Sitting of 23 February 1983

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

    Domestic Rating
    Mr. Fitchasked the Secretary of State for the Environment if he is yet able to announce when he expects to make a statement on his review of the future of domestic rates and possible alternative sources of local revenue.
    Mr. David Atkinsonasked the Secretary of State for the Environment if he is yet able to announce when he expects to publish the White Paper on rate reform.
    The Secretary of State for the Environment (Mr. Tom King): I shall announce our decisions on the review as soon as possible.
    Mr. Fitch: Will the Secretary of State admit that the Government have not the faintest idea how to deal with the future of rates or, indeed, the whole local government financial structure? This is a very urgent matter. What plans for reform does he intend to introduce in the very near future to put local government on a better and more satisfactory financial basis?
    Mr. King: I note the hon. Gentleman's feeling that changes need to be made. As I made clear, I cannot announce anything today. I do not accept the first half of his question, and we intend to announce our decisions on the review as soon as possible.
    Mr. David Atkinson: Does my right hon. Friend agree that, although the last Conservative manifesto made it plain that rate reform could not be given a high priority, many thousands of ratepayers in the country voted Conservative in the belief and hope that we would abolish the domestic rating system? Will he therefore ensure that when the White Paper is published it will propose complete abolition, instead of only tinkering with the existing system?
    Mr. King: In the interests of accuracy, although the question refers to a White Paper, I referred to our decisions, and the form that they might take is not yet decided. However, I assure my hon. Friend that I, of all people, am more than aware of the interest in this subject and of my responsibility to produce satisfactory answers.
    Mr. Litherland: Does the Secretary of State realise that local government financing will now affect Manchester so much that some 20 community centres will
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    be closed and that that will affect the young, the elderly, the single parents, and the mums and toddlers club? Does he realise that what he is doing to the financing of those projects in Manchester will result in riots on the streets again? Will he, like his predecessor, come to Manchester with crocodile tears when the riots start?
    Mr. King: I was proud to be able to announce two major new schemes for Manchester from this Dispatch Box last week, which I hope the hon. Gentleman appreciated. I hope, too, that instead of making speeches, which are now pretty obsolete, about the "bleeding cuts" that are necessary in various areas, he will look at the ways in which economies could be made in other services to ensure that essential provision is made. I know that the hon. Gentleman takes an interest in local government. There may be a question later on the Order Paper showing one or two areas in Manchester where that could be done.
    Mr. Proctor: Is my right hon. Friend aware that the Conservative-controlled Essex county council is proposing to increase rates by 5 per cent., whereas Labour-controlled Basildon district council is proposing to increase rates by between 30 and 40 per cent? Is he further aware that the leader of the Labour group on the county council proposes next Tuesday to try to increase the Essex county rate by 2p in the pound more? Is not the real reform one that people can make for themselves in the May elections by electing Conservative administrations to county and district councils?
    Mr. King: My hon. Friend will be aware that the pattern is now well established and well documented, on any statistical basis that one chooses, that Labour-controlled authorities have consistently gone for far higher rates increases, often with catastrophic results for employment and jobs in their areas. I note the stark contrast that my hon. Friend mentions between the Conservative-controlled Essex county council and. Labour-controlled Basildon.
    Mr. Kaufman: Will the Secretary of State's statement, when it comes, honour the Prime Minister's personal and specific promise to abolish the domestic rating system?
    Mr. King: I shall give exactly the same answer to the right hon. Gentleman. I have nothing to add to what I told him the last time he asked exactly the same question.

    Water Workers (Pay)
    Mr. Marlowasked the Secretary of State for the Environment how water workers' pay has compared with that of local authority manual workers over the past 10 years.
    Mr. King: A strict comparison is not possible because of the wide range and different natures of the jobs performed by the two groups.
    Mr. Marlow: As there is no earthly reason why the pay of water workers should be compared with that of power workers, local authority manual workers, or even their probably harder working, less well paid and certainly less secure brothers in manufacturing industry, will my right hon. Friend undertake so to constrain the finances of the water authorities that yesterday's decision can be paid for only through productivity increases?
    Mr. King: My hon. Friend is correct. He will know that the chairman made no finding in support of

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    comparability with other groups of workers in his statement yesterday. He will also be aware that the vast majority of authorities have now established their water rates for the coming year. Therefore, the only way in which any increases can be paid for is out of productivity, greater efficiency and cost economies.
    Mr. Arthur Lewis: If the Minister is to make the comparisons that his hon. Friend the Member for Northampton, North (Mr. Marlow) wants, will he also bear in mind that there are about 800 men and women receiving 10 and 12 times as much in tax free expenses in another place as are hon. Members here?
    Mr. King: That goes a little wider than the original question and, in defence of my hon. Friend the Member for Northampton, North (Mr. Marlow), I think that the purpose of his question was to make clear that there is no such thing as comparability in this sphere.
    Several Hon. Members rose—
    Mr. Speaker: Order. There will be a statement at the end of Question Time on the broader issues of the water dispute.

    Planning Applications
    Mr. Knoxasked the Secretary of State for the Environment whether he is satisfied with the speed with which planning applications are being dealt with.
    The Under-Secretary of State for the Environment (Mr. Giles Shaw): There has been a welcome improvement. The latest statistics, which are for April to June last year, show 70 per cent. of planning applications being determined in eight weeks, as against 62 per cent. a year earlier. I hope we can improve further on this.
    Mr. Knox: Is my hon. Friend aware that in the second quarter of last year, the period to which he referred, 23 per cent. of the planning applications to the Peak district national park joint planning board took more than 13 weeks to determine, compared with 5 per cent. of the applications to the Staffordshire Moorlands district council and none of the applications to the Newcastle borough council, the other two local authorities in my constituency? Is my hon. Friend satisfied with the performance of the Peak district national park joint planning board and, if not, can he do anything about it?
    Mr. Shaw: No, I cannot be satisfied with the performance of the Peak district national park joint planning board, because its performance, although it has improved in recent quarters, is substantially below the average of other national parks. I recognise that many planning applications in areas of outstanding natural beauty take a considerable time to be dealt with, but some further improvement can certainly be made.
    Mr. Stephen Ross: Although I recognise that there has been an improvement in this area, does the Minister agree that time is money, jobs and investment? Will he please encourage planning committees, so that they may reach decisions more quickly to meet more frequently than once a month when they have to deal with big applications for which people are paying sizeable sums?
    Mr. Shaw: I entirely accept that it is vital that local authorities recognise the importance of speedy decisions, and I am happy to say that most now do.
    Mr. Chapman: Although I welcome the more speedy processing of planning applications, is that because local planning authorities' procedures have been improved, or simply because fewer applications are being made?
    Mr. Shaw: There has been a decline in the number of applications, but I should like to think that some improvements have also been made. A considerable effort has been made by my Department and, I might even say, by myself, to speed up such matters.

