing industry is now at its lowest for about 17 years. That is the indictment of the Government.
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  Many industrial manufacturers have voted Conservative solidly, all along the line. They supported the Government in the belief of a revival. There is now evidence that since the beginning of 1983—some Conservative Members will agree—people no longer believe in that revival.
  Some large industries which kept their work force in the hope of better things to come are now thinking of ways of reducing their excess labour because they no longer believe in the revival. Many small firms in my constituency have had contracts with large firms but they are finding that those large firms are giving up those contracts because they no longer believe in the recovery about which the Chancellor and the Prime Minister have been telling us since 1981. Industry sees that recovery is not coming, and therefore it is less active. That is dangerous, not just for the Government but for the country. It means that in 1983 we may see a much sharper rise in unemployment and a greater rundown of industry than we have seen during the past couple of years. The position is serious for British industry.
  It is difficult to suggest remedies. I shall appeal to the Minister on a constituency basis. The one thing that would be helpful in my constituency would be the speeding up of new developments in the coal industry. Will the Minister convey to his colleagues at the Department of Energy and through it the National Coal Board that if there is to be a revival new pits are desperately needed in constituencies such as mine? Recovery in a constituency such as mine depends upon recovery in the west midlands, which in turn depends upon recovery in the country generally.
  I believe that we must have some selective import controls if there is to be any hope for industry in tie west midlands in years to come to allow it to compete with industries in other parts of the world which have benefited from large capital investments.
  I agree with the suggestion by my hon. Friend the Member for Coventry, North-West that the Government should bring together the major west midlands industries to see whether they are prepared to accept industrial planning. I understand that the West Midlands county council has already taken some steps in that direction. It needs Government support.
  I agree with the hon. Member for Bromsgrove and Redditch (Mr. Miller) that the west midlands does not want assisted area status. I was absolutely horrified at the suggestion by my hon. Friend the Member for Coventry, North-West to designate the west midlands metropolitan county an assisted area. What will happen to an area such as mine that borders this metropolitan county? Assisted areas provide jobs only at the expense of other areas. It is as simple as that. It is no answer. The answer must be a co-ordinated plan to bring major industries together.
  Some Conservative Members might not agree with me that there is a need for selective import controls. British Leyland should be consulted about that. In the past British Leyland has bought some of its components from overseas. The House has shown its support for the workers of British Leyland and British Leyland must show its support for the hundreds and thousands of component workers in the west midlands who depend upon it. I accept the suggestion of my hon. Friend the Member for Coventry, North-West that there is a need to bring people together in the west midlands to study some kind of development plan.

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  The only real answer to the problem, not just for my constituency but for the west midlands and the country, is a vast increase in public expenditure. Public expenditure creates demand. Conservative Members are exponents of the market economy. They know that the key to the market economy is the creation of consumer demand. There is a desperate need to increase public expenditure in the short term and for investment in capital projects in the public sector. It will create jobs and generate demand in the economy.
  It is only with such policies that there will be any hope for people in my constituency, for the west midlands and for the economy generally.
  7.55 pm
  Mr. David Gilroy Bevan: My constituency is only 148th—what a terrible way to put it—in the league table of unemployment statistics in the Library. It is not the highest in Birmingham, but it represents a significant number of people. At the time of the census, about 15·7 per cent. of males between 16 and 64 were unemployed. It is in the upper quarter of the statistics. It is a wholly new experience for a midlander who has never been at the top of such a table.
  The MSC figures are based on travel-to-work areas. They show 118,000 claimants and about 16·6 per cent. of unemployed males, 3 per cent. higher than the national average. When Parliament convened and I was first honoured to be a Member in May 1979, west midlands unemployment was 5·7 per cent., which was a lowish figure. In the two and a half years to October 1981, there was an explosive deterioration and the figure rose to 16·6 per cent. That is the criticism of the Government. However, as hon. Members have said, the criticism is not levelled solely at the present Government. It is not a matter for party politics or bickering. We should analyse where the creative development areas are.
  Birmingham was once a city of a thousand trades. It is now, regrettably, a city of far fewer. The city has always been dependent wholly on the metal-bashing industries, general engineering and car manufacturing. Those industries have always been important for employment trends in the area. With the reduction in manufacturing and the work force at British Leyland, we are seeing an internal geographical movement of manufacturing industries and the tilting of a loaded manufacturing gaming table. We witnessed it first in the closure of the Rover plant at Solihull and the internal shifting of the manufacturing centre to Cowley. We have seen it in many sectors, especially in the motor components industry. The ingredient of success in Birmingham and the west midlands now is for the engineering industry to be succoured and for British Leyland to find the success that it needs, especially with its lifeline, the Austin Metro and its derivatives. In a turbulent industrial sea, that lifeline is being threatened by the mountain of tariffs around the Spanish coast, especially Spain's direct tariff of 35 per cent. That tariff barrier, aggregated up with many other figures, brings us to well over 60 per cent. That is what it costs to get one Metro from Birmingham into Spain.
  Britons must consider whether we should put up with that iniquity whenever we are fortunate enough to buy a new car. The multinational companies, such as Ford, Vauxhall and General Motors, must consider whether they
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  can subscribe to those policies. The subscription to those external policies has caused a socio-industrial revolution, without bullets or barricades but with the soft shoe shuffle of planners internally and multinational companies externally. We have witnessed those events and we especially appreciate my right hon. Friend the Prime Minister's assertion that she will take unilateral action. We shall look to the Ministers to whom we have submitted our considerations for such action to be taken quickly to protect the Birmingham car industry.
  Hon. Members on both sides of the House are horrified by the gravity of the position in Birmingham and the west midlands. In Tyesley in my area, 1,250 workers were affected by the proposed closure of the Lucas Girling works. It was said that 550 would be made redundant and that 500 would be redeployed. A further 1,250 workers were affected the very next week by the proposed closure of Lucas Girling. Where will those redeployed workers go? Birmingham has better skills and has plants equal to any others in Britain. Those redeployed workers will be moved to assisted areas such as Cwmbran, Pontypool and Scotland. Those areas are still attracting perks such as low rents, grants, capital allowances and all the other benefits that were begun by the coalition Government of 1945 and proposed by the then president of the Board of Trade, Mr. Hugh Dalton. Those benefits, which were intended to be temporary palliatives, have become permanent features and they have enfeebled the strong west midlands and Birmingham at the expense of strengthening the weak.
  The process continues automatically. In the climate of evanescence—of disappearing to other pastures and places that originally existed in the west midlands and to which a son of Evan does not wish to subscribe—we must ask for more than specific sector aid and for more than the support that hon. Members on both sides of the House agree is necessary. The 10 per cent. car tax must be wiped out and national insurance must be abated substantially or removed altogether. There must be a reduction in rates, and if possible, a reduction in energy charges to industry, and we must ask for other benefits besides.
  It does not matter whether Birmingham is called an assisted area. We need financial assistance in the west midlands to ensure that jobs remain in the area and that firms remain manufacturing entities. Although my right hon. Friend the Prime Minister and her colleagues in Cabinet have started to roll back the areas with assisted area status, they still exist and attract industry away from the west midlands. While that is happening, we must ask for equal general support for industry in Birmingham—the iron heart and the manufacturing centre of Britain—so that we can continue to offer jobs.
  It is understandable that, when workers are offered redundancy payments, they will eventually reach out and take them, if they are significant amounts. They will take them, as did the dockers, the miners and the car workers, because they are the only alternative. Of course, many of them have entrepreneurial skill. One of my constituents in Tyesley took his early redundancy money from a bakery and started a baker's round with it. He is doing well and has more orders than he can handle. When there is no alternative, the workers of a threatened industry will take the redundancy money because it is their only chance.
  There is continual erosion because of this silent socio-economic change and, with that erosion, there is an absolute necessity to set matters right. In singling out the Government for criticism, we must remember the

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  Government of 1945 and the Socialist Government of 1947, who brought in the industrial development certificates that were removed only about two years ago by the present Government. Those certificates prevented firms in the west midlands from expanding—from putting one brick on top of another—and from making substantial developments to their factories, and forced them to look elsewhere to places with other attractions.
  Mr. Rooker: Will the hon. Gentleman give way?
  Mr. Bevan: I should prefer not to, but I shall.
  Mr. Rooker: I am doubly grateful to the hon. Gentleman. Did the imposition of industrial development certificates or the other matters that he has just mentioned prevent him from keeping his promise to get together a consortium of business men to save the Rover plant at Solihull? Is that one reason why he was not an entrepreneur?
  Mr. Bevan: I am grateful for that question, although I had hoped that the debate would not lead to party bickering. The initiative for which I was asked to speak could not be successful. One reason for that was the size of the rates bill for that factory in Solihull [Interruption.] The hon. Member for Birmingham, Perry Barr (Mr. Rooker) laughs, but three years ago the rates bill for the main assembly shop was nearly £1 million. The bill for the paint shop was £350,000, and the precept from the West Midlands county council contributed to those rates charges. It would have been prohibitive for an industrialist to take on that factory. Industrialists call for a reduction in rates and in power charges. Birmingham has more than 1 million sq ft of unoccupied factory space. One tenth of that amount around Small Heath, Greete, and Tyseley is still priced at 50p per sq ft, with no takers, because the rates for the areas being offered at 50p per sq ft are based on calculations of £1 per sq ft.
  Therefore, we must look for general support. We must look for new answers. We must look to the Front Bench to support the thesis of support, to support new industry and low rating. Although Opposition Members may not like it, the high wages in the public sector disadvantage workers in the industrial sector.
  There must be a case, surely, not only for the excellent youth opportunity scheme but for a scheme of national service, whether industrial, social, the voluntary decision of the individual or military to take up the young.
  I am certain that the west midlands patient, having been subject to substantial surgery, sometimes intended and sometimes unintentional, must now be put into intensive financial care by the Government. I therefore support the opposition to the terminology of the hon. Gentleman's criticism of the Government.
  8.12 pm
  Mr. George Park: Today's debate is an "inaction replay" of the debate which took place on 4 December 1981 when my hon. Friend the Member for Walsall, North (Mr. Winnick) won a place in the ballot and chose the same subject. It is a sad commentary that we have to rely on the result of a raffle to highlight again the extent of the disaster that has fallen on the west midlands and have to try again to spur the Government into doing more than utter sympathetic noises.
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  The companies that I named in that previous debate have continued to go downhill, but so that I will not be accused of trying to attribute all the unemployment to the term of office of the present Government, I will start in 1975. In Coventry since 1975 19,000 jobs have gone from British Leyland; 7,000 jobs from GEC; 6,000 from Talbot; 4,600 from Tooling Investments; 2,300 jobs from Dunlop and 1,300 jobs from Courtaulds, to name but a few. In total during that time, 47,000 jobs have gone and there are more in the pipeline.
  Since July 1982 there have been 13,500 announced redundancies from 69 companies in the west midlands. You will note, Mr. Deputy Speaker, that I said "announced redundancies", which means that redundancies of 30 or fewer are probably never mentioned. Last year in Coventry alone 4,500 people lost their jobs. In the same period, 25,500 people were sacked in the metropolitan county area. In my constituency, unemployment is 22 per cent. How many more jobs have to go before the Government stop saying that overmanning is a major issue? Do we have to grind to a complete halt before the Government recognise that the industrial lifeblood of the heart of England is draining away?
  Behind these cold statistics lies a tale of human despair, waste and frustration throughout the age range. Each year the job market shrinks for the school leaver. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) told the House that, of the fifth formers who left schools in Coventry last year. 86 per cent. had no job to go to. Of the sixth formers, 84 per cent. had no jobs. The statistics show that the more disadvantaged the school leaver, the worse off he is. Of school leavers from special schools, only one found open full-time employment. How are parents and teachers expected to maintain enthusiasm and a responsible attitude to life from youngsters in those circumstances? There are today more unemployed under the age of 25 than were unemployed in all the age groups on the day the Government were elected. Men and women in their late 40s and early 50s are increasingly being told that they are too old, and for those already out of work for more than a year, the DHSS is creaking under the weight of the claims and is rarely able to abide by the regulations on claims.
  We are seeking in the debate not merely a recital of facts that should be only too well known to the Government, but some positive sign that they are prepared to tackle the problem. I know that the Government will tell us about the various schemes, but all my hon. Friends and I can say in reply is that they do not seem to have made any impact so far, and confidence is draining away.
  The Government could take some action. For example, there is divergence of opinion about making the west midlands an assisted area—a divergence of opinion that has been voiced in the debate. The Government could agree to inner urban area programme authority status, which Coventry has been seeking since 1978. Coventry has had no reply so far. The West Midlands county council supported Coventry and also supported Walsall and Sandwell for programme authority status. Such status would give us access to EC funds. Investment incentives could be reintroduced to help companies to retool, which would help the machine tool industry and equipment suppliers. The additional car tax and the payroll tax should be removed. Energy costs for industry could be reconsidered. Further money could be made available for the small firms investment scheme.

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  The Under-Secretary of State, in reply to a letter from me, said that the Government could not operate an open-ended scheme. I can appreciate that, but it is clear from the demand when the scheme was introduced—the Government then added money to it—that there is a pent-up demand and that the scheme rang bells with small firms. The Government should reconsider the position.
  The hon. Member for Bromsgrove and Redditch (Mr. Miller) referred to unfair tariffs. He may have had a promise but nothing has yet happened. Positive steps must be taken to eliminate or counter these discriminatory tariffs against our exports. Where public money is invested, there should be a requirement to buy British. Other countries do not seem to have a problem with this principle.
  The problem of void rating could and should be dealt with nationally. We should not have the spectacle of industrialists ripping the roofs from factories. What effect will that have if and when there is an upturn? Consideration should certainly be given to grants for the clearance of old factories. Such grants should be increased for clearance in city centres. One can sit in the CBI offices in Birmingham and look out on to acre upon acre of old, derelict factories that should be cleared. If clearance took place, there would be the equivalent of green field sites and it would not be necessary to impinge upon farm land. That is something that could be done.
  If anyone thinks that no initiatives have been taken he should remember the science park at Aston, the science park at Warwick university, the development agencies, the unit factories and the new enterprise workshops. I could recite the entire list, but time does not permit me to do so. It cannot be said that we are sitting on our hands and waiting for the Government to do everything for us.
  There is a crying need for Government action on a scale which we cannot initiate locally if new hope is to be given to the west midlands and its constituent parts. I urge the Government not to waste time on the irrelevancy of privatising Jaguar but to stem the haemorrhage in industry and provide us with a much-needed transfusion by adopting any or all of the suggestions that I have made. Time is not on our side.
  8.21 pm
  Mr. J. F. Pawsey: I hope that the hon. Member for Coventry, North-East (Mr. Park) will forgive me if I do not follow him too far down the road that he signposted. The hon. Gentleman spoke with his usual sincerity. When he speaks in the House he is always listened to with great respect.
  Between 1979 and December 1982 unemployment rose faster in the west midlands than in any other region. It is the only area where the number of those unemployed has literally trebled. In May 1979 the west midlands was eighth in the league table of unemployment. In December 1982 it had taken fourth place after Northern Ireland, the north and Wales. This is the first time that the west midlands has suffered unemployment on this scale. That makes the situation even worse as the region has moved from comparative affluence to real depression. It is difficult to avoid the conclusion that the region has to some extent contributed to its own difficulties. Faced with this situation, two questions must surely be answered. First, what are the reasons for the decline in the west midlands? Secondly, what can be done to improve matters?
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  No examination of the causes can be complete without reference to the motor industry, which for years has been the principal employer. That can be said not only of the great motor plants of Coventry and Birmingham but of ancillary companies such as Dunlop, Lucas, Lockheed and Girling. There is also the host of small engineering companies that is involved in the production of tools, jigs and fixtures and the companies that supply the parts that go into the manufacture of a motor car.
  The motor industry continues to be in decline. It seems that there are four basic reasons for this. First, there is the record of strikes, lost man hours and low productivity. Secondly, there have been some poor management decisions. Thirdly, there has been Government interference. Fourthly, there has been the impact of imports, especially from Japan, Spain and the EC.
  In 1973 industrial disputes totalled 297 separate stoppages which involved 441,000 employees. The number of days lost in that one year was 2,082,000. Even as late as 1979 there were 165 separate stoppages involving 367,000 workers with over 3 million days lost. That is what I mean when I refer to the west midlands having contributed to its own difficulties.
  Disputes are self-inflicted wounds. Throughout the 1960s and 1970s the motor industry increasingly lost its reputation for both quality and quantity. Its work force had the unenviable reputation of being prepared to strike for the most trivial reasons. Labour relations were appalling with misunderstandings and suspicions being generally the order of the day. Restrictive practices were legion and over-manning was rampant. It is a fact that in the British motor industry twice as many workers were needed to produce the same number of cars as their counterparts produced on the continent. Too often trade unions refused to accept new methods or new ideas to improve productivity. They preferred to live in some fool's paradise in which wages increased by 316 per cent. between 1972 and 1982 and in which productivity during the same period increased by only 25·3 per cent.
  That in a nutshell is one of the reasons—perhaps the principal reason—why the region, a part of which I represent is in such decline.
  Secondly, senior management has made many mistakes. It is difficult to justify the original concept of British Leyland. The hon. Member for Coventry, North-West (Mr. Robinson), who opened the debate from the Opposition Front Bench, recognised that Leyland grew under a Labour Government. That was one of the points that he made especially well. But in effect, management decided to abdicate control of its own plants and sought to buy peace at any price. I believe that to be a real indictment of British management techniques.
  Mr. Percy Grieve: We all recognise that there is great truth—
  Mr. Les Huckfield: Who is this?
  Mr. Grieve: —in the catalogue of failure to which my hon. Friend has alluded. However, does he agree that there has been a great change in the management of the motor industry, especially of Leyland, which is manifesting itself today in considerable achievement?
  Mr. Pawsey: I readily concede that. I am seeking to draw the picture in the round and to give the reasons for our industrial decline. It is no good anyone pretending that

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  we can halt and reverse industrial decline in only three years. The faults of the past cannot be put right in such a relatively short period.
  Thirdly, successive Governments have grossly interfered. This was best illustrated by the way in which hire purchase was used as a regulator. Governments moved hire purchase deposits up and down and showed a complete lack of understanding of the realities of mass production. Successive Governments appeared to think it possible to turn production on or off like water from some pre-dispute tap.
  Finally, imports, especially those from Japan and Spain, have made enormous inroads into the domestic market. Japan must be recognised as a substantial threat. It holds between 10 per cent. and 12 per cent. of the United Kingdom market. An even greater menace than Japan is Spain, which is taking advantage of great tariff differentials. It is time that Britain got to grips with the competition and started playing it at its own game and under the rules that it invented.
  I referred to Government interference. It appears that, for the best of reasons, all Governments wish to interfere. It is evidently a fact of governmental life and is presumably hewn on tablets of stone somewhere in Whitehall that everything gets better providing that there is more Government interference. I have formulated Pawsey's law of interference: "Nothing is so bad that it cannot be made worse by positive Government interference." Like the way to Hell, the way of Government is paved by good intentions.
  Regional policy is a good example of this attitude. Has it really any worth in today's climate? At a time of depression, existing jobs are simply being moved from region A to region B—a type of musical chairs, except that it is played not with a diminishing number of chairs, but with a diminishing number of jobs. Regional policy has done nothing for the west midlands, but has presided over the movement of factories, for example, from Coventry to Linwood. It has distorted the production infrastructure and weakened the motor and component industries, and has not even provided long-term jobs to those regions that it sought to help. Anyone who doubts that should go to Linwood to find out for himself.
  Government interference is more than regional policy and industrial development certificates. It includes other measures, ranging from job protection to health and safety at work legislation, all introduced for the best of reasons, but all blunting our competitive edge.
  I do not seek to argue that all Government interference is bad. We must not ignore the enormous sums that have been provided for the motor industry—over £1 billion to British Leyland alone. Most of that money has been spent in the region, although it should be regarded not so much as regional aid, as sector aid. Rolls-Royce has received over £500 million since 1979. The west midlands has received support and the Government have put their money where their mouth is. Clearly, more remains to be done.
  I have long argued that there are at least two fiscal measures that would help the motor industry. The first is the removal of the 10 per cent. car tax, a tax that unfairly discriminates against the motor industry, and a penalty that distorts car purchases in the United Kingdom. If that tax were removed, more new cars would be purchased. I appreciate that about 50 per cent. of those cars would be imports, but none the less the balance of sales would still
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  provide a major shot in the arm for our car industry. The hon. Member for Coventry, North-West may disagree with that, and if he does, let him stand up and tell us why. Let me hear him argue the case in favour of the 10 per cent. tax.
  The second measure would be to exclude company cars from VAT. According to George Turnbull, president of the Society of Motor Manufacturers and Traders, 70 per cent. of company cars are British. If, therefore, additional incentives resulted in the more frequent purchase of company cars, that would provide an important boost to our domestic motor manufacturers which would, in turn, lift the region.
  It might be appropriate for me to say here that the problems that I outlined earlier were not of this Government's making, but had developed under successive Governments. As the hon. Member for Cannock (Mr. Roberts) said, unemployment did rot start in 1979. It has been rising steadily under successive Governments. It is worth while remembering that under the Labour Government, unemployment doubled.
  What is new is the world recession—[HON. MEMBERS: "Oh."] Hon. Members may moan and groan, but if they listen they will discover why I make the point about the recession. They represent, as I do, the west midlands and should know that it is export orientated because so many of its products go abroad. It is because of this fact that our region has felt the draught of depression more than most.
  Action has been taken. It would be erroneous to assume that the Government have sat on their hands. They clearly have not. The Government have done a great deal and will do more. For example, industry demanded lower interest rates and lower inflation and has had both. That will create a climate in which a recovery can develop. It is worth remembering that the base rate has been reduced by 5 per cent. since October 1981. That is worth about £1,750,000 to British industry in a full year. Inflation is now at about 5 per cent., which is invaluable to the exporting industry of the west midlands and specifically to companies in my constituency such as GEC.
  As the inflation rate has fallen, it has been much easier for these companies to quote and secure orders throughout the world. That shows just how successful have been the measures that the present Government have taken—measures that will positively assist our region and our nation. It is no good hon. Members shaking their heads or seeking to deny the facts. They do not like the truth, but tonight they will have to listen to it.
  Recent trade union legislation will do much to restore a proper balance in industry—a balance that has become grossly distorted in favour of organised labour, again to the detriment of industry. The Government promised help to small firms, and that help has been given—[Interruption.] The Government have improved the tax climate, reduced bureaucracy and provided more advisory services. My next statement gives the lie to the laughter of Opposition Members. More small firms are being formed than ever before in this nation's history.
  Mr. John Spellar: Is it not also true that there is a record number of bankruptcies in the courts?
  Mr. Pawsey: Yes, and that is a fair point. I am always prepared to admit the truth when I hear it. The hon. Gentleman has drawn my attention to the number of bankruptcies but he might have been a little more honest

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  had he stressed the importance of the new companies that have been started and that are generating more work and more jobs. That is what should excite the hon. Gentleman's imagination. He should look forward instead of back. Another facet of Government aid is the great number of people in the west midlands who are now benefiting from the Department of Employment's programme of training measures. The figure ranges from 10,700 people on the temporary short-time working compensation scheme, to 6,600 who are taking advantage of the job release scheme. The number also includes almost 80,000 young people in youth opportunity programmes. In addition, the experimental enterprise allowance scheme in Coventry has undoubtedly proved successful. I pay tribute to the Under-Secretary of State for Industry, my hon. Friend the Member for Coventry, South-West (Mr. Butcher), who has taken particular note of the scheme, and I very much hope that it will be expanded.
  I should also like to see the urgent resumption of the imaginative small engineering firms investment scheme. This point was touched on by the hon. Member for Coventry, North-East and I fully agree with his comments. It has proved to be a considerable success and the £30 million allocated to it was taken up in 12 weeks. The majority of that money went into the west midlands and is now helping our small companies to re-equip and retool so that when the country moves out of the recession, they will be in a position to take advantage of the improvement that takes place.
  Mr. Les Huckfield: When is that?
  Mr. Pawsey: When the Finance Bill is introduced in March, I hope that it will contain a reference to the resumption of that scheme and in a much expanded form.
  Yet, despite all that, it is a mistake to assume that Governments hold all the answers to unemployment. So much could be done if each man or woman, before making a purchase, found out the country of origin and, where possible, bought British. Too often we find ourselves purchasing foreign goods when a sound British alternative exists. It is almost as if it has got to be foreign before it is good, and the cost of that principle is measured in factory closures and job losses that range from steel in Dudley to motor cars in Coventry.
  I shall illustrate that point. In the first nine months of 1982, 58 out of every 100 cars bought in Britain came from abroad. According to the Confederation of British Industry, if we had kept the share of home and international markets that we had 12 years ago, there would be 1·5 million more jobs in the United Kingdom. That shows just how much market share we have lost and how much emphasis we should place on supporting our home-based industries.
  The recipe for renewal is a mixture of Government measures and self-help. The west midlands still has the benefit of its people's skills, good communications and inventiveness. Our people will have a go and, as the business and industrial climate improves, so will our fortunes. But Government must start the engine of renewal.
  8.39 pm
  Mr. J. W. Rooker: The speech that we have just heard did not have much content, but it was remarkable, because the hon. Member for Rugby (Mr. Pawsey) made some positive points. The contrast between his speech and those of his two hon. Friends was astonishing. All that I can say about the hon. Member for Birmingham, Yardley (Mr. Bevan) is that he will not be able to make such speeches in the next Parliament because he will not be back here.
  I am sorry that my hon. Friend the Member for Cannock (Mr. Roberts) is not in his place, because I disagree with bipartisan twaddle. I was not sent to this House to do deals and to be nice to Conservative Ministers who are putting thousands of my constituents on the dole. That is what is happening in the west midlands now. It is no good saying that we must not be party political. If we cannot be party political in the House of Commons, where can we be party political? That is why we are here. We are elected to represent and articulate the needs and problems of our constituents. The fact is that in 1983 the biggest single problem in the west midlands is this Tory Government. There is no equivocation about that, and certainly there should be no equivocation on this side.
  I do not claim that there was never unemployment before May 1979. Clearly there was. In 1979, it was 5·7 per cent. in Birmingham. Last October it was 18 per cent. That was before the Government used the new fiddled figures. So it went from 5·7 per cent. to 18 per cent. It is true that there was unemployment before 1979, but it was not mass unemployment. That is what we have today.
  The economy of the west midlands is unique. I do not say that one region should have more unemployed than another region. I have not fallen into that trap, either in this House or outside. Because of its historical background, the structure of business in the country, and the nature of the beginning of the industrial revolution, the west midlands economy, by and large, is heavily dependent on metal-bashing industries. That is one thing that the hon. Member for Yardley said. There are eight industries—metals, metal manufacturing, engineering and electricals, and vehicles, coupled with construction, professional services, the distributive trades, and the odd miscellaneous services.
  Two thirds of the west midlands labour force depends on those eight groups. Over the past few years five of the eight have been more in decline than in advance. Because of this element of dependence and because of the structure of our industry, when external economic pressures are applied to our region, whether because of the present depression, which has been brought about and substantially added to by Government policy, or because of the world depression, or, for example, the three day week, the effect on the local economy is greater than in other regions.
  It is for that reason, as the hon. Member for Rugby (Mr. Pawsey) said, that unemployment in absolute terms has trebled under this Government. Under this Government, the big attack has been on manufacturing and industrial output, and because of the nature of our economy we have been harder hit.
  I shall give one statistic to illustrate what I have said. Nine years ago this country was on a three day week. Between December 1973 and January 1974, because of the effect of the three day week and the cut in power

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  generation, there was a 560 per cent. increase in unemployment in the west midlands. The average for Great Britain was 207 per cent. We had the highest increase in unemployment during the period of the three day week because of the external pressures applied, in power generation and so on, to the manufacturing base of the country. It happened during the three day week, and exactly the same has happened during the past three years, because the attack has been on manufacturing industry. Those who say anything else fail to take account of reality.
  I do not wish to give too many statistics, but one cannot make the case without mentioning some. On the third anniversary of this Government last summer, manufacturing output was 15 per cent. down on the same period in 1979. The CBI's response was to say, "Be bolder with safety." By November 1982, industrial output was 19 per cent. below that of 1979. One in five jobs had disappeared. According to information produced only last month, industrial output was at its lowest level for 17 years. A headline in the Financial Times on Wednesday 19 January read:
  "Manufacturing activity at its lowest level for 16 years."
  In The Times, the headline was:
  "Industrial output slides to lowest level for 17 years."
  I understand the technical differences in assessing industrial and manufacturing output. However, whether it is at its lowest level for 16 or for 17 years, that is the reality. Anyone who argues that this state of affairs is due to the world recession cannot have examined what is happening in the world. Between the second quarter of 1979 and the third quarter of 1982, output in the Common Market countries dropped by 6 per cent., in the United States by 9 per cent. and in the United Kingdom, excluding oil, by 15 per cent. Even if oil is included, output fell by 11 per cent. whereas in the OECD it fell by only 4 per cent. During the same period, output in Japan increased by 14 per cent. We have done much worse than the rest of the industrialised world.
  Mr. Beaumont-Dark: The hon. Gentleman makes one mistake. Inflation in this country was by far the highest in Europe. The pains of curing it have therefore been so much greater.
  Mr. Rooker: That has been the Government's main argument since they came to power If it is true, we should have been seeing last year the beginnings of a fantastic upsurge in employment. The remarks of Mr. Steve Rankin, the west midlands chief of the Confederation of British Industry in September 1981, led to a headline in The Birmingham Post stating:
  "Jobless figures may be near peak, industry chief believes."
  There are now another 20,000 or 30,000 unemployed people in the west midlands. Where are the new jobs coming from?
  It will be interesting to hear what the Minister has to say. The hon. Gentleman will have to put some flesh on the remarks of the hon. Member for Bromsgrove and Redditch (Mr. Miller) about the Prime Minister's pledge. The Minister will have to put on record what the Prime Minister stated. We cannot be left with an account of private discussions between an hon. Member and the Prime Minister. There has to be some accountability to the House of Commons so that our constituents know the Government's position. Is it the case that the Government, by the end of March, have to deliver on the issue of sanctions against Spain?
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  It is from the Opposition Benches that the call for this debate has come. I wish to draw attention to the demise of a number of jobs in particular companies in the west midlands. It is not only the recession in Britain that has brought that about. I want to highlight one or two other factors. I must go back to before the Government took office and I shall use figures taken from the Financial Times on 9 December 1982 from a first-class article on the shape of the shake-out and the effect on jobs and Britain's leading exporters. That article gave employment figures for the period 1973–1982 but I shall take those for 1977–1982 because they give the fairest picture of what has happened in the last few years.
  British Leyland dropped 91,000 jobs—53 per cent. All the companies have a strong base in the west midlands. They are household names in the west midlands as well as national names. Lucas Industries dropped 19,000 jobs—28 per cent. of its United Kingdom employment. During the same period Lucas Industries took on new people in its overseas factories. As a proportion of Lucas Industries' worldwide employment, jobs in Britain were decreasing while those elsewhere were increasing. The same can be said of GKN. That company dropped 33,000 jobs—45 per cent. of its British work force. Over the same period the percentage of its British work force out of the total dropped from 67 per cent. to 54 per cent. It was taking on workers elsewhere.
  It is well known that we are receiving imports from our own companies. Those imports are not just fully assembled motor vehicles. Lucas Industries is a classic example. Years ago one could walk round the shops such as Halfords and buy Lucas products—simple motor car spares such as contact sets and rotor arms. Mack where? They are not made in a Lucas factory in Birmingham or anywhere else in Britain but in France and Germany, in glossy packaging. It is printed in England but when one looks to see where the product is made it says "France" or "Germany". While all that has been happening, Lucas Industries has shed thousands of workers in Britain to export those jobs overseas.
  Dunlop has done the same. Between 1977 and 1982 it dropped 50 per cent. of its British work force—24,000 jobs. It made sure that over roughly the same period the percentage of British employees in its work force worldwide dropped from 48 per cent. to 39 per cent.
  Mr. Grieve: Has the hon. Gentleman paused to ask himself why that should be? Is it not because the goods could be produced more cheaply and efficiently elsewhere? Should we not be aiming at counteracting that and producing them more efficiently and with greater productivity here?
  Mr. Rooker: Yes, of course I have asked myself why this has happened, as so many other people have. However, given the scale of the pull-out from Britain, it is clear that it has been the deliberate policy of many multinational companies to cut out their United Kingdom base and to minimise their dependency on the United Kingdom operation.
  I do not know what part the Government's abolition of exchange controls played in this, but some companies have set up overseas financial centres so that they can export capital from Britain and deliberately invest abroad in a way which they could not do before. That has happened in countries where such companies are not

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  known for having good health, welfare and educational facilities. There are South American countries which have damned good armies and police forces but rotten social facilities for the workers. Of course the unit labour costs are low. Nor are they well known for having free trade unions to conduct the free collective bargaining which is so much appluaded by the Government. Nevertheless, there is clear evidence of a major pull-out from Britain by many leading companies.
  My hon. Friends have made many proposals for direct action. I speak for the future in terms of what the west midlands and Birmingham chamber of commerce have said. There is no rosy future so far as they can tell. We want to know when the upturn will come. The latest quarterly survey by the west midlands and Birmingham chamber of commerce dated December 1982 shows that twice as many firms as a year ago think that their turnover will worsen. There has been a 50 per cent. increase in firms that have revised investment for plant and machinery downwards. Those firms are told by Ministers, "We are nearly there; it is the bottom," whatever that is: "You have got to invest for the future".
  To talk, as did my hon. Friend the Member for Coventry, North-West (Mr. Robinson), about the great unemployment inequalities between the regions, the age groups, the sexes and the minority groups in our society is not scaremongering. The Government have deliberately set out to set neighbour against neighbour and worker against worker. In some parts of the country that is working, as people see no hope whatsoever.
  Given the scale of what industry says it will do, which is not very much and given the lapdog attitude of the CBI leaders who promised a bare-knuckle fight with Government, all they seem to do is to export British jobs and queue up for knighthoods while they give their company money, which came off the backs of their customers, to the Tory party. There is no hope in that quarter.
  When the last Labour Government asked industry, "What are your prospects? If you want Government assistance come and talk to us about your future plans for production and industrial location", they were told, "No, we are not going to talk to the Government."
  Many of those companies cannot wait to shed their labour force. There is no hope whatsoever as long as this Government stay in office pursuing their present policies. It does not matter what they come up with now. The Government realise that in areas such as the west midlands they will lose dozens of parliamentary constituencies. It is too late for the Government to put the gloss on the damage that they have done in the last three years, which Labour Members of Parliament alone have sought to highlight.
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. As my predecessor warned the House, this is a three-hour debate. It must end at 9.58 pm. There is great pressure to speak, and I ask hon. Members to bear that in mind. If we have five-minute speeches, I shall be able to call most hon. Members who wish to take part.
  8.58 pm
  Mr. Anthony Beaumont-Dark: I agree with the hon. Member for Birmingham, Perry Barr (Mr. Rooker) that a great deal has been said by hon. Members on both sides about the problems facing the west midlands. I disagreed with the hon. Member for Coventry, North-West (Mr. Robinson) when he said that it was factual, simple and direct and that it was all the Tory Government's fault. It was almost as though it was a deliberate policy. I do not think that that kind of comment helps to bring about an understanding of what really happened to the west midlands. It is not simple. What he said was not factual, and it certainly was not directly related to the issue.
  In the 1930s unemployment was at a very low level—2 or 3 per cent. People came from Wales, the north-east and Scotland to jobs in the west midlands because we had possibly the only growth industry at that time, which was cars. The midlands—Coventry and Birmingham—were churning them out, as well as Fords and General Motors in the United States of America or Mercedes in Germany.
  The problem we have this time is that because during the war the west midlands showed great productive abilities, with lorries, tanks and aircraft, once again people poured into the area. As soon as the war was over there was a great shortage of cars. Cars could not be bought for love nor money. Cars could be sold for double their list price. I remember more than once people being offered cars at double the list price in the papers and in the pubs.
  People thought that this great cornucopia of the car industry would go on for ever, and it seemed that it would do so. Indeed, in Whitehall's mind it is still going on. It is felt that this problem is a temporary aberration and that the midlands will soon recover, but we know that it will not, because the car industry has changed enormously.
  We must learn from what went wrong. The introduction of IDCs and the shifting of production lines 200 miles to Bathgate or Halewood did not transfer prosperity to those areas. We all know that now, because those plants are dead. Instead, such changes virtually killed an efficient motor industry.
  We can now say that companies such as Jaguar and Rover have had a year free of labour disputes, but not so long ago the motor industry was fighting for its life and labour relations were the subject of music hall and television jokes. That may be a thing of the past, but it had its damaging effect.
  As the CBI has pointed out, in the last 10 years the RPI has gone up by 278 per cent., energy costs have increased by more than 400 per cent., rates have risen by 416 per cent., and the national insurance surcharge and national insurance payments have gone up by 621 per cent. Consequently, there is a great tax on jobs. That is what the national insurance surcharge is. It is a tax on exporters, not on importers.
  The Budget will be of tremendous and profound importance. We do not need the approach of the Institute of Directors. We should not give tax concessions to people who are already in jobs. Directors may want, but do not need, tax concessions. Nor do we need more tax concessions on capital, good as that might be in its own way. We should not talk about reducing the standard rate of tax. Instead, the Government should increase personal allowances, people on the lowest rate of tax should be

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  taken out of tax, and any tax concessions should be given on the threshold. That is no more than common sense and common justice.
  When the CBI said that the competitiveness of British industry was 20 per cent. below that of Europe, it was not talking about the value of the pound falling another 20 per cent., as Terence Beckett made clear. It has asked for Government help to back up what industry has already done to reduce its costs. There are several things that the Government can and should do to get industry moving, not just in Birmingham, Dudley or Bromsgrove. If industry improves, the heart will beat faster and will recover quicker.
  Energy costs are still uncompetitive for large manufacturers. Something should be done about that. It would only cost about £200 million, but it would be a fillip to industries such as chemicals, paper, board and foundries.
  The national insurance surcharge should never have been introduced. It must now be wiped away. It is a tax on jobs and it cannot be justified. What about industrial derating for manufacturers? Why cannot industry be treated like our prosperous farmers? I know that the farmers have a much better lobby, perhaps because many hon. Members are large landowners and therefore understand the problems of land more than the problems of industry. But if farmers can have rates relief, what about our hard-pressed industries? Why not save British Leyland £630,000 in rates? Why not save Guest Keen and Nettlefold £1·2 million in rates? Why not save Birmid's £400,000 in rates? That would help to create jobs. What is good for the farmers is good for industry.
  We do not need assisted area status or enterprise zones. We do not need an arrangement whereby a factory at this end of the Chamber gets all the help in the world but if you, Mr. Deputy Speaker, have a factory at your end of the Chamber you have had it, or rather you are not going to have it, because you are on the wrong side of the line. Enterprise zones are all right in great open fields. They are all right in the Welsh hills and valleys where there may be no factories already. Elsewhere, however, they cause great and artificial divisions. Let us have no more of them.
  Some people are calling yet again for more help here and more help there, but that is the approach that has sapped the strength of the west midlands. The assisted areas and good-hearted schemes that drive industry here, there and everywhere have caused the poverty. The IDCs and all the similar schemes were based on false assumptions.
  Hon. Members on both sides of the House are united in their attitude to Spain and Spanish cars. That great injustice must not be allowed to continue. If Spain will not reduce her duties, we must raise ours. Our oriental friends, the Japanese, must be told once again that talkee-talk is all right but that jobs must be preserved. If the Japanese wish talks to continue, let us give them three months to come to an agreement, or deal with them in the same way.
  The cities and county councils must remember that the money they spend comes from the backs of industries which may decide, every time their rates are increased by £1, that someone else must go. If the Government and councils use common sense, without any great ideas about assisted area schemes, we shall survive. The Government have their part to play. What they do for industry on 15 March will decide whether the west midlands prospers or flounders.
  9.8 pm
  Mr. Terry Davis: We have heard four speeches from Conservative Members and all four have sought to excuse the Government's record. The hon. Member for Bromsgrove and Redditch (Mr. Miller) began it by saying that a decline in the west midlands was forecast 20 years ago. He is right about that, but he is wrong to imply that a decline of such magnitude was ever forecast before the present Government came into office. The hon. Gentleman also said that the adverse industrial structure of the region was partly to blame for its problems. He is right in that, too, but he did not say it in 1979.
  In March 1979, on the eve of the general election, the hon. Gentleman published "A Manifesto for the Midlands" with his right hon. Friend the Member for Worcester (Mr. Walker) and his hon. Friend the Member for Loughborough (Mr. Dorrell). In that manifesto he wrote:
  "It is not a region packed with dying industries. It is a region well equipped to meet the challenges of a modem world."
  Today, however, the hon. Gentleman talks of an adverse industrial structure.
  Mr. Hal Miller: I think that the hon. Member will agree that the region is well equipped with communications, skilled people and opportunity.
  Mr. Davis: I stand speechless before the hon. Gentleman's excuses for the Government and his apologies for his own words in 1979. He did not tell the people of Bromsgrove and Redditch, of whom I am one, that the adverse industrial structure of the west midlands would lead to a trebling of unemployment during the life of this Government.
  The charge against the Government is not that they caused all the problems of the west midlands but that they have done nothing to solve them, and have actually made them worse.
  The hon. Member for Birmingham, Yardley (Mr. Bevan) referred to the much lower unemployment figures at the time of the general election in May 1979. He was quite right. Unemployment in the west midlands has trebled since his Government came to power. It has risen from 5 per cent. then to almost 17 per cent. now. The figure is even higher in the west midlands county than in the west midlands region. Given that at least 30 per cent. of the unemployed are not registered, unemployment in the county is now nearer 25 per cent., or one in four, compared with one in 12 in May 1979. For every vacancy, there are now 57 people unemployed in the west midlands county compared with 29 in Great Britain as a whole. The west midlands figure is double the national average. Indeed, a factory recently attracted 500 applicants for 15 vacancies without even advertising outside.
  The hon. Member for Rugby (Mr. Pawsey) referred to the region's position in the unemployment league table, but the position of the west midlands is even worse than he suggested. The Office of Population Censuses and Surveys recently published a survey of the nine regions in England. In 1979, the west midlands was fourth out of the nine with 4·7 per cent. unemployment, which was also the average for England as a whole. After two years of Conservative Government, the west midlands was first in the league, 12·7 per cent. unemployment, compared with 9 per cent. nationally.

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  From being the average, the west midlands has become the leader, despite constant promises from the Government of good times just around the corner.
  In June 1979, the then Minister, the hon. Member for Basingstoke (Mr. Mitchell) told the House that the results of the Government's policies would be seen by the end of the year, with more to come. He could not have been more right, and there was certainly more to come—more and more unemployment.
  This is the fourth debate about the economic problems, the unemployment and the industrial decline of the west midlands since the Government came to power. In June 1980, the then Minister, the hon. Member for Bosworth (Mr. Butler) said that there were grounds for optimism. In March 1981, the then Minister, the hon. Member for Arundel (Mr. Marshall) said that we should take comfort from the fact that four regions were even worse off and that the west midlands had less unemployment than the north, the north-west, Wales and Scotland. Since then, we have overtaken the north-west and Scotland, and only Wales and the north are still worse off. In December 1981, a new Minister, the hon. Member for Norfolk, South (Mr. MacGregor) said that he recognised that industry in the west midlands faced its most difficult period since the war. He said that it was an uphill climb—too right, and every time we push it up the hill the Government push it down again.
  Today there is a new face at the Dispatch Box. It looks as though the Under-Secretary of State for Employment, the hon. Member for Eye (Mr. Gummer), will be replying to the debate. Why does a different Minister reply to each of these debates? It is because Ministers are scared that we shall remind them of what they said last time.
  In December, the Birmingham chamber of industry and commerce produced a survey of 84 firms. Conservative Members may not like the results, but they cannot run away from what their own friends in industry are saying. The survey showed that, compared with December 1981, fewer firms were reporting increases in United Kingdom orders and more were reporting decreases. Fewer reported increases in export orders and more reported decreases. More firms were working at less than 60 per cent. capacity. More had lower stocks and forecast even lower stocks. More firms reported cash flow problems. More firms reported that their work forces would decrease during the next three months. More firms reported that they would revise their investment plans downwards. Fewer firms were confident that their turnover would improve under this Government. That survey was in December.
  What has happened since then in the west midlands? There have been 500 redundancies at Dunlop, 500 redundancies at Lucas Girling with the closure of a factory at Tyseley, 800 redundancies at Lucas Electrical and almost 400 redundancies at Imperial Metal Industries. None of those redundancies is the result of strikes, low productivity or any other of the reasons given by Conservative Members. In January alone the west midlands had 2,500 redundancies. They are running at the rate of 100 per working day. During the past six months the west midlands has lost 14,000 jobs.
  Employers declaring the redundancies do not blame strikes, low productivity, trade unions or wage claims. Quite simply, they blame lack of work, drop in business,
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  a slump in orders and a slump in demand. In one word, there is a slump. That is the cause of the job losses, not the adverse industrial structure that we have had for the past 10 or 20 years.
  Against that background, we need special measures. The west midlands needs to be put on an equal footing with the other regions whose unemployment levels we have overtaken. Several hon. Members have said that the west midlands is part of the United Kingdom. As the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) said, we should seek to reduce the costs of industry, but there are two ways to do that. The better way is to increase demand and production. That would reduce industrial costs. To achieve that we need reflation and more Government spending instead of less. The Government should not cut back, but should create the demand and create the markets for the goods made by British manufacturing industry.
  To get the benefit of that demand, we need import controls, but we will not obtain them from the Government. They will not impose import controls on Japanese cars. Most Conservative Members are opposed to import controls on Japanese cars. Every survey carried out proves that. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) expressed surprise that goods are imported by multinational companies such as Lucas and Dunlop. He should remember that the same multinationals wanted to take us into the Common Market so that they could switch production to the continent.
  We have seen a succession of new ministerial faces at the Dispatch Box replying to debates about the west midlands. But we need new policies. The Government have had plenty of time to change their policies, but they have declined to do so. It is time for the people of the west midlands to change the Government.
  9.17 pm
  Mr. John G. Blackburn: I am grateful for the opportunity to speak, even if only for a few minutes, in this important debate about the west midlands. There has been wide agreement about the problems of unemployment in that region. I wish to concentrate on only three or four aspects of that. First, it is true and acknowledged on all sides that unemployment in the west midlands did not start in May 1979. In my constituency, there were 4,200 job losses between 1977 and May 1979.
  As always in these debates, I am pleased to see the hon. Member for Wolverhampton, South-East (Mr. Edwards) in his place. I would expect him to be here because his area suffered large and savage redundancies with the closure of the Bilston steelworks. Many of its workers live in the northern part of my constituency.
  I have spent 22 years of my life walking the avenues of industry in the west midlands, like so many people in the Chamber and outside. During that time I, like everyone else, took a 316 per cent. pay rise and, in contrast, produced only 17 per cent. more goods. I learnt the hard way in the black country that everything starts with an order. An order means production, production means jobs, jobs mean profits and profits mean reinvestment. Everything starts with an order. We must learn the lesson—if we have not learnt it before—that our industry is utterly dependent on orders, on being competitive, and on producing the right models and the right goods for the right markets. I have stood here, with hon. Members from both sides of the House, in debate after debate, urging the

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  Government to invest in the LC10 model, which we believe will have a tremendous impact on the economy of the west midlands. Nevertheless, I am saddened when I discover that many of the components for that model, which is being produced in the west midlands with Government aid, are not to come from the area. We do not produce motor cars in Dudley but we produce components. The car industry is the lifeblood of the engineering industry in the west midlands.
  I may not be popular for saying it, but it is part of my psychology that Governments were never elected to run industry. They are not capable of running industry. They are not qualified to run industry but they have a solemn responsibility to create an environment in which industry can prosper. In that connection, I echo what has been said about the 10 per cent. reduction in tax on the motor industry. Nevertheless, it is not the answer. We must ensure that that makes the product competitive and that people buy British goods.
  Another important issue is whether the west midlands can compete. I sincerely believe that the people of the west midlands are capable of competing, but on one condition—that the terms are equal. We are not competing on equal terms. I am not one of those who advocate assisted area status.
  In the next 24 hours I and several hon. Members, including my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) will be keeping an appointment to see my right hon. Friend the Secretary of State for Industry. I shall plead the cause of the Round Oak steelworks with him. I remember vividly the excellent speech by the hon. Member for West Bromwich, West (Miss Boothroyd) who dealt with the problems at the London works and the Duport foundry.
  Capital for investment in the west midlands is available. People are interested in investing in our excellent work force. However, there must be a political will to allow that to happen. That all revolves around the Government's responsibility to create an environment in which business can prosper. In that spirit, I have abundant faith in the west midlands, provided that it can compete on equal terms. In that spirit also, I still believe that there is a future for the fine people of the west midlands and what they produce. It is for the House to give the fine workers there its united vote of confidence.
  9.23 pm
  Mr. Robert Edwards: It is always a great pleasure to follow the hon. Member for Dudley, West (Mr. Blackburn). I noticed that a firm in his constituency, Cannon Iron, wanted 15 temporary labourers a few weeks ago. There were 500 applicants. They walked from all over Wolverhampton to get a job there. That gives some idea of the scale of the problem in Wolverhampton and the west midlands.
  The facts have been recited throughout the debate, but they are well worth repeating. In 1978, 6 per cent. of the work force in Wolverhampton were unemployed and their number was being reduced. In Bilston in my constituency it is 26 per cent. In one ward in Wolverhampton it is over 30 per cent. The people are in despair. They feel like criminals and outcasts. There is nowhere in this great big world where they can fit in. They are depressed. Some 300,000 in the west midlands receive supplementary benefit. They have to go through the undignified process of applying for it. That has never happened before.
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  In Wolverhampton, 7,000 children are relying on free meals and extra support for clothing and boots. That has never happened before. The people are in the poverty trap and are suffering all the indignities that that involves. The hon. Member for Bromsgrove and Redditch (Mr. Miller), for whom I have great respect, suggested that no real initiative is necessary and that the market should solve the problem. I am sure that he did not make that suggestion seriously.
  The hon. Member for Dudley, West (Mr. Blackburn) suggested that we should have fair competition. With fair competition, the west midlands people, with all their skill and traditional wisdom, will come through. However, what sort of fair competition exists today? The industries are competing against the cheapest labour in the world in South Korea, Malaysia, and now in Communist China.
  According to the import figures, 78 per cent. of sporting equipment here is imported. Once, in my time, we dominated the production of sporting equipment. The biggest producers were Dunlop. Its factory in Malaysia now supplies most of our imports. Dunlop, a multinational company, has factories all over the world. It is cutting its British labour force to the bone. It has closed its tyre factory at Speke, and jobs have disappeared as if they never existed. It has cut back its labour force at Port Dunlop in Birmingham. A few thousand jobs will disappear.
  Dunlop is now negotiating an agreement with China to build a large tyre factory in China. The firm will be supplied not with Chinese currency, which is unconvertible, but with tyres. The European and British market will be flooded with tyres produced by some of the cheapest labour in the world. It is not so long since Dunlop was saying that it could not produce tyres in British factories because of the cheap tyres that were coming from east European countries. Some of the factories in those countries were built on 50–50 agreements with British and American multinational companies. Those agreements still exist.
  The import figures reveal a dreadful state of affairs. For example, 95 per cent. of the cutlery used and sold in this country comes from abroad. South Korea can produce 1 billion knives every year with which to flood world markets. The price of the cutlery is less than the price of steel. How does one deal with such dumping? It roust be stopped by import controls.
  Some of the other figures astonish me. Hand calculators could be produced by British Aerospace without difficulty, yet 72 per cent. come from overseas. We can make hand calculators, but our problem is that we cannot compete with the cheap slave labour of Thailand and South Korea.
  It is the nth degree of human stupidity to allow our industries to be destroyed and to decline and to cause desperation and anxiety among our people. To maintain our industries we must take steps to stop the dumping of the products made by cheap labour.
  9.30 pm
  Mr. Nick Budgen: The hon. Member for Wolverhampton, South-East (Mr. Edwards), who comes from the same midlands town as myself, demonstrates the desperate thoughts so strongly felt in Wolverhampton at present. When I first went there, almost nine years ago to the night, I found that Wolverhampton had enjoyed about 40 years of

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  uninterrupted prosperity. It had known little unemployment and had the self-confidence that came from believing that it would enjoy a constant boom.
  During the past nine years Wolverhampton has been hit and hit again. There are many who, in desperation, look to desperate remedies to solve their problems. The three main shocks that hit Wolverhampton were the increase in energy prices in 1974, the increase in energy prices in 1979 and the crucifyingly high sterling exchange rate which came about at the end of 1979. It is significant that, just as Wulfrunians do not thank Governments for the prosperity that they enjoyed for 40 years, they do not now generally blame the Government for the disasters that they now suffer, sometimes with desperation but always with dignity.
  I agree with my hon. Friends the Members for Rugby (Mr. Pawsey) and for Birmingham, Selly Oak (Mr. Beaumont-Dark) in being sceptical of Government solutions. I believe that Governments have an overriding duty to attempt to improve the position, particularly through the tax system.
  I agree with hon. Members from all sides of the House who attack, as firmly as possible, the scandalous imposition of the national insurance surcharge. It is a tax on jobs. There may have been some justification for it when it was imposed at a time of higher employment, but there is no justification for it now. Let it be abolished as quickly as possible. I agree with those of my right hon. and hon. Friends who are distraught, even disgusted, about the delay in the way in which the Government have sought to renegotiate our trade agreement with Spain.
  We know that it must be carried out through the EC, but if the Government wish to see the west midlands supporting the ideal of Europe, they had better get on with renegotiating that deal with Spain. It is becoming increasingly clear to many of those who supported entry into the Community that, had we been able to negotiate directly with Spain, the treaty would have been renegotiated long ago. Let us hear rather less talk about how it is being done through the Commission and how we have made several initiatives to the Council of Ministers. This matter is urgent and has wider repercussions than many of those in government understand.
  However, the Government could make things much worse in the west midlands. It is obvious that the Government are as yet undecided about their policy on the price of North sea oil. On the one hand, the Treasury is delighted that the price should remain high so that the tax take remains high. On the other hand, the Department of Industry understands that low energy costs are good, especially for heavy manufacturing industry. The Department of Energy wishes to have high North sea oil prices because that will encourage further investment in North sea exploration.
  However, we in the west midlands are in favour of low energy prices. We wish to see OPEC crack. We do not mind if some of the punters who have had a punt on North sea oil lose a bit of money, because we believe that social stability is one of the most important factors for which the Tory party stands. The laying waste of our heavy manufacturing industry is not good for social cohesion. Let us join those who wish to see OPEC smashed.
  There are advantages in a 12 per cent. devaluation. We do not wish to have a managed devaluation of 30 per cent.,
  710
  but there are advantages in a devaluation that has been caused by the market and which will operate as an import control. We must not have higher interest rates in order to increase the exchange rate again.
  Several Hon. Members rose—
  Mr. Speaker: Order. The Minister has agreed that he will not reply until 9.43 pm.
  9.37 pm
  Mr. David Winnick: Everyone knows that the west midlands had many difficulties before 1979. The industrial base was too narrow and new technology industries were required. However, the indictment against the Government is that their economic policies have led to the west midlands, and certainly the black country, suffering devastating blows during the past three years. In May 1979 unemployment in my travel-to-work area Walsall, was 5·1 per cent. Today, even on the new basis on which the figures are calculated, it is 18·8 per cent. Conservative Members have said throughout the debate that there was unemployment in the west midlands before the present Government came to power. They are right, but there was no mass unemployment, nor was there the poverty and devastation that goes with it.
  There is little doubt that the true unemployment figure is even higher than 18·8 per cent. It is likely to be nearer 25 per cent., and the same is true of other parts of the black country. An important way in which we can judge the severity and the depth of unemployment is to note for how long people have been unemployed. In a reply that I received last week I was informed that between January 1979 and October 1982 there was an increase of 423 per cent. in those unemployed for more than 12 months in the Walsall travel-to-work area. In Dudley and Sandwell the figure is 562 per cent. and for Wolverhampton it is 374 per cent. For the region as a whole, the increase for those who have been unemployed for longer than 12 months is 379 per cent.
  What about young people, who obviously leave school desperately eager to find a job? Between January 1979 and October 1982 there was an increase in the west midlands of 621 per cent. for those under 20 who had been unemployed for more than 12 months.
  I have given the statistics, but behind them lies the tragedy of people who cannot find a job. Certainly there are the young people, but let us not forget those in their 40s and early 50s who are not only unemployed but face the daunting prospect that unless there is a change of policy and a change of Government they may never work again. Their crime is to be 45, 48 or 52. They have worked all their lives and now find themselves not only unemployed but daily having to face the terrifying possibility that, no matter how hard they try, or how desperately they seek work, there is no opportunity for them. I hope that the Minister will deal with the plight of those people, who stand little or no chance of being able to earn their living.
  My hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards) already referred to a case involving one vacancy. Another case was quoted in the Express and Star last week. There was vacancies for 30 people in a hotel, but 500 people turned up seeking those jobs. That is an illustration of what has happened in the west midlands and the desperate situation in which we find ourselves.

  711
  We last debated the difficulties of the region in December 1981. I was lucky in the ballot and initiated that debate. I spoke then of the plight of the unemployed and the tragedy of what is happening in the region. What is terrible, as my hon. Friends have stated tonight, is that things are now so much worse. Unemployment has continued to grow and there is no sign of economic recovery at all. I hope that we shall not hear phoney optimism from the Minister tonight. We know that there is no sign of any economic recovery. However high unemployment is now, in the next few weeks or the next few months unemployment will grow worse in the west midlands and the black country.
  We need changes of policy. We need more demand in the economy. Lack of demand, above all else, has been the cause of what has occurred in the past few years. We need a more competitive exchange rate. As my hon. Friends have said, we also desperately need selective import controls. Surely the time for debating that matter is over? If British manufacturing industry is to survive, we must have some protection. That point has been stressed tonight by some Conservative Members as well as by my hon. Friends. We need the restoration of exchange controls. The abolition of exchange controls has been almost a direct incentive for the export of capital.
  What we really need above all else, and what would give hope for the west midlands, is a change of Government. We need a Labour Government pursuing economic policies that would reverse the tide of mass unemployment. The people of the west midlands are sick and tired of being the victims of the Government's policies. They do not want to be punished and penalised. They take the view—and we agree with them 100 per cent.—that they have a right to earn their living. They do not want to live the rest of their lives on the dole queue, living on the very minimum. Is it too much to ask that in the Britain of the 1980s our fellow citizens should have the right to work? There is no hope with this Government. The defeat of the Government at the next election and a change of policy is the best hope for the west midlands to be able to survive as a major manufacturing industrial area.
  9.45 pm
  The Under-Secretary of State for Employment (Mr. Selwyn Gummer): I was hoping, before the speech of the hon. Member for Walsall, North (Mr. Winnick), to follow the advice of the hon. Member for Cannock (Mr. Roberts) and address myself to the issues rather than to bandy party political accusations across the Floor of the House on my first visit to the Dispatch Box. I thank my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) for his kind words. I congratulate the hon. Member for Coventry, North-West (Mr. Robinson), who introduced the debate from the Opposition Front Bench, on his success and that of his fellows in procuring the debate.
  It would be wrong to start in any other way than by saying that any of us who pretend that unemployment is a matter which can be dismissed or grinned about do not understand the debilitating nature of being without a job. Many hon. Members, from background or recent experience, are aware of that effect on their own lives and on the lives of their constituents.
  It is important to say that in the west midlands there has been quite a sudden change. It was an area of relatively low unemployment and it is now suffering considerably higher unemployment. The change has come so much
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  more suddenly than in areas which have been struck by high rates of unemployment over a long period. The west midlands is suffering the particular pains, difficulties and disillusion that come with that change. It would be wrong for anyone to ignore or deny those facts.
  It is vital—
  Mr. Ivan Lawrence rose—
  Mr. Gummer: I have very little time to cover the issues which have been raised already. There are hon. Members on both sides of the Chamber, including my hon. and learned Friend the Member for Burton (Mr. Lawrence), who were unable to catch the eye of the Chair and make their contributions because of the time limit.
  We should treat seriously the speech of the hon. Member for Coventry, North-West, and perhaps more seriously than some others. The hon. Gentleman made a real attempt to provide alternative answers to the problems which face us. It does the unemployed no good merely to rant and rave about those whom we dislike and the policies that we do not accept. The only answer is to suggest policies that might solve the problems to which we address ourselves.
  Mr. Lawrence rose—
  Mr. Gummer: I shall not give way at this stage. I gave as much time as I could to as many hon. Members as possible.
  The hon. Member for Coventry, North-West offered four answers to our problems.
  Mr. Geoffrey Robinson: Five.
  Mr. Gummer: If there was a fifth one, I shall return to it when I have found it in my notes. The hon. Gentleman offered four answers which I suggest were of great importance. The fifth one may have been the general one that was adopted by the hon. Member for Walsall, North, who wants a new Government. The hon. Gentleman's four specific answers do not meet the real issues. First, he suggested that the west midlands should have assisted area status. That argument has been advanced on both sides of the House. Similarly, it has faced opposition on both sides. It cannot be said that it is a suggestion that is accepted as a panacea by everyone in the west midlands.
  A review of the policy of area status is taking place and the second stage is about to begin. One of the most important matters to be considered will be the position of the west midlands and the arguments that have been advanced for the west midlands having assisted area status. It would be only reasonable to tell those who are carrying out the review that the argument did not seem to be conclusive as it was adduced on either side of the House. It does not seem to be recognised as such in the west midlands.
  Secondly, the hon. Member for Coventry, North-West said that we should have an answer to the question surrounding the Nissan project. My right hon. Friend the Secretary of State for Industry has talked to Nissan's top management. He did so during his recent visit to Japan. It is clear that Nissan is not yet in a position to take a decision on the United Kingdom project. It is equally clear that a favourable outcome is still a real possibility. The contact with the company will continue and I hope that we shall be able to make an announcement. Unfortunately, we cannot make one now.

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  It would help a great deal if the Labour party dropped its decision and determination to leave the European Community. If there is one factor that is likely to make Nissan think again, it is the feeling that, at the drop of the hat, and with no referendum, Britain might cease to have the major part of its present export market. One has to ask the Labour party to take the responsibilities that are reasonable to an Opposition.
  The hon. Member for Coventry, North-West and other hon. Members suggested that we should use selective import controls. For an area that has depended for so long on its exports to go for selective imports seems to me to be little short of madness. It is certainly reasonable to protest strongly about unfair imports, and I agree with many of the points made about Spanish cars. The word that has been used, and I use it again, is that the arrangements that we have are "grotesque". I repeat the assurance that the negotiations are continuing.
  My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) made the point that negotiations always take time in the European Community. His scepticism on the Community is well known. However, I assure him that later in the month the Commission is due to report the results of those negotiations and the Secretary of State for Trade will be visiting the west midlands at the end of the month to discuss the matter with the industry.
  Mr. Les Huckfield: Big deal.
  Mr. Gummer: We shall see whether it is a big deal. The hon. Member for Nuneaton (Mr. Huckfield) may be leaving the west midlands as he feels that he cannot be reelected there, and is in no position to say "Big deal".
  Mr. Budgen: Will my hon. Friend please give some prediction to the House as to when these "grotesque" arrangements will be changed?
  Mr. Gummer: The anouncement of the results of those negotiations will be made to the Council later this month. The Secretary of State for Trade will then discuss the matter with representatives of industry in the west midlands. I can give my hon. Friend that clear and categoric assurance, but I cannot give him the results of the negotiations, or there would be no point in having them.
  The proposals made by the hon. Member for Coventry, North-Esat were supported by a number of hon. Member, including some of my hon. Friends. Where I am unable to answer hon. Members' points in the short time that I have, I shall write to the hon. Members concerned. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) made an important point when he asked Labour Members how it was the they continued to talk without mentioning one of the most important effects on industry in the west midlands—the high rates levied upon it.
  If Socialist-controlled councils would put to the forefront restraint in their spending, and make their contribution to the improvement of industry in the west midlands, it would be a good example to central Government. It is a sad thing that in seeking to attack the Government, Labour Members did not take the opportunity to bring home to their supporters the fact that they have within their own hands a means of helping industry in the area about which they are concerned.
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  The main burden of the argument of the Labour party has been that the way to deal with the problems of the west midlands is to pump more money into the economy as a whole. The hon. Member for Coventry, North-West said that he felt that what the Government had done up to now was a hotchpotch of relief schemes that the Secretary of State had grudgingly agreed.
  If the hon. Member feels that the large numbers of important schemes that have been taken up widely in the west midlands are merely that, he is flying in the face of everything that other people of all political parties would say about the west midlands. He may ask for further relief and further schemes, but to suggest that the considerable package of schemes that has been seen to be very successful in many parts of the west midlands is merely a hotchpotch grudgingly agreed is flying in the face of the facts.
  Mr. Geoffrey Robinson rose—
  Mr. Gummer: I have only five minutes more and I cannot give way. The hon. Member made the longest speech so far this evening and it is reasonable for me to want to finish in the quarter of an hour that I have been allowed.
  Behind all this, the major demand of the Labour party is for a large input of cash into the economy. That came out most clearly in the speech of the hon. Member for Birmingham, Perry Barr (Mr. Rooker). He said that he did not want to go in for bipartisan twaddle. He certainly did not go in for bipartisanship, but we heard a great deal of twaddle. He suggested that the problems of the west midlands had been caused by this Government since 1979. He then proved that that was quite untrue.
  In so far as he went in for facts, the hon. Gentleman's major case concerned Lucas and the fact that for several years Halfords had sold goods that were manufactured abroad. He then said that those goods had been manufactured in countries that had strong armies and police forces but not much else. The hon. Gentleman then cited the countries, and they were France and Germany—[Interruption.] I have a note in front of me. The hon. Member for Perry Barr can look at the record, but he said that Lucas was manufacturing in France and Germany. In those countries wage rates are higher than in Britain. The provision for workers is better than in Britain. Why is Lucas manufacturing in those countries? The answer is that productivity in those countries has for years far outstripped that in Britain. Therefore, the case is proved.
  Over the years the west midlands, largely through the ineptitude of the trade union leadership, but also through the appalling record of industrial relations that has marred its industries, has sadly not kept up in competition with other countries. I refer not to some sad little country in South America but to France and Germany, which can compete with us right across the board.
  I considerably respect the hon. Member for Wolverhampton, South-East (Mr. Edwards), but I was sorry to hear him make that speech. He spoke about imports from Malaysia, but hon. Members should realise that some of the imports from developing countries are essential to the lives of those nations. To hear the Labour party becoming little Englanders not only towards the European Community but towards the poorest nations on earth is little short of disgraceful.
  We face high unemployment in the west midlands, which is part of the worldwide legacy of the recession.

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  However, it is worse in Britain and in the west midlands not because of this Government but because of years of neglect, a refusal to face the reactionary labour policies of the trade union movement and the way in which this industry has been destroyed by those who have put money before increases in productivity and have demanded more money for less work. By putting those basic facts right, this Government will achieve a rejuvenation of British industry throughout the country and, above all, in the west midlands.

  Overseas Visitors (NHS Charges)
  9.58 pm
  Mr. Alfred Dubs: The Government introduced their new proposals to charge overseas visitors for National Health Service treatment at the beginning of October 1982. Those proposals followed several debates and statements in the House and the report of a DHSS working party that looked into the possible working of the scheme, as well as a thorough investigation by the Home Affairs Committee. I also happen to be a member of the Sub-Committee on Race Relations and Immigration, which looked into the scheme in detail.
  My main purpose is to raise some of the issues that have come up since the scheme's introduction. It is useful to remind ourselves of the Government's case for introducing the scheme. The Government put forward only two arguments in favour of it. First, they said that it would raise £6 million a year, and they assured us that that was a not inconsiderable sum. Of that, £1 million was to be obtained from fees to be charged for NHS treatment of overseas students in their first 12 months in this country. That came on top of the swingeing fees that overseas students at our universities are charged as a result of the Government's actions.
  The second justification put forward by the Government for introducing charges for NHS treatment was that there was abuse of the NHS and that the scheme would somehow lessen or prevent that abuse. Let me remind the House of the opposing arguments, to which I subscribed. The first was that the Government would not in fact raise £6 million by means of these proposals. The second was that there was little evidence of abuse, and that what abuse there was was on a small scale. Thirdly, the whole idea was most unfair to overseas students. Fourthly, the proposals would be seen to be discriminatory against the black population of this country who, although eligible for NHS treatment, might be subjected to a more difficult process of questioning when they went to hospital for NHS treatment. This view of the discriminatory possibilities of the proposals was fully supported by many health authorities which gave evidence to the Home Affairs Select Committee. The fifth argument against the proposals was that they were extremely complicated, would impose an extra burden on NHS staff who had better things to do, and might be applied incorrectly or improperly because of the sheer complexity of the way in which the system should be applied.
  In its report, the Select Committee, not surprisingly, divided on party lines. I shall refer in particular to the evidence that the Secretary of State gave to the Select Committee on 1 March 1982. First, he said:
  "I must emphasise that there is nothing in the proposals that I am to do which needs or, I believe, will, increase racial discrimination or tension, as far as that is concerned. Certainly I would do everything in my power to prevent that taking place."
  That is a fairly clear commitment. Secondly, the Secretary of State said, on the same day:
  "On first hearing that proposition, my aim is to demonstrate to everyone concerned, and to the ethnic minority groups, I suppose, in particular, that this system is fair. Yes, I would be prepared to consider some kind of checking system, if that were thought to be useful."
  The Select Committee thought that that form of monitoring would be useful, and recommended accordingly.
  What has happened since 1 October, when the scheme was introduced? Many of us were interested to know how

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  it was working. So I asked a number of parliamentary questions last December, thinking that I would get some evidence about what was happening. I asked how many overseas visitors had been charged, and what the income had been for each regional health authority. I asked about extra staff having to be appointed to administer the new procedures. I asked whether the new procedures had been introduced in all hospitals. I also asked from which countries the overseas visitors came who had been charged for this treatment. The Minister of Health replied on 9 December 1982:
  "The information sought in these questions is not available centrally".—[Official Report, 9 December 1982; Vol. 33, c. 587.]
  I asked a further question about a week later as to whether the Secretary of State would introduce a monitoring system, to which the Minister of Health replied:
  "I see no need to do this at present and doubt whether the expense to public funds would be justified".—[Official Report, 16 December 1982; Vol. 34, c. 247.]
  Finally, today I asked whether the Secretary of State for Social Services was satisfied with these new procedures and whether they were working satisfactorily. The answer came:
  "Yes, so far as I am aware".
  Those answers are a little surprising, to say the least, in the light of the undertaking given by the Secretary of State when he met the Home Affairs Select Committee. He said that he would take care to ensure that racial discrimination did not take place in administering the scheme and that he would consider a checking system, if that was thought to be desirable. Clearly, it was thought to be desirable. In my opinion, the Secretary of State gave perhaps not explicit but certainly implicit undertakings that he would monitor the progress of this controversial scheme.
  I would further argue that the Secretary of State has, in the event, not kept the undertakings that he gave to hon. Members. Accordingly, I wrote to all 14 regional health authorities in England putting to them the questions that the Secretary of State was unable to answer because he was not collecting the information. Some of those answers have arrived. Some are still coming in. They cover the three to four-month period since the new charging method was introduced on 1 October. I have done some rough calculations on the basis of the information that I have so far received. I wish, from that point of view, that the debate was taking place in a few weeks' time when I shall have the full results.
  The population covered by the regional health authorities that have so far supplied information amounts to about 14·5 million out of a total population in England and Wales of 50 million. I appreciate that one cannot be precise. A heavier weighting in terms of charging overseas visitors arises in the London area. Of the four regional health authorities covering London and the home counties, one has so far replied. The total income obtained by the regional health authorities that have replied, in the three to four-month period, although they did not all give figures for the same period, was £22,000. Even if that figure is multiplied by four on the assumption that their replies related to a three-month period, this gives a figure of £88,000. Projected on the basis of the population for England and Wales, the figure becomes £300,000.
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  I accept that these figures are not the best basis for making estimates. Even so, the Minister should be concerned that the original estimate of £6 million by his Department is not likely to be met in the first year. There are, of course, teething troubles. It is known that not all hospitals and not all district health authorities are yet operating the scheme. That may be an argument for saying that more money can be expected, although it is not an argument, I believe, from which the Minister will take a great deal of comfort.
  In support of the argument that the money will not amount to the sum originally suggested, I should like to refer especially to overseas students. A number of parliamentary questions were asked by my hon. Friend the Member for Crewe (Mrs. Dunwoody) last year about the expected income from overseas students. In March 1982, it was expected that £500,000 would result from Health Service charges imposed upon overseas students who had come to this country at the invitation of the British Government. Given the original estimate by the Department of Health and Social Security that students would contribute £1 million, it can be seen that roughly 50 per cent. comes from those students invited by the British Government.
  By December 1982, the Minister for Overseas Development had clearly revised his figures. His reply stated that the likely contribution of the overseas students who came at the invitation of the British Government would be £100,000. On the basis of simple proportions, it is likely that the income to the DHSS from all overseas students will be £200,000. It might be a little more because the Minister added that the overseas students coming under the British Government scheme had had previous health checks, were therefore a bit healthier than the average, and would need less Health Service treatment.
  There have been other developments since the scheme was introduced. A judgment by the House of Lords in December is usually referred to as relating to Shah and others. This was concerned at least in part with the definition of the words "normally resident" in this country. That is important, because the definition of who is normally resident arises on this method of charging overseas students. One interpretation of the House of Lords judgment is that "normally resident" has now been defined in such a way as to cover all overses students who would no longer be liable to pay for NHS treatment. I cannot say with utter precision whether the House of Lords judgment will mean that in practice, but it is certainly how it has been interpreted by students and organisations representing them.
  There are three particular respects with which we must all be concerned as to how the scheme is now working. First, some people are being charged large sums of money for NHS treatment as a result of accidents that have occurred during a visit to Britain. There was a case in Bradford of an individual, I believe from the Indian sub-continent, who was visiting Britain on holiday. I think that he broke his leg and was charged £7,500 for treatment. It may be that such examples of heavy charges are exceptional— I hope that they are—but it must be a matter for anxiety if people suffer from acidents while visiting Britain and have to pay large sums of money for something which could not be anticipated.
  Secondly, it is my contention that some people are being charged incorrectly or out of line with the Government's stated intentions when the scheme was

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  introduced. May I give one example? A woman who had settled here—I cannot give her name, because she would be embarrassed by the publicity—went to the Indian subcontinent and then returned to Britain. I think that at that time her husband was still on the Indian sub-continent. She was pregnant and when she went to the hospital about her impending confinement she was asked about the basis of her stay in Britain according to the form of questioning which is part of the proposals. Because the woman was rather alarmed about the implications of the British Nationality Act 1981—it may have been that she did not understand it fully—when she was asked whether she was staying here permanently she said that she was not sure, although she was settled here and had not been away for two years, so that under the immigration rules she had evey right to stay for the rest of her life. However, because she was disconcerted and ill at ease about the British Nationality Act she was unsure how to answer and she said something about not being quite sure and that she might or might not be going back.
  What happened? She has been charged. I cannot understand how that can be an example of other than the way in which these charges have been wrongly applied, even according to the Government's stated intentions and the way in which the Secretary of State described those intentions to the Select Committee on Home Affairs.
  Thirdly, there have been several instances—I have been given details of at least two—where the sponsor of a visitor to Britain has been forced to sign an undertaking to pay for NHS treatment before that treatment has started. On at least one occasion that undertaking was demanded in what I would only describe as the most stressful of circumstances. When the sponsor's father was on the point of being wheeled into the operating theatre the hospital authorities told the sponsor that he must sign an undertaking to pay. Presumably, the undertaking was for a person who was being treated and could not pay. This is an alarming example of how this particular scheme is being applied.
  It is difficult to understand why the DHSS and the Minister are so reluctant to look into the workings of this highly controversial scheme. There was much argument up and down the country about it before it was introduced, and there has been much argument since it has been introduced.
  I was in Birmingham last week with the Home Affairs Sub-Committee on Race Relations and Immigration. We were taking evidence on a totally unrelated point, but a black person described a series of events concerning his son who had been subjected to difficult and, in his view, discriminatory questioning in relation to the possible treatment for a broken arm at a hospital in the midlands. Examples of that sort have come to light time and time again. Our black population is very ill at ease and sees that as yet another example of discrimination being practised against them, even when they are absolutely within their rights to go for the Health Service treatment to which they are entitled.
  I cannot help thinking that this is a bad scheme. Ideally, it should be withdrawn. It cannot be justified even by the arguments the Government have put forward. At the very least, the Minister owes it to the House and to the people affected by the scheme to ensure that his Department monitors how it is working. His Department should be able to say if the money is coming in, what the difficulties have been, whether the staff are co-operating, how many
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  hospitals are not taking part in the scheme, and what has happened to general practitioners. Labour Members have been forced to accept proposals which they dislike intensely. People up and down the country dislike the proposals intensely, yet there is no way in which we can get the answers to the many questions that we wish to ask about how the scheme is working.
  I have written to the regional health authorities and am getting courteous replies from the majority of them. They are giving me the information that I require.
  It is absurd that a Back-Bench Member of Parliament should have to write letters to regional health authorities simply to collect information which for a lesser cost the Minister's own officials could collect more easily and could keep collecting at intervals. Members of Parliament could then have information as of right about a scheme that is controversial. Will the Minister consider the plea that he should monitor the scheme so that he can tell the House how it is working, thereby enabling all hon. Members to come to a judgment on whether the Government' s aims for the scheme have been achieved.?
  10.18 pm
  The Minister for Health (Mr. Kenneth Clarke): The hon. Member for Battersea, South (Mr. Dubs) has raised the question of the Government's new scheme for charging overseas visitors who are not ordinarily resident in this country for the hospital services they receive. It is by no means the first debate the House has on the subject. The new scheme that the hon. Member is debating has been in effect only since October last year. The House debated this subject comparatively recently when, following on an Opposition Prayer, it approved the Government regulations. I shall not again give the details of the Government's basic case for introducing the charges.
  I remind the House that the principle on which we acted was that we thought it was right that overseas visitors from countries with which we had no reciprocal agreement should pay for their treatment normally by insuring themselves. That is the same basis on which British visitors, when they go to those countries, pay for hospital treatment that they may be unlucky enough to have to receive. I suspect that the bulk of the visitors about whom we are talking come from prosperous countries—American tourists, Australian tourists and visitors from the Gulf—who have a higher per capita income than our own. They also come from countries where British visitors and tourists are expected to insure against the costs of their own treatment.
  Someone must pay for the hospital treatment that patients receive. We are generous in the treatment given to visitors in emergency and other circumstances. We freely enter into reciprocal agreements with many countries, but, if the visitor does not pay or insure himself, the British taxpayer must do so. Most British taxpayers would agree that it is perfectly reasonable for visitors to insure so that they can pay for themselves.
  I do not believe that we are applying a system that would be regarded as unreasonable by the authorities of the countries from which the visitors come. The aim of the scheme is the perfectly worthwhile one of raising a little more revenue for the NHS. It also puts on a clear footing the longstanding arrangements that have applied to the NHS. Ever since the NHS was created, we have never had a rule whereby overseas visitors were as of right entitled to free treatment.

