Sitting of 14 February 1983

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
DEATH OF A MEMBER
Mr. Speaker: I regret to have to inform the House of the death of Edward Joseph Fletcher, Esq., Member for Darlington, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.
Oral Answers to Questions
  INDUSTRY

    National Economic Development Council (Industrial Investment)
    Mr. Dykesasked the Secretary of State for Industry when he next plans to chair a meeting of the National Economic Development Council to discuss industrial investment in new assets by United Kingdom companies.
    The Secretary of State for Industry (Mr. Patrick Jenkin): Meetings of the National Economic Development Council are normally chaired by my right hon. and learned Friend the Chancellor of the Exchequer. Investment features regularly in NEDC discussions and may well come up at the next meeting in March.
    Mr. Dykes: I thank my right hon. Friend for that answer. Although the existence of a deficit on the corporate account capital account of companies has been
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    a feature for 10 years or more and has somewhat disguised the insufficiency of investment in certain key sectors, what steps might be taken within the NEDC, in conjunction with conversations with the banks, to determine which sectors might benefit from more new investment capital in the future to get growth again?
    Mr. Jenkin: There is no evidence of a shortage of capital. Investment depends crucially on profitability and, as the Confederation of British Industry pointed out at the January National Economic Development Council meeting, profits of industrial and commercial companies, excluding North sea oil, fell from around 10 per cent. in the years up to 1973–74 to below 3 per cent. in 1980–81 and have recovered only to around 4 per cent. in the current year. Future investment depends crucially on rebuilding the profits of industry.
    Mr. John Grant: Has the Secretary of State examined what last week's OECD report said about investment? Will he throw off the Chancellor's shackles and stand up for British industry and for the unemployed? With regard to that report in particular, does he agree with it that we need more public sector investment, that industry needs more help with its costs and that these things should take priority over pre-election tax bribes?
    Mr. Jenkin: This question is about industrial investment, not about public sector investment. I am bound to tell the hon. Gentleman, however, that the absolute precondition for restoring the prosperity of this country has been the fall in inflation. [HON. MEMBERS: "Hear, hear."] I hope that the hon. Gentleman cheers as loudly as anyone else the fact that inflation is now below 5 per cent.

    Manufacturing Output
    Mr. Winnickasked the Secretary of State for Industry what has been the percentage fall in manufacturing output since May 1979; and what is the average change for the other European Community countries in the same period.
    The Under-Secretary of State for Industry (Mr. John Butcher): Between 1979 and the third quarter of 1982, the latest period for which comparable figures are available, the index of manufacturing production in the United Kingdom fell by 15 per cent. Between the same two periods the index for the European Community as a whole fell by some 7½ per cent.
    Mr. Winnick: Is the Minister aware that the considerable difference in the drop in manufacturing output since May 1979 between Britain and other EC countries shows only too clearly the disastrous effect on British industry of the Government's economic policies? Is the Minister further aware, as he should be, bearing in mind his constituency, that the drop in manufacturing output, which is probably now nearer 20 per cent., shows only too clearly the reason for the massive redundancies and the factory closures in the west midlands and the crisis facing that region, as unemployment there is now among the highest in the United Kingdom?
    Mr. Butcher: I believe that to be an over-simplistic analysis. If the hon. Gentleman considers the period 1970 to 1980, he will note that the inflation rate in total during that period was 360 per cent., that wages went up by 424 per cent. and that output went up by 17 per cent. That is an awful score within which to face the vagaries of a world recession. I particularly take the hon. Gentleman's point on industrial production, but I ask him again to consider the trends. With regard to increases in productivity, we are now outpacing our European competitors in the main. Of our major competitors, only the Japanese continue to beat us on a world scale.
    Mrs. Kellett-Bowman: Will my hon. Friend accept that he have taken the very words out of my mouth? I was about to ask him to confirm that now that we have overcome the problems created by the Labour Government, to which he referred, our productivity is outstripping that of our EC competitors?
    Mr. Butcher: The evidence, which is based on the trends, is quite encouraging. Production fell over the year ending the third quarter of 1982 by 1½ per cent. It fell by 3½ per cent. in France, 4½ per cent. in Germany and 9½ per cent. in the United States. The trend is to be welcomed. The basis of the benign telepathy that exists between my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) and myself, and the consequent concord, is one that will surely be recognised in the House.
    Mr. Orme: The Minister has not said why we are at the bottom of the OECD league. The manufacturing sector now employs only 27 per cent. of those who are in employment. Does the Minister agree that that is reaching a dangerously low level? What will the Government do about it?
    Mr. Butcher: Undoubtedly, our future prosperity will depend on the maintenance of a healthy, productive and competitive manufacturing base. We have defects in our economy that will take a long time to overcome. We have been producing goods for which there is low demand and we have not been producing enough goods for which there is high demand. We have been operating and developing a mismatched economy, and it will take a long time to put things right.

    Boilers (Coal Conversion)
    Mr. Kenneth Carlisleasked the Secretary of State for Industry how much of the finance of £50 million allocated to the scheme for converting boilers to the use of coal has been spent.
    The Under-Secretary of State for Industry (Mr. John MacGregor): By 31 January 1983 offers totalling over £14·6 million in grant had been made, of which £1·3 million had been paid out.
    Mr. Carlisle: Is my hon. Friend aware that our coal conversion scheme has been made much more attractive by the addition of the Common Market loan scheme? As the two schemes have been running together for only about six months and are due to end in March—there has not been much time to put together viable projects—will my hon. Friend consider extending the schemes? Not all the money originally allocated has been used.
    Mr. MacGregor: My hon. Friend is right. The rate of applications seems to have increased since details of the cheap ECSC loans were announced. A further sum of about £10 million is still under consideration. I hope that many companies are still considering this attractive scheme. Companies with coal-firing projects should submit their applications as soon as possible. We are anxious to receive them. I cannot say what the position will be after March.
    Mr. Dormand: I acknowledge that the overall take-up for so welcome a scheme is disappointing. Will the Minister dismiss any suggestion of winding it up? I understand that that has been discussed. Does the hon. Gentleman agree that if the scope of the scheme were widened and it received greater publicity the number of applications would increase?
    Mr. MacGregor: The scope of the scheme is as comprehensive as possible. The Industry Act 1972 precludes the giving of assistance to bodies such as local authorities, hospitals and schools. However, I think that the scope has been widened considerably. I shall do everything that I can to continue to publicise the scheme, but other considerations seem to prevent a greater take-up. For example, there are still fears in some companies about the effect on coal prices of possible future industrial action. We must try to eliminate those fears.

    A320 Airbus
    Mr. Andrew F. Bennettasked the the Secretary of State for Industry when he last met the chairman of British Aerospace to discuss funding for the A320 Airbus and related issues; and if he will make a statement.
    The Minister of State, Department of Industry (Mr. Norman Lamont): Department of Industry Ministers have regular contact with the chairman of British Aerospace. The A320 project has been among the topics discussed with him. I cannot at this stage make a statement on the question of launch aid.
    Mr. Bennett: Does the Minister accept that there is much anxiety among workers in British Aerospace about their job prospects? Is he aware that it seems that much more confidence is being shown in the future of civil avaiation by the French Government than by the British

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    Government? Is it not time that we showed our confidence in the industry and started to take decisions so that we do not miss the bus in the next few months?
    Mr. Lamont: I understand that there is considerable anxiety about the future of civil aerospace projects. There are serious uncertainties surrounding the A320. First, the engine is not yet available for the aircraft. Secondly, the market is uncertain, which is why Boeing has delayed its 150-seat aeroplane. Thirdly, we must be satisfied about the viability of the project. General Electric and SNECMA have put forward proposals for a derivative engine—the CFM 56–54—which might be suitable for the A320. The Airbus partners are now considering whether to seek the reaction of the airlines to this proposal. We shall examine that when the partners return to us.
    Sir Anthony Meyer: Is it not regrettable that British Airways and other European airlines fail to make any effort to buy a European aircraft that is every bit as good as the equivalent American aircraft now available?
    Mr. Lamont: First, British Airways must make its decisions on commercial lines. Secondly, despite recent publicity, no decisions have been made by British Airways about impending purchase of aircraft. Thirdly, we must remember that the A320 will not be available until 1988. I am sure that British Airways will give consideration to the aircraft. The French have not made a final commitment to the aircraft.
    Dr. John Cunningham: Is it not right that the chairman of British Aerospace has been pressing the Government for a decision since the spring of 1982? Does not the inability of British Aerospace to proceed with this main airframe project without public assistance—without Government launching aid—underline the irrelevance of privatisation to the future of the British aerospace industry?
    Mr. Lamont: We have said that in principle we are prepared to support an application for launch aid provided that it is shown that this is a commercial and viable project. We have had far too many prestige and political aircraft in the past. It is essential that we know more about the aircraft's engines before we take a momentous decision involving huge public expenditure.
    Mr. Colvin: My hon. Friend is quite right in assuming that there is no point in developing an aircraft without having engines to power it. Will he report to the House on the progress of talks between Rolls-Royce and Pratt and Whitney on future collaboration on the RJ500 engine, which is one of those designed to power the new generation of 150-seat airliners?
    Mr. Lamont: The discussions between Rolls-Royce and Pratt and Whitney are continuing. They are extremely complex negotiations. I cannot anticipate when I shall be able to make an announcement to the House.

    British Airways
    Mr. Colvinasked the Secretary of State for Industry when he last had a meeting with the chairman of British Airways to discuss the funding of the support costs of Concorde and the purchase by British Airways of new aircraft.
    Mr. Norman Lamont: The chairman of British Airways is in regular touch with my right hon. and noble
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    Friend the Secretary of State for Trade on a variety of issues. Industry Ministers have also discussed these matters with Sir John King.
    Mr. Colvin: Does my hon. Friend agree that the 200th anniversary of man's first flight is hardly the year in which the Government should pull the rug from under the feet of the Concorde project, which was a major achievement in aeronautical progress, especially when British Airways has said that it is prepared to shoulder the full burden of support costs for flying Concorde as from April 1984? With regard to the second part of my question, which relates to the purchase of new aircraft by British Airways—
    Mr. Speaker: Order. We have finished with the first part of the question and we have had enough of the second.
    Mr. Lamont: As my hon. Friend said, we put to British Airways the suggestion that it should take over the future costs of supporting Concorde. The British. Airways board replied that it could take over the future costs of supporting Concorde subject to agreement being reached on a number of matters. We very much welcome this conclusion, but we are still considering some of the detailed matters. It is not possible yet to say when a final announcement will be made to the House.
    Mr. Penhaligon: Will the Minister outline the Government's view on supersonic flight? Is he aware that the west country is plagued with Concorde booms night after night for six months of the year? An hon. Member representing a west country seat receives scores of letters about this. Does he agree that this problem outlaws supersonic aircraft for commercial purposes?
    Mr. Lamont: Questions about noise are for the Department of Trade and the Department of the Environment.

    Small Engineering Firms Investment Scheme
    Sir David Priceasked the Secretary of State for Industry how far the small engineering firms investment scheme in 1982 achieved its objectives; and if he will introduce a similar scheme in 1983.
    Mr. MacGregor: I am in no doubt that the small engineering firms investment scheme is achieving its objectives. By 28 January 1983, 1,393 offers had been made involving assistance of £31 million, of which £8.1 million has been paid out. It is not possible to say, given the other calls on limited funds, whether there will be a new scheme.
    Sir David Price: Does my hon. Friend agree that in the engineering industry today machines and equipment become technologically obsolete long before they are physically redundant? Does he further agree that the scheme has given small firms a chance to remain competitive and up to date? Will he undertake to reintroduce it as soon as he can persuade our right hon. and learned Friend the Chancellor of the Exchequer to give him the money to do so?
    Mr. MacGregor: I noted my hon. Friend's second point. There are no further funds for the scheme. There was a limit for this year, which we increased by 50 per cent. I entirely agree with his first point. The scheme was designed to assist small firms to buy technologically

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    advanced capital equipment. As a result of all our evidence and the surveys that we have carried out, I am sure that the scheme has achieved that. I hope that firms that have been made offers but have not yet placed orders will do so, as it is important for them to become technologically up to date as soon as possible.
    Mr. Park: Does the Minister agree that one of the problems is a lack of knowledge of Government schemes within industry? Why, when the Government hit on a scheme which apparently rings bells and is immediately taken up, do they not allocate a further tranche of money to it?
    Mr. MacGregor: I agree that there are often problems with making schemes more widely known to the firms that they are intended to help. We are putting a great deal of effort into improving that. However, that is not the case with this scheme. We marketed it well and received a good response. That is why we increased the funds by 50 per cent.
    Mr. Grylls: Does my hon. Friend agree that it is astonishing that, when the Department of Industry hits on a scheme that is successful and receives much interest from small firms, it promptly stops it? Does he further agree that that cannot be because of a shortage of money, as the Government had no difficulty in finding £100 million to force the British Steel Corporation to keep open its works at Ravenscraig? Does he agree that the money exists?
    Mr. MacGregor: There are many other calls on the Department's funds, many of which are of high priority. We increased the amount for the scheme because we recognised its advantages. There remains £22 million for offers that have been made and which, it they are taken up by firms, will have a good impact on the engineering industry and the manufacturing firms that provide the equipment. That sum has still to be used.

    Post Office (Investment)
    Mr. Cunliffeasked the Secretary of State for Industry when he next expects to meet the chairman of the Post Office to discuss the investment programme for the industry.
    The Minister for Industry and Information Technology (Mr. Kenneth Baker): My right hon. Friend has no immediate plans to discuss with the Post Office chairman the corporation's investment programme, which has risen from £42 million in 1978–79 to £115 million in 1982–83 and is planned to rise to £130 million in 1983–84.
    Mr. Cunliffe: Bearing in mind the improvements in productivity and service to customers, would it not be prudent for the Minister to embark on extra capital investment and expenditure for more new plant and facilities for the Post Office?
    Mr. Baker: There has been a substantial increase in the Post Office's capital expenditure programme. It has trebled since we have been in office. That allows the Post Office to go ahead with its investment programme on such things as letter sorting equipment.
    Mr. Wigley: Is the Minister aware that, once again, there is uncertainty and anxiety in rural areas about the future of small post offices and sub-post offices there?
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    Will he give an assurance that his Department is not examining any further programme of closure in that regard?
    Mr. Baker: I can give the hon. Gentleman the assurance he seeks. The Post Office, rather than the Government, has to consider the size and scope of the network and the throughput of activity in sub-post offices.
    Mr. Greenway: Is my hon. Friend aware of the anxieties of industrialists in my constituency about the last post collection being moved from 7 pm to 5.30 pm? Will he use his good offices to move it more closely to 7 pm, as much business is being lost?
    Mr. Baker: I shall draw my hon. Friend's comments to the attention of the chairman of the Post Office. He will appreciate that such details are for the management of the Post Office. If my hon. Friend is worried about help to industry, he will agree that the announcement today by the chairman of the Post Office that the increase of 1p for first class mail is to be held down to only ½p is a direct contribution by this successful enterprise to reducing the burden of costs on industry.
    Dr. John Cunningham: Will it not become necessary for the Post Office to have more capital expenditure if it is to improve the rate of mechanisation—and, therefore, productivity—and the quality of service to its consumers, to develop new services such as datapost and to speed up the modernisation of the massive number of rural sub-post offices? Does the Minister agree that if sub-post offices are not modernised they will not be able to offer customers the services that they want and will therefore be likely to come under a threat of closure?
    Mr. Baker: I should like to emphasise once again that the Post Office's capital expenditure for this year and next is at the highest levels ever. I take those remarks ill from an hon. Member who supported the Labour Government under whom the Post Office's capital investment programme was about £30 million a year. Next year it will be £130 million.

    Malaysia and Singapore
    Mr. Durantasked the Secretary of State for Industry if he will pay official visits to Malaysia and Singapore to discuss further industrial co-operation.
    Mr. Patrick Jenkin: I have no plans to go there at present.
    Mr. Durant: Does my right hon. Friend agree that that part of the world is extremely important to high technology industries in the United Kingdom? Does he agree that my right hon. Friend the Foreign Secretary's recent statement about students' fees will create a better atmosphere there? Does he agree that this is a good time to make an effort in that area? Will he reconsider his decision about sending a Minister there?
    Mr. Jenkin: It is not for me to send Ministers, but I agree with everything else that my hon. Friend said. He will have seen reports in the press this morning of the remarks that were recently attributed to the Malaysian Prime Minister about the marked improvement in relations between Britain and Malaysia and the possibility of Dr. Mahathir Mohamed visiting Britain shortly. I am utterly persuaded of the importance to our commercial effort of the best possible relations with Malaysia and Singapore.

    European Regional Development Fund
    Mr. Knoxasked the Secretary of State for Industry what is the value of the grants allocated to England from the European regional development fund since its inception.
    Mr. Patrick Jenkin: A total of £209·6 million has been allocated to England from the quota section of the European regional development fund since its inception in 1975.
    Mr. Knox: Does my right hon. Friend agree that that is a significant sum and that the grants bring considerable advantages to Britian? Is he satisfied that the general public are aware of the extent of the assistance from the European Community?
    Mr. Jenkin: No, I am not satisfied about that. We must continue to redouble our efforts to bring home to the British public just what are the advantages to us of membership of the Community, especially with regard to regional policy. The Government and local and other public authorites take all practical steps to ensure that the grants are widely publicised. For example, we erect signboards at project sites and publish details in British Business. Nevertheless, I accept that we must do more.
    Mr. Stoddart: Is it not a fact that the sum given by the Secretary of State is chicken feed compared with what is needed by our regions? Would it not be much better if we used our money for this purpose rather than paying thousands of millions of pounds to the EC for the regional development that is badly needed in Britain?
    Mr. Jenkin: Without doubt, membership of the Community has brought substantial advantages to Britain. Our trade with the community has risen half as fast again in the past 10 years as our trade with the rest of the world. Millions of jobs in Britian now depend on that business. If the Opposition's policy of withdrawing from the Community were ever put into practice, it would be disastrous for Britain.
    Mr. Skinner: Being in has been a disaster.
    Mr. Wigley: Will the Secretary of State confirm that application has been made to extend the use of this aid to inner city areas in England? If that is so, will there be further finance from the EC, or will existing aid be spread more thinly?
    Mr. Jenkin: I have noticed the questions that the hon. Gentleman has tabled on the subject. I cannot usefully add to the full and helpful answers that he has received from my hon. Friend the Under-Secretary of State for Industry.
    Mrs. Kellett-Bowman: Does my right hon. Friend agree that the substantial regional development fund grants to which he has referred are made infinitely more effective by the large sums that we receive from the European Investment Bank? Is he aware that small firms are especially pleased with the recent scheme to make that money more readily available to small firms at low rates of interest?
    Mr. Jenkin: I agree with my hon. Friend. I should tell the House and small firms that the recent change in rules allows those firms to benefit from those funds, even though firms are not in the regional areas. The availability is now national.
    Mr. Edwin Wainwright: Is the Minister satisfied with the amount that is coming from the regional development fund? If so, what contribution have the Government made to supplementing it in Yorkshire and the north-east, where it is badly needed because of high unemployment?
    Mr. Jenkin: We always wish to see a better return from the European regional fund. Part of our purpose has been to seek to amend such things as the common agricultural policy so that there can be a more even distribution of the burden and the benefits of membership. With regard to the allocation of funds to the different regions, large parts of Yorkshire benefit from regional policy. I hope that the hon. Gentleman recognises that.

    Industrial Location (Inquiries)
    Mr. Campbell-Savoursasked the Secretary of State for Industry how many industrial location inquiries have been directed to his Department's northern regional office, north-western regional office and the Invest in Britain Bureau, respectively, over the past 12 months.
    Mr. Norman Lamont: In 1982 the Department's north-east regional office handled 187 location inquiries, and the north-west 254. Over the same 12-month period, the Invest in Britain Bureau handled some 440 inquiries from foreign-owned companies where there was a likelihood of an eventual investment decision.
    Mr. Campbell-Savours: Will the Secretary of State or the Minister carry out the fullest possible investigation into the arrangements for handling industrial locational inquiries originating from the United States of America? Is the Minister aware that the Northern Ireland Office can sift through those applications prior to their being forwarded to the north-west regional office of the Department of Industry or the northern region? That happens because most of our officials in the consulate and embassy in the United States of America are funded out of the Northern Ireland Vote and not the Department of Industry's Vote. Will the Minister make the necessary changes?
    Mr. Lamont: I shall look into the hon. Gentleman's point. If he wants to give me further information, no doubt he will.
    Mr. Andrew F. Bennett: From the figures that the Minister gave in his original answer, can he tell us how much development took place as a result of each of the inquiries processed?
    Mr. Lamont: All that I can tell the hon. Gentleman is that under section 7, £16 million-worth of assistance has been offered, which is expected to preserve over 4,500 jobs in the north-west and to create nearly another 4,000 jobs. In Cumbria, £1½ million is being spent, which will preserve over 300 jobs and create almost 200 jobs.

    Manufacturing Industry
    Mr. Chapmanasked the Secretary of State for Industry if he will make a statement on the competitiveness of British manufacturing industry as measured by unit costs and output per man-hour in the past three years.
    Mr. Patrick Jenkin: Following several years in which United Kingdom manufacturing industry lost competitiveness, since the first quarter of 1981 it has improved by 24 per cent. Between 1979 and the third quarter of 1982 output per man-hour has improved by 10·1 per cent. Those trends are encouraging.
    Mr. Chapman: I welcome that dramatic reversal in the trend of uncompetitiveness, which was entered into in the last half of the 1970s. Will my right hon. Friend confirm that that augers well for Bitish manufacturing industry as the world recession ends? Does he agree that so long as the Government allocate subsidies to industry it is better to allocate them to creating new jobs in new expanding industries than to use them to prop up and preserve uneconomic jobs in dramatically declining manufacturing industry?
    Mr. Jenkin: I cannot dissent from my hon. Friend's general proposition. Unfortunately, in the real world of politics it is not always easy to adhere to that, tout court. I agree that the trends are encouraging, but there is still some way to go before we can recover the competitiveness that we had in 1975.
    Mr. J. Enoch Powell: How is the factor of exchange rates eliminated from the comparisons to which the Minister has just referred?
    Mr. Jenkin: The changes in the exchange rates are included in the figures that I have given. It is important to make sure that the benefits endure, by keeping hold of costs. That has not happened when the pound has been devalued previously. The benefit that comes to industry through having a lower exchange rate has been lost as costs have risen to absorb that benefit. We must make sure that that does not happen this time round. That will be to the benefit of British industry recovering its share of the markets both here and overseas.
    Mr. Orme: Why is the manufacturing sector in such a crisis? The Minister must know. Like him, I travel round the country visiting many major companies, which tell me the same story. Since 1979 there has been a disaster. In many cases firms have lost half their employees. I visited Lansing Bagnall, a major vehicle company, last week. It has lost over 2,500 employees. One cannot complain about unit costs of production at a firm such as that. Why is there such a crisis?
    Mr. Jenkin: The right hon. Gentleman should have come with me when I visited the TI Raleigh company in Nottingham on Friday. That company is bent on putting its house in order. It is recovering its share of the market, restoring its profitability and has introduced new models. It is introducing new production methods. I give it three hearty cheers.

    Microcomputers in Schools
    Mr. Greenwayasked the Secretary of State for Industry whether he is satisfied with the progress of his Department's microcomputers for schools programme; and if he will make a statement.
    Mr. Kenneth Baker: The progress is good. We have provided 6,400 microcomputers to secondary schools. As far as we can judge, every secondary school now has one; we are the first country to achieve this. The primary school scheme began in October last year. So far 6,500 schools
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    have applied out of the 27,000 eligible. Including Europe, the United States and Japan, we are leading the world in the impact we are making on education through the use of microcomputers. This is good news for the future of our young people and of Britain as a whole.
    Mr. Greenway: I am sure that the whole country will join me in congratulating my hon. Friend on that progress. [Interruption.] Will his Department look at the provision of microcomputers in special schools? Some expense is involved because the computers have to be adapted to the needs of disabled children. However, it is important to remember that equal opportunities will be given to disabled people through the use of those computers. Can something be done for them?
    Mr. Baker: I thank my hon. Friend for his comments. I was surprised at the grudging way in which the Opposition welcomed the good news. There is no doubt that microelectronics applied to disabled or handicapped children can result in considerable improvements. We are sponsoring several experiments in special schools to ensure that those developments come through and are widespread.
    Mr. John Garrett: Does the Minister ever visit the schools that are on the receiving end of his microcomputer scheme? Does he find, as many others do, that the Department of Education and Science has undermined the scheme by refusing to provide extra money for software or training? No head teacher will pay for software or training when the money comes out of the capitation allowance for the school, which is being cut. He will not buy software if the children will have to share books.
    Mr. Baker: I visit schools frequently. I assure the hon. Gentleman that I do not receive such comments. The Department of Education and Science allocated £9 million and has just announced that it will increase that sum. From our budget we have allocated an additional £500,000 for educational software.

    Robotics Industry
    Mr. Sheermanasked the Secretary of State for Industry what steps he takes to encourage the establishment, to assist the growth and to ensure the survival of the British robotics industry.
    Mr. Kenneth Baker: The Government provide financial assistance to United Kingdom companies to develop and manufacture new types of robot and to United Kingdom companies to install robots. We also support consultancy studies for robotics. Grants totalling over £8 million have so far been offered by my Department for those purposes.
    Mr. Sheerman: Does the Minister accept that many of us believe that this is part of a public relations exercise on the high tech side, while, at the same time, most of British industry is falling to pieces? Is he aware that Remek, one of the leading and largest robotics manufacturers in Britain, based in Milton Keynes, is now in the hands of the receiver and that some people have argued that the Government neglect British robotics and encourage only joint Japanese ventures?
    Mr. Baker: I disagree with what the hon. Gentleman has said. A few years ago only two or three companies in the United Kingdom were capable of making robots. There

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    are now 15. There are about six joint ventures between Japanese and British companies and American and British companies. This is not a PR exercise. I want to extend the use of robots and robotic devices throughout British industry. That will help to make it more competitive.

    Regional Policies (Review)
    Mr. Dormandasked the Secretary of State for Industry if he will make a statement on the progress being made on the review of the Government's regional policies.
    Mr. Norman Lamont: Officials of the Departments concerned have completed the first stage of the review, which was to examine the working of current regional economic policies and identify ways in which they might be made more effective. We now have to decide what further work we may want to commission. I should like to emphasise that there will be no further substantial changes in the lifetime of this Parliament.
    Mr. Dormand: Is the review a cover-up for yet another attack on regional aid? What possible justification can there be for the proposal in the public expenditure White Paper to cut regional and general industrial aid by 21 per cent.? Will the Minister give an assurance that before any conclusions are reached he will consult organisations and local authorities in the regions concerned?
    Mr. Lamont: We consult local authorities and other people involved in the regions on regional policy all the time. I have already said that no further changes in regional policy are planned in the lifetime of this Parliament. But, having said that, it is perfectly reasonable that the Government should review regional policy and its effectiveness, about which there is a lot of argument and controversy.
    Mr. Hal Miller: Does my hon. Friend agree that under current criteria the west midlands would qualify for assisted area status, so that he is faced with the choice of either including it or reviewing the policy? In that review, will he pay particular attention to the creation rather than the diversion of jobs—which many suspect the current policy encourages—and the cost-effectiveness of regional policy as a means of assisting industry?
    Mr. Lamont: The criteria, of course, include geographical position and access to markets, too, and not just levels of unemployment. I entirely agree with my hon. Friend that cost-effectiveness, and, indeed, the effectiveness of regional policy, are the very things that inevitably any Government must look at.
    Mr. Prescott: Does the Minister agree that the only principle that seems to govern the Government's attitude to a review of regional policy is how to reduce the areas given grants and thus save money? Are they not the overriding considerations? Will the Minister tell us that in considering the review of regional policy he will seriously think about the effective role that the Labour-controlled councils, such as the GLC, the west midlands and Manchester, and smaller local authorities, play in creating jobs, some at a cost of only £250 a job and not the £40,000 a job, which is quoted from the Conservative Benches on occasions?
    Mr. Lamont: Unfortunately, some of the jobs safeguarded in the public sector by Labour-controlled authorities have been at the expense of jobs in the private
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    sector. The hon. Gentleman talks about cuts in regional policy. We have simply narrowed the area covered by regional policy schemes, which must make sense if they are to be effective. It makes no sense for regional policy to cover nearly half the country. RDGs in 1979–80 were £330 million, in 1980–81, £490 million and in 1981–82, £616 million.

    British Telecom (Report)
    Mr. Eggarasked the Secretary of State for Industry if he will make a statement on Professor Littlechild's report on British Telecom.
    Mr. Kenneth Baker: have nothing to add to the statement that I made last Monday, which has received a wide welcome.
    Mr. Eggar: Is my hon. Friend aware that the report is particularly welcome for the clear and concise way in which it sets out the options? However, is there not a danger that the RPI minus x formula, which in many ways is the key recommendation of the report, assumes that BT at present has an appropriate level of efficiency and, what is more, that there will not be significant cost reductions in equipment? Should there not be reserve powers for either the Director General or the MMC to look into the cost structure of BT if necessary?
    Mr. Baker: As I am sure my hon. Friend appreciates, this is a most complicated matter, on which we have already spent 25 hours of debate in Committee. I assure him that there will be opportunities for the Director General of OFTEL to examine the cost structure of certain of the charges of BT.

    Computer Software Industry
    Mr. Richard Pageasked the Secretary of State for Industry what assistance is currently available from his Department for the computer software industry.
    Mr. Butcher: The software products scheme can provide grants of up to one third of the cost of developing and launching software products. The scheme was relaunched last year with an additional £10 million funding. I am greatly encouraged by the response from industry. In addition, we are continuing to look at ways in which the public sector may draw upon the considerable talent available in the United Kingdom software industry.
    Mr. Page: In thanking my hon. Friend for that reply, may I ask whether he is satisfied that enough of that aid is going to the smaller software houses and through them into the smaller businesses, which need the aid to compete?
    Mr. Butcher: As with industry in general, often many talented people are contained within our smaller companies. There is no restriction precluding the smaller companies from taking advantage of the scheme. The major criteria are an application area and type of software product and not so much company size.
    Mr. Campbell-Savours: Would not the computer software companies also benefit if the enterprise allowance employment premium—the manpower subsidy introduced by the Government last year to run for six months—were extended to those companies and to all other companies throughout the whole of the United

    15
    Kingdom in the way that the Department of Employment and the Manpower Services Commission were suggesting only a few months ago? Will the Minister put pressure on the Department of Employment to ensure that the scheme is extended?
    Mr. Butcher: The scheme has to stand on its own merits and each application must be looked at on its merits, regardless of location within the United Kingdom or whether the company or the region in which the company is located receives special grants. I shall examine Hansard, and, having clarified the position further, see whether I can meet the hon. Gentleman's point.

    Service Industries
    Sir Anthony Meyerasked the Secretary of State for Industry if he will seek to extend assistance under the Industry Act 1972 to service industries.
    Mr. MacGregor: Assistance is given to service industries through several schemes set up under the Industrial Development Act 1982, which consolidates the Industry Act 1972 and amendments, including for example, under the office and services industry scheme, the coal firing scheme and the small firms loan guarantee scheme. A considerable number of service industries have already benefited from the last mentioned scheme.
    Sir Anthony Meyer: Is it not now becoming increasingly clear that, even if there is a major upturn in the world economy, manufacturing industry will not be able to provide many more jobs and that they will have to come from the service industries? Is not the time coming to switch resources from manufacturing industry into the service industries, including, in particular, tourism?
    Mr. MacGregor: As my hon. Friend will know, tourism is aided through other schemes. I have said that there are a number of service industries that will benefit under the Act. I agree with my hon. Friend that a major source of new jobs will be the service industries. I think that he may have in mind regional development grants, but there are problems about extending them to service industries generally. For example, one must be careful that assistance to one firm is not simply displacing activity by another in the same area. There are also problems in that many service industries are less flexible in the choice of location.
    Mr. Wigley: Is not that point equally valid for manufacturing industry? May not grants given to one manufacturing concern displace jobs in another area? Has not the time come to look at service and manufacturing industries together and get a new structure of grants, recognising that many more jobs in the future will be available in service industries rather than in manufacturing?
    Mr. MacGregor: I have heard what the hon. Gentleman says. That argument has been put forward by a number of people. Regional development grants were designed to increase capital investment and, on the whole, capital expenditure has taken place on a much wider scale in manufacturing than in service industries.
    Mr. Robert C. Brown: In view of the disappointing reply that the Minister of State gave to question 16, would the Under-Secretary of State read the debate on the northern region last week and consider what was said about small businesses, particularly in the service sector?
    Mr. MacGregor: I do not need to read it. I listened closely to the entire debate. As I said, I entirely accept that small firms will be a major source of new jobs in the future. That is why we are concentrating a large number of schemes and other forms of assistance on small firms. Nearly all of them apply to the service sector as well as to manufacturing.

    Information Technology
    Mr. Warrenasked the Secretary of State for Industry when he expects to come to a decision on the proposals of the Alvey report on a programme for advanced information technology; and if he will make a statement.
    Mr. Kenneth Baker: As my hon. Friend is aware, the Alvey report proposes an investment by Government and industry of £350 million. Investment on this scale will determine the course of a very significant proportion of the IT industry's research activities. It is therefore imperative that the decisions that we take now are the right ones. For this reason, we have consulted widely with the industries. In the light of these and other consultations we are considering our response to the report and I hope to make an announcement shortly.
    Mr. Warren: Does my hon. Friend feel that his time for response should be of the same order as that taken by the committee to produce the report? Does he appreciate that other countries are moving ahead extremely fast and that a response is urgently required by our industry?
    Mr. Baker: I am as anxious as my hon. Friend that we should reach a decision quickly on this very important programme. As it is the largest co-operative research programme that this country has ever tried, I must consult industry and indeed other Departments. Those consultations are now coming to an end.

  ATTORNEY-GENERAL

    Historic Documents
    Mr. Christopher Priceasked the Attorney-General what is the Lord Chancellor's policy in considering applications by Ministers to withhold historical documents beyond the 30-year period.
    The Attorney-General (Sir Michael Havers): The Lord Chancellor considers applications on their merits in the light of the provisions of section 3(4) of the Public Records Act 1958 and in the light of the policy laid down by section 5 regarding closure after transfer. In considering applications under section 5 of the Act the Lord Chancellor has regard to these provisions and the criteria set out in paragraph 26 of the White Paper "Modern Public Records".
    Mr. Price: May we know more about the criteria? What possible sense is there in relating all the Foreign Office intercepts that took place during the second world war while refusing to release those that took place between the first and second world wars, with the exception of those that Lloyd George took away and placed in the House of Lords Library? Is it not reasonable to assume that the years between 1919 and 1939 are now history?
    The Attorney-General: I understand the hon. Gentleman's great interest in this matter. The matter has

    17
    been considered with great care, especially with regard to second world war intercepts. The arguments for exempting security and intelligence-related records from public release have less weight in relation to records of interceptions of messages transmitted by the services of a country with which the United Kingdom was then at war.
    Mr. Newens: Is there any truth in reports that public records dealing with the British Union of Fascists are likely to be witheld for the full 100 years? Bearing in mind that attempts were made a few years ago to withdraw certain Metropolitan police records relating to the hunger marches of 1933 and 1934, which were later countermanded, is there not a case for great vigilance in these matters to ensure that too many exceptions to the 30-year rule are not allowed?
    The Attorney-General: This is very carefully supervised. The matter raised by the hon. Gentleman falls within the responsibilities of the Lord Chancellor, but I will certainly write to the hon. Gentleman about it.

    Shoplifting (Sentencing Policy)
    Mr. Campbell-Savoursasked the Attorney-General if the Lord Chancellor has any plans to meet the Magistrates Association to discuss sentencing policy for shoplifting offences.
    The Solicitor-General (Sir Ian Percival): As was indicated in the replies to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on 9 June 1980 and 9 March 1981, meetings are not arranged with the Magistrates Association to discuss sentencing policy limited to a single type of offence.
    Mr. Speaker: I should make it clear that in future I shall not call hon. Members unless they stand up. Does the hon. Member for Workington (Mr. Campbell-Savours) intend to ask a supplementary question?
    Mr. Campbell-Savours: Does the Solicitor-General accept that people under stress and the mentally ill should not be threatened with prosecution or brought before the courts for sentencing on shoplifting charges? If the right hon. and learned Gentleman has any sympathy with that principle, will he ensure that all police forces are required to appoint persons qualified to assess the degree of stress or, indeed, whether the person concerned is mentally ill?
    The Solicitor-General: I am sure that most prosecuting authorities are well aware of those considerations. There is no question of any special threat being held over the heads of the mentally ill or anyone else. The threat is the same. The greatest safeguard in this respect is the availability of legal aid and advice so that those appointed to assist people may take account of these points in their defence and see that full weight is given to them, either before prosecution is undertaken by making representations to the authorities, or, if there is a conviction, in mitigation before the court passes sentence, which is the point to which the main question relates.
    Mr. Arthur Davidson: As a fair proportion of those prosecuted for shoplifting are elderly first offenders, do the Attorney-General's new guidelines on prosecuting policy contain clear advice to prosecuting authorities on the advisability of cautioning rather than prosecuting? Does the right hon. and learned Gentleman agree that the sense of shame and disgrace for the elderly first offender far outweighs any penalty that the court may impose?
    The Solicitor-General: I entirely agree with the hon. and learned Gentleman on the last point. Anyone appearing at a police station or court for the first time, but perhaps especially an elderly person, may become thoroughly confused. We all want every assistance and indulgence to be given in such cases. Cautioning is indeed referred to in the document mentioned by the hon. and learned Gentleman. It is also referred to in another document, which will soon be available and which I believe will be of interest to the hon. Member for Workington (Mr. Campbell-Savours)—a report of the Home Office standing advisory committee on the prevention of crime. The difficulty is that cautioning can be administered only if the accused makes a clear admission of the offence. That limits its usefulness, but that does not alter the fact that whenever it is available and useful it must be considered very seriously.

    European Court of Human Rights
    Mr. Marlowasked the Attorney-General how many cases he has conducted before the European Court of Human Rights.
    The Attorney-General: None. I have conducted one case before the European Commission of Human Rights.
    Mr. Marlow: Is the court competent to judge cases concerning the discrimination in the level of grant available to individual adult students on the basis of something outside their control; in other words, parental income? If it were to pass judgment on this, has my right hon. and learned Friend any idea what that judgment would be?
    The Attorney-General: An application of that kind would not be within the convention.
    Mr. English: Would it be a good idea to have a European attorney-general or public prosecutor who, through a modest amendment of the convention, could prosecute any intentional breach of human rights committed in any state party to that convention?
    The Attorney-General: I note that suggestion with interest.
    Mr. Christopher Price: Did the Attorney-General conduct the Government's defence in the case, which I believe is still before the European court, concerning telephone tapping? If the judgment goes against the Government, will he guarantee to put down an amendment to the Police and Criminal Evidence Bill currently before the House?
    The Attorney-General: I have learnt from hard experience that it is always unwise to answer hypothetical questions.

    Jurors
    Mr. Chapmanasked the Attorney-General if the Lord Chancellor is satisfied with the criteria for reimbursing loss of income and expenses to jurors.
    The Solicitor-General: The Lord Chancellor is satisfied that the criteria are generally fair in so far as it is possible without giving rise to an excessive charge on public funds.
    Mr. Chapman: Following a constituency case, the details of which I sent to the Lord Chancellor, will my

    19
    right hon. and learned Friend consider sympathetically the case of an unemployed man seeking employment who is called for jury service and thus denied the opportunity to attend an interview for a job? Is there not a case either for loss of income considerations or for not requiring such a person to be called for jury service?
    The Solicitor-General: I gladly respond to the first part of the question. I shall certainly look sympathetically at that case. I should like to consider the details with the Lord Chancellor and write to my hon. Friend.

    Care Proceedings (Legal Aid)
    Mr. Meacherasked the Attorney-General if he will make legal aid available to parents in respect of care proceedings regarding their children.
    The Attorney-General: My noble and learned Friend the Lord Chancellor made clear the Government's intention in this respect on 17 June last year. A further statement will be made shortly.
    Mr. Meacher: Is it not intolerable that this absolutely necessary measure that was enunciated in the Children Act 1975 and promised again under the present Government is still not implemented because of arguments over cost? How can the Government find the money to compensate people for closed shop episodes up to 10 years ago that are
    20
    now over and done with and yet not find the money for legal representation for parents threatened with the removal of their children here and now?
    The Attorney-General: A considerable amount of consultation has been necessary, together with other considerations. However, as I have told the hon. Gentleman, a statement will be made shortly.
    Mr. Lawrence: Will my right hon. and learned Friend take cognisance of the fact that the view expressed from the Opposition Benches is not confined to that side of the House?
    The Attorney-General: Yes, Sir. I appreciate that.
    Mr. Arthur Davidson: Why has there been such a delay? Is it the fault of the Home Office in drawing up the rules? Is it the fault of the Department of Health and Social Security or of the Lord Chancellor's Department? As the Attorney-General will know, the Law Society is most anxious that a date for the implementation of this necessary decision should be announced very soon.
    The Attorney-General: The Government are fully aware of the need that exists and of the distress that might be caused to parents, for example, by the absence of these provisions. There have been a number of necessary consultations and I hope that a statement will be made shortly.

Allied Corporation of America
3.30 pm
Mr. Charles Irving: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter related to inhuman and cavalier treatment by a multinational company, one of the top 20 in the United States, namely,
"the decision of Allied Corporation of America to create 500 redundancies at its Cheltenham-based factory, Linotype-Paul."
The reason for transferring to its loss-making West German plant the profitable products researched, developed and manufactured by British workers is inexplicable. The House, with your permission, Mr. Speaker, should urgently consider steps that Ministers can take to prevent the appalling exploitation of British companies similar to Linotype-Paul, whose order book is profitable, being moved abroad. There are suggestions of illegal inducements by West Germany to attract British companies, contrary to the Treaty of Rome, to relieve its own failing economy.
The pirating of British products must cease now. Bribery and corruption have many unacceptable faces. As recently as January of this year Linotype-Paul was recruiting staff, most of whom are still working overtime. This leaves the greatest suspicion in my constituency that Allied Corporation of America is by no means whiter than white.
Malpractice should be rooted out and such wealthy groups now seeking oil concessions from the Government refused the opportunity to, yet again, reap rich rewards on the backs of an able British work force.
The matter is specific. Five hundred workers are losing their profit-producing jobs. The matter is urgent and important for those put out of work and for the country in general. The House must, without delay, take measures to ensure that multinationals do not prop up jobs abroad at the expense of British jobs and technology.
The matter comes within the scope of ministerial action, as the Standing Order requires. Ministers must protect British industry from abuse. My right hon. Friends the Secretaries of State for Energy and for Industry must immediately consider carefully whether Allied Corporation of America is a proper company to receive oil concessions when it treats its British work force with such
22
contempt. There is no probability that the matter will be brought before the House by any other means. I therefore ask you, Mr. Speaker, to rule that this is a proper matter to be discussed under the terms of the Standing Order.
Mr. Speaker: The hon. Gentleman gave me notice before 12 o'clock midday that he would seek to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the decision of Allied Corporation of America to create 500 redundancies at its Cheltenham-based factory, Linotype-Paul."
As the House knows, applications under Standing Order No. 9 that relate to redundancies and unemployment always cause me a considerable amount of difficulty. But the House is also aware that I do not decide whether this matter should be debated. I merely decide whether is of such a character that it must be debated either tonight or tomorrow.
Under the Standing Order I am directed by the House to take into account the several factors set out in the order but to give no reasons for my decision. I must rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order, and therefore I cannot submit his application to the House.

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: By leave of the House I shall put together the Questions on the three motions relating to statutory instruments.
Ordered,
That the Wildlife and Countryside (Definitive Maps and Statements) Regulations 1983 (S.I., 1983, No. 21) he referred to a Standing Committee on Statutory Instruments, &c.
That the Town and Country Planning (Public Path Orders) Regulations 1983 (S.I., 1983, No. 22) be referred to a Standing Committee on Statutory Instruments, &c.
That the Public Path Orders and Extinguishment of Public Right of Way Orders Regulations 1983 (S.I., 1983, No. 23) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Archie Hamilton.]

BUSINESS OF THE HOUSE
Ordered,
That Private Members' Motions be not proceeded with at this day's sitting; and the Motions of which notice has been given for this day may be proceeded with in accordance with the provisions of paragraph (7) of Standing Order No. 6 (Precedence of Government Business) on a future day.—[Mr. Archie Hamilton.]

Water Industry (Dispute)
3.37 pm
Mr. Gerald Kaufman: I beg to move, That this House do now adjourn.
Leave having been given on Thursday 10 February under Standing Order No. 9 to discuss:
The dispute in the water industry.
Mr. Kaufman: The union that sponsors me as a parliamentary candidate amalgamated three months ago with the General and Municipal Workers Union. I am now, therefore, a candidate sponsored by the General, Municipal, Boilermakers and Allied Trades Union and very proud to be so.
Today, the first ever national water strike enters its fourth week. It is a strike that has caused hardship to scores of thousands of our fellow citizens and serious inconvenience to millions more. It is a strike which, if it continues for much longer, could create great hazards for the health and well-being of the whole country. It is a strike that must speedily be brought to an end on honourable terms. It is a strike in an industry which hitherto has known good industrial relations, with a public-spirited work force represented by responsible trade unions. It is a strike which should never have begun and which need never have begun.
The trade unions presented their claim on 21 September. They asked for an increase on the basic wage linked to the going rate and a settlement that would recognise the comparability of their jobs with those of workers in other industries such as gas and electricity. In a statement on 13 October the National Water Council declared that
"there is no issue between the employers and the trade unions which cannot be resolved by negotiation and collective bargaining in the usual way."
Seven weeks elapsed between the lodging of the claim and the time when the employers were ready to hold talks. The unions arrived at the headquarters of the National Water Council at 10.30 am on 11 November, ready for what the National Water Council called
"negotiation and collective bargaining in the usual way."
They were kept waiting for four hours until 2.30 pm, yet, when finally they met the employers, they were greeted with an absurd offer of 4 per cent. on the basic wage and nothing in recognition of comparability, and not by any willingness to negotiate, but by an immediate demand that the claim be taken straight away to arbitration because, according to the National Water Council, it
"could not be accommodated within the water industry negotiating machinery."
It may be that that extraordinary response by the employers affected the unions' subsequent attitude to arbitration.
What had caused that extraordinary change in the employers' position between October and November? I can state categorically that the employers had been willing to negotiate with the unions up to an offer of 6 per cent. Why, then, did they not negotiate in that way? The answer is that on the very day of the intended negotiation the right hon. Member for Bridgwater (Mr. King), now the Secretary of State for the Environment, told the negotiating group of the National Water Council that it must offer no more than 4 per cent. He put intolerable pressure on the negotiating group to conform to his wishes, and it did so.
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The right hon. Gentleman's interference has been documented repeatedly in such newspapers as The Daily Telegraph, the Daily Express, the Daily Mail, The Economist, The Times and The Sunday Times. It has never been denied, because it cannot be denied. It took place on the day when the Prime Minister had the brazen nerve to tell the House:
"I understand that negotiations with the water industry are taking place today. The Government are not a party to them."—[Official Report, 11 November 1982; Vol 31, c. 666.]
Yet at the very moment when the Prime Minister was speaking those words to the House, the reckless and highhanded interference of the Secretary of State was leading directly to the strike that we are debating.
After that day there was no contact again between the employers and the unions until just before the strike began on 24 January. The employers increased their offer, but no settlement was reached.
Through the good offices of ACAS, which has struggled hard to bring about a resolution of the dispute, a mediator was called in. That mediator's report was issued on 23 January. It recognised fully that the workers in the water industry had what it called
"a deeply held sense of grievance"
which, it said, should receive
"an understanding, positive and determined response
as a matter of great urgency. But it also said that the workers' claim for comparability with the gas and electricity workers could not be met, not because there was no merit in that claim—indeed, paragraph 4 of the mediator's report documented in detail the merits of the claim for comparability—but because, as the mediator said in paragraph 6 of his report,
"conditions in the labour market have changed to an unparalleled extent as large scale unemployment has made its impact on terms and conditions of employment … Thus, I consider the water workers—through this adverse movement in relative position—to have been the victims of wage inflation elsewhere in the economy, on the one hand and the recession, on the other."
So the mediator was saying that the admitted merits of the workers' claim had been made irrelevant because of the mass unemployment created by the Government. That is what the mediator's report says, and I have quoted the words.
On that criterion, genuine wage bargaining might as well come to an end, because the just claims of a group of workers providing a vital service have been invalidated by Tory monetarist policy.
The Minister who has presided over this unprecedented level of unemployment, the Secretary of State for Employment, made matters worse by insulting and reviling the major union involved. He alleged that its members had gone on strike in violation of their rule book. That was quite false. Indeed, the union had taken a ballot beyond the requirements of its rule book to ensure full consultation with the membership and had received overwhelming support. If the right hon. Gentleman had got 74 per cent. of the votes in an 81 per cent. poll he would be very happy to come to the House on that basis.
The Secretary of State for Employment claimed that there was a long trail of agreements that had been entered into voluntarily and ruthlessly broken by the unions concerned. That allegation was false as well.
Under successive Governments, the Ministry of Labour and the Department of Employment have had at their head Ministers who have regarded it as their function to conciliate and to heal. That was how Conservative occupants of the post such as Sir Walter Monckton and

25
Mr. Iain Macleod saw their role. Dedicated civil servants who served Ministers such as they must view with revulsion the debasement of his high office by the loutish bully boy who now occupies it.
The Secretary of State for Employment has been abetted willingly by the Prime Minisiter herself. In the middle of the dispute, speaking at a dinner in Glasgow, she lectured the water workers on their obligation to abide by what she called "a puritan work ethic". The most appropriate comment on that sanctimonious piece of preaching came in a leading article in the Daily Express, which said that
"it was surely a blunder for her to use a glittering function, with diamonds atwinkle, to direct sharp words at sewage workers."
So, in an atmosphere embittered by the Prime Minsiter and her colleagues, the strike proceeded. Attempts by the unions to resume negotiations resulted in a meeting on 6 February at which the employers tabled proposals listed on one sheet of paper. There was much anticipation of what the meeting might produce, because, on the radio three days before, Mr. Len Hill, the chief employers' negotiator, had said that water workers could look forward to a package that would add at least £5 to £10 a week in productivity gains to the offer then on the table of 7·3 per cent. over 16 months.
When the proposals were examined it was found that, averaged across the industry, the increase available was about 50p a week. But in fact nearly half of the work force would have got nothing, while 14,500 of the 29,000 workers in the industry could have expected about 80p a week, with appreciable increases available to precisely 120 of the 29,000 workers, or four-tenths of 1 per cent. of the total. That was the grand bonanza calculated to end the dispute.
Last week it emerged that the employers had found that they had added up their sums wrongly. There were reports that the 7–3 per cent. offered over 16 months was really worth 8·5 per cent.—or was it? The Daily Telegraph clarified the matter by reporting:
"Differing figures for water rises 'all correct."
A Water Council spokesman improved the shining hour with this explanation:
"We claim there was never a mix-up anyway."
No wonder ACAS said last week in a statement:
"Expectations raised by certain statements made to the media by the employers, and subsequently dashed, have not made the negotiations easier and have prejudiced the prospects of a settlement."
No wonder that the Prime Minister's favourite newspaper, The Sun, put the matter with its customory elegance when it said in a leading article:
"What a shower of wets are in charge of the water industry! It is difficult to imagine anyone making a bigger mess of pay negotiations."
I have great sympathy with the employers' negotiators. They are honourable men. Left to themselves, they would have reached a negotiated settlement months ago. The culprits are pinpointed in that same leading article in The Sun, which states:
"The farce began last November when a six per cent. offer had to be withdrawn because it did not have Government approval.
Sir Robert Marshall, whom the Secretary of State ejected from his post as chairman of the National Water Council, said recently that the Government's interference in the affair had created an impossible negotiating position. It is impossible for employers to negotiate
26
sensibly when they are harried and harrassed by Ministers, and when they are even called in and instructed on how to conduct an extremely expensive propoganda campaign.
The Government have always had it in their power to enable the dispute to be sensibly brought to an end. Sir William Dugdale, the present chairman of the National Water Council, said frankly that
"when Governments want disputes settled they want disputes settled … if you elect a Government they call the shots, and I'm a loyal servant of every successive Prime Minister who I work for. If they say do this I endeavour in my humble way to deliver it".
The Secretary of State has become a great advocate of arbitration in the dispute. His Cabinet colleagues were not such devotees of that procedure during the National Health Service and Civil Service disputes. They flatly turned down arbitration and would have nothing to do with it. Of course, one problem is that the Government are completely unwilling to play any active part in bringing the dispute to a speedy and honourable conclusion. As we know, their contacts with the employers have been mainly to urge them to be recalcitrant. They have had no contact at all with the unions.
During the three years and nine months since May 1979, neither the present Secretary of State nor his predecessor have once met the unions in the water industry to discuss its problems and prospects—not even when a major reorganisation of the industry had been embarked upon. Most people would think that the Government would have wished to consult the workers representatives about the reorganisation, yet there was no prior consultation at all. Indeed, it has been the Opposition who have sought to maintain a dialogue with all those involved in this vexed dispute—the unions, the employers and ACAS.
The unions have declared that they wish to have the problems of their industry considered by a third party. They have discussed with ACAS the possibility of establishing an independent inquiry. Talks to help bring about such an inquiry proceeded throughout the weekend. The key issues have been the terms of reference of the committee of inquiry and the attitude of the parties to its outcome. The Opposition have been in close contact with developments, and during the past few hours I have spoken to all the parties involved. As a result, I can tell the House that I believe that, with good will, it might be possible to resolve the dispute speedily.
The trade unions said last Wednesday that had the employers been willing to proceed to an inquiry the dispute could have been settled within a matter of days. It could have been settled by today. Both sides have now agreed to a committee of inquiry under the auspices of ACAS. The unions are willing to go to the inquiry without conditions. They have given assurances committing themselves to the resolution of the dispute by that process. Those assurances have been given by all the unions concerned and represent their committed view. It is the employers who are laying down conditions which, if insisted upon, could jeopardise the inquiry proceeding to a speedy conclusion.
With good will, it could be possible to proceed quickly to set up the committee of inquiry. The trade unions are ready to be forthcoming in a manner that would be of great assistance—
Mr. Tony Durant: I have listened closely to the right hon. Gentleman's speech. He

27
obviously feels that he is in close contact with the trade unions. Will he say whether they will honour any agreement that is forthcoming? Will they honour its terms without question?
Mr. Kaufman: I shall repeat the words that I have spoken with great care today. The unions are willing to go to an inquiry without conditions. They have given assurances committing themselves to the resolution of the dispute by that process. Those assurances have been given by all the unions concerned and represent their committed view—[Interruption.] Do Conservative Members not want a settlement? If they doubt the good word of the trade unions, that is in line with the way that they have neglected them and the way in which the Secretary of State for Employment has insulted them during the past months.
I repeat that the trade unions are ready to be forthcoming in a manner which I believe will be of great assistance. The Secretary of State must tell the House that the National Water Council will be similarly forthcoming. If he does not, he and it will carry a heavy responsibility. If he does, and seeks to match the efforts of others, important progress could be made.
I hope that what I have said today will help to lead to a speedy settlement of this vexed dispute—[Interruption.] If that is the attitude of Conservative Members, they will carry the responsibility if the dispute is not resolved.
There has been some disposition to write off the workers' action as ineffectual and to say that the country can continue indefinitely despite the action. I reject that view. The only reason why exceptionally disturbing consequences have not already occurred is the unions' code of practice, which places great stress on avoiding action that prejudices public health and safety, and requires them to make every effort to avoid banning the health of consumers.
Because the unions have carefully adhered to that code, the strike has been far less effective than it might have been. It is the Prime Minister's puritan ethics in practice. Even so, the water system is deteriorating day by day. More people are being deprived of their water supply and many more cannot be sure of its purity. The pollution in rivers is causing great anxiety.
I hope that what I have said today will help to bring about an early and honourable settlement and that industrial relations in the water industry will return to where they were before the Secretary of State's dangerous intervention three months ago.
3.58 pm
The Secretary of State for the Environment (Mr. Tom King): I wish immediately to pick up a comment made by the right hon. Member for Manchester, Ardwick (Mr. Kaufman) in his closing remarks. He said that some people were writing off the industrial action as ineffectual. I want to make it clear to the House that I am certainly not one of them. People are, at this moment, standing on icy paths, with buckets in their hands and possibly at frozen standpipes. It does not, therefore, behove the House to say that the action is ineffectual. I regard it as extremely serious. Many people are affected by it—whether by lack of proper water supplies, by the need to boil water as a precaution or by the deterioration of the quality of effluent and sewage works. I regard each of those as serious consequences of the action.
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I welcome this emergency debate, and I say to the right hon. Gentleman—because I do not believe that this is a day for spending all our time scoring political points—that I accept the second part of his speech as a genuine attempt by him to approach a difficult problem. I hope that our debate today, in the time provided, will offer a serious opportunity to address serious issues, and that it will not be seen as merely an opportunity to score points. The country expects more of us than that.
May I say a word about the general position. The latest information about the number of properties without a mains supply has now risen to around 54,000. That means that about one property in every 500 now has to rely on supply by either standpipe or tanker. There have already been far too many cases of hardship caused to groups of people who are least able to look after themselves. About 7·5 million people are now advised to boil water intended for human consumption. In some places, this is because chlorination has stopped; in other places, it is as a precaution. The water authorities will continue to monitor closely the quality of water put into supply. Wherever there is the slightest reason to doubt the quality, precautionary measures will be taken. In a small number of areas, the cessation of normal chemical treatment has led to water authorities reporting higher levels of lead. Where such a problem exists, there is close monitoring, and full advice is given to protect consumers.
So far, the effects on industry and agriculture have been relatively small, although I know that for some—farmers and some industries—it has posed real problems. Some firms have been asked to reduce consumption, and others have had to take special measures to overcome shortages in supply. There have been a very few closures. The effect of the deterioration in sewage effluent has been modified by the dilution of higher river flows, but while some streams are polluted, there have been no serious effects yet on rivers. However, there have been one or two incidents where it is feared that pollution has killed fish.
To a large extent, the limited impact of the strike reflects the considerable effort of many workers in the water industry who have made exceptional efforts to maintain supplies and level of service. I pay tribute to the management and staff of the water authorities and water companies who have worked so hard over recent weeks. I want to say, with all the authority that I can from this Dispatch Box, that the best tribute that the public can pay to them for those efforts is to give the greatest attention to economy in water use at present. The House will be aware of the words of the chief executive of the Thames water authority, the largest water authority in the country, and I hope that those words will be heeded both in that area and throughout the country.
I also want to thank the manual workers who, in spite of the strike, have recognised their obligation to safeguard public health and safety and who have carried out a number of emergency repairs. Without in any way derogating from what I said about the people who have helped, I should add that there have also been a number of serious examples of hardship and distress. Those examples have been caused by what I would call rather narrow and unfortunate arguments about the exact extent of emergency cover. In my view, it is not acceptable for union officials to threaten or carry out the withdrawal of emergency cover—to which they are committed under their national agreement—from people who are quite

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unable to defend themselves. I hope that a spirit of generosity will be shown in the interpretation of such events.
I shall now describe the sequence of events in this dispute—which the right hon. Gentleman also sought to trace—that have brought us to where we are today. First, I want—not to correct him, because I am sure that the right hon. Gentleman sought to put the matter into the correct context—to remind the House that the issue of what is called the upper quartile, the top quarter of average manual earnings, is not something that suddenly arose with the presentation of this year's pay settlement. The issue has been around for a considerable time. Early in 1982, as part of the last pay settlement, it was agreed between the trade unions and the employers that there would be talks, without commitment, and on a basis of mutual benefit, about improving the relative position of manual workers' earnings. I hope that the House will note carefully those words. The trade unions and the employers met on three occasions to discuss this matter in the summer of 1982. The unions made proposals for parity with the upper quartile of manual earnings. The employers put forward counter-proposals for increases in earnings, in return for specific agreements on changes in working practices, and other cost savings. They rejected the demand for upper quartile parity. No progress was possible in those informal discussions. Already in September—the House will note this—there were press reports of
"increased militancy among members of the GMWU and a new readiness among its leaders to take industrial action over pay this year."
That was last September.
At the third meeting in September, the unions tabled their full pay claim. The unions then combined their aspirations to rise to the top 25 per cent. of manual workers, with a claim for increases relating to their annual pay settlement, due in December. The employers undertook to consider the claim and to respond at the next agreed meeting of the National Joint Industrial Council in November, in accordance with normal procedure. The union response was to call a one-day official strike. That took place on 21 October. It was the first official strike ever to take place in the water industry. It occurred more than six weeks before the settlement date.
In November, the employers responded to the initial claim with a pay offer of 4 per cent. Following the rejection of this offer by the unions, the employers, in accordance with the National Joint Industrial Council constitution, proposed to refer the differences to arbitration. The unions refused, despite the national agreement, clause 12.
Early in January, the trade unions called for a ban on overtime, and then an all-out strike. Immediately before the strike began, the Advisory, Conciliation and Arbitration Service contacted both sides and agreed a procedure to resolve the dispute. Copies of this agreement are in the Vote Office. The House knows that this agreement was signed by the chairman and secretary of both the employers and unions, and witnessed by Mr. Lowry, the chairman of ACAS.
Moreover, Mr. Lowry wrote on the same day to both sides, making clear the various points in the agreement, so that there could be no possible ambiguity. Copies of this letter are also in the Vote Office. The agreement provided for negotiations in good faith under an independent chairman. A chairman, Mr. Buchanan, was appointed by
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ACAS, with the agreement of both parties. It was agreed that when the chairman was satisfied that proper negotiations had taken place, and if there was still no agreement, he could then intervene, in the role of a mediator, with proposals for a settlement. The agreement also stated that if this stage did not result in a settlement recourse should be had to arbitration. It was agreed that the arbitration should be in accord with the NJIC agreement, to which both sides had previously subscribed.
To underline the nature of the agreement, the chairman of ACAS, Mr. Lowry, wrote to both sides making it clear that in the circumstances of disagreement either party would have the right to seek arbitration and the other would have the obligation to respond. As I said, copies of the letter, which will be familiar to many right hon. and hon. Members, are in the Vote Office.
In the discussions which followed under the independent chairman, Mr. Buchanan, the employers increased the pay offer, first to 5 per cent. and then to approximately 5·8 per cent. No agreement resulted and the independent chairman, in accordance with the agreement signed by both sides, assumed the role of mediator. After listening to the arguments in some detail, he made three specific recommendations.
First, he did not support any increase to bring water workers into the upper quartile of the manual workers national earnings scale. He recommended against any increase that would restore the relative position of water workers in the earnings league to some previously prevailing position. Secondly, he recognised the strength of feeling on the part of the water workers about their wage position and recommended both sides to explore, and rapidly proceed to implement, possibilities for increases in earnings opportunities. He referred to administrative efficiencies by moving to the payment of wages by credit transfer and to the development or extension of the performance-related bonus schemes. Thirdly, the mediator recommended an increased offer of 7·3 per cent. to be effective for 16 months. He also proposed to more than double the long service supplement, for which 65 per cent. of manual workers qualify.
Within 24 hours of the mediator's report the employers accepted the recommendations and made an improved offer to correspond to the proposals in the report. However, the unions then rejected the mediator's report. That, as was also clear in Mr. Lowry's letter which hon. Members will have read, was not binding upon them. Subsequently, they rejected the improved offer by the employers for increased productivity earnings which, of course, occurs under paragraph 8.
The unions were asked for, but were not able to make, any proposals of their own for cost savings that could lead to increased earnings. They made no proposals for changes in working practices that might earn such productivity payments. However, that is not the end of the story because Mr. Lowry's procedure, and that of ACAS, specifically allowed for the possibility of failure to agree at that stage. The ACAS agreement had also contained a specific clause acknowledging that the procedural rights and obligations set out in the NJIC's constitution would be respected. Clause 12 of that constitution gives both parties in a dispute the right to evoke the final stages of the procedure—arbitration—as a last resort.
I have quoted to the House before an important sentence from Mr. Lowry's letter but I make no apology for

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repeating it. The third sentence of the clause deals specifically with the possibility of arbitration as the final stage in the procedure. Mr. Lowry went on to say:
"In the absence of any intervention by either side when I was making these points the parties have signified their agreement with them."
Therefore, the employers formally requested the referral of the dispute to binding arbitration.
On 9 February the unions said that they would not accept arbitration. Instead, they sought a non-binding committee of inquiry. Not unexpectedly, given the experiences of recent weeks and months, that was not acceptable to the employers. They had seen the agreed procedures rejected, the constitution ignored, and they had been subjected to severe industrial action. In those circumstances, the House will understand why the employers are most anxious to see that any further stage in the dispute will be entered into on the clear understanding that the findings of either an arbitrator or an inquiry must be accepted by both sides.
Mr. Dennis Skinner: The Minister says that the decision of the committee of inquiry must be binding. Does he recall that when, in 1972, the last Tory Government took on the miners the Wilberforce inquiry was set up, to deal with matters quickly. The NUM did not accept the terms of the inquiry. As a result of the findings of that inquiry—which were not bad; they were the best that the union had had for some time—the union went along to 10 Downing street and knocked out of Ted Heath another dozen concessions. Any union worth its salt would not accept the terms of an inquiry beforehand because if it did the inquiry's judgment would be based upon that. Therefore, it is in the union's interest not to accept the terms beforehand, just as the NUM did in 1972.
Mr. King: If I thought that the conduct of responsible union leaders in Britain was dictated by the hon. Gentleman's attitude I would be very worried indeed. I worked in industry all my life before coming into the House. I worked in the printing industry, which is hardly a non-union shop industry, and I was well trained by many union leaders who drove some hard agreements with me. However, it was made clear that once those agreements had been made they took a pride and responsibility in seeing that they were honoured.
I have in my hand the national agreement for the water industry—the terms and conditions of service. I am sure that the hon. Gentleman will have read clause 12, as I and, I hope, most hon. Members have. I hope that on reflection it will be seen that it is necessary that that should be followed.
Mr. Den Dover: Will my right hon. Friend explain to the House why the unions rejected binding arbitration and are asking for a committee of inquiry?
Mr. King: I shall come to that in a moment.
I have now made four statements to the House about this dispute. In the last three, on 1 February, 3 February and 10 February, I said that there were two options to achieve an end to the dispute and to secure an immediate return to work. The first option was to follow the mediator's recommendations. The second was to honour the agreement through ACAS and to follow the terms of the national agreement by going to arbitration. If the first
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is not acceptable—that is a judgment that must be reached by both parties—the second remains. That provides a sensible procedure for resolving the dispute and it should be honoured.
I want to put the dispute and the issues around it in the context of the present. The House will have noticed that on Friday the Chancellor of the Exchequer announced that the current rate of inflation is 4·9 per cent.
Mr. Skinner: Temporarily. It will not be soon.
Mr. King: The offer at present before the water workers as recommended by the independent mediator is 7·3 per cent. over 16 months. To those 65 per cent. with long service that is equivalent to an offer of 8 per cent. That is against what I do not think it would be a distortion to describe as a union claim of the order of 20 per cent. That rather gives the lie to the somewhat facile comment that I have heard in some places that an opening offer of 6 per cent. would have saved all this trouble.
I, as well as any hon. Member, can understand a comment that was made by Mayor John Lindsay of New York who, on one occasion, found himself faced with a sewerage workers' strike. He was asked whether he thought it was good for his personal reputation to stand up vigorously for the rights of the New York people against what was thought to be an unreasonable demand. The mayor made the fairly perceptive comment that no one would come out of a sewerage workers' strike smelling like a rose.
In this situation—whether it be the Government, the Opposition, the water authorities, the unions, the people who are suffering hardship and distress, industry, people whose jobs are now threatened, firms that may close never to reopen, the general consumer or Britain's reputation—all of us have something to lose and all of us have a stake in seeing the dispute settled at the earliest possible opportunity. It threatens jobs, health and safety, future employment and the security of many people. It also threatens the important position of ACAS, which was set up by the previous Labour Government and which is supported by this Government. It is faced with a very difficult problem.
The dispute has not become unnecessary. Whatever other figures have been challenged, the figures that I am about to give have not been challenged and reveal an average increase for those concerned of more than £10 a week. Given the economic and industrial world climate, that is a not unreasonable offer. The value of that offer is very real to the water workers, and they, as well as pensoners and everyone else, have an interest in ensuring that inflation does not rocket up again as a result of a series of higher and higher claims.
Mr. Les Huckfield rose—
Mr. King: The proposal has been made by an independent mediator. He is not some fly-by-night mediator whom no one has ever heard of. Today I checked on Mr. Buchanan and asked how many other arbitrations he had done. I am told that between 1972 and 1981 he carried out no fewer than 66 arbitrations. I assume, therefore, that he must have been continuously acceptable to the unions. Thus, 66 arbitrations proved acceptable, but sadly the sixty-seventh proved unacceptable.
However, that is not the end of the matter, because there is another procedure for settling the dispute. The