    Vacant Land Registers
    Sir William Elliottasked the Secretary of State for the Environment if he will now seek to require unused and vacant public land under one acre to be included in the vacant land registers.
    Mr. Giles Shaw: I have no plans to do so at the moment. I prefer to concentrate for the time being on promoting the more effective use or disposal of land already registered, but I shall keep this question under review.
    Sir William Elliott: Is my hon. Friend aware that the land already registered as unused and derelict totals no less than 94,000 acres, much of which is in the hands of state-run industries and local authorities? Will he do his best to release that land to create employment and also to add to local authorities' rate revenue?
    Mr. Shaw: I entirely accept my hon. Friend's point. The objective of the land register scheme is to provide information about available sites, some of which have clear potential for development.
    Dr. David Clark: The House will be pleased to hear the Minister's answer today, but has he seen the survey that was conducted by the House Builders Federation, which showed that the 26,000 acres listed on the land registers included roadside verges and a six-mile rail embankment, and that only 11 per cent. of the land on the register was suitable for house building? Therefore, will he have no truck with the idea of bringing in the smaller areas?
    Mr. Shaw: The hon. Gentleman's point should be fully and correctly answered. Although 11 per cent. of the land is available for house building, a large proportion of registered land will not be suitable for development. That has always been the case. However, it must be important that we are trying to bring every development site into productive use as soon as possible. Smaller sites will be too costly to introduce at this time.
    Mr. Hordern: As the Government already have the power to direct local authorities and the nationalised industries to dispose of this land, why is that power not being used and why is the land not being sold so that the construction industry can be put to work?
    Mr. Shaw: I am prepared to take action where circumstances warrant it. In recent weeks we have written to the owners of about 78 sites inviting their comment as to why they have not disposed of the sites in question. I must remind my hon. Friend that the present state of the construction industry is such that not all sites available for development are being taken up even now.

    Rate Support Grant
    Mr. Altonasked the Secretary of State for the Environment what estimates for the rate of inflation were used in calculating the recent rate support grant levels.
    Mr. King: Like all other public expenditure programmes, the local authority expenditure provisions for 1983–84 were planned in cash. They reflect the Government's view of what the country can afford.
    Mr. Alton: As the water workers' award may well have a spin-off effect for other public sector employees, and as the rate of inflation could well increase, how will the Secretary of State help local authorities which find that they do not have sufficient resources at the end of this year to maintain existing services?
    Mr. King: It is becoming clear that local authorities have been considerably advantaged in the present year by the fall in inflation and interest rates. Despite an admittedly tough rate support grant settlement that reduced the rate support grant by 3 per cent., the overwhelming majority of responsible authorities are now making very low rate increases and I expect that to be maintained. I do not want to follow the hon. Gentleman in looking at every possible problem that can be dredged up.
    Mr. Kenneth Carlisle: Will my right hon. Friend confirm that the rapid fall in the rate of inflation has enabled many councils to impose low rate increases in the coming year, which is a further proof of the success that can be achieved if we continue our fight against inflation?
    Mr. King: I certainly endorse that. However, there will be some unfortunate exceptions to the low rate increases. One notices the sorts of projects that the Greater London Council has for its expenditure. It is no wonder that it is threatening Londoners with yet another substantial rate increase.
    Mr. Marks: Is it the Government's view that, compared with industry, domestic ratepayers do not pay a high enough proportion of local government expenditure?
    Mr. King: We have no proposals to change the balance between the domestic and industrial ratepayer, as I made clear in the original discussions and in the Green Paper.
    Mr. Oakes: Will the Secretary of State comment on the reports of his speech to the Conservative party's local government conference last weekend, when he said that he was about to scrap targets and penalties?
    Mr. King: I told the local authorities and delegates at that conference that I would very much prefer to see a system in which targets were not necessary. The challenge is with local authorities. Targets were introduced to try to obtain a better achievement on Government expenditure targets overall and if we were able to secure that I would be delighted to see whether it was possible to get rid of targets.

    Vacant and Derelict Land
    Mr. Hawksleyasked the Secretary of State for the Environment, of the 61,000 acres of vacant and derelict land in local authority ownership and included in the vacant land registers at 1 July 1982, how many acres have now been brought into use by the owners.
    Mr. Giles Shaw: The latest returns are still being analysed, but it is provisionally estimated that by 1 January this year some 3,800 acres of local authority land had been released from the registers, of which over a third had been brought into use by the owners since registers were published.
    Mr. Hawksley: As the Telford area has a total of 2,175 acres on the register, will the Minister consider trying to persuade the development corporation to de-designate and sell any surplus land, although I appreciate that new towns have an above average amount of spare land?
    Mr. Shaw: I would certainly be willing to take up my hon. Friend's suggestion, but it is important that those who seek to use land that is on that register should make the application. If it is not being effectively dealt with, I should very much like to know about it, but the local demand must exist.
    Mr. Steen: Will my hon. Friend now do something more than merely say that he will persuade nationalised industries and local authorities to do something in the fullness of time? Is he aware that 3 per cent. of all land in Britain is now vacant and that 1·5 million acres are wasting? Bearing in mind that we import more than 50 per cent. of our food, is it not time that we auctioned off some of the derelict public land which is still in ownership and is unused?
    Mr. Shaw: I accept my hon. Friend's conclusion that we must apply every possible pressure for the development and disposal of land. With regard to the public register, however, we are dealing with what certain categories of owner possess, for which there is no plan beyond a two-year date. I plead with my hon. Friend to recognise that we will seek to secure disposal, and we could be substantially aided and abetted in this when circumstances improve locally, which would increase the demand for such development to take place.
    Mr. Edwin Wainwright: Will the Minister take into account the fact that often when local authorities sell land, land sharks take over and make a tremendous profit out of it? Will he ensure at all times that when a local authority sells its land it does so for the benefit of the community as a whole and not for the benefit of a few individuals?
    Mr. Shaw: It will be enormously to the benefit of the community if land for which it has no planned development is allowed to be sold and developed, thus producing a greater rateable value for the local authority.

    Local Authorities (Privatisation)
    Mr. Marksasked the Secretary of State for the Environment what progress has been made in privatisation within local authorities.
    Mr. King: A growing number of authorities are testing the efficiency of their services by putting them to competitive tender, and an increasing number are finding that significant savings can be made by awarding contracts to specialist outside firms.
    Mr. Marks: Is it the Government's intention to put pressure on local authorities to sell off or put out to private enterprise such things as sports centres, allotments, playing fields, swimming pools and even cemeteries?
    Mr. King: I am anxious that every local authority should test every service to ensure that it is being provided