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  We tried to estimate the amount that would be raised following the introduction of a charging scheme. We used a figure of £6 million, which the hon. Gentleman will find was something of a guesstimate, although I always personally felt that that was an underestimate of the sum that could be raised for the NHS. A figure of 0·25 per cent. of services charged for would produce £7·5 million. We suspect that £6 million is, therefore, a reasonable expectation, although we have no means of knowing for sure, and I doubt whether the hon. Gentleman has any basis for knowing at this stage what exactly a full year will produce.
  If we get £6 million or anything like it, that will be a welcome addition to NHS funds. The Government have steadily increased expenditure on Health Service provision of all kinds, but the hon. Gentleman would be among the first to argue that we could spend additional money in a perfectly worthwhile way. I therefore cannot understand why foreign visitors from countries with which we have no reciprocal agreement should not make a modest contribution to their own care when they are taken into hospital and are able to pay.
  The hon. Gentleman has consistently been a critic of the scheme. He has been against it from the word go and has always thought that it should never have been introduced. He has sought evidence to show that he was right, that the scheme is not working and that all his fears have been justified. He has asked parliamentary questions to discover whether in the first three months of operation there is evidence to support his criticisms. The answer to his inquiry is, first, that we are not collecting centrally the informatiion he wants and, secondly, that it is far too early in the lifetime of the scheme to check any sensible statistics because the information is not readily to hand.
  Not every district health authority has introduced the new procedures at the same time. In October last year, we were in the middle of the NHS pay dispute, which was a much higher priority on management and staff time. Most authorities now have the scheme under way, but it has been introduced at a time when the number of foreign visitors is very small. I also hope that those authorities are not devoting undue effort to checking the working of the system and collating the statistics.
  I hope that they are ensuring that the guidance is followed properly, fairly and consistently, but I have no intention of organisng a massive statistical collecting operation, which would merely impose a high administrative cost. I cannot imagine that most regional health authorities have the spare management time to indulge in a close scrutiny of the monthly revenue returns from district health authorities. We have, however, asked health authorities to keep a separate record of any complaints arising from the scheme. We wish to be informed of these and in due course will ask for a return, but it is far too early to do so yet.
  As for income from the scheme, figures for the first six months will emerge in autumn 1983. As I have said, however, I do not expect those figures to be fully representative, as the scheme was slow to get under way in some areas and the figures will relate to a period in which the number of foreign visitors was at its lowest.
  Therefore, I do not believe that it is justified at this stage to start collecting the detailed statistics that the hon.
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  Gentleman requires or to reach any sensible conclusion about how the scheme is working in practice and how much revenue it is likely to raise.
  The hon. Gentleman raised some specific and important points about events since the scheme was introduced and the way in which it has worked so far. He referred to the House of Lords decision in the case of Shah and others regarding the residential status of certain overseas students. I accept that there may be implications for the guidance that we have issued about charging of overseas students.
  The legal basis on which overseas visitors may be liable to hospital charges depends upon whether they are "ordinarily resident" here. That has always been the term used in legislation governing the National Health Service. Their lordships actually considered a definition of "ordinarily resident" in the case in question. They rejected the "real home" test which had been used in the past and referred instead to the purpose of living in a particular place. The definition that they preferred comes from a judgment of Lord Scarman to the effect that a person should be judged as ordinarily resident here when, having regard to the purposes for which he is living here, he can be regarded as having established
  "a sufficient degree of continuity to be properly described as settled".
  That is one random quotation from a judgment that the hon. Gentleman has studied. We must study it and consider its relevance to the guidance that we have issued and the practice that we have been following in relation to overseas students. I do not, however, accept the claim that some have been quick to make that all students are now exempt. To take an obvious example, I do not think that a person who comes here for a short language course in the summer could be regarded as ordinarily resident. Nevertheless, we may have to reconsider our advice about students. We shall try to clarify matters for health authorities as quickly as possible if we decide that the legal position established by the House of Lords requires a change in our guidance.
  The hon. Gentleman described some cases in which he had been involved. For understandable reasons, he did not give names, and he gave inadequate information for me to respond to those cases. I am aware of one or two cases in which there were difficulties, but they did not match the information that he gave. If he will write to me about those cases, giving the names and details in confidence, I will give specific answers to the points that he raised on behalf of the complainants.
  Mr. Terry Davis: If my hon. Friend the Member for Battersea, South (Mr. Dubs) wishes to send copies of his correspondence to me, I hope that the Minister will do me the same courtesy, as I am very interested in the allegations of discrimination. My right hon. and hon. Friends have brought other cases to my attention and I hope that the Minister will entertain those, too on a confidential basis.
  I believe that the Minister inadvertently misled the House when he said in opening that the situation is still that the National Health Service provides generous treatment in emergencies. Certainly, treatment in accident and emergercy departments is still free. If an overseas visitor needs treatment for emergencies, such as a broken hip that requires treatment in an ordinary hospital ward, that visitor is charged—even though it is an emergency. I know of

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  several accidents involving broken bones where visitors have been charged substantial sums for treatment in hospital. That is a change arising from the Government's new regulations. Previously, the treatment would have been free, which was the policy of all Governments.
  I understand the Minister's problem in answering questions on revenue. As he said, the scheme has been operating for only a short time and there are not many foreign visitors at this time of year. When will it be sensible to give a better idea of the annual income from the scheme? Will he please drop his statement that my hon. Friend the Member for Battersea, South is asking for a massive collection of statistics? He is asking only for a simple accounting report. The income is supposed to be accounted, and will be a separate item in the accounts. It should be relatively easy to provide an inexpensive report.
  Will the Minister consider the costs? My hon. Friend rightly concentrated on the aspects of racial discrimination, about which the Opposition are worried, but we also wonder whether the revenue will justify the cost of the administration and clerical work involved. If the Minister is so confident that the revenue will be about £6 million, which will more than compensate for the cost of the scheme, will he refer the matter to the new team established under the leadership of Mr. Griffiths? One of its terms of reference is to consider the effective use and management of manpower in the NHS.
  Will the Minister say a few words about the position of general practitioners? Is the circular ECN 473, which was issued in 1964, still applicable?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. That was one of the longest interventions that I have heard. The hon. Gentleman had already addressed the House. He should ask for the leave of the House if he wishes to make a second speech.
  Mr. Clarke: It was a long intervention. I had not realised that it would be quite so long, and did not note every point. I shall try to remember them and cover them in a way that allows me to return to my thread in answering the hon. Member for Battersea, South.
  I have already covered the point about revenue. I said that in the autumn of next year we expect to produce the returns for the first six months. That will be subject to the proviso that some districts did not introduce the scheme quickly because of other problems. Also, the first six months will be winter months.
  I decline to introduce any system of monthly returns that would be administratively expensive. We rely on the report of the working party—which recommended a scheme of administrative costs. It contained some administrators from the NHS and also representatives of ethnic minorities. Paragraph 38 of the report concludes:
  "Our proposals should be capable of being implemented by health authorities without any significant increase in administrative costs, and while in certain areas additional staff may be required to operate it, this should only be in hospitals where the additional income may be expected to exceed this cost."
  I have not yet received any information to show that that advice and prediction have gone wrong. I am not aware of anyone having engaged additional staff. If we do attain anything like our modest estimate of income, it will far outweigh the administrative costs.
  The hon. Member for Birmingham, Stechford (Mr. Davis) mentioned advice to general practitioners. We are considering that question and will issue advice in the not
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  too distant future. It follows naturally from our view on charges for hospital service that we should examine the long-standing circular issued to general practitioners to ensure that it complies with the law, is defensible and does not give rise to unnecessary difficulty for family practitioner committees, doctors and chemists. With regard to copies of the correspondence and the types of cases that have been cited, I shall reply to the letters that the hon. Members for Battersea, South and for Stechford sent me. We all accept that we are dealing with the names of the patients confidentially unless the patient has indicated otherwise.
  I shall examine the case of the lady who came here to have her child. An error may have been made. We wish to detect it if one has been made. Nevertheless, as a general proposition, if, having followed our procedure, a hospital concludes that a woman is not normally resident here but has come here for the express purpose of giving birth to her child, quite a few ordinary British taxpayers will complain. They will maintain that, if we have no reciprocal arrangement with that country, there is no earthly reason why she should not pay for the treatment if she regards NHS treatment for the delivery of her child as so superior to that of the country from which she came. If she is normally resident, or the birth is premature or unexpected, other considerations of course arise.
  Mr. Dubs: Our immigration rules are extremely complicated. The lady in question was settled here, had lived here without any restrictions and had gone back to the Indian sub-continent for a while. I think that her husband was working there. On her return to Britain, she faced these difficulties. As she had been living here for some years and was settled here, I do not think that the ordinary British taxpayer would feel that she was not entitled to NHS treatment.
  Mr. Clarke: As, I think, we have agreed, the catch is whether the lady was ordinarily resident here. The hon. Gentleman said that she may have given some ambiguous or inaccurate replies to questions because she was worried on other counts. If, on examination of the facts, it appears that she was legally entitled to free treatment, we shall reconsider the case.
  Other cases have been raised, such as those of people who have suffered accidents here and received emergency treatment. It remains the case that no charge is made in the accident and emergency department. Anyone admitted following a road accident or some other unexpected emergency is exempted, but he can be liable for charges thereafter when admitted for in-patient treatment.
  That is not so startling or unjust. When a British person goes abroad—to the United States, for example—if he is wise—and we recommend it—he insures himself for hospital fees as he will be charged if he needs hospital treatment. We are trying to treat our visitors in exactly the same way as the British visitor is treated in the countries in question. I accept that we should be sensitive and sensible about the way in which the charges are collected. Sponsors and relatives may be asked to pay charges, but the first consideration will be that the proper treatment should be given.
  We have no intention—we will try to protect against it and I do not think that it happens now—of going over to what occasionally happens in other countries whereby people who need emergency treatment are not admitted

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  and dealt with because consideration is being given to whether they will be able to pay for the treatment. Our guidance is quite clear. We say that the procedures adopted
  "must accord with normal principles of patient care. If staff have any reason to think that medical attention is required without delay, then that must take priority over enquiries into the patient's liability to charges or his ability to pay."
  Those are the words of our circular. We have given clear guidance that should enable people to deal with accident victims sympathetically.
  The final allegation is the most serious one that the hon. Member for Battersea, South made. He said today, as he has said in the past, that somehow the regulations and the policy that we have introduced are intended to be racially discriminatory. I shall not labour all the arguments that I used when the regulations were introduced, except to remind the hon. Gentleman that one of the reasons why we felt that it was necessary to tidy up the long-standing arrangements was that the working party, which included representatives of ethnic minorities, found that in practice the old system could easily become or seem to be racially discriminatory.
  I quote from the working party's report when it studied how the old system, which some people want to go back to, was working. It said that the old system was so haphazard that it came to the conclusion that
  "because the checks currently used by many hospitals appear to be based on little more than the intuition of hospital staff that a patient may not be resident in this country, there is a distinct risk that they may be being applied in a way which discriminates against members of ethnic minorities living here."
  Because the old system had the risk of being racially discriminatory in practice, we thought that it was necessary to bring in a new system and to avoid any danger of racial discrimination.
  The hon. Gentleman has been supporting a most unfortunate organisation that is campaigning on the subject up and down the country, which calls itself the No Pass Laws to Health Campaign, a particularly ridiculous title, which I am afraid is used by a body that sends out fairly ridiculous propaganda, which, if read, would give the impression to many black and Indian residents that they were likely to be discriminated against when they went to hospital. The propaganda is based largely on almost direct misquotation or misrepresentation of the contents of our circular and the procedures being used. I will quote from one of its circulars, which was issued at the time of a conference addressed by the hon. Gentleman. It said that we were bringing in new regulations and that—
  "This means that if you are black or have a 'foreign sounding' name or accent, you may well find it more difficult to get NHS treatment because you may be asked to prove that you are entitled to it."
  As I am sure the hon. Gentleman knows, every instruction given to health authorities and everything in the guidance is designed to ensure that the exact opposite is the case. That is a good description of the previous arrangements, which the Government have ended and which we have sought to clarify. The new arrangements ask exactly the same questions of people whatever their origin in the first instance by a sifting process, and thereafter questions are asked sensibly according to a set pattern that avoids the risk of any impression of racial discrimination. For instance, we expressly ruled out requests for passports, except for EC nationals and others
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  trying to prove quickly that they are entitled to be treated on a reciprocal basis because of agreements with their countries.
  In contrast to what the No Pass Laws to Health Campaign says, our guidance says:
  "Ministers would find it totally unacceptable for the process of establishing identity to impose a special burden of proof on any group of people living in this country. It is important that the selection of patients for detailed inquiry must not be influenced by the personal characteristics of the patient—such as colour, accent or name."
  We have had no complaints about racial discrimination arising from the regulations, as far as I am aware. The whole point of our guidance was to avoid any impression of racial discrimination being caused because the working party found that the old system was giving rise to just those dangers in practice. It is the old system to which the hon. Gentleman appears to want to go back. The new system is designed to avoid those dangers.
  With regard to alarm being created among members of the ethnic minorities, alarm is not created by the Government or by anyone who has read our circular. If there is any, it is being caused by ridiculous and unhelpful campaigns such as the No Pass Laws to Health Campaign. It seems to me that the people behind the campaign are trying expressly to raise fears among the immigrant population that it will be discriminated against, by deliberately misrepresenting the terms of the policy, the way in which it is being applied and the advice that is being given by the Government.
  Mr. Dubs: The Minister said earlier that I had alleged that the Government were deliberately introducing a racially discriminatory scheme. I was doing nothing of the sort, although I said that one consequence of the scheme would be that it would discriminate against black and Asian people.
  I shall refer the Minister to a point made by the Secretary of State about passports. The Secretary of State gave evidence to the Home Affairs Sub-Committee on Race Relations and Immigration. He was asked about his assurances that passports would not have to be produced under the stage 2 procedures. He said:
  "No, because what I have said on passports is that it may well be for the convenience of the individual—if, for example, he comes from an EEC country—actually to establish, from his entitlement to free treatment, that he is a resident of Denmark or he is a resident of West Germany. Therefore, as in all things, I think that commmon sense has to be applied."
  Although the Secretary of State quoted the EC as an example of from where a resident might be asked to produce a passport, he did not say that passports would not be asked for from people of other countries. The basis of the No Pass Laws to Health organisation was the fear that passports would be required before health service treatment was given free-of charge.
  Mr. Clarke: Passports are relevant at stage 2, because they can be helpful for someone who comes from an EC country or some other country which has a reciprocal agreement. The quickest way for a visitor to prove that he is a national of a country which has such an agreement is to produce his passport.
  Our guidance expressly sets out that, apart from those countries, passports are not be be requested, precisely because we responded to fears expressed before the scheme was introduced that people would be worried that it was part of an enquiry about their immigration status and so on. Passports, apart from this, are not particularly

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  relevant because access to free hospital services depends upon ordinary residence and not upon nationality or immigration status.
  If I misquoted the hon. Gentleman when I said that he was suggesting that we were deliberately introducing racially discriminatory legislation, I apologise. He has not done so in his speech. However, he has appeared on the platform of the No Pass Laws to Health organisation helping to support its campaign. It is distributing leaflets typeset by an organisation called Bread 'n Roses (TU) of 30 Camden Road, London. It is being printed by Community Press (TU) in St. Pauls Road, London. I do not know whether that is a printing press of which the Labour party approves or disapproves. The hon. Gentleman knows perfectly well the scurrilous nature of the literature being distributed by the organisation. I shall quote one paragraph:
  "We can guess from what already happens in hospitals that ethnic minority people will be singled out for more careful questioning and will be more likely to experience delays before getting treatment. White people will not meet the same barriers."
  Anyone, including the hon. Gentleman, who has seen our regulations and our guidance knows that their tenor and terms are designed to ensure exactly the opposite. The same questions are asked of everyone regardless of race, accent, name or anything else.
  We are laying down a clear procedure that avoids the danger described in that leaflet, which existed before the Government acted. It is irresponsible to suggest that the new arrangements, which are designed to reduce the risk of racial discrimination, are causing greater racial discrimination. The campaign is not helpful.
  I apologise to the House if I have used, even shortly, the basic arguments put forward in earlier debates about the scheme. They were accepted by a majority in the House. It is a common sense reciprocal arrangement giving some overseas visitors the same treatment that British visitors would expect in civilised countries abroad where one expects to insure and pay for treatment.
  It is far too soon to have details of how the scheme is working in practice. It would be absurd to make detailed checks at this stage. We shall eventually have figures for the income and we shall monitor carefully any complaints that arise, including those raised by hon. Members.
  I believe that a disproportionate amount of fuss is being made about a commonsense improvement to a long-standing legal position on entitlement to Health Service treatment. If it produces a little extra income for the National Health Service we should all agree that it is a good thing because the Health Service can use all the revenue that it obtains.

  Arab Trade Boycott
  10.50 pm
  Dr. M. S. Miller: I am grateful to the Minister of State for being here this evening, and I apologise for detaining him from some function that might have been of greater interest than listening to or speaking to the many hon. Members here this evening. The right hon. Gentleman and I have crossed swords many times. To use a religious analogy, it reminds me of the story of the Presbyterian minister and the Catholic priest who were talking on a train. The Presbyterian minister said, "Of course, there should be no differences between us, because we are both doing God's work." The Catholic priest replied, "Yes, that is true. You are doing God's work in your way and I am doing it in his way."
  The Arab trade boycott of Israel has been described—I am sure that the Minister has heard what I shall say many times—as an economic menace, as a mere or a major nuisance, and even as a paper tiger. It was originally envisaged by the member states of the Arab League as an expression of their determination not to trade with the people who settled in Palestine many years ago, and their determination not to trade with the state of Israel, as it later became. However, the boycott grew wings, crossed frontiers and oceans and invaded almost every part of the world. Its purpose was, and still is, to engineer as far as possible a worldwide economic blockade of the state of Israel.
  The origins of the boycott go back a long way and came about before the state of Israel was formed in 1948. Therefore, the blockade was not a response to war or to the occupation of territory. Its aim is to damage trade between Israel and the rest of the world, and thereby to damage Israel.
  The boycott takes many forms. There is a primary boycott, in that the Arab League countries refuse to trade with Israel or to buy Israeli goods through third countries. They have done that since 1948, and I can understand it. They may do what they wish. Nothing in civilised behaviour determines that one country should do as another country demands. If Arab League countries do not wish to trade with Israel, they are perfectly at liberty not to do so.
  However, a secondary boycott involves the blacklisting of firms outside the Middle East, for example in Britain, if such firms are held to be in violation of the boycott regulations. An analogy of the secondary boycott would be for the United States of America, which has banned trade with Cuba, to say that we in the United Kingdom could not enjoy nice Cuban cigars, such as I received this evening at a function. There is also a tertiary or voluntary boycott. Some countries outside the Middle East have, because of exaggerated fears of the boycott, refused to buy from companies that are on the Arab blacklist, even if they do not trade with Israel.
  There is a fourth boycott—a self-inflicted one—which is directed against persons and institutions, the news media and other organisations. Not many years ago, a junior Minister at the Foreign Office wrote an excellent article entitled
  "Britain's trade, and the Arab blacklist"
  in which he said that many people were unaware of the pusillanimity of the British Government in helping industry to meet the challenge of the boycott. He referred

  729
  to the different boycotts—primary, secondary and tertiary. He mentioned the authentication of signatures by the Foreign Office and detailed many aspects of the boycott that affect Britain.
  Britain has a proud tradition of freedom of trade overseas and, although officially disapproving of all trade boycotts which are not internationally sanctioned or imposed from Westminster itself, the underlying attitude of British Governments in this respect has been one of tacit and weak-kneed compliance, which has taken various forms.
  The Department of Trade has issued directives in which disapproval of the Arab trade boycott is expressed, not vehemently, but in veiled terms. British firms are told to use their "own commercial judgment". Such advice is superfluous, since all companies use their own commercial judgment in their dealings not only with companies in Britain but with those overseas. The Arab boycott has political as well as economic connotations. The Department's phraseology suggests that it is not prepared to help firms coming under boycott pressure.
  In addition, the Foreign Office is guilty of sins both of commission and omission. It expedites boycott documents by witnessing the signatures of notaries public—signatures that are required periodically by Iraq and some other Arab states. These notary public signatures accompany the so-called Arab "negative certificates of origin", which state that the goods to be exported to the Arab country in question are not wholly or in part of Israeli manufacture. I have here a copy of a certificate. Negative certificates are not acceptable to any reputable chamber of commerce, but the Foreign Office "defence" is that its own signatory will not actually have seen the contents of the negative certificate.
  That brings me to a interesting point which I came across when looking at some papers some time ago. An hon. Member who was worried about this negative certificate tabled two questions to the Foreign Secretary asking for information about Government policy and requesting him to forbid officials of his Department from certifying or signing documents of a negative or discriminatory nature. He received a reply which he described as the gobbledegook of the Foreign Office.
  The junior Minister who answered the questions confirmed that his officials were prepared
  "in accordance with international practice"
  to legalise documents required for presentation in foreign countries. He added that the Foreign Office legalisation certificate appended to such a document authenticates only the signature of the Notary public or other public offical, his seal and the signatory's capacity to countersign such a document.
  The writer then said that the Minister stressed that the legalisation
  "does not relate to the contents of the document itself. The practice of the Foreign and Commonwealth Office in this respect is not discriminatory".
  The right hon. Gentleman knows that the hon. Member to whom I am referring is the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who is now the Under-Secretary of State for Foreign and Commonwealth Affairs. The hon. Gentleman commented:
  "What a splendid lawyer's reply! What a lot of baloney!"
  730
  The position is no different now. Other arguments apart, a notary's signature is the accepted final seal on a document and it does not need to be witnessed by anyone.
  The Foreign Office fails to use its diplomatic good offices to assist British firms which have fallen foul of the Arab boycotters and which would wish to continue trading with Israel. A European country which has shown a more responsible attitude is the Federal German Republic. Its Government have helped firms coming under boycott pressure. A special example is the Volkswagen company, which was threatened with Arab blacklisting.
  The British Government have avoided all forms of direct action against the operation of the Arab boycott on British soil and have therefore tacitly renounced a part of British sovereignty. Legislation that would have been perhaps similar to that of the American Administration has been rejected out of hand. It is well known that four years ago a Select Committee of the House of Lords recommended measures to curb Arab boycotting activity in Britain and that next to nothing has been done to implement the recommendations. Indeed, Her Majesty's Government have countenanced the circulation of boycott documents in Britain of the Arab-British chamber of commerce. This has been going on for over two years and is a direct violation of the chamber's undertaking, which was given shortly after its formation in 1977. It undertook that there would be no question of boycott declarations appearing on its certificates of origin. The same chamber now circulates negative certificates. It has circularised British firms informing them of probable blacklisting if they buy Israeli Government bonds.
  Why should the British Government be so lily-livered about the Arab boycott? There are several explanations. First, there is the idea of Arab oil power. The suggestion that Arab oil does not matter because Britain is more than self-sufficient is said to be misplaced. Arab oil continues to be vital to Britain's European trade partners and Britain, too, would be hurt if the Arab oil weapon were used against Western Europe. British Governments take a cautious view of the prospect of Arab oil power declining, for if and when the world economic recession ends the demand for oil will escalate. That is one viewpoint. That is one of the arguments that is advanced by the Foreign Office.
  The second argument is based on Arab petrodollars. There are massive Arab investments and bank balances in Britain. The pound sterling has been weak for some time and it has never been weaker than today. The withdrawal of a substantial part of Arab funds could have a shattering effect on the British economy. Another argument hangs on Arab markets. They are of tremendous importance to British exporters. As a result, a new and powerful lobby has emerged. It is led by interests involved in armaments, construction, engineering and electrical companies. Firms in these sectors conform readily with Arab boycott regulations. This gives the Arabs great confidence in making ever more outrageous demands.
  There are military-strategic considerations. It seems that the Western Alliance and the Foreign Office take Israel for granted as part of Western defence or Western interests and therefore there is no need to do anything to bolster that state of affairs because it is there to be had if necessary.
  Britain is not the worst offender in selling arms, but it has joined other European nations in pouring arms into a

  731
  highly combustible area. The arms market is highly competitive, so the desire not to offend Arab Governments is heightened.
  There is the mentality of what is known as the British establishment, which is well known. Hugo Young, in an excellent article in the Sunday Times two weeks ago, talked about the Franks report as being the Establishment talking to the Establishment. We all know what this is, and there is a lingering feeling that Britain has a special role to play in the Arab world because of supposedly worthwhile relations in the past.
  This feeling is strongest on the Foreign Office, and has an undeniable effect on foreign policy. Its corollary is not to offend the Arabs. This led to the relatively recent visit to Riyadh of the former Foreign Secretary to assuage Saudi anger over the film "Death of a Princess", which was shown on British television. It leads, too, to the readiness of the Foreign Office to play ball with the Arabs over the boycott.
  I can remember a case in 1968, concerning a close friend of my youth—we were in the same boy scout group. He was a little older than I and was in the Army when I was still in medical school. He left the Army, went into the consular service and then to the diplomatic service. He became Sir Horace Phillips. Sir Horace was appointed by the British Government as the ambassador to Saudi Arabia. He was accepted until the Saudis found out that he was a Jew. There was nothing to be done about it, and his credentials were withdrawn. Sir Horace had spent his whole life in the Islamic world and could speak perfect Arabic in a number of dialects, but the British Government had to accept this humiliating outcome.
  These factors have contributed to the British singular, and even exceptional, weakness in the face of the boycott. In no other European country is there a more widespread secondary boycott—the Arab blacklisting of British firms which continue trading with Israel and which receive no protection from Whitehall. However, there is also a tertiary boycott—a boycott of British firms which trade with other British firms already blacklisted. This is a very intricate ball game. In no other European country is there a more widespread voluntary boycott, entailing spontaneous application to the Arab boycott offices for forms to fill in and negative certificates of origin to be completed. There is a veritable deluge of these, because the British Government do nothing to discourage the practice.
  Only occasionally do cases of this kind come to light, because neither the Arab authorities nor the British firms concerned wish to advertise their actions. A number of recent cases have come to light of the actions of British firms. For example, the Berger paint company broke off relations with a Tel Aviv firm, Autotrade, causing the latter substantial losses. Berger refuses to admit that this was due to Arab pressure, which its manager euphemistically managed to translate into "extraneous reasons."
  Teleconsult, a subsidiary of the Government-controlled British Telecommunications has given assurances that it will do no business with Israel. BT's policy is almost certainly influenced by negotiations between the Ministry of Defence and Saudi Arabia for a £200 million contract for a communications network in that country.
  Another British firm, Transcall, broke off relations with the Israeli firm of Teletron for what it called "obvious reasons," but it obstinately refuses to disclose them.
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  Perhaps a more strikingly disgraceful case is that of a British supplier of bandages to a Jerusalem hospital, whose general manager was reported as saying that
  "as far as I am concerned, Israel does not exist."
  Then there is the bank—the case is still under discussion—whose cheques carry on the reverse side the rubber stamped statement:
  "Negotiable in all countries of the world except Israel."
  Surely that is as blatant an example of discrimination as one could imagine.
  A leading construction company indulges in what is, almost certainly, a "voluntary" boycott by filling out negative certificates of origin for equipment sent to Oman.
  There is a host of less important examples that I could cite in which British firms have given way to Arab pressure. British Airways publishes a "Middle East Pocket Brief", whose map simply omits Israel altogether. In addition, the DHL courier service claims to be "world wide" in its brochures, but refuses to do business with Israel, allegedly because of specific Arab pressure.
  Bartholomew's, perhaps the world's leading cartographers, sells maps of the Middle East in Arab countries that show Israel as Palestine. That is more than a pin-prick, for a cartographer should be totally committed to producing truthful and accurate maps, and the Arab boycott offices can only take encouragement from the firm's genuflection to Arab foibles. There are Arab countries that have lost practically all interest in the boycott. I refer to such countries as Lebanon, Sudan, Tunisia, Morocco and most of the small Gulf states. There have also been successes in resistance to the boycott. Barclays Bank and Lonrho have refused to bow to boycott pressure. After some negotiation, Grand Metropolitan repudiated the action of a subsidiary that had bowed to Arab pressure.
  A leading property company, MEPC, was exposed over its dismissal of a Jewish employee during negotiations for large-scale business with Kuwait. An industrial tribunal found that his dismissal had been unfair and the consequence of unlawful discrimination for racial reasons. It is not only a question of refusing to trade with Israel. Very nasty and dangerous symptoms of anti-semitism are creeping in. Arab countries have refused to do business with companies with Jewish directors on their boards. Sometimes, firms have firmly but courteously refused to give way to boycott pressure and have continued to do business with both Israel and Arab countries.
  The main object of countering the boycott is to enable business with Israel to carry on and prosper. That is all happening now. Excluding the probably temporarily depressed trade in diamonds, British exports in 1982 were about 50 per cent. higher than in the previous two years. Israeli exports to Britain in the same period rose by about 16 per cent., giving Israel a favourable trade balance of just about £50 million. However, British investment in Israel still lags and that may be the most serious consequence of the boycott, although it must be added that Britain's actual share in an expanding Israeli market has been halved since 1975. British Government offices, however, would point out ruefully that that is also happening in some of its other foreign markets.
  The Foreign Office views world situations from the standpoint of how they appear to be. Foreign Office analyses are superficial, their conclusions concerned with British interests as it sees them, to the exclusion of almost every other consideration. I do not quarrel with the view

  733
  that British interests are of the utmost importance, even paramount, but the pundits of the Foreign Office have a blinkered view of what constitutes British interests, and a long history in the Middle East of equating Arab interests with those of the United Kingdom. It takes a short-term view and a totally inadequate appraisal of the longer term. Fairness, justice, moral obligations and dignity play little part in its deliberations.
  Let us consider how the situation changes. The oil blackmail weapon, which I mentioned a moment ago, no longer exists. There is a glut of oil. In spite of what the Foreign Office may say, experts are of the opinion that the oil glut will continue for a considerable time. Some say that not only will it continue for a considerable time but that the possibility of blackmail by oil is gone for ever. That is due to more than the recession. First, the world has gone in for conservation. For the first time, the Americans are serious about the development of small cars. They are running smaller cars, now that they produce them. Secondly, other sources of energy have been substituted for oil, such as coal and nuclear power. France, for example, now produces 40 per cent. of its electrical energy from nuclear sources, and by 1990—only eight years from now—it will be producing 72 per cent. I was told only three months ago by the director of the nuclear energy agency of the OECD that no OECD country is now building an oil-fired power station. So things change, and what the Foreign Office believes is in British interests today or tomorrow, may not be in British interests next week.
  Only a handful of countries have passed legislation to discourage the totally unethical operations of the boycott on their soil. Arab boycott offices have sought to interfere with the normal trade with Israel of foreign firms, have wasted their time and money, and have flagrantly violated the principles of free and fair trading and the rules of organisations such as the European Community and GATT. Only the United States of America—and, to some extent, Canada—has legislated to make it mandatory for American firms to report all boycott-related transactions, fining those firms that fail to do so. Even Governments of the most democratic industrialised countries have done no more than express a pious disapproval of blatant Arab interference in their economic affairs. For Israel that is disappointing. Her trade partners should stand united in resisting economic blackmail.
  I admit that there are faint hints of a change in governmental attitude. Last May the then Chief Secretary to the Treasury promised to look into the matter of the Foreign Office expediting negative certificates of origin. In August the present Minister of State stated that Government policy vis-a-vis the boycott was under review. However, I am afraid that when the Prime Minister is not concerned, the wheels of government in Britain grind exceeding slow. The Prime Minister has been absorbed in other matters, such as the British contributions to the Common Market, the East-West confrontation on nuclear arms, and the Falkland Islands conflict. When she does not put her foot down, it seems that the Foreign Office proceeds along its leisurely way.
  It is not enough for the Government to express disapproval of the boycott. They should officially and actively discourage compliance with it. Government Departments, offices and institutions should be instructed
  734
  not to comply with the boycott. This should also apply to nationalised industries and companies in which there is a majority public interest.
  The Foreign Office should cease authenticating signatures on discriminatory certificates of origin. I do not accept that this would be
  "an unacceptable risk to our exports."
  There should be a legal obligation on British firms to notify the Department of Trade of any boycott requests or demands that they receive and whether these have been complied with. Such reports of compliance should be open to public inspection. Compliance with the secondary boycott should be made illegal. This would enable British business men to give a prompt and effective response to boycott pressure.
  If the Minister does not accept these points, I should tell him that they are exactly the points that his hon. Friend the Member for Pentlands made five or six years ago in an article in The Times. The actions that the hon. Gentleman recommended should be taken. They could not be expressed better today. Hon. Members may have seen on television the German film "The Oppermanns".
  The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): It is a very good programme.
  Dr. Miller: I am glad that the right hon. Gentleman agrees. The scene of the boycott of the Jewish firm of Oppermanns was horrendous. Hundreds of brown-shirted thugs, with their Nazi armbands, carried placards of hate and shrieked commands to the crowds in the street not to buy from Jews. The stamp on the shaved head of the woman who defied the order read, "I am a traitor to Germany because I bought from Jews." That was only slightly less obscene than the stamp on the forehead of the patient in bed which read, "I am a traitor to Germany because I was operated on by a Jew."
  This is the viciousness of the boycott. I implore the Minister to stop it now before it reaches the stage that it reached in another country.
  11.22 pm
  Mr. Greville Janner: I congratulate my hon. Friend the Member for East Kilbride (Dr. Miller) on his initiative and on his presentation of a well-known case. One reason why I venture to take part in the debate is that I have been campaigning for years, together with hon. Members on both sides of the House, to try to induce successive Governments to change their attitude towards the boycott and to cease authenticating boycott documents. Secondly, I relished the thought that the Minister and I might find ourselves on the same side on a Middle East issue, to the shock and horror, and perhaps dismay, of the right hon. Gentleman.
  It is also an enormous pleasure to be able to speak on the Middle East while the howling hyenas, my hon. Friend the Member for Dundee, West (Mr. Ross) and the hon. Member for Northampton, North (Mr. Marlow), lie in their beds in their lairs, presumably, and while there is no one else trying to shout me down on an issue where too often too many are too vocal and too stupid. They have perhaps chosen a good issue on which to be silent, because there is so little for them to say. They may fear hard work or late hours, but it is the fear, I believe, of presenting a case that is basically intenable that has kept them from the House tonight.

  735
  I know that the Minister will treat seriously the complaints that have been made so eloquently by my hon. Friend the Member for East Kilbride, and which I shall seek to put in other forms, not only for their own sake but because they reflect a sensitivity to discrimination of a peculiarly evil kind which is extremely bad for the United Kingdom's trade and traders and contrary to the spirit, activity, trends and traditions of Britain's commercial interests. That is the matter which should be of primary concern to the Minister.
  It has always been the proud symbol of Britain that British firms should trade without hindrance with any country with which we have friendly relations. As far as I know, there has never been any other case where any United Kingdom Government have played any part in any discrimination in trade against a fellow democracy with which we have full diplomatic relations. This is a sole, unpleasant and shameful anomaly in an otherwise proud tradition and I trust that the Minister will not try to make light of the part that the Government—alas, in common with their predecessors—are playing in this process by lending their weight and apparent approval through the authentication of boycott documents.
  The first essential for the Minister to understand is that a discriminatory trade practice against a friendly democracy is impossible to sustain or to justify and that no Government of this land should have any part of it. Secondly, he should recognise that the authentication of boycott documents may, in strict dogmatic fact, be a mere authentication of signatures, but in reality it is taking a step in boycott procedures which is an encouragement to those who would sustain that evil practice and a discouragement to those who seek to oppose it.
  My hon. Friend has referred to the three levels of boycott—primary, secondary and tertiary. I share his views, but I would take the step one ricochet further. It is not so long ago since the Mancroft affair when the noble Lord was excluded from the board of an insurance company which saw fit to try to get rid of him because it wished to have a "Judenfrei" board in order to do business with Arab countries. It was the public outcry against that company which caused it to change its methods and procedures.
  It is only months since the case to which my hon. Friend referred of the property company which saw fit to dismiss its company secretary because he was Jewish and it wished to do business with Arab lands which objected to Jews on its board.
  The Minister should see that it is a short step between saying that we will not trade with those who trade with Israel to saying that we will not trade with those who have Zionists on their board, and that, in the parlance of the extreme Left and of the extreme Right, means Jews on their boards. Indeed, as most Jewish people are Zionists, there is an element of truth in that too. But in Britain, it is a proud and great tradition that we do not discriminate against people in our commercial life because of their religion. It is the law of this land that it is not permissible to discriminate on grounds of race—and that means race, nationality, colour, or ethnic or national origin. It should surely be against the law of the land to permit discrimination against companies because they refuse to discriminate in their trade with the Jewish state.
  Of course it is up to any country to decide with whom it will do business. It is up to any company, any firm, any commercial concern, to make its own decision. But when
  736
  it attempts to impose a boycott decision on others, it creates a discriminatory practice which I am sure the Minister will condemn.
  When another country says to a company or a firm in this land, "We shall not trade with you if you trade with our enemies," that is a form of discrimination. When the Government say, "We will authenticate documents which show that you are complying with our boycott list," the Government are partaking in the boycott. It may not be direct participation, but that is very close. Indirect participation in an evil practice leaves the stain of complicity upon those who take part in it.
  The sensitivity which my hon. Friend and I share reminds me of the celebrated remark of Henry Kissinger which the right hon. Gentleman may have heard, when, as Secretary of State, he said, "I may be paranoid, but that does not mean that I haven't got enemies." There is no true paranoia amongst those who fear the boycott as an insidious beginning to an evil end. Even if there were, it is the growth of enmities that has produced the boycott.
  The right hon. Gentleman's colleagues in the Department of Trade and Industry encourage trade with Israel. It surely is a curious anomaly that his Department should play a part in any effort by anyone to discourage that trade. It is, alas, a part they do play.
  We should praise those firms that have stood up to the boycott. There is no loss of trade for any of them that have spoken firmly and have determined that they are not prepared to give way to what my late and revered father used to call "blackmoil"—which in the days of oil plenty can simply be called "blackmail".
  All praise to those businesses which have declared that they are not in any circumstances going to have anybody tell them with whom they may and may not do business. It is for each person, company, country and firm to decide whether it will do business and with whom, but not for them to discriminate or to cause discrimination in the practices of others.
  There was a feeling among Governments of the United Kingdom that it would be wrong to take the lead in anti-boycott legislation or to take steps such as the hoped-for refusal to authenticate boycott documents which would show that the denunciations of the boycott were no mere bleating in the dark.
  There is no longer that excuse. As my hon. Friend so rightly pointed out, we would certainly not be the first country to take that step. I ask the Minister to state in his reply whether he knows which other countries have passed such legislation. Is he aware of such countries? If he does know, he will appreciate that it is not just transatlantic lands that have decided that they will not permit this kind of discrimination against their firms, but also some European countries. My guess is that he does not know, but we shall no doubt soon hear. If he does know, the House is entitled to inquire whether he has read the report of the Select Committee in the other place headed by Lord Byers, whether he has considered the recommendations it made; and whether he is prepared now to commit the Government to compliance with such recommendations. If not, why not?
  I know that if he follows the lead of those who have sat in his seat previously, the right hon. Gentleman will denounce the Arab trade boycott against the only democracy in the Middle East. I hope that he will not merely denounce the boycott but renounce authentication of boycott procedues. I hope that he will build a small

  737
  bridge with a country, with which there are many differences of opinion but which is a trading partner. I hope that he will do so by dissociating the Government actively from any part whatever in a procedure that successive Governments have denounced as contrary to the interests of the United Kingdom.
  11.31 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): I congratulate both hon. Members, but in particular the hon. Member for East Kilbride (Dr. Miller) on the way in which he has used this opportunity. It is not an entirely novel subject, but it can always be treated in a new way. That is what he did this evening.
  The hon. Gentleman used the opportunity to range fairly widely over a number of matters, such as Sir Horace Phillips 15 years ago, but he will forgive me if I do not follow him down all those byways. He gave a number of reasons, some of them pretty fanciful, for the stance that successive Governments have taken and then proceeded to knock them down.
  I want to confine myself briefly to restating what our policy is and to outlining the reasons for it. As the hon. and learned Member for Leicester, West (Mr. Janner) fairly said, Government Departments encourage trade with Israel, as with other countries, and we are glad that our exports to Israel last year amounted to £220 million. That is a sizeable figure. The Department of Trade actively supports the British Overseas Trade Group, particularly the advisory group, which spends much energy promoting trade with Israel.
  As has often been stated, we dislike the Arab boycott and wish that it did not exist. But the real question that British Governments have had to face is whether we should take powers through this House to prevent British firms from following their own judgment—whether we should restrain them. We have come to the same conclusion as previous Governments, including the Government supported by the two hon. Members. We do not think it right to legislate to constrain the commercial judgment of firms.
  It is perfectly true, as the hon. and learned Gentleman said, that, having looked at the matter, other countries have come to a different conclusion, but, as the hon. Member for East Kilbride said, such countries are relatively few.
  Mr. Greville Janner: Will the right hon. Gentleman be good enough to say which countries have legislated against the boycott?
  Mr. Hurd: I should like to deal with that when I discuss authentication, because that is the issue on which both hon. Members have pursued us with the greatest zeal. At present I am discussing whether it would be right for this country to take powers to prohibit British firms from following their own judgment. I do not believe that there would be a general feeling, either among firms or in this House, that it would be right for us to legislate and to take those powers.
  I have read the report of the Select Committee in another place, but I believe that the authentication issue has been raised out of its proper proportion. The impression is sometimes given that it is some special
  738
  procedure whereby the Foreign Office goes out of its way to provide this facility for British firms wishing to comply with the boycott and thus that we are somehow lily livered and comply with a policy to which in theory we object. As the hon. and learned Member for Leicester, West knows, the nationality and treaty department of the Foreign Office authenticates signatures on a large number of documents going abroad. That is done as a public service and it is an authentication of the signature, not of the document. It is no use the hon. Member for East Kilbride suggesting that that is pedantic gobbledegook. It is a statement of fact. That is what the authentication is.
  Nevertheless, as there has been, not misrepresentation, but widespread misunderstanding of that point, we have taken action to remove any uncertainty. Just in case anyone really believed that the authentication of a signature in some way gave encouragement to the boycott, we have introduced a document to make the point clear, to remove any possible misunderstanding and, we hoped, to prevent hon. Members from continuing to sing this ancient tune. Every certificate now states that authentication of the signature
  "does not imply that the contents of the document are correct or that they have the approval of the Foreign and Commonwealth Office".
  It is well-known procedure applying to all kinds of legal documents that that which is being authenticated is the signature at the bottom and not the contents of the document. I suspect that the hon. Gentleman knows all this thoroughly from A to Z, and it is unfair of him to continue to mispresent the practice as he has.
  Dr. M. S. Miller: The Minister is surely not so naive as to believe that no one would regard the authentication as some kind of imprimatur. It must be within his knowledge that that is exactly what some people want. If it is of no value, why does the Foreign Office do it? Why does it not tell the firms that ask for authentication that it is of no value, that the notary public who has signed the document requires no witness of signature, and that they should tell the companies that are pushing them that the British Government will have no part in it?
  Mr. Hurd: The hon. Gentleman persists in taking the point wrongly. What may be of value is the authentication of the signature—certifying that the person who purported to sign the document was indeed that person and no one else and that he held a particular position. That is the nature of the authentication. It has no further significance. Moreover, in case there should be any doubt, a statement is now attached to every such document stating that the authentication has no further significance than that, so that really is a false point.
  Neither the hon. Gentleman nor his hon. and learned Friend mentioned the very practical point that the great majority of the signatures are not authenticated by the Foreign Office nationality and treaty department at all. I cannot give an exact figure, but we believe that only about 10 per cent. are authenticated in that way. The great majority are authenticated not by us but by the Arab-British chamber of commerce, to which the hon. Gentleman referred.
  It would be wrong to suppose, as did the hon. Gentleman, that we would alter significantly the effectiveness of the boycott by refusing to authenticate the signatures in the Foreign Office. That is an important

  739
  practical fact. The effectiveness of the boycott and the changes proposed need further study than that evident in the speeches tonight.
  What would be the practical effect on the boycott if we complied with the hon. Gentleman's wishes and if the 10 per cent. of signatures that are authenticated were taken to other places? That is a legitimate matter, and one which we are now considering. For some months we have been reviewing the practice. The hon. and learned Member for Leicester, West likes to present the policy as something that the Foreign Office dreamt up and administers, despite the more practical views of others. That is not the position. If we are to review the policy, we must take into account the opinions not only of Departments in Whitehall, not only of the House, but of a large number of people and groups who have legitimate interests, which vary according to their position. The review has been announced to the House. I cannot announce its conclusion today. It is a genuine review and the House will be informed of our conclusions.
  Mr. Greville Janner: The Minister promised that, when he dealt with authentication, he would talk about other countries where the practice has been banned. As part of his consideration, has he discussed these matters with those countries with which we are trading partners?
  Mr. Hurd: I agree that I undertook to give the hon. Gentleman some information on that point. The United States has anti-boycott legislation. France, the Netherlands, Italy and Luxembourg carry out authentication through the Arab chambers of commerce, without the involvement of Government. The procedure followed in Denmark, the Federal Republic of Germany, Belgium and Ireland is similar to our own, although in the first two cases there are certain restrictions on negative certificates of origin. The position in Greece is unclear, but we do not think that the Government there, would take a strict line against the boycott's operation. There is a wide range of practice within our partners in the Ten, and nothing approaching a common view.
  Dr. M. S. Miller: The Minister is dealing with a country that not only has friendly relations with Israel but
  740
  is a democratic country to which we should be pushing exports. It has a surplus balance with Britain and could take a lot more. Does not he think that he should be examining the position with the view of trying to increase exports to that country?
  Mr. Hurd: As I said earlier, that is one of the purposes of our trade policy and one of the factors that must be taken into account. I do not deny that. However, it is not the only factor. It is a serious effort by the different Government Departments and the different Ministers to reconsider the matter. It was suggested by Lord Carrington after his visit to Israel. We are taking the matter seriously. It is not easy. I do not believe that Opposition Members haw, thought through what would be the effect on trade if we stopped the practice of which they complain. They might do a little research into that. It is one of the matters that worries us. We are examining the matter seriously and will report to the House.
  The final point, into which I would not have gone if the hon. and learned Member for Leicester, West had not ended with a pereration, is that the boycott comes about as a result of a long-standing dispute between Israel and some of her neighbours and other Arab countries. The dispute has gone on for so long that it has bred a deep sense of insecurity and injustice on both sides. The hon. and learned Gentleman gave us an eloquent explanation of the sense of unjustice that is felt, not only by Israelis but by some hon. Members, about the boycott. We all know, because we hear it from the gentlemen of England now abed to whom he referred. We also know that there is a deep sense of insecurity and injustice because of certain actions by the Government of Israel which they regard as an affront and intolerable. We are discussing a ripple of that dispute.
  The boycott will not be ended by any action or inaction by this Government. If we really want to get rid of the boycott and the feelings that give rise to it, the two hon. Members who have spoken should join us in our efforts to help settle the dispute once and for all, as that is the only way.

  Nuclear Missiles
  11.51 pm
  Mr. William Rodgers: Pleased though I am to be able to raise this subject, I am astonished at the failure of the Secretary of State for Defence to be present, I heard accidentally that he would not be here because he is making a political speech in Berkshire. In view of the importance of the subject, which has been raised many times and will arise again, his absence is a dereliction of duty. I say that in the presence of the Leader of the House and with no disrespect to the Minister of State for the Armed Forces whom I have known for a long time, like personally and would be more than happy to see on every other occasion. It is arrogant behaviour by the Secretary of State, and it is not what the House should expect from a new Secretary of State.
  I deplore the absence of the Secretary of State because of the high political importance of the dual key, or the double safety catch as it is sometimes called, on American-owned cruise missiles in Britain if they are deployed here. It will feature increasingly in debates in the House and in public about defence policy. It is a reflection on the procedures in the House that discussion of a subject of this type is dependent on the luck of the ballot on the Consolidated Fund Bill, archaic as it is.
  Apart from set-piece confrontations in the House that deal with virtually all aspects of defence policy, there is precious little opportunity to examine detailed subjects seriously. There is a conspiracy between the Government of the day and the official Opposition. Conservative Governments like to make a mystery of defence and treat even trivial matters as though they are highly classified. The Labour party believes that the less said, the better. Bearing in mind the fundamental differences of opinion on defence policy in the Labour party, it is, if anything, even more secretive when in government.
  If one wants to learn about defence policy—this has been the experience of hon. Members on both sides of the House—one must go to Washington to talk to the United States Administration, because it will talk more freely. One might also go to an American university, as defence policy is studied seriously there.
  The Select Committee on Defence—I say this with regret, as I strongly support our system of Select Committees—has shown much less tenacity in its single-minded pursuit of truth than other Select Committees. Sometimes it has behaved as if it were the Ministry of Defence's poodle. I remember some years ago a permanent secretary at the Ministry of Defence complaining to me that meeting the requests of the Select Committee involved the employment full time of an assistant secretary. At that time, the Ministry of Defence had over 100 assistant secretaries, but he failed to see the irony of his complaint.
  I should like to believe that this short debate, even in the absence of the Secretary of State, will move the House in the right direction. A fuller and more open discussion of defence issues is wholly in the public interest. It is all very well for the Secretary of State for Defence to talk about an advertising campaign, but if the Government's case—or any Government's case—on nuclear matters is good, there is no better way of proving it than through argument in the House.
  742
  The deep public concern about defence policy—there is no doubt about it, whatever view one takes about how the matter should be resolved—and the growing demand for unilateral disarmament stem partly from the failure of successive Governments to come clean, face their critics in the House and explain the conclusions that they have reached. The issue of dual key illustrates the point perfectly. Perhaps it is naive of me to suggest it, but I still hope that the Minister of State will be franker with the House than either the Prime Minister or the Secretary of State has been so far.
  I shall make plain my view and that of my right hon. and hon. Friends on the deployment of cruise missiles, so that there will be no misunderstanding. We believe that the twin track decision of NATO taken in December 1979 was right. I said as much when the initial statement was made in the House on 13 December 1979 and I said it again in the debate on 24 January 1980. My remarks were made on behalf of the official Opposition, for which I was then the defence spokesman. The Labour party has changed its mind, but I have not.
  The account in this week's Sunday Times of the Labour Government's approach to theatre modernisation is substantially correct. It mentioned the so-called Mulley letter of August 1977 and reminded us of what Vice-President Bush has been saying in the past few days, that both the Federal Republic of Germany in the person of Chancellor Schmidt and the British Government wanted new theatre nuclear weapons. The United States Government responded to the wishes of their European allies. We should remember that when the Americans are somehow blamed for now wanting to deploy cruise missiles in Britain in the way in which they were asked to do.
  The decision of December 1979 was right. It would have been supported by a Labour Government and I endorsed it in the House on behalf of the Labour Opposition with the previous Prime Minister, the right hon. Member for Cardiff, South-East (Mr. Callaghan), sitting beside me. Unlike the present Leader of the official Opposition, he was then and remains a robust advocate of the Western Alliance and all that that means.
  Neither I nor my right hon. and hon. Friends want cruise missiles deployed here. We still hope that it will never happen. That was the nature of the twin track decision. I made it clear three years ago that the period up to the date fixed for the deployment of cruise should be used for negotiations, which I hoped would succeed. It was a disappointment when events in Afghanistan cast a shadow and a new American President was slow off the mark in seeking serious disarmament negotiations with the Soviet Union.
  It was also a disappointment, although not a surprise, that the Soviet Union continued to deploy SS20 missiles and made no serious negotiating proposals. My right hon. and hon. Friends and I welcome signs that such negotiations are at last starting in the Geneva talks. Both sides are now showing flexibility. We want substantial and verifiable reductions of SS20s and Mr. Andropov appears to be willing to move in that direction if the United States does not lock itself into the zero option.
  We do not want cruise missiles deployed here, but if the disarmament talks fail eventually, the circumstances in which cruise missiles would be deployed would become

  743
  an important question. There is a strong case on merit for a dual key on cruise missiles. There is a stronger case for reassuring the public.
  It is right to clarify what I mean by a dual key: no cruise missile could be launched, or a warhead armed, without explicit decisions by both the American President and the British Prime Minister, separately conveyed and implemented in the firing system by United States and United Kingdom personnel.
  The idea of a dual key originates in the so-called dual lock adopted by the United States strategic air command in the early 1950s to govern the launch of the Minuteman. It is a physical device and the procedure, with some modifications, applies still to all United States nuclear weapons in Europe. It is relatively simple to adapt that procedure to involve two nationalities. There are electronically controlled dual-key arrangements on Lance short-range missiles and on other nuclear weapons, as the Minister knows, which are deployed in Europe and are activated by both American and Western European officers.
  At the moment there is far more fog around the precise arrangements for cruise than there was about the deployment of four intermediate range missiles in Great Britain between 1959 and 1963.
  In the aftermath of Suez, the newly installed Prime Minister, Harold Macmillan, set out to patch up relations with the Americans and establish a new partnership in defence matters. The relevant part of the Bermuda agreement of March was endorsed by the NATO council at its meeting in December, 1957. A bilateral agreement was signed eventually on 22 February, 1957 and published as Cmnd. 366 in 1958.
  The White Paper referred to the location and deployment of the four missiles and said that they would be manned and operated by United States personnel and that the warheads would remain in full United States ownership, custody and control, in accordance with United States law. However, paragraph 7 of the relevant part of the agreement states:
  "The decision to launch these missiles will be a matter for joint decision by the two Governments."
  As a result, there was a dual key with an American key activating the warhead and a British key activating the missile.
  That system, based on the so-called permissive action link, remains the basis for joint physical arrangements when the United States deploys nuclear weapons in Europe under co-operation programmes.
  the nub of my argument is that I do not understand why that system cannot be adopted and, if necessary, adapted for cruise. The Prime Minister, and the Secretary of State for Defence and his predecessors, rest their case on the Attlee-Truman agreement, but so far they have been far from precise and not always consistent.
  When the former Secretary of State for Defence, now the Foreign Secretary, made his statement in the House on 13 December 1979 I mentioned a dual key. I asked about the consultation process. When the right hon. Member for Cardiff, South-East pressed the matter, the Secretary of State said:
  "The same arrangements for consultation will continue that have existed heretofore."—[Official Report, 13 December 1979; Vol. 975, c. 1552.]
  It is fair to say that he seemed less than familiar with the exact arrangements.
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  The idea of consultation persisted for some time in the replies of Ministers, but the Prime Minister now refers to "joint decision arrangements". As for the new Secretary of State, he said in the House last Tuesday:
  "The use by United States forces of bases in this country in an emergency … would be a matter for joint decision between the two Governments in the light of circumstances of the time."
  We should note the reference to "bases". There is no reference to the firing of missiles. If it means the same thing, the Minister of State should make that clear tonight. Does the reference to the use of bases imply and involve the firing of missiles?
  Last Tuesday, the Secretary of State went on to read from the communiqué issued in January 1952 following discussions between Mr. Churchill and President Eisenhower. That also refers to
  "the use of these bases … in the light of circumstances at the time."—[Official Report, 1 February 1983; Vol. 35, c. 133.]
  The Prime Minister and her Ministers now rest simply on those arrangements of more than 30 years ago. but before we know whether they are satisfactory, we should at least know what they are.
  I mentioned the Thor agreement, which said that the launch of the missiles would be a matter for joint decision. I stress the word "launch". That agreement was reached in 1958, but the Prime Minister relies on the agreement of 1951. I must assume that there is a difference between the use of bases—the formula for cruise—and the decision to launch the formula for Thor. But there is further confusion. In the fourth volume of his memoirs, "Riding the Storm", Harold Macmillan gives an account of the Bermuda agreement and the agreement on the stationing of Thor. He describes a further visit to the White House on 9 June 1958 for a conference with President Eisenhower, and says:
  "The President and I initialled an agreement about the use of bombs or war-heads under joint control … This regular agreement replaces the loose arrangements made by Attlee and confirmed by Churchill."
  "This regular agreement", as Macmillan called it, referred to bases. Cmnd. 406 of 1958 is relevant here.
  Is the Prime Minister relying on what Harold Macmillan called a loose arrangement or on Harold Macmillan's regular agreement? What does she see as the difference between the two, whichever one she may rely upon? The House has a right to be concerned if it is the loose arrangement that Harold Macmillan found inadequate, but if it is Mr. Macmillan's agreement, why has she not said so? The House has a right to know exactly what the present arrangements are, other than by reference to an apparently loose agreement that is more than 30 years old.
  We all know that the American Congress and the American people are aware of their chain of command and communications system. If the American Congress and people know, why should not the House of Commons and the British people? Americans know that if the President cannot personally make a decision, it will be made by the Vice-President and, if not by him, by the Speaker of the House. If the Prime Minister for whatever reason, however good, was unable to make the decision—if decision indeed it is—what then? The House of Commons and the British public should know. We should know what "decision" means and who would take it.
  In Germany, under the Athens guidelines of 1962, there is a form of joint control over the firing of certain Pershing IA missiles and what I would regard as a dual key

  745
  arrangement over other Pershing IA missiles. One involves a veto by the German Chancellor and one does not. Are we to take it that the Government would have an absolute veto in the case of cruise? My assumption is that they would not, because on 25 January 1983, when asked for a straight yes or no about a right of veto on a decision of the American President, the Prime Minister ducked the question and replied:
  "The position is exactly the same as it has been for the past 30 years."—[Official Report, 25 January 1983; Vol. 35, c. 789.]
  If the Government have a good case in defence of the present arrangements, let them make it. I believe that they could easily do so without any security risks. In any case, I would guess that Moscow, like Washington, already knows more than the House of Commons.
  I return to what I said about the reassurance of an explicit dual key, either as I defined it or as applied to Thor 20 years ago. It seems obvious that a dual key makes best sense. Why do we not have one? Did the Government forget about it in the negotiations leading up to the decision of December 1979? Have they been so confident since then as to believe that it did not matter in terms of public opinion? The Government may be entirely satisfied with present arrangements, but alternative reasons have been given for their failure to get a dual key.
  One reason is that we should have to buy the missiles and man them ourselves at unacceptable cost. Another is that the Germans would not like it because the Russians would not want the Germans to have a finger on the nuclear trigger. It has even been suggested—although, to be fair, not by Ministers—that the American Administration would not want a dual key on American missiles in Britain. My own understanding is that if the Government asked the United States Administration for a dual key, they would still agree. As the Secretary of State has said, the dual key was on offer when the decision to deploy was taken in December 1979.
  The United States Administration have always accepted and accept now that there should be different arrangements in different countries. In Britain, the launch of cruise could be on the basis of two separate affirmative decisions with the British Government in sole charge of one of the communications system. There could be British manning of the missile bases and joint crews. All this is open to the Government, unless the Minister of State says otherwise, if they ask.
  Cost is not crucial. We would not be obliged to purchase the missiles. Again, if that is not so, I hope that the Minister of State will say so. The cost of the communications system could be managed. In any case, if the present arrangements are as good as the Government claim, the problem of communications must already have been solved.
  In his letter to me of 31 December, the predecessor of the present Secretary of State referred to "the additional cost burden" of a dual key. If the new Secretary of State disagrees with what I have said, will the Minister of State spell out exactly what this additional cost burden would be, and say when Washington offered such terms?
  As the Minister of State knows, I have a letter dated 25 January to the Secretary of State awaiting reply. Perhaps he will answer my questions tonight and then ask his right hon. Friend the Secretary of State to confirm them in his reply to my letter.
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  The Vice-President of the United States will be in London this week and some of us will be meeting him on Wednesday. I hope that the Prime Minister, the Secretary of State for Foreign and Commonwealth Affairs and the Secretary of State for Defence will say clearly that the most positive efforts must be made to get an agreement with the Soviet Union that will avoid the deployment of cruise missiles. I hope also that they will make it clear to the Vice-President that the United States will find real problems with its allies if it fails to negotiate flexibly and in good faith.
  I hope that the Prime Minister will say that many of us who are firmly committed to the proper defence of Britain and to the membership of a nuclear-armed NATO are profoundly concerned about the present arrangements for joint control and the absence of a dual key. It is within her capacity to remedy this and it would be wise to tell the Vice-President that she intends to do so.
  12.16 am
  Mr. David Penhaligon: I wish to support the detailed speech of my right hon. Friend the Member for Stockton (Mr. Rodgers). I have had some interest in the arguments in favour of the dual key control of cruise for at least four years. I have raised the issue at various party conferences and at public discussions of the party's defence posture. In common with many others, I do not want cruise in Britain. However, I accept that there may be conditions that will make it necessary to have it. My analysis of those conditions would be searching and they would certainly have to go beyond those that presently apply.
  There must be discussions with the Soviet Union with a view to mutual arms reductions. If the USSR has the peaceful intent that many believe it to have—I must put a question mark against that intent—then there are offers that it can accept. It can do so without a loss of face and this will give encouragement to those who are worried about the long-term.
  It may be that what I consider to be a reasonable offer will eventually be made to the USSR and it will refuse it. I am prepared to say that in that event there are circumstances in which I would be prepared to use my vote in the House to support cruise. One condition is dual control. I cannot understand why this weapon system is about to be imported into our land without the Government having any physical control over it.
  The current arrangements were explained by the Secretary of State for Defence at Question Time last week. It seems that if a maverick President of the United States were in office and the missiles were installed in Britain, he would have the capacity to fire them no matter what the British Government might do. That would be the physical position in the short-term. A decision of such significance and importance, should not be made without the Government having the means to say no. That is what we are looking for in the dual key arrangement. If the missiles are on British soil and may be fired from British soil, the Government should have that right.
  We do not need to attend many meetings in our constituencies to discuss the general arms build up that is taking place to know just how worried people are. Their worries are manifold.
  Some of the worries I feel that I could represent in the House. Some I could not—I am neither a pacifist nor a unilateralist. However, there are many fears that one can

  747
  comprehend, and feel. People realise that the firing of these weapons can only herald the end of civilisation as we know it. The idea that the odd cruise could be fired without retaliation is ludicrously optimistic.
  During question time last week, and in one or two articles that I have read—although I have not studied the subject as well as my right hon. Friend the Member for Stockton—the only reason that has been given against dual key control is one of cost. I would be interested to know what those costs are. Perhaps the Government may need some votes to get the extra costs through. If they do, I might be prepared to join such a Lobby. If the Government can find £10,000 million to install the Trident missile system, I cannot believe that the extra cost of a dual key control of cruise does anything other than pale into insignificance.
  If the reason is not one of cost, what is it? There seems to be some willingness on the part of the United States to have dual control—why then do the British Government refuse it? I assure the Minister, who might be wishing to persuade his hon. Frinds of a defence policy with which I might not completely concur, that if he could say to the British people that the missiles are to be installed in our country only when the British Prime Minister of the day has a physical "No" at his or her disposal, there would be a great deal more confidence among the British people.
  It is an elementary question for the people to demand that, with a weapon system of this sophistication and destructive power the Prime Minister elected by the British people and installed in power for a Parliament, should have an absolute ability to deliver a physical "No" to the firing of cruise. The inquiries I have made reveal that the only constructive reason given against that aspect of the development of nuclear policy is that of cost. That is an extraordinary reason when one understands the size of our total defence budget.
  If the Minister announced dual key tonight, he would do much to reassure many of his supporters. Doubts on this subject are not confined to the Opposition Benches. One can meet many Government supporters, as I do in my part of the country, who are worried about the dual key and the physical "No" aspect of the cruise missile system, even if they have confidence about other aspects of the nuclear policy.
  I hope that the Minister will reveal what the cost is, and why the Government do not grasp this option. I hope he does not use the old excuse that we agreed something different in 1950. I was six years old in 1950. The world has changed since then. We want reasons as to why, in today's conditions and with today's knowledge, the Government are not prepared to insist upon a physical "No" before the cruise missiles are ever used from our soil, when and if they are installed.
  12.24 am
  The Minister of State for the Armed Forces (Mr. Peter Blaker): I repudiate at once the spurious complaint made by the right hon. Member for Stockton (Mr. Rodgers) that I am taking the debate, and not my right hon. Friend the Secretary of State. I do not recall, in 18 years in the House, a case where a Cabinet Minister has taken one of the debates on the Consolidated Fund when that Cabinet Minister has other Ministers in his Department.
  None the less, I am grateful to the right hon. Gentleman for raising this subject. It is one that has caused some interest in the House and it is right that we should discuss
  748
  it in depth. In the course of the debate, I hope to allay some of the concern that has been expressed by explaining the background to the existing arrangements, which the Government believe to be satisfactory and which previous Governments, which have included the right hon. Member for Stockton serving as a Minister of State for Defence in a Labour Government, have likewise accepted.
  From 1942 onwards, with a brief post-war break, there has been an American military presence in the United Kingdom. It was during the Berlin blockade by the Soviet Union in 1948 that American aircraft returned here. From that time all successive British Governments have welcomed the stationing of American forces at bases in this country. The deployment of American forces in the United Kingdom, as in other European countries, is a visible proof of the United States readiness to identify its national security with Britain's and Europe's security, and to defend it similarly.
  That readiness is a crucial element of the NATO Alliance ability to deter aggression from wherever it may come. It is essential that any potential aggressor should be in no doubt whatever that the United States is fully committed to the defence of Western Europe, and that our defence is a collective one. Without the support of the United States since 1945, including the presence of American forces in Europe, Western Europe would not have survived in freedom. A fundamental principle of the Alliance is to share our defence in the common interest. An attack on one is regarded as an attack on all.
  Since the foundation of NATO we have subscribed, with our allies, to the strategy of deterrence. We have sought to maintain forces of a character and on a scale that would deter a potential aggressor by showing that any possible gains were far outweighed by the risks he would incur. That does not necessarily require matching the Russians weapon for weapon, but it does mean having a flexible and significant armoury ourselves at both the conventional and the nuclear level.
  NATO's intermediate range nuclear forces have consisted since the 1960s of British and American aircraft stationed in England and no other country—the British Vulcan and the American F111. The Vulcan aircraft are no longer operational. The remaining American aircraft will become increasingly vulnerable to new Soviet weapons and their bases, the location of which is no doubt known to the Soviet Union, are static. They will become less secure against an improving Soviet ability to attack targets far from their homeland. Our forces therefore need to be modernised. That is one of the reasons for the cruise missile decision.
  On the other hand, the Soviet Union has over the past six years built up a potent force of SS20 missiles, each very accurate, each with three warheads able to hit separate targets, as well as retaining many of its older SS4 and SS5 missiles. It has about 1,000 warheads on intermediate range nuclear missiles aimed at Western Europe. NATO has no equivalent missiles.
  Some Opposition Members—particularly Labour Members—claim that there is nevertheless in effect parity of intermediate range nuclear missiles between East and West. Let me quote to them the judgment of the International Institute for Strategic Studies in its latest statement on the military balance:
  "the balance is distinctly unfavourable to NATO and is becoming more so."

  749
  This enormous Soviet build-up, starting in 1977, and following the deployment since 1974 of the Soviet backfire bomber, was the reason why, after two years of careful study, the Alliance took in December 1979 what is known as the twin track decision. It resolved to introduce 464 cruise missiles in five different countries, and 108 Pershing II missiles in the Federal Republic of Germany. Each will have only one warhead. That was the first track. At the same time it offered to negotiate with the Soviet Union to make such a deployment unnecessary. That was the second track. The preparations for this decision started no later than 1977. It was the Europeans, not the Americans, who first pressed for a modernisation of intermediate range nuclear forces in Europe by the Americans to match, in part, the Russian build-up then already under way.
  Mr. Sydney Chapman: I listened carefully to the remarks of the right hon. Member for Stockton (Mr. Rodgers) and the hon. Member for Truro (Mr. Penhaligon). The issue is of great concern to many people in this country. Will my right hon. Friend confirm that the number of Russian nuclear targets on Western Europe has increased by no less than 56 per cent. since 1977?
  We all want peace, but peace can be guaranteed only by what Winston Churchill once said was the balance of terror. The cruise and Pershing II missiles are a direct response, not to America wanting them, but to West Germany initially and other NATO countries wanting them. If Mr. Andropov were to agree to President Reagan's zero option, whereby we could remove all the targets in east and west Europe, we could make the best possible cause for peace in Europe in our time by removing all these hideous weapons. Until then, the latest remarks by Mr. Andropov for a freeze of nuclear weapons will leave an imbalance, which again will cause insecurity in Europe. Therefore, we must concentrate our attention on multilateral disarmament, rather than unilateral disarmament of nuclear weapons.
  Mr. Blaker: I entirely agree with what my hon. Friend says about the implications of Mr. Andropov's offer. Its effect would be to give the Soviet Union a monopoly of intermediate range land-based nuclear missiles. We would be debarred under that proposal—it has not yet been made formally—from having any of the missiles which we propose to deploy in the absence of a sensible, fair and balanced agreement with the Soviet Union, which is what we are seeking.
  My hon. Friend rightly said that it was the Europeans who asked the Americans to deploy American weapons to help to redress—at least to some extent—the imbalance that was developing in Europe between the Russians and NATO in intermediate range nuclear missiles. The history of the affair is that the Europeans are requesting the Americans to bring their missiles here.
  My hon. Friend asked how many missiles had been installed by the Soviet Union since 1977. It now has 333 of the very accurate and powerful SS20 missiles, each with three nuclear warheads, two thirds of them aimed at western Europe.
  My hon. Friend mentioned the balance of terror. Some people say that that is the way peace has been kept in Europe since 1945, and that is true. The balance of terror
  750
  is much better than an imbalance of terror, and that was the direction in which we were heading until the decision by NATO in 1979, to which I have referred.
  This enormous Soviet build-up following the deployment since 1974 of the Soviet backfire bomber, was the reason why, after two years of careful study, the Alliance in December 1979 took what is known as the twin track decision. I have already said how many of the missiles are to be deployed.
  The right hon. Member for Stockton said that the account in yesterday's Sunday Times of the involvement of the Labour Government in the preparations for the decision taken in 1979 is substantially correct. That is my impression.
  From 1977 until they lost office in May 1979, the Labour Government were fully involved in all the NATO studies and decisions. For example, in May 1978, the North Atlantic Council communiqué said that the NATO representatives
  "also noted with interest the work under way in the nuclear planning group towards meeting needs for the modernisation of theatre nuclear forces."
  The word "theatre" refers to the European theatre and "theatre nuclear forces" are those now known as intermediate range nuclear forces, of which cruise missiles are part.
  On 25 April 1979 the NATO nuclear planning group met in Florida. The United Kingdom was represented by the right hon. Member for Sheffield, Park (Mr. Mulley) then Secretary of State for Defence in the Labour Government. The following day The Guardian stated:
  "NATO's planners have apparently agreed on the need to modernise their nuclear armed aircraft and missiles with the range to strike into the Soviet Union from Western Europe. A decision in principle was taken yesterday by the Alliance's Nuclear Planning Group."
  It was also reported by The Guardian that
  "the ministers have spent the past two days considering how best to match the SS20 and the Backfire with longer-range and equally deadly nuclear weapons within Europe alone. And, as the Russians must undoubtedly have expected, they have on their list a long-range version of the Pershing missile, then the Cruise missile and possibly a purpose-built weapon aimed from Western Europe at the Soviet Union."
  The communiqué published at the end of the meeting is consistent with that account, although not so full. It is clear that from the beginning the Labour Government were deeply involved in all the preparations for the installation of intermediate range nuclear missiles in Europe to provide some element of deterrence against the Russian build-up. It is true that in April 1979, just before they lost office, no final decision on the choice of weapon was taken, but as the nuclear planning group communiqué makes clear, the decision of principle to modernise theatre nuclear forces was taken. So far as the first track was concerned—deployment of missiles in Europe—the right hon. Gentleman the then Secretary of State for Defence, awake or asleep, was in it up to his neck.
  After the twin track decision was announced, the Opposition supported it. As he has said, in the debate on 24 January 1980 the right hon. Member for Stockton, then Labour shadow Secretary of State for Defence, speaking for the official Opposition, said of the decision:
  "we accepted the need to move ahead on the proposed timetable. It was the view of the previous Government that theatre nuclear modernisation was essential, and that is our view today."—[Official Report, 24 January 1980; Vol. 977, c. 691.]
  Later in his speech, the right hon. Gentleman made it clear that he was speaking with the authority of the shadow

  751
  Cabinet as a whole. Four days later, in a debate on East-West relations, the right hon. Member for Stepney and Poplar (Mr. Shore), then the shadow Foreign Secretary, said:
  "NATO made its offer of arms limitation in the context of the decision on theatre nuclear weapons on 12 December and that offer was repeated in NATO's statement last Friday, on 25 January. I believe that that is right."—[Official Report, 28 January 1980; Vol. 977, c. 1074.]
  The right hon. Gentleman made no criticism of the decision on theatre nuclear weapons. The terms on which they were to be accepted were stated by my right hon. Friend the Member for Cambridgeshire (Mr. Pym), then Secretary of State for Defence, in the debate on 24 January 1980 in which the right hon. Member for Stockton took part as follows:
  "There is a domestic aspect of the TNF programme on which the House will expect me to say something. Within the programme, which needs to be looked at as a whole, the Government have agreed to accept the deployment in the United Kingdom of 40 launch vehicles with 160 ground-launched cruise missiles. They are to be owned and operated by the United States within the long-established framework of the agreements between our countries; agreements which cover any use of United Kingdom bases in war, and which my right hon. Friend the Prime Minister recently confirmed to the House. We are now having detailed discussion with the United States about where the new systems might best be located and I shall make a statement about our conclusions on that in due course."—[Official Report, 24 January 1980; Vol. 977, c. 676.]
  In the light of what I have said, I do not see how it was possible for the right hon. Member for Leeds, East (Mr. Healey) to say in the House on 15 December:
  "The matter was not discussed in NATO circles, and no decision was taken, until the end of 1979".—[Official Report,15 December 1982; Vol. 34, c. 314.]
  I simply cannot square that with the facts. It is time that the right hon. Gentleman explained exactly what he meant by those remarks.
  What were the arrangements to which my right hon. Friend the Member for Cambridgeshire referred? The use of the bases from which the American forces operate is governed by an agreement reached by Mr. Attlee and President Truman in 1951 and reaffirmed by Mr. Churchill and President Truman in a joint communiqué in 1952. The text of that communiqué was read to the House on Tuesday 1 February 1983 by my right hon. Friend the Secretary of State for Defence. I shall do so again because it is fundamental to allaying hon. Members' concern on this issue. It says:
  "Under arrangements made for the common defence, the United States has the use of certain bases in the United Kingdom. We reaffirm the understanding that the use of these bases in an emergency would be a matter for joint decision by Her Majesty's Government and the United States Government in the light of circumstances at the time."
  That arrangement covers the use of bases for all United States forces in the United Kingdom, both conventional and nuclear, including the United States F111s which are already sited in Britain and the cruise missiles which are due to be deployed here from the end of 1983 in the absence of concrete results from the arms control negoiations in Geneva. As the text of the 1952 communiqué makes clear, a joint decision is required. I emphasise that this is not just a matter of consultation, nor one for the United States Government alone. It is a matter for joint decision making.
  That that argreement has stood the test of time is, I believe, well illustrated by history. It is reviewed and has been reaffirmed every time a Prime Minister in Britain takes office ad every time a President in the United States
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  takes office. That has been done by successive British and American Administrations since 1951, including that in which the right hon. Member for Stockton served in the Ministry of Defence, and on each occasion Governments of both parties have accepted the arrangement. My right hon. Friend the Prime Minister has recently told the House that the Government are satisfied that the understanding remains effective.
  Mr. Rodgers: The Minister referred to a joint decision on the use of bases. As this is an important matter, will he explain exactly what he understands by "the use of bases"? Does that explicitly involve the launch of missiles, and if so, does it also involve their arming, which, as he knows, in the case of cruise takes place at a later stage?
  Mr. Blaker: I am sure that, as a former Minister in the Ministry of Defence, the right hon. Gentleman knows that no Government since 1952 have been prepared to go into detail about exactly how these arrangements are put into effect. However, I repeat that every new Administration who have taken office in Britain have looked into these matters and have expressed their satisfaction with them, including the Administration in which the right hon. Gentleman served.
  Mr. Rodgers: As this is an important point, I should make it plain that, as I said, the arrangements for Thor missiles were much more explicit. In 1950–51 there may have been no demand for greater explicitness, as the Minister said, but there is a demand now. If it could be done for Thor, and given the fact that the knowledge of these arrangements exists elsewhere, why cannot the Government lift the veil of secrecy which may have been convenient for 30 years but which is not justified in the present circumstances?
  Mr. Blaker: I shall deal with the Thor missile Later, but the brief answer is that we owned the Thor missiles and the United States owned the warheads. There is no precedent for a dual key. There was a dual key in the case of Thor—that is the difference. There is no precedent for a dual key except where the host government owned the missiles or other forms of delivery of the weapons.
  Mr. Rodgers: With respect, the Minister cannot have it both ways. Either he argues that because this information is and should remain classified he cannot give it to the House or that the Prime Minister is not prepared to give it, which would apply to Thor, or, if it is possible to give the information about Thor because of the dual key, that is no reason why information should not be provided now about the precise arrangements governing cruise. I ask again, does the joint decision affect only the use of the bases, which is a flabby description, or does it affect the launch of missiles and their arming?
  Mr. Blaker: The right hon. Gentleman knows that if he had been at the Dispatch Box he would not have been able to go further than I, except that in the case of Thor it is not true that we can explain all the details. I will say more about Thor and other dual key systems in a moment. I certainly would not dream of explaining how the system works.
  Mr. John Roper: The hon. Gentleman said that no one has gone further in the House. He must know what Mr. Harold Macmillan said:
  "United States aircraft carrying nuclear weapons also carry the apparatus for arming them. I have the assurance of the United

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  States Government that the pilots have specific instructions not to arm weapons until they are directly ordered to do so in order to carry out an operation of war, and that in that event the arming would not take place until the latest moment necessary for the execution of the operation. I must repeat that such an order could be given only after agreement between the two Governments".—[Official Report, 12 December 1957; Vol. 579, c. 1421.]
  Mr. Harold Macmillan was able to go further in 1957, so why can the Minister not do so?
  Mr. Blaker: That is an example of a joint decision.
  The right hon. Member for Stockton drew attention to the arguments in favour of a dual key system of control for cruise missiles. I am now coming to how Thor and other dual key systems have operated. As the right hon. Gentleman knows, there are dual key systems in Germany at the moment. There are a number of ways in which they can operate. In essence they all depend on the fact that one country owns, mans and operates the means of delivery—whether it is a missile, an aircraft or an artillery piece—while the second country owns and controls the nuclear warhead. This arrangement has been described as "dual key", although physical locking mechanisms are not necessarily involved.
  This is the arrangement under which the United Kingdom-owned Lance missiles and nuclear-capable artillery in BAOR operate with US warheads, and many of our NATO allies also operate similar dual key systems. The Thor missiles, which I have already explained, were an example of a system of this kind. Those missiles were owned by the United Kingdom and operated by the RAF, although the warheads remained under United States ownership and control.
  The United States Government made it clear to the United Kingdom and to the other European countries that are accepting basing of the Pershing II and cruise missiles that they were prepared to make the missiles available on a dual key basis. There is no point of principle here. As my right hon. Friend the Secretary of State made clear recently, the option of having a dual key was open to the United Kingdom if we had purchased the missile and supporting equipment and provided British service men to man them, with the United States providing only the nuclear warheads. This would have cost hundreds of millions of pounds and required well over 1,000 additional British service men.
  I emphasise again that the Government were, as they are now, fully satisfied with the effectiveness of the existing arrangements under the terms of the 1952 communiqúe, that has stood the test of time over a significant period under Governments of both parties.
  Mr. Rodgers: The hon. Gentleman said "now". It is a question of principle whether cruise missiles should be dual key. He said that at the time of the decision in December 1979 the United States Government made it clear that to have a dual key system we would have to purchase the missile. Can he say, categorically, that that is still the view of the United States Government, and that they are now saying that we would have to purchase the missile in order to have a dual key?
  Mr. Blaker: We have not discussed this matter with the United States Government. We have no reason to
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  expect that their position would be any different. The reason why we have not discussed it with them is that we are satisfied with the present arrangements.
  Against the background of the cost that would have to be incurred if we were to purchase the missiles, we came to the conclusion that there was no requirement to incur the additional strain on the defence budget that that would have involved.
  There will, however, be an element of British responsibility for the cruise missile force of which hon. Members may not be sufficiently aware. I say this because the right hon. Member for Deptford (Mr. Silkin) asked a question last Tuesday which implied that he was not aware of it. He asked what would be the position when the cruise missile, which, of course, will be mobile, travels by road. The answer is that the missiles, whether on their bases or outside them, will be guarded by a joint and integrated security force, a substantial proportion of which will consist of members of the RAF. Indeed, the bases at Greenham Common and at Molesworth are and will remain RAF bases, with a substantial RAF presence, commanded by a senior RAF officer.
  Disarmament is the second of the twin tracks. NATO would prefer that it should not have to introduce cruise or Pershing II at all. That is why the United States, with full support from NATO, has put forward the zero option. This would involve the Soviet Union dismantling its intermediate range nuclear missiles targeted against Western Europe in exchange for NATO abandoning its plans to introduce cruise and Pershing II. It would mean the Soviet Union dismantling missiles which already exist, but this is simply a reflection of the superiority that it possesses.
  It is a radical proposal for real disarmament—as opposed to the proposals of the one-sided disarmers who seem unconcerned at the formidable capability of the Soviet arsenal and unwilling to seek to reduce it. I cannot see why anyone in the West should prefer a situation in which there should be no cruise missiles, no Pershing IIs but some SS20s.
  One thing that is not sufficiently recognised is that the introduction of cruise and Pershing II missiles into western Europe will not increase the number of nuclear warheads in Europe. For every warhead introduced, one will be removed. Moreover, when the twin track decision was announced, the United States promised to withdraw 1,000 nuclear warheads from Europe. This it has done, regrettably without any reciprocal action by the Soviet Union. Our policy will not, therefore, increase the number of nuclear weapons in Europe—quite the contrary.
  The zero option must surely be the best solution, involving as it does the abolition of an entire category of nuclear weapon. We recognise that this may not in the final analysis be possible and are ready to consider seriously any fair and sensible proposals from the Soviet Union for achieving a balanced reduction of forces. But Soviet proposals must be fair and sensible. We remain deeply sceptical of packages designed for propaganda purposes rather than for serious discussion.
  The onus is on the Opposition to explain why they have now decided to reject the policies in which they have believed for 37 years—policies which in that time have successfully kept the peace in Europe. They should explain why, having supported NATO's decision of 1979 to deploy cruise missiles in this country but at the same time to negotiate with the Russians for an agreement which

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  would make such deployment unnecessary, they have now changed course by 180 degrees and resolved to reject NATO's policy.
  The Government believe that if we were to waiver in our resolve to carry through the NATO decision, still more so if we were to reject it, the pressure on the Soviet Union to agree to reductions in its own forces would be lifted and the prospects of arms limitation by both sides would be seriously damaged. As Aneurin Bevan would have put it, we would be going naked into the conference chamber.
  It is only the West's resolute approach—preserving peace by maintaining adequate defence forces—which includes modernising them when necessary, coupled with consistent support for disarmament by both sides, which offers any prospect of ensuring our security and persuading the Soviet Union to engage in meaningful negotiations on arms control. It has brought the Russians to the negotiating table. It has persuaded them to offer some concessions, even if they seem at present not to go far enough. It has begun to work. If we pursue it, it can go on working.
  12.54 am
  Mr. John Roper: We are grateful for the Minister's comments, but, as I said in an earlier intervention, he has been a good deal less forthcoming than others have been in the past on this important subject. It is not a new subject, and a great deal of general discussion on the need for the dual track decision of December 1979 took place on previous occasions. The purpose of today's debate is to probe as far as we can and as far as occurred on previous occasions the nature of the control of nuclear weapons based in this country. Despite the Minister's remarks today and the Secretary of State's answers last week, one of which the Minister has quoted, the position is not clear.
  The House is still somewhat confused about the significance of the Secretary of State's reply on 1 February when his hon. Friend the Member for Plymouth, Sutton (Mr. Clark) pressed for the introduction of a dual key. The Secretary of State said:
  "It might help my hon. Friend to understand that the arrangements governing the use of the bases would come into effect much sooner than the decisions to use weapons in the context in which my hon. Friend describes the rather delicate electronic machinery for firing the weapons.
  The decisions to use the bases would be at a much earlier and therefore much more important stage of the process in that context."—[Official Report, 1 February 1983; Vol. 36, c. 134.]
  Presumably, the decision for the Americans to use the bases has already been taken. Is that what the Secretary of State meant? That is clearly an important decision and it has been taken at a much earlier stage than the decision to use the weapons. It was certainly a curious reply to say that the decision to use the bases was a much more important and a much earlier decision than the decision to use the weapons and it contrasts with the comments of Mr. Harold Macmillan, one of which I have already quoted.
  In the winter of 1957–58 there was also some confusion following the extraordinary remarks of Colonel Zinc, an eagle colonel of the United States air force, who on 27 February 1958 claimed that he was about to take over operational command of the rockets and rocket bases in England. Mr. Macmillan noted in his diary:
  "As this is in direct contradiction to

  (a) the terms of the agreement published last Monday,

  (b) what we told Parliament on Monday and in the debate yesterday,

  Colonel Zinc has put his foot in it on the grand scale!"
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  It is all very well for the Colonel Zincs of this world to put their foot in it on a grand scale, but many people are worried lest they put their finger on the button on a grand scale.
  That ambiguity in regard to an American colonel in operational command may have been acceptable at that time because, in contrast with the Minister today and the Secretary of State last week, Mr. Macmillan had been a great deal more explicit. I have already given a quotation from Hansard of 12 December 1957. In a broadcast reported in The Times of 6 January 1958, Mr. Macmillan had gone further. Referring to bombing from aircraft based in the United Kingdom, Mr. Macmillan said:
  "None of these bombs could be, or would be, used except by deliberate military order, given under the instruction of the British and American Governments acting in agreement. We ourselves have an absolute veto on the dropping of these bombs from any plane based in this country."
  Mr. Chapman: The hon. Gentleman, as much as any hon. Member, desperately wishes for peace with security. Whatever a former Prime Minister may have said 25 years ago, is it not true that during the past five years the Russians have increased the nuclear warheads targeted on Western Europe by 56 per cent? As my hon. Friend the Minister said, the West has reduced the number of nuclear warheads by 1,000. The simple proposition is that if the Russians agree to dismantle their SS20s—never mind the SS5s and SS4s, although they are important—NATO will not introduce the cruise missile and the Pershing II. If Russia, in good faith, is interested in reducing tension and removing the threat of nuclear warfare in Europe, all it has to do is reduce the weapons and we will not introduce cruise and Pershing II. That is the best step forward for peace in Europe in our time.
  Mr. Roper: The hon. Gentleman is right. If an agreement can be reached at Geneva it will not be necessary to deploy the weapons. We devoutly hope that that will be the case. However, it is clear that a large number of our fellow citizens are concerned, as was Harold Macmillan in 1957 and 1958, about the control of the weapons if an agreement is not reached. At the end of the year we are bound to deploy the weapons under a decision taken in 1979.
  Neither the Minister nor the Secretary of State has aswered the point made by Harold Macmillan, who said in 1958:
  "We ourselves have an absolute veto on the dropping of these bombs from any plane based in this country. There is no doubt about this whatever … And we will have exactly the same veto upon the use of rockets as we have on the use of bombs from aeroplanes."
  That was his clear statement. It is a much clearer statement than we heard last week from the Secretary of State for Defence or from the Minister today, who said that he had gone as far as possible for reasons of security. If it was possible for that degree of clarification and reassurance to be given to the House and the country by Harold Macmillan in 1957 and 1958, why is it not possible for it to be given by the Secretary of State and the Minister today? That question has puzzled my right hon. Friend the Member for Stockton (Mr. Rodgers), and it certainly puzzles me.
  The Minister mentioned one possibility that was considered and discussed by the NATO allies in the high level group in 1978–79, when the arrangements for the deployment of the intermediate nuclear forces were made.