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crucial factor is that that procedure is not being followed. On Friday, I was asked on "The World at One" whether the unions were dishonouring their agreement. I hope that the House will concede that I have sought at all stages and in my statements to the House not to inflame the situation, but to find a way in which this damaging dispute could be sensibly resolved. I did not accept that question. I do not regard the agreement as being dishonoured, but in my judgment, and that of the vast majority of people, it has not yet been honoured. It is important that it should be honoured at the earliest possible opportunity.
Mr. Leslie Spriggs: Will the right hon. Gentleman now answer the charge which was put to him by my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) that he stopped the offer of six per cent.?
Mr. King: The stories that I have read suggest that I said that four per cent. and nothing more could be offered. I think that the House knows that on that first day of negotiation the offer was four per cent. and almost immediately—perhaps within an hour, although I do not know the exact time—the employers decided, on their own initiative, to offer arbitration once it had been made clear to them that that offer was not acceptable. They were familiar with the background of the dispute and with the long-standing problem over the upper quartile and decided that the gap was so enormous that arbitration was the most sensible way to proceed.
Mr. Denis Howell rose—
Mr. King: I should like first to reply to the very important and constructive point that has been made. The right hon. Member for Ardwick has made a constructive effort—which I take at face value—to resolve this difficult problem.
Obviously ACAS is more than willing to help to resolve this difficult problem. I have made it clear that we believe that the national agreement should be honoured. Indeed, I draw the attention of the House to its wording. It deals with the first point raised by the right hon. Member for Ardwick, and states that the difference should be referred to ACAS, or to any other agreed tribunal for arbitration. That is contained in the national agreement and that is the position on which we stand. As the remaining part of the sentence states, a settlement must be on the basis that any award made in relation to the difference is accepted by the two sides and is treated as though it were an agreement between the two sides.
Different forms of words may be conjured up and they may or may not sound more or less the same, but the issue that must be faced is whether that form of words will be accepted. We can continue with semantics and clever legal phrasing, but the real question is whether those agreements are accepted, whether the agreement will now be honoured and whether the findings will be accepted.
That is the right way to proceed. The terms of the national agreement were, I am sure, signed in good faith by union representatives, just as I am sure that they signed the agreement witnessed by Mr. Lowry on 21 January in good faith, and that must be honoured. The problem is difficult, but it is high time that the water workers stemmed their loss of earnings—and the losses are becoming very substantial—and that the dispute was
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ended for the health of the industry and its tradition of service, and for the health of the country and its dependence on proper and efficient water supplies. That is the way forward. That agreement provides a route to the solution of the problem. My earnest plea is that the position should be sensibly considered and that this serious dispute should be resolved at the earliest possible opportunity.
4.26 pm
Mrs. Shirley Williams: I very much welcome this debate. As you know, Mr. Speaker, I pressed for it several times earlier last week and during the previous week. I welcome the debate for two reasons. First, as the Minister and the right hon. Member for Manchester, Ardwick (Mr. Kaufman) have said, we are daily running the risk of fatalities as a result of the effect of the dispute on public health. Only today one of the water industry's senior managers said that he prayed every day that there would be no fatalities in his region because of the pollution of the rivers. Secondly, the industry has been marked for many years by extremely good relations between the unions and management. It is a tragedy that this industry should today be marked by growing suspicion and distrust between the two sides.
The House has been given two somewhat partial accounts of the events that led to the breakdown of negotiations in the water workers' dispute. I have no interest to declare, but it must be said—if we are attempting to be fair—that the employers did themselves no good by implying that increases of £5 to £10 per week would be available to the water workers over and above the 7·3 per cent., and by subsequently revising the mathematics of their offer to show that it was not 7·3 per cent. but 8·5 per cent. Understandably, those two admitted mistakes by the National Water Council have led to a growing lack of confidence in its ability to negotiate sensibly and aptly.
I noticed how carefully the Secretary of State avoided directly answering the question raised by the hon. Member for St. Helens (Mr. Spriggs). He must recognise that the National Water Council's decision last October to make an offer of 6 per cent.—which was considered for several hours and which was about to be made to the water unions—was suddenly changed to an offer of only 4 per cent. That change is widely believed to have been due to the Minister's intervention.
I do not blame the Minister, because he happens to be a member of a Government who consistently say that they do not believe in any public sector incomes policy, but who have one in practice. We all know that they have one. It is to make public sector income settlements match an unwritten norm. The Labour party must also admit that the unwillingness of the unions to abide by an agreement which they have signed, in conjunction with the chairman of ACAS, will make such arbitration agreements the subject of great distrust.
One must acknowledge that there were faults on both sides, but the unions—despite the distrust which I recognise existed and which was held in their minds—should have been willing to carry out the terms of the agreement which they signed.
The Minister referred to the talks last summer between the National Water Council and the unions. They dealt with productivity and whether efficiency measures could be taken which would benefit the manual workers and have

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corresponding benefits for consumers and managers. The talks were about comparability. The Minister said—and he was telling the truth—that the unions decided to end the talks. But he left out an important fact—on 7 July the Government announced the disbandment of the National Water Council and said that they would no longer require the services of the then chairman, Sir Robert Marshall, who had the confidence of both sides. The Minister did not mention that, but it was a significant reason for the breakdown of the talks. It is time that it was said in the House that there were faults on both sides and that those faults led to a lack of trust and to the present bad relationships.
I believe that five steps would bring an end to the dispute. I say to the right hon. Member for Ardwick that the obvious duty of anyone who wishes to speak seriously in the House on the matter is to be in touch with both sides. Like him, I have been in touch. That is no great deal. It is the minimum that any hon. Member would do. I stress that on both sides of the House hon. Members want nothing more than to see the dispute honourably settled.
The first step is to set up a committee of inquiry acceptable to both sides. I understand the Minister's support for arbitration, but one must admit that that is not likely to be acceptable to both sides now. A committee of inquiry would have to work as quickly as the committee of inquiry into the complicated steel dispute three years ago, which completed its study within two days.
Of course, secondly, there must be agreement on the committee's terms of reference. It is clear that the terms must include an examination of comparability, because the water unions feel strongly that they have the right to bring that issue before a committee of inquiry. The terms of reference should also include consideration of productivity and of flexible working, which the employers have brought to the fore. Thirdly, I hope that the Minister, or the Under-Secretary of State, will repeat in this debate that there will be no interference of any kind by the Government with the employers' evidence or with the findings of that inquiry. That would be helpful. I believe that a formula under which both sides would agree to honour the inquiry's findings and recommendations might bridge the gap between the two sides, if I understand their positions correctly.
I say, lastly, to the Labour party and trade union representatives that I hope that if we have an independent committee of inquiry, which will report quickly, the unions will find it possible to resume work or, at the very least, to accept full emergency cover with no question of its being withdrawn in any part of the country.
The House should take full note of two lessons from the dispute. The first is that our water and sewerage system is in a desperately frail condition. Hon. Members will have seen in The Times this morning the estimate that the cost of repairs required as a result of the failure to maintain the system for nearly a month will almost certainly exceed many times the full cost of the union's claim. That does not mean that the union's claim should be conceded in total. It shows how near the edge our water and sewerage system now is.
The system is kept going by dealing with collapses, emergencies, mains bursts and broken sewers. Because of unwise economies in recent years, the system has not been subjected to any planned modernisation schemes. The
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National Water Council believes that about £100 million more investment a year is the basic minimum needed to keep the service at a reasonable standard for public health.
Mr. Skinner: The right hon. Lady was a Minister for 10 years and did nowt about it.
Mrs. Williams: There has been a drop of 36 per cent. in water investment since 1979, and the hon. Member for Bolsover (Mr. Skinner) should know that.
Mr. Skinner: Hypocrisy.
Mrs. Williams: The hon. Gentleman does not understand facts.
I underline the following facts. The electricity workers have made a claim for a substantial pay increase and for shorter hours. Local government manual workers only this morning rejected a 4·5 per cent. settlement by a ballot showing a vote of 3:2 against the proposal. Coming fast down the track is a major crisis for the Government in public sector pay.
I conclude with a few words to each side. To the Government, who are pretending that there is no incomes policy for the public sector, I say that they are doing neither the Government nor the country any good. There is a public sector incomes policy. It would be better if it were brought out into the open and if attempts were made to reach binding agreements, with arbitration, and with a formal recognition of the Government's interests.
To the right hon. Member for Ardwick I say that when he quoted the mediator's report he underlined paragraph 6, but failed to draw the conclusions from it. The mediator said:
"I consider the water workers through this adverse movement in relative position, to have been the victims of wage inflation elsewhere in the economy and of the recession, on the other hand."
There is no disagreement about the recession. If the party to which the right hon. Member for Ardwick belongs believes that the comparative position of the water workers has worsened as a result of wage inflation elsewhere in the economy, as the mediator said, it is high time that he followed the logic of his own argument at the Dispatch Box and recognised the need for an incomes policy.
4.39 pm
Mr. Tony Durant: I intervene briefly to to make one or two points. I followed the speech of the right hon. Member for Crosby (Mrs. Williams) very closely and I should like to put one point to her. If she wants large-scale investment in the water and sewerage industries, which I agree is necessary, she cannot have it both ways. Where will the money come from? One cannot necessarily have higher wages and greater investment. That is the problem facing the industry.
It is an important industry. All of us are concerned about the strike and are worried about its continuation. We hope that a settlement can be achieved as soon as possible.
There is some confusion in the press about water workers and sewerage workers. I should like to point out that about two thirds of sewage processing is carried out by local government manual workers who are not involved in this dispute. Therefore, we are discussing the water workers and not necessarily the sewerage workers. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) quoted the Daily Express. I think the Daily Express got it wrong when it quoted the sewerage workers.

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My constituents cannot understand why, when a mediator with whom both sides agreed to meet, came to a figure the unions did not agree to it. As this was agreed by both sides, why did they not go along with it?
The Government have an interest in wages. There is no point in our pretending that the Government have no interest in local government or national Government workers. The Government have such an interest because they are involved in the financial aspects of these industries and they must make some reaction to the negotiations. It is not surprising, therefore, that the Government have some interest in the matter. Wage levels are crucial to inflation, and the Government set out as their main plan the combating of inflation.
I have many dealings with private industry in which, today, most settlements are running at 2½ per cent. The people in those industries, some of which use large quantities of water, feel a little put out by the fact that they are prepared to settle at 2½ per cent. because of general national circumstances, while other workers in safe and reliable jobs are offered 7·3 per cent. but are not prepared to settle. They find that worrying and puzzling and ask why they should be expected to settle at 2½ per cent.
Not everyone in the union favours the strike. Chaps in the industry who want to go back to work have been in touch with me this weekend. They said that the only reason why they are not prepared to go back to work is that the industry is a closed shop. They have been threatened that if they go back to work they will lose their cards and their jobs. The last phrase they used to me was "We want to go back to work." That is another aspect that must be considered. Is it right that those people should be forced to go on strike when they do not want to?
We have seen reports in some of the newspapers about the use of contractors. It would be helpful if the House knew the exact legal position. In a report today, The Daily Telegraph said that, according to Lord Denning, it is legally permissible to use contractors. It would be helpful to know the legal position.
The use of a strike weapon by an industry of this type is out of date. By now we should be solving these problems more sensibly. Who does the strike hurt? It hurts not the employers but the old and the sick and young families. The water workers are hurt because they immediately lose money. Some of them have mortgages, children and so on. They are equaly vulnerable.
I urge the unions to consider whether it is time to go back to work, and to take the committee of inquiry as a basis of discussion. I intervened during the speech of the right hon. Member for Ardwick, who appears to have been in close touch with the unions today, who implied that the unions would accept the findings. I have before me today a document sent by the National Water Council to all hon. Members. I shall use its words rather than my own. Under the heading "Arbitration", it states:
"During the negotiations the Employers have asked for arbitration on three separate occasions in accordance with the National Agreement. The Trade Unions have steadfastly refused this. Instead they have offered a court of inquiry but have not committed themselves to its findings."
I received the document today. I cannot act on any more than that, although the right hon. Member for Ardwick seemed to imply that the unions might accept the findings. We ought positively to know the answer. If we are to go to the great trouble of an inquiry, it should be binding on all parties or there is no point to it.
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I urge the workers to take this matter seriously, to go back to work and to settle the matter through a proper, well-run inquiry.
4.44 pm
Mr. Reg Race: We have today heard some extraordinary speeches from right hon. and hon. Members. The Government have only themselves to blame if the water workers do not trust their words. After all, this is the first Government in the history of this country who have managed to engineer a strike in the water industry. It is the first time ever that this group of workers has been on strike. The Secretary of State should reflect on that, because it is of significance.
The most significant part of the dispute is the way in which the Government have intervened in the negotiations and the discrepancy of view between the employers and the trade unions on whether serious and proper negotiations have taken place. We know, not from the unions, but from the National Water Council through its former chairman, that it was, Ministers who telephoned to tell the water council to reduce the offer that was to be made.
Relationships in the industry between employers and the trade unions have traditionally been cordial. Trade union negotiators have consistently argued that relationships with the employers were better than elsewhere in the public sector and that there was a certain degree of trust between the trade union and employers' sides, a trust which was broken by the Government's intervention last October and November when they instructed the National Water Council to reduce the offer that it was to make and which it had intimated it was going to make. That prejudiced the negotiations.
The Secretary of State told us today that the employers asked for binding arbitration very shortly after the 4 per cent. offer was made. They asked for binding arbitration after their first offer. What they were really trying to do was to suggest that there was a small difference between their position and that of the trade unions. There was not a small difference between the positions at that stage, because the trade unions had submitted a claim for comparability with the gas and electricity workers, a claim which had not been properly dealt with over a number of years. Therefore, there was a substantial difference between the two positions.
Both at that time and since the trade unions have argued that, because of the Government's intervention, and because of the failure of the employers to deal properly with the issue of comparability with gas and electricity workers, the negotiations had not been properly and seriously conducted by the employers. That is why the trade unions have consistently said that they are not prepared to go to arbitration and have a restriction placed on the issues that the arbitrator can consider.
Mr. Anthony Beaumont-Dark rose—
Mr. Race: If the hon. Gentleman will allow me to develop this point, I shall give way in a moment.
What is crucial is that arbitration has been asked for on a number of occasions by the employers, but the trade unions want all the relevant factors to be considered. An arbitrator might simply consider the labour market conditions in this country. He might not consider very

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seriously the employers' ability to pay. The water industry is highly profitable. When trade unions are establishing a claim for an improvement in wages, they consider the employers' ability to meet the claim. We know that over the past year the employers made profits amounting to £189 million. Therefore, the industry's ability to meet an increase in the wages paid to its workers is extremely high—
Mr. John Townend rose—
Mr. Race: —especially when we consider that labour costs are a small proportion of the industry's total costs.
Mr. Beaumont-Dark: Is the hon. Gentleman aware that, according to the published figures, the water workers have done better than the miners and local government workers over the past three years, and marginally better than gas and electricity workers? The water workers are not hard-pressed employees who keep on falling behind. Does the hon. Gentleman agree that they are trying to shove and push themselves to the top at a very difficult time?
Mr. Race: As usual, the hon. Gentleman does not know what he is talking about. Average earnings in the water industry are lower than the national average for manual workers. The hon. Gentleman is wrong. Gas, electricity and water workers are all previous employees of local authorities and until 1974 they had virtually the same rates of pay. Since then, major differences have been created and the electricity and gas workers have had increases which have been substantially more than those achieved by the water workers.
Mr. John Townend rose—
Mr. Race: No, I shall not give way. I want to pursue my argument.
Mr. Skinner: The hon. Member for Bridlington (Mr. Townend) has 12 directorships.
Mr. Race: The costs of settling the dispute would be microscopic compared with the Government's public sector borrowing requirement and in terms of consumers' bills. It has been estimated that settling the claim in full would cost an extra ½p a day for the average family. The overall cost of the claim is only £40 million, and the industry's profits were £189 million. It is absurd that we have reached the position where the Government are saying to water workers that they cannot have a modest increase in pay this year and, in effect, that they would prefer the workers to go on strike. It seems that the Government want a confrontation.
Mr. Beaumont-Dark: Is 20 per cent. a modest claim?
Mr. Race: The hon. Gentleman should remember that the water workers have lost ground since 1979. Like many other groups, they have fallen behind when account is taken of increases elsewhere, especially the increases that have been given to company directors and others over the past few years. I hope that the hon. Gentleman will not forget that during the last election the Conservative party pledged itself to cut taxes for the low-paid and for those on average earnings. Does he remember that during the 1979 campaign the Prime Minister said that it was an article of faith to cut taxes for those people? What has
40
happened? The hon. Gentleman and his right hon. and hon. Friends have voted to increase taxation for the low-paid. They have increased taxation for those on average earnings. Only those who are on five or 10 times average earnings have seen their taxes reduced. The hon. Gentleman has no real argument. He has voted to increase taxes for the low-paid and for those on average earnings and he should not expect them to do other than try to maintain their living standards. I am sure that he does not expect them to do otherwise.
I am a member of the National Union of Public Employees and I am proud to be sponsored by it in this place. NUPE wants an inquiry into the way in which the dispute has been handled. It wants an inquiry that will consider all the relevant factors and take into account the pay of gas and electricity workers and the ability of the employers to pay. It wants it to exclude from its consideration factors such as the impact of mass unemployment in the market place. If we wish to set a correct rate of pay for the job, it is absurd to tell workers, "You cannot have an increase in pay because all those outside the gate want your jobs and are reducing the value of the work that you do."
The findings of the inquiry should not be binding on both sides in advance. The Wilberforce inquiry's findings were not binding on both sides in advance. Similarly, other industrial relations inquiries' findings have not been binding in advance. If an inquiry is conducted speedily and a conclusion is reached in a matter of days, as is necessary, it is crucial that the National Joint Industrial Council should have the ability to firm up the results at the end and to reach a negotiated settlement. That is a reasonable way of settling the dispute.
We should have in mind the position in which the workers find themselves and the work that they do. The water workers' jobs are not confined to purifying the water that we all drink. These people wade through raw sewage up to their waists to keep the sewers free. They are the people who have to fish out the dead dogs and the dead bodies that are found in the reservoirs. They are the people who maintain the filter beds to produce clean and pure water for everyone.
The Secretary of State showed his ignorance when he told me that the sewerage workers were not really involved because they are local authority employees. The local authority workers are doing the same jobs as the water workers because they are subject to water industry contracts. They are part of the same negotiations. The right hon. Gentleman did not know what he was talking about.
Mr. John Townend: The hon. Gentleman does not know what he is talking about.
Mr. Race: We must recognise the important job that the water workers and the sewerage workers perform for society and ensure that an inquiry is set up as soon as possible. The inquiry should have terms of reference that bring in the factors which the trade unions want to discuss with the employers. We must put an end to the nonsensical view that there have been proper negotiations already.
The ACAS statement has been widely quoted, but one crucial sentence has not been drawn to the attention of the House. It reads as follows:
"One party considers that the bargaining has been conducted in good faith and the other does not."

41
That is the crux of the matter. The employers, on the Government's instruction, have reduced their wage offer. They have placed themselves in difficulties and they have tried to get binding arbitration, but the trade union side does not believe that the negotiations have been free and unfettered, as they have been in the past to a certain extent. They believe that great pressure has been put on the employers by the Government. It is that pressure that has produced the first national strike in the history of the water industry. If anyone is to blame for the present circumstances, I suggest that it is the Government.
4.59 pm
Mr. Douglas Hogg: The hon. Member for Wood Green (Mr. Race) reminded us that he is a sponsored member of NUPE. Sponsored Members usually take some care to present an accurate account of the relevant facts. I listened to the hon. Gentleman's speech with some care and I find that his adherence to accuracy must be called into question.
As I understood the hon. Gentleman's speech—some parts of it were quite unintelligible—his principal contention was that the water workers had been treated badly as compared with other workers in the public sector. I expected him to let us have some figures. I expected him to answer robustly when my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) pointed out that he was wholly wrong. When it came to figures and facts, the hon. Member for Wood Green was as silent as he normally is. The reason is that the hon. Gentleman's basic proposition—that the water workers have done worse—is simply untrue. I shall tell the House how untrue it is. The figures are well known and certain.
Mr. Skinner: Is the hon. Member for Grantham (Mr. Hogg) aware that at the weekend there was an illustration of a water worker whose pay packet, based on a normal week's work less tax, amounted to £58·50 for a five-day week? I suggest that that water worker's pay has fallen behind that of Mr. Len Hill who gets £19,000 for three and a half days a week and Sir William Dugdale who gets £30,000 for working for a water authority for four days and who works for someone else on other days. It is certainly less than that of the hon. Member for Grantham who picks up his salary as a Member of Parliament and God knows how many thousands of pounds for working in the courts before he comes here.
Mr. Hogg: I am not surprised by what the hon. Member for Bolsover (Mr. Skinner) has said. He hoped, no doubt, to divert me from giving the figures that I shall now quote. [Interruption.] He obviously hoped that, as a result of his intemperate intervention, I should not embarrass his hon. Friend—[Interruption.] Nevertheless, I assure him that I shall embarrass his hon. Friend.
Mr. Speaker: Order. May I say once again to the hon. Member for Bolsover (Mr. Skinner) that he was heard in silence. The House listened to what he had to say. The least he can do is to show some good manners and listen to other hon. Members.
Mr. Hogg: I shall give the figures for 1979–80. In that year, the average water worker's pay increased by 21·4 per cent., local government employees' pay increased by 13 per cent., coalworkers' pay increased by 17 per cent., gasworkers' pay increased by 18 per cent. and electricity workers' pay increased by 19 per cent. That year was not
42
in any sense an exception. In 1980–81, water workers' pay increased by 12·3 per cent., local government workers' pay increased by 7·5 per cent., coalworkers' pay increased by 9·7 per cent., gasworkers' pay increased by 12·6 per cent. and electricity workers' pay increased by 12·5 per cent.
Mr. Skinner: What about lawyers?
Mr. Hogg: Nor was 1980–81 an exception. In 1981–82, water workers got an extra 8·8 per cent., local government workers 6·9 per cent., coalworkers 7·4 per cent., gasworkers 7·9 per cent. and electricity workers 7·4 per cent.
Mr. Skinner: What about lawyers?
Mr. Hogg: It is not my purpose to bore the House with a series of figures of this type, but occasionally one has to produce the evidence simply to gainsay the nonsense, the factually inaccurate nonsense, that some hon. Members utter. That simply will not do. The hon. Member for Wood Green should be ashamed of himself, although I suppose he is seeking reselection somewhere.
Mrs. Shirley Williams: Perhaps the hon. Member for Grantham (Mr. Hogg) would discover how to make his remarks compatible with the findings of the mediator, who referred to the relative deterioration of water workers' circumstances since 1979 and said that it provides the basis for a deeply held sense of grievance. How does the hon. Gentleman explain that?
Mr. Hogg: I have no doubt that there is a sense of grievance. Most people would like more money but whether they are entitled to it is quite another matter.
About a fortnight ago, I took the liberty of seeking leave to adjourn the House under Standing Order No. 9 to discuss a matter that my hon. Friend the Member for Reading, North (Mr. Durant) spoke about 10 minutes ago. I refer to the operation of closed shop agreements in the water industry. You, Mr. Speaker, were unable to grant my application. Of course, I have no complaint about that. Indeed, if you had, Mr. Speaker, it might have been a trifle embarrassing for the Government, who had urgent business for that and the next day.
My reason for the application was serious. Since 1975, closed shop agreements have been operating in the water industry. Since 1975, membership of a trade union has been a condition of employment for manual workers. It follows, therefore, that if a trade union member is deprived of membership, he faces the substantial risk of dismissal.
It was made clear to me that a number of my constituents who are members of trade unions and work in the water industry would like to go back to work and accept the mediator's offer but for the fact that they fear for their jobs. They believe that if they go back to work they will be expelled from the union and thus lose their jobs. That would be a terrible act of injustice. I wrote to the chairman of the National 'Water Council, Sir William Dugdale, asking him for a formal undertaking that he would not bring about the dismissal of any employee. I regret to say that he would not give that undertaking. I also wrote to Mr. Bickerstaffe and Mr. Basnett, of the trade unions, asking them to give me an undertaking that they would not bring about the dismissal of any employees. I regret to say that they have not taken the trouble to reply

43
to my letter. One must take the view that, to put it mildly, a failure to reply is discourteous and, to put it more robustly, is lamentable in the extreme.
The right hon. Member for Manchester, Ardwick (Mr. Kaufman) would do well not to laugh. He may be a good film critic but it does not suit him to laugh when I am talking about the possible dismissal of trade union constituents of mine. Since I raised the subject some 10 days ago it has become more urgent. A substantial number of trade union members in the water industry are working in Lincolnshire. It is clear that the unions are taking, or contemplating taking, disciplinary action against some people who work on the east coast. I strongly fear that the unions will expel those people and then try to procure their dismissal. I would regard such an action as an affront to natural justice. I suspect that such action would be unlawful. It would certainly bring discredit on trade unions, and the House would not be able to overlook the matter.
The trade unions concerned must be aware that to try to procure the dismissal of any employee who tries to exercise his right to return to work would be dreadful and that hon. Members on both sides of the House would deeply resent it. I hope that my hon. Friend the Under-Secretary of State will confirm that the Front Bench of my party agrees.
I shall now deal with hardship. The right hon. Member for Ardwick has complimented the trade unions on their adherence to the code of practice. In many cases they have adhered to it. However, we should not blind ourselves to the fact that, whatever their adherence might be, real hardship is being caused. Hardship is being caused in general to the consumer, who has a tainted water supply or no water supply, to the livestock farmer, who has immense difficulty in keeping his stock alive, and to industry and commerce, where the jobs and salaries of millions are being put at risk. Those are the general consequences. They amount to hardship.
A more particular matter causes me in my constituency role great concern. The village next to mine is Ancaster. Last Tuesday the water main burst. Unfortunately, that prevented water being supplied to premises called Angel Court, which happens to be a warden-controlled group of houses used exclusively by old people. Since Tuesday that group of houses inhabited by old people only has been entirely deprived of water. Local residents, under the guidance of the vicar, have arranged assistance. They have been lugging water across a busy road, where someone was killed in the latter part of last year. That is hardship of a high order. Those people are 70, 80 and older. They cannot put buckets into cisterns. They want their cup of tea. They do not want to be without water. They are old. To try to pretend that that is not hardship of a high order is to deceive the House.
I got in touch with the Anglian water authority. I shall try to persuade it and the unions involved that this is an emergency and that the mains should be connected. I am sure that what is happening in Ancaster is happening throughout the country. Why on earth should old people be injured in that way by trade union leaders? I find it deeply offensive. What is more, I do not believe that ordinary trades union members would try to justify that; my experience of ordinary trade union members in the
44
water industry is that they are conscientious and hardworking people who would deeply regret those consequences.
I have great respect for those who work in the water industry. I have had the opportunity to go round sewage plants in my constituency. I know that hard work is being undertaken by my trade union constituents. If they were to reflect on the matter a little longer and not be led astray by some people such as the hon. Member for Wood Green, should they bother to listen to him, which I doubt, they would appreciate that the present offer is essentially reasonable. If accepted, that offer would represent an increase of 65 per cent. in the real value of their wages since April 1979, which contrasts with an increase in the RPI of 52 per cent. That is a substantial increase—however one measures it. The workers should bear in mind unemployment in the private sector, the fact that in many areas in the private sector wage settlements have been much lower, and further that what is now an offer is the result of the mediator's determination after due consideration of all the facts. I am fairly confident that if they give the matter unbiased and careful thought they will see the merit in the offer.
I should like the water workers to go back to work straight away. If they feel that they cannot accept the offer, I hope that they will feel able to accept some form of arbitration, whatever its name, which is binding on both parties. I hope that in the meantime they will withdraw their present action and return to work.
5.15 pm
Mr. Robert C. Brown: I declare an interest in that I am the secretary of the General Municipal, Boilermakers and Allied Trades Union group in the House of which 16 hon. Members are members. Being a sponsored Member means that my union undertakes to pay 80 per cent. of my election expenses and an annual sum to my constituency Labour party in accordance with the agreement reached with the Labour party under the Hastings agreement.
There are many sponsored Members in the House who are not sponsored by trade unions. The sponsorships are recorded in the declaration of the Members' interests as parliamentary consultancies or as directorships. I say without fear of contradiction that I hope that each Member with such sponsorship can put his hand on his heart and say that there is nothing personal going for him. Let me use an unparliamentary expression and say that the first time that my union demands that I should say or do anything in the House I shall tell it to stuff its sponsorship. I hope that other hon. Members with the type of sponsorship to which I referred would be prepared to say the same. I doubt it.
There is no doubt that the full Whitehall propaganda machine and the frenzy among the political correspondents in Fleet street have been directed against the unions involved in the water dispute, accusing them of tearing up national agreements and refusing to go to arbitration. As those attempts at black propaganda emanate from the office of the Secretary of State for the Environment, it is necessary once again to lay before the House the facts of the dispute and the honourable role played by the unions throughout in trying to find a solution and, further, in response to what the hon. Member for Grantham (Mr. Hogg) said, the honourable role of the workers in the industry who have seen that the least possible hardship has

45
been imposed on the general public. There is no doubt that, had those workers not taken that attitude, the strike would have bit much harder and earlier. In the area covered by the Newcastle and Gateshead water company members of my union have been breaking the strike to alleviate hardship to groups of old people such as those to whom the hon. Gentleman referred. By contrast, we have had a record of ham-fisted interference by Ministers, and astounding and, at times, tragically hilarious incompetence from the management of the National Water Council.
As long ago as September 1981 the unions first submitted their claim for a restoration of the comparable position of water workers to something approximating that of gas and electricity workers. In the 1981–82 wage settlement it was agreed that that should be referred to a special working party. The unions attended that special working party in good faith. The secretary of the employer's side insisted that the unions should quantify what they meant even before the special committee considered any factual evidence. The unions were reluctant to do so, but eventually put forward a mechanism that would link their wages to the upper quartile.
The discussions in the special working party continued, but suddenly in May they were broken off by the employers. The unions have justifiable reasons for assuming that they were broken off at the behest of Ministers. From then on, industrial relations in the industry regrettably started to go downhill. The incompetence of management and the dictation of Ministers became more and more apparent.
The situation was exacerbated in July 1982 when Ministers announced that the Government intended to abolish the National Water Council and therefore abolish the national agreement in the water industry. That is precisely what the Bill proposes. At that time the trade unions wrote to the Government via the TUC stating:
"the Trade Union Sides want to warn the Minister and the public that his irresponsible proposals far from improving industrial relations in what is already a very volatile situation would seriously exacerbate matters".
Since Ministers determined that this year's negotiations would, in effect, be the last national negotiations in the industry there was bound to be a major problem. That was made dramatically more likely by further Government interference. The unions had submitted their claim in September. Item 1 was the reference to the comparability issue and to the upper quartile. Despite the fact that the employers discussed that in the special working party for several months, they threw up their hands in horror. They said that it was a completely new claim and that they would not give a response for a further two months, on the spurious excuse that the unions were introducing completely new matter.
It is well established that at the 11 November meeting the employers were under clear instructions from the Government to offer only 4 per cent. Only a few days earlier the employers had been telling industrial correspondents of the national press that the figure that they intended to offer would be close to the miners' settlement of 6 or 7 per cent. but the Government stepped in and stopped that. All the deliberations since then have not produced an offer from the National Water Council which, if expressed as a 12-month settlement, is as much
46
as it was prepared to offer back in November had it not been for the Government's interference. That has not been denied by the Treasury Bench.
The trade union side responded to the 4 per cent. offer by consulting its members about the offer and about strike action. In the painstaking consultative process, my union, the GMBATU, received an overwhelming mandate from its members for rejection and for strike action. I believe that it was about 4:1. It was clear before Christmas that there would be an overwhelming rejection. The announcement on 7 January was made by all the unions and confirmed overwhelming rejection, yet there has been no move by the employers or the Government.
The trade union side was therefore forced to name the day for a strike. On the weekend before the strike was due, ACAS provided facilities for reopening negotiations. The agreement on procedure adopted under the auspices of ACAS committed the parties to negotiate in good faith on the earnings league issues. It also provided for the involvement of a mediator.
The mediator reports the offer from 4 per cent. to 7·3 per cent. over 16 months—that is, 5·5 per cent. over 12 months. There were no negotiations whatever on the earnings league issue, let alone negotiations in goad faith. Since Conservative Members keep talking about the national agreement, let them take into consideration the issue of good faith. Good faith has been singularly lacking from the employers and the Government.
The mediator's recommendations have been subject to major distortions by the Government. The mediator found in favour of the unions that a grievance existed, but recommended against the upper quartile mechanism to put it right and against other proposals by the unions on the earnings league. But he asserted that the problem would not go away and should be dealt with urgently. I repeal that the employers refused to negotiate on paragraph 8 of the report. The strike went on.
We then had the completely irresponsible intervention of the Secretary of State for Employment, whose predecessors, as my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said, always sought industrial peace and harmony. The right hon. Gentleman, in contract, seeks confrontation and union bashing. It was preposterous for him to attack my union as having broken its rules on the strike. It was a lie born out of ignorance and malice. The overwhelming support that the water workers have given the strike shows their overwhelming support for the negotiators' position. To pretend that union democracy has not been observed is a gross calumny and a ludicrous absurdity. I am sorry that the right hon. Gentleman is not in his place. Does he wonder why I accuse him of behaving like an industrial skinhead? That is precisely his attitude.
Mr. Douglas Hogg: I am happy to accept that the hon Gentleman's union tried to ballot its members, but will he accept that in a number of areas, including my constituency, individual members, and whole groups of them, never received a ballot paper or any other form of consultation? Will he see whether that can be put right?
Mr. Brown: I am not prepared to accept that from the hon. Gentleman. I shall find out from officers of my union whether it is so.
Make no mistake. Any hon. Member would be laughing if he could be sure of 81 per cent. of his electorate

47
voting in a general election and getting 60 or 70 per cent. support from that 81 per cent. The hon. Gentleman and very few of his hon. Friends can expect such support at the next general election.
After two weeks of the strike the employers appeared to move. It subsequently emerged that they had moved further than they were being allowed to by the Government. Len Hill, the chairman of the employers' side in the negotiations, announced via Robin Day, who had not been appointed as arbitrator, following an earlier exchange with Jimmy Young, that if the unions negotiated on paragraph 8 of the mediator's report—something that until then the employers had refused to do—there was, to quote Mr. Hill,
"at least another £5 to £10"
available to them.
That statement was not only rapidly retracted by the employers' side, but the Secretary of State for the Environment waded in promptly to clarify the statement by the employers' leader. At the same time he continued to assert that the Government were not interfering and had no intention of interfering in the negotiations.
When the employers eventually returned to the negotiating table, rather than £5 to £10, they offered 86p, and to only about half the workers. It was nearly three weeks after the strike began before the employers made any offer relating to comparability or the earnings league, and then it was a miserly 86p for half the work force. It is no wonder that the trade unions consider that there have not been negotiations in good faith on the main point of their claim. The procedure agreements that Ministers constantly accuse trade unions of breaking require negotiations to be conducted in good faith.
The national agreement in the water industry and the procedure agreed via ACAS at the time of the mediators' report both refer to negotiations taking place before we move to arbitration. Apart from the minimal 86p offer, no negotiations have taken place in good faith on the unions' main case. The failure to negotiate is a breach of the spirit of the agreement. In the unions' judgment, it means that the agreement Cannot be invoked to impose compulsory and binding arbitration. In any case, it ill behoves either the Secretary of State or any other member of a Government who have announced the complete tearing up of the national agreement to cite its clauses—wrongly and mischievously in this case—against the trade union side.
Despite that provocation and failure to observe agreed procedures, the unions have sought a way out of this damaging dispute. With ACAS, they have proposed the setting up of a committee of inquiry under ACAS auspices. They have made it clear to ACAS and to the employers for several days, and now to the public, that they are committed to the resolution of the dispute through that process.
I am appalled by the inference drawn more than once by Conservative Members about the good will, honour and integrity of Eddie Newall, my union's national industrial officer, and latterly of David Basnett, the general secretary. The advantage of a committee of inquiry over enforced and ex-parte arbitration is obvious. An inquiry can look at the whole issue and decide it in principle. An arbitration award, particularly one arrived at under the agreement, would have to be set in tablets of stone and applied as though it were itself an agreement.
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In calling for a committee of inquiry rather than arbitration, the unions are not attempting to avoid their responsibilities. They, more than any other party, want the committee of inquiry to produce a solution so that the strike can be called off. The strike is costing the strikers, my colleagues in the union, a lot of money. It is also costing the union a lot of money, and it will damage industrial relations in the industry for a long time. We all want a solution. The best solution, given the employees' commitment, a similar commitment from the employers and adequate term of reference, is to set up a committee of inquiry now. It need not take long; the issues are very simple. The committee of inquiry could have been set up in the middle of last week, but it was not. One may ask why. Let us set up that inquiry now so that this damaging dispute can be drawn to a close.
Several Hon. Members rose—
Mr. Speaker: Order. Before I call anyone else, I should make it clear that it is hoped to begin the winding up speeches at 6.6 pm. Clearly not all hon. Members seeking to catch my eye will be able to be called, but much will depend on the length of speeches.
5.34 pm
Mr. David Penhaligon: The nub of the argument concerns the quartile, and I do not see how it can be conceded. It is mathematically impossible to put into the upper quartile all those demanding to be put there. I recall an anxious mother coming to my constituency surgery in a positive rage because the headmaster of the local school had told her that her daughter was of below average intelligence. Thinking to help her, I was foolish enough to tell her that that applied to half the population. I wished that I had never said it, as I spent the next 15 minutes trying to explain what an average was. The quartile argument therefore cannot be conceded.
Some water workers, however, have a good case, because basic rates in the industry are not high. It is not for me to judge the entire pay structure of the industry, but the difference between basic rates and average pay is extraordinary. I believe that workers who have only basic hours and basic pay rates at their disposal have a case. The difference between basic and average rates is such that one wonders who is the highest paid manual worker in the water industry and how much the dear gentleman is actually paid. Simple arithmetic suggests that he must be making at least £10,000 a year. That is not a satisfactory way in which to deal with pay in such an important industry, in which, by definition, round-the-clock working arrangements are required because of the nature of the service.
The Government downgraded the original offer from 6 to 4 per cent. We had an admission of that, or as near as we ever get to an admission, from the Government today. I admire the Minister for not denying it. He did not admit it either, but one cannot have everything. That downgrading of an offer that was apparently willingly made was an unmitigated disaster and the key to many of the problems that have arisen since then. Nevertheless, those who have based all their behaviour on that experience should realise that there is a limit to which any disaster of Government decision-making can be extrapolated to other actions.
The union's refusal to accept arbitration, for example, is quite extraordinary. It is clearly laid down and I see no

49
reason to suppose that the unions would have done other than rather well out of it. As some water workers have pointed out to me, however, the Government themselves are not always willing to go to arbitration. I argued strongly, and with more confidence than I do now, on behalf of the health workers when the Government refused arbitration on that pay claim, so the Government are not always consistent in these matters. Nevertheless, I believe that the water workers should have accepted arbitration and that their refusal to do so will prove in the long run to have been a mistake.
Mr. King: It depends on what is in the agreements. As I said, this is included in the water industry's national agreement, which is signed by the unions as well.
Mr. Penhaligon: I accept that the Minister had a strong point there—almost strong enough to make up for the fact that he probably wrecked the whole thing in the first place by reducing the offer from 6 to 4 per cent.
As for the effects of the dispute, this is a classic case of the media judging the situation according to what is happening in London. In this instance, very little is happening in London, so the media suggest that the dispute is having little effect, but that is not so in the remoter parts of the country. I estimate that more than 10 per cent. of the houses in my constituency have had their water cut off at some point in the dispute. I understand that half of my home town of Truro is currently disconnected. Malpas is disconnected. Trispen and St. Erme are disconnected, although at the best of times they have water only on a good day when the wind is blowing in the right direction. Perranporth, a substantial town with a population of 4,000, has also suffered disconnection, as has St. Dennis, so at least 10 per cent. of my constituents have suffered disconnection at some time. At present, some will be totally disconnected from the water supply. Moreover, everyone in my part of the country has been boiling water from the outset.
I understand that eight primary schools in the county, most of them at the Penzance end, are today closed. That is a considerable number. The situation in the Penzance area is intolerable. People have been putting up with conditions that amount to far more than merely waiting a few hours for water to be restored. Those living in isolated communities, virtually in what seems like the middle of the Atlantic, experience weather conditions in February that have to be witnessed to be believed. In those communities there are elderly people who have seen no water come out of a tap for several days. The conditions are intolerable. They are the worst of which I am aware in my part of the world, although not necessarily the worst in the country. It is not satisfactory that people in their 70s, 80s, and, in the odd case, in their 90s should be treated in this manner.
It seems obvious that there should be an inquiry—I detect general agreement on that in the House, with varying degrees of emphasis—the result of which should be binding on both sides, and that the unions should agree to resume work.
I have no wish to inflame the dispute, but there are arguments in the area that I represent for bringing in the troops. That is a move which all concerned wish to avoid, because it creates scars and wounds that take years to heal, but the arguments are strong for bringing in troops to those areas where water is unobtainable within three or four miles.
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I hope that today's debate will have helped both sides to work off steam. I trust that within hours of this debate there will be news that an inquiry has been established and that its finding will be binding on both sides.
5.41 pm
Mr. David Model: This is a dangerous dispute. Almost every hon. Member has mentioned the fact that industry, although it has not so far suffered to any great extent, is on the brink of great difficulty unless there is a speedy settlement and return to work. Such issues as that now before the House are not normally debated by hon. Members. They are transferred to ACAS. I agree that this should be the normal procedure. However, this debate is essential because widespread hardship is being caused. It is incumbent on hon. Members to suggest how a speedy resumption of work might be achieved.
The right hon. Member for Manchester, Ardwick (Mr. Kaufman)—I am sorry that he is not in his place—is aware of the dangers if the dispute continues. The right hon. Member served in a Labour Government that saw Ulster almost collapse in ruins during the Ulster workers' strike in 1974, when essential services were hard hit. The right hon. Gentleman also spent much time trying to sort out the difficulties in British Leyland. There is one looming question that I should like to put to my right hon. Friend the Secretary of State, although lie may not be able to give me an answer today. If the dispute continues, domestic consumers and industry are asking whether they will get a reduction in their water rates. Some water companies say yes and some say, no. The National Water Council has yet to give advice.
Most of the last day before the dispute started was spent arguing over the employers' increased offer. It went up twice. At the last minute, the mediator—all hon. Members share in respect for him—suggested that improved bonus and efficiency payments could provide an answer. It was then probably too late to stop the strike. It is tragic, however, that there have so far not been detailed discussions of the mediator's suggestion of improved bonus and efficiency payments. I have asked previously in the House that the mediator should be recalled quickly to help steer unions and management out of the difficulty on the basis of his recommendation that there could be improvements in bonus and efficiency payments.
In some areas local emergency services are working well. It is a complication that more than one union is involved in the dispute. I should like to ask the unions, as the weather worsens, to have urgent talks with local management to try to lift the hardship caused by the sudden drop in temperatures. Many improvements are needed in industrial relations in the water industry once this dispute is over. That improvement will be hastened if local emergency cover is improved through immediate discussions between management and unions.
The TUC should have been involved earlier in these discussions. If the dispute continues, it will be detrimental to the trade union movement as a whole. In the past, the TUC has intervened to try to achieve a settlement of disputes. Throughout industry generally, in the past few years, management and unions have co-operated excellently in grappling with the severe recession. I wish to see the Government participating in that improved climate which exists in many parts of industry. Where they are an indirect employer, the Government should seek to

51
build on that state of affairs. If agreement is not possible through ACAS, there is an overwhelming case for early intervention by the TUC. It may be that the TUC is on the verge of intervening, as it is entitled to do under its constitution, off its own bat.
I agree with those hon. Members who have called for a committee of inquiry. I do not believe that the trade unions would have agreed to a committee of inquiry that merely established another inquiry. I do not believe that this domino effect can continue. It is my belief that the unions would abide by the findings. I agree that there is a risk. Often, in industrial relations, there is an element of risk. It is at least worth establishing the inquiry to see what happens. If the unions were unable to accept the findings, I believe that unions in other industries, which depend desperately on an uninterrupted supply of water, would raise the issue through TUC and other trade union channels to insist that the findings of the inquiry were observed.
There has been haggling for weeks over the issue of arbitration. Under section 3 of the Employment Protection Act 1975—the Act which set up ACAS—a matter is not normally sent for settlement to arbitration unless there is agreement by both sides
"or unless, in the opinion of the Service, there is a special reason which justifies arbitration".
On an issue where public health is involved it will be necessary for unions and management, when renegotiating arbitration procedures, to examine carefully the backstop role of ACAS. Once the dispute is over, ACAS will have to use section 5 of the 1975 Act which says that it can order an inquiry into
"if it thinks fit … industrial relations in any particular industry".
There has been more than enough misunderstanding in this industry to justify ACAS conducting such an examination under section 5.
All hon. Members are aware that the dispute is on the verge of becoming entangled in the pay claims of gas and electricity workers. It is a triple alliance with a difference. I do not fear the old triple alliance because industry has moved on and modernised. However, unless there can be an agreement for handling the problem of a triple alliance of gas, electricity and water challenging any Government, we would be facing great difficulty. It is not necessary to rewrite the Employment Protection Act or to establish a separate inquiry. It is only necessary to fulfil section 4 of the Act under which ACAS may give advice
"if it thinks fit, on request or otherwise".
In view of the turn that the dispute has taken, ACAS should give advice to the gas, electricity and water industries to seek improvements under the paragraphs which state:
(c) machinery for the negotiation of terms and conditions of employment, and for joint consultation;
(d) procedures for avoiding and settling disputes and workers' grievances;"
and
(k) payment systems, including job evaluation and equal pay."
It is inevitable that these industries are coming together. This would happen whatever party formed the Government. We are moving to a stage where the new triple alliance that provides these vital services will probably start to negotiate together. The sooner that ACAS can give advice on how matters should proceed, the better.
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The strike should be suspended at once. I feel that there is sufficient trade union confidence in the good offices of ACAS and in its practical experience for a solution to be found swiftly. We should not add to the distress and difficulty that exists over unemployment, as will happen if the dispute continues. It is incumbent upon hon. Members, ACAS, the employers and the unions to bring about an immediate resumption of normal working, to use the good offices of ACAS and to improve industrial relations generally in the country.
5.50 pm
Mr. Les Huckfield: I shall be brief, so I hope that the hon. Member for Bedfordshire, South (Mr. Madel) will understand if I do not take up any of his arguments.
I speak as an hon. Member who is sponsored by the Transport and General Workers Union, which has between 4,000 and 5,000 members working for the various water authorities, and I am sure that the Secretary of State for the Environment is rather remiss to be surprised that the dispute has reached the stage that it has.
It was as far back as September 1981 that talks on comparability and relativity first started, and they have been proceeding since then. It was no wonder that in the Sunday Times of 9 January this year, Sir Robert Marshall, who recently retired as chairman of the National Water Council, said:
Water workers are dedicated men who feel that they have lost ground, and I think that that is right. Four per cent. is well below the going rate in pay offers."
The Secretary of State should not be surprised at the attitudes currently being taken by the trade union negotiators, especially in view of the fact that in their various meetings with the employers they do not feel that any real negotiations have yet taken place.
I want to underline what was said by my hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown). The offer was first discussed in the November meeting. In the January meetings the reaction of the employers, when the trade union side started to want negotiations to get going, was immediately to want to refer those negotiations to binding arbitration. My hon. Friend was right to refer to the document of 21 January which set up the mediation—and it was mediation and not arbitration. That document was signed by the employers' side and the union side and said that the parties committed themselves to bargaining in good faith and that they would exercise their right to invoke the final stage of the procedure only in the last resort.
The union side does not yet feel that any bargaining in good faith has taken place because it believes that the employers' side has the Government permanently breathing down its neck. How can the employers bargain in good faith when they have the Secretary of State looking over their shoulders the whole time?
Let us consider the mediator's recommendation—and I say again that it was mediation and not arbitration. It is interesting to note that in both paragraphs 5 and 8 of his report he recognises that the unions have a deeply held grievance. It is not to be dismissed lightly, as one hon. Member tried to do. What is more, the mediator says in paragraph 8 that there should be talks as a matter of great urgency.
The mediator himself recognises that there is a deeply held grievance on the part of the trade unions.

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Unfortunately, in a most peculiar reference, he goes on to brush aside the claim for relativity and comparability merely because of economic circumstances. It is a long time since I have seen a mediator's recommendation which dismisses a relativity claim or reference simply by referring to the prevailing economic circumstances.
Let us go on to consider the claims of the Secretary of State, some of which he repeated today. The right hon. Gentleman talks of water workers being able to earn at least £10 a week more under the present offer. What kind of water worker is the right hon. Gentleman referring to? According to figures that I have seen, if a water worker benefited by an increase of about £10 a week he would have to be a class 1 employee, he would have to have 33 per cent. bonus earnings and he would have to be working shifts, weekends and at least two hours' overtime. If the right hon. Gentleman is arguing that all water workers would get that kind of increase, I suggest that he should check his figures, because they are very misleading. Some of the water workers in my constituency whose pay slips I have seen qualify for family income supplement. I hope that the right hon. Gentleman will get some of the figures in correct proportion.
The right hon. Gentleman also claims that the Government are not intervening. They are, of course. They are proposing to wind up the National Water Council. That is intervening. They are saying that the employers cannot offer more than 4 per cent. That is intervening. They prevented the employers' latest offer. That is intervening as well.
The Secretary of State even tried to suggest last week that in some way the employers were non-political. I come from Warwickshire. I can tell the Secretary of State that Sir William Dugdale, the chairman of the employers' side, used to be the leader of the Conservatives on the Warwickshire county council.
Dr. Keith Hampson: Mr. Hill?
Mr. Huckfield: The chairman of the National Water Council is Sir William Dugdale, who was leader of the Tories on the Warwickshire county council. He flies his own aeroplane. When the chairman of the Severn-Trent water authority, Sir William Dugdale, buys land in Warwickshire he is usually buying it from himself as a private person. Is the right hon. Gentleman claiming that the chairman of the National Water Council is in some way non-political?
Let us look, finally, at the report of the Monopolies and Mergers Commission on the Severn-Trent water authority and at some of the extravagant expenses allowances that members and officers of that authority were claiming. Recently, for example, that employer spent £7,000 sending officers and members and their wives to an international water conference in Zurich which was nothing but a Swiss junket. That is the kind of employer that water workers in my constituency have and that is why they feel justified in standing firm for their claim.
The inquiry suggestion came from the unions. It did not come from ACAS. The unions asked for the inquiry because they
"wanted the inquiry to recommend a formula for resolving the dispute."
They made that suggestion in good faith. I hope that even now the Secretary of State will use his influence to see that that suggestion is taken up.
5.57 pm
Mr. Den Dover: One matter always puzzles me in circumstances such as these. Why do the Government or the employers always have to give way and allow the unions to gain ground in disputes of this kind? We have seen wage increases put on the table. A mediator has been appointed following the agreement of both sides, and he has rejected the upper quartile argument and also a comparison with electricity and gas workers.
We have a formal agreement, signed before the chairman of ACAS, saying that there shall be binding arbitration agreed by both parties and that the findings will be accepted by both parties. However, when I asked my right hon. Friend earlier in the debate why the unions did not want binding arbitration and instead wanted a court of inquiry, I received no real answer.
We now have a suggestion from the unions that there should be a court of inquiry. However, I hope that before the court of inquiry begins we shall see a return to work. I also look for a categoric assurance from the unions that they will accept the findings of the inquiry.
The unions want upper quartile earnings and they also want to be compared with gas and electricity workers. I suggest that they should also be compared with workers engaged in similar activities in the private sector. As a civil engineer, I know the earnings of those employed by private contractors up and down the country. When we are considering comparability, we have to remember that workers in the private sector have to work hard, have to compete and have to live or die by their efforts Water workers in the public sector have their jobs for life and have no enforced redundancy.
I hope that the court of inquiry will take those factors into account, because there is complete disparity between public sector and private sector workers. I do not believe in comparability. I feel that there is the market place. There is the law of supply and demand. It is that which should apply in disputes such as the present one.
6 pm
Mr. Don Dixon: I declare an interest, not only as a sponsored Member of Parliament, but as someone who pays water rates. This Government have achieved something that no other Government have achieved. They have caused the most moderate of workers to decide, by a majority of four to one, to strike.
The strike has been caused by the interference of the Secretary of State for the Environment. He reduced the employers original offer from 6 to 4 per cent. It is no good him talking about settlement by arbitration when he has upset that possibility by his interference. He compared the pay offer with the present rate of inflation. He should compare it with the rate of inflation that prevailed when negotiations began.
I do not want to repeat all that has been said by my night hon. and hon. Friends. The Minister has asked union officials to restrain their members and to ensure that emergency services are maintained. Unless the employers or the Government are prepared to negotiate in a worthwhile manner, the matter will be out of the hands of the responsible union negotiators.
After holding my surgery last Saturday, I visited the Howden water works, which are being occupied by a workers sit-in. I spoke to the workers for two hours. They are moderate men who have never been on strike in their

55
lives. They have never broken the law. Yet they are so infuriated by the Government's interference in the negotiations that they are prepared to take the law into their own hands.
People are boiling water, using standpipes and some of the elderly are without water. The responsibility for that lies squarely with the Secretary of State for the Environment. He interfered in the strike and prevented negotiations which would probably have settled the dispute some time ago. What faith can the trade unions have in binding arbitration when the Government abolished the Clegg commission on comparability? Only one person can settle the dispute, and that is the Secretary of State for the Environment. He began the dispute by his interference. Let him accept the union's suggestion for an inquiry as soon as possible.
6.2 pm
Mr. Anthony Beaumont-Dark: I hope that you, Mr. Speaker, will look after the rights of Back Benchers. More than two-thirds of the debate has been taken up by Front Bench spokesmen. These debates are as much for Back Benchers to make their views known as they are for distinguished members of either Front Bench.
The hon. Member for Nuneaton (Mr. Huckfield) referred to Sir William Dugdale as a prominent Conservative. I was not aware that Mr. Len Hill was anything other than a prominent Socialist. If anything has jaundiced the negotiations, it has been the talk of £5 or £10 a week being available. It appears to have bedevilled so many of the negotiations.
This is a short debate and I shall not repeat the comments of other hon. Members. The most important clause in the national water agreement is clause 12, which was introduced to save the country from the position in which it is now placed. As my hon. Friend the Member for Grantham (Mr. Hogg) said, the elderly are cut off from water supplies. In my constituency there have been 38 burst mains. I am sure that every other hon. Member can tell similar tales.
Public services are meant to be what the name implies. They are meant to serve the public, whether they be electricity, gas or water. They are vital services for the well-being of people in their homes, and also for industry. Nobody is decrying the fact that the water, gas or electricity workers, because they provide a vital service, should be properly attended to when they put forward a wage claim. However, we must bear in mind the wide gap between the two sides. One party offered 4 per cent. while the other demanded 20 per cent. Therefore, was it not sensible for the employers immediately to suggest arbitration? Surely if the case was so good, and if we can trust ACAS and the negotiators—and good cases have been put forward for having such trust—was not it more sensible, responsible and honest to suggest arbitration?
People are going without water because we are arguing about what is arbitration and what is an inquiry. One side will not accept that the outcome of the inquiry or arbitration should be binding. The British people will not forgive either side for not quickly realising that, although they have some rights, those whom they are meant to serve have even more rights.
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The dispute has not been handled well by either side. The Secretary of State was honest enough to say, when quoting the mayor of New York, that one never comes up roses from a sewerage workers dispute. No one will come out of this dispute with any credit. The employers have not done well. They have lost public support because they have put the case poorly. The unions have lost support because 3 million people who are without a job look upon those being offered 8 per cent. in addition to a safe and secure job as doing well in the present position. In all these matters—whether water, gas or electricity—we must decide on some form of compulsory arbitration when people cannot reach a sensible agreement. The people and their representatives cannot be blackmailed or find themselves suffering as a result of other people's foolish negotiations.
I hope that we can agree that clause 12 should operate and that the unions and the employers should agree that the people should be freed from the present trouble. If negotiations had been handled properly in the first place, none of us would be in this position.
6.7 pm
Mr. Denis Howell: The dispute was born out of the distrust that was created—or the good will that was destroyed—by the continuous intervention of Government in the free bargaining of the water industry. Like all industrial disputes, at the end of the day it must be settled around the table.
I am sorry that the Secretary of State today appeared to close options when he should have created them. Even if there is a committee of inquiry, a mediator, binding arbitration or any other method of third party judgment, the findings must be accepted and implemented. That requires trust and good will. They have been systematically destroyed during the past six or seven months by the Government's actions, as I shall seek to show in some detail.
The main task of the debate is to create trust and to generate good will. But that will not happen until we understand the processes that have destroyed them. The unions believe that the Government's intention is to destroy their national bargaining position, to divide them, to carve them up and to force them into regional negotiations. Such negotiations would be far more dangerous for the industry and for Britain than central negotiations have ever been, but that is another point. The essential point is that by their every action the Government have convinced the unions that their strategy is to destroy national negotiations. There have been eight stages in the development of that strategy. The process goes back some six months. It started last July, well before the water negotiations got under way. It started when the Chancellor of the Exchequer made it perfectly clear to the chairmen of the nationalised industries that he wanted national bargaining replaced by local bargaining. That happened last July, and that set the scene for this developing strategy. It is no good the Secretary of State shaking his head. I am telling him what happened, on quite good authority. If the Secretary of State is not shaking his head in disagreement, he must be keeping himself awake.
This policy first saw the light of day in the Government's consultation paper, which came out last July. That consultation paper could not have been more

57
damaging or more serious for industrial negotiations. I shall quote paragraphs 21 and 22. The Minister will know these quotations by heart. Paragraph 21 says:
"Legislation to effect the abolition of the Council will include repeal of section 26 (2) (3) and (4) of the Water Act 1973. It is not intended to replace these statutory provisions".
Paragraph 22 says:
"Bargaining machinery established under … the Act will however cease to exist on the day appointed by the Secretary of State for the Council's functions to cease (expected to be 30 September 1983); and the collective agreements themselves will cease to operate on that day".
In other words, the Government were saying directly to the unions in the consultation paper as long ago as July "We are going to end all national negotiations in this industry". On the day that the Government said that, they turned the unions' doubt into certainty. That was the beginning of the whole story.
That certainty was reinforced when the Water Bill was published in October, by the proposed abolition of the National Water Council, and the total absence of comment on the National Joint Industrial Council machinery.
It was in that setting that we came to the famous day in November. [Interruption.] I know that when the Secretary of State cannot answer a point he holds a conversation with his next-door neighbour. I know him well. I hope that the Minister will reply to what I am about to say, although of course the Secretary of State ostentatiously refuses to give way, for obvious reasons, when we seek to intervene in his speeches. On that day in November, when the water chairmen were about to start with an offer of 6 per cent.—that being the offer that they judged to be reasonable—the Secretary of State himself—he knows this; I have put this to him four times in the House, and he has never denied it—intervened by telephoning his negotiators and virtually telling them that they were not to offer a penny over 4 per cent.
Mr. King: I am sorry if I appeared discourteous to the right hon. Gentleman, but I was on another point at the time. I am glad that he has raised this matter, because it gives me an opportunity to say a word on it. I have it on the best authority that at no time did the employers intend to open their offer at 6 per cent.
Mr. Howell: The Secretary of State clearly refuses to tell the House that he did not telephone anyone, that he did not intervene, because he was relying on his chairmen to do what he knew they knew he expected them to do. That is the truth. I said that they wanted to open at 6 per cent., but that they opened at 4 per cent.
I was described by one newspaper at the time as being "very angry" when I raised the matter in the House in a private notice question in November. Indeed I was, as would anyone be who knows anything about the industrial relations of this union and the inevitable results of a serious breakdown, with the consequences that we are now seeing. That situation is a result of the Minister's monstrous intervention.
Mrs. Elaine Kellett-Bowman: Alleged.
Mr. Howell: I have alleged it, and the Minister cannot deny it. I have now raised the matter five times in the House—three times at this Dispatch Box, and twice upstairs in the Committee considering the Water Bill. The matter has been clearly put to the Secretary of State, and on not one of those five occasions has he denied the truth of what I am saying.
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The truth is that the Government have never attempted to convince the industry that those allegations are not true, and the Secretary of State has certainly not convinced this House. Indeed, the opposite is true. There has been continual Government intervention. When Mr. Len Hill made his famous offer of £5 to £10 as a minimum for productivity, it was the Secretary of State who demanded time on "The World at One"—all these negotiations seem to take place on "The World at One" which is a quite remarkable situation—so that the following day he could correct what Mr. Hill said on the same programme the day before. When he was asked by Mr. Brian Widlake what he was doing, was he attempting to correct, or was he interfering with the negotiations, he said "No". Mr. Widlake then asked him, "If you are not interfering, Secretary of State, what are you doing in this studio?" Game, set and match to Mr. Widlake. The Secretary of State was back to his old tricks of giving a tortuous three-minute answer so that we all forgot the original question. However, we listened very carefully to what he said.
The next step in the timetable was three months of Total indifference. Nothing happened between November and January. There has never been such a critical period of absolute indifference in industrial relations. From November until 21 January, when the mediator was appointed, there were no meaningful negotiations. It is no wonder that the unions went to the mediation feeling that the Government were interested in nothing but arbitration and had no interest in purposeful negotiations.
Throughout the long negotiations at ACAS—all 12 hours of them—after the mediator's report, there was no proper negotiation. I notice that the Secretary of State had the procedure agreement in his hand, but he could not point to a single clause that allowed him a locus in these negotiations. This is an independent nationalised industry. It does not depend on funds voted by Parliament. We should ask the chairmen of nationalised industries whether in future they should allow themselves to be shoved around in this way by Ministers who have no responsibility. I know what the Secretary of State will say. He will say that on previous occasions, when Labour was in power, there were discussions with the chairmen. Indeed there were, because then we had an open incomes policy on the table. We all knew what it was and we were all negotiating from it. Now we have a Government who profess to believe in free collective bargaining, and then proceed to have an incomes policy in the public sector alone. That is totally irresponsible.
We all hoped that the famous paragraph 8 in the mediator's report would get us off the hook in this dispute. The Secretary of State said repeatedly today that the unions would not accept the mediator's report.
The truth is that the unions accepted the mediator's report, which said that there would be additional sums for productivity deals. The unions went back to ACAS to negotiate—they thought—with the employers and the famous £5 to £10 was immediately brought up. Those productivity deals, whatever they were worth, had to be judged against what the leader of the employers' side said that they would be worth. The men, as we all know, believed that they would negotiate productivity deals worth between £5 and £10 and instead were presented with a deal worth 50p. The men are intelligent and honest workers and they thought at the end of the day that they had been sold down the river. Their negotiators could not have negotiated any deal worth 50p when they had gone

59
in the morning thinking that they were about to receive between £5 and £10 in exchange for productivity. It was never possible to produce such productivity deals because that sort of money is not in the industry any longer. All these productivity deals have been made before in years past. This is a capital-intensive industry.
It is a completely new twist for the Government to say now that everything must go to arbitration, when, as we know, the NHS and the Civil Service workers, represented by the same unions, were refused arbitration last year. I shall add a new dimension and tell the House that two years ago, when the negotiations in the water industry reached a critical stage with 10 per cent. on offer, the Secretary of State—then the Minister of State —encouraged the employers not to go to arbitration but to up their offer so that they settled for 12·3 per cent., much to the disagreement of many regional water authorities in Britain. Those chickens are partly coming home to roost in this dispute. It is the Government who are destroying the arbitration procedures and they have no right to be lecturing the unions or anybody else about the sanctity of arbitration. The Government refused to take the dispute to arbitration when they had the opportunity and the responsibility to do so.
The Government's statutory obligation is another important aspect of the dispute that has not been mentioned at all today. Nobody can have any doubt that the Government are behaving unlawfully at present. About three months ago when we discussed the matter in the House I asked the Secretary of State what he was doing to maintain his statutory obligations and, again, he avoided the issue. This is not a new point as some hon. Members may think. Those statutory obligations are twofold. The first is to supply the British people with good wholesome water and the second is to maintain the quality of river water. Both those statutory obligations are contained in the Water Act 1973 and at least three or four EC directives. The industry has not maintained the lawful supplies that the Government have a duty to ensure. I am glad to see that this morning no less an eminent authority than Lord Denning has upheld the "Howell judgment" in this House as to the Government's lawful duty. The Government have contracted out of their obligations and they have had several months to say a word about that but have done no such thing. Quite apart from the contractual obligations, they have failed in their obligations to people who pay for their water in advance and who are not now receiving any.
At the end of the debate the important point is simply that it is in everybody's interests for the dispute to be settled by honourable means as soon as possible. That is one thing on which all hon. Members can agree. I believe that it can be settled and so does ACAS. I know that the unions believe that it can be settled and I was glad to hear this morning the spokesman from the NWC saying the same thing on the radio. The terms of reference can be agreed by ACAS immediately and the inquiry set up at once. Its findings will then be received by the NJIC. It will treat them in the responsible way that we would expect. Indeed, I know that both sides of the industry will treat the inquiry's findings in an honourable and responsible way. As one of the industrial negotiators on the union side said, "We shall not walk away from them." That is a phrase of great significance.
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I started my speech by talking about the distress that has developed and about the killing off of national negotiations because it must be understood that when the unions receive the inquirt's findings they will use the national negotiating machinery. The findings will be received and improved and that is important for the unions. It is important not just that they should change the findings but that the national machinery, which they think it is the Government's strategy to destroy, will be used to receive the findings and to honour them. Therefore, I hope that when the Minister replies he will endorse the hope and belief that the inquiry should be established, the findings should be published, and they should be received and implemented by all sides.
6.26 pm
The Under-Secretary of State for the Environment (Mr. Giles Shaw): I must confess to astonishment that the right hon. Member for Birmingham, Small Heath (Mr. Howell) should trace the genesis of the dispute to the possibility that the national wage negotiating structure should no longer be in place due to the Water Bill, which is presently passing through the House. That is tantamount to saying that 50,000 houses are without supply and that 7·5 million people are required to boil their water as a precaution and are consequently put at risk because there appears to be the view that somehow or other the future of national negotiations is the major issue.
The right hon. Gentleman knows that when the Bill was in Committee hardly any major attempt was made to deal with that point. Indeed, the clause abolishing the NWC, and with it the relevant sections of the Act, went through unopposed. There was no Division on the clause.
Mr. Denis Howell rose—
Mr. Shaw: The right hon. Gentleman must recognise that if he believes that to be the background to the dispute we are in for a most extraordinary time. Will the right hon. Gentleman accept that no decision has yet been made on the pattern of wage negotiation to be installed after the abolition of the NWC? He knows that in good faith the chairmen have agreed to examine that point and to decide on their recommendation. Neither the right hon. Gentleman nor the Opposition should believe that the genesis of this massively important matter should be held to be in the structure of the negotiations.
I remind the House, as did my right hon. Friend the Secretary of State, of the scale of the problem that is presently before us, in terms of water supply, sewage treatment and pollution policy. We recognise that this is an extremely grave dispute. The right hon. Member for Crosby (Mrs. Williams) referred to pollution, and it is a fact that there have been one or two pollution incidents which have affected rivers. However, I wish to remind the House that about 99·8 per cent. of properties are still receiving their proper domestic supply, that there has been no serious dislocation of industry as yet, and that there has been no serious health hazard or pollution incident.
In almost every case attempts have been made to restore supplies to vital premises such as hospitals and renal units. I pay tribute to the fact that in nearly every case the trade unions have agreed that such attempts should be made. However, a twofold lesson can be drawn from that. First, the regional water authorities have been doing a fantastic job to maintain services under the most difficult

61
conditions. Secondly, despite the enormous difficulties, it behoves everybody to try to overcome them by the speediest and most effective route.
There has been rather an orgy of hindsight today, although it is easy for hon. Members on both sides of the House to indulge in that when examining such a problem. However, I should like to take up some of the points made about where we should go from here. My hon. Friend the Member for Reading, North (Mr. Durant) raised the question of Lord Denning's remarks this morning. Far be it from me to be able to comment on the legal aspects, but I undersand that Lord Denning suggested that home owners who had been left waterless should resort to self-help and that if they had the mains repaired privately they could recover the cost from the water authority. With all respect to the former Master of the Rolls, I must warn householders that they cannot dig up highways at will and that under the Water Acts interference with equipment could be an offence. It is by no means clear that they can recover the cost of repair from the water authority, even if repairs are justified. Therefore, it would be right to show a modest amount of caution in that regard.
My hon. Friend the Member for Bedfordshire, South (Mr. Madel) asked about water rate rebates. The water authorities greatly regret the fact that there has been a disruption of supply and are making great efforts, at considerable cost, to ensure that alternative supplies of some type are made available either through standpipes or bowsers. He will also recognise that they are fully entitled, at least under the Act, to maintain their regular charges for that, just as they did during the drought of 1976.
However, I noted my hon. Friend's views and we have already asked the water industry urgently to consider in what circumstances it would be right to give rebates on domestic water charges where consumers have suffered hardship that can clearly be identified. I refer, in particular, to those who have been deprived of a mains water supply and who have to rely on standpipes and tankers that are at considerable distances. Therefore, we are taking that matter up with the National Water Council and I shall report to the House about it in due course.
The hon. Member for Wood Green (Mr. Race) attacked the water industry for the profits that it makes. He quoted £189 million, but even that is a very small return on the industry's capital assets. If it does not make an adequate return, it will be unable to afford to increase wages. The hon. Member for Newcastle upon Tyne, West (Mr. Brown) asked about the negotiation machinery.
Mr. Race rose—
Mr. Shaw: I understand that the hon. Member for Newcastle upon Tyne, West has particular knowledge of such matters and I respect his point, but I hope that he will
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accept the assurance that no agreement has been reached and no proposal has yet been made about what negotiation machinery will follow the abolition of the NWC.
The hon. Member for Truro (Mr. Penhaligon) gave a robust defence of the situation, saying that there must, indeed, be room for arbitration. He gave full support to the proposition that that arbitration should be binding. That is the crucial factor. My hon. Friend the Member for Grantham (Mr. Hogg) mentioned the closed shop and the work that has to be done by private contractors. Indeed, he has raised that point before in the House. He will know that individual water authorities are making their own arrangements to consider the matter carefully. He will also know that some workers have already returned to work. It is for the employer to decide what is appropriate in each circumstance.
There can be no doubt that the debate centres on what can be done to end the dispute. My right hon. Friend the Secretary of State has made it clear that the proposal for an inquiry exists, and was made by Mr. Lowry, the chairman of ACAS, in his recent statement when he said:
"It is our view therefore that the dispute can now only be resolved, and further hardship avoided, by a reference either to arbitration or to some other third party, for a final decision."
That is the position that the Government fully accept. Those who believe that there is an intention to intervene in ACAS's recommendations about the inquiry must be ignored. The Government are four-square behind the view that a way can be found to resolve the dispute. However, the House must understand two undoubted facts. First, given the agreed process of mediation, it is surely right to ensure that the parties that agree to the next and, we hope, final step will agree to abide by its findings. It would be absurd to encourage the setting up of machinery for a final decision if the decision as to whether it should be final rests in other hands. That must surely be so.
Mrs. Shirley Williams rose—
Mr. Shaw: Secondly, there has suddenly been a national water strike in an industry that has never known a national dispute and we must seek a resumption of the honesty and integrity that has existed for so long between the employers and employees. This country has been extremely well served by the water authorities and water unions, which have maintained very high standards of service and supply. We cannot allow that to be put in jeopardy simply because there is an unwillingness to accept that parties that have entered into an agreement must abide by the decision that is reached.
It being three hours after the commencement of the proceedings, MR. SPEAKER interrupted the proceedings pursuant to Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) and the motion for the Adjournment of the House lapsed, without Question put.