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    in the most cost-effective way. As the hon. Gentleman decided to ask this question—perhaps his hon. Friend the Member for Manchester, Central (Mr. Litherland) will be interested in this—I checked on Manchester's refuse disposal service. Manchester now has the most expensive refuse collection service per capita, outside any London borough, in the country. On a rough estimate, it now appears on the new proposal that Manchester's refuse collection cost is twice that of Birmingham, and that if Manchester could make an equivalent saving to Birmingham, £2·5 million would be available which might go to deal with some of the difficult problems with which the hon. Gentleman has to reckon.
    Sir Anthony Grant: I welcome the good sense of the increasing number of local authorities which, in the interests of their ratepayers, are using private enterprise for there services, but is my right hon. Friend aware that we are still a long way behind many other countries in this respect? Will he follow the excellent example of his right hon. Friend the Secretary of State for Social Services and issue a powerful circular to local authorities along the lines of the one issued by his right hon. Friend in the case of the Health Service?
    Mr. King: I am upset by that question. I thought that we were well ahead of my right hon. Friend the Secretary of State for Social Services. We have been advocating and encouraging this approach, and my noble Friend Lord Bellwin, the Minister for Local Government, has also been extremely active in this area. I believe that no council, no councillor and no council official can honestly claim to be properly discharging their duties unless they have established and checked whether services are being provided in the most cost-effective way. The only way to do that is to put them out to tender.
    Mr. Eastham: The Secretary of State continues to make snide remarks about refuse disposal in the city of Manchester. Does it ever dawn on him that refuse disposal sometimes costs some cities hundreds of thousands of pounds because they have no tipping space, which means that tons and tons of refuse have to be transported out of the city? What about that aspect?
    Mr. King: That is absolutely correct. That is why I was referring not to refuse disposal but to refuse collection. If the hon. Gentleman is dismissing the fact that it costs twice as much to collect Manchester's refuse as it does to collect Birmingham's, that is the most classic example of a closed mind that the House can ever have seen.
    Dr. Mawhinney: Does my right hon. Friend agree that the pressure to privatise local authority services is motivated by a desire to give the ratepayer the best value for money rather than being simply an ideological exercise?
    Mr. King: If we are to see services of the type that the House would wish to see for the handicapped, for the elderly and for the disadvantaged in our society, it is essential that main services are provided in the most cost-effective way.

    Sheltered Housing
    Mr. Foulkesasked the Secretary of State for the Environment how many sheltered housing starts he expects in 1983.
    The Under-Secretary of State for the Environment (Sir George Young): My Department makes no such forecasts. It is for individual local authorities and housing associations to decide, in the light of local needs, what provision to make for sheltered housing from the resources available to them.
    Mr. Foulkes: Has the Minister seen the Age Concern, Scotland figures, which show that the shortfall of sheltered housing in Scotland is 24,000? Is he aware that, if one extrapolates that figure for the whole of the United Kingdom, there must be about 250,000 old people who need sheltered housing but do not have it? Will the Minister therefore give some encouragement to local authorities to install dispersed community alarm systems so that, at the very least, old people at risk will have some immediate contact in times of emergency?
    Sir George Young: No, I have not seen those figures, because I have no responsibility for housing in Scotland, but I am happy to say that sheltered units started in England in 1982 were 40 per cent. up on 1981. The hon. Gentleman is quite right. There is a wide variety of alternative provision, such as that which he mentioned, which enables many elderly people to stay in their own homes, which is what many of them wish.
    Mr. Andrew F. Bennett: In spite of the Minister's claim that sheltered unit starts are 40 per cent. up on the previous year, does he accept that the number is appallingly low and that it is not growing even at a rate to keep pace with the number of people aged over 75? Does he agree that what we need is a major improvement in the amount of sheltered housing so that people can have the type of housing that they need, thus vacating family houses so that others can use them?
    Sir George Young: The decline in starts began in 1977. I am happy to say that we have now reversed that slide. We are now on a steady increase. The important point is that one wants to provide a variety of choice and that sheltered units provided by local authorities are not the only answer. Substantial progress can be made through home improvement grants and through loans. I am delighted that the private building sector is taking a growing interest in making provision for elderly people and that there is an interest in the leasehold scheme for the elderly.

    Sports Council
    Mr. Proctorasked the Secretary of State for the Environment what public funds were given to the Sports Council in 1982–83 and 1981–82; and what is his estimate of the sums available in 1983–84.
    The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): In 1981–82 the Sports Council grant-in-aid was £21,032,000. For the current financial year it is £28,002,000. That figure includes £1 million for Merseyside and two supplementary grants totalling £4·25 million.
    The Sports Council's grant-in-aid for 1983–84, subject to parliamentary approval, will be £27,030,000, which includes a further £1 million for Merseyside.
    Mr. Proctor: Does my hon. Friend agree that it is rather incongruous, when, rightly, we put a microscope on all areas of public expenditure, that the Sports Council

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    deems it right to give £90,000 by way of grant to the David Lloyd regional tennis centre, which is no doubt a profitable and flourishing tennis club? Does my hon. Friend think it right to have a thorough review of the Sports Council's activity and the accountability of the Sports Council to the Minister for its expenditure of these massive sums of public money?
    Mr. Macfarlane: The Sports Council is an independent body and is obliged to refer to my Department only when it is anticipating providing capital of more than £200,000. We look closely at these figures, but the Sports Council is an independent body. I do not accept that this centre will be the success that my hon. Friend thinks it will be and, in that a large amount of private money is invested in it, I can only hope that it will do much to restore tennis in this country.
    Mr. Pavitt: Has the Minister noted the excellent work of the Sports Council in contributing to racial harmony and integration? Has he noticed that, as a result of the work of the Sports Council, Great Britain is receiving a large amount of kudos from events all over the world where Caribbean ethnics and other British citizens are able to gain medals in sports and athletics on behalf of Great Britain?
    Mr. Macfarlane: I pay tribute to the success of all our athletes and sportsmen and women. It shows that there is great integration in our cities and counties. I can only hope that it will continue.
    Mr. John Carlisle: Despite the tone of the question by my hon. Friend the Member for Basildon (Mr. Proctor), will my hon. Friend the Minister send the congratulations of the House to Mr. Dick Jeeps and his colleagues on the tremendous amount of work that they have been doing for the unemployed in the inner cities? Will he tell the House that large sums of money from the urban aid programme have gone towards helping the unemployed and providing facilities for them?
    Mr. Macfarlane: I willingly do that. I am always anxious to save my Department's money, so I would sooner tell Mr. Jeeps that than send him a telegram. I pay tribute to the work that has been and is being done, which is most important. The first facility for the pound-for-pound scheme on Merseyside opens in Toxteth tomorrow. We have endorsed that with further pound-for-pound schemes in Bristol and the north-east, the details of which I shall announce in due course. The urban aid programme, together with the inner city partnership money and derelict land grant mean that in the last full financial year the better part of £60 million was dispersed towards the inner cities.
    Mr. Graham: What part did the Minister play in the enforced resignation of the director general of the Sports Council?
    Mr. Macfarlane: I am responsible only for the appointment of the chairman, vice chairman and members of the Sports Council. The appointment and rejection of any persons in the Sports Council is a matter for the chairman, the vice chairman and the council, not for my Department.