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  The Minister said today, as has been said before, that the option was then available for the host countries to have a dual key system. He suggested that it was probable that the United States would have required the host countries to cover the costs of acquiring the missiles, which would probably have run into hundreds of millions of pounds. I hope that I do not misrepresent him.
  Mr. Blaker: Not probably—certainly.
  Mr. Roper: I am grateful for that clarification. Two questions arise from that. Were the Lance missiles—which are based in West Germany and operated by the British Army of the Rhine, and which have American nuclear warheads but are controlled under a dual key arrangement by British and American officers—bought by the British armed forces before the dual key came into operation?
  Mr. Blaker: We have bought them.
  Mr. Roper: I am grateful for that reply. The Minister said that in 1978–79 the United States required host countries to purchase their cruise missiles outright. He quoted a figure of hundreds of millions of pounds. The figures are diminutive compared with the billions of pounds that the Government are contemplating for the Trident missile system.
  It would be interesting to know whether we are in the lower range of hundreds of millions of pounds or in the higher range. Whichever it is, the Minister had to admit under pressure from my right hon. Friend the Member for Stockport that the Government have not returned to the subject in their discussions with the United States since 1979. That is odd when a large proportion of the British public, Conservative Members and other hon. Members, believe that a solution by which there was a dual key would give such reassurance to the British people and reduce some of the opposition to the installation of cruise missiles.
  It does not seem necessary that the United States should require payment in full for cruise missiles. They may need no payment at all. The Minister is unable to tell us, because the Government have not had recent discussions with the United States. That is rather surprising. All that is required is an additional communications line between where the Prime Minister or the British political authority is and the base. That would not represent a significant additional cost.
  The Minister has given a disappointing response. We ought to know whether that option is now on offer, how much it will cost and if, as I suspect may be the case, it will not cost much, whether the Government will consider introducing a dual key system. If we need to deploy the missiles by the end of the year, the vast majority of our fellow citizens would prefer it if they were deployed under a dual key system.
  1.7 am
  Dr. Oonagh McDonald: The implication of some of what the Minister has said was just what we have come to expect of the party that he represents. It was the usual claim that Labour is somehow determined to leave the country defenceless and that, by rejecting the deployment of cruise missiles here, Labour will ensure that the country is represented naked at the conference table.
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  We are used to such complaints from the Tory party. They are being intensified. The chairman of the Conservative party is travelling around the country. He has been told to blame the Labour party for world war two. Apparently the Labour party made the country weak, unarmed and unable to cope with Germany.
  It is good to choose someone who regards himself as young and dynamic but who was only four in 1935 when the Tory party won the general election with a majority of 247. Yet with that majority, and the power and ability to re-arm the country and face the threat that Germany posed, the Tories claimed that they could do nothing and that the very existence of the Labour party ensured that the country was unprepared for the war. All the while, they followed a policy of appeasement.
  Precisely the same sort of complaint is being made now that, although we are in Opposition, our opposition to the possession of a so-called independent nuclear weapon and to the deployment of cruise missiles here is somehow weakening this country in relation to Russia. That is in no way part of our intention or plans. In its opposition to nuclear weapons, particularly to the possession of an independent nuclear weapon, our party is trying to clear the way to building up strong conventional forces. Just as this party neglected the nation's defences in the 1930s, so the Tory Government are now neglecting the nation's defences in the 1980s. Shortly after the Tories leave office the number of ships in the Navy will have fallen to about 40 and the Air Force will not have been properly built up—
  Mr. Blaker: What possible justification has the hon. Lady for giving that figure of 40 ships? Where did she get it from because it is totally untrue?
  Dr. McDonald: From the British Maritime League, in its analysis of the number of ships, their age, and the refits that have been carried out. That is one among many reasonable and respectable sources on which to rely for such a figure.
  It was said about the sending of the fleet to the Falkland Islands that a year later that could not have taken place. Once again the Tories will leave the country weak. Its conventional forces will be weak. When we return to office we shall have to devote some of our energies to building up the conventional forces, for we believe that those conventional forces provide us with our real strength and that they are the best contribution that we can make to NATO's defences. That is why we put our emphasis there. When we take office, by abandoning the Trident missile project, we shall be able to put our money where our mouth is.
  Expenditure on cruise missiles is not in any way such as to prevent the proper build-up of conventional arms. Our opposition to them has a different basis. We believe that the deployment of cruise missiles here will render this country not stronger in relation to Russia but more vulnerable. The argument is extraordinary that we should accept cruise missiles to aid us to negotiate their disappearance. More extraordinary is the argument and the quotation from Aneurin Bevan that we should not enter the conference chamber naked but rather with our nuclear weapons, either American or British-owned, in tow.
  The fact is that we are not in the conference chamber. The present talks in Geneva are between America and Russia. We are not included. From time to time, when she

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  remembers the need to refer to peace, the Prime Minister echoes but faintly what President Reagan has to say. We want to see the disarmament talks succeed. It is surprising that once again the Minister referred only to the zero option. Other proposals have been put on the table by Russia. I am not saying that those proposals should necessarily be accepted at face value, but I am saying that the Government should not be too inflexible in their support for America in the progress of disarmament talks. After all, some of the signs from America are that other possibilities could be considered at Geneva. The Prime Minister should not only echo that but she should be using all her energies in a push forward for peace and for the progress of the disarmament talks at Geneva. We hear little enough from her on that topic.
  Mr. Blaker: The hon. Lady is inaccurate again.
  Dr. McDonald: The Minister likes to take silence as support for his arguments because he has little else with which to support them.
  I return to the question posed by the right hon. Member for Stockton (Mr. Rodgers) about the dual key system for the cruise missiles based in this country. He has expressed it as a matter of grave anxiety and has been supported by his hon. Friend the Member for Farnworth (Mr. Roper), and his party has taken up the issue. I am surprised by the right hon. Gentleman's anxiety. In a pamphlet entitled "Defence, Disarmament and Peace" which was published in July 1980—a long time ago in politics, perhaps, for the right hon. Gentleman—in a paragraph headed "No new principle" he states:
  "As for a change in policy, there is certainly nothing new about nuclear weapons assigned to NATO being located in the United Kingdom … The United States has operated with nuclear weapons from bases in the United Kingdom since the early 1950s".
  He then lists some of them. He continues:
  "In each case, the weapons have been controlled by the Americans subject to agreement on their use. There have also been facilities for American submarines armed with nuclear missiles at Holy Loch in Scotland, There has been no secret about these arrangements and they have been openly debated from time to time."
  The right hon. Gentleman then continues with a series of questions and answers. He poses the question:
  "Couldn't some mad general press the button and launch the missiles at the wrong time or by mistake?"
  He answers his own question by saying:
  "Very elaborate procedures exist for consultation within NATO about the use of nuclear weapons. Here again, precisely
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  the same safeguards will apply to cruise missiles as to manned aircraft. A joint decision between HMG and the United States will be required."
  In July 1980 the answer was straightforward and simple. There were no problems or anxieties.
  Mr. Rodgers: The hon. Lady is reading from my pamphlet, from which I have also read. There is nothing in the pamphlet from which I wish to dissent now. What I said about elaborate procedures to avoid a mad general pressing the button is as true now as it was then, and I am satisfied with the arrangements. The hon. Lady will know, and if she does not I must remind her, that on 13 December 1979 I raised the subject of the dual key from the Bench on which she is now sitting. I raised it on a number of occasions in the following year, in particular on 2 December 1980. I was far more persistent in seeking a dual key than anyone sitting behind me.
  Dr. McDonald: I have read this pamphlet through carefully and I detect no sign of such anxiety or reference to a dual key system. I believe that the anxieties have arisen for a different reason. It is because the Social Democratic party leadership has had to disappoint so many of its new members who are opposed to nuclear weapons here. In order to divert attention from the discrepancy between its members' views and those of the leadership it has brought up the dual key issue. It is a popular issue but not as popular as opposition to cruise missiles. Perhaps it would be sufficient to divert attention from the fact that the SDP is not opposed to cruise missiles.
  We also heard a Liberal voice this evening, but that, too, was raised to divert attention in the same way. The leader of the Liberal party is also disappointing his membership by going back on the Liberal party assembly decision to oppose cruise missiles. The leader of the Liberal party wishes instead to concentrate on the best way of getting rid of cruise missiles, which is to push forward the disarmament talks in Geneva. He is not prepared to lead his party into an election on the grounds of opposition to cruise missiles. That choice for the electorate during an election campaign will be presented solely by the Labour party, which is the only party that is clearly and unequivocally committed to the removal of cruise missiles and is opposed to their deployment in Britain should they be installed here.
  The Liberal party and the SDP are raising an issue—not unimportant—that is intended entirely to divert attention from the fact that they, too, support cruise and that their policies on defence are no different from those of the party in Government.

  Scotland (Expenditure Plans)
  1.21 am
  Mr. William Hamilton: This debate gives the House an opportunity to examine what the Government have in store for Scotland during the next three years up to 1985–86. All the expenditure figures are given in the White Paper in cash terms, and no account is taken of inflation, although table 1.14 on page 17 of volume 1 of the White Paper gives the expenditure figures in cash terms, using 1981–82 as the base year. I shall put the figures on record to show what we are complaining about tonight. Whereas in 1980–81—the year before the base year—the total public expenditure in Scotland was £5,893 million, in 1983–84 that figure has fallen to £5,656 million. That is a reduction of £237 million, or more than £40 per head of the Scottish population. It represents a substantial cut in expenditure on housing, education, health and the services that do so much to improve the quality of life of many Scottish people.
  The cuts could be much more devastating than the bare figures show, because they are based on the assumption that the rise in prices each year will stay at about 5 per cent. However, not many experts are so optimistic. The Sunday Times stated yesterday:
  "The White Paper's assumptions on inflation are, bluntly, incredible."
  The article continued
  "Five per cent. inflation … is a Government fantasy".
  and suggested that 8 per cent. inflation is more likely. The article gave pensions as an example. It said:
  "The pensions increase for next November to be announced in the Budget is to be based on an assumed 5 per cent. inflation rate in the year November 1982–83. Pensions, however, will not go up by the full 5 per cent., the White Paper makes clear; a deduction is to be made for the fact that pensioners got two per cent. more than needed to compensate for inflation in the last uprating … If 5 per cent. for prices is incredible, so, too, is the 3½ per cent. which is all the Government allows for public sector pay."
  The article goes on to say that every 1 per cent. above the 3½ per cent. received by public sector workers would cost the Exchequer about £350 million a year.
  In theory, of course, according to the Government, if the workers received more than 3½ per cent. in increased pay, the difference could come from programmes, but The Sunday Times article pours doubt on that proposition. Can anyone imagine the chiefs of the defence staff saying that, if pay increases by more than 3½ per cent., we will cut the purchase of guns or battleships. That would not happen. But, in paragraph 14, on page 79 of the White Paper relating to Scottish education, the Government say that, while a real cut in education is projected:
  "The number of teachers that can be afforded within these plans will depend crucially upon the level of pay settlements for teachers."
  In other words, the Government are saying that, if the teachers receive more than 3½ per cent., there will be fewer of them and therefore, presumably, poorer education for the children. Even taking account of inflation, there will not be an improvement in the education service at any level over the three years with which we are concerned.
  In terms of job opportunities for the young, the old, the middle aged and women, Scotland is rapidly becoming an industrial desert. A "scorched earth" policy could hardly have created as much devastation as the Government's policies in the past three and a half years. Yet, as the dole queues lengthen day by day and month by month, the
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  Government do little or nothing except to cook the figures and pretend that unemployment is good for the soul, and that it is not as bad as it used to be since the Secretary of State for Employment got his fingers on the statistics.
  Table 2.4 of volume two shows that regional development grants are to be cut from £600 million in 1982–83 to £474 million in 1983–84. That help has gone and does go mostly to manufacturing industry in badly hit regions such as Scotland. Is Scotland being protected from that massive cut, because it is happening at a time when manufacturing industry is suffering its deepest recession for 50 years? How will the Scottish economy be protected from that onslaught? How many more jobs will be threatened under the present policies?
  One can hardly pick up a daily newspaper without finding evidence of the increased number of redundancies all over the country. About 800 jobs are threatened at British Aluminium in Falkirk, and 1,900 jobs are threatened at Timex in Dundee.
  The steel industry at Ravenscraig is by no means out of the wood and the workers are desperately worried. If the threatened takeover of Andersons of Strathclyde by Charter Consolidated goes ahead at the Government's instigation, how many jobs will be threatened? At John Haig's at Markinch in my constituency there is cold-blooded murder of 340 jobs. Markinch will be dead as a community if John Haig's closes. When I talked to the management last week there was no sentiment. It seems that the workers are regarded as pawns on the chess board to be moved or swept out of the way. The company is owned by distillers and is a profitable and wealthy organisation but the redundancy terms are appalling. I talked to a man who has been working for the company for 27 years. He has given loyal service. He will get £4,500 in redundancy pay, less than one year's pay. It will be gone almost overnight after 27 years. He is only in his early 40s, but he will not work again. There is no other work available for him in the area.
  Another 200 jobs are threatened at Balfours at Leven. That is in an area where male unemployment in November 1982 was over 28 per cent. Despite repeated representations by the local authorities and Members of Parliament, the Government have refused repeatedly to return special development area status to the Levenmouth area.
  The latest unemployment figures in Fife and throughout Scotland show the devastation of unemployment. The White Paper gives no crumb of comfort for those who are on the dole. There is an assumption of another 280,000 for the breadline in the United Kingdom next year. That will mean about 50,000 in Scotland. In October 1982—the latest figures available—127,837 had been out of work for over 12 months. I suppose that the figure is now about 150,000. When these figures were mentioned in the House last week the Secretary of State for Employment bleated "There is no easy solution. There is no easy, painless, short-term solution to this." We remember the fraudulent Tory poster at the 1979 election that was produced by Saatchi and Saatchi. It implied that if the electorate got rid of the "wicked Labour Government" the unemployment problem could be solved almost overnight. It was claimed that it was all the fault of the Labour Government.
  The Prime Minister is constantly referring to the great achievement of her Government. She reminds us that the Government have brought inflation down to 5 per cent. I do not know what it is in the Sahara desert, but it will be

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  less than 5 per cent. We can always get inflation down as long as we are prepared to pay the price. The price is 3 million to 4 million on the dole with more to come. There is no sense in boasting about the rate of inflation if we have a ruddy desert on our doorstep, and that is what we are getting throughout the United Kingdom.
  On her last visit to Scotland the Prime Minister appeared bejewelled, glittering, peroxided, powdered and painted and said "You have got to take it. Take your medicine, it is doing you good." The right hon. Lady is not suffering and nor is anyone on the Government Benches, but our people are. She said that the people should return to the Victorian virtue of hard work and thrift. By God, those on the dole would be happy if they could return to the prospect of hard work and thrift. They cannot work and they cannot exercise thrift. They have been denied both by the Government.
  We were told last week that over 14,000 building trade workers are out of work. Yet over the past three years, we have seen the worst record of house building in 50 years. In 1980, only 2,800 council houses were started—the lowest peacetime figure since the 1920s. As we have had less money provided by the Government than ever, that downward spiral will continue. In the whole of 1981, and through the first nine months of 1982, according to the Under-Secretary, only 17,300 houses were completed in the public sector. In the same period, 28,500 houses were sold, with a net loss in the public rented sector of about 11,000 houses.
  The Shelter survey in the winter of 1981 showed that more than 157,000 were on council house waiting lists in Scotland. There is an enormous pent-up demand for public house building, for the old, the single, those on low incomes and the newly married. Yet, the Government have not the wit to marry the 14,000 unemployed building trade workers with that enormous demand for houses. It is common sense, morally, politically and in every other way.
  The figures in the White Paper show that, far from the Government doing that, public expenditure on housing is to be slashed in real terms by 20 per cent. in the next three years. That amounts to criminal irresponsibility, and a gross dereliction of duty on the part of the Government.
  The sad story is told in table 2.15.3 on page 78 of the second volume of the White Paper. It shows that 5,100 houses were completed in 1982, but in 1976, under the previous Labour Government, 22,823 were built. In that same period, while the number of houses has gone down by 75 per cent., average rents have gone up by more than 150 per cent. Another period of Tory Government and all building of council houses will cease and all public money towards the building of those houses will have ceased.
  Another aspect of this depressing White Paper is that of education. I speak as an ex-teacher, and I hope that everybody accepts the view that the long-term future prosperity of the Scottish economy depends more than anything else on investment in education at all levels. However, the Government are planning for a worsening of the pupil-teacher ratio, from 17:1 in 1982–83 to 17:6 in 1983–84 and 17:5 over the next two years.
  It is true that the overall expansion in education expenditure is planned to rise by 9 per cent. from 1982–83 to 1985–86, but that is 9 per cent. over three years. That is 3 per cent. each year, which is a substantial cut in real terms. We have seen the examples of threats to teachers on the Clyde. In Lothian, several hundred teachers are
  764
  threatened with being sacked in the foreseeable future. Coupled with that, there will be severe restraints on teachers' salaries.
  The capital expenditure programme on the Health Service will increase from £104 million to £132 in the three years of the survey period, which is an increase of 27 per cent., or 9 per cent. a year. That might well match inflation for the period, but there is hardly any scope for improvement in the service. It also implies a pay freeze of about 3·5 to 4 per cent. That applies to the nurses who were so scandalously treated in the last pay round. In addition, ancillary workers will be expected to take not more than 3·5 to 4 per cent. Meanwhile, inflation will increase to about 8 or 9 per cent. In other words, there will be a further reduction in the living standards of all those workers.
  There will be no significant improvement in the health service despite the fact that the number of elderly people is increasing and that more resources are therefore needed. There are also greater demands on the local community services provided by local authorities, which are hard hit by the Government. The prospect is grim for almost every section of our community. Scottish Members of Parliament will have received today—and if not, they will receive tomorrow—a letter from Age Concern in Scotland which refers to the fear of the clawback that the Chancellor of the Exchequer is likely to announce in his Budget statement. It continues:
  "Over half our retired people are living either in poverty or on the margins of poverty."
  The letter also refers to the poverty brought about by the fact that this winter fuel costs are beyond the means of many of our old people. But the elderly are not the only ones to be involved in the struggle against poverty. By 1985—if the Government last until then—the number of those living on supplementary benefit and on the poverty line in the United Kingdom will have reached a record of more than 4 million. A large proportion of them are old-age pensioners.
  I have concentrated on a few of the services that are likely to be axed. There is no doubt that the figure that I gave earlier shows a substantial overall decrease, which means a reduction in the standard of living. However, there has been an enormous increase in defence expenditure. The Government can find plenty of money to spend on guns, bombs, aeroplanes, ships and soldiers. Spending has increased from £12,072 million in the last year of Labour government to £14,163 million in 1983–84. That is an increase of more than £2,000 million in defence spending in four years. It means that for every man, woman and child in Britain, we shall spend £250 a year. That is £5 per week for every man, woman and child.
  As I have said, on the Government figures that have been published so far, the Falklands exercise will cost us more than £2,500 million, or about £2 million per head for every Falkland Islander. For Scotland, with a population of about 5 million, the proportionate figure would be £10 billion. The Government are spending all that money on the Falkland Islands and the whole story has not yet been told.
  We are also spending a lot more money on the police and law and order. While the Government squeeze expenditure on housing, education, health and the services on which our standard of living depends, they are upping sevices for the police, the soldier, defence and the prison service. The figure that I have for the prison service shows

  765
  a substantial increase. So if a person wants to get a house in Scotland he should go into the prison service. That is the best way to get one. If he wants a good wage, he should join the Army or the police force, because that is where the money is going. Those are the Government's priorities.
  My conclusion is a simple one. The Scottish economy is sick, although not dying. Among all sections of the community there is a feeling of despair and anger, a feeling that nothing is being done to help those who are most in need. Far from being optimistic, people feel that the situation will get worse. The Government believe that, too. That is why there is pressure on the Prime Minister to cut her losses and go to the country quickly in June before she is found out, and the pressure is coming from Tory Members.
  The projections in the White Paper show that there is little or no sign that the Government intend to do anything to improve a situation which makes us all very despondent. Unless the Government change their policies, or unless there is a change of Government, that despondency will continue, and I shudder to think what the ultimate prospects may be.
  1.46 am
  Mr. Harry Ewing: I congratulate my hon. Friend the Member for Fife, Central (Mr. Hamilton) on raising this important matter against the background of the public expenditure plans for Scotland.
  I start by taking up my hon. Friend's final point about the increase in expenditure on the police and prison services, compared with the decreased expenditure on the other services that he mentioned. I am sure that my hon. Friend will agree that there is a connection, in that the reduced expenditure is causing unemployment and problems in the Health Service, education and housing. As a result of a reduction in expenditure on those items, the Government are having to increase expenditure on the police and prisons. There is no doubt that the social pressures on people in Scotland as a result of the Government's economic policy are leading to a substantial increase in crime. The Government came to power saying that they would end unemployment and reduce crime, but what has happened? Unemployment has soared dramatically, and so has crime. Unemployment and crime both came down during the last year of the Labour Government. Unemployment fell for seven or eight consecutive months, and in the last two years of the Labour Government crime, too, was reduced. Under the Conservative Administration both have gone up.
  My hon. Friend dealt with the industrial scene. He spoke of the reduction in expenditure between now and the financial year 1984–85 on regional and industrial assistance, which goes primarily to manufacturing industry. The Minister should tell us how much truth there is in the story in the Sunday Standard and other reputable papers that discussions are taking place inside the Government with a view to restructuring the various development areas, the special development areas, and the intermediate areas, and that the Secretary of State for Scotland is prepared, yet again, to accept more than his share of the Governments's reduced expenditure on regional aid.
  766
  The last time this exercise was entered upon, the reduction in regional aid amounted to £250 million for the United Kingdom as a whole. The Minister, who has drawn the short straw and has to remain here until 2 am to reply to the debate, will recall that he was a Back Bencher at the time. He will also realise that had he still been a Back Bencher he would now be in his bed. These jobs have their rewards and their punishments. The hon. Gentleman is now suffering the punishment. I have experienced it myself. I am not, of course, sympathising with the hon. Gentleman, who deserves everything that he is getting.
  Of the £250 million reduction in regional aid to which I referred, the Secretary of State for Scotland gave up £45 million, or about 20 per cent., of the total. If there had to be reductions at all, the Secretary of State should not have been prepared to surrender more than 10 per cent. The story that I read in the Sunday Standard had opposite it pictures of the Minister of State, Department of Industry, and of the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher), whom I have to face in the British Shipbuilders Bill Committee at 10.30 am—the gruesome twosome, as I have been describing them recently.
  How much truth is there in the story that discussions are taking place? I warn the hon. Gentleman that if any attempt is made to reduce the status of many of the development areas in Scotland, in the interests of other parts of the United Kingdom, it will be strongly resisted by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan), by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who is present for this debate, and by all my hon. Friends on the Opposition Benches. Scottish industry, as the Minister will know from his previous incarnation with the CBI in Scotland, is in such desperate straits that, far from suffering a reduction in regional aid, we badly need an increase. All the assisted areas require upgrading if the problems that beset Scottish industry are to be dealt with.
  My hon. Friend the Member for Fife, Central referred to the problems at Markinch following the announcement of the closure of John Haig's, a company of over 100 years' standing. There are problems associated with the possible closure of Henry Balfour and Son at Leven, my home town, and with the closure of the Carron company in Falkirk, a company of 260 years' standing. The first furnace was blown at the Carron Company in the year that Rabbie Burns was born. The furnaces were blown out last year by the Prime Minister.
  That is the story throughout Scottish industry. It may be argued that these industries are old, but the new industries on which the Scotland of the future was to be rebuilt—the car plant at Linwood, the pulp mill at Fort William and the smelter at Invergordon—are also going. It is an additional warning to the Scottish Office not to contemplate giving up any resources.
  I do not wish to forecast what will happen later this morning at Falkirk in my constituency. The Minister knows that the situation there is serious. There is to be an announcement today that will bring gloom and despair to the town against the background of the closure of the Carron company. When the Minister was pushing through the House his statutory instrument on the derating of external plant and machinery, I warned him of the devastating effect of the increased rate burden that he was imposing on other industries in my constituency. In a few hours we shall see the first casualties of his actions.

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  There is nothing to be cheery about on the job front in Scotland, despite what the Secretary of State tells us about the number of small business start-ups. We have had another major bankruptcy in East Kilbride today, in which the Scottish Development Agency has a major stake. Such bankruptcies are occurring one after the other. Almost daily we hear despairing announcements about the industrial scene in Scotland.
  I could continue for some time on the subject of jobs, because the Scottish economy is in a desperate situation, but let me deal with housing, a subject dear to the heart of my hon. Friend the Member for Garscadden. Local authority and public sector housing in Scotland leave a great deal to be desired. Housing starts are at their lowest level. Local authorities are being starved of funds and there has been an attempt to deprive Falkirk district council of any housing start grant at all. If that action is carried out, the authority will have gone from a housing start grant of £8 million three years ago to nothing in 1983, all under this Government. That is a disgrace in anybody's language. Housing stock in Scotland, as the Minister knows well, because it is his responsibility, leaves a great deal to be desired, are all his policies are based on the altar of the ability to sell council houses. That is a policy that does not now bear examination because of the heartbreak that young couples are suffering due to the lengthening waiting lists in local authorities and their inability to get a local authority house.
  Local authorities require more money because there is a great deal to be done to the immediate post-war housing stock, which, rightly, was built in a hurry because the needs were desperate at that time when men were coming back from the war and they and their families needed to be housed. But those houses are now 30, 35 or 36 years old and require a great deal of money to be spent on them. Indeed, there is a strong case for a scrap and build programme. Some of the older immediate post-war houses could be demolished altogether and replaced by new and modern houses. I know that the Minister will argue about loan charges, but, as my hon. Friend the Member for Fife, Central said, the Government are expert at producing money almost from nowhere to meet the whims of their mistakes in the Falklands. I am sure that they could produce money for the things about which I am talking.
  Hon. Members talk to parents every week at their surgeries and we see them as we go round our constituencies. They are now becoming more and more worried about Scottish education. It is simply not good enough for the Government to say that they are spending more per head on pupils now than ever before. Somehow or other the Government seem to assume that because they spend more money they should be producing more O-grade and H-grade passes, and so on, as if that were the be-all and end-all of education.
  As my hon. Friend said, the rate support grant settlement budgets for a reduction in the number of teachers employed in the Scottish education system. Discussions are now going on about the further contraction in the colleges of education where most of our teacher training is done. I am very much aware of the announcement by the Under-Secretary on Friday to introduce an all-graduate profession in the year beginning 1984. It will be 1988 before we get the results of anything from that. In that time enormous damage could be done to the Scottish education system as a result of the cuts in public expenditure to which my hon. Friend has referred.
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  Health is a subject dear to my heart. I have heard the Under-Secretary responsible for health, and the Minister himself, who had responsibility for health for three or four weeks, say that there are more nurses and doctors, and more this and that in the Health Service. The Minister knows that the Health Service is bursting at the seams. It is creaking under the strain because the Government have not yet published any building programme since the day they were elected. They are still working on the building programme left to them by the outgoing Labour Government in 1979. Not one brick has been laid under plans made by this Government for Health Service building. All the health centres and hospitals that have been built, and anything that is being built at the present time, whether it be a geriatric or a maternity unit, is part of the last Labour Government's building programme.
  The Government have circularised all health boards. The Under-Secretary was at the Department when the circular was sent out telling the health boards in Scotland that before they could even ask for permission to build a new bed they must write to private hospitals to see if they had any spare beds. If there were any, the health boards had to buy those beds before they could get any permission or consideration to build new beds. The National Health service is becoming a two-tier service.
  Ministers tell us that health boards are responsible for administering their own health board area. I believed that until a fortnight ago, when I read that the Secretary of State had overruled seven or eight health boards which had refused to accede to requests from consultants to use the National Health Service facilities for private practice.
  The consultants have apparently appealed to the Secretary of State. The right hon. Gentleman has overruled the very people whom he appointed to administer those health boards areas. In anybody's language, that is a disgrace.
  The Minister has been given a difficult job because he has to justify the Government's economic policy against the background of the debate.
  Mr. Donald Dewar: Impossible.
  Mr. Ewing: My hon. Friend says "Impossible". The electors in Scotland will be the judge of this matter. We may debate this matter across the Floor of the House, but like my hon. Friend, I am convinced that sooner rather than later the electors will get the opportunity to judge the Government's record in Scotland. I think that the judgment will be harsh on the Conservative party and on Conservative Members of Parliament. Many of the small number present had better start looking for jobs. There are nearly 400,000 unemployed people in Scotland. Old-age pensioners will have their pensions reduced, folk cannot get into hospital, parents of school children are complaining bitterly about the schools, and there are lengthening queues for local authority housing.
  The Minister must know from his CBI connections that industrialists are thoroughly sick of this Government. I was talking to some of them today in my constituency. They are all turning against the Government, and their judgement will be harsh, indeed, when the time comes. It will be interesting to hear what the Minister says. No doubt he will do his best to paint a rosy picuture, but there is no rosy picture. The Minister must know that. He has constituents, just as we have. He must know that the scene is very depressing indeed.
  2.5 am
  The Under-Secretary of State for Scotland (Mr. Allan Stewart): I agree with the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) on at least one point. I congratulate the hon. Member for Fife, Central (Mr. Hamilton) on his choice of topic. It also goes without saying that hon. Members who are present, and those who are not, will no doubt return to some of the themes that have been raised.
  I want to respond to the detailed points raised by both hon. Members, but before doing so I should like to tell them of a change in the procedure of reporting the details of public expenditure plans in Scotland. I hope that it will be helpful to all hon. Members. In the past, my right hon. Friend has provided the Select Committee with a detailed memorandum on the public expenditure figures, and that has subsequently been published. This year, we propose to bring forward the programme, and the detailed commentary on the figures will be published in the very near future.
  Let me put the debate into a general context. The Government have sought progressively to reduce public expenditure as a proportion of national output as a necessary condition to reducing inflation and freeing resources for the private sector to use productive, wealth-creating enterprise. Unlike Labour Members, we believe that that is the only sure way forward. We must create a sound base for a healthy economy in the medium and long terms.
  Within that general context of restraint, resources have been channelled to priority programmes such as law and order, health and defence. We have also tried to sustain the capital programmes.
  In total, the provision for 1983–84 is an increase of about 5 per cent. over the plans for 1982–83. That is broadly in line with expected inflation. The hon. Member for Fife, Central seemed to quote press reports suggesting that the Government's inflation forecasts would not be achieved, but later admitted that inflation was currently running at about 5 per cent. The Government have been extremely successful in the battle against inflation—a great deal more successful than most of the forecasters envisaged.
  Looking ahead to 1984–85 and 1985–86, increases of 3 per cent. overall are planned for the programmes under the Secretary of State's control.
  Mr. Dewar: In the housing projection up to 1985–86, there is a cut in cash terms of 9 per cent. Presumably the Minister will have done the calculation, so perhaps he will tell me what that is in real terms, assuming that the anticipated inflation figures are in reality.
  Mr. Stewart: I shall come to housing, but I should first like to put the broad picture.
  We must not compare the Scottish programme with the United Kingdom programme as a whole. Some misleading comparisons have been made, but not by the hon. Member for Fife, Central tonight. Scotland also benefits from United Kingdom programmes such as defence and the externally financed expenditure of the nationalised industries. When we compare like with like, there is a 3 per cent. increase each year for the Scottish programme, and that is on a par with increases in the comparable English programmes.
  The hon. Member for Fife, Central referred to table 1.14 of the White Paper and claimed that, because the
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  figure for the Scotland programme in 1983–84 is £170 million less than the expected outturn for 1982–83, this showed a neglect of Scotland's interests. I think that that is a reasonable summary of what he said. Quite apart from the qualifications that should hedge about any argument on cost terms comparisons, the cost terms figures for 1983–84 look low simply because the 1982–83 figure is so much higher than it should be because of spending by local authorities. If that is discounted, the so-called cut in real terms shrinks to vanishing point.
  Hon. Members should pursue that line of figures backwards. They will then find that even without making allowance for local authority overspending the Scotland programme for 1983–84 in cost terms is still higher than it was in 1978–79, the last full year of the Labour Government. That puts into context some of the more extreme statements that have been made about savage cuts, cuts to the bone, and so on.
  On housing, the hon. Gentleman's figure of 20 per cent. is wholly misleading. Real comparisons in cost terms are a poor way to judge expenditure plans. Not only do they suffer from the deficiencies surrounding any cost terms figures, but the allocations to the housing programme, as to any programme, must be set against the needs of the programme. There is an overall surplus of houses over households and there are about 29,000 empty public sector houses in Scotland. There is also enormous scope for a far greater contribution from the private sector, and housing starts are rising sharply. Against that background, it is perfectly right and reasonable that the housing programme should be concentrated on the needs of special groups and on rehabilitation, improvement and repair. That is a sensible policy which avoids the elementary mistake that has been made in the past of equating high public expenditure with good housing.
  The hon. Member for Fife, Central also mentioned council rents. The current average council rent is less than 7 per cent. of the average earnings of a male manual worker in Scotland and an even smaller proportion of the average household income. That puts that complaint into its proper perspective.
  Houses sold to sitting tenants are not, as the hon. Gentleman claimed, lost to the housing stock. They remain in the housing stock, and the total housing stock has increased by 50,000 houses since the Government came to power.
  Mr. Dewar: The Minister makes a rather strange argument to suggest that there is no housing need in Scotland, but why does he regard the attempt to establish what the cash figures in the housing estimates mean in real terms as a misleading exercise? Will he answer the simple question that I asked? What would be the cut in real terms if his 5 per cent. and 3 per cent. inflation projections were met?
  Mr. Stewart: I have already explained why the hon. Gentleman's figures for expenditure in real terms are wholly misleading. Not only do real comparisons in cost terms suffer the deficiencies surrounding any cost terms figures, but any programme must be set against the needs of the programme. That is the question to which the Government must address themselves. Of course there are housing needs and it makes every kind of sense to concentrate resources on improvement and repairs. Hon. Members also forbore to mention the financial incentives

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  that the Government have provided for improvement and repair in the private sector. Those incentives are extremely generous and have been so regarded by local authorities of all political persuasions, including Labour authorities.
  The hon. Member for Fife, Central referred to the education programme. It must be seen in the context of the falling school rolls. We are faced with a 3 per cent. fall in pupil numbers this year. He also referred to the pupil-teacher ratio, he correctly quoted the figure for 1983–84 at 17·6, and 17·5 for the following two years. That figure compares with a figure of 18 in the last full year of the Labour Government in 1978–79. That shows that the provision for education is reasonable.
  The hon. Gentleman, as the House would expect, referred to health. He knows a great deal about that subject. He was rather more cautious in his comments on the Government's plans in that area than about some of the other programmes. The provision for health and social work is £108 million higher than the expected outturn for 1983–84, with further increases in the later years of the programme. For health alone, the increase in 1983–84 is £101 million, which is more than 6 per cent. It is well in excess of the expected movement for programmes as a whole. That shows the priority that the Government are according to health. It will enable health authorities to meet new demands caused by demographic changes and by advances in medical techniques. It is important that inflation is kept under control. The real resources that will be available will depend on the level of inflation.
  Opposition Members were critical of the Government's priorities for law and order and prisons. Most ordinary people would regard the priority for law and order as perfectly right and proper. They would regard it as highly desirable that there should be a modest growth—such as we are planning—in police numbers to meet estimated needs. I was taken aback by the criticism of the Government's provision for increased spending on capital for the prison service.
  Mr. Harry Ewing: The Minister should not misquote me. I did not criticise police expenditure. I said that it was inevitable because of the reduced expenditure on the social programmes. The Government are fully responsible for the increase in crime and, therefore, the increase in the prison population. The two are linked. The Minister must not misquote me. The additional money that he is having to
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  spend on the police and the prisons is of his own making because of the reduction in expenditure on social programmes.
  Mr. Stewart: I do not for a moment accept that analysis. The hon. Gentleman must know in his heart that the causes of rising crime are a great deal more complex than that—as Opposition Members constantly told the House when they were in Government. The Government are providing for increased investment in improving conditions in prisons. We are providing for the capital reconstruction of Greenock and also for the next phase of the development of Shotts prison. I would have thought that all hon. Members, irrespective of party, would support those priorities.
  Both the hon. Member for Fife, Central and the hon. Member for Stirling, Falkirk and Grangemouth referred to industry and to jobs. Selective financial assistance to industry will continue at broadly its current level, as will the programme for the Highland and Islands Development Board. The provision for the Scottish Development Agency in 1983–84 is more than the agency has spent in any past year. Of course, there are undoubtedly serious problems that face the Scottish economy. Nevertheless, it would be cruelly misleading to those who are out of work for anyone to suggest that there is a serious prospect of quick and easy alleviation. The fact remains that the economy is in recession and that we cannot spend ourselves out of trouble in the way in which some Opposition Members seem to think we can. A massive injection of public money might bring some apparent short-term relief, but the lasting effect would be more inflation or high interest rates or both. That would inevitably lead to a loss of competitiveness and jobs.
  It is essential to the employment prospects of industry and commerce in Scotland that the Government maintain their firm anti-inflationary policy. It is clear from the White Paper that the Government will continue to concentrate on their priorities. It is also clear that we shall seek realistic economies. It is essential to make more effective use of resources in the public sector. It is by maintaining a proper balance between the public and private sectors that conditions for the growth of industry and commerce will be created and maintained. that is what the programme, as set out in the White Paper, is all about. that is as important for Scotland as it is for the rest of Britain.

  Shipbuilding Industry
  2.21 am
  Mr. Don Dixon: I am pleased to have the opportunity to debate the importance of the British shipbuilding industry, which is experiencing one of its most difficult periods since the 1930s. In spite of that, according to the chairman's statement in the 1981–82 annual report, British Shipbuilders kept within the £25 million target that was set by the Government and the trading loss was only £19·79 million.
  It is vital that we have a Merchant Navy and the shipbuilding capacity to build and maintain it. The Merchant Navy is the main carrier of our national trade—98 per cent. by weight of our trade comes and goes by sea. The post-war growth in foreign fleets and shipbuilding is not the result of a failure by British shipbuilders, but of a combination of factors such as nationalism, changing patterns of world trade and, above all, financial taxation and other direct and indirect support that is given by foreign Governments to their home shipping and shipbuilding industries.
  The world recession in trade has resulted in the shipping industry facing a worldwide crisis. Freight rates are now at their lowest level—a level at which shipowners find it impossible to operate profitably. Huge losses are being incurred by ships that operate in virtually all trades.
  It was recently reported in Lloyd's List that some owners are chartering vessels at rates that just cover fuel and crewing costs, and do not take account of depreciation or return on capital. These problems have spawned a shipbuilding trade war, especially between western Europe and the Far East. Korean shipyards are now quoting prices that would only cover the cost of materials in European shipyards.
  It has been said that even if British shipyard workers worked for no pay, we could not compete with some of the prices that are quoted by the Koreans. It is impossible to believe that the Korean and Japanese Governments are not protecting their shipbuilding industries to the hilt. Now is probably the worst time for the Government to introduce legislation—I refer to the British Shipbuilders Bill—which, rather than supporting British Shipbuilders, will result in greater insecurity and confusion. The proposed legislation bears no relevance to the industrial needs of the British shipbuilding industry. I am of the confirmed opinion that that legislation is pursuing purely political objectives, which could destroy the achievements of the five years since the British shipbuilding industry was nationalised. It may halt a number of major initiatives aimed at further improving the industry's efficiency and productivity.
  Since vesting day, nine shipyards, three engine building facilities and three ship repair yards have closed, 25,000 jobs have been cut and a further three ship repair yards are being closed with a loss of 1,400 jobs in south Tyneside, the area that I represent. Just last week we were told that another 1,800 jobs would have to go, many in the north-east. People talk about the massive redundancy payments that the shipbuilding workers are alleged to receive. The average redundancy payment is less than £3,800.
  Until now, all that has been with the co-operation of the trade unions. The dramatic decline in numbers of jobs, together with increased flexibility and mobility, resulted
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  in an increase of 15 per cent. in productivity by 1981. At the time of nationalisation there were 168 bargaining units in the industry. Different groups of workers competed against one another, with leapfrogging claims and demarcation disputes. Productivity suffered, costs rose and any innovation was regarded with widespread suspicion. One of the first major achievements of British Shipbuilders was to reduce the 168 bargaining units to two—one for the manual workers and one for the staff in the supervisory division. All pay and other conditions at national level are negotiated once a year. Leapfrogging and demarcation are now a legacy of the past. Each national wage settlement has been struck at well below the rate of inflation, with the result that shipyard workers have dropped from third in the wages league to 19th.
  All that has been made possible because of the industrial democracy that was introduced when the yards were nationalised. The men are conscious of their responsibilities to the industry, which now communicates effectively. They are aware of the problems besetting the industry. There is a feeling of working for a total industry that is competing internationally rather than one company competing with another on the other side of the country or even on the other side of the river. That good will and co-operation will be lost if there is any fragmentation of the industry and industrial democracy is stopped as a result of the British Shipbuilders Bill. There will be confrontation with the unions at the worst possible time for the industry.
  Robert Atkinson, the chairman of British Shipbuilders, in the 1981–82 report, said:
  "Britain as an island nation is, and always has been a strong maritime nation needing seapower, and by necessity this must continue to be the case. Shipbuilding plays a vital part in our nation's prosperity and in its protection. We have a capability that needs to be sustained and recognised as a national asset because a shipbuilding capability is not something that can be used intermittently, to be available when required. To be effective it needs continuous use, it needs constant improvement and continuous investment in men and materials. Once that capability is allowed to disperse it will not be recoverable. Shipbuilding like shipping is a national strategic industry and needs a declared national maritime policy. Britain remains one of the few major maritime nations in the world where the national requirements of shipping and shipbuilding are not linked."
  Before nationalisation British Shipbuilders was subject to a number of reports—the Patten report in 1962, the Geddes report in 1966 and the Booz-Allen report in 1972. Investment in British shipbuilding then did not compare favourably with that in many European shipyards. A survey was carried out at the time of the Geddes report in 1966 which showed that there were assets of £825 for every many employed in the industry in this country, in West Germany it was over £1,000, in Italy £1,200, in Sweden £1, 800 and in Japan £2,800. There was little investment in British shipbuilding compared with our overseas competitors.
  If we are not careful we shall have no one to build ships in the future. In 1979 more than 20,000 apprentices and trainee technicians were taken in to shipbuilding. In 1981 there were 10,000. Who will build ships in the future if we do not train apprentices and technicians?
  I want to talk a little about the effects of the recession in the north-east where shipbuilding, repairing, and marine engineering have formed an important part of our industrial base. We have been top of the unemployment league for many years. I do not like talking about percentages when talking about unemployment because

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  we are discussing human beings—breadwinners and wage earners. An individual is 100 per cent. unemployed whether he is one of 15 per cent. or 20 per cent.
  The northern region accounts for 20 per cent. of the United Kingdom's shipbuilding industry, and we were able to take advantage of the shipbuilding boom of 1973 because of our skills. In that year 51 per cent. of United Kingdom tonnage was launched from yards in the north-east. Nearly 8 per cent. of employment is in shipbuilding and connected industries compared with 2·5 per cent. nationally.
  The concentration is higher in certain parts of the region. On Wearside 20 per cent. of the work force is employed in shipbuilding, ship repairing and engineering. On Tyneside the figure is 16 per cent. We have a completely integrated shipbuilding, ship repairing and marine engineering industry, which is not duplicated anywhere else in the United Kingdom.
  Many organisations are connected with the industry. The university of Newcastle has the country's largest and foremost naval architecture department, which has closelinks with the industry. It also has a marine industry centre. Sunderland polytechnic has a department of naval architecture. South Shields marine and technical college is internationally known. The north-east has the greatest concentration of facilities for technical education directly connected with shipbuilding.
  Shipbuilding is not just a job; it is a way of life because of the close relationship between the working and living environment. For example, a survey carried out at Swan Hunters at Wallsend showed that 62 per cent. of its work force lived in Wallsend or the adjacent towns. In Sunderland the survey showed that 37 per cent. of Austin Pickersgill's work force lived within one mile of the yard and only 15 per cent. lived more than five miles away. That is how important shipbuilding is to communities. The whole social and economic life of communities in our area depends upon shipbuilding. That is why the recession in shipbuilding has such an effect on those communities.
  I want from the Minister, first, a national maritime policy co-ordinated by a senior Cabinet Minister, to be formulated in consultation with trade unions, British Shipbuilders and the shipping industry. That was suggested by the Select Committee, which interviewed trade union representatives, British Shipbuilders' representatives, and the Minister who will reply to tonight's debate. Recommendation (iii) of paragraph 43 states:
  "The Government should set up a high-level interdepartmental working group to consider the full implications of a maritime policy for the UK embracing both shipbuilding and shipping."
  Robert Atkinson, the chairman of British Shipbuilders, said in an article in the shipbuilding magazine in November 1982:
  "I am convinced that there is only one way in which this can be achieved. There must be a single national body overseeing the interests of all the maritime industries and interests involved including defence. What we need is a Minister of maritime affairs or a Minister of the sea, as exists in France; a man of senior position within Government, who can evaluate the problems facing us all, and with the power to implement decisions."
  Mr. Atkinson said that after the publication of the Select Committee report.
  Secondly, British shipowners, Government Departments and nationalised industries should be told to buy British. Not long ago, P and O ordered one of the
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  largest cruise liners ever to be built, at a cost of £90 million, but the order went to Finland. We had arguments about the replacement of the Atlantic Conveyor after it was sunk in the Falklands dispute, and last week we had discussions about the CEGB cable boat, which is to be built in Korea. An article in the Sunderland Echo on Wednesday 2 February stated:
  "A £10-million contract which could have saved shipbuilding jobs on the Wear is believed to be going to Korea. Sunderland Shipbuilders, which had put in a bid … to carry out work for the Central Electricity Generating Board, had been 99 per cent. certain of winning the contract. The barge, for delivery in March next year, would have filled the gap at the Deptford yard which would have seen them over an extremely lean period this year, and saved many jobs. Today there was anger at the yard that the contract may go to the Far East, and Mr. Fred Willey, M.P. for Sunderland North, is taking up the matter.
  The cable-laying is being sub-contracted out by the CEGB and Sunderland Shipbuilders were told that their tender was the lowest in Europe and even matched Far East tenders. 'When the yard heard the order was to go to Korea everyone was extremely angry', said a Sunderland Shipbuilders spokesman."
  One can understand why everyone was extremely angry, because in Sunderland we have one of the highest unemployment rates in the country. This order would have saved many jobs.
  Paragraph 43(v) of the Select Committee report states:
  "The Government should remind all public authorities of the desirability of buying British materials and components and also ships built in British yards."
  British Shipbuilders does so. Last year, British Shipbuilders placed orders of £550 million with United Kingdom-based companies.
  The British Steel Corporation is a major recipient of such orders. In 1980, the British Steel Corporation supplied 189,200 tonnes of heavy plate to the shipbuilding industry; in 1981, 138,000 tonnes; in 1982, on current orders, 164,000 tonnes with estimates for 1983 of 202,000 tonnes. That represents 95 per cent. of the heavy plate requirements of British Shipbuilders and the orders were placed with the British steel industry. British Shipbuilders pursues a "buy British" policy. One would hope that other nationalised industries would reciprocate, and build and buy ships from the British shipbuilding industry.
  My third suggestion is the introduction of a scrap and build scheme with credit terms for British shipowners to order ships in British yards. On page 30 of the Select Committee report it is pointed out that some years ago, under a previous Government, Britain grantee aid for shipowning of about £450 million of taxpayers' money, of which about £133 million was spent in Britain. The rest went for orders overseas to build up the asset strength of our competitors in Japan. There should be credit facilities for British shipowners to build their ships in Britain.
  A Member of the European Parliament recently asked to what extent EC shipowners placed ship orders in European shipyards. The United Kingdom placed orders in Community shipyards to the extent of 13·3 per cent.—the highest percentage of ships built in other yards. The United Kingdom built only 47 per cent. of its ships in British yards, while Germany placed orders for 79 per cent. of its shipping in German yards; Belgium 94·6 per cent.; Denmark 84 per cent.; France 91 per cent. Britain was bottom of the league.
  My fourth suggestion to help British Shipbuilders, certainly in the short term, is to create enterprise zones on both sides of the River Tyne and on both sides of the River Wear. That would assist British Shipbuilders and the local authorities. In West Germany, according to the evidence

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  given by Robert Atkinson to the Select Committee, local authorities can help German shipbuilders. In Britain, they cannot. If the Government were to make enterprise zones on both sides of the Rivers Tyne and Wear, it would help the shipbuilding industry and the local authorities.
  My final suggestion is the withdrawal of the British Shipbuilding Bill, which is at present in Committee. If the Bill is enacted, it will cause confrontation with the trade unions at the worst possible time for the British shipbuilding industry.
  I say that with all due defence to the Minister.
  A shipbuilding conference was held in Blackpool on Monday 24th March 1980—there has been another meeting since then—at which the following resoulution was passed:
  "this Conference of Manual Employee Tradesmen, and General Workers, Office Staff, Technical Staff, Supervisory and Management Staff of British Shipbuilders accepts absolutely, the need for the most harmonious and close working of all parties within the Industry in order to steer the Industry through the present-continuing difficult World Marketing situation, and of course to provide the maximum employment for our members.
  We reaffirm that such relationships can only be maintained on the basis of the Industry retaining its present nationalised Form, under Public Ownership.
  We therefore reject totally any attempt by the Government to introduce any element whatsoever of de-nationalisation, whether it be Hiving-Off or Sale of Shares.
  In the event of any such proposals being brought forward by the Government, we call upon the Shipyard Negotiating Committee to arrange an immediate reconvening of this Delegate Conference to consider positive action to oppose any denationalisation or hiving-off proposals.
  This Conference also confirms that with our co-operation to date, on the re-structuring of the Industry, the introduction of centralised bargaining, the acceptance of flexibility and changes in working practices and the acceptance of self-financing Productivity Schemes have all been forthcoming on the basis of progressing the successful future of the Nationalised Shipbuilding Industry. Any necessary re-assessment of our position arising from any Government proposals to commence `dismantling' in whatever form would require us to consider our future attitude to the items listed in Paragraph Four."
  I genuinely believe that the Minister has the industry at heart. I suggest that if the British Shipbuilders Bill goes on to the statute book we shall have confrontation at a time when the shipbuilding and shipping industries can least afford it. I hope that the Minister will respond positively to the issues that I have raised.
  2.48 am
  Mr. Harry Cowans: I think that my hon. Friend the Member for Jarrow (Mr. Dixon) is the one Member of this place who has worked in the industry. I am pleased to have the opportunity to take up his remarks briefly and to raise two or three additional issues.
  It seems nonsensical that we place orders for ships with countries such as Korea and Taiwan. If we continue to do so, there will be no British shipbuilding industry. If that happens—it may very well happen—where will the ships be built? If the present policy is implemented and we destroy the shipbuilding industry, ships will not be built in Britain. I ask the Minister seriously to consider whether that is what he wants.
  As my hon. Friend the Member for Jarrow has said, there has been co-operation right across the board by the
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  trade union movement on the Tyne and Wear. Contrary to what the Conservative Government say, we on the Tyne have a remarkable record of building ships.
  I fear that we are in danger of destroying an industry on the Tyne, and of putting nothing in its place. We may find that having destroyed shipbuilding, despite the co-operation of the trade union movement and the management, there will be nothing left on the Tyne. Where will the Minister then go for the ships that the Tyne supplied when Britain faced its greatest crisis of recent years? We turned out the ships to the Falklands, but if the industry is destroyed, heaven forbid that that crisis ever comes again.
  The Minister should think hard, because if the industry is destroyed and Britain is in trouble again, where will he turn to for the ships and the co-operation that he got on the Tyne? He should think hard before destroying the industry, as he is in grave danger of doing.
  2.51 am
  The Minister of State, Department of Industry (Mr. Norman Lamont): I pay tribute to the hon. Member for Jarrow (Mr. Dixon), who is assiduous in supporting the shipbuilding industry and speaking out for it in the House. Having been with him for some weeks in Committee on the Shipbuilding Bill, I know of his expertise and knowledge of the industry and his hard work on its behalf.
  The hon. Member's speech was full of realism, and he did not deny the problems that shipbuilding and shipping face worldwide. He referred to the pressure, for example, on freight rates. The whole of western European shipbuilding is under enormous pressure. Despite a substantial reduction in production, here, in western Europe and in Japan, there is still far too much shipbuilding capacity chasing far too few orders. That is a problem from which we cannot isolate British Shipbuilders.
  I cannot hide from the House the fact that the industry faces tremendous problems and will be under pressure for some time to come. While the Government accept—and I have gone out of my way to emphasise this in Committee—that merchant shipbuilding will need support for the foreseeable future, the success of the industry in withstanding the pressures of the market must depend primarily on the competitiveness that we need.
  The industry has made progress, as both the hon. Member for Jarrow, and the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) have said. It has made progress under Sir Robert Atkinson, as he now is, but a considerable amount remains to be done. The future of our shipbuilding industry lies to a noticeable extent in the hands of the industry. Management and work force must work together.
  I agree with both hon. Members who have spoken that there has been a good record in the recent past of co-operation and moderation in wage claims. That is the way in which we can develop the efficiency and competitiveness that we need. We have, as the hon. Member for Jarrow knows, continued with the intervention fund, which we use to enhance the competitiveness of our merchant shipbuilders. The purpose of the fund is to put us on a more equal footing vis-a-vis competition from the Far East.
  Up to January of this year, support under the scheme approved for British Shipbuilders amounted to £248 million. The fifth directive on shipbuilding aids has been

  779
  renewed and we expect that the Commission will very soon approve the continuation of the intervention fund up to mid July. We shall shortly be in touch with the Commission on shipbuilding support after July.
  Of equal importance is our support for the restructuring of the industry. If we are ever to be competitive with the Far East, we must make efficient use of labour and capital. That process of essential adaptation is supported by the shipbuilding redundancy payments scheme. To date there have been some 22,000 beneficiaries, and the total amount paid out in benefits is approxmately £62 million.
  Both the hon. Member for Jarrow and the hon. Member for Newcastle upon Tyne, Central naturally referred to the recent publicity given to the Central Electricity Generating Board barge. Of course, the Government would much have preferred that order to go to British Shipbuilders. As my hon. Friend the Under-Secretary of State for Energy emphasised this afternoon, the barge was not being purchased or owned by the CEGB. It was using an intermediary. He also emphasised that when the tenders were received by the various intermediaries there was such a big difference in price that the board—because it was anxious and would have preferred the order to be placed in Britain—asked that tenders should be resubmitted. Unfortunately, there were still huge differences in the tenders and tender prices. I am afraid that the British Shipbuilders bid was a long way out, and the extent to which it was out was such that it could not have been bridged by the intervention fund or by Government intervention.
  Both hon. Members asked about public sector purchasing policy. We have such a public. It says, not that we must always buy British in the public sector, but that public sector authorities should be aware of and take into account the industrial consequences of their decisions. We accept that British firms and British nationalised industries should be given the opportunity to compete. In this instance, British Shipbuilders was given the opportunity to compete and the CEGB requirement went to tender twice.
  The CEGB's requirement was for the hire of a vessel for 12 to 18 months to bury cables between England and France. The tenders, therefore, did not reflect just the purchase price of the vessels. The hirers would be the operators of the barge, and in quoting prices that had to be allowed for in the expected utilisation of the vessel over its commercial life. Therefore, it is not possible to say that International Transport Management won the charter simply because it intended to buy the ship in Korea. However, I stress that we would have preferred the order to go to Britain.
  As the hon. Member for Jarrow said, British Shipbuilders has achieved much in its five years of existence. A disparate group of more than 40 companies has been pulled into a divisional structure and central financial control has been greatly strengthened. As has been said, until this year the corporation has been able to stay within a reducing external financing limit. The point was made that the corporation faces a renewed recession in world merchant shipbuilding, marine engineering, ship repair and in offshore activity.
  In Committee, the hon. Member for Jarrow and I have discussed productivity. As I have said before, productivity has not been all that was hoped for. Productivity, which I admit is difficult to measure in the shipbuilding industry, slumped during the recession, when yards had gaps in their
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  work load, but it improved as order books strengthened. However, in a period of recession it must be doubtful whether British Shipbuilders can sustain the improvement achieved during the past two years. Despite improvements, productivity levels still have to surpass those of the pre-nationalisation days.
  I shall say a little about the financial performance of British Shipbuilders. In 1979–80 losses amounted to £110 million. In the two subsequent years they fell to £41 million, then to £20 million, but the improvement has proved temporary. At the half year, British Shipbuilders announced losses of £28 million, which, as the hon. Gentleman said the other day in Committee, is already substantially over the loss target of £10 million that we had set for the whole year.
  These overall figures disguise an even more worrying underlying picture. Warship building is the profitable part, while merchant shipbuilding is making substantial losses. The Falklands replacement orders announced before Christmas are good news for the corporation, providing additional work for Yarrow, Swan Hunter and Vosper Thornycroft. A further frigate order will be placed next year, but the corporation still needs to stick to its long-term aim of improving its warship export sales. That will be extremely difficult, because the corporation has not had a major warship export order for the last 10 years.
  The offshore market also faces great difficulties. Cammell Laird recently won the British Gas Morecambe bay order, but it will soon need another to follow on. Losses in the offshore division last year amounted to £21 million.
  The hon. Gentleman is well aware of the problems on ship repair. Many of the Tyne ship repair yards that have been closed are either in his constituency or near it. Losses in ship repair last year came to £7 million and action was needed to stem the considerable losses at Tyne ship repairers. All this has meant continuing and substantial Government support—£600 million since we came to office.
  The hon. Gentleman said something about European shipbuilding policy. Within Europe we have sought to maintain a framework of aid for shipbuilding which would allow the European industry to adapt to the changes in the world market and prevent a pointless subsidy race with our European competitors. The EC countries have recognised that in the present market conditions aids are necessary, but that we should reduce them progressively and together.
  The level of United Kingdom aids is sometimes criticised, as the hon. Gentleman has done, but taking direct aid and credit together, we believe that the United Kingdom assistance compares well with what is available in other countries. In some countries—for example, Belgium and Denmark—shipbuilding credit schemes are more favourable than ours, but their credit, unlike ours, is in principle open to their shipowners, whether they build at home or abroad, and I emphasise that they do not, as we do, give production subsidies as well. If one assesses the combined value of credit and production subsidies in the major shipbuilding countries, the United Kingdom in terms of support comes about the middle of the league. That is before one takes account of the financing of losses, the injection of public dividend capital into British Shipbuilders, which is a substantial additional support available to BS and which is not available to many of the European shipbuilders, many of which are privately owned and do not receive support of this nature.

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  The introduction of a scrap and build scheme has been suggested several times as a way of helping the industry. We do not believe that a scrap and build scheme would be more cost-effective than existing measures of support. We are opposed to adding such a scheme to existing subsidies, as this would run counter to our policy and to the European policy of reducing state aids. The question of a scrap and build policy was at one time explored but commanded little support within the EC. It is also doubtful whether such a scheme would be effective in current market conditions, when many ship owners are thinking of scrapping or selling to get rid of tonnage and do not want new ships.
  There has been reference to a maritime policy and the work of the Select Committee on Trade and Industry. The Government have a maritime policy designed to promote the interests of shipbuilding and shipping. We are opposed to any change in that policy that would have the effect of increasing aid to shipbuilding at the expense of the shipping industry. We have to look at the two together. They are closely related. One can easily damage the other. We set out our views on a so-called maritime policy in our response to the Select Committee report which was published earlier this year.
  A proposal canvassed by the chairman of British Shipbuilders is the appointment of a Minister for the sea. I hesitate to cross swords with the chairman of British Shipbuilders, but I wonder whether that is not really a rather gimmicky approach. It is a good phrase. What does it mean? We consider that the existing administrative arrangements operate well. The Secretary of State for Trade has the primary responsibility for co-ordinating policy on maritime matters, but other Ministers take the lead in areas closely connected with their own Departments. It has been emphasised time and again that there is close co-ordination between the Department of Industry and the Department of Trade on these issues.
  There has been reference to the Booz-Allen report, the Patton report and the Geddes report, which have commented on the inefficiency of British shipbuilding under private ownership. I am well aware of the criticism contained in the reports. None of them suggested that nationalisation would be an answer to the problem. The thrust of the reports means that remedies could be found without a change of ownership.
  Mr.Cowans: Both my hon. Friend the Member for Jarrow (Mr. Dixon) and I have stated that the primary worry is the decimation of the shipbuilding industry in this country. Can the Minister name one Japanese ship that was built outside a Japanese yard? While the Japanese have a policy of building at home, we build overseas. The day will come when we shall have no shipbuilding industry and the Japanese will hold us to ransom.
  Mr. Lamont: I cannot name a Japanese ship that has been built in a British yard. Japanese ship owners choose to build in Japanese yards. The yards are highly efficient. Rates of interest are very low. Japan is a low-inflation country. Those are the factors that influence Japanese ship owners.
  I spend much of my time trying to persuade and appealing to British ship owners to place orders in British yards. It is precisely because part of my concern is the health of British shipping that at the end of the day I am
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  not prepared to compel British ship owners to place orders in British shipyards against their will. The hon. Gentleman knows as well as I do that British ship owners do not always want to place orders in British yards. That may be regrettable, but it is unfortunately true.
  Mr. Dixon: The Minister said that the Patton report, the Geddes report and the Booz-Allen report did not suggest nationalisation of the shipbuilding industry. I accept that the Patton report and the Geddes report did not. The Geddes report suggested that there should be rationalisation and that a shipbuilding industry board should be set up to finance that. However, the Booz-Allen report, which was virtually a plan for nationalisation, criticised the British shipbuilding industry. The nationalisation plans which were accepted by the 1974 Labour Government were virtually based on the Booz-Allen report.
  Mr. Lamont: None of the three reports recognised or even implied that nationalisation was the answer. The Geddes committee was specifically asked to consider the industry's structure. Indeed, the very fact that it did not recommend nationalisation could be taken to imply that it felt that remedies could be found which were separate from the ownership of the industry.
  Mr. Dixon: What about the Booz-Allen report?
  Mr. Lamont: The hon. Gentleman is not right to imply that the Booz-Allen report in any way suggested that nationalisation was the answer, but perhaps that is an argument that we can continue in Committee.
  The hon. Gentleman also touched on the impact—it is natural that he should—of the recession on shipbuilding and the tremendous job losses in his constituency. I understand and sympathise with the concern that he feels. After visiting his constituency last week and talking to some of the people who had been made redundant at Readheads, I well understand the anxiety and despair that is felt there because of the failure of new industries to come into the area fast enough to take up the job losses in shipbuilding. I cannot give an easy answer to the question. All I can say is that the Government are giving to his and other constituencies in the area all the aid that they possibly can.
  As the hon. Gentleman is well aware, his constituency has special development area status. The northern region—not just his constituency—has more assisted area status than any other region in England. Over £36 million in regional development grants has been paid to companies in south Tyne since May 1979 and in the same period, under section 7 of the Industry Act 1972, selective assistance has been offered in 45 cases, involving over £10 million. Regional development grants paid in the northern region in 1981–82 totalled £143 million, which is higher than for any other region in England. Indeed, it accounts for 23 per cent. of the total regional development grants paid out.
  The hon. Gentleman asked for an enterprise zone in his constituency and on both sides of the Tyne. There are two enterprise zones near his constituency. He may feel that they are not a direct benefit to his constituents, but we had to bear in mind the proximity of other enterprise zones when making decisions about new ones.
  I assure the hon. Member for Jarrow that we in no way underestimate the tremendous social strains and problems

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  created by the level of unemployment in his constituency. I am always pressing for productivity improvements and the need to be competitive, but I well understand the human implications involved.
  The hon. Gentleman talked about the British Shipbuilders Bill. He made an appeal that we should withdraw it, as he thought that it was damaging. He will not be surprised to hear that I cannot agree to that. The purpose of the legislation is to develop the industry's strengths without the taxpayer having to pick up all of the bill.
  I have said again and again that the merchant shipbuilding sector is unlikely to attract private investment. I emphasise that it will continue to be supported by the Government for the foreseeable future.
  Warship building is a separate question. That may attract interest. Those companies should not be starved of capital investment because of the losses of the rest of the corporation.
  The hon. Gentleman implied that privatisation of part of British Shipbuilders might lead to a break-up of the national agreement with the unions. The Bill is an enabling measure. Its passage will not lead to an immediate and total privatisation of British Shipbuilders activities. I see no reason why, following any disposal of those parts of the shipbuilding industry remaining in public ownership, British Shipbuilders should not continue to negotiate in a unified fashion if that is judged to be in the interests of the industry.
  Finally, I strongly agree with what the hon. Gentleman said about the great technological expertise in the higher educational institutions in his region. He referred to Newcastle university and Sunderland polytechnic. I agree that it is extremely important that the shipbuilding industry and those institutions should have the closest possible links. We hear a lot of talk about the new technology being
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  applied to new industries. What is important is that the new technology should be applied to the traditional industries. That is the way in which we can compete with everyone.
  The hon. Gentleman asked me the unanswerable question of how the Koreans manage to quote the prices that they do. How can we compete with the Koreans? Even if we worked for nothing, we still would not be competitive. One way is to harness modern technology to shipbuilding. I endorse everything that the hon. Gentleman said about establishing the closest possible links between the local universities and polytechnics and British Shipbuilders. There is a remarkable reservoir of technical knowledge there. I know that and the Koreans know that. They have even employed some. That emphasises the world-leading technology in those institutions.
  I am convinced that the combination of our policies of support for the industry and the new horizons being opened up by the British Shipbuilders Bill are right for the industry. Much has been done, but much remains to be done. There needs to be a continuing assault on costs and productivity. British Shipbuilders will have a hard task maintaining the pace of improvement of recent years in a deteriorating world market.
  I hope that hon. Members will take home the message that the Government are providing support and help to the industry and will continue to do so. The Government cannot solve all the problems. We cannot conjure up orders out of thin air. The industry must attack its own costs and boost its own productivity. Increased efficiency is the only route to increased competitiveness. Competitiveness is the essential ingredient in the industry's future. A partnership between the Government and the industry is essential for competitiveness.

  Wales (Nationalised Industries)
  3.19 am
  Mr. Ray Powell: I have listened to a number of speeches today; and most have proved informative, especially those in the debate on shipbuilding initiated by my hon. Friend the Member for Jarrow (Mr. Dixon). Nevertheless, to begin one's speech at 3.19 am, having attended for Welsh questions at 2.30 pm, must seem to those outside this building to be bizarre, to say the least.
  I hope that the Minister will try to answer my questions and not treat the debate with the contempt with which the Secretary of State treated Welsh questions earlier in the parliamentary day. It is no joke to stay up all night waiting for one's debate to be reached. Because of the importance of the subject, because it concerns thousands of jobs in Wales and our basic essential industries, and because there are 180,000 unemployed in Wales, I hope that these matters will receive attention and that the Minister will respond positively and will persuade his colleagues within and outside the Cabinet to act more responsibly.
  The Consolidated Fund Bill is a very short, one-page Bill. Clause 2 refers to issuing to
  "Her Majesty for the service of the year ending on 31st March 1984 the sum of £35,955,985,500."
  That is a colossal sum. We are debating the Government's expenditure plans for 1983–84 to 1985–86. Volume 1 of the White Paper costs £5·10 and volume 2 £9·75, so I doubt whether many of my constituents in Ogmore or indeed many people in the Principality will have purchased copies, although it directly affects their lives.
  The White Paper also sets out the Government's plans for 1984–85, although I cannot understand why they should wish to go beyond June this year, which I hope will be the end of their term of office. According to the index, Government lending to nationalised industries is dealt with on page 26 of volume 2. There we discover exactly what the Government have to offer—a blank page and a reference to part 3. Careful study of part 3 enables one to determine the expenditure on fixed assets. The table shows that in 1977–78 under the Labour Government the capital requirement of the British Steel Corporation was £502 million. In 1982–83, under the Conservatives, it was reduced to £183 million, and for 1983–84 it is estimated at £270 million. For 1984–85 and 1985–86 the figures have yet to be determined, but the House may be assured that with the return of a Labour Government the amounts will be substantially increased.
  I shall not go into all the details contained in the documents. First, I wish to examine briefly what Government policy since 1979 has done to our great steel industry. Since "slim-line" was introduced in 1979, the manpower employed has been reduced from 166,000 to 85,000 in 1982. All over Britain iron and steel works are silent, and good, healthy, trustworthy, hard working men are idle, helpless, hopeless and searching for a job. Those who are left are realising their fate and are expressing total opposition to any further cuts and reductions. Manpower and steel production has fallen faster than anywhere in the Western world.
  In Wales, there has been a rapid decline since 1979. In Ogmore, where thousands of my constituents worked in the Port Talbot steel works, demanning has caused devastation. Unemployment escalated, coal demand
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  dropped and other industries supporting Port Talbot, Llanwern, Shotton and Ebbw Vale steel works caught the backlash, resulting in massive unemployment.
  That unemployment was not phased, nor were jobs sympathetically trimmed down. The steel industry was just butchered by MacGregor, the right hon. Member for Pembroke (Mr. Edwards) and the then Minister for Industry, planned and manipulated by the biggest problem in the steel industry—the occupier for the short period left of No. 10 Downing Street, the right hon. Member for Finchley (Mrs. Thatcher). Her policies have cut manufacturing by a fifth; caused record bankruptcies; cut manufacturing investment by a third; destroyed more than 3 million jobs; pushed manufacturing imports up by a fifth and encouraged overseas investment. Apart from the misery caused by these policies, they have all cut steel demand.
  For example, the car industry now needs only 15,000 tonnes of steel a week, whereas in 1979 it required 21,000 tonnes. The Tory slump in 1980 and 1981 caused the industrial sector to drop demand by 30 per cent. and even more for 1982. In Europe, steel unemployment is 5·3 per cent., but for the same period in the United Kingdom, job losses have amounted to 11·7 per cent. How many more jobs will we lose, and when will those who remain be content with any sort of job security?
  This should be the plan for steel—emergency action under article 19 of the General Agreement on Tariffs and Trade to prohibit damaging imports from non-EC countries; an immediate review of trade balances with EC countries and the introduction of restrictions where the gap is unacceptably wide; BSC powers to move massively into stockholding and to take a tighter grip on the trade; and a Government commitment to keep energy prices to industry to the general EC level, thus putting the BSC on a competitive footing. But, more importantly, we want a Government committed to a crash economic expansion programme through construction, investment and producer goods, all of which will require increased steel making.
  My last word on this subject relates to the press rumour that this butcher of the steel industry might be pushed over to make a further disaster area of the coal industry. I hope that that attempt will be dismissed, because putting the lid on pits will be much more difficult than slashing the steel industry.
  The south Wales coal industry has also suffered at the hands of the Government's mad monetarist policies. I hope that this essential industry will have better treatment in the years ahead than it has received in years past. I have witnessed the ghost valleys left after pits have closed, with little, if any, help provided. I have read the list of pits on the danger list. I hope that my suggestions will be taken in train by the Minister, the Government and the NCB.
  I was pleased to learn recently that the mine workers in South Wales decided to abandon the strike action called for 17 January, having been promised a meeting with officers of the NCB. That meeting took place with the chairman of the NCB and other officers, and an undertaking was given by the NCB that the proposals for future investment in the South Wales coalfields would be seriously considered, and that the regional officers in South Wales would meet miners' representatives to discuss certain aspects of the proposals put forward by the National Union of Mineworkers at area level. Those

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  meetings are taking place, and firm promises on some of the proposals have been made by the NCB. I hope that the meetings will continue, and that they will be fruitful.
  I shall summarise the NUM proposals both at national level and for South Wales. It wants major replacement units at the Glyncastle new mine and the Margam new mine. It wants major extension and reorganisation of existing unit plants — the Ancit replacement at Aberaman, the new drifts at Aberpergwm, and Nantgarw, washery and coal preparation plant reconstructions at most major units, east side development at Betws and lower measures development at Abernant. It wants exploration surveys in the Glyncastle-Whitworth area east of the Neath valley; in the deep measures of the anthracite reserves especially around Trimsaran, Blaenhirwaun-south, Pantyffynon — Wernos south, Betws-south, Cwmgwili and Abernant; on the southern—central rim of the coal field from Margam to Llantrisant; of the deeper measures to the north of the Garw, Ogmore and Mon valleys. It wants the NCB to deal with the association problems requiring urgent capital investment on recruitment, general replacement and updating of powered supports and pit machinery, including shield support faces where possible.
  I want to discuss two of those proposals in detail—first, the proposed new mine at Margam and, secondly, the Aberaman Phurnacite plant. I initiated a debate on 14 December 1981 on the issue of a new mine at Margam. Indeed, it appears that the Government and the NCB are burying their heads in the sand and not recognising the benefits that could accrue if that mine was developed. For a number of years the NCB has considered sinking a new mine at Margam. The reasons for not doing so are that the NCB is not receiving sufficient money for investment and that it is starving South Wales of urgently needed improvement. It prefers to use its admittedly inadequate resources in other regions. The Government are starving the NCB of money to modernise the industry to enable it to provide a solid energy base for the future. The Government are showing a pathetic, narrow-minded, typically Tory attitude to the needs of the coal industry, especially in Wales. Britain will regret that in the next and future decades.
  According to the NCB's experts, the proposed new mine at Margam would provide 50 million tonnes of high quality coking coal. The NCB has considered extracting 1 million tonnes per year. The main obstacle is investment. High interest rates plus the £160 million to £200 million capital cost and the low level of international prices mean that the NCB cannot be sure of an operating profit in today's circumstances.
  The new mine could be viable if, at today's costs, the NCB did not incur interest charges or if the United Kingdom cost increases kept below future increases in world coking coal prices. However, the cash limit constraint on south Wales could militate against new investment at Margam, even when the NCB was satisfied with its viability.
  That is where far sightedness by the Government is essential. They must take account of the longer-term strategic interests of the coal mining industry, rather than base investment decisions that are crucial to south Wales in the 1990's and the next century on financial returns from and during a period of recession. The new deep mine at Margam would make available 50 million tonnes of prime coking coal, employment for 1,000 people during
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  construction and employment for 1,000 people when it is operational. Moreover, it would probably inject about £12 million each year into the local economy.
  How much would it cost the Government to attract that number of jobs through their regional policies? How certain can we be that, the nation having spent considerable sums of money on attracting that number of jobs, they will still exist in 10 years' time and that the enterprises will make valuable sources of energy available to Britain to the end of this century and well into the next one? Nobody can doubt Wales's need for 1,000 new jobs. The Government should take that important factor into account when they evaluate the Margam project. They should also seek additional financial support for the project from the European Community.
  I should like now to deal briefly with the Phurnacite plant at Aberaman. It produces smokeless fuel by the Dista coke process. It is an old plant that is subject to creating severe environmental problems through air pollution. They arise from the out-dated process and are made worse by its being in a valley. Two million pounds has been spent to ease its detrimental effect on the people who live nearby and on the environment generally, but circumstances are still far from satisfactory. The clean air inspectorate says that the works are still by far the worst source of air pollution in the district, and possibly in the country. The design of the process is such that no addition to the layout as it is can cure or even make a satisfactory improvement in the environment.
  It is considered that the only satisfactory solution is to introduce a new process—Ancit—to replace Dista coke for the production of Phurnacite. That would mean rebuilding the whole plant. The cost of rebuilding and introducing a modern process is estimated at £35 million. In June 1981, the Government refused to give the NCB any assistance and it was unable to proceed. The Government's decision was taken on narrow, short-term financial considerations. They must re-examine the subject and take a wider look at the troubles that a new Phurnacite plant would solve and the benefits that it would bring to the environment, the NCB, the coal industry and employment in the valley where unemployment is now at a rate of more than 18 per cent.
  The NCB wants to retain the Aberaman plant—without it, the market for smokeless fuel would collapse. The plant employs 1,000 men and 4,500 miners who produce the dry steam coking coal that the plant needs.
  That is what the Government need to take into account in deciding on the aid for the NCB for updating the Aberaman Phurnacite plant—not narrow commercial considerations, but the improvement of the environment, a powerful consideration in itself, the safeguarding of the market for domestic fuel and the 5,500 jobs involved in an area of extremely high unemployment.
  The escalation of unemployment in Wales was caused by demanning in the steel industry and the rundown in the coal industry. The Opposition constantly warned the Government and expressed great reservations about the action that the Government were taking in their first months of office. We were accused of over-indulgence in condemnation. However, in three and a half years, what has happened to the economy of Wales? What has happened to unemployment there?
  At Welsh questions today the Secretary of State for Wales replied to a question that I asked about the number of people out of work in 1979 in comparison with January

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  1983. On 13 January 1983, unemployed claimants in Wales totalled 180,664, an increase of 134·1 per cent. over the May 1979 figure of 77,177. In my constituency there were 6,061 unemployed in January 1983, but there were no comparative figures for May 1979. The number of people employed in Wales in June 1982 totalled 877,000, a fall of 145,000, or 14·2 per cent., since June 1979.
  Those figures alone are a condemnation of the Government's policy and purpose. The regional impact of unemployment in Wales needs to be seriously considered. Nationally, more than 1 million people have been on the unemployment register for 12 months or more, just about the same as the total number of people who were out of work when the Government took office. More than 32 per cent. of the unemployed have been out of work for more than 12 months. That alone is an indictment of the Government's bizarre monetarist policies.
  Wales's figures are worse than the national figures. The Minister might take time to tell us of the remedies that he has to offer, not for increasing unemployment but for reducing it without the aid of his unfrocked chartered accountants.
  Under the Labour Government, more than 25,000 apprentices were taken on. Under the present Government the figure fell to 15,000 last year and the current estimate is no more than 9,200 apprentices for 1983. That represents a 63 per cent. devastating fall since Labour left office. Despite that pathetic attempt by the Government to recruit new apprentices, month by month more than 200 at a time are declared redundant as closures and redundancies escalate around us. The effects on the Principality are more devastating.
  There are 6,100 unfilled vacancies in Wales and 180,664 people out of work. It means that 17·5 per cent. of the population is without a job. If the 6,100 vacancies were filled there would be still 174,564 people without a job.
  I have taken part in numerous debates on unemployment since the Government took office three and a half years ago. We have highlighted the impact on communities of the closure of pits and factories and the massive demanning in the steel industry. It has been a waste of time, effort and energy to listen to all the promises made to Welsh and Scottish Members and to Members from other regions. The Saatchi and Saatchi campaign during the last election published posters depicting rows of unemployed people and promises that something would be done. What have the Government done? They have trebled the figures, and to rub salt in the wound the Government talk hypocritically in the House about their anxiety and compassion for those whom they have made jobless. However, they do little about curing the scourge and the cancer.
  There are 6,000 people out of work in my constituency, and there are 100 jobs available. There is a 60-to-one chance of obtaining work. What hope do those people have for the future? Many of them have been out of work for two to three years. Those aged 50 or over accept that they are destined never to work again.
  They are not working for any financial reward now; they are working for the early return of a Labour Government. They know that that is the only answer to their problems, and that Labour is the only party with
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  Positive plans to solve the unemployment problem. They know that Labour must win if they are to be taken out of the pit of deprivation, degradation and despair.
  I do not know why the pollsters do not ask the 3·5 million people who have been pushed out of work how they will vote at the next election. Even if they have been deprived of their dignity by being thrown on the scrapheap, they have a vote still. Who will vote for a Government that caused such massive unemployment and degradation?
  Those people still in work are becoming fewer week by week. Whose job is safe with redundancies escalating, factory closures announced daily, company liquidations rising by 35 per cent. in 1982 to a new record of 11,131, which is over 200 a week? If the job is safe now how long will it continue to be safe? If it is essential, how long will it remain so under this Government? Who is left that the Government have not fought? They have fought the Health Service workers, railwaymen, transport workers, miners, steel workers, shipyard workers, shop workers, local government workers, tax inspectors, many others, and now the water industry workers. How many of those people will vote for the Government at the next election?
  They have support from the City, the Stock Exchange, the bankers and some of their friends who have been protected by the Government's fiscal and monetary policies, but they are insignificant compared with the millions of people without jobs or who are paid miserly wages and are thus among the 6·5 million people who live on or below the poverty line. That represents one out of every eight British people. The pollsters should contact those people to obtain a more accurate opinion of the Government's handling of this depressing matter.
  Where have the jobs been lost that we could and should replace? Social services have been cut to the bone. The list is endless—home helps, meals for the aged, sheltered accommodation, hospitals, hospital services, schools, school meals, sewers, housing, housing repairs, roads and railways. But all that is needed is the opportunity to throw out the Government and change their policies to those of a caring, sharing Government who will alter finances to create jobs, not to destroy them and escalate unemployment. The day of that decision is long overdue and I, with millions of others, await the opportunity with eagerness.
  3.51 am
  Sir Anthony Meyer: The hon. Member for Ogmore (Mr. Powell) directs our attention at 3.50 am to important matters, and he has treated us to the speech that he will no doubt deliver, with the minimum of corrections, to his management committee when he returns to Ogmore tomorrow.
  Of course the problems are grave, but they require altogether more serious consideration than the hon. Gentleman gave them in a highly partisan speech. Every one of us is worried sick about unemployment in the United Kingdom, and the even worse unemployment in Wales. If we are to consider those problems, we must do so in a world context, which was notably absent from the hon. Gentleman's speech. We cannot have the escalation in oil prices that has taken place in recent years, and the transfer of world purchasing power to the oil-producing states, with their restricted use of such funds to create world employment, without immense repercussions on

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  employment in this and every other industrialisd country. It would be much more helpful if those factors were taken into account by hon. Members on both sides of the House.
  I agree with the hon. Gentleman that Government policy towards the steel industry, in obliging the British Steel Corporation to keep open the Ravenscraig works, will—although I understand their reasons and I am sure that the Labour party would have made the same decision—imperil the continuance of steelmaking at Port Talbot and Llanwern. If I believed for one moment that the Government intended to consider seriously the highly theoretical options outlined in the Serpell report, which would involve the closure of most railway lines in Wales, I would be among its most vociferous opponents. But of course the Government will do nothing of the sort. The whole incident shows the great danger of thinking aloud.
  Much of the danger in Wales stems not from the Government's policies, but from the conduct of some public sector unions. The outlook for the steel industry in Wales is much grimmer than it would have been but for the senseless strike two years ago. That was not even a strike to save jobs—it was a strike to try to force the nationalised steel industry, which was and is still massively subsidised by the taxpayer, to give a large wage rise to those workers. The result was the only possible one—a derisory wage increase and a massive loss of jobs in the industry as one consumer after another switched to foreign suppliers and did not switch back again to British steel. Mr. Ian MacGregor had to be called in to save what could be saved; and that he could do only by the most drastic and painful surgery.
  The picture in the coal industry is superficially a little different. Mr. Arthur Scargill would dearly love to lead the miners into the same type of suicidal strike that took away the jobs of the steel workers. But time after time he has been disowned by the miners he purports to lead; and now he, too, sees his nemesis fast approaching in the shape, I hope, of the redoubtable Mr. MacGregor. But even the diminished Mr. Scargill has so far been able to hold up the process of concentrating resources on the most economic mines, without which there can be no long-term hope of jobs for the Welsh miners. If only the Government will give Mr. MacGregor—if it is to be Mr. MacGregor—rather firmer backing than he got in his efforts to concentrate steel making in the most profitable steel mills, there could be a real future for Welsh coal mining and for new pits using the newest techniques such as the liquefaction of coal at the Point of Ayr.
  What the hon. Gentleman really objects to is that the Government are forcing the nationalised industries to live in the real world in the same way that private industry has long had to do. Many of these industries are monopolies, just like the nationalised utilities of water, gas and electricity. If the unions in those industries are to use their industrial power to push up wages higher than in private industry, they will find that the consequences are exactly the same as they would be in private industry—that the bottomless purse of the Exchequer is no longer there to bail out their jobs, that higher wages will mean fewer jobs even if, in the end, that does entail a real reduction in service.
  Wales's special misfortune is that she has been for too long too dependent on old-fashioned nationalised industries. With unemployment at its present terrifying level, it is tempting to try to hold on grimly to the jobs we have, even if they are in dying industries. For that reason, I would have found it hard to withhold some sympathy for
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  the steel workers' strike if it had been a strike to keep jobs. But it was a strike to destroy them and, as such, it was highly successful. Need we go through any more such traumas before we learn the inescapable truth that one cannot fight industrial change; one has to welcome it.
  It is not by freezing present industrial patterns, or by banning imports of goods which are being made better and cheaper elsewhere that we will get and keep the jobs we need. If we try to ban the import of foreign motor cars, we may by that very process of banning deal the death blow to the British motor car components industry. It is by beating the foreigner at his own game, by rooting out inefficient work practices on both sides of industry, by refusing to accept wage increases that rob our industry of its competitive edge, by constantly moving up market and into service-based industries that we can win the Welsh jobs that we so desperately need.
  3.58 am
  The Under-Secretary of State for Wales (Mr. Michael Roberts): I should like, first, to congratulate the hon. Member for Ogmore (Mr. Powell) on being successful in the ballot under the new arrangements for the Bill. I am particularly pleased that he has introduced a debate on the nationalised industries in Wales. These industries are important. No one can be unaffected by their activities, and their performance has a major impact on the economy.
  I have listened with interest to the points that have been made. I understand the hon. Gentleman's deep interest in the subject. I understand, too, why he chose to concentrate on some industries rather than on others. What I cannot understand or accept is the argument that we have somehow failed the nationalised industries and that the solution lies in greater subsidy and investment, regardless of viability and the rate of return.
  The nationalised industries must be allowed to compete for investment and priority of resources on a se sensible economic and efficiency basis. They must be allowed to compete, but they cannot be shielded from the effects of the market and world conditions. If they are shielded they will lack the right incentives to improve the supply of goods and services while containing the cost of supply and the price to the consumer. Of course, there is a separate area of social obligation. Where grants are required for social purposes, such as British Rail's public service obligation, they have been paid by this Government as by others. British Rail's public services obligation, which stood at £702 million in 1978, has risen in real terms to £926 million in the current year.
  The hon. Member and others of his persuasion are keen to put a ring fence around United Kingdom industry, including the nationalised industries. Such artificial barriers just do not work. Let us have a bit more faith in the ability of our nationalised concerns to meet international competition. Certainly if that competition can be shown to be unfairly subsidised there is cause for complaint. But let us not forget the extent to which the nationalised industries in this country are supported. Since external financing limits were introduced in 1976–77, they have averaged nearly £2½ billion a year. The total external financing limit for 1982–83, as set out in the recent public expenditure White Paper, is £2·25 billion. The forecasts for the next three financial years to 1985–86 are £2·67 billion, £2·26 billion and £1·8 billion.