Orders of the Day

  Miscellaneous Financial Provisions Bill
  Order for Second Reading read.
  6.37 pm
  The Minister of State, Treasury (Mr. John Wakeham): I beg to move, That the Bill be now read a Second time.
  Apart from the fact that they are all connected with finance, there is no obvious connection between the clauses in the Bill. If there were, it would not be called "miscellaneous". But that is not to imply that the clauses have no value. I commend them to the House as good, sound administrative measures; the sort of thing which a Government have to bring before the House from time to time. For convenience we have grouped seven such measures in the present Bill. I shall explain what the clauses do, and why the changes they bring about are desirable, and I hope that these essentially administrative measures will command support from both sides of the House. I shall, of course, be happy to answer any question on any aspect of the Bill which any hon. Member cares to ask me.
  Clause 1 concerns the Development Commission, which was established by Lloyd George shortly before the first world war with the task of identifying and tackling the various problems of rural areas. Following a review of the work of the commission my right hon. Friend, the then Minister for Local Government and Environmental Services, told the House in March last year that he believed that the commission still had a distinctive and necessary role in bringing economic and social assistance to rural areas of England. The Government accepted that the commission should have a greater degree of independence and should, for example, itself choose the areas in which to concentrate assistance.
  At present, the commissioners advise Ministers on how money in the development fund voted by Parliament should be spent. This is an archaic and possibly unique arrangement, so the Bill seeks to establish the Development Commission as a grant-aided body, able to spend directly the money provided by Parliament, and accounting for it directly to Parliament, on the same basis as other grant-aided bodies. The Secretary of State and the Treasury will continue to have a duty to supervise financial matters, and a power to give broad direction of policy and practice.
  The Bill also gives us an opportunity to resolve a recent legal doubt whether the Council for Small Industries in Rural Areas, which is the principal commercial agent of the commission, has been acting ultra vires in helping profit-making commercial undertakings. Since the doubt arose the matter has been covered by authorising the relevant sums under the Appropriation Acts. This should not be allowed to continue indefinitely and the Bill, when enacted, will regulate the position.
  I shall describe the specific provisions in the Bill. Clause 1 establishes the Development Commission as a grant-aided corporate body, defines its purposes, and, together with schedule 1, sets out its powers, duties and financing. The purposes of the commission are substantially unchanged from what they were when it was
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  set up in 1909, although the terminology used in this legislation is different from that of 1909. In specifying some of the areas of activity of the commission, the Bill reflects the special role that the commission now plays in the social and economic regeneration of rural communities in England.
  These provisions, then, are to bring the statutory basis of the Development Commission into line with its present-day role—not to change that role. The commission's objective remains the economic and social development of rural England, and I hope that the House will welcome this clause as enhancing its ability to carry out or assist others to carry out such a development.
  Clause 2 similarly introduces no new principle. It represents a piece of necessary tidying up, in providing statutory authority for the Secretary of State for Industry to make grants, out of money voted by Parliament, to English regional development organisations. At present, authority rests on the Supply Estimates and the conforming Appropriation Acts.
  Successive Administrations have paid grant-in-aid to the four organisations listed in the clause. The money supports their work of helping to attract new industrial and commercial development to their regions, which include the main assisted areas in England. The local authorities in the regions are the other main source of income for these regional bodies, which therefore represent a partnership between central and local government. Similar promotional bodies—again supported by both central and local government—exist in Scotland and Wales.
  Mr. D. N. Campbell-Savours: Do the Government intend to make additional money available to county authorities, since some authorities with particularly high levels of unemployment have a special role to play, through industrial development units? Will the Minister address himself to such authorities?
  Mr. Wakeham: The Bill is not the appropriate place to deal with that. If the Government were seeking to increase the sums available they would not do so in this Bill, which is basically a bookkeeping arrangement. The Minister of State, Department of Industry made a statement only a few days ago in a written reply and I have nothing to add to that.
  Mr. John Prescott: I have that answer here. In the Bill, why do the Government choose to give the full amount to some areas and not to others? Is that because of disagreement with some of the local authorities or with the new town corporations? Why is there a differential in the policy?
  Mr. Wakeham: That is a matter for the Secretary of State for Industry. It does not arise under the Bill.
  Mr. Prescott: We appreciate the Minister's difficulties. He thinks that the Bill is a simple financial measure, but he must know that the Treasury determines policy. I understand that we shall interrupt consideration of this Bill at 7 o'clock and return to it later. In the interval, perhaps the Minister will consult the relevant people and then tell us what clause 2 is about. Many of my hon. Friends will want to ask questions about clause 2, and if necessary the Secretary of State should be brought in to assist.
  Mr. Wakeham: I shall listen to everything that is said and do my best to answer any questions. It seemed right in my opening remarks to outline what the clauses set out to do and to deal with specific points later.
  My hon. Friend the Minister of State, Department of Industry, anounced on 19 January the level of grant to be paid to each of these bodies next year. The English regional bodies work closely with the Invest In Britain Bureau in the Department of Industry, and their overseas campaigns are co-ordinated with the promotional activity on behalf of the United Kingdom as a whole.
  Although the main purpose of the clause is to regularise the payments to these existing bodies, we think it right also to provide for the possibility that other similar bodies may be supported in this way, for the benefit of other regions in future.
  Clause 3 is different. Its object is to writeoff debts of £13·4 million owed by Zimbabwe to the Consolidated Fund. These debts stem from obligations contracted by the Governments of Southern Rhodesia towards Her Majesty's Government before the unilateral declaration of independence in November 1965. The debts included liability to reimburse the Government for payments made out of the Consolidated Fund under Treasury guarantees when the Government of Southern Rhodesia defaulted on five loans from the International Bank for Reconstruction and Development.
  Following independence, Mr. Mugabe stated that his Government intended to honour these obligations. However, discussions were held in May and June 1980 about Zimbabwe's capacity to service debt obligations in the light of prospects for the country's economy, and under the terms of the Zimbabwean debt settlement which was announced in Parliament on 2 July 1980 the Government agreed to writeoff the sum owed in respect of three of the five guarantees. On 7 November 1980 the then Financial Secretary stated that it was our intention to provide for this by legislation in due course. This is necessary because the debt is an asset of the Consolidated Fund.
  The Bill sets out the dates and amounts of loan made by the International Bank for Reconstruction and Development. The first loan was to provide funds for an electric power project, and the final instalment was paid on 2 May 1977. The second loan went towards the development of the Rhodesia railways, and the final instalment was paid on 4 May 1978. The third loan was for an agricultural development programme, with the final instalment being paid on 1 December 1969. The second and third loans were technically made to the Federation of Rhodesia and Nyasaland, but when this was dissolved in December 1963 the Governments of Southern Rhodesia and Northern Rhodesia each assumed direct responsibility for half of both loans. The guarantees were in respect of principal, interest, and other charges in various currencies to the dollar values given. The sterling equivalent of all three was £13·4 million.
  Clause 4 widens the range of financial liabilities of public bodies which the Treasury may guarantee under its existing statutory powers. At present these powers generally extend only to guaranteeing the repayment of principal and interest on a loan, though there is a considerable disparity among the industries. The bodies covered are listed in schedule 2 to the Bill. The Bill does not add to the number of bodies covered, nor should what is proposed add to the cost to public funds—rather the opposite.
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  Lenders offering attractive terms to our public bodies have occasionally insisted on additional obligations beyond the undertaking to guarantee the repayment of principal and payment of interest. For example, they may ask for payment of certain fees in respect of a loan. It is clearly in the taxpayer's interest to guarantee these additional obligations if this is a way of ensuring, that the best terms can be obtained, especially as this can be done without the guarantee adding significantly to our liabilities.
  Clause 4 permits that. A guarantee will be given only if the Treasury considers that the loan is worth making on the terms demanded. This is exactly what happens now. Thus, we shall continue to ensure that the best possible rates are obtained, with minimal liability for each loan that our public bodies take on.
  Clause 5 amends section 3(2) of the Crown Estate Act 1961 so as to extend the maximum statutory period for which the Crown Estate Commissioners may grant leases from 100 to 150 years. The background is that the commissioners are not normally in a position to be able to finance major site developments as they have no borrowing powers. They therefore look to institutional investors to finance commercial projects. However, in the field of commercial property nowadays, institutional investors favour leases of 125 to 150 years duration, because that allows sites to be redeveloped about halfway through the lease—after 60 years or so, which is reckoned to be the life expectancy of a building.
  The commissioners judge that their present inability to grant leases for periods as long as 150 years means that they cannot make the most of the earning potential of the Crown estates. The revenue surpluses from the estates are surrendered to the Exchequer in accordance with the Civil List Acts. I hope that the House will agree that we should not tie the commissioners' hands unnecessarily and should therefore extend the period of leases, as the Bill proposes.
  Mr. Campbell-Savours: Is there any evidence that the Exchequer will receive greater sums of money for those leases, or will the clause have little effect on the valuation? As the Minister must be able to justify this to the House, can it be said that the commissioners have found it impossible to relieve themselves of leases and that with the Bill they will now be able to let those properties?
  Mr. Wakeham: The commissioners consider that they are best able to make the best use of their property if they can enter into leases of 150 years. That will therefore improve the return to the Exchequer in the sense that they will be able to do better deals by getting better institutional support. That is the purpose of the exercise.
  Clause 6 gives the Treasury the power to redeem, upon the payment of compensation, certain small periodic payments at present charged direct on the Consolidated Fund or on Votes under old legislation. These payments are expensive to administer, and it has therefore been decided that it would be sensible to discontinue them, subject, of course, to the payment of reasonable compensation. The compensation is to be so calculated that if it were invested in an appropriate Government stock it would provide an income equivalent to the redeemed annuity.
  The Treasury is already empowered under the Consolidated Fund (Permanent Charges Redemption) Act 1873 to agree that any perpetual or non-life annuity

  67
  charged on the Consolidated Fund or Votes should be redeemed on certain terms and subject to certain conditions. In the years immediately following the 1873 Act, redemption terms were agreed for many annuities. In some cases, however, this proved impossible and the annuities have continued at increasing administrative cost. The new clause will empower the Treasury to redeem unilaterally small annuities which have been payable since before 1873 or, to put it another way for the benefit of Opposition hon. Members, in 1873 the Government of the day took powers to deal with these matters where a voluntary agreement could be made. We are now in 1983 and hoping to take power to deal with those where voluntary agreement has not been possible.
  Clause 7 is designed to amend the provisions of the Local Government Act 1972 so as to provide a greater degree of flexibility to local authority members when making use of the option that is available to them under section 24 of the Local Government, Planning and Land Act 1980 to receive financial loss allowance when they perform the approved duties of the council, instead of the attendance allowance which is generally offered.
  At present, the legislation provides that councillors can make this choice or revert to receiving attendance allowance after making an earlier choice to receive financial loss allowance, only three months prior to the beginning of a financial year—or, in the cases of newly elected councillors, at their election or re-election. This creates difficulties for those councillors who have chosen financial loss allowance and who lose their jobs during the year. Under the present arrangements, such members would presumably not be able to show financial loss, yet would be unable to receive attendance allowance instead until the next financial year. That could mean a prolonged period—possibly up to 15 months—without any allowances other than those for travelling and subsistence expenses.
  The attention of the Government has been drawn by the local authority associations to the fact that the way in which the present legislation is drawn up is causing considerable hardship in cases where members, having chosen to receive financial loss allowance, quite unexpectedly lose their jobs. The number of these cases of hardship has risen with the increase in unemployment.
  Clause 7 provides that a member who loses his job will in future be able to withdraw his financial loss allowance and, from the following day, be entitled to receive attendance allowance for the perfomance of approved duties. The amendment to the law will bring the position in England and Wales into line with that which already exists in Scotland. I think hon. Members will agree that this is a very desirable adjustment to the existing arrangements. The proposal has been pressed by the local authority associations, which welcome the change.
  In conclusion, the Bill contains seven measures, some to tidy up or modernise existing arrangements, and the last
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  one to remedy a hardship caused by the operation of the present rules. All can be justified on their merits, and I commend the Bill to the House.
  6.56 pm
  Mr. Robin F. Cook: I hope that I shall not offend the dignity of that great Department, the Treasury, if I describe the Bill as something of a job lot. It is no disrespect to the Minister's office if I observe that it has been unable to provide the Minister with a thematic speech but has come up with a Bill in which there are seven clauses not one of which bears any relation to the others.
  As the Minister said, at least one of the clauses has been waiting since 1980 for legislation, and, having studied the notes on clause 6, I am inclined to feel that it has been waiting since the eighteenth century for legislation.
  I shall begin by putting the Lord Commissioner out of his suspense by saying that the Opposition welcome some of the clauses. We see no objection to the rest, and, therefore, it will not be our intention to divide the House tonight. Nevertheless, a number of questions are naturally prompted by the clauses in the Bill and there are some lessons that they can tell us about the economic handling of the country's affairs by the Government over the past three years. I propose to explore some of those questions and some of those lessons. I know that some of my hon. Friends will wish to intervene at a later stage in the debate to rub home the lessons as they affect the regions my hon. Friends represent.
  I do not propose to return to those clauses, Mr. Deputy Speaker, if I catch your eye later in the evening and I hope to be excused if I begin, therefore, by following the Minister on his brief tour of the byways of the Bill. I should like to start with clause 3, which relates to the extinction of Zimbabwean debts.
  It is obviously unfair that we should contemplate smartly passing back to the Government of Zimbabwe debts that we incurred only because the earlier Government of Rhodesia defaulted on them. It is apt that we should be examining this question tonight, the day after the Chancellor has returned from the IMF meeting where he has claimed a certain triumph in averting major defaults of countries in debt to the IMF by increasing the liquidity of the IMF. The Opposition remain unconvinced by that triumph since the entire increase in the liquidity of the IMF over the next five years is equivalent to the borrowing of Mexico in a single year.
  At a time when the number of developing countries is increasing, when those countries are struggling to avoid being pushed into default by bank debts and when the Government have proved singularly accommodating to Argentina in assisting it to avoid defaulting on its bank debts, it is salutary to recall that one of the rare cases of default in international finance occurred in the history of the rebel regime of Rhodesia. I was in this place for half the period during which that rebel regime—
  It being Seven o'clock, and there being private business set down by the Chairman of Ways and Means under Standing Order No. 7 (Time for taking private business), further proceedings stood postponed.

  Ginns and Gutteridge, Leicester (Crematorium) Bill
  Order for Second Reading read.
  7 pm
  Mr. John Farr: I beg to move, That the Bill be now read a Second time.
  First, I should explain my interest in the Bill. I was approached by representatives of the company known as Ginns and Gutteridge. They asked me in April of 1982 to help them with the possibility of erecting a new crematorium in Leicester. The Cremation Act 1902 is a narrow and rather out-of-date measure, and it was because of the narrowness of its confines that it was necessary for my constituents' firm to proceed by the Private Bill method. That is why I am promoting the Bill.
  The site in Vaughan way, Leicester, does not lie in my constituency. However, I have consulted the hon. and learned Member for Leicester, West (Mr. Janner), in whose constituency it lies. The hon. and learned Gentleman has asked me to say that he is sorry that he cannot be present—I understand that he has to be in Leicester—and that he would have been in his place if that had been possible.
  The reason for the introduction of this Private Bill is the narrowness of the 1902 Act. The Bill is a short, five-clause measure. It deals with the relevant restraints of section 5 of the 1902 Act. That Act is now 81 years old and is strictly confined by today's standards. Messrs Ginns and Gutteridge have promoted a Bill to authorise the construction by them of a crematorium in the basement of their premises at 51–55 Vaughan way. The constraints of the 1902 Act provide that no crematorium can be constructed nearer to any dwelling house than 200 yds except with the consent in writing of the owner, lessee or occupier nor within 50 yds of any public highway.
  On 5 December 1982, Ginns and Gutteridge, in accordance with Standing Orders, gave us notice of the proposals contained in the Bill together with a statement that every owner, lessee or occupier of the dwelling houses within 300 yds of the land to be used for a crematorium had been circulated about the proposal.
  Leicester has been greatly depopulated in some areas and in the 300 yds radius from 51–55 Vaughan way there are now only 21 dwellings in which 38 residents are known to live. They were notified of the proposals even though the 1902 Act requires that only those living within 200 yds be so circulated.
  The main purpose of the Bill is to provide better facilities for those in the growing city of Leicester, which is composed of many people of different ethnic backgrounds. One of the features that Ginns and Gutteridge is making of its application in the Bill is that it will afford a service to the community at all hours on all days of the year other than Christmas day, Good Friday and Easter Sunday. It has been providing a funeral directors service from the present site since 1840.
  It is felt by many people in Leicester that the proposed development of a crematorium on this site is a natural development of the company's policy. There have been considerable representations from the substantial Asian community in and about Leicester, which feels that its needs are not being adequately catered for at present. Its needs include the arrangement of cremations within 24
  70
  hours of death in the evenings or at other times when members of the entire family can expect to be able to attend.
  The company applied to the city council in August 1982 for planning permission for the new crematorium. That was granted on 5 October 1982 subject to tough conditions which the company is confident it can meet. These conditions, quite rightly and properly imposed, relate to the emission of fumes or any visible trace of smoke in the air, and Ginns and Gutteridge is confident that it can fully meet the proper regulations laid down by the city council with the modern equipment that it is installing.
  Although the city council gave planning consent in October 1982, it has seen fit, for reasons best known to itself, to deposit a petition against the Bill. In many respects it is extremely inaccurate. I can probably best deal with it by referring to paragraph 17 on page 8 of the petition. I can assure the House that, contrary to what is stated in the petition, consultations have not taken place with the Oadby and Wigston borough council in my constituency. No consultations have taken place with that council and no committee has been formed with which it is involved. I telephoned members of the council during the weekend and they told me that they would positively welcome another crematorium in Leicester that would help provide a better service.
  A second petition has been deposited by the Federation of British Cremation Authorities, of which the city council is a member. The petition contains wide-ranging allegations about the effects of emissions of unpleasant fumes, obnoxious gases and visible effects if a new crematorium is established in Vaughan way.
  The company is prepared to prove to the satisfaction of the Committee that the allegations that are lodged in the petitions of the Federation of British Cremation Authorities and the Leicester City council are untrue. I share that view.
  Sir Kenneth Lewis: Does my hon. Friend agree that an answer to petitions of that kind can be met adequately in Committee? Does he agree, therefore, that the Bill ought to be allowed to go into Committee where the petitions can be properly considered and argued, whereupon the House will be able to make up its mind?
  Mr. Farr: I am grateful to my hon. Friend for that point. He is absolutely right.
  The crux of the city council's opposition to the Bill lies in the opening hours of the present Gilroes crematorium, which is operated by the municipal authorities of the city, and the facilities that Ginns and Gutteridge will provide if it is lucky enough for the Bill to have the consent of the House. At the moment, the opening hours of the city crematorium are limited to 9 am to 3.30 pm, Monday to Friday. That means that there are no weekend or evening cremations. As was said in the statement on behalf of the sponsors, the company has taken a pride in affording a service to the community since 1840 at all hours of the day and all days of the year except Christmas day, Good Friday and Easter Sunday.
  Mr. Stephen Dorrell: My hon. Friend is absolutely right about Ginns and Gutteridge excluding Christmas day, Good Friday and Easter Sunday. Will he confirm that Mr. Ginns has said in correspondence that his services are available on Christmas day and that

  71
  he has worked through the Christmas holiday? Does he further agree that Ginns and Gutteridge provides a service that no local authority can ask its employees to provide and, indeed, which no local authority employees would be prepared to give?
  Mr. Farr: My hon. Friend has hit the nail on the head. Mr. Ginns has also said that there are members of his family who are ready, eager and willing to work any hours of the day and night when normal salaried staff would not be expected to work.
  It is important to Leicester to have this additional crematorium facility because it is a rapidly changing city with a host of different enthnic groups. Each has its own wishes with regard to the disposal of the dead. Messrs. Ginns and Gutteridge are principally concerned with catering for that new demand. Some beliefs require cremation to take place within 24 hours of death. If that is the belief of a quite numerous group in the city of Leicester, Ginns and Gutteridge will try to meet it. There is also a strong demand from the large Asian community for cremations in the evening and at night. Moreover, there is a demand for the hand on the casket service. The modern machinery that Ginns and Gutteridge hopes to install will enable a relative almost literally to put the casket in the cremater at the critical time. That operation will be safe because of the modern equipment and the high and special safety arrangements that are associated with it. That cannot be provided or done safely at Gilroes.
  Mr. J. D. Concannon: I am listening intently to discover why these strange circumstances should occur in Leicester. Will the hon. Gentleman explain what makes the people in Leicester so different that we have not experienced an upsurge for this type of crematorium in the rest of the country?
  Mr. Jim Marshall: He does not know.
  Mr. Farr: I do not believe that the hon. Member for Leicester, South (Mr. Marshall) would disagree that the ethnic minorities in the city of Leicester are more deeply absorbed into what I call the British way of life. They are more firmly established in Leicester than in other parts of the country. Unlike communities in other parts of the country, they have not hitherto paid much attention to their customs. Thay are now so well established that they are trying to get things done in the way in which they used to be done before they came to Britain.
  I can give the right hon. Member for Mansfield (Mr. Concannon) an example. Not long ago, a group called the Leicester Crematoria Society employed an architect through whom they approached the city council. The society was composed almost entirely of Asian business men. They wanted to acquire 15 acres of land just outside the city to build a crematorium that would meet their special wishes. As is recorded in the minutes of the city council, they made that request in December 1982. The council felt it right to turn down the application. Irrespective of whether my reasoning about the upsurge in the desire to dispose of the dead in this way is right, the fact remains that the interest exists. It is powerful in the city of Leicester. I believe that it is the least we can do to promote and respect such customs with respect to the disposal of the dead and departed.
  Mr. Ron Lewis: I know little about the case apart from what was contained in the information that was sent to us by the parties involved. If the Bill is passed, will there be a special place where ashes can be scattered? As the hon. Gentleman will know, many crematoria have woodlands and the like where relatives can go.
  Mr. Farr: I have learnt to treat the hon. Gentleman's interventions with respect. They always have great merit. The company hopes to make it clear during the Committee stage that a special garden of remembrance and rest will be provided for the ashes.
  Mr. Ron Lewis: Near the crematorium?
  Mr. Farr: At the crematorium.
  The Bill revolves around the riddle of planning consent that the city council gave in October. It is hard to understand why, having given planning consent, only a month or two later the city council, although it did not withdraw planning consent, made it almost impossible by hinting at tough penalties and lodged a petition against the Bill.
  When consent was given in October by the planning committee, a number of proper provisions were made. The details will come before the Committee. I hope that it will be satisfied with them. The detailed requirements laid down by the planning committee required the expenditure of a considerable amount of money and the provision of the latest techniques and equipment, which Messrs Ginns and Gutteridge can provide at considerable cost. They are prepared to do so. Therefore, they were surprised to receive a further letter from the city council saying that it would lodge a petition against the Bill and that, after all, it did not think that it would be a good idea for Leicester to have an additional crematorium.
  After the original planning consent was given in October last year there must have been second thoughts about whether it would be helpful for Leicester to have an additional crematorium, although there is a demand for weekend and night work, which the municipal crematorium cannot meet. One can only assume that political pressures were put on the city council and that by a split vote it decided to lodge a petition against the Bill.
  The Bill is being debated on Second Reading because of the petition against it by the city council and the Federation of British Cremation Authorities. Other points have been raised in the petitions. I shall not go into great detail because they are Committee points. Some evidence, for example, about the height of the new crematorium's chimney and the question of whether there will be traffic delays if the crematorium is used at certain hours of the day at Vaughan way and near Great Central street, should be discussed in Committee.
  I emphasise that the main critique of the proposals of Ginns and Gutteridge is that, however modern the equipment and expensive the machinery that is put into the new crematorium, there must be some visible emissions when a cremation takes place. I am confident, as I am sure the Committee will be, that the equipment which Ginns and Gutteridge will provide will ensure that the whole operation is carried out in what I would call an invisible manner. Also, the whole of that part of Leicester is virtually unpopulated after nightfall and only 31 persons live within 300 yards' radius of the crematorium site. When the new crematorium is erected, it will be impossible to tell when a cremation takes place.
  Mr. Deputy Speaker (Mr. Paul Dean)In accordance with the usual practice, Mr. Speaker has not selected the amendment in the name of the hon. Member for Leicester, South (Mr. Marshall).
  7.25 pm
  Mr. Jim Marshall: I shall pick up only two of the points that were made by the hon. Member for Harborough (Mr. Farr). First, he said that many of the matters should be raised in Committee. The hon. Gentleman's speech, dealing with fine detail, was a Committee speech. We are discussing the principle underlying the Bill and what the consequences could be if the Bill were passed. I make it clear at the outset that I bear no malice towards Ginns and Gutteridge. My only disagreement with them is that I do not think that this legislation should have to be passed in this manner, via the Private Bill route.
  Secondly, the hon. Gentleman seriously misled the House in two instances, the second of which was when he replied to my hon. Friend the Member for Carlisle (Mr. Lewis). I am not here to defend Leicester city council or the Federation of British Cremation Authorities, but if the hon. Gentleman reads Leicester city council's petition he will see that it states that the Ginns and Gutteridge site is not adequate for the disposal of human remains. If cremation facilities were granted, the garden of remembrance at Gilroes cemetery would still have to be used. Perhaps on reconsideration the hon. Gentleman will withdraw his answer to my hon. Friend.
  Mr. Farr: I did not mention this to the House because I did not want to speak for too long. Messrs Ginns and Gutteridge say:
  "The chapel, rest rooms, waiting rooms, as well as available catering facilities, already provided by the promoters are markedly superior to the equivalent facilities of the City Council at Gilroes. The Promoters fully accept that a Garden of Remembrance is a necessary adjuct to their proposals, but no difficulty in arranging this will arise."
  That is stated in the explanation to the Bill.
  Mr. Marshall: I still think that the hon. Gentleman should withdraw the answer that he gave to my hon. Friend.
  My objection goes deeper than the Committee points that the hon. Gentleman raised. There is an urgent need for the Government to review cremation legislation. It is over 30 years since there was legislation amending the Cremation Act 1902. We must consider seriously whether public attitudes to cremation have altered over the past 30 years and whether section 5 of the 1902 Act is necessary. It is because the company is seeking to waive section 5 of the 1902 Act, which refers to the need for the crematorium to be 200 yards away from dwelling houses and 50 yards from a public highway, that it has to promote the Bill. I believe that only the Government can carry out that review and provide the information that is necessary for the House to determine whether alterations to the present legislation are required.
  There are precedents for private legislation seeking to waive section 5 of the 1902 Act or a similar enactment in the Cemeteries Clauses Act 1847. The three examples that I have are the Torquay Cemetery Act 1940, the Merchants House of Glasgow (Crematorium) Order Confirmation Act 1950 and the London Necropolis Act 1956. The important point of principle to note is that none of the organisations in those three Acts seeking a waiver of section 5 was a firm
  74
  of funeral directors and all the sites were within an existing cemetery. All three Bills were successful, but only Torquay went ahead and since then the crematorium has been taken over by the local authority.
  If the Bill becomes law it will create a unique situation in two ways. First, the crematorium will be directly owned and run by a firm of funeral directors. Secondly, it will be the first time that the waiver will have been exercised outside a cemetery.
  It is my understanding that at present no crematorium is owned directly by any firm or firms of funeral directors. The Great Southern group of companies, as a holding company, owns crematoria and also carries on business as a funeral director, but the two are not directly connected. There is no financial link between the two functions. If the Bill becomes an Act there is a possibility of the company promoting cremation for business interests at a time when people are most vulnerable and need sympathy and protection and should not be made to feel that private gain is the objective of the funeral undertaker.
  Let us suppose, for the sake of argument, that the Bill becomes an Act. Why should not every other funeral director, not only in the city of Leicester but in the United Kingdom as a whole, apply to operate a cremation service? The arguments that the hon. Member for Harborough has used for Ginns and Gutteridge could apply to the Co-op and the other funeral directors in Leicester and throughout the country. We would have the ridiculous situation where every funeral director was also operating a cremation service.
  Mr. Michael Latham: Could the hon. Gentleman explain at least something during the course of his speech? If these arguments in principle are so important, why did the Leicester city council grant planning permission in the first place?
  Mr. Marshall: I think that I made it clear at the outset that I am not here to defend Leicester city council or the federation. Leicester city council can do what it wants and so can the federation. My point is that—I am sure that it is not lost on the Minister, even if it is lost on Conservative Members from Leicestershire who seem to be promoting a sectional interest—the principle underlying the Bill has far greater consequences than just giving Ginns and Gutteridge the power to operate a crematorium.
  Mr. Christopher Murphy: Will the hon. Gentleman give way?
  Mr. Marshall: No, I will not give way. I do not believe that the hon. Gentleman knows all that much about the city of Leicester or the county of Leicestershire.
  Mr. Murphy: The hon. Gentleman is talking about a general principle.
  Mr. Marshall: Very well.
  Mr. Murphy: As a Member of Parliament not directly, involved with the situation in Leicestershire, I am listening with interest to the point of principle that the hon Gentleman is trying to put across. Am I right in thinking from what he is saying that he is against the whole concept of private enterprise being involved in funeral direction and all other aspects of this difficult subject? If so, would he like to explain why?
  Mr. Marshall: I am pleased that the hon. Gentleman is dressed suitably for the debate.

  75
  What the hon. Gentleman says shows his lack of knowledge and understanding of the subject. If he was prepared to do a little reading to improve his knowledge he would note that some crematoria are already operated by private business men. I am not objecting to private interests operating crematoria. The point of principle that I am making is, first that if the Bill is passed it will create a unique situation in that a funeral director will also be directly responsible for operating a crematorium. I realise that Conservative Members want to keep the debate going until 8 o'clock. The hon. Member for Harborough has his hon. Friends coming back to support him if there is a Division. I also repeat my second point. If a waiver of section 5 is given, it will be the first occasion—again creating a precedent—that a crematorium has been sited outside a cemetery.
  Mr. Dorrell: The hon. Gentleman has established that this may be the first time that there would be a direct financial link between a crematorium and a funeral director. He has not established why he believes that to be so unacceptable. He has asserted that it is unacceptable, but so far he has not begun to substantiate that assertion.
  Mr. Marshall: What I have said so far is that it would be a unique situation in two ways and I said at the outset that there is a need for the Government to review the operation of the legislation. The situation should not be created by means of private Bills.
  Mr. Dorrell: Is the hon. Gentleman really saying that the House of Commons cannot make up its mind on the issue until the Government have spoken?
  Mr. Marshall: I am in favour of the House of Commons making up its mind. It will make up its mind in the next half hour.
  I repeat that if Ginns and Gutteridge can so operate a crematorium, why should not every other funeral director be in a similar position? They will not be unless they follow this route. I suggest that if permission is given in this instance, the Government must have a view of how they will react if every other funeral director wishes to do the same. Subjectively, do we want a situation where every undertaker can operate his own crematorium? I do not know. It is a matter for the House and the Government. But until there is an investigation and a review by the Government we shall not be in a position to decide.
  Secondly, will it lead to a deterioration in standards if every funeral director operated his own crematorium? That again reinforces my view that we need a Government review and new legislation.
  Being parochial and coming back to the city of Leicester, I believe that it is necessary to consider the effect on the present crematorium at Gilroes cemetery in Leicester. There is capacity for 27 cremations a day and at present there are only 14. If the city council's projections are to be believed—I accept them in this instance—further facilities will not be required until the end of the century. It is to cope with the situation at the turn of the century that the city council intends to develop the site at Enderby.
  If the Bill were passed it would take business away from Gilroes but the city council would still have to maintain the large gardens at the cemetery and the buildings. There
  76
  would be two alternatives. First, there could be an increased rate burden on the ratepayers of Leicester. Conservatives always seem keen to protect the interests of ratepayers and I would have thought that they would oppose the legislation on those grounds alone. Alternatively, it could lead to an increased charge for the bereaved. Either alternative is undesirable. For that reason, and for the reasons of principle that I have enunciated, I intend to seek to divide the House.
  7.40 pm
  Mr. Stephen Dorrell: It is with some trepidation that I rise to speak on this subject. My constituency is served direct by its own crematorium, but I believe that some people who live in Leicester have their loved ones cremated at Loughborough rather than at the Leicester city crematorium at Gilroes. In that sense, therefore, I have a direct constituency interest, but that is not what I want to speak about.
  The hon. Member for Leicester, South (Mr. Marshall) argued that the problem is that the Bill will allow a funeral director to have a direct financial interest in a crematorium. I do not see that that is an objection. First, the hon. Gentleman argued that it would be different if the crematorium were incorporated as a separate company. I suspect that if that were all that prevented the hon. Gentleman supporting the Bill, Ginns and Gutteridge would be happy to set up a separate company—presumably owned by the same shareholders, as in the instance that the hon. Gentleman cited—to be responsible for the crematorium. There would then be two separate companies—the funeral directors and the crematorium company. I cannot see that that would improve matters from the hon. Gentleman's point of view, although there would doubtless be no objection to organising the business in that way.
  Mr. Jim Marshall: As the hon. Gentleman will appreciate, cremation has never been positively promoted in this country as a means of disposal of human remains as opposed to the traditional method of burial. If a firm of funeral directors has a direct financial business interest in cremation there is, to my mind, a strong possibility that it will be in its financial interest to promote cremation as opposed to other forms of disposal.
  Mr. Dorrell: The hon. Gentleman may or may not be right, but if that argument has weight it has exactly the same weight in the instance that he noted of the two companies held by the same holding company as it would have if Ginns and Gutteridge set up its own crematorium company. In any case, it is an unjustified slur on the character of most funeral directors to imagine that they will promote a service that they offer as opposed to burial. I am sure that most funeral directors, including Ginns and Gutteridge, would leave the choice open to the family, or that if the individual had expressed his own wishes in his lifetime those wishes would be respected. The argument is not based on any evidence and cannot be sustained, although what the hon. Gentleman fears could perhaps be a remote possibility.
  The hon. Gentleman then argued that if we allowed this precedent of the funeral director having his own crematorium, the flood gates would be opened. Where might the flood lead us? The hon. Gentleman suggested that every funeral director might have his own

  77
  crematorium. I see no real objection in principle to that, but there is a simple business reason why it will never develop, and it is clearly illustrated in the case of the city of Leicester. A crematorium can handle many more cases than are generated by the average funeral director. The level of business required to make the crematorium necessary is very different from the level of business required to support the funeral director. That is one obvious reason why we shall never reach the position in which all funeral directors have their own crematoria, so the hon. Gentleman's basic argument does not really hold water.
  Given the history of this case, that fact should not surprise us. All the opposition to the Bill, both from the city council and, with great respect, from the hon. Gentleman, has been essentially insubstantial. The hon. Gentleman attacked my hon. Friend the Member for Harborough (Mr. Farr) on the ground that all my hon. Friend's arguments were essentially Committee points. That is unfair, as my hon. Friend was simply responding to the arguments from Leicester city council and other opponents of the Bill.
  Mr. Ron Lewis: It should not be overlooked that the Association of District Councils, a very important body, also opposes the Bill.
  Mr. Jim Marshall: It is Tory-controlled, too.
  Mr. Dorrell: No doubt if a referendum were held we should find a large number of people against the Bill, but we can deal only with the arguments that have been put to us. So far as I know, the Association of District Councils has not put its views in writing to Members of Parliament.
  Mr. Jim Marshall: Yes, it has.
  Mr. Dorrell: The hon. Member for Leicester, South is in an especially privileged position. Clearly I am not on the association's mailing list, as it has not circulated me. Nor, I gather, has it circulated my hon. Friend the Member for Harborough. Therefore, it is entirely reasonable that my hon. Friend did not respond to points that he did not know had been made to other hon. Members. My hon. Friend responded to criticisms of the Bill advanced by Leicester city council and to some extent in the local press. It is unfair to criticise his speech on the ground that it dealt with narrow Committee points. As he was merely responding to the arguments against the Bill, one may argue that the arguments against the Bill are based on narrow Committee points. The hon. Member for Leicester, South has thus condemned his own case by criticising my hon. Friend's speech. Essentially, the case against the Bill is a Committee case. It is insubstantial. No major argument of principle can be adduced against the Bill.
  Mr. Concannon: I am not from Leicester, so I take a broader view. In my view, the issue before us is whether section 5 of the Cremation Act should be waived on this one occasion. Why should that be done just for Leicester? Surely if section 5 is wrong for Leicester it must be wrong for everyone. I am not being parochial. I am not arguing for or against Leicester. I want to know why on this one occasion we should waive that section for that one city. The issue is not whether Leicester needs a crematorium, private or public, but whether the proposed waiver is justified on this one occasion in this one instance.
  Mr. Dorrell: The answer to the right hon. Gentleman's question, in a sense, is "Why not?" We are not being asked to decide the general question whether section 5 is right or wrong. We have to decide whether there is any objection in public policy to the provision of the Bill before us today. I see no objection to it and I have not yet heard any objection.
  Mr. Concannon: That was my objection.
  Mr. Dorrell: The right hon. Gentleman says that his objection is that the Bill contravenes the provisions of an Act of Parliament dating from 1902. If this were the first occasion on which that section had been contravened, he might have a point. Even then, although I am no expert on House of Commons procedure, I understand that any private Bill of this type will by its very nature contravene specific provisions of previous legislation.
  The right hon. Gentleman may or may not be right. It is not, however, the only occasion on which the section has been contravened. This was acknowledged by the hon. Member for Leicester, South, who drew a distinction between this and previous cases. I have suggested that it is a distinction without a difference. There is no basis for the distinction that he drew and no reason, therefore, for us to draw a distinction between this Bill and previous Bills that have been passed in contravention of the section in the Cremation Act.
  Mr. Farr: The right hon. Member for Mansfield (Mr. Concannon) asked why section 5 of the Cremation Act 1902 should not apply to Leicester. There is a whole list of precedents where section 5 of the Act has been disapplied by private Bills. These have included the London County Council (General Powers) Act 1935, the Greater London Council (General Powers) Act 1971, the Mortlake Crematorium Act 1936, the South-West Middlesex Crematorium Act 1947, the North East Surrey Crematorium Board Act 1956 and the City of London (Various Powers) Act 1969. Those are some of the Acts that have disallowed the provisions of the 1902 Act. They are precedents which we are asking Leicester to be permitted to follow.
  Mr. Dorrell: It is worth emphasising that the Greater London legislation exempts the whole of Greater London from the provisions of the 1902 Act. The exceptions have already been drawn in large number. If it is argued that there is a difference between them and this Bill, I do not believe that the difference amounts to grounds for rejecting the Bill.
  Mr. Jim Marshall: Does the hon. know whether any of the precedents given by the hon. Member for Harborough (Mr. Farr) apply to private funeral directors or to local authorities? I am sure that the two hon. Gentlemen will know that, in general, a private Bill is not required for funeral directors wishing to establish a crematorium, unless they want the waiver of section 5, whereas with local authorities it is necessary.
  Mr. Dorrell: I cannot quote the name of the firm in order to establish the point beyond peradventure. I am, however, virtually certain that the answer is "Yes". I am virtually certain that there is, somewhere in London, a private crematorium that benefits from Greater London council miscellaneous powers legislation. It is almost certain that there is, somewhere, another private

  79
  crematorium that benefits from a derogation from the original Cremation Act, although I cannot refer to a particular instance in detail.
  I wish to come back to the central argument of the promoters of the Bill. The argument is that the opposition to the Bill is insubstantial, for reasons that have mostly lain beneath the surface. They did, however, break the surface in the speech of the hon. Member for Leicester, South. The hon. Gentleman recognised that one of the arguments against the Bill was the impact of a new crematorium on the municipally owned city crematorium at Gilroes. That has, I believe, prompted Leicester city council to change its original grant of planning permission for the crematorium and then to petition the House to reject the Bill. There can be no clearer illustration of the truth of the statement that the real reason for objection to the Bill is the protection of the municipal monopoly in Leicester than the minutes of the Leicester city council recreation committee of 10 December 1982.
  At that stage the city council's planning committee had already given planning permission for the crematorium to go ahead. It had agreed that the crematorium should be built. At its meeting on 10 December the recreation committee, which is responsible for running Gilroes, the municipally owned crematorium, got wind of the fact that the city council was allowing a private funeral director to establish a private sector competitor for its business. It started looking around for an excuse under which the planning permission could be revoked. The minutes of the recreation committee state that a letter had been received from Ginns and Gutteridge, which
  "Stated that the proposed crematorium was not intended to compete with Gilroes but to make better facilities available, especially for the ethnic minorities."
  What concerned members of the recreation committee was the fact that the proposed crematorium intended to compete with Gilroes.
  The minutes added:
  "The City Planning Officer stated that the proposal had received planning approval, subject to some stringent conditions relating to exhaust gases. It was not the planning committee's prerogative to consider the financial effect on the council's own crematorium activities."
  There cannot be any clearer evidence in the minutes of the real concern of the members of the recreation committee. However, there is better to come. The minutes continued:
  "The City Attorney stated that in view of the planning approval it would be difficult to object to the proposal, if this were the committee's wish, on environmental grounds but the officers might be able to prepare a case on other grounds."
  The officers, the city attorney is apparantly saying, were willing to go away and grub up a case on grounds as yet undefined if the city council wished to oppose the development on the real ground that what was being done was to establish something in competition with a municipally owned crematorium.
  If one looks through the Leicester city council petition to the House in opposition to the Bill, one can have no clearer evidence of the insubstantial nature of the case put by the opponents. Paragraph 11 states that it was necessary to erect a chimney 70 metres high on the advice of the chief environmental health officer. The next sentence states:
  "A chimney of that height would not however be acceptable on planning grounds"
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  The Americans gave us Catch 22. Leicester city council seems to be developing its own home ground version—"On the one hand you have to have it. On the other hand we ban it." What is the promoter of the Bill supposed to do?
  The next paragraph contains a passage which I hesitate to read as it might be regarded as being in bad taste. It reads like a direct quotation from a Joe Orton comedy. In talking of people arriving at the premises of Ginns and Gutteridge, it says that
  "these people see the funeral processions which pass at present (and funeral processions are not generally considered a pleasant sight) but if the crematorium were established they would know that in some cases at least the corpse was to be cremated. That is something which in your Petitioner's submission is found so distasteful by some as to cause positive distress."
  We all have sympathy for people whose relatives have died recently, but it is stretching credibility to imagine that passers-by would be more distressed on seeing a funeral cortege knowing that it was going to a crematorium than they would be if they knew that it was going to a traditional burial. That is absurdity gone mad.
  The petition continues in that vein. In my view, it is a very insubstantial case against a Bill promoted by a firm which offers a good service in Leicester and which wants to improve that service to all members of the community.
  I hope that the House will resist the blandishments of the hon. Member for Leicester, South and give the Bill a Second Reading.
  8 pm
  Sir Kenneth Lewis: If ever there was a case for the Committee stage of a Bill coming before its Second Reading, this is it.
  The Bill deals with a local matter in an area on which my constituency impinges slightly. All the arguments from both sides to which we have listened ought to be deployed in Committee and, I am sure, will be so deployed. I do not know what will happen as a result. Obviously there are points to be made on both sides, but at least in the Committee counsel will be instructed to represent the views of both sides.
  The House of Commons has to consider where it goes with the private Bill procedure. Very few hon. Members are present to listen to the debate. Most of us are locally interested. It does not deal with a matter of great national interest, and it breaks into business which is of national importance. Probably there will be a Division at the end of the debate, and again very few hon. Members will take part in it. What may be an important Bill in terms of one specific locality—in this case, the Leicester locality—may well founder because it concerns a local matter that is of no interest to large numbers of hon. Members who represent constituencies far away from Leicester.
  This debate is a good example of a procedure that needs modernising.
  8.3 pm
  The Under-Secretary of State for the Environment (Mr. Giles Shaw): It is one of the fascinations of the House of Commons that, following a debate for three hours on a national emergency, we move to consider a private Bill on the creation of a private crematorium in Leicester. That is in no way to denigrate the promoters of the Bill from the point of view of the business of the House, and I note what my hon. Friend the Member for

  81
  Rutland and Stamford (Sir K. Lewis) said about the procedure, but the fact remains that Parliament allows a private Bill to have a proper debate and, quite rightly, it enables hon. Members to advance the opposing point of view. They have a right to do that and to take the side of petitioners against the Bill.
  It is my duty to give the Government's view on the Bill, bearing in mind all the time that it is essentially a private Bill, the Second Reading of which was well moved by my hon. Friend the Member for Harborough (Mr. Farr).
  The Government responsibility for crematoria and cremations is divided between two Departments, the Home Office and the Department of the Environment. Essentially in this measure the House will recognise that we are dealing primarily with the absolution from the planning restraints involved to enable the proposed development to go ahead. It is correct to say that in a sense the Department of the Environment is in the lead on this issue.
  It is for my Department to offer any Government comment on the siting of the proposed crematorium. I understand the concern felt by those who live and work in the area. I acknowledge the worries expressed by the hon. Member for Leicester, South (Mr. Marshall), the hon. Member for Carlisle (Mr. Lewis) and the right hon. Member for Mansfield (Mr. Concannon) about whether this is an appropriate site. However, I am sure that hon. Members will recognise that that is a matter that the planning authority will determine. The procedures being followed in this measure allow the local planning authority to adopt its normal course of action.
  I know that many people take the view that funeral processions are somewhat harrowing. However, the point was well made by my hon. Friend the Member for Loughborough (Mr. Dorrell) that that of itself was not necessarily a matter that should cause us to express concern in legislation. The absence of a garden of remembrance from the site is another factor that causes concern. I understand that that, too, has been taken on board by the promoters and that it is their intention to correct that omission.
  However, these are factors that ought to be taken into account in deciding whether the project should go ahead. No doubt they were the kinds of factors very much in the minds of our predecessors when they enacted section 5 of the 1902 Act. I am bound to say that that Act is not necessarily the most modern way of expressing planning permissions, proximities to dwellings, and so on. But they imposed restrictions—and it is right that they should be observed—on the proximity of crematoria to dwelling houses or public highways.
  The intervention of my hon. Friend the Member for Harborough has established already that there are a number of precedents for local Act amendments to the restriction on the distance of crematoria from dwelling houses. That is well precedented. What is more, as the House will have recognised, they are almost all for urban planning authorities facing similar problems to that which Leicester city council faces and one of the obvious problems that face Messrs Ginns and Gutteridge and their premises.
  These questions of siting and the absence of a garden are considerations that nowadays can and should be taken into account in the planning system. In this case, therefore, the Government do not object to the waiving of the restrictions in the 1902 Act on environmental grounds.
  82
  Since the Bill disapplies class XII of the General Development Order, this development is subject to normal planning controls, and the planning aspects are a matter for the local planning authority—in this case, Leicester city council.
  The hon. Member for Leicester, South expressed concern that this case would create a precedent for bringing together under one roof and under unified control the two responsibilities of undertaker and cremation authority. To the best of my knowledge, this is permitted by the 1902 Act. It has not occurred up till now, but that of itself should not concern us in terms of the section 5 exemption—[interruption.] I shall dwell on this at length for the benefit of the hon. Member for Leicester, South despite the prevaricating circumstances of the sudden arrival of my hon. Friend the Member for Grantham (Mr. Hogg). The hon. Member for Leicester, South deserves an answer. My hon. Friend the Member for Grantham is merely "ticking" in his usual way that I should resume my seat.
  This would not be the first private crematorium. There are some 26 others in operation. But if the Bill is successful and the promoters secure planning consent, it will be the first crematorium controlled directly by a firm of funeral undertakers. There is nothing to stop a firm of funeral undertakers establishing a crematorium that satisfies the existing general legislation, and it appears to be a historical accident that so far this has not occurred. But it is a development that has implications for existing safeguards, and here I accept the remarks of the hon. Member for Leicester, South. My right hon. Friend the Home Secretary shares the hon. Gentleman's concern, because one of the purposes of the Cremation Acts is to prevent cremation being used to conceal the commission of a crime. Such a possibility is extremely rare, but it is important that the safeguards remain.
  Under the cremation regulations the medical referee of a local authority is responsible for scrutinising the documentation that is required. He has to see that the regulations are effective and that there is nothing suspicious about the circumstances of the death. He is assisted in this job by the staff of the crematorium.
  My right hon. Friend the Home Secretary is giving further careful consideration to whether that job can continue to be done as effectively when the same staff are responsible for making an application for cremation. I can tell the hon. Member for Leicester, South that his point has been taken on board. It is a matter on which my right hon. Friend probably will be able to give assistance at the Committee stage for adequate consideration of this matter.
  The right hon. Member for Mansfield argued that a private Member's Bill is not an appropriate vehicle for approval of such a project as it involves the possibility of a fundamental change in the relationship between undertakers and operators of crematoria. It is a matter for Parliament to determine. The Act makes that provision, and there is nothing peculiar in this measure.
  Paying due consideration to the points raised by the hon. Member for Leicester, South (Mr. Marshall), the fact that planning provision will apply, and that Leicester city council has given initial outline planning authority and seeks to apply stringent criteria, I believe it right that an opportunity should be given for the promoters of the Bill to persuade the House that the powers they are seeking are justified and for the petitioners to state their case in Committee.

  83
  I recommend that the Bill be allowed to proceed so that the issues can be fully considered in Committee.
  8.10 pm
  Mr. Farr: With the leave of the House, Mr. Deputy Speaker, I shall reply briefly to two major points. The hon. Member for Leicester, South (Mr. Marshall) questioned whether it was right for funeral directors to operate a crematorium. I am advised that there is nothing in the present law to stand in the way of that. There may or may not be precedents for it, but it is an incidental effect of the Bill and not part of the permission that Ginns and Gutteridge needs to receive from the House.
  The hon. Member for Carlisle (Mr. Lewis) raised a point about the garden of rest. Following research, I understand that no Conservative Member has received the brief from the Association of District Councils to which he referred. If the matter concerns him, no doubt he will approach Committee Members and ask them to deal with it.
  Mr. Ron Lewis: The Association of District Councils sent the letter to its vice presidents, which is why I received it.
  Mr. Farr: I am grateful to the hon. Gentleman for clarifying the matter.
  The right hon. Member for Mansfield (Mr. Concannon) said that there had been many precedents for the Bill, and I dealt with that point in an intervention.
  I am grateful to all hon. Members who have shown interest in this important measure.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 88, Noes 54.

  Division No. 66]

  [8.15

  AYES

  Aspinwall, Jack

  Farr, John

  Beaumont-Dark, Anthony

  Fenner, Mrs Peggy

  Braine, Sir Bernard

  Fookes, Miss Janet

  Bright, Graham

  Fox, Marcus

  Brinton, Tim

  Garel-Jones, Tristan

  Brooke, Hon Peter

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

  Brown, Michael(Brigg & Sc'n)

  Hamilton, Hon A.

  Browne, John (Winchester)

  Hamilton, Michael (Salisbury)

  Buchanan-Smith, Rt. Hon. A.

  Heddle, John

  Butcher, John

  Henderson, Barry

  Carlisle, John (Luton West)

  Hogg, Hon Douglas (Gr'th'm)

  Carlisle, Rt Hon M. (R'c'n)

  Howell, Ralph (N Norfolk)

  Channon, Rt. Hon. Paul

  Hunt, David (Wirral)

  Chapman, Sydney

  Hunt, John (Ravensbourne)

  Clegg, Sir Walter

  Jenkin, Rt Hon Patrick

  Cockeram, Eric

  Jopling, Rt Hon Michael

  Cope, John

  Lang, Ian

  Costain, Sir Albert

  Latham, Michael

  84

  Lawrence, Ivan

  Shepherd, Colin (Hereford)

  Lee, John

  Skeet, T. H. H.

  Lewis, Kenneth (Rutland)

  Smith, Tim (Beaconsfield)

  Lloyd, Peter (Fareham)

  Speller, Tony

  Lyell, Nicholas

  Spicer, Michael (S Worcs)

  Macfarlane, Neil

  Squire, Robin

  MacKay, John (Argyll)

  Stainton, Keith

  McNair-Wilson, M. (N'bury)

  Stevens, Martin

  McQuarrie, Albert

  Stewart, A.(E Renfrewshire)

  Marten, Rt Hon Neil

  Stradling Thomas, J.

  Mawby, Ray

  Taylor, Teddy (S'end E)

  Mawhinney, Dr Brian

  Thompson, Donald

  Maxwell-Hyslop, Robin

  Thorne, Neil (Ilford South)

  Miller, Hal (B'grove)

  Townend, John (Bridlington)

  Mills, Iain (Meriden)

  Townsend, Cyril D, (B'heath)

  Moate, Roger

  Trippier, David

  Monro, Sir Hector

  Wakeham, John

  Mudd, David

  Walker, B. (Perth)

  Myles, David

  Watson, John

  Neubert, Michael

  Wells, Bowen

  Newton, Tony

  Wheeler, John

  Normanton, Tom

  Whitney, Raymond

  Page, John (Harrow, West)

  Winterton, Nicholas

  Pollock, Alexander

  Wolfson, Mark

  Renton, Tim

  Rhodes James, Robert

  Tellers for the Ayes:

  Rossi, Hugh

  Mr. Stephen Dorrell and

  Shaw, Giles (Pudsey)

  Mr. Christopher Murphy.

  NOES

  Allaun, Frank

  Kerr, Russell

  Alton, David

  McKay, Allen (Penistone)

  Beith, A. J.

  Marshall, Jim (Leicester S)

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

  Mason, Rt Hon Roy

  Campbell-Savours, Dale

  Millan, Rt Hon Bruce

  Canavan, Dennis

  Mitchell, R. C. (Soton Itchen)

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

  Morris, Rt Hon A. (W'shawe)

  Concannon, Rt Hon J. D.

  Morton, George

  Cook, Robin F.

  Newens, Stanley

  Cowans, Harry

  Orme, Rt Hon Stanley

  Cryer, Bob

  Penhaligon, David

  Davidson, Arthur

  Powell, Raymond (Ogmore)

  Dean, Joseph (Leeds West)

  Prescott, John

  Dixon, Donald

  Price, C. (Lewisham W)

  Dobson, Frank

  Rees, Rt Hon M (Leeds S)

  Dormand, Jack

  Shore, Rt Hon Peter

  Dunwoody, Hon Mrs G.

  Skinner, Dennis

  Eastham, Ken

  Smith, Rt Hon J. (N Lanark)

  Faulds, Andrew

  Thorne, Stan (Preston South)

  Foot, Rt Hon Michael

  Varley, Rt Hon Eric G.

  Golding, John

  Wainwright, R. (Colne V)

  Hamilton, James (Bothwell)

  Wellbeloved, James

  Harrison, Rt Hon Walter

  Whitlock, William

  Healey, Rt Hon Denis

  Wigley, Dafydd

  Heffer, Eric S.

  Winnick, David

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

  Home Robertson, John

  Tellers for the Noes:

  Hooley, Frank

  Mr. Ron Lewis and

  Kaufman, Rt Hon Gerald

  Mr. Andrew F. Bennett.

  Question accordingly agreed to.
  Bill read a Second time and referred to the Examiners of Petitions for Private Bills.