    Civil Engineering Industry
    Mr. Litherlandasked the Secretary of State for the Environment if he will arrange to meet trade union representatives to discuss the problems of the civil engineering industry.
    The Minister for Housing and Construction (Mr. John Stanley): Department of the Environment Ministers regularly meet representatives of the civil engineering trade unions at meetings with the group of eight and at the economic development committees for building and civil engineering.
    Mr. Litherland: Does the Minister realise that the financing of the infrastructure of this country is vital and that this vital industry is receiving, in real terms, decreasing finance? Does the Minister agree that he should not only listen to the unions but should take action that will get us out of this economic mess?
    Mr. Stanley: The hon. Gentleman will be pleased to see that the figures for 1982, which were announced today, show that there was a 4 per cent. increase in real terms in new orders for construction last year. That shows that there is some revival of the construction side of the economy. I draw the hon. Gentleman's attention to the public expenditure White Paper, which shows that we are making a public expenditure allocation for construction programmes involving a 10 per cent. increase next year on this year's outturn. That represents an increase in real terms.
    Mr. Latham: I welcome the figures that my hon. Friend has just given, because civil engineering is important to our infrastructure. Will he ensure that there is no underspending in Government Departments on civil engineering programmes?
    Mr. Stanley: It is the wish of all my right hon. Friends that we try to make full use of the available allocations. That is very much the wish of, for example, my right hon. Friend the Secretary of Stare for Transport and others of my right hon. Friends who have direct responsibility for the capital investment programme. They are very much aware of that.

    Inner City Areas (Housing)
    Mr. Cohenasked the Secretary of State for the Environment if he has any plans to assist housing development in the inner city areas, such as Leeds; and if he will make a statement.
    Sir George Young: The Government are actively encouraging local authorities to work with private house builders to meet the housing needs of their areas, in particular by selling land for development. Current initiatives include new building under licence from the local authority, improvement for sale and homesteading and enveloping. Local authorities and housing associa-tions are also assisting low-income purchasers to take advantage of those opportunities on shared ownership terms.
    Mr. Cohen: Will the Minister say whether, following the statement that was made on Tuesday of last week, he has reviewed the views expressed then and decide which authorities will benefit from the statement? Is he aware that areas such as Leeds feel that they are Cinderellas?

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    Over 500,000 people are still neglected. Does the Minister recognise that there is a waiting list of 22,000 for corporation or local authority housing in the city and that we are faced with problems in education, housing, leisure services and so on? Is the Minister prepared to make a statement to the effect that an additional list will be issued containing the authorities not included in the previous list.
    Sir George Young: The hon. Gentleman is referring to the statement that my right hon. Friend made last Tuesday on the urban development grant. I am happy to say that there will be further announcements on the urban development grant. I am aware that Leeds hopes to use an urban development grant to get the city centre housing development scheme off the ground, in association with a private builder. Within the Department we are currently considering the Leeds application. On the housing side, Leeds has recently been given an additional allocation of £9 million for expenditure between now and the end of the year. I am sure that that will make a significant impact on the problems mentioned by the hon. Gentleman.
    Mr. Squire: Does my hon. Friend agree that one of the problems in innner urban areas is vacant property and difficult-to-let estates? Does he agree also that the priority estates project initiated by his Department has made considerable strides towards providing housing in areas that were previously rejected?
    Sir George Young: My hon. Friend is absolutely right. I am delighted that under the urban programme many local authorities are putting forward schemes that will draw on some of the many ideas in the priority estates project booklet to which my hon. Friend referred.
    Mr. Steen: Does my hon. Friend agree that one of the best ways to help housing development in the inner cities is to allow those on council housing lists to put council flats and houses that are in disrepair into repair and to move in? Is he aware that the extended lists of people who want to move into council houses are caused by local authorities refusing to let people move in and do their own repairs?
    Sir George Young: My hon. Friend is absolutely right. I am sure that local authorities which are sitting on empty properties that are earning no rents and no rates will listen to what he has said and encourage any imaginative suggestions for putting those properties to good use.

    Private Tenants (Right to Buy)
    Mr. Winnickasked the Secretary of State for the Environment if he will introduce legislation to permit as of right private tenants to purchase the accommodation they live in.
    Mr. Stanley: I refer the hon. Member to the reply given to him by my right hon. Friend the Prime Minister on 15 February 1982.
    Mr. Winnick: Why should the one group of tenants most at risk from unscrupulous landlords and property companies be denied the right to buy as of right? Is the explanation—perhaps the Minister will be honest enough to admit it—that Tory Ministers do not consider it part of their job to offend substantial property interests, including those who sit on Conservative Benches and in another place?
    Mr. Stanley: We have made it clear to the hon. Gentleman on many occasions that we believe that sales in the private sector should be by a voluntary process. The Government do not believe that a Government have the right to require the disposal of houses that have been purchased by private individuals with their own assets. It is strange that the hon. Gentleman has raised that issue when he has spent an inordinate amount of time in Standing Committee F denying and arguing against the right to buy in the public sector.
    Sir Albert Costain: Does my hon. Friend realise that a number of landlords are offering their tenants the opportunity to buy on exactly the same terms as council tenants? My hon. Friend must appreciate that there are some good landlords and that they are not all demons and devils, as the hon. Gentleman implies.
    Mr. Stanley: My hon. Friend, as always, is entirely right. Our estimate is that over the past decade between 150,000 and 200,000 sitting tenants in the private sector have been able to negotiate the purchase of their homes from their landlords.
    Mr. R. C. Mitchell: If the Conservative party really believes in a property-owning democracy, why on earth do not the Government extend this principle by accepting the excellent suggestion made by the hon. Member for Walsall, North (Mr. Winnick)?
    Mr. Stanley: That is an interesting observation. I am sure that it will be noted outside that the alliance has no regard to private assets in private property.
    Mr. Cryer: Is it not true that the Conservative party has every respect for private assets, which is why it will not advance to these tenants rights which it regards as very important for the public sector? Is it not true that the Tory party is bent on destroying the public sector and hiving off important public assets, which will not add a single house to the public sector and will inevitably lengthen housing waiting lists in the public sector?
    Mr. Stanley: We have no wish to destroy the public sector, as the hon. Gentleman suggests. We have an expanding house building programme and an expanding provision of public expenditure in the public sector. We believe that the aspirations of the overwhelming majority of people to buy their homes should be fulfilled wherever possible.
    Mr. Durant: Does my hon. Friend agree that many councils are extremely bad landlords and that is why the Government had to introduce a tenants' charter?
    Mr. Stanley: I am grateful to my hon. Friend for making that point. He is entirely right. As a result of the Government's actions through the Housing Act 1980 and the provisions that we have tabled to the present legislation, we shall have brought about the most important single extension of the legal rights of all tenants in the public sector.