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  Those figures clearly indicate that the Government have a very substantial commitment to the nationalised industries. The Government have not been starving the nationalised industries of cash. Equally, it is not realistic to demand levels of investment for Wales outside the context of national investment priorities and for projects without a viable basis. The hon. Gentleman has once again demanded immediate substantial investment in a new pit at Margam. I well understand his concern and the arguments in favour of such a project, but the essence of any decision must be whether the NCB assesses it as economically viable at this time.
  All the nationalised industries, as I have said, must be exposed to competitive forces. Where and when appropriate there is a role for the private sector to take over in whole or in part. Obviously the hon. Gentleman would like to say that he does not agree, but he wanted to debate the effects of our policies in Wales, so he must not ignore the scope within privatisation for bringing a more effective, responsive and economic service to Welsh consumers. Our determination to pursue this policy is clear. The Telecommunications Bill is now in its Committee stage and we can anticipate the progress that British Telecom will be able to make when freed from the constraints of nationalisation. Wales will benefit along with other parts of the United Kingdom.
  I come now to the detail of the hon. Gentleman's remarks. Of course the rundown in the steel industry has had a serious effect on jobs in Wales in recent years, but steel is not a pensioner to be kept going by subsidies. It is an industry which, after facing serious and deep-rooted problems, is being shown the way to recovery and the ability to compete. Years of heavy investment—
  Mr. Ray Powell: I refer the Minister to page 95 of the White Paper which sets out the Government's expenditure plans and the capital requirements for the nationalised steel industry. We are talking, not on a Principality basis, but about the British Steel Corporation's capital requirements. The table on page 95 shows that the capital requirement for 1982–83 was £183 million, whereas in 1977–78 it was £502 million. The provision has been reduced from £289 million in 1979–80 to £183 million this year. It is estimated that next year it will be a mere £217 million.
  Mr. Roberts: The hon. Gentleman has referred to this issue previously, and I shall deal with it.
  As I was saying, steel is not a pensioner to be kept going by subsidies. It is an industry which, after facing serious and deep-rooted problems, is being shown the way to recovery and the ability to compete. Years of heavy investment resulted in far too much steel-making capacity being available. The problems were recognised by the Labour Government. They closed the steel-making works at Ebbw Vale and East Moors, in Cardiff, but although they understood the nature of the problem, they failed to react with the determination that the circumstances required. BSC was left with the major task of closing outdated plants, and both Llanwern and Port Talbot were included in the "slimline" operation that started in 1980. Further demanning continued under BSC's 1981 corporate strategy. One result, as the hon. Member said, was the severe reduction in employment in Welsh steelworks. By the middle of 1982 BSC's manpower in Wales stood at 21,000.
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  He has looked at only one side of the coin and has failed to mention that those reductions led directly to massive improvements in productivity and eventually in morale. By example, productivity at Port Talbot rose from 6·2 to 4·8 man hours per tonne of liquid steel, and at Llanwern from 4·7 to 4·2 man hours per tonne, between May 1981 and May 1982. Those figures are illustrative of the improving performance at most of the Welsh plants. If the hon. Gentleman wants to take account of our policies in Wales he should consider these figures carefully. We believe that the effect of our policies, together with Mr. MacGregor's management, has produced a genuinely competitive public sector steel industry in Wales, and our improved reputation for productivity stands us in good stead throughout the world.
  Of course, BSC still faces substantial difficulties as a result of the continuing effects of world recession. My right hon. Friend the Secretary of State for Industry outlined the problems in his statement to the House on 20 December. He made two crucial points, which I want to repeat now. First, we have made it quite clear to our European partners that we have taken stronger steps to put our house in order, and it is now their turn to do likewise. Secondly, with the prospect of an improvement in steel demand this year we believe that it would be wrong at this time to take irreversible decisions on future capacity. Clearly, this leaves a degree of uncertainty, but the hard-won performance of Welsh plants should stand them in very good stead when an increase in business comes.
  As to investment prospects, we intend to make an announcement about Port Talbot's request for a £135 million hot strip mill modernisation scheme as soon as possible. The Government's record of investment in the Welsh steel industry is very good. The three years from 1979–80 have seen a total investment of over £240 million. This includes some important schemes such as the continuous casting plant and the new Morfa coke ovens at Port Talbot, a new coil inspection line at Llanwern and the updating of the five-stand cold mills at the three tinplate works of Ebbw Vale, Trostre and Velindre.
  Predictably, the hon. Gentleman's speech contained much about the coal industry. For our part, just as my right hon. Friend the Secretary of State has made known his strong desire to see a viable Welsh steel industry within a viable United Kingdom steel industry, so too, do we want a strong and viable Welsh coal industry within a national context. But clearly there are major differences between the hon. Gentleman's proposals for a large, production-orientated, massively subsidised and inherently vulnerable industry and the Government's plans for a cost-effective industry in line with the market demand for coal.
  The hon. Gentleman knows very well that all pits eventually reach the stage where they can no longer be supported. Why else were 46 Welsh pits closed between 1960 and 1979? The economic realities of an extractive industry do not change from one Administration to another. I understand why the hon. Gentleman calls for huge new investment, but he must understand that the South Wales coalfield is being supported with very substantial amounts of taxpayers' money just to cover deep mine losses—£95·9 million last year and possibly over £120 million this year. Investment funds have been made available to the NCB for those projects which it believes to be economically sound.

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  In the two years to 1981–82, capital investments in the South Wales coalfield totalled over £75 million. Investment this year will be at about the same annual rate. The hon. Gentleman should remember that these levels of capital investment must be seen together with the support given to cover losses. He will remember, no doubt, that Oakdale, for example, in south Wales is receiving £22·3 million for reorganisation and access to new reserves. In North Wales, at Point of Ayr—this was mentioned by my hon. Friend the Member for Flint, West (Sir A. Meyer)—a new drift is being developed at a cost of about £16 million. At Lady Windsor, Abercynon, a new skip winding scheme represents an investment of £5 million. At Trelewis, a new drift mine represents £9·8 million. At Merthyr Vale the development of new reserves means £3·5 million. At Marine, £2·5 million is being invested in new winding gear. At Abernant £0·7 million will go on underground manriding. AT Blaenant, new service blending plant will amount to £0·5 million. At St. John's, improved coal handling facilities represent £0·4 million. Therefore, we are investing in our coalmines in South Wales.
  Earlier I briefly mentioned the Margam project. Because of the hon. Gentleman's obvious interest—he has, I know, raised the subject often in recent years—I want to say a few more words about it. I have outlined the approach that the NCB takes on investment decisions—and those decisions, incidentally, are a matter for the board and not for the Government. My right hon. Friend the Secretary of State has had discussions on a number of occasions with the chairman of the NCB about Margam. We have therefore kept in touch with the prospects for Margam and we understand why the NCB does not wish to proceed at this time.
  As the hon. Gentleman will know, the NCB has undertaken a thorough survey at Margam. This has established that the coal seams lie very deep and therefore to mine here would inevitably be a high-cost operation. At the same time, the NCB has to pay regard to its future markets and that is as true for Margam as for any other prospect. But the coke market has declined in recent years and a market for Margam's coal is thus by no means secure. The point is that the NCB could proceed with the Margam project only if the costs were right, if the market were right and if it made sense within its overall investment plans. The hon. Gentleman must consider those three points.
  No coalfield can expect an automatic right to an arbitrary level of investment. That investment must be relevant to the industry as a whole and medium-term market expectations. During his interview with the South Wales Echo last week, the Secretary of State was asked about investment. He said
  "It really would be odd and very eccentric if investment was distributed proportionately, because the simple fact of the matter is that the Welsh coalfield is making a huge chunk of the NCB's losses."
  He went on to say:
  "I think the pattern in Wales is going to be that there is going to have to be continual closure of loss-making pits for which there isn't a future and relevant, worthwhile expenditure in the pits which have a future."
  That means that the NCB must, under the agreed arrangements, continue to assess very carefully the future of pits which are serious lossmakers and show no prospect of recovery. At the same time, it will be looking at the case for investment. Several pits have received valuable funds
  796
  recently and important schemes are in operation, which I have mentioned the most important. More will follow, and other important developments are in hand.
  I well remember the hon. Gentleman and his hon. Friends insisting that the NCB should invest in the Ancit process in 1979. At that time the process had not been fully tested and it would have required a substantial subsidy from the Government. A decision to proceed then would have been wrong, but I hope, that the hon. Gentleman has taken note that the NCB is now ready in principle lo go ahead with the scheme on a properly secured technical and financial basis. The announcement last Thursday will be very welcome to the work force and the inhabitants of that part of the Cynon valley. I recognise the pollution that has been caused by the phurnacite plant there.
  I hope, too, in case the hon. Gentleman still doubts our commitment to the future of the coal industry, that he remembers the support that is being given to the NCB's proposals for a coal liquefaction pilot plant at Point of Ayr. We all hope that this investment will lead to major new markets for coal in future generations.
  The Government hope that the rail network will continue on a healthy and efficient basis. My hon. Friend the Member for Flint, West raised this matter. It is also the Government's duty to ensure that the taxpayer gets value for money. It is unwise of the hon. Member for Ogmore or anyone else to accuse the Government of failing to support the railways. In fact, British Rail is absorbing large amounts of public finance—about £926 million this year alone. We have reached the stage where we can no longer continue in the present inefficient way.
  Last Thursday my right hon. Friend the Secretary of State for Transport made clear where the responsibility lies for the current state of affairs on the railways. At the same time, he welcomed the Serpell report. My right hon. Friend explained that the network options set out in the report were not closure plans. The report, however, did raise questions as to what is the most cost-effective way of meeting transport needs. The Government's intention is to consider the long-term future of the railways in the light of all the facts and the public debate following this report.
  Hon. Members can be assured that in all this the Secretary of State and I will look very carefully at the needs of Wales, particularly in the rural areas. However, as the Secretary of State for Transport explained to the House, the taxpayers' contribution to British Rail has risen steadily in real terms over the past five years. For example the public service obligation contribution which enables British Rail to maintain the network in Wales and elsewhere, at constant 1982 prices, has risen considerably. The figures are: £664 million in 1977, £702 million in 1978, £768 million in 1979, £774 million in 1980, £891 million in 1981 and £926 million in the current year. In real terms, there has clearly been a steady climb in Government social support for the passenger railway. We have now reached the point where the value of our support exceeds the total revenue from fare-paying passengers.
  British Rail's investment picture in Wales is by no means gloomy. For example, in May last year a new HST service linking south Wales with Birmingham and the north-east was introduced and, as recently as January, the service was strengthened by an additonal HST in each direction. The main line stations in south Wales are the subject of a major refurbishment programme, with work in hand at Cardiff and with work at Swansea planned. A

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  new freight line to service Coed Bach washery is at an advanced state of planning and since we came to office the Welsh Office has grant-aided the provision of freight handling facilities and wagons in Anglesey and south Wales. Several more schemes of a substantial nature are currently in the pipeline and these should help to preserve rail freight carryings, while at the same time protecting the local environment.
  The hon. Member for Ogmore, not for the first time, raised the issue of unemployment, especially as it affects south Wales. I wish that he had the generosity of mind to appreciate that concern is not limited to himself or to the Opposition. He selected demanning in the steel industry and the continued rundown of the coal industry as the two important escalaters of unemployment.
  I have already mentioned the fact that it was a Labour Government who closed East Moors in Cardiff and Ebbw Vale. The years between 1964 and 1970 were a peak period in which 39 pit closures occurred in south Wales, with 17,754 miners losing their jobs. I do not blame the Labour Government. It would be possible to conduct a more realistic appraisal of the problem if we stopped pretending that it was an act of the Government that caused every economic catastrophe in south Wales.
  Few people, are prepared to maintain that the steel industry would be surviving today at Llanwern and Port Talbot if essential demanning had not taken place. Most steel industry experts ask why the nettle was not grasped earlier to ensure that the industry became more competitive and able to secure international and domestic markets.
  The hon. Gentleman asked what the Government were doing about unemployment. We are trying to make the nationalised industries highly competitive and efficient. Only in that form can they survive. We are trying to build an infrastructure in north and south Wales that will attract new industries. We are building roads and factories at a record level. There is every evidence to suggest that a number of important new technology industries have come into south Wales, attracted by the infrastructure that we have provided. Mitel, AB Electronics and Inmos are recruiting labour.
  I recognise that, at a time of world economic recession, we are not making up completely for the ground that has inevitably been lost through coal closures and the demanning of the steel industry. These were not the acts of a Tory Government alone. Governments of both political parties were inevitably engaged in them. If only the hon. Gentleman would see that people who do not share his political ideology and who take a different view of society share with him concern for the unemployed we would be much nearer a solution to some of the problems in south Wales.

  Operation Major (Oxford)
  4.24 am
  Mr. Andrew F. Bennett: I am pleased, even at this hour, to have the opportunity to raise the issue of who really were the guilty people in Operation Major at Oxford on 2 September last year. Does the Minister accept that the book "Poor Law—the mass arrest of homeless claimants in Oxford" by Ros Franey, an account of Operation Major published recently by CHAR, the Campaign for Single Homeless People, the Child Poverty Action Group, the Claimants' Defence Committee, the National Association of Probation Officers and the National Council for Civil Liberties, is basically a fair account of what happened? I hope that the Minister will make it clear that he excepts most of the account.
  It is clear to me that those who were convicted by the courts in Oxford were very small villains, if villains at all, compared with the real criminals who so far have got away with their crimes. Who are those guilty people? At this stage, one can only speculate. Are they really Ministers of the Crown, supplementary benefit and fraud officers or controllers in the Department of Health and Social Security, the police, the magistrates clerks, the magistrates themselves, or some Oxford landlord? The only way to find out the truth and to try to clear the good name of most people involved is for the Minister to institute a full public inquiry.
  Let me try to follow the train of events as they have been told to me and as I go along pose some questions to the Minister. When did the Department of Health and Social Security first believe that there might be a problem of illegal payments in Oxford to people with no fixed home? Was it as early as February 1982? How soon did it involve the police? Was that April 1982? Who gave the authority to go on making possibly illegal payments from February or April until September 1982? Were Ministers informed? If not, were they asked for authority at that early stage to make those payments? Why would such authority be necessary? As the House knows, benefit is paid out weekly, based on a weekly claim. When the claim is made, particularly for people in this type of accommodation, it is made on a regular basis, The benefit officer must be satisfied that it is a genuine claim. If he is not so satisfied, he can ask for extra evidence and can check up on the claimant. He can even refuse benefit and force the claimant to appeal. Certainly from my experience, and I am sure that of other hon. Members, the benefit officers regularly make checks and insist on extra information.
  Often, when people use bed and breakfast accommodation, benefit is paid out in vouchers, not cash, to try to avoid any possibility of fraud and to ensure that the claims are genuine. It is interesting to note that in the incident in Oxford, the very day after the mass arrests, a new system was introduced there to eliminate the possibility of the fraud system or anything like it being used again.
  Once one raises the question of possible fraud, no benefit officer could be certain about the claims that he was paying out unless he visited the addresses and made other checks on the individual claimants. Had he done so, Operation Major could not have gone ahead. I know that the Oxford offices were short of staff, but how can a benefit officer go on knowingly paying out a few

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  fraudulent claims for over six months without someone authorising it? Who authorised it? Was it the Minister? Was the Minister told at this stage? Why were benefit officers authorised to go on paying out what they thought might be fraudulent claims for up to six months without making the normal checks and carrying out the normal safeguards, which, of course, would have made Operation Major impossible?
  If the problem was fraudulent claims, they could have been stopped in February or, at the latest, in April by the police or by the DHSS fraud squad visiting the lodging houses. Over three or four weeks, all the possible fraud could have been stopped. Oxford could have gone over to paying out the money in vouchers instead of in cash. Oxford could have introduced in February the scheme that they introduced in early September and which appears to have stopped the frauds.
  Someone must have decided not to act. Why? The only possible explanation is that the authorities believed that other criminals were involved—not claimants; possibly the landlords. Perhaps the police believed that someone in the DHSS benefit offices was acting illegally. If that was the explanation why on earth did the Department go on paying out benefit for six months?
  There is another possible explanation. Perhaps a publicity-seeking official in the DHSS—a regional controller for supplementary benefit or a regional fraud officer—decided to obtain publicity. There are other possible explanations. Did the DHSS and the police allow illegal payments to be made for six months on the Minister's instructions? Was it officials or the Minister who wanted a big fraud success?
  The right hon. Member for Daventry (Mr. Prentice), when he was Minister, as well as the present Minister, have made some wild claims about the level of fraud in supplementary benefit payments. Did Ministers issue an instruction to the supplementary benefit officials or the fraud squad to look out for a big operation? Did the Minister believe that Operation Major was the big one? Was he planning a series of operations? If so, why were the others not carried out? Was there not sufficient evidence? Was Operation Major at Oxford allowed to go on because it was the first and the only one that might, with luck, have met the Minister's original plan and instructions? Were the others stopped because Operation Major turned into a fiasco?
  Was Operation Major at Oxford authorised by the Minister, or was it part of some nationwide scheme authorised by the Minister of which Operation Major was the only part to be publicised?
  I hope that the Minister will make a much clearer statement to the House than he made in his prevaricating letter to The Guardian last Friday about ministerial involvement.
  There are three possible explanations of what Ministers knew and authorised. The Minister ought to tell the House exactly what happened and clear up possible misunderstandings.
  Was it a Thomas à Becket situation? Did the Minister make it clear that he wanted dramatic fraud action so some officials set up Operation Major acting on a general ministerial instruction but never discussed the details with him? More than £20,000 was paid out to hire the school. Innocent people were held and denied their legal rights. Were Ministers told only on the day itself, either the morning or the afternoon after the event?
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  The Minister ought to make it clear to the House today how much the Secretary of State was told, when he was told, how much the Minister himself knew about it and how much the Under-Secretary of State, the hon. Member for Braintree (Mr. Newton), was actually told? Was it true that he found out only when he was asked to comment by the Press some time in the afternoon? Is it true that the senior permanent officials in the Department first heard about it from the media after it had taken place? That is one possible account—over-zealous officials acing off their own bat without the Minister knowing anything about it, beyond a general instruction to try to obtain plenty of publicity about certain allegations of fraud.
  Another possible explanation is that the regional directors planned the whole scheme with the police and did not tell the Minister the details until it was all over, so that they were not really acting on any instruction from the Minister.
  The third possibility is that Ministers knew all about the operation, were fully consulted from the planning stage onwards, and gave their full consent.
  The Minister owes it to the House and to the country to state exactly what his involvement was. He may reply to some of my questions by saying that he cannot answer for the police or the magistrates, but he should certainly be able to give far clearer answers about his own responsibility and knowledge than he gave in his letter to The Guardian on Friday.
  I return to the real question. Only the possibility that landlords or supplementary benefit officials might be involved in crime could have justified the failure to take action in February or April to stop the fraud.
  If the motive was publicity, can the Minister really justify aiding and abetting fraud for six months merely to obtain publicity? If it took officials as long as that to act because they were holding off to obtain publicity or if the Minister instructed them to do that, it is a disgrace, the officials should be sacked and the Minister should resign. No one can justify encouraging fraud for that length of time merely to obtain publicity.
  Only the belief that the police and the Department were on to something big could have justified the silencing of the Oxford Mail, if indeed that can be justified at all. The Oxford Mail stumbled on the story in July. The police said that they were after the landlords. Was that true? The Minister should at least be able to answer that. If it was not true and the police wished only to catch claimants who could have been stopped in February or at the latest in April, how could they possibly justify lying to the Oxford Mail?
  If the police and DHSS fraud officials went along with the inquiry and found that no Mr. Big existed or if they accidentally tipped them off, why did they not call the whole thing off? Did the operation go ahead as a cover-up to justify the police and the DHSS fraud officials spending so long on it, or was it only at the last minute that some police officer or DHSS fraud official deliberately or accidentally tipped off the real criminals? Did the real criminals actually get away with it?
  The police and the DHSS officials clearly acted illegally in selecting claimants to go to a specially opened benefit office to collect benefit on 26 April. Those benefits could have been paid out legally only if the officer paying them out believed the claimants to be genuinely entitled to them. It was clear, however, that in selecting some claimants to go to the new office the DHSS did not believe

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  that they were all genuine. DHSS officials must have suspected that some of those people were not genuine. Therefore, as part of their duty when they parted with the money, they should have checked those claimants.
  The first question for a public inquiry is therefore this. When did the DHSS and the police first suspect fraud and why did they not stop it there and then? Did they believe that there were other criminals—landlords or DHSS officials—and, if so, when did they find out that no one else was involved? Did the real criminals that the operation was designed to catch manage to escape? Was the prosecution of those who appeared in court designed to cover up the abject failure of the operation to achieve its real aim? How did Ministers know about it? If they were not told, why were they not told? Who authorised the paying out of some benefits for six months when the claims were believed to be fraudulent?
  At this stage, the question is whether the police were misled by the DHSS. Did officials at the Department mislead the police? Did they give the impression to police officers that £1·5 million was involved? Were the police shocked and ashamed when they realised just how little was at stake? The DHSS does not seem to have explained to the police that a person is entitled to claim at the lodgings rate even if he does not stay in those lodgings for one night a week.
  On that basis, the police advised people not in the lodgings on the night of the 1st to plead guilty because they were missing from those lodgings for one night. However, when the regulations were explained, it was clear that those people were not guilty. If the DHSS failed to inform or misled the police about that element in the regulations, how much did the DHSS really tell the police?
  Did the senior police officials decide that £1·5 million was involved, in which case why did the DHSS not make it clear that such a sum was not involved? Was Detective Superintendent George Hedges misled by the DHSS, or did he work out the figure himself?
  One of the lodging houses in Oxford run by Jeremiah Cronin was raided some time between 6 and 7 o'clock in the morning. What was on the search warrant? It is a small point, but it would help us understand what this was really all about. Why a search at all? If the landlord was supposed to be helping the police, as it now appears from all the statements produced, there could have been much simpler ways of acting. The police could have obtained the co-operation of the landlord to keep a check on those who went in on the night of the 1st and those who left on the morning of the 2nd. Those records could have been kept for three mornings as clear evidence that people were not entitled to the benefit they claimed.
  If the landlord was not helping the police, did the raid tip him off and ensure that he or someone working in his lodging house were able to escape possible prosecution?
  The Minister must say more about what happened at the special DHSS office, the setting up of which cost a lot of money. Why were innocent people detained? Why were they not allowed to make phone calls? Was it just an accident that no one thought about the rights of individuals to make phone calls? Was it impossible to install at short notice sufficient telephones, or was it a deliberate attempt to make sure that people could not communicate with others outside? Why were people treated in that way? If it was to prevent them from communicating with people
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  outside, it is just about possible to justify that up to 12 o'clock in the morning, yet people were denied that opportunity for another six or seven hours.
  Some time around 12 o'clock, the Oxford Mail started printing. It contained pretty full coverage, and there was coverage in most of the media from that point on. In fact, the police seemed keen to ensure that their version received good publicity.
  The limited account of police arrests given in "Poor Law" must make the vast majority of the police force ashamed of the Thames Valley senior police officers, who deliberately set up an operation knowing that they would force many of their junior officers to break so many rules.
  Whom did the police intend to catch on 2 September? Why did the police not allow phone calls after 1 o'clock? Why did they not allow claimants access to solicitors or probation officers to discuss the preparation of a defence which many of them had?
  The House will have seen the bleatings in the press from the Thames valley assistant chief constable, Mr. Wyn Jones, complaining that The Guardian and the publication "Poor Law" infringed the sub judice rules. As we are allowed to debate the matter in the House, there can be no question of those rules being infringed. It is a pretty weak argument to put forward. He asked for the whole matter to be delayed and suggested that questions should not be asked. That is an odd interpretation. After all, it was the police who called the press conference. They wanted to draw attention to the event.
  What was the point of the press conference and the thrust of the stories that followed it? One assumes that the police press officer did not make a complete mess of the matter and did not give wholly the wrong story. The police wanted to magnify and exaggerate the extent of the possible fraud. The press conference produced a figure of £1·5 million at stake—not the £60,000 which is all that even the Minister could suggest was at stake. The press conference was designed to win headlines and to influence the magistrates and convince them to act hastily and to refuse bail because big crime was involved.
  It is odd that the police set out to pervert the course of justice with a press conference. They encouraged and pressurised magistrates to take a harsh line and to impose harsh sentences because it was a big event. Yet they now object to the publication "Poor Law", the asking of questions and the demanding of answers.
  The senior chief officers in the Thames valley have much to conceal—either the real criminals got away or the police acted like bullies and thugs, using ridiculous measures to stop small crimes that could have been stopped six months earlier with normal DHSS procedures. We understand that the police carefully made a video of their proceedings while they held people in the bogus DHSS office. Did the Minister ask to see that video? I understand that the public cannot see it for various reasons. The Minister should at least have ensured that he saw it. There should be some arrangement for Members of Parliament to see it. If there is a public inquiry into the matter, the video should be shown then.
  There are major questions to be asked about the use of video in such circumstances. The Home Secretary issued clear guidelines to police forces. The use of video on this occasion does not appear to come within them. The other suspicion is that the Thames valley police wanted to use

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  it as a training film, but that would be an illegal use of it as I understand the rules. Certainly Members of Parliament and others cannot see it.
  If the police broke many rules, so too did the magistrates. I understand that the Oxford bench is, in normal circumstances, a conscientious bench. Why did it not ensure that all defendants had an opportunity to discuss their problems with a solicitor? Why did it not allow bail while the bail hostels or the lodging houses accepted for bail purposes had vacancies? What evidence did it demand from the police in each case against the presumption of the Bail Act 1976 that everyone is entitled to bail unless evidence shows why it cannot be allowed?
  As I understand it, the police did not put up evidence in each case. What will the Government do about producing free pardons for those people who were pressurised into pleading guilty because of their ignorance? Even worse, the police were ignorant. We now understand that the police advised anyone who was not at the address that they claimed to be living at for one night that they had broken the law, yet we knew from later cases when people pleaded not guilty that if they were missing from that address on only one night they had not committed an offence.
  Why were the magistrates' clerks involved in such breaches of the rights of the accused? Why have the JPs who sat in the courts not been asked to resign or offered to resign? It is a fundamental part of our system of justice that someone who is accused should have the right to consult a solicitor to prepare a defence. It is the duty of the magistrates and their clerks to ensure that that happens. According to the book "Poor Law", attempts by the accused to consult solicitors were repeatedly frustrated by the officials of the court.
  We must examine the balance sheet of the operation. We are now told that £180,546 was spent on trying to stop a fraud of about £60,000—if we are generous to the Government. That is about 4 per cent. of what the police and DHSS officials suggested was involved at the original press conference. Most of that money could have been saved six months earlier through normal DHSS procedures. Why was that amount of money spent? What was the justification for it? The Minister ought to tell the House.
  I know that the Minister will not accept responsibility for the media, but he must tell the House how all of the media arrived at the claim that a £1·5 million fraud was at stake. Everyone now realises that that could not possibly be argued. A claimant would have to claim for three or four years to get anything like that sum. The media themselves must ask what justification there was for the Oxford Mail going along with the cover-up. Was it conned? Did the police lie to it?
  The media must also question themselves about the headlines that they published. What were they based on? Did they check the story? Why did they produce the information that was given at the press conference? Is there just a possibility, as sometimes happens when journalists attend a press conference, that they all stood around afterwards, discussed the story and came to a consensus? The headlines in the papers the next morning were extremely similar. They said such things as "£1·5 million fiddle smashed" and "286 held in dole fiddle". They were utterly wrong, as few people involved were unemployment benefit claimants. Why did the media not get the real headlines such as, "Real criminals escape:
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  massive DHSS and police raid goes wrong" and 'Minister never told about Operation Major" or "Chief constable justifies ill-treatment of epileptics and mentally handicapped: JPs and magistrates' clerks ought to be in the dock"?
  It is also interesting that, when one or two people started asking questions, only a small proportion of the press decided that it was worth going back over the headlines and stories of 2 September, and considered that a different slant on the story was necessary.
  I do not want to spend all my time going back over the incidents of Operation Major, because there are many lessons that must be learnt from it. Of course I want assurances from the Minister that it will never happen again, but all hon. Members share some responsibility. The present Government are responsible and previous Governments must take much of the blame.
  Probably the real crime is that we still cannot provide decent accommodation for single homeless people either in Oxford or in most of the towns and cities in the country. In many ways the conditions of the single homeless have altered little since George Orwell described the spikes in "Down and Out in Paris and London" 50 years ago.
  If there was decent accommodation at a reasonable price, most of the problems of the single homeless would not exist. Landlords could not exploit common lodging houses. We should give the same rights to the single homeless as for parents with children, for example the right to have local authority housing. My hon. Friend the Member for St. Pancras, North (Mr. Stallard) will introduce a private Member's Bill on behalf of CHAR. I hope that the Minister will see that it goes through and that we give the right to decent accommodation to the single homeless. Those people would then have accommodation, and there would be no difficulty in getting benefit. It should be a decent level of benefit, adequate to pay for the accommodation.
  As long as we have such lodging houses in Oxford it is clear that the Department has a duty to see that they are regularly inspected and come up to minimum standards. The local authority should inspect them to see that they are meeting the standards required by the fire regulations and that they are the sort of places on which we should spend public money and where people should be allowed to stay.
  There are many lessons for the police. They have to make sure that the law is administered fairly and that there is not one law for the well-off—those who can speak up for themselves—and another for the disadvantaged, the sick, the mentally handicapped, and the disabled. The police give people who are accused of offences their rights. There is access to the telephone, the solicitor and bail, unless there is clear evidence that the person will commit some other crime that will seriously endanger society.
  At Oxford, Chief Constable Imbert said that he had many copies of people's rights printed on posters on the walls of the fake DHSS office. That shows the chief constable's attitude. One would have thought that he would have weighed up for a minute the fact that some of the people who were likely to be at the office probably could not read, or found reading difficult. They would find it difficult to understand such a poster. It is not an unreasonable assumption that in a group of homeless people, quite a few would be unable to read and would find it difficult to understand what the notices meant. I suggest that the chief constable should change many of his

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  attitudes the next time he is thinking of setting up a mass arrest and should make sure that people are told their rights.
  The Oxford bench has to do some careful thinking. It is difficult for magistrates and magistrates' clerks not to be bamboozled or bemused by the police, particularly if they issue a statement at a press conference in which they suggest that many people have been breaking the law and that there is a need for mass court appearances. They must make sure that even in those circumstances people get a fair trial. The measure of justice is whether it is applied all the time, consistently, and not sometimes.
  We must make sure that we change our attitudes. We should condemn everyone who cheats the state, whether through social security fraud, VAT fraud or income tax fraud. We must make it clear that the emphasis and expenditure of state resources should be on detecting the big frauds first—for example, tax frauds. In matters relating to the DHSS we should not, perhaps, go for the frauds but should design and run the system so that it cannot be defrauded. In Operation Major, why did not the Department emphasise the need to prevent fraud? Why did it not stop the fraud as soon as it had an inkling of it six months previously? The Department should have been preventing such frauds not seeking publicity.
  I hope that the Minister will give the House a great deal of information. However, I believe that the only way that the air can be cleared and the bitter taste can be removed from the mouths of the people who read the book "Poor Law" or who have studied other accounts of what went on is to have a full public inquiry in which the Department, its officials and the police can state their case and from which we can see who were the guilty people.
  5 am
  The Minister for Social Security (Mr. Hugh Rossi): The hon. Member for Stockport, North (Mr. Bennett) has seen fit to launch an attack upon a police operation with which my Department co-operated and which was designed to stop a serious and rapidly growing fraud against the social security system in Oxford.
  The hon. Gentleman has based his attack upon the contents of a recent publication which the assistant chief constable of the Thames Valley police described in a letter to The Guardian on 4 February as
  "inaccurate, biased and totally selective."
  The letter also said:
  "The Thames Valley police have been constrained from public comment because of a desire not to prejudice the fair trial of those still to appear at court … Only when all prosecutions have been completed will the facts about Operation Major be available."
  I shall leave to the chief constable of the Thames Valley police the matters which are his responsibility and not that of any Minister whether within my own or any other Department—the police operation to secure the arrest and detention of those people involved. Nor can I answer for the magistrates in the exercise of their judicial discretion on bail or the custodial sentences which they saw fit to impose.
  However, I answer for the DHSS and the part played by my officials in the matter. Before I enter into a discussion of the details of the case, I remind the hon. Gentleman, and those who have shown an interest in the matter outside the House, that my Department is
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  responsible for the payment of a sum in excess of £30 billion in cash benefits in a year. It makes literally millions of payments, some of them substantial, through local offices, across post office counters or by post. There are enormous opportunities for the money to go into the wrong hands. It is, therefore, essential that strict control is kept and every possible effort made to detect and prevent fraud and abuse. I make no apology for that. Indeed, I should regard it as the height of irresponsibility and a breach of duty to the taxpayer, and the entire working population which produces the money spent by my Department, if that were not the case.
  In 1980–81, 121,695 cases of fraud were investigated. They led to 30,116 prosecutions. In 1981–82 there were 136,307 investigations into fraud, resulting in 25,654 prosecutions. Convictions were secured in about 97 per cent. of the cases prosecuted.
  The hon. Gentleman will note that those figures show that the number of prosecutions in relation to the number of investigations has fallen from one in four to one in five during those two years. That is the result of deliberate policy on my part. I have taken the view that it is far more important and humane to check the abuse of the system when it is detected and to try to recover the money than to mount expensive prosecutions and to drag those individuals through the courts. The exceptions to that rule, where prosecutions should be pursued, are when substantial sums are involved, or the fraud perpetrated is essentially grave, or where a growing practice must be demonstrably brought to a halt.
  I have been criticised severely for my policy, especially that of specialist claims control, by many of those whose voices have been raised against Operation Major. The argument against me is that it is wrong to deny people accused the opportunity to clear themselves before a court. My reply—that most people would prefer to be given the opportunity to restore the money rather than to face a public trial—has been brushed aside. Now those critics complain that arrests have been made and prosecutions mounted and that, so the argument goes, those poor unfortunate people should be left alone and that the costs of dealing with them outweigh the money wrongfully taken. Those critics cannot have it both ways. The House will forgive me if I say that there is a strong element of hypocrisy in the way that they seem to back contradictory arguments when it suits them. One must wonder about their real motives.
  The specific circumstances of Operation Major are that, early in July 1982, the Oxford local office found that claims for benefit were being made by about 200 people on the basis that they were living at one of two Oxford addresses and paying charges of £42 a week for bed and breakfast. Those claims attracted supplementary benefit of £67·20 a week. The local office noted that there had been a dramatic build-up of those claims during May and June. They also involved—I mention this because the hon. Gentleman made the point—the abuse of board and lodging vouchers.
  The officials at Oxford knew that the premises in question could house only about 90 people, so they alerted the regional fraud section. Schedules were set up immediately to keep a close check on the number of claims from those purporting to live at the two addresses. There was a high turnover among the claimants, and the landlords did not keep accurate records of their tenants. That made it very difficult to keep an accurate check of

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  the continued residence of claimants, but it soon became obvious that some positive action was necessary to counter fraud that had clearly grown to substantial proportions.
  The build-up of claims was such that there was reason to believe that the supplementary benefit scheme was being manipulated in an organised way. By the time the operation was launched on 2 September, the numbers involved had grown to almost 300, but because of the itinerant nature of the individuals, and because officials were dealing with a shifting population, it was difficult to pin-point at any one time which of the 200 to 300 people claiming to live at those addresses were the 90 for whom there was room.
  Mr. Andrew F. Bennett: Is it being suggested that it became clear to the Oxford office that the problem existed in July? As I understand it, the Minister's officials in discussions earlier this week said that it first came to their attention in February and the police were first involved in about April. The Minister, having said that they first noticed it in July, then said that it appeared that there had been a big build-up in May and June. When did the Department start talking to the police? Was that in July?
  Mr. Rossi: I shall come to that at once. At about the time the regional office fraud section was informed by the local office of its suspicions—
  Mr. Bennett: In July?
  Mr. Rossi—because of what was happening in May and June, the police visited the local office saying that a murder inquiry had highlighted that a problem of fraud existed in respect of these addresses. The local office then explained to the police that it had already set in train inquiries and had informed the regional fraud section, but from that point onwards the matter became a joint operation—
  Mr. Bennett: In July?
  Mr. Rossi: That was at the end of June. The hon. Gentleman will appreciate that there was good sense in a joint operation between my officials and the police, for reasons that I have already given. The vast majority of the people claiming to live in the same two houses were itinerants and it was expected that few, if any, would be able to give an alternative address to those used in connection with fraudulent claims. The problems therefore were how to deal with large numbers and how to prevent claimants from absconding.
  The police have the resources and the powers to overcome both these problems. The matter was referred to them at the early stage to which I referred. Any attempt to deal with the fraud in a piecemeal fashion would have resulted in many of the offenders avoiding detection. There is also a distinct advantage in seeking police assistance in such a case because where there has been an arrest the case can be brought before the courts quickly, even on the same day, as was done in this case. Everybody arrested and charged was brought before the magistrate that same day. Again, cases can be dispensed with quickly on the first hearing before the magistrates' court. By contrast, departmental fraud procedure involves the issue of a summons, which can lead to a large lapse of time between discovery of the offence and its final disposal in court, with the impending prosecution hanging over the person involved.
  Mr. Bennett: Do I take it that at this stage of the joint operation between the Minister's Department and the police the minister or one of his ministerial colleagues was told about it?
  Mr. Rossi: I shall come to the question of ministerial knowledge and instructions in due course. I shall deal with the events chronologically.
  The DHSS staff co-operated with the police in setting up the operation and in interviewing the suspects when they came into the temporary office to make their claims, but action taken thereafter was a matter entirely for the police.
  As a result of the operation, 283 people were arrested, 179 of whom were subsequently charged and remanded by the courts. In the event, 160 of those charged pleaded guilty to obtaining benefit fraudulently and 15 pleaded not guilty. Four cases are still outstanding. There were 165 convictions and 10 acquittals. All those who were convicted received terms of imprisonment ranging from seven to 180 days. Of those convicted only 20 had no previous convictions.
  Mr. Bennett: Will the Minister make it clear whether the 20 had previous convictions for supplementary benefit fraud or for other offences?
  Mr. Rossi: I believe that the nature of the previous convictions varied from individual to individual. I cannot give the hon. Gentleman the specific details. These matters were all mentioned in open court.
  Of the four cases remaining to be dealt with by the courts, two of the defendants—Jones and Carron—have been charged with conspiracy. Jones has pleaded guilty, and Carron has pleaded not guilty and has been committed for trial. They are facing much more serious charges than the other defendants for whom the hon. Gentleman showed the greatest concern. He will appreciate that I cannot comment upon a case which has still to come before the courts.
  The hon. Gentleman has joined in the criticisms of the decision to set up a special office. Those in charge of the operations took the view that it was necessary to interview all those concerned on the same day. This could not have been possible by using either the local social security or the unemployment benefit offices. Therefore, it was decided to open separate premises for this purpose. This enabled all claimants using the suspect address to he brought together, at the same time avoiding inconveniencing other claimants attending the office on legitimate business. These temporary premises were school premises and they have been used subsequently as an emergency office during the strike in the Oxford area office.
  The hon. Gentleman has made a great deal of the fact that the news media estimated the extent of the fraud at being anything up to £l½ million. I can assure the House that neither this figure nor anything like it emanated from my Department. I can only assume that the amounts quoted were the result of speculation. A press conference was held by the Thames valley police on the day of the operation. That is a matter for them. At the conference a police spokesman said that the fraud involved was of a substantial amount. When pressed he said that it ran into thousands rather than hundreds of pounds. At no time was any other reference made to the amount of benefit

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  involved. I have that information on the authority of my regional information officer, who sat at the back of the police press conference as an observer.
  I and other Ministers have subsequently made it clear on a number of occasions that had the situation been allowed to continue for a full year the wrongful claims would have amounted to £450,000. The Department incurred costs of £21,000 in mounting the operation and I am informed that police costs amounted to £15,000 over and above normal duty costs. The hon. Gentleman has asked whether I or my right hon. Friend the Secretary of State gave instructions for a great spectacular because we were seeking some large publicity gimmick. We did no such thing, and would do no such thing.
  As I had made plain in my letter to The Guardian, which the hon. Gentleman has seen fit to denigrate, Ministers do not direct investigations into individual cases; nor do they decide who should be prosecuted. It is right that that should be the case. If Ministers were to make themselves responsible for each of the 130,000 investigations into fraud that take place every year—assuming that it was physically possible for them to do that—there would be questions as to whether there might be some political bias in the way that they directed their investigations against particular individuals, or particular groups of individuals.
  How many more questions would be asked if Ministers directed or instructed who the individuals should be that are or are not prosecuted? Therefore, Ministers—I speak not only for myself but for my predecessors—have nothing to do with these matters. The decisions are taken by those officials who are charged with the responsibility for ensuring that the overall policy is carried out. That overall policy is to detect and prevent fraud whenever possible.
  Mr. Bennett: It is possible that the Minister is coming to my point, but I should like to make the matter clear. When did he know about the operation, and when did his ministerial colleagues know about it, particularly in view of the decision to spend almost £20,000 on office accommodation? If it had been spent in other ways, that money could have prevented the fraud, even if the Minister knew about it only in July, by having extra accommodation available and extra staff to do the checking up. That would have meant preventing and not catching.
  Mr. Rossi: I knew about the matter for the first time on about 21 or 22 September, when I returned from leave. I knew nothing about the operation before I went away on leave. A note was prepared by officials for Ministers a week or so before 2 September. That was simply to advise them that a large-scale operation was to be launched in the Oxford area, which, because of its size, was bound to attract public attention. That is quite usual in cases that are likely to be reported extensively in the press, so that Miniters are not caught unawares by the figures of the people involved. Ministers are not asked for authority, nor are they given details of the way that the operation is being conducted.
  Mr. Bennett: Presumably the Minister did not see the note because he was away on holiday, but did it go to both of the hon. Gentleman's colleagues in the Department? The Minister says that it contained a figure showing the size of the fraud. What was that figure?
  Mr. Rossi: I am not sure whether that note went to all the Ministers in the Department at that time. Therefore, I cannot answer the hon. Gentleman's first specific point. I saw the note when I returned from holiday, and I can fairly say that if I had seen the note before I went on holiday, there was nothing in it to alert me to the fact that the offices about which complaints had been made had been set up, or that there was anything particularly unusual about the case, other than that about 200 arrests were expected.
  Although the hon. Member for Stockport, North is desperate to pin some responsibility or blame on Ministers or officials at the Department, I can assure him that Ministers were notified of the impending exercise in accordance with departmental practice which, I understand, has been long standing. Equally, it has been the practice of successive Ministers not to become involved in the detailed operations of investigations for fraud, for the good reasons that I have already given.
  I hope that the hon. Gentleman is not seriously suggesting that Ministers should become involved in such investigations, because there would be implicit dangers. However, we take full responsibility for the overall policy on fraud prevention and investigation. There would be considerable disquiet generally if we did not do so, and there would be allegations of political bias if we intervened in cases, or in the planning of operations such as Operation Major.
  Therefore, I hope that the House appreciates that, given the scale and nature of the fraud, there was no alternative but for the Department to co-operate with the police in that way. The fraud could not have been stopped earlier, because it was impossible to identify the 90 genuine residents out of the 200 itinerant members of a fluctuating and shifting population. It would have been impossible and improper for any official to say to Mr. Smith, who approached the counter, "Oh, you live at that address. We are not going to pay your benefit, because we feel that many of those using that address are trying to swindle us." He could not do that until he was satisfied that Mr. Smith was not at that address, and was using it falsely. That could be proved only by such an exercise and by gathering together all those who pretended to use that address to sort out those who were genuine and those who were not.
  Mr. Bennett: Does not the Minister accept that from time to time this sort of problem has arisen in other lodging houses in the country? It has been solved by the DHSS, instead of police being involved. Oxford is unique, because such procedures were used, instead of the more traditional procedures that are often used when checking whether people are genuinely staying in lodging houses. I would sometimes be the first to complain, but those procedures have been used fairly extensively in the past.
  Mr. Rossi: The officials involved also deal with fraud and its problems in many other ways. They came to the view that, in their professional judgment, the only way to solve the problem was to co-operate with the police, as they did. I must support and back their professional judgement, because it is for them to decide such matters. What happened after the police had effected the detention, arrest and so on, are not matters for me. I cannot answer for them in any way. The hon. Gentleman must direct his question elsewhere. His complaints, as I understand them, concern matters which are outside the activities of my

  811
  Department and outside anything for which I can properly assume responsibility. I would accept the responsibility, if it were mine, but it is not my responsibility in many of the incidents which the hon. Gentleman mentioned.
  I hope that the House will agree that the matter was handled in an entirely appropriate manner by DHSS staff, who should be commended for their vigilance. The operation was carried out in pursuit of a well established policy to take vigorous action against suspected fraud against public funds. Naturally, the Department recognises that it is preferable to prevent fraud from being committed in the first place, and we are constantly seeking ways of making our claim procedures fraud-proof. However, we must keep a sense of proportion and ensure that any checks that are introduced are not so burdensome as to deter the genuine claimant. It must be accepted that there are inevitably areas in which the benefits system is liable to be defrauded. Nevertheless, the Department has a duty to try to maintain the integrity of the system, and it must always be prepared to take effective action against fraud, wherever it is found.

  Pensioners (Living Costs)
  5.31 am
  Mr. A. W. Stallard: This debate, timed as it is immediatedly after the publication of the White Paper on public expenditure, and just a few weeks before what could well be the present Chancellor of the Exchequer's last Budget during this Parliament, gives me the chance to raise again some of the more worrying aspects covered by the broad title of "Pensioners (Living Costs)." I hope that it will also provide the Chancellor with some thoughts on how to improve the content and quality of his forthcoming Budget speech.
  I begin by repeating a plea that I and many others have made for some years for an urgent review of pensioners' incomes and spending needs, compared with those of the rest of the population, and an urgent rethink of the need for a new method of calculating and uprating pensions more accurately in accordance with pensioners' needs, while striving to allow pensioners the maximum personal choice on how to spend their income.
  Almost all pensioners' organisations have argued for a long time that neither the official retail prices index nor the pensioner prices index accurately reflect the living costs of elderly people. The Social Services Select Committee, in its recent report to the House, House of Commons Paper No. 123, said:
  "There are good grounds for believing that the welcome fall in the rate of inflation over the past 12 months has not been fully reflected in the expenditure patterns of pensioners and other groups of social security beneficiaries".
  It went on to say:
  "Expenditure on fuel and light in particular accounts for between 15 and 20 per cent. of expenditure by poorer pensioner households, and there is reason to believe that these costs are rising faster than the retail prices index in general. Indeed the retail prices index figures for fuel and light rose by 2 percentage points between November 1982 and December 1982 alone, compared to a general RPI rise of 0·5 percentage point".
  Further proof of what I am saying was contained in a written reply to my hon. Friend the Member for South Ayrshire (Mr. Foulkes) on 7 December, when the Chief Secretary to the Treasury said:
  "The 1·5 per cent. fall in the mortgage rate announced in August will have reduced the retail prices index by 2/5 per cent. The further 2 per cent. fall announced in November will in due course reduce it by another 3/5 per cent."—[Official Report, 7 December 1982; Vol. 33, c. 494.]
  That was his reply, although, according to another written reply on 13 December 1982, at c. 55, only 100,000 pensioners own their homes on a mortgage and will thus benefit from that fall.
  The British Association of Retired Persons, in a letter to The Daily Telegraph, said:
  "One aspect of the index-linking of old-age pensions which appears to have escaped the notice of both Sir Geoffrey Howe and Mrs. Thatcher is that the method of calculation of the retail prices index is most unjust towards old-age pensioners. The recent reduction in the rate at which the cost of living continues to rise is largely due to the fall in interest rates having caused a reduction in the mortgage interest element included in the RPI computation. Few retired persons, however, have mortgages, having paid such off by thrift during their working lives. Moreover, many retired people have their lifetime small savings on deposit with the building societies whose interest rates to depositors are now being reduced, the small supplementary incomes of the retired being thereby reduced while prices of food, fuel and other necessities continue to rise."
  No one can say that the association is full of people who think as I do. It could have mentioned that a reduction in

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  the price of motor cars had contributed to a lower inflation rate. I am not aware that many pensioners in my constituency will have been affected by that reduction.
  Paragraph 15 of the report of the Select Committee on Social Services stated:
  "It would be in the highest degree unfair if, at the moment that pensioner and other households find their costs are rising faster than the general rate of inflation, on fuel and light in particular, their benefits were adjusted in line with that general rate."
  All hon. Members will, I think, agree with those sentiments.
  A recent booklet entitled "Inflation and Elderly People", issued by Age Concern as a discussion document, estimates, on the basis of an alternative pensioner index, that pensioners have experienced 12 per cent. more inflation than other households since 1974. The author, Mr. William Smith, a lecturer in economics at the University of Kent, produces statistics and tables to prove that assumption. He argues that to keep pensioners' future living standards in line with the true rate of inflation, as it affects them, they should be linked to a new prices index.
  Mr. Smith concludes that the use of the present retail price index as a measure of price rises for pension increases is inadequate. This, he says, is a cause for great concern, considering the amount of poverty among pensioners. A single person's pension amounts to only one-fifth of average male earnings. A married couple's pension is less than one-third of average earnings. Nearly half of all pensioners—over 4 million people—have to claim means-tested benefit to supplement their pension.
  In his booklet Mr. Smith says of pensioners:
  "However, their demographic importance is not reflected by their economic status. For example, total expenditure in the economy by single person and married couple pensioner households is only 12 per cent. of the total for all households, despite pensioners comprising approximately 22 per cent. of the adult population."
  That statistic is not widely realised.
  The discussion paper concludes that, to keep in line with the living standard of those in work, the link between pensions and earnings should be restored. That is part of the problem which we all know as the break in the link. I assume that the Minister has read the booklet to which I have referred, because it has been widely distributed, and I hope that he will be able to comment on the useful points that are made in it.
  There are many more more well-researched examples of the injustice being done to pensioners and other beneficiaries by the continued use of the present method of linking. I hope that the Chancellor and his colleagues will consider the need for an immediate review and the early introduction of a more accurate prices index that will reflect the true differentials of the pensioners' inflation rate.
  I have mentioned the link with wages and the fact that the Government have broken that link. That is just one of a series of measures introduced by the Government to cut costs and save money that have seriously affected pensioners. By breaking the link with pensions the Government saved £500 million, but a married couple lost £2·25 a week. By delaying the date of uprating by two weeks the Government also made a huge saving, but a married couple lost £12·30 a week.
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  By freezing the earnings rule, despite a clear manifesto commitment to abolish it, the Government made further savings. The poorest pensioners on supplementary benefit received increases which were lower than the rate paid to other beneficiaries—0·5 per cent. less—due to changes in the method of calculating increases as a result of the changeover to housing benefit in November 1982. We know, too, that some pensioners will have lost entitlement to certain forms of heating allowance from November 1982, although at the moment the numbers are not available.
  The total savings from all those measures must be well in excess of another £500 million. It is also a fact that the Government saved £160 million by the 1 per cent. clawback in 1981. A case can easily be made for saying that the Government owe money to pensioners, rather than to talk of further clawbacks.
  According to the most up-to-date statistics, 1,119,000 pensioners in 920,000 households are dependent on incomes below the supplementary benefit level. The White Paper published last week shows that an estimated 1,730,000 pensioners are receiving supplementary benefit. There are also an estimated 2 million pensioners receiving either rent or rate rebates and many more who should be but do not claim. Therefore, we are talking about more than 4 million pensioners either living in poverty or just above the poverty line after three years of this Government.
  In the face of all that, what are the Government doing? In his autumn Budget the Chancellor announced that because of overestimating at the Treasury pensioners had been overpaid. He said:
  "We accordingly intend to make an adjustment to next year's uprating."—[Official Report, 8 November 1982; Vol. 31, c. 314.]
  Quite rightly, as was to be expected, that announcement brought anger from pensioners and pensioners' organisations throughout the land.
  I do not want to burden the House with long quotations, but it is appropriate to quote from "Pensioners' Voice", the official organ of the National Federation of Old Age Pensions' Associations. It says:
  "The Chancellor's announcement of a 'claw back' from this year's uprating met a bitter and angry response from the National Executive. The proposal was condemned as callous and cheese-paring and the following letter sent to the Prime Minister and the Chancellor."
  The letter contained the following paragraph:
  "The decision was condemned as callous and cheese-paring coming, as it does, at the end of a year which has seen allround increases in the basic essentials of life. Statistically, it may be possible to prove a fall in inflation. Practically any pensioner will tell you that prices in the shops, on the buses and especially the cost of heating continue to rise. Further, the retail prices index is hardly a fair yardstick by which to calculate the living cost of pensioner households. The pensioner prices index is much more accurate and throughout this year has exceeded by four or five points the RPI. On the basis of that statistic, therefore, it would appear that a 9 per cent. increase is correct. There is no overpayment."
  It went on to say:
  "The cut now proposed, although of itself apparently insignificant, will mean a loss of £41 to single pensioners and some £67 to married couples. A considerable sum especially when one considers that it will be deducted at a time when inflation can again be expected to rise."
  Hugh Faulkner, the director of Help the Aged, said:
  "Help the Aged is dismayed and despairing on hearing the announcement by the Chancellor that pension increases next year will be reduced because of the more rapid fall in the rate of inflation than had been anticipated. It is an act of hurtful

  815
  meanness deliberately reducing pensioners' standard of living and ignoring their years of battling against heavy inflation on a pension which is still all too low. The Chancellor has lost his sense of compassion as well as his trousers".
  The Britsh Association of Retired Pensioners had this to say:
  "Most old-age pensioners need every penny of their present near-poverty-level pensions, and any threat further to penalise them seems to be singularly inept treatment of some 9 million voters with a general election in the offing. Perhaps the Chancellor is only making this threat of a 'claw-back' with the intention of withdrawing it in his spring Budget, but even the possibility has caused much worry among the elderly and it is our sincere hope that either the Chancellor of the Exchequer or the Prime Minister, or both, will take an early opportunity of setting at rest the fears that they have raised in the minds of the old aged pensioners of the United Kingdom by their recent statement".
  Those are just a few of the many reactions to the autumn Budget announcement of the claw-back. I know that the phrase upsets Ministers. Nevertheless, it is true.
  Age Concern and the British pensioners trade union action committee made similar responses. It is hoped by all of us that the Cabinet is reconsidering the situation.
  From recent pronouncements by Ministers, it seems that some rethinking is going on. For example, following the Chancellor's very definitive statement, there have been a number of follow-on statements. The Secretary of State for Social Services, for instance, said:
  "Decisions on what the 1983 uprating should be will be taken, as usual, at the time of the next Budget. Legislation will be introduced as necessary, but I have no specific timetable in mind at this stage."—[Official Report, 30 November 1982; Vol. 33, c. 125.]
  On 15 December, the Minister who is to reply to the debate said to the Select Committee on Social Services:
  "I hope to avoid legislation"
  —there was a change—
  "if at all possible, because legislation leads to other problems".
  There one sees a slight shift in the language and in the emphasis. It is a welcome shift if it goes far enough.
  In further evidence to the Social Services Select Committee on that day the Minister said that
  "there is no statutory restriction on the size or frequency of uprating on, for example, war pensions, supplementary benefit, child benefit, one-parent benefit, family income supplement, mobility allowance, death grant, maternity grant and Christmas bonus".
  In a letter to myself on 6 January of this year, Lord Trefgarne, who is a Minister at the Department, said:
  "All we have said is that the level of next year's increase in pensions and other benefits in November 1983 will be decided at the time of the next spring Budget. It will then be necessary to consider to what extent we have to bring pensions and other benefits in line with inflation or allow them to continue to run ahead of it".
  There is a change of language, almost moving away from that definitive statement by the Chancellor in his Budget.
  Page 66 of volume two of the public expenditure White Paper states:
  "It is intended that the decisions about the increases in November 1983 will have regard to the fact that the forecast increase in prices over the year November 1981 to November 1982—on which the November 1982 uprating was based—exceeded the actual rise in prices over that period."
  That again is an attempt to soften the language.
  Could it be—we are entitled to speculate—that there will not be a claw back, that there will merely be a tiny claw back, or, as the Minister seemed to suggest to the Select Committee just before Christmas, that there could be a claw back on benefits which the Government are not required by legislation to uprate in line with inflation?
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  To most people there is something very wrong with a procedure that can produce such a farcical and worrying situation. In any other walk of life, increases are agreed and, if necessary, back pay is given, often by a lump sum, if negotiations drag on past an agreed date. No one else must rely on an estimate made in March for an increase the following November, with the uncertainty and possibility of having some snatched back. We can imagine what would happen in industry if that procedure were applied.
  The days of this pernicious procedure must surely be numbered, and the Government should urgently seek alternative methods of indexing and uprating pensions. On probably their last Budget before the election, the Government should announce an urgent review of the present method of calculating upratings. In the meantime, they could restore the link with wages, extend heating allowances to those on rent and rate rebates, increase the capital cut-of from £2,500 to at least £3,000, raise the £300 limit for single payments to £500, and restore I he death grant to its 1949 level. There are plenty of arguments to justify all those propositions, and these few modest requests would go some way towards improving the serious plight of thousands of pensioners.
  5.54 am
  Mr. Thomas Cox: I welcome the opportunity to take part in this debate, just as I welcome the debate itself. All hon. Members are aware that the problems faced by our 10 million elderly increase year by year. We often tend to think that, once a person has retired, he needs less income that he received when at work. Indeed, most people accept that once they retire, their income will fall. However, we often forget that people have built up a standard of living while at work, and they have the right to expect to retain that standard once they have retired.
  Sadly, many of the essential services such as heating and lighting are needed far more in retirement, when people are at home all day rather than out at work, and such services cost a lot of money.
  On many occasions in the past few months we have raised the subject of standing charges, none more consistently than my hon. Friend the Member for St. Pancras, North (Mr. Stallard). Eventually the Government became extremely concerned, although the concern came initially from the Opposition, and changes have now been made in standing charges for people who consume very little gas or electricity.
  Standing charges, however, are only part of the problem. For many people, the real problem is the size of the quarterly bill that they have to pay. At Question Time on 31 January, figures were given, which the Secretary of State for Energy did not challenge, to show that since the last general election gas prices had increased by 97 per cent. and electricity prices by 82 per cent. Many people, especially retired people, find it extremely difficult to meet those exorbitant price increases. If the Government are really concerned, they should reduce the amount that people have to pay for their heating.
  As my hon. Friend the Member for St. Pancras, North has said, and as the Minister must know from his travels throughout the country and his meetings with pensioners' groups and representatives, the one constant request is for an increase in the heating allowances that are now paid. I hope that the Minister will not merely tell us that the

  817
  Government are aware of this, concerned about it, and so on. I hope that he will tell us that the Government intend to do something about it before next winter.
  Insulation is occasionally mentioned in the House, but one wonders how much is done about it outside. We know that there are grants to help with roof insulation, which has a major role to play in heat conservation within the home, but what about the windows and doors, especially in the older properties in which so many retired people live? It is no use heating a house if the heat is lost through ill-fitting windows and doors. What constructive policy can the Government offer to deal with that problem?
  The Chancellor will soon be introducing a new Budget. The one thing that pensioners will certainly watch is whether the threatened clawback occurs. Let us hope that it does not. Let us have none of the talk in which some Ministers have indulged about how pensioners must be realistic and recognise that they were paid far too much in the past because inflation did not increase so fast as the Government expected and a slight reduction will be no great loss. According to the popular press, the Budget is likely to contain many pre-election handouts. I am sure that no hon. Member is in any doubt as to the deep offence that pensioners will feel if the clawback operates.
  We hear from the Government that inflation has fallen, but the real issue is the cost of commodities in the shops. That does not fall. Hon. Members should walk around the shops and, if they are in any doubt about my assertion, talk to pensioners. They should tell them not to complain because inflation has fallen, as have prices—and then wait for the abuse from pensioners who will ask, in no uncertain terms, "What kind of world do you live in? What prices are falling?" Therefore, the threatened clawback is a crucial issue.
  I realise that my next remarks may be somewhat controversial, even with my colleagues. Pensioners have complained bitterly to me about the amount of income tax they must pay. It is because they have a state pension and also a work superannuation pension. I well understand their concern. When they were at work, and wages were much lower than they are today, many of them made the effort to join company superannuation schemes to look after themselves when they retired. Now, they feel that they are being unfairly treated in the amount of income tax they must pay on the total income. I am sure that many Treasury Ministers could, in a matter of moments, demolish that argument, but I know from the pensioners I meet—ordinary working-class people—that when they were in work they genuinely tried to provide for themselves in retirement. They feel aggrieved about the amount of tax that they must pay.
  As we approach the forthcoming Budget, if there is a possibility of giving an additional £1 in tax concessions to the retired person or those in the low income group, rather than to someone in receipt of a salary of hundreds of pounds, I am sure that there will be little doubt in people's minds where the priority should lie. That matter will be watched closely by pensioners throughout Britain.
  The title of the debate is "Pensioners (Living Costs)". It covers many issues, and I wish to touch upon one. In my area there is a sub-post office in Franciscan road, Tooting. I am told that it is under review. I am sure that many hon. Members are in no doubt about the meaning of "under review". It is that there is a real possibility that it
  818
  will be closed. If that should happen, it would be an utter madness that wholly ignored the needs of that area and the local residents. The sub-post office covers a populated area in which many elderly people live. They use that office.
  The office is popular, as is the sub-postmaster who runs it. I received 22 letters from constituents today. They are worried by the knowledge that the sub-post office is under review. I shall read just one which is typical and gives some idea of the strength of feeling that exists:
  "I have been given to understand that my post office at 180, Franciscan road, SW17 is threatened with closure. If so, it will be a great hardship for us pensioners because we will have further to walk. Also, we will have to cross busy main roads, which is dangerous for elderly people. My wife is 75 and I am 77. I strongly protest against the closure. Will you give this every consideration and do all in your power to oppose?"
  In part of my constituency called Bedford hill, there is housing occupied by elderly people but not on a bus route. Many of those people have to take a taxi to go shopping because they cannot walk up and down the hill. The taxi fares can be anything from £1·50 to £2. It is often difficult for elderly people to walk long distances. If the sub-post office is closed, many elderly people will be forced to take a taxi to draw their pension. That would add to their costs.
  Every hon. Member should be aware of a report which could affect us all, even those in the Minister's constituency. It says:
  "Post Office chiefs were considering a plan to close 200 post offices and 3,000 sub-post offices. They were also thinking of downgrading another 1,500 main post offices to sub-offices and shutting others at lunchtime and on Saturdays. Such plans would hit tens of thousands of customers who would have to travel further to the nearest post office. Hardest hit would be the old age pensioner and people without their own transport and the disabled. The plans have been drawn up by Lord Rayner, until recently a top adviser to Mrs. Thatcher."
  I do not know what the Minister can tell us about that. He should say what is taking place. It would be better for every hon. Member if he made a statement soon. Not long ago there were mass rallies protesting at closures. We had a special debate on the threatened closure of sub-post offices. Hon. Members were left in no doubt about the disastrous effect that that would have on local communities. We are entitled to know what is happening now.
  My hon. Friend the Member for St. Pancras, North talked about pensioners' living costs. In my area which is a built-up area of inner London, people have to take taxis to shops because there is no bus service. Therefore, I hope that we will hear about that matter as soon as possible.
  Pensioners now form a large part of our population. No hon. Member would dispute that conditions have improved, but there is still a long way to go. If any one is in doubt about that, all he has to do is to attend the all-party pensioners group, regularly attended by hon. Members of all parties, and listen to the pensioners' representatives talking about the varying concessionary fares schemes, television licences, the death grant and so on, which are of crucial importance. The pensioners have to pay for those important services.
  The Budget will soon test the Government's concern for a large section of our population. Who will benefit? Will it be the wealthy or the pensioners and those in the low income groups? Many people both in the House and outside will be watching how the Government as they come up to the next election treat each section of the

  819
  community. Many people in my constituency will keenly watch where the Government put their priorities in the next few weeks.
  6.11 am
  The Minister for Social Security (Mr. Hugh Rossi): With the leave of the House. I am grateful to the hon. Member for St. Pancras, North (Mr. Stallard) for the way in which he introduced the debate. I am well aware of his concern for pensioners and of the fact that he represents many pensioner organisations in the House. He will forgive me if I do not answer all the matters that he raised. If I understand him correctly, he addressed his remarks more particularly to my right hon. and learned Friend the Chancellor of the Exchequer than to my Department. I cannot anticipate what he will or will not do in his Budget Statement, nor can I anticipate what my right hon. Friend the Secretary of State will say in any uprating statement.
  The hon. Member for Tooting (Mr. Cox) referred to the threatened closure of his sub-post office. I regret that I can give him no answer on that matter as it does not fall within my responsibilities. Nevertheless, I can share his concern. I have had similar problems in my constituency. One has to do battle with the chairman of the Post Office. One wins some and one loses some. That is the only comfort that I can give to the hon. Gentleman.
  I share the concern of the hon. Member for St. Pancras, North about pensions. I agree with him that for someone who is solely dependent upon the old-age pension life is very difficult. It always has been for someone who has not been able to accumulate savings of his or her own during a lifetime or enjoy the benefits of an occupational pension as well as the State pension. That is why we have supplementary pensions that assist people who find themselves in that unhappy situation.
  One recognises that people in that unhappy position, dependent upon the old-age pension, have particular problems with the cost of heating. It is precisely for that reason that the Government have extended heating allowances for those people who need them. We are spending some £325 million in the current financial year on supplementary benefit heating additions to help the people for whom the hon. Member for Tooting expressed such anxiety. It is more than any Government have spent. There is other help that such people can receive in grants for insulation which is possibly one of the best ways in which old people can help themselves to keep warm.
  Standing charges were debated in the House on 13 December 1982. I do not think it would be right for me to go over the same ground once more. The hon. Member for Tooting has tempted me, because, although he made a grudging reference to the fact that the nationalised industries are prepared to make some concession in respect of standing charges for fuel, he claims a great deal of the credit for that decision for the Opposition. The record does not show that. In 1976 the Government he supported looked at the matter and ruled out both the elimination of the standing charge and the half standing charge concession.
  The Secretary of State for Energy at the time was the right hon. Member for Bristol, South-East (Mr. Benn). He said:
  "After considering the group's report the Government have concluded that none of these possibilities offers a satisfactory way of helping poor consumers with their fuel bills."
  820
  The Opposition had the chance when in Government and rejected it. It has been left to us to put the matter right as best we can in the prevailing conditions.
  The hon. Member for St. Pancras, North referred me to a recently published booklet which questions whether the retail price index is the proper basis upon which one can have regard to the uprating of pensions. I have received the book recently and I have skimmed through it quickly. It seems to contain a great deal of interesting information. I have not yet had an opportunity to study the arguments in detail, but I shall. The hon. Gentleman quoted the Select Committee on Social Services with approval when it suited him. He did not quote that passage of the Committee's report which supported the view that the RPI remains the best price measure for general social security upratings. The Select Committee on Social Services said:
  "We would need more convincing evidence of a case for change than has so far been produced, to persuade us to move from an index which is widely accepted, comprehensive and reliable to any alternative so far available."
  I have the authority of an all-party group of the House which specialises in such matters supporting the use of the RPI for that purpose.
  Mr. Andrew F. Bennett: Will the Minister give way?
  Mr. Rossi: Yes. The hon. Gentleman is a member of the Select Committee.
  Mr. Bennett: I am pleased that the Minister supports that recommendation. I assume that he will be consistent and support all the other recommendations; or is he quoting selectively?
  Mr. Rossi: The hon. Gentleman must await, with his usual patience, the Government's response to the report which will be issued in due time.
  The hon. Member for St. Pancras, North mentioned the increases that pensioners have received compared with increases in prices. I remind him that during the Government's period of office pension levels have been increased, over four upratings, by about 68·5 per cent. By comparison, the retail price index rose by only 61 per cent. between November 1978 and November 1982. The pensioner price indices, which are often recommended by hon. Members as a more reliable basis for comparing increases in pensions, rose between the final quarter of 1978 and the final quarter of 1982 by only 58 per cent. for a single pensioner household, and by 57·5 per cent for a two-pensioner household. On those criteria, the Government have more than redeemed their pledge to ensure that pensions are fully protected against price increases.
  Both the hon. Member for St. Pancras, North and the hon. Member for Tooting referred to the comparison with average adult earnings. There was a lament for the breaking of the link with earnings on the upratings. If one takes a longer period than the term of office of the present Government, to try to see those matters in a wider perspective, the hon. Gentleman will find that during the 10 years from October 1972 to November 1982 the State retirement pension rose by 386·7 per cent. As against that, average adult male earnings rose by 310·3 per cent., and the pensioners price indices for a single pensioner-household, from final quarter to final quarter, rose by 277·6 per cent. By whatever yardstick, over a substantial

  821
  period pensioners have been kept ahead of the field by successive Governments. That must be borne in mind when one is considering the general questions with which we are concerned.
  The hon. Member for St. Pancras, North also mentioned the imperfections in our system for uprating pensions, because the announcement is made at about Budget time, the increase takes place in November, and in the uprating there is an element of forecast that invariably proves to be wrong, which requires an adjustment in the uprating from year to year. I remind the hon. Gentleman that the present system of forecasting, of which he was so critical, was introduced by Mrs. Barbara Castle when she was Secretary of State. When she did that, she departed from the historic method of calculating the upratings. It caused great comment and criticism at the time, because the effect of changing the method of uprating was to deny pensioners about £500 million, which at today's rates is in excess of £1 billion.
  We were then left with this curious method of uprating pensions, legislated for by the previous Administration. Each uprating decision can happen at any time between March and June. My right hon. Friend the Secretary of State has to take the past six months of increases in prices and estimate the next six months of rises in prices. He must then state a percentage figure by which the pension shall be uprated. In making a forecast of a likely increase in prices in the future, certain assumptions or guesses, to use an easier term, must be made. Whenever one guesses or makes assumptions, it is only right to accept that one will not be able to get it right every time. Assumptions are no more than assumptions and can be proved to be wrong. It is not the same as a calculation based on known figures of what has happened.
  Therefore, ever since the present Government have been in office, inheriting that particular way of uprating the pensions, it has followed that one year we have overestimated and another year we have underestimated the increases in prices. When we have underestimated the increases, we have made good, the underestimate as we did in November 1982. We underestimated the preceding year, so in November 1982 we added an additional 2 per cent. to pensions to make good the underestimate. If one makes that type of adjustment, it follows logically that if a forecast is going to be wrong the other way, an adjustment must be made. What is sauce for the goose is sauce of the gander. That is no more than the Chancellor has indicated might be the position when he comes to consider what he has available at Budget time.
  Mr. Stallard: I did not pray in aid for my criticisms the previous conduct of any Government. I am sure that members of the Government for whom the Minister has voiced support will be touched by his support, however belated. I did not pray those in aid and I will not do so now. I would criticise them as I criticise the present Government or any Government, because I believe that all Governments have the system wrong. Now is the time for a total rethink, which is why I quoted some of the new thinking that is coming forward. I mentioned one idea from the new pamphlet to which I referred.
  Mr. Rossi: I accept what the hon. Gentleman says. I do not know, and have not taken the trouble to find out, whether he voted for or against his Government when they changed from the historic to the forecasting method of uprating. I am not sure that he can recall now which way he voted and whether he gave his Government his support on that occasion. Whether he did or did not, it was a decision of his Government as a whole. That is the consequence and this is the trouble we find ourselves in today. One must consider these matters to see whether it is possible to produce a better method. The historic method has its advocates because it has certainty. There is automatic uprating within that method, albeit six months too late. The difficulties with a historic method is that one is basing the increases on past rises in prices. If there is rapidly accelerating inflation, there is an appreciable time-lag for the pensioners before the pension is put right to take account of the rise in prices which has taken place. That is the difficulty with that method.
  These are matters that must be of continuing concern to the Government. We must try to satisfy ourselves that we can find the best practical means of dealing with these difficult matters. The best solution of all would be to achieve an economy in which there is very little inflation. The method of forecasting the uprating would become increasingly academic in that climate. The House knows that that has been the basis of the Government's economic policy. Our aim has been to reduce inflation as rapidly as we can and to restore the economy to a firm and sound basis. As Labour Members know, the Government have been singularly successful in their policy of reducing inflation. This has been all to the benefit of the pensioners.
  I do not feel that I can take the matter much further. The various other issues which have been raised in the debate are really for my right hon. and learned Friend the Chancellor of the Exchequer or for my right hon. Friend the Secretary of State. I cannot anticipate statements that they may be making in future.

  Abducted Children
  6.31 am
  Mr. Reg Race: The problem to which I seek to draw the attention of the House at this unearthly hour in the morning is a growing and serious one throughout the country. It is the problem of child abduction—child stealing—which has faced many of my constituents over the past three and a half years.
  In my constituency of Wood Green in north London, over the past two years I have had drawn to my attention three cases in which women have had their children, who were living with them at the time, abducted by their fathers. One would have thought that that might have been a chance happening, were it not for the fact that many women throughout the country have recently come together in an organisation to try to draw attention to their plight. It is a multi-faceted plight and that is why I am concerned about the attitude of the Foreign and Commonwealth Office and the Home Office towards this matter, which affects both Government Departments.
  When one talks to Foreign Office officials they say that the number of abduction cases with which they deal can be counted on perhaps the fingers of four hands during one year. That is the tip of the proverbial iceberg, for a number of reasons. First, the Foreign and Commonwealth Office does not see many of the cases that are to be found in the community. It deals only with cases of children who have been taken abroad or who are now believed to be abroad. I suspect that, similarly, the Home Office does not see the children and the women who are involved because many people are deterred from raising the matter with Government Departments, having once raised it with the police.
  I want to try to show this morning the practical difficulties that face my constituents and women throughout the country. It is mainly women who are affected by the problem. They face practical problems because of the enormous difficulty that they are in and because of the feeling of powerlessness that they have about the enormous problems that are being placed on their shoulders.
  I do not wish to ask the Minister to answer problems relating to specific cases, but rather to refer to the generalities of the problem. However, all the cases that I have had to deal with over the past three or four years have been extremely heartbreaking because of the problems that the women have had to face. I wish, for the benefit of the House, to place on record a demonstration of the practical difficulties that these women face.
  I do so by describing one case in my constituency, which began in 1980. On 23 February 1980, Mr. Mohammed Waseem drugged his wife Seema and two teenage daughters Sameena and Rubeena. During the night he abducted the two youngest children of the family, Khalid, then aged 12, and Shahina, then aged only one, and took them to Pakistan.
  The family live in my constituency, but the children were taken in the middle of the night, and it is believed that there was some collusion between Mr. Waseem and other members of the family over the abduction. Mr. Waseem had planned the abduction unbeknown to his immediate family for some time, when in the preceding months he had talked them into moving from their comfortable home in Enfield to a fairly run-down house
  824
  in Wood Green. He told them that this was to release the capital tied up in the house so that he could set up in business on his own and leave his work with the Civil Service.
  However, Mr. Waseem's real intention was to steal the money, which amounted to £26,000, from the sale of the house in Enfield, and which was then in the bank, leaving his wife and daughters with the massive mortgage of £20,000 and no means of support. Incidentally, he removed the £26,000 from the joint bank account on only his signature without the bank querying his withdrawal. When he left, taking the children with him, Mr. Waseem took the family's passports and his wife's jewellery.
  There is also some evidence that Mr. Waseem may have sawn a gas pipe in half so as to destroy the house and the people in it. These were the actions of a man who had very little regard for human dignity or for the family with whom he had lived for such a long time.
  After these incidents in 1980, Seema Waseem's life became tragic. She has had to fight for supplementary benefit to live, to keep her home, and, worst of all, for the return of her two children. Khalid and Shahina are both British citizens born in the United Kingdom, and they have been made wards of court through the judicial process in this country.
  However, because the children have been removed from Britain, Mrs. Waseem had to go to Pakistan to fight for their return. She therefore had to leave Britain in the summer of 1981, and did not return until autumn 1982. Court proceedings were extremely long-drawn-out, not least because at one stage her husband attempted to bribe the clerk of the court in Pakistan to hold things up.
  Seema Waseem obviously had no means of paying for her passage to Pakistan. After her husband left her, she had no means of support. She had no job. She had to go to the local DHSS office to claim supplementary benefit, as was her right. In itself, of course, supplementary benefit does not provide the wherewithal to purchase air tickets for Pakistan. No practical assistance was available from the state for the legal costs of fighting an action in Pakistan to recover the children. No legal aid is available for court cases conducted abroad to recover abducted children. I want to take up that point with the Minister later.
  Therefore, Seema Waseem had to leave for Pakistan with no financial support of her own, knowing that in fighting for the return of her children, she would incur huge debts. She had to leave behind her two teenage daughters who were both at college. They had to fend for themselves and cope with the bills and problems to which their dilapidated house in my constituency gave rise. Incidentally, they coped extremely well with that dreadful ordeal.
  What then happened is extremely instructive. Having taken the matter—as she was advised to do by me and by the Foreign Office officials whom we saw—through the courts in Pakistan, she eventually, after a lengthy legal process, won a whole series of court cases, including appeals by her ex-husband against the court's first decisions. I am now happy to say that she has almost completed all the legal processes in Pakistan. I believe that there is only one formal hearing still to come in that country, and it is expected that it will be finalised this month.
  However, her basic problem still remains. She still has not managed to recover her children. She still does not know quite where they are and the problems that she has

  825
  experienced as a result of that traumatic event in her life are extraordinarily complex. They show, in miniature, some of the problems that such women face. I should like to place them on record, because Ministers do not yet fully understand such matters. I say "fully understand", because I accept that there has been a change in the attitude of the Foreign Office recently, which I greatly welcome.
  I shall outline the common strands in the Waseem case and the two other cases that I have had to deal with as a constituency Member of Parliament during the past three and a half years. First, it is plain that in most cases it is the women who lose their children, and the men who take them away. Indeed, when the Minister recently met a delegation at the Foreign Office, he must have been as impressed as I was by the balance of the sexes. I think that there was one man in the delegation, and about eight or 10 women. I suspect that that balance is a true reflection of the numbers of men and women who are affected. Thus, child abduction becomes an issue of women's rights, as well as one of equality, fair play and fair dealing.
  There is a second common strand in these cases. Often the parents do not know where their children are. That was what happened with Mrs. Waseem. Although she knew that, initially, the children were in Pakistan, she did not know whether they had been taken elsewhere. It was thought at one time that they might have been abducted to Libya, as Mr. Waseem's brother was in the Pakistan air force and was thought to be based in that country. Nor did she know where they were in Pakistan, if they were in that country.
  The same thing happened in the other cases which arose in my constituency. One case involved a woman whose two children were taken by her ex-husband to Italy. She did not know, when she came to see me for the first time, where her children were. In the third case in my constituency, again the woman did not know where her children were. She did not know which country they were in—in Britain or in another country to which her ex-husband might have taken them. Women, or parents, feel powerless in such cases. They may not know where their children are. They may not be able to cope with the multiplicity of practical problems that beset them, and we in this House should take seriously the practical difficulties facing those women.
  That brings me to the third common factor in these cases—the multiplicity of problems that the women face, once financial support has been removed from them. I do not suggest that women are incapable of looking after themselves. Of course not. However, in many cases they are forced to rely on supplementary benefit and they are faced with many difficulties.
  First, there is a practical problem. Some of their money may have been stolen. There may also be the difficulty of claiming supplementary benefit. Although it is easy to go to the local DHSS office and claim the basic scale rate of supplementary benefit, when it comes to paying the legitimate mortgage interest costs of an owner occupier in this situation, the DHSS has a discretion not to pay if it thinks that the costs are unreasonable, or to pay part of the costs if it thinks that the total costs of the interest are unreasonable.
  My constituent, Mrs. Waseem, had to fight extremely hard, with my assistance, to get the local DHSS office to pay those costs, because without that practical assistance
  826
  she would rapidly have become homeless. As it happened, because she still had two children in full-time education, the local authority would have had a statutory responsibility to rehouse her under the Housing (Homeless Persons) Act 1977. It would, however, have been another enormous hassle for her and her family. Luckily, it did not come to that.
  Another practical difficulty is the problem of whose name the house is in. If it is a tenancy, particularly a local authority tenancy, the tenancy is often in the name of both the man and the woman. The same is true in the case of an owner-occupier. One difficulty for the woman is obtaining a property transfer order when notice cannot be served through the court on the respondent. There is a long-drawn-out process whereby the woman has to try to regularise her position in relation to her own housing.
  That is not all. If a woman or a parent has to go abroad to fight the court cases that are necessary to recover abducted children, it is obvious that during the period that she is away the existing home still needs servicing. Money is required to keep it going. Someone has to pay the rates, the gas bill, the electricity bill and perhaps the telephone bill. For those on supplementary benefit, the local DHSS office pays the benefit in the normal manner to a named householder claimant while that person is in England and for a short period of four weeks if it is necessary for the person to leave the country for a legitimate purpose. After the four weeks, benefit stops. Unless there is someone else in the household who can claim supplementary benefit, the home itself is threatened. There is no means of getting finance into the house to keep it going.
  Many of my constituents, including at least two of the women I have been speaking about, were in that position. They had to travel to a foreign country to try to win back their children while, at the same time, dealing with an enormously complicated set of practical difficulties placed in their way by the operation of the local welfare state. It is a real problem for these women. I do not believe that these problems are properly appreciated in all their detail and power by the Government. One of the purposes of this debate is to try to draw the attention of Ministers to these serious practical problems.
  Matters may not progress to the extent that I have described. If children are abducted, it is possible that the parents will say that they have looked for them in all possible locations in the United Kingdom but cannot find them, that they have insufficient money to go to another country to continue their search, that they have not sufficient money to pay for legal assistance in that country where legal aid is not available and that they therefore give up. It is extraordinary that parents are being forced into that position by the weight of practical problems which is placed on their shoulders.
  Parents are faced with three choices. First, they can go to another country and fight a battle through the courts which might be extremely costly in all its aspects. Secondly, they can do nothing. They can say that they simply cannot afford it and give up. Thirdly, they can short-circuit the legal process and attempt to snatch their children back from their ex-spouses if they know where they are. Frankly, I do not believe that those options are in the best interests of either the parents or the children. For all those practical reasons, there should be a change in the way in which both the Foreign Office and the Home Office go about their business in child abduction cases.