  Miscellaneous Financial Provisions Bill
  Question again proposed, That the Bill be now read a Second time.
  8.20 pm
  Mr. Robin F. Cook: As I was saying, before, to my regret, the House decided to go private, I was in the House during half of the period when the illegal regime in Rhodesia defied the Crown. I was recalling with my hon. Friends that, during that period, there were hon. Members who were happy to extend succour and support to those rebels against the Crown, and that, on the whole, those hon. Members who were prepared to do that were the same Members who pride themselves on a rigorous financial orthodoxy. However, we now see from this clause that those hon. Members, while supporting not simply the most rigorous but the most savage financial orthodoxy at home, were also prepared to support a regime that had welshed on its international financial obligations.
  One question arises on the clause, and I hope that someone among the ministerial football team that has come along to support the Minister will be capable of answering it. I understand that there were five different debts on which the illegal regime defaulted, thus triggering our guarantee. Of those five, three are accepted and extinguished by the clause that is now being considered. That leaves another two that remain the responsibility of the present legal Government of Zimbabwe. What is strange about this division is that the two debts that the Government of Zimbabwe are left with are worth more than the three debts that we have accepted. Their debt liability is some £20·8 million; the debt liability that we are accepting and extinguishing in the Bill is £13·4 million. I therefore ask the Minister: why is there this distinction among the five debts? What logic is there in our accepting the liability for part of those debts? Why, if we are accepting only part of those debts, do we accept the lesser part?
  Clause 4 provides that Treasury guarantees can be provided on a more flexible basis to cover more flexible borrowing requirements. The Opposition are happy to support the clause, in so far as it goes. Plainly, it is desirable that when public sector bodies borrow, they should be able to borrow on the best terms that are available. However, it is ironic that the House should be asked to consider this clause, which provides for greater flexibility in Treasury guarantees, in the immediate wake of a public expenditure White Paper that provides for a further reduction in borrowing by public bodies. If we look at the table on nationalised industries in the White Paper, we see that the White Paper provides over the next couple of years for a reduction in net external finance for the nationalised industries of no less than 30 per cent. At the same time that nationalised industries are to have a reduction in external finance of 30 per cent., they are expected to achieve the trick of raising investment by 12 per cent. Candidly, I do not believe that that trick can be performed. In my opinion, one cannot make more bricks with less straw. I do not believe that the nationalised industries will be able to increase investment while reducing their borrowing.
  Those entries in the public expenditure White Paper are pure fantasy. They are a piece of the fantasy that covered last year's expenditure White Paper, and that stimulated
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  the Treasury to provide a deficit of £10 million in that White Paper for the shipbuilding industry although in the current year, a year of international recession, there is a deficit in our shipbuilding industry, not of £10 million but of £70 million—all of this is at a time when major public bodies are being allowed, if not encouraged, to place orders for ships in Korean shipyards.
  if there is to be borrowing of any amount, it is plainly desirable that that borrowing should be on the most flexible basis. I wish to put a question to the Minister. It is a question that involves Treasury policy, and presumably, therefore, an answer can be obtained tonight: why does the Treasury persist in its perverse policy of counting a Treasury guarantee as an item of public expenditure? It is frankly silly to do so. The risk of default by a major public body is minimal. All that need concern the Treasury is that it has the capacity to honour the guaranteee should it be triggered. If we ever arrive at the state in which the Treasury is liable to be bankrupted by the triggering of one of those guarantees to one of the public bodies beneath the Treasury, we shall be in such financial turmoil that the fall of that guarantee will be a small matter indeed. It is, in truth, a daft practice that acts as an artificial constraint on borrowing for investment and it is high time we had a more realistic system that does not impose an artificial burden on the PSBR every time a Treasury guarantee is offered.
  Clause 5 relates to the Crown Estates Commissioners. I say straight away how refreshing it is that at a time when many businesses cannot see beyond the next few months or perhaps weeks there should be one body in the land that finds 100 years too short a time span for effective planning and is therefore obliged to request us to enable it to extend the leases for 150 years. It will not surprise the House that that body trades in property. I doubt whether many manufacturing companies in the length and breadth of this land can see beyond the next 100 days, never mind beyond the next 100 years.
  One obvious question arises in relation to this clause and I shall touch upon it only briefly because my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson) intends to ventilate it at rather greater length from his constituency experience. If the House is to extend to the Crown Estates Commissioners the right to increase their period of chief lease, that entitles the House to ask questions of the Crown Estates Commissioners about the terms on which they make that lease available to subtenants or sub-lessees, particularly when there is some evidence from practices within London, some of which have come before the courts, that some of the lessees who have obtained a lease from the Crown Estates Commission appear to have been pioneering techniques designed to avoid the provisions of the Rent Acts. Therefore, I hope that when my hon. Friend raises the matter in the course of the debate he will receive a full reply from the Minister because I suspect that this is one matter to which we might wish to return when the Bill is committed to a Committee.
  Clause 6 deals with the extinction of annuities, to which the Minister referred. I felt that he did not do full justice to the colour and background of the clause which clears up the lumber-room of history. I have sat on the last half dozen Finance Bill Committees and in the course of each of those we have spent a considerable time debating at length the treatment of the taxation and excise Jury on alcohol. Throughout those entire six years I was in a state of complete ignorance that each year we were paying £803

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  to the Duchy of Lancaster on the grounds that it has surrendered the right to levy prisage and butlerage on wines brought into the Duchy of Lancaster. There are one or two hon. Members from the north-west in the Chamber tonight. I would not care to try to describe to the House the response that the Duchy of Lancaster might get were it to stop those hon. Members on their way into the northwest and seek to apply prisage and butlerage on any wines and spirits being brought by those hon. Members into the duchy.
  I also find it rather strange that we are still paying £4,000 to the Duchy of Cornwall in recognition of its surrender of the right to mint coins in Cornwall. I am surprised that a Treasury team so committed to the doctrine of monetarism should have waited so long before striking out from the legislation a measure that could have created such havoc with M3 if the Duchy of Cornwall were to seek to reassert its ancient right to mint coins. The Opposition will not stand in the way of sweeping out that particular corner of the lumber-room and we shall happily support the clause.
  Among the disjointed parts of the Bill I come lastly to clause 7. Not only do we support that clause, but we warmly welcome and enthusiastically endorse it. Indeed, it is only fair at this point to pay tribute to my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) because that clause is the fruition of his long campaign to achieve recognition of the problem. It is similar to an amendment that he moved during a debate on the Local Government Finance Act 1982 in the last Session. The clause will end an anomaly that deprives many councillors of any allowance if they fall unemployed while in office. I have been a councillor and I am bound to say that there is little understanding among the public at large as to the financial sacrifice that many individuals experience upon entering local government. There is little appreciation of the loss of income, the certain loss of promotion and, in cases that I have known, the loss of pension rights that flow from participation in local authority duties. From experience of people I have known I can say that any unemployed councillor is in a desperate plight. Even when unemployment is low, an employer will not take on an unemployed councillor in the full knowledge that he will have to give him the right to time off to attend to his local authority and civil duties. Therefore, I strongly support the clause, and it will receive the Opposition's heartiest endorsement. However, the need for the clause has become urgent as a result of the explosion in unemployment under this Government, which has affected members of local authorities as well as their electors.
  I turn back to the first two clauses, which deal with the promotion of industrial development. We support clause 1, which will widen and strengthen the Development Commission's powers to carry out the promotion of industrial development in rural areas. Indeed, it would be strange if we did otherwise, because it was the Labour Government who greatly expanded the role of the Development Commission in promoting industrial development in the rural areas. I have studied the fortieth report of the Development Commission—it is available in the Library—which confirms how right we were to expand that role of the Development Commission. It also confirms
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  the valuable role carried out by the Development Commission and COSIRA, which acts as its agency in stimulating small businesses in rural areas.
  I noted what the Minister said about COSIRA, and I welcome his endorsement of its work, but I was intrigued to note that the commission's fortieth report contains a reference to it having achieved the target of a 10 per cent. reduction in manpower. Where did that 10 per cent. cut come from? Was it something that the commission thought up, or was it imposed from outside? If the Government proposed to the commission or to COSIRA that there should be a 10 per cent. reduction in manpower, it casts an ironic light on the statements of general support that we have heard today from the Dispatch Box. It is impossible to read the fortieth report without noting the comments on the way in which the Development Commission's role has been made much more difficult by Government policy. For example, the Development Commission notes that local authority expenditure cuts have
  "hit rural areas particularly hard."
  It also notes that it is now more difficult for it to carry out its task of training the unemployed and of retraining those in employment because, as a result of reductions in public transport in the rural areas, those undertaking training have to travel much further and almost certainly have a more expensive journey.
  Mr. Frank Hooley: If there is any transport at all.
  Mr. Cook: Indeed.
  The same paragraph points out that many trainees have to stay overnight to undergo retraining, because there is no transport. That is extraordinary in a comparatively compact country. Above all, the Development Commission repeatedly points out that the economic context of low demand and high interest rates constantly frustrates its efforts to persuade private industry to invest in the rural areas that it seeks to assist. If we acknowledge that problem in relation to the Development Commission's work in the rural areas, we see it writ large in the context of the four English regional development organisations, dealt with in clause 2, which cover a great part of the assisted areas in Britain. I assure the Minister that we shall support the clause and will not stand in the way of putting assistance to those development organisations on a regular footing.
  It is only fair to say that the additional resources released by clause 2 are dwarfed by the onslaught on incentives to regional development launched by the Government when they took office and sustained remorselessly since. The Minister with responsibility observed:
  "Regional policy is obviously likely to be more effective if it is concentrated on a smaller number of areas where there is greatest need."
  That might make sense if areas of need were diminishing and contracting. In that context one could understand the case for concentrating resources on diminishing areas of need. All right hon. and hon. Members know that that is not happening. We know that under the present Government areas of need have expanded as never before.
  Last July the Secretary of State for Industry made a statement that effectively halved the population covered by assisted area status. The percentage of the working population covered shrank from 47 per cent. to 27 per cent. Within the areas that lost their status that day are no

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  fewer than 300,000 men and women who are unemployed now, but who were not unemployed in 1979. In each of those areas the problem is worse today than it was in 1979—it is not better.
  Concentrating on the areas that were assisted in 1979 understates the Government's epic achievement. The Government's epic achievement is to create areas of urgent need where before there was no need for assistance. An obvious example is the west midlands where unemployment is higher than in Scotland. In the west midlands the largest number of people are chasing the smallest number of jobs. The west midlands has the highest ratio of unemployed persons to vacancies in mainland Britain. The ratio is 49:1. The Government have created in many areas of mainland Britain an unemployment to vacancy ratio which before was known only in Northern Ireland.
  The Government's response is further to cut regional development assistance. In the financial year that draws to a close next month £600 million will have been spent on regional development grants. In real terms that is the lowest figure since the mid-1960s when the regional development programme began in earnest. The public expenditure White Paper issued a fortnight ago forecast that in the next financial year that figure, already at a record low, will be cut by a full 25 per cent. to £474 million. We are witnessing, not a concentration of resources in the areas of greatest need, but a cut in resources at a time when the demand and need for the resources are expanding.
  Of course we are glad that some support has trickled out of the Treasury in the direction of the four regional development organisations, but when regional expenditure is being butchered we cannot be expected to be thankful. Each of the regions has suffered under this Government but the north-west has suffered the highest proportional increase in unemployment. All regions are bad, but the north-west is outstanding.
  In January 1979 about 192,000 men and women in the north-west were unemployed. In January this year about 419,000 men and women in the region were unemployed. Even that figure understates the problem because it is compiled under the new Tebbit index. If we use the comparable basis for the figure collected in January 1979, the true figure for January 1983 is not 419,000 but 447,000 men and women unemployed. That is well over double the rate of unemployment of January 1979.
  Even when we contemplate the modest expansion of resources to these development organisations we find an element of controversy. The North of England Development Council applied to the Minister of State, Department of Industry for a grant of £1 million. The Minister gave it £850,000. Since that same Minister is saving £126 million in expenditure on regional development, it is rubbing salt into the wound now to save a further £150,000 at the expense of the North of England Development Council. But the position of the North-West Industrial Development Association is bizarre. Indeed, it has sought a meeting with the Minister of State, which will take place on Wednesday. Unfortunately, that meeting will come after rather than before the Second Reading of the Bill. I therefore hope that the Minister will be able to shed some light on this matter before the House proceeds to give the Bill a Second Reading.
  As I understand the background to the controversy, the grant to NWIDA was originally introduced on the basis of a one-to-one formula—for every £1 the Government gave
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  in grant, the local authorities in turn matched it with £1 of their own. The previous Labour Government changed the formula to be more generous. They introduced a two-to-one formula—£2 was granted for every £1 matched by the local authorities.
  In 1980, as part of the Government's general retrenchment on regional expenditure, that formula was undermined and replaced once again with the one-to-one formula. However, there was a catch this time—a catch that was absent when the previous Conservative Government employed the one-to-one formula. The requirement that every £1 of Government money should be matched by £1 of local authority money was reimposed in the context of a savage drop in the resources available to the local authorities, which were unable to honour their part of the formula with the result that in each of the three years since then NWIDA has underspent because it cannot get the matching grant from the local authorities.
  In Hansard of 19 January the Minister of State, Department of Industry, said that for the next financial year he will give a grant to NWIDA up to a maximum of £260,000. That figure is completely meaningless. Because of the constraint of local authority expenditure, NWIDA anticipates that it will be lucky if it receives £150,000 from the local authorities in the area and therefore it will be able to draw only £150,000 of the Government grant. Therefore, the Minister's figures are wholly fictitious and misleading.
  The interesting question is, why did the Minister retain the one-to-one formula? When NWIDA applied for its grant, it applied to be put on the same basis as the North of England Development Council which has now—we welcome it—been freed from the constraint of matching Government grant with a grant from the local authorities. In that written answer of 19 January, the Minister of State said:
  "I have not, however, been able to satisfy myself that the requisite degree of commitment to a fully and effectively coordinated regional programme by all the local authorities and new towns in the north west has yet been domonst-ated".— [Official Report, 19 January 1983; Vol. 35 c. 145.]
  My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) intervened in the Minister's statement to ask a question on this point. I repeat that question and I hope that, with the time that has elapsed since we touched on this point earlier this evening, the answer will be available when the Minister comes to reply. My understanding is that every local authority and, admittedly only recently, now every new town authority within the area has agreed that NWIDA should act for them in coordinating and liaising on the promotion of industrial development. Given that every local authority and every new town has agreed to that, it is incomprehensible what the Minister means in saying that he demands further demonstration from NWIDA that it has the support of its local authorities. This point is of particular pertinence because I understand that the Yorkshire and Humberside development association proposes to embark on a phased expansion of its budget.
  Mr. Campbell-Savours: I intervene because my hon. Friend is referring to the organisation that is responsible for promoting industrial development in my constituency, NWIDA, that operates in the north-west. Does he recognise clearly that the Minister, in leaving the arrangement as it is for NWIDA and leaving the funding as it stands, is, in effect, saying to the north-west region

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  "You must have second best to the northern region"? It has been acknowledged that the northern region has better funding, but it has not been demanded of NWIDA that the service that it provides to each of the local authorities in its area is as good and effective as that provided by the NEDC. Therefore, lower standards are being imposed in the north-west than in the northern region.
  Mr. Cook: I shall respond to my hon. Friend's intervention with some temerity. I am conscious that as a Scots Member I am treading on eggs throughout my observations. In my contact with the regional development organisations during today, each one said that it wished that it could be outside with the Scots. The North of England Development Council felt that it would have been outside with the Scots if it had obtained the full £1 million. It received only £850,000, which, it believes, leaves it 85 per cent. on the way to being out with the Scots.
  My hon. Friend the Member for Workington (Mr. Campbell-Savours) is right to raise an issue which I am sure will wrankle with those in the north-west. It is not at all apparent why the north-west has failed to meet a test which has been successfully passed by the North of England Development Council. It has demonstrated that it has the unanimous support of every local authority and development corporation in the area. That was demonstrated by the North of England Development Council. I accept my hon. Friend's argument that the two organisations should be put on the same basis.
  The Yorkshire and Humberside Industrial Development Association did not apply for the same basis of funding in the current year because it wanted to see its budget rise in an appropriate and manageable way. However, it has applied for and succeeded in obtaining a significant increase in resources. Next year it will wish to be in the same position as the North of England Development Council and in the position which NWIDA had hoped to achieve this year. It wants some assurance that when it makes that application it will be received favourably. Unless it has that assurance it cannot with confidence plan for the expansion that it wishes to take place in phases.
  When the Minister replies, I hope that he will be able to explain the curious chain of reasoning by which he has justified refusing the application, or, better still, say that on Wednesday, when he meets the delegation, he will be expressing a change of heart and will be putting the association on the same basis as that which prevails in the north of England.
  I am indebted to The Observer for reminding us that it was precisely 20 years ago yesterday when Lord Hailsham donned a flat cap and went to the north-east as the Minister with responsibilities for regional affairs. He went to the north-east to mark concern and anxiety about the rate of unemployment in the area, which was then 5 per cent. The rate in January was 20·6 per cent. One is bound to say that the Government of which the noble Lord was then a member sprung from a very different Conservative party from the party that created the present Government. The current rate of unemployment is now four times that which prompted the noble Lord's visit, yet we do not see the appointment of a special Minister. We do not see the spurious initiative of a special visit. We do not even see
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  the purchase of a special hat. All we see is a cut in public expenditure to reduce the moneys available to the regions for regional development grant.
  Mr. Campbell-Savours: There are only three Tory Members in the Chamber. Where are the others?
  Mr. Dennis Skinner: In the Dining Room, where else?
  Mr. Cook: The Cambridge Economic Review has spelt out clearly what will happen if the Government's policy in the regions is continued. It has perceived that by 1990, 800,000 men and women will have been obliged to leave assisted areas in the search for work—half going abroad and half staying here—(Interruption.] As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) says, it will be the only growth area. Even though those 800,000 people will have left assisted areas by 1990, the rate of unemployment in the assisted areas will be 20 per cent.
  On the front page of The Observer, there was a headline that said that the Prime Minister has given the CND what she described as a Hitler warning. If there is a warning to the House from the lessons of that period, it is a warning of the malignant and evil political forces that are released by mass unemployment and leaving a generation of young people without hope. If we are to save this nation from those malignant and evil political forces, it will not be necessary for us to provide additional resources on this scale for development organisations; it will be necessary for us to change the whole thrust of the Government's economic policies. It is perfectly plain from the past four years that to do that it is necessary first to change the Government.
  8.55 pm
  Mr. Frank Hooley: I do not intend to follow my hon. Friend the Member for Edinburgh, Central (Mr. Cook) into all the complications of the Bill. I shall comment briefly on matters that relate to clause 3 concerning the extinguishing of some Zimbabwean debts.
  Clause 3 echoes battles that were fought a long time ago. Some of us took part in them. It is a curious reflection on the solemn and slow proceedings of the Treasury that it should take 31 years to write off a debt that was originally incurred by the colony of Southern Rhodesia, which is now, happily, demised. It has also taken the Treasury 25 years to write off the debt of that ill-conceived and unlucky venture known as the Federation of Rhodesia and Nyasaland. Few people will recall that experiment with any satisfaction.
  The Sub-Committee on Overseas Development has reported on the Zimbabwean economy. The report relates to debts and the land resettlement scheme. I do not wish to go over the points that were made in that report as it is available to hon. Members and was the subject of a formal reply by the Government. I should like to emphasise that the United Kingdom still owes a debt to Zimbabwe in respect of 10 years of civil war which her people suffered on account of the mishandling and bungling of the federation, subsequent political developments and our failure to put a rebellious, racist regime in its place more vigorously and energetically when the rebellion occurred.
  It is pleasant to be able to record that the present independent Government of Zimbabwe are tackling the country's problems with great vigour, energy and some

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  success in the light of the constraints and difficulties that they face. Last year, or the year before, Zimbabwe had a record maize harvest. It was able to contribute to the alleviation of the food problems in that part of the world. Unfortunately, that has not continued.
  The country is faced with serious difficulties on account of the deliberate policy of subversion and harassment by its neighbour to the south—South Africa. In that connection, I am appalled by the recent decision of the Sheffield chamber of commerce to send a trade mission to South Africa. It is intending to expand and promote our economic relations with that country rather than contract them.
  The economic problems of Zimbabwe, which will be alleviated slightly by the provisions of clause 3, are compounded by its position as a land-locked country. The difficulty that arises there is that all of its essential supplies of energy have to go through Mozambique and dangerous and difficult country, again because of the unashamed and admitted incursions, attacks and sabotage carried out in Mozambique by the South African Government.
  Therefore, I hope that in addition to writing off the debt, which is provided for in the Bill, Her Majesty's Government will look carefully at other possibilities of assisting the Zimbabwean economy directly by such further technical and other assistance as that Government may request and indirectly by making sure that we have good relations with Mozambique, and in particular by helping Mozambique with the communications, oil pipelines and other facilities that are vital not only to its economy but to the economies of the land-locked central states in southern Africa, notably Zimbabwe, Zambia and Malawi.
  In a recent report by the Select Committee on Foreign Affairs dealing with the work of the Commonwealth Development Corporation, the Committee suggested that the corporation should not expand its operations unduly to various parts of the world in view of the amount of opportunities that still exist in the Commonwealth. We made a special exception in the case of Mozambique, precisely because of the reliance of the British Commonwealth countries such as Zimbabwe, Zambia and Malawi on communications through Mozambique, by road, rail and in the form of oil pipelines. I hope that in due course the Government will reply to that point.
  The other aspect of the economy of Zimbabwe about which it is appropriate to talk in connection with the clause is the Southern Africa Development Co-ordination Conference, which is an organisation set up by the nine states—I do not know whether one can call them front-line states, but the nine African states—immediately to the north of South Africa. It is designed to harmonise and bring together the economic policies of those nine states with a view to providing mutual assistance and development and to overcoming the considerable problems that the states share, not least the subversion and harassment from South Africa.
  I hope that in addition to writing off the debts Her Majesty's Government will give serious consideration to how they can best and most profitably join in that cooperative effort of the nine states in the SADCC in helping to build up their economies. Those countries have enormous potential wealth. They could and will in due course provide considerable markets for British enterprise. They are of great significance politically in Africa, because on their democratic development and full
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  independence will depend the peace, stability and prosperity of a vast area Of the world in the southern part of that continent.
  Therefore, I welcome the somewhat belated action by the Treasury in writing off debts that are 23, 25 and 31 years old. I hope that that is a sign that this country is still alive to the debts and obligations that we owe to the newly independent countries within the Commonwealth. I hope that we shall consider these debts and obligations not only directly in terms of Zimbabwe but in the wider context of our relationships with the countries of the Southern Africa Development Co-ordination Conference to see what greater economic assistance we can give to assist in their development.
  9.4 pm
  Mr. A. J. Beith: I do not think that when the Minister opened the debate well over two hours ago he anticipated the strength of feeling that he would meet, particularly from hon. Members from northern constituencies who see the Bill against the background of the enormous unemployment rates and the withdrawal of a number of crucial forms of assistance. If he thinks that it should not be he who is falling victim to the anger of northern Members, he must reflect that we attribute much of the policy that has brought about this unemployment to Treasury thinking. Most of us feel that his Department plays a large part in determining the doctrines under which the Department of Industry has so scaled down its regional assistance. The Bill represents only a very small part of what the north and other regions need to stimulate economic development and growth and tackle their serious unemployment problems.
  Clauses 1 and 2 are desirable and of considerable merit. We welcome them, but we are bound to see them against the background of unemployment rates that are extremely high and are growing all the time. In my constituency—in a rural area—the rate is 19 per cent. and over.
  Clause 2 deals with the body upon which the north has to depend for the promotion of its needs and the attraction of new industry to the area—the North of England Development Council. The Minister will be well aware from earlier discussions that northern Members feel strongly that that body lacks the teeth available to the bodies in Wales and Scotland, where, although serious problems also exist, the level of unemployment is not as high as in the northern region. It was not until after a long battle involving many hon. Members in all parts of the House that the grant for the coming year was agreed. Indeed, we had considerable fears that it would be much lower. There is still a clear need to get the figure up to at least the £1 million which the NEDC argued was needed. It has a good basis for that argument and for arguing for powers that are far stronger than those it now enjoys.
  It would be in some small way consistent with at least some parts of the Government's thinking to recognise that if they gave bodies within the north-east more resources they could get on with the job. Instead of trying to determine from Whitehall—central Government—how the problem of the north-east can be tackled, why not give north-east institutions such as the development council the money and the power to do more about it? They are engaged in a very competitive market trying to attract industry when not only other regions of the country but other countries are trying to lure internationally mobile industries. The development council has a difficult job to

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  do and it is doing it against a background of Government policies that are directly inimical to a solution of the unemployment problem.
  I wish to deal particularly with clause 1, which deals with the Development Commission. It is a commission for which Liberals are bound to feel a warm affection since it was set up by a Liberal Government over 70 years ago. It has remained an extremely active body in the rural areas—now of course only in the rural areas of England.
  Its work has been essential, made the more so by the fact that special assistance of various kinds has been withdrawn from many of those areas. Certainly in my constituency it is to the Development Commission alone that we now look for assistance and support. The Government have withdrawn assisted area status from an area with 19 per cent. unemployment. I cannot see or understand the supposed logic of that policy. The Government's intention is alleged to have been to concentrate help on areas where the problems are greatest and unemployment is highest, but they have crossed an area such as Alnwick and Amble off the list. I am glad to say that the Development Commission has certainly not crossed Alnwick or Amble or the Berwick part of my constituency off its list. It has continued to treat it as a rural area with serious long-term unemployment problems that require attention. I welcome what the commission has done.
  The essence of the commission's success and promise is its flexibility—its ability to undertake a wide range of measures, to explore new ideas and to break away from the often stereotyped thinking of previous approaches to tackling unemployment. The commission has involved itself in a wide range of rural problems, including the promotion of small industry, the creation of opportunities for craftsmen and the retention and support of essential community facilities such as rural transport, and the provision of transport facilities to get people to hospital. Such facilities are an essential part of life in the countryside and without them it is impossible for people to stay and work there.
  The commission has been pioneering and far-sighted in its approach, and its achievements would have been impossible without flexibility. I hope that the new arrangement for the Development Commission and the new pattern of its relationship with the Treasury and the Department of the Environment will guarantee its ability to act flexibly. I hope that Treasury thinking and Treasury narrow-mindedness will not move in to stifle the initiative for which the commission is known.
  If the commission is to succeed in its difficult task of regenerating rural areas, it will do so by operating in an independent and adventurous way that is not hamstrung by traditional departmental constraints. It is a small body and in some ways its smallness contributes to its effectiveness. I hope for positive Government encouragement for its work, a positive Government approach to its funding and a better climate in which it can operate. All its good work will be undermined if we continue to have an economic climate in which small firms are under constant pressure and constant threat, and the essential industries of the rural areas cannot operate or compete.
  9.11 pm
  Mr. Charles R. Morris: I do not wish to detain the House for long, but clause 2 seeks statutory authority to make grants out of money provided by Parliament to the four English regional development corporations. I am mindful of the reference to the North West Industrial Development Association, and concerned at the developing economic problems of the north-west.
  The unemployment figures for Merseyside are appalling. The problem of unemployment in the former textile areas of north-east Lancashire is equally sad and tragic, and the city of Manchester faces a growing crisis involving the elimination of jobs generally. When the unemployment rate was hovering above 7 per cent. the Government withdrew assisted area status from Manchester and 20 other areas in the north-west. Unemployment is now 21 per cent. in Manchester generally and 44 per cent. for the male unemployed in Moss Side. Unemployment on Merseyside is equally appalling. Yet there is no sign that the Government are seriously concerned about attracting inward investment or promoting the economic needs of the area.
  Clause 2 also shows no concern on the part of the Government about the inadequacy of grants to the English regions compared with the decidedly more generous grants that Scotland, Wales and Northern Ireland attract. I am mindful, too, that those areas have appreciably less unemployment than our region. I do not wish to have a competition about the misery of unemployment, but the Government should be concerned about the needs involved and those needs should be met.
  I hope that the Minister will respond to the need for clarification of the whole question of development grants. At present, development grants are paid by the Treasury, but the policy according to which they are paid is determined by the Department of Industry. In the new towns, however, the Department of the Environment is involved. Greater co-ordination is required in this area of public expenditure. In the north-west there is a tragic and illogical competition between new town and regional development corporations to attract inward investment.
  Nightly on Granada television one sees advertisements paid for by the Department of the Environment—to the tune of £750,000, I am told—to promote the economic development of one new town. That is all very encouraging for that new town, but the industry that it attracts with the help of money from the Department of the Environment is taken from other parts of the same region with even greater economic problems. Serious consideration should be given to making the allocation of public expenditure in promoting development more realistic and taking full account of existing problems.
  Finally, the Invest in Britain Bureau does a very effective job in attracting overseas investment, but I wish to examine the situation from the other end. At present, the bureau finances offices in New York, Chicago and other American cities as well as in Tokyo. In the same cities, there are separate offices representing the Welsh Development Agency and the Scottish Development Agency, but none specifically representing the interests of the north-west, which has such major economic problems. How can public expenditure be justified to provide offices in Tokyo, New York, Chicago and elsewhere to promote Scotland, Wales and Northern Ireland in isolation from the United Kingdom as a whole? If the Treasury is concerned

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  about the efficiency and effectiveness of public expenditure I hope that it will examine that aspect very closely.
  9.19 pm
  Dr. David Clark: I wish to confine my remarks to clause 2. We in the northern region are pleased that the Government are prepared to give almost £850,000 to the North of England Development Council. It would be silly not to welcome the money. However, as my hon. Friends have explained, it is completely insufficient. I had intended to say that it was like prescribing a couple of aspirins when someone needs antibiotics. The insult is greater. It is like offering someone a corn plaster after amputating his foot. That is what the Government are doing. It is an insult to the northern region to be offered this sort of money when action upon action has desecrated and decimated our region, our towns and our homes. Education spending has slumped. Housing starts and finishes are plummeting. Health care is scarred. Road and rail expenditure has been reduced. Added to that, the Government have directly taken action to reduce the number of jobs in the area by moving regional headquarters 100 miles south to Manchester and Leeds. That is not good. We find it regrettable.
  I am, however, glad that the North of England Development Council is to receive the money. It is trying to do what it can to help. I wish only that the Government would provide the wherewithal for the job to be done properly. I understand the Government's difficulties. Hardly any Conservative Members represent constituencies in the north and north-east of England. There are about three Conservative Members representing constituencies in the north-east. One can understand that the Government are unaware of what goes on. Our region, like the older industrial regions of Lancashire and Yorkshire, south Wales and the Clyde, built Britain. It was our region that built the ships. It was our region that made the steel. It was our region that dug the coal. That industry now needs rebuilding.
  It is ironic that the wealth of North sea oil, which should be used to rebuild the industrial infrastructure of the older industrial areas, is now being used to keep people on the dole. It is for these reasons that the Opposition find the Bill's provisions inadequate. There has been mention of the Hailsham report of 20 years ago. If one looks back 49 years, one finds that another Government were so concerned about areas such as the northern region that they set up a commission. It is incredible to read those reports and to see how the Government are taking us back to those days and to those conditions that the reports reveal. The comments in the reports are as true today as they were then. They refer to the fact that the
  "psychological effects of the depression are not confined to particular spots, but permeate the whole region."
  I give another quotation. It states:
  "In the course of the investigation it has been impossible to avoid a strong general impression that the area as a whole is losing hope."
  That was written in 1934. It could be a prophecy for today. It is because of the experience of the region and because of statements such as that made by the Minister of State last week, when talking about unemployment in the north-east—
  "We cannot win under modern conditions".—[Official Report, 8 February 1983; Vol. 36, c. 871.]—
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  that we say that such defeatist talk cannot be tolerated, that we are not prepared to tolerate it, and that we expect better.
  If we look at the needs of the region, we find that it is a peculiarly different region. A study of regional economics throughout the world shows that there is always a frontier region—the mezzo-giorno in Italy, parts of the eastern section of West Germany—that are far away from the centre and on the borders of another country or another semi-nation. One finds particular problems in those areas. That problem, I suggest, exists in the northern region. A basic weakness in the north is that there are few indigenous companies. We have few companies with headquarters in the region. That cannot, thankfully, be said to quite the same extent of Scotland. There are major problems in Scotland, and I do not want to enter any auction about unemployment, deprivation and so on, but there is a national feeling in Scotland, and there are national companies with headquarters in Scotland that have a national market. We in the northern region do not have that advantage. In fact, we have a disadvantage.
  I have listened to a number of debates about the Northern region, and I have heard hon. Members talk about the wonderful infrastructure in the north-east. That is true if it is judged only in that context, because infrastructure in the north-east is not enough. It is all very well having an excellent infrastructure in a region, but it is important to get out of the region. In the northern region, our great disadvantage is that we have very good communications within the region and to the south, but communications to the north are deplorable and those to the west are not much better. We need an improved infrastructure because it is essential for us to export the goods that we are able to produce in the region.
  In this respect, it is interesting to refer again to the 1934 report. The commissioner writes:
  "My own impression is that the most formidable difficulty lies in the fact that Durham and Tyneside are geographically too remote from what is regarded as the largest market for the sale of those goods which the new light industries are Principally engaged in producing."
  That is the sort of need that we have in our region, and we cannot compete with stronger bodies such as the Scottish Development Agency and the Welsh Development Agency unless we have more power at our elbow. As my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) pointed out, Scotland and Wales have all the advantages of Cabinet representation and all the advantages of having offices overseas. In comparison, we get £850,000 to help our region, and it simply is not enough.
  It is interesting that the Conservative Government of 20 years ago had sufficient social conscience and knowledge of the whole nation that they sent Lord Hailsham to the northern region whereas, like Pontius Pilate, this Government wash their hands of it. It is also interesting again to go back to 1934 and see that w hat was recommended was a small board or a single commission to co-ordinate the work locally. That is what we need. I am advocating not a Minister but a small board or development agency that will do the work of the tourist authorities, of the export agencies and of the planning authorities, acting as a complete development agency. Only in that way can we start to get the north going again to the point where it can compete with its neighbours.
  9.28 pm
  Mr. Frank Dobson: I am sorry to intervene in this regional debate, but some of my constituents are having problems with the Crown Estates Commissioners and, consequently, I am, too.
  In the Book of Job, we read in chapter 31, verse 35
  "Would that my adversary had written a book."
  The equivalent of that for Members of Parliament is
  "Would that my adversary were promoting a Bill."
  In this case, the Crown Estate Commissioners are promoting a clause in the Bill which gives me an opportunity to air what is going on.
  The proposition in the Bill is to extend from 100 to 150 years the maximum lease that the Crown Estate Commissioners may grant. I am much more concerned with their current leases. Some of their shorter ones cause me more concern than the prospect of extending the range from 100 to 150 years.
  In my constituency, the Crown Estate Commissioners own a considerable amount of property around Regent's Park. Some of it is extremely elegant and well kept. Some of it is bordering on the inelegant and is badly kept. Some of it is run-down—so run-down that it is seen by the Crown Estates Commissioners as ripe for development or ripe for rehabilitation. I do not share that view. It needs some work and some money spent on it.
  One terrace—Colosseum terrace—has been causing considerable concern to the commissioners, and even more concern to the benighted occupants of the run-down housing. Various companies and individuals have been given not long leases, but short leases by the Crown Estates Commissioners. The leaseholders have sub-let, although that is probably not the right description. The houses are in multiple occupation, often occupied by people whose command of English is poor and who, consequently, are more vulnerable than poor people with a command of English to exploitation by unscrupulous landlords. Some of them may be reluctant to raise their problems with anyone because their immigration status may be rather doubtful. I do not like anyone exploiting people because they are vulnerable.
  Some of the rents are high. The property is becoming run-down and the companies want a quick killing. For example, one such company is Jay Estates, which has developed, or in some cases copied, a variety of devices to avoid the Rent Acts that Parliament passed to protect the interests of people living in such housing. Some years ago, at no. 11 Colosseum terrace, the firm tried to turn the existing units into what are known as holiday lets. Following intervention by the housing aid centre and the Camden law centre, that was stopped. Its next effort was to turn the flats into bed and breakfast accommodation. Breakfast consisted of packets of cereals, some of which were delivered weekly. That scarcely falls within the usual definition of bed and breakfast accommodation—even in Blackpool at the time of the Labour party conference.
  That firm also pioneered what are now called nonexclusive occupation agreements. They are licensed agreements that allow the firm to avoid the provisions of the Rent Acts and remove the protection of those Acts from the benighted people living in the dwellings leased from the Crown Estates Commissioners. It is estimated that as long ago as 1979—about the time that I entered the House—No. 14 Colosseum terrace was raking in about £8,000 a year for Jay Estates.
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  When the Crown Estates Commissioners were approached by the housing aid centre, an official said that they did not wish to become involved in disputes between lessees and sub-tenants. That was a noble statement, full of social conscience. They also expressed some sympathy with the sound business practices of Jay Estates in seeking to avoid the effects of the Rent Act 1974—passed by the House and by another place—which was intended to be the law of the land and to apply to every piece of property.
  More recently, I became involved—as was my predecessor—in the matter. I was approached by a number of tenants occupying No. 12 Colosseum terrace. They complained about scaffolding attached to the house which they believed was dangerous, about the general condition of the property, about defective lighting on the staircases, in common areas and in some of the flats, and about the filthy mess and rubbish both inside and outside the flats. They told me that the agents and workmen who came to the house posed a severe security problem because they did not have duplicate keys, and many of the doors were consequently not secure. Theft was common and difficult to prevent. Unqualified workmen had removed and changed electricity meters. [Interruption.] I do not suggest that there are any bones in the garden, but the same sort of deprived people who went to Muswell Hill were living in this property, which is owned by the Crown Estate Commissioners.
  There has also been interference by the landlord, his agent and workmen with postal deliveries to the house. Moreover, there is evidence that the rents are very high, that deposits are required of would-be tenants, and that the flats are barely furnished.
  I took up the matter with various people allegedly in authority, including the Crown Estate Commissioners. The registered rent of room No. 7 at 12 Coliseum terrace was £13 per week. Including rates and various other charges that are believed to be legitimate, this amounted to £69·18 per calendar month. The woman concerned had been asked for and was actually paying £121·33 a month. It came as no surprise to me to discover that her command of English is not very good, although I should add that she is perfectly entitled to be in this country. She is also entitled to £576·52 repayment from the landlord. Although the law centre wrote as long ago as December to ask the landlord for the money, none of it has been forthcoming. It gives the lie to what was said to me in a letter of 25 January from the Crown Estate Office about this property:
  "In fact, it has provided cheap accommodation for a good many sub-tenants over the past few years with few problems until recently".
  More recently, the housing aid centre in Camden, on behalf of some other tenants or occupants of that block, wrote to the landlord to complain that the telephone, which is for the use of the tenants and for which they have paid, is at present cut off, that the lock on the front door is faulty, that the bells are not working, that there is rubbish outside the house, that something is wrong with the plumbing, and that there is often a great deal of noise at night from the landlord's agent who comes round and disturbs the occupants—whether he comes for the rent, I am not sure. The environmental health department is also looking into the standard of the property.
  So why are the Crown Estate Commissioners letting such peculiar leases to private landlords? In my innocence, I wrote before Christmas to the Crown Estate on the assumption that any lease that it gave required that the

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  protection to tenants in various parts of landlord and tenant legislation would be sought from its lessees. I was, therefore, surprised to receive a reply which said:
  "Indeed, so far as the Rent Acts are concerned our lease deliberately and explicitly disbars the sub-tenants from the protection of the Rent Acts".
  In my opinion, no public bodies should be issuing leases of that nature, even in the peculiar circumstances of these buildings. In particular, they should not let them to people who can profiteer from private property. This business should be stopped. I hope that as a result I shall not be executed because, if I turn to the original Act, to which this Bill proposes an amendment, I discover that section 1(5) says—and this is a quite amazing power that was granted to the Crown Estate Commissioners in 1961:
  "The validity of transactions entered into by the Commissioners should not be called in question on any suggestion of their not having acted in accordance with the provisions of this Act regulating the exercise of their powers, or of their having otherwise acted in excess of their authority, nor shall any person dealing with the Commissioners be concerned to inquire as to the extent of their authority or the observance of any restrictions on the exercise of their powers".
  It seems to me that the House was a trifle remiss in granting such extensive protection—
  Mr. John Home Robertson: Is my hon. Friend aware that I hope to introduce a Bill on 2 March affecting the Crown Estate Commissioners which would, among other things, repeal the subsection that he has just quoted? Would my hon. Friend care to act as a sponsor to that Bill?
  Mr. Dobson: I gratefully accept my hon. Friend's invitation.
  I should like tonight to propose that if the Bill goes to Committee—although I do not mind the time period of the leases being extended—we should change the law to limit leases of this nature. The Crown Estate Commissioners were letting such short leases with such peculiar provisions in them to protect themselves against the possibility that they would eventually either redevelop or rehabilitate the building. All sorts of public authorities are faced with the dilemma of whether to keep a building empty and thus fully protect their interests or whether to let it so that people can live in it. There are plenty of other ways around that problem without letting such properties to profiteering private landlords. One scheme, which has been adopted by many public bodies, is to let properties to, or reach agreement on their management and occupation by, charitable or other organisations which look after short-life housing for the benefit of the homeless.
  I am glad to say that the Crown Estate Commissioners in their most recent letter to me have said that they are considering that approach and that is very welcome. However, it would be appropriate, when the Bill reaches its Committee stage, for the Committee to change the law to restrict short leases so that they can be given only to non-profit-making organisations. That would have merit for those who live in such properties and also for the Crown Estate Commissioners, since if they adopted that course of action their buildings would be better looked after because the organisations that I have mentioned have an interest in maintaining them to provide a decent and secure home for those who live there, unlike private landlords whose interests are served only by maximising the rents and minimising the money that they spend on the repair and maintenance of such buildings. I hope that we
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  shall have some benefit from this clause, which just happens to have crept into the Miscellaneous Financial Provisions Bill.
  9.43 pm
  Mr. D. N. Campbell-SavoursI wish to make an unashamedly local speech this evening, because the Bill has clear implications for localities and certainly for the locality in the northern region from which I am sent to Parliament. In doing so, I want to apologise to my hon. Friends, particularly those whose constituencies fall within the northern region, because they know that, although my heart remains with them, the administrative arrangements for the control of the county of Cumbria, in the main, including industry and employment, have been switched to Manchester, against, I may say, the wishes of many thousands of people within the county of Cumbria. I hope that one day a Labour Government will consider redressing the imbalances that have been created by that switch.
  The debate is important, because it allows us to discuss the issues involved. The public should note that, despite the statements that have been, and will be, made from the Dispatch Box tonight, the Bill makes no additional moneys available throughout the United Kingdom. Under "Financial and Public Service Manpower Effects" it states:
  "The Bill is not expected to have any material effect on public expenditure in the long term."
  We are tinkering with the administrative arrangements for the payment of forms of regional assistance to promotional bodies and with arrangements for the administration of the Development Commission.
  During the past few months, as the economy has steadily deteriorated and unemployment has relentlessly increased throughout the nation, the public have waited with bated breath for a U-turn by the Government that would increase the resources made available from the Treasury for industrial development in the regions, but it has never come. The public cannot understand—and the Bill does not help—why, when manufacturing and industrial output is falling, when there is a reduction in the competitive position of British exporters and a declining exchange rate—from which the Government can produce little benefit—the Government are still unwilling to give additional money to companies that desperately need it to resolve their problems in competing with our overseas competitors, particularly in terms of investment.
  In the Workington travel-to-work area the problem is acute. The Bill will do nothing to alleviate it, unless the Minister is willing to intervene to tell me that additional financial resources are being made available. Of 1,083 teenagers in the Workington travel-to-work area, 657 have been out of work for the past three months. They ask me a question which I can only refer to the Government: what will the Government do for them? Do they have to wait in the dole queue for the upturn in the international economy which the Government have persisted in telling us for the past two years is about to take place? Many of those young people are unwilling to wait. In many ways they feel a strong sense of hatred for the Government. I do not use that term lightly, but that is the language that they use when referring to the Government, and it is for the Government to respond. In addition, 46 per cent. of unemployed men in my constituency have been out of work for 12 months and the number of unemployed people has tripled since the general election in 1979.

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  The level of unemployment today in the small and famous town of Maryport in my constituency is as high as in the whole travel-to-work area, including a town in the Home Secretary's constituency, Aspatria, Workington and Cockermouth, and all the small communities that made up that area at the time of the last general election. The Government must be held responsible, yet they refuse to respond in any meaningful way that gives people the assurances that they need for the future.
  We are crying out for a regional policy that works, yet we have not received one. The Government turn a blind eye to the problems. Let us consider the public expenditure White Paper and its implications for areas such as mine. In the section on regional development grants there is a reduction from £600 million in 1982–83 to £474 million in 1983–84. Further reductions are provided for in the future. If a general election were not in the offing, I am sure that the Government would have been even more honest in the White Paper and predicted an even more severe downturn in public expenditure on regional and general industrial support and on other forms of regional aid.
  The problem is that the Government refuse even to consider the personal tragedy of unemployment. I often hear minor and seated interventions from Government Members which reveal an insensitivity about what unemployment means. Many of us who have never been unemployed will never understand. Those who have never suffered the misery of unemployment must make a special effort to understand what it means and not resist a solution to a major problem.
  Many county and metropolitan authorities have set up their own industrial development promotion units. In my area the Labour-controlled county council has made valiant efforts to ensure that Cumbria's case is put in the international forums where decisions on manufacturing investment are taken.
  We are on the limit of penalty. What we spend additional to our budgets today is subject to a tax imposed by the Government—the clawback arrangement which the Government have enshrined in legislation. It is a tax on the rates that we levy. It is that which in Cumbria prevents us from spending additional moneys on developing and expanding the industrial and promotion budget. Yet we know that unless we have the added resources in that budget it is with difficulty that we can sell our region where decisions are taken.
  The Minister of State referred to a written reply and admitted that the north-west region had as strong a case as the northern region. If the Government had accepted that that was so, they would have ensured that the differential in the allocation to the North of England Development Council and the North West Industrial Development Association was not what it is. A clear principle is identified in that response.
  In relation to the northern region, the Minister said:
  "They have satisfied me that they"
  —that is, the North of England Development Council and others—
  "are capable of mounting a realistic and effectively co-ordinated programme of events on behalf of the region as a whole".
  Referring to the NWIDA, the Minister said:
  "I have not, however, been able to satisfy myself that the requisite degree of commitment to a fully and effectively coordinated regional programme by all the local authorities and
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  new towns in the north west has yet been demonstrated to justify the higher option."—[Official Report, 19 January 1983; Vol. 35, c. 143–45.]
  That higher option is a higher level of Government assistance towards the budgets.
  In accepting that, the Minister puts the north-west region in a position secondary to that of the northern region, which also feels aggrieved that other parts of the United Kingdom, through the Welsh and Scottish Development Agencies, are in a better position. The Government are dividing and ruling. They ensure that built into their calculations for regional support are differentials that will spark inter-regional arguments about allocations. The Government bear the responsibility for such stupid and insensitive decisions.
  My constituents ask me why it is that the Government can find £1 million for every Falkland Islander to secure the development of a remote island in the South Atlantic where only 1,800 people live, but yet they can find only £474 million to cover all regional development grants paid throughout the United Kingdom in the current financial year. The Government have got their priorities completely wrong. We believe that charity starts at home.
  The taxpayer demands that investment, if it is available, is placed in this country to secure jobs for our people. They demand an end to the principle that seems to dominate the Government's investment strategy, which is to export our potential investment in the greater interest of financial institutions and to minimise our financial and industrial investment at home, when clearly that is damaging the industrial infrastructure of our manufacturing base.
  An interesting document was produced about a month ago by the Regional Studies Association, which carried out an inquiry into the regional problems of different parts of the United Kingdom. In a document entitled "The North in the Eighties", the northern branch in its submission, which all my hon. Friends will have received—it is very much at the heart of decisions that should be taken by the Government today—says in paragraph 22 says:
  "A body should be set up at the highest level of Government, preferably attached to the Cabinet Office, charged with responsibility for supervising regional investment programmes. Its duties would include the setting of goals and standards for the regions, the maintenance of coherent strategic planning guidelines designed to achieve set objectives and the monitoring of the activities of all central Government Departments, nationalised industries and related agencies against these guidelines. This body should formally advise the Prime Minister and Cabinet colleagues, as well as Departments and agencies concerned, of any major inconsistencies between national and regional strategies. In the latter context it may be necessary to require Departments to prepare annual assessments"
  I hope that the Treasury Minister will take note—
  "of the likely regional impacts of their spending proposals and longer-term strategies as well as a statement on the extent to which their plans for previous years were realised."
  The document then goes on to refer to the need for the information of development corporations, along with a possible development agency—which is the policy of many of my hon. Friends—for certain regions of the United Kingdom.
  The case being put forward is that in any decisions that are taken on the allocation of public expenditure there should be a built-in consideration of the regional impact. That would have a major bearing on our areas. The Government in their derelict land reclamation arrangements have now built in an incentive in favour of parts of

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  the United Kingdom other than the areas of high unemployment, such as the northern region. That principle should be reversed.
  The derelict land grant is a formidable mechanism for channelling public expenditure into the regions. We believe that the Government have a duty to reverse the current arrangements under the development land grant and that in all further allocations of public money—apart from that for public transport—within the substantially reduced sums in the public expenditure White Paper they should ensure that there is a regional emphasis to help resolve and reduce the problem of unemployment.
  Finally, I should like to refer to what is happening in another country, which should have some bearing on our debates. The system of regional aid in France is much better than ours. Industry and Treasury Ministers would do well to consider the publication entitled "European Regional Incentives 1982", which has been edited by two lecturers at a university in Scotland—Mr. Douglas Yuill and Mr. Kevin Allen. It is a formidable publication. It outlines the various arrangements that exist within the European Community for the payment of regional aid. What it shows is that—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the Miscellaneous Financial Provisions Bill may be proceeded with, though opposed, until any hour.—[Mr. Garel-Jones.]
  Question again proposed, That the Bill be now read a Second time.
  Mr. Campbell-Savours: The publication shows that the French are in a substantially better position than we are in the United Kingdom. The French do not have a direct equivalent to rates, but they have what they call a local business tax, which is referred to as taxe professionnel. It appears to be their equivalent of rates. The concession against that tax payment is available in principle in an area covering 76 per cent. of the French population, whereas in the United Kingdom, enterprise zone status, which is our rate-relieving arrangement, is available in only 15 or 16 areas. That will be the position when the most recent tranche of money under the enterprise zone programme is made available which will be by June.
  The French obviously believe that their local business tax is a successful way of helping their industry. The Government should consider the systems of regional aid that are available in France, especially as the form of relief which they employ is so widespread. It would be popular among British industrialists. It certainly would be very popular among supporters of the Development Commission, which is responsible for the development of industries in rural areas. I feel sure that if the Minister were to speak to that lobby, to the CBI and to other representative organisations throughout the United Kingdom he would find that they all favour such a measure.
  I have no doubt that the Minister of State will be one of the Ministers representing the Treasury when we consider the Finance Bill in Committee. No doubt he will be with us for some months. I ask him to accept that the French system is a damned sight better way of spending Government money than handing back capital gains tax and capital transfer tax moneys to the better off in society.
  10.3 pm
  Mr. Harry Cowans: The real tragedy of the debate is the mass of empty Benches on the Conservative side.
  Mr. Dobson: The Tories do not care. They never have done.
  Mr. Home Robertson: There are more civil servants here than Tories.
  Mr. Cowans: Not one SDP Member has appeared in the Chamber throughout the debate.
  Mr. Tristan Garel-Jones: Cheap.
  Mr. Cowans: Yes, it is extremely cheap. That is demonstrated by the mass of empty places on the Tory Benches. When we had a northern region debate Tories entered the Chamber and spent a long time discussing various items and prevented Labour Members, who had valuable contributions to make, from participating in the debate.
  Mr. Garel-Jones: Cheap.
  Mr. Cowans: This debate is a continuation of the regional debate in another guise. Where are the Tories tonight? In expressing this criticism, I make one exception. The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke in the regional debate and he is present tonight. He is the only exception that I can make. During the debate on the northern region, hon. Members who have no connection with it flooded into the Chamber. If they felt so deeply about the subject, where are they tonight? That is a reasonable way to stall the Bill. The tragedy is that—
  Mr. Cook: I am grateful to my hon. Friend for giving way before he gets to the tragedy. Will he draw attention to the fact that four regional development organisations are mentioned in the Bill? One of them is an industrial development bureau for De von and Cornwall. My hon. Friend is aware that Opposition Members who represent the other three regions—the north-west, the north and Yorkshire and Humberside are present. We have not been favoured with the presence of one hon. Member for Devon and Cornwall, although that region is clearly implicated in the clause. Not one hon. Member from the Conservative or Liberal parties which are well represented in that area, or the Social Democratic party, has participated on behalf of that region.
  Mr. Cowans: That is part of the empty seat policy. The Conservative party has the majority of seats down there, but, equally, the Liberals represent the area. What will their constituents think of their lack of attention when, increasingly, questions about Devon and Cornwall and its unemployment figures are asked? When there is an opportunity to speak on behalf of that area, the hon. Members who represent it are conspicuous by their absence. The public will recognise that their representatives were not present when it mattered and when they had a chance to speak on behalf of their constituents. It is not unreasonable for the public to be aware of that. Devon and Cornwall is suffering, not as badly as the north-east, I admit, but suffering, yet not one representative has deigned to come to the Chamber.
  Mr. Bob Cryer: Does my hon. Friend agree that those Tory Members of Parliament and possibly

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  the Liberals from Devon and Cornwall would be among the first to deny water workers and manual workers the same wages—
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. We are debating whether to give the Bill a Second Reading. Hon. Members should confine their speeches to that issue.
  Mr. Cowans: I should hate to incur your wrath, Mr. Deputy Speaker, by pursuing that line. Nevertheless, there is some truth in what has been said.
  The Bill is comparatively short. One could argue that it is a typical Treasury Bill in that it looks as though it says a great deal yet it misses much and ends up saying nothing. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) said, there are no extra finances in the Bill. Opposition Members find themselves in the eternal dilemma in that the Bill provides a small number of crumbs—one could not argue that there is a crust—for which we must be grateful. It is sad to be faced with a Bill that provides crumbs when large loaves are required, especially in the north-east.
  Nothing in the Bill does anything to solve what the Secretary of State for Employment described as an extraordinary problem in the northern region. Taking those words to their logical conclusion, I submit that the Bill is an opportunity to take some extraordinary measures to solve that extraordinary problem. No such measures have been taken. The Minister said that the Bill is purely financial. That is true. However, anyone with a grain of sense knows that the Treasury rules everything. The Minister may smile, but that is fundamentally true. Under the Bill he could not accept what the north has been lobbying for, demanding and arguing for—a development agency—but he could have written into the Bill the financial arrangements which, while not giving the power of a development agency, would have given the finance. That would have been half the battle. However, none of that is provided. The Bill is remarkable not for what it contains, but for what it lacks. It falls short in many ways of meeting the extraordinary problem highlighted by the Secretary of State for Employment. There are no extraordinary measures in the Bill to meet the problems of the northern region.
  I am grateful for the crumbs in the increased budget of the north-east development council. However, that is a financial argument that still falls short of what that body requires to do the job that must be done. Wider financial powers are required to solve these extraordinary problems.
  The finance has been increased, and we are grateful for small mercies, but the remit within that financial commitment does not equal that of the Welsh or Scottish Development Agencies. I appreciate that the development council's remit could not be spelt out in a purely financial Bill, but the financial commitment could have been. My hon. Friend the Member for Workington said that the Bill provides no new money. I go further and say that there is a reduction.
  In their public expenditure White Paper the Government have reduced regional aid by 25 per cent. Therefore, this "extraordinary problem" which has been highlighted by Ministers is receiving 25 per cent. less than it did before they discovered that there was an extraordinary problem. Is it not extraordinary to solve an
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  extraordinary problem by reducing the financial commitment? If that is not the logic of the lunatic asylum, I do not know what is. The Bill will do nothing to help solve the problems in the northern region.
  I make no special plea for my constituency, as other hon. Members in the northern region can match the figures that I am about to give and, in some cases, surpass them. There is 31 per cent. unemployment in Newcastle upon Tyne, Central. No doubt my hon. Friends the Members for Easington (Mr. Dormand), Jarrow (Mr. Dixon) and Workington can match that figure, but that only emphasises the size of the problem in the region.
  Clause 2(2)(a) lists
  "the Devon and Cornwall Development Bureau".
  It is sad that there is no one on these Benches to speak for the area. It is not my remit to do so. People outside the House will take cognisance of the fact that there is no one here to represent that area's case. That cannot be said for the northern region, for Humberside or for the north-west. Representatives have been here. Not everyone might agree with the case, and the Government might take no notice of it, but representations have been made. Where are the representatives from Devon and Cornwall?
  Paragraph (b) lists
  "the North of England Development Council".
  We have assessed the situation not out of fantasy. We have looked at the various bodies in the northern region. After a long debate and a lot of heart searching, we have decided that the best way to co-ordinate efforts and to use the available finance is through a northern development agency. It could co-ordinate the financial commitment throughout the region. It would have the same powers as the Welsh and Scottish Development Agencies. Nothing in the Bill provides that, and there is no extra finance. I hope that the Minister does not ignore that point when he winds up.
  There is a wonderful and typical Treasury argument about the power to
  "make grants to any body within subsection (2)".
  Subsection (2)(e) states—this is wonderful; it may be the Minister's answer to the argument that I have just put about finance—
  "any other body, whether corporate or unincorporate, whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England."
  It does not say "in the areas mentioned under (a), (b), (c) or (d). It says
  "in an area in England."
  Although apparently we are not to divide the House, I hope that the Minister will answer our questions.
  Mr. Prescott: We will think about it.
  Mr. Cowans: I am open minded about dividing the House until we hear the Minister's reply.
  Mr. Prescott: Is the Minister open minded? What exactly does the phrase in paragraph (e) mean?
  Mr. Cowans: We shall find out when he replies.
  Will the Minister cast his mind in this direction? Who qualifies? Is it a body of local authorities which combine together for industrial development and, to use the words of the Bill, promote "industrial or commercial development" in the north of England? Would they qualify for a grant? Does the Newcastle city council, which operates community workshops to promote
  "industrial or commercial development in an area of England"

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  qualify? Does the Tyne and Wear council, which operates something similar and also has an advanced technology workshop, qualify? Is this the Minister's secret weapon to put more finance into the northern region or is it just gobbledegook—the Treasury laying down rules but making it impossible for anyone to qualify? That requires an answer.
  Moreover, even if the northern region or some other region passes the Treasury test so that it actually reaches the starting gate and qualifies, what amount will be available under subsection 2(e) and what will be the determining factor? In an amazing statement earlier today, the Minister of State said that regional grants were based on "geographical position". Does that mean that, whatever the sum available, the organisations concerned will be considered in relation to unemployment in their areas or to the social needs of their area? There is no qualification in the Bill. Perhaps the Minister will answer that, as it may be—I suspect that it is—the case that a whole host of bodies in the northern region could qualify under subsection 2(e).
  Mr. Jack Dormand: I am delighted that my hon. Friend noticed that phrase, which was used in relation to a question from me at Question Time today. It is astonishing to say that one of the criteria should be geographical position. My hon. Friend asks the Minister what are the criteria. I think that one can guess. The main and sometimes the only criterion for the Government is market forces, and the chances of anything for the north of England are virtually nil. As we all know, everything goes to the south-east.
  Mr. Cowans: By pure coincidence, I was sitting next to my hon. Friend when the Minister of State gave that answer. I noted the words used and spent the following three hours analysing the relevance of geographical position to regional policy in the determination of regional aid. Perhaps the Minister will tell us, as that reply is very germane to what happens under subsection 2(e). What does "geographical position" mean? Does it mean that those nearest London will receive most because proximity to London is a geographical advantage? Does it mean that the area with the head office will receive the regional grant? With the greatest respect to the Minister, all of those questions must be answered in this debate.
  I hope that we shall not get a short, sharp answer from the Minister, because if the answer is wrong the whole Bill is nonsense. How can we talk about regional aid—I emphasise the word "regional"—if the aid is determined according to geographical position? It is not regional aid. All the money, albeit a small amount, that has so far gone to the north-east development council could be taken away under subsection 2(e). That is nonsense in anyone's terms. It highlights the Government's non-policy. It is nonsense to insert such a clause in a regional Bill without any qualification. I says nothing about who qualifies or what are the criteria for qualification.
  I am attempting the impossible in trying to put into the Minister's head what clause 2 means. I am, perhaps, a super-optimist. Under clause 2, he could write into the Bill qualifications of high unemployment, social need and deprivation to permit grants to be paid. If the Minister did that, he would have some justification for saying that he had some sort of regional policy. If he does not do it, the clause becomes nonsense. It is possible that the bodies that
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  qualify under clause 2(2)(e) could include co-operatives in the north-east? If the Minister does not possess a copy of a document called "Co-operatives in the local economy" by the Northern Region Co-operative Development Association, I shall pass him a copy. If he read it, he would be better informed about how he could use that part of the Bill.
  There are similar bodies in the constituencies of many hon. Members representing northern constituencies. I am sure that there are also such bodies in the north-west and in Scotland that would be able to qualify if this was written into the Bill. It would enable the Government to put their money where their mouth is. Is there new money available? Or is the Treasury, with its usual cleverness, dissipating the amount of regional grant? Does it see clause 2(2)(e) a means of rot paying anything? This needs to be clarified.
  One day, when a shaft of light appears, the Government will realise that it is only through a regional development agency and a co-ordinated regional policy for the northeast and other regions—it is a tragedy that other regions are catching up the north-east in unemployment terms—that the regions will be helped. We want parity with the Welsh Development Agency and the Scottish Development Agency rather than the hotch-potch of non-regional policy.
  On clause 7, I give the Minister the good news first. I am delighted to see this clause. Much is stated about people going into local government as if they were reaping the moon and the stars. That is not true. Little is written about the other side of the coin. The clause is long overdue. I congratulate the parliamentary draftsman. Clause 7 is long overdue. But I am a little disappointed to discover that it is not retrospective. Before coming into the Chamber, I looked through my files, and I happen to have with me a copy of the amendment that I moved to the Local Government Finance (No. 2) Bill on 25 February 1982. I accuse no one, but if there were two mirrors in the House and one held up my amendment and clause 7 together, it would be difficult to find any difference in the reflections. I am pleased to see the clause, but I hope that the Government will not take credit for it as though it was the new Jerusalem and they had just discovered it.
  It was not right to put my amendment into another Local Government Finance Bill, yet here it is in clause 7 of the present Bill. If my amendment had been incorporated into last year's Bill, a lot of people would have been helped a great deal earlier.
  There is a problem here, and it is more acute under this Government. Before the start of the financial year, a local councillor has to choose between the financial loss allowance and the attendance allowance. But the financial loss allowance is payable only if the person claiming it is working. Obviously there can be no financial loss if he is on the dole, so it cannot be claimed by anyone who is on the dole. Under the circumstances which prevailed, a councillor had to make that choice prior to 31 December. But on 5, 6 or 7 January, he could be made redundant, and his financial loss allowance went. It means that the position was even worse than my hon. Friend the Member for Edinburgh, Central (Mr. Cook) suggested. Not only could that councillor not qualify for the financial loss allowance; he could not qualify for attendance allowance. Even worse, because he carried out his public duty and attended committee meetings, he could not claim

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  unemployment benefit. In that way, there was a three-way attack on members of local authorities who were giving their time to do a job of work.
  Clause 7 redresses the balance, and I am grateful for that. However, I hope that the Minister will acknowledge that, if my amendment had been accepted in February 1982, a lot of people could already have been helped. Better late than never; better a death-bed conversion than none at all.
  Subject to the House receiving the clarifications which have been asked for, I hope that the Bill—with clause 7 in mind especially—has a speedy passage through the House. Having said that, I am deeply concerned that no effort has been made in the financial provisions to name the regions that could be helped more. By putting some financial commitment into the Bill, we could have helped to solve that extraordinary problem. None of that has been done. Until that is done, there will always be a regional problem. It is made much worse by the Government's policies. They have put people out of work 20 times faster than any other Government. If they can do that, they must put the wherewithal into the regions to reverse the process that they began.
  10.35 pm
  Mr. Don Dixon: I shall confine my remarks to clauses 2(2)(e) and 7. My hon. Friend the Member for South Shields (Dr. Clark) referred to the 1934 Act. That was prior to the Jarrow march, when the president of the Board of Trade was a Mr. Walter Runciman. A deputation from the Jarrow council went to see him about the high unemployment in that area. They were told that they had to work out their own salvation. When the previous Secretary of State for Industry—now the Secretary of State for Education—attended a meeting in Newcastle a couple of years ago, he said that people would have to help themselves.
  South Tyneside local authority is shared by my constituency and that of my hon. Friend the Member for South Shields. It has tried to help itself. It set up an industrial fair which, for the past four years, has endeavoured to attract industry to south Tyneside. It has been financed by the local authority. I hope that the Minister will say whether clause 2 will allow south Tyneside council to obtain finance to continue the fair, which has been successful and is accepted by the Department of Industry, the northern CBI and everyone concerned. Because of current restrictions on local government expenditure, it cannot produce the fair this year. I hope that clause 2(2)(e) will provide assistance for south Tyneside district council.
  My hon. Friend the Member for Edinburgh, Central (Mr. Cook) referred to the number of vacancies in one area. In Jarrow, 6,068 people are unemployed, with only 78 vacancies—that is about 77 people chasing every job. The Government are cutting expenditure in the regions. They have given the North-East Development Council £850,000 to promote work, but they are spending £1,000 million on unemployment benefit.
  My hon. Friend also mentioned the shipbuilding industry. Twenty per cent. of those working in that industry work and live in the northern region. Britain is going through a world recession, and the north is being hit hard. Last week it was announced that south Tyneside
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  would suffer another 1,400 redundancies in the ship repairing industry, with another 1,800 declared for the shipbuilding industry. It is absolute nonsense to confine British Shipbuilders to a loss of £10 million while it costs £5,000 a year for every shipbuilding worker on the dole. That is the economics of the madhouse.
  My hon. Friend said that by 1990 about 800,000 people will have left assisted areas. They will be the young and active. When they leave—whether on their bikes, or whether they are going down to certain places to mend gates—they do not take with them the community centres, parks, libraries, hospitals or old people's homes. Those are left in the area, to be financed by an aged population. This Government's policy of cutting back local government expenditure places a tremendous burden on the people left in areas such as south Tyneside.
  The northern region has always been top in the unemployment league, whether under a Tory Government or a Labour Government. We have suffered under regional policies, whether they be the carrot on the stick, or whatever. The best time we had was when the fellow came along with the cloth cap and did something for the infrastructure of the region.
  Clause 7 was mentioned by my hon. Friend the Member for Edinburgh Central. Before I came to this House I served on a local authority for 20 years. When the attendance allowance came in in 1974, in spite of what the newspapers said—the local newspaper in south Tyneside still gives a league table of the amount of money that councillors claim in attendance and subsistence allowances—many people went on to the local authorities, and, in spite of the attendance allowances, lost money. They not only lost money in wages, but they lost chances of promotion and had their pensions restricted.
  Clause 7 is welcome, because at present, if someone opts for the financial loss allowance and is declared redundant, he cannot claim an attendance allowance. As my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) said, not only could he not claim attendance allowance, but he could not claim financial loss because he was not working, and he could not claim unemployment benefit, because he was unavailable for employment, as he was carrying out local government work.
  I shall confine my remarks to those two clauses, so that others of my hon. Friends may speak.
  10.42 pm
  Mr. Bob Cryer: I am keen to comment on some of the clauses—for instance, clause 2—that my hon. Friends have mentioned, particularly as there is a reference to the Yorkshire and Humberside Development Association. Naturally, that association requires Government grants which
  "The Secretary of State may out of money provided by Parliament make",
  to put forward the claims of Yorkshire and Humberside to the various investment projects that are being made. It needs the money because, among other things, there has been a significant loss of jobs in this textile area. It has not been anything dramatic, but it has been a continuing erosion of jobs, as the latest news bulletin from the wool textile and clothing industry action committee for February this year demonstrates. For example, in 1979 in the textile clothing and footwear industries, centred largely on Yorkshire and Humberside, there was a job loss

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  of 30,000; in 1980 it was 93,000; in 1981 it was 112,500, and in 1982 it was 31,000. Naturally enough, the Yorkshire and Humberside Development Association is much needed to remedy the loss of over 200,000 jobs in the clothing, textile and footwear industries since the Government took office.
  In my constituency the Conservative achievement has been to increase the level of unemployment from 4·5 per cent. in 1979 to over 14 per cent. There are some areas in Keighley with the level of unemployment mentioned by my hon. Friends. In certain areas there will be between 20 per cent. and 25 per cent. of male adults unemployed, many of them unemployed for one, two or more years. Another Conservative achievement has been that the number of people of working age in receipt of supplementary benefit paid from the supplementary benefit office at Worth House, Worth Way in Keighley has increased by over 200 per cent.
  The Prime Minister is given these days to talk about Adolf Hitler. Let me remind the House that she has done more damage to British manufacturing industry than Adolf Hitler ever achieved in the years between 1939 and 1945. If the Prime Minister is to draw parallels between Adolf Hitler and the campaign in the 1930s and 1940s and the position today with regard to nuclear weapons, she will find herself up against a strong argument indeed.
  I want to confine my remarks today to the damage that has been caused by the Government to British manufacturing industry and the need for a development association in Yorkshire and Humberside to counter that damage. One of the difficulties that we find in the legislation before us tonight is that several development associations are mentioned. Clause 2(2) (e) says that grants shall be made to
  "any other body, whether corporate or unincorporate whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England."
  That is quite extraordinary. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) raised the question of regional development assistance. That is not just something that appears necessary to the Secretary of State. It is fairly carefully defined by the Industry Act 1972 as amended by the Industry Act 1975. I am unhappy that the Secretary of State should have power to give grants to
  "any other body … whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England".
  That is far too wide in its power.
  In a recent Adjournment debate I raised the question of the ending of intermediate area status for Keighley, which was accompanied by the massive increase in unemployment that I have already described whereby roughly 4,000 people in Keighley are now chasing about 80 jobs a month. A letter was sent to the local paper by a gentleman who suggested that perhaps it was not good to mention the difficulties that were besetting Keighley and asked whether it would not be better for a few decent industrialists to get together and promote Keighley, to put on one side all the nasty comments about so many people being unemployed, and to promote the good side of Keighley.
  A few months later that gentleman turned out to be not promoting industry for Keighley but promoting funds for the Conservative party to promote parliamentary candidates in Bradford. No wonder he did not want the
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  dark side of Conservative policy to be highlighted. He was up to his neck in defending the shoddy record of this rotten Government.
  We certainly need some sort of organisation that will try to counter the difficulties that arise, but unfortunately it looks as though things will get worse rather than better. If the grant is made to a reputable organisation such as the Yorkshire and Humberside Development Association that is one thing, but the wide powers to give money to any organisation seem to me to be much less desirable.
  Page 37 of the current issue of "Economic Trends" from the West Yorkshire metropolitan county council states:
  "The Manpower Services Commission estimate that the number of long term unemployed will increase by up to another ½ million in about 18 months' time. In West Yorkshire, this could mean that about 65—70,000 people would have been cut of work for a year or more, compared with just 12,500 in January 1979. To cope with this trend, the MSC has suggested to Government that a special package of measures should be instituted to assist particular deprived groups within the long term jobless i.e. young adults, those with dependent families, ethnic minorities and older people."
  However, grants to the Yorkshire and Humberside Development Association and the other development associations simply are not enough. Of course, everybody in Yorkshire and Humberside wants his case for potential investment presented. The same is true of all those in the regions particularly hit by unemployment, which are mentioned in clause 2. No matter how large the grant, it will not be adequate. Millions of people, and particularly the 3·5 million to 4 million who are on the dole, want a complete change of economic policy, so that those regions particularly affected by unemployment are at the margin, and do not reflect the whole nation.
  For example, we should stop the free flow of capital and restore exchange controls. We should get out of the Common Market so that we can run our economy without being subject to the decisions of Brussels and to the secret meetings of the Council of Ministers. We need massive injection of public funds into the public utilities to create jobs. The Government always accept that argument for defence expenditure, but not for anything else. However, when we come to the defence debate—and the Government will soon use it as part of their co-ordinated campaign against the peace movement—the Government will say that public expenditure on the defence industries will create jobs. But the same is also true of the civil industries. We need massive public expenditure to create jobs. At present between £10 billion and £12 billion goes on unemployment benefit, supplementary benefit and on lost tax revenue. That money should be spent on creating real jobs, because we must take people off the dole queue.
  Although grants to the various development associations are welcome, they are simply not enough. There is a danger that development associations will go cap in hand to the multinationals, asking them to move to their regions. That is Government policy at work; setting man against man. They believe in competition and they like one region to compete against another, offering further inducements. When that happens, power is handed over to the multinationals. For example, American Hyster builds forklift trucks but is telling part of its Scottish work force that it must either accept a wage cut or the company will pull out and close the factory.
  Under the Tories we are moving not forward, but backward to the 19th century, when the mill owner trampled on the rights of the work force. Who should turn

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  up speaking on behalf of the multinationals but a Minister from the Scottish Office. The message is "Take a wage cut lads, otherwise these people will move out of the country and take away your jobs completely." That is the danger of being subjugated by the multinationals. That is the danger of supplication, and of going round the world with a begging bowl, asking companies to invest here. Investment should be made on terms that are beneficial to the people as a whole, and not on terms that are beneficial to the multinational companies and their shareholders.
  The Government constantly talk about the market place. At Question Time the Prime Minister utters clichéridden platitudes about competition and says that we are not making our way in the world because of our lack of competitive force. She does not mention the over-valued pound, the hidden import controls that other Common Market members use, but which we do not, even though the Government have investigated them. The Government seem to think that the end of civilisation would arrive if we acted on them.
  For example, what about the outrageous suggestion that imported goods should be examined to ensure their safety? What would have happened if, instead of all those Polish light bulbs exploding when people put them in the socket and turned on the electricity, they had been checked before they were sold? What a ridiculous idea for the United Kingdom! What if all our imported factory machinery was examined for safety before somebody's finger is cut off because a guard or other design factor does not measure up to British standards? Of course, we do not make such examinations, but the Prime Minister ploughs on, speaking as she always does in italics, about how we lack competition.
  What about the rural areas? Competition does not work there. If the Government are so worried about subsidies, let them stop subsidising the farmers. The principle that governs the Tories is greed, not competition. If their chums in the farming community can get their snouts in the trough, that is so much the better for them.
  The rural areas do not allow market forces to depopulate those areas, although that is happening as people seek jobs because of the decline in rural communities. They set up, properly, development commissions to replace the development commissioners. They establish development commissions with powers set out in clause 1 to encourage industry to
  "(a) make grants and loans and give guarantees … (b) acquire land … (c) provide or facilitate the provision of premises for occupation by industrial or commercial undertakings; (d) form, and hold controlling or other interests in, bodies corporate; (e) act alone or with other persons, either in partnership or otherwise."
  That is a package for detailed state intervention in the rural communities. Why not? If the Government are prepared to intervene in rural communities, what about the urban communities that are being laid to waste by the Government? The truth is that the Government are operating the pork barrel principle—they give money where their supporters are and hang the rest. The Government do not command many votes in the urban areas and they are not bothered about an urban development commission to help the people to
  "make grants and loans, … acquire land or other property"
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  or give them other enormous powers, which I welcome. Why do they not give the same powers to the urban areas? Why do they not encourage the development of real jobs, not just the training schemes—which, of course, I welcome because they help to alleviate the enormous problem caused by Government policy? It is interesting that the Government should have such comprehensive legislation for the rural areas which could be useful for the urban areas. I hope that the Government will change their mind and establish a development commission for the urban areas so that powers can be used when needed.
  I know that my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) wishes to speak, no doubt about Scottish matters, but I am concerned that in a miscellaneous Bill of this nature the representations that I have made about including legislation to give grants in certain areas for repair grants to post-1919 houses are not heeded.
  The Bill contains in the schedule at least two modifications to legislation which is the direct responsibility of the Secretary of State for the Environment. I have suggested to him that if there are any legislative problems—I do not believe that there are—to allow him to take up selected areas such as Stocksbridge in my constituency and to give post-1919 houses repair grants, he should seize the opportunity provided by the Bill. I am disappointed that there is no reference to this in the Bill. I have written to the Secretary of State asking him to use a miscellaneous powers Bill of this character to remedy any lack of power that he might claim prevented him taking action.
  Stocksbridge in my constituency has been blighted from 1968 to 1982. Now, happily, the path of the Airedale trunk road has been decided and the blight has been removed. But for that period of time—14 years—almost 20 owner-occupiers have stuck it out. Because they were never sure that the motorway was to come through, they deferred repairs. But because the houses are immediately pre-1939, the owners find that they are not eligible for repair grants. It would be reasonable if the Government, who are supposed to be concerned about owner-occupiers that the houses have been blighted, though the fault of the Department of Transport's proposal made in 1968, and carried on by successive Governments until eventually, in 1982, a decision was made to fix a route that lifted the blight. Why cannot the Government give them repair grants because of those special conditions? It might also apply to other areas.
  If other areas have the same deserving case, why should it not apply to those other areas? Why should owner-occupiers have to suffer if, as a result of a Government proposal, there is an accumulation of outstanding repairs for the perfectly proper reason that owner-occupiers felt, jutifiably, that it might not be worth spending money because they never knew the position from year to year? They should now be eligible for a repair grant.
  I urge the Minister, even at this late stage, to contact the Secretary of State for the Environment to see whether an amending clause could be added to the Bill to get the powers. If there is any doubt—at one stage of the exchange of correspondence the Secretary of State said that he may not have the powers—let us have a clause added to the Bill to bring some relief to people who justifiably deserve help.
  11.2 pm
  Mr. John Home Robertson: This is a spectacularly miscellaneous Bill, ranging as it does from Devon and Cornwall through the north of England to Zimbabwe and indeed, on to the functions of the Crown Estate Commissioners in the Isle of Man. Perhaps my hon. Friend the Member for Keighley (Mr. Cryer), before he leaves the Chamber, will bear in mind the possibility of moving an appropriate amendment to the Bill in Committee, as I have no doubt that, having spoken on Second Reading, he is likely to be appointed to the Committee that will deal with the Bill. Such an amendment would have the effect that he has so eloquently suggested. I am sure that he can rely on the support of many hon. Members on the Opposition Benches.
  I shall refer briefly to only three clauses in the Bill, starting appropriately with clause 1, which deals with the Development Commission. The Development Commission will replace the Development Commissioners, with the power to develop rural areas of England. It is of some concern to me that the writ of the new commission will not run in Scotland.
  I understand that the Development Commissioners had power to undertake some promotional activities in the rural areas of Scotland. This is particularly relevant in the south of Scotland, which is not covered by the Highlands and Islands Development Board. I suspect that my hon. Friend the Member for Edinburgh, Central (Mr. Cook) is about to shoot me down in flames for making such a suggestion.
  Mr. Cook: Never.
  Mr. Home Robertson: It would be more appropriate if the Scottish Development Agency were to have overall power. In effect it has that power, but it has relatively limited funds and it has to reserve its funds for the disaster areas, for the areas with the very highest unemployment, where the Government have achieved the maximum in their endeavours to introduce deindustrialisation in western and central Scotland. The agency has relatively little money available for developing the rural areas of Scotland. I express the hope that the new commission will be successful in its operations in England. I am aware of the needs of many rural areas of England. As the new commission will not be in a position to carry out similar works in Scotland, I hope that the SDA will be given the funds and the encouragement that it requires to carry out the parallel function in deprived rural communities in Scotland.
  It is understandable that clause 2 has attracted the most attention during the debate. It is an interesting clause. It refers specifically to the Devon and Cornwall Development Bureau, the North of England Development Council, the North West Industrial Development Association, the Yorkshire and Humberside Development Association and other miscellaneous bodies. There is one bureau, one council, two associations and goodness knows what else.
  Many of us have been anxious to learn the nature of the Government's regional strategy. I suppose that it is set out in the Bill. It consists of a miscellany of quangos through which the Government want to operate. My hon. Friend the Member for Jarrow (Mr. Dixon) and others of my hon. Friends with constituencies in the north-east have made it clear that they are dissatisfied with the extent and the scope of the provisions that are before us, and rightly so. I have
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  more than a passing interest in the north-east, because from my house I look across the river Tweed to the northeast. If I have to live next door to the English, I could not ask for better Englishmen as neighbours than those of the north-east.
  Dr. Brian Mawhinney: Put away your fiddle.
  Mr. Home Robertson: They are right to be concerned about the parlous economic state of their region. They are right also to be concerned about the disastrous consequences of the deindustrialisation of Tyneside and the high unemployment in the area. I assure hon. Members with constituencies in the area that Scottish Members who have the benefit of the SDA would be more than willing to support them in their endeavours to get a parallel and similar agency for their region, which they need every bit as badly as many parts of Scotland need the SDA.
  I recognise that I cannot go very far down the Scottish line while speaking on this Bill. I earnestly wish that we had a directly elected Scottish Assembly to administer the industrial development and other functions of the agency. I look forward to the day when there is a proper and positive regional policy for the regions of England. I applaud the fact that this has been articulated ably by my hon. Friends. We look forward—I fear in vain—for an explanation from the Government of what they regard as a constructive regional development policy. All they have done so far is do away with regional development status in many areas. We have a sort of fire-engine policy of setting up gimmicks such as enterprise zones, which do not appear to be an outrageous success.
  Clause 5 was referred to by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson). It deals with the powers of the Crown Estate Commissioners. My hon. Friend quoted from the Crown Estate Act 1961 and explained the problems that had arisen for some of his constituents as a result of the way in which the Crown Estate Commissioners exercise their powers in leasing property. The Bill will extend from 100 to 150 years their power to grant leases. I was disturbed to hear how that operates in an urban part of England.
  The Crown Estate Act 1961 is interesting. It refers to Windsor great park, Regents park and various properties in London and other parts of the country. The House may be interested to know that the commissioners' writ also runs under water. They own the sea bed within three miles of our territorial waters. Anything that is moored or attached to the sea bed, anyone who wants to prospect for gravel or aggregates within that area or anyone who wants to start a fish farm in a sea loch may have to get a lease from the Crown Estate Commissioners.
  The subject has recently come to my attention because of a licence that was granted by the commissioners to a company based in Kent to prospect for marine aggregates off the coast of my constituency. Indeed, it does not simply apply to the coast off my constituency. It covers almost the entire east coast of Scotland, for several miles off shore, including the whole of the Firth of Forth and the Firth of Tay from a point north of Stonehaven in Kincardineshire to a point off St. Abbs head in my constituency. It covers 300 square miles.
  There has been no consultation with anybody. It is hardly surprising that the granting of this licence has caused some anxiety among the fishing community.