    Financial Institutions Group
    Sir Anthony Grantasked the Secretary of State for the Environment what has been the practical effect of the work of the financial institutions group established by his Department; how many members there are; and what has been the total cost.
    Mr. King: The financial institutions group has been a most successful experiment in combining the expertise of the public and private sectors. Twenty six managers from major private sector institutions have worked with the Government for the past year on new approaches to urban regeneration. The urban development grant and inner city enterprises are two ideas that have already been adopted. The institutions met most salary costs and expenses—about £1 million. The cost to the public sector—approximately £350,000—was mainly for Civil Service support.
    Sir Anthony Grant: I welcome any initiative that my right hon. Friend takes to encourage private enterprise to operate where there is urban decay. Does he agree that the financial institutions group is one of many hundreds of such bodies throughout the country and that what it has achieved in terms of removing urban decay is obscure? Would there be some merit in having a national directory of all these schemes that includes an evaluation of what they are doing to achieve my right hon. Friend's admirable aim?
    Mr. King: The financial institutions group has worked with the Government to investigate ways in which the institutions and private sector funding can play a larger role in contributing to some of those programmes. Much work has already been done, but I am keen to give the maximum publicity to the work that such bodies have done. I shall see how that can be carried forward.
    Mr. Squire: I congratulate my right hon. Friend on the flexibility that the Department shows in tackling the problems of inner-city areas. Does he agree that that is in contrast to the attitude of several Opposition Members who still see the problem as being simply one of spending ever more state money by local authorities?
    Mr. King: That is right. I referred briefly to urban development grant. The first tranche that I announced was £10 million, which was in support of £40 million of private investment. It is interesting to note that an additional £800 million of investment, which is strongly geared to private sector investment in this regard, is under consideration in my Department. There is a charming note which describes that, which I see included in my briefing. It says:
    "Unspecific optimism is the order of the day."

    Gleneagles Agreement
    Mr. John Carlisleasked the Secretary of State for the Environment if he will seek to convene a conference of Commonwealth Ministers of Sport to discuss the effect on sport in member countries of differing interpretations of the Gleneagles agreement.
    Mr. Macfarlane: No, Sir.
    Mr. Carlisle: In view of the vindictive action of the Jamaican Government, who have cancelled the English women's cricket team tour, and in view of the Australian Government's banning of English nationals simply because both parties have played some sport in South Africa, will my hon. Friend consider such a conference and recommend to the Commonwealth Prime Ministers that the Gleneagles agreement is now being used for purely political purposes and should therefore be abandoned?
    Mr. Macfarlane: It is the Commonwealth declaration on apartheid in sport, not the Gleneagles agreement.
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    Moreover, it is not an agreement. The 1977 declaration was agreed by the Commonwealth Heads of Government. Only they can amend it. I cannot. I should like to make it clear that the Government have always interpreted that declaration as enabling Governments to have the discretion to fulfil their own obligations according to their own laws. We have made it quite clear that we do not recognise the United Nations apartheid committee and its blacklist.
    Mr. Graham: Will the Minister bear in mind that the Gleneagles agreement is held to be satisfactory by all except the South African lobby and that, if it is honoured, there will be no British representation at the Olympic Games in 1984, the Commonwealth Games in 1986, the world cup in 1986 and the European football championships in 1984? If we are to continue to oppose racism in sport, will the Minister remember that no authoritative group or individual has yet claimed that sport in South Africa is not fully controlled by apartheid laws?
    Mr. Macfarlane: I acknowledge the hon. Gentleman's latter point. Nevertheless, the meeting of Commonwealth Heads of Government in Melbourne in September 1981 agreed to uphold the principles of the Gleneagles agreement.

    Empty Houses (Private Sector)
    Mr. Greville Jannerasked the Secretary of State for the Environment what estimate he has of the percentage of houses in the private sector that are empty and treated as voids; and what have been the corresponding figures for each of the past five years for which records are available.
    Sir George Young: Local authorities' 1982 housing investment programme returns provide the latest available estimate that about 4·3 per cent. of private dwellings in England were vacant in April 1982 for all reasons. Authorities' estimates are not generally based on detailed surveys and their accuracy will vary, the private sector figures being less firmly based than the corresponding ones for the public sector.
    The corresponding percentages for the four preceding years were 4 per cent. in 1978 and 1979, and 4·1 per cent. in 1980 and 1981.
    Mr. Janner: Is not the truth about housing in the private sector that the shortage is not one of land, as the Government proclaim, but of money to enable people either to buy or rent houses in that sector? Does he agree that the Government should now recognise the need to put money into the public sector, where more and more disadvantaged people are having more and more trouble in having the decent roof over their heads to which they are entitled?
    Sir George Young: There has been a tremendous underspend by local authorities this year. They have not been able to spend the resources that the Government have made available to them. Next year those resources will be about 15 per cent. higher than they were this year. With regard to the private sector, I am not aware of a shortage of resources in building societies for people who want to buy.
    Mr. Hill: Does my hon. Friend agree that one of the reasons why so many private sector houses are left vacant

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    is the abysmally low rents under the fair rents system, the two-year phasing for rents and the fact that as soon as a private house is rented the occupant demands the maximum maintenance and repairs? Does he agree that it is, therefore, almost impossible for the private landlord to let a house that has been void for some years?
    Sir George Young: The Housing Act 1980 addressed itself to the balance between landlord and tenant and recognised that the balance had shifted too far towards the tenant. With regard to property remaining empty, we have introduced shorthold. I deplore the irresponsible claim of the Opposition that they will repeal shorthold should they be returned to power.
    Mr. Stephen Ross: Is the Minister aware that some of the houses that are empty are in conservation areas and are not therefore rateable by the local authority? Does he agree that that is one way in which those properties could be brought back into occupation? Is he further aware that I know of two such properties in my home town?
    Sir George Young: I shall examine that problem. However, I should be surprised if that is the only reason why those properties are being kept empty and whether it would have more than a marginal impact if they were rated.

    Homeless Persons
    Mr. Easthamasked the Secretary of State for the Environment if he will make additional resources available to local authorities in areas which are the centres of large conurbations to assist them with the provision of hostels for homeless persons.
    Sir George Young: The need for investment in hostel and move-on accommodation was one of the factors that was taken into account in determining housing investment programme allocations for 1983–84. In addition, through its hostels initiative, the Government have since 1981 made substantial and increasing sums for hostels available to housing associations through the Housing Corporation.
    Mr. Eastham: Is the Department placing enough importance on the problem of the single homeless as it affects the core cities? Is the Minister aware of the high financial consequences that affect their revenue account and which will be subject to penalty? Does he realise that they must face the problems of social behaviour of some of the people who need urgent assistance? Is it not time that they were placed under the umbrella of one Department instead of being between the Department of the Environment and the DHSS?
    Sir George Young: Discussions about topping-up grants are continuing with the DHSS. We hope to come to a conclusion quite soon. With regard to the hon. Gentleman's general point about accommodation for the single homeless, the Housing Corporation allocation for hostel schemes was £12 million in 1981–82, whereas next year it will be £32 million. That gives some idea of the priority that we give to the subject.
    Mr. Pavitt: Is the Minister aware of the importance of the question of my hon. Friend the Member for Manchester, Blackley (Mr. Eastham) about centres of large conurbations? Does he know that in Brent this week 430 homeless people are being provided with bed and breakfast accommodation at a cost of more than £30,000
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    per week? Will he reconsider his decision of some months ago and enable Brent council to buy hostel accommodation outside the borough boundaries, which would be much cheaper for our ratepayers?
    Sir George Young: I met the director of housing of Brent council at a recent conference and asked him to write to me about the specific problem to which the hon. Gentleman referred. When I receive his letter I shall see what I can do to help.