  827
  There is also a strong case for changes in international law to make more easy the recovery of children who have been removed from their homes in the United Kingdom.
  I want to draw to the attention of the House some of the enormous problems which parents face when their children are abducted in relation to the attitude of the Foreign Office and the Home Office. The clear advice which is given by Foreign Office officials in the consular section if a parent goes to see them because a child has been removed is that the battle must be conducted through the courts in the country where the children are believed to be. That advice is given to everyone; it is impartial and general.
  The Government's general attitude seems to be that, as this is a domestic or civil matter, a matter between spouses who have lived in the same home and had children, they cannot intervene. That is a convenient way for the Government to get themselves out of the difficulty of having to do something about it. It also reflects both international and United Kingdom law.
  When parents go to a foreign country to try to recover their children they take the battle through the courts. They may approach the consul in the country for assistance. Very often—certainly in the case of one of my constituents—that assistance was denied. I do not want to make a meal of this because I know that the Government have changed their policy—and a good thing, too—but some British representatives in some countries in the past have told parents who have come to see them that they cannot intervene in such matters because they are domestic and civil rather than criminal. They say that they cannot interfere with the courts of the other country and that they can do nothing except ask for a welfare report on the children concerned. That is little comfort indeed to parents who have had their children removed and who, quite rightly, regard the removal of those children as a crime.
  I welcome the way in which the Government have issued a new circular to their consulates throughout the world urging them to be more helpful to parents who ask for assistance in other countries. That is long overdue. Parents facing practical problems in other countries will greatly welcome the assistance of the United Kingdom Government in seeking to make representations to other Governments about the location of their children and also about the long delays in the legal process that can be extremely costly and frustrating and destroy the chances of parents getting their children back at all.
  The new Foreign Office circular will be helpful. Unfortunately, that is not all. There are two other problems to which the Government must turn their mind. The first point is of international law. A delegation from the new organisation of parents who have had their children abducted went to see the Minister of State. He made the pertinent statement that if they were in favour of reciprocity between countries, of being able to go to foreign countries and getting their children back because of a court decision made in the United Kingdom, it must follow that the same would be true of parents coming to the United Kingdom in the belief that their children had been abducted and brought here. They would be able to enforce in the United Kingdom a court order made in another country.
  I and the parents who saw the Minister say that that is right, but they accept that there are several practical problems. No doubt the Minister will receive representations from some hon. Members about constituents
  828
  threatened with the removal of their children as a consequence of court orders made in another country. That must be considered very carefully. On balance, I, and I am sure many of those parents who have been affected already, favour the idea of reciprocity. The Hague convention ought to be endorsed and implemented as swiftly as possible.
  The Home Office is involved when a child is thought to be in the United Kingdom. If that is so, the matter proceeds through the High Court. The children are searched for by the police. The missing persons department of the Metropolitan Police, in the case of London, takes action on the instructions of the tipstaff of the High Court. The tipstaff of the High Court has extremely limited resources. Only three or four people actually work in that department. They do not have the resources to track down or follow all the leads that undoubtedly exist in any particular case. The police are sometimes reluctant to act on information that they receive from other sources about the possible location of children who have been abducted within the United Kingdom. They are reluctant to do so, first, because they receive their instructions from the tipstaff of the High Court and, secondly, because it is a civil offence and not a criminal offence.
  Responsible and decent policemen concerned about this issue have told me that they would do more about abduction cases if it was a criminal rather than a civil offence. We in the House of Commons should demand a change in the law in Britain to make child stealing or child abduction a criminal rather than a civil offence.
  These brave parents must overcome the great difficulty of finance. They are faced with enormous problems over arrangements in the United Kingdom. They face the great difficulty of fighting court battles, sometimes many thousands of miles away, with no legal assistance. Therefore, there ought to be some way in which they can claim on a fund to finance the attempt to recover their children.
  The Minister should consider the possibility—no doubt he would have to consult his Government colleagues—of setting up a fund, paid for by the taxpayer, from which parents could claim if they were forced to fight to get their children back to the United Kingdom. The creation of such a fund is long overdue. It would have to be means-tested, and there is no reason at all why that should not be the case. In any event, parents must have somewhere to go to for practical help.
  This is not a small problem. The Minister may argue that such parents can go to a registered charity to obtain financial assistance, but the problem is that most registered charities will not make grants to individuals. They must be made to other registered charities or to corporate bodies. Therefore, there is an enormous problem about the individual obtaining a financial grant from a charity. Even if he does, it is unlikely to cover more than a small fraction of the costs of fighting a court case or meeting travelling expenses.
  The Government must now turn their attention to the possibility of establishing such a fund to enable parents to have an equal chance of getting their children back. Many parents—certainly the women to whom I have spoken from my constituency and elsewhere—feel that they are fighting with one arm tied behind their backs and with the weight of enormous problems around their heads. Our job this morning is to try to relieve them of some of those

  829
  burdens and to assist them in a traumatic period of their lives. We should do something practical for women or parents who have faced one of the most awful things that can ever happen to a human being—the abduction of their children. I very much look forward to hearing what the Minister has to say.
  7.9 am
  The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): I ask for leave to address the House again.
  I entirely agree with the hon. Member for Wood Green (Mr. Race) about the importance of the subject, and he has taken us fairly and thoroughly through the problems that have occurred in his constituency. I am glad that we have this opportunity to go over the ground again, because since the House last discussed the general problem and also a particular case in an Adjournment debate initiated by my hon. Friend the Member for Cambridge (Mr. Rhodes James) two days before Christmas, we have taken some decisions on the matter and others may be taken before long.
  The hon. Member for Wood Green referred to the very useful and, for me, instructive meeting on 26 January with a delegation led by his hon. Friend the Member for Keighley (Mr. Cryer) and including the hon. Gentleman himself, the right hon. Member for Wakefield (Mr. Harrison) and my hon. and learned Friend the Member for Burton (Mr. Lawrence). They brought with them Mrs. Burt, who has taken the initiative in forming the new self-help group to which the hon. Gentleman referred and a number of her colleagues all of them parents who in one way or another had been through the anxiety and anguish of losing one or more of their children, at any rate temporarily. Not all were abduction cases, and I appreciate that the anxiety and anguish are probably greatest in such cases.
  I am very glad that that group has been formed, as I believe that it will be useful for individuals. When new cases are brought to our attention we do our best to help in the ways that I shall describe, but we also suggest that the parent concerned gets in touch with and perhaps joins that group.
  The hon. Gentleman described briefly one of the cases in his constituency—that of Mrs. Waseem. As he specifically said that he did not wish me to go into detail about it, I shall not do so, but, as he said, we now expect the final decision of the Pakistan court before the end of the month and our consulate general in Karachi has asked to see the Home Secretary of the Sind Government to request action by the Pakistan police regarding the father's unlawful detention of the children and his failure to present them in the civil court. I appreciate that this case has gone on for a very long time and caused Mrs. Waseem great trouble and sadness, but I hope that there will be a good outcome before too long.
  I wish to tackle the general points under three main headings. The first concerns the role of the Home Office, which has equipped me with something to say which I hope the hon. Gentleman will not find entirely negative. Under section 56 of the Offences Against the Persons Act 1861, it is an offence in this country to abduct a child under the age of 14 by force or fraud. That offence is extraditable, because it is listed in schedule 1 to the Extradition Act 1870.
  830
  The Criminal Law Revision Committee has recently examined this area of the law and, as the hon. Gentleman knows, in its fourteenth report on offences against the person, published in 1982, it recognised that in certain circumstances the definition in section 56 of the 1861 Act, especially the requirement that force or fraud must be an element if it is to be a criminal offence, had given rise to difficulty. The committee therefore suggested that there should be a new offence of child abduction. It would be a defence to the new offence that the abductor was the child's parent, except where the intention was to take the child unlawfully out of the country. The new offence would, like the existing offence in section 56, be extraditable.
  The Government have considerable sympathy with the reasoning put forward by the committee in that part of its report. However, it deals with a wide range of other matters on which some of the arguments are less clear cut. My right hon. Friend the Home Secretary does not feel that the time is yet ripe for comprehensive legislation in that area. I take the hon. Gentleman's point—he raised it with me also on 26 January—and I shall draw the attention of the Home Secretary to it. As my right hon. Friend assesses the committee's recommendations, he will wish to look carefully at the point about abduction and any recent experience, such as that adduced by the hon. Gentleman.
  As the hon. Gentleman knows, international law is an important part of the argument and, perhaps, of our hopes for improving the position of parents in the plight that he described. There are two forthcoming international conventions that could be helpful. There is the European convention on recognition and enforcement of decisions concerning custody of children and on restoration of custody of children 1980. We have signed that, and are considering ratification. We are also considering whether we should sign and ratify a second convention, which is an international convention going wider than the membership of the Council of Europe, that being the Hague convention on civil aspects of international child abduction 1980. That convention would deal with the practice of international child abduction by providing procedures to ensure that the right of custody and access under the law of one contracting state are effectively respected in another contracting state.
  My right hon. and noble Friend the Lord Chancellor has recently issued a consultation document about the Hague convention. He has set out, at great length, the proposals of the convention and also discussed its relationship with the European convention. He has asked that all interested people should, by 29 April, give his Department their views on whether Britain should sign and ratify the Hague convention and ratify the European convention. The hon. Gentleman has given his views on that. I am glad that he reproduced faithfully a point that I made at our meeting, that it is no good supposing that the internatonal obligation would be only one way. It would not simply be a matter of enabling a British parent with British court orders, in cases covered by the convention, to recover children who had been taken abroad by the other parent. It would also enable parents living overseas to come to Britain with foregin court orders to obtain children presently living here.

  831
  I suspect that we might have debates of an opposite nature as parents with children living in Britain found that they might be removed from them because of an order granted in a foreign court. That would be the consequence of Britain adhering to one or both of the conventions. It must be weighed against the advantages explained by the hon. Gentleman. All those interested in this important matter should take advantage of the consultation and let the Lord Chancellor have their views by 29 April.
  As the hon. Gentleman recognised, in the present state of international law, when the two conventions are not in force in respect of Britain, children are under the jurisdiction of the courts in the country in which they happen to live. British court orders, or the fact that the children are wards of a British court, do not automatically mean that the orders are applicable where the children happen to live. We have to deal with the courts and authorities of the country where the child happens to be. That is the major stumbling block with which, understandably in their distress, some parents do not come to terms. There is nothing that the Foreign Office can do to overcome that basic point.
  The hon. Gentleman spent a good deal of his speech on the financial troubles of parents who have to fight a case overseas and may also face a good number of complicated financial problems at home. I understand that. I note his proposal that there should be a special fund of public money to help such parents. We shall examine that, though it is not essentially a matter for the Foreign Office. I cannot this morning hold out any hope of providing such a fund.
  As the result of the previous Adjournment debate and the number of cases that have recently been brought to my attention, I have re-examined, with officials, the scope of the help that our consula posts abroad and in London can give parents in these circumstances. As the hon. Gentleman fairly said, we are sending out new instructions this week—I approved the draft at the end of last week. There are various ways in which, for some time, consuls have helped parents in these circumstances, and there are other ways which I believe they can and should use. I shall briefly list the seven points in the circular.
  Consuls will continue to provide lists of local lawyers to enable parents to pursue their case in the local courts. They will also try to obtain welfare reports on abducted children and, if possible, visit them. They will continue to give any help that they can with regard to granting access to children, on the understanding that that is essentially a matter for the jurisdiction of the local courts.
  The first new element is that we are giving consuls discretion and encouragement to draw the attention of authorities in the countries to which they are accredited details of British court orders that affect the children. British court orders do not have an effect in law in those foreign countries, but it might be useful for a foreign court to take account of the review of the facts and the conclusion reached by a British court.
  Consuls will also do anything that they properly can to help bring about a speedy conclusion of legal proceedings. Many of these cases involve delay. Mrs. Waseem's case involved delay. The law has its delays in any country, but sometimes it is suspected that the delays go on because the issue is being avoided. It is right that a consul should be able to say at a certain stage whether a country's processes can move faster on a case.
  832
  A consul may be asked to approach the local authorities for help to trace abducted mothers. This is also relevant to the Waseem case—the parent who is living here is not sure where the children are. There is a case in the United States where that is especially true. It is right that our consuls should enlist, where they can, the help of the local authorities to trace abducted minors.
  Finally, we are emphasising to our representatives ways in which they can be helpful when access has been agreed but there is a difficulty as to where the parent can see the child. I see no objection to their seeing them on embassy property, whether it be the consul's office or another suitable part of the building, or why he should not help, if that is not possible, to find a suitable place.
  Those are not major or revolutionary steps. They do not change the basis on which the troubles occur. I cannot hold out hope of a fund that would relieve the financial side. However, those procedures could take the edge off some of the anxieties and difficulties. Many of the Parents wander into a world of which they know little, of overseas lawyers and all sorts of difficulties. It must be right that our official representatives should give what help and sympathy they can in a common sense way. I hope that it is now established that we should do that.
  Mr. Race: I am grateful to the Minister for placing on record the details of the circular that he is issuing to our consulates throughout the world. Will he make it clear to our overseas representatives that those cases must be taken on their merits and must not be influenced by other considerations that may arise in relations between the United Kingdom Government and the Government of another country? Great offence has been caused to parents who have asked for the protection and assistance of British consular staff, only to be told that it would be difficult for them to raise that case with the authorities in that country because of the problematic relations between the United Kingdom Government and that Government.
  Mr. Hurd: The consul has to decide how best he can help. If for reasons that have nothing to do with the case, our consul is not in a good position—if our relations with the country are bad, or its standards of justice are so completely different from ours that there is a great gap—it may be difficult for him to help. I am in favour of frankness in those cases. If there is a real difficulty and he sees no prospect of being able to help, and if the mere mention, for example, of a British court order might turn the thing the wrong way and be interpreted as an act of interference, the consul must explain matters as best he or she can to the parent. There are difficulties. What we can usefully do depends on the circumstances, which vary widely.
  I am trying to set out ways in which we are giving discretion and encouragement to our consuls to be helpful. They must decide, in the light of the circumstances, which of the methods is best suited to the case. We are talking about dual nationals in the Waseem case. If the children are dual nationals of Britain and the country in which they are at the time, the consul must take that into account, because the courts will do so.
  I thank the hon. Gentleman again for introducing this subject. I hope that he and other hon. Members who have constituency cases will encourage the parents concerned to get in touch as early as possible with the consular department of the Foreign Office, either direct or through

  833
  me. We have given much thought to the matter in the past few weeks. I hope that the new arrangements will be an improvement and that they will take some of the edge out of the anxiety. It would be helpful from our point of view if parents who are in trouble came to us early before they are deep into the difficulties that the hon. Gentleman described.

  Prime Minister (Relations with the Media)
  7.29 am
  Mr. Tam Dalyell: It is a rare, very rare occurrence for a Consolidated Fund Bill debate to be answered by a Cabinet Minister, let alone the Leader of the House of Commons. It may not have been done since the opponent of the Leader of the House in the 1959 general election, in Coventry, R. H. S. Crossman, whose PPS I was, decided to take the debate himself on an awkward topic raised by a contumacious hon. Friend only to find that that hon. Friend had paddled off home to his bed without telling anyone, leaving the Minister and his officials to froth with fury at the ultimate in House of Commons bad manners.
  At one level I apologise to the Leader of the House because people who have to attend the Cabinet or Cabinet Committees the following day should, in my view, not be deprived of sleep.
  At another level I do not apologise, because I raise some basic issues on a delicate and complex subject facing a Government, which are addressed properly to a senior Member of the Cabinet, one whom his opponent Dick Crossman was to describe as then the most intelligent young man in the Tory party and certainly
  "a cut above his friend Enoch."
  In raising the topic of the Prime Minister's relations with the BBC, ITN and the press over the release of the Franks report, and her visit to the Falkland Islands, I am more interested in the future than the past. The overriding significance of the behaviour of the Prime Minister and some of her entourage, Mr. Bernard Ingham in particular, is that it could set an example and precedent which could inhibit the future objective coverage of issues on which emotions are running high.
  In my scale of values, the BBC's objectivity is a major, supreme, long-term national interest. If I concentrate on the BBC, it is, candidly, partly because, as a dissenting voice over the Falklands issue, I believe that ITN and IRN were fairer in opening their doors to minority and dissenting opinion.
  It is the threat, actual and potential, to the supply of objective information during highly emotional situations that should interest Parliament.
  The Select Committee on Defence has examined the role of the media during the Falklands war, and I shall not dwell on the period that it covered. However, one piece of background puts the debate into context. A Cummings cartoon in mid-May 1982 depicts von Hindenburg, Ludendorff, Admiral Tirpitz and the Kaiser being interviewed on "Traitorama" over the caption:
  "If Britain admits German sovereignty over the British Isles we'll stop the war."
  It was discussed in Robert Harris's perceptive and important book "Gotcha" which analyses the blatant use of news management throughout the Falklands war.
  The hon. Members for Canterbury (Mr. Crouch) and Flint, West (Sir A. Meyer), and my hon. Friend the Member for South Ayrshire (Mr. Foulkes) and I, appearing as we did, douce and muted on Panorama of 10 May to put a dissenting view, might be forgiven for not recognising ourselves as the German field marshals of the first world war.

  835
  I recall the programme, which spawned a vast correspondence in The Times, because it transpired subsequently that a number of brave journalists on the BBC staff all but lost their jobs because of the screening of the programme.
  It is a matter of public record also that none other than George Howard, the normally phlegmatic chairman of the board of governors, went on the Radio 4 early morning programme to defend the right of his editorial staff to allow four rational, well-mannered Members of Parliament to express their doubts on one of the BBC's flagship programmes about the justification of the Falklands war and the dispatch of the task force.
  Until the "Panorama" team made its bold decision to devote part of a programme to the dissenters' views, I had supposed that senior BBC journalists were biased against the dissenters in that war and did not give the slightest vent to the views of those of us who, day in and day out, said that we were against the south Atlantic folly.
  One of them, my hon. Friend the Member for Wood Green (Mr. Race), raised an extremely important matter in the previous debate, and anyone who has had experience of the subject of abducting children abroad knows how important it is.
  Throughout that period, if the polls were to be believed, about 30 per cent. of the population appeared to share our view to some degree.
  We know from Mr. Robert Harris's inquiries that the Prime Minister happened to be watching that "Panorama" programme in her Downing Street study and, according to the author, was "transfixed".
  She was not transfixed for very long, because she caused the Government machine to catapult into action, and lurid accounts reverberated around the lobbies and corridors of Westminster of the fraught meeting between Conservative Members of Parliament, Mr. George Howard and Mr. Alasdair Milne. "I have not seen so much blood on the walls since you and I have been here, old boy," muttered one of the more relaxed of the Leader of the House's senior Back-Bench colleagues to me.
  However, the matter did not stop at Westminster. "One cannot imagine what pressure we were under for having given scope to your views," a senior BBC journalist outside London told me after the fighting was over. That was not an isolated case. Many talk in embarrassed and somewhat hushed tones of the pressure that they were under. In my innocence, I wondered what those pressures were, because I did not feel any pressure at public meetings, in my constituency meetings or from my mail.
  In an article in the Sunday Times of 30 January, Mr. Geoffrey Cannon said:
  "Throughout the Falklands war between a third and a quarter of the population were opposed to it, and people were making up their minds on the basis of some false information—for example, on the willingness of the Argentines to negotiate, and the effect of Britain's actions on the possibility of negotiations. John Cole, BBC political editor, worried that the BBC was 'most vulnerable to criticism over its limited coverage of the internal debate in the country although many Tories would regard any coverage of this as pure speculation because the dissenting views were being kept so private.'
  The debate in the country about the Falklands went largely unreported on the BBC, because the 'normal' and 'official' channels used by the BBC—the lobby system, the confidential briefings with politicians, the line taken by the 'Government machine'—went unchallenged. In the event, the BBC toed the line."
  836
  Mr. Alan Protheroe is quoted in the same article as saying that he
  "copied the BBC's responses to the prime minister's office as a precaution against more MP chicanery."
  I hope that, by "MP chicanery", Mr. Protheroe did not mean the opposition of those of us—my hon. Friend the Member for Wood Green, myself and several others—from 2 and 3 April, to what we regarded as the south Atlantic folly. By accident of fate, the veil has been lifted a little, the curtain pulled slightly aside, to give us, to use a Scots word, just a "keek", at what is now going on in this land.
  On Friday 21 January; Channel 4, on the "Alternative News", broadcast a truly astonishing clip of dialogue between Mr. Bernard Ingham, chief press officer at 10 Downing street, then in the Falklands, and Mr. Alan Protheroe, deputy director-general of the BBC, picked up by a radio ham and recorded. I asked the Prime Minister yesterday, pursuant to her answer of 27 January, Official Report c. 495,
  "what progress has been made in the investigation into the circumstances in which telephone calls from Mr. Bernard Ingham to No. 10 Downing Street were intercepted and recorded by a radio ham?"
  The Prime Minister answered:
  "I have nothing to add at present."
  I hope that at some time there will be some explanation.
  On Channel 4 it was said that it had been a scoop for the BBC as the BBC had the only crew out there, and that Downing street hinted that it might be worth the BBC's while staying on in the Falklands. I asked the Prime Minister:
  "what indications were given by her office to the BBC prior to her visit to the Falkland Islands that it would be worthwhile to extend the stay in the islands of their film crew which was already there?"
  She replied:
  "None. The Ministry of Defence, who made the detailed arrangements, suggested to the BBC, without elaboration, that it might be worthwhile for their television team to remain in the Falklands for a few more days."
  Apparently, the Government believed that the hint was dropped on the condition that film shot in the Falklands of the Prime Minister's visit should be pooled. That was the statement made in the "Alternative News." Apparently they did not tell the BBC and the BBC thought that the material was exclusive. I asked the Prime Minister:
  "whether any prior indication was given to the. British Broadcasting Corporation that film taken by them during her visit to the Falkland Islands should be pooled."
  She replied:
  "No prior notice was given."—[Official Report, 7 February 1983; Vol. 36, c. 244–45.]
  I make it clear that on the particular issue of whether or not the film should be pooled, I rather agree with Mr. Ingham. Probably, in the circumstances, on balance, the film shot by the BBC should have been made available to ITN. In fairness, I quote a letter of 1 February front Mr. Alasdair Milne. I gave him warning that I would raise this matter. It says:
  "It was originally intended that Nicholas Witchell and his crew should return to the UK early in the New Year. Sources in Whitehall, however, made it clear that it might be worthwhile staying on, but at no point was Witchell told, formally or informally, of the Prime Minister's pending visit. The suggestion that the BBC was party to 'secret planning' has no basis whatever in fact. After Mrs. Thatcher's arrival, Downing Street officials `demanded' that the BBC film should be pooled: this we refused to do, making it perfectly clear that officials had no right to make such a demand. In keeping with long-standing practice however, we did agree to let ITN have some of our film."

  837
  What concerns me is the threatening style and behaviour of the Downing street chief press secretary as recorded on that clip.
  Mr. Ingham and the Prime Minister wanted maximum coverage. On Channel 4 a recording by a radio ham was played—apparently he is a radio ham on the Falklands. No. 10 threatened the BBC with "incalculable consequences" if it did not agree to provide that coverage. Is the radio ham's version an authentic account of Mr. Bernard Ingham's conversation with Mr. Alan Protheroe, assistant director-general of the BBC? If it is, the Prime Minister's press relations are being handled at senior level by someone whom I can only call a thug. There is no other word than "thug" for the speaker on the tape as recorded. Anyone who heard the recording—I have listened to the tapes three times—would be unable to come to any other conclusion.
  Yesterday I asked the Prime Minister
  "whether Mr. Bernard Ingham told Mr. Alan Protheroe of the British Broadcasting Corporation that the consequences of the corporation's failure to pool the film of her visit to the Falkland Islands would be incalculable and whether this was said with her authority."
  The right hon. Lady replied:
  "We have no exact record of Mr. Ingham's conversation with Mr. Protheroe, but Mr. Ingham has no recollection of having made such a remark."
  They could get a video or a recording from the Library. I think it casual to give the answer:
  "We have no exact record of Mr. Ingham's conversation with Mr. Protheroe."
  We are talking about something which is in the public domain, something which was broadcast on television on Channel 4 and which is available from the Library of the House. Either it is a false recording or it is a true one. If it is an entirely fictitious recording, we should have been told some time ago.
  I am bound to say that previous press officers in this important position—Sir Harold Evans, who occupied the position when the Leader of the House and I were first elected and who was Harold Macmillan's chief press officer, Donald Maitland, Trevor Lloyd Hughes and Tom McCaffrey—would not have thought it part of their job to behave in such a way. I repeat a quotation which I have already given, which reads:
  "'It is childish behaviour' Ingham roared to Protheroe, and then went on about a 'signal service—keeping you people on the islands at considerable risk to ourselves'."
  I asked the Prime Minister
  "what was the nature of the risk of keeping British Broadcasting Corporation personnel on the Falkland Islands which was referred to by Mr. Bernard Ingham in his conversation with Mr. Alan Protheroe of the British Broadcasting Corporation."
  The answer was as follows:
  "The risk was that it would cause speculation or a leak of information about my impending visit."
  I asked the Prime Minister
  "whether in his conversation with Mr. Protheroe of the British Broadcasting Corporation Mr. Bernard Ingham threatened to prevent any of the corporation's film leaving the Falkland Islands unless the corporation agreed to pool it with Independent Television News and Independent Radio News; and whether this was done with her authority."
  The reply was:
  "With my authority, my chief press secretary indicated to Mr. Protheroe that no Government facilities would be made available to return the BBC's film to the United Kingdom unless it was made available to the ITN and the IRN in the interests of fair play."
  838
  Apparently no film was to go out that night unless Mr. Ingham had the absolute assurance that it would be freely available to ITN and IRN. The issue is the pressure being put on the BBC by the Prime Minister's press secretary for the purpose of the Government.
  To make a judgment, one has to hear the conversation to get the flavour of it. Put bluntly, a man who behaves like this should not occupy the important position of chief press secretary to No. 10 Downing street. He is, after all, a civil servant who operates for the Prime Minister. I cannot imagine Harold Macmillan, or Alec Douglas-Home, or the right hon. Member for Sidcup (Mr. Heath), having any truck with the kind of operator that Mr. Ingham has shown himself to be. Consideration should be given to finding him another job in the Civil Service.
  Mr. Ingham's behaviour during the second telephone call to "No. 10" must force the BBC to ask questions about its so-called capitulation. "I won," chortled Mr. Ingham triumphantly when he told Mr. Protheroe things "in no uncertain terms". He gave Ingham an "assurance". Should the BBC allow itself to be pressurised by Governments in circumstances when the Downing street interest is to get maximum publicity for the Prime Minister? As Channel 4 put it, the BBC fought hard and lost. That is a very important matter.
  I quote The Observer of 23 January:
  "Downing Street officials are inquiring into the legality of a telephone intercept of a row between the Prime Minister's press secretary and a senior official of the BBC, which was broadcast in a Channel 4 programme on Friday.
  Mr. Bernard Ingham, the Press Secretary, is understood to be very disturbed that a private call he made from the Falklands to Mr. Alan Protheroe, Assistant Director-General of the BBC in London, should have been intercepted, tape-recorded and broadcast.
  The producer of Channel 4's 'Friday Alternative,' Mr. David Graham, claims that the interception, and tape recording was made by a radio ham who happened by chance to tune in to the call.
  Even if that is legal it is thought that a complaint to the Independent Broadcasting Authority is almost certain to be made."
  I should like to know whether a complaint has been made to the IBA, and if so, what the result is? Is the BBC, in the persons of George Howard, Alasdair Milne and Alan Protheroe, to stand up in the best traditions of the BBC and refuse to be suborned by the politicians, or will it be forced to knuckle under to Government pressure?
  For what it is worth, I record my complete confidence in both Mr. George Howard, whom I have known for many years, in my capacity as a council member of the Scottish National Trust. Our experience of Alasdair Milne during his stay in Scotland, when he was a conspicuously successful head of the BBC, suggests that he will be nobody's creature.
  Mr. Milne told The Standard on 12 May:
  "We might increase our popularity by appearing jingoistic, but no one would believe what we were saying. I do not intend to trade our reputation to please such critics."
  There is a wider issue. Why do we have to tolerate a lobby system in which able, gifted journalists are forced to become beholden to men in the position of Mr. Ingham who threaten assistant directors-general of the BBC with "incalcuable consequences"? Why should men and women of calibre, chosen by editors to represent newspapers at Westminster, be put in the position of prostituting their profession by keeping in with truculent, arrogant bullies of the species that the Prime Minister's press secretary has clearly become?

  839
  I do not know what Mr. Ingham was like in previous posts, but perhaps the heady air of Downing street has warped his judgment. Nevertheless, he is in a crucial position in society, and I am worried that many distinguished journalists are in what can only be called a supplicant relationship to him. We all know that the Leader of the House and the Leader of the Opposition see the lobby on a non-attributable basis on Thursday evenings. I have no objection to that. It is an understood procedure, although it can lead to misunderstandings. However, that is quite different from trekking to and fro once or twice a day to Downing street in the interest of what the system has made into a supplicant relationship.
  That shuttle across the road must disturb all of us who are concerned about healthy press relations in Britain. I am not at all surprised by the Prime Minister's conduct, because domestic politics, rather than the interests of the Falkland Islanders, or high principle in resisting agression, have been her major concern since the beginning of the Falklands issue.
  Indeed, the same Mr. Ingham was the right hon. Lady's hatchet man on the release of the Franks report. Of course, there was concern that the Prime Minister's gloss should be on the report before anyone had had a chance to read it.
  In recent times, there has never been quite such squalid news management. Even the president of the Newspaper Publishers Association, Lord Marsh, has called publicly for the restoration of the embargo system. Even The Guardian and Peter Jenkins, who wrote in a critical vein throughout the conflict and who had shared a platform on 3 June at the Quakers' hall with E. P. Thompson and me, denouncing the war, came out with a mild verdict.
  How could the BBC, Independent Television News, Independent Radio News or any journalist be expected to pick out anything other than the conclusions of the Franks report before their deadlines at 5 pm or 5.45 pm or the deadline for the first editions? The situation was eloquently put by the perceptive James Naughtie, the chief political correspondent of The Scotsman. Writing in his paper on Thursday 20 January, he said:
  "What was vital for Mrs. Thatcher was that the first interpretation of the report concentrated as much as possible on the concluding paragraphs, absolving the Government from blame in failing to prevent the junta's invasion of the islands. She succeeded, mainly by employing the oldest trick in the book. 'News management' is what it is called these days, but it is nothing new … When she read the Franks Report, and its long passages detailing Whitehall blunders, the rows between Lord Carrington and Sir John Nott, and the failure of the Overseas and Defence Policy of the Cabinet to discuss the Falklands for 15 months before the invasion despite constant warnings of Argentine aggression, she decided she had to ensure that it was presented in her own way. As a result copies were released at 3.30 pm on Tuesday, as she rose to address the Commons. Back-benchers interested in the Falklands, rushed out of the chamber, to grab a copy from the Vote Office, as did journalists. Mr. Michael Foot, Mr. Roy Jenkins, Mr. David Steel and former Prime Ministers had been given their copies in advance (though in some cases only an hour before) in the traditional courtesy extended to party leaders, but no-one else had a chance."
  I feel strongly about the matter, because I gave written and oral evidence to Franks, and it was made very clear by Lord Franks and others that he wanted his report read as a whole, and not taken out of context.
  I return to Mr. Naughtie. He said:
  "Naturally the Prime Minister emphasised the report's conclusion that the Government could not be directly blamed for allowing the Argentine invasion—but it was presented in something of a vacuum. The implicit criticism, not just of
  840
  Whitehall's intelligence machinery but of the way in which ministerial discussions were directed by the Prime Minister, was kept well out of sight. Thus the important hours immediately after the release of the report were dominated by Mrs. Thatcher's own interpretation … As one of her officials put it later in the evening: 'It worked.' What he meant, simply, was that the decision to hold back the report until the last minute served its purpose. Downing Street claimed that even after close scrutiny Mrs. Thatcher will emerge unscathed from the report, but officials being officials they wanted to ensure that the Prime Minister herself dictated the way in which it should be first considered".
  It was left to the Sunday newspapers, which had more time, to cast a beadier, more careful eye on what Franks actually said. However, by the time the leader of The Sunday Times was printed—it was deeply critical, having had time to read Franks—first impressions had made their mark, and by Sunday, Mr. Ingham and the Prime Minister had succeeded in their task of putting their own gloss on the Franks committee report. Clearly, this was done with forethought, and it is an example of news management. I am not the only one who is concerned, because my right hon. Friend the Leader of the Opposition, after I raised the matter on Tuesday 18 January, at 3.30 pm on a point of order, said that it was a matter to which Parliament would have to return.
  I quote from Punch of 2 February. My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said in his column:
  "Now that we have all had the opportunity to digest the Franks Report, Mr. Raphael's achievement"—
  a reference to the political correspondent of The Observer—
  "seems even more spectacular. For after weeks of careful sifting, he actually came to the same conclusions as the document's two final paragraphs. The rest of Franks—as all the serious newspapers have now explained—is highly critical of the Government's performance. It takes a journalist of real talent to conduct an independent enquiry and come up, not with the opinions expressed in the body of the report which his investigations mirrored, but with the conflicting judgement with which it ended".
  So, in my view, there must have been selective leaking by someone. I have no proof that it was Downing, street. Indeed, there may have been what I can only call "deep-throated" members of the Franks committee giving all sorts of negative and not-so-negative guidance. We all know how effective deep-throated members of a committee can be in semi-leaking. I have to ask, however, in view of the remarkable conclusions of Mr. Raphael and others, before Franks was let out into the public domain: are we so certain that there was not selective leaking? It was my right hon. Friend the Member for Sparkbrook who wrote that it was a very remarkable achievement to get that so right.
  I come now to the issue of embargoing. The decision to release at 3.30 pm may have been revenge For the leaking of the Falklands honours list. The honours list was leaked, partly by The Times, which was the first, I believe, to break the embargo. There is, however, more to it than that. The embargo was for an excessively long period, from Thursday 7 October to Monday 11 October. It is perhaps the case that the embargo was not for the convenience of the press but for the political purposes of the Prime Minister who did not want the release of the honours list to compete with a major speech that she was making at the Tory party conference at Brighton. In a sense, the embargo on the honours list for such a period of days was something of an abuse of the system.

  841
  It is also true that some Ministers were annoyed about the leaking of the Queen's Christmas message to myself. It was completely understandable that the Queen should refer to the gallantry of service men. The leak occurred because the journalist was appalled that a comparison should be made between the Falklands and the second world war in which both the journalist and myself would have fought against Hitler.
  Why did a journalist tell me about Mr. Ingham's proposed guidance to the press the following day at 11.45 and 2.45 on the morning of Tuesday 18 January? You may recall, Mr. Deputy Speaker, that you were in the Chair when I raised a point of order at midnight on Monday 17 January, about which my hon. Friend the Member for Hackney, Central (Mr. Davis) complained on an early morning programme. The leak occurred because the journalist—not a member of the Left-wing press—was professionally and personally outraged at news management. As a token of my good faith, I refused to appear on ITN, "Newsnight" and radio programmes, although invited, on the evening that the Franks report was published because no one could comment on a report of such complexity without having had time to mull it over.
  The attitude of the Prime Minister, favouring instant comment, is a bit different. The right hon. Lady said:
  "I specifically instructed him"—
  that is, Mr. Ingham—
  "not to brief the press either on the paragraphs or in any way."—[Official Report, 18 January 1983; Vol. 35, c. 176.]
  This was after the matter had been raised on a point of order. Did Mr. Ingham carry out the Prime Minister's instructions? My right hon. Friend the Member for Sparkbrook, writing in Punch on 26 January, stated:
  "despite the Prime Minister's stern injunction, Mr. Ingham did come to the aid of the bewildered press. Of course, he did not brief them before they saw the report. But after Mrs. Thatcher's House of Commons statement, some lost souls did ask him 'to give them a quick run-through'. That is how Mr. Ingham describes their requests. And 'if people do not believe' in the innocence of his agreement to help, 'that is their problem'."
  So, first, I ask whether a man who has come to behave like an operating thug, who threatens the BBC with incalculable consequences, should continue to be the Downing street press secretary or should be redeployed to other duties. Any threat that could inhibit or which could be seen to inhibit the long-term objectivity of the BBC is a threat to the British national interest.
  Secondly, is it healthy that the system should require good journalists to trek daily or twice daily across to Downing Street to meet a chief press officer on the basis of a supplicant relationship, if not being creatures of the Administration at least taking into account the fact that the Ministry is so often the hand that feeds them? Incidentally, that is also true of defence correspondents who become terribly beholden to the Ministry of Defence.
  I believe that Donald Maitland suggested that briefings should be on the record, and I am also told that the lobby voted against that when it had the opportunity to pass judgment on it. I just say to members of the lobby that some of us are concerned that the preservation of any lobby mystique might be extremely expensive in terms of journalistic professional integrity. There is a dilemma here which I raise in a serious fashion and which must be discussed, not least by distinguished members of the lobby themselves.
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  Thirdly, I make a call for the civilised and sensible system of a 48-hour or 72-hour embargo on complex documents to be restored forthwith. The management and manipulation of news is an idea that is alien to the concept of communication in a free society.
  Fourthly and finally, in the light of what has occurred, the House of Commons must set up an inquiry into the workings of the lobby and its effect on Britain comprised of Members, editors, journalists and two or three laymen which should report early in the lifetime of the new Parliament. In my view, this has become a matter of urgency and importance in the light of the events surrounding the handling of the Prime Minister's visit to the Falklands and the release of the Franks report.
  8.12 am
  The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): The hon. Member for West Lothian (Mr. Dalyell) opened his remarks by making a characteristically kind apology for having kept me here through the night and dragged me to the Dispatch Box to deal with the debate that he has initiated. I dare say that we have a shared experience of national service, when one learned to go through the night wearing one's boots. For all the rigours of the Palace of Westminster, I find that an all night sitting is a good deal more bearable than an all night guard duty.
  The hon. Gentleman has raised points of considerable significance and I should like first to congratulate him on his good fortune in securing a place in the ballot for this debate under the new procedures. It is perhaps scant reward for his assiduity that the debate has come on at this witching hour, but I hope that it is of some comfort to him, perhaps more even than it is to me, that I am here to share in the occasion.
  I have tried in preparing my remarks to anticipate, as helpfully as I could, the points with which the hon. Gentleman would mainly wish to concern himself in his speech. I say at once that his speech was a most fascinating occasion and the time went very fast. It was highly controversial, but none the less it did not drag. When we ended with the old question of the reform of the lobby system he will understand if the prescience of my modest office was not such that I have come briefed with a comprehensive reply on that and many other points. Having followed the hon. Gentleman's campaign, I am sure that any points that I do not touch upon will not lie neglected. I do not suppose for one moment that this debate will close the topic.
  I should like first to deal with the publication of the Franks report and the various suggestions and claims that have been made about it. In doing so, it may be useful if I remind the House of the position as it was then regarding the release of official Government documents and in particular their release to the press.
  On a point of order which the hon. Gentleman raised on 18 January he referred to
  "The civilised and sensible habit of an embargo for the lobby".—[Official Report, 18 January 1983; Vol. 35 c. 171.]
  I would not myself dissent from that description, but, for reasons of which the House is well aware, the previous practice of issuing documents overnight on a 24-hour embargo had been discontinued with documents being made available instead only a few hours before publication.

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  As it so happens, I am very pleased at this stage of my remarks to be able to bring the House up to date. I understand that Lord Marsh, chairman of the Newspaper Publishers' Association, has written a very helpful and constructive letter to the chief press secretary. In it he offers a formal assurance that member companies of the Newspaper Publishers Association will use every endeavour to ensure that embargoes are honoured. The way is now clear for some relaxation of the tight restrictions placed on the operation of the system following the wholesale breach of the Falklands honours and gallantry list embargo in October. I am sure that this will be generally welcomed. However, in his remarks on 18 January, the hon. Gentleman went on to imply that, on this occasion, the absence, as he termed it, of an embargo system had led instead to a process of selective briefing. I can assure the hon. Gentleman that this suggestion is indeed mistaken. The facts of the matter are as follows.
  First, my right hon. Friend the Prime Minister took the decision that there should be no advance issue of the Franks report in the form of a "confidential final revise" entirely independently from the restricted embargo system currently in operation. She decided that no one, apart from those to whom such release would obviously be constitutionally proper, should be put in possession of the report before Parliament. The hon. Gentleman would not, I know, wish to contest the propriety of this decision. Accordingly, copies of the report were made available to the press at the same time as they appeared in the Vote Office, which was at 3.30 pm on Tuesday 18 January when my right hon. Friend stood up to make her statement.
  Secondly, it has been suggested that the contents of the Franks report were leaked, with the obvious implication that this was done in order to secure an advantage for the Government. I cannot accept that point of view. The report is there and can speak for itself, as I believe it has done. Nevertheless, let me repeat the assurance that my right hon. Friend has already given to the right hon. Gentleman the Leader of the Opposition. There was no leakage from No. 10. Indeed, the hon. Gentleman will no doubt recall the written reply that he himself received from the Prime Minister on the same day—18 January in c. 111—and that reply seems to me to be an entirely satisfactory statement of the position in this respect and I do not think that I can usefully add to it.
  Finally, I should like to turn to the suggestion that, in some contorted way, the Government were contriving to give through the press office at No. 10 improper guidance to the lobby on the key paragraph numbers in the report. Here again, I find myself unable to do more than repeat the factual and complete account of the position which the Prime Minister gave to the House on 18 January. Nevertheless, it does seem to me quite unreal to seek to impute into what was planned, or what in practice happened, any attempt to manipulate or mislead.
  As my right hon. Friend the Prime Minister explained on 18 January, there was in the event no guidance given to the press on the key paragraphs in the report before it was made available to the House. Previous plans which had been made at the request of the press to extend this assistance with a complex and lengthy document, were dropped following the hon. Gentleman's point of order on 17 January.
  I should like to turn now, Mr. Deputy Speaker, to the matter of the Prime Minister's visit to the Falklands. The hon. Gentleman will today have received written replies
  844
  from the Prime Minister which I hope he will have found useful. Indeed, he was supplied with a great deal of the structure of the speech that he has made. I think I would be fair in deducing from that that he was not entirely satisfied with the answers he received. No doubt he will return to this topic again.
  The hon. Gentleman will not expect me to add any interpretation of my own, but I would like to offer just one observation which I think should not go unsaid.
  In linking these two topics—that is, the handling of the Franks report and the Prime Minister's subsequent visit—the hon. Gentleman is evidently seeking to construct a theory of a Government campaign, consciously and assiduously undertaken, to manipulate the news media to their own advantage and so to deprive the public of a fair and impartial interpretation of events. I cannot accept that charge. I commend to the hon. Gentleman the Franks report itself, and in particular annex A thereof, to show that where there have been "mistaken or misleading statements"—and there have indeed been some—these cannot be laid at the Government's door.
  Mr. Dalyell: Annex A is fraught with inaccuracy. Part of my oral evidence to Franks was to suggest that the Hercules airliner that landed at Port Stanley in the second week of March was a decoy in the sense that it was the Argentines trying out the runway for weight and length. Franks dismissed that, saying that there had been witnesses to a leaking fuel tank.
  The right hon. Gentleman and I have done national service. If we thought that an engine was leaking, and if we were air crew, we would not start off two hours later having had tea and buns at the house of Commander Gammon into the South Atlantic air without repairing it, stripping the engine or finding out what was wrong. This is just a concrete example of where Franks has far too easily dismissed evidence that was available to him. In fact, it is technically ridiculous. Therefore, annex A is open to all sorts of queries.
  Mr. Biffen: That demonstrates the real nature of the debate that the hon. Gentleman conducts with an increasing number of people. The target widens. The guilty men and women are not merely to be found on the Treasury Bench. He says that the Franks report is flawed. He must have doubts about the way in which many of his right hon. and hon. Friends conducted themselves throughout the campaign.
  The hon. Gentleman is an engaging and resolute campaigner, but there comes a time when these matters must be put into perspective. I have known the hon. Gentleman as a campaigner for many years. Indeed, I hold aloft the very first campaign that I associate with him—the case for ship schools and the book that he kindly gave me to mark his appreciation of my interest.
  This debate has taken place in the fairly relaxed circumstances of the Chamber, with all the protection that the Chamber confers on Members of Parliament. We learn that Mr. Bernard Ingham is an operating thug and a truculent and arrogant bully. One would begin to imagine that we had some sort of rough-spoken Yorkshire Rasputin who is manipulating Government and corroding the standards of public morality.
  I am happy to endorse and support what the Prime Minister said about Mr. Bernard Ingham and about the quality of service that he confers in his role as a civil

  845
  servant. It is easy enough to take someone on, knowing that one is protected within this Chamber, but it is less easy to reflect upon what that may do for a man who has a career as a civil servant, who has had a career independent of the Civil Service and who may well have a future career outside the Civil Service. If the hon. Member for West Lothian wants a target, there are plenty on the Treasury Bench. It in no way enhances the style of debate to pick out Mr. Bernard Ingham for the kind of treatment that he has received today, because character assassination demeans a campaign.

  Elderly Persons
  8.25 am
  Mr. David Alton: First, I wish to say something about the debate that has just ended. It is always an experience to listen to the hon. Member for West Lothian (Mr. Dalyell) and to observe the resolute way in which he pursues his arguments about the Franks report and the Falkland Islands. In that respect he is an example to all Back Benchers of the need for determination in pursuing the things that we believe are right. It was equally fascinating to hear the remarks of the Leader of the House. I can only hope that the Minister who is to reply to this debate, which is my first experience of breakfast-time Parliament, will reply as courteously and helpfully as his right hon. Friend replied to the last one.
  I wish to deal with the care of the elderly, especially in Liverpool, where in years to come this will be perhaps the biggest challenge after tackling that of unemployment. It is estimated that by the year 2001 the number of people aged over 75 will have risen to about 493,000. The number aged over 85 will increase by 288,000, or 52 per cent. The number aged over 75 who will be housebound or bedfast will rise by about 74,000, and those over 75 who are unable to bathe without help will rise by 200,000. A further 60,000 elderly people will be unable to go out by themselves, and 250,000 more people over 75 will be living alone, including 143,000 over 85 who will be very vulnerable indeed.
  The Liverpool director of social services states in a report that the situation in Liverpool will be much the same. He says that the number of men and women aged 65 or over in Great Britain has risen by one third in the past 20 years and now represents about 15 per cent. of the population. There are just over eight million over-65s, or one in seven of the population, and more than three million over-75s. In the city of Liverpool, almost one in four of the population is now over retirement age.
  It is easy to become punch drunk with statistics after an all-night sitting, but it is precisely because of the scale of the problem that this is such an important challenge. I wish to raise a variety of matters connected with that challenge.
  The number of home helps in Liverpool has doubled since 1973 and there is no charge to the client. That is to the credit of the local authority and I pay tribute to Liverpool city council for the way in which it has responded in that respect. In a letter which arrived yesterday, however, the director of social services makes it clear to me that extra provision will be required. In 1981–82 some 6,500 people, about 6,000 of them over 65, received that service, but there is a waiting list of several hundred. He says that
  "with the massive problems of the elderly in Liverpool we would certainly like to see extensions, particularly with community based services such as home help provision, which we would intend to extend to cover a 7-day period".
  He goes on to say that application is to be made by the local authority within the inner city partnership funding arrangements to try to increase that provision. I hope that the Minister can give us some idea of how that might be received by the Treasury Bench.
  There are 1,000 home helps in Liverpool—excluding those involved in the home care service—to deal with the one in four of our population over the age of 65, many of whom are reliant on home help. It is far better that people should stay in their homes than be incarcerated in some

  847
  institution for the elderly. It is often the best and most sensitive way to deal with them. Now, it is somewhat ironic that in Liverpool there are 57,000 unemployed on the dole. It costs taxpayers £5,500 per person to keep them unemployed. Would not it be more sensible to use some of that money to put those people into work to deal with the problems of our elderly, especially through increasing the number of home helps?
  The home care service was introduced in 1974 and provides an intensive service of help, domiciliary meals and social work support. There were 144 home helps assisting 1,900 clients last year. But the DHSS guidelines, with which the Minister will be familiar, show a need for 967 home care helpers. The present provision proposals, which total 717, reveal a gap of 250, which would be required if the service were to be maintained at the level at which most professionals at work in the field believe is necessary.
  Another area of concern is the provision of day care and geriatric care, which was referred to recently as "the silent epidemic." I took the opportunity last week to visit the Royal teaching hospital in Liverpool to talk to its senior geriatricians. I met Mr. Raymond Tallis, the senior lecturer in geriatric medicine, and Dr. Jeremy Playfer. While there, we spoke of the inadequate help available for the elderly in the southern and central sector of Liverpool health authority. I wrote to the Secretary of State on Wednesday setting out the problems at the hospital. I sent a copy of the letter to the chairman of the area health authority. I understand that a meeting later today will discuss the problems of geriatric care.
  I want to bring to the Minister's attention the scale of the problem at that hospital and throughout the city of Liverpool. In 1976, Barbara Castle, in her report, recommended that there should be 10 beds for every 1,000 retired persons, and that 50 per cent. of those beds should be in general hospitals such as the Royal. Yet less than 30 per cent. of its beds are available for that purpose. In a city where 25 per cent. of its citizens are over retirement age, that is clearly an unsatisfactory position. There should be 140 acute beds, but there are only 41. In all, there should be 280 beds—140 in the general hospital alone. The position is so bad that the consultants claim that many elderly people are left neglected in their homes because space cannot be made available. They gave me the example of an 82-year-old lady with acute jaundice who cannot be admitted to the hospital because no bed is available. When the elderly are taken into hospital they are often left in general wards and not given the specialist care which the geriatricians believe they should receive.
  All that has an inevitable knock-on effect for the remainder of the Health Service. If people are not treated early enough, geriatricians cannot use preventive medicine. So those who could have been short-stay patients become long-stay patients, thereby merely compounding the problem of overcrowding. Had they been short-stay patients, they could have been sent home to live relatively normal lives.
  The consultants at the Royal hospital point out that it was built at enormous expense and is probably the most costly hospital built in Britain, yet it laughs at the population surrounding it. It is almost as though the hospital envisages the typical and desirable patient as a young man with appendicitis or a common ailment. It is as though the hospital feels that its training staff are best suited to deal with that group, yet the needs of the
  848
  community that surround the hospital are those of a community that has more than its fair share of elderly people and provision for them is actually being reduced.
  The consultants said that the Princes Park hospital, which is attached to the Royal hospital, is being considered for closure. If provision is not improved they say we will return to the 1930s. They say that instead of being placed in a pleasant homely environment, many elderly people will end up in a battered old bed in a ward that might overlook a cemetery. What sort of a way is that for us to treat our elderly people? There must be an increase in provision of that service.
  The geriatricians told me that many skilled and highly dedicated people came to Liverpool to work for the elderly. When they were interviewed, they were told that they would be given increased resources, especially at the Mossley Hill hospital, where a new ward with day care facilities was to be opened. They were told that the facilities would be pioneered by the Area Health Authority.
  Yet, in the past two weeks, the regional health authority has told the area health authority to cut back on that provision. That inevitably means that people who came to the city can now feel only disgust. They have lost morale as they feel despondency creeping into their own lives. Many dedicated staff now feel that the best thing for them to do is to up their roots and go elsewhere. That would be a tragic loss to Liverpool. Professor Williamson, who held the first chair in geriatrics at Liverpool university, which is attached to the hospital, left in disgust in 1976. He said that the service did not measure up to what was required. When I met geriatricians last week they said that nothing had changed. I hope that the Minister will reply to that point.
  I next pay tribute to the Liverpool Echo, which last week highlighted the problems of the elderly. As a compassionate and caring journal it recognises the scale of the problem in the city. I commend that article to the Minister.
  I have previously raised the issue of providing? incontinence pads to voluntary hostels that are attached to the local authority. The problem is not confined to Liverpool, where I am president of the Liverpool old peoples hostel association. At the hostel that my association runs, at St. Augustine's hostel, and at Stapley Home, they face the problem of having to buy incontinence pads for their elderly patients. I have made representations to the Department and to the local social services committee. This need could be financed legitimately by the DHSS. It is a major overhead for many of the voluntary concerns. The cost often works out at several hundred pounds a month, which must be met out of voluntary funds. It would be much better if that money were released by the DHSS, thus making funds available for the better care of the elderly.
  If the voluntary homes close down, statutory provision for old people will have to be made and that will cost the Government a great deal more. On this point, I am grateful to the Minister for his sympathetic replies to the Parliamentary questions that I tabled and the letter that I wrote, but I hope that he will give us more than sympathy today.
  The old-age pension was introduced at the turn of the century by a great Liberal Prime Minister, David Lloyd-George. In 1944, the Liberal Member, Sir William Beveridge, made his maiden speech in the House. He said:

  849
  "I suggest that our aim should be that every British citizen, who works while he can and contributes while he is working and earning, should be assured of an old age without want, without dependence on the young, and without the need for charity or assistance."—[Official Report, 3 November 1944; Vol. 404, c. 1127.]
  Today perhaps more than ever the elderly are suffering far more from the effects of inflation than any other group in our society. Since 1974 they have suffered by about 12 per cent. more from inflation than any other group. That is because the basic things that they require, such as heating and food, which are affected more by inflation than any other commodities, form a greater proportion of their household expenditure than in families with more resources at their disposal.
  A single person's pension is now worth only 20 per cent. of average male earnings. I should like the link between pensions and earnings to be restored. I hope that the Minister will also give us an assurance that next year the Christmas bonus, which is pitifully below the level at which it should be if it is to keep pace with either inflation or earnings, will be increased to meet people's needs.
  In the city of Liverpool one crime is committed every four minutes and one home is burgled about every 17 minutes. Many of the people whose homes are broken into are elderly. If the Minister has had the chance to read my speech when I introduced my Victims of Violent Crimes Bill, he will be aware of the demands that I made for statutory telephone provision and the provision of alarms for elderly people. People who are unemployed could be used to provide those things. If both telephones and alarms could be provided, that would enhance security.
  We need increased help through victim support units. I saw the Minister of State, Home Office recently and discussed the problem, together with the hon. Member for Liverpool, Garston (Mr. Thornton). We both pressed the matter on the Minister. I feel strongly that there should be greater statutory provision of victim support units, complementing those of the voluntary organisations. I pay tribute to the work of people such as Joan Jonker on Merseyside, who has done a great deal of work with elderly people who have suffered from violent crime.
  One of the other things that we could do to help elderly people who are vulnerable is provide more sheltered accommodation, granny flats and bungalows for the elderly. Often accommodation for the elderly is bigger than it needs to be. How sensible it would be if we built more sheltered accommodation, bungalows and granny flats. This could make available the houses in which they live for families on the waiting lists. If they wished, the elderly would be rehoused in the same area in sheltered blocks where there is both security and independence. In the properties in which they live there is frequently poor wiring because the properties are old and there is inadequate insulation, leaving many people to suffer from hypothermia. It is estimated that 60 per cent. of the lofts of elderly persons' homes have no insulation. That is more work which the unemployed could do.
  Many elderly people have become prisoners in their homes. Age Concern says that 750,000 people are at risk from hypothermia. Long hours are spent in cold and uncomfortable surroundings because old people are afraid to turn up the heating because of the cost. Therefore, there should be, first, increased insulation; secondly, increased
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  fuel allowances, and, thirdly, the savings of the elderly should not be regarded as a disqualification for help, particularly towards heating.
  In 1971 the Age Concern manifesto defined the overall needs and aspirations of the elderly as follows:
  "The elderly need to have sufficient income to meet their needs for social physical and emotional well-being; accommodation which ensures their right to privacy and the retention of their own material possessions; and the freedom to exercise those preferences and prejudices which express their individuality and sense of the past. They need easy access to transport to enable them to supply many of their own wants and to pursue their personal inclinations. They need the security of knowing that, in the event of an emergency, they will not be put at risk through the failure of essential domestic supplies or shortage of basic food stuffs whether living in residential institutions or their own homes, they need the kind of help, care and domiciliary support which will help them to obtain the maximum degree of independent living in spite of increasing infirmities or disabilities."
  That was over 10 years ago, and those great challenges remain. We shall be judged by our response to the needs of the elderly. They have served the country well, some in two world wars. Many feel lonely, dejected or isolated. Others are frightened or insecure. If we measure up to the challenge of tackling their problems, we shall have earned the right to call ourselves civilised. I am grateful for the opportunity to raise these important issues this morning and I hope that the Minister will be able to reply to some of those points.
  8.44 am
  The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): I am not sure that I should be believed if I were to say that I was grateful to the hon. Member for Liverpool, Edge Hill (Mr. Alton) for having kept me here all night in order to deal with this matter this morning. However, even in my slightly bleary state I am prepared to acknowledge that it is important. I certainly recognise the hon. Gentleman's anxiety about the subject.
  It is unlikely, in the limited time now available, that I shall be able to cover comprehensively all the points that the hon. Gentleman has raised, but my colleagues at the Department and I will take note of his remarks, together with the letter that he has written to the Secretary of State, which unfortunately I have not yet seen, and the many parliamentary questions that he has asked about this matter over the past few months.
  It would be sensible if I were to begin, not by reiterating the Department's official version of the statistics which illustrate the size of the problem that we face, because the hon. Gentleman began his speech by emphasising the numbers of people potentially and actually involved, but by dealing with one or two points which seemed clearly of particular interest to him—the provision of geriatric services in Liverpool against the background of his recent discussions with people in hospital.
  The hon. Gentleman will realise that I am constrained by a number of factors, not least of which is the fact that the decisions about the future provision of the strategy on these matters is, if not now, shortly to be discussed by the Liverpool health authority. Indeed, the notes with which I have been kindly provided by my Department have the word "tomorrow" written on them. That is now today.
  The hon. Gentleman will know, as I do, that the Liverpool health authority has been considering options for its long-term strategy for some months and is due to consider the detailed strategy at the meeting which is to

  851
  take place today. That draft strategy, as the hon. Gentleman said in his speech, has a considerable effect on geriatric provision.
  At present there are 707 designated geriatric beds in Liverpool including 93 reserved for patients from south Sefton health authority. In practice, other general medical beds, particularly at Newsham hospital are used for geriatric patients. Mersey region estimates that Liverpool should have about 600 geriatric beds by the end of the decade. The existing beds are located at no fewer than eight sites, including two where contractual beds are used. The hon. Gentleman will surely recognise that there is some scope for rationalisation. In addition, a number of hospital beds are in a poor state of repair.
  The health authority is being asked to consider a strategy which will result by the end of the decade in the closure of two hospitals—Princes park and Newsham general. Geriatric patients from Princes park will go to Sefton general hospital and from Newsham beds will be transferred to Mossley Hill, Rathbone and Broadgreen hospitals. The beds used by south Sefton patients will be reprovided at south Sefton itself. There will be other adjustments to geriatric beds at other hospitals.
  I want to emphasise that the strategy is not solely interested in bed reductions, because it contains a number of intended positive improvements. For example, a new 95-bed geriatric unit and a 50-place geriatric day hospital are proposed at Broadgreen as part of the plan. Wards at Park hospital will be upgraded and a 50-place day unit will be opened there. Wards at Mossley Hill and Rathbone hospitals will be upgraded also and a geriatric day hospital will be provided on the Royal Liverpool site.
  The overall strategy has several objectives, as I understand it, in respect of geriatric services. First—this ties in with some other remarks made by the hon. Gentleman—the general level of community services in the city will be improved. Secondly, an increase is planned in day facilities for the elderly and the elderly severely mentally ill. Thirdly, the strategy proposes an integrated admissions policy for general medicine and geriatric services. Fourthly, the plan is to locate beds in relation to the population served, especially in respect of services for the elderly.
  Although, inevitably, I have outlined the broad thrust of the intended strategy under discussion, the hon. Gentleman will understand that I cannot now comment on it, either personally or on behalf of the Department. The strategy has not yet been adopted today, it will then be subject to widespread consultation. If, during that consultation, a health council opposes the closure of Princes park and Newsham general hospital, the ultimate decision on closure will rest with my hon. and learned Friend the Minister for Health, who is present now to show his interest in this matter as well as in another matter that will be discussed in a few moments. It would be wrong, especially in my hon. and learned Friend's hearing, to express my view on the merits of the strategy before consultations have taken place and local opinion has been assessed. However, I assure the hon. Gentleman that my hon. Friends and I will take his remarks into account in considering the strategy.
  Mr. Alton: One issue that was raised with me by geriatricians is that rumours have been flying about and statements have been made by the area health authority almost every week to the effect that different hospitals and
  852
  wards seem to be at risk. They have not been consulted, and although I am grateful for the presence of the Minister for Health, would it be possible for the Under-Secretary of State or his hon. and learned Friend to meet those geriatricians to discuss their misgivings?
  Mr. Newton: My hon. and learned Friend will have noted that request, as I have. It would be inappropriate to go beyond acknowledging it and saying that we shall consider what the hon. Gentleman said, until Liverpool health authority has had its meeting today and we see precisely what is being proposed. Perhaps the appropriate course would be for discussions and consultations to take place between the health authority and those immediately concerned in Liverpool. The hon. Gentleman will understand, for the reasons that I have just outlined, that my hon. and learned Friend would find it a little difficult, at the outset of a process of formal consultation between the health authority and those affected in the area, to become directly involved.
  I cannot comment in detail on all the hon. Gentleman"s remarks, but he will appreciate that several of his points—about home helps, the home care service and the provision of sheltered accommodation—are ultimately matters where central Government can exhort, in some cases encourage, or even try to persuade the health authority. However, decisions about the allocation of resources fall ultimately to the local authorities, and especially local social services.
  Central Government can ensure—we can fairly claim to have done so already—that the needs of the elderly and the problem of social services in general, against the background of the increased number of elderly people, are given the attention that they deserve. The hon. Gentleman will know that Ministers have emphasised repeatedly the importance that they attach to that aspect of social services provision for both the elderly and the elderly mentally ill, who have tended for many years to be a somewhat neglected group.
  There are various ways in which Ministers can show their concern, short of trying to control what happens in detail on the ground. We have shown and will continue to show and develop that concern. Although it is inescapable in the world in which we live, there is never enough money to spend on those matters that we would wish. I hope that the hon. Gentleman recognises that spending on personal social services is about £2 billion, which is about 9 per cent. more in real terms that it was in 1978–79.
  That does not accord with some of the gloomier remarks that have been made about what has happened in social services.
  What is more important is that the longer-term figures in the Government's recent White Paper continue to give personal social services what has been described as a 2 per cent. lead over average cash increases for local authority services generally. Again, that reflects our recognition of the problems in this area. It is reflected in the forthcoming year by the fact that more than 25 per cent. of the £232 million which has been added to the service figures for 1983–84 has gone to the personal social services despite the fact that personal social services account for only 10 per cent. of local authority current spending.
  The number of initiatives that the Government have taken either to provide examples which local authorities may be able to follow in improving their provision or to provide resources for health authorities and local

  853
  authorities to develop good new projects and practices to carry forward is now becoming impressive, and perhaps not yet sufficiently recognised.
  The hon. Gentleman may remember that, in the middle of last year, my right hon. Friend the Secretary of State announced our intention to go forward with three experimental schemes run by health authorities for nursing homes with a special style of care for elderly people in need of nursing care but based on the provision of homes of about 20 to 30 beds rather than keeping people in large hospitals. We are hoping that one of those experimental homes will be under way by the middle of this year and others early next year. Only a few weeks ago my hon. Friend announced £6 million over the next three years for demonstration development districts, with at least one for each regional health authority. We would provide the funds for comprehensive and integrated service for the elderly mentally ill. Again, it is an example and encouragement to improvement of provision throughout the country.
  Within the next week or two, we shall be publishing the new circular entitled "Care in the Community" on improving joint finance arrangements. Again, we are making extra money available to support schemes for getting people out of hospital. Sometimes, that will be the mentally handicapped but it should also include some of the elderly and especially the mentally ill elderly to remove them from hospital and get them back into the community.
  In the Bill currently passing through the House of Lords, there are provisions to improve the registration of residential homes, to provide for dual registration of residential homes and nursing homes and to improve the flexibility and quality of the care and the alternatives that are available.
  In the context of his remarks about unemployment, the hon. Gentleman may wish to recognise the important steps that we have taken to fund and encourage opportunities for unemployed people to volunteer to help in personal social services. It may not go as far as many people would like, and it is not specifically what the hon. Gentleman suggested, but Age Concern and other large voluntary organisations which have been operating this scheme on our behalf have welcomed it and have pressed us to expand it. Only last week my right hon. Friend was able to respond by announcing the doubling, from £2,500,000 to £5 million, next year of the amount of money we are making available directly through voluntary organisations to fund such schemes. That picks up another of the hon. Gentleman's thoughts.
  Although I accept entirely that there is a long way to go and that it will be many years before a Minister can stand here and say that he is satisfied, we are beginning to make some real progress in dealing with the type of problems that the hon. Gentleman has rightly described.
  Mr. Anthony Berry (Comptroller of her Majesty's Household): I beg to ask leave to withdraw the motion.
  Motion, by leave, withdrawn.

  Tadworth Court Children's Hospital
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
  9 am
  Mr. George Gardiner: I raise on the Adjournment debate alternative proposals that have been put forward to keep open the Tadworth Court children's hospital. It is fitting that a cause that has aroused such deep national concern as this should be debated twice on the Adjournment of this House. The first was on 1 December, when my hon. and learned Friend the Member for Burton (Mr. Lawrence) and I drew attention to the necessity for saving Tadworth Court children's hospital, threatened with closure under proposals from the Great Ormond Street Group governors in their search for ways out of their financial difficulties.
  Today's debate is different. It is about how this can be done. My hon. and learned Friend the Minister now has before him a viable scheme to enable these children suffering from cystic fibrosis, or from a range of physical and mental handicaps, many of a terminal nature, to go on benefiting from the unique care provided at this hospital than can truly be said to have stirred the nation's heart.
  In the 10 weeks since the last debate much has happened. The Spastics Society, supported by other voluntary organisations, has drawn up a detailed scheme for the hospital to continue to operate, opening up its respite care facility to far more children in need of it, and at less cost to the DHSS.
  Meanwhile I have been working to ascertain what existing and potential support is available from private charitable sources. I can confirm that more than £250,000 has already been either donated or reliably pledged, and that a number of city businessmen are prepared to launch a special appeal to companies and finance institutions, with a target of a further £500,000, in the event of the Minister reprieving Tadworth Court.
  In the interval my hon. and learned Friend the Minister for Health has himself visited Tadworth and heard the moving pleas from parents in desperate need of a hospital such as this to which they can turn with total trust. He has also seen the alternative proposed by the Great Ormond Street governors, at Queen Mary's, Carshalton. He showed his concern by replying himself to the first Adjournment debate on this subject and he has done so again by his presence today, for which we are all most grateful.
  Before outlining the Spastics Society scheme, which I strongly commend, let me explain why the society felt moved to bring it forward. After examining the proposed alternative at Queen Mary's, the society's professional and medical staff reached the same conclusion as the parents, consultants and everyone concerned with Tadworth—that as an option Queen Mary's was inferior in many respects.
  Though an excellent acute children's hospital, it is not suitable even with the upgrading of wards for the sick and disabled children now nursed at Tadworth. It is a large unit, with more than half its patients adult mentally handicapped, and with inferior rehabilitation facilities—an inadequate hydrotherapy pool compared with Tadworth's, restricted access for parents, and nothing to equal the summer holiday facility offered at Tadworth for children who will never see a holiday of any other kind.

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  Though a good hospital for other categories of patients, Queen Mary's is large and lacks the homely ambience of Tadworth. The Spastics Society is committed to moving children from large institutions into more appropriate forms of care, as the Government themselves envisage in their policy for "Care in the Community".
  I turn now to its alternative plan, the details of which result from extensive consultation with DHSS officials and with health administrators on the ground.
  First, Tadworth court would be taken out of the Great Ormond Street group and administered as a separate unit. This could take the form of a special health authority, or a newly formed charitable trust. On these options we have an open mind.
  Secondly, savings would be made in the running of the hospital and from removal of the obligation to maintain unwanted properties. The society has already suggested savings amounting to £400,000 a year.
  Thirdly, the respite care facility at the hospital would be opened out to take children referred directly to it by local authorities. The Spastics Society's experience here would be particularly valuable. Already it runs a small home for under-16s at Bury St. Edmunds, at a sponsorship rate of £168 per week. This is regularly supported by seven county authorities—proof that when such a facility exists it will be used. A further five neighbouring local authorities have already indicated interest in placing cases at Tadworth court.
  Fourthly, the Spastics Society itself will make an input to the management team. I hope that the Minister will agree with the recent comment in the Financial Times that
  "no one is likely to question the administrative or professional competence of the Spastics Society to lead the task."
  Then there is the question of sale of land. The Great Ormond Street governors want to sell the entire site of 62 acres with outline permission for low density housing development, although I can see great difficulties in them obtaining that. We would prefer to sell the 34 acres not required for hospital use, with the proceeds—estimated by valuers at £1·7 million—used to help support the children at Tadworth court, which would seem to be only just. Planning permission in these circumstances would be much more likely.
  The Spastics Society plan would, of course, require a continuing commitment though probably a declining one, from the DHSS. This is estimated at £750,000 for each of the next three years, to be fixed at a lower level thereafter as local authorities refer more cases, which they are barred from doing at present. Seven hundred and fifty thousand pounds a year may sound a lot, but it must be set beside the £400,000 that it is proposed to pay Queen Mary's to care for these children—a figure that many believe to be excessively low. Nor should we forget the capital cost of at least £320,000 required to bring the designated wards at Queen Mary's up to even the minimum standard.
  Finally, there is the vast potential for funding from private sources. In the debate on 1 December I spoke proudly of £7,000 in our local Tadworth Court appeal fund. In the weeks since, that has soared to £60,000, without any donations being solicited on our part. I spoke hopefully of a survival fund of £250,000. That figure has now been passed, in donations into different appeal funds and pledges of support from major charitable bodies, including the Genesis Foundation in the United States of America. Now business men are talking of raising a further £500,000 which those with experience of such appeals tell
  856
  me is certainly an attainable target for a cause such as this. However, I must stress that all these donations will have to be returned, and all these firm pledges will go up in smoke, if the Minister denies Tadworth Court the future that everyone wants.
  In conclusion I would say this. Both my hon. and learned Friend the Minister and the Secretary of State have spoken eloquently of the concept of partnership in the Health Service. As the Secretary of State told the BMA last December:
  "We need partnership—partnership with local authorities, particularly their personal social services departments, partnership with voluntary organisations."
  What better example, what better chance of partnership in practice, could he have than the viable scheme for Tadworth Court before him now from the Spastics Society, involving other voluntary organisations and local authorities, and supported by the income from an endowment fund of some £750,000 raised from private donations?
  I do not believe that this is an opportunity for partnership in the aid of sick and severely handicapped children that the Minister can possibly reject. In the name of these children, of others who will need such care in the future, of their suffering parents, of the consultants and of the charities involved, I appeal to him to seize it, and to announce that he is giving Tadworth Court his full support.
  9.9 am
  The Minister for Health (Mr. Kenneth Clarke): I congratulate my hon. Friend the Member for Reigate (Mr. Gardiner) on raising such an important matter in the House for the second time in 10 weeks. Throughout discussions about the future of Tadworth Court, he has taken a leading part in the public debate, as his own constituents are directly affected. In the intervening period since we last had a debate my hon. Friend, my hon. Friend the Member for Carshalton (Mr. Forman), and I have visited the two hospitals. We all took the view that it would be quite wrong for Ministers to take any decisions on such an issue without having seen the hospitals for themselves.
  My hon. Friend the Member for Reigate has also taken the lead in the preliminaries of raising substantial sums of money, which he believes could be available, and that reflects the very considerable concern about the future of the hospital. Among the several meetings that I have had with those directly involved in the problems of Tadworth Court, I have had meetings with my hon. Friend, and he has gone over the way in which he anticipates being able to raise substantial sums if the hospital can be saved.
  I should have liked to respond to the plea that my hon. Friend the Member for Reigate made at the end of his speech and to have announced a decision this morning. Last week I was abroad for a brief time and there was newspaper speculation that a decision had already been reached and could be announced this week in the House. That is not the case. No decision has yet been reached. I say that with some regret, because I realise that the continuing uncertainty causes difficulty to everyone involved and we should come to a clear conclusion as quickly as possible.
  On the other hand, it has not proved possible to come to that quick decision and at the same time to do justice to the very many arguments involved and in particular, to the efforts being made by my hon. Friend the Member for Reigate and those who are supporting him and by the

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  Spastics Society. The ideas that he puts forward have an obvious attraction, but to ensure that we are not simply continuing uncertainty and that we are judging the best use of funds and resources as objectively as such vast sums require, it has been necessary to study in considerable detail and depth the proposals that are being made.
  We have examined the proposals of my hon. Friend the Member for Reigate and the charity's proposals, and today, I have a further meeting booked with Mr. Tim Yeo and the Spastics Society, at which it will be necessary to go over yet further details. The Government and I hope to come to a conclusion as quickly as possible once we have all the necessary information and have evaluated it with the necessary care.
  While this anxious debate has been going on, the Government have ensured that services at all the hospitals in the Great Ormond Street group of hospitals continue at their present level, and without interruption, at least until the end of the current financial year. It shows the size of the problems with which the governors of Great Ormond Street and the Government are wrestling when I say that we have devoted £½ million of central funds from the taxpayers' money to keep the present level of services at both Great Ormond Street and Tadworth Court continuing on the present basis, at least until the end of the current financial year.
  As I have not taken a decision, it is obviously not possible for me to go into much further depth this morning. However, I re-emphasise—to allay some of the strongest alarms that some members of the public have expressed about the proposal—that the proposal before Ministers at the moment is not, and never has been, the ending of the services provided to the children at Tadworth Court. The proposal put forward by the governors of Great Ormond street would have allowed for the transfer of all services to the Queen Mary's hospital for children at Carshalton, where accommodation is available about four miles away from the present site of Tadworth Court. The proposal always envisaged the children being in the care of the same consultants as care for them now, and would have provided an opportunity for many of the Tadworth nurses to transfer with the children if they wished.
  The main issue that has been raised by those who challenge the Government's proposal is whether not only the basic services could be provided by the same people to the children at Queen Mary's, Carshalton, but whether the nature of the care provided at Tadworth is so unique and dependent on the individual characteristics of this small hospital that it could not be recreated in the larger unit. Also, I have been very aware of the great worry felt by parents and children, who are subjected to the stress that families experience in some of the cases at Tadworth Court, at any suggestion of change to well established and sensitive arrangements.
  That is the proposal. I should add that some people, in campaigning, have been rather carried away into attacks on the quality of the care at Queen Mary's hospital for children at Carshalton. The people at that hospital have shown great understanding and forbearance in not replying to those attacks. I have visited Queen Mary's, and I was extremely impressed by the dedication and commitment of all the staff there. My hon. Friend said today that he entirely supported my view that Queen Mary's is a highly successful hospital. We have to consider whether the
  858
  nature of the layout and the environment at Queen Mary's would—or would not—allow a successful transfer of all the qualities of the service at present provided at Tadworth Court.
  The charities proposal would of course be supplemented by my hon. Friend's efforts to raise substantial funds for investment. As I said, it is still necessary to appraise the proposal in detail. The fact that we have already spent £500,000 in keeping the present services going while these proposals are worked out shows the formidable nature of the sums of money that are involved. Clearly, no Government, however sympathetic to the case, can accept that Tadworth must continue at any cost. Indeed, no one now suggests that Tadworth Court should continue exactly the same as before. All the proposals presuppose the sale and development of some of the substantial surplus land that is on the site, and include suggestions to improve the occupancy rate of a hospital where at present only about half the places are taken up by patients. We must ensure that the substantial resources, capital, revenue and staff are used in the most effective way, so as to benefit a maximum number of parents and sick children and to keep the highest quality of services in all the hospitals that are involved.
  I want to say a word in defence of the board of governors. I have already said a few words in defence of Queen Mary's, Carshalton. The board has been somewhat unreasonably misunderstood at times when people have criticised it for putting forward its proposals. The board is faced with the conflicting needs of the three important hospitals for which it is responsible. The doctors at Great Ormond Street hospital are continually developing highly specialised new methods of treating malignant disease, diagnosis and treatment of renal disease, and the development of new surgical techniques in the neonate. The results of those developments at one of our greatest children's hospitals is that the cost of providing services there steadily rises, and at times threatens to outstrip the increased resources which the Government keep giving the board.
  So the board looked at the problems of financing its three hospitals. The board itself originally proposed to reduce the number of beds at Tadworth to improve occupancy and to sell off surplus land. The board's original proposals were similar in some respects to those now being put forward by the charities. However, at the time those proposals were strongly resisted by the Tadworth staff and by local interests. After that, the board, in consultation with the Merton and Sutton health authority, developed the proposal to transfer all services to Queen Mary's, and decided to put the proposal to Ministers. The board has throughout acted entirely properly. Its main motive has been to show how it thought it could make resources available to develop better methods of treatment for more people, while safeguarding the services now provided at Tadworth. I am quite sure that the board's intentions and purposes have been beyond doubt throughout.
  The decision now rests with Ministers. I have to consider the moving experience of my visit to the two hospitals and the appeals put to me by those with an interest in the matter. I have also to examine the mechanics, the figures and the viability of the proposals being proposed by the Spastics Society, so formidably and valiantly supported by my hon. Friend the Member for Reigate. I can only repeat what I hope I have already made clear. The main consideration of Ministers in deciding this

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  difficult matter will be to do what we consider to be right in the interests of sick children, their parents and families. The whole purpose of the Health Service, especially in this area, is to make the maximum effective use of resources available to provide for the highest standards of care for sick children and the best levels of support for those families who have sick children within their midst.
  That must be our first concern. It is concern for the sick children and their parents that has moved substantial numbers of members of the public to express their interest in the subject and to put so much support behind my hon. Friend's campaign. I am grateful to all those who have taken part in the debate ranging from the hospital
  860
  governors, those at Queen Mary's and Tadworth Court, my hon. Friend the Member for Reigate, the Spastics Society and members of the public who have sometimes put conflicting proposals to ministers but who are all anxious to do the best for sick children and their families.
  A decision has to be made shortly when we have evaluated the various proposals. I undertake to my hon. Friend that he will be among the first to know, although I hope that everyone will know precisely where the future lies for these services within the next few weeks.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes past Nine o'clock am.

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

Nuclear War and Civil Defence
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, having regard to the 1957 White Paper statement that there are no means of protecting the population against nuclear attacks, they will abandon their proposal to force local authorities to provide an illusion of civil defence.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): No, my Lords. As the 1957 White Paper (Cmnd. 124) also said, it would be wrong not to take some precautions to minimise the effects of nuclear attack, should the deterrent fail to prevent war. That is still the Government's view.
Lord Jenkins of Putney: My Lords, is the noble Lord not aware that the noble Lord, Lord Zuckerman, who was chief scientific adviser at the time, said that the White Paper made it clear that there was in fact no civil defence against nuclear war? However, in view of the rumours, will the noble Lord say whether it is the case that the Government are now reconsidering their civil defence policy and are contemplating whether to revert to a policy of evacuation and of public shelter? Has any decision been reached?
Lord Elton: My Lords. the local authority associations and the GLC have been consulted on the proposed new civil defence regulations. Their views were invited by 31st January. Further discussion and meetings with Ministers will occur during February, and it is hoped to lay the final draft regulations before Parliament in March with a view to debate after Easter. The noble Lord will find the answer to his question therein.
Lord Mayhew: My Lords, even if it is true that organised civil defence may be of limited value in an all-out nuclear war, is it not clear that in other likelier circumstances—such as conventional war, accidents, natural disasters or the dropping of a single demonstration nuclear weapon—civil defence can save a vast amount of human suffering? Is it not extraordinary that people should wish to sabotage what is essentially a humanitarian service?
Lord Elton: My Lords, I find myself at one with the noble Lord on both his analysis and his amazement.
Lord Bishopston: My Lords, at the end of a busy day for the Minister and his colleagues, would he care to listen at 8 o'clock tonight to a radio play entitled "When the Wind Blows", which may be relevant to this Question and may give him some idea of the natural fears and anxieties of ordinary people?
Lord Elton: My Lords, most of your Lordships had the opportunity of seeing the book upon which the script of this play was based. Nobody would stand at this Dispatch Box and say that nuclear warfare was desirable or something to be looked at with anything but horror. The function of this Government is to preserve this people in the face of that threat. We believe that to do so we must not only be armed, so that we cannot be seen to be a push-over, but also be prepared so that we are seen to be ready to run the risk that is necessary in order to preserve peace both for this country and for mankind.
Lord Jenkins of Putney: My Lords, in their anxiety to retain the nuclear weapon must not the Government take great care that they do not seek to condition the people of this country into a frame of mind in which they are prepared to accept it?
Lord Elton: My Lords, with respect, if anybody is trying to condition the British public it would appear to be the noble Lord with this endless series of Questions suggesting that what we do out of motives of compassion and prudence is dictated by either folly or some kind of cruelty.
Lord Orr-Ewing: My Lords, would my noble friend tell the House the difference between the appeasement that we had in the 1930s and unilateral disarmament which certain prople are advocating today?
Lord Elton: My Lords, I think that that is a different question, although there are similarities.