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  People who have made a living for many years from fishing for shellfish, lobsters, crabs, prawns and white fish could be considerably harmed if a company goes dredging in those waters. Nobody has consulted them about whether the licence should be granted. The development is not subject to planning control, as the commissioners have the power to issue a licence and, in due course, to grant a lease for 150 years if the Bill is passed.
  I understand that there have been similar problems on the west coast of Scotland, where, in the deprived rural communities to which my hon. Friend the Member for Keighley referred people wanted to build up small businesses and employ one or two people in fish farming enterprises in sea lochs. What do we find? The Crown Estate Commissioners, without asking anyone, have in some cases sold the right to carry out fish farming operations to undisclosed persons. Goodness knows who they may be. There is no register of who has been granted leases. The commissioners have not sought permission from anybody. Nobody has been consulted and nobody can do anything about it. Therefore, some potentially useful developments have been inhibited.
  Rather than extend the powers of the Crown Estate Commissioners to grant leases, we should amend section 5(1) of the 1961 Act and look for ways in which to subject such developments to the normal planning controls. At the very least there should be a publicly accessible register of who owns the rights to and holds the leases of the sea beds in the areas to which I have referred.
  This is quite the most miscellaneous Bill that I have come across, and I have seen one or two miscellaneous provisions Bills. There is scope to talk about many issues, but I do not wish to delay the House. I hope that the Minister will reply to some of the constructive points that have been raised in the debate.
  11.14 pm
  Mr. Austin Mitchell: I shall concentrate on clause 2, particularly as it relates to the Yorkshire and Humberside development association, which covers Grimsby, and so is of interest to me. There is no doubt that bodies such as the Yorkshire and Humberside development association do a good job. That is because they are the only bodies available, because of the Government's folly in destroying regional policy, to promote the English regions. In doing that job, they are in an extremely difficult situation, first because they have to compete for development with organisations such as the Scottish and Welsh Development Agencies which have more clout in the sense that they can offer a more complete package of services and can go out with a more vigorous recruitment drive. More important, they have far more money at their disposal. The second inadequacy is the financial limitation in the grants that the Government make available.
  An answer from the Minister of State, Department of Industry on 19 January 1983 specifies that the North-Eastern development council will get a grant in 1983–84 of up to £850,000. That is the option two grant in which the conditions for local authority participation will be relaxed, subject to review, because the Minister wants to see how effective the co-operation promised by the local authorities will be. The important point is that he is not offering the other three organisations, including Yorkshire and Humberside, the same substantial increase in grant,
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  nor is he offering them any relaxation of the pound for pound matching requirement, presumably to keep up the pressure on local authorities to participate in this fashion, which is all very well, but the sums produced by that technique are small.
  Given the scale of the problem in those areas, particularly Yorkshire and Humberside, the sums are puny. In 1983–84, compared to up to £850,000 for the north-east, Yorkshire and Humberside will get only £163,000 to deal with an enormous area with enormous problems. That is an important point. Let us compare the unemployment figures of January 1979 with the current unemployment figures and the real or de-Tebbitised figures. In the north-east the figure for January 1979 was 112,000 while in Yorkshire and Humberside it was 115,000, which is roughly comparable. However, there is a difference in the most recent figures. I am talking about the de-Tebbitised figures, in other words the unemployment figures as they were before the recent attempt to fiddle the figures. Unemployment in the northern region is 235,000, which is an increase of 110 per cent., but in Yorkshire and Humberside, which gets a minute grant compared with the north-east, the figure is 303,000, an increase of 162 per cent.
  In the face of an increase of 162 per cent. compared with 110 per cent. in an area that gets a better grant, there is clearly a need for more generous provision for the Yorkshire and Humberside development association specifically. It definitely needs an option two provision. It needs a relaxation of the conditions of participation for local authorities. Most of all, it needs, simply and straightforwardly, more money to do a job that is becoming increasingly important.
  There are other points to make on the association and the relevant authorities as quoted in the Bill. It brings up the whole problem of regional planning. The English regions have never developed an effective framework for regional planning. Indeed, the framework was enormously weakened by the abolition of the regional employment premium, which was the most effective and sensible means to bring money to bear directly on the key problem—the creation of jobs in the regions. That is what the basis of regional planning is all about.
  Given the fact that we have never effectively solved the problem or built an effective framework, the only way to go is forward to regional government, each region having its own development agency and each applying local and national money in combination. We need to set the regions free of the leading strings of central Government. They need to get out and attract the industries that they want in the way that they want them, providing the financial support which best fits that region's plans and which is the best inducement for the industries.
  In passing, I am glad to welcome wholeheartedly the framework for regional planning proposed by my right hon. Friends on the Front bench for the consideration of the Labour party for its next election policy. This Government are extremely unlikely to develop the framework of regional planning, much as they need to. They have been loth to move in that direction. They have cut by 25 per cent. the financial provision.
  So the Government's only regional policy is really a policy for the south-east, disguised as a policy for the whole country. Because of the policy of survival of the fittest and the fattest, development, such as it is, will concentrate on the south-east, an area that has always been

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  pampered and has drained the life away from regions like mine and others further north—the deprived and declining regions which suffer from the growth not only of the great wen but of the whole prosperous south-east. That essentially is the Government's regional policy: let the south-east go ahead, in so far as any region can in face of their economic policy, and let it drain the life from the rest at an even faster rate than it has been doing.
  We are seeing increasingly intense competition in attracting industry, which is the important factor for regional policy. The amount of foot-loose industry available for attraction by bodies like the Yorkshire and Humberside development association is minute. We are involved not only in intense competition within the country with bodies like the Scottish and Welsh Development Agencies, which have superior clout. We are also involved in increasingly intense international competition. The regional organisations need to get out and compete internationally for the industries that they want.
  Yorkshire and Humberside faces another problem. The inducements that it can offer, because of the vagaries of development policy, are in some respects less attractive than those of other parts of the country. Our instance, perhaps the most striking to the people in Grimsby, is the decision of Findus to establish a new fish processing plant in Newcastle, away from the centre of the industry and the focus on Humberside—in the Grimsby college of technology there is the food technology build-up associated with the industry—and away from the main landing port and market, which is Grimsby. It was lured to Newcastle by the fact that the area could offer superior incentives. That is why each area must be able to frame its inducements, attractions, subsidies and support in its own way to develop the kind of industrial nucleus that it needs. That flexibility is essential.
  Considering regional policy in a wider sphere, the multiplicity and complexity of institutions to help and encourage the regions often dazzle local government officials. They include English Industrial Estates, the four bodies with which we are dealing today, including the Yorkshire and Humberside Development Association, as well as the Invest in Britain Bureau, the British Technology Group, në NEB, BSC Industry and the European Coal and Steel Community Fund. There are also the enterprise zones, although they are essentially just a means of trying to distract attention from the gravity of the problem by moving furniture around as vigorously as possible. That is the essence of the Government's economic policy. There, are also the local authorities able to offer a 2p rate.
  In the document "European Regional Incentives 1982", for a copy of which I am grateful to my hon. Friend the Member for Workington (Mr. Campbell-Savours), the section on Great Britain and Northern Ireland is the longest, due to the complexity of the structures that we have developed. The same document shows that the French not only offer a more sophisticated and, in many ways, more attractive matrix of regional incentives, as the Timex experience shows, but industrialists taking advantage of the grants and benefits are tied to the targets to which they pledge themselves, and to enforce this there is an effective clawback of regional grant of up to 10 per cent. of the total available in any one year.
  Mr. Campbell-Savours: Does my hon. Friend agree that if the European Community functioned properly it would have ensured that the arrangements were common to all member countries and that there were not such massive differences between one area and another that companies such as the one in Dundee could shift resources and investment from one part of the Community to another?
  Mr. Mitchell: My hon. Friend is quite right. Moreover, the reason why the British Labour party and the British people reject the European Community is that it has never developed in ways that would favour this country. It has developed basically as an agriculture protection society—two-thirds of its expenditure is on agriculture—because that suits the needs especially of French but also of German agriculture. It has developed as an industrial free trade organisation because hat suits the needs of Germany, but it has never developed an effective common energy policy, which is what we want because we are energy rich, or an effective regional policy which we need because we face a more acute problem than most other EC countries in terms of regional disparities and regional decline associated with the decline of older basic industries. Until it develops those two policies it will never suit the needs of this country.
  The structures with which we are dealing today are less than adequate, as I shall illustrate from my constituency. A body such as the Yorkshire and Humberside development association covers an enormous area which often has little in common with the needs of an area such as Grimsby, which has a very strong local pride, partly the result of isolation, and whose needs and aspirations are limited to the south bank of the Humber, which has been almost tacked on to the Yorkshire and Humberside unit simply because there was nowhere else on the chess board to put it. If we are to develop local pride and involvement and to mobilise the strong local feelings that still exist in Grimsby, though they have disappeared from other parts of the country, we need more local development agencies such as those that the Bill allows the Minister to support—bodies
  "whose principal object appears to the Secretary of State to be the promotion of industrial and commercial development in any area in England."
  That kind of body, if more limited in area and scope, is needed in Grimsby. We are linked to the north bank by the Humber bridge. However, in fishing, Grimsby and Hull have always been competitors. There is also intense competition for a limited supply of available footloose industry. The problems of Grimsby are the kernel of the problems associated with regional development. An approach on the basis of bigger and wider areas means that it is difficult to meet the specific needs of Grimsby. There is need for more immediate authorities having closer contact with the areas they serve.
  Under the Government, unemployment in Grimsby has become extremely serious. It is part of a national crisis. In many respects, we are witnessing the strange death of industrial Britain. The policies of deflation, high interest rates and the deliberate use of depression as a means of disciplining the working class and breaking the power of the trade unions have hit Grimsby especially hard.
  Our decline has been the steepest of any country in the advanced industrial world. Whatever the steps taken by the Secretary of State for Employment to conceal the disaster, the real figure of unemployed is between 4 million and 5

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  million. With the highest fall of industrial production, especially in manufacturing industry, in the advanced industrial world, our depression is the most severe.
  It is no use arguing that, phoenix-like from the ashes, there will arise new industry—real jobs, as the Prime Minister has described them—and a dynamic economy, because growth tends to beget growth and decline to beget only decline. We are locked into a spiral of decline that hits particularly an area such as Grimsby—all for the sake of a policy that cannot work. We had a male unemployment rate in Grimsby in May 1979 of 8 per cent.—the overall figure was 6 per cent. That has now become, in January 1983, a rate of 20 per cent.
  Grimsby is a hard-working town. It has always been concerned to get on with the job. It possesses a high level of skills and a high degree of involvement in work. Now, in a town that was proud of its traditions, the policies of the Government mean that one man in five is unemployed. That is a horrendous achievement. What is more, the overall unemployment rate is 15 per cent. The vacancies for every 100 unemployed, which in May 1979 were 19, are now 0·97. There is an increase in unemployment of 150 per cent. That is a tragedy, not only for young people but for older men who are strong of arm and back but for whom there is no industrial future.
  It has all been so pointless and unnecessary. We are running the economy for money, not for people. It is like Goldsmith's "The Deserted Village". The same can be said of the deserted aluminium plant, the deserted fish dock, the deserted steel plant and the closed down coal mine:
  "Ill fares the land, to hast'ning ills a prey,
  Where wealth accumulates, and men decay."
  That is what is happening all over the country, for no reason.
  It is heartbreaking especially for a place such as Grimsby, because the essence of regional policy in Grimsby as operated by the local authority has been a consistent, wise and far-sighted attempt since the war to diversify away from the staple, basic industry of fishing into new industries to bring new life to the area and prevent disastrous consequences ensuing from any decline in fishing. After the war, the Grimsby council developed sites on the Humber bank and elsewhere to attract new industries and diversify what had been almost exclusively a fishing port in the period up to the war. That made Grimsby a very diverse industrial society.
  The impact of this Government's policies and the failure to redress them by effective regional policies is that that diversification has been steadily and, in the last two years rapidly, undermined. We have seen one of the new industries, Laporte, shedding 330 people in 1980 and 500 people in 1981. We have seen the extremely efficient and competitive Courtaulds plant, employing more than 2,000 people, now reduced to a little over 1,100. We have seen the same pattern of redundancies at Norsk Hydro, Fisons as it was, 240; and at Lloyd Cars, which produced parts for Rolls-Royce, 25. We have seen the slimming-down of the food processing plants: Birdseye, Findus, and the closing down of the Ross No. 1 plant for processing fish. We have seen a long and tragic decline, undermining the wise and far-sighted efforts that the council put into trying to develop the area.
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  From the point of view of each firm it is not difficult to understand what is happening. To survive, each firm has to make itself more efficient and has to shed labour. That is the state into which the Government's policies have plunged them. There is no alternative for firms but to shed people to survive. The problem is that no one is taking any control or oversight of the overall position. No one is responsible for the jobs and the futures of the people who are shed in this way because no one is developing the new industries and bringing in the new jobs. No one is taking effective control or oversight of the regional consequences of the decline.
  Each of the persons shed, for valid reasons, by each firm, costs £5,000 in terms of taxes no longer paid, benefits received and production no longer achieved. It is a crippling cost. It is interesting that people such as Baker and Eltis, who talked about the burden of Government spending and the so called non-productive sector in the mid-1970s, are not talking now about the burden of all those unemployed people on a shrinking productive base. Everything that has been done in that area has been rapidly undermined. Yet, at the same time, the original base—the fishing industry—from which the council tried to diversify in the post-war period, is itself now in decline because of the loss of distant water fishing. It is wholly uncertain about its position. It is no longer possible for firms to continue as they are not producing enough profits. The market prices are not high enough and the catches are not large enough to produce profits to invest in modernising the ageing fleet.
  The fishing industry in Grimsby is of a crucial size. It is too small for the scale of facilities, the dock charges, the labour charges, the slipways and the engineering that it must support. The industry is rather like a house of cards. Recently it lost two firms—one in Grimsby and one in Hull. It faces the loss of vessels either through other firms going bankrupt or through vessels deciding to transfer elsewhere. The house of cards is threatened and becomes more precarious. It is impossible for the remaining vessels to carry the burden of charges that press down on the industry. So the base of the structure of diversification—fishing itself—is now threatened.
  Industry in Grimsby, like industry throughout the nation, is leaner, trimmer, more competitive and more productive. But it has nothing to stimulate it, nothing to produce for, no incentives and no great drive. That is because the Government obstinately refuse to do the only thing that can now give British industry the go ahead, which is to expand the economy to provide a sense of buoyancy, expansion and an ability to increase and find demands for output to support and to increase profits and investment.
  Grimsby is an area with peculiar problems. It has a strong local focus, to which the existing large institutions can offer little. If Grimsby is to develop and recreate that spirit of local incentive and an awareness of the development needs of the area, which it had in the postwar period, it must have a development institution with a more local focus that can attend to the needs of that unique area. Grimsby and South Humberside need more realistic units for development and incentive. Instead, we find a multiplicity of institutions. There is the story of Aneurin Bevan pursuing power from the parish council—when he found that it was not there—to the county council to find that it had moved on to Westminster, only to find that it

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  had gone from this Chamber. In the same way, any local organisation pursuing development must do so throughout the country because there are so many institutions.
  Grimsby wants development. It wants to attract new industry. To get it it must, first, approach the EC and plead that it has special needs and a special claim to help because it is dependent on fishing and the treaty of Rome pledged to develop not only agriculture, but fishing. Fishing has had a cruel fate, while agriculture has had a rich and prosperous fate. A community that depends on fishing has a claim to development. It could turn to the social fund. It could turn, as we are doing, to a regional study of the needs of Hull and Grimsby together. It could turn to the national Government. It could turn to the Department of Industry and ask for help under the Industry Act. It gets help through regional policy. It gets help through the Yorkshire and Humberside development association. If we are to attract a factory such as Nissan—we hope to do that, because we are the best site that is available—it will be through the blandishments and the efforts put in by the Yorkshire and Humberside development association and the county council.
  We can turn to other Government Departments for specific help for the fishing industry. For that we can also turn to the British Transport Docks Board. We have to turn to the Ministry of Agriculture, Fisheries and Food for aid, and to the Common Market for restructing the policy on fish.
  The sources of such help are scattered, numerous and confusing for a local authority that has wide responsibilities and for which the task of attracting industry is a tremendous burden. There is a multiplicity of help for local government, but it is often difficult to get. Grimsby is applying for inner urban aid to tackle the problems in the centre of the town, where the social problems are as acute as they are in many of the big city centre areas. Because Grimsby's area is more localised, it finds it more difficult to produce the statistics for aid or to show the scale of the problems. The contrast between the poorer parts and the richer parts of Grimsby is as stark as in many other cities. The need may be more difficult to prove, but it is as great.
  We also turn to central Government for help in the Pyewipe reclamation scheme. We are running short of land for industrial development, and there is the possibility of reclaiming up to 1,000 acres. That reclamation will be valuable for the whole region, but it is beyond the resources of a local authority such as Grimsby. It needs wider planning and wider participation.
  We want help from central Government for MSC grants and for training facilities. We need the help of Associated British Ports in releasing land from the docks for development in Grimsby.
  I have catalogued the directions in which a town such as Grimsby, anxious to build its future and control its own destiny, has to turn. The same is true all over the country. There is a confusing complexity of authorities to which towns that are proud of their area have to turn for help. That multiplicity is beyond the resources of small towns to cope with, but wider bodies such as the Yorkshire and Humberside development association are directly relevant to it.
  The result of the inadequacy of regional policy in a time of economic decline, as under this Government is the
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  generation, not only of despair in a place like Grimsby, but of a feeling of inadequacy, even impotence, in coping with the problems that the town desperately wants to solve.
  The result of regional policy here, as in so many other places, is not to develp the regions but to generate in those regions a begging-bowl mentality in which the trains to London are full of deputations and delegations going to different Government Departments for different forms of help rather than having the organisations and the framework through which they can help themselves. That is a particularly tragic weakness for a town such as Grimsby which had such a proud tradition of developing its area and which wants to fight back. It does not want to sit down and suffer the kind of decline that is happening. Local pride wants to encourage new industry to the area but does not have the facilities through which to do so.
  Regional policy should set areas such as Grimsby free to help themselves. The Bill is inadequate because it does not do that. It does not provide Government backing to areas to help themselves. It does not set them free to build up their strength. That is a particularly tragic gap in the face of all that the Government have done to British industry, to areas such as Grimsby and to the declining parts of Britain. In the light of that, the Government should at least have had the sense of responsibility and the sensitivity to provide areas with the framework, strength and financial backing to fight back and rebuild destinies which the Government have ruined.
  11.51 pm
  Mr. Wakeham: This was a wide-ranging debate even before the hon. Member for Grimsby (Mr. Mitchell) made his speech, and I make no complaint about that. The Bill is about a rather narrow range of subjects. It makes changes in the law applicable to several aspects of public expenditure and financial management. What it does not do is to make any significant change in the levels of public expenditure.
  Mr. Cowans: That is the trouble.
  Mr. Wakeham: There is a considerable degree of agreement about the principle and there is substantial disagreement about the levels of public expenditure. I understand that. However, that is not what the Bill is about. We shall have substantial debates on the public expenditure White paper in the near future. [interruption.] No doubt the Opposition Chief Whip will assist if extra days are required. We shall also have a Budget introduced by my right hon. and learned Friend the Chancellor of the Exchequer, and there will be a debate on the Finance Bill, which will cover many of the subjects dealt with this evening.
  I shall do my best to answer many of the points that have been raised. The hon. Member for Edinburgh, Central (Mr. Cook) welcomed the Bill and said that it would have the Opposition's support, subject to the many points that he raised. I am grateful to him for that. He raised several matters, one about Zimbabwe and the two out of the five loans which he identified which are not written off in clause 3. The other two loans were made by the International Bank for Reconstruction and Development to the Central African Power Corporation.
  When the Rhodesian Government failed to service those loans, the Government honoured the guarantees and paid the International Bank for Reconstruction and

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  Development. However, during the period of UDI the Central African Power Corporation paid the interest on the loans into a non-interest bearing blocked account with the Reserve Bank of Zimbabwe. From May 1980 the money was invested in Zimbabwe Treasury bills, so it was available when the independence settlement was reached and it was agreed that Her Majesty's Government should be repaid. After a period of two years' grace from 1980 the repayments were rescheduled over a period of eight years at an interest rate of 8 per cent. payable on the amounts outstanding from the time of the settlement. To date, we have received £9 million.
  The hon. Member for Edinburgh, Central said that the Treasury guarantees should not be treated as public expenditure. I understand that they are not so treated, except when the guarantee is called and that guarantee falls outside the public expenditure. In the normal run of things, the guarantees do not form part of public expenditure. As the hon. Gentleman will know, discussions are taking place between the Public Accounts Committee and the Government on that matter. I understand that the PAC has put forward a contrary view. The Government will reply to its observations, but at present, if Treasury guarantees are not called—that is, if the liability is not called—they do not form part of public expenditure.
  The hon. Gentleman also mentioned the annuities and cast doubt on whether they should not have been dealt with long ago. The Labour party has had since 1973, when the original arrangements were made, to do something about them. It has had a reasonable period in government—many of us might think rather too long—and probably had a chance to deal with them. However, the Government have introduced a Bill to deal with that matter.
  The 10 per cent. cut in manpower at COSIRA was part of a general drive to improve efficiency in Government and quasi-governmental organisations. COSIRA was able to find the 10 per cent. savings from its central administration and has also been able to redeploy some staff in the field. Therefore, it is both the organisation's and the Government's view that COSIRA is now more effective as a result of the savings.
  Mr. Cook: The Minister said that the reduction was part of a general drive for manpower savings. Can he be more specific? Is he really saying that COSIRA came forward and said that it could achieve a 10 per cent. saving, or was that suspiciously round figure sent to COSIRA as its target?
  Mr. Wakeham: I have no doubt that agreement on the figure was reached after negotiations. It is in the nature of such things that at the beginning of such negotiations there may be some differences. However, I have no details of the negotiations, although I congratulate COSIRA on its achievement in reducing central costs and thus making itself more effective. That is to its credit.
  I think that all hon. Members have welcomed clause 7. The hon. Member for Newcastle upon Tyne, Central (Mr. Cowans), who made an interesting speech, claimed more credit than most for it. I do not complain about that. The Government are not even denying that he is entitled to his share of the credit, but we have introduced the clause and I am glad that it has been welcomed by the House.
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  The Bill is not about regional policy as such. Clause 2 is about regional development organisations. Hon. Members have expressed concern about the effectiveness of regional policy, just as the Government have. Our main aim is to concentrate on the areas most in need.
  The Government are reviewing the effectiveness of regional policy. As the Prime Minister told the hon. Member for Easington (Mr. Dormand) recently, the purpose of the review of regional policy is to see how we can best help effectively and in the longer run to build industries that will have a future. We are aware that some industries that went to the regions—I suppose that Linwood is a classic example—did not have a future.
  We have concentrated our help on the special development areas and we shall continue to do that. When the review of regional policy is complete, appropriate announcements will be made.
  The hon. Member for Newcastle upon Tyne, Central and others asked about clause 2. The main purpose of the clause is to regularise payments to existing bodies. We think it right to provide for other similar bodies to be supported in the same way, for the benefit of other regions in the future. There is no commitment at this stage to do that, but we thought it right to include the principle in the Bill.
  Mr. Campbell-Savours: Is it possible to talk of extending the provision when the part of the Bill dealing with public sector manpower says that it will have no material effect on public expenditure? That and what the Minister says cannot both be correct, unless the Minister is misleading the House.
  Mr. Wakeham: I am certainly not misleading the House. The Bill sets the framework for future arrangements. The financial arrangements for any future organisations will be made, not under the Bill, but by way of Votes on the appropriate Department. The Bill makes it possible for the Government to set up additional bodies if they are needed.
  Mr. Cowans: Clause 2(2)(e) makes that possible, but it does not say what qualifications are needed for the Treasury to pay out the money. It does not say whether social need will be taken into account. If the Treasury is to pay out, it must have some qualifications. What are they?
  Mr. Wakeham: We are talking about organisations to promote development in a region. We are talking, not about organisation or payment, but about promotion. Negotiations with the local people concerned will have taken place and the organisation will have to be such that it can promote the region effectively. Each suggestion will be treated separately. Each area that comes up with proposals will be considered sympathetically. We are anxious for the regions to be promoted. I cannot go further than that, because whether a body is set up will depend on the region and the Government.
  Mr. Cowans: Surely, under clause 2(2)(e), anyone may apply to promote a region, because no qualifications are set out. The Secretary of State will have to decide. Would it not be more fruitful to set out the qualifications? Would it not make sense to specify social need as a priority? If Uncle Tom Cobbleigh and everyone else applies, it will make nonsense of any regional policy that the Government have, if they do in fact have one.
  Mr. Wakeham: The hon. Gentleman is still confusing regional policy with a regional development organisation. The Bill deals with a body to promote the region in other parts of the world and so on. The Government's regional policy is under review and will at the right time be announced, but it is no part of the Bill to deal with it.
  The regional development organisations, the sums of money available and the division of those sums between the organisations are not strictly within the province of the Bill. The Bill is about the principle of making these grants. That principle is not in dispute. My hon. Friend the Minister of State, Department of Industry, in his written answer of 19 January, set out quite firmly the reasons behind the allocation of grants to each of the four regional development organisations.
  Mr. Dixon: I specifically referred to the south Tyneside industrial fair, which was promoting something to attract industry to an area of high unemployment. Will the Minister say whether that would come under clause 2(2)(e)?
  Mr. Wakeham: It is not a matter for me, but I would say almost certainly not, because a northern regional development organisation covers that region. It is that organisation which deals with that area. Clause 2(2)(e) deals with providing regional organisations in those parts of the country that do not have them.
  Mr. Campbell-Savours: I thank the Minister for giving way, but clause 2(2)(e) does not say that. It does not say "either, or". Clause 2(2)(e) is not presented as an alternative. It appears to us to be additional. In no way can it be said that clause 2(2)(e) precludes the right of any organisation within the northern region or any other part of the country that wishes to do so to promote
  "industrial or commercial development".
  Will the Minister come clean at the Dispatch Box and tell us what we want to know? Can our individual industrial development promotional units, on the basis of clause 2(2) (e), go to the Government and be provided with additional money under a separate heading in another Bill? That is all we want to know.
  Mr. Wakeham: The hon. Gentleman is asking questions the answers to which are not in the Bill. Of course, there is nothing to stop any organisation from going to the Government and asking for money. No Bill of which I am aware has been passed to do that. Whether an organisation would be successful would depend upon negotiating something with my hon. Friend the Minister of State. We are speaking in theory. I am saying that my hon. Friend is not likely to agree to a regional development organisation that will undercut the existing ones, some of which are doing extremely well. It is not the best way to promote a region to have two competing regional organisations in this fashion.
  Mr. Cryer: The Bill does not refer to any regional body. It refers to
  "any other body, whether corporate or unincorporate, whose principal object appears to the Secretary of State to be the promotion of industrial or commercial development in an area in England."
  The word "area" is not defined. It could be a region, a town or a county council area. It is available to the Secretary of State to use his discretion to decide whether to make grants to a town association or a county council association. It does not necessarily have to be a region.
  Mr. Wakeham: I was not saying that it was. I was giving my understanding of how my hon. Friend would use the clause. I am not saying that it is not possible for him to use the clause to introduce two competing regional organisations in, for example, the northern region. I am saying that in my view my hon. Friend's likely decision is that that would not be the most effective and efficient way of using such organisations. If the hon. Gentleman thinks that there is a case to be made for using two competing organisations, or if his hon. Friends take that view, it is up to him or his hon. Friends to advance the argument to my hon. Friend.
  A number of questions have been raised about the North West Industrial Development Association. The complaint of the right hon. Member for Manchester, Openshaw (Mr. Morris), who courteously told me that he had to lease the Chamber, is that there is a lack of co-ordination and other related difficulties. The right hon. Gentleman is to see my hon. Friend later this week to discuss these issues. It would be inappropriate for me to deal with details that will be discussed at the meeting. The matters which the right hon. Gentleman raised are exactly the same sort of items which my hon. Friend mentioned in his report to Parliament on 19 January. I have no doubt that there is every likelihood of a useful and constructive meeting later this week.
  Mr. Cook: I am glad to hear that my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) is to have a useful and constructive meeting later this week. I am sure that he will welcome that assurance. The difficulty arises from the wide terms of the Bill. The clauses provides that
  "That Secretary of State may"
  impose
  "such conditions as he may … think fit."
  One of the conditions that he has imposed for three of the organisations is that local authorities must match Government grant pound for pound. NWIDA applied to be treated in accordance with the more generous formula applying to the North East Development Council. It believes that it met the same test that was set for the development council. If the Minister wants the Opposition to accept the clause—obviously we shall return to it in some detail in Committee—with such a wide and sweeping power for the Secretary of State, he must give a more convincing explanation to the House and the Committee than his hon. Friend gave when he made his statement on 19 January.
  Mr. Wakeham: It would not be appropriate for me to add to my response other than to say that it seems that the complaints of the right hon. Member for Openshaw covered the same areas that my hon. Friend mentioned in his statement. My hon. Friend said:
  "I have not … been able to satisfy myself that the requisite degree of commitment to a filly and effectively co-ordinated regional programme by all the local authorities and new towns in the north west has … been demonstrated."—[Official Report, 19 January 1983; Vol. 35, c. 145.]
  That is the sort of issue that can be best handled at a sensible discussion with my hon. Friend and not in debate on the Floor of the House tonight.
  The hon. Member for Sheffield, Hooley (Mr. Heeley) expressed concern about Zimbabwe and the development there. The aid to Zimbabwe made or pledged by the Government amounts to about £113 million, plus £15 million guarantee on export credits. My right hon. Friend the Member for Aylesbury, (Mr. Raison), the Minister for

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  Overseas Development, was in Zimbabwe earlier this month. He pledged an additional £20 million. There will be £15 million of export credits and £5 million of additional aid.
  The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) referred to Crown Estate property. I am in no position to answer his detailed questions. The Bill extends leases to 150 years, which, as I said, is an important means by which the commercial property of the Crown Estate can be dealt with. No doubt the hon. Gentleman will pursue what he said. I have no idea of the detail or scale of what the hon. Gentleman said, but what he said was of little comfort to me.
  The Crown Estate leases set out the rights and obligations of the lessees. The Crown Estate Commissioners are bound by the Rent Acts. The commissioners can intervene only if there is a breach of the lease. I have every reason to believe that the Crown Estate conducts its affairs properly and deals with problems that are brought to its notice when obligations that it has power to deal with have been broken.
  Mr. Home Robertson: I have just noticed that clause 5 extends to the Isle of Man. I have not noticed a Bill in this Parliament that extends there. I realise that the Minister cannot reply off the top of his head, but will he give us some idea whether there are any precedents in this Parliament of Bills extending to the Isle of Man? Is that not normally the function of the House of Keys?
  Mr. Wakeham: I have no idea whether other Bills have extended to the Isle of Man. I am sure that this one does.
  Mr. Home Robertson: Will the Minister tell us?
  Mr. Wakeham: I shall write to the hon. Gentleman, with the greatest of pleasure. I was about to answer the other points that he raised. He asked about the Development Commission in Scotland. The Scottish Development Agency and the Highlands and Islands Development Board took over the Development Commission's functions in 1975 and 1976. Most hon. Members who I have heard discuss these matters believe that the Scottish Development Agency does not do too badly. Most of the complaints seem to be on the other footing.
  I have done my best to answer the points that have been raised. Some of them went wide of the Bill's main provisions. I do not complain about that. There is general agreement that the Bill does several useful things, and I commend it to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  MISCELLANEOUS FINANCIAL PROVISIONS [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to establish a Development Commission in place of the Commissioners appointed under the Development and Road Improvement Funds Act 1909, to authorise the making of grants by the Secretary of State to bodies promoting industrial or commercial development in areas in England, to extinguish liability in respect of certain guarantees given under the Colonial Loans Act 1949, to amend certain enactments authorising the Treasury to give guarantees, to extend the power of the Crown Estates Commissioners to grant leases, to make provision for the redemption of certain annuities and allowances which have been payable out of public funds since before 1874, and to amend section 173A of the Local Government Act 1972, it is expedient to authorize—

  (1) the payment out of money provided by Parliament of sums required to enable the Secretary of State to make grants—

  (a) the Development Commission, and

  (b) bodies promoting industrial or commercial development in areas in England;

  (2) the extinguishing of liability to make payments in consequence of the fulfilment of guarantees given under the Colonial Loans Act 1949 in respect of certain loans made to the Colony of Southern Rhodesia and the Federation of Rhodesia and Nyasaland;

  (3) The payment out of the Consolidated Fund of —

  (a) any sums paid in redemption of certain payments charged on the Consolidated Fund or payable out of money provided by Parliament; and

  (b) any increase in sums payable out of that Fund which is attributable to any provision of the said Act of the present Session extending the power of the Treasury to give guarantees under any other Act;

  (4) the payment of any sums into the Consolidated Fund.—[Mr. Mather.]

  ENERGY [MONEY] (NO. 2)
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to amend the law relating to electricity so as to facilitate the generation and supply of electricity by persons other than Electricity Boards, and for certain other purposes; and to amemd the law relating to duties of persons responsible for nuclear installations and to compensation for breach of those duties, it is expendient to authorise the payment out of money provided by Parliament of any sums required by the Secretary of State for making payments to or in respect of the Electricity Consumers' Council established by the said Act of the present Session or to or in respect of the chairman of the Council.—[Mr. Mather.]

  Industry and Housing (Walsall)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]
  12.19 am
  Mr. Bruce George: We have dealt with the Ginns and Gutteridge Leicester (Crematorium) Bill. I trust that Hansard will subtitle this debate the Walsall industrial graveyard debate. That is the situation in the constituency that I have been proud to represent since February 1974. Both the Minister and I were part of that intake. The Minister's role in the House of Commons football team has been to prevent adversaries from shooting the ball past me into the net, a task in which he rarely succeeded. I regret that on this occasion his chances of stopping the balls flying past him into the net will be even more remote.
  The plight into which my constituency has been plunged is no game. It is deadly serious because a town with a history stretching back to medieval times is in a crisis, much of which is the Government's making. I am not a dogmatist who seeks to pin all the blame on the Government, but it is dogmatic for the Government to put the blame on virtually everyone else for the current state of our economy and my constituency. Apparently the fault lies with the recession, the Government's inheritance, obstreperous trade unionists, Arabs, Japanese, and Spaniards—almost anyone except the Prime Minister, the Chancellor of the Exchequer, the Secretary of State for Employment, the Secretary of State for Industry and the rest of the Cabinet.
  I had the honour of saying the last words in the last Parliament. My hon. Friend the Member for Greenwich (Mr. Barnett) replied to the debate. In that debate there was hope for my constituency. At that time there was under 6 per cent. unemployment, 6,000 jobs were saved by the temporary employment subsidy, £20 million was allocated to council housing and £17 million was allocated via the Housing Corporation. Over a few years no industrial development certificate had been refused for Walsall since 1974, and there was a housing programme to meet the town's needs. Now, three and a half years after the dawn of the new age—a dark blue age—what a different situation my constituency is in. The position is desperate. What was a difficult situation is now acute. What was unemployment is now mass unemployment. The roll call of dead companies is terrifyingly long, and growing. Unemployment is now nearly 20 per cent. even according to the Government's doctored figures. In reality one in four people are out of work. I am sure that the makers of graph paper must be enjoying a boom as the graphs are now covering more than one sheet of the paper, such is their steepness.
  Many companies are hanging on by their fingertips. I visited one enterprise in my constituency last Friday. The proprietor told me: "We are talking about survival. We cannot suffer losses indefinitely."
  I shall take just one part of my constituency, the township of Darlaston, which has seen the demise of some of its former industrial giants, such as Rubery Owen, GKN, Charles Richards and Eaton Axles. Many other major redundancies have been announced. Some companies such as Bradley and Foster, Rubery Owen and
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  GKN are barely a rump of their former selves. The consequences for the constituency are almost equivalent to the dropping of some form of industrial megaton bomb.
  The latest body blow is the near extinction of F. H. Lloyd, the largest steel foundry in Western Europe, making one sixth of steel castings of the United Kingdom. It has been done to death by the Lazard scheme in connivance with the Government, the EC and the owners of the company. Why was it chosen for execution? What part did the Government play? It is ironic that such a catastrophe did not even make the headlines of the local papers. I suppose that catastrophes have been routinised under the Government.
  The Lazard scheme is immoral and probably illegal. Shareholders are being bribed to scuttle—to take their 30 pieces of silver and run. F. H. Lloyd has had a lot of Government funds to enable it to modernise—there is the new pattern shop and the new sandplant. That is taxpayers' money. What will happen to that equipment? I understand that under the Lazard scheme it will go under the hammer. It will be physically destroyed. If vandals broke into the factory and destroyed that equipment, they would be jailed, yet Luddism can be practised legitimately at the behest of the Government.
  Is the Lazard scheme legal? Is it not in contravention of the treaty of Rome, as I suspect? I shall write to the European Court to see if it is legal and to seek to get it struck out.
  The cumulative effect of these closures and redundancies has been to produce bitterness, frustration and a sense of helplessness among every generation. Men of 40 are told that they are too old. I recently visited the Darlaston redundancy action group. It had a profound effect on me to see a large number of men who know that, barring a dramatic development in our economy, they will never work again. There are youngsters for whom full-time employment is a remote possibility. Women and ethnic minorities are suffering disproportionately.
  Other parts of Walsall, which may be more oriented to Birmingham, such as Pheasey, are also suffering dramatically and drastically from unemployment in the north Birmingham area. The west midlands was once second only to London and the south-east, with virtually zero unemployment in the 1960s. Now 41 per cent. of the unemployed in our region have been out of work for a year or more. The ratio of unemployment to vacancies is 48·7:1, lower only than Northern Ireland.
  At one time Walsall's unemployment was way beneath the regional and national average. Now we are higher than both. We have the worst figures in the West Midlands county council area. Government policy is not creating jobs; it is destroying them.
  Why is it, when our unemployment figures are as high as they are, that we are virtually the only west midlands authority which is not part of a Government programme, partnership or designated status authority? We have no enterprise zone. Why was the scheme for Darlaston to be created an enterprise zone slung out by the Government? Enterprise zones are not the solution of industrial problems—far from it. We are desperately trying to attract industry and there has been some success with starter factories, but we are becoming increasingly isolated and hampered in seeking new industry.
  A sensible business man, with a choice of locations for setting up premises, will examine the merits of rival locations. Increasingly he will look at the package of

  135
  financial aids available. It is a sad fact of life that adjoining areas to Walsall benefit from the powers of the Inner Urban Areas Act and can compete for industry in a way that we in Walsall cannot. We want to be able to compete equally with our neighbours. We do not want to be in a situation, as one person said, of going to the wicket to face a hostile bowler with no bat and pads.
  Will we have that equality of status? What assistance will be forthcoming to prevent the haemorrhaging of our economy from becoming fatal? Will the Minister help to infill the large areas of the town that have been undermined by limestone caverns, blighting housing and industry? The Department of the Environment report has been postponed to June? I wonder why? I hope that it will announce for us a considerable assistance in filling in the limestone caverns.
  Public finance is used to trigger private sector money through urban development grants. How much money will Walsall get? Are these funds open to non-designated areas?
  Going on to housing, Government assistance has not met the needs of the town. Under this Government, housing has taken three quarters of all cuts. Council house building is lower than at any time since the 1914–18 war. No council houses are being built. We need 2,100 units of municipal accommodation, yet none is being constructed. The net increase of the waiting list since 1978 is about 14,000 and no new contracts have been let since 1979. Rents are up 134 per cent. nationally. In Walsall in April 1979 the average gross rent was £9·54 a week; in April 1982 it was £21·50. It is the rent payer who is paying for management, for repairs, for the homeless and for the elderly, because there is no public subsidy to the housing revenue account.
  The housing stock of Walsall is deteriorating, as is proven by the recent West Midlands house condition survey—3,500 public sector dwellings are unfit, and more than 6,000 properties require major repairs. People are paying more and more for less and less. Waiting lists are growing longer and many of the elderly who seek appropriate accommodation will probably die before it is made available. With the break-up of marriages and the number of people unable to pay for mortgages joining the queue, the problems are becoming acute and they are not being met.
  We need resources to build private and public housing and to save houses from dereliction. The pittance that we are allowed to spend is grossly inadequate. We need a massive building programme to begin very soon, a freeze on all rents for a year, a right to repairs, full protection for direct labour organisations and better protection for private tenants. Tenants should no longer be second class citizens, and proper tenant democracy should be introduced. We want to give authorities the right, if they wish, to take over the property of absentee landlords, and we want to provide new forms of aid for first time house buyers to get the industry moving. It is a tragedy that while so many people in the building industry are out of work hardly any houses are being built in the public or the private sectors.
  The Government have failed Walsall, the West Midlands and the nation. Industry has been slimmed down to such an extent that if and when there is a recovery we shall be too weak to capitalise on it. There is no time today, and it is outside the Minister's competence, to talk
  136
  about Government policy on public transport and their failure to implement a proper transport policy. Nor is it within the Minister's competence to talk about the recent crisis in our area health authority or about the Government's confrontationist policies in seeking constant fights with organised labour. It is also not the Minister's role to seek to defend the Government's policy of reducing inflation at such a heavy price.
  Today is St. Valentine's day. The kiss from the Government to my constituency is the kiss of death, delivered with the same affection as that of a certain infamous Transylvanian and with the same lethal effect of removing blood from a healthy body. I am assured by books on the occult that the way to rid oneself of that demonic influence is a goodly supply of garlic, a wooden cross and a stake. I trust that the cross that will dispose of such pernicious influences will not be a wooden one held at arm's length but, more appropriately, a cross on a ballot paper to consign the Government to the fate that they deserve. They have failed the constituency that I represent. That is not the Minister's fault. I am sure that he is sympathetic to the plight of many people whom I and my hon. Friend the Member for Walsall, North (Mr. Winnick) represent. In fairness, however, I think that he will see and admit that the Government must change their policies because our St. Valentine's day message to the Government must be that the people of Walsall have had enough of unemployment, and if the Government do not create employment they will reap the whirlwind.
  12.33 am
  Mr. David Winnick rose—
  Mr. Deputy Speaker (Mr. Paul Dean): Order. Does the hon. Gentleman have the permission of the hon. Member for Walsall, South (Mr. George) to intervene?
  Mr. George: Yes, Mr. Deputy Speaker.
  Mr. Winnick: I am grateful to my hon. Friend the Member for Walsall, South (Mr. George) for allowing me two or three minutes of his time. We both represent the same borough and we are both deeply concerned about the situation there. The Minister may say, as Ministers have said in previous replies, that there was unemployment in Walsall before the Government took office, as indeed there was. What did not exist, however, was mass unemployment and all the problems associated with it. In May 1979 when the Government took office the unemployment rates in 222 travel-to-work areas in the United Kingdom were higher than in the Walsall travel-to-work area. Today, there are just 70 that are higher.
  When the Government took office unemployment in the Walsall travel-to-work area was 5·1 per cent. It is now officially 18·8 per cent., although probably nearer to 24 per cent. or 25 per cent. Devastation has occurred as a result of massive redundancies and factory closures. My hon. Friend has referred to the latest bombshell, the closing of F. H. Lloyd. This means tremendous problems. Many people in their 40s and 50s in the area believe that they will never be able to work again. There can be no hon. Member who feels happy or complacent about such a terrible situation in which our fellow citizens, who have reached their 40s and 50s and been made redundant, believe that the opportunity to find other work has disappeared.
  On Wednesday, the west midlands group of Labour Members is meeting the black country district of the

  137
  Confederation of Shipbuilding and Engineering Unions, when there will be a frank exchange of views. Of course, as Labour Members, we know what needs to be done. Our intention is to do our utmost on the Floor of the House, at Question Time and in debates, to try to persuade the Government that there must be a reversal of policy and that we should not accept mass unemployment as inevitable.
  In the black country alone, there has been an increase of over 75,000 in the number of unemployed since the Government took office. The statistic was given to me in a reply by the Prime Minister. We in Walsall do not wish to become the Jarrow of pre-war years. We do not want the tremendous difficulties of continued mass unemployment and all the poverty and social problems that arise from it. We want to give the people in our area the opportunity to earn their living.
  This Government are denying our people the right to earn their living. We believe that there must be a change of policy. The most effective method—it will probably arise some time in 1983—is to get a change of Government and for a Labour Government to pursue policies to reverse the tide of mass unemployment. I do not claim that a Labour Government will be able overnight to solve the problems. However, the Labour party possesses positive policies that are very different from those of the Government. If those policies are put into effect, the problems of mass unemployment and the fact that no council houses in Walsall have been constructed in the past three years can be resolved. The present Government have failed the people of Walsall.
  12.37 am
  The Under-Secretary of State for the Environment (Sir George Young): It is a pleasure to respond to a debate initiated by the hon. Member for Walsall, South (Mr. George). The hon. Gentleman and myself have played together for the parliamentary football team. If any goals were conceded, he cannot blame them on me. I was a striker and not a defender. The football team suffered the unique handicap of having two captains, one Conservative and one Labour. This meant that the united approach that the occasion called for was not always implemented.
  Both the hon. Gentleman and his hon. Friend the Member for Walsall, North (Mr. Winnick) sold their constituencies short by emphasising the bad news that has affected Walsall without emphasising the good news. It might have been helpful had they mentioned Woden Electrical Products of Bilston, which is now recruiting 20 more workers after receiving a rush of orders for its products, Merrol Fire Protection Engineers of Bilston, which has won a £2 million contract from Qatar for a power and water station, Tyler Mall Superstores, which has plans to invest £5 million in a project involving a supermarket, a do-it-yourself centre and electrical wholesale premises at Cannock, the Albert Mann division of the Darlaston based Wellman Mechanical Engineering, which has won an export order worth £500,000 to supply Aluminium Bahrein with an automated billet saw and ancillary equipment, Zeeta Sales Batevale Ltd. of Brownhills, supplying scissor lifts which has won a £30,000 contract to supply steel stacking equipment to a factory in South Africa.
  I quite understand why the hon. Members emphasise the down side in their constituencies, but I am sure that they would not want to give the impression to the country
  138
  that everything was on the decline in their constituencies and that there were not significant successes there which also needed mention.
  The hon. Member for Walsall, South mentioned the problems facing F. H. Lloyd. As the hon. Gentleman said, we had last Friday's announcement by Lazard Brothers that the general sector of the steel castings industry had reached agreement on a major self-help rationalisation scheme, and I quite understand the hon. Gentleman's distress that jobs with F. H. Lloyd at the Wednesbury foundry and at nine other United Kingdom foundries are to be lost. However, radical action of this kind is essential if the long-term future of the industry is to be safeguarded and it is to be made fit to compete internationally and to grasp new market opportunities.
  The hon. Member for Walsall, South mentioned in passing the Walsall and limestone caverns. As I think he knows, the present study of the limestone caverns, which is being jointly undertaken by my Department in partnership with Walsall, Dudley and Sandwell MBCs and the West Midlands county council is drawing to a conclusion. The consultants hope to present their final report, which will include an assessment of the risks, if any, that these caverns represent, in late spring or early summer this year. That report will be published and should remove much of the air of doubt and suspicion about the caverns that currently exists.
  If the consultants find that some areas are at risk, of course the Government, in co-operation with the local authorities concerned, will urgently consider how best to remove or minimise the risk. But it would be quite wrong at this stage to anticipate the consultants' report and to assume that some areas are in immediate need of remedial work. We must await the outcome of the investigations now drawing to their conclusion.
  The hon. Member for Walsall, South also pleaded for improved status for Walsall under the Inner Urban Areas Act. The Government are reviewing the bids of a number of authorities, including Walsall, and we hope to come to a conclusion and make an announcement within a matter of days.
  Both hon. Members spoke of the problems facing industry in Walsall, and it is salutary to remind them of the extent of industrial support that is available to firms in their area. Aid is available under section 8 of the [Industrial Development Act 1982 to help with investment that will lead to substantial improvements in performance or the introduction of new projects or internationally mobile projects. At 30 November 1982, 56 projects had been offered almost £1·2 million on project costs of £5·2 million. We also recognise a role for the Government in encouraging the development of high technology industries operated by the Department of Industry. These schemes—including the support for innovation package and the microprocessor application project—are designed to encourage the development and application of microprocessor and other advanced technology. Exact figures for expenditure in the hon. Members' constituencies are unfortunately not available. But it is growth in precisely these sectors which is of particular importance to any economy such as that of Walsall.
  As a housing Minister, I was particularly interested in what both hon. Members said about the housing problems facing Walsall council. This is not the first time that the council's problems have been debated in the House. On a previous occasion, some 18 months ago, the matter was

  139
  raised by the hon. Member for Walsall, North, and the Government's response was put by my hon. Friend the Member for Pudsey (Mr. Shaw). The broad approach of that response remains the same, but fortunately, since then there have been distinct changes of attitude by the council.
  Before commenting on these changes, I should like to restate the Government's general position on housing. This is pertinent for all authorities, many of which face housing problems similar to those facing Walsall. The Government are committed to improving housing conditions. But this can be achieved only on the basis of a sound economy and by increasing the country's resources.
  For this current year, in real terms, housing capital allocation has been set 6 per cent. above the provisional allocation figure for 1981–82. In cash terms, that is 30 per cent. more than local authorities' housing capital expenditure for 1981–82. For next year we have allocated nearly £2·5 billion, which is expected to be some 15 per cent. more than local authorities will spend on housing capital projects this year. In addition, we have told local authorities that next year they will have access to capital, over and above their allocations, to finance home improvement grants where their expenditure on grants is more than 10 per cent. above that for which they had planned.
  It is for authorities to take advantage of these increases in allocations; and they can increase activity in the knowledge that we have tried to bring some measure of continuity into housing programmes for the first time ever by promising now that the allocations for 1984–85 will generally be set at a minimum of 80 per cent. of 1983–84 levels.
  I mentioned earlier the noticeable change in Walsall council's approach since the previous debate. I find that encouraging. Initially, it seemed reluctant sellers of council houses. As the House will know, the right-to-buy provisions of the Housing Act 1980 came into effect on 3 October 1980.
  Six months after that date, the council had not sold a single house under the right-to-buy provisions and had not even sent a single case to be valued for sale. That was despite the fact that more than 2,300 tenants had by then applied under the 1980 Act to buy their homes.
  Not surprisingly, the Department received numerous complaints from tenants about the lack of progress with their applications. That generally unsatisfactory situation prompted the Department to take up formally with the council its rate of progress in implementing the right to buy. I am pleased to say that the council's current progress is much more encouraging. House sales are now moving apace—more than 2,200, to the value of £17½ million, were sold by the end of last year giving the council £6 million to £8 million in immediate capital receipts and the ability to augment its housing capital programme by £3 million to £4 million.
  The council initially also showed scant interest in the initiatives recommended by my hon. Friend the Minister for Housing and Construction, but there are now signs of changing attitudes. It is increasing its involvement in the improvement of older houses for sale. A number of small
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  derelict sites have been improved with the help of derelict land grant and will be used to provide about 100 low-cost homes.
  I also understand that the council is considering selling a 50-acre site for housing and taking payment for the land in completed houses to add to its stock. It is also, I believe, turning its mind towards involvement in that more difficult area of homesteading. That involves selling run-down houses with the promise of an improvement grant backed by substantial Government assistance. It has also experimented with a small scheme of enveloping. By that I mean using public moneys to carry out essential work to the external fabric of privately-owned dwellings to prevent decay into unfitness and to provide the incentive for owners to up-date their dwellings internally.
  I hope that the council, and other authorities, will take advantage of the Government's latest provisions to save more houses and areas in that way.
  The effect of all these initiatives has been to meet housing need which might not otherwise be met and, equally important, to increase the capacity of the council to augment its housing capital programme for 1983–84 by some £7 million. When added to its HIP capital allocation of £10·091 million, the council will be able to sustain a housing capital programme of about £17 million next year.
  I turn now to the way in which that capital might be spent. The hon. Member for Walsall, South mentioned the lack of a new-build council house programme. The council is, of course, free to decide its own priorities. I understand that it is inclined to devote the bulk of its resources, some 80 per cent., to modernising and repairing older homes—about three-quarters to be spent on council housing and one-quarter on renovation grants to private housing.
  It is not for me to deny that that is a wise choice. The council estimates that more than 22 per cent. of the borough's housing stock is either unfit or in need of substantial repair—for the council's own stock, that figure is 24 per cent. Faced with a decay problem of that magnitude, renovation must have a large measure of priority. I certainly would not have the temerity to argue with Walsall council's inclinations in that respect, because, as the House will know, the Government have taken a number of steps recently which recognises the importance of tackling vigorously the problem of older housing.
  Walsall council has been able to take advantage of the recently increased grant rates and increased capital allocations. This year alone it expects the increases to have enabled it to add nearly £500,000 to its spending on renovation grants—an increase of some 34 per cent. on its originally planned expenditure on grants. It expects to pay grants on 448 applications this year and to increase that number next year. That compares with an average figure of 204 payments a year over the previous three years—nearly 120 per cent. I hope that his trend will be repeated in other parts of the country where the need is to tackle the problem of older housing.
  The Question having been proposed after Ten o'clock on Monday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eleven minutes to One o'clock.

OVERSEAS DEVELOPMENT
  Food Aid
  Food Aid
CIVIL SERVICE
  Quangos (Publication)
  Quangos (Publication)
ATTORNEY-GENERAL
  Mr. David Somes
  Mr. David Somes
  Prosecution Criteria
  Prosecution Criteria
PRIME MINISTER
  Public Bodies (Efficiency)
  Public Bodies (Efficiency)
  Public Bodies (Financial Control)
  Public Bodies (Financial Control)
  Gold Reserves
  Gold Reserves
  Falklands Campaign (Ship Chartering)
  Falklands Campaign (Ship Chartering)
  Top Salaries Review Body
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NATIONAL FINANCE
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EMPLOYMENT
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  Argentina
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ENVIRONMENT
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  Allerdale District Council (Expenditure)
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  Boxers (Brain Damage)
  Rate Support Grant (London)
  Rate Support Grant (London)
  Ordnance Survey
  Ordnance Survey
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  Security Equipment (Buckingham Palace)
TRANSPORT
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  Road Markings and Signs
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  Associated British Ports
  Archway Road (Inquiries)
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  Seat Belts
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  Road Traffic Accidents
AGRICULTURE, FISHERIES AND FOOD
  Butter
  Butter
  Trout (Whirling Disease)
  Trout (Whirling Disease)

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

Argentina: Financial Support Measures
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 what arrangements were agreed with British banks to provide financial assistance to the Argentine and when such arrangements were cancelled.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, the Argentine authorities have agreed an arrangement with a group of international banks for a short-term bridging facility for 1.1 billion dollars. British banks are participating in this and are taking part in negotiations which are currently in progress for a 1.5 billion dollar medium-term loan. These loans are an integral part of the IMF support arrangements for Argentina which are conditional on a programme of economic adjustment.
Lord Molloy: My Lords, while thanking the noble Lord, Lord Trefgarne, for that reply, may I ask whether there was any discussion in Government and with the Bank of England, and was there immediate endorsement that this action should be taken? Can he explain to me and to the House how all this fits in? Are there any restrictions, such as that the Argentine will not use our portion of the money to buy Exocets or frigates—as they are going to do, from West Germany;
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and how is this congruous to the policy of the Falklands defences and all the risks which might be involved if difficulties arise?
Lord Trefgarne: My Lords, the purpose of these facilities is to enable Argentina to meet her debts as they fall due, and the IMF support programme, of course, has a number of conditions attached to it. As the noble Lord will recall, it is not customary to reveal the details of those conditions. I can say, however, that the conditions are pretty stringent, but I hope your Lordships will agree that it would not have been in the interests of the international banking community and, above all, of this country, for Argentina to have defaulted on her obligations, with all the consequences which might have flowed from that.
The Earl of Lauderdale: My Lords, does my noble friend not agree that whatever the dangers to the world financial system of an Argentinian default, what is not to the world's advantage is Argentine rearmament?
Lord Trefgarne: My Lords, I do of course agree with my noble friend. As I have said, a number of conditions were attached to the IMF support programme, of which the bank facilities to which I referred form a part. Those restrictions are quite severe and will no doubt at least curtail Argentinian ambitions, if they have any.
Lord Molloy: My Lords, will the noble Lord the Minister say quite clearly that in the interests of our people, in the interests of our armed forces, and in the interests of those who are still in hospital and wounded, none of this money will be used in a way which is contrary to the policy of a fortress Falklands and can in no way be used to maim and slay British troops in the future, if matters do not go properly and correctly, as we hope they will?
Lord Trefgarne: My Lords, I can say quite clearly that that is not the purpose for which the money was provided.
Lord Bruce of Donington: My Lords, is the noble Lord aware, as evidently his right honourable friend

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the Prime Minister was aware, that these loans and so-called bridging facilities may release other funds from their existing obligations in the Argentine? It is the pressure which will be taken off when these funds are released that may make it possible for the Argentine Government now to rearm with Exocets and other missiles. Is the noble Lord aware that his right honourable friend the Chancellor of the Exchequer is a leading member of the IMF, and will he tell the House what representations were made by his right honourable friend to the IMF to make the conditions so stringent that the contingencies to which my noble friend Lord Molloy has referred, will not happen?
Lord Trefgarne: My Lords, as the noble Lord, Lord Bruce of Donington knows, the negotiations which go on at the board of the IMF, and at which the United Kingdom is represented, are confidential. I can assure the noble Lord that the terms are very strict, and I doubt very much whether the Argentinians will have much in the way of spare cash for the sort of military adventures which he fears. I might add that if support had not been provided for Argentinian debt repayment purposes in these circumstances, presumably they would have defaulted on their obligations—not only on their obligations to us but on their wider obligations to the world banking community in general; and that would have released substantially more funds for the purposes which the noble Lord and I both deplore.
Lord Paget of Northampton: My Lords, do the debts to which the noble Lord has referred include compensation due to this country for the injuries and expense inflicted upon us by Argentine aggression; and if not, why not?
Lord Trefgarne: My Lords, those items were not included in the figures to which I was referring; but they are matters which are enjoying the Government's consideration at this time.
Lord Molloy: My Lords, I wonder whether the Minister will answer at least one part of my original supplementary question? Was there any resistance by officials of the Bank of England; what was the role, for example, of Lloyds Bank; and did British bankers not express grave apprehension in respect of this particular exercise? The public have a right to know where these people, who have so much power and authority, stand in this issue. Did they acquiesce or did they object?
Lord Trefgarne: My Lords, the banks are free agents in this matter, and it is not for the Government to direct them or to forbid them to take part in these arrangements.
Lord Hatch of Lusby: My Lords, will the noble Lord answer the question asked by my noble friend Lord Bruce of Donington? Does he agree with his right honourable friend the Prime Minister, who appeared to be prepared to admit that the provision of this money will release other money which will be used to buy further armaments for the rearmament of the Argentine?
Lord Trefgarne: My Lords, that is theoretically possible, but the practise of the matter is that the Argentinians now have to control their monetary policy in a much tighter way than they did before, which will certainly restrict the funds available for this purpose. In any event, as I said just now, if these arrangements had not been agreed, substantially greater sums would have been available.
Lord Bruce of Donington: My Lords, finally on this one point, following the noble Lord's assertion that the Government had no right to interfere with the activities of commercial banks, does that mean that the commercial banks of this country, regardless of the national interest, can lend exactly as they please? In this particular instance, and with regard to the 1,100 million dollars loaned late last November, were any conditions attached? Did the Government insist on any conditions being attached, and, if not, why not?
Lord Trefgarne: My Lords, the banks are, of course, entitled to conduct their operations in accordance with the legal framework that exists at the time. There were up until recently, as the noble Lord will recall, restrictions upon the financial arrangements between our two countries. These have now been lifted and only trade restrictions remain. While the financial framework of legislation permits the banks to conduct this business, there is no reason for the Government to step in.