    Shared Ownership Housing Schemes
    Mr. Jesselasked the Secretary of State for the Environment if he will make a statement on the progress of shared ownership housing schemes.
    Mr. Stanley: The use of shared ownership by first-time buyers in particular is continuing to accelerate and is likely to do so markedly this year as a result of the do-it-yourself shared ownership scheme that I announced in answer to my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) on 24 January, and as a result of the right-to-buy on a shared ownership basis proposed in the Housing and Building Control Bill.
    Mr. Jessel: Will my hon. Friend see what can be done to give a fair wind to the excellent shared ownership scheme of the Richmond Upon Thames Churches Housing Trust Ltd. at London road, Twickenham?
    Mr. Stanley: I assume that the scheme is in the process of gestation. I shall write to my hon. Friend when I discover the state of play.
    Mr. Dubs: Is the Minister aware that many private tenants, especially those with bad landlords, would wish to take part in shared ownership schemes if only they had the opportunity? Will he reconsider his answer to my hon. Friend the Member for Walsall, North (Mr. Winnick) about the right of private tenants to buy when the landlord is selling the property? Will he consider giving private tenants the right to buy in those conditions?
    Mr. Stanley: As to the availability of shared ownership, I refer the hon. Gentleman to the new scheme that I announced a few weeks ago. We have now created a shared ownership opportunity for all tenants—including those still living with their parents, or single people—throughout the country. In a written answer that I shall give to the hon. Member for Woolwich, East (Mr. Cartwright) later today I shall set out the housing associations that will cover each area in England under the do-it-yourself shared ownership scheme. That will provide the opportunity of shared ownership for all who wish to take advantage of it, especially for the first 3,000 sales for which we have made financial provision. The scheme will be helpful.

    Property Services Agency
    Mr. Conlonasked the Secretary of State for the Environment what further consideration has been given to the future structure of the Property Services Agency; and if he will make a statement.
    Sir George Young: My right hon. Friend has now received from the chief executive of the Property Services Agency proposals for restructuring the agency and for changes in its management and operating methods. Before

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    taking any decision on those proposals, Ministers are consulting the departmental trade union side and other Government Departments affected.
    Mr. Conlan: I am grateful to the Minister for his reply. However, will he give an unequivocal undertaking that the Newcastle office of the Property Services Agency will be maintained because of its crucial role in defence? Will he also undertake that there will be no privatisation of the work carried out in that office?
    Sir George Young: The proposals are at an early stage and it is impossible to say which offices might be closed. The rather alarmist proposals circulated by the trade unions have given rise to needless anxiety.
    Mr. Robert Atkins: In the review to which my hon. Friend refers, does he expect consideration to be given to the arrangements that obtain between the PSA and various military organisations in terms of the direct line of management for repairs and other jobs carried out by the PSA on bases and in RAF camps?
    Sir George Young: The proposals deal with that relationship, and there are suggestions to co-locate the PSA departments with Ministry of Defence departments rather than splitting the responsibilities of the PSA among all the Government Departments that it serves.
    Mr. Marks: Is the Minister satisfied that, where PSA functions have already been handed over to private enterprise, the private firms are carrying out the same training of apprentices and professional people as the PSA did? Will he monitor this matter?
    Sir George Young: The proposals are not primarily about privatisation, but about the functions and operating methods of the PSA, to see whether we can make it more efficient and improve its services.
    Sir Anthony Grant: In the reorganised PSA, will my hon. Friend satisfy himself that there is absolute fairness and openness in the way in which the PSA appoints architects and private contractors for some work?
    Sir George Young: Yes. That is our policy. If my hon. Friend knows of a problem, perhaps he would be good enough to write to me.

    Vacant and Underused Land
    Mr. Heddleasked the Secretary of State for the Environment what steps he is taking to ensure that local authorities and other public bodies holding vacant and underused land dispose of land for private housebuilding.
    Mr. Giles Shaw: The Department has regular contact with the House Builders Federation, which has drawn attention to registered sites that appear to it to be suitable for housing. On the basis of this information and the Department's initial appraisal, it was decided to send formal letters to 38 landowner bodies asking to know their intentions in regard to a total of 78 sites in their ownership.
    Mr. Heddle: Does my hon. Friend agree that the problem of council house waiting lists could best be solved by encouraging the private sector to build homes for sale, using the half-and-half scheme and the other initiatives announced by his Department? Will he ensure that all local authorities and public sector landholders dispose of their land to the private sector as quickly as possible?
    Mr. Shaw: We intend to encourage them so to do. Various actions are in train to achieve that objective.
    Mr. Newens: Does the hon. Gentleman recognise that many local authorities need land for building council houses, and that many people have no hope of getting a home unless they can get a council house tenancy? In those circumstances, what will he do to prevent property speculators, who are anxious to make the most of sales to the private sector, from taking over all available land from local authorities which need it for other purposes?
    Mr. Shaw: I remind the hon. Gentleman that the land registers produce a list of sites for which there is no planned local authority development. If they had such plans, the land would not appear on the land register list.
    Mr. Durant: Will my hon. Friend do all that he can to encourage local authorities to look within their boundaries for vacant land to develop both private and public sector housing, rather than constantly looking outward to green field sites?
    Mr. Shaw: I entirely agree. The land register system is one such proposal.

    Greater London Council
    Mr. Wellbelovedasked the Secretary of State for the Environment what representations he has received concerning the abolition of the Greater London council.
    Mr. King: In the past year I have received more than 50 representations from individuals and organisations concerning the abolition of the GLC. All but three have been in favour of abolition.
    Mr. Wellbeloved: Will the Secretary of State bear in mind that the case for abolition does not rest only on the lunatic antics of the Labour-controlled GLC and its desire to dish out lavish subsidies to organisations ranging from those who support gay tights to supporters of IRA bombers? Is he aware that the real case for abolition rests on the simple fact that no service provided by the GLC could not be undertaken by the 32 London boroughs, individually or by co-operation?
    Mr. King: I understand the hon. Gentleman's point, although he will accept that it is sometimes difficult to find out what the GLC is doing, so widespread and lunatic are some of the schemes at present espoused. The result of that is that this year GLC expenditure looks as though will be more than double what it was when the Labour administration there came to power.
    Mr. Mark Carlisle: Does my right hon. Friend recognise that any consideration of the abolition of the GLC will bring into question the future of education in London? Does he agree that, whatever solution is required, a return to the boroughs would not be suitable?
    Mr. King: In considering any such proposals, education would be affected. At this stage I shall simply note my right hon. and learned Friend's comments.
    Mr. Arthur Lewis: Is the Minister aware that the red dictator, Ken Livingstone, has been joined by the blue dictator of the Tory party in speaking against the abolition of the GLC? Can we be assured that the Tories there have not been got at by the reds in County Hall?
    Mr. King: I do not believe that Councillor Richard Brew has ever been described as a blue dictator. However,

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    I note the comments that have been made, and I am aware of the views advanced by those who support the retention of the metropolitan counties. I am also aware of the strong feelings of those who believe that there should be significant change.
    Mr. Stephen Ross: Does the Secretary of State expect to publish any documents on the future of the metropolitan counties and the GLC?
    Mr. King: We have no plans to do so.