The Coal Industry: Policy
2.41 p.m.
Lord Gormley: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are still fully in support of the commendations in the Plan for Coal.
The Parliamentary Under Secretary of State, Department of Energy (The Earl of Avon): My Lords, Government policies have been and are directed towards securing the basic objectives of Plan for. Coal—an efficient, competitive coal industry with a long-term future.
Lord Gormley: My Lords, may I ask the noble Earl whether it is true, then, that the Coal Board and the Government have issued new target figures, separate from the ones contained in Plan for Coal, and that this is a fight? Surely, it is a terrible state of affairs if new plans and new targets have been established without

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full consultation with all the people who took part in the original inquiry.
The Earl of Avon: My Lords, my understanding is that, as a result of Plan for Coal many things, as the noble Lord is well aware, have gone extremely well. One or two things have not worked out. the first of which was demand, which has not been as high as Plan for Coal originally anticipated; and the second was productivity. My understanding is that at the moment the Government are in discussions about the future and I am sure that they will bear in mind what the noble Lord has said.
The Earl of Lauderdale: My Lords, will my noble friend agree—or can he confirm—that the improvement of productivity, though not yet up to the original target, was better at the face by something like 4 per cent. or 5 per cent. last year?
The Earl of Avon: My Lords, my noble friend is quite right. During the period from 1972–73 to 1981–82, however, it was very disappointing. In the total of that period, it was less than 4 per cent. However, as my noble friend rightly says, it has improved remarkably in 1981–82 to the figure of 3.4 per cent.
Lord Strabolgi: My Lords. may I ask the noble Earl whether he is aware that the retiring chairman of the NCB. the noble Lord, Lord Ezra. had such a great success as he had a thorough knowledge of the industry? Will the Government ensure that the new chairman—his successor—is also someone who has an adequate knowledge of the industry and is not necessarily imported from outside?
The Earl of Avon: My Lords, we all, of course, welcome the noble Lord, Lord Ezra, here, although on this side of the House—and no doubt immediately opposite—we are disappointed that he is going to be seated to the side of us. However, we welcome him just the same. So far as a successor is concerned, I am sure that the House will not wish me to comment on newspaper reports which appeared over the weekend.
Lord Gormley: My Lords, may I ask the noble Earl a couple of questions and then I shall have finished? Plan for Coal, in paragraphs 50 and 78, laid down guidelines of action that could or would be taken by a Government at times of difficulty in the selling of coal. The noble Earl said in his Answer something about the market not being there. I will not talk about productivity because I am told it is higher now than it has ever been; but paragraphs 50 and 78 lay down that help will be given to the industry in selling coal when there is difficulty in the markets. Surely, with the stocks of coal on the ground and the battles that are being fought all over the world for energy supplies, we should get the Government to welcome what is said in these paragraphs and help the Coal Board to get rid of the stocks of coal to consumers in Britain and therefore help British industry?
The Earl of Avon: My Lords, indeed we should like to do exactly that, and I think I should say in answer
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to the noble Lord. Lord Gormley, that we have of course become a net exporter of coal, which is to be welcomed. I hope that it will continue.
The Earl of Lauderdale: My Lords, would my noble friend not agree that, since it was a Conservative Government which started the Plan for Coal in cooperation with the unions and the Coal Board, it might be a good thing for a Conservative Government to initiate a tripartite review of the situation, in view of the depression?
The Earl of Avon: My Lords, I take note of what my noble friend has said, and in the same breath I should like also to associate the name of the noble Lord, Lord Gormley, with the 1974 Plan for Coal, because he was very instrumental in it as well.

The US Rapid Deployment Force
2.45 p.m.
Lord Kennet: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is proposed that British or other North Atlantic Treaty member forces should exercise regularly, or occasionally, with the new United States Rapid Deployment Force and whether it is proposed that Britain or NATO will take part in the discussions to be held to decide on a "forward headquarters element" of the Rapid Deployment Force in the Middle East.
The Earl of Avon: My Lords, to date, neither British forces nor, so far as we are aware, those of other North Atlantic Treaty member forces, have exercised with the United States Rapid Deployment Force. However, we would not wish to exclude the possibility of such exercises taking place in the future. Neither Britain nor, so far as we know, other NATO member nations are proposing to participate in discussions of the kind described in the Question.
Lord Kennet: My Lords, would the Government agree that there is a faint danger of things going rather far forward without anybody noticing? Would the Government further agree that whether or not a given line of development is desirable is something which should be subjected to fairly wide discussion in Parliament and among people? Would they make a statement at some time which could serve as a trigger for a public discussion?
The Earl of Avon: My Lords, indeed; at the moment studies of the impact of the RDF on NATO planning are themselves taking place, so there are no decisions at that level being made at the moment. Of course I shall bear in mind what the noble Lord has said.
Lord Paget of Northampton: My Lords, would the noble Earl agree that so far as rapid deployment in the Middle East is concerned, that concerns the Sixth Fleet and really nobody else? Would he further agree that, so

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far as we are concerned, we are likely to avoid trouble and humiliation if we do not involve ourselves in commitments which we are in no position to implement'?
The Earl of Avon: My Lords, while I agree entirely that the RDF is a case for the United States of America—indeed it is their force—I believe we can offer some encouragement to those countries, although we shall not lead them astray by saying that we can produce a force of this sort of magnitude.

Floating Arms Exhibition
2.48 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will give details of the make-up and schedule of visits proposed to be made by the Floating Arms Exhibition.
The Earl of Avon: My Lords, an exhibition of British defence equipment on hoard the commercial ferry "Viking Venturer" will visit Qatar, Bahrain, Saudi Arabia, Kuwait, Abu Dhabi, Dubai, Jordan and Egypt between 8th February and 15th March. Some 50 British defence manufacturers are taking part in the exhibition, which is designed to display a wide range of military equipment to a number of friendly countries in the Middle East.
Lord Molloy: My Lords, I thank the noble Earl for that detailed information, for which I am most grateful. Could he please say whether the costs of this exhibition will be borne to some degree by some of the 50 companies concerned, and not merely from the Exchequer?
The Earl of Avon: Yes, my Lords; indeed it is the intention to collect the costs for this "on board" operation from the companies concerned.
Baroness Gaitskell: My Lords, would the Minister not agree that this is a most mischievous Question, and only set to make trouble in the Middle East, an already very troubled part of the world?
The Earl of Avon: My Lords, I was not putting any such interpretation on the Question of the noble Lord, Lord Molloy, whose supplementary, I thought, was perfectly within the bounds.
Lord Brockway: My Lords, may I ask the Minister whether there will be any restriction on the countries to whom these arms are displayed? May I also ask: would it not be desirable that the Government should not sell arms to repressive countries which have been found guilty by the United Nations Human Rights Commission?
The Earl of Avon: My Lords, I have given a list of the countries to which this sales group is going. As a
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Government, we consider that the sale of defence equipment to friendly Governments brings important political, military and commercial benefits to the United Kingdom. Every proposal is carefully considered on its merits.
Lord Paget of Northampton: My Lords, will the noble Earl tell us whether Iran and Iraq are included in the friendly countries, or is only one of them included, and, if so, which?
The Earl of Avon: My Lords, I shall avoid the noble Lord's question by saying that neither was in the list that I gave at the beginning.
Lord Cledwyn of Penrhos: My Lords, does the noble Earl think that traffic in arms of this kind is conducive to stability in the Middle East, and could he say whether the Government certify each sale? What is the procedure whereby the Government show their approval or disapproval of sales to these countries in the Middle East?
The Earl of Avon: My Lords, I cannot do more for the noble Lord than to amplify my previous answer, that we consider that the sale of defence equipment—and I underline the word "defence"—to friendly countries brings important benefits to this country. But every proposal—and I mean every proposal—is carefully considered in Whitehall on its individual merits.
Lord Cledwyn of Penrhos: With respect. my Lords, the noble Earl has not replied adequately to my question. He said before that these sales are considered, but could he go beyond that and say what the Government do in respect of these sales? If the Government were to disapprove of a sale to a country in the list which he has given to the House, what could the Government then do to stop it?
The Earl of Avon: My Lords, they fail to give a licence for the export of those goods, and I can give examples of where this has happened.
Lord Avebury: My Lords, what happens in the case of Buenos Aires, where there is such a good sale for naval gas turbines and electronic equipment for controlling Exocet missiles?
The Earl of Avon: My Lords, I think that we are going slightly wide of the mark on this Question. Personally, I believe that what we are doing is an exceptionally good exercise.
Lord Mowbray and Stourton: My Lords, is it not the case that, under all post-war Governments, British military, naval and air force advisers have been seconded to certain of the Middle East Trucial States Governments, and how is it to be expected—I ask myself—that we should not support them with armaments?
The Earl of Avon: My Lords, I am grateful for my noble friend's intervention. I should like to underline again the word "defence".
Lord Molloy: My Lords, may I put to the noble Lord a proposition? In so far as a remarkable amount of administrative information must be gained, and probably more ability accrued, through the Floating Arms system, can this be used in the future—for example, by the Board of Trade for exhibitions of the same style of other great British manufactures, which are not necessarily arms?
The Earl of Avon: My Lords, I am sure that the Ministries as well as the commercial attaches concerned will very much bear in mind what the noble Lord has said and see how successful this particular venture is.
Lord Kennet: My Lords, when did a British Government last approach the other principal arms exporting countries of the world, with a view to a mutual self-denying ordinance that they would not "flog" weaponry around the place to less developed countries, which has the sole result that they kill more of each other's citizens whenever they have a fight?
The Earl of Avon: My Lords, I can see a lot of question marks about the noble Lord's question. To start with, who are they? But, even more difficult, as we have discovered fairly often in latter years—the noble Lord shakes his head—if we do not do it, somebody else does it, anyway, so an ordinance of self-denial is not altogether profitable.

Statements
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Glenarthur will, with the leave of the House. repeat a Statement that is to be made in another place on telecommunications regulation.
This will be followed by my noble friend Lord Avon repeating a Statement on the Central Electricity Generating Board vessel charter.

British Nationality (Falkland Islands) Bill [H.L.] formerly British Nationality (Falkland Islands) Amendment Bill [H.L.]
Report received.

Water Bill
2.55 p.m.
The Minister of State, Department of the Environment (Lord Beliwin): My Lords, I beg to move that this Bill be now read a second time. The broad purpose of the Bill is to restructure the way water services are managed in England and Wales. It proposes changes in the constitution of water authorities and improvements in representing the interests of consumers. It also provides for the dissolution of the National Water Council and the Water Space Amenity Commission. The Bill makes other changes
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in the way in which water authorities will conduct their business in future, and it contains other important provisions relating to borrowing. overseas activities, sewerage functions and the repeal of the Water Charges Equalisation Act 1977.
The cornerstone of the proposals is to help the water industry, through this Bill, to come of age. It is not a radical restructuring—that was carried out in 1973. 1 pay tribute to my right honourable and honourable friends that in the Water Act 1973 they produced a highly effective reform. For the first time, there were unitary authorities responsible for managing water resources in river catchment areas. from the moment water falls as rain to the time it flows out to the sea.
Most of the advantages then foreseen have come about. There is an ability to plan all uses of our rivers and other water resources together, whether for water supply. sewage disposal. land drainage, recreation or other purposes. There is the opportunity for effective planning over wider areas; previously, there were 198 statutory water undertakers and over 1.300 sewerage and sewage disposal authorities in England and Wales; the inefficiencies and inadequacies of that system are widely recognised. The present system represents a major improvement. There are no proposals in the Bill to alter the basic responsibilities and areas of the water authorities.
The overall success of our reorganisation can be judged from widespread foreign interest in our system. Other countries have copied it. Even the Japanese
have had discussions with officials of my department about introducing similar arrangements. This is one case where we might be happy to let them borrow our ideas. Having said which, it has become apparent over the course of time that the water authorities do not operate within the right managerial framework and this has led us to make the proposals in the Bill. Our conviction was supported by the Monopolies and Mergers Commission in their 1981 Report on the Severn-Trent Water Authority and its two water companies. They recommended that the size of Severn-Trent's membership should be substantially reduced, and that its membership should not be based predominantly on local government representation.
This brings me to the first of the main provisions in the Bill. Clause 1 provides that water authorities are to be reconstituted as small boards of between nine and 15 members. all appointed by Ministers. This marks a major departure from the arrangements which have been in force since the 1973 Water Act. Currently, the majority of authority members are appointed by local government and the size of the membership is generally much larger than the proposed boards, reaching as many as 62 members in the case of the Thames authority. That is larger than many local authority councils. let alone commercial or industrial boards, and clearly it makes no practical sense.
It was felt at the time of reorganisation that it would not be appropriate to remove management of the new authorities from the orbit of local government. In particular, local government had accumulated experience over the years which was of considerable benefit to the water authorities in the first years after reorganisation. A compromise was reached which reduced the involvement of local government but

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provided that local government members should form a majority on each authority. At the time, this arrangement was a sensible solution to the problem of transition to the new system. But I think it is fairly generally accepted that it has not proved a satisfactory long-term answer to the requirements of efficiency and effective management.
First, the unwieldy size of the boards, and the local government régime within which they are required to operate, has resulted in a plethora of committees, subcommittees and working groups with all the attendant bureaucracy and administrative costs. These are local government arrangements. They are not, in our view, appropriate to such organisations as water authorities whose purpose is to provide services to the consumer as efficiently and as economically as possible. The report of the Monopolies and Mergers Commission pointed to the considerable savings which could be made in this area. In the case of Severn-Trent alone these were estimated at £650,000 per year.
Secondly, the system of local government appointment has led to a high turnover in membership. On the Thames authority alone there have been no less than 131 members since reorganisation. How is it possible to preserve continuity against such a background?
Thirdly, there has been a good deal of confusion between the different roles which water authority members are expected to play under the present structure-those of executive management, consumer representation and representation of local interests. It has been unclear where a local authority member's primary responsibilities lie—to the water authority of which he is a member, to the local authority which have appointed him, or to the people of his area. In this respect the 1973 arrangements have been an unsatisfactory compromise.
The Government's proposals—which follow a consultative exercise last year—will help to reduce the bureaucracy by a very considerable margin. An important subsidiary change will allow senior executives to become members of the new boards. This will put those with primary executive responsibility into the decision-making role. They must accept full collective responsibility for the consequences of board decisions.
However, we have made it clear that the new arrangements should take account of the historical and functional links between local government and the water industry. For this reason, we propose that county and district councils will have the opportunity to nominate people for at least two appointments to the new boards. Like the rest of the appointments, however, they will be for fixed terms and the appointments will be made by Ministers. All those appointed will need to be able to make their contribution to running a large-scale industry.
In addition to the provisions of the Bill to strengthen the management role of the authorities, we have put forward important proposals in Clause 7 to improve the representation of consumer interests. Clause 7 requires each water authority to prepare a report on the arrangements they propose to make for the representation of consumer interests in their areas. In so doing, they must have regard to guidelines issued by
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the Secretary of State. The Government are currently consulting on a draft of these guidelines on which we have asked for comments by 31st March. The proposals put forward by the authorities will be subject to approval by the Secretary of State.
Water authorities will be asked to appoint a consumer consultative committee for each of their divisions and the interests of groups representative of domestic consumers, industry, farming, commerce, recreation and amenity will be fully represented. Also, each county and district council within the area served by the consultative committee will be represented. In their role as elected members representing the electorate this is the area where councillors can make the most effective contribution. The consultative committees will have the right to look into a wide range of issues including charging policies, investment plans, local concerns and individual customer complaints. On the major issues, such as charging policies, they will have to be consulted before decisions are made. We believe that they will be able to make an important contribution.
Another major proposal in the Bill is to abolish the National Water Council and the Water Space Amenity Commission. The council played a valuable role in the years following water reorganisation and I would like to pay tribute to my noble friend Lord Nugent who chaired the council for its first five years and played a key role in its work. The council's task in those early years was to ensure that the water authorities' voice was heard by Government and the world at large. There was a danger in their infancy that the water authorities could not have made a contribution to the many debates—on pollution control, resource management and the like—where their opinions are of critical importance. The fact that this was not so, that the voice did not go unheard, is in no small part thanks to my noble friend and to the enthusiasm and dedication of the council's staff.
The council's statutory role is a mixture of the advisory and planning on the one hand and the executive on the other. The advisory and planning role was central to the thinking in the early 1970s. Continued high growth was expected at that time in water consumption—2·4 per cent. per annum had been the pattern in the 1950s and 1960s. A need was perceived for a national strategy. Nowadays, however, forecasts of growth are much smaller. The water authorities collectively estimate 1·2 per cent. growth over the next 20 years, and in fact since 1979 water consumption, even at times not affected by industrial action, has actually been falling. Water authorities are, to an extent not fully appreciated in 1973, capable of dealing with most of their own problems within their own boundaries.
The NWC has only a few direct executive responsibilities. When we announced our decision to wind up the council, we issued a consultation paper setting out suggestions to the water industry and others about how those functions, where they were still necessary, should be carried out. Broadly, the responses to our consultation paper confirmed our preliminary views. There is not time today to go into the details of the different functions, but I would like to mention one. The NWC does have responsibility for negotiating pay and terms and conditions of service in

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the water industry. This is of course a matter of great topicality. In our view, it is right that the water authorities should themselves be directly responsible for these matters and the chairmen of the authorities are considering how in the future they would wish to see negotiations carried on.
Clause 3 also provides for the dissolution of the Water Space Amenity Commission. Our judgment of WSAC is similar to our view on the NWC. The Water Space Amenity Commission played a valuable role in the early days in promoting a wider awareness, among those primarily concerned, of the importance of water recreation. However, WSAC has now fulfilled this role. Water authorities have fully acccepted the importance of recreation, conservation and amenity work in accordance with their statutory duties under the Water Act 1973. Moreover, the chairmen of the water authorities have agreed that the new Water Authorities Association should have joint meetings with the various recreational bodies at national level, and have also agreed that there will be committees at the regional level as part of the new consumer arrangements. to ensure that the links are maintained at that level.
Two provisions linked with our structural changes have given rise to special concern. The first is that the Bill proposes that there should no longer be access for press and public to meetings of water authorities and their committees. I yield to no one in my advocacy of openness in Government. After all, it was my right honourable friend the Prime Minister who was responsible for the Public Bodies (Admission to Meetings) Act 1960 which first required that local authority meetings and committee meetings should be open to press and public to attend and report upon. I was myself, during the proceedings on the Local Government Finance Bill, a firm supporter for our proposals to throw more light on the expenditure decisions of local government, and, I may add, my views were not universally shared in this House or elsewhere.
However, what has to be recognised here is that water authorities are being changed by this Bill into small executive boards. It is impossible to function effectively as a member of such a board if at every stage one is concerned that the odd word here, the odd outspoken comment there, will hit the headlines next day. We in this House, like Members of the other place and of local authorities up and down the land, are used to the press taking interest in what we say. In a debating chamber such as this, or such as the meetings of a water authority at present, that is reasonable and proper. But the new small executive boards of the water authorities will be totally different in character.
It is sometimes said that because water authorities levy a tax they must be open to public scrutiny. We do not accept that they levy a tax. They levy charges for the services they perform, for the facilities and rights they make available. The charges may still, for most domestic consumers, be linked to a rateable value; but that is no longer the case for industry, increasingly it is no longer the case for commercial undertakings and all householders now have the opportunity of a metered supply if they wish. They do not have to pay for their
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main water charges on a tax basis, and we do not accept the argument that, for reasons connected with their charges, they should admit the press and public to their meetings, any more, for that matter, than do gas and electricity hoards. About one-third of charges received for water supply come from metered supplies. I might add that the water companies which charge for water on the same basis as water authorities have never been subject to the Public Bodies (Admission to Meetings) Act.
That is not to say that the public should not continue to have access to information about water authorities. Indeed, we attach considerable importance to ensuring that they should. In another place, we explained that the water authority chairmen have drawn up a code of practice on their future relations with press and public. One provision is that press should be admitted to meetings of consumer consultative committees. I have mentioned the importance of these committees, the wide range of questions they will be examining, and the fact that they will have access to whatever supporting information they need to discharge their functions. They are to be established precisely to ensure greater public involvement. They will meet in local divisions of the water authorities and will therefore be much closer to the majority of local newspapers than meetings at regional headquarters, often many miles away.
The chairmen also propose to have regular press conferences after meetings, which will give the press a chance to question as well as to record information. In terms of informing the public this will go much further than a right to attend meetings. Authorities will invite the press to attend meetings where special circumstances justify this. Detailed implementation of the code is to be discussed by the authorities with the Guild of British Newspaper Editors, the National Union of Journalists and the Institute of Journalists.
The other area of concern is the jurisdiction of the local ombudsman. The local ombudsman does not have the right to investigate nationalised industries and we can see no case for treating the water authorities differently. However, we have accepted that there are some areas where the functions of water authorities overlap with those of local government. In those cases—land drainage, and sewerage cases where there is a local authority sewerage agency—we think it important that the local ombudsman should continue to have a right to investigate water authorities as well as local authorities. These represent a substantial part of the local ombudsmen's caseload—about half the complaints investigated have been complaints of this kind. We have made an amendment to the Bill in another place to secure the continuation of the jurisdiction in these overlapping areas. The removal of local authority members as such from water authorities in our view makes it inappropriate for the local ombudsman, whose jurisdiction is over local authorities and similar bodies, to continue to have jurisdiction over the water authorities.
The Bill is introducing an important new area of scrutiny over the authorities. The provisions in Clause 7 for arrangements to represent the interests of consumers, as I have explained, will mean that in

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future the consumer consultative committees will be able to investigate complaints not satisfactorily dealt with by the water authorities. Moreover, the Bill makes no change to the other safeguards for customers. They will continue to have the right to raise matters of concern with the water authorities' auditors. There will continue to be annual reports and accounts published, and we have recently taken steps to improve the value and quality of the information contained in these reports. The authorities will still be answerable to Ministers and Parliament for what they do. and I can assure the House that this is no mere fiction. The size of my colleagues' postbag on water authority matters, and our willingness to answer questions on a wide variety of water topics, is a proof of this.
I would like to deal briefly with the other major provisions of the Bill. Clause 2 increases the borrowing limit of the water authorities. The authorities are expected to reach the current limit of £5,000 million by about the end of next financial year and it is important to take the opportunity to increase the limit. The Bill provides for an immediate increase to £6,000 million and there is provision to raise the limit by a further £1,500 million by order.
Clause 5 deals with the power of water authorities and statutory water companies to act overseas. It will enable them to provide advice and assistance, including training facilities, in respect of any matter in which they have skill or experience. This will allow water authorities and statutory water companies to help British exporters to take advantage of the very substantial opportunities which are opening up. We have proposed important safeguards to ensure that water authorities are not able to compete on an unfair basis with the private firms involved in overseas markets.
Clause 6 deals with the arrangements for carrying out sewerage functions, particularly determinations under Section 15 of the 1973 Act and the relationship between the water authorities and local authorities where they are their agents for sewerage work. The Monopolies and Mergers Commission has recently, at our request, produced a report on the sewerage functions of the Anglian Water Authority and North West Water Authority. They did not recommend any fundamental changes. They felt that agency arrangements should generally continue but that water authorities should have clearer control.
Their conclusions form the basis for the consultation paper which we issued on 8th November indicating the Government's provisional views for change. We are currently considering the responses which we have received. Any amendments we feel are required, in the light of this consultation, will be tabled at a later stage, but I should repeat the assurance made by my honourable friend in another place that the Government do not see any need for fundamental change, nor should water authorities interpret the MMC report as an invitation to tear up agency agreements. Wherever agency arrangements are the effective and efficient way of proceeding, they should continue. There is, however, one specific but modest proposal about the Secretary of State's determination of applications made to him to vary or end sewerage
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arrangements which we have decided to include in the Bill as Clause 6.
Finally, Clause 8 repeals the Water Charges Equalisation Act 1977 which was introduced by the last Government, with the intention of offsetting the cost of water supplies for customers in high cost water areas. That Act failed to achieve its purpose. In consequence of the Act, almost as many consumers' bills moved away from the national average as towards it. The Act has not, in fact, been implemented since 1979, and we are now taking the opportunity to repeal it.
The overall purpose of this Bill is to improve efficiency and cost-effectiveness. That is the hallmark of the present Administration. We believe that this is the area which can bring the most benefit to the public. The importance of this principle in the water authority context is underlined by the enormous size of the industry: with capital expenditure of almost £700 million a year, and revenue expenditure of £1.77 billion per year. this is a tremendously important industry to all the citizens of this country. It is vital that standards of service to consumers be maintained, and, where necessary, improved, but we just do not believe that this inevitably means at increased cost. The more efficiently the industry operates, the greater the margin for improved investment—which I am sure many noble Lords will say this afternoon is something vitally needed. I am, of course, aware of the recommendations which relate to this in the recent report by the Select Committee on Science and Technology on the Water Industry.
In our view, the principles of this Bill are that the authorities should he given the right form of management and the right overall framework within which to operate, in order to achieve the economies and improvements for which we all hope. When we first canvassed the possibility of change in the structure of the water authorities a year ago, most of those we consulted, apart from the local authorities, favoured what we proposed. I know that there is continuing concern among many local authorities, but we are not severing the links with local government. There will still he local government members on water authorities. There will also be an important local authority input to the new consumer arrangements. We remain convinced that this is the right way forward. I commend this Bill to your Lordships' House. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Bellwin.)
3.19 p.m.
Baroness Fisher of Rednal: My Lords, I have listened very attentively to what has been said by the noble Lord the Minister, but I must say at the outset that we on these Benches cannot accept the principles on which the Bill is based. We have serious reservations about several clauses, and the Minister has said nothing to satisfy our disquiet or to allay our suspicions. We would accept that the water industry is big business; we do not quarrel with that. But we say that the needs of the community and of the consumer must be clearly recognised.

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The noble Lord the Minister spoke at great length, but he did not tell us one or two things. He did not tell us that the Bill does nothing at all to reduce the household water bill; it contains nothing to find a fairer system of charging. If we followed the press reports of the Tory Party conference last year, we know that the question of a fairer system of charging was discussed at great length at the conference. We also know that the cost of water is unrelated to the amount used, except. as the Minister said, when a meter is installed; but the number of domestic consumers who have meters installed is negligible. Therefore. charges are based on the rateable value of the property. There is no need for me this afternoon to remind this House, which has discussed this problem many times, of the position of the single person householder and the iniquity of the rating system; that point has been raised many times in debates in this Chamber. We find that in this Water Bill the iniquity is perpetuated. How much more welcome would the Bill have been to this side of the House and to the 25 per cent. who are single person householders in this country if it had brought forward some means of counteracting the unfairness of the part they have to play in paying for the water that they use.
Of course, the Bill does nothing at all to improve the water supply or the treatment system. We have heard of nothing in the Bill on conservation. We have heard that the regional water authorities will be these very small executive bodies. May I say that they will no doubt become the yes-men of the Ministry. What we would ask the Government is whether it will he their remit, or Whitehall's remit, to formulate a national water policy. We on these Benches must express concern that the small executive bodies which will comprise the regional authorities are perhaps not the people who are going to be concerned with a national water policy. But we can see that the provisions of the Bill will perhaps make these small, élite groups a halfway house to privatisation.
There is nothing in the Bill that shows us where there is going to be any improvement in efficiency; there is nothing spelled out at all. It might be worth saying that it will probably worsen industrial relations within the industry by abolishing the national joint industrial council. We on these Benches must register our apprehension and concern regarding the arbitrary way the action was taken to abolish the joint industrial council without any discussion with the participants.
The Bill does nothing at all to repair the failing sewerage system. In this House we have had a Select Committee sitting for a number of months discussing the water industry, and that also draws attention to the difficulties, especially the difficulties that will be faced by the inner city authorities. There is nothing in this Bill that gives us any encouragement that the Government are considering the failing sewerage system. We on this side of the House will be tabling amendments, which we hope will be favourably received, to allay the concern of local authorities regarding sewerage arrangements. That is not only a concern of the Association of Municipal Authorities but also of the Association of County Councils and of the shire areas.
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The Minister has made no mention of the internal drainage boards. If the figures supplied to me are correct. I understand that these boards spend up to approximately £60 million a year. Perhaps the Minister, in winding up, could give us some information on what will be the position of the internal drainage boards.
My Lords, up to now I have been speaking of what the Bill does not do. I would like to use the rest of my time in drawing to your Lordships' attention what the Bill in fact does. First of all, it takes away. all the democratic rights presently in action; there are no democratic rights left in the Bill. It takes away local government representation as we have known it ever since the existence of a water industry. Let us remember that it was the local authorities which first decided that in the interests of health there must be a safe water supply and disposal of the waste. Local authorities built up a great reputation for their water authorities. All that is now going to be removed from local authorities; there is no direct representation of local authorities.
The Government are being very magnanimous: they have been able to concede—this was said in a Statement in the other place—that there will be two local authority representatives on each water authority. Big deal! we would say. What we want to know is how these arrangements are going to be contained in the Bill. There is nothing in the Bill that says specifically that the local authorities will have two representatives. If we are going to have only two, we want to know where they are going to be provided for in the Bill. Are the Government going to bring forward amendments at a later stage regarding the nomination of local authority members? Is this matter going to be contained in a schedule to the Bill? These are important questions, because local government means local democracy.
If we are talking about democracy, it seems strange that a Government that believes in open government wants to close all this industry up. When we look at democracy and how this affects the local government ombudsman, it must have been a very small portion of elastic of democracy. I am not going to enlarge on the role of the local government ombudsman because we on these Benches are very privileged to have here my noble friend Lady Serota, who has an excellent record in her capacity as local government ombudsman. We recognise that, and we hope that noble Lords will also recognise that this afternoon when she addresses your Lordships. I understand that she will be concentrating entirely on the very limited powers the local government ombudsman will have.
Of course, open government falls into serious disrepute and a most serious invasion of democracy arises from removing the media from the meetings of the authorities. To think that the Government are insisting—not saying it might be permissible, but insisting—that the press have no right at all to be present at the meetings of this very highly skilled group of people, these "intellectual watercrats"! They will actually be anonymous, faceless. No doubt after the end of the meeting there will be some lowly office boy who will go out and say, "This is what I have to read to you. We have decided 'X', 'X', 'X'." Do you think that that really will be satisfactory to the press?

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My noble friend Lord Ardwick has, we know, spent his whole lifetime in the service of the press, and he will be enlarging upon this particular point in the Bill. But, before I leave it, I pose the question to the Minister: are these water authorities to be executive bodies—that is, as I said, yes-men to the Minister—or are they to be policy-making bodies which will decide how large amounts of money shall be spent? If the latter, their power must come under public scrutiny.
Of course—and this sounded absolutely wonderful when the noble Minister spoke—the next step that the Government propose will be that a democratic check of the activities of the water authority will be in the shape of the consumer consultative councils. I want to say that we shall be pressing from this side of the House at the Committee stage that provision is made for the consultative councils to have real powers, including real powers of investigation, and that they shall become completely independent of the water authorities. They cannot fulfil the job if the water authorities decide who is to be the chairman and, to a certain extent, who is to be on the committees. We feel that, if they are to be useful and are to be the watchdogs, they must be completely independent of the water authorities. We shall be seeking an understanding with the Government that the water authority proposals on the arrangements that they propose to make for the representation of consumers in their areas will be published and opportunities given to interested parties to express their views before the proposals are finally agreed. It is not only local authorities that will be concerned with who will sit on the consumer councils: the National Farmers Union has also written to me expressing concern, and there are anglers, people interested in water facilities, big business, big industry; all these people want to be sitting on these consumer consultative councils.
Therefore it is important as well that the Government also recognise that both sexes are given consideration when the consumer councils are set up. The National Water Council—as the noble Minister has said, and he gave great credit to the noble Lord, Lord Nugent, who will be speaking later—has had a very powerful influence at national level. It has been able to justify a great amount of capital expenditure. Therefore we must express concern that this powerful voice, which the Minister accepted, will be lost to the water authorities.
Sport, recreation and leisure facilities have taken on a new dimension during the last decade, and a large number of the population looks forward every week to using the facilities of the water industry. But the Bill is failing to give statutory rights to sporting activities and recreation, to amenity bodies, in the way that existed under the old Water Space Amenity Commission, and the Minister must be fully aware that there will be a conflict of interests between the considerations affecting the consumer—safeguarding the pure water supplies and their disposal and the cost of providing that—and the interests of those involved in recreation and leisure pursuits.
There are many noble Lords in this House who have extensive knowledge of wildlife. We came to know those noble Lords very well on the wildlife Bill. Many noble Lords have great interest in conservation. I see
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that my noble friend Lord Melchett is speaking later in the debate and I know that he will be putting the point of view of the conservationists. There are noble Lords who have interests in sailing, angling, canoeing, and no doubt they will be enlarging on these particular issues.
I am drawing to a conclusion, because I recognise that there is a very long list of speakers; but first, may I say, we are all looking forward to listening to the maiden speeches of my noble friend Lady Nicol, and the noble Lord, Lord Hemingford. In conclusion, I should like to say that we on these Benches fail to see the necessity to tear up the whole structure, as we now know it, by its roots and go in for another massive reorganisation. Changes might be needed, but the changes that the Government propose will mean, in our view, more close control from the centre. There will be less public awareness of the issues, and the accountability from the new water authorities will be negligible. Therefore, we cannot support this Bill.

Telecommunications Regulation
3.36 p.m.
Lord Glenarthur: My Lords, with the leave of the House, I should now like to repeat a Statement being made in another place by my honourable friend the Minister of State for Industry and Information Technology on telecommunications policy. The Statement is as follows:
"With permission, Mr Speaker, I will make a Statement about telecommunications policy.
"After privatisation, British Telecom should be able to develop and diversify in a dynamic manner not only in the area of existing telecommunications services but also in the new information technology systems on a world-wide basis. This should benefit the customer, the country, investors, British Telecommunications and its staff. But the Government recognise the public concern that there should be no opportunity for BT plc to fix excessive charges to customers in the areas where it has a virtual monopoly for the time being. To this end, my right honourable friend the Secretary of State announced at the Second Reading of the Telecommunications Bill the appointment of Professor Stephen Littlechild of Birmingham University to carry out a study of these issues. Professor Littlechild's report is being published today and copies are available in the Vote Office. The Government are grateful to Professor Littlechild for undertaking this important task.
"Professor Littlechild has made two major recommendations concerning the price régime after privatisation and the extent of competition. As regards pricing policy, he recommends that British Telecom plc should be obliged for five years to keep below the increase in the RPI any increase in its prices for domestic rentals, local calls and other services of particular concern taken together. The Government accept this approach but will want to give further consideration to the range of services to be included within the price limitation—for example, charges for installation and trunk calls. We will also be considering the period for which it

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should apply. It will be important that the precise formula should be seen to be soundly based and fair both to the consumer and to BT. BT will be obliged to observe the arragement finally determined, and the powers of the Director-General of Telecommunications under the Bill are adequate to ensure that it is complied with. These arrangements are aimed at securing a continuing improvement in BT's efficiency and a continuing reduction in the real cost of telephone services to the consumer across the country.
"Professor Littlechild also says that competition is by far the most effective protection against monopoly. He sees his price limitation proposal as a safeguard only required until competition develops. The Government accept this approach, and accordingly I can now announce further initiatives to promote competition.
"First, customers who have standard BT sockets will be free to purchase from any supplier the first telephone for connection to direct exchange lines. I will table an amendment to the Telecommunications Bill to give effect to this change. BT and the manufacturing industry need time to adjust, but I intend that by the end of next year all customers who want to exercise this choice will be able to do so.
"Second, the maintenance of all new call routeing apparatus will be opened to competition by persons approved by the Secretary of State. BT themselves will remain free to offer a maintenance service but on a fair, commercial basis. I intend to introduce an amendment to the Telecommunications Bill to provide for licensing of those maintaining call routeing apparatus. I will also be consulting BT, the industry and other interested parties on the phasing in of these arrangements, which I expect to he completed within three to four years. The ending of the prime instrument monopoly and of BT's monopoly over the maintenance of call routeing apparatus. means that the entire market for new telecommunications apparatus will be open to competition.
"Third, the Government accept that the current restrictions on Mercury's supply of international. services should be eased. This will require discussions with other Governments. A study on the provision of international services is nearing completion and, after consultation with all interested parties, I will make a further Statement. I would hope to be able to do so by the end of April this year.
"Fourth, the Government accept the principle of reducing restrictions on resale of capacity on private telecommunication circuits leased from BT and other public telecommunications operators, but I recognise that this could have considerable implications for BT's revenue. I will want to consider the terms and timing of introducing the changes after consultation with BT and other operators.
"Fifth, the Government believe that competing public networks should have the right to interconnect on appropriate terms with BT's networks. But in return BT must have the right t
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charge operators such as Mercury and the two cellular radiophone networks access fees on a nondiscriminatory basis which will contribute towards the cost of providing the national asset of countrywide local networks. BT's own trunk and international divisions should also be subject to access fees on the same basis. These access fees will generate a significant revenue for BT to cover emergency 999 services, which are free, and any losses incurred on call boxes and other services, particularly those in remote and rural areas. The access fees will safeguard the continued provision of these services without subsidy from the taxpayer, thus maintaining the universal service.
"The Government recognise the importance to the national economy of BT's vital role in telecommunications. We are phasing in these new measures of competition in step with progress towards moving BT out of the public sector and out of the present web of Government controls. This is an expanding and rapidly changing market, and the greatest benefits to Britain, the consumer and the telecommunications industry will come from fuller and fairer competition. The arrangements I have announced today will help achieve this".
That concludes the Statement.
3.44 p.m.
Lord Ponsonby of Shulbrede: My Lords. may I thank the noble Lord for repeating this extremely long and complicated Statement. The Statement is, in fact, a statement of intent to move a series of amendments to the Telecommunications Bill which is currently going through its Committee stage in another place. I have no doubt that my honourable friends in another place will need to study the report before continuing with the Committee stage.
The report was embargoed until 3.30 p.m. today and I have only recently received a copy of it, but from the Statement I should say straight away that our prime concern is the Government's intention to abandon its prime instrument policy. We have debated the question of the prime instrument policy on a number of occasions in the past and until now the Government have been firm in sticking to a policy that the prime instrument should be provided by BT. On more than one occasion it has been pointed out that if the prime instrument is not provided by BT it can lead to great servicing problems when deciding who is responsible for a fault. If the instrument and the socket have been provided by BT there is no doubt who is responsible for clearing up the fault, but if the prime instrument has been provided by private enterprise there can be very great difficulty for the subscriber to know exactly whether the fault lies within his instrument or within the network. This will cause undue hardship and a great many problems. Moreover, abandoning the prime instrument policy will open the door to a great many cheap and possibly less satisfactory imports into this country, and that will not be good for jobs.
I must further say that we have continued concern about the problems for rural areas. Professor Littlechild said in his report that free competition is the answer to a great many problems, but I do not think he has satisfied anyone, as far as I can see, that

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the rural services will be maintained on this basis. Indeed, they cannot be, because one is imposing a restriction on BT to ensure that these services are provided. In the third paragraph of the Statement the Minister states:
"As regards pricing policy, he recommends that BT plc should he obliged for five years to keep below the increase in the RPI any increase in its prices for domestic rentals, local calls and other services of particular concern taken together."
What is meant by the words "taken together"? Do they mean that the price for local calls, for calls to the rural areas, where there is a great deal of concern, will go up more than the RPI, whereas calls for the international areas, where competition will be felt from other systems, will be reduced? That will not be to the benefit of those living in the rural areas. That remains a great area of concern for us.
Let me say that, overall, we will not be discussing the Telecommunications Bill in this House until the summer, when we shall no doubt want to return to these points, and many others, having had time to digest the report.
3.48 p.m.
Baroness Seear: My Lords, we also thank the Minister for repeating the Statement. We too have to say that we have not had the opportunity to see the Littlechild Report, which makes it difficult to comment on the Statement except in a superficial way. The report contains a great deal of detail, not all of which is entirely clear as to its full implications. We on these Benches take a non-doctinaire view towards the case for privatisation, but we see no virtue in privatisation unless it improves the service and the choice available to the consumer. To that extent, therefore, we welcome the recommendations of the Littlechild Report and the Government's proposals to increase the opportunity for choice for the consumer and also for the extension of competition. There is very little virtue in creating a private monopoly simply to take the place of a public monopoly. Some of the provisions in the Statement before your Lordships certainly seem to move in the direction of reducing the monopoly that seemed to he inherent in the British telecommunication programme. Like the noble Lord, Lord Ponsonby of Shulbrede, I am left with some questions about the position of the rural areas.
When telecommunications were discussed previously there was considerable concern that people in rural areas would he in a very difficult position or might have to pay extremely high charges for services which are particularly important in many ways for people in rural areas. We notice that the point has been taken up in today's Statement, but there is the suggestion—and perhaps I have not fully understood what is intended—that the costs of maintaining telecommunications services in the rural areas at a reasonable price, at a price people living in these areas can be expected to pay, will be borne by the charges for particular services which have been identified by British Telecommunications as able to be increased in order that the money so raised (and it says so quite specifically in paragraph 8) can he used to make possible the provision in rural areas without any subsidy at all. This seems a curious interference with the competition policy which the Government are
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adopting. One wonders whether perhaps some open subsidy maintained for people in rural areas would not have been a more straightforward way, without putting additional charges on particular services which seems to be the proposition put forward by the Government.
Lord Glenarthur: My Lords, I am grateful to the noble Lord, Lord Ponsonby of Shulbrede, and the noble Baroness, Lady Seear, for their comments. The noble Lord, Lord Ponsonby, asked me a number of questions which I shall endeavour to answer. To begin with, he pointed out that this was a complex Statement involving a complex report and that it also relates to the Telecommunications Bill which, as your Lordships will know, is in Committee in another place at present. Therefore, a great deal of the subject matter will come before your Lordships' House for discussion in due course.
So far as the prime instrument is concerned, we feel that more choice in this respect is an improvement. Perhaps I can briefly explain the position. At present the failures that take place in telephones themselves, in the actual instrument, are of an extremely low order of magnitude. I do not have the actual figures but it is less than 0·5 of a per cent. I believe that the figures are available in the last annual report of BT. Therefore, they must be looked at in context.
Of course, once the prime instrument has been bought or—if this is the case—rented from somebody who sets himself up in the business of renting approved telephones under the schemes to be introduced in the Bill, then of course repairs will be carried out by the person who does the renting in the same way as perhaps a normal television set is repaired at present, and the maintenance of the line will be a matter for the person who installed the line. But in any case someone who comes to inspect it can soon verify whether it is the line, the cable or the machine which is at fault.
So far as the machine, the instrument, is concerned, I can assure the noble Lord that all instruments will have to be approved to Government standards before they are connected to the system in the standard socket to which I referred.
Lord Ponsonby of Shulbrede: My Lords, before the noble Lord leaves that point, I should like to ask how the subscriber is to determine which of the sections he is to call upon to look at his instrument. It seems to me that we may be falling into the problem where two or three visits have to be made before a repair can be made.
Lord Glenarthur: No, my Lords, not necessarily, because if the subscriber calls upon, for example, British Telecommunications to come and investigate his fault, then under the system to be introduced, British Telecommunications would be delighted to repair the instrument even if it was not theirs; but of course they would do so for a charge.
I referred a few moments ago to the question of the instruments themselves. These will be approved to Government standards. The noble Lord also asked, as did the noble Baroness, Lady Seear, about rural areas. This is something which has cropped up before in your Lordships' House. Services to rural areas will be

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protected. British Telecommunications will be obliged to maintain the same standard of service as at present and this will be laid down in their licence. Subscribers in rural areas will share, under the tariff reduction scheme, in the general benefits from falling real costs in telecommunications. Furthermore, the conditions in British Telecommunications' licence on anticompetitive discriminatory practices should deter British Telecommunications from charging higher prices for the same service in some areas compared to others.
The noble Baroness and certainly the noble Lord, Lord Ponsonby, also referred to the question of price restriction and whether it applied to all the items, as he put it, taken together. The fact is that "taken together" is a reference to a whole basket of services. so some could be more and some could be less than the figure which is taken as the eventual target in the RPI minus X formula. But international services will not be included in the index.
The noble Baroness raised the question of an open subsidy as an alternative. Professor Littlechild looked into the whole question and outlined various schemes which the noble Baroness will see when she reads the report. Rather than becoming involved in complex economic arguments now, I think that the whole matter will be clearer to her when she reads the report.
3.57 p.m.
Lord Diamond: My Lords, we, too, are most grateful to the Minister for repeating the Statement, albeit it is clear—is it not?—that the Statement is particularly intended for the other place where the Bill is in Committee. We, of course, shall have our opportunity to consider the matter and to express our views clearly when it comes to this House. Nevertheless, is it not clear already from the contradictions in policy in the Statement itself, and from the need to introduce at least two major amendments in policy in a Bill which has already reached Committee stage in another place. that this is a Bill which has been quite inadequately considered by the Government and that they are in as much a state of confusion as we all are, as is shown by this unintelligible Statement?
Lord Glenarthur: My Lords, I really cannot agree with the noble Lord, Lord Diamond, that this is a contradictory Statement. As he is aware, the Bill is in the process of discussion in Committee in another place and that, I should have thought, was a very obvious part of the parliamentary process. It will be further amended, as are other Bills—indeed, all Bills—when it comes before your Lordships. It has been given a great deal of consideration. It will he discussed here in debate at Second Reading. But I agree with the noble Lord that it is certainly an extremely complex Bill and in my view it is best to leave any discussion of it until it comes before your Lordships' House.
Lord Cledwyn of Penrhos: My Lords, I should like to ask the noble Lord a simple question following the questions of my noble friend and the noble Baroness about access fees in rural areas, concentrating particularly on paragraph 9 where the noble Lord's right
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honourable friend has said that these access fees will cover any losses incurred in remote and rural areas inter alia. This presupposes that enough will be generated by way of access fees to cover these costs. If an insufficient amount is generated, can the noble Lord give an assurance that a subsidy will then be paid to maintain the services in rural areas? In view of the concern felt in rural areas about the Government's policies on this question. it will be a great help if he can give an assurance from the Government that there will be no cut-back and that adequate services will be maintained in the North of England. Scotland and Wales.
Lord Glenarthur: Yes, my Lords, I can give that assurance, and I have already given it on more than one occasion.
Lord Cledwyn of Penrhos: My. Lords, not specifically.
Lord Glenarthur: My Lords. British Telecommunications will be obliged by their licence to maintain the services. The access fee will apply to connections between one area and another. This matter is extremely complex and it took me a great deal of time to understand it myself when it was first explained to me, and I am sure that the same will apply to the noble Lord, Lord Cledwyn. The internal subsidy is consistent with competition policy if all competitors—that is to say, BT, Mercury, Hull and anyone else who comes in—pay access fees. as in fact
they will have to.
Lord Molloy: My Lords, notwithstanding the plethora of statements included in the one Statement one important element is still missing. What is the Government's policy with regard to that part of British Telecommunications' activities which are strictly related to the British Armed Forces and are classified as top secret? Will they be guaranteed, so that there are no leaks and nothing slips by which might endanger this nation after privatisation takes place? That is a fair question which demands an answer, if not today, then later on. Secondly, will the massive amount of research that goes on and has been going on in British Telecommunications in the name of the British people also be safeguarded and not given as gifts to private entrepreneurs—as has happened in private medicine, which in the main has been provided with the results of the research of the National Health Service?
Lord Glenarthur: My Lords. I think that we are going rather wide of the Statement. These are matters that are concerned with the Bill itself and I am sure the noble Lord will agree that it is best to debate them in due course.

Water Bill
4.3 p.m.
Second Reading debate resumed.
Lord Beaumont of Whitley: My Lords, we revert to the Water Bill, which is a reasonably complex Bill

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which has attracted a large number of speakers for the Second Reading debate. For that reason, among others, I do not intend to delay your Lordships long at this particular stage, although I think it is necessary to lay down the approach to the Bill which noble Lords on these Benches will take. I must apologise to the House that I am unable to stay to the end of the debate. This is partly because of the rearrangement of our speakers which has had to be made due to a rather late change in the business of the House, but my noble friend Lord Winstanley will be here for the whole debate and will be replying at the end.
The area on which we wish to concentrate and on which, when it comes to the Committee stage of the Bill, we shall certainly concentrate, is to a large extent the one which has been dealt with at considerable length in another place and the one to which both the noble Lord and the noble Baroness who have already spoken devoted the bulk of their remarks. I should like to thank the noble Lord, Lord Bellwin, for his exposition of the Bill.
The matters and the major issue—and certainly this is the view of this party—are to do with the democratic control of the water industry; or, if one likes to put it another way, the consumers' control of the authorities. It seems to us that this has been badly damaged by the Bill as drafted, and that we need to do a certain amount about it before it is allowed to emerge from Parliament as an Act. There are possibly four items I should like to mention, which all tie in together. Indeed, you could say that they all form one subject, although there are four different aspects of it.
There is the membership of the authority: its size, how the members are chosen and who they represent. That is the first item. The second is what representation the consumer will have: what representation he will have on the authority, what representation he will have through consumer bodies, and what machinery he will be able to bring to bear on the doings of the water authorities. Thirdly, and again overlapping, there is the whole question of the ombudsman and his ability or inability, as the case may be, to correct matters which have gone wrong. Fourthly, there is the watchdog of the general public, the consumer and the electorate—the press. It seems to me that in all these four areas the Bill as it at present stands is unsatisfactory and needs amending, and that we ought to do our best to amend it in this House.
The first question is that of the membership of the authority. Quite clearly, there is a serious case for the Government's intent to make the bodies which rule the water authority much smaller, more executive, less unwieldy and able to act more swiftly and in a less cumbersome way. However, I believe that in trying to do this, which in its own way is thoroughly laudable, they have left undone, or left unconsidered, the other side of the matter, which is the way in which these services represent the wishes of the people whom they are due to serve. In a way, some of the discussions that we shall have on this Bill in Committee remind me of some of the discussions that we have been having on the National Heritage Bill, particularly on the amendments of the noble Viscount, Lord Eccles, on that particular matter. When you have bodies like these, how do you fix the size and the responsibility of the people who run them?
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Water affects absolutely everyone. Unlike anything else—unlike transport, where there are canals, rail and roads; unlike fuel, where to a certain extent you can choose between gas, oil and electricity—water is virtually a monopoly, apart from possibly in the north of Scotland, where the distilleries run freely and where there may be alternatives. But for most of us it is a monopoly: and, therefore, it is very important that the consumers and the electorate as a whole should make certain that they can control what is going on and that they have a channel for their complaints.
This probably means that there should be two bodies concerned, just as there are in the Government of this country, where there is a Cabinet and a Parliament. Ideally, I think that one should have a much wider solution than that which the Government are suggesting. I would find the simplest way of doing this might well he through the Liberal and, I understand, Social Democrat proposals about regional government. There is a considerable case for saying that water should be a regional concern. Whatever the long-term solution is, whatever the ideal solution is, there is little doubt that the non-representation of local government is a matter we ought to do something about, and where we must make a change. I know we are assured that there will be two representatives of local government on each board, but there is no substitute for representation as set up by the councils, who are themselves elected by the local electorate.
Apart from the membership of the authorities, there is the question of how the consumer is to be represented. Once again that ties in with what I have just said, and it would be best if the consumer was represented through his elected representatives on the authority which is dealing with water. I do not think that the proposition which is being put before us of these consumer consultative committees is satisfactory. In a lot of areas they have proved to be fairly toothless watchdogs. There is no substitute for basic democratic election and for doing it on a fairly wide basis through the normal channels of democratic local government.
Thirdly, there is the question of the ombudsman. We are probably all of us delighted that we shall be hearing from the noble Baroness, Lady Serota, in the course of this debate. It is an advantage that the Government saw their way to producing amendments in another place so that the ombudsman can deal with drainage and sewerage, but that is only a small part of the Bill. If the problems which I have mentioned with regard to membership of the authority and representation of the consumer in other ways are not dealt with, it is all the more important that the ombudsman should be involved in these proceedings.
Fourthly, and possibly the most important, there is the matter of the press. We are told that the press will be excluded. Indeed, as I understand it, it is not even open to the water authorities to have the press in if they should want them. The press will be excluded because it will be a small board. But the regional and district health authorities are not much bigger than the water authorities, and the press are admitted to their meetings. It seems thoroughly wrong that a Government which says that they believe in open government should produce a Bill in this form at this particular time.

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Altogether, in these matters the Government talk with one voice and act with another. They talk about their dislike of bureaucracy and their determination to assert accountability to the general public, and a great many of us say that we agree and shall hack them if they produce measures to deal with these problems. To do justice to them, there are some fields in which they have asserted greater accountability and in which they have produced greater openness. But time and time again, when it comes to the crunch, when it comes to a major point, and particularly with regard to local government, their actions are exactly the opposite. This Bill in fact makes for a more bureaucratic, less responsible and less open government of a particularly vital service to the country.
It is not any answer to say (not, to do them justice, that the Government do say, but it could be said) that water is one of those things which is provided more or less satisfactorily, and you do not get political rows about it, you do not get many problems arising from it. It is a matter of principle that anything which is so basically important to the community should be open to community control and to community knowledge of what is going on. This Bill does exactly the opposite.
It is a basic principle of our democracy that there should not be taxation without representation. The noble Lord. Lord Bellwin, said in his opening speech that to call it taxation was wrong. it was merely a charge. A charge for a basic essential commodity which is also a monopoly exerted or controlled by the Government is taxation in one form or another, and with it must go representation and control by the people. It is important that your Lordships' House should, in the course of the forthcoming stages of this Bill, make certain that some provision for public control is inserted into this Bill before it is allowed to become an Act.

CEGB Vessels Charter
4.17 p.m.
The Earl of Avon: My Lords, with the leave of the House I should like to repeat a Statement which is being made in another place by my honourable friend and colleague the Parliamentary Under-Secretary of State for Energy. The Statement reads as follows:
"In connection with the 2000 MW cross-Channel electricity cable project, the CEGB sought competitive tenders from a number of British shipping firms for the hire of a vessel to lay cables between England and France. The lowest tender was submitted by a British firm, International Transport Management of Middlesbrough, from which the vessel will be chartered. I would emphasise that the cable laying barge will not be purchased or owned by the CEGB, but by the British firm concerned.
"The CEGB must of course be conscious of its obligations to provide electricity as cheaply as possible. As a nationalised industry it is also conscious of the Government's wish that wherever possible it should buy British.
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"However, when the CEGB received the first tenders for this project some months ago, the price differences were so great it appeared inevitable that the shipbuilding work would go abroad. The hoard. naturally concerned over this, then asked the firms to tender again, and expressed a clear preference—other things being equal—for vessels supplied by UK shipyards.
"Regrettably, the second tenders showed such a huge price difference that the board had no choice but to accept the bid from ITM, involving the construction of a vessel in a Korean yard. Other bids to the CEGB. I understand, were at least 50 per cent. higher.
"The Government does, of course, provide financial assistance to help UK shipbuilding firms to gain orders. but even with Government assistance the difference in bids would have been unbridgeable. Honourable Members who have repeatedly stressed the importance to industry and consumers of low-cost electricity will understand this decision.
"Questions on the shipbuilding industry, including matters relating to assistance from the Shipbuilding Intervention Fund are. of course, matters for my right honourable friend the Secretary of State for Industry."
My Lords. that concludes the Statement.
Lord Bruce of Donington: My Lords, the House will be grateful to the noble Earl for having repeated the Statement made in another place. This Statement raises questions of principle of the utmost gravity. However, first it is necessary for me to ask the noble Earl to disentangle the somewhat circuituous route by virtue of which the Central Electricity Generating Board eventually proposes to hire, or charter, the ship concerned. The ship itself was, I am intructed, put out to tender in very detailed form; it was, indeed, to the CEGB's own detailed specifications. That presupposes that the CEGB will have the use of the vessel on charter for some considerable time for its own specialist purposes.
It is therefore necessary to ask why the CEGB should not itself have ordered the vessel direct, rather than hiring it, because in either event the charge must be borne by the public board. If the CEGB had ordered the vessel itself—if that had been the route selected—the Minister will be aware that, under the taxing statutes, the CEGB would then have been entitled to very substantial capital allowances in the earlier years, and that would have been of considerable advantage, an advantage which will now be transmitted to a company called International Transport Management.
May I ask the Minister to say, as part of his reply in disentangling this somewhat complicated arrangement, whether, directly or indirectly, the CEGB will be funding the purchase of the ship by International Transport Management'? It is necessary that we should know from what source the money is coming. Regardless of that, and in anticipation of the noble Earl being able to throw further and more detailed light on the matter, while it is clear that three tenders were originally issued, to which replies were received, as the Minister said, a third tender, I am instructed,

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was invited from International Transport Management—who presumably are the shipping company in this instance—and I am given to understand that no request to British Shipbuilders, inviting them to tender, was sent by International Transport Management. This raises questions of some principle because, while it is clearly understood that British Shipbuilders and other ship construction firms must submit to the competitive process, it is well known and well understood, and it has been the policy of successive Governments, that governmental subsidy to British shipbuilding is frequently required under conditions of entirely false competition.
Is the noble Earl aware that one of the reasons enabling this 50 per cent. price differential—on which, as to that being the case, I should like him to enlarge—is that the wage rate in South Korea is about 70p an hour, as against rather over 330p or 340p in Western Europe? Is he aware that it appears to be the case that, as a deliberate act of policy, Her Majesty's Government are now requiring British Shipbuilders and other manufacturing industry to compete directly with newly industrialised countries whose wage rates are lower and against whom it is impossible to compete? Will the noble Earl please explain how this is consistent with the Prime Minister's adjuration to buy British?
Lord Tanlaw: My Lords, we on these Benches are also grateful to the noble Earl for repeating that Statement, and we welcome the fact that the cross-Channel electricity cable project is clearly and at last getting under way. May I ask him to answer two question that could be worrying? First, how will this charter appear in the CEGB's books; how will it be shown, on a discounted cash flow basis, that it really is a step towards cheaper electricity than an outright purchase, as has already been stated?
Secondly, as for the International Transport Management Company of Middlesbrough, while we appreciate that perhaps it is to the benefit of electricity consumers that the cheapest hull is purchased from anywhere available in the world,may I ask what proportion, if any, of the equipment to be fitted into that hull to CEGB's specifications will be British?
Is the noble Earl able to encourage the CEGB to back up its statement that it has an obligation to provide electricity as cheaply as possible by saying whether the nuclear electricity intended to be produced at Sizewell B will be cheaper than that produced by a coal-fired power station? I have asked that question on frequent occasions but have been unable to get an answer. Therefore, I shall be only too happy to agree with the statement that occurs within the Statement, if it can be proven.
The Earl of Avon: My Lords, I am grateful to the noble Lords, Lord Bruce and Lord Tanlaw, for their response to the Statement, and I will first take up some of the points raised by Lord Bruce. The charter, as I understand it, is for this use only and it is not intended to carry on chartering this particular boat. I know that there is no question of CEGB funding this ship because, as I just remarked, they will use it only for this one operation, which is the laying of this cable.
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I have with me the list of tenders, but the noble Lord will appreciated that for commercial reasons I cannot read out the names to the House. However, there was a tender by the British shipyard of Sunderland which has been mentioned, and some of the tenders were actually double the price which the CEGB were offered. As for the Shipbuilding Intervention Fund, I mentioned earlier that, even with that amount of money, there would still be a substantial difference between prices. I understand that the CEGB do not pay tax, so the remark made by the noble Lord in that context would not appear to be applicable.
As for wage rates, to which the noble Lord, Lord Bruce, referred, the answer must surely be in the price of electricity, I believe the House (the noble Lord, Lord Tanlaw, made this point) would wish to see electricity produced commercially and at the cheapest price possible. If we were to ask the CEGB to pay more for the ship than they can get it on a commercial basis, we should be arguing against ourselves. The Prime Minister said in another place:
"I am prepared to advise people to buy British only when British goods are the best, most competitive and most suitable to the buyer".
That remark fully suits this situation.
The noble Lord, Lord Tanlaw, asked me to comment on electricity prices. I am afraid that I am not prepared to do that at the moment. though I would remind the House that 80 per cent. of electricity at present comes from coal. He questioned me on other specific points, the answers to which I will find out and let him know in due course.
Lord Molloy: My Lords, may I ask the Minister to say whether there will be an in situ examination and inspection of the vessel by the proper British authorities, to see that it satisfies all the conditions? While he says that we must get the cheapest whenever possible, is he aware that that must be his answer in order to fulfil the philosophy and logic of the Conservative Party? In other words, if they can find a place where there is slave labour, with no wages at all paid, then they will say that is where we should go to buy, rather than buy British.
The Earl of Avon: My Lords, I bow to no one. not even to the noble Lord, Lord Molloy, in my wish that everybody would buy British, but, quite honestly, there are cases where it cannot pay. In the first part of his question the noble Lord asked about inspection of the vessel. I am sure that the CEGB would not think of using the vessel unless it was up to its full requirements. I am equally certain that the firm International Transport Management of Middlesbrough would not accept the vessel for it to be chartered unless it met all the specifications, which, as the noble Lord, Lord Bruce, said, are very detailed.
Lord Bruce of Donington: My Lords, I should like to press the noble Earl a little further. Will he please reply to the point that was made by the noble Lord concerning the fitting out of the ship itself and its equipment? The noble Lord asked whether all the equipment, too, was going to be made in Korea, or whether British firms would be involved in the fitting out of the vessel. Will the noble Earl also please take note that we shall

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probably return to this question in greater detail at a later stage?
The Earl of Avon: My Lords, with regard to the fitting out of the vessel, I imagine that it will come fully fitted out in order to be chartered by the CEGB; that is to say, International Transport Management will surely have the duty of doing that. So far as the contract for the channel electricity cable project is concerned, I am informed that this is expected to be the only part of it that will go overseas. With regard to the final point made by the noble Lord, Lord Bruce, we shall be perfectly happy to answer any questions on this subject. We have nothing to hide.

Water Bill
4.32 p.m.
Second Reading debate resumed.
Lord Sherfield: My Lords, I am intervening in this debate with three purposes in view: first, to draw your Lordships' attention to a report by the Select Committee on Science and Technology on the water industry, which was published during the Christmas Recess and to which the noble Lord. Lord Bellwin, has just referred; secondly, to refer to some consequences of the abolition of the National Water Council to which the report draws attention; and thirdly, to inform the House that I shall be putting down some amendments at the Committee stage on behalf of the Select Committee.
Your Lordships' Select Committee last year conducted an inquiry into the engineering aspects of the water industry, and I had the privilege of being the chairman for that inquiry. It was not directly concerned with the organisation of water authorities and the kind of questions raised by this Bill, or the politics of it. Our main interest was in the application of science and technology to water resources, water supply and distribution, sewerage and reservoir safety, and we dealt with wider questions only in so far as they were directly relevant to our terms of reference. I commend the report to any of your Lordships who have an interest in the water industry, and I hope that in due course it will be possible to arrange a debate upon it.
During the time that our inquiry was taking place the Government announced their intention to abolish the National Water Council. We did not attempt to form an opinion whether that was desirable, since it hardly came within our remit. But we did draw attention to the effects of abolition on research and training. In the case of research, we found that one part of the research spectrum—strategic research—is being neglected. I shall not go into the reasons for this, but merely observe that the National Water Council, though admittedly it had not done a lot about research and development, was the only forum in the water industry in a position to make good this defect.
Strategic research involves long-term investigation of problems such as the behaviour of groundwater, the economics of leakage control, and so on. These
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questions are of great importance to the industry and involve all the water authorities to a greater or lesser extent. But they do not have immediate, or very local, application. Because of the autonomy of the water authorities and their preoccupation with more pressing issues, strategic research is liable to be neglected. The conduct of strategic research also requires due consideration of views and interests outside the water authorities. Up to a point the National Water Council was able to provide a national perspective which individual water authorities could not do. An association of water authorities has been proposed to take the place of the National Water Council. but the committee did not believe that such an association would have the strength or the cohesion to provide a national view and it would lack the wider perspective of the representatives from outside the water authorities. An amendment will be proposed to meet this point.
Another consequence of abolition of the National Water Council concerns training. Perhaps the best thing that I can do is to quote from chapter 7, paragraph 6, of our report on this point. The report stated:
"The Committee consider that some central training facilities must be preserved. As a supplement to the training given by the water authorities individually, central training can ensure that the whole field of water engineering in its widest sense, is covered. It can help the staff of the industry at all levels from technical to academic to keep abreast of changing technologies and can promote cross-fertilisation of ideas. Furthermore, it should assist the development of a career structure for the whole industry, encouraging staff to he more outward looking and to move more freely between authorities."
With the end of the National Water Council the committee urges that central training facilities should not be abandoned.
I now come briefly to the amendments that the committee proposed in chapter 6, paragraphs 29 and 28, and chapter 4, paragraph 46, of its report. The first will lay on the water authorities a duty to draw up research programmes in consultation with Ministers along the lines of the duty imposed on other public utilities in this respect. This should meet the point about research to which I have already referred. Secondly, the committee considers that water authorities should have an obligation to subscribe to the Water Research Centre, which is the industry's research arm. At the moment membership is voluntary, and though I believe that at present every authority, except the Island authorities, does in fact belong to the Centre, there have in the past been threats of withdrawal. Thirdly, the committee took up the recommendation of the Monopolies and Mergers Commission about agency arrangements for sewerage, and made its own recommendation that the water authorities should have a permissive power, not a duty, to enter into agency arrangements. An amendment of Clause 6 of the Water Bill will therefore be needed.
I should here again emphasise that the committee approached this question from the standpoint of science and technology. Having looked at the question from this angle, the committee formed a clear view, whereas the recommendations of the Monopolies and Mergers Commission are convoluted, to say the least. Our report says simply in chapter 4, paragraph 38:

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"What the Committee wished to establish was whether the agencies affected the water industry's technical capacity to discharge their sewerage functions. They concluded that the agencies were a hindrance".
The succeeding four paragraphs summarise the evidence which supports this conclusion.
The proposed amendment will be far from revolutionary or fundamental. It will merely seek to introduce a measure of flexibility into what, on the face of it, is an over-rigid system. I understand from what the noble Lord, Lord Bellwin, said, that the Government, following on consultations which are still in progress, may lay some amendments covering this general field. My colleagues and I will look forward to studying them when they appear. I must now say that, if the Committee stage of the Bill is held up until next month, I regret that I shall be unable to be in my place owing to absence abroad. But I shall endeavour to arrange that the amendments are moved by other Members of the Committee.
Lastly, I should mention two issues on which the committee will not be seeking to introduce amendments but where we have called on the Government to table amendments if they are required to meet the purposes in view. We have recommended a new emphasis on demand management in water supply. It is possible that the present statutory duty of water authorities to provide an adequate supply of wholesome water might conflict with this. If there is any conflict, the committee are in favour of an amendment of the law to permit some restraint of demand. Secondly, the committee have deplored the Government's failure to implement at least parts of the Reservoirs Act 1975, which has now been on the statute book, therefore, for eight years. Until this is enacted, reservoir safety will be jeopardised.
The 1975 Act has commencement provisions which permit different appointed days for different provisions, but the Government have said that the Act is not drafted in such a way that it can be implemented piecemeal. We found this argument difficult to follow; but on the assumption that the Government are right in what they say, the committee urges them to make any necessary amendments in the Bill. I invite the Minister to indicate in his reply whether any decision on the need for amendments on these two matters has yet been reached.
4.43 p.m.
Baroness Nicol: My Lords, you are all aware of the terrors that attend a maiden speech. Apart from the obvious difficulty of addressing such a distinguished audience, there are the inhibitions which are laid down by our Standing Orders. I must not be controversial. It is difficult to think of any subject sufficiently important to be discussed in this House which would not be thought controversial by someone, and especially following such a lively and fiery speech as that of my noble friend Lady Fisher, who would incite anyone to controversy! In addition, the Companion seems to indicate that a minimum of 10 minutes is required. I am sure that your Lordships will be very relieved to hear that even in moments of rare emotion I seldom speak for more than five minutes. Therefore, this for me is an added difficulty.
This Bill is controversial, and there are certain
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elements in it which this House will need to examine very closely. We must ask ourselves whether the removal of local authority representatives who are elected by and answerable to the people and their replacement by ministerial appointees, even including some members of local authorities, is a step away from the democratic principles by which we live, and whether the establishment of consumer councils under an appointed chairman will be an adequate substitute for the free voice of those elected members.
This House will need to examine very closely the effects of this legislation, not simply because of its immediate effects but because of the fact that it adds to previous legislation and exaggerates the effects of that. We must ask ourselves whether the removal of the right to undertake sewerage functions and the inevitable dismantling of technical departments within the direct labour organisations will not diminish career prospects within those organisations. This would have the effect of reducing the calibre of applicants which could only be detrimental to those organisations, and in any case it will make it more difficult to achieve financial targets within direct labour organisations.
Since the reorganisation of local government in 1974 there has been a gradual erosion of the responsibilities of local authorities and a growing tendency to blame them for problems which are not always within their control, with a consequent reduction in the public respect that they once enjoyed. An effect of this which has not received enough publicity is that fewer men and women of quality and initiative are being attracted into public service either as officers or as members. This is not to say that some excellent people are not still coming forward; but in many areas parties of all persuasions are finding it extremely difficult to get candidates of the right quality. The disillusion among officers is shown by the large number of early retirements which are being taken. Although the present high rate of unemployment has eased recruitment for the time being, there is no doubt that morale in the town and county halls is very low indeed and that many of our brighter young people are waiting for an opportunity to move on.
In this country we have been rightly proud of our tradition of quality in our local authorities. Corruption is so rare that even a hint of it makes headline news. To maintain this record requires staff of integrity with a commitment to public service and an elected membership of equal integrity. This House has the time and the expertise not only to examine and improve the legislation before it but also to look at the wider effects of that legislation and its contribution to the overall scene. I hope that we may keep these aims before us during the passage of this Bill.
We shall need to pay particular attention to the need to safeguard plans for local development. Without the presence of members with wider responsibilities, water authorities could easily become planning authorities with decisions heavily biased in favour of one element of the application and without the restraint of local accountability for their decisions. We must examine what degree of public accountability is desirable and how it can be achieved in a body whose deliberations would not be open to the public, whose agenda would not be available for inspection and whose actions

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would not longer he open to appeal to the Ombudsman. Finally, we must look at the Bill against the background of the 1982 report of the Monopolies and Mergers Commission.
My Lords, I am grateful for your indulgence. I have tried not to be provocative but simply to highlight those aspects of the Bill which seems to me to be most in need of your Lordships' close examination.
4.50 p.m.
Lord Nugent of Guildford: My Lords, to me falls the pleasure and privilege of congratulating the noble Baroness, Lady Nicol, on her maiden speech, which she executed in such an expert and charming manner. May I congratulate her on the brevity of her speech, which not all of us always quite copy but it is an example we could all take note of. I should also like to congratulate her on her success in keeping within the hounds of non-controversy on a subject about which she clearly feels very deeply. We all listened with attention to her comments about local government and it is clear that in the noble Baroness we have a doughty warrior for the local government cause; one who will have something quite trenchant to say when she is no longer restrained by the maiden speech convention. We look forward to hearing from her frequently in the future.
I must thank my noble friend Lord Bellwin—at least convention requires that I should—for the lucid exposition of the Bill. He made it sound so attractive that I hardly recognised it; and I should say that the description given by the noble Baroness, Lady Fisher, in her speech conformed much more nearly with my own impression of the Bill. But I shall refrain from the trenchant strictures which she applied out of consideration for my noble friend's withers, which are already somewhat raw and likely to be a good deal more raw before the evening is over. However, I thank him for his generous compliments to the staff of the National Water Council, who have indeed worked as a splendid team, and for the kindly compliments to myself.
The national water industry has been an unlucky child. It was conceived by a Conservative Government in 1973 and born under a Labour Government in April 1974. So it was in fact a political orphan from birth, with no father to say a good word for it. This Bill now inflicts the final indignity on it by cutting its head off and removing the National Water Council. The reference my noble friend made to foreign admiration is quite right. Foreign water engineers and scientists, when they come to this country, admire the technological structure of single water management over the whole water cycle as the best you can possibly have. They also admire the tremendous technical progress made in the past 10 years since we introduced it here. It is unfortunate that, because the charges have come in and inevitably have been increased, it has been the object of constant criticism all round and has had a pretty rough time.
The main purpose of the Bill is outlined in Clause 3, which abolishes the National Water Council and transfers its powers and functions to the DoE. I agree that it is a very strange thing for a Conservative
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Government to add to bureaucracy in that way. As the noble Baroness has rightly said, this will gravely weaken the structure of the industry. Ministers and civil servants, however good they are, change every year or two, and at the best leadership from the DoE will be intermittent and guided more by political than industrial considerations. At worst, there will be none at all.
The voluntary association of 10 regional water authority chairmen with no statutory authority has no prospect of giving effective leadership. Even with its excellent chairman-designate, Mr. Len Hill, it cannot hope to do more than carry out a holding operation, so that, as the noble Baroness rightly said. national quality will go by the board.
I will give just two examples of where the existing. and now departing, body, the National Water Council, gave national leadership in the past 10 years. There are many other examples that could be given. The first concerns the security of water supply following the 1976 drought. Your Lordships will remember that in some parts of the country we were then dangerously near to running out of water altogether; and evidently national policy was needed to secure a supply for the future, whatever kind of drought hit this country. The National Water Council gave the lead and the regional water authorities responded speedily and efficiently by designing regional schemes to connect surplus areas to shortage areas. The regional water authorities are topographically well designed to have both. The strategy consisted in linking them up, and by the end
of 1977 we could say that the water supply of the
country was secured against any drought of whatever kind that might come upon us, even one as bad as the 1976 drought. That was with the exception of the south-west, where two new storage reservoirs were needed One of them is now in building and the other is shortly to start.
That is one example. The other one, which will be of interest to some of your Lordships, refers to river water quality in the interests of conservation, of course. and particularly for fisheries and long-term abstraction for supply. Before the 1973 Act, many industrial towns in the Midlands and the north had an unhappy record of discharging toxic effluents and polluting their rivers. The river authorities in the past lacked the power to oblige them to improve their treatment works. Since the 1973 Act, regional water authorities have managed the treatment works and the result has been dramatic progress in improving the quality of effluents and in removing black spots from our rivers. Only a few remain, awaiting the day when large-scale capital investment is available for building new plants.
By 1978 it was clear that the overall improvement was good enough to introduce a national policy of river quality objectives on all our rivers. Despite the reluctance of some regional water authorities because of heavy financial obligations, a strong lead from the National Water Council won general acceptance and application. That has now been applied throughout the country and was a really major achievement. Incidentally, it was a very timely one because it has enabled us in the United Kingdom to conform with EEC regulations on conservation of river water.
There are many other examples I could mention, but these two brief examples I have given illustrate the

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need for a lead from the centre. Water authorities on their own cannot do that; nor could the DoE. The NWC had an integrated relationship with all the regional water authorities; they knew what was happening and they could move together as a team. I say these things in order to put them on the record; and perhaps one day some Secretary of State for the Environment will have the wisdom to restore the National Water Council, but I doubt it.
Turning now to the other contents of the Bill, I warmly support the reference that my noble friend Lord Sherfield made to the report of the Select Committee on Science and Technology, on which I was very happy to serve. I shall support him on the Committee stage over the amendments he has mentioned.
There is one other minor point I should like to mention before coming to the main part of my speech; that is, in regard to the water industry's pension scheme. This was set up by the National Water Council and managed under them. I believe the present value of the fund is some £600 million, so it is not peanuts. There is no mention of it: it was never mentioned in the other place at all. It is administered, as I set it up, by a body of trustees at national level, representing both employers and employees, and is served by a structure of investment management which has an excellent record. It is important to the whole industry throughout that a similar national structure continues in the future. I would ask my noble friend what provision he is making for this fund.
I turn to my final and major point, namely, the demolition of the industrial relations structure. That was set up by the National Water Council under Section 26 of the 1973 Act. At this time, when our people are enduring a national water strike for the first time in our history, we would he failing in our duty if, as parliamentarians, we did not search out a better way of settling wage disputes in the future. I should like to make a few general observations about the strike; but let me say immediately that I shall not comment on the negotiations because that might prejudice them. However, I would say this: in my judgment there have been mistakes on all sides.
I come now to speak about the industry itself. The working relationships in the water industry have been good in the past. Wage and salary levels are reasonable; they are backed by index-linked pensions, job security and a workforce always willing to exert themselves in an emergency. I can recall particularly how in the 1976 drought, when water shortage was made by nature, and not by man, they put out unlimited efforts to keep our dwindling water supplies going for the good of the nation.
So we must now take note of the other side, the consumer side, of the picture. There is hardship and dislocation which our people are now suffering. There are already tens of thousands of households where the water has to be carried by bucket from the standpipe down the street. I can remember visiting some parts of the country in the drought when this was happening, and the hardship is very considerable, especially in the middle of winter. There is no water heating in the house, no water appliances, washing machines and so on, and it really means hardship, especially for the old
1022
people. In addition, millions must boil their drinking water. The threat to industrial supplies, with large-scale loss of employment, becomes daily more imminent, and a further slide down this road leads to disaster on a major scale.
In international relations, if you cut off a nation's water supp y it is an act of war. In mediaeval warfare, this was often the strategy by which a state was brought to its knees. But for one section of the community to use it against the rest is an act of barbarity which is simply not acceptable in a civilised nation, which we are. So let us then turn in a constructive spirit to consider the alternative industrial relations structure of the future that we might have.
There seem to me three possible alternatives. The first is to replace the disappearing National Water Council structure with a similar national negotiating machinery, where the employers' side would be represented by a voluntary association of the 10 regional water authorities and 29 water companies, and the employees' side by the three trade unions for the manuals, as now, and by NALGO for the white collar workers. There are two serious objections to this. First, this structure has produced the ultimate failure of a strike now in this sensitive utility; and, secondly, a new structure based on a voluntary association of employers would be even less effective than the present one.
There are often more problems in getting agreement among a number of independent employers than with the trade unions themselves, and all noble Lords who have had any experience of industrial relations will know this. On the other hand, trade union leaders are completely professional operators, who are familiar with every move of the game, and they will run rings round an employers' side in disarray. This was our experience in the water industry for the first two years of operating the new machinery, after the 1973 Act. For two years running, a settlement was made which was embarrassing to the Government of the day. Each time, the chairman of the employers' side retired hurt, and each time angry Ministers sent for me, as chairman of the National Water Council, and, therefore, long-stop, to give me six of the best.
As there were no more volunteers for the job after that, and, anyhow, I was held responsible whenever we made a mess of it, faute de mieux I took on the job myself of leading the employers on the NJC and the NJIC. I am glad to say that for the next two years until I retired, wage and salary negotiations ran smoothly. But—and this is the point—it took a major part of my time and the exertion of all the influence that my office as chairman of the National Water Council could carry. I was greatly helped by a first-class director of manpower services and, I may say, had very friendly co-operation with the trade union leaders.
But, against the background of this experience, it is obvious to me that the chairman of the future voluntary association of RWAs would be seriously handicapped in leading the employers' side in the NJC and the NJIC, and the prospect of averting a calamity such as the present one would be even less. The noble Baroness, Lady Fisher, was absolutely right. The National Water Council was bad and this makes bad worse.