Inquiries: Procedure
2.45 p.m.
Lord Allen of Abbeydale: 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 yet able to make a statement on the findings of the Crown Agents Tribunal (H.L. 149 1981–82) about the procedure to be followed by future inquiries set up under the Tribunals of Inquiry (Evidence) Act 1921.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, the Government have noted the comments made by the tribunal and by others about the general question of the procedures to be adopted by tribunals of inquiry under the 1921 Act, and in particular the tribunal's view that no legislation is needed in this connection. These procedures were the subject of recommendations made by the Royal Commission on Tribunals of Inquiry under the chairmanship of the noble and learned Lord, then Lord Justice Salmon, which reported in 1966. The recommendations were broadly endorsed in a Government White Paper in 1973 (Cmnd. 5313). The implementation of a number of them would in fact have required legislation. The Government accept the Crown Agents Tribunal's conclusions on procedure, and accordingly consider that the proper safeguards for persons involved in inquiries—the need for which the Government do recognise—can be adequately

5
applied by tribunals under the provisions of existing legislation, to which no amendment is therefore needed.
Lord Allen of Abbeydale: My Lords, I should like to thank the noble Lord the Minister for that very helpful and informative reply, which, incidentally, is the very first statement made by Government since the date of publication of the report practically nine months ago. May I ask the Minister this: The procedure as recommended by the Royal Commission and by the White Paper to which the noble Lord referred has been shown in some repects to be inappropriate. It is a very complex issue. I wonder whether the Minister could tell us whether it is proposed to issue an amended White Paper, or to put a statement in Hansard, or in some other way give publicity to precisely what a revised code of practice should contain?
Lord Elton: My Lords, I think the noble Lord's Question and the Answer which it has elicited will result in suitable public attention being directed at the matter. The note which contains the views of the tribunal on this matter extends for five pages, from page 569 of the report, and the Salmon conclusions are only three and a half pages. I am, therefore, in some doubt as to whether it is necessary to reprint these.
Lord Elwyn-Jones: My Lords, is it not regrettable that this report has not been debated in either House, and that the Government have brought forward no proposals, save what has been elicited today by the Question of the noble Lord, who was a distinguished member of the Royal Commission? Is this not a rather churlish way of treating the work of this Royal Commission, whose deliberations extended over nearly two years and which was presided over by a distinguished High Court judge, in that no response, apart from a brief answer at Question Time about eight months ago, has emanated from the Government and Parliament has not been given an opportunity to discuss a matter which caused grave public concern when it arose?
Lord Elton: My Lords, nothing churlish is intended by the length of time it has taken to digest the very considerable mass of material which was generated by and arose from a series of events, starting with the V and G inquiry many years ago. As to what ought to be debated by Parliament, is a matter for the two Houses and the usual channels. My own feeling is that the conclusions, having been reached after mature reflection, have been crystalised into brief and clear summaries. Your Lordships may wish to bear that in mind when considering whether to go into the matter at greater length.
Lord Wigoder: My Lords, would the noble Lord agree that the way in which the Government have treated the report of this tribunal is hardly an encouragement to persons of distinction to serve on similar bodies in the future?
Lord Elton: My Lords, I am not entirely sure that I understand the purport of the noble Lord's question, because most such people are gratified when the Government accept everything which they recommend.
Lord Elwyn-JonesMy Lords, most people expect some response from Government. This was an issue occasioning a great deal of public scandal and yet there has been no response by the Government, quite apart from failure of the usual channels in Parliament to arrange discussion of this matter. If the noble Lord himself had been a member of this tribunal—and I note the restraint of the noble Lord who has asked the Question—I should think he would think it pretty churlish treatment.
Lord Elton: My Lords, I doubt whether a careful study of Hansard will reveal a single interrogative point in the noble and learned Lord's delivery, but, if I can turn it into a question, I would say that the noble and learned Lord is aware—is he not?—that there are days for the Opposition Front Bench to devote to discussing matters; if he feels that this is a matter suitable for such a day no doubt he will take appropriate steps. But I would remind the noble and learned Lord that the Question relates, and therefore the exchanges relate, to a recommendation about the conduct of tribunals and not about the voluminous inquiry into this particular event; it is about the way all inquiries should be conducted, and that is a smaller issue.

Local Authorities: Award of Contracts
2.50 p.m.
Lord Gainford: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many local authorities have refused to award contracts to firms solely because they were engaged in work on military installations.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, I do not know if any local authorities have done so. But noble Lords will recall from the debate on 26th January that the Southwark Borough Council resolved not to employ companies which had been awarded contracts for work at Greenham Common. I am keeping a very close watch on that and on any other cases which are brought to my attention.
Lord Gainford: My Lords, I thank my noble friend for that Answer. Has he any information as to the possibility of a connection between such refusals to contractors and certain councils declaring nuclear-free zones?
Lord Bellwin: My Lords, so far as I understand the position, the authority that I mentioned at least implied that its resolution was for that reason, but beyond that I cannot go at the moment.
Lord Gridley: My Lords, may I ask my noble friend whether he has any evidence that local councils are being required to act in this way either by inducement or by any other method?
Lord Bellwin: My Lords, we have seen recently, or have heard of, a number of instances where local authorities have passed resolutions declaring their intention not to give contracts to firms who carry out work for bodies or other people whom they do not like. Of course, the Government deplore this very much. The criteria should be whether the work will be done satisfactorily, whether it will be done at the lowest possible price and whether the company concerned is sound in every way. I cannot think that in the interests of those they represent there can be any other factors that they ought to take into account.
Lord Renton: My Lords, is there anything in the law governing local authorities which entitles them at will to do anything which might sabotage the efforts at defending the country?
Lord Bellwin: My Lords, I appreciate the point that my noble friend makes. I would prefer it if he would allow me to say no more than that we are looking very closely into this particular case to ascertain just what is the legal position. I assure him that it is not a matter that we are about to leave without the closest investigation.
Lord McIntosh of Haringey: My Lords, I listened carefully to the noble Lord's answer about awarding contracts to those who put in the lowest tender. Will he extend that principle to the prohibition which the Government have placed on direct labour organisations from competing on equal terms by imposing extra financial constraints upon them?
Lord Bellwin: My Lords, I do not accept the point that the noble Lord makes in talking about extra constraints.

The Falkland Islands Defence Force
2.52 p.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what plans they have to improve the size, training and equipment of the local militia in the Falkland Islands.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): The Falkland Islands Defence Force lost all its equipment following the Argentine invasion last year. We are currently considering the best means of reforming the force, and hope to take decisions shortly.
Lord Orr-Ewing: My Lords, would my noble friend not agree that with 3,000 regular troops deployed in the Falklands it is important that the militia should be recreated at the earliest possible moment? Is it not true that if we made every farmstead into a strongpoint, both in east and west Falkland, it would be of considerable assistance to the regular forces and also a
8
disincentive for the Argentine to again attempt an invasion?
Lord Belstead: My Lords, I can well understand why my noble friend attaches importance to the re-creation of the force. Members of the Falkland Islands Defence Force gave valuable assistance to the men of the task force when they were in the process of repossessing the islands in May and June last year. We are now consulting the civil commissioner on the islanders' wishes and, as I said in my original Answer, we hope to take a decision shortly. I agree with my noble friend that there could be a very useful role in future for men of a force of that kind in the defence of the islands.
Lord Molloy: My Lords, would the Minister not agree that what ought to be examined in great depth and thoroughness in the interests of the British forces in the islands, servicemen and women and the islanders, is what transpired in the short question and answer period on the first Question this afternoon? The totally unsatisfactory nature of the answers must have caused grave distress to people on the Falkland Islands and to the people who might be going there to help to defend them.
Lord Belstead: My Lords, my reading of the original Question this afternoon was that it was a very good Question, but a simply splendid Answer.
Lord Bruce of Donington: My Lords, in the interests of the British taxpayer, to whom the noble Lord is undoubtedly devoted, will the Government give consideration to asking the corporate absentee landlords, who take most of the money out of the Falklands, to make a voluntary- contribution to any costs that might fall on Her Majesty's Government?
Lord Belstead: My Lords, the position of the taxpayers of this country is always in the mind of Her Majesty's Government. So far as those whom the noble Lord refers to as being "corporate absentee landlords" in the Falkland Islands are concerned, I think the noble Lord really must accept from the Government that we have made clear our view about the importance of the land holdings, as they exist at the moment in the Falkland Islands, in the reply which we have already given to the Shackleton Report.
Lord Boothby: My Lords, may I ask the noble Lord how, if Her Majesty's Government wish to increase the size of the local militia in the Falklands, they propose to set about it?
Lord Belstead: My Lords, first of all we need to find out what are the islanders wishes. In order to do this we are consulting the civil commissioner. Then, if it is decided that the force should be set up, it will be necessary to decide on the size, the training and the equipment. I think that answers to those few questions will not be difficult to find.
Lord Orr-Ewing: My Lords, would my noble friend suggest some sense of urgency? Nine months have elapsed. The local inhabitants played a tremendous part in relieving the Falklands and in helping our troops. Is it not true that regular troops and units must

9
necessarily rotate and that, therefore, they will have less personal and intimate knowledge of the very difficult terrain in the Falkland Islands? It is, therefore, desperately important that we make the maximum use of those who took a great pride in defending their homes when they were under attack from the Argentines. Nine months is too long and we must get on with the job.
Lord Belstead: My Lords, I agree with my noble friend in the particular use on which he puts his finger in asking this supplementary question. I should like to underline that when the Government say, as in my original reply, that we hope to take a decision shortly, we really do mean that.
Lord Gladwyn: My Lords, how many platoons would this force comprise when at full strength?
Lord Belstead: My Lords, there were three before the invasion. Possibly a small addition would be in order.
Lord Monson: My Lords, would not the Minister agree that the enlargement of the local defence force may well be essential because the pro-Argentine statements emanating from certain quarters in this country, which suggest that the Falkland islanders should have no right of self-determination, can only encourage the erstwhile aggressors to renew their aggression?
Lord Belstead: My Lords, I think that the setting up of a force of this kind, if that is to be the decision, would go towards allaying the sort of fears that the noble Lord has just expressed.
Lord Molloy: My Lords, bearing in mind the serious point raised by the noble Lord, Lord Orr-Ewing, in his supplementary question this afternoon, does the noble Lord really wish to leave—that is, his reply to my question—the possibility of British money going to the Argentine which could be used for arms against the Falkland Islands and British forces? Is it a jocular issue on the Conservative Benches?
Lord Derwent: My Lords, I should like to ask my noble friend whether that question is in order. It does not seem to have anything to do with the Question on the Order Paper.
Lord Belstead: My Lords, if the noble Lord will forgive me, it does fall outside the scope of the original Question.

British Nationality (Falkland Islands) Bill [H.L.]
3 p.m.
Read a third time.
Baroness Vickers: My Lords, I beg to move that this Bill do now pass. I should like to say just a few words of thanks to the noble Lord, Lord Elton, and his officials for redrafting the Bill, over which they have
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taken a great deal of trouble. Indeed, I think that everybody should now be well protected.
I should also like to thank the noble Lord, Lord Bruce of Donington, for kindly withdrawing his Bill and giving his support to my Bill. I thank, too, the noble Lord, Lord Stewart of Fulham, who supported both this Bill and the debate on Belize, and the noble Lord, Lord Aylestone, who probably saved the day because the Opposition did not move three amendments in the previous Bill as I was out searching for representatives of the Falkland Islands who were going to give me some further information. My thanks are also due to my noble friend Lord Boyd-Carpenter for the explanation of his vote, which was entirely consistent with his views, and I am very grateful for the generous way in which he did it. Finally, I should like to thank all those who gave up Friday to come along and give the Bill an unopposed Second Reading. I beg to move.
Moved, That the Bill do now pass—(Baroness Vickers.)
The Lord Chancellor (Lord Hailsham of Saint Marylehone): My Lords, the Question is that the said Bill do now pass. As many as are of that opinion will say "Content"—
Lord Elton: My Lords, I am sorry that we seem to be getting a bit out of kilter because I did not get up quickly enough. My noble friend Lady Vickers deserves congratulation on her work which has resulted in the measure before the House. The Bill appears rather differently now from how it appeared when it came on to your Lordships' Order Paper, but there has been no significant change in what it achieves for the Falkland islanders. My noble friend's Bill puts all the islanders on the same footing as far as citizenship is concerned and has the effect of treating their links with the Falklands as though they were links directly with the United Kingdom.
The Government arc grateful to my noble friend for her willingness to accept amendments which were needed mainly to ensure that, as far as possible, the Bill is consistent with the scheme of citizenship provided by the British Nationality Act 1981. The effect of the Act in relation to the Falkland islanders has been widely misinterpreted and perhaps I may be forgiven for stressing again that the 1981 Act did not change the constitutional relationship between the United Kingdom and the Falkland Islands. Nor did it deprive any Falkland islander of any right of settlement in the United Kingdom which he may have had under the previous nationality law. Those who became British citizens and the minority who became solely British dependent territory citizens, had exactly the same rights with regard to the United Kingdom as they did before the Act became law.
The Government's assistance with the present Bill recognises the exceptional circumstances and very special position of the Falkland islanders. I am sure that the people of other dependencies will understand that this wholly exceptional change in citizenship for the Falkland islanders cannot be seen as a precedent for further amendments which could only be to the detriment of the British dependent territory citizenship introduced by the 1981 Act. I know that

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your Lordships' House will look with sympathy at my noble friend's objective and will welcome her Bill on to the statute book.
Lord Bruce of Donington: My Lords, we on this side of the House should once again like to offer our congratulations to the noble Baroness on having brought forward this Bill and, indeed, express a sense of relief—I put it no higher—that Her Majesty's Government have given every facility in assisting the noble Baroness with the Bill.
On the last occasion that I was privileged to address your Lordships on this subject—it was, I believe, on Report—I endeavoured to draw some lessons from the disastrous act of refusing, a long, long time ago, to do what has now been done. On that occasion I was reproached by the noble Lord, Lord Elton, for having raised such a point on Committee because it could have been raised on Second Reading. The noble Lord will agree that that was not so because, of course, the Franks Report had not been published at the time of the Second Reading and I was perfectly in order in doing what I did then. So I hope that the noble Lord will withdraw the implied criticism that he made on that occasion. There is no point in hammering that point any further.
We on this side should like once again to wish the Bill well and to express the hope that when it goes to another place it will pass just as speedily as it has passed through your Lordships' House.
Lord Boyd-Carpenter: My Lords, I, too, should like to thank my noble friend Lady Vickers for her kind personal references and to congratulate her most warmly on the progress of her measure. I should also like to take the opportunity of repeating to my noble friend Lord Elton the question which I put to him at an earlier stage of the Bill and which, no doubt inadvertently, he did not answer on that occasion. I asked him then, as he may recall, whether, in view of the helpful attitude the Government were now taking in respect of this measure and particularly of the skilled technical assistance which they had made available to my noble friend in getting the drafting right, he would give us some assurance that in another place the influence of the Government would also be favourably directed towards its passage?
Lord Elton: My Lords, with the leave of your Lordships' House, I think I can only say that junior Ministers in the Lords do not have disposal of Government time in the Commons, but my noble friend does know how we feel about this Bill.
On Question, Bill passed, and sent to the Commons.

Transport Bill
3.7 p.m.
Lord Bellwin: My Lords, I beg to move that this Bill be read a second time. When the Government announced last July their intention to introduce transport legislation, they gave four objectives: firstly, to ensure greater certainty and stability for public transport; secondly, to improve efficiency; thirdly, to obtain better value for money; and fourthly, to
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maintain a reasonable balance between transport users, ratepayers and taxpayers. Anyone who knows about the transport executives, and who has at heart the interests of transport users, ratepayers and taxpayers—and, indeed, the interests of those who work in the industry—knows that there is an urgent need for these changes.
I will begin by explaining the need for the Bill and then describe the Bill in enough detail to show how it will work and meet its objectives.
Over the last 20 years car ownership and use have extended vastly, providing personal mobility for part of the population. Public transport operators in our major cities have suffered a continuing reduction in demand for their services. Between 1966 and 1981 the number of passenger journeys in Greater London and the metropolitan counties fell by 42 per cent.
The performance of the transport executives since their creation is that they have had to try to adapt to fundamentally changing circumstances, but their rate of adjustment has never been quick enough. Reduction in vehicle miles run has lagged behind falling passenger demand. For example, while the numbers of passengers has fallen by 30 per cent. since 1976, vehicle miles have fallen by only 15 per cent. A recent report on the bus industry by the Polytechnic of Central London has suggested that more efficient working methods could provide cost savings of 5 to 10 per cent. That would in turn reduce subsidies by 15 to 30 per cent. That report also recommends decentralisation of operational management and subcontracting. Subsidy should be explicit in purpose: and the report advocates, as did the Commons Select Committee, a reorientation of support, from revenue to capital.
Another feature of the last 10 years has been the rapid growth of subsidy. Revenue subsidies are paid by authorities to executives under the 1968 and 1969 Acts. They include payments for transmission to British Railways for Section 20 services under the 1968 Act. The Bill applies to all these subsidies, but not to concessionary fares.
This Bill does not apply to payments made by authorities to executives to purchase concessionary fares for the elderly, blind and disabled, under Section 138 of the 1968 Act, and similar powers for London. I must set the record straight about this. The metropolitan authorities and their association have spent ratepayers' money on a massive and misleading campaign against the Bill. Some advertisements have actually alleged that the Bill threatens concessionary fares. I must make the matter absolutely clear, so that there should be no misunderstanding. The position is that the powers of authorities to pay for concessions to the elderly, blind and disabled are not affected by this Bill. Hundreds of elderly people have, as a result of these distortions, written expressing their concern. The Government condemn those who deliberately misled and frightened these elderly people.
General subsidies have grown very rapidly. In 1982–83 the payments are estimated to total £400 million, while for 1983–84 authorities were proposing to spend £700 million. Funding of subsidies comes approximately as to one-quarter from the domestic ratepayer, one-quarter from the business ratepayer and a half from the national taxpayer through rate

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support grant and transport supplementary grant. So three-quarters of the cost is met by the business ratepayer and national taxpayer combined, who have no vote in relation to the local decisions on subsidy.
Subsidies can provide either higher levels of service, in terms of vehicle miles run, or lower levels of fares than would otherwise be the case. The average load is only 11 passengers per bus in one of the metropolitan counties. South Yorkshire charges only 8p for a three-mile bus journey, and this fare has remained unchanged since January 1976. For similar journeys in other metropolitan counties fares range from 27p to 36p. It cannot be right to leave fares unchanged year after year as a matter of dogma while the ratepayers and national taxpayers foot most of the bill.
The metropolitan counties and the GLC raise their funds by precepting on the rating authorities. But high levels of subsidy pre-empt resources, very much to the detriment of other services, such as education and social services. Supporters of subsidies sometimes claim that subsidy redistributes income to the less well off bus users. But an elderly ratepayer with a concessionary pass will actually be made worse off by higher general subsidy, because the cost is recouped partly through the rates. It is no good saying that the elderly get rate rebates—some do and some do not—but higher rates hit the elderly, too.
Revenue support subsidies are often given without the authority, or for that matter the ratepayer or taxpayer, having any very clear idea what benefits they are buying. In many cases at present the authority simply decides a level of subsidy and hands the money over to the executive. Neither side could say what the subsidies are buying. Mark my words: in addition to buying bus services which might otherwise not run, subsidy is also used to pay for inefficiency, restrictive practices and the cushioning of management and staff from good commercial practice. One measure which highlights this is that costs in the industry have risen by 50 per cent. in real terms over the last 10 years. The transport user, let alone the ratepayer, gets no benefit whatever from subsidy which leaks away into excessive costs and wages.
The Government support the wise use of subsidy to maintain higher levels of services and lower fares than would otherwise be the case, and they have indeed accepted £283 million of subsidy for London and the metropolitan counties for transport supplementary grant in 1983–84. But we also believe that the executive and authorities should use subsidies to obtain specific benefits. The public needs to know, too, what they are getting for their money.
To this background of growth and doubtful application of subsidy we must now add the legal uncertainty about the powers of the authorities to pay subsidies. First, the GLC were challenged by Bromley about their Fares Fair policy, which required a huge increase in subsidy and in rates. The judgment came down against the GLC, who then decided for massive fare increases. London MPs and the GLC asked for clarifying legislation. There were also legal cases on Merseyside and in the West Midlands.
This, then, was the context when the Government decided to introduce this Bill. Subsidies were too high and were growing rapidly. There was insufficient
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attention to the benefits which subsidies should provide; and there were legal uncertainties about the powers to give subsidy, which were likely to lead to further challenge in the light of the proposed further sharp increases in subsidies.
In the recent action between GLC and London Transport the judges found that the GLC's proposals for a 25 per cent. fares reduction were a valid exercise of their powers. But the court explicitly did not decide whether the proposals struck a reasonable balance between the interests of transport users and ratepayers. Lord Justice Kerr said:
"Whether the balance has been struck at the best point, and even at a permissible point, is not a matter which this court can evaluate".
The judgment is very much in line with the approach adopted in this Bill, for this time the GLC had prepared a reasoned plan—exactly as we had urged them to do all last year. But there are still counties paying revenue subsidies with no proper demonstration of the benefits; and the fact that the GLC has had to go to court twice in little over a year shows how much we need a Bill which will provide absolute protection from legal challenge for reasonable levels of subsidy.
Opponents have alleged that the Government failed to consult. As with concessionary fares, this is another distortion. When the intended legislation was announced in July comments were invited. But the AMA and individual authorities decided not to cooperate. The Government have remained ready to listen to representations, and I am pleased to say that Ministers and officials have more recently held useful discussions with a number of the authorities and executives.
I turn now to say a little about the Bill itself. Part I deals with the transport executives and with subsidies. Clause 1 defines terms. Revenue grants are to include grants under Section 13 of the 1968 Act and Section 3 of the 1969 Act, but not—I say it again—concessionary fares. But payments for reductions in fares for children are included in the definition. Executives' revenues include grants.
Clause 2 brings in a new financial duty for executives, who are to break even each year, revenues balancing charges, "so far as practicable". If, in any year, a deficit occurs, it becomes a charge on the next year's accounts. Then the duty to break even will ensure that the deficit is made good in that second year. Once again, this is "so far as practicable". The clause makes provision for the authority and executive to use the executive's reserves in order to reduce the amount of subsidy required. If the executives do not break even, they will be failing in their statutory duty.
Clauses 3 to 5 introduce the new financial planning procedure for the executive and authorities, culminating in the authority approving a three-year plan and setting the level of subsidy for the first year. The procedure is that each year the executive will consult the authority and prepare a three-year plan, including proposals for services and fares. The executive will make an assumption about the level of subsidy, and will set out the benefits. There will be advice from the Secretary of State about the amount of grant to assume, and about methods for making other

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assessments. This plan will represent the ideas of the professional transport operators in the executive as to the best way forward.
The authority will consider the plan, asking the executive for more material if it is needed. It will have regard to the Secretary of State's initial advice, and to the need for a proper balance between the interests of the ratepayers and the transport users. Having decided whether it wishes to modify the plan, the authority sends it to the Secretary of State. He must take into account the matters which the executive and authority have considered, and the level of total national resources. He must put the authorities' proposals into a national perspective. The Secretary of State then informs the authority of a level of subsidy which he judges appropriate to receive the protection provided by the Bill. This is called the guidance level, or "protected expenditure level". The authority then approves the plan, with or without modifications, after taking account of the Secretary of State's guidance. It decides on an amount of grant to give the executive in the first year.
Clause 5 does two things. It prohibits an authority from giving grant except in accordance with the procedures I have described. The clause also provides protection from challenge for revenue grants up to the level of the Secretary of State's guidance. The authority may decide a higher level of grant, but if it does so it will not have the protection from challenge provided by Clause 5(2). The new procedure will help executives and authorities to carry out better longer-term planning as recommended by the Monopolies and Mergers Commission, and it will create greater stability by providing protection from challenge for a reasonable level of grant.
Opponents have alleged that these procedures threaten local democracy, because, they say, the Secretary of State is taking over the control of the executives and imposing a limit on spending. In fact, this is not so. The roles of the executive and authority are just as they were when these bodies were established. The Secretary of State is providing guidance and protection from legal challenge to expenditure up to the level he thinks appropriate. An authority may decide to spend more. If it does it will be open to challenge, just as at present. The authority is to have the last word on the plan itself, and on the level of grant. That is the extent of the threat to local democracy. Much greater danger, I would submit, to local democracy is already present, because authorities can act unreasonably and place intolerable burdens both on the rating authorities and on local business. No central Government could stand by for ever and watch the growing disregard of the authorities for those who have to pay but have no vote.
Clauses 6 to 10 make various supplementary provisions. Clause 7 places a duty upon the authority to review the organisation of their executive, to see whether sub-division of the organisation into smaller accountable units would be more efficient. A review is to be made whenever the Secretary of State requires it. There is evidence that there may be gains in efficiency to be had from decentralising management in these executives. Clause 8 requires the executives to review activities which might be appropriate for contracting
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out. They are to accept tenders which appear to them to show that such activities can be satisfactorily and more cheaply executed by outside suppliers. This might include providing maintenance services, or catering services, and possibly part of the peak hour provision of passenger services, if the executive believed such services would be carried out satisfactorily and more cheaply than they could do.
There are three ways in which the Bill will encourage executives to seek better value for money. First, there is the whole field of planning the services and getting value from subsidy; second, there may be savings from breaking down the management of the executives' organisation into smaller and more manageable units through the organisational review; third, the Bill encourages the use of other suppliers, where these can provide services more cheaply. Clause 9 and the schedule deal with repeals.
Clause 10 is about commencement and transitional provisions. It is a complicated clause. Subsection (1) provides, first, that the new financial duty will come into effect on Royal Assent; secondly, that the main planning process will begin on 1st April this year, and lead on to a plan and grant determination for the year beginning 1st April 1984; thirdly, that certain other matters take effect from 1st April 1984. But because the Government wish to provide guidance in the form of a protected expenditure level for 1983–84, and legal protection for a reasonable level of grant, the remainder of Clause 10 is concerned with achieving this, despite the absence of a plan for the coming year. The Secretary of State has already given provisional guidance in the White Paper, totalling £436 million, including £95 million for depreciation and renewals by London Transport.
Soon after Royal Assent, the Secretary of State will announce final guidance figures, authorities will determine the grant, and the Bill will provide the full protection of Clause 5(2) for any level of grant up to the guidance level. In the unlikely event of the Bill going on to the statute book after 31st March, the Government are satisfied that finance officers of authorities will make suitable arrangements to cover the short period until the authorities' determination is made.
The second Part of the Bill provides for writing off £23·8 million of debt to the Government in relation to the national voluntary severance scheme. In April last year the Government promised to write off debt arising from severances in London and Liverpool in 1981 as part of a package of measures to help ease the financial problems associated with the running down of manpower in the docks. The writing off of debt will benefit all ports participating in the national voluntary severance scheme. The third Part of the Bill deals simply with short title and extent.
I have described the reasons for the Bill and, I hope, put right some of the criticisms of these measures. In concluding, I must say that this Bill is long overdue in insisting on a more systematic approach to subsidy and to efficiency in our transport executives. Increasing subsidies have shielded the executives and authorities from the discipline of seeking efficiency and wise application of subsidy. It is time to call a halt to the slide into subsidy which, in the case, for example, of South Yorkshire, now has three-quarters

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of the costs of the services met from subsidy, not the fare-box. And three-quarters of the funds for the subsidy are provided by disenfranchised payers. It really is time to say, "Enough" and to substitute a more rational system for determining a level of subsidy which is fair to ratepayers, taxpayers and transport users, and use of subsidy which achieves worthwhile objectives. The Bill is vital to the future stability and efficiency of public transport in London and the metropolitan counties. It has the interests of transport users, ratepayers and taxpayers at heart, as well as those who work in the industry. I commend the Bill to the House. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Bellwin.)
3.28 p.m.
Lord Underhill: My Lords, the House will be grateful to the noble Lord the Minister for, as usual, the excellent way in which he has explained the features of this Bill. However, I am certain that before the Second Reading debate is finished noble Lords will appreciate that this is an attack on local democracy. In fact, most of the criticisms that the noble Lord, Lord Bellwin, has made could be used as an argument for full control by national Government of local government services.
The Bill does not clarify the legal position. What it does is to involve the Secretary of State in detailed matters of local transport which should be left for determination locally by the elected councils, and it may also have an adverse effect on local transport services and facilities. There was abnormal haste in bringing the Bill to Parliament. The Bill and the White Paper which explains the provisions were published both on the same day. No time was allowed for consultation. It is difficult to recall a previous instance of such an important Bill affecting the financial arrangements and powers of local authorities being introduced at the same time as the relevant White Paper.
The Minister has said that there was consultation. He has referred to a document issued on 27th, July. That in no way can be termed a consultation paper. It comprised lust 700 words on two and a half pages of typescript. If noble Lords want to check this they can turn to the Commons Standing Committee on the Bill at column 107 of 2nd December, where a member of the Committee read out the full text of this so-called consultation paper.
Because of the guillotine procedure adopted in the other place, some clauses received little or no consideration whatever, and that, in the absence of proper consultation with the organisations concerned, makes it imperative that this House gives the Bill the most careful consideration with a view to removing or amending some of its worst features.
The Minister has given what the Government say are the aims of the Bill. The reasoning behind the Bill and the Government's attitude to public transport has been revealed by the Department of Transport press notice No. 428 issued on 10th December. This quotes a speech by the Secretary of State who, referring to some major authorities, said as follows:
"Their answer to the needs of the 1980s is to try to entice people back to the travel patterns and habits of the 1930s by pouring
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precious resources into purposeless cuts in fares on a fixed pattern Of public transport services which, in a lot of cases, are no longer in touch with people's needs."
With the greatest respect—if I may use the word "respect"—that is just arrant nonsense. It ignores that 40 per cent. of the households in Great Britain have no car; that in some regions of the country the percentage is about half. In most households the car is not available to other members of the family during most of every working day. It ignores that for millions of people public transport is essential to get to work, to go shopping, to visit hospitals, to visit relatives and make social calls. Public transport is so often the car for the aged and the disabled.
Stores in city centres have said that a cheap fares policy has resulted in more people travelling in to shop. Then there is the throw-away phrase about "purposeless cuts in fares". This ignores the achievement of declining passenger use being halted, where people have willingly been enticed back to use public transport. It also overlooks the need for efficient public transport in our major cities if they are not to be snarled up by traffic congestion. It ignores also that most industrialised countries are rethinking the role of public transport; they seek to reverse the trend whereby public transport has been allowed to decline. These countries recognise the need for public revenue support, generally at a far higher figure than do we in the United Kingdom.
I would ask: where is the dogma to which the noble Lord the Minister referred? It surely must be in Government statements and in their attitude towards this Bill. The Secretary of State in that speech referred to local councils as being out of touch with people's needs. That reflects the sorry outlook which runs throughout the Bill, that the Secretary of State believes he knows better what are local needs than do the elected representatives who are in constant touch with the people who elected them.
It would have been helpful if Ministers and other Members opposite could have heard what was said by people from these various counties who, with some of their elected representatives, attended the lobby meetings in our House on 1st February. These persons expressed serious concern about the provisions in the Bill, but many of them spoke with pride about the achievements in transport carried out by their own local authorities. I do not have time to go into these, but I have no doubt that other noble Lords will emphasise some of the successes that have been achieved by various authorities. Concern is expressed in such a way that at these meetings I was handed petitions with some 89,000 signatures from all parts of Tyne and Wear and, in a very limited petition, some 10,000 from Greater Manchester. These I propose to hand to the Minister some time tomorrow.
The Minister referred to statements on concessionary fares. People are concerned that there will be cuts and fares increases, and that all this will bear heavily on the local authorities. As members said at our meetings: what is the use of a concessionary fare if there are no transport services upon which to use the fares?
It is claimed that the Bill clarifies the law. All this is set out in the White Paper. I should like to point

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further to what the noble Lord the Minister said, by quoting from paragraph 19 of the White Paper:
"Whilst it will not necessarily be unlawful for an authority to pay a subsidy in excess of the indicated level, if they do they will not have the protection of the new provisions. The councillors will know they run the risk of surcharge."
This means that what are essentially political decisions may be left for determination in the courts. This in no way can be called clarifying the law and the whole tone of the White Paper positively encourages litigation. I would ask the Minister: surely, where an authority seeks legal advice, which is given and accepted, no councillor can then be held to surcharge, because he would be in the belief that the expenditure was authorised by law?
I have no desire for the Second Reading to concentrate on the various legal cases, but the noble Lord, Lord Bellwin, referred to the GLC case. Although this is not stressed in the White Paper, it must be pointed out that the judgment made clear that it was not unlawful for the GLC to make a rates subsidy towards London Transport. The noble Lord has referred to the subsequent GLC case, on which I think judgment was given after the Bill had gone through the Committee stage in the other place and which made it quite clear that the new plan of the GLC was lawful.
The White Paper makes only fleeting mention that there were two other actions in the High Court, but, surprisingly, gives no details. The Minister this afternoon referred to the Merseyside case. That is not even mentioned in the White Paper by name, but the judgment was not referred to. Mr. Justice Woolf ruled that a precept levied to provide a subsidy in the case of the Merseyside council for a lower fares scheme was not unlawful. The metropolitan counties have been satisfied that the Merseyside judgment helped to clarify the setting of fares and subsidy grants.
In fact, I understand the Secretary of State said, not so long ago, that it was not his wish to change the law outside London. He must have had a change of mind when the White Paper was issued and the Bill was published. Undoubtedly, the first GLC action showed that there were important differences in the wording in the Transport (London) Act 1969 compared with the Transport Act 1968, which affects the metropolitan counties. There could have been a legal clarification if the position in London was changed to that of the 1968 Act, which everyone thought was the case until the GLC action last year. Instead of clarifying the law, the Bill will introduce uncertainty and increase the possibility of litigation.
The Minister referred to the procedure set out in Clauses 3 and 4 by which eventually the Secretary of State will reach a decision on the protected level of revenue grant. This involves a lengthy and bureaucratic timetable, so much so that my right honourable friend Mr. Albert Booth, the Shadow Transport spokesman, explained it to the Commons Standing Committee on the Bill. All this is set out, not just in half a column, but in columns 309 to 311 of the Official Report, Standing Committee A, of 9th December. My right honourable friend said that he had checked the details with the Association of Metropolitan Authorities, yet, surprisingly, I find that in a very lengthy answer the Under-Secretary of State,
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Mr. Reginald Eyre, did not challenge what was said about this detailed and complicated procedure. In fact, he appeared not to mention it at all in his reply.
Under the Bill, the Secretary of State will become directly involved in the non-elected transport executive in each area, even to the extent of giving advice and guidance, although the executive is responsible to the elected county Council which, of course, is also the transport authority. It is the executive which has to supply the Secretary of State with information so that he can give advice to that executive on aspects of its annual plan. This advice will include the cost, level of demand and benefits of the provision of the services and facilities, and the general form and content of the plan.
The executive will also be told what the Secretary of State considers to be the appropriate amount of revenue support. The Secretary of State will give that last piece of advice before he has even started on the long-drawn-out procedure, which the Bill makes out to be so essential, before the Secretary of State tells the authority what will be the amount of grant to be protected. The noble Lord, Lord Bellwin, said there would be no interference, but it is laid down that in preparing its plan for submission to the authority the executive must take all that advice into account. It is a strange form of advice; but I would say they must take that instruction into account.
How will the Secretary of State be in a position to advise on the level of services that are needed? That is what his advice, or instruction, will mean. How is the Secretary of State able to decide on the level of fares to meet local needs and circumstances? And at the end of the lengthy procedure he may also indicate where the executive plan must be changed to take account of his "guidance". It was all too much for one Conservative Member of the Commons Standing Committee, Mr. Barry Porter, the MP for Bebington and Ellesmere Port, who complained:
"There is still too much interference, even by this Government, with the detail of local government activity".
Later he said:
"I was astonished to find that the Bill reiterates the old cliché that the man from Whitehall knows best and will tell us what to do. The powers are to be with the Government to control the totality of expenditure, but what has it to do with Government how people run their buses?" (Official Report, Standing Committee A, 9/12/82; cols. 273–4.)
Noble Lords opposite may think the same by the time this Second Reading debate is over.
Let me set a brief scenario. The Secretary of State tells an authority what he regards as the protected level of revenue support. The elected county council decides that in order to meet the needs of the local people, and in accordance with policies approved by the electors, a grant contribution should be made from the rates. The Secretary of State then says, "If you follow that democratic course, it will be against my guidance and you may be taken to court and individual councillors may be surcharged". That seems a very strange form of non-interference with local government matters.
When asked what would be the criteria for giving such guidance, the Secretary of State replied that it was set out in Clause 4(6). I will not go into the detail of that now, but if noble Lords look up that provision they will find that it contains general matters, very

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important ones, and that on those general matters the Secretary of State will decide on the level of grant, which must have an effect on the provision and level of services.
As has been pointed out, the Bill will allow an authority to make only one revenue grant in any one financial year. No account is taken of special circumstances, and when asked about that the Secretary of State said that that could be met by borrowing. First, that could he bad economics, and, secondly, the borrowing must be adjusted the following year, as laid down in the Bill, and that could affect the level of grant for the following year and make it very difficult then for the local authority to maintain services and the level of fares.
It is claimed, however—and the Minister spent a considerable time emphasising this—that the Bill will provide stability. Stability requires that the level of income from fares and grant will enable a proper service to be maintained; and the three-year programme, to which reference has been made, overlooks the fact that the TPP, the transport policies and programme, which every authority must submit annually, covers far more information than is suggested in the three-year plan. Moreover, how will the three-year rolling programme fit in with the decision, reaffirmed by the Government, that the grant will be decided only from year to year? There cannot be stability if that is the way the grant is to be determined.
I come to the forthcoming year, 1983–84, to which the noble Lord, Lord Bellwin, made reference. The decision to be taken after Royal Assent will occur after the councils have made their budgets and after they have fixed their precepts on their boroughs or districts, as the case may be. As has been emphasised, the Bill provides that for subsequent years there will be a very complicated procedure, but apparently that does not matter at all for 1983–84. The Minister referred to the provisional figures given in the White Paper, but there were no detailed criteria for determining those figures and, therefore, they must be considered a subjective judgment on which the authorities could not be expected to base any figures in their budgets. All the authorities have expressed concern that the figures, which are all reductions on the current year—that is so in the case of all the figures in the schedule at the end of the White Paper—threaten cuts in services and may entail increases in fares.
The Secretary of State—this was confirmed by the noble Lord, Lord Bellwin—has replied that that need not be the case and that the position could be met by reorganisation and efficiencies. Where is the evidence that the PTEs and PTAs have not been carrying out their duties efficiently up till now? The Monopolies and Mergers Commission referred to the efficiency, cost and possible abuse of a monopoly situation in five public transport undertakings. One of those was the West Midlands PTE, which is one of the bodies affected by the Bill. The report, published in July, made favourable reference to the West Midlands authority and to the efficiency of all the undertakings. The report concluded:
"We have not found that any of the undertakings is abusing any monopoly situation existing in its favour, nor that in any matter falling within the questions referred to us any of the undertakings is pursuing a course of conduct which operates against the public interest".
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Two of the authorities engaged consultants in recent months and are working on their advice; they have been going into the whole question of the operation and organisation of their executive. Another set up a working party. Remember, we are talking about only seven authorities, and at least three of them have appointed consultants or set up a working party to go into these matters. It is clear that the authorities do not require legislation before looking into the questions of efficiency and the reorganisation of their executives.
Clause 8 requires that an executive shall invite outside tenders for its various activities. The activities are not specified; but, surprisingly, I find in the Notes on Clauses (which I thank the Minister for making available) the comment that such activities should include peak hour provision and services late at night or at weekends. The dangers in that should be apparent to all noble Lords. Furthermore, subsection (5) of that clause requires that the annual report of an executive must include a statement setting out the steps taken to comply with these provisions. I see in that the implication that it could have a bearing on the Secretary of State's guidance on the level of grant for the subsequent year. In fact, that is inferred in paragraph 29 of the White Paper, although there are no legislative proposals in the Bill to carry that out.
The Bill shifts Government control from the national level of expenditure to the detail of service expenditure of the particular authorities, and the Secretary of State will, in effect, be making judgments on local needs and priorities. Despite what the noble Lord, Lord Bellwin, said—and we admire his understanding of local government—this is a further regrettable attack on local democracy and ignores the accountability of elected councillors to those who put them where they are.
3.50 p.m.
Lord Tordoff: My Lords, too, should like to join in the thanks extended to the noble Lord the Minister, who always gives a clear exposition of the Bills that he brings to your Lordships' House. He tells me that this is the twentieth Bill that he has brought to the House in the period that he has been here. Unfortunately, having listened most carefully to what he had to say, I merely find that the conclusion that I had reached before the debate started has been underlined; namely, that this is not a transport Bill at all. I have to offer the House an alternative Long Title for the Bill, which would read:
"An Act to increase the power of the Secretary of State over local government expenditure and for the further demolition of the public sector to the benefit of the private investor regardless of the needs of the community and the environment".
I do not myself intend to spend much time on the local government aspects of the Bill; I shall leave that to the greater knowledge and wisdom of my noble friend Lord Evans of Claughton. My task is to deal with the transport aspects; and having said what I have just said, perhaps I ought to sit down and leave it at that.
However, I should like to begin by referring to the White Paper, since we have had no opportunity to debate it. As the noble Lord, Lord Underhill, said, it was published at the same time as the Bill which is now receiving its Second Reading. The White Paper starts by stating, in its first line:
"Efficient transport is vital to the life of our great cities"

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And so say all of us, my Lords! But I am not clear that the Bill takes us any nearer to that admirable end. Of course we would support measures that would help the GLC and the metropolitan counties to achieve increases in efficiency. But such increases in efficiency must include contributions to the improvement of the environment; they should not just be measures of fiscal restraint.
Where in the White Paper, I ask, is there any analysis of the transport problem in our great cities and conurbations? Where in the Bill is there any attempt to deal with the overcrowding of our streets, the over-use of motorcars, the miserable conditions that commuters face every day in coming into central London? Where is there any reference to the lack of integration of our public transport services?
Those are the problems that a transport Bill ought to be dealing with, and those are the problems which make the public sector less attractive to the traveller and force more and more people to use private cars, which leads to a downward spiral, resulting in the kind of inner urban deprivation that we all know. There are no new ideas, or assistance, being offered to tackle these problems; indeed, rather there is an implied threat for those metropolitan counties that have tried to do something towards producing schemes.
The noble Lord, Lord Underhill, mentioned the very impressive lobby that took place two weeks ago, when members of the metropolitan counties from all over the country came to lobby your Lordships. It was a most unusual, and I think almost unique. event—certainly on that kind of scale. To my mind, it underlined the strength of feeling that there is in the country among not only councilors, but also the users of public transport in our great cities. We should listen to the people from Tyne and Wear, who are pleased with the service with which they are now being provided.
We are told by the Minister, and Members in another place were told by the Secretary of State, that the Bill is designed to remove uncertainty. But I had thought that the Merseyside case had removed uncertainty from the minds of the members of the Merseyside Metropolitan County Council. Certainly the GLC was given a sharp reminder of the proper balance between political dogma and the limits to which it could go in terms of fiscal probity. But the latest court findings would seem to suggest that it has got round that problem, and that it has now put forward a more balanced and sensible project. What I am sure about is that there will be less certainty than there is at the moment once the Bill becomes an Act and reaches the statute book.
As the noble Lord, Lord Underhill, has hinted, one of the great omissions from the Bill, and indeed from the White Paper, are the criteria by which the Secretary of State will determine levels of grants. The White Paper gives guidance figures for 1983–84, but no indication at all of from what these have been derived, save only the criterion of what can be afforded nationally. Clearly that is a criterion which the Government have a right to take into account, but it surely cannot be the sole one, and I think that we have a right to ask, what other criteria have been used?
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Paragraph 21, on page 7 of the White Paper, states that,
"account will be taken of the benefits to users of public transport and to other road users in terms of reduced congestion and accidents".
That is very fair, but where, I ask, does it appear in the Bill? The Bill seems to lay no obligation on the Secretary of State to accept even that criterion, and once again we find that authority unconfined is passing to a Secretary of State. That situation is underlined again at the end of the same paragraph in the White Paper, where it is stated:
"Officials in the Department of Transport will discuss with those concerned the information and procedures needed for this purpose".
I think that that rather gives the game away. In other words, the people from the Ministry who know all will go and tell the local authorities how they should handle their affairs. Clearly, this is a matter that we shall come to again and again during the Committee stage, and I am sure that we shall all try to insert criteria by which the Secretary of State can judge his role.
I now wish to turn to Clauses 7 and 8 of the Bill. Here again I regret that I can derive no comfort. In Clause 7(1) we find that the Secretary of State, whenever he requires—which, presumably, can be every Tuesday fortnight, if he feels like it—can tell the authority to review its organisation,
"for the purpose of determining whether … any particular activities of the executive should be managed as separate units with separate accounts".
Again, that is a very worthy objective, to try to improve efficiency, if possible. But of course the real purpose is in order, under Clause 8, to pressurise the executives to offer parts of their undertakings for private tender. We are not told what happens if an authority exercises its judgment and refuses to offer certain activities for tender. Again, the Bill does not tell us, but here again the White Paper gives the game away. Paragraph 29, to which the noble Lord, Lord Underhill, referred, states:
"When accepting expenditure…the Secretary of State will take into account the progress made by the authority and the executive in seeking cost-effective management structures and securing value for money from contracting-out services".
In other words, that is the concealed big stick, held within the White Paper, and not actually referred to in the Bill.
Let me make it clear that we on these Benches believe that there can be a role for the private sector, but it must be in terms of fair competition, and certainly fair competition can improve efficiency. But it is not fair competition to hand over to the private sector only those parts of the transport system which are profitable at the moment and to leave the public sector with the awkward parts. This is the way to the kind of self-fulfilling Tory prophecy of declining profitability, leading to declining morale, leading in turn to declining service.
In those circumstances with what confidence can a local authority plan new schemes? I have already mentioned the Tyne and Wear integrated transport system, which, so far as I can judge, and so far as is being judged by the citizens of that part of the world, is extremely successful. But if the citizens of Tyne and Wear believed that parts of it were going to be sold off,

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and, moreover, that the profitable parts were going to have to be sold off under pressure from the Secretary of State, in what kind of position would that leave them? What kind of chance would there be of any other local authority embarking on such an ambitious and, in the end, successful experiment? I prophesy that similar schemes will not see the light of day in the future if the Bill goes through.
It is not only the local authorities who are worried. Individual people are extremely worried by the possible consequences of this Bill. I am sure that many of your Lordships have received letters from such people. I mention only one, a minister of a Welsh chapel in Merseyside who is exceedingly worried that, with a scattered congregation with few motor cars at their disposal, if the loss of public transport is such that they cannot get to their chapel on Sunday, the whole question of its survival comes into account. I am sure that this will occur not only in this particular case but in a number of small communities of people who are perhaps not part of the great majority in the country. These are the people who, I fear, will be hurt by the legislation. And I have to tell this gentleman in response to his letter that I have seen nothing, read nothing and heard nothing which helps me to reassure him.
My Lords, the truth is that this Bill comes as a result of a vendetta which the Government have against the Greater London Council, and particularly against its leader. It has warped the Government's judgment and I believe that it is time the Government came forward with a transport Bill that was a transport Bill and not yet another attack on local government. I have some hope, however, in the noble Lord the Minister, who has a feeling for local government and who is usually flexible in Committee stages of Bills. I trust that he will recognise the need that people have in this country for reassurance; otherwise, I deeply fear that this Bill will be damaging to transport in the metropolitan counties and in the GLC to a level which may become beyond recall.
4.2 p.m.
Lord Marsh: My Lords, I must say that when I first heard comments being made in relation to this particular Bill my heart began to beat faster. I heard it described as a massive and vicious attack upon the Greater London Council—and there are many less worthy causes than that. I was led to suppose from speeches which I have read that Mr. Livingstone, for example, took strong exception to it. Generally, as a rule of thumb, I find that Mr. Livingstone's perturbation is to me a source of pleasure, satisfaction and confidence. Having listened to the two speeches which oppose the Bill so far, I remain as puzzled as I was at the beginning. This is a very gentle little Bill. It is not a bad Bill, it does not do any particular harm. It does not do very much for those major problems in public transport, particularly in some of the large conurbations and particularly for those of us who live in London.
It would have too been too much to expect the Minister to use this opportunity to slide in a clause abolishing the Greater London Council—but one would hope that he has not given up that possibility—as a body which costs a great deal of
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taxpayers' money and achieves very little apart from intense irritation and ever-increasing rates. It was not too much to expect the Minister, after all the time which has elapsed, to use the opportunity to transfer London Transport out of the hands of the Greater London Council. I believe that it was a major mistake for the Labour Government (of which I was a member and the Minister responsible for the Bill) ever to transfer London Transport from central Government. Whatever the colour of the Greater London Council, it is not possible in my view for any local authority to manage and control a transport undertaking of the size, complexity and importance of the capital's central transport system. Therefore, that is another cause for sorrow.
But, my Lords, to see this Bill as a repudiation of Magna Carta, as an attack on local authorities and on local democracy would be extraordinary, I do not believe that anyone who has been interested in this subject over recent years can look at the performance and activities of some—not all—local authorities in regard to the financing of transport undertakings with anything other than horror. The fact is that the policies which some have embarked upon have been irresponsible in the extreme and deeply damaging to the people who have to pay the bill. Before someone says—and it will be said—that people have complete authority and control over local authorities and their actions because they have the right to vote them out of office from time to time, I give the case totally that no one expressed his views and intentions in relation to London Transport with greater clarity than did Mr. Livingstone in the run-up to the last local elections. I was certainly quite clear what he had in mind.
But noble Lords are fully aware—and, if I may say so, there is no Member of either House of Parliament who is better aware than the noble Lord, Lord Underhill—that local elections are not fought on local issues. That is a myth used to bolster up the egos of many local authority members. Local elections are fought on national issues. If the Conservative Party is the party in favour at a particular time and an election occurs at around that time, then most local authorities will find a swing in favour of the Conservative Party. And the same thing is true if the Labour Party is in favour at that time. The fact is that, when people vote for their local authority members, they are voting for a wide range of things and it is difficult for them—they take very little interest in local elections—to hold their councillors accountable for each individual item even when the political party make the efforts which the Labour Party in London made in the last elections to make their wickedness known to all in advance.
If one looks at the Bill and what it does, one understands that there are three main objectives to the Bill. One, to remove some of the uncertainty caused by recent legal action. I must say that I was somewhat surprised to hear the noble Lord who has just sat down apparently suggest that this seemed to be a fairly unimportant point. I should have thought that there was a great deal of uncertainty for anyone at the moment in any local authority as to what is permissible and what is not permissible—not as a matter of political opinion but as a matter of law. Secondly, I see the Bill as providing some mechanism for the provision of transport plans which will enable the

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reconciliation of the interests of the ratepayers and the national taxpayers with the transport needs of the area concerned, and all that—and this I think is a significant development—against a background of the demand on national resources in general.
One of the things which I think has probably caused great worry and great frustration to any one who has been in a Government of any party is to see over and over again the very limited amount of control that there is upon the expenditure of local authorities, particularly at times when national economic events make major and unpleasant decisions necessary. It seems to me that the transport of the nation has at some point to be seen against the background of the total resources available to the country as a whole.
Thirdly, I see the Bill as providing some control over policies which I believe have caused hardship to those citizens who have to pay the bills and which do nothing to improve the quality of public transport; and I will come on to the detail of some of my arguments on this question of subsidies in a moment. On the first point, I submit that there really is an urgent need to clarify the law in this field. We cannot, on the one hand, accept a situation where small groups of people can determine to place vast resources and commit them for long periods in advance with no come-back for the public. Let me say that I regard the need for greater clarity as important, not just for the local authorities but for the public at large, who also need to be in a position where, if large numbers of them believe that their local authority is behaving stupidly and irresponsibly, they can have recourse to the courts so they can seek some redress in that direction. I repeat that in my view recent years have seen the development of a level of financial irresponsibility on the part of some local authorities which would not be permitted by law in any other area of business activity. It is crucial that the public, who have to pay for these schemes, should have the opportunity to seek the protection of the courts, and the current state of the law makes it difficult for groups of citizens to challenge the actions of local authorities in this particular area.
The Labour Party has announced over the weekend, as I understand it, that they have arrived at a way of removing the legal doubts which may exist at the present time. They have arrived, as they are perfectly entitled to do, as I understand it from Mr. Kaufman, at a decision to give local authorities carte blanche to spend virtually what they wish in transport subsidies without any threat of legal action now or in the future. That is one way of removing the doubt; it is not one to which I personally subscribe. I want to see some method of ensuring that the public not only get value for money but they are entitled to seek proof that they are obtaining value for money.
One of the things which has been said on a number of occasions is that this Bill challenges the concept of subsidies to public transport. I find that difficult to understand, since the main thrust of the Bill is to decide—rightly or wrongly—on mechanisms to provide subsidies for public transport. There are very few people nowadays who would argue that public transport systems can be run without subsidy, and I certainly would not. The Bill is primarily concerned with establishing a mechanism for dealing with
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subsidies and the level and method of assessing the subsidy to be paid.
Transport subsidies in some parts of the country are now completely out of hand. They are running ahead of every economic index, whether it is the retail price index, the index of average earnings or public expenditure in general. They bear no relationship to any figures or indices which we use. In the past three years, as has been said, they have doubled to £400 million a year. That is quite a lot of money. But there are plans to increase those subsidies still further, from £400 million to £700 million in the year 1983 to 1984. One does not have to enlist the sympathies of the late Professor Einstein to discover that one cannot extrapolate increases in one area of public expenditure on that scale for very long. The arithmetic begins to run out.
If one takes the GLC's Fares Fair scheme, had it been allowed to go ahead, the cost to the taxpaying public would have been close to £2 billion in five years. These are vast sums, yet it is said that no Government has the right to consider them and become involved in them. If the subsidies paid on bus fares alone in South Yorkshire were extrapolated to the nation as a whole, the cost would be nearly £1½ billion a year. These are ludicrous figures against which to argue that the Government should not become involved. Subsidy on this scale for just one area of activity is simply not acceptable in the country's current economic climate.
We hear a great deal about the need to subsidise travel of ordinary people; but what about the situation of ordinary people as ratepayers? There are already people living in London in three-bedroomed terraced houses who are paying over £20 a week in rates. There has to be some limit to what you can ask of these people; and dwellers in three-bedroomed terraced houses really do not represent the idle rich. They are very ordinary people who cannot afford to live in Lord North Street, Hampstead or Holland Park. The weight for them is very considerable indeed and they see no end to it.
Virtually all transport studies agree that fare subsidies—subsidies on the revenue account—are largely money down the drain and are in fact positively damaging because they divert scarce funds from investment to revenue support. All the evidence shows the people's choice of transport mode, whether car, bus or rapid transit system, is not determined primarily by the marginal difference in cost. If that were the case, very few of us would use cars in London, where the parking charges alone would make the cost prohibitive compared with the public transport system which exists today.
The choice of mode is determined to a far greater extent by comfort, reliability and regularity of the service. This is the reason people choose cars as opposed to public transport, and this is the aspect on which public transport can be improved to obtain a transfer of people. These are all matters which are primarily conditioned by the level of capital investment and not by the level of revenue support. It is also the case that open-ended subsidies on the revenue account are an infallible method of ensuring the maximum amount of inefficiency with the minimum amount of transfer of passenger load. Of course more people will travel if fares are subsidised. No doubt still more people would travel if fares were

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abolished and if there were no fares. One could go to the absurdity of saying that if you paid them to travel you would get still more people to travel.
What one has to consider is not simply how to persuade more people to use public transport, but to ensure that the subsidies represent value for money compared with other needs. It is a mix of objectives we have to consider, not just getting people to use public transport. If one looks at the cost of getting people out of their cars and on to public transport, in terms of revenue support there is no evidence that that has proved particularly successful. Again, if I may give an example, South Yorkshire has succeeded by very large subsidies in increasing passenger journeys on its buses. We do not know where they came from but assume that they all came from cars. The amount of increase is 7 per cent. That is a major shift. If that were the objective, then of course one would be able to say that they had been successful; but in obtaining that 7 per cent. increase in passenger journeys, they increased subsidy on the revenue account by 600 per cent. That really cannot make sense in terms of the administration of scarce public funds.
So far as this particular Bill is concerned, I think that it is a step, a short term breathing space to give us time to take a more rational look at how we finance our urban transport systems in this country at the present time. No one is opposed to subsidies so far as I know. Most people would agree that there is a need to improve the use of public transport wherever we can. Something which in my view is beyond argument is that the present measures were introduced largely in the 1968 Transport Act which I carried, to my shame, through the House, but which I will claim in my defence I inherited from Mrs. Barbara Castle—and why Prime Minister Wilson had such a vendetta against me that he left me with that particular monstrosity, I do not know. It was designed to shift authority back to the people, to shift it back to local authorities.
What we have done is to enable a relatively small number of full-time local authority members in some places to play Monopoly with vast sums of public money and to enable the public transport system to decline at the same time. I believe that this Bill provides some temporary alleviation while the Government set their mind to more radical solutions.
4. I 9 p.m.
Lord Boyd-Carpenter: My Lords, as he knows, I have been for many years a devoted admirer of the noble Lord, Lord Underhill. I listened this afternoon to his most gallant effort to—if I may so phrase it—steam himself and the House up into a belief that this small Bill—and, as I shall say in a few moments, I think this mouse of a Bill—was a massive onslaught on local democracy. Not only did that seem to carry the technique of exaggeration to a level which, while perhaps acceptable in another place, is rather unusual in this House: it was also significant in that, in seeking to raise indignation on this matter, the noble Lord, Lord Underhill, at no point in his speech—and I am subject to his correction—expressed the slightest sympathy for the position of the ratepayer; nor, for that matter, did the noble Lord, Lord Tordoff, from the Liberal Benches.
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This, given the very heavy rise in rates to which transport subsidies have contributed, though of course they have not been the sole cause, is really quite extraordinary. It is all very well for the noble Lord, Lord Tordoff, to say that people are worried. Of course they are. Many of them are very worried about the rate demand they are going to get in April. To ignore all that, and to ignore the massive rate increases to which people and firms in London and in the other major cities have been subjected, really does confirm what many of us have come to believe—that members of the Labour Party are drifting further and further out of touch with reality; because for one who is worried about public transport there must be at least half a dozen who are at least as seriously worried about rates.
It is not only the rates the individual pays; it is the rates that companies pay. You cannot, in the case of companies, say, "Oh, well, this is local democracy", because in local elections the company has no vote. It is the helpless victim of local authorities—elected sometimes on quite a small percentage of the local electorate, and very often elected also on the votes of people many of whom are not ratepayers—mulcted of whatever sum that particular set of elected persons sees fit to impose.
My Lords, in London you can see the signs of it. There is not only the position of the householder, to which—I was about to say "my noble friend", because I agreed with almost everything he said—the noble Lord. Lord Marsh, referred; there is the effect on companies. Plain to the eye today is the number of great companies that are moving out of London, inter alia because the burden of rates on their London premises is excessive. That is not a process that can go on indefinitely, however ruthless and determined local authorities in London may be to extort the utmost penny from the ratepayer. They cannot extort it from the people who have gone and they will find, if this course continues to be followed, that the number of ratepayers available for them to levy these imposts on has been very substantially reduced.
Therefore, I suggest that your Lordships should look at this matter not solely from the point of view of the possible perfection of transport under local authority guidance, though that is relevant. but also from what 1 believe to be one of the sensible purposes of this Bill, from the point of view of providing some alleviation for the ratepayer. The noble Lord, Lord Underhill, objected to haste, but he will recall that there will be another series of rate demands coming out this April. I, for one, will be delighted if this measure, slight though its effect I judge will be, could be on the statute book in time at least to modify the demands of local authorities for money to be spent on transport subsidies.
I think your Lordships may also wish to analyse the question of local authority subsidisation of public transport. I agree with the noble Lord, Lord Marsh, that many forms of public transport do require a subsidy from some source; but it is by no means self-evident that, for example, the ratepayer of Greater London should pay large sums to subsidise London transport. Where do the users of London transport come from? The commuters who pour in and out of this city every weekday, who use London transport to get across it to their offices or their factories, pour in

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from Hampshire, Surrey, Sussex, Kent, Hertfordshire, Essex, Buckinghamshire and Berkshire—perhaps from an area bounded by Brighton to the south, Newbury to the west, Watford to the north and Chelmsford to the north-east. They are not London ratepayers. They do not contribute to the subsidisation of London transport; yet under the arrangements made by the Greater London Council their journeys are subsidised by the London ratepayer.
They are not the only ones. In this capital city of ours, very large numbers of people come up from the provinces on business or pleasure and use London transport. They, too, are not London ratepayers and the majority are not from areas where the ratepayer subsidises public transport. Then there is the steady onrush of foreigners from every part of the world. They flock to this great capital city and if they use public transport they have their transport subsidised by the London ratepayer. I really do not accept that in London—and at the moment I am concentrating my argument on London, though not exclusively—there is very much of a case for the London ratepayer being called upon to effect these subsidies.
I was most interested when the noble Lord, Lord Marsh, with a confessional gallantry which I am sure the House greatly admired, admitted that it was he who was responsible for placing London transport under the Greater London Council. I recall the time when I was Minister of Transport and Civil Aviation, some years before the noble Lord, Lord Marsh, when London transport was controlled by a separate nationalised industry, the London Transport Executive, which was answerable, as were the other nationalised transport set-ups, to the Minister of Transport. That had several advantages. First—and it was the noble Lord, Lord Tordoff, who used that phrase about "an integrated passenger transport system"—it did mean that the various forms of overlapping services, such as the underground lines that run parallel to the suburban rail lines and the Inner London buses that run parallel to the country coaches, were all ultimately under the same Minister and the same central guidance on behalf of the Government. That system, in my recollection, worked pretty well, and it worked a great deal better than does the present system of placing it under the GLC.
Moreover, this brings one back again to the question of subsidy. If London transport requires subsidy then, for the reasons I gave a moment or two ago about the use of London transport, that subsidy should be paid nationally. It should be paid on behalf of the taxpayer as a whole—and it is the taxpayers generally who are the users of London transport—and be subject to the supervision of my right honourable friend the Chancellor of the Exchequer, with all that means under all Governments, of a prudent investigation of proposed expenditure.
I am very disappointed if this Bill means that the Government intend to retain the GLC as the operator and owner of London transport. I hope this is not its implication. I hope that my noble friend, when he replies, will be able to say something about that because it has turned out, even under well-managed majorities at county hall, to be an inefficient and awkward system. I leave out of this argument the fact
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that the present majority at county hall seems to have as a main object in life the finding of matters on which it can manage to spend public money—even to the extent, as your Lordships know, that, having no police powers, it has solemnly set up a police committee and incurred expenditure in the discharge of non-existent responsibilities. Even when county hall is well run, as it was notably under my noble friend Lord Plummer, this is a mistake. The appointment, the control, the subsidy, should be in the hands of central Government. If any noble Lord objects that if you take London transport away from the GLC it will have so few functions left that it might be sensible to wind it up, that is a logic which I myself would find very little difficulty in pursuing and whose consequences I would face with stoical fortitude. But I hope that my noble friend can assure me that the fact that this Bill appears to accept GLC ownership and control over London transport is no indication whatever that the Government have closed their minds to what has been urged on them very freely from many quarters: that London transport should go back to where it came from, to the control of central Government.
I welcome the speed with which this measure is being put forward, for the reason I have given, that it may help the ratepayer next year. It may be that my noble friend will, for that reason, say that it was not possible to find time for the more radical reform which one would like to see. Nor do I find this measure, even within its limits, particularly effective. We have had no indication, as I hoped we would, that Government guidance to be given when the Bill is an Act will be such as to restrict and restrain local authority subsidisation of transport. I hope indication will be given that in this respect, as in so many others, the Government will take the view that there must be restraint in this.
I say this in no hostility either to local authorities or to their transport undertakings, but for the reasons so very eloquently described by the noble Lord, Lord Marsh. At a time when national resources are desperately required for economically justifiable projects, when, under the Government's guidance, the economy seems at last to be coming through an extremely difficut worldwide financial recession, we simply cannot afford to have these very large sums of money levied from the ratepayer, so that they cannot be spent on anything else, and spent in the most inefficient way possible in revenue subsidies to services which are the less efficient for the receipt of those subsidies.
I hope, therefore, that the Government may say that, limited though the powers of this Bill are, limited though its scope is, these powers, if Parliament gives them to the Government, will be exercised with the toughness and determination which the Government, and if I may say so in particular, the former Secretary of State for the Environment, have exercised in so many other directions.
I have only one other point to make and that is on the other section of the Bill dealing with the writing-off of the Dock Labour Board's debt. I think that we are owed a little more explanation, though the sum of money is not very large. Your Lordships know that the Dock Labour Board has been a disaster, you know that it has done much to ruin the ports of London and

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Liverpool, and I, for one, will take a little convincing that, even although its liabilities may have arisen in a last-minute attempt to reduce the amount of employment that it gives, there is any real justification for writing-off this sum of money. The term "writing-off" is such an easy one. What it amounts to is that we are being asked to give to the Dock Labour Board a sum of £14½ million and I do not think it is worth it.
4.34 p.m.
Baroness Bacon: My Lords, I am sure that we have all listened with interest to the noble Lord, Lord Boyd-Carpenter. As he knows, I have been listening to him for a very long time both here and in another place and his speeches are usually quite entertaining. But, as usual, I found some of his arguments difficult to understand. I was very surprised that he brought in the fact that some of us who live in the north of England and come to London are using London Transport and getting part of the subsidy that is being paid by Londoners. Surely, that happens all over. I suppose that I am paying rates in Yorkshire and other people coming from other parts of the country get the benefit. But I was very surprised indeed to hear him put forward the argument that visitors from abroad are coming here and taking part of the ratepayers' money in London. I should have thought that the enormous amount that is brought in to commerce, industry, shopkeepers and hoteliers by foreign visitors to London far outweighs anything that they take out in subsidies from London Transport—
Lord Boyd-Carpenter: My Lords, would the noble Baroness allow me to intervene? I think that she did not follow my argument to its logical conclusion, which I beg her to do. It is that, while what she has just said is wholly true and highly advantageous, such subsidy, being in the national interest in respect of such people, should be provided nationally and not at the sole expense of the ratepayers of Greater London.
Baroness Bacon: My Lords, we might agree with that if the Government provided more subsidies to local authorities. But, if I may make the few remarks which I want to make, I admit at the outset that I am not an expert in all the intricacies of public transport. But I have lived the whole of my life in West Yorkshire, I know the area and its people and I realise the problems that they face. I have had the advantage of representing the centre of the very great and busy city of Leeds—
Lord Bellwin: Hear, hear!
Baroness Bacon:—and living 10 to 12 miles away in a small mining town, so I know the people of West Yorkshire. Although the transport problems in some of the areas of West Yorkshire are quite different from those in other areas, having studied the Bill and the report of the proceedings in another place it is clear to me that this Bill could have an adverse effect on transport in all areas of West Yorkshire—the cities, the small townships, the country areas and so on—because it takes away local financial control and it seems inevitable that this will lead to a decline in transport services.
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There are two aspects to this problem. One is the financial aspect and the other is the social consequences, and today we have heard, except from my noble friend Lord Underhill and from the Liberal Benches, more about the financial aspects than about the social consequences of this Bill. I want to speak principally about what has been happening in West Yorkshire, because that is the county which I know best. In West Yorkshire over the last eight years the bus system has suffered a considerable decline, due partly to the fact that today more people have cars, but principally because of the recession, with fewer people travelling to work in the big cities. I want to show in the few minutes available that West Yorkshire has acted in a very reasonable manner in this sphere, and yet it will be in great difficulty if this Bill goes through.
After 1974 both parties, the Labour and the Conservative Parties, in West Yorkshire met the problems by increasing fares. As a result, West Yorkshire had the highest fares of any of the passenger transport executives. But this policy proved unsuccessful. The last time fares were increased the number of people travelling by bus decreased enormously. Service cuts were tried and, of course, that meant that more passengers were lost. Other schemes produced much less favourable results. All parties—and I want to stress this—on the West Yorkshire Metropolitan County Council recognised the need to do something about this and were committed to a freeze in fares before the 1981 county council elections. The county council used this breathing space for a major reorganisation of the passenger transport executive, which has resulted in substantial savings. The introduction of an off-peak fare scheme has resulted in more passengers, without any significant loss of income.
But, most important, West Yorkshire, on the advice of former transport Ministers, appointed a firm of consultants to advise the county council. These consultants—Booz, Allen and Hamilton—have reported and made many suggestions, including a 10 per cent. increase in late summer of 1983. This is to be accompanied by a prepayment programme with multi-journey tickets. Taking into account all the suggestions made by the consultants, the county council's passenger transport executive estimate that revenue support in 1983 should be £44·7 million, for buses and £10.4 million for rail, making a total of £55·1 million. I would stress that this figure was reached after including the programme of economies in line with the consultants' proposals.
The Secretary of State has issued guidelines on the amount of subsidy which can be used by the various passenger transport executives. The figures he has arrived at for West Yorkshire, for the same period I have just described, are £35 million for buses and £9 million for rail, making a total of £44 million. This means that, to conform to the Secretary of State's suggestions and guidelines, West Yorkshire will have to slash more than £11 million from the figure they believe is essential after the consultants have given their advice. It is obvious that to keep within these guidelines there must be either great increases in fares—which have proved to be counter-productive in the past—or cuts in services. This is going to hit the general public, both workers and shoppers.
I wish to draw attention to two specific areas which