    Regional Water Authorities (Chairmen)
    Mr. Edwin Wainwrightasked the Secretary of State for the Environment on how many occasions he has met the chairmen of the regional water authorities during the present wages dispute; and if he will make a statement.
    Mr. King: I have met some of the chairmen of the regional water authorities several times during the present dispute over water workers' pay. The hon. Gentleman should be aware that I have referred to these discussions several times during exchanges in the House and I do not propose to make a statement on this matter, except the one that I shall make shortly.
    Mr. Wainwright: Does the right hon. Gentleman realise that the settlement has caused a sigh of relief to be breathed in thousands of homes in this country? Next time anything similar happens in the water industry, may I beg the right hon. Gentleman to be careful how he intervenes? Does he not think that his interference in reducing the 6 per cent. offer to 4 per cent. had a grave influence on the dispute? For goodness sake talk to the people involved, but do not interfere with the figures.
    Mr. King: This is an opportunity to clear one point. The suggestion that I intervened and instructed the water employers that 4 per cent. and no more should be offered is quite untrue. The hon. Gentleman knows that the employers' opening offer was 4 per cent. As a result of the gap that then divided the two sides, the employers offered arbitration as long ago as last November. There might have been a happier outcome if that offer had been accepted then. The water employers at no time had any intention of opening at 6 per cent. and made that abundantly clear.

Water Industry (Dispute)
3.31 pm
The Secretary of State for the Environment (Mr. Tom King): With permission, Mr. Speaker, I wish to make a statement to the House about the water industry dispute. The House will note that, following the findings of the chairman of the committee of inquiry set up by ACAS, agreement was reached last night in the National Joint Industrial Council for a settlement of the pay dispute and an end to the strike.
The terms of the settlement are as follows:

i. the increase in the base rate should be 7·3 per cent. over 16 months, equivalent to 5·5 per cent. on an annual basis. This is exactly as recommended by the mediator a month ago on 23 January;

ii. a number of the employers' proposals made in their offer on 6 February were adopted. These were improved payments under the national productivity scheme equal on average to approximately 55p per week; an extra day's holiday for employees with 10 years service; the introduction of a scheme for the payment of wages by credit transfer, for which the chairman proposed £75 rather than the employers offer of £50 as a single lump sum payment; and a minimum rate of £5 for employees taking part in local schemes for greater flexibility in working hours rather than the £4 offered by the employers which will apply to only a limited number of employees. In addition, there will be, with effect from 1 April 1984, a one hour reduction in the working week.

iii. the chairman's findings and the settlement go beyond what had previously been on offer in only two significant respects—

a. £5 of bonus payments are to be consolidated into the basic rate, which will increase average earnings by about 2 per cent. and

b. the service supplement payable to those with over five years' service is to be paid to those with more than two years' service and to be raised, as in the employers' offer, from 2·5p per hour to 5·2p per hour. This adds 0·4 per cent. to average earnings over and above the employers previous offer.