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The second alternative, which has been discussed outside, is to split up the national industrial relations structure into 10 regional structures operated by each regional water authority independently. This solution has obvious attractions. It would avoid a trial of strength at national level. But there are serious practical difficulties. The conduct of the NJC and the NJIC, as I have explained, is a highly expert affair. Thus the success of a regional system would depend on each of the 10 regional water authority chairmen, and his officials, being expert enough to conduct his regional negotiations and to co-ordinate them with the others to prevent leapfrogging, et cetera.
In addition to the negotiations for manual workers, there are the negotiations for the salaried workers, so there are two sets of negotiations to be done every year. Obviously, it would be impossible for this to be done. I may say that the trade unions have already declared their opposition to it, but they would be far better able to cope with it than would the employers. So the danger of a regional structure degenerating into a shambles is so evident that, in my judgement, this cannot be regarded as a practical solution.
So I come to the third alternative, which is the introduction of a statutory arbitration system. This would hear the submissions of the two sides of the industry and would hand down an award which would be legally binding on both. It would be a major constitutional change to abandon the freedom of the market place, where employer and employee can hammer out an agreement in the light of prevailing conditions. Of course, the removal of this freedom could be justified only in completely exceptional circumstances, but I believe that these circumstances exist in the water industry. Water is a commodity on which life directly depends. In a strike, the ultimate threat is to the life of the nation. This is simply not acceptable, and I cannot really believe that the majority of the water workers, many of whom I know, would want to make such a threat. It is on these grounds that I advocate this major constitutional change.
The arbitration authority might be simply constructed with, perhaps, a High Court judge or a Lord Justice of Appeal, supported by two other members, one from one side of industry and one from the other—and, of course, experienced in industrial relations—and a small professional secretariat to service them. Their terms of reference would require them to examine the intrinsic merits of the wage and salary claims in the industry and the general conditions of the national economy.
I can anticipate weighty objections to making such a change as this, both from my noble friends on the Front Bench here, for one set of reasons, and from noble Lords on the other side, for another set of reasons. But I believe that the man in the street and the woman in her kitchen would be heartily thankful for a solution which took water out of the arena of industrial warfare. In that spirit, I commend this proposal to your Lordships. I intend to put down an amendment to give it effect at the Committee stage.
5.8 p.m.
Lord Hemingford: My Lords, when my father first spoke in this House about 35 years ago, he mentioned his diffidence at doing so and now I know exactly how he felt. He said that it was compounded by the fact that he had been able to be present in the House on only two or three occasions previous to that, because he was resident abroad. I find myself in similar straits with less excuse, because, although I work in London, I have been able to make only two brief appearances here, and I should not have troubled the House so soon were it not for the fact that this Bill contains a clause which gives me some concern.
I refer to the clause which has already been mentioned, and which removes the right of the press, on behalf of the public, to attend the meetings of water authorities and therefore, and equally importantly, to obtain the papers of those meetings. I must here declare an interest, because I am the editorial director of Westminster Press, which has a large number of local newspapers up and down the country. I am also a past president of the Guild of British Newspaper Editors, to which reference has already been made this afternoon. Therefore, although I cannot personally claim to have reported the proceedings of water authorities, many of my associates have done and continue to do so. It is unfortunate that the present Bill removes that right so that the new water authorities will be able to conduct their deliberations in secret.
In view of the other constitutional changes which are to be made to the nature of water authorities (which I am certainly not concerned to discuss, mindful of the injunction to be non-controversial) I believe that it is more than ever important to retain public access—for that, really, is what press access is—to the deliberations of water authorities. In a sense, I believe there is no real argument about that. The argument is more about how it should be done. It could hardly be more obvious than it is at present how important control of the water and sewerage industry is to the community. What is more likely to be at issue is the means by which access should be achieved.
I am nervous about the argument that because the press are not admitted to meetings of the gas and electricity boards they have no place at meetings of water boards. I would rather turn the argument on its head and suggest that because water authority meetings have been opened successfully, the same might be done for gas and electricity. There are, though, matters which a water authority clearly should be able to discuss in private. Even as a reporter I would concede that. I have in mind discussions on individuals, or commercial matters of contract, and so on. Happily, the Public Bodies (Admission to Meetings) Act, which has hitherto been applicable to water authorities, provides for confidential discussions. It permits an authority to go into private session if it first passes a resolution to that effect and, significantly, provided that it gives a reason for its action.
Surely the bodies which control water authorities should be openly observed on behalf of the people. I submit that this is a role which the press has successfully performed on the public's behalf for many years. I recognise that to defend the press may be seen as grossly provocative. Certainly there are many things

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which the press does which one can be unhappy about, and I share the unhappiness, but I believe that it would be a backward step to remove its representatives from water authority meetings. This is true, regardless of the number of people who sit on water boards. It is the policy-making process, not the numbers of people involved which is important. I have to add that I fear that the consumer consultative councils will, if they follow the pattern of those in the gas and electricity industries, hardly prove satisfactory substitutes for the presence of reporters at the principal water authority meetings.
In 25 years in journalism I have attended a good many press conferences, and much of the experience has been unhappy. I am afraid that they are as likely to obscure as they are to illuminate. The Guild of British Newspaper Editors has been told, they tell me, that a code of practice could be produced which would require the holding of a press conference after a meeting of a water board. I have no reason at all to suppose that such a solution would be effective. Indeed, it might actually be worse, in that it might encourage the illusion of genuine participation without providing the reality. I do not feel that it would be a substitute for the presence of independent observers during a meeting. Therefore, I hope that we can maintain a press presence at such meetings while these vital matters are being discussed by the water authorities, and that we are not forced back on to predigested information that is both second hand and second best.
5.15 p.m.
Lord Flowers: My Lords, we have had two splendid maiden speeches this afternoon. I join other noble Lords who have congratulated and will congratulate the noble Baroness, Lady Nicol, for her gracious and thoughtful maiden speech. It is always a privilege to follow a maiden speech, and on behalf of all quarters of the House I should also like to congratulate the noble Lord, Lord Hemingford, who has interested us greatly, who like the noble Baroness has struck just the right note, and who has brought a particular and important expertise to bear on our debate—an expertise of which I hope we shall often have the advantage in the future. The freedom of the press is, after all, a vital aspect of working democracy.
Coming now to the matter before us, may I first declare my dismay, which is shared by other noble Lords on this Bench, that in Clause 1 of the Water Bill the Government should wish to reduce still further the influence of local authorities. If the Government themselves appoint the chairmen, the deputy chairmen and the members of the new-style water authorities, that is yet another piece of creeping centralisation from which, in our view, this country already suffers too much. It is not just a question of efficient management and of thorough consultation, which the noble Lord, Lord Bellwin, assured us there would be, but also of where the real power lies in a matter of vital local concern. Here I agree entirely with my noble ally on the Liberal Benches, Lord Beaumont of Whitley.
I cannot pretend to any deep knowledge of the water industry and its ways. I rise mainly to support, as a scientist, the noble Lord, Lord Sherfield, on whose
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sub-committee of the Select Committee on Science and Technology I had the honour and pleasure to serve. That experience sufficed to convince me that the water industry is becoming increasingly dependent upon science and technology, some of it quite high technology at that. Of course, like everybody else, I already knew that the purity of our water—the fact that most of us in this country can in normal circumstances drink water straight from the tap—depends upon the application of a lot of chemical and biochemical knowledge as to water purification plants and (before I turn to the environment) sewage treatment plants. Our health depends on that, as we may discover to our cost if the present strike continues much longer. The noble Lord, Lord Nugent of Guildford, has spoken authoritatively about that.
I had some inkling, too, of the extent to which our water resources and our ability to store water depend upon the hydrology of the soil and the geology of the rocks beneath, but until our inquiry began I had only the haziest idea of the extent to which high technology is needed to penetrate the vascular system—the pipes and pumps which comprise the mains and drains—and the brains, too: the controls which deliver the right amount of water to the right place at the right time. The report puts it succinctly in paragraph 3.20, from which I should like briefly to quote:
"There is simple telemetry, which permits remote recording and monitoring of local data—reservoir levels, pumping station activity, river flows, district meters, and such like … Automatic control, based on telemetry, permits management to respond to the data received and to control reservoir levels and pumping schedules centrally … Pressure control, with valves automatically maintaining pressure at set levels, can greatly reduce leakage and cut pumping costs. Supported by mathematical modelling to optimise the design and operation of the distribution system, computer technology has the capacity to enhance the standard of distribution radically."
This is language more reminiscent of a chemical plant than of what I had imagined the water industry to be.
A few weeks ago I was further enlightened when I found myself sitting as a member of a panel with Mr. Anthony Montague Browne and the Marchioness of Anglesey, judging applicants for the much coveted travelling fellowships of the Winston Churchill Memorial Trust. We had chosen as one of the special categories for 1983 "Workers in Sewage, Water and Flood Control"—and very popular it proved to be. We were delighted by the quality as well as the quantity of the response, with people of all ages from all parts of the water industry applying to spend some weeks in a country where there are techniques to be learnt and applied back home.
Tomorrow, the trust is announcing the names of the 99 successful candidates. Among them will be 10 first-rate people from the water industry. I will mention a few names with the permission of the trust. The 10 include Dr. Robert Huggins of the Wessex Water Authority, who wishes to visit the United States to study the use of natural marshlands and other ecological methods of sewage treatment; Mr. Charles Jefferies of the British Oxygen Company, who wishes to visit Australia to study the effect of oxygen injection on the septic corrosion of an urban sewage system; Mr. Gordon Sheldon of the Bolton Metropolitan Borough, who wishes to visit European countries which use high density polyethylene liners to prevent further deterio-

1027
ration of their drains; and Mr. Peter Walker of the Severn-Trent Water Authority, who will visit the United States to study the application of leak detection equipment produced only in Japan for the detection of non-metallic pipes. These examples illustrate the problems which also arose in the Select Committee's inquiry.
We were puzzled, as we often are in the Winston Churchill Memorial Trust, that employers do not finance studies of such immediate and obvious importance to themselves, but we hope that the conferment of these Churchill fellowships will draw further attention to the need for modern science and technology in the water industry as well as to the merits of the individuals concerned.
Your Lordships' Select Committee found great variation among the water authorities in the extent to which they were trying to benefit from modern technology. What is certainly the case, as has been said by the noble Baroness, Lady Fisher of Rednal, is that in many cases the supply network and the sewerage system are nearing a state of collapse and are in great need of technological support. What effort is available has to be devoted to the repair of actual faults in crisis conditions rather than to preventive maintenance and programmed replacement. It is an expensive policy of muddling through. We found very little evidence that the Department of the Environment were devoting serious thought to the matter. On the contrary, they were proposing (and this is the effect of Clause 3 of the Bill before us) to abolish the only body apart from themselves—as the noble Lord, Lord Sherfield, has explained—which is able to take a national view and construct a coherent policy; namely, the National Water Council, whose impending demise was so lamented by the noble Lord, Lord Nugent of Guildford.
As the Select Corn mine on Science and Technology we are, of course, concerned with research and particularly with strategic research; that is to say, basic research that is needed to foresee future difficulties and to have solutions ready in good time. Our inquiry into the water industry is only the latest of several reports in which we have found there was no policy focus in Government or outside Government according to which the requirements for strategic research could be perceived and its progress eventually monitored. This was the primary finding of several of the recommendations made in our report on the provision of scientific advice to the Government.
Instead, as I put it before, there is a policy of muddling through; hoping that nobody will notice or that the problems will somehow disappear. The present Government, to be sure, are not solely to blame for the state of the water industry, for there have been many years of neglect. But the present Government are particularly to blame, in my view, for systematically dismantling active foci around which strategic research programmes can be mounted.
I now come—and your Lordships have been very patient—to the amendments of which we have been given warning by the noble Lord, Lord Sherfield. In the absence of a National Water Council, and with no particular interest in water or competence shown by
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the department, the task of forming a national view of the implication of technology for the water industry and of giving a lead to the industry's own efforts in this respect must fall upon the Water Research Centre; there is no other body. We thought well of the Water Research Centre, of the director and his staff, of its laboratory facilities at Swindon, and of its achievements so far. But in the absence of the council the centre must be given more teeth. We believe that it needs more money too, but more important than that we believe that its position vis--vis the water authorities should be strengthened. To quote from our recommendations, the water authorities should have a statutory responsibility,
"to draw up, in consultation with Ministers, programmes of research into matters affecting the performance of their functions and to ensure the carrying out of these programmes,"
and,
"membership of the Water Research Centre should be compulsory for statutory water undertakers".
The proposed amendments are intended to achieve these objectives, as the noble Lord, Lord Sherfield, has explained, and I shall support them when the time comes, because I believe that the application of technology to the grievous problems of the water industry will otherwise be greatly delayed. Naturally I hope that when the noble Lord the Minister replies he will be able to respond favourably in this respect. If he is concerned about the difficulties of giving these amendments practical effect, I can understand. The Water Research Centre draws its present voluntary membership not only from England and Wales but also from Scotland and Northern Ireland, where arrangements are somewhat different—and from water companies as well as from water authorities. It serves the whole of the British water industry and not just statutory undertakings. But this is only a symptom and not the cause of the difficulty. If I may say so to the Minister, the cause of the difficulty is that the Department of the Environment refuse to take seriously the responsibilities they have for the future wellbeing of the water industry.
5.28 p.m.
Viscount Ridley: My Lords, it seems odd to me that a Conservative Government seem to be quite unable to resist the temptation to legislate on matters to do with water. It seems particularly odd to me that we should in this Bill seek to nationalise this industry today. I have no doubt that the next Labour Government will find it much easier to complete the process and include the private water companies to as a result of what we are proposing to do today. But I do think it is very odd, and I never thought that I should live to see the day when a Conservative Government were sitting here proposing 1945-type nationalisation opposed by noble Lords on the Benches opposite; some of our predecessors would wonder what is happening to this House.
This has been argued in the name of efficiency, and I hope that is what will happen. What worries me most is that the whole flavour of the Bill before us seeks to perpetuate the worst aspects of nationalised industries; their remoteness from public opinion and from financial control, and their huge bureaucratic size and undemocratic constitutions. Many of the matters

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before us today seem to me to be absolutely contrary to the present philosophy of the Conservative party regarding nationalisation and privatisation. The noble Baroness, Lady Fisher of Rednal, said that this was leaning towards privatisation, but I should have thought we were going flat out in the opposite direction.
I have no quarrel with the need to reduce the size of the authorities and I am sure that that is sensible, but I wonder very much whether the Secretary of State has to make every single decision on every single appointment to the new boards. To use a dramatic phrase, I believe that he will be hovering over every board room at every meeting, and that his presence will be felt in every decision at which they arrive. There has been a promise made in another place that local government shall have the right to nominate some of the members, but there is nothing in the Bill to say how that will be done. This point having been mentioned, I will not labour it, but I believe there should be a place as of right for democratically elected members of local authorities at some level or another. I believe that historically and functionally there is a very strong argument for this. I do not think that these people should be put forward by the Secretary of State: they should be nominated by the local authorities in the area concerned and not by the associations, because they have no part in this. It is worth noting that I believe the Welsh local authorities are very upset that their own nominations have already been turned down by the Secretary of State for Wales as a result of legislation which we passed on another occasion. If it is argued that this would lead to local party politics creeping into water, then I would only say that the whole membership of the board as stated in this Bill is open to political appointment already.
There are three other things proposed in this Bill which seem to me to be pointing in the wrong direction, the undemocratic direction of Whitehall control. The first is selection of deputy chairmen. This is to be done by the Secretary of State. Surely the water authorities should be responsible and able enough to choose their own deputy chairmen, especially as the chairmen, rightly, will be appointed by the Government.
Secondly, the right of the ombundsman is going to be removed. We have already heard a lot about this, and I would only hope that your Lordships will refuse to agree to it when the time comes. I speak as one who has been processed by that person and I know how very thorough and how excellent a system it is.
Finally, there is the removal of the right of the press to attend meetings of the authorities. This I believe to be a very retrograde step, which I cannot support. Local government has long been urged to open its doors to the media, and rightly so. Even if the press nearly always print the things you do not want them to say and not the things you hope they will say, it is still right for reporters to be there, because it does concentrate the mind wonderfully and leads to better government. Also, of course, at local election time their presence leads to much longer speeches, but you cannot have everything. I think the water authorities should be allowed to decide for themselves what level the press should be involved in, but in principle all their dealings should be as public as possible.
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Naturally, they would need the right to keep certain matters confidential, staffing, personnel and so forth.
My noble friend Lord Hemingford mentioned the suggestion that water should be brought into line with electricity and gas. I bend the Standing Orders to congratulate him on his maiden speech, but I am sorry he stole the remark I was about to make myself; I should have thought it much better that electricity and gas should be brought into line with water.
I do not shed many tears for the dissolution of the National Water Council, despite the eloquent defence of it by my noble friend Lord Nugent. I think it has in recent years become almost too big a body. I think the 10 authorities could surely get together to set up a joint association such as they need and no more. Local authorities have had to do this for many years and have done it successfully for far larger numbers than 10. Wage negotiations, in which Lord Nugent has such unrivalled experience, can be done jointly by that means. I do not think this is a matter of concern to Governments: I believe that the water authorities should be allowed to evolve their own mechanism and organisation for co-operation.
The Government will seek to answer the charge that the new authorities are undemocratic by referring to the consumer consultative committees to be set up under Clause 7. I do not think that experience of other nationalised industries leads one to be too enthusiastic in welcoming these. They can of course be politely listened to and equally politely ignored. Even here the authorities themselves have far too much say in the setting up of these bodies, and the result will be that they will not be trusted to be impartial and to represent the consumer.
I think it goes without saying that we are all consumers in the matter of water and we are all compulsory payers to a monopoly industry, whether we use it or not. It is, therefore, of very great interest to us to have a very good system, as indeed we do have in this country at the moment. The public have great worries and considerable anxieties over every aspect of water; it comes very much into people's lives, as we well know at the moment. Every MP and councillor realises how many complaints he gets on the matter. I do not think it is difficult for water authorities to arrange to meet the local authorities in their areas to discuss these things. There is no better way of consulting the public than through the elected local councillor, whether at parish, county or district council level. He is the person best able to put forward the views of the consumer, the person who pays for the services, to the water authorities. It can be done successfully if the local authorities can meet with the water authorities regularly, and of course such meetings can be widened to include any other group which feels it necessary.
Again, I think that the question of these consultative committees is too much under the thumb of the Secretary of State, who puts himself into too commanding a position over every detail. I should add that the Association of County Councils has discussed this at length, has resolved to seek no involvement in the form or constitution of these new committees and has no confidence in them, believing that local authorities themselves are far more effective in achieving their aims.

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Finally, my Lords, the noble Lord, Lord Bellwin, said that he was proud that the Japanese had come to copy our water administrative system. I think I must warn him that they have also come to steal water from the Hebrides in order to compete with our whisky industry. I hope he does not let them have too much of our water in the process.
5.37 p.m.
Lord Ardwick: My Lords, first, I have two apologies to make: I missed the opening minutes of the speech of the noble Lord, Lord Bellwin, and I shall have to leave this debate earlier than I had hoped. The reason for both my latecoming and my early departure is a domestic. problem, the nature, of which I have explained privately to the noble Lord.
Next, I have to congratulate the two maiden speakers. The noble Baroness, Lady Nicol, brings to us a wide experience of local government. I may say, as one who has not had that experience, that it very much enriches this Chamber and gives a lot of substance to many of our debates. Sometimes I think, in view of recent appointments, it should be said that there is a coronet in every councillor's briefcase. As for the noble Lord, Lord Hemingford, I cannot hail him as a political friend but I can as a professional colleague. I am going to say more or less the same things as he said this afternoon. He put them with all the refinement and delicacy of a maiden speaker, but I shall put the same points rather more brutally and, perhaps, more vehemently. I do hope that, though his duties will not permit him to attend the House every day, they will permit him to come when there are questions of press freedom at stake.
I myself must plead an interest as chairman of the Press Freedom Committee of the Commonwealth Press Union. My Lords, this is an inauspicious time to defend the freedom of the press. During the past few days one or two national newspapers have been severely censured by the Press Council for their conduct after the arrest of the Yorkshire Ripper. We shall no doubt have occasion to discuss the council's judgment and its proposed remedies for the unacceptable conduct inspired by cheque book journalism. The problem in that case will be to decide what further limitations should be put on newspapers in their quest for information which will interest their readers, which will provide a story that will shock or fascinate them, and which will profit the newspaper.
It is a very different problem of press freedom which arises under this Bill. The question is: what right of access should the press have to information about a public authority—a public authority in which their readers have an important material interest, and a double interest, as ratepayers and as consumers? That right will be greatly diminished by this Bill, if indeed it can be said that it will exist at all if this Bill passes unamended. Yet unless the press have access to this information the ratepayer/consumer will be deprived of the knowledge he requires if he is ever going to have influence on the policy of the authority which levies rates upon him and furnishes him with his water supply.
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This is a legitimate example of the freedom of the press representing the freedom of the citizen to secure information which is vital if he is to play his normal democratic role. It is a right which he now has and which he will lose if this Bill passes into law unamended. It is a right which the water ratepayer enjoyed for a century, for as long as the local authorities were responsible for water supply. It is a right which he has later enjoyed as a result of applying the provisions of the Public Bodies (Admission of the Press) Act; and it is a right which this new Bill takes away. Why? What are the Government up to? What is the Minister trying to protect or to conceal? What has happened to the brave concept of open government with which the party opposite, the party now in Government, wooed the electorate at the last general election?
Words of the Prime Minister spoken in her maiden speech have often been quoted in the debates on this Bill and elsewhere; namely, that publicity is the most effective check on arbitrary action. That is profoundly true. It is equally true—and this is the problem facing us today—that secrecy is the most effective sponsor of arbitrary action. The authorities will sit in secret and debate in private the manner in which they intend to spend the money they have the power to demand from us.
They will, it is true, after some meetings, summon the press and tell the public, through the press, what they want the public to know about the decisions they have taken. But of the debate that has gone on, we shall be ignorant. We shall not know the alternatives to their decisions, the manner in which they reached them what dissent there was inside the new authority. The Government's excuses, even when put with all the persuasive power of the noble Lord, Lord Bellwin, are lame and unconvincing. They start by saying that the authorities will have changed their character. They will be smaller, and their duties will be largely of an executive nature.
Can one really accept that? Does anyone believe that these authorities, spending vast sums of money and undertaking important responsibilities, are simply going to do just what the Minister who has appointed them tells them to do? Are the new "watercrats", as my noble friend described them, to be performing seals, snatching at the fishy bait which the Minister offers them, or are they to be dolphins rising above the reservoirs to jump through the hoops? Surely these authorities are not greatly diminished. Surely they will discuss policy, how they should carry out their responsibilities, and how they will spend the money that they demand of us. There is all the difference in the world between a chairman's discreet account of a meeting at a press conference and a report of what actually went on, written by a reporter who was present with a notebook.
We are all indebted to the Guild of Newspaper Editors—of which the noble Lord, Lord Hemingford, was once a member, was once chairman, I think—which has alerted parliamentarians to some of the dangers and deprivations in this Bill. National daily newspapers, for quite good reasons, are not members of the guild, which contains many editors of solid provincial newspapers very much concerned

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with the affairs and interests of the community in which they circulate. Not for the first time are we grateful for the guild for its vigilance.
I liked the comment of the Sandwell Evening Mail on the proposed press conferences. It said:
"It is ironic that this shabby substitute is put forward by an administration supposedly devoted to the practice of open government".
That phrase, "shabby substitute", would be the verdict of every journalist.
Some of us may not be aware of what the provincial newspapers have reported about the water authorities. They have been well described by the editor of the North Western Evening Mail, of Cumbria. I quote:
"The North-Western Authority discussed many questions affecting my readers. These include the every increasing cost to consumers, the region's chronic crisis over supply, the construction of the new pipeline from Haweswater, the deterioration of the Victorian sewage system and the serious pollution around our coast."
He goes on to point out that the press is to lose the access which it has had previously to documents in advance of the meeting—documents which it could summarise and publish, so that members of the public could make their views felt before final decisions were reached.
The Government case is thin indeed when they say that not all newspapers concerned attend every meeting. Newspapers have to be selective in their coverage. They do not have, and cannot have, resources to cover even every court of law that is sitting, but this, of course, would not justify the closing of the courts to the press. Nor is it an answer to say that the press would be able to attend the consumer councils that are to be set up. Consumer councils do not have an impressive record in this country, and they are not the decision-makers. Nor is it an argument to compare the water supply with gas and electricity bodies, which do not have the press at their meetings, though they might be better for them. If there was ever a case of arbitrary action it has been carried out by these two nationalised bodies as a result of their meeting in such secrecy. The water authorities are different. Nobody has to have metered gas or electricity. We can exist, if we wish, on candles and wood stoves; but everyone has to have water. Every householder has to pay a rate for his water, and the water authorities have a duty to supply him with water. That is the vital difference, and that is why the public and their representatives, the press, must not be excluded from listening to and hearing the decision-making process.
The relations between this Government and the newspapers are not very happy. There were some disappointments about the contempt act, of which we thought rather highly in this Chamber, but fortunately those have been ironed out, although they caused a good deal of anxiety until recent weeks. As a result there are quarrels about the breaking of an embargo, that newspapers are not getting their important documents in good time to digest them and make comment upon them. This is the kind of sanction that is being taken by the Government. I think it is a most unwise one. It is an inconvenience for the press, but it is the kind of inconvenience which newspapermen are able to overcome. The people who suffer are the
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public, because there is inevitably a lowering of the quality both of the comment and of the analysis when it has to be done in such a short time. I hope the Government will think about their relations with the newspapers, and that they will reconsider their decision on this Bill, so that when amendments are moved to restore the freedom of access of the press to these authorities that they will give them a fair wind.
5.49 p.m.
Lord Sandford: My Lords, I start by congratulating the noble Baroness, Lady Fisher of Rednal, for coining the expression "watercrat". It conjures up just the image that we need in front of us and on which to concentrate our minds in deciding what to do on this Bill and to bring some sort of accountability to the people who will be operating the water industry. I took pride some 10 years ago in introducing the Water Act 1973 to your Lordships' House and I still take some pride in having taken a small part in creating the system of regional water authorities which have overall responsibility for the water cycle from raindrop to the rivers and to the sea. But I take no pride at all in belonging to the party responsible for introducing this Bill. My shame chiefly resides in the total lack of accountability under which these regional water authorities will now be left to operate. It strikes me, as it has my noble friend Lord Ridley, as very strange that a Conservative Government seems bent upon nationalising the water industry, because that is what is happening.
I want to concentrate mainly on accountability because that is the worst aspect of the Bill. The Bill removes the guidance and control of the National Water Council. I do not need to say any more about that because the point has been fully made by the noble Lord, Lord Nugent of Guildford. It goes on to remove the majority which local authorities had in each of the regional water authorities and through which some measure of democratic control could be exerted.
If I am to take pride in introducing that Bill I have to take responsibility for that particular system which, it is certainly true, has not worked well. For the local authorities to exert their majority on the regional water authorities it was necessary, for instance in the case of Severn-Trent, for representatives to attend meetings in Birmingham from as far away as the Welsh Marches to the West and the mouth of the Humber to the East. It was necessary for them to turn up on almost every occasion. It was then necessary for the districts and the counties to agree, and their interests are very different. It was then necessary for the Labour members to agree with the Conservative members. I am afraid, therefore, that with 10 years' hindsight one has to say that the expectations which we had of the majority of local authorities being able to exert their influence were not fulfilled. But that is not a reason for doing what is proposed in the Bill; for dismantling the National Water Council, for removing rather than increasing the majority which the local authorities have and going on to take further steps which further reduce the accountability of these authorities.
There is no need for me to say anything about the effect of taking these authorities out of the purview of

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the ombudsman because the noble Baroness, Lady Serota, is to speak next and when she has said what she has to say there will I am sure be no more to be said on that. Nor is it necessary for me to go into the disastrous decision to take away the scrutiny of the press, because the noble Lord, Lord Ardwick, and the noble Lord, Lord Hemingford, have deployed that case. But the total effect of all these measures is to give these very powerful authorities complete freedom to behave as they like and to do so in respect of a commodity which, as several noble Lords have already pointed out, is the one commodity on which every household is totally dependent day by day. If one does not like gas, one can have electricity. If one does not like travelling by British Rail, one can use one's car, and so on, but with water we have absolutely no choice. We are entirely in the hands of these authorities.
The loss of accountability that the Bill creates is absolutely scandalous. If we are not able to do anything with this Bill, because of what this Bill seeks to do these regional water authorities now become prime candidates for the attention of the Parliamentary Control of Expenditure (Reform) Bill which, fortunately, the other place has just introduced. It has just received its Second Reading and has substantial all-party Back Bench support. My scrutiny of that Bill leads me to suppose that it will bite upon the regional water authorities, and I am sure that when the other place takes it in Committee it will make certain that it does.
If we are to remove the press, the ombudsman, local democratic control and the National Water Council, something else must be instituted to keep control of these watercrats. Parliamentary control under the new Bill seems to me as good a way as any to do it. If the Bill reaches this House without it being clear that Parliament can exercise control, I hope that your Lordships will join me in making sure that it does.
I turn from accountability to sewerage agencies, which was a topic first introduced by the noble Lord, Lord Sherfield. I very much agree with him that this is a matter on which it will he possible for the district councils, who are the local authorities chiefly involved, the committee which he chaired and the Government to reach agreement. It is important to get this right and I fully believe that we can do so in Committee.
The only other point which I mention now, but on which I suggest it might be useful to have a short debate in Committee, refers to Clause 5. This clause makes provision for each of the 10 water authorities to be able to provide assistance and advice to persons outside the United Kingdom. This is chiefly designed to back up and support the commercial activities of our water industry. I suggest that a small debate on this aspect would be useful because the water industry has also established its own charitable arm—WaterAid, on which I served as a trustee—for supplementing the commercial activities of this country overseas with a charitable and voluntary effort in support of the United Nations' Decade for Water and Sanitation. I shall be moving an amendment to delete Clause 5 in order to have a short debate on that point. But by far
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the most important, and worst, aspect of the Bill is the lack of accountability of the regional water authorities to anybody or anything.
5.58 p.m.
Baroness Serota: My Lords, I must first express my thanks to the noble Lord, Lord Bellwin, for his exposition of the Bill, although, as the debate has gone on—and we are now nearly halfway through—perhaps commiserations would be more appropriate. I cannot recall a single speaker who has spoken in his support.
I also warmly congratulate both maiden speakers upon their contributions today. Indeed, as I listened to their speeches, I shared many of their inevitable apprehensions, since it is now a considerable time since I have been able to take part in the deliberations of the House owing to my responsibilities as Chairman of the Commission for Local Administration in England and, local commissioner for Greater London and the South-East from 1974 until recently.
It is because of this experience that I feel bound to express, together with several other noble Lords who have already spoken, my deep concern that the Bill now excludes many of the actions of the proposed new water authorities from the jurisdiction of the Local Ombudsman, leaving only certain sewerage and land drainage matters which were mentioned, by the noble Lord, Lord Beaumont of Whitley. Like him, I appreciate that Clause 1(2) was introduced by the Government in another place to meet the anxieties expressed on all sides about the problems of overlapping in the Bill as originally tabled.
I also recognise that the Government have undertaken not to reduce the remit of the Local Ombudsman until the proposed new consumer consultative committees have been brought into existence. But neither of these concessions deals with the central issue of principle—namely, that in 1974 Parliament, with the support of all parties, gave all citizens the right to ask for an independent investigation when they considered they had suffered an injustice as a result of maladministration by a water authority. Now, nearly nine years later, this right, apart from the two exceptions that I have just mentioned, is to be materially reduced on the grounds—indeed, on the sole grounds, as I understood from the introduction of the noble Lord, Lord Bellwin—that water is in future to be classed as a nationalised industry and no longer as a public service and that nationalised industries do not have Ombudsmen.
It is difficult to follow the logic of the proposal, especially as the new authorities will remain statutory bodies with powers to levy a rate and issue a precept—the two criteria in the 1974 Act which bring them within the jurisdiction of the Local Ombudsman. Like the noble Viscount, Lord Ridley, I know of no other nationalised industries that are financed mainly in this way. The argument that the proposed new consumer consultative committees will offer as much protection to the consumer as the Local Ombudsman, simply does not hold water—if I may be pardoned the expression! However enthusiastic and energetic the proposed new committees may be, I must ask the noble Lord, Lord Bellwin, whether they

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will have the resources, the powers and the independence of the Local Ombudsman to enable them to investigate individual complaints in depth, including the powers of a High Court judge to require any person to give information or to produce documents; and will they enjoy absolute privilege, as do the Ombudsmen? The draft guidelines for the consumer committees which have been published by the Government show that they clearly will not.
They are to be appointed by the water authorities; they will have to rely on them for accommodation and staff and they will have no powers to inspect records or to require evidence from those involved in any complaint. Indeed, the guidelines specifically say that they:
"should not be the channel through which individual complaints are handled as a matter of routine",
although the consultative document then goes on to say that,
"a committee should not be precluded from considering an individual complaint if it wishes"—
but without the essential powers for full investigation.
I would therefore urge the Government and the House to retain the existing independent Ombudsman system for the whole range of water activities, side by side with the proposed new consumer consultative committees. These committees should have as one of their main functions the need for each authority to have clear and effective systems for considering complaints locally, leaving the Local Ombudsman, as now, as the impartial and independent service of the last resort to which the citizen can turn when local efforts to settle a complaint have failed. After all, in the National Health Service we have community health councils side by side with the health service Ombudsman. I do not recall at any stage in our long debates on the 1973 Bill anyone suggesting that they cannot operate effectively with their different remits. They are not incompatible; on the contrary, they reflect the general wish, regardless of party, to strengthen the rights of individuals in relation to large appointed public bodies providing monopoly services—a point which many noble Lords have already made in our debate here today.
I therefore urge the Government not to reduce the safeguards to the citizen against administrative fault by water authorities and I hope that my proposal to retain the Local Ombudsman system intact will receive support from all sides of the House both today and in our debates at the following stages of the Bill.
6.4 p.m.
Lord Sandys: My Lords, it is a very great pleasure to follow the noble Baroness, Lady Serota, and I share on this side of the House all that she has said in her plea to the Government on this especially important matter of monitoring the process. I also share with my noble friends Lord Sandford and Lord Ridley all the anxieties that they have expressed about the Bill. However, I approached the Bill initially in a spirit of inquiry to see how another place had handled it. I was greatly interested to see how the two Ministers spoke of it on Second Reading on 16th November 1982. I should like to quote from the then Minister of Local Government—now Secretary of State—Mr. Tom
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King. He was in some anxiety himself, if I read it correctly, because in regard to the system as it stood and whether it was working, at columns 151 and 152, on 16th November, he said:
"Arc the 62 members of the Thames water authority supposed to run that authority or to provide representation for the community and involvement with consumer representation? That question has never been adequately resolved".
We had to wait until a great deal further on in the debate for the point to be taken up by the Minister replying—Mr. Giles Shaw—when, at column 227, he said:
"What is important now is that the structure that is set up for the future of these authorities should be capable of responding to the challenges ahead. There can be no doubt that boards of 47 or 65 are an anachronism if we want to see efficient use of the nation's resources".
What has not been answered there is either the purpose of the structure as it stood originally or the true reason behind the proposed reconstruction, other than to put forward the suggestion that it is or will be an anachronism to have such large bodies to which my noble friend Lord Sandford has referred in considerable detail.
I shall leave that aspect because I wish to make only a brief speech as there are so many other speakers. Before I proceed further I should declare an interest as a landowner because I am going to tackle two matters specifically concerned with problems arising in that field. The first matter concerns burst sewers. The problem is as follows. At present, if a sewer bursts and floods a householder's property he can be put to considerable expense and trouble. Nevertheless, the law as it stands at present will only allow him to obtain any compensation if he can prove that the authority has been negligent. That, from a householder's point of view, is almost impossible. He will not be in a position to accumulate the information; nor will he be able to bring an action in law to do that unless he is remarkably well informed.
Therefore, when we consider the state of the law as it is today and compare the situation as regards burst sewers, to which I have just referred, with the situation as regards burst water mains, it is a matter of pleasure that in the Water Act 1981 the situation was remedied as far as water mains were concerned. But still the situation of the householder regarding burst sewers remains a matter of acute concern.
The second matter to which I wish to refer is the question of rights of entry. This is a very important matter because the official privilege which will be afforded to the authorities in exercising their powers will concern very wide opportunities in this field. Water undertakers can enter land and lay mains and sewers after having served appropriate notice. But there is no right of appeal or opportunity to make representations. The projects today can be very large indeed and can occupy in certain cases several hundred acres. But often the owner is not consulted in advance—or very long in advance—and is given quite short notice before the contractor arrives on site, which will afford him considerable anxiety and dislocation of business due to severance. This matter is one that we shall wish to investigate in the course of the Committee stage.

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A comparison should be made with the powers as they exist at the moment of British Gas, where the authority can refer disputed pipeline cases to an inquiry, and those of the oil companies, which are under a statutory obligation to negotiate with owners before being allowed compulsory rights to lay pipes. I think that all these areas concentrate upon one single issue, which is that other authorities have to justify their powers, whereas immunity is to be afforded to these authorities; and this is a matter of major public concern. I wish to conclude my remarks by saying that, if public confidence in the water authorities is to be sustained, provision should be made to ensure that public accountability is very much greater than it is in the Bill as it stands.
6.11 p.m.
The Earl of Shannon: My Lords, I intend to make a very short intervention in this Second Reading debate to cover only two points. My first point follows the comments of many previous speakers, and in this respect I should declare an interest as a vice-president of the Inland Waterways Association. Like many others of your Lordships who have spoken this afternoon, I am concerned with the proposal to dispense with the Water Space Amenity Commission, which was set up under the Water Act 1973 to cover amenity users of water, including navigation. Some two years ago, the Government proposed to dissolve the Inland Waterways Amenity Advisory Council, which covered the waterways administered by the British Waterways Board, but they were fortunately dissuaded from this course of action by the very strong opposition which they incurred.
Now those navigation users which are not under the British Waterways Board are having to lose their similar body, although the Government may, and have in another place, made conciliatory noises about, as yet undefined, consumer committees. I think that, before the navigation users can accept this sop, they must have some commitment that on those committees they will be properly represented among, and not be totally swamped or ousted by, those others who were so ably listed by the noble Baroness, Lady Fisher, in her speech.
An amendment to this Bill was proposed at the Report stage in another place. It was to introduce a new Clause 1. But the Government's objection was on the ground that this apprehension which was entertained by navigational users of waterways, with which it did not appear that they disagreed, did not require a major addition to legislation. May we hope that at a later stage in this House the Government will accept minor additions to the same end?
I turn to my second point, and here I should declare another interest as Director of the Federation of Technology Institutes. Reference was made earlier to the report on the water industry by the Select Committee of your Lordships' House and most especially—and I am sorry that the noble Lord is not in his place—to the proposed amendments to be made to the Bill by the noble Lord, Lord Sherfield. Here I would very strongly welcome the suggestion that water authorities should have a duty to programme their
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strategic research. However, I view with very grave apprehension the suggestion of compulsory membership of the Water Research Centre, which for many years has been a member of my federation.
During a Second Reading debate I do not suppose that it is appropriate to dilate further this afternoon on this apprehension and I feel that I should save my detailed comments for a later stage if the amendments are tabled. But I would take this opportunity to remind the House that, after nearly 14 years' experience of running co-operative research organisations, I can assure your Lordships that, where they have occurred in the past, compulsory memberships and statutory levies do not lead to the best conduct of applied research. The idea may be well-intentioned, but it is misguided. In fact, I would go further because, as the founder chairman and the present secretary of the European Federation of Co-operative Research Organisations, I have seen abroad how remarkably ineffective compared to British research associations are the European institutes, which are supported by levies or by parafiscal tax systems.
In the Water Research Centre in this country we have a unique research facility with a voluntary, active, interested membership. Compare that with the water research institutes in almost every other European country. I am not attempting in any way to dispute the undoubted scientific talent of the noble Lords on your Lordships' Select Committee; I am merely suggesting that the organisation and administration of co-operative research is not best handled in the way proposed. I hope that alternative proposals will prevail.
6.17 p.m.
Lord Melchett: My Lords, usually one of the pleasures of speaking from the Opposition Benches at a late stage in the debate is that somebody has said something in favour of the legislation with which one can quarrel, but this must be a pretty unique Bill from the Government's point of view because I do not think that anyone has said a single word in favour of any of the provisions at all, except the noble Lord, Lord Bellwin. So all of us are having to have a go at some of the things he said, but luckily he gave all of us plenty to aim at.
From the Opposition Front Bench my noble friend Lady Fisher said that under the Bill, if it in fact goes through in its present form (which looks so unlikely that it is pretty academic to talk about the Bill as presented), the people running the regional water authorities will be small élite groups. The noble Lord, Lord Bellwin, used as one of the planks of the arguments which he had against the ombudsman, the press and anyone else who might have kept a check on these small élite groups the argument that they were simply charging for services which they provided. I think that that has been pretty comprehensively demolished, but it is, of course, nonsense; all sorts of people have no choice but to pay charges for services which are not available to them or which they have absolutely no intention of taking up.
Perhaps I may give a good example to the noble Lord, Lord Bellwin. It is that of conservation organisations which own nature reserves, where they have to

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pay a drainage rate to, in most cases, the internal drainage board for doing things which, if they did it to the nature reserve, would completely destroy its interest from the point of view of the organisation that owns it. So to say that these are bodies simply charging people for services which are in the market place, as it were, which I imagine is what the noble Lord had in mind—people pay up if they want it—is, of course, complete nonsense. That is one of the reasons, at least, why the ombudsman, the press and others should be able to have a check.
The other matter that I cannot resist taking up with the noble Lord is the idea that press conferences are just the same as having a meeting open to the press. I just wonder how often the Government will work this the other way round and, for example, dispense with all the boring and time-consuming business of briefing the political lobby—the journalists in another place, and so on—after Cabinet meetings. Simply to let them in and allow them to listen to the meeting would be much quicker. The noble Lord would seem to be saying very much the same thing: "It does not really matter one way or the other". Of course, that is a complete nonsense as well.
The regional water authorities are extremely important bodies, and I want to concentrate my criticisms of the Bill and its effects on an area which has been touched on, but not in any great detail; that is, conservation and, in particular, the conservation of wildlife and landscapes. But before I do that I should like to add a word to what has already been said to some extent, although not stressed very much except by one noble Lord who spoke earlier, and that is about the conservation of water and the importance of strategic planning and of all water authorities getting together to take an overall view of the water supply and demand in this country.
The abolition of the National Water Council and the failure to replace it with any statutory alternative is likely to lead to far less strategic planning on a nationwide basis, to much more duplication of reservoirs and the loss of agricultural land in which that results, and so on. Each regional water authority will slip hack into wanting to be self-contained and to have its own big new reservoir scheme on the go, and so on and so forth. That seems to me to be a deplorable thing for the Government to have done, just at the time when there was a start being made on some strategic planning and water authorities were looking to co-operate and share resources between them.
Regional water authorities play a crucial role in determining the future of wildlife and landscape conservation in this country. They also control major recreational resources of great importance to a number of interests: to people who fish and sail, and to people who walk, not on the water, but around the large water catchment areas which many water authorities own. I am concerned that the only statutory representation on water authorities at the moment—and this does not apply in Wales, for some completely unaccountable reason; perhaps the noble Lord can explain that—is for agriculture, land drainage and fisheries. As it is spelt out, even that does not seem to be adequate in itself. There is a case for increasing the statutory representation for larger
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authorities, as the National Farmers' Union proposed, and clearly the provisions for Wales need clarifying.
I can see no good argument why there should not have to be in the Bill statutory representation for the two interests which water authorities have a statutory duty to further; that is, recreation and nature conservation, where recently, in the Wildlife and Countryside Bill, new duties were placed on water authorities. It was as a result of that that in another place, in the Standing Committee on 18th June, at column 992, the then Minister at the Department of the Environment said:
"We shall use our best endeavours to ensure that the water authorities have at least one member with experience of wildlife and conservation."
I should like to know from the Government whether that clear assurance still stands in the light of this piece of legislation, and, if it does, why it should not be written into the Bill, because it was given in clear terms very recently by the Government.
The question of representation does not end with the regional water authorities. There are also the regional land drainage committees, which again are of crucial importance so far as wildlife and landscape conservation are concerned. Those committees seldom, if ever, have any conservation representatives present. It is for that reason that, in the past, there have been severe problems. The Halvergate Marshes and the Somerset levels are two recent examples of severe conflicts when proposals have been drawn up, finalised and then published without any serious consideration of the conservation case in advance.
May I turn quickly to two other points. Local consumer consultative committees—these things that the Government have come up with to answer some of these problems—seem to me likely to make matters worse rather than better. They are certainly no substitute for having representatives on the regional water authorities themselves. There is a real fear among nature conservationists that these committees will be used as an excuse to do away with the detailed consultations that now take place between regional water authorities, the Nature Conservancy Council and the major voluntary wildlife organisations like the RSPB and local nature conservation trusts.
Without detailed consultation, looking at capital programmes several years ahead, site visits, and so on—and I do not imagine that these are the sorts of things that local consumer consultative committees are designed to do—there is not much point in having them at all. That seems to be recognised by the Government in their guidelines for water authorities, the Nature Conservancy Council, internal drainage boards and so on, which they have recently issued, where they spell out the consultation procedures much along the lines I have just said. I hope we might get an assurance from the Government that those procedures will continue.
Your Lordships may have thought that you had heard everything about all the secrecy that it was possible to imagine in the criticisms which have already been made of this Bill—the exclusion of the press, the ombudsman and democratically elected representatives. But the water industry has another major fault as far as secrecy is concerned which exists

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independently of the Bill, but which I hope the Bill might be amended to alter. That is the secrecy with which cost-benefit analyses of major proposals for land drainage are treated, and the determination at all costs by all of those involved, so far as I can see, to avoid public inquiries where major schemes of this sort are concerned. Even when a statutory body like the Countryside Commission calls for a public inquiry, as it did over the proposal to drain Halvergate Marshes, the Government did everything they possible could to avoid having one.
This determination to keep what the water industry does out of the public realm at all costs seems to be disgraceful. I hope that we can amend the Bill not only to get rid of the new steps which the Government seem to be taking to avoid public scrutiny but also to get rid of some of the present iniquities in the system. I hope that Ministers from the Department of the Environment who will be dealing with the Bill might support at least that part of it, because at the moment the problem is that public inquiries can be called only by the Minister of Agriculture, and because just occasionally that department has a particular interest in some proposal public inquiries are very rarely called.
The other thing the Bill does not deal with—and my noble friend on the Front Bench gave a long list of things it does not deal with—concerns the structure and functions of the internal drainage boards. We had a lot of discussion about this on the Wildlife and Countryside Bill and afterwards in debates initiated by noble Lords on the Government Benches. The response from the Government at that stage, at least in part, was that these antiquated, odd organisations were going to be subject to a comprehensive review. If the noble Lord, Lord Skelmersdale, who is to reply to the debate, cannot tell me this evening—and he is going to have a lot to reply to—I hope that he will write to me to tell me how that review is going, and whether the Government are going to bring forward any amendments which will affect the powers, the functions and the composition of IDBs in the later stages of this Bill.
The noble Lord, Lord Sandford, seemed to be looking ahead to another Bill on its rather uncertain course in another place to put right some of the wrongs in this Bill. It seems to me that with the unanimity of opinion against the Government's proposals in this debate it ought to be possible to be a little more optimistic than the noble Lord, Lord Sandford, appeared to be, and that we ought to be able to put right some of the iniquities during the further stages of this Bill.
6.29 p.m.
Viscount Montgomery of Alamein: My Lords, the noble Baroness, Lady Fisher, thought that this Bill was a halfway house to privatisation. Unfortunately, would that it were so. It seems to me to be quite the reverse, as my noble friend Lord Ridley pointed out. The Bill, as it stands at the moment, replaces many large, flabby quangos with fewer, small, sharp ones. Whether this will improve the management of water affairs is a question that will need a lot further analysis.
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The noble Lord, Lord Melchett, dealt with the aspects of conservation, on which he is an expert, and it would be presumptuous for me to attempt to follow him down that track. I shall therefore confine myself to Clause 5, which concerns overseas activities. I was unaware that my noble friend Lord Sandford was hoping to delete that clause altogether. Be that as it may, it is worth while expressing some concern about this aspect of the Bill, which provides for water boards to embark on completely new adventures.
The noble Lord, Lord Flowers, told us about water board engineers travelling overseas to acquire knowledge. That is a splendid activity, but trading overseas is quite a different matter. The CEGB and the Gas Council buy heavily from United Kingdom industry and use British consulting engineers, but I do not think they sell their wares in competition overseas or seek overseas contracts. Whereas the water boards may have great skill and experience—to quote my noble friend Lord Bellwin—that may not necessarily be applicable overseas, where conditions are very different. Other nationalised industries have not been significantly successful overseas.
It was, therefore, with some surprise that one found a Conservative Government, dedicated to the encouragement of private enterprise, starting up a new public sector activity which the private sector does extremely well. I have in mind such activities as engineering studies, conceptual design and contract supervision, in which fields British consultants have a fine record and reputation overseas. They also have a high earning capacity; British consultants earn well over £500 million annually overseas, of which some 20 per cent., or over £100 million, concerns water and water-related activities. It seems to me, therefore, that there is no need for the present successful scene to be confused by the entry of the water boards, which presumably will compete with each other overseas, thus creating further confusion.
The Minister said that safeguards would be introduced to prevent unfair competition, and we shall need to know much more about those safeguards before the clause is considered in Committee. In another place when debating the Bill before Christmas it was announced that guidelines would be published. I do not think they have yet appeared, and I suggest that any such guidelines regulating the overseas activities of the water boards would need to be agreed with professional bodies such as the Association of Consulting Engineers. I therefore hope that my noble friend Lord Skelmersdale—who seems to have come under a great deal of fire today, with many questions being put to him, and I apologise for adding to them—will be able to give us some reassurance on this important aspect of the Bill.
6.34 p.m.
Baroness White: My Lords, I join in the congratulations which have already been extended to my noble friend Lady Nicol. In addition to her great experience in local government, it is clear that she has also been blessed with a voice to which it is a pleasure to listen. I wish also to say how much we welcome the noble Lord, Lord Hemingford, as an active Member of your Lordships' House, both for his own sake and because

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many years ago his father and I were close colleagues in various aspects of African affairs, to which his father devoted much of his time and energy. So they are both extremely welcome.
I must also extend commiserations to the noble Lord, Lord Bellwin, whose Bill has not even been damned with faint praise. There has been hardly a friendly voice for it in the House. He will, I am sure, appreciate that in your Lordships' House at least there are a large number of people who, in one way or another, have considerable experience of the matters dealt with in the Bill. He will therefore have quite a rough ride when it comes to later stages. I am sure he will enjoy it, though, seriously, I hope he will take some of these criticisms, based on experience, very seriously. I have had the privilege of being a member of the Science and Technology Committee, chaired by the noble Lord, Lord Sherfield, and I would simply say, in view of his lucid and forceful exposition of our views on the matter, that I would entirely support anything he puts forward.
My other reason for speaking in this debate is that 10 years ago I had the privilege, from the Dispatch Box on this side of the House, of endeavouring to improve the Bill introduced by the noble Lord, Lord Sandford. One aspect of that legislation has entirely stood the test of time. It was the major principle of the 1973 Act, which was to make certain that the organisation of the water industry in this country treated the entire water cycle as one, with the units for organisation of the industry being the total catchment areas of the river basins. That is important because even today the noble Lord, Lord Beaumont of Whitley, for example, was hankering for regional units of government which would also run the water industry. With great respect, the noble Lord overlooked the main principle of the 1973 Act. In other quarters people have spoken nostalgically of local authorities' rule. Nostalgic moans come from local authorities themselves now and again, saying, "If only we could go back to the good old days when the local authorities ran the water industry". That, of course, is unrealistic. The present system is clearly the most satisfactory basis for the organisation of the water industry. I hope that no one will spend time during later stages of the Bill trying to argue against it.
That does not remove the difficulties we are facing with the current proposals. I can fully understand that the noble Lord, Lord Nugent of Guildford, with his dedication to the National Water Council, felt that the main object of the Bill was to destroy the National Water Council. With respect, I should have thought that was the secondary objective of the measure, the main one being to reorganise the authorities themselves.
Unless the noble Lord, Lord Bellwin, said something about it in the opening sentences of his introduction of the Bill, which unfortunately I missed, no one has referred so far to the fact that we have been running the new system in the Principality of Wales for nearly a twelve-month. We can therefore reasonably claim to be able to offer some good advice. It has had some success and indicated some weaknesses. The Government in this Bill are unfortunately subsuming the Welsh organisation which our Secretary of State
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was able to introduce by order; we shall now be taken up in this England and Wales Bill, which I believe is not only no improvement but positively disadvantageous.
The Welsh authority has been organised on the basis that the local authority majority has disapppeared. That is common form now. Frankly, in spite of some of the feelings which I know exist on both sides of the House, I think that basically that was the right thing to do. There was, let us face it, a certain degree of pseudo-democracy about the local government member majorities on the boards. But they were not elected to serve on the water authorities, so they were not answerable directly to the electors for what they did on the water authorities. Their excessive numbers impeded business, and my view is that basically the smaller boards are the right way to run the organisation. But that does not mean that, so far as the Bill is concerned, one should entirely ignore the reality of the interest that local government is bound to have in the operations of these very important authorities which impinge greatly on a number of local government functions.
I understand that in the other place Mr. Shaw gave an undertaking that not fewer than two—which obviously contains within it for the larger authorities the possibility of rather more—members of local authorities would be appointed. But that is not in the Bill. The pattern that we have had in Wales has been that there are four members, appointed admittedly by the Secretary of State, but on the proposition of the local authority associations, representing the counties and districts respectively. We do not have any metropolitan authorities in the Principality. In my submission, that is not too bad a system. I speak with some experience, because for five years I was chairman of the Land Authority for Wales. It is a more modest organisation than are the water authorities. However, it is a quango that has certain similarities. We were, dealing with planning, land and so on which the local authorities also thought—at any rate at the outset of our existence—to be a great encroachment upon their activities. Our pattern was that we had two persons chosen by the Secretary of State from a list submitted by the counties, and two by the district councils' association. I appreciate that the noble Viscount, Lord Ridley, does not approve of this system, but at least it is better than nothing, which is the position at the moment in regard to the Bill.
Viscount Ridley: My Lords, I did not disapprove of the system. I just did not think that it was working in Wales.
Baroness White: Well, my Lords, as I say, I can speak for an authority which I had the honour to chair for five years. We found that it was a very useful link with local government in Wales. At least they knew that they had on our authority four members to whom they could turn and who could act as interpreters of local authority interests. That was quite apart from the direct contact that one had in day-to-day business the whole time. I repeat that we do not have even that statutory assurance in the Bill.
We may of course have guidelines. However, one of my objections to the tendency at present all too

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prevalent in the Government, in particular in the Department of the Environment, is that we are now having government by guideline. The reason that is often put forward is that it is a much more flexible approach, but, my Lords, it really is undermining the authority of Parliament. It is neither primary nor secondary legislation. We have been accustomed to the two-tier process, with first the primary legislation, then leaving the details to be more flexibly dealt with by ministerial order of one type or another. We do not have that now. We have these guidelines that are sent round at various stages of consultation to various bodies. Unless one happens to be a member of such a body, one never quite knows which bodies are receiving the draft guidelines, and then the revised guidelines. Finally we get the real guidelines. In relation to the Wildlife and Countryside Bill, for example, we did not receive the guidelines on nature conservation under Section 48 until a year after the Bill had received Royal Assent, The guidelines on finance appeared at the beginning of this month, 15 months after Royal Assent. I mention this point en passant, but it is an important manifestation of a change in the departmental attitude. Departments imagine that they are entitled to do a great deal of the detailed work following legislation by way of guidelines which have no statutory status whatever.
I feel quite strongly about that matter, but I should like now to turn to a point which I admit has already been dealt with and indeed dealt with with the greatest competence, as one would certainly expect, by my noble friend Lady Serota. I refer to the question of the ombudsman, on which I think the Minister must by now recognise that he really will have to give way. I inquired about this point in the context of our Welsh experience. The Land Authority under the Community Land Act is not a local government body, yet it is subject to the Local Government Ombudsman in the Principality. I am told that this may be partly because, although local government members are members of the authority not by election but by appointment, nevertheless they are there. I am not a lawyer and so I do not know whether that is sufficient to bring them within the ambit of the ombudsman. But certainly the Land Authority is under the ombudsman.
If the Minister will include in the Bill a provision that there shall be certain representatives of local government as members of a water authority, that might do the trick and get the water authorities under the ombudsman. The entire feeling in the House today has been what I found in my own recent consultations —that the activities of the water authorities are of such a nature that they should come under the jurisdiction of the ombudsman. As my noble friend Lady Serota has pointed out, the consumer consultative committees are altogether different animals. They are not appropriate for the investigation of the kind of matter that is now referred to the ombudsman. Consultative committees do not have powers to send for persons or papers. Their proceedings are not privileged. They do not have, and are not likely to have, the kind of staff that would be at all appropriate for dealing with the kind of matters that are referred for investigation.
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I have here a note of the situation in Wales with the Welsh Water Authority. Since 1974 there have been 35 complaints that have been dealt with by the Ombudsman for Wales. Fourteen of these complaints were fully investigated, with the full paraphernalia of the procedure involving examination by the ombudsman, and 10 of the 14 complaints against the water authority were upheld.
By far the most dramatic situation in regard to which a reference has been made to the ombudsman will, I hope, be dealt with by my noble friend Lord Brooks of Tremorfa. That was the matter of the Cardiff floods, in which in 1979 between 3,000 and 4,000 homes and other premises were flooded, due to the overflow of the river Taff. There were complaints that the alarm systems were deficient. That is not the kind of matter that can be dealt with by a consultative committee. It might be of such a magnitude that one might say that perhaps it should be dealt with by a ministerial inquiry. But there are intermediate situations which I am quite sure are appropriate for the ombudsman, but which are quite unsuited to the kind of investigation that might be carried out by a local consultative committee.
In another place, certain activities of water authorities in relation to sewerage and drainage were included in the Bill as remaining within the surveillance of the ombudsman. But, my Lords, what a ludicrous position one is now in. It is really quite absurd. There are sewerage works that are carried out by agency, by a local government authority. There are other sewerage works—I understand about 10 per cent.—that are carried out directly by the water authorities themselves. So, if something goes wrong with the drainage in one's area, one has to find out whether it is the local authority that is doing the work, or whether it is the water authority that is responsible for the state of the sewers. If it is the local authority, one will then be able to go to the ombudsman, if one feels that one has a sufficient grievance. If it is the water authority that is carrying out exactly the same function, one will be precluded from going to the ombudsman. How absurd! Similarly, it is possible to transfer some of the internal drainage functions to the water authorities, and one has the same absurd situation. This is something which, for reasons both of public policy and administrative convenience, must be looked at again if this Bill is to carry any respect in your Lordships' House.
I shall not go into the arguments about the National Water Council or about WASAC, as it is called, for they have been fairly well adumbrated already this evening, and time is getting on. I should like to say one word of general support for the intervention of my noble friend Lord Melchett. After all, rivers do affect the countryside. They affect wildlife and amenity, and not only as sources of water for drinking or other uses such as recreation. The only people who have been completely left out of this Bill so far are those interested in wildlife and conservation. After an initial omission, those whose main concern with water is recreation have been included by a kind of semantic sleight of hand by calling them consumers. There is a special little subsection to say that if you are concerned with recreation, you are a consumer.

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As the noble Lord, Lord Melchett, made clear, it is very difficult to turn a conservationist into a consumer, even by twisting words a little. There is no guarantee whatsoever anywhere in this Bill that I have been able to find that those of us who are concerned about the effects upon rural life, nature conservation, and so on, will have any say at all in any of the operations either of the water authorities or of the land drainage authorities, which are the ones with which we usually have the greatest problems.
No doubt the Minister will say, "There will be guidelines". Well, we do not trust guidelines. We should like to see something by statute. Why should those of us who have these particular interests at heart—and some of us work extremely hard, not least my noble friend Lord Melchett and his friends, although I do not always agree with them—be regarded as second-class citizens and not be mentioned at all in the Bill when almost every other interest—land drainage, recreation, fisheries and the rest of it—has its place by statute?
I think that I have said enough but I hope that the Minister will recognise that he is going to hear from some of us again.
6.52 p.m.
Baroness Vickers: My Lords, with all the experts to whom I have listened, my speech will be very short. I should like to say a word of appreciation to my noble friend Lord Bellwin because I am very pleased with Clause 5. I do not agree with what my noble friend Lord Montgomery said about that. One aspect that we have neglected overseas—for instance in the colonies, when they were colonies—was to put in water facilities. We must have a much bigger drive to get water facilities put into these countries. Health and happiness depends greatly on this. The more we can do to augment the water service the better. I should like to see people trained in their own country so that they know the character of their country rather than coming over here and being trained. It is absolutely essential to know your territory when putting in water facilities.
I have particular reasons for wanting this. I have lived in India and we had only the minimum amount of water a day and one had to boil drinking water. One saw women carrying water jars or cans on their heads day in and day out. Animals were used on the machinery drawing up the water, and one saw the animals just walking round and round the machinery, particularly in the rice fields, and so on. It does seem that if the scheme in this Bill is enacted, it may be some help.
I should like to thank the noble Baroness, Lady Serota, for what she said. I do not think I can add to that. Having been a Member of Parliament for many years, I used the ombudsman to great effect. Not only was he very helpful, but he gave the person making the inquiry confidence that the case had been looked into. Therefore I hope we can get something on those lines.
The powers of the Secretary of State in this Bill worry me. I started to try to collect a list of them and I reached 18. The noble Baroness has referred to guidelines, so there will be guidelines as well. I served on the Statutory Instruments Committee for many
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years. We shall have order after order coming to us. I think that we shall have to look into this to see that we do not lay ourselves open to, say, the dinner-time with orders—
Baroness White: My Lords, with great respect, as I understand it, the noble Baroness will not have orders. This is one of our complaints. There will not be orders, there will be guidelines which will not actually be binding on anybody. There is the greatest difficulty in getting hold of these and following them unless you happen to be a member of an organisation which is directly concerned.
Baroness Vickers: My Lords, it also mentions orders in the Bill, though I should not like to contradict the noble Baroness because she is much more knowledgeable about the subject than I am. If there are going to be guidelines, we shall have to watch them. If we are never going to see the guidelines, that will make the situation even worse than having statutory instruments which we can debate.
I should like to refer to Clause 3(4), where it says:
"The Secretary of State may by order transfer to any authority, or to any person who in his opinion acts or will act on behalf of one or more authorities—"
I think that this is most complicated. One turns over the page and finds what "authority" means, and there are five different authorities.
I am particularly interested in river authorities. One of the things which are most neglected at the present time are rivers. I have raised this matter in this House before. This is with regard to the fact that without notice people put down boreholes. They take too much water from the acquifer and we are suddenly faced with a river which is six or seven inches lower than normal at a particular time of year. One has no redress at all. I hope that we shall know something about what is going to happen under Clause 3. Perhaps the Minister can say something when he replies.
I should also like to mention a very interesting point on page 10 of the Bill. It states:
"A water authority shall pay to their members such remuneration and allowances as may be determined by the appropriate Minister with the consent of the Treasury".
I wonder how many are going to get through? I should like that to be considered again. Then it says:
"Where an employee of a water authority—

(a) becomes a member of that or any other water authority, and

(b) immediately before becoming such a member was, by reference to his employment with that authority, participating in a superannuation scheme",

so I gather that they will get their pensions paid under this scheme. I think that is a very good idea.
I should also like to refer to housing accommodation. On page 11 of the Bill it says:
"provide housing accommodation for persons employed by them (whether by constructing, converting, enlarging or acquiring any buildings and whether by selling such accommodation or letting or permitting it to be occupied is to be occupied with or without requiring the payment of rent or other charges)".
It then goes on to say that the person can stay there even if he is not in employment. Are we going to build up a kind of little village round these areas, or are employees going to live a long way from their work

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and be provided with accommodation in that way? I should be grateful for an answer.
In saying these few words, I should like particularly to end by agreeing with Clause 5 and hoping that we shall get the many changes which have been suggested by people who are far wiser than I am regarding water facilities.
6.59 p.m.
Lord Bowden: My Lords, the hour is late and there seems to be so little left of Lord Bellwin's Bill that I think the best thing I can do is to tell your Lordships about the extraordinary urgency of some of the tasks which will have to be undertaken when the Bill—either this one or some other—has been enacted, in order to cope with the problems of the collapse of the main streets of some of the northern cities into the sewers which are fast decaying. I have discussed this subject in your Lordships' House before; but it is worth reminding the House of the full horror of what has happened in the North-West.
Since 1975—that is to say in the last seven years—there have been no fewer than 60 main sewer collapses in the commercial and shopping part of the City of Manchester and there have been an average of 60 collapses a year in the total metropolitan district of Manchester. These collapses are quite appallingly big and quite appallingly destructive. I think I have already explained to your Lordships that the unit of size of a hole in the road produced by one is the so-called "DDB"—and that stands for one double-decker bus. If you can get a double-decker bus in a hole it is said to have a size of 1 DDB. The biggest hole we have ever had in Manchester was 4 DDBs and it cost £900,000 to repair it.
We cannot go on like this. I would ask your Lordships to try to imagine, if I can draw an analogy, that suddenly in Whitehall, a hundred yards from here, a hole appeared in the road into which four double-decker buses would go. You can imagine the total disruption of the traffic, the distortion of all ordinary life and the utter chaos for miles around which would be produced for the traffic flow and for the commercial life of the City of London.
And what have we in this Bill to help? Nothing at all, so far as I can make out. The last time I mentioned this to the noble Lord, Lord Bellwin, he said that it was a mind-boggling problem, and the citizens of Manchester take some slight satisfaction from the thought that the Minister's mind has already been boggled. But supposing this happened outside in Whitehall, do you think that the citizens of Westminster would be content to know that they had to live with a hole into which four double-decker buses would go, which would take a couple of years to mend and which would cost £1 million or so, and the only thing the Minister could say was that his mind was completely boggled?
Something has to be done and done urgently: otherwise the whole of the life of some of the great cities of the North-West will come to a stop. The City of Manchester is much worse afflicted than any other, the reason being that its sewers are older and most of
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them run down the middle of the roads which follow the lines of the cart tracks which were originally there 120 years ago and into which the sewers were first put. Beyond doubt it will be an expensive and elaborate process to mend them. At the moment the city is able to spend about £4 million a year on its sewers and this sum is all used on urgent repairs to the holes which have already occurred. They are not able to make any progress at all on the general repair of the whole sewerage system to prevent similar collapses in the future. Not in any circumstances is it going to be remotely possible for them to make such progress that the sewers which still survive will not begin to fall in before the first lot have been fixed.
Among civil engineers, in the places where such men congregate, the city is known as the hole-y city of Manchester—and the Hansard reporter will have great difficulty in spelling that word without causing offence, I suspect, to some of the noble Lords sitting opposite to me at this moment. I beg the Minister to believe that it is not enough to discuss a Bill which has met with such tremendous opposition, as it were, in the abstract. We have to discuss it in the very concrete form of a whole set of sewers needing repair in the North-West, and particularly in Manchester. Unless this is done, civilised living will not be possible for very much longer. You cannot maintain a city if, for example, shops become inaccessible because there is a hole in the road just in front of the main entrance or if the traffic cannot move around the city because the last hole had not been mended before the next one fell in.
I have discussed this matter at some considerable length with the Chief City Engineer. He sees no way at all by which the city can be made safe unless the total funds at his disposal can be increased from the £4 million which they are now to at least four or five times as much as he now has. He thinks he could probably spend £15–£20 million a year and then begin to make some inroads into the problem and do a certain amount of maintenance to stop new collapses from occurring.
Clearly the most expensive way to keep sewers mended is to mend the holes which occur from time to time when bits fall in. I have mentioned to your Lordships before the story of the hole at the top of Oxford Road. This was a 2 DDB collapse and it fell in just at the spot where traditionally on Armistice Sunday the band marked time before the ceremony started. Lord Mayors of Manchester have been worried ever since about the city's reputation had the hole appeared when the band was marking time. Had it been just a little bit further up the road the library would have fallen in, and had it been just a little to the left the Midland Hotel would have fallen in. This is terribly funny if you do not happen to have to live with it.
I would beg your Lordships to ponder the prospect that holes like that might appear in this City of London—because sure enough, given time, your sewers will go the way ours have gone. Ours were put in 150 years ago and have done jolly well. Many of them are 200 years old and still surviving, but they cannot go on for ever and ever. As your Lordships will know, the main sewer near here is, of course, under the Embankment so if it fell in it would not matter very

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much; but there is the possibility of sewers falling in in other parts of London—perhaps not so near as Whitehall—and if they did the city simply could not survive.
It is not a matter of saying, "We can always walk around the hole". If the drains do not work the sewers will not take the effluent and the roads will not allow traffic to pass. No civilised living is possible any longer. This is the state we have reached. That is a point which is not referred to explicitly in the Bill because, so far as I can discover, no mechanism has been suggested to provide funds on a very substantial scale indeed to be put at the disposal of the local authorities who are peculiarly affected. The City of Manchester is the worst affected. The City of Wigan had problems because of subsidence of old coal mines, but they were relatively small.
The Minister for the Environment as he then was—he has since gone to the MOD—has proposed a plan for cleaning up some of the particularly dirty rivers. A great deal of money has been earmarked for this, but no one seems to have given any thought to the effect of storm overflow from the sewers into the Mersey until such time as proper arrangements have been made to divert it. This has not been included in the cost, so far as anyone can discover, of the proposed cleaning of the Mersey. The total sum involved is really very large indeed and it can be measured in hundreds of millions of pounds over the next few years in the country as a whole. Last year the water authority said there were 5,000 sewer collapses in the country as a whole. We had more than our fair share.
We are told constantly that the country cannot afford to do this, but here is a very important problem of finance of which the Government never seem to have been properly seized. The real cost of doing this work can be computed only when you allow for the fact that there are, at this moment, a large number of unemployed civil engineers and labourers who could do it, and they are having to be kept on the dole. So the first item you have to take on the credit side is the cost of not keeping these people on the dole. Furthermore, we have the fact that the gravel pits which would provide them with some of their raw material, and the lime kilns which would have to be burned to produce cement, are idle, too. Were we to employ the men whom the city would like to have on the job, they would have 700 or 800 men on the sewers and another 1,000 or so providing the ancillary services—perhaps, the better part of 2,000 men.
But the point I make is that all the work will be done using indigenous raw materials. There will be no demand at all on any commodity which has to be brought in. It is not even like housing, which uses timber. All the work would use ordinary indigenous material, except for the small quantity of oil that is required to work the engines. So it would have no effect at all on the balance of payments. It would have no effect at all on the economy of the country vis--vis the rest of the world. But it would have the most profound effect by making it possible to hope that civilised life can be perpetuated into the 21st century.
This must be faced. It is not enough for the Government simply to say that this Bill makes this sort of
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thing possible. The Government will have to take the initiative and put funds at the engineers' disposal, so that they can get on with it, and on a very much larger scale than they seem to have thought of as yet. If they do that, we may be spared the sight of Oxford Street or Regent Street in London being totally closed to traffic for a period of a year or two while someone digs out and fills in a hole into which four double-decker buses will already have fallen. This is a message which should, and must, be absorbed by the Government. Otherwise, none of their other legislation will be of any effect at all.
7.13 p.m.
Lord Nathan: My Lords, as the 20th speaker in this debate, I wish that I could start by saying something which would fall agreeably on the ears of the noble Lord, Lord Bellwin, but, alas! I cannot. What I would say, however—and I think I shall be the first to say it—is that this Bill comes at a strange time. For it was only the other day, as it seems, late last year, that the Government indicated that they were going gradually to bring into force Part II of the Control of Pollution Act 1974, eight years after it was enacted.
Part II of that Act imposes on the water authorities duties and responsibilities in relation to pollution and the environment which are wholly distinct from their duties in relation to the supply of water. They will, for instance, have responsibilities for estuaries and coastal waters, as well as a duty to establish and maintain a public register of consents to discharges. They will also have duties to remedy or forestall pollution injurious to flora and fauna, and for water standards of bathing beaches.
And yet it is at this moment that, in the cause of increased efficiency in water supply, as I understand it, the Government have decided, by analogy with electricity supply, radically to alter the membership of the authorities. This must be a false analogy. The electricity authority is responsible for the supply of electricity. So far as I remember, it is responsible for doing so as economically as possible and has to bear in mind the environmental factors. But it has no direct responsibility in relation to the environment, as have the water authorities, under other parts of the Control of Pollution Act, under other legislation and under the recently brought into force Part II.
The water authorities have a duty to supply water. They have a duty for sewage. They have a duty in relation to the environment, leisure, and the quality of discharges, to maintain the quality both of fresh, and now of estuarial, waters in the interests of fishing, bathing et cetera. So a water authority has an entirely different measure and type of responsibility from either the gas or the electricity authorities. It is not at all comparable.
The effect of the Water Act 1973, as has been said so often this afternoon, was to include among the members substantial representation of local authorities, and it gave water authorities the right themselves to raise funds by direct imposition of a water rate. I remember in my own village considerable concern being expressed by local authority representatives at the absence of local control or direct influence over water rates, which was shared by many. I suspect that

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at that time a public outcry was avoided by heavy local authority representation on water authorities, and by express provisions in the Water Act 1973 giving the public access to meetings of the water authorities as a statutory right.
In the following year, 1974, the Control of Pollution Act was enacted, giving water authorities far greater responsibilities, and now Part II of that Act is to be brought into force. It must be assumed that these extended responsibilities will require funding out of the water rates. The administration arrangements, let alone the extended operations, must, one would think, require this. I wonder whether, when the Control of Pollution Act came before Parliament in 1974, giving water authorities the responsibilities and, indeed, the powers which it did, that Act would have been passed at that time had the structure of the water authorities then been as is now proposed.
And yet it is at this moment that the Government have decided to introduce a Bill which will confine membership to between nine and 15 persons to be appointed by the Secretary of State or the Minister, and by subsection (4), which is tucked away at the end of Clause 1, to remove the right of the public and press to be present at meetings. As others have said, the proposed arrangements for consumer representation under Clause 7 provide no sufficient answer. They are couched in the vaguest terms. On first reading Clause 7, I assumed that it was in relation to the consumption of water. That has been somewhat extended by a statement, but, as has been said, there is nothing in the proposed legislation at present about what a "consumer" means. Consumer representation by a body outside the authority is quite different in its influence from representation within it.
Environmental responsibilities, like other environmental matters, are of concern to the public generally and not just to those living in the locality. Bathing beaches are a good example. The preservation of flora and fauna is another. Therefore, on the consumer representative bodies, if the matter is to be dealt with in that way, one can envisage, following the suggestions of numbers of your Lordships, that quite a large number of representatives of organisations concerned in these fields will be required, some directly related to the locality and perhaps living in it, and some coming from outside, for it is not purely a local matter. If it is said that water authorities are analogous to executive boards, and will not therefore hold meetings at which it is appropriate for the public to be present, one is left to wonder what a water authority is if it is not a public body which should exercise its functions in the public eye, and not behind closed doors.
But the change in the constitution of the membership, and the exclusion of the public from meetings, have their implications, too. One instance of this relates to the confidentiality of information about, for instance, samples of effluent taken by the water authorities. As I understand it, this information must be maintained secret unless the discharger agrees to its publication, or in connection with fulfilling certain statutory duties, or for the purpose of taking any proceedings. This duty of confidentiality arises under
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Section 12 of the Rivers (Prevention of Pollution) Act 1961, which is still in force.
While it may now be possible for somebody other than the water authority to take proceedings in relation to a breach of the provisions contained in the Bill, this is valueless if access to the information on which such proceedings would be taken cannot be obtained. The change in the constitution of membership of the water authorities may have a direct bearing on the continuance of these provisions, precisely because heavy local authority representation will be absent and, therefore, pressure to enforce the Act may be far less. It must be remembered that under the 1973 Act it was clearly understood that the water authorities were both poacher and gamekeeper in relation to effluent. Their discharges are by far the greatest in question. The Government seem to have recognised this by enabling others to enforce the Act but, as I have said, this is useless unless the information upon which such enforcement can be taken is available. I quote this as merely one example of the need to examine not only the direct but also the indirect implications of the Bill.
7.22 p.m.
Lord Howie of Troon: My Lords, I should like to join in the congratulations to the two maiden speakers: my noble friend Lady Nicol, who comes from local government, and the noble Lord, Lord Hemingford, who comes from the press. I very strongly endorse the strictures of the Bill which the noble Lord included, in his non-controversial way, in his maiden speech, the more so since I am engaged in the publication of a small number of magazines. Three at least are directly concerned with the water industry, and one of them is particularly close to the water decade which was mentioned in passing by the noble Lord, Lord Sandford. The remarks of the noble Lord, Lord Hemingford, were reinforced by those of my noble friend Lord Ardwick. I suggest that those parts of Hansard which refer to these speeches should be heavily underlined by the noble Lord the Minister and that he should spend a considerable part of tomorrow musing over them with a view to remedying the Bill where it is quite clearly defective with regard to the representation of the press.
I turn now to Clause 5 of the Bill. I shall attempt the very difficult task of trying to agree with both the noble Viscount, Lord Montgomery of Alamein, and the noble Baroness, Lady Vickers, who take almost directly opposite views with regard to Clause 5. I have no difficulty in reconciling those views, and I hope that the Government will be able to do so, too.
I accept the generalisation of the noble Viscount, Lord Montgomery, that consulting engineers are of the utmost importance in overseas work of the kind which he described and that they require a certain amount of protection from the kind of overseas activities which the water authorities might conceivably be interested in pursuing. However, I do not believe that the consulting engineering profession, which, as the noble Viscount pointed out to us, is very successful, requires quite so much protection as he claimed. It needs some, but not quite so much protection. The noble Viscount was also a little unfair to public authorities which engage in overseas work. He suggested that they are

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not doing very much. We might quarrel about how much is "very much". The noble Viscount ought to be aware that British Airports International is heavily engaged in the Queen Aliyah International Airport in Amman, very successfully, I gather. He should be aware, too, of the several successful interventions of Transmark, which is the similar arm of British Rail, in a variety of overseas contracts.
A solution to the dilemma which faces the noble Baroness and the noble Viscount would be for the guidelines which the Government propose to lay down to be included, as the noble Viscount requires, in the Bill but included in such a way that a mode of operation analogous to that pursued by British Airports International and by Transmark was pursued by the water authority. By this means the consulting engineers might well get as much protection as they require. But, more important, we would be in a position to maximise the use of the very considerable public resource in civil engineering expertise which exists in the water authorities. Here, if anywhere, there is room for compromise and I hope that the Government will take advantage of it.
I want to refer to two other matters only, neither of which is dealt with in the Bill: first, the matter raised a short while ago by my noble friend Lord Melchett. He suggested that in certain circumstances, particularly in order that the discussion of the impact of capital works on the environment should be carried out in public, cost benefit analyses should be pursued. I am inclined to agree with my noble friend, with the proviso that from his point of view it might be better if there were environmental impact analyses instead of cost benefit analyses. On the other hand, since they are not identical it might be that we should require both. In any case, whether we have one or the other, or both, the major point which my noble friend Lord Melchett made was that the discussion should be in public—a similar point to my first remark about the press. If not similar, it is at least akin to it.
The last point I want to make arises from the speech of the noble Lord, Lord Sherfield, who drew our attention to the recent report of the Select Committee on Science and Technology. He covered a variety of matters about which he said the members of the committee would like the Government to put down amendments. However, he said that he did not wish to put down amendments relating to the Reservoirs Act 1975, even though the committee had said that that Act ought to be implemented and that, in so far as it is possible, this Bill should include amendments to make the Reservoirs Act usable. The noble Lord, Lord Sherfield, drew attention to certain allegations of the Government which suggested that the Bill could not be used in its present form. If I understood him correctly, the noble Lord doubted whether the Government were right. I agree with him. If the Government believe that the Act is defective, it is up to them to try to put it right.
It is worth, very briefly, going over the history of this matter. The safety of reservoirs is guarded by an Act which was passed in 1930. That Act was very severely criticised by the Institution of Civil Engineers in an institution report of 1966 which it presented to the Government at that time. Over the succeeding year or two somewhat desultory talks took place between the
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institution and a variety of Keynesian Ministers. Then at Christmas 1969 a man on horseback was crossing the Lluest Wen Dam in South Wales when his horse fell into a hole—it was not a double-decker bus. It was not a hole the size of a double-decker, but had a double-decker bus been crossing the dam, the hole would have been bigger. The horse fell into the dam and there was a considerable stir to look into this incident. The Government were galvanised into action by that disaster and after one or two vicissitudes the Government took up the matter. Unfortunately, they fell at elections and then the Bill was passed in 1975. That Bill was intended to eradicate what was felt to be deficiencies in the 1930 Act.
The Government are now saying that the 1930 Act is adequate and they have issued instructions to local authorities to that effect. The Select Committee quite rightly asked whether the 1975 Act was unnecessary, and the Government apparently say. "Yes, it is unnecessary". The Select Committee said in their conclusions that it was not unnecessary. The conclusion of the Select Committee was that the Reservoirs Act 1975 should not be left on the statute book unimplemented and if amendments are required they should be included in the current Water Bill.
I agree entirely with the committee. I believe that the 1930 Act is inadequate, and ample evidence was put to the committee to show that inspections required under the 1930 Act were not being properly carried out and that, in any case, when inspections were carried out it was by no means always that the remedies suggested by the inspector were carried out, either. So the 1930 Act is not working and the Government's attempt to save money by not implementing the 1975 Act is really preposterous.
The most obvious weakness in the 1930 Act is that the penalties for failing to carry out the remedies required by the inspector are derisory. Let me remind your Lordships that there are three. If the owners fail to publish the name of an engineer whom they have appointed to conduct an inspection, they may be fined up to £20 on summary conviction. If they neglect to publish a report in the manner demanded by the Act, they become liable to a fine not exceeding £10. And if they are taken before the Crown Court for more serious offences than these and the court decides that they have failed to carry out the safety requirements which the law demands, they are liable, in the words of the Act, to
"forfeit to His Majesty such sum, not exceeding five hundred pounds, as the court thinks fit—".
These sums may have been serious deterrents in 1930, but they are surely quite derisory now. They indicate that the 1930 Act is long out of date and that it is an antique rather than a weapon to guard the safety of reservoirs.
What should be done? Unfortunately, the committee are unwilling to put down amendments at this stage, although I hope that members of the committee might change their minds in the course of the next week or two. I am heartened by the speech of the noble Lord, Lord Bellwin, earlier today when he referred to Clause 8 of the present Bill. He drew our attention to the fact that the Water Charges Equalisation Act 1977 had failed. He said that it had

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not been implemented since 1979 and so ought to be repealed. There is a solution here to a problem over the Reservoirs Act 1975. It has not been implemented at all. I suggest that the Minister puts down another new clause after Clause 8 which would repeal the Reservoirs Act 1975 for the same reason that he is repealing the Water Equalisation Act 1977, and puts into that new clause such parts of the 1975 Act as he considers would properly reinforce and strengthen the 1930 Act.
I have not inquired whether or not such a procedure would be in order but if the Government do not put down an amendment of that nature, and if the members of the Select Committee do not put down other amendments as they think fit, I myself shall be very tempted to put down an amendment of that kind. At the very least it will compel the Government to tell us whether or not they think that the 1930 Act really is adequate and whether or not they consider that the 1975 Act is unnecessary, as the Select Committee asked.
7.35 p.m.
Lord Feversham: My Lords, I hope that the noble Lord, Lord Howie of Troon, will forgive me if I do not follow him into the intricacies of the 1930 Act and as to whether or not the 1975 Act is necessary. At this late hour, and following a very long debate which has already covered all the main concerns of this Bill, I believe that the House will thank me if I keep my remarks as brief as possible. I should like to begin by supporting all that has been said in favour of the two maiden speeches which have been made during the course of this debate.
I do not propose to examine in detail specific proposals put forward in the Bill. That has been done already more than adequately, and further opportunities to do so will arise at Committee. At this point in the debate I wish I could offer some support for the Bill and for the Government Front Bench. Other speakers in this debate have said the same; it has been remarkable how many difficulties Members of this House, speaking to this Bill today, have seen with it. I am afraid that I cannot find words to support the Government. I shall also have to confine myself to blanket support of the majority of speakers who have raised many and considerable fears about the shape of this Bill.
It is virtually impossible at this stage in the debate to introduce a new slant, unless it be to suggest that one specific view put forward by a number of speakers is perhaps a little too dogmatic. It is the view that we can do without electricity and we can do without gas, but we cannot do without water. The only thing I can do here is to introduce your Lordships to my great-grandmother—a lady who thought that she could do without water. She based her entire life on grape juice and milk. She was extremely suspicious of water, and regarded it as a highly dangerous substance. As far as she could she never had anything to do with it. She drank champagne, her food was cooked in wine, she brushed her teeth in brandy, and she bathed in milk.
Baroness Fisher of Rednal: To what age did she live?
Lord Feversham: My Lords, she lived to a very great age indeed. I am afraid she is no longer with us, but she lived until she was well into her 80s.
In general, I should like to take a moment to consider the principle which induced the Government to introduce this Bill in the first place. As the noble Lord the Minister said in his opening remarks, it is one which is entirely in line with the Tory philosophy that seeks to cut through red tape and simplify executive structure towards the goal of greater efficiency. That is a philosophy with which I have some sympathy, and I suspect it is a philosophy that will appeal to a great majority of our fellow citizens; but whether it is the right philosophy to apply to the water industry, I am less sure. Even if it is, I am not at all sure that the way in which it is being applied in this Bill is the correct way. I believe that that is what everybody who has spoken this afternoon has been saying in one way or another.
I believe that the human frame can survive for a period without food substantially longer than it can without water. I suspect that, despite my great-grandmother's attempts to prove otherwise, water is a basic requirement of human existence. A number of speakers today have said that the water industry is a vital industry. It is an industry which is crucially concerned with the health and welfare of every individual, and as such each individual must be concerned that his interests in this quarter are adequately protected. If life without water is not possible, in real terms the water industry is and will always be a public service industry; and, surely, if that is the case, there ought to be limitations on the extent to which any Government which believe in democracy can sweep away democratic structures relating to the water supply.
The Minister introduced this Bill today in his usual persuasive tones. I was surprised by some of his arguments. For example, if the Government feel so strongly that the water boards should have the same treatment as gas and electricity boards when it comes to the press, do they also feel that employees of the water industry should have the same treatment with regard to earnings as employees of the electricity and gas industries?
My Lords, the Government are trying to be persuasive about the provisions for consumer councils to watch the activities of these new, powerful, tough, small, executive water authorities. What worries me, as it has worried many today, is that the Bill is magnificent in its lack of detail as to just what is proposed. It is terribly hard to disagree with the contents of the Bill because there is so little in the Bill to disagree with in that respect. It is all very well the Government saying the Secretary of State will decide the shape of these consumer committees and that a consultative committee is going to offer him guidelines before 31st March, but should not all this have been done before trying to introduce a Bill? In broad terms, I agree entirely with the noble Baroness, Lady White. People over a very wide spectrum of interest and political persuasion are concerned by the lack of detail in this Bill. I suggest that unless the Government are at least sympathetic to these fears during Committee in this House then this is going to be a very unpopular Bill indeed in the country.