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could be at risk if this Bill passes through in its present form. First, there is the area of children's fares. I am not talking specifically about school transport but about children's fares in general. Secondly, there are the rural areas. With regard to children's fares, Clause 1 of the Bill makes it clear that revenue grants are to include:
"grants made under those provisions in respect of reductions in fares for children".
It is also clear from Clause 2, and from what the Minister has said in another place, that the Minister can take into account his own view of what element of the subsidy should be devoted to reductions in children's fares. If a county council fixes a higher level of grant than the Secretary of State thinks appropriate, they run the risk of legal challenge and a surcharge. The West Yorkshire policy at present is half fare for all children at any time, and not just on journeys to school. In South Yorkshire, a quarter of the fare is payable. The half fare policy enables children to travel with their parents, and it enables children to go on school outings both during school hours and outside school hours. They can travel to leisure activities and to playing fields, which are sometimes far from their school.
The current West Yorkshire subsidy for children is under £1 million, but by this Bill the Secretary of State could reduce this subsidy, and this may eventually affect fares to and from school as well, because the county council will have to take the whole matter into consideration.
I should now like to say a word about rural services. When the metropolitan counties were formed they were described as great industrial conurbations. People living south of Watford probably think of them as built-up areas of smoky cities and towns. But this is not a true picture; certainly not of West Yorkshire County Council, nor of South Yorkshire or Greater Manchester. In West Yorkshire there are the big cities of Leeds, Bradford, Huddersfield and Wakefield, but there are also great rural areas. They include some of the most beautiful countryside in Britain, and also some of the wildest: Wharfedale, Ilkley Moor, Hawoarth, "Bronte land" and all the moors around Hawoarth, and the wild and sometimes forbidding Pennines area.
I am sure that many of your Lordships have watched that delightful series on BBC television, "Last of the Summer Wine". I will merely say to those of your Lordships who have watched it that when you see Compo, Clegg and Foggy sitting at the top of a hill surveying all that countryside, miles and miles of it, that is all the West Yorkshire metropolitan county area, merging with South Yorkshire and Greater Manchester. I also always say, to prove that when we are talking about a metropolitan county we are not talking only about cities but also about vast areas of the countryside, that Holmfirth, where the television series is set, is a real village, but it is one of the biggest villages in the Pennines area. Many of the villages are little hamlets clinging to the sides of the Pennines.
The people in these areas depend on buses to a very great extent. Even people with cars cannot use them in winter. The buses are not full (I am not going to claim
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that they are) and they are not profitable (I am not going to argue that they are), but they are essential to the people in those areas. What will this Bill mean? At present, a duty is placed on a county council to provide a range of services. As I have said, not all these services are heavily used. It is obvious that in rural areas with few inhabitants services are less well used, but they are relied upon more. It may be that the cuts will have to come there. It is absolutely vital for these villages that the subsidies are continued, to keep buses running even though they are not profitable. This Bill threatens those services. It is not just a question of, "Will fares go up?", but of, "Will the services continue?".
The effect of the lower level of subsidy will be to make the PTEs examine services not on the basis of social benefits but on the basis of whether or not they make a profit. If this happens, some of the services in rural areas will be greatly at risk. In the past 10 years there has been a great deal of what I can only call in "real Yorkshire", messing about with local government. The greatest upheaval in the 1974 Act—and I hope that the noble Lord, Lord Bellwin, will say "Hear, hear!" to this—was in the county of Yorkshire. Overnight, Yorkshiremen became Lancastrians, which is the worst thing that could ever have happened to them. Parts of the East coast became Humberside. In 1974 there was too much talk of boundaries and too little talk of functions and methods of financing local government. We have to get back to that.
This Bill imposes strict control from Whitehall—and it is no use the noble Lord, Lord Marsh, saying that it does not—over local authorities who know what is best for their own areas. I am quite certain that if the noble Lord, Lord Bellwin, who comes from Leeds, was still where he used to be he would today be talking of Government control over local authorities. I hope, therefore, that many changes will be made to this Bill, and that it will be recognised what great harm it is going to do to the people of the metropolitan counties.
4.50 p.m.
Baroness Stedman: My Lords, it is difficult to follow a fighting speech from the noble Baroness, Lady Bacon, when she is really in form as she is this afternoon. I think we all accept that the Minister made it plain this afternoon that the origin of this Bill followed the fiasco of the GLC Fares Fair policy and the ruling given on it when on 26th July the Secretary of State announced that he intended to introduce legislation to clarify the position and to determine the future of revenue support for the local transport operators. According to the Secretary of State, and this was repeated by the noble Lord, Lord Bellwin, this afternoon, the purpose of this Bill is to bring stability to the public transport in our cities and to ensure that there is a fair balance between travellers and ratepayers by establishing guidelines for the payment of subsidies.
Under this Bill, the Secretary of State each year will give the transport authorities a suggested figure for those subsidies. Payment of subsidies up to that level will be lawful. But what happens if authorities decide to pay more? Far from clarifying the situation, the Bill leaves wide open the question of what level of subsidies

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will in future be deemed to be illegal. Thus the Bill will create more and not less uncertainty and instability over subsidies.
Both the 1969 Act, on transport in London, and the 1968 Act, covering transport elsewhere in the country, have a clause which requires that the transport authorities should break even so far as is practicable. It was breach of this clause that led to the House of Lords' decision on the GLC policies. This Bill repeals that clause, but it replaces it with a new provision which is broadly the same. So the courts will still have to decide what level of subsidy is both legal and reasonable, having regard, on the one hand, to the fiduciary duty to the ratepayers and against that, on the other hand, the statutory duty to break even so far as is practicable and to maintain an efficient service in London. It must be the responsibility of the GLC and the PTEs in the metropolitan counties to develop their own coherent transport policies. That responsibility must include the power to adjust the charges made by public transport operators to accord with their overall transport policy.
If we create government authorities, then we must allow them to act as they think fit and to be accountable to their electors, who will be able to judge the fitness of their actions through the ballot box. This Bill will only enlarge the area of uncertainty. The Minister will specify the level of subsidy that he regards as legal, and that will leave wide open the question of what is illegal. What could create more uncertainty than that? Courts of law cannot be expected to define the right level of subsidy or the acceptable degree of financial intervention.
What is absolutely certain is that all kinds of odd groups of objectors will be encouraged to challenge their councils in the courts. This Bill is antidemocratic, because it will be the courts and not the local authorities which will end up taking the decisions. It is the responsibility of the GLC and of the PTEs in the metropolitan counties to develop their public transport policies. That is what they have been elected to do. They are accountable through the ballot box and not to the whims of judges, as when the GLC policy was struck down while a similar policy was upheld by Mr. Justic Woolf on the level of subsidy for cheap fares in Merseyside.
The crucial question, therefore, will be to what extent the courts will regard ministerial guidance as to the protected level of subsidy as narrowing the scope for local authority discretion. This can only be determined by litigation. The Secretary of State has an opportunity here to clarify transport strategy, investment and fares policy. Instead, what he has proposed is an unacceptable measure in the form of this Bill, which will create even greater uncertainty in what is already a very sensitive area. The Secretary of State has yet again taken over the democratic process from the local authorities. He has removed overall transport policy decision-making from the elected councillors and has taken that responsibility unto himself.
Clause 4 deals with the appoval of financial plans and the determination of revenue grants, and it gives the Secretary of State power to make a subjective judgment on what appears to him to be the appropriate national level of expenditure by authorities in revenue estimates. If this goes through, should there
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not be some means of Parliament checking the Secretary of State's value judgment annually by making him seek the approval of Parliament for his guideliines, specifying the basis on which benefits have been balanced against costs? Should not Parliament also have an annual White Paper specifying the Government's priorites for transport, and the proposed allocation of finance to highways and public transport? That would at least give Parliament the opportunity annually, throughout the three-year rolling programme as it is updated, to see just how well the Secretary of State is dealing with the issues that arise from time to time.
With other Members of this house, I met the lobbies from the GLC and the metropolitan counties, and in spite of what the noble Lord, Lord Bellwin, has said, they really are concerned about their ability to keep their transport concessions and their right to protect their concessionary fares. From all sides of the House for many years we have extolled the virtue of an integrated transport system, and yet in the one place where that has been achieved, Tyne and Wear, where a considerable sum of Government money has been committed to the metro, the subsidy is now to be cut, and, as reserves disappear, service cuts and job losses will follow.
The noble Lord opposite said that concessionary fares were safe, and a junior Minister in an interview on Tyneside said that concessionary fares are safe for 1983 and 1984 and possibly after that; that he was not going to interfere with concessionary fares. But where does it say that in this Bill? Where is there real assurance that the metropolitan authorities can accept that that is the line the Government are taking? In the west Midlands we were told that city centre shops were closing in Birmingham because higher fares restrict the number of passengers able to come in and spend money in those shops. On Merseyside, if cuts have to be made, we were told that the likely candidate is the ferry across the Mersey. It is uneconomic, but it is an important safeguard against tunnel defects.
In all the metropolitan areas, slum clearance has meant wholesale removals to areas outside the city centre. Means of travel are an important and an essential social need. School reorganisation has meant more travel for children, and cuts in services will mean that it will be impossible for some to get to work, impossible for others to look for work, impossible for some to visit the doctor, the dentist and the hospital, and the burden will be greatest on those least able to bear it, the old, the sick, the handicapped and the unemployed. We were told by that lobby that the restriction of subsidies could mean a 35 to 40 per cent. increase in fares in areas of very high unemployment; areas with the lowest rate of car ownership and areas with the highest number of people in receipt of family income supplement and rate and rent rebates.
Then again, the Bill is retrospective because Clause 10 gives effect to the Bill in April of this year. But the GLC and the metropolitan authorities are working out their budget for 1983–84 now, and their decisions at this point of time are legal. After the rate has been fixed, and if the Bill becomes an Act without the necessary amendment, what those authorities are doing legally today could be illegal in April. That could lead to supplementary rates and the Heseltine

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penalties. It is monstrous to treat democratically elected local authorities in this way. It is yet another instance of the Government's denigration of local government and of local democracy. The Bill is an attack on the powers of metropolitan local government and on public transport standards. If it goes through in its present form it will raise massive and complicated problems for local government in those areas.
It is a Bill designed to end the low fares policy, but higher fares can lead only to more traffic congestion, to more accidents and to business time lost by people frustrated in trying to get to and from work. Higher fares will especially hit the poor and the elderly. The Bill leaves local government little or no freedom in this crucial area of public service.
The Bill was rushed through in another place with little or no consultation with the parties affected. As the noble Lord, Lord Underhill, said, before the Bill was published, there was little consultation between the Minister, the GLC and the metropolitan counties. They met once, on 27th September, when the Minister made it clear that he was not open to negotiation on the legislation. He did at that time promise a paper on methodology and planning procedures for subsidies under the legislation, but the local authorities did not receive that guidance until 2nd November, and three days later the White Paper and the Bill were published, on the same day. That, in itself, must surely be almost without precedent.
Second Reading in another place was on 15th November, and the Bill went into Committee on the 23rd. It was guillotined on 17th January and arrived in your Lordships' House two weeks later. So it has not been fully debated. It has not been properly considered. It has not been thought through carefully in another place and we in this House must make amends. The Bill provides the wrong answers because it deals with the wrong issues. As the noble Lord, Lord Tordoff, said, it is much more a local government measure than a transport measure. It deals with arrangements for subsidies, whereas more effort might have been profitably spent looking at the case for major and continuing capital investment that would bring long-term benefits such as lower transport operating costs. The Tyne and Wear metro, because it has invested more in its network than have the GLC and British Rail in London, is now enjoying a lower subsidy load, although I admit it did have a very big advantage in being able to build a network from scratch in the late 1960s.
The Bill deals with the GLC without examining the case put forward by the Select Committee in another place for a new metropolitan transport authority which would be responsible for transport policy-making in London. Like the noble Lord, Lord Marsh, I regret that the Bill fails to put forward any serious institutional change of this nature. The GLC, unlike other metropolitan authorities, is not designated as a passenger transport executive and it has not the powers it needs to influence British Rail commuter services, especially in South London. There is a case for a new authority in this area.
However, the Bill is really about principle and it is difficult, indeed well nigh impossible, to amend
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principles. Nevertheless, I am satisfied that the combined opposition from this side of the House will examine every clause and every line and will endeavour to make it a more sensible Bill, a more reasonable Bill and a Bill which recognises the democratic rights of local government in the GLC and in the metropolitan authorities.
5.7 p.m.
Viscount Caldecote: My Lords, on this Valentine's day it is a great pleasure and privilege to be sandwiched between four noble and distinguished Baronesses on the speakers' list. Before speaking in support of the Bill I should like to declare a non-interest, as a member of the British Railways Board, and to make clear that the British Railways Board is neutral on the Bill. It has good relations with the Passenger Transport Executives and wishes to be free to continue to co-operate with them as seems best. I wanted to make that point in case anybody might feel that, seeing me support the Bill, British Rail was seeking to make life easy for itself by getting rid of these subsidies. That is not so at all and in supporting the Bill I emphasise that I am speaking entirely for myself and in no way reflecting the views of the British Railways Board.
We should today look particularly at the main objectives of the Bill. No doubt, as the noble Baroness said, it can be improved in Committee. It seems to me that there are three principal issues in Part I of the Bill. First, there is the overall constitutional position relating to responsibility; secondly, the effect on efficiency and value for money; and, thirdly, the effect on rates and local prosperity. On responsibility, the noble Lord, Lord Underhill, and others, complained that the Bill interferes with local democracy, that it curtails local autonomy and responsibility for local transport matters, and in general restricts the freedom of local authorities to act. Not so, except in so far as we are all subject to the laws passed by Parliament. In our democracy Parliament is the guardian of our freedom and if any organisation or section of the community abuses its freedom and thereby damages society some curtailment of that freedom becomes inevitable, whether the organisation is a trade union, big business, in the private or in the public sector.
Clearly in this case of transport subsidies some local authorities have indeed abused their freedom by acting irresponsibly. Inevitably that will result, and must result, in some regulation by Parliament. In addition to that, when the action of the local authorities was challenged in the courts, the local authorities, as other noble Lords have pointed out, complained that the law was uncertain and difficult to interpret. Clearly, therefore, there is a need for Parliament to act, both to prevent the irresponsible use of power by local authorities and to clarify the legal position.
The question then is: whether the provisions of the Bill will be effective and are the best way of dealing with the situation? The noble Lord, Lord Underhill, and others, argued that subsidy was necessary because not everyone has a car. That assumes, as many have done, particularly on the other side of the House, that the lack of a subsidy will automatically mean less, or less efficient, public transport. That seems to me to ignore entirely, as often the party opposite does ignore,

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the importance of efficiency. Experience shows that once any form of subsidy is accepted it tends to deter efficient operation and providing value for money. Therefore, ultimately it threatens the existence of that activity. It is not the taking away of a subsidy that threatens it; it is the fact of having a subsidy, which gets bigger and bigger as time goes on, that threatens that activity. We see that in every case all over the country.
Once again the principle of subsidy has been accepted, it is all too easy to see it increased to balance increased costs, instead of pressure being applied to reduce those costs. So it is highly desirable to tie subsidies, if they really are essential—as they are in some cases—to some clearly identifiable objective. A general wish to reduce the charges made to the public simply to obtain electoral advantage does not satisfy that principle.
Many people—and this has been pointed out by other noble Lords—can well afford to pay the full costs of transport. If they consider the cost is too high then they should put pressure on the authorities to make the transport activity more efficient so as to obtain better value for money. That is a healthy pressure and leads to better value for money, more transport facilities and not less. If other people cannot afford to pay the full costs—the old, the young, the blind and the disabled—then subsidies should be concentrated on that aspect. The provisions of this Bill do not interfere with those concessionary fares, as the noble Lord, Lord Bellwin, has already pointed out. The Bill does not prevent or interfere with those subsidies in any way at all.
Lastly, there is the effect on local rates. There are two aspects of excessive rates. First, there is the general spiral effect to which the noble Lord, Lord Boyd-Carpenter, has so eloquently drawn attention. The effect of high rates is to drive businesses and people out of the town, city or metropolitan area, leading to fewer people to share the burden, to higher rates and so on in a very vicious spiral, leading to the type of financial crises that we have seen in New York City.
Secondly, there is the serious effect of higher rates on business costs generally. Rates are a direct cost and a heavy burden on industry, particularly on small companies, on newly-formed companies struggling to establish themselves and on those in difficulties because of the recession. It is quite a different type of burden from that of taxation because rates have to be paid whether a company is making a profit or not, whereas tax is only levied in cases of profitable businesses. Therefore, it is essential to reduce the burden of rates if we are to maintain and create jobs as quickly as possible.
Again as has been pointed out, industry has no vote in local elections and therefore its position must be protected by Parliament. Today, as never before, the creation of new jobs is of the utmost and highest priority. A major contribution to that is to make industry more competitive—through lower costs, and sensible rates that are as low as possible make a major contribution to that end. For all those reasons, I strongly support this reasonable and not very big measure. It gives a better balance between central and local government responsibility, and it still enables any
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responsible local authority to carry out its task effectively.
5.14 p.m.
Baroness Denington: My Lords, let me at the outset make it clear that I fully support the indignation of the noble Lord, Lord Underhill, and others who have attacked the Bill because the Bill itself attacks local democracy and the powers of local government. However, I shall not pursue that theme. When the Secretary of State spoke in the other place when introducing this measure on 15th November last—and the noble Minister Lord Bellwin made the same points when he opened here this afternoon—he said that:
"The Bill has three major purposes … First, it clarifies the law on subsidy support for public transport. The second purpose … is to help improve the efficiency and value for money performance of our public transport systems in cities. The third … is to discourage city authorities from the reckless course on which some of them have been set, with their excessive commitment to high rates … and to ultra-low fares which destabilise our transport systems"—[Official Report, Commons, cols. 41–42.]
It is on the third matter that I wish to try to say something this evening. I do so largely in relation to London because it is the London scene that I know and because I was concerned with, and know something of, the history that led to the low fares policy. I think it would be helpful for your Lordships to understand that.
I am sure that we would all agree that transport arrangements are vital to the economic health of any large, modern city. The arrangements to he made for transport—and transport covers a great many things, it does not cover just public transport—are the responsibility of the metropolitan county councils and the GLC. Long may it remain so, because it is a local matter. The elected bodies are the ones who have the detailed knowledge of their areas and who know that, unless they can keep the balance between road space and the needs of private and commercial vehicles and public transport vehicles, congestion will seriously impair the operation of all enterprises. That particular point is vital, and even more vital than the issue of the rates which is of concern to all of us here.
The Secretary of State appears to have decided that the policies that are now being pursued by the metropolitan county councils and the GLC are motivated to win political popularity and to gain votes; that the councillors are irresponsible and have no regard for the costs or the operational efficiency of their public transport undertakings. That is not so. While I have no sympathy with some of the actions of those who are now in control at the GLC, and do not agree with some of the things that they are spending public money on, I recognise that the GLC cheaper fares policy is a considered and serious contribution to the basic problem of movement in London. Unfortunately, the waters have become muddied by political animosity on both sides. That is a very great pity because we are discussing a vital national matter.
I beg your Lordships to consider the problems that have led the metropolitan authorities and the GLC to bring in the present policies, and the reasons for them. The ever present danger facing all of our cities—and particularly the capital city—is that their activities will be strangulated by the ever-increasing volume of traffic. The challenge is to keep the traffic moving.

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How to do it? All studies in the end bring us face to face with the fact that it is only by reducing the number of private cars on the roads that any progress can be made.
I want to quote figures that were given in 1979, and which have recently been updated, at the International Road Congress in September of that year. They were given by a Mr. Bouladon of the Battelle Institute, a man with an exceedingly high international reputation. He said, when speaking at that international congress, that on the basis of two million registered commercial vehicles it was calculated that if the average vehicle loses the equivalent of only half an hour a day through inability to drive freely without congestion to its destination, the cost penalty to industry and commerce would be around £10 million per working day—or over £2 billion a year. These are staggering figures. I also heard the same figures quoted when I was a member of the South-East Economic Planning Council, which was very concerned about the on-costs of road congestion. Certainly London accounted for a considerable proportion of this figure and I am authoritatively advised that the figure of £2 billion a year should now be updated at least to £3 billion a year.
With all this knowledge, the GLC has been for years and is deeply concerned about the question of road congestion: what to do about it? In the 1960s I was a member of the GLC and your Lordships will remember that the plan then to try to deal with congestion was for extensive road-building and road-widening. Your Lordships will remember the scheme for the three ringways. Only the outer one—the M25—which did not call for the destruction of thousands of homes, ever got off the ground, and it is not completed yet. It was the slogan "Homes before roads" which defeated that effort to solve the congestion problem, which is the basis of what we are discussing this afternoon. It was simply not acceptable to the people of London, and even now it is still difficult to get any road improvement schemes accepted.
I would also remind your Lordships of the very long lead time it takes to get any roads constructed or even altered, and of the enormous cost of road-building. In the 1970s the GLC considered various methods to restrain the use of private cars in order to try to do something about the growing road congestion. I was involved in this. We considered all sorts of ideas. We considered road pricing whereby, as your Lordships will remember, a black box was to be attached to the car which would enable people to pay for the mileage they did, at least inside the congested areas. We considered supplementary licensing which involved, as it were, putting an invisible cordon round London and when people crossed a certain point they had to pay more; they had to have a supplementary licence—which could have been a daily licence—if they wished to come into London. Imagine the checking that that would have involved, with all the thousands of roads that come into London. However, it was considered, examined and evaluated, but it got nowhere. It just was not possible.
The GLC even considered fleets of battery operated little cars for individuals or two people which
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contained a slot meter. They were all publicly owned and available at peripheral car parks. When you had used one, you left it at the end of your journey, or in another car park if you could. This scheme was tried on the Continent, so it really was tried. But, again, it was not a starter.
Having exhausted those possibilities, the number of parking meters was steadily increased; the number of parking spaces was decreased to keep cars out; bus lanes were marked out and operated to try to help public transport. We wanted taxi-sharing. We tried car-sharing—we actually advertised it—but it got nowhere because there was no response. At that time wheel clamps were proposed and, as your Lordships well know, have since been agreed experimentally to see how they work. We got that far. We tried "dial a bus" and so on. These were serious efforts to try to solve this problem of congestion, but the ideas were impracticable.
Now we come to the present policy. The authorities are now trying a new answer, which is to offer inducements to the private motorist to leave his car at home or at a peripheral car park, thus freeing road space. The key to the whole thing is to free road space. There can only be one effective inducement—I know of no other—and that surely is a financial one. If it is to achieve its objective, it must be an adequate financial inducement.
So we come to low fares. If it works, all traffic will be able to move more freely—those who still use cars because they will move faster, commercial vehicles and public transport—because we are trying to free road space. But the private car is warm, comfortable and convenient. So the inducement must be substantial and public transport also has to be pleasant, adequate and reliable. It wants improving. All this is costly, but it is a serious attempt to meet a very serious problem.
We are considering matters that are vital to the prosperity of this capital city of ours and to other major cities. Road space simply must be freed for the sake of commerce and industry. In my view, the costs to them of congestion far outweigh the impact of rates. When I was chairman of the new and expanded Towns Committee I learned that the heavy cost of delays inflicted on the distribution of goods, to which I have already referred, was one of the main reasons why firms left London. Another frequently quoted reason was the turnover of staff in London, staff absences due to illness, staff arriving late, worn out and not in a fit state to start work until they had had a cup of coffee and recovered. People were just tired out with the effort of getting to work. After the firms had moved, I was told by managers that productivity had soared and that it was largely because they now had a staff who arrived fresh for work, were happy, contented, and so on. Another reason was that they could get their goods on the road without congestion, and that of course meant lower costs.
Your Lordships may have seen a television programme just over a week ago on the Bond Street shop closures. All those who were interviewed spoke about their vastly increased rents. Only one person actually mentioned the word "rates"; it was rents on which they were concentrating and which were making them shut up shop. I know that the level of

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rates has risen very sharply, but in my view the Secretary of State attaches much too much importance to that single factor.
I know that I have spoken at some length in an attempt to show the economic importance of fare subsidies and the low fares policy, how it has arisen and why it is there. It is not irresponsible; it is not a gimmick. It is a serious attempt to solve a problem. I have not spoken about the importance of the transport system to housewives, the elderly and people without cars. My noble friends on this side of the House have already done so and those matters will arise on amendments during the Committee stage.
The Secretary of State may have to scrutinise public expenditure and keep it under control—of course, he does; but he also has a duty, as do the local authorities, to see that our cities—especially our capital city, with its vital financial, national and international functions—are able to function satisfactorily in the modern world, even though they are still cut in the mould of years ago with their old system. I am profoundly concerned because it seems to me that there is a grave danger that the Secretary of State will not judge fares issues in the full context of overall transport needs.
Seen in this light, I find the GLC's latest balanced fares plan, under which fares are higher than the Fares Fair original plan, reasonable, but the Secretary of State has already sent the council a letter rejecting it. It appears to me that either he has not weighed the transport reasons behind the policy, or not grasped the gravity of the problems to be solved. If—I should say when—the upturn in our economy comes, bringing with it an increased flow of vehicles to choke our roads, as it is bound to do if we succeed, recovery and prosperity could quickly be frustrated as a result of the present ill-advised policies of the Government.
5.31 p.m.
Baroness Gardner of Parkes:My Lords, I rise to support this Bill, which will remove the uncertainty of financial planning for London Transport. I shall speak mainly on the London aspect as I am a member of the Great London Council. I remember clearly the impact that the Fares Fair policy had on my constituents and the shock caused by the proposed supplementary rate levy of 11·9p in the pound to meet Fares Fair. I have here a letter from a constituent dated 16th October 1981, which was just at the time when the Fares Fair and supplementary rate came in.
"Madam, I called at my local rates department and then at the rates department of County Hall but could not get a helpful reply to my query about the supplementary rates. I went all the way in person because I feel that I cannot put my case clearly in a letter".
I telephoned this lady and arranged for her to come into County Hall because she was really quite distraught. When she arrived, I arranged for her to meet the chairman of the London Transport Committee, who is still the chairman today. He was most sympathetic but regretted that there was nothing at all that he could do to help her, and he admitted that the elderly ratepayers were gravely disadvantaged by the supplementary rate and the increased rate proposal which was to follow the following April.
This lady was living in a bedsitter in my constituency. She was trying to save to leave London, mainly
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because of the expense of living in London, but her savings were inadequate for her to purchase anything outside London, and the small funds that she had meant that she could not seek a rate rebate. She was trapped by the rate increase, and she gained nothing at all from Fares Fair or any fare reduction as she was already the holder of a free bus pass. She hardly used the Tube, but at that time the fare on that was 10p for elderly people. Most elderly people in London found themselves faced with a sharp rise in rates to meet the revenue support for the London Transport changes, without any benefit.
I should like to comment on a couple of other letters I had of the same type. I just picked out a few at random. I had dozens of letters from my constituents. This one says:
"As a ratepayer, I am incensed by what the GLC are doing using my money to further their own ends. I trust you and your supporters will be able to curtail the apparent misuse of our money".
Remember, these letters were all related to the Fares Fair policy.
The next one:
My family is just one of thousands who will derive no benefit whatsoever by the lowering of London Transport fares but are called upon to pay £55-plus for supplementary rates for the benefit of others, many of whom are non-ratepayers. The fairest way to decide if the majority of ratepayers"—
and she underlined that—
"were in favour of this huge increase in rates would be to have a referendum. A compulsory imposition which, I might add, I can ill afford".
That was her reference to the present rates.
Others were perhaps more significant because they were not just on a personal line. This one, apart from talking about dismay and shock, says:
"The extra burden this will place on me as a house owner is bad enough, but for my company the increases will mean an additional £50,000 per annum. Such swingeing increases cannot be sustained and will almost certainly cause redundancies adding to the already high unemployment figures".
The next one is from a small printing business employing 40 people:
"We have been fighting desperately to hold costs down in order to survive and protect jobs".
He goes on on the same lines. I shall not go through any more but I think it is interesting for your Lordships' House to hear these genuine letters which people sent at that time.
My constituency is at the end of the London Transport system. I should like to emphasise a point that the noble Lord, Lord Boyd-Carpenter, made in his speech that of course we have the direct evidence of the vast increase in commuter traffic because they all arrive at the end of the Tube line, and in fact my residents had great problems because they restricted access to all the streets. In fact, there was a series of letters about tire hazards.
The noble Lord, Lord Tordoff, is not here at the moment, but I think that his view that this Bill is a vendetta against the Greater London Council is wrong. I cannot accept that. This Bill is designed to protect ratepayers, and I welcome it for that reason. Clause 3 of the Bill calls for planning three years ahead, which is a most desirable situation. Clause 4 will confirm the maximum permitted revenue grant and enable the GLC to budget on the basis that such

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ratepayers' monies may be properly spent on London Transport. Clause 5 confirms the proper sage of this amount.
The removal of the present uncertainty, which necessitated the recent friendly action between London Transport GLC, must be to the good of London ratepayers and passengers. I would emphasise that there are distinctions. Some people are both ratepayers and passengers; many are in only one of these categories. The emphasis in this clause on the need to achieve a proper balance between the needs of ratepayers and of transport users is welcome indeed. This very day the Conservative spokesman on the Transport Committee of the Greater London Council is moving at the council meeting a reference back to the Transport Committee, asking that the presently proposed £230 million revenue support grant, now reduced in accounts I saw over the weekend to £210 million, be reduced to £115 million, and demanding:

"1. The preparation of a scheme of selective fare reductions, simplification and integration at a gross cost in 1983–84 no greater than £40 million (equivalent to approximately a 10 per cent. fare reduction in a full year).

"2. Productivity gains of at least 2 per cent. over the previous year—that is, savings of £15 million.

"3. Reduction in fraud losses of at least £10 million.

"4. Sales of surplus property and assets of a further £10 million.

"5. A minimum operation of 162 million bus miles and 28½ million train miles in 1983".

I would mention here that the transport supplementary grant from central Government is £67 million this year, up from £55 million last year. I would emphasise that the figures that I have just pointed out to your Lordships in terms of the reference back can be justified. In the last fiscal year, 1982–83, the revenue support for London Transport had a deficit from the previous year in the Fares Fair situation of £105 million. That was a once only expenditure and the revenue support, including £25 million from 1st January to 31st March this year, was £94 million. So that made the need for last year only £199 million. For the fiscal year 1983–84, continuing the same amount of support net of the deficit, we carried forward the £94 million; plus 5 per cent. increase in cost of £35 million makes it £129 million. Plus the net cost of 10 per cent. selective fares reduction from 1st June 1983 would be £25 million, making a total of £154 million.
Savings can be achieved, as I have just mentioned, first on a productivity increase of 2 per cent.—£14 million; a reduction in fraud losses—£10 million; reductions in bus services as shown in the budget, 3 million bus miles, that has been agreed by both Conservative and Labour groups—that would save a further £3 million. Reduction in national insurance surcharge cost to London Transport—£10 million; increase in the old age pensioners' grant—£2 million. That gives a saving of £39 million and brings the total expenditure down to £115 million, with a selective fare reduction of 10 per cent. That comes within the limits of the Bill and shows clearly that it can be done.
It is also worth pointing out that when the supplementary rate was outlawed after the Fares Fair court case, the GLC recouped the total cost from the ratepayer in one year, although it could have been done over many years; and so it had that money in
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hand this year and could have used it actually to cut the rate, but that was not done.
The pre dministration at the Greater London Council is cerned with the redistribution of resources. members elected and responsible for the budget of £897 million have no experience of wealth creation and little appreciation of the difficulties that its policies cause for the managements of large businesses employing people in London. If it did, it would realise that the rate burden is destroying jobs in the capital—the jobs it talks about wishing to create. My noble friends Lord Boyd-Carpenter and Lord Caldecote remarked upon the rates burden and its effect on industry. I would emphasise that.
The chairman of the GLC finance committee recently attended the meeting of the women's committee on which I happen to serve. That committee has currently allocated the spending of £7 million in the coming year. He congratulated the chairman of that committee as being the council's best "freer" of funds. I did not know that word. While I found the phrase a new and interesting one, I knew exactly what he meant. He means that that committee is giving grants to almost anyone who applies without the detailed consideration that such grant applications should have. Minority members of two parties have had to complain repeatedly about not receiving papers in time, and at a recent meeting actually declined to consider such applications proposing grants of many thousands of pounds because the papers were given to members at 10.20 a.m. for a 10.30 a.m. meeting.
As the United Kingdom representative on the United Nations' Status of Women commission, I am a firm advocate of improving the situation of women here and round the world, but I do not believe that handouts without real knowledge or understanding, or any proper financial consideration, is a way to do this. This careless use of ratepayers' money is to be deplored and it is in complete contrast to the very effective use of the United Nations' voluntary fund—which has done so much to help women in the developing countries.
Lord Mishcon: My Lords, I hesitate to interrupt the noble Baroness, but if she would kindly be seated for one moment I should like to ask whether it is in order for her to be dealing with voting on women's funds in a United Nations association on the Second Reading debate of the Transport Bill?
Baroness Gardner of Parkes: My Lords, I take the point of the noble Lord, Lord Mishcon, and I thank him for it. I am quoting that committee because I happen to be a serving member. The chairman of the finance committee congratulated that committee on being a freer of funds. That is the chairman who is responsible for deciding what monies are given to London Transport Executive. That is the relevance of the matter.
Lord Boyd-Carpenter: My Lords, will my noble friend allow me to intervene? Is it not perfectly in order for my noble friend, in dealing with irresponsible handling of public money by a particular body in this country, to contrast the careful handling of it by another body and so show what could be done if the body in this country were responsible?
Lord Mishcon: My Lords, before the noble Baroness resumes her seat, if, indeed, we all indulge in speculation of this kind in regard to various matters other than transport, your Lordships will find themselves here beyond midnight and not terribly interested in the discussions which are taking place.
Lord Boyd-Carpenter: My Lords, that is not a point of order.
Baroness Gardner of Parkes: My Lords, I think it is important, in terms of the remarks of other speakers earlier in this debate upon the autonomy and democracy of the elected local government system, to realise that although the number of members is 48 to 44 on that authority, all committees are on a ratio of seven to three or seven to four. That destroys the argument that local government is working on a fairly democratic basis.
However, to turn on, the need to protect London ratepayers is very important; and the ratepayers do not seem to be very important to the present administration. Is it surprising that, having seen how carelessly funds are considered, I am convinced of the need to protect London ratepayers in this Transport Bill? In inner London, the Greater London Council and Inner London Education Authority precept for the coming year is 117 pence in the pound. Under the previous Conservative control the GLC precept was 18 pence and is now 39·9 pence.
Let us now look at the effect of rate rises right here where we are, in the City of Westminster. In 1982 there were 19 empty business properties with a rateable value of over £100,000. The rates payable on these properties were about £4 million. At the 50 per cent. present rating level which the authority can collect, this represents a loss of about £2½ million, close to £3 million. Many firms have already vacated, and I have here a list of such names, including the 19 over the £100,000 value, who have already vacated their premises. Other announced moves are from Blue Circle, Phillips Petroleum, ICI, Esso; and possibly your Lordships saw this week in The Sunday Times the statement that more and more companies are moving out of London and, further, that there is not a single company of substance that is not considering leaving this capital.
I must say that I consider this to be directly related to the burden of rates which is now becoming such a major factor in London. The city treasurer of the City of Westminster presently estimates a loss of revenue in the last year of £27 million because of the empty properties. The present estimates of lost rates vary, for just the major commercial blocks, between £5 million and £11 million, but it is reaching the point when Westminster Council will be forced to raise their own rate to compensate for the loss of revenue base as these ratepayers leave London.
Some of the big firms leaving now appear to be doing so on the basis that they are getting out while they can. The fear now is that these offices will not be relettable or resaleable to anybody else, and certainly this vast increase in unoccupied property in the last year is significant. My noble friend Lord Boyd-Carpenter said in his speech that this would be happening. I confirm that it is happening. For anyone
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in the GLC areas this year, the GLC precept has gone up from 34p to nearly 40p, and of course people in the Inner London area are worse off because that has gone up from 71p to 77p in the pound.
Think what that increase in rates means to the largest ratepayers in Westminster. Marks and Spencer, for their offices in Baker Street, and BP in Victoria Street, are each paying over £3 million a year in rates now. The GLC and ILA increases alone will represent an increase of over £250,000 for each of those companies. Esso and Shell pay over £2 million a year; Trusthouse Forte and Mobil, over £1¾ million; Selfridges, C and A and John Lewis, £ 1¼million; the Savoy and ICI, over £1 million; the Abbey National in Baker Street, Blue Circle and Debenhams have been just under £1 million but now, with an increased GLC precept of £78,000, they will have the doubtful honour of joining those companies who are paying over £1 million for their year's rates. The Hilton will be lucky to be just below the £1 million league; their increase will be only £70,000 on the rates just announced.
The argument put forward so often in this debate—that the ratepayers can register their protest through the ballot box—does not apply. None of those organisations paying that amount of rates has any say in the electoral system. Everywhere one looks in London today one sees the "To Let" boards going up, and there would be more without the benefit of all the EEC offices which at least have been making a home in the centre of London.
But the proportion of the Westminster City rate paid by business is falling; it is 84 per cent. this year whereas last year it was 89 per cent. This shows the gradual transference of rates from the commercial to the domestic ratepayer, and domestic ratepayers are finding themselves very hard hit. The rating situation is undoubtedly driving businesses—and, with them, jobs—out of London. Westminster Chamber of Commerce pays rates of £1,000 for each person it employs. A senior partner in Edward Erdman, a leading estate agents, whose personal responsibility is for commercial property, informed me that their clients are now often more worried by the rates payable than the rent. In the past rates were not a factor even to be considered. Today, the rent is a known factor, probably not varying for some years, while the rates are unknown and constantly rising.
Lord Mishcon: My Lords, the noble Baroness will, I hope, take my word for it when I say that I would never want to be discourteous to her. But we have now had a speech from her, and I appeal to the Front Bench opposite, now in charge of the conduct and guidance of the House, to say whether the whole of the last 10 or 12 minutes of that speech, in which names of estate agents have been quoted and names of public companies and so on given, are in order on the Second Reading of this Bill. It is a precedent which, I say with respect, is extremely bad and may be copied by all Members of this House.
Lord Boyd-Carpenter: My Lords, before my noble friend Lord Bellwin answers that, may I ask him also to bear in mind, having paid great attention to what my noble friend Lady Gardner has been saying in the last 10 minutes or so, that she was justifying the

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general statement about the high level of rates with specific hard evidence. With respect to the noble Lord, Lord Mishcon, surely specific hard evidence of the actual effect of the rates burden, which we are discussing, is of supreme relevance, and perhaps of decisive importance, to this debate.
Lord Bellwin: My Lords, as one who has this last eight days sat on this Bench for probably six hours at a time on a number of occasions, noble Lords would, I think, expect me to be sympathetic to the basic point made by the noble Lord, Lord Mishcon. However, in all fairness and equity, noble Lords may also agree that I always try to listen to speeches of any length from either side without interference, relying on the good judgment of those concerned to bear in mind that a debate is taking place. I am sure that in this case the point made by my noble friend Lord Boyd-Carpenter is fair. Having said that, I am sure that my noble friend Lady Gardner must be nearing the end of her very interesting speech.
Baroness Gardner of Parkes: I am obliged to my noble friend and, my Lords, I assure the House that I have not much more to say. I shall not name him—if the noble Lord, Lord Mishcon, would rather I did not—but a different estate agent has published a research survey showing the change in the ratio of rents to rates. Whereas in Westminster in 1973 the rates were only 17 per cent. of rents, they are now 44 per cent; and in Islington, whereas they were 18.7 per cent. in 1973, they are now 66·7 per cent., which is an increase of more than three times.
Rates are highly relevant to this debate, as transport revenue support can cause drastic rate rises. Consider the Fares Fair policy and how that cost 11·9p to implement and 5·4p to take out—and then tell me that rates are not relevant! As rates rise and businesses are forced out of London, the rate base is eroded and those remaining in the capital must bear ever higher rate burdens, and that forces more firms to move out in the spiral mentioned by the noble Viscount, Lord Caldecote.
I wish to make it clear that I wholeheartedly support the use of zonal fares, ticketing for regular users, incentive pricing and other constructive and innovatory ideas. The elimination of fraud and the introduction of new and constructive ideas in transport are essential, and I earlier set out the exact pattern of finance which, if operated through London Transport, could achieve savings with an improvement in transport and a reduction in costs and fares. I believe there is room for that, and that is where this Bill is good.
I must take issue on one point with the noble Baroness, Lady Denington, in that, when she talks about congestion on the roads and the difficulty with roads, I must tell her that, during the time she was a member of the administration at County Hall, that administration set its face against a good roads system for London, and the effects of that are certainly being felt today and are having their impact on transport. If cars cannot get along the roads, nor can buses. Having been a planning vice-chairman on a committee, I assure the House that we found that buses could not
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even get into the bus lanes because the planning of the roads and the bus lanes was so bad. Therefore, London needs a good roads system and it certainly needs this Bill to make a balanced and careful provision for Londoners and for better transport.
5.59 p.m.
Lord Mountevans: My Lords, in many respects I welcome the Bill, but I have several reservations about what it will eventually do to both the provision and utilisation of public transport in London and the metropolitan counties. While the Government are to be applauded for seeking to redefine by legislation a framework within which the metropolitan transport services must be prudently managed and funded, the discipline and methods which they are inflicting on the local authorities and transport executives concerned may lead eventually to a less satisfactory provision of service. That in turn, I fear, will lead to less utilisation, higher deficits, worsening services, further declines in usage, and finally the need for reconsideration of higher subsidies from central or local funds, which the Bill seeks to limit. Whichever party forms the next Government, I fear that in a couple of years' time we will find ourselves back here debating the falling usage and worsening financial position of the undertakings that we are discussing today.
This afternoon we are in broad agreement that there is a need for public transport in our major cities. But the Bill that we are discussing may make such transport less attractive to captive or potential users on grounds of perceived cost, frequency, convenience and reliability. If it does, then the Bill's provisions, it seems to me, may defeat its aims.
As the noble Lord the Minister has told us, the Bill's antecedents are the Transport Act 1968 and the Transport (London) Act 1969, as interpreted in cases affecting London, Merseyside and the West Midlands. In response to the uncertainty created by these cases it gives the Secretary of State powers to review three-year plans submitted from the local level and to define the degree of support which may be provided, as specified in the protected expenditure levels. In that the Secretary of State is thus seeking to prevent local authorities from using ratepayer and taxpayer funds to subsidise inefficiency, this is a step which should be welcomed by taxpayers, as well as domestic and commercial ratepayers alike.
As an aside in this context, it would be interesting if the noble Lord the Minister, when he replies, can give some indication of how much rate income from domestic ratepayers in the metropolitan counties is genuine rate income from the ratepayers' own pockets, and how much constitutes central funds being "laundered" through the welfare system on behalf of those who find themselves unable to meet their rate demands, for one reason or another.
Returning more specifically to the terms of the Bill, I welcome the requirement that it imposes on the local authorities concerned to review both management structures and operations of their undertakings, as well as the requirement that passenger transport executives seek tenders to carry out certain of their activities where sub-contracting would be appropriate. Clause 8, however, seems to me to be less specific than it needs

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to be if the Secretary of State's aims are to be achieved. Any equation which combines the words "as they" (here it refers to executives) "may determine to be appropriate"—I quote from Clause 8(1)—with the words "if it appears to them" appropriate, can, I believe, lead to a whole number of options and answers, none of which will quite achieve what the Bill is set out to do.
Thus far I have given a welcome, albeit a qualified one, to the Bill. I am however worried that, because of those acts and judgments which have given birth to it, the Bill embraces both London and the metropolitan counties. I am not an expert on all the undertakings which are governed by the Bill's proposals, but I am a Londoner, and, as a believer in planned and coordinated local transport, I have followed developments in Tyne and Wear for a number of years.
Although as a Londoner I am aware of the magnitude of the task facing London Transport and impressed by the solutions that it is seeking to achieve, I feel that there are a number of improvements that could be made in London Transport's operations without impairing its efficiency. Do we really need to have a number of buses designed for one-man operation but in practice operating with both drivers and conductors? Do we need to have guards on Underground trains, when many systems in the world have gone over to one-man operation? In fact, it has been proved that systems can operate without even the man at the front, but he is there to preserve public confidence. Is it really necessary to check our tickets both where we start our journeys and where we finish them, not to mention from time to time in between; let alone to collect the tickets? Is it really necessary to have bus routes which for long distances in central London run parallel with the Underground system?
All those factors seem to me to be symptoms of ratepayer and central funds being used to subsidise inefficiency, as is the absence of a transferable ticket, which would reduce the number of fare transactions and thus the manning requirement, so improving productivity and reducing the need for subsidy, from whatever source. The aims of the Bill, in so far as they require constant review of operations, are to be applauded.
But there is, on Tyneside, another side of the coin. None of my perceptions relating to London applies in Newcastle, where every possible effort has been made to minimise the manpower requirement and integrate the system. Almost none of the stations is manned, though they are supervised by closed-circuit television. Buses run to points on the Metro network, thus complementing the latter rather than duplicating it. Usage of travel cards is strongly encouraged, and embraces substantial discounts for off-peak travel.
The policies adopted and the efficiency of the system are such that people come from all over the world to examine it. Despite external factors, usage is increasing, and figures given to me recently suggest that fare income as a proportion of total cost will rise slowly, but steadily, in the period to 1985–86, when it will be very close to half the total cost of the undertaking. That is in spite of external circumstances such as the very high level of unemployment prevailing on Tyneside.
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It concerns me that the Tyne and Wear system, which I believe to be a model of its kind, is being tarred with the same brush as is being used on some of its less efficient brothers. It worries me even more that the provisional figure given in the White Paper for revenue grant in 1983–84 was so misestimated by the Department of Transport that the county council has already been given consent by the department to use £7 million of reserves to increase the grant originally specified, which was in any case the lowest given to any of the metropolitan authorities. In my opening remarks I was worried that although the Bill's aims were laudable, its methods were of less merit. Is this renegotiation with Tyne and Wear a pointer to the future and an indication that in trying to get things right, the Bill is going to get them wrong?
6.6 p.m.
Lord Sefton of Garston: My Lords, before I speak about the Bill I should like to deal with two points that have been raised in the debate, and I shall do so as briefly as I can. First, there was the point raised by the noble Lord, Lord Boyd-Carpenter, who ascribed to this part of the House a statement that the Bill was a massive attack on local government. I do not think that the words "massive attack" were used. The words used were, "This is an attack on local government", and the noble Lord nods his head in agreement, and—
Lord Boyd-Carpenter: My Lords, the noble Lord can refer to me. He cannot put words into my mouth, nor can he infer from the movement of my head something that did not happen.
Lord Sefton of Garston: Well, my Lords, I am not quite sure what that means, and I am not quite sure what a nod of the noble Lord's head means, but it is a trick as old as the hills, and older even than this Chamber, that one should first of all put up an aunt sally, and then knock it down. No one described the Bill as a "massive attack" on local government; they described it as "an attack" on local government. It is a step along the road that this country, and in particular local government, sees all too clearly. It is one more step towards the control of our economy and our affairs by a bureaucratic state.
Knowing the noble Lord, Lord Bellwin, as I do, no one will tell me that his heart is really in the Bill, or that the Secretary of State produced the Bill. The Bill is a product of discussions in the transport field, and, as a previous speaker said, it stems from the desire to make political capital out of the animosity aroused in the battle between the Greater London Council and other parts of our community. That is the real reason for the Bill.
The Bill is no more necessary, and no more justified, than was the Police Bill 1964, which took the first small step along the road which ultimately will remove police powers completely from local government. That will be the net effect in the end. It is not our job here to debate small items; it is our job to debate the principles of a Bill. The principle of this Bill is that one way or another it will reduce the powers of local authorities to take decisions in a field which, until now, has quite rightly and legally been theirs. That will be the effect of the Bill.

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I want to refer to one other point. I have heard it mentioned previously, especially in this House. I have heard it in other places, too. I have heard it in public meetings, I have heard it at the CBI, I have heard it wherever private enterprise rears its head. I have heard the old, hoary story about the disfranchised business ratepayer. Why is he disfranchised? He lives in the country, somewhere or other. He lives in an area in which he can be, and is, a local authority elector. If he so wishes, he can in fact take part in the local government in that area. Why are such people disfranchised? It is because they consider themselves too important, too busy, or they think that local government is so despicable that they are not bothered to become interested in it. That is the real truth of this disfranchisement. There are many people in local government, thank goodness!, who are extremely busy businessmen. They often stand up in almost every local authority and, in effect, say, "I am a business man and that therefore qualifies me to be considered more intelligent than anyone else". They could follow the route and, by the very nature of things, if they so wished they could play a very important part in the life of the GLC. If not, it is their choice. So let us not be making any more excuses.
One of the worst features of central decision-making is that those people who are aggrieved by the decision never really know the reasons for the decision. When these PELs are fixed, will anybody openly discuss with the local authorities the reasons for such limits?—of course not. It will come down from on high, the Secretary of State or the noble Lord responsible in this House will receive a brief and he will stick to that brief. There will be no real discussion. No real reasons will be given, and no real reasons could be given for a projected expenditure level in local authority transport; the task for Whitehall would be so enormous that it could not be done.
I will give an example. In the early 1960s I was associated with the noble Lord, Lord Marsh, and members of the British Railways Board, as the leader of Liverpool City Council, at the instigation of central Governments, Tory and Labour, in laying down a rail infrastructure in Merseyside to suit the Merseyside transport needs. The fact that when it was completed British Rail did not come up with the right coach, and on the opening day the coach broke down, is another example of the fact that we in local authority, particularly in transport, do not need lessons from members of the British Railways Board as to how to run an efficient undertaking. The noble Lord is not here at the moment, but that will be on the record and that satisfies me.
Having built the railway, there were, of course, reasons for it. There is a peculiar circumstance about Merseyside which does not apply anywhere else in the country—or almost nowhere else, except perhaps in Hull. Merseyside is an intensively developed area divided by an estuary a mile wide with the highest tidal rise and fall in the United Kingdom. It poses a barrier. It was necessary to construct tunnels to cross that barrier. We did it; we did it at great expense; we did it with the assistance of the Government; and we extended it into a railway system which I consider to be one of the best urban railway systems in this
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country. However, it posed problems. Just as the international gardens now being laid down on Liverpool's ex-docklands are going to cause problems in the future with regard to maintenance, so did that rail system.
But there were other problems in Merseyside because of the few crossings over the Mersey. This meant, in effect, that all the transport services in Liverpool on the northern bank of the Mersey were conducted in the form of a half wheel and all came to the hub of that half wheel. That poses problems in transport that cannot be seen anywhere else in the United Kingdom. In order to fit a projected expenditure level, one would have to know what problems that posed. Could anybody in Whitehall understand those problems, let alone estimate their enormity?
As Liverpool City Council, we had to take a decision many years ago when, because of necessity, we were compelled to move people out to the perimeters (particularly those in the northern part of Merseyside) to Kirkby and Speke, Everton and Bootle. We had to take that decision as the transport authority in Liverpool. Do we now penalise these people that we moved out from the centre of Liverpool and, on top of fairly high council rents compared to what they were paying, now make them pay higher fares on the basis of the standard charge per mile in order to get back to their place of work or to the centre of their community? We decided, as Liverpool City Council, that we should not penalise them in this way but that we should subsidise the longer-distance fares. I think that that was absolutely right.
I do not expect that anybody in Whitehall would appreciate that problem, or even that they could appreciate that problem. Yet, when fixing the expenditure limit, if they are being fair they will have to take it into consideration. We have proof. The projected figure for next year is £40 million. The courts have just decided that it was perfectly reasonable and perfectly legal and well within their rights to have an expenditure of about £54 million—which reckoned in relation to this year will be about the same sum. So already the Government are on the wrong foot. The Government have said that £40 million is the right figure; while the courts have already decided that Merseyside's figure of £54 million is right. So already mistakes are being made. One could not possibly compare the situation in Merseyside with the situation in Manchester, where it is possible to organise through routes, routes right through the city centre. You cannot do that in Liverpool unless you make the buses amphibious; and that is not a possibility that I view with any satisfaction.
If we are going to be fair, will somebody in Whitehall or the Minister of State take into consideration the hidden subsidy that exists in London which nobody else gets and most of which is paid for by the ratepayers as a whole? That is London weighting. They talk about the expenditure on rates being a burden on the business community in London. One of the biggest burdens on the business community in London is the paying of London weighting; and the Government are the biggest paymaster. They must pay an average of £1,200 a year for every typist and office worker in the city centre. That could lead us, of course, to another

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argument about whether they really should be working other than inside the London city centre. The argument advanced by the Government is the need to control global expenditure in the field of transport. This is in line with a principle that I agree with. The Government should have control of the national economy.
Can anybody seriously believe that a subsidy of some millions in the locality will affect the national economy when it is really only a transfer from one pocket to another pocket inside the locality? It is a transfer, admittedly, from ratepayers to fare payers. But it has never had such an abominable effect that we have had to begin to undermine the whole system of local government relationships with the centre. Is it really going to have that effect? Of course not. It is fallacious to suggest that it should. To me, that is the most important part of this Bill and the most dastardly of its proposals and implications.
What are we going to ask the courts to decide? When I first came to this Chamber I was fairly cynical about the establishment existing down here. I am still cynical about a lot of it, having seen some of it working and having seen the number of times that people stand and say the same thing over and over again. But there is one thing I have learnt and one thing that I have seen in practice that I value very highly, and I have always valued it. That is the independence of the Judiciary. Whenever I have heard noble and learned Lords in this House speak, it has taught me that there are things in this long tradition of ours that we must value. We should never impose upon them the burden of settling our political squabbles. I see agreement from my Front Bench. My goodness! we are making advances. That is nearly enough to make me sit down, but I do not want to sit down. I could go on for a long time outlining the problems of Merseyside. I could also retail the numbers of times in which it has had disagreement with Governments over housing, transport and many things, all of which will come up, I hope, at the Committee stage—that is, if I have sufficient calibre to stick it out.
We are not really asking the judges to decide matters of principles of law under this Bill. The principle involved is whether or not there should be a subsidy for public transport. That is the principle. Everybody agrees that there should be a subsidy. If the central Government say that it shall be £40 million and give no reasons, and if the local authorities say that it should be £58 million, then we leave it to some aggrieved ratepayer to bring the courts into the maelstrom of politics and opinions on transport policy. Then the judges will be asked to consider whether this figure is justifiable. The reply from the Front Bench will be, no. The courts will not be asked to decide the balance. The noble Lord, Lord Bellwin, quoted Mr. Justice Kerr, who said, "Don't ask the courts to decide the balance".
So the Front Bench will have to come up with another reason, and the reason will be that the courts will be deciding only whether or not the expenditure on transport takes into consideration the interests of ratepayers in accordance with the time-honoured practice of local authorities. That is what the Front Bench will say. Therefore, why bring it into the Bill? Why write it into the Bill on top of the expenditure
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limit? It is already there. Already any ratepayer can take the matter to the courts at any time and the issue will then be clearly seen to be an issue of complying with the accepted practice of local and central government. But, by deliberately putting that legal requirement or legal possibility on top of this particular fixing of the projected protected expenditure level, the Government are quite deliberately bringing in the courts to decide our political arguments.
I consider that to be one of' the most important issues relating to the Bill. That is a principle that this country has for too long accepted too readily, and it usually arises because, as I say, the advice coming to the politicians is advice from bureaucrats who have an interest in the preservation of their activity. We get advice from everybody. We get advice from the police service, but really there cannot he interference with the police service by local authorities! Is there anybody in this Chamber—is there anybody in Parliament —prepared to stand up and say that our police force is less corrupt and more efficient than it was under the old watch committees? I would not say it and I have had 30 years' experience stemming from the old watch committees. I saw the Police Bill in, and all the rest. Is anybody going to say that British Rail is a very efficient undertaking or that the electricity undertakings of these days have improved out of all recognition? Why is this, my Lords? It is because these services were taken from the field of local authorities. Will anybody say that in hospitals it is now possible for patients to make a bigger impact on the hospital administration than they used to under the local authorities? Of course they do not. Do we get the same service in our health services that we received under the local authorities? Of course we do not.
We are not seeing a massive attack upon local government; this is a slow, insidious form of attack that springs from the fact that the bureaucrats have too much power in this country. I can only look forward to the day when we have somebody on the Front Bench opposite, and on the Front Bench on this side of the House, who has the guts and the courage to stand up against the bureaucrats and defend our local democratic system—and local government is the very mainstay of' that system.
6.25 p.m.
Lord Evans of Claughton: My Lords, because of an accident of' local government it was normally my unfortunate lot in our old days on Merseyside County Council for me to speak before the noble Lord, Lord Sefton, and have all my delicate and carefully constructed arguments smashed to pieces in a subsequent speech. I was rather looking forward to following the noble Lord this evening and possibly getting a little of my own back, but I find myself in absolutely total agreement with everything that he has had to say. This enables me to cut down what was going to be about a 40-minute speech to around four minutes. May I say that there is no one in your Lordships' House who is better qualified to speak on the subject of transport and local government than the noble Lord, Lord Sefton? As he told the House, he was deeply involved in the problems of Merseyside. The only quarrel that we had with him about transport was that he imposed the bilious green Liverpool buses on

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Wirral, which had nice blue ones, and on Southport, which had nice red ones.
I agree entirely that this Bill is just another insidious step down the road of destruction of local government, independence. I do not suppose that the noble Lord the Minister will expect me to say anything else, because I have said it to him so often in debates in your Lordships' House when the Local Government Planning and Land Bill and the local government finance Bill were being pushed through the House. Now we have this piece of legislation. It is one of a series of pieces of legislation which emasculates local government in one way or another.
I must say here to those noble Lords who have made a great issue—one might say, at exhaustive length—about the imposition of rates that the remedy is not to attack local government but to reform the system of financing local government. That is the answer there. I would remind the Government that in their 1974 Manifesto there was a clear commitment to abolish the rating system. That disappeared in the 1979 election manifesto and has now been kicked out of the window.
If I were not sensitive to the fact that your Lordships have been listening to a lot of speeches, I should read you selected pieces from the report of a committee on the reform of local rates of which I was chairman and which reported last September. The House will be delighted to know that I have not brought a copy of the report with me. But the gravamen of its proposals are that the local rates should be abolished and replaced by local income tax. The important aspect is not so much the means by which you raise the money, but that it makes local government much less dependent on national government and the present system and thereby encourages it to remain independent, and goes some way to solve the problem—which several noble Lords have rightly mentioned—of the strangulating effect that the payment of rates has on many enterprises.
Everyone recognises that the problem of commercial rates is a very difficult and a separate one which could be partly resolved, I expect, by charging for services rather than by charging on the basis of rateable value. That would of course raise much less in terms of cash than the present system does. Possibly a site value taxation system might be considered. Quite frankly, I think that it is wrong and ill-advised of noble Lords on the Government side to blame all the problems of high rates onto local government and local government services. On the whole, as I have often said in your Lordships' House, local authorities—with exceptions, of course—have been extremely careful in husbanding the resources of the ratepayers.
As the noble Lord, Lord Underhill, said, one of my strongest criticisms of this Bill relates to the way that it has been brought in almost surreptitiously for discussion. To have the White Paper and the Bill on the same day, and then to have the imposition of the guillotine in another place, seems both to be acting in undue haste and to be making it perfectly clear. I hope, to those managing the Government's affairs here that we should have a very good—and, unfortunately, long—time to discuss what is a short Bill but an
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extremely important one which in my opinion needs substantial amendment.
It has been said that one of the aims of this Bill is to introduce stability into public transport planning. I believe that in fact what this Bill does is precisely the opposite. It introduces a prospective expenditure level as an additional hazard, not as a way out. If legislation were needed, it should have been directed at making court appearances less likely. I suspect that what this Bill will do is to make court appearances and expensive court actions more likely.
It does succeed, as no one will be surprised to hear, in giving the Secretary of State more powers to interfere, particularly in the planning and projected expenditure levels. So you have three guidelines for expenditure: TSG, GRE and an overall spending target. Now there is a fourth interference in the form of the protected guideline figure. So I think that interference in transport planning by the Government is going to he suffocating in the future.
I do not need to go over the point which was very effectively made by the noble Lord, Lord Sefton, about the effect it will have on people who have been forced by Government policies to live away from the centres of cities. I think that is a very important point. I had understood that one of the policies of the present Government was to try to reduce bureaucracy; but the Secretary of State has admitted that it will need several more—he has not said precisely how many—civil servants, local government officers and transport officials to carry out the proposed amended system. So it would in fact be quite a significant increase in the public sector bureaucracy. However, at the end of the day the basic criticisms, in my opinion, are the greater interference in local government once again from this present Government, a greater uncertainty and instability.
I must say in closing that if you believe in a democratic system it can be very inconvenient at times, as people like Adolf Hitler found out, if a local authority is Labour-controlled and the Government is a Conservative Government (or the other way round). Until we reach the ideal state of aligning government locally and nationally, democracy at local and national level is very inconvenient. I would suggest that if your Lordships care, as I am sure you do, about the independence and representative nature of local government, we should all be trying to ensure that local authorities do attract a higher quality of person, as the noble Lord, Lord Sefton, said. I remember as a boy that all the leading businessmen, the commercial interests, industrial interests, insurance interests and the shipbuilders, were all on the local council. They made jolly sure they were there, because the local council was very important.
I would suggest, as a final commercial line, that if you do feel as strongly as I feel about local government being representative, you will all be here on Friday morning to vote for the Bill of my noble friend Lord Harris, since that would give local authorities a chance to be even more democratic and representative than they are now. But I think this Bill is based on an incorrect philosophy. I fear it is a philosophy which has been a threat throughout this Government's period of office, and I very much regret it, because I regret the departure of local government.
6.35 p.m.
Baroness Elliot of Harwood: My Lords, we have had a very interesting debate, and I promise your Lordships that I shall be short and, I hope, to the point. I do not often speak on Bills which have absolutely nothing to do with Scotland, and this Bill has absolutely nothing to do with Scotland. But the reason I should like to speak is because I have been a ratepayer in London for 55 years in the same house. There are not many people who can say that; and if I were to tell the noble Lord, Lord Mishcon, the difference between the rates I paid in 1929 as compared with the rates I pay now, I do not think he would believe me. But I dare say that in 55 years one must not make comparisons, since the world is now quite different. On the other hand, I have been and am still a strong supporter of London and of all that happens in London, though I have not actually been on the London County Council.
I agree with the noble Lord, Lord Evans of Claughton, that we all believe in local government —do not make any mistake about it—but the problem arises when local government fails, as it has on this occasion, because the figures that have been given to us by the noble Lord, Lord Bellwin, show that the matters relating to transport have completely altered in the last 10 to 15 years. I think he is entirely right—and I support the Government strongly about this—when he says that something has to he done. It is better to do something which is not too strong or too forceful, as it were, and to do it gradually, than to make what some noble Lords have thought is a great attack on local government. I do not look on this Bill as an attack on local government. If it were, I would not support it. But it is something we have got to do because the figures, as we have had them from the Minister, show that the situation has altered considerably.
We all agree that transport is a subject which must include subsidy; we cannot have transport without subsidy. The question is: How should those subsidies be ordered? I was greatly impressed by the speeches of the noble Lords, Lord Boyd-Carpenter and Lord Marsh, both of whom have had tremendous experience and whose words I thought were of great importance. I admire the noble Lord, Lord Marsh, for saying that some legislation for which he had been responsible when in the Labour Party he now considers to have been a mistake. It is very honest and brave of someone of his standing to say that, and I admire him for it. We have at times to admit when we have been wrong, and we try to get something better.
What we all want is a good transport system: one which is economical and which serves the public. What the public want is value for money. On that, obviously there are a number of items which could be changed. When it comes to the account which we were given just now of the way in which the big businesses and industrial concerns are trying to get out of London, I would have thought that was a very strong warning indeed, because living as I do in Westminster I have seen enormous changes since as well as before the war; and if these great buildings that have been put up in Victoria Street and elsewhere are all going to be empty because the big industries which have moved into those areas cannot afford to stay there, it will be
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a disaster for London. I think it is important that we take some steps to see that these excessive rate demands are kept under control.
I know this is not easy, because otherwise it could have been done before; but it is important that it should be done, and I think the proposals in this Bill—which I will not go over since everybody has discussed them earlier—are very wise and sensible. The fact that we have had such excellent support from people who are most experienced—and I admired very much the account given by the noble Baroness, Lady Gardner, of all that she has experienced, because she is on the London County Council—shows that things are happening that those of us on the outside perhaps do not know about. They are happening, and they are something we ought to try to stop.
I think that this is a very good effort by the Government and I hope that it will be very successful. I do not look upon it as an attack on local government; it can perfectly well work in with local government. I hope that the Minister will have a lot of support, both in the country and in your Lordships' House, during the passage of this Bill.
6.40 p.m.
Baroness Fisher of Rednal: My Lords, I apologise for not being here during one part of the debate. I was present at the opening of it, but I then went upstairs to a Committee of the House. My comments will be mainly to do with the West Midlands. I get a little concerned when people bandy about the word "efficiency" so easily, but never define what they mean by it. To most people who travel on buses, and who do not want to wait in the bad weather, the efficiency of a bus service is measured by its frequency. But there are other factors that one has to consider. Therefore, when that word is used it ought to be defined. I am a bus and train traveller in the West Midlands, where the authorities have integrated transport. It has been very carefully developed there, as well as in the Birmingham area. The local authorities have nurtured and extended bus and rail services between one area and another. That is thought of in the West Midlands as an efficient local transport system.
Therefore, we are concerned when the Secretary of State prescribes the level of grant which a council can make to an executive and which can be challenged in the courts. We in the West Midlands are also concerned as to how the Secretary of State has set a particularly low figure for the West Midlands. The figure of £28 million for the West Midlands is equivalent to £11 per head of the population there, although the average figure approved by the Secretary of State for the metropolitan counties outside London is £19 per head of the population. So we are concerned that there should be that difference and that we should have such a low estimate. Such a substantial difference cannot be accounted for on any ground of reasonableness.
We in the West Midlands have become efficient. All the buses are now one-person operated. I do not say "one-man operated", because there are quite a number of lady drivers in the West Midlands. That has involved trade union co-operation and it works very smoothly. The majority of people now travelling on the buses use quarterly, half-yearly or annual tickets,