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The Government are trying to suggest that the water authorities are not rate-levying bodies. I think their arguments here are about as thin as arguments can be. I agree with the noble Lord, Lord Beaumont of Whitley, on that point, and, indeed, with the Conservative Member of Parliament for the constituency in which I reside, Thirsk and Malton, who said during Report stage of this Bill in another place:
"The water authorities are rate-levying bodies and people have the right to be represented."
This is not a happy Bill, my Lords. Some management systems buffs might see merit in it; it would not very greatly have troubled my greatgrandmother—not at all—but the vast majority of people in the country ought to he troubled if the Bill is enacted without considerable modification.
7.43 p.m.
Lord Winstanley: My Lords, as the first speaker below the line in this debate, rather than introduce new themes I ought to focus my words on the speeches already made. In that connection I have to apologise at once for having missed the first two speeches—those of the noble Lord, Lord Bellwin, and the noble Baroness, Lady Fisher. Perhaps I will be forgiven when I tell the noble Lord that I was engaged this morning on an on-site visit looking into some problems which are aising on the shores of Thirlmere, which, as the noble Lord will know, is a lake in the Lake District National Park which happens to be owned and managed by the North-West Water Authority, and I may say managed in a way not wholly suited to those who have the interests of the national park in mind. However, I have heard all the other speeches, and that means that, like other noble Lords, I had the privilege of hearing two most elegant and eloquent maiden speeches: from the noble Baroness, who brings a great knowledge of local government and great feeling about local government to your Lordships' House; and, again, from the noble Lord, Lord Hemingford, who brought us his knowledge of the press. I think both maiden speakers did credit to our debate and made speeches of a kind that make us all anxious to hear them on many occasions in the future.
To go briefly to the words of the noble Lord, Lord Hemingford, he spoke about a matter I meant to deal with—the whole question of the exclusion of the press from the activities of the new water authorities. That matter has been dealt with very thoroughly by many other noble Lords: the noble Viscount, Lord Ridley, the noble Lord, Lord Sandford, and certainly the noble Lord, Lord Ardwick, all dealt with this point. If I may say so, the noble Lord, Lord Hemingford, in his gentle manner—an entirely non-controversial manner, as was proper in a maiden speech—perhaps struck the most savage wound of all, because he clearly felt this so keenly.
I will say no more about that matter save to remind your Lordships, should it be necessary, that the provision whereby the press are present at meetings of water authorities arose from the Public Bodies (Admission of the Press to Meetings) Act, which noble Lords will remember first saw the light of day as a Private Member's Bill introduced by the present Prime Minister. Perhaps I could say rapidly that I have not viewed that lady's subsequent activities with quite the
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same degree of enthusiasm as that with which I looked upon the introduction of that Bill, but I would nevertheless say that I very much hope that the well-known qualities of inflexibility and determination which are possessed by our Prime Minister will be applied to this particular issue. I am told that the Prime Minister does not like U-turns, but the Department of the Environment is U-turning her with this Bill, by turning the press out of these meetings.
I would think that by now the noble Lord, Lord Bellwin, is beginning to derive some comfort from the fact that we have a convention in this House that we do not usually divide on Second Readings of Bills which come from another place. It is surely obvious from the serried ranks of Government supporters opposite! Were there to be a Division on this matter, the noble Lord must know that this Bill would not have the chance of a snowball in hell of getting through Second Reading. I can merely express the hope that it will get fairly well mangled in Committee.
My recollection from having listened to part of the Second Reading debate in another place is that the Minister of State (as he then was), now Secretary of State, referred to this Bill as being largely technical—perhaps it is—and non-political. In my view nothing could be more political. This is a Bill which goes to the very heart of politics. It is about the manner in which we try to make large-scale enterprises accountable to those who depend upon them for goods and services, and sensitive to the needs of those who depend upon them for their livelihood, because they work for them.
Very often the argument is about who should own these large-scale enterprises—and here we are talking about something which is very large-scale. All science-based industries have to be large-scale, and, as the noble Lord, Lord Flowers, very rightly said, this is now very much a science-based industry and it has to be large-scale. Usually, political discussion is about ownership: should those enterprises be in public hands, as is so often said by Members of the official Opposition, or should they be in private enterprise hands, as is so often said by noble Lords opposite (though it would appear today that the two roles are reversed)? Here we certainly have a Bill which seems to me to be very like a nationalising measure, and certainly a centralising and authoritarian measure. I am delighted to see the recent conversion of the official Opposition to decentralisation. I certainly welcome that, late though it may be.
I believe that one of the main political problems facing our nation, and indeed many western nations, is how we should organise large-scale enterprises so as to make them accountable to the needs of those who depend on them for goods and services, so as to make them competitive in the true economic sense and so as to make them sensitive to the needs not only of customers but of those who work for them, and so on. The person depending on these organisations does not care tuppence who owns the shop: what matters is what sort of a deal it gives him.
In my view we have not yet constructed or devised a system of managing and running large-scale enterprises in this country, whoever owns them, so as to make them accountable. I am quite sure that all the

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faults which noble Lords opposite can see, frequently and rightly, within the nationalised industries and the statutory undertakers can also be found by noble Lords on this side, or indeed on the other side, in private industry as well. It does not matter whether you look at the Coal Board or at British Leyland. If you look at large organisations you do not very often see accountability, nor sensitivity, nor competitiveness.
What does this Bill do so far as accountability is concerned? My Lords, it does nothing. It takes away the ombudsman—and how regrettable that is. The noble Baroness, Lady Serota, made it clear how she feels about it. She should know. In your Lordships' House a very long time ago when the Parliamentary Commissioner Act was first passed, the ombudsman, the Parliamentary Commissioner, the original one, was described as not so much an ombudsman as an ombudsmouse. As far as the local commissioners are concerned there can be no doubt at all about what the ombudsmen have achieved in relation to local government and what they have achieved in relation to undertakings such as this. To exclude the ombudsman certainly does nothing for accountability. Nor does excluding the press do anything for accountability. Nor does changing the role of local government.
I do not agree with those noble Lords, and the noble Baroness, Lady White, who said that the old structure in which a large number of the members of the water authorities happened to be local government nominees necessarily made those people wholly accountable and representative of the consumer. I do not think that that is true. But I do think that if one changes radically the extent of local government representation on these bodies, one changes their character and makes them less accountable.
We also have the question of more and more of the members being appointed by the Secretary of State, so that we now have the whole industry virtually run by Government appointees. I am not necessarily saying anything about who and what they appoint. Personally I do not like the idea, whether it is that Government or another Government or even, should there ever be one, an alliance Government. I am not all that happy about great power being placed into hands which happen to be the hands of people who are chosen by the Secretary of State of the day. I think, as other noble Lords have said, that we have heard rather too much or seen too much in this Bill about the powers of the Secretary of State.
My time appears to have stopped at "1". I have gone on for a lot longer than that. I think it must be 11. So I must move on. Perhaps I may deal with just one or two other more specific matters. The question of Clause 5 has been referred to, I think by the noble Viscount, Lord Montgomery of Alamein and the noble Baroness, Lady Vickers. I am on both sides, in a sense, but in essence what Clause 5 is saying is that the water authorities now, with their great technical ability and scientific expertise, should be using these for export purposes. The Minister of State, speaking on this matter in another place, said that he had the idea not so much of the new water authorities taking over this role from the private sector, but he looked
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forward to the time when the public and private sectors would work happily in partnership overseas. I would have said that the time for the public and private sectors to be working in partnership overseas was after they had learned to work in partnership at home. I have seen very little evidence indeed of any happy partnership between water authorities as they now are.
In our own private industry, in the constituency which I represented in another place, Cheadle, we had a firm which did an enormous amount of work for water authorities overseas. It was constantly cleaning up rivers in the Soviet Union, rivers that ran for miles and miles through industrial conurbations; but the company's expertise and services were not often sought by our water authorities, who tended always to use in-house services very much more than go outside into the private sector, which was so able. Therefore I say that if we are to encourage the water authorities to go in for export in partnership with the private sector, let us first see the public sector and the private sector working in partnership at home.
A brief word now about WASAC and its demise; that is, the Water Space Amenities Commission, of which I had the honour to be a member for some time. In justifying this, too, the Minister in another place appeared to say not once but over and over again that WASAC could now go because it had done its job, In its years of existence it had convinced the various water authorities of the need to provide for recreational opportunities and things of that kind.
This change which has come over the water authorities over the years—we have all seen it—has not been brought about wholly as a result of a change of heart on the part of the people in the water authorities. I can remember, as can other noble Lords, a time when one could not go near a reservoir. Think of the things one might do into the water, or, if one did not, perhaps one's dog might. Now of course we have people bathing in the reservoirs, fishing in the reservoirs, sailing on the reservoirs. What has caused that change of view? In the main, it has been the constant work of bodies such as WASAC. If that pressure is taken away, I do not think we can necessarily be satisfied that the same momentum will be maintained.
WASAC did not just act independently by advising the water authorities, but it worked very closely with other Government agencies, It was represented on a body consisting of the chairmen and directors of Government agencies—Cadger it was called for short, when I was chairman of that body. Perhaps it was called Cadger because it often went to Government departments to try to get money. But all the different bodies were represented there—the Sports Council, the Forestry Commission, the Nature Conservancy, bodies concerned with wildlife, and so on. WASAC, in combination with those other bodies, influenced them and, jointly with other Government agencies, persuaded the water authorities to change their views with regard to recreation and also with regard to things like wildlife, to which the noble Lord, Lord Melchett, referred. I think the idea that everything is now good and WASAC can disappear because we do not need it any longer is, frankly, misguided.

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The clock still does not seem to be working properly but I am sure I have gone on long enough and I would merely say this. I have tried to focus my remarks mainly on what is actually in the Bill rather than, as the noble Lord, Lord Bowden, did—this is no criticism of the noble Lord; he was entirely right—speaking about all the things that ought to have been in the Bill. Indeed they should. The deplorable state of the infrastructure in our major conurbations, particularly in the North-West, where Britain's wealth was earned in the last century, is absolutely dreadful and part of it is, of course, the sewerage system. The noble Lord is right. There is not a word about that in the Bill, although I have no doubt that the Minister will say that the machinery is provided in the Bill whereby all those matters can be dealt with. So it may be, but it is not being dealt with, and I do not necessarily believe that it will be dealt with.
About the Bill, and what is in the Bill, all I would ask the noble Lord the Minister is to look at the bodies that are opposed to it—all the local government associations, the Associations of District Councils and Metropolitan Councils, and I think probably the Association of County Councils as well. The various consumer bodies are opposed to it, the Consumer Association, the Consumer Council and so on. The press, both those who own the press and those who write in it, are opposed to the Bill. The consulting engineers are opposed to it. Then there are the wildlife bodies such as the Royal Society for the Protection of Birds and the nature conservancy bodies like the Council for the Protection of Rural Wales and the Council for the Protection of Rural England, which are opposed to the Bill. I even venture to suggest that, had the noble Lord, Lord Stanley of Alderley, not withdrawn his name, we should have found that that fine redoubtable arm of the Conservative Party the National Farmers' Union is a little uneasy about the Bill. When I add to that that my noble friends and myself on these Benches are all desperately uneasy about the Bill and so are my noble allies on another Bench in the Social Democratic Party, then the noble Lord will realise that, when we come to the Committee stage, there will be very many attempts made by very many people in all parts of your Lordships' House to do something to improve and modify the Bill, which, if it is not changed, and becomes an Act, will be a very bad
one.
8 p.m.
Lord Brooks of Tremorfa: My Lords, I hope that the noble Lord, Lord Skelmersdale, comes to us this evening with an unboggled mind. He must surely be feeling rather lonely after listening to an almost uninterrupted condemnation of his Government's proposals. I had expected at the very least that there would be some measure of support from the Government side of the House and I wonder what the Minister feels about the charge from a number of his noble friends that this Bill is a nationalisation measure. My own view is that it is a piece of 19th century Fagin paternalism—a philosophy which most of us on this side of the House discarded many years ago.
I wish, first, to deal with the proposal for immunity from investigation by the local government
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ombudsman, and in doing so refer to the ombudsman's report on the Cardiff floods of 1979. On the 27th December 1979 the River Taff rose above its banks and a large area of Cardiff, containing between 3,000 and 4,000 houses, was severely flooded. The ombudsman had the power under the Local Government Act 1974 to s
investigate a complaint of maladministration which was made against the Welsh Water Authority. The complaint was made that the Welsh Water Authority, first, failed to provide and implement an operable flood warning system, with the result that residents received no advance warning of floods and, secondly, failed to take proper precautions to prevent the flooding and failed to provide adequate flood protection works.
In a lengthy and very detailed report the ombudsman said that he found that the Welsh Water Authority had carried out its own operational function efficiently and in strict accordance with agreed procedures. However, the report emphasised what the ombudsman called,
"a lamentable lack of agreement among the four public bodies concerned as to the procedures current in December 1979 for dealing with an important aspect of a major emergency".
The report reveals a dire lack of co-operation between the bodies responsible for dealing effectively with an emergency which caused great misery to many thousands of people. But the public did have the right to appeal to the ombudsman. The public was made aware of the deficienies in the flood warning system. The last paragraph of the ombudsman's report said:
"I am relieved to note that much has been done since 1979 to seek unanimity between the water authority, the city council, the county council, and the police as to what will be done to warn residents if the waters in Cardiff rise again. Fortunately, as a result of the flood protection works now completed, such an event is now much less likely to occur than formerly but it cannot be ruled out entirely. I urge the four authorities to keep their joint arrangements under constant review to ensure that there is no room whatsoever for doubt as to the role of any authority or individual officer in the event of the floods ever being anticipated again".
Nothing in this Bill encourages the hopes of the ombudsman—quite the reverse. In isolating the water authorities from investigation and in divorcing local authorities from direct involvement in the responsibilities of the water authorities the Bill is yet another example of creeping bureaucracy. which is a far cry from the Conservative Manifesto called To Set the People Free.
There are no proposals in the Bill to make the charging for water any fairer. There are no proposals to bring about justice between the regions and there are no proposals likely to reduce costs with a consequent benefit to the consumer who has to pay. The Conservative Government's Water Act 1973 allowed that water charges could no longer be assisted from the general rates and thus through the rate support grant. This led to very large increases in water charges—an average of 120 per cent. in Wales and 40 per cent. in England. The Labour Government recognised this problem and mitigated the water charges by introducing a special level of domestic rate relief. In Wales this was set at 33½p in the pound, and it was 13p in the pound for England. This was later adjusted to 36p for Wales and 18½p for England. In 1977 the Labour Government introduced the Water Charges Equalisation Act which the present Govern-

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ment have abolished, leaving glaring anomalies in the current system. For example, water charges are based on rateable values, but rates are subject to a rebate system for the lower paid and this Bill does nothing to ensure a fairer basis for water charges.
Many noble Lords have referred to the disquiet felt by the proposals in the Bill to exclude the press from meetings of the water authorities. Recently the press has not enjoyed a very popular image, as some noble Lords have said. Some reporting of the Falklands campaign and the recent Press Council strictures on cheque-book journalism have brought many newspapers into disrepute. But the right of the press to report the actions and deliberations of public bodies is one of our greatest safeguards against maladministration and misuse of authority. Those of us active in local government are often left with a feeling of frustration at the way we are reported, but I know of no one in local government who would advocate for one moment the removal of the right of the press to be present at local authority committee meetings. The reasons put forward for the exclusion of the press are extremely weak. The removal of the right of the press to report directly and a substitution of that right by stage managed press conferences is unacceptable.
The noble Lord, Lord Bellwin, likened the water authorities to the gas and electricity boards, but the crucial difference, as was mentioned in the debate earlier, is that water authorities are rating authorities and the fact that domestic water users may opt for metering does not invalidate that essential difference. As my noble friend Lady Fisher said, the amount of metering is insignificant and water authorities will remain rate levying authorities for a very long time, especially when we consider that meters cost £100 each to instal.
The Minister said that a reduction in the size of the proposed water authorities is a reason for the exclusion of the press. As the Guild of Newspaper Editors said:
"In any event, the number of people seated around a table cannot seriously be thought to be so crucial that a long-established legal right should he removed at a stroke".
The noble Lord, Lord Bellwin, has a long experience in local government. He is devoted to open reporting of local government proceedings, as he has told us. Many important decisions in local government are taken by sub-committees. What would he say if it were proposed that a local council's sub-committee proceedings should not be reported simply because only a handful of local authority members were present? One need only put the proposition to see how ludicrous that would be.
The right of press admission to meetings of consumer consultative committees or to meetings of the water authorities in special circumstances will not provide the essential communication to the paying public. The Minister reminded us that the present right of the press to attend meetings of water authorities came about as a result of a Private Member's Bill sponsored in 1960 by the present Prime Minister. It would appear, on this matter at least, that the lady is for turning.
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In December 1981 the Welsh Water Authority Constitution Order was placed before your Lordships' House. It was pointed out at the time by my noble friend Lord Cledwyn of Penrhos that it was more by accident than design that the Secretary of State for Wales had the power to change the composition of the Welsh Water Authority by order. His power came about as the result of a legislative quirk. We now have a Bill before the House which will receive the same widespread condemnation as the proposals for Wales. The Bill allows the Secretary of State to make 90 personal appointments to nine new quangos. The great majority of the organisations consulted on this Bill were against the Government's proposals. There have been severe critics in all parts of your Lordships' House today and I hope that the committee stage will result in a series of amendments which will command sufficient support to make radical changes in what is at present a series of shabby proposals.
8.10 p.m.
Lord Skelmersdale: My Lords, in spite of the views of the great-grandmother of the noble Lord, Lord Feversham, water is the most important and fundamental of man's needs, and therefore it is of no surprise to me that so many of your Lordships have chosen to enter the fray on the Second Reading of this Bill and that this debate has attracted not one but two maiden speeches. The noble Baroness, Lady Nicol, who was introduced to your Lordships only the other day, is, as we have heard, a lady of wide experience as regards local authorities and research into job satisfaction. Her speech, of course, bore out that experience. The noble Lord, Lord Hemingford, also brought his experience of the press to bear on this matter of the Water Bill. I hope that we shall hear from them again on a wide range of subjects both soon and often, and with the exceptional brevity with which they have both spoken to us today. I must compliment them on their models of uncontroversiality on what has become, as the noble Lord, Lord Winstanley, has said, a very controversial subject.
I do not know whether your Lordships expect me to hide at this point, but I am encouraged by a few noble Lords—notably the noble Baroness, Lady White, and my noble friend Lord Nugent of Guildford. They have been my educators (if that is a good expression) on water matters for some considerable time. I had the benefit of serving as a co-opted member of Sub-committee G for five years. Throughout most of that time the noble Baroness, Lady White, was my instructor, my mentor and my guide. I am grateful to her and to my noble friends Lord Nugent and Lord Sandford, who prompted me in various directions at various times when I was in that capacity.
The key to understanding this measure is that it is designed to help the consumer. The water authorities' customers have been bewildered in recent years by some of the increases they have faced in the costs of water services. The reason is partly that they now receive separate bills for water and sewerage where once, for most of them, these were included in their general rates demand. But some concern has also been felt at the rate of increase in charges. During the high period of inflation caused by the previous Government's chaotic economic policies, water charges, like

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all other charges, rose rapidly. Your Lordships cannot deny that last half-sentence. It is, I understand, true to say that they rose less rapidly, on the whole, than prices generally, but nevertheless the increases which were experienced were alarming to a large number of people. I also believe that the late Government cannot receive credit for that. However, that is another point.
Our task as a Government today has been to do what we can to moderate charges, increases, and in particular to improve the value for money which the customer obtains from his or her water authority. From the speech that he made this evening I think that the noble Lord, Lord Winstanley, would agree with that aim. Our most important contribution, of course, has come from the general reduction in inflation brought about by our prudent economic policies. My Lords, I hear more hollow laughter.
Beyond that, however as my noble friend pointed out in his introductory speech, we have taken firm steps to keep water authority costs and expenditure under control, and we have set a high priority on improving the authorities' performance. There has been close scrutiny of budgets using independent consultants, the setting of performance aims and regular reporting of the water authorities manpower figures. Since 1979, for the first time since water reorganisation, overall numbers of those employed in the water industry have been falling. This Bill will further encourage that trend.
Overall, we hear few complaints from the public about quality of service, although, of course, there are some. We do hear many complaints about charges. In drafting this Bill, therefore, we have had a basic philosophy firmly in mind, and this is improving efficiency in the water industry.
I would say to the noble Baroness, Lady Fisher of Rednal, and others that it is vitally important to recognise what we are not doing. The noble Baroness devoted half her speech to what we are not doing.
Baroness Fisher of Rednal: My Lords, it was a third.
Lord Skelmersdale: My Lords, I apologise; it was a third. But I am sure the noble Baroness will take the point. This Bill is aimed at a completely different subject. We are not dismantling the water industry, carrying out further reorganisation—
Baroness Fisher of Rednal: My Lords, will the noble Lord allow me to intervene? He said that it was about a fair pricing policy. That was the point that I was recognising. The noble Lord has said that that is what it is all about; it is to get prices down.
Lord Skelmersdale: Yes, my Lords, but like other noble Lords I have listened to the noble Baroness for a considerable amount of time, and perhaps she will bear with me a little longer. There have been some five hours of debate which have covered some of the points which the noble Baroness raised at the beginning. I hope I will manage to satisfy her, at least in part.
The fundamental reorganisation was done in 1973. Broadly, as my noble friend said, that reorganisation has worked well. There is no need to pull up this plant to see how it is growing, which was a charge of the
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noble Baroness: that is the policy of the party opposite. In their 1977 White Paper The Water Industry in England and Wales, they planned to brigade water authorities under a new national planning body. That is just the centralist approach we might expect from them.
The noble Lord, Lord Winstanley, is quite wrong in his opposition to the Bill. The local authorities are, indeed, for the most part, opposed to the loss of majority membership on the water authorities, as we have heard from local authority representatives on all sides of the House, and others, this evening. But most of the other people responding to our consultation paper supported these proposals. The National Consumer Council is not, so far as we are aware, opposed to the Bill. The press have misgivings, but I would not say that they are opposed to the total Bill.
Our starting point is that autonomous regional authorities, as at present, are the right organisations to control the industry. We have no plans to alter basic responsibilities or their area. As now, they will have areas based on river basins. Benefits of unified management are apparent to anyone living or temporarily residing, as I do, in London. There have been rapid improvements in the quality of, for example, the River Thames. Last year 100 new fish species were to be found in the tidal estuary, and four adult salmon were recaptured which were thought to have started off from the Upper Thames. That is a remarkable testimony to the importance of unified river basin management. I hope that no one will disagree with me on that point.
Baroness Birk: My Lords, will the noble Lord give way for a moment? I have listened to most of this debate. A great many points have been raised, in fact an astonishing number, from all over the House, criticising the Bill. I am being quite serious when I say that what we want to hear are the Government's answers to those points. We do not really want to hear this evening—although at some other time we might—a wide discourse on the water industry generally, or on water generally. The remarks as regards the press have not been answered—the remarks made on what was said by the Minister when he first introduced the Bill. With great respect, I would ask the noble Lord if he could keep to answering points made on the Bill.
Lord Bellwin: My Lords, we have sat and listened for five hours to hardly very flattering observations, but not once did we interrupt in any way whatever. The least that my noble friend can expect is that he, too, should have the same hearing as we gave to the other side.
Lord Skelmersdale: My Lords, I hope the noble Baroness will bear with me a fraction longer, because I am indeed going to answer the very points which have been raised, but I must be allowed to put them into my own context. As I was saying, we are not interfering with those arrangements. The purpose of our Bill is to reduce the burden of central bureaucracy, to improve methods of decision-making, and to improve arrangements at the local level for the

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customer to make an input to water authority thinking or, alternatively, to complain against their decisions.
When I was listening to the noble Baroness, Lady Fisher, speaking from the Front Bench opposite, I was reminded of numerous occasions on which local councillors did not remain on their own councils, let alone water authorities, for more than one term. Her noble friend Lady Nicol explained one of the reasons for this. These consultative committees are a good example of open government, whatever the noble Lord, Lord Beaumont of Whitley, may say. It will be the people who elect the councillors who will be on them. How much closer to the people can the water authorities get?
First, the charge that has been levelled at us is the reason for change. As has been said by several noble Lords—I agree not necessarily of my own party, but nonetheless correctly said—it is quite inappropriate to have large, unwieldy boards—for example 48 members on the Severn-Trent Authority and 62 on the Thames Authority—to manage major industrial undertakings. Excessive bureaucracy of the present arrangement has inhibited effective decision-taking. There is a definite need to bring executive members onto every board, as they are responsible for so many key decisions.
The system of local authority appointed members to represent consumer interests has not worked as intended, and I think that perhaps my noble friend Lord Nugent, with his vast experience of this matter, would agree with me. As the noble Baroness, Lady White, said, smaller hoards are the right way to run water authorities. She offered this advice based on experience of what has happened in the comparatively recent past in Wales.
Of course, we clearly recognise the close historical and functional links between water authorities and local government. That is why we are proposing that county and district councils should have the opportunity to nominate people for some appointments on the new small boards. These will vary according to the size of the boards. We have said—and I am prepared to stick to this tonight—that between two and four members will be an appropriate number, depending on the size of the board. The Government believe that the new arrangements will improve the accountability of water authorities to Ministers, to Parliament and to their own consumers.
The noble Lord, Lord Flowers, my noble friend Lord Ridley and many others questioned accountability. All members of the new small boards will be appointed by Ministers who, as I have said, will be answerable to Parliament for those appointments. If appointments were to be made by local authorities, it would conflict with this principle and make it unclear whether board members were accountable to Ministers or to their local authorities.
The noble Lord, Lord Flowers, also mentioned creeping centralisation. but I would suggest to him that abolishing the National Water Council must in itself be a decentralising measure. Inevitably, mention has been made of the recent report of the Select Committee of your Lordships' House. The noble Lord, Lord Flowers, referred to it, as did the noble Lord, Lord
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Sherfield—the distinguished chairman of the Select Committee—and others. I suggest that everything which the noble Lord, Lord Flowers, said about his experience on that committee is justification for the Government's line, because, by improving efficiency, all that he wishes can be done. There are savings which may or may not be ploughed hack for the subjects that he enumerated.
My noble friend Lord Ridley spoke of the philosophy of the Government party. I would remind him that it is part of this Government's philosophy to make nationalised industries work effectively and efficiently. This Bill is part of that trend. The Bill makes specific provision for the interests of agriculture on the new small boards. Clause 1 provides that two members of each regional authority will be appointed by the Minister of Agriculture. Fisheries and Food, from people with skill and experience in agriculture, fisheries and land drainage. Incidentally, the Internal Drainage Boards have nothing whatever to do with this Bill.
The noble Lord, Lord Melchett, asked: what about Wales? My right honourable friend the Secretary of State is the Minister of Agriculture in Wales: therefore, the Principality does not need a Ministry of Agriculture appointee.
Lord Melchett: My Lords, I do not want to interrupt the noble Lord any more but, if he does not mind my saying so, he has not answered the point. Why should not the Secretary of State for Wales still he obliged to appoint, among all the people he appoints to the water authorities there, two who represent the interests that he mentioned—agriculture, land drainage and so on? There is absolutely nothing to stop that being put in the Bill. Why did not the Government do it?
Lord Skelmersdale: My Lords, at the risk of lengthening my speech even more unduly than it has been lengthened already by interruptions, perhaps this is a point to which we might return in Committee.
Inevitably, much has been said of the local ombudsman's jurisdiction. We all welcome the experience that the noble Baroness, Lady Serota, has offered on this occasion, as, indeed, she has on many other occasions both in your Lordships' House and outside. She would be the first to agree with me that the local authority ombudsman, or, to give him his correct title, the Local Commissioner for Administration, is exactly that; he is to investigate complaints against, in this particular case, local authorities, in other cases, the health authorities or, in yet other cases, the Government.
The Bill does not entirely remove this jurisdiction, but it ends the direct involvement of local authorities in water industry management, and the local ombudsman is, in the interests of consumers, essentially an instrument of control over local authority and similar bodies. No nationalised industry is subject to the ombudsman. Once the local authorities cease to have a dominant representation on water authorities, there is, in the Government's view, absolutely no reason for the ombudsman to continue to have total jurisdiction.
However, jurisdiction will be retained in certain activities of the water authorities. We recognise that there are two main areas where functions of water

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authorities and local authorities overlap. These are land drainage and sewerage functions, where there are sewerage agencies under Section 15 of the Water Act 1973. In these cases it would be wrong for a local ombudsman's investigation to be brought up short when the local authority's part has been investigated: the water authority's part should also be covered. The Bill was amended in another place to secure this.
In future that part of the ombudsman's work which is being replaced will be done by the new consumer consultative committees that the authorities will be establishing under Clause 7. The ombudsman's jurisdiction will not be ended until the new committees are in being. As to whether they shall have the powers—a point which was brought up this evening—I am sure we shall be discussing this at greater length.
The noble Lord, Lord Beaumont, introduced the subject of the right of the press and public to attend water authority meetings. In fact, he did not quite introduce it, because my noble friend Lord Bellwin mentioned the point and has been sharply criticised for his explanation of it. He referred to the electricity boards and the gas boards. But it is only fair to remind your Lordships that we are talking about a totally executive body. I would go even further than my noble friend and say that there is no press access to any executive board, either public or private. So why should there be now?
Even with this thorny problem of water authorities, I cannot see that there is any justification for it. This does not mean that water authorities' affairs will be held in secret. We have been accused of veiling this behind a cloud or a curtain. I accept that it is still vitally important that the public have access to information. Water authority chairmen have at our request drawn up a code of practice of which the main points are: regular press conferences after hoard or main committee meetings; the press to be invited to authority meetings where special circumstances justify this; and the press and the public to be admitted to meetings of the consumer consultative committees with copies of agendas and everything else that goes with this. Therefore, regular close contact with the media will continue and a wide range of informative literature and material, including annual reports and accounts, will continue to be available. In our view this represents a real improvement on existing arrangements.
The fear has been expressed—I am not sure whether it was tonight or whether I read it earlier from other comments—that the water authorities will control the consumer consultative committees. This is quite untrue. They will be totally independent. They will include representatives from all local authorities in the area. After all the odium that has been heaped on my head and that of my noble friend, I am going to pay the Opposition a compliment. Since 1973 water authorities have been able to look at needs of their regions systematically. All this has reduced the need for investment. I remind noble Lords opposite that four-fifths of the reduction had been achieved by 1978–79, the last full year of the previous Administration. Current public expenditure provision very largely accommodates water authorities' bids.
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Inevitably some noble Lords, especially the noble Lord, Lord Bowden, brought up the subject of sewer collapses and their replacement. All I would say at this point is that local authorities are able to do something about this now under existing legislation. To a great extent they have not. In view of this year's underspend on capital, a theme I am returning to after a short absence, I can only suggest to your Lordships that they do not see a pressing need to do this.
The noble Lord, Lord Sherfield, spoke about training. I am aware that there has been some criticism of the National Water Council's training efforts. The Manpower Services Commission in a report in 1981 suggested that the training division had a too centralised approach. A 1982 value for money study by the Water Council's auditors also suggested improvements. The chairman's industry committee have been considering what central arrangements are needed for training in the water industry. We understand that they favour the establishment of a company limited by guarantee to provide training services, and to manage central training facilities. We are awaiting fuller particulars from the chairman. Mention has been made of the international advisory service and its future. There will be no difference from now, except that it will be an ordinary equity company.
I cannot finish before mentioning another important part of this Bill, the Water Space Amenity Commission. The noble Lord, Lord Winstanley, particularly mentioned this. The commission has of course played a useful role, but what we feel is needed at the regional level is that there should be established in all water authority areas sport and recreation committees to provide a link between the water authorities and the recreational conservation bodies. These will be regional committees, not part of the consumer consultative committees. We shall amend the consumer consultation guidelines to ensure that they are established. In this connection recreation covers the broad spectrum, and covers the point that the noble Lord, Lord Melchett, put to me in his speech.
Lord Stanley of Alderley: My Lords, I wonder whether my noble friend would let me interrupt? Will these committees in fact be chaired by a member of the board or will they not?
Lord Skelmersdale: My Lords, I regret that I am unable to give my noble friend that information at the moment, but I shall write to him. The role of exports has been mentioned by my noble friends Lord Montgomery and Lord Sandford, and others. Water authorities and water companies have operational, management and technical expertise which is in demand in developing countries. Meeting this demand can draw in British firms who can also use this expertise to strengthen and complement their bids for overseas business. The aim is to win a larger share of the export market where the scope for expansion is very large indeed.
Clause 5 provides that, before water authorities and water companies will be able to avail themselves of the proposed powers, they require the consent in writing of the Secretary of State. In this respect I would tell the

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noble Lord, Lord Howie of Troon, that guidelines will be produced giving clear advice as to the basis on which consent by the Secretary of State will be operated. My noble friend Lord Sandys asked about sewerage arrangements. I am afraid that I have not got a suitable reply to give him at this stage, but I shall certainly write to him.
Nobody has very much liked the consumer consultative machinery which we are setting up under this Bill. It has been suggested, although not quite in the unparliamentary phraseology that I am about to use now, that these committees will be toothless talking shops. They will have all the local authorities in the area represented on them as well as representatives of industry, agriculture, commerce, the domestic consumers, and others. With this representation we do not think that they will lack the energy to prosecute their case. In addition we expect the committees to be consulted well in advance of final decisions on major issues, and they will have a right to receive such supporting information as is necessary for them to discharge their functions.
The draft guidelines on these propose that the committees should be able to consider any matters which affect the interests of the water authorities and the water companies' consumers. It should not be precluded from considering matters affecting a wider area than its own. For example, general principles of charging, planning for investment, and so on. The consultative committee should have discretion to raise matters itself, but water authorities should also invite the committee's advice on general questions affecting some, or all, of their consumers.
Time is getting on, but I am able to give to the noble Lord, Lord Howie of Troon, and the House a commitment this evening that 1 shall, with my noble friend, Lord Bellwin, consider every word spoken by every speaker today, but I rather doubt that it will be tomorrow. The other measures of this Bill have been thoroughly discussed both tonight and in another place, and indeed generally in the country. That will not stop your Lordships on other stages in this House, nor, I accept, should it. They too will help the water industry to operate more efficiently, and in the case of the provision on overseas activities to make a fuller contribution to our national export efforts. The provision for consumer arrangements is of course closely linked with that for the water authorities. It lies at the heart of what we are proposing. The consumer consultative committees will play a key role in representing the interests of customers to the water authorities and of ensuring that those interests are taken into account. If for no other reason, I commend this Bill to your lordships.
Lord Nugent of Guildford: My Lords, before my noble friend sits down, he has not given an answer to my major question and proposition: what provision is he intending to make for the industrial relations structure of the water industry in the future?
Lord Skelmersdale: My Lords, I apologise to my noble friend. I had a note on it. I certainly agree with my noble friend on the effects of the strike on the
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consumer, but he will accept that now is not the time to go into the future. The NJIC and the National Water Council will remain operative until the Bill becomes effective. However, the Government expect to explain their position on this before this Bill completes its passage in the House. For the moment I would simply say that it will be up to the employers and the unions to decide in negotiation on arrangements and machinery in due course. Both sides of the industry are still considering what the future position should be. I have noted carefully what my noble friend said when he paraded—if that is not an uncomplimentary term: it is certainly not meant to be—a degree of options. As I say, we shall consider most carefully what he said.
Lord Nugent of Guildford: A very bad answer.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Consolidated Fund Bill
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill; read a first time.

Agricultural Marketing Bill
8.41 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): 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.—(Earl Ferrers).
On Question, Motion agreed to.
House in Committee accordingly.
[The LORI) WELLS-PESTELL in the Chair.]
Clause 1 agreed to.
Clause 2 [Functions of Food from Britain]:
Lord Houghton of Sowerby Lord Houghton of Sowerby moved Amendment
No. 1:
Page 2, line 27, at end insert—
("In exercising its powers under this subsection Food from Britain shall—

(a) distinguish between food produced by means of intensive and non-intensive agricultural systems: and

(b) ensure that preference is not accorded to food produced by intensive agricultural systems.")

The noble Lord said: This deals with the labelling or description of Food from Britain items which may be marketed at home and elsewhere. It refers to Food from Britain exercising its powers under the Bill, and I am assuming that it would have the power to do what the amendment would require it to do. It may be that I am not clear enough as yet about the functions of this new organization; how far, for example, would it take responsibility for quality and for the accuracy of describing food marketed under its auspices? It may be that other legislation would take care of the integrity of the producer. I am not sure about that, but I have

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assumed for the purposes of my amendment that those who organise, co-ordinate and in other respects take responsibility for marketing will take responsibility for what it is they market, and that is the point of the amendment.
The Committee will see that I propose to distinguish between food produced by means of intensive and non-intensive agricultural systems. And my proposed amendment to Clause 8 can be discussed at the same time because that proposes to put in the Bill a description, a definition, of what is meant by food produced by means of intensive agricultural systems. I am not very clear, either, whether live food animals will come within the scope of Food from Britain. For example, are the sheep and lambs shipped abroad for immediate slaughter to be within the compass of this marketing organisation and will they be labelled with stickers marked "Food from Britain"?
At the bottom of the amendment is the growing concern of an increasing number of consumers as to what it is they are eating, especially in processed foods. We heard during the debate on Second Reading what a high proportion of food now produced is processed and packaged food, and of course that opens the way to the finer points of ingredients, additives and other aspects of the display, presentation and attractiveness of food.
Many people have very strong feelings about animals bred and produced in certain environments and under certain conditions. A striking example of this is veal. I would never touch veal if I could help it. Indeed, the Chairman of the Select Committee of the House of Commons, dealing at a press conference with intensive systems for sheep and cattle, said that, having seen what veal looked like when it was being bred in crates and other confined spaces, he never wanted to touch veal again.
Lord Oram: Is my noble friend aware that in the cafeteria of another place today they were serving veal burgers? Is that an indication that the officer to whom he referred is not quite carrying out all he intended?
Lord Houghton of Sowerby: I am not sure I heard all of that. The Minister in another place in the debate on 19th November said that the great majority of veal calves were now bred in better conditions than crates. I asked for evidence of that and I was told in reply to a Question that I tabled that the evidence came from "a variety of sources". I am not at all sure that that evidence is convincing. The point I am on is whether this marketing organisation will be able, or will feel able, to distinguish between the different methods of rearing animals for food.
There are other aspects I have not mentioned in the amendment—about free-range eggs, for example. Many people, including myself, would not eat a battery hen egg if we could help it, and there is a growing market for free-range eggs. These are not just fads or a fastidious discrimination between one form of food and another. How is one to express one's disapproval of some of the methods of rearing living things for food? That is the issue. Some people have a conscience that they want to express in their daily lives, in their purchases and in what they eat, and the question is: can they be helped to make that choice?
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Another importantpoint is that if I were a customer in Europe I should want to know the state of the slaughterhouse in Britain. We are now awaiting the report of the Farm Animal Welfare Council on slaughter, and it will be very interesting to see what verdict it reaches.
Another disturbing uncertainty that we have in this country arises because one cannot be sure whether meat has been slaughtered under the conditions of the Slaughterhouses Act, or whether it has been excused from those conditions on the grounds that the animals being slaughtered were for the food of Jews or Moslems. One has reason to believe that some parts of animals that are slaughtered under the Jewish system are not consumed by Jews; the animals go elsewhere. The question is: Where do they go? Do they go into our meat pies, or what? Again, it is a question of whether the customer can be given information about what he is eating.
Your Lordships may say that the customer can decide for himself whether he buys meat pies, or sausages. And what about the English sausage? What is inside the English sausage these days? What about horsemeat? What about kangaroo meat? What about the meat rackets that we read about, which are apparently undenied—indeed, confirmed? What is put in processed meat in the food industry at the present time? This is what lies behind the amendment that I have tabled.
Where does the responsibility lie? That is the question. Will it lie with the Food from Britain marketing organisation, or will it lie elsewhere? If the Minister says that these are matters that are within the discretion of the Food from Britain organisation, then that is the answer; it may not be necessary to make any statutory stipulation about these matters, they can be part of the development of this new and more imaginative marketing system. But these points cannot be brushed aside by the farming community.
Looking around the Committee at the moment I can see signs of the "arable mafia", which is described in the most scathing terms by Mr. Edward Pearce in the February issue of Encounter. During the debate on agriculture last week we heard of the history of the "arable mafia" of the Mackie brothers, and most fascinating it was. I thought then: what a good thing it is that your Lordships' House has not only one big brother but two big brothers in this field of agricultural experience and knowledge! My relationship with the "arable mafia" is very much further down the scale, and I shall not trouble the Committee with it.
Last night I looked at the "Money Programme", and taking what Mr. Edward Pearce wrote together with what was said on the "Money Programme", I really wondered: what are we doing, pouring more money into the marketing of this food? Is it really true that the farming industry has never had it so good? Is it really true that the farmworkers are demanding a 44 per cent. increase in pay because the profits of the farming industry have gone up by 40 per cent. in the last 12 months? What is this £14 million that is to be poured into the marketing of horticultural and agricultural products when they are rolling in it, and subsidising food for Soviet Russia? Is the marketing organisation going to take an interest in the subsidised

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food that we are sending to the Soviet Union? That, too, would be an interesting part of its activities.
In short, what we want, as far as possible, is a growing awareness of the choice which can be made, and is being made, by the consumer, not necessarily on grounds of quality but on grounds of humanity, as to how particular forms of food are produced. Are those methods humane? Are they tolerable, or are we concerned only with what the food looks like, what it costs and what it tastes like? Or is there something more to it? That is the purport of my amendment, and I hope that the Minister will be able to give me some assurances as to how this matter can be taken care of under the provisions of the Bill. I beg to move.
Lord John-Mackie: Into the "mafia"! We all know of my noble friend's anxiety on this subject, but I think that he is inclined to widen the debate rather much when he gets to his feet in this Chamber, or anywhere else for that matter. The very end of his remarks contained the crucial point—the quality of the goods. I was brought up on a farm in central Aberdeenshire. and in those days all the hens were free-range. When I think of what the hens ate—whether or not I had been squeamish as a small child—I do not think I would have eaten eggs at all. But today, when I can see hens with controlled feeding and everything else, I have no scruples about eating the eggs.
The quality of the food is the real issue. During the Second Reading of the Bill the noble Lord, Lord Tanlaw, made a very strong point about beef from Scotland, and there is no doubt at all about its quality. But an enormous amount of that beef is produced from animals that are tethered for quite a long time during their lives. I am sure that if the noble Lord, Lord Houghton of Sowerby, were to go to some of these farms he would see how well looked after these animals are in every way; and there is certainly no cruelty in tethering beef animals, at any rate in the way that it is done in the north-east of Scotland.
The noble Lord is mixing up the two things entirely. The question of how animals are looked after is an altogether different subject from that of the quality of the products that Food from Britain might be marketing. The noble Lord is perfectly right to raise in other debates the subject of how animals are looked after, but, if I may say so, I do not think that it affects the present Bill.
Earl Ferrers: I agree with the noble Lord, Lord John-Mackie: when the noble Lord, Lord Houghton, gets on his feet one is greatly tempted to follow him down the fascinating passages along which he takes us. We all realise his deep interest in, and concern about, the welfare of animals. I was prompted to raise a smile when he referred to the "arable mafia". I was not totally concerned about to whom the noble Lord. Lord Houghton, was referring—the noble Lord. Lord John-Mackie, said that it was obviously to him—but I should like to correct him on one point: the agricultural industry is not rolling in cash. He referred to the question: had they never had it so good? If I may say so, I think that that is a total exaggeration. What has happened is that this last year appears to have been a
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better year than the previous year: and I think that we can leave it at that.
The noble Lord's real concern was about Food from Britain and about who will be responsible for the labelling and the marketing. I should tell him that food labelling is governed by the food labelling regulations. A Food from Britain sticker. such as he referred to. would be awarded as a hallmark of quality, and it would not substantiate a descriptive label. The originating company would be totally responsible for the legality and the accuracy of its own labelling. Food from Britain cannot compel people to do anything. It cannot compel people to label. What it can do is to suggest that their labelling or presentation could be clearer, or more distinct. Therefore, it is in the business of trying to encourage marketing, exporting and sales of food from Britain. Food from Britain is not therefore legally responsible for any labelling such as may appear on products.
The Bill has been drafted to ensure that the Food from Britain organisation is given widely defined powers to assist or encourage in any way the improved marketing of our agricultural and food produce. Good marketing means taking every step to satisfy the consumers' requirements. Food from Britain will communicate this message to the industries which it serves. It would be wholly inappropriate to impose constraints such as Lord Houghton's amendments would do on Food from Britain's freedom of operation. If we were to accept the noble Lord's amendments it would oblige Food from Britain to conform to particular requirements in relation to various methods of livestock production.
The amendments cause considerable practical difficulties for Food from Britain should they be accepted. If the body is required by statute to distinguish between intensive and non-intensive activities, it would require a clear definition in law of those two categories, and the definitions which the noble Lord has proposed in his Amendment No. 2 will lead to various anomalies. The definitions are themselves ambiguous and they will cause difficulty in implementation. In particular in paragraphs (b), (c) and (d) of Amendment No. 2 it is suggested that systems which restrict movement or natural functions should be included within the definition "intensive agricultural systems".
Any system of keeping an animal, however humane that may be, requires a degree of restriction, whether in a field, a pen or by tethering. A proposed definition lists a number of systems which in the view of the noble Lord imposes unnecessary restrictions. His general words then go on to catch a great many other people and perfectly acceptable livestock production systems. For example, home-made cheese produced by an old lady from the milk of a single tethered goat would be called "intensive", while a frozen chicken from a large broiler unit would be called "non-intensive". That stretches even my imagination and credulity a little far; but I have grave doubts whether there is an alternative practical definition which would meet the case.
Even if we could define "intensive agricultural systems" satisfactorily, I still do not think that it would be right to amend the Bill in this way. It is already

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totally within the scope of the powers of Food from Britain to assist in promoting products from non-intensive systems. I do not therefore think that the imposition of such a statutory obligation which will be difficult to define and implement would be a useful addition to Food from Britain.
The noble Lord referred, for instance, to free range eggs. He said, "Why can't we label these properly? Consumers must know what it is that they are buying". I have tried to point out that it is very difficult to distinguish in law between intensive and non-intensive methods. I would remind the noble Lord, Lord Houghton, that in 1982 a producer who sold what were called free range eggs was successfully prosecuted in the Shrewsbury County Court for a misleading trade description on the grounds that his production system was not a truly free range one. Were the same generous definition of free range applied in other quarters and dealt with by other courts there would be virtually no free range eggs. This illustrates the difficulties of the problems of definition in this area. I hope therefore that the noble Lord will see that it will be impossible to incorporate those words within the meaning of a statute which would have the clear and lasting effect that the noble Lord intended.
Lord Houghton of Sowerby: I am very much obliged to the noble Earl for his full and careful explanation. I am convinced from what he says that it would be difficult to include in the Bill a statutory provision of this kind when the Food from Britain organisation can be open—as I assume it can—to representations from consumer interests at any time on any matters within its purview related to the marketing of these products, their quality and anything else that is relevant to the sale of goods of this kind. I think that it is to that organisation that we should send our representations in due course, although it may be that the real remedy is not at this end but at the production end, that of prescribing more adequate conditions under which animals shall be kept. That is receiving attention (as the noble Earl knows better than most of us) on the Farm Animal Welfare Council and in the industry generally. I thank the noble Earl for what he has said. I take the points that he has made. The address of Food from Britain—when we know what it is—is the place to which we might send our representations on this and other matters. In the meantime, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
9.6 p.m.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Beswick: I beg to move that we leave out Clause 2. The purpose of the amendment is to offer an opportunity to the noble Earl, Lord Ferrers, to spell out the responsibilities and prospects for the Central Council for Agricultural and Horticultural Co-operation once it goes into the new Food from Britain organisation. In particular, I hope that the Minister will now be able to answer the questions which I put to him on Second Reading. The fact that these questions were not answered on Second Reading leads me to say that the noble Earl—as we expect of him—was
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winding up the Second Reading debate in the most helpful and informative manner when into the Chamber there entered his noble colleague the Chief Whip. I have sent a note to the Chief Whip saying that I am going to refer to him.
That entry reminded me of a missile called "Alarm" which is now being developed by the British defence industry to put enemy radar out of action. The Chief Whip, it seems to me, has now developed in human form a missile to put Ministers out of action. As a one-time Chief Whip myself, my admiration for this missile is tempered by the belief that its deployment is not always in the best interests of the House and it should, I suggest, be used with very sensitive discrimination.
To return to the more constructive subject of agricultural co-operation, the point of those unanswered questions was to get positive assurance from the noble Earl that the objectives of the CCAHC would be in no way diminished and indeed would be enhanced in the new arrangement. When a unit is put into a bigger organisation it can enjoy a wider scope or, on the other hand, it can be overshadowed and discouraged. The Minister in another place said that the Central Council was charged by statute to be responsible specifically for agricultural and horticultural co-operation. Therefore, he said, it had a much narrower responsibility than the new council will have. If by the new council, in this context, is meant the new "Food from Britain" organisation, then in that sense the Minister in the other place was right.
What I want from the noble Earl, Lord Ferrers, is an assurance that within the Food from Britain set-up the specific responsibility to which reference was made, vested in the CCAHC by statute, will be just as valid when this Bill becomes law as it was after the passing of the 1967 Act. For example, will the product marketing campaigns so brightly publicised in the leaflets I have here—potatoes, cauliflowers, onions, pigs—be able to go ahead without any hindrance and indeed with encouragement from the new parent, Food from Britain?
Following that question was the one I put about funding. Government finance for the parent body, we are told, will be phased out after five years. I ask for an assurance that the previous commitment to the Central Council will be continued. I ask for confirmation of that and for some indication as to how the continued funding will be channelled through the new body in to the specific work. Is it proposed, for example, that there will be a separate division, separately accounted?
I hope and believe that I shall carry the Minister with me if I go on to say that what we are fundamentally interested in here is the best possible reward to the producer, consistent with the consumer getting the best possible value. It is the producer and the consumer who matter in a healthy economy and if a co-operative form of marketing can serve their interests and the money-lender, the speculator and dealer do less well, then we are justified in giving special assistance for co-operative promotion.
However, I quite agree with what was said on Second Reading by noble Lords with great experience in this field, like the noble Lord, Lord Stanley of

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Alderley, and the noble Lord, Lord Wise, that the easy-going or half-hearted co-operative is of less worth. I should like to think that in this new dispensation we shall make it the occasion for renewed effort and dedication, with more research into experience elsewhere and increased educational and promotional effort. I look forward to the noble Earl saying that he entirely agrees with me, thus enabling me to withdraw my amendment.
However, there is one other matter about the Land Settlement Association tenants, about which I have already spoken to the Minister and which I hope can properly be raised on this amendment. On Second Reading the Minister assured the noble Lord, Lord Collison, and me that help and advice would readily be available to those LSA tenants who wished to establish a new co-operative marketing system when the old scheme terminates. He also said that the usual grant-aided assistance would be available, and when I asked for more information he said that a number of statements had been made although, understandably, he had not time to refer to them in detail.
I am told that the statements and the intentions of the agriculture Ministers have not been followed quite so enthusiastically by the Treasury when the two departments come together at official level. I hope that the Minister will be able to tell me that his own robust support will prevail, and I have in mind particularly the financial problems caused by the needs of successor organisations to obtain essential capital equipment when the old LSA arrangements are wound up.
A number of the LSA estates are, I gather, now energetically endeavouring to set up new estate co-operatives. However, they obviously need equipment, such as packing sheds and grading machines, and I am told that for these purposes grants are not obtainable. I ask the Minister tonight whether he can ensure some reasonable leasing arrangement, which would give the growers time to get established and then make payments in, say, four or five years' time. It would seem a sensible utilisation of assets. The Minister will realise that the situation has not been created by the growers. It has arisen from this rather abrupt change of policy of the Government, and I hope that he will be able to assure me and others outside that there will not be a short-sighted Treasury solution when these matters are discussed, and that there will be the more constructive approach which he has hitherto shown.
Lord Collison: Before anyone else speaks, may I just endorse what my noble friend has said about the LSA? I know that a number of settlements are busily creating their own co-operatives and there are quite a number of them already on the stocks, as it were. They are going to need some assistance with regard to packing sheds, and maybe machinery, and the leasing arrangement which has been mentioned would help them. So perhaps the Government can give some assurance or assistance on the leasing-out side.
9.16 p.m.
Lord Oram: I should like strongly to support my noble friend Lord Beswick in what he has had to say to your Lordships. He has expressed concern, quite rightly, that the work of the Central Council should in
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no way be diminished when it becomes the responsibility of the new organisation, Food from Britain. As he said, he spoke about these matters on Second Reading and he did not get the assurances that he then sought. So I hope that with this opportunity the noble Earl will be more forthcoming in answer to my noble friend on the points that he raised.
I notice that in the Explanatory and Financial Memorandum to the Bill there is an encouraging and reassuring phrase to the effect that there are no plans to change Government support for co-operative activities, and I hope that this evening the Minister will make it clear beyond any doubt that that expresses the Government's intention. But it is not only important that the work which the Central Council itself has done should be continued. What needs also to be safeguarded is the work of some other organisations, which have been associated with the Central Council in helping with the establishment and the sound administration of agricultural co-operatives.
For example, I have in mind the work done by the Federation of Agricultural Co-operatives and, in particular, by the Plunkett Foundation for Co-operative Studies which is headquartered at Oxford. I myself have had some firsthand experience over the years of the value of the work of the Plunkett Foundation, and on the basis of that experience I can appreciate what a sad gap there would be left if that organisation should in any way suffer, as a result of what is being done by this Bill. The foundation has worked jointly with the Central Council and with the Federation of Agricultural Co-operatives in promoting knowledge among farmers of the value of co-operative organisation.
I have particularly in mind the work that the foundation has done in the collection of agricultural co-operative statistics. It claims, and I think rightly, that the system of statistics for which it is responsible, and which it carries out with great competence, is better than that in any other Western European country. I know that the information which it has gathered together in this way has been of great value in guiding those responsible for administration in this field. Therefore, as I say, any lack of support for the foundation in this kind of work would be a sad loss.
In past years, I have been particularly aware of the valuable work which the foundation has done in the development of co-operatives in the third world, and the amount of support that it is currently receiving from the Overseas Development Administration is, I am sorry to say, less than it used to be. Nevertheless, the foundation is still able, with a struggle, to carry on its work both overseas and here at home.
In relation to the present Bill, we are concerned with the work which the foundation does in connection with agricultural co-operatives in this country. I am confident—I hope that the Minister and the Government share this confidence—that the co-operative organisations among farmers in this country will in the future have an increasingly important role to play. If that is so, I suggest that the research, education and training of bodies such as the Plunkett Foundation will likewise be of continuing and increasing importance. It is for that reason that I intervene briefly in support of my noble friend Lord Beswick. I very much hope that

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the Minister will be able to assure the Committee that the new organisation will make use of the work of the Plunkett Foundation and that Food from Britain will give all possible support to the foundation in the future.
Lord Stanley of Alderley: I have two short questions for my noble friend. At Second Reading, I believe my noble friend said that the central council would continue to be funded, as in the past, both by national Government and by the EEC. I hope that my noble friend will be able to confirm that this is so and that it will continue when Food from Britain runs out—if it does. May I ask my noble friend how much money he thinks will come from Food from Britain to the co-operative sector? Does he envisage that the co-operative sector will get, say, 50 per cent. from Food from Britain, or does my noble friend see a much smaller proportion of Food from Britain money going into the co-operative sector? I concede that my noble friend may not want to answer that question, because it is up to Food from Britain, but if he is able to give me a guide it will be helpful.
Next, when it comes to marketing a political problem is often involved. If one tries to export grain abroad one comes up against the problem of the French, who at the moment subsidise their grain exports by means of very favourable credits. When Food from Britain or the co-operative sector come up against a problem like that which prevents them from selling, may I ask my noble friend whether they will have ready access to him or to the Minister in order to point out that a political hazard, rather than the quality of the goods. is preventing them from selling?
Lord John-Mackie: My three noble friends have very ably expressed their worries about the continuing role of the CCAHC and what help the LSA will get to continue with marketing co-operatives. I cannot put it any better than my three noble friends. I endorse all they have said. I am sure that the noble Earl, Lord Ferrers, is seized of their worries and will give a very satisfactory answer to the various questions which have been put to him.
Earl Ferrers: The first thing I must do is to leap to the defence of my noble friend the Chief Whip. The noble Lord, Lord Beswick, said that he had come equipped with a new missile, called an alarm, to terrify Ministers. I assure the noble Lord, Lord Beswick, that my noble friend has no such missile and that, even if he did, it would not terrify this particular Minister. But I saw the noble Lord, Lord Beswick, use a missile of his own, which is commonly known as a sidewinder, to put into one who has succeeded to the post which the noble Lord held with such distinction. I have no doubt at all that when the noble Lord was Chief Whip he used his own form of deterrence if noble Lords spoke for too long. If, however, I did not answer the noble Lord's questions—and I did not—I give him a wholehearted apology. I had intended to do so. It was due to my own incompetence and concern for brevity. I see that at that time I had already spoken for about 27 minutes and felt that I had probably spoken long enough to have exhausted your Lordships. Evidently, and I am delighted to hear this, I had not exhausted the
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noble Lord, Lord Beswick. I do apologise to him for not answering questions which were very important; and I welcome the opportunity to do so this evening.
Perhaps I may give the assurance for which the noble Lords, Lord Oram and Lord Beswick, particularly asked; that is, that Food from Britain will continue to carry out in full the co-operative functions which have hitherto been the responsibility of the Central Council for Agricultural and Horticultural Co-operation. Clause 2(1) of the Bill provides for these functions to be transferred in their entirety to Food from Britain. The functions of the central council remain as set out in Clause 58(2) of the Agriculture Act 1967. They are in no way altered or diminished, and the Government will continue to support Food from Britain as appropriate to enable it to exercise its co-operative functions as the central council has done to good effect in the past.
It is for Food from Britain to decide upon its own organisation. I understand that the intention is for the main council to have two operating boards which will report to it. One is to be a British Food Board, and this will be chaired by Food from Britain's chairman. The other is to be a Co-operative Development Board, which will be chaired by the deputy chairman of Food from Britain. This will ensure that the work of each board will be given the fullest attention and priority. This kind of structure will ensure that within the structure of Food from Britain there will be co-ordination of marketing initiatives between the co-operative and the food sides, with the council in a position to determine priorities at the highest level.
The Co-operative Development Board will take over the present co-operative functions of the central council. In a similar fashion, it will have separate grant panels for England and Wales, Scotland and Northern Ireland, together with specialised product groups. There will therefore be no diminution of effort whatsoever towards co-operative development within the new structure, and I am sure that the co-operative activities of Food from Britain will stand to gain from their being part of a wider marketing organisation with all the benefits in terms of expertise which this should bring. Producers and co-operatives have become increasingly aware in recent years of the need to ensure that their products are geared to the needs of the market. The establishment of Food from Britain, taking within it as it does the work of the present council, is a logical step in the development of co-operation and marketing.
The noble Lord, Lord Oram, referred to the Plunkett Foundation. The bulk of the income of this comes from overseas consultancy work. The Central Council and the Federation of Agricultural Co-operatives have contributed a great deal, and the co-operatives and the marketing boards have also contributed quite an amount. The summary of statistics was financed 90 per cent. by the Central Council. I pay tribute to the very valuable work of the Plunkett Foundation in promoting and developing co-operation through research and education. I hope that it will establish as good a relationship with Food from Britain as it has with the Central Council. I see no reason why the newer organisation should be in any way different from that of its predecessors with regard to the Plunkett Foundation.
Lord Beswick: If the noble Earl is leaving that point. he has still not referred to a continuation of the funding of the co-operative activities.
Earl Ferrers: I have been discourteous enough to the noble Lord. Lord Beswick. and it is not my intention to be discourteous again. If the noble Lord will be content to wait a little longer. I will come to that point as well.
My noble friend Lord Stanley referred to the smaller co-operatives and asked: was Food from Britain going to encourage co-operatives on a smaller scale? I think that was his question.
Lord Stanley of Alderley: Not quite. It was a question of how much they would get from the Central Council vis-a-vis the other board which the noble Earl mentioned a moment ago.
Earl Ferrers: I think it would be impossible at this juncture to say exactly what the split of funds would be as to smaller organisations and bigger ones. Then he asked whether Food from Britain would have ready access to the Minister if there were any political problems. The answer is that it would. There will, of course. be continuing interest by the Minister in Food from Britain because, apart from anything else. he has responsibility for the appointment of members.
To return to the point of the Central Council. the noble Lord. Lord Beswick. asked what the future was. Clause 7(1) allows Ministers to pay grants to Food from Britain to carry out its marketing functions. It is a permissive and not a mandatory provision. The clause itself does not impose a time limit on the Government's contribution. Ministers may decide the amount and the extent of the funds they provide under this clause. But the Government have decided to set a five-year time limit on their financial support for marketing activities, in keeping with their view that by the end of that period the industry which Food from Britain serves should pay for the marketing and promotional services which it provides. This approach makes it imperative that Food from Britain convince the industry that its activities are worthwhile.
After the five-year period, therefore, Food from Britain's marketing operations will be financed on a voluntary basis: for example, by means of contributions from statutory bodies on behalf of their producers, by contributions or subscriptions from companies and from individuals, by payments for services provided and by payments made towards participation in particular ventures. It will be for Food from Britain to develop a workable subscription system and to undertake ventures which receive full and continuing support from the industry. The Government, though, will continue to provide Food from Britain with the appropriate financial contributions in order to enable it to carry out the co-operative functions which it will take over from the Central Council. This funding will continue both during the first five-year period and thereafter. The provision for this funding rests on Section 58(9) of the Agriculture Act 1967. which makes it mandatory on Ministers to provide such funds to the extent which is agreed by the Treasury.
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I can appreciate Lord Beswick's concern that money for co-operative activities should be used for the intended purpose, and we have taken steps to ensure this. Clause 5 makes appropriate provisions for the keeping of accounting records, the auditing of those records and the preparation of an annual report to Parliament. In addition, Ministers and the Comptroller and Auditor General can inspect such records, and by virtue of Section 60(2) of the Agriculture Act 1967 such inspections may be extended to any other relevant books or records. To ensure that accounting records are kept in appropriate form, a financial agreement between the Government and Food for Britain is being prepared which will lay down a system of internal financial management and so ensure proper control over expenditure of public funds.
The noble Lord. Lord Beswick, and the noble Lord, Lord Collison, referred to the Land Settlement Association. The noble Lords asked whether grant aid would be available for new co-operatives. The normal administrative and statutory interest will be applied to any applications for grant aid from potential co-operatives on the LSA estates. These applications will be carefully considered by the Central Council before recommendations on grant aid are made to my Department. The noble Lord, Lord Beswick, was also concerned about the difficulty which some of the estates may have in wishing to purchase either machinery or buildings. The position is that where new co-operatives are formed or where existing co-operatives take over the LSA's marketing functions on individual estates, they will be given the first opportunity to purchase the equipment which is currently being used by the LSA for its marketing purposes. This will consist mainly of packhouse equipment and some vehicles. The price will be subject to negotiation between the Ministry and the organisations concerned.
As far as buildings are concerned, the department will be prepared to offer the co-operatives first refusal on the purchase of packhouses and other buildings which they might require. Where the co-operatives are facing difficulty in raising the necessary capital for outright purchase in the time available before 31st December 1983, my department is prepared to enter into short-term rental arrangements on agreed terms. It is expected that the purchase of buildings is likely to cause the greatest problems for the co-operatives and this is why we are prepared to adopt a flexible approach with regard to rental as opposed to outright sale.
The noble Lord asked whether there was a possibility that my department might sell the equipment on extended credit terms—I think he suggested leasing over a period of years. I am bound to tell him that the possibility has been investigated in the past but it has been concluded that the department has no statutory authority to advance credit as such in these circumstances. I hope that I have given the noble Lord the satisfaction of knowing that it is our intention to help as far as we are able in this change.
Lord Beswick: I am much obliged for what the noble Earl has said, I do not accept his apology about the non-answering. I do not accept it because it was

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not necessary. It was not his incompetence, it was the electro-magnetic force of an impatient Chief Whip. I think we will leave it at that.
The question that was put by the noble Lord, Lord Stanley of Alderley, about the split of funding between the co-operatives and the rest of marketing was a very interesting one. It illustrated the anxiety that I was feeling. There should be no question here of a split of revenue. The point is, as I see it, that there is an inherent and statutory right of the successors to the co-operative central council to Government grants. As I understand the noble Earl now, I gather that those grants will be forthcoming.
However, when we come to the other difficulties of the LSA tenants, the noble Lord emphasise that there were some difficulties about the application of what he called the normal provisions. There is a problem in that we are here faced with a completely novel situation. The Government have decided to wind up a scheme. They were going to do it in a very quick time. Fortunately they are now allowing rather more time but there are special financing problems and I understand the difficulties of the noble Lord in giving specific assurances, but I hope that he will find that with the further discussions with the new estate co-operatives it will be possible, not with extended credit—that is not allowed under the law—but one can achieve the same objective by other means and I hope those other means will be found.
Earl Ferrers: May I interrupt the noble Lord, Lord Beswick, to see whether I can clarify something to which he referred and also the noble Lord, Lord Stanley of Alderley. I want to make it quite clear that the funds which come into Food from Britain will be virtually from three sources. One will be Government funded—pump priming—for five years. That will be for marketing. Secondly, there will be funds from organisations which will make subscriptions. The third will be funds from the Government for the business of co-operative ventures and co-operation, which the Central Council used to have before. My noble friend asked whether we could give an indication of what that split will be. The Government will be giving £14 million over five years to the business of marketing. That will be in addition to the £l½ million annually which will continue to go towards that which the Central Council now does. I hope that has clarified the point raised by my noble friend.
Lord Stanley of Alderley: Not quite. I am sure it is a question which my noble friend cannot answer.
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What I am asking, because I can see that it will be a problem, relates to the £14 million which is going to Food from Britain which will be divided partly to help the Central Council over and above what it is getting at the moment. Some of it will go to the other part, which is food export or import restitution. What proportion of the £14 million does the Minister see going—I say this selfishly—my way to the co-operative movement as opposed to the other side of the equation? I can understand my noble friend's reluctance to answer that, but I should like to know.
Earl Ferrers: There is no question of a reluctance to answer. My noble friend said that I cannot answer but if he thought that I could not answer it I wonder why he asked the question in the first place. I would merely say that the £14 million which goes into Food from Britain goes towards assisting marketing and assisting presentation displays, and that will refer to the whole concept right across the board of marketing Food for Britain. Some of that may come from retailing places, some from producers and some may come from co-operatives. My noble friend is right to ask how much will actually go to the co-operatives. However, the answer is that it is quite impossible to say. The whole purpose of this is that Food from Britain should be in a position to try to expand the sales of British foods wherever they come from, of which that which comes from co-operatives will form a part.
Lord Beswick: I think I follow the exchanges, My point is that there is a specific statutory obligation in the old Act to provide funding for the promotion of co-operatives. As I understand the noble Earl, whether or not the new organisation prospers there will be this continuing obligation resting on the Government. On that understanding and with the intention of carefully reading what I thought was a fine spirit shown by the noble Lord in relation to the LSA—
Earl Ferrers: This seems to be a difficulty and we must be absolutely clear. The noble Lord said that if he understood me correctly whatever happened to Food from Britain commercially on the marketing side there would still be Government funding for the co-operative side. The noble Lord is quite correct.
Lord Beswick: I am doubly grateful to the noble Earl and I shall not press this matter.
Clause 2 agreed to.
Clause 3 agreed to.

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Clause 4 [Contributions by marketing organisations]:
On Question, Whether Clause 4 shall stand part of the Bill?
9.45 p.m.
Lord Houghton of Sowerby: This Clause provides for the statutory bodies mentioned on page 3 to make such contributions as they wish to the work of Food from Britain. I cannot understand why Food from Britain cannot require some contribution from these various statutory bodies who are engaged to some extent in the same type of business. Really and truly this whole scheme is a subsidy by the taxpayer in order that some organisation should sell his food to him through a Quango and a body which is financed out of public funds. The inference behind the title. Food from Britain, is that it will be exported. We do not want to talk about Food from Britain when it is our own food grown here because then it would be food from within Britain. Food from Britain is presumably the food we send to somebody else from Britain. So although the whole concept is really export orientated, a great amount of the products of Food from Britain will be sold in this country. Why cannot some contribution be required?
The intention behind this is that after five years the whole outfit will be maintained by industry, but in the meantime this work will he done, or so it seems, wholly at public expense, except to the extent to which voluntary contributions should be made by other bodies which have a very close interest in what Food from Britain is doing. I should have thought that some reasonable contributions could be required by Food from Britain for the functions that they are performing on their behalf.
It is provided here that the various statutory bodies do not contribute to Food from Britain for functions which are transferred from them to Food from Britain. But as regards the other additional marketing activities that are to be undertaken by Food from Britain, I should have thought that a contribution could be required rather than a contribution made purely voluntarily by the several organisations concerned. Why is that? Why cannot some tighter financial provision be made right from the beginning? I quite accept the £500,000 in Clause 6, just to get the thing going, but there is to be a continuous drawing on public funds for five years. up to £14 million. That is quite a lot considering the answers that are being given by the Government at present to requests for increases in public expenditure. A lot of people could do a great deal with £14 million at present—very necessitous people, too. They want to be sure that this money is being properly spent for a good cause and not just for the extension of marketing arrangements which at home may be almost unnecessary but which for export may be very desirable indeed. That, from our point of view, is probably the worthwhile motive behind the whole proposal.
Earl Ferrers: The noble Lord, Lord Houghton. says that here is a quango which is going to be drawing on public funds to the extent of £14 million for the next five years, and he asks why it is not made a compulsory
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levy. We have considered and we have rejected the idea of a compulsory levy. A number of sectors are already subject to statutory levies and we envisage that their representative bodies may choose to make contributions to Food from Britain from funds which are provided on this basis. Clause 4 of the Bill empowers them to do so. We do not wish to set up a further system of statutory levies, which would he costly to administer. A voluntary system of financing by industry would provide a true test of whether the organisation was serving the industry well. Perhaps I may say this to the noble Lord because he has insinuated disapproval of this organisation by saying that a huge quango is to be set up to export food. We believe that British agriculture is very efficient. We believe that British retailing is very efficient. We believe that much of agricultural produce has to be processed before it is eaten.
It is in order to get food in all its respects from Britain given a proper boost to enable it to get onto the tables of the world that it is necessary to have some organisation. Almost every other country has one. Germany has one; France has SOPEXA. There are many other countries in Europe which have an organisation which encourages their food to be exported and to be co-ordinated. It really is not just a drawing on public funds to get a quango operative: it is being set up in order to enable food in all its respects—which we in this country manufacture and process so well—to be bought either in this country or across the world.
The way in which Food from Britain will operate is by encouraging promotional activities, by encouraging people to attend various fairs and promotional aspects. It will then be able to help by giving contributions and by advising on how best to get into the markets of other countries. That will be the way in which the money will be spent. Of course, at the same time it will ask for contributions in the way of setting up, for example, these British stands: those who take part will no doubt be asked to make a contribution. But we have to start somewhere, and that is why we have suggested that this will be necessary over the next five years, starting on a smallish scale, building up and then gradually moving down again as funds from private industry come into operation.
Lord Houghton of Sowerby: Again, I am very much obliged to the noble Earl for his explanation. I rise only to disabuse his mind of the suggestion that I am insinuating something. I owe the Committee an apology because I was prevented by other engagements from taking part either in the debate on the Second Reading of the Bill or in the more general agricultural debate later last week. But I must say how astonished I was at the uncritical reception of almost anything relating to the agricultural industry. In one debate I doubt whether any noble Lord spoke who did not declare an interest. It seemed to be, if I may say so, a very cosy discussion on both sides of the House, full of self-congratulation at the performance of the agricultural industry.
Nobody has greater admiration for what the farming industry has done. But the state has taken very good care of the farmer since the war—very good care

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indeed. A great many workers in Britain who still have jobs are being told to go to work on a wage cut. In these conditions those of us who have no interest whatever to declare have a duty to examine what is being done for the agricultural industry in present circumstances that can be justified in the general ecomonic and financial environment and in the light of Government policy, which many people are finding it very hard to bear at the present time.
That is all there is in it. I am not insinuating anything and I apologise if I have given that impression. I just think that someone should probe; that someone should utter a critical word or two so that the farming industry does not go away from your Lordships' House thinking that all is right with the world, God in his heaven and everybody else because the farming industry is doing so well. It is, but at a price—a very big price.
I have been soured, if I may say so, by Mr. Body, the Member of Parliament, who has recently written a critical book on the agricultural industry, as well as the article I read in Encounter to which I have referred, and the "Money Programme" last night. Add all that together, and one wonders whether a more critical approach than we have been taking to agriculture for the last 30 years is not fully justified.
Earl Ferrers: The critical approach is fine provided that the criticism is based on accurate facts and figures. The noble Lord should not be too greatly persuaded by some of the things he reads. I do not know whether I may just tell him this and give one example; a lot of agricultural food is processed. Potatoes are one particular example where a tremendous quantity of potatoes grown go for manufacture. This becomes an international business, and certainly a European business.
If, as an example, we in Britain do not provide the correct forms of potatoes, of the right kind, at the right price, of the right quality, and with continuity of supply, those manufacturing businesses which want the potatoes will place themselves inside other member states of the Community and not in Britain. If that happens, that will be greatly to the detriment of British employment. What we want to do—and part of Food from Britain will encourage this—is to enable the food to be produced so that the processing and manufacturing can be done in this country. We do not want to see that go to other countries.
Clauses 4 to 7 agreed to.
Clause 8 [Interpretation]:
[Amendment No. 2 not moved.]
Clauses 8 and 9 agreed to.
Schedule 1 [Food from Britain]:
Lord Mountevansmoved Amendment No 3:
Page 8, line 29, leave out ("other than") and insert ("who may, but need not be,").
The noble Lord said: I beg leave to move the amendment standing in my name on the Marshalled
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List. I touched on this matter on Second Reading, and hope that I shall not delay your Lordships long in raising it again tonight. My concern is that the wording of Clause 6 reads to me as though it disbars members of the council of Food from Britain from serving on committees which Food from Britain can establish under this clause.
If my reading of the Bill as currently drafted is correct I feel that a mistake is being committed, because to have members of the council of Food from Britain serving on such committees as it may eventually establish creates a form of communication in both directions which has been found useful in many other statutory bodies. I have looked at the reports of a number of other quangos, and one frequently finds that where they have set up committees these committees have members of the parent body serving on them, not infrequently as chairmen. Hence my amendment which seeks to enable members of Food from Britain to serve on such committees as that body may eventually set up. I beg to move.
Earl Ferrers: I appreciate the noble Lord's reasons for proposing the amendment; he explained them on Second Reading and tonight. He is anxious to ensure that paragraph 6 of Schedule 1 can allow committees appointed by the council of Food from Britain to include council members among their number. I am glad to tell him that the Bill as drafted allows that. It provides for two types of committees: the first would consist of people other than council members of Food from Britain, and the second would consist of people other than council members of Food from Britain as well as council members themselves. So both types of committee are possible under the present drafting. I think it is right to provide for both types of committee. As the noble Lord suggests, there may be committees where the presence of a member of the Food from Britain council would be valuable as a means of communication of policy, and other committees might consist of co-opted experts of Food from Britain staff members. We therefore have provided for both of those.
If the amendment were accepted, it would permit a committee to consist only of council members and of no outsiders at all, in which case it would change almost like litmus paper into the council or a subcommittee of it, and there is no need to have a power in the Bill to create a sub-committee. The only legal power which is necessary is to permit the co-opting on to committees of those who are not members of Food from Britain, and that the Bill as drafted does.
Lord Mountevans: I thank the Minister for that reassurance, and it would be churlish of me to do other than beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
Remaining schedules agreed to.
House resumed: Bill reported without amendment;
Report received.

Pig Industry Levy Bill
10.4 p.m
Earl Ferrers: My Lords, I beg to move that this Bill be now read a second time. It is introduced in response to the grave concern of the pig industry about the spread of Aujeszky's disease. The detailed provisions relate to powers which are to be given to the Meat and Livestock Commission in order to enable them to raise a levy, whose proceeds will be used to pay compensation and other costs arising from the introduction of a control and eradication scheme for Aujeszky's disease, which is a viral infection primarily affecting pigs.
The disease exists in all other European countries and in most other parts of the world. It has been known to exist in Great Britain since 1953, and over the last decade there has been an increased prevalence. In 1982 there were 43 outbreaks. Over the past four or five years pig producers have become increasingly concerned that measures should be taken to deal with the disease on what might be regarded as traditional animal health lines; that is, by means of a slaughter policy.
The possibility of a control and eradication policy has been under active discussion for some years. A major difficulty has been that under animal health legislation the Minister of Agriculture is bound to pay compensation for animals that are slaughtered for animal health purposes, and additional Government funds are not available to meet such expenditure in the case of Aujeszky's disease. However, the Government made it clear that if producers registered enough support for an eradication policy, and they were themselves prepared to provide the funds for the payment of compensation, further consideration would be given to an eradication programme.
A poll of producers was therefore undertaken by the Ministry of Agriculture in 1981, but the results did not meet the agreed criteria for proceeding. Another poll was taken recently. It involved 26,000 producers, who between them owned 7½ million pigs. It showed that 86 per cent. of those who replied—and they owned over 5½million pigs—were in favour of an eradication scheme with compensation being met by a levy on producers. As owners of 75 per cent. of the total pig population are in favour of proceeding in this way, the Government have decided to make the necessary arrangements.
The Bill would extend the levy-raising power to enable the Meat and Livestock Commission to raise a levy specifically to meet the costs incurred by the Minister as a consequence of exercising his powers under the Animal Health Act 1981 in relation to Aujeszky's disease, and for the purpose of making payments in respect of consequential losses which are suffered by owners of pigs which are slaughtered. The poll document, which was sent to producers, explained that the compensation which would be payable to owners of slaughtered herds would be a maximum of £300 for any one pig slaughtered. In addition, though, the producers' organisations propose to compensate owners for the costs arising from the disruption of their business on the basis of 20 per cent. of the compensation which is paid for the slaughter of breeding stock,
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weaners, and fattening pigs, where they are part of a breeder-feeder operation on the same premises; and 5 per cent. of the compensation for the slaughter of fattening pigs on separate premises, as they can return to full production very much more quickly.
I must emphasise that the Government, for their part, cannot depart from the long-established rule applied in compensation for slaughter of animals for disease control reasons that no consequential losses may be borne from public funds.
It is the Government's intention to support the eradication policy through the veterinary service and the facilities of the agriculture departments to the greatest possible extent. The cost of the work which will be undertaken by Ministry staff, including the work which the veterinary service undertakes in its professional capacity, will be borne by the Government. Producers will be responsible, through the levy, for meeting the compensation costs and also the relatively small additional costs which may arise from, for example, the employment of valuers and slaughterers, as well as the costs of feedingstuffs which have to be destroyed.
It is very difficult to forecast the number of infected herds which might have to be tackled, but our best estimate is that there might be about 250 which would have to be slaughtered under an eradication scheme. We anticipate that most of this work would be undertaken during the first year of the campaign. subject of course to other possible demands on veterinary manpower arising, for instance, from outbreaks of other important diseases. I can assure your Lordships that it is our intention to start work at the earliest possible date.
It is anticipated that the Meat and Livestock Commission levy on producers, in the first year of operation, would be 30p per pig slaughtered, or exported live, and that this might be expected to yield £4 million. Obviously, a view on the amount of the levy for future years will have to be taken in the light of the progress which is made.
The industry is to set up a limited company, which will become the body which will be responsible for receiving the proceeds of the Meat and Livestock Commission levy, for reimbursing the Minister for the costs which he will incur in payments of compensation for slaughter, and for paying directly to farmers the consequential loss compensation. It is obvious that in the initial phase of the campaign the proceeds of the levy would not be adequate to meet the costs. The industry is making arrangements for the company to raise funds in order to meet the excess of expenditure over income during this period. This will enable us to make an early start, while ensuring that funds will be available to meet the compensation costs. I should add that disbursements from the Meat and Livestock Commission to the company will be under ministerial direction as an additional safeguard.
I should be happy to take your Lordships through the Bill clause by clause, but I fancy that that might not be totally welcomed this evening. I hope that what I have said in this summary of the Bill will have provided sufficient detail to make clear what is proposed in it. We see it as performing an essential function in a unique arrangement for dealing with an

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animal health problem. There has been some interest expressed in whether this arrangement constitutes a precedent for future animal health control and eradication measures. It does not. Every case must be considered on its merits. The Bill is designed to meet the expressed wishes of the producers themselves in relation to this particular disease.
I hope that, in view of that, your Lordships may consider that it would be appropriate and helpful to the industry to expedite the later stages of the Bill as quickly as possible. As my right honourable friend has made clear, we believe that this is the right time to take action to rid Great Britain of an increasingly troublesome pig disease. I commend the Bill to the House. I beg to move.
Moved, That the Bill be now read a second time.—(Earl Ferrers.)
10.11 p.m.
Lord John-Mackie: My Lords, the noble Earl's preamble before he came to the clauses of the Bill, was very good. He is quite right, noble Lords will forgive him for not going through the Bill clause by clause, even without prodding from his Whip. As he said, this disease was known here in 1953. There is no doubt about it, successive Governments marked time on doing anything about it. I gather that in 1976 the BVA at a conference in London listened to a Dutch vet who had great experience of the disease. He warned vets in this country how bad it could be. The BVA called for eradication as early as 1977. So this matter has taken a long time. But we welcome the Bill now it is before us.
There is no doubt about it, the industry itself was not altogether blameless in not coming to decisions itself. We are indebted to Mr. Joseph Nickerson, who told me, "If I had not knocked their heads together a year or two ago, they would never have done anything". Of course, the first poll was something of a muddle. It is quite interesting that in the second poll only 43 per cent. voted, which represented round about 75 per cent. of the pigs—I suppose that that is proportional representation in a different way! However, there it is; we now have the Bill. We welcome it very much.
It is a good thing to take a poll in the industry for this type of legislation. But, considering that the BVA, a lot of private vets and many Ministry vets realised the danger—and I do not know whether the Government could have acted without a poll to impose the levy—I think that a risk was taken. As the noble Earl pointed out, the number of cases is increasing. I gather that there were 38 cases last year. We have had a few cases since then in this year. I was very surprised when the noble Earl said that perhaps 250 herds might have to be destroyed. That is a very large number. There is no doubt about it, we should get this Bill on to the statute book as soon as possible. The noble Earl can take it from me that there will be no delay from this side of the House.
Earl Ferrers: My Lords, I am very grateful to the noble Lord, Lord John-Mackie, for his welcome to this Bill and for saying that there will be no delay from his side of the House. I greatly appreciate that. The
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noble Lord referred to the Government acting without a poll, considering people have been warned about this disease. I explained that the 30p levy is likely to produce £4 million. The demands of animal health are very considerable. We discussed this matter within the department a great deal.
It was our view that the expenditure of public funds on this disease alone would not have been justifiable. If those funds had been available—and they were not—there were other diseases more demanding in the totality of animal health for an injection of such funds. But we concluded that if the producers themselves wanted to pay for this we would support them. Obviously, if you are going to make a levy on the producers and force them to pay for something which is totally new like this, it is best to find out first whether it is actually wanted. In the first poll, which the noble Lord described as a "muddle"—I thought that was slightly ungenerous, especially as it happened to be my responsibility—the producers did not give such a clear clarion call. I think that when they discovered that they had not they then got a little more agitated. The second poll did give a perfectly clear result, and that is the reason we have acted as we have.
Lord Wise: Before the noble Earl sits down, may I ask him one question relating to the levy? Am I right in understanding that the 30p levy will be paid only by the finishers of the pigs when they are sold? Will any levy whatsoever be placed upon the breeders of the pigs?—because it seems to me now that the balance is very heavily weighted in their favour if breeders are not going to subscribe at all to any levy and if the finishers are going to pay the lot.
Earl Ferrers: My Lords, if I may speak with the leave of the House, the levy will be placed upon the pigs as they are slaughtered and of course this is the way in which it eventually gets back to the breeders.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
House adjourned at seventeen minutes past ten o'clock.

  HIGHER EDUCATION: 18-YEAR-OLD ADMISSIONS
  HIGHER EDUCATION: 18-YEAR-OLD ADMISSIONS
  EFFECTIVE PRESCRIBING: WORKING GROUP REPORT
  EFFECTIVE PRESCRIBING: WORKING GROUP REPORT
  DIOXIN POISONING
  DIOXIN POISONING
  STREET HEATH SSSI
  STREET HEATH SSSI
  SWALE SSSI
  SWALE SSSI
  TERRITORIAL WATERS
  TERRITORIAL WATERS
  LEGAL SERVICES: THE LORD CHANCELLOR'S DEPARTMENT
  LEGAL SERVICES: THE LORD CHANCELLOR'S DEPARTMENT