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which speeds up operations. Most of the fares are in units of 5p or 10p, although nobody travels for those amounts in the West Midlands. For two stops you pay 20p, but all the fares are now calculated in digits of 5p or 10p so that the traveller knows that he needs only those coins.
As I said, all the buses are of the pay-as-you-enter type and the majority of people have fare cards, so that is an efficient way to run a bus service. The manpower has also been reduced. What is particularly good with an integrated service is that if you go through the centre of Birmingham you will see, for example, a bus that is going to Londonderry. That is going not to Ireland, but to a part of the West Midlands outside the city. The idea was to have services that went from one side of the city to the other, thus avoiding bus terminals taking up space in the centre.
The Minister talked about the reduction in passenger numbers, and we in the West Midlands are concerned about the figures. At Longbridge, they used to employ 20,000 workers, but the number is now less than 10,000, which is reflected in the number of people on the buses. Because of the high unemployment rate in the West Midlands, fewer men and women are going to work morning and night, which must mean a reduction in passenger numbers. I was interested when the noble Baroness, Lady Elliot, said that she did not want to see empty offices in Victoria Street. We have problems in the West Midlands and in the City of Birmingham, where people are living in multi-storey flats 12 or 14 miles from the centre. It is just as important for them to travel from the outskirts into the City of Birmingham, in order to shop and to get the best value for money, as is is to help office blocks in Victoria Street.
Finally, there has been mention of Tyne and Wear and the Metropolitan-Cammell factory. That is a West Midlands-based industry which has produced vehicles for Tyne and Wear. When I was in Hong Kong after Christmas, I found that the transport system there was built by Metropolitan-Cammell. They studied the Tyne and Wear complex before they gave the order to Metropolitan-Cammell. That scheme will be extended further within the next 18 months, so that it goes out to the New Territories where all the people are living in blocks of flats. So we can say that public transport helps not only the people who travel on it, but also our overseas trade.
I am particularly concerned that public transport is always expected to make a profit. We have to accept that, although local authorities may be able to make a profit by providing banquets and civic catering, it is not always possible on other activities, and other factors must be looked at. I feel that this Transport Bill will not provide a better service for local people, and it will do nothing to help those who are compelled to travel by public transport. Therefore, any undertaking has to consider those people in its midst who have no alternative but to use the bus service. They are interested in an efficient bus service and they do not expect wholesale subsidies.
Figures are always being given, and this side of the House is as guilty as the other, as to how cheap items are or how expensive they are. The West Midlands is not a cheap fares authority. One can travel only four
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bus stops for 25p. If one is travelling from Birmingham city centre to the Leyland factory at Longbridge, it will cost 70p each journey. So while we have heard that there will be commercial interests who are not represented (shall we say) and who therefore have no choice but to pay their rates, if fares become much more expensive it may mean that the workers will be asking for an increase in pay to cover their bus fares. I crave the indulgence of your Lordships' House for allowing me to speak although I have not been present for the whole of the debate.
6.51 p.m.
Lord Campbell of Alloway: My Lords, I apologise to the House for not being here to listen to the opening speeches: I was in court, but I do undertake to read Hansard with attention. In these circumstances, I hope that your Lordships will allow me to speak, especially if I confine my remarks to matters of principle.
This Bill is surely not fairly to be seen either as undemocratic, as I understand it has been described, or as an attack on local government, as I have heard it described. Certainly it is limited to the needs of transport in and around our capital city, but surely just the reverse is the case. It is no attack on local government: rather, it frustrates the misuse of the machinery of local government in this sphere. As I understand it, such is its true intendment. The grounds of objection canvassed in this debate cannot be sustained on any reasonable nalysis, as distinct from a measure of preconception. I refer to such matters of principle as the contention that it is wrong for central Government to influence the activities of local government; that it is wrong to have competitive tendering by private enterprise in the interests of reducing costs; or that it is wrong because the Bill fails, according to the noble Baroness, Lady Stedman, to remove private cars from the road, and is in effect a Tory vote-catching exercise—
Baroness Stedman: My Lords, I said nothing of the kind. I did not refer to a Tory vote-catching exercise at all.
Lord Bellwin: I believe that my noble friend meant to refer to the noble Baroness, Lady Denington.
Lord Campbell of Alloway: I am much obliged my Lords. I apologise to the noble Baroness, Lady Stedman. I am afraid that I transposed my notes. I hope that the noble Baroness will accept my apology. I meant to refer to the noble Baroness, Lady Denington, who is not here.
As a Tory, of course I have no objection to any form of vote-catching exercise other than in a Bill. The idea that one produces a Bill in order to catch votes is really wrong, and obviously objectionable. As to the removal of private motor cars from the road, this is something that people have been trying to do for some time, and I gather without very much success. It would not be right to criticise this Bill, as it was criticised, on that ground.
Surely the Bill is to be welcomed as a matter of principle. It affords a safeguard against a certain type of abuse practised upon ratepayers. It secures a

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balance between the interests of transport users and those of the ratepayers. My noble friend Lady Gardner of Parkes has dealt at very great length with the question of abuse of ratepayers, and on that subject your Lordships would not, I am sure, wish to hear any more from me.
From the legal aspect—and I suggest that this is a serious plus for the Bill—the Bill hacks out an intelligible divide through the legal jungle that encompasses the basis of payment for subsidies. On one side of this divide the subsidy is lawful if within the guidance given by the Secretary of State. On the other side, although non-compliance with the guidance is not per se unlawful, the subsidy can be challenged by the ratepayers or the auditor. With the greatest respect to the noble Lord, Lord Sefton of Garston—and of course I agree with all that he said about Her Majesty's judges, and there we shall never quarrel—I suggest to the noble Lord and to your Lordships that it is unrealistic to say that this Bill drags Her Majesty's judges into the political arena in any sense in which they are not there already. Again, on cool analysis—and this is purely a legal point—the reverse is the case. The provisions of the Bill, be they right or wrong, on this issue to some degree remove judges from the area of legal contention, whatever may be the merits, political or otherwise, of other matters on which I have spoken.
The Bill should also be welcomed because it seeks to secure a measure of order out of chaos without undermining the status—and this is important—of local government. This is achieved by introducing a form of financial discipline with control and with something else that is so necessary and important—forward planning. Surely this is, at all events, an honest Bill that faces up to fundamentals. Transport must be subsidised. A fair balance must be struck between the users and the ratepayers. Forward planning of public transport is essential. Financial disciplines and control must to some degree obtain. Private enterprise tendering, where appropriate, is acceptable. Safeguards for concessionary fares are indeed preserved and, as I have submitted, a requisite clarification of the law is achieved without involving the judges.
In conclusion, this is not only an honest Bill but a Bill which is requisite to redress a situation which has long been ripe for reform, irrespective of the matters which arose on the other side of the river within living memory. It is a case for reform which is long overdue, notwithstanding those eccentricities to which I have referred. In submission, this Bill is not just commendable but warrants, and indeed commands, your Lordships' commendation as an imaginative exercise in constructive forward planning.
Lord Sefton of Garston: My Lords, before the noble Lord sits down, would he like to say how long it is overdue?
Lord Campbell of Alloway: My Lords, I have insufficient practical experience of local government to hazard how long, but, as the noble Lord asks me, I should have thought for about a decade at all events.
7.1 p.m.
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Boyd-Carpenter, was unkind enough to describe the Bill as a mouse, presumably in the hope that we on this side of your Lordships' House would let it scuttle in and out of its small hole and we would not see it as causing severe damage to the fabric of our society. The trouble with mice is that they tend to breed. Indeed, I rather think that this mouse has been bred from the Local Government, Planning and Land Act and other legislation introduced by this Government, and it is evidence, if further evidence were needed, of the failure of that Act and of other legislation and administrative activity to secure the clampdown on local government expenditure which is the object above all of this Government. I want to suggest that, just like previous legislation, this Bill is seriously defective; it is defective in terms of historical analysis on which it is based, and particularly defective in the claims it makes and the inadequacy of its content to meet those claims.
Let me say something first about the historical analysis, because the noble Lord, Lord Marsh, referred to both aspects that I want to talk about. He first accepted the guilt, as he put it, for the 1969 Transport (London) Act, and said that it was mistaken of him as a member of a Labour Government to have accepted it and brought it forward. I think if he were here he would agree with me that the pressure was not particularly socialist pressure from a Labour Government trying to impose on a Conservative Greater London Council; the pressure was from the civil servants in the then Ministry of Transport, who realised that the time had come when it was no longer possible for any public transport system, particularly in a metropolis, to be run on a break-even or a profitable basis.
This is not a fact confined to this country; it is a fact which is known all over the industrialised world. Seeing that the deficits which were to come would be a call on central Government expenditure, the civil servants, quite rightly, scuttled for cover; they wanted to palm it off on the Greater London Council. Indeed, so anxious were they to do so that they had virtually to bribe—I am using the word without any implication of lack of financial rectitude—the noble Lord, Lord Plummer, the then leader of the GLC, to take on the financial control of London Transport. That was how he succeeded in getting 100 per cent. of the London Transport past debts written off before he agreed to take over control of London Transport.
The second bit of re-writing of history which has gone on has been about the GLC fares policy, which has been referred to by many speakers. The noble Lord, Lord Marsh, said that Mr. Ken Livingstone was honest before the election in saying that this was what he was going to do. My Lords, he did not say it; I said it. I was the Labour leader in that election and I had the honour to lead my party to victory at that election. I am in no way ashamed of what I said to the electorate at that time, and in no way ashamed of the policies which were put forward at that time, because I believe they were right; they have been proved to be right and they were extremely moderate in their intent. I call in aid the noble Baroness, Lady Denington, because she was the chairman of the transport committee of the GLC at a time when valiant efforts, without much

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support from the Labour Government, were made to improve the financial position of London Transport and to improve the services.
The policy which was put to the electorate of London in 1981 was in fact a return not to a lower fare structure than had ever been seen before, but to a fare structure which was no higher than that which had been reached in 1977, when the Labour Party lost control of the Greater London Council. There was no attempt on behalf of my party to go for free fares or for give-away fares; it was simply a return to a status quo which had been eroded by four years of Conservative rule, during which fares had gone up in real terms, in which services had declined—this is matter of fact which can be checked—and in which the subsidies charged to London ratepayers had also increased. In other words, Conservative policy in the GLC had failed on all three of the counts on which they, the Conservative Party, had won the election in 1977. I have no shame whatever in saying that what we did was the right thing to do, despite the judgment of the noble and learned Lords. I think, with respect, that that judgment must have been based on inadequate submissions to them, but there have been grave mistakes in the way in which that judgment has been interpreted; let me put it that way. The thinking behind the policy was consistent over a period of years, had been put to the electorate over a period of years, and still stands up to the same democratic scrutiny which was applied to it at that time.
My Lords, I turn to the Bill itself and the three major claims made for the Bill: first, that it will reduce legal uncertainty; secondly, that it will provide a degree of financial stability; and thirdly, that it will create greater efficiency of public transport systems. I believe that not one of those three claims stands up. Let me start with the issue of legal uncertainty. I fear that what we have in this Bill is evidence of a willingness to wound but a fear of striking. The Government, in putting forward this Bill, are perfectly prepared to protect a low level of expenditure which they are prepared to decide in advance. If there is expenditure thought necessary by the local people, through their representatives, higher than that level, the Government do not say, "You shall not do this"; they say, "Anybody can take you to the courts and decide whether it is proper or not"; in other words, it is an invitation to indulge in litigation.
My Lords, as a member, still, of the GLC, for the next two weeks, I can say that I have encountered litigation in local government more in the last two years than at any other time in my life, and, I hope, at any other time in my future. It has got so bad that, even when I came home from the cinema last Saturday night, there was a further package, which had arrived by special delivery, concerning further judgment from Queen's counsel about the validity of another part of the GLC budget which is being debated today and tomorrow. I am told that there were more judgments and more opinions coming thick and fast this morning, and perhaps more will come tomorrow morning. Who knows? The point about these judgments and opinions is that they are not about the transport policy. There is no legal doubt about the transport policy, either in London because of the
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divisional court judgment in January this year, or in the rest of the country because of the Merseyside case under Mr. Justice Woolf. There is no part of local government which is more free from legal uncertainty than public transport subsidies and public transport fares, and there is no doubt that this legislation, by inviting private prosecution, is in effect inviting further litigation.
The second claim is that this Bill will produce financial stability. What does "financial stability" mean? The White Paper refers to a three-year rolling programme, although of course the decision coming from the Secretary of State for Transport will be given only on an annual basis, and no justification is required to be given for the level of expenditure set.
Let us contrast what is proposed in this Bill with what was agreed, I think by all parties, to be the correct procedure when transport policies and programmes were introduced in 1974. There we had a five-year programme of expenditure and there we had the possibility of major capital items—and if noble Lords opposite are in favour of capital expenditure as opposed to revenue expenditure they must be prepared to raise their financial horizons accordingly. There we had a five-year period and some assurance that over a period of time a continuous rolling programme would be assured.
What has happened under this Government? For the capital programme under TPP the horizon has been reduced to two years and on revenue to one year. If the Government are so keen on longer financial horizons and financial stability, why have they emasculated the transport support grant and the TPP procedures? Why are they proposing only a three-year rolling programme now for public transport and are not willing to make any commitment beyond a single year? I suggest that as usual the cold hand of the civil servant is to be seen in this and that not enough political or business consideration has been given to the issues involved.
The third claim for this legislation is that it is going to promote efficiency in public transport. I suggest that it will do the contrary because it is concentrating quite openly and explicitly on only one part of what the noble Baroness, Lady Denington, called the movement problem—the noble Baroness was referring to movement in London—which is what transport is about. This is what the economists would call sub-optimising. One cannot, in fact, have a serious, fully efficient and economic transport policy unless one takes into account at the same time, when considering the same budget, both private and public transport. One must take into account a consideration of expenditure on roads and expenditure on all other forms of transport at the same time as considering public transport subsidies.
But the Bill is grafted on to the existing procedures under the transport policies and programmes. It does not replace them, it is grafted on. In addition to the TPP, which we already have each year, we now have a new acronym—PEL; the protected expenditure level. It happens at a different time and it is calculated on a different basis. There is just as little explanation of what it means or why it is done, but it means that local authorities have a further hoop to jump through

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before they can attempt to reach any sort of judgment about the right level of their own expenditure on things which are of concern to their own ratepayers and the people in their own area.
I suggest again that the Bill is the absolute reverse of efficiency, because it is failing to take into account the full consideration of transport problems and movement problems in our cities. It may be unworthy to suggest it, but I think there is a certain amount of feeling among those who have put forward the Bill that the object of the exercise is to kick Ken Livingstone; that here is somebody who has offended the establishment in more ways than one and this is an opportunity to get political advantage by bringing him to heel. I suggest that that is an unworthy motive and that the Bill, which has been cobbled together, rushed through the other place and is now being proposed to be dealt with in a period of only six weeks in your Lordships' House, is not good enough. It does not do justice to the seriousness of the problem. It deserves to be very seriously considered here, and then rejected.
7.14 p.m.
Lord Broadbridge: My Lords, while it could hardly fail to contain some good things, the Bill before us is gravely defective in crucial areas, including that of meeting the three main claims made for it by the Government. I, too, believe with the last speaker that specifically it does not provide a clear and consistent policy or framework for the payment of subsidies. It adds to, rather than detracts from, legal uncertainty, and it discourages, rather than promotes, efficiency. Worst of all, it appears to move control away from local government and towards central government.
I should like briefly to justify these critical conclusions but, before I go any further, I want to thank the officers of the London Amenity and Transport Association, of which I am a member, for their expert observations and assistance. However, my views here must be my own.
First, what of the Bill as a clarifier of the framework for the payment of subsidies? Clause 3(1) begins:
"It shall be the duty of an Executive in each year to prepare in accordance with this section and submit to the Authority a plan containing their proposals for the next three years".
If that is taken with Clause 4(1) there is a conflict, for that clause, by stating,
"An Authority shall … determine the amount of the revenue grants, if any, to be made by them to the Executive in the first year",
authorises revenue subsidies for one year only. We have, therefore, got planning by public transport authorities for three years—which I think is about right, although five years might be better—with authorisation of the revenue subsidies for only one year, which is an illogical combination, undermining the three-year plan.
A three-year strategic plan with a one-year tactical plan is common enough and appropriate for small businesses which are flexible and well suited to take advantage of short-term changes in their markets, and many are designed deliberately in this way, but it is not appropriate for a large and comparatively inflexible organisation like a metropolitan transport authority where a hand-to-mouth planning process must reduce efficiency by decreasing the attraction, if not the outright planning feasibility, of more ambitious ideas.
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For example, the zone system whereby one travel card covers any combination of above-ground bus and tube journeys surely cannot be planned and implemented within one year's subsidy—or, perhaps I should say, the certainty of a one-year subsidy.
In preparing its one-year plan the executive has to provide a detailed justification for its request, but the Government have to give no reason for their decision. If, in a society of grown-up people, a request is made and then modified or rejected in return, a reason is given. That would help provide the Bill's claimed clearer framework for payment of subsidies and enable each party to the agreement to learn from the other and grow in respect. The proposed policy sabotages the growth of that respect and will undermine the confidence of those running passenger transport executives. It should not be forgotten that, even if a metropolitan authority applies and gets agreement for its transport supplementary grant from the Department of Transport, it may still suffer a reduction in its block grant from the DoE.
Thirdly, legal uncertainty is increased. The outline procedure for approval by a local authority of an executive's plan is in the following stages: the executive submits a detailed draft proposal to the authority, which sends a copy to the Secretary of State for Transport. The Secretary of State sends his advice direct to the executive—that is, cutting out the local authority—and saying "count on so much and no more". Separately, the local authority considers the plan, amends it and returns the plan it wants, and sends a copy to the Secretary of State, who gives it back with "guidance" to the local authority, which must be considered. The authority then gives "instructions" to the executive.
I believe that, deriving from that part of the Bill which is comprised in Clause 3(5), with Clauses 4(3) and 6(2), the Secretary of State should not engage in detailed discussions direct with local transport operators. The procedures laid down will lead to confusion. Operators will receive "advice" from the Secretary of State on their plans and local authorities will receive "guidance" on theirs. Finally, the latter will give instructions to the operators and there will be legal uncertainty, not only about the prospect of subsidies above the official guidelines but also about the possibly different plans which may result.
Subsections 4(5) and 4(6) compound this inappropriate relationship between the Secretary of State and the local authority, and I fear that I object to them in principle. They specifically give the Secretary of State power to give detailed guidance to the local authorities on the running of their transport undertaking, not simply on the finance available from the Government. This could lead to the courts deciding whether the views of the Secretary of State or those of the local authorities should be implemented. It is unlikely that the Secretary of State will have the detailed local knowledge to assess local needs and benefits. If he does acquire such knowledge his department must grow and grow to duplicate the work of local authorities. Inadequate criteria—and this point has already been made several times by other noble Lords—are laid down on which the Secretary of State must make his decisions while local authorities are bound by definite factors.

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Fourthly and lastly, I see a shift in control from local to central Government. I recall that the White Paper of 1977 on transport policy pointed out that most journeys are local and that people most depend on their local system of travel. It further stated:
"It should be for the locally elected authorities… to decide what are the needs of their area and the provision they should make".
That is undoubtedly the proper view. However, since that date Government control of money has been used to undermine that principle.
In summary, my objections to the Bill are, first—and this is my main objection—it makes explicit central Government control of local transport. Secondly, the Bill reaffirms the refusal of the Government to permit long-term planning of public transport. Thirdly, the Bill fails to clarify present legal confusion about payment of subsidies by local authorities, and also introduces a new and most undesirable legal possibility: that the courts will be called upon to judge between local authorities and the Government. Fourthly, the Government are given too much arbitrary power since their guidance or advice, which may well have considerable legal effect, does not have to provide detailed justification based on agreed criteria.
In conclusion, I have a letter from the Department of Transport dated last Thursday, 10th February, which, in replying to a question about the proposal contained in the House of Commons Select Committee Report, Transport in London, for a new metropolitan transport authority, says:
"My Government is considering the Select Committee's recommendation for a metropolitan transport authority within the context of its own examination of whether a more fundamental reorganisation of transport responsibilities is now required".
This was news indeed to me and perhaps to other noble Lords. Surely we should perhaps wait for this in hope, and not give a Second Reading today to the Bill before us?
7.24 p.m.
Lord Teviot: My Lords, I am happy to say that I think that this Transport Bill has much to commend it. One therefore regrets that its opponents do not adopt a more balanced approach to it. I hope that one is not asking for too much. The defence of local policies in the administration of local government is, in principle, valid. However, it seems that the practical problems this legislation might cause arise precisely because it does give the last word to the local councils, subject only to the courts. Whatever guidelines the Secretary of State—of whichever Government—may provide, it will be the councils who decide the level of financial support to be given to the transport executives. Moreover, the basis on which their actions may be justified will be far more realistic than under previous laws, as interpreted by the courts. It must help the locally elected authorities to be able to justify their policies in the wide terms of overall benefit to the local community, in the local circumstances. So far so good.
On the other hand, the way in which this Bill has been prepared and presented and opposed is likely to encourage challenge in our courts of law of some, if not many, of the local decisions. This seems to one to arise
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from undue emphasis on the differences in political attitudes to public transport—of which we have heard a great deal this afternoon—rather than the considerable areas of agreement. Party rows must not be allowed to reduce the levels of service to the public, which this Bill is about—the voters at both local and national elections.
The Bill—as amended in another place—seeks to avoid making the transport executives the whipping boy of both central and local government. It does however leave areas of uncertainty which will make it difficult for the executives to develop consistent policies, necessary for ensuring the best possible service to the local community. One accepts that such policies must be developed within the wider strategies of local government. Yet it is here that party political conflict may lead to litigation, waste of resources, and hindrance to good management. The courts knew that management must manage and, in the recent Fares Fair case, indicated that it is Parliament who must get the legislative basis right. Despite the undoubted merit of this Bill, it seems destined to cause problems in the short term.
In case your Lordships think that I have been put as a plant on this side—which I have not—at the Committee stage of this Bill I hope to come back and adopt a constructive approach and ensure that we have legislation that will work in practice for the good of the community. For my part, I still have misgivings about Clause 3 and shall be considering whether it may be possible further to improve it.
7.27 p.m.
Lord Mishcon: My Lords, unhappy is the lot of the twentieth speaker in a Second Reading debate who rises to address your Lordships in order to wind up on behalf of the Opposition at 7.30 p.m. I suggest that the only way in which he can redeem himself is by endeavouring not to repeat the very eloquent speeches that have been made before him and he ought in my view—and I hope your Lordships will accept this—merely to make some general comments and then resume his seat.
It has been an intriguing debate, not least from the human point of view as well as from the point of view of the important subject that we are discussing. I am so sorry that the noble Lord, Lord Marsh, is not in his place. However, I must be naive, because I learnt several things from him this afternoon that I quite honestly had not learnt in public life before. The first thing that I had not learnt was that one could not refuse a ministerial office if it was offered to one by the Prime Minister. The second thing that I learnt—and it was a novel lesson for me—was that you could quite easily accept the parenthood of a legislative child, be it from Mrs. Barbara Castle or anybody else, and do so very willingly at the time, but then deny it years later with, it seemed to me, the utmost lack of gallantry. However, there it was.
Another human aspect that I learnt this evening in the course of this most interesting debate was something that the noble Lord, Lord Campbell of Alloway, said, and we always listen to him with great attention. He said that he had not the slightest objection to any vote-catching exercise—and I quote him precisely—but he did think it was bad form to do

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that in a Bill. How you carry out a vote-catching exercise in any election manifesto or by any other device and then not carry it out by a subsequent Bill, again beats me. However, as I said, I am sure that I have something to learn about this.
One ought to say some words in general about the Bill. If I were to try and sum it up I would say that it was a plutocratic Bill; I would have said that it was an autocratic Bill; I would have said that it was a bureaucratic Bill; and I would have said that it was an antidemocratic Bill. And, having said that, possibly I have said a lot. I would have said it for the following reason. First—and I promised your Lordships that I intend to be brief—it is a plutocratic Bill; and I feel that many contributors to the debate did not sufficiently appreciate the social content that there must be in any transport policy. In other words, it is not, as I believe one contributor to the debate said, just a matter of pounds, shillings and pence.
The relevance of this point is that you can have a perfectly genuine social policy and conscience about transport if you are in a local authority, perfectly genuinely exercised, and you may have a Government that have, as their only consideration—certainly as their prime consideration, especially when advised by the Treasury—a monetary policy which must be carried out regardless of social considerations. That is, in fact, a division, and it is a division that used to be accepted.
I now come to the legal point that was dealt with most interestedly in this debate. You get the difference between what has operated up until now and what will be operating under this Bill, whatever the noble Lord, Lord Bellwin, with his usual persuasive eloquence, said to us when opening this debate. Up until now, the decisions, which have varied, can be summarised in this way. Provided that the local authority has acted with proper consideration and with regard to its fiduciary position, its decision, whatever it may be, will pass muster with the law, and the law will not be concerned with figures, or arguments on figures, or with policies.
What will happen under the Bill? The courts will be referred to a figure, which is a limit which is placed, so far as the Government wish to impose it, on what the Government think to be the propriety of a grant. The noble Lord the Minister says that it is not a binding decision, but a guideline: if you go up to that guideline, you have done something that is lawful. Does not that infer that if you go above the guideline, then, regardless of the principles that have been before the courts previously, you may be acting unlawfully?
In these circumstances, how can the courts interprete this new duty cast upon them in such an unwelcome way?—and I wish that I could match the eloquence of the noble Lord, Lord Sefton, on this very point. The courts now have to say: "Before we decide whether you were acting unlawfully in going above this limit, we have to know what the Government had in mind in setting this limit and what you had in mind when you went above it". If anybody wants to say that this is the eccentric thought of Members on these Benches or, if I may say so, the very intelligent and useful speech that was made from the Cross-Benches just now and to which, again, if I may, I shall refer,
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may I tell your Lordships that that is the view of no less eminent a periodical as The Economist.
In its issue covering the period 5th to 11th February, which I read with great interest, it said this on the Bill:
"A clause in the Transport Act passing through Parliament says subsidies above limits laid down by the Transport Secretary should be open to legal challenge. This clause will result in lots of political litigation. If Parliament does not wish locally elected politicians to put forward local transport policies, then it should remove transport from their functions. The worst course is to allow them to propose costly policies and then force them to spend even more on lawyers to dress them up".
It was only in honesty that I included that last sentence, but I had to out of sheer integrity. But, by our own legislation, we would be forcing our courts into being a political forum, instead of our accepting the responsibility unless, as was the law up to now, a local authority acted improperly, to use one word, but I have already summarised the considerations that obviously have to apply.
In only a few more minutes may I try to deal with one other point that astounds me with regard to the Government. Incidentally, if the noble Lord, Lord Marsh, can find himself after a few years saying that he so much regrets a Bill that he put forward, I pray for the soul of the noble Lord, Lord Bellwin, with his distinguished past in local government. If I may prophesy to the House, one day maybe he will be saying from these Benches, with that charm of his, how much he regrets having inherited a Bill from his predecessor and having, in fact, supported it in this House.
But on the issue of efficiency, what an extraordinary thing for a Conservative Government that have been preaching administration at a national level, to say that it must exclude red tape and bureaucracy, that it must be syphoned off in regard to all the various administrative acts that so far have taken place; that it must be streamlined and that it must run efficiently. We now have a Bill which, in urging efficiency, talks about a triangle. The triangle consists of an executive that has to take into account local needs and then put them to the national Government; and the national Government, with their bureaucracy—and obviously that will have to be increased—will then consider national needs with local needs, and will have to carry out an examination of local needs, otherwise they will not do their job under the Bill. That is then sent back to the executive, and the authority, in considering its grant, has to consider the guidelines put forward by national Government, and take into account the plan that is prepared by the transport executive.
If Labour Administration ever put forward such a way of dealing efficiently with public affairs, I can hear in my ears at this moment the laughter of the noble Lord, Lord Boyd-Carpenter, who would rise in his place, completely inspiring the whole House with that ready phrase that he always uses, and make us shrink back onto our seats in absolute shame for having put forward such a ridiculous plan for governmental and local government efficiency.
I shall end with a reference to the points that have been raised about local democracy and local government. I heard the noble Lord, Lord Boyd-Carpenter, say that he could face with fortitude—if it had to be faced—the end of the Greater London Council. The noble Lord nods his head; this time I have the

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movement right. It is not extraordinary, when you think back on what politicians have done in their time? As one who was privileged to be one of the leaders of the old London County Council with the Government of the noble Lord, Lord Boyd-Carpenter, I can remember pleading with the Conservative Administration not to create the Greater London Council. It was the party opposite, of course, who were so keen upon creating the Greater London Council.
But the one thing one wants to see, whether one has a Greater London Council or the old London County Council which I revered so much and I believe other Members did, is getting back into the councils—I say "getting back" advisedly—the quality of personnel that, I say without any patronising sense at all, the noble Lord, Lord McIntosh, has demonstrated in the speech he made today and on the occasion of his maiden speech, whether one agrees with his views or not. That is the sort of calibre that one wants to see in local government, and I say frankly that it is fast disappearing.
It is all very well for the noble Lord, Lord Boyd-Carpenter, to talk about industry and commerce not having a voice. The point has been made by someone else in this debate that it is really for the leaders of industry and commerce to make the sort of contribution that the noble Lord, Lord Broadbridge, made from the Cross-Benches. As your Lordships know, he is a distinguished member of important boards in this country, and a management consultant with leading firms of chartered accountants. He will forgive me if I blow his trumpet for him from these Benches. Your Lordships heard what he thought about this national interference with local government, quite apart from the question of the efficiency of the whole strategy of this Bill. One wants to see these people there arguing about efficiency of transport, and so on; arguing the case about rates, and the way in which money could be saved.
Are we going to encourage people like that, and are we going to encourage people with great experience in industry, whether it be in management or otherwise, to take on local government when, again and again, the big brother of national Government calls out, "Local government, new members, you can think you can create new policies, but you dare go above a figure in relation to those policies and you will face the law courts if you do. We are telling you what the plan ought to be. We are issuing guidelines. You just sit there and pretend that you represent the local people by whom you were elected"? Is this an encouragement to local government?
I sometimes wonder, I say frankly, whether the Benches opposite—I except the noble Lord, Lord Bellwin, from this; he is an unfortunate victim of this policy—really want local government to survive. If they do, they will get the mice to whom the noble Lord, Lord Boyd-Carpenter, referred in a different context.
Lord Boyd-Carpenter: My Lords, would the noble Lord allow me? There is much in what he says. But would he, in suggesting that encouragement should be given to men of standing and calibre to go forward into local government, feel that they had much encouragement
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from the experience of his noble friend to whom he has just referred, Lord McIntosh, who, having won the election for his party, was promptly replaced by a man of manifestly lower calibre?
Lord Mishcon: My Lords, I do not think that in this House one ought to compare politicians, nor ought one to refer to those who have fallen in any party, be their name Heath, or whatever it may be. It is a dangerous exercise. Therefore, I propose to close my remarks by saying that it is a bad Bill that has come to us from another place. It is bad for the reasons that have been advanced in this debate and to which I have ventured to refer. We are bound by a tradition in this House when Bills come up to us from the democratically elected Chamber. But I think that those of us who will see the Second Reading of this Bill nodded through will do so with regret, and we shall do our best in the later stages to see what we can do with a bad Bill.
7.45 p.m.
Lord Bellwin: My Lords, the Bill we have been debating is basically about securing the future for public transport in London and our major cities. For the last 30 years we have witnessed a steady decline in the use of local buses and trains. As use has declined costs have increased, but fare levels have been held down, so the burden of financing local transport has fallen more and more on the ratepayer and taxpayer.
The Government fully accept that subsidy is necessary to maintain a public transport network. There is no difference or argument about that. What we are concerned about is the fact that we simply cannot go on with a situation where every year huge and ever-growing increases in subsidy are demanded for a transport network which is carrying fewer passengers. We need to look afresh at the financing of local transport in our cities to ensure that it is put on a sound and efficient footing for the future. My Lords, that is what this Bill does.
One point that none of your Lordships picked up from what I said in my opening remarks was that every time subsidy goes up we should all remember that it means less public money is available for other vitally necessary and, some would say, more deserving projects. Because the metropolitan councils insist that so much of the money available to local government goes on subsidy, it means that they restrict the opportunities for district councils to decide their priorities. The lion's share goes on subsidies, and the districts have to take what is left. That is a strange form of democracy to me. It is certainly not, as my noble friend Lord Boyd-Carpenter said, democracy for the non-voting ratepayer to be forced to pay more and more for transport. I shall touch on that again in a moment, because we have run round that one several times today.
High subsidy policies next year in London and some metropolitan counties are going to cost commercial ratepayers over £200 million. They are also going to cost some domestic ratepayers very dearly. The old age pensioner who already has a concessionary pass will see his, or her, rates rise next year by £24 in South Yorkshire. The Bill is about efficiency. The noble Baroness, Lady Fisher, did not like the word. I know that it is anathema to some. But the fact is that while

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the number of passengers using the buses in the conurbations went down by no less than 30 per cent. between 1970 and I981, mileage was reduced by only 15 per cent. I say, as I did in opening, that over 10 years costs in the bus industry have increased in real terms—and this is a really staggering figure—by over 50 per cent. It is now costing half as much again to run in real terms as it cost 10 years ago. That is a sobering thought. Therefore, when we suggest that local authorities should look hard in the future at what they are getting for what they are spending, I cannot believe that any of your Lordships would quarrel with that being the right thing to do.
The point about local democracy was the last point on which the noble Lord, Lord Mishcon, touched. Clearly, it is very important. He said kindly that he excluded me from his strictures upon the rest of my noble friends. I have to tell him that I join in with them. He would expect no less. The noble Lord asked: do we want local government to survive? He must take it from me that we very much want local government to survive. Frankly, we think that local government—and I have discussed this at the highest levels within the Conservative Party, and you do not need me to translate that too much—is the greatest safeguard for the future of our constitution. If we let local government go, imagine, if you will, what could happen in the many ways that none of us want to see. I say this with great feeling and great conviction. I believe it quite sincerely.
Because I say that, because I feel that way, I must take issue with those of your Lordships who have said we do not really want to see local government survive or that this Bill will seriously undermine it for the future. To me, the greatest protection one can give to local government is to ensure that it maintains the standards that I remember not all that long ago—and the noble Lord, Lord Sefton of Garston, who was a colleague at the time, certainly remembers them, as does the noble Lord, Lord Evans of Claughton. It was always an axiom of local government that when elected one sets out to protect, represent and look after all the people in one's ward or area. It did not matter whether they voted for you or whether they did not, what their beliefs were or were not. One set out to do the best one could for all those one represented. One did not set out to disadvantage any sector because it was a minority—far from it. That was the last thing you did. It behoved you to make sure that their interests, perhaps more than the majority's, were properly catered for. That was the high standard that I always believed in and which to me is the essence of what local government should be about. I do not think I would have much argument from your Lordships about that as an underlying philosophy.
But what we are seeing here, what we are discussing, what this Bill has to deal with are excesses; the pressure on certain groups in the community who are disadvantaged so much that there is no-one to protect them if the Government are not prepared to say, "Yes, there is injustice". I do not question the sincerity of people in the metropolitan counties. They are local government people, who, as they see it, feel that the reduction in fares is a social service which is very necessary. That is their judgment. But the unfortunate fact is that, in the exercising of that judgment, they are imposing on
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so many people in their areas the kind of financial burden which, frankly, is not tolerable any more. It has gone too far. It has gone over the top. When we are talking about the preservation of local autonomy, surely it is a far greater danger to local government that central Government are compelled to move in and say that they want to impose certain restrictions.
We see that not just in this Bill. The noble Lord, Lord McIntosh of Haringey, referred to the Local Government Planning and Land Bill. If we look at some of the requirements in that Bill we find they come about for the same reason. Why should we have targets for local authority spending? If we think back, why do we have to have targets? The fact is there are a number of authorities unfortunately spending large enough sums to knock out of kilter the whole of central Government's national policy. No Government will stand still and take that. They cannot; they must not; it would not be fair to those who do conform. That is why there have to be targets and why those in local government—I include myself, if I may—ask, why are the Government imposing these kind of restrictions? the fact is, it is due to the excesses of those who refuse in any way to conform or live up to the old proud traditions of local government. We always worked within the parameters set down by the centre. Lord Sefton knows we always did. We did not always agree with what the Government of the day wanted. We often disagreed bitterly. I remember Circular 45/76—I shall never forget it—and what it called upon us to do in one year in my own authority. The fact is that Governments have to govern and that overrides anything else. We subscribed to it then, local government subscribed to it, and the noble Lord, Lord Sefton, certainly subscribed to it.
Lord Sefton of Garston: My Lords, will the Minister explain this necessity to conform to central Government, except in the field where there is a damage to the national economy? Can the Minister demonstrate how the transferring of comparatively small amounts of money, measured against the national economy, from the ratepayer to the fare payer can damage the national economy?
Lord Bellwin: My Lords, I was illustrating the point why local government is in the situation where it feels the centre in a number of areas is coming more and more on top of it. The point that the noble Lord makes is in itself valid because we are talking here about a potential next year of £400 million of subsidy. The noble Lord may feel that that is not very much, but it is significant. It has doubled in the last two years and in two years time the total figure could be over £1,000 million and no Government will stand by and watch that.
If I may quote just one other example here. In South Yorkshire—your Lordships may not believe it—I have some very good friends on the council. I would not name them because that would be the kiss of death for them, but your Lordships can take it from me that the council is now charging the same fares that it was charging nine years ago at a cost to its ratepayers of £60 million of subsidy—fancy, that is one authority. The mind absolutely boggles. When I consider how we

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used to count every penny we spent, how we jealously argued and asked how we could justify a few hundred pounds, and here one authority is spending £60 million. We simply shrug our shoulders and say. "It is in the interests of local autonomy and we should not take any notice of it". I am concerned for the standing and future of local government and what we are proposing in the Bill is not to disadvantage the ratepayers. It would have the opposite effect.
I thought that my noble friend Lady Gardner of Parkes, who is not in her place, made a powerful case. I should like to take just one moment of your time. We had in the Leeds City Council a very worthy lady chairman of the social services committee. She rose once to answer a debate in the council and eventually the opposition spokesman said, "Peggy, we give in. All right, we concede everything. We give in". But we could not stop the lady. She was so sure, so vehement and so passionate, just as was my noble friend today. Her case, if I may say, I thought was a very powerful case.
How does one answer? What does one say to people who are moving away? If it was in my authority I would be shattered to feel that big companies are moving out, with employment opportunities and so on. How can one equate that? How can a council stick up a big poster across a building that states the unemployment numbers, as the GLC do, when their own rate policies are increasing unemployment in London every week? It should put up another poster which shows the rate increases and how many more people have left London. Your Lordships may like to think about that. It has some merit.
Lord Mishcon: My Lords, I may be interrupting the noble Lord at a wrong place. I apologise, but before he moves on to another point I am sure he wants to be just. He will know that rates bear a relevance to rents. What is driving so many people out of the centre of London are the huge rents that are being charged. He must not just talk about rates.
Lord Bellwin: Very well, my Lords, I do not wish to spoil what I think is an excellent case by distortion. I take the point that the noble Lord makes. Of course, rents are also a factor. There are other factors as well. I do not seek to imply it is only rates—far from it. I think the case is so good that it does not need any distortion. It has to be said that it is not just London that we are talking about; we are talking about many areas in the country. Only time prevents me from reeling off place after place and giving facts and figures. If any noble Lord wants them, I shall gladly write to him. These are very significant points. The noble Lord, Lord Marsh, made them as well as anyone.
I want to try, as your Lordships know I always try in replying to a debate, to pick up some of the points that were made. I have a great wad here and I clearly cannot get through them all, but I feel some of the points raised should be answered tonight. Simply in the interests of time, I will write to everyone who has raised a matter that he feels or I feel ought to have a reply from me. The noble Lord, Lord Underhill, started us off. He was concerned and referred to other legal cases which, apart from the GLC Bromley case,
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he thought fairly established the position. It is not fairly established. Mr. Justice Woolf's opinion in the Merseyside case is not the universal answer. In fact, Mr. Justice Woolf decided that it was not possible to say that the council had not exercised their discretion properly, but delay in appealing was a factor, and of course the case was not considered by the Court of Appeal or the House of Lords. In the West Midlands case, the authority quickly increased their fares after the challenge, so the matter was not fully tested. But the West Midlands certainly thought their use of the powers was legally uncertain. I make that point not to score off it but simply to say that the position needed clarifying. It had not been clear hitherto and I think that even the GLC asked more than once for some clarification, and that is what we are trying to do.
Lord McIntosh of Haringey: My Lords, is the Minister suggesting that there should be further legal challenge to the balanced fares policy of the GLC which has been approved by the Divisional Court?
Lord Bellwin: No, my Lords, I am not saying that. I am saying that the whole position needs clarification and that it is in everyone's interest that we should have that, and that is one of the things which the Bill sets out to do.
If the noble Lord, Lord Underhill, reads Hansard, he will agree with me that he did not say a single word about and did not even mention the damaging effects that excessive subsidies can bring. Again in the interests of brevity, I will not go into that tonight; I am sure we shall come back to that in Committee, and I shall want to make that point when the time comes. He asked what it had to do with Government how people ran their buses—those were the very words he used—and the noble Lord, Lord Marsh, answered him better than I could.
Lord Underhill: My Lords, my reference to what it had to do with Government was made by a Conservative Member of the Standing Committee on this Bill.
Lord Bellwin: That does not make it any more right so far as I am concerned, my Lords. That one does not throw me one bit; if it is not right, it is not right.
Several noble Lords mentioned petitions, and there is a point I must make about petitions generally. I have been round helping to get petitions and done lobbying and so on. The fact is that we were talking of one particular issue, the concessionary fares issue, where clearly there has been the most awful distortion. I shall be charitable and say they just did not understand. I have with me a Tyne and Wear publication which says specifically that, for the blind, the senior citizens and the disabled, concessionary fares could go. If they did not know the Bill had nothing to do with that, then frankly they should have known. If they did know, then it was, to say the least, mischievous. I believe that that must be said, and I wonder how many of those who signed the petitions knew that that was not the case.
The noble Lord, Lord Tordoff, said, "Listen to Tyne and Wear". I have referred to the leaflet from that area and—dare I say it?—I have some good friends on Tyne

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and Wear County Council. There they all go! Seriously, I have a great deal of time for the people on Tyne and Wear County Council, but the fact is that they got this one very wrong. The noble Lord said that the Merseyside case had removed uncertainty, but 1 have illustrated why I feel that there still is uncertainty, and why that must be clarified. I agreed with the noble Lord when he said that individuals were worried by the Bill. I hope I have given one reason to show why many categories of people need not be worried at all. As for it being a vendetta against the GLC, I must pray in aid South Yorkshire. They might say the same, and others too. No, it is not that at all. The whole topic we are discussing is not about the GLC. The GLC happens to constitute one of the more extreme manifestations of some of the problems about which we have been talking.
I appreciated the powerful speech of the noble Lord, Lord Marsh. One does riot have to agree with him, although I did, to accept that he speaks with great knowledge and background in this whole field. I challenge any of your Lordships who comes from a local government to disagree with the noble Lord when he remarked that so often local elections are decided on national issues. I have been on the receiving end of that, and I bet that every noble Lord in the House tonight who has been in local government has had the same experience. You felt that, if only what you had done for your local authority was measured by achievement, you would be entitled to he returned to office, but the fact was that you were not returned, the reason being that national issues decided the matter. Noble Lords must concede that that is the truth of the matter, and it is important that the noble Lord raised that point.
The noble Lord said that there was urgent need to clarify the law, and I have already said that I believe that, too. In addition, he referred to South Yorkshire's 7 per cent. increase in passenger take-up. I would only tell him that 2 per cent. of that 7 per cent. comes from the acquisition of a company they obtained, so that makes it 5 per cent. I thought I should mention that to get the record straight.
My noble friend Lord Boyd-Carpenter always makes an excellent contribution and a telling one, as he did tonight. He always makes me feel very humble. When he said that nobody had mentioned the ratepayers, I thought how right he was. He asked if the powers would be exercised with toughness. I am not quite sure what he meant by that, but if he meant what I think he did, the answer is, yes, but we will go no further into that for now.
I must be very careful in coming to the noble Baroness, Lady Bacon, because she comes from close to home. She said she had lived all her life in West Yorkshire and knew the people. She has nothing on me by saying that; I come from the same place. As for all the nice things she said about West Yorkshire, I agreed with her wholeheartedly: she is absolutely right, but she got one thing quite wrong. I should have liked tonight to refer to what she said about children's fares, but I cannot because I should never get through all I have to say, but I shall write to her about it.
The noble Baroness, Lady Stedman, always puts her argument well, and tonight was no exception. I did not
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go along with much of what she was saying, especially as she kept talking about cuts in services and about the old, the sick and the handicapped. 1 will not tell your Lordships a joke I know about that, because there is not time, but I went to great pains to try to make the point several times—and my noble friend Lord Caldecote certainly did—that this Bill is not about concessionary fares for the old, the sick and the disabled. It has nothing to do with them at all.
In any case, when we talk about cuts, why do we always have to say that cuts are the first things to consider? Cuts provide the last option. The first option is to ask whether we can get more for what we are spending. The cuts come at the end, if that cannot be achieved. I believe that there is enough ingenuity in local government to achieve a great deal more, especially in the transport sphere, before we get to the question of cuts.
The noble Baroness, Lady Denington, always makes a sincere contribution. One is almost embarrassed to have to differ from her, but I must do so. The GLC's Fares Fair policy reduced the fares by 32 per cent. and reduced the traffic by 1 per cent., so the matter is not always all that straightforward. What a list my noble friend Lady Gardner gave! I shall not comment tonight on what she said, except to say that her list was so impressive that I shall use it to quote from. The noble Lord, Lord Mountevans, raised an interesting point which would be too long to consider now, and I shall, therefore, write to him on the subject. I am sure he will forgive me for not dealing with it now, and I would only comment that he was right to mention it.
The noble Lord, Lord Sefton, and I are old antagonists. When he speaks about local government, one has to listen. I make no bones about the fact that he knows local government inside out. He is always worth listening to, and the fact that we do not always agree does not mean a thing; that is neither here nor there. There must have been occasions when we have agreed on something. I will think of something some time. He was anxious to know why certain things were in the Bill. Why, he asked, need we write into the Bill the ability to challenge subsidy above the level? With respect, we have not done so. The protected figure protects from challenge a reasonable level of subsidy, and in so doing we are removing the right of ratepayers to challenge up to that level. Above that level, subsidy remains open to challenge, just as now; it is open to challenge now at any time, and one of the reasons for the Bill is that it is open to challenge.
There is no reason for the Government to protect a subsidy level above that which they consider reasonable. The argument will be as to what the level should have been, and that is where local government comes into its own. It is no good saying, "We don't want to consult, we don't want to know, we don't like it". That leads to a situation where one forfeits by default, and that is never a way to do things. Now we want to see a situation in which local government, the people, the authorities concerned, will discuss matters, and that will be the time to make the point about what they consider to be reasonable levels.
I should love to talk much more about what the noble Lord, Lord Sefton, said, because he was discussing the underlying philosophies, and dearly one loves to discuss such things, but I suspect that this is

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not the occasion to do so. We will have a drink in the bar and talk about it later.
The noble Lord, Lord Evans of Claughton, said that the remedy lay in rate reform—
Lord Sefton of Garston: My Lords, does what the noble Lord say mean that we can talk about philosophy during the Committee stage of the Bill?
Lord Bellwin: My Lords, I have never known the noble Lord, Lord Sefton, not talk about anything that he wants to talk about, at any stage of a Bill.
The noble Lord, Lord Evans, spoke about the necessity for rate reform. "Well, just a little more patience", is all that I say to him. But I go back to my earliest point and say, "Oh, dear me! if only we had worked within the parameters so much of the action that we are talking about would not have been necessary in any case."
I am so grateful to the noble Baroness, Lady Elliot of Harwood, for her support. I may tell your Lordships that if you look at the voting figures, you will see that she does not always support the Government, and so I am delighted to have her with me on this issue.
The noble Baroness, Lady Fisher of Rednal, said that the West Midlands transport authority was an efficient organisation. Well, my information is that by comparison she is right; but everything is relative, and the truth is that I do not want to make a comment because I really do not know enough about it. The information is that that authority is not one of the authorities which charge excessively in many ways. I am grateful to my noble friend Lord Campbell of Alloway for his observations. I am always very glad to have him on my side when he talks about the law, and I am grateful to him.
From the noble Lord, Lord McIntosh of Haringey, we heard the first of what I suspect will be many forays between us, and I suppose that he and I must simply agree to disagree. No doubt we shall be doing that a great deal in the future. Certainly I would concede that he brings to your Lordships' House knowledge and experience that are invaluable, and I respect that in the noble Lord as much as I respect it in everyone else. The fact that we do not always agree has nothing to do with it. The noble Lord has the know-how, and gosh! we need as much of that as we can get.
I am sorry that I missed part of what the noble Lord, Lord Broadbridge, said; I shall read it with much interest. I thank my noble friend Lord Teviot for his intervention. I hope that he will be on my side when the time comes; it has not always been so.
Finally, we heard from the noble Lord, Lord Mishcon. I have never discovered quite how to respond properly to him. He always speaks so superbly and makes it sound as though I agree with him all the time, when really I do not. Yes, of course, above all there is a social content in public transport, as there is in every public service. I believe that. Where we differ is about the amount of subsidy that should go into it and how it should be handled. When we come to the later stages we shall be debating all these matters at length.
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I am not going to deliver some kind of peroration, explaining why we think that the Bill is all perfect and good. There is not very much in this life that is perfect and good. But I conclude on this note: a difference exists, and it is a controversial Bill in many ways, though not a big one. I know that your Lordships accept that the convictions on this side of the House are every hit as deeply felt and held as they are on the opposite side. We have to make sure that when we go into the details we make the Bill as good as we can make it. If we can make it better, why not? That is really what your Lordships' House is all about.
On Question, Bill read a second time and committed to a Committee of the Whole House.

Trade Marks Act 1938 (Amendment) Bill [H.L.]
8.15 p.m.
Read a third time.
The Schedule.
Lord Campbell of Alloway Lord Campbell of Alloway moved the following amendment:
Page 3, line 17, at end insert ("—services")
The noble Lord said: My Lords, I beg to move this amendment, which relates to a mere printer's error.
On Question, amendment agreed to.
Lord Campbell of Alloway: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Campbell of Alloway.)
Lord Alexander of Potterhill: My Lords, I should like to make a point on the Bill. I understand that the Government have shown less than great enthusiasm for the Bill because of the fear that it could involve a significant increase in public expenditure, and I want to deal with this point because it is utterly untrue. In evidence to the Select Committee the Comptroller-General of Patents said that he could see no reason for the Bill causing increased public expenditure, and experience in Germany and Australia would confirm that.
The statement was made that the Bill might involve 20 to 30 additional staff in the registry. It might involve some increase in staff for a period of 12 months, because experience has shown that when such a provision has come into force elsewhere, such as in Germany and Australia, there has been a sharp increase in all those seeking to have trade marks in services. But it lasts only 12 months. I have here the figures for both Germany and Australia. There is a sudden increase, and within 12 months the figure goes back to just a little above its previous level.
However, more important than that is the fact that in the registry of this country in four out of the last five years there has been shown not a deficit, but a surplus. I have always understood that if a successful company is making a profit and then increases its turnover—which the Bill will inevitably mean—the profit is increased. Therefore I think that the argument that has been put forward in that respect is invalid.

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I wish to make a second point. I have for seven years been a member of a sub-committee on Europe in your Lordships' House, and I have been a little worried about the Government's tendency never to find any directive from the European Community quite acceptable. I think that it is time that we ceased to he halfhearted Europeans. I hope that the Bill will be not only accepted by the Government, but supported by them. It will be to the benefit of this country. The question of the location of the Community's office—if the directive is accepted—has yet to be settled. I would hope to see it in this country.
8.19 p.m.
Lord Mishcon: My Lords, the House owes a great debt, which I ought to express on the Motion, That the Bill do now pass, to the noble Lord, Lord Campbell of Alloway, for having piloted the Bill through to this stage, assisted, as he was—and I am sure that he will want me to mention this—by the noble Lord, Lord Lloyd of Kilgerran, who placed his considerable experience in the field of trade marks at the disposal of the House.
Your Lordships have now had a contribution from the noble Lord, Lord Alexander of Potterhill, whose voice when it comes to questions of education, administration and the way that Governments ought to act, is a voice that is very welcome in this Chamber. His support of this Bill is, therefore, one that one regards as very considerable. I would remind those who sit on the Front Bench at this moment, and especially the noble Lord the Minister in charge of this matter from the Government's point of view, that other eminent Members of your Lordships' House not only have spoken in support of the Bill but have pleaded for Government support, both here and in another place, so that this Bill does not lightly go from this House into some cubby hole never to be seen again or, possibly, not to be seen for some time.
I mentioned the name of the noble and learned Lord, Lord Scarman, who also added his voice as the chairman of Sub-Committee E of the Committee that guides your Lordships on matters of the EEC. Sub-Committee E had been into the whose question of trade marks and EEC directives, had been over it for a period of months and had no hesitation in supporting immediate legislation in order that services could be brought into the registration of trade marks and the availability of trade marks to those engaged in services.
From these Benches I add my plea—and this is not a political matter—to those who are so anxious to see this Bill become an enactment. I add only one point to the contribution of the noble Lord, Lord Alexander. It is this. Even if one were to find that there is some need for getting through the present difficulties (which the noble Lord the Minister mentioned previously) of backlog in the trade mark registry, I do not think that anyone would object to this Bill having an effective force from the point of view of any further administration, from a date which could easily be measured, in order to see that that backlog could be dispensed with. I plead with the Government not to adopt the negative, unhelpful attitude which has been adopted up to now, and which has merely given reasons and excuses for not doing anything until a much later date than this, when it is the view of those who are expert
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on these matters that it will be too late to save from harm those of our people in this country who would very much wish to have this protection.
8.23 p.m.
Lord Campbell of Alloway: My Lords, may I thank all noble Lords who have taken part in this debate, a debate which has been dominated by the authoritative contributions of the noble and learned Lord, Lord Scarman, in his speeches on the EEC trade marks report; a debate which has benefited from that singular and swift grasp of essential as is customarily displayed by the noble Lord, Lord Mishcon; a debate which has been embellished with the specialist expertise of the noble Lords, Lord Lloyd of Kilgerran, Lord Noel-Buxton, Lord Cawley and also the practical wisdom of my noble friends the Duke of Portland, Lord De La Warr and, today, the noble Lord, Lord Alexander, for which I am most grateful. While thanking my noble friend Lord Lyell, but for whom perhaps there would not have been any debate, may I offer my own tribute to the valiant good humour with which he stood up to the crossfire of some very trenchant criticism and also to his dogged loyalty as a Front Bench spokesman.
Having said that, I may say that some of us are puzzled as to why this Bill should be accepted as sound and requisite in principle, yet no less than eight reasons should be found in the course of the debate for inaction—all of which have been shown to be ill-founded and misconceived. For the record it is right, as none of them has yet been answered, that they should be recorded.
First, they say that the EEC report, Lord Scarman on the draft EEC regulation and directive is not yet published. Now, it has been published. Secondly, they say that the proposed amendments to Article 7, if accepted—that is, to the regulations—which is most unlikely, would render the Bill otiose. But this not only is a nonsense; to fail to implement this Bill would weaken our stance in those very negotiations. Thirdly, they say, "Look at the extra staff!" May I respectfully adopt the authoritative contribution of the noble Lord, Lord Alexander, on this, that with a will there is a way?
Then they say, "Oh, the increased expenditure!" There is no overall increase in expenditure because the fees govern that situation. Again, although I was not to anticipate this bonus, the noble Lord, Lord Alexander, dealt with that. Then they say that passing off is adequate. Not so! There is no different case from goods; and it is not available as regards the proposed trade mark for either. And that is of the essence of the problem. Then they say, "Wait for a consolidation Bill of trade marks law in, say, five years' time, after the final form of the regulations and the directive are agreed by the EEC council working party." But we have shown why this leaves our service industries without protection. Then they say, eighthly, that the service industries have no pressing need for it, anyway.
My Lords, I have letters from the Institute of Road Transport, 7th February; the British Assurance Association, 4th February; one from M and G Limited, 4th February; and it is worthy just to quote, if I may, from the M and G letter. It really is something

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which might move the Front Bench because it is straight-shooting, so to speak, from the hip:
"This company would certainly wish to avail itself of an opportunity of registering its mark as used on its literature and notepaper. Further, we feel that there is a real danger that we could be disadvantaged by any future legislation such as the proposed Community trade mark regulation if this country does not at once bring its trade mark law into line with most of the world's advanced industrial countries".
So that it is really idle for the department to state ex cathedra that there is no need when, in fact, industry says that there is a need.
The straw which broke the camel's back was when my noble friend Lord Lyell said in the EEC debate (Volume 438, No. 33) that, because of delays in the registry in processing new applications, it would not help British business nor the registry to double the delays by adding service marks to the statute. But the department acknowledged in correspondence that the anticipated applications per year for service marks would be initially about 3,000 against 17,000 for trade marks, which is about one-sixth. I checked the Australian figures today. Australia has just introduced this provision and this Bill is based upon the Australian concept. For 1980 goods registrations were 11,590 and services, 1,977. So there again it amounts to one-fifth or one-sixth. It is just not understood how my noble friend the Minister could talk about an increase in registry staff from 200 to 250 to cope with another 5,000 applications each year. That is reported in column 115 of Hansard and is, as has been explained, just a non-reality.
During this month there has been much correspondence between my noble friends Lord Lyell, Lord De La Warr—who is at the moment testing the efficacy of various service industries in Miami and is unable to attend here today—and myself. In the last letter, of 8th February, the Minister gives three reasons for delay: first, no new protection; the common law is adequate. Secondly, wait for the final draft EC regulation and directive. Those are the old reasons. Thirdly—and here it comes, the real problem—in this letter, at long last, is stated:
"The real problem is the Trade Marks Registry because input has run away with our capacity to handle applications for marks for goods so there is a definite need for delay on this ground".
We know the real reason: the Trade Marks Registry does not wish to have the extra work. The department of state does not understand the essence of the problem and does not wish to understand.
It is unfair to ask my noble friend to comment. However, if he were able to enter into the constructive spirit of this debate with a will to recognise the need, with a will to insist that the trade marks office might perhaps provide this service—as suggested by the noble Lord, Lord Mishcon, who is always realistic—to dovetail in and delay the implementation date until—and, again, the essential point—the office can be made ready to accept it, then this could afford considerable grounds for gratification, certainly to me, but perhaps to many of your Lordships.
8.34 p.m.
Lord Lyell: My Lords, my noble friend and the House will expect—indeed, it is a tradition of your
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Lordships' House—me to say a few words. I will not say "very few", but I will not say many words this evening beyond what I have said before. However, the spirit of my speech is one of, I hope, gratitude. I salute my noble friend for the persistence and the advocacy with which he has presented his Bill and with which he has argued the case throughout the several stages which the Bill has gone through in your Lordships' House, and of course on the occasion when we discussed the report of the European Committee which was so ably chaired by the noble and learned Lord, Lord Scarman.
I hope that your Lordships will be mindful of the date today, which is not always what it might seem from publications. I understand that in the late 1920s it was the date of an ugly scene in the Mid-West of the United States. But I have no reason to believe that I am in any way vulnerable. As your Lordships will be aware, this Bill has received support from all sides of the House. The Government have carefully reconsidered the issue in the light of the support that has been shown; but we remain convinced that now is not the right moment to support this proposal for legislation. I have to say again that we are not complacent about the present lack of registration facilities for service marks. We recognise the value to service industries of the proposal of my noble friend in his Bill, but these demands for new facilities are being looked at in the broader context of the trade mark system as a whole.
The Community proposals for a new trade marks system have made all the parties who are interested much more sensitive to the need for these registration facilities, and have led those who are interested to conclude that they are in imminent danger and that these facilities must be provided now. We believe that this is based on a misunderstanding of the Community position. It is true that the current proposals would place users of service marks at a disadvantage compared with the users of registered trade marks for goods. But the current proposals are just that. They are proposals; they are not legislation which is about to come into force. Member states are discussing these proposals, and it is clear that there are many problems for us and for other states. The United Kingdom negotiators will have all the interests of this country, including those of service mark owners, uppermost in their minds during the negotiations, and it is quite clear that a lot of work needs to be done before the final shape of the Community system is agreed by member states. I shall reassure your Lordships once again that the interests of owners of service marks are not about to be swept aside by Community legislation.
This being so, we want to look at the problem in its broader context. Service marks do have powerful protection—the protection of common law. There is no suggestion that the protection provided by a passing-off action is in any way illusory or defective, or that our industry is suffering as a result. The service industries are protected; but, not unnaturally, they would like better protection. We understand their position, but the law is not defective in the sense that our industry is suffering real damage. Neither, as I have made clear on several occasions, is the position about to change as a result of Community legislation.

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Thus, the Government have been led to consider the likely impact of this proposal on the Trade Marks Registry itself. Here we have a real problem, because in recent years the input has run away from our capacity to handle applications for marks for goods. I have to stress that we now have a sizeable backlog which we know is unwelcome to many companies seeking to launch new products under new marks. The registry is undergoing a complete transformation at the moment to alleviate the position, but it will take several years before the matter is put right. If we add service marks now, the position could go from bad to well-nigh intolerable. We cannot meet this problem by simply taking on new staff. I stress that, especially in view of the remarks of the noble Lord, Lord Alexander, because I am sure that he of all people will be aware that new staff have to be trained from scratch. Any sizeable increase in inexperienced staff at the moment would simply add to the problems of the registry. In our view, the immediate outcome of this measure to help service industries would be to increase the obstacles faced by manufacturing industries in seeking to register a trade mark without giving any immediate benefit to the service industries. We do not believe that that would be a sensible course.
I mentioned the input into the Trade Marks Registry. This has grown, as my noble friend pointed out, in recent years, and the backlog of unexamined applications is now at what we regard and what industry regards as a critical level. I am sure that your Lordships will be interested to learn—that is those who are not aware of the specialist problems in this field—that the registry is now being reorganised as a result of a study by the noble Lord, Lord Rayner. It could take up to five years to correct this situation and if this legislation is amended, taking service marks now, we believe that the input could grow by as many as 5,000 applications per year. We believe this would bring about a severe deterioration in the service provided to the public and would increase the backlog to an intolerable level for manufacturing industry without any meaningful gain for the service industries.
I would stress that such a large increase in the input could only be met by increasing the staff from around 200 to around 250. I stress again that the new staff would have to he trained from scratch in view of any change in legislation which is proposed by this Bill on top of the serious problems and the serious delays that are already present. I would also stress that the presence of such a high proportion of inexperienced staff would itself jeopardise the reorganisation now in progress. I hope that the strong comment I have stressed will go some way towards answering the query raised by the noble Lord, Lord Alexander.
The noble Lord, Lord Mishcon, was his usual persuasive self but I would impress upon him now, as I have before, that the report he mentioned—the report produced by the committee of the noble and learned Lord, Lord Scarman—goes far wider than the area that is covered by this Bill. So far as my noble friend Lord Campbell is concerned, I am immensely touched—indeed, nobody could fail to be moved—by his most generous tribute to me, which I shall certainly pass on to the department. I really am very grateful to him since—
Lord Mishcon: My Lords, would the noble Lord forgive me? I think I am correctly interpreting—though the noble Lord, Lord Campbell, can speak for himself—that in saying that the tribute was meant entirely for the noble Lord himself, and not for his department.
Lord Campbell of Alloway: My Lords, that is so.
Lord Lyell: My Lords, the noble Lord is his usual kind self. I said that I would pass on the tributes to the department. What they do with them and what my noble friend will feel, I will leave to the judgment of your Lordships' House I am very grateful for the kindness which has been shown since I have battled. I am very happy to do so, but I feel that a great deal of patience has to be shown by all of us.
My noble friend Lord Campbell said that eight reasons were given I would stress to him that there are always nine questions asked of him. I feel rather like the mythical creature that climbed up the drainpipe in our elementary mathematics at school: he climbed up three feet but slipped hack two in the night. I continue to climb, but I continue to slip back and so it seems that there is always extra footage to climb. I am very glad, of course, to attempt to do this.
I would stress to my noble friend that the problem of extra staff is one of the dominant factors in the Government's view of his legislation. My noble friend asked that we should be moved. With regret, I must suggest to him that we sing the old song that I sing very frequently in the open air of a Saturday afternoon: "We shall not be moved". I do not say that in the imperative sense but with humility and with the courtesy that is usual in your Lordships' House.
My noble friend mentioned some very interesting figures from Australia. I hope that he noticed, as I did that the year mentioned was 1980. I believe he said that these were the latest figures available. I wonder whether my noble friend would agree that if this shows in part the delay that could occur in the Australian system, which he and other noble Lords believed was working well, how much worse might it be with our own system which, first, would have to take on inexperienced staff, and, secondly, is undergoing reorganisation?
Lord Campbell of Alloway: My Lords, I am very much obliged to the noble Lord. I was only seeking to draw a parallel between the first year of the implementation in Australia and the first year of implementation here, if this Bill were to reach the statute book, taking aboard some of the observations made by the noble Lord, Lord Alexander, and in that context to put together a concrete basis for comparison and not, so to speak, keep sliding up and down the drainpipe.
Lord Lyell: My Lords, I would be fascinated to find a large enough drainpipe to have the noble Lord, Lord Alexander, my noble friend and myself wedging one another up and down. If I misquoted or got my noble friend's figures out of context, I apologise; but I will give the undertaking that I shall read my noble friend's comments very carefully. Indeed, I am sure they will be read widely, both inside your Lordships' House and outside.

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I would conclude by suggesting that the proper sequence in our view is, first, to complete the reorganisation of the Trade Marks Registry and give current users the service they need. Secondly, we should press on with the negotiations in the Community to the point where the shape of the Community system becomes clear. Thirdly, we should re-examine the whole of our legislation in the light of any Community system and then, and only then, legislate for the future.
Lord Alexander of Potterhill: My Lords, I wonder whether the noble Lord would be kind enough to allow me to draw to his attention the report of the Australian Parliament the year before this became operative, because of his emphasis on the staffing problem? I quote:
"Methods of improving use of staff resources, including the use of part-time trade mark examiners and the establishment of a temporary pool were investigated and implemented."
They had the same surge and subsequent increase. I suggest that if Australia could cope, we might manage.
Lord Lyell: My Lords, with your Lordships' leave, I would suggest that might be so, but I would fire back at the noble Lord, Lord Alexander, that there was not just one problem but three problems in the Trade Marks Registry. We already have problems there. I believe that the situation, as it then was, in Australia, and ours are not wholly comparable.
On Question, Bill passed, and sent to the Commons.
House adjourned at eleven minutes before nine o'clock.

  MR. QUYAM BUTT
  MR. QUYAM BUTT
  ASSAULT BY INTRUDERS IN THE HOME
  ASSAULT BY INTRUDERS IN THE HOME
  GREY SEALS: ALLEGED ILLEGAL KILLING
  GREY SEALS: ALLEGED ILLEGAL KILLING
  CRITERIA FOR PROSECUTION: GUIDANCE
  CRITERIA FOR PROSECUTION: GUIDANCE
  LEAD PIPES: REPLACEMENT GRANT APPLICATIONS
  LEAD PIPES: REPLACEMENT GRANT APPLICATIONS
  A.34 WHITWAY DIVERSION
  A.34 WHITWAY DIVERSION