The House will note that the chairman made no recommendation in support of the unions' central claim for comparability with other groups.
I should now tell the House the present position in the country. Ninety-one thousand properties are without normal mains supplies and 8·2 million people have been advised as a precaution to boil water. The quality of effluent from many sewage treatment works has deteriorated, but there have been very few serious effects on rivers. The House will appreciate the hardship and distress represented by the figures. None the less, it will also recognise the fact that after a four and a half weeks strike over 99 per cent. of users continue to receive their water supplies.
The water authorities and companies deserve every credit for this substantial achievement in keeping their systems running. The exceptional efforts of their staffs have maintained this essential service and safeguarded public health, and I pay full tribute to them. [HON MEMBERS: "And the unions".] Having said that, the House will recognise how damaging this dispute has been for all
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concerned. The water authorities and companies have been unable to maintain their normal service to all their customers, many of whom have suffered real hardship.
The manual workers went ahead with the strike in spite of an offer worth more than £10 per week on average. They have gained little more than £3 per week on average on top of that offer. In the process, they have lost many hundreds of pounds. For many of those involved it will take two to three years to recover the difference.
The cost of the water settlement cannot be found by raising water charges this year. Nearly all the water authorities have already set their budgets for next year. It will have to be met by further economies in operating and manpower costs.
The message of this dispute is clear. In industrial action of this kind there are no winners. There were always arbitration procedures available in the industry to resolve this dispute without a strike. The employers offered this on 11 November and again throughout the dispute. It has been an unnecessary strike. I trust that normal working will be resumed immediately and a full service restored to every customer as quickly as possible.
Mr. Gerald Kaufman: The Opposition share the satisfaction that will be felt throughout the country, though, if the evening press is to be believed, not by the Prime Minister, at the ending of this unnecessary and damaging dispute, but the House will have listened to the Secretary of State's sour and ungracious statement with a good deal of distaste. It was flavoured with the arrogance and insensitivity that provoked the strike in the first place. It was also irresponsibly provocative. Has the Secretary of State considered what the effect of belittling the settlement might be on workers considering their union's recommendation to return to work? If the unions have gained so little from the strike, why were they not offered this settlement in the first place, last November?
Can the right hon. Gentleman say how long it will take for the water system to gel: back to normal, when those having to use standpipes will regain their domestic supply, and when those now boiling water will no longer have to do so? What will be the cost of putting right the damage to the system?
In the debate last week, when I pressed for the inquiry that in fact took place—[Interruption.] Oh, yes; we asked for the inquiry. At that time, the Secretary of State stressed the importance of both sides accepting the inquiry's findings. I trust, therefore, that he will be gratified that both sides have accepted its findings and that the unions have honoured their agreement.
Has the Secretary of State reflected that if he had not intervened so damagingly on 11 November there would have been no strike, no hardship to householders, no pollution of rivers, and no costly damage to the system; and almost certainly a negotiated settlement last autumn would have been at a lower level than the one now accepted?
Has not the Secretary of State's intervention turned out to be a very expensive affair? Will the Government now abandon their invidious, discriminatory, back—door incomes policy, conducted by the arm twisting of walling employers? If the right hon. Gentleman, the Secretary of State for Employment and, above all, the Prime Minister have learnt their lesson, it may be that some good will come out of this sorry affair.
Mr. King: The House will be interested to recall the right hon. Gentleman's opening words, when he accused me of making a sour and ungracious statement. I must tell him that, if the cap fits, he should wear it. His attempt to rewrite the history of the dispute makes no impression on anybody who knows its background. If he has made any attempt to study the matter, he must know that many people in the union movement predicted that there would be industrial action in the water industry. It was to be the focus of pressure this year, and people know that to be the case.
The idea that a change being made in any opening offer provoked industrial action that would otherwise not have taken place is a total fallacy. The right hon. Gentleman must be about the only person in the country who still thinks that if a higher opening offer had been made there would have been a lower ultimate settlement. That is absolute rubbish.
The right hon. Gentleman attempts to claim the credit for suggesting the format of the committee of inquiry, but he does no credit to the employers who offered that on 4 November and continued to offer it throughout the dispute. It was enshrined in their national agreement.
The disgrace that the right hon. Gentleman bears is that at no time did he call upon the unions to honour the national agreement. Every old person who, during the past four and a half weeks, had to go to a standpipe in freezing weather has noted that he made no effort whatsoever—and nor did his right hon. and hon. Friends—to ensure that national agreements were honoured and that the strike was avoided.
The right hon. Gentleman asked when service would return to normal. Obviously that will vary in different parts of the country. I wish to make it clear to the House that, in the interests of all those suffering the present hardship and distress, I have asked the water authorities to ensure that normal service is resumed as soon as possible and that they use all available means to achieve that.
Mr. Tony Durant: Does my right hon. Friend accept that many of the workers in the water industry were very worried by the strike and did not wish to participate in it but that the closed shop arrangement forced them to do so? Does he further accept that the settlement will, in the long run, cost jobs in the industry?
Mr. King: There is no question but that I and any hon. Member who has spoken to constituents who are water workers know that they fervently hope that there will never be another water strike. Even if the right hon. Gentleman denies it, they know all too well just how expensive it has been and the losses that they have incurred. It is a staggering thought. It was exactly a month ago that the mediator made his recommendations. They did not have to accept them but could have gone to arbitration. Had they done so, no one would have lost a day's pay and they could have still pursued the claim. Now, as a result of union leadership, they have lost hundreds of pounds which, I estimate, will take them between two and three years to recover.
Mrs. Shirley Williams: I offer the Minister my contribution to a shrivelled bouquet to the right hon. Member for Manchester, Ardwick (Mr. Kaufman), who obviously single handedly sorted out the strike. Will the Minister ponder on the fact that the result of the settlement is not that there are no winners but that the country is to
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some extent the loser? Will he confirm that there has been a substantial deterioration in what was already a ramshackle water system?
As 2 million people are waiting to make wage settlements during the next few months, will the right hon. Gentleman assure the House that the 9 per cent. annual rate that will emerge from the settlement will not be regarded as the norm? Will he tell the Opposition the extent to which, if one gives people with muscle well above the inflation rate, those without muscle end up either receiving less or with no jobs at all? Will he confirm that many water workers made a substantial contribution to maintaining emergency supplies?
Mr. King: I respond immediately to the right hon. Lady's last point. I pay tribute to those workers who honoured the emergency cover, but I am afraid that it was a far from uniform practice. There were some extremely unattractive incidents when arguments occurred about whether old people in difficult circumstances represented an emergency. But I pay tribute to those who honoured the emergency cover.
One of the lessons we learnt from the dispute is not how ramshackle is the water system—obviously with bursts there are problems—but how well the system performed. Some of the more modern plants performed extremely well. I have no doubt that one of the effects of the dispute—under which the system was put to a real test—will, as my hon. Friend the Member for Reading, North (Mr. Durant) said, be greater automation and mechanisation, more modern plants and, I am afraid, some reduction in manpower costs that will obviously fall on the workers.
On the annual rate, certain factors in the water industry concern the amount of bonus, which is outside the basic rate. The mediator and the chairman of the committee both confirm the going rate at 7·3 per cent. for 16 months, which establishes an annual rate of 5·5 per cent.
Mr. Robert C. Brown: Is the Minister aware that I appreciate his difficulty because he has finished up with egg on his face? Will he be a little more generous and concede that 99 per cent. of water consumers received their supplies due in no small measure to the sense of responsibility of employees in the industry?
Is the right hon. Gentleman aware that each region of my union was in touch with the health authorities about the cases to which he referred concerning the elderly, those on dialysis machines and so on? He should be generous enough to concede that point.
Has the right hon. Gentleman now learnt his lesson? Does he realise that the dispute would not have occurred had it not been for his flat-footed intervention? Has he learnt the lesson of honouring the Prime Minister's election pledge to allow free collective bargaining to operate?
Mr. King: The hon. Gentleman referred to contact with health authorities. I must tell him that part of the procedure for emergency cover under the closed shop arrangement was that there should be contact with water authorities. Many needy cases are not brought to the attention of the health authorities. They may be dependent on the social services departments of local authorities, and urgent action may have been required. If the hon.

939
Gentleman is not aware of that, he should be. There were a number of distressing cases, something which I hope he would not condone.
The hon. Gentleman cannot honestly believe that the strike was caused through an argument about an opening offer. He knows that the union claim was in excess of 20 per cent. The unions were determined to achieve that figure. They have fallen far short of it. He should not refer to egg on my face. He is a Member of Parliament sponsored by the major union concerned in the dispute. No doubt he will wish to discuss with his members why they were led into industrial action by their leaders that has resulted in a loss of earnings for them this year.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call four hon. Members from each side and then move on to the other two statements.
Mr. Jim Spicer: My right hon. Friend has made it clear that the wage award will not be passed on to consumers this year. As the fact that that applies to this year only will be in everyone's mind, will he give an assurance that it will be an ongoing process and that the consumer will not be allowed to suffer as a result of wage awards above the rate of inflation?
Mr. King: As my hon. Friend knows, the Government have taken a close interest in the performance of water authorities. We have set performance aims for each authority which clearly set out manpower costs. I was glad that the chairman of the negotiation committee, Mr. Len Hill, confirmed that those aims will be adhered to. The only way in which that can be done is through economies in costs, not by passing on charges to the consumer.
Mr. Peter Hardy: Does the right hon. Gentleman accept that much of the problem arose from his reorganisation of the water industry? Does he accept that if the employers had not been facing the possibility of new jobs there might have been a more peaceful situation earlier?
Mr. King: I do not accept that at all. Anyone who knows the background to this knows that the issue of comparability with gas and electricity workers had been in existence for three years. The pressure had been building up and it is sad that a dispute of this kind was inevitable, but the background is a great deal longer than some people suggest.
Mr. David Madel: Will the Government make an announcement soon about rebates for people who have been without water for some time? Does my right hon. Friend agree that the very least that those people can expect is some form of rebate in view of all that they have suffered during the strike?
Mr. King: I well understand the concern about that. Clearly there is a valid point, as people who pay through a meter system do not have to pay for a supply when they are disconnected. The National Water Council is considering the matter and I hope that it will be possible to make a further statement later.
Mr. James Lamond: If we are to believe the Minister's desperate attempt to talk down the settlement reached as a result of the strike, may we take it that if other public service unions seek settlements at similar percentage levels there will be no girning from him
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or from anyone else on the Government side and that he will try to deflect any anger in Downing Street if other unions manage to achieve the same moderate increases that he has tried to tell us were forced on the water workers?
Mr. King: I am not trying to do anything of the kind. My duty in making a statement to the House—no Minister would dare to do otherwise—is to give the facts. I have to make clear the figures involved in the settlement. I have seen some propaganda and I have heard some people shouting about victory. I well understand the reason for that, as some of their members may be having second thoughts about why they were led out in the first place. It is my duty to make the facts clear.
As the hon. Gentleman knows, I followed the matter very carefully, and the facts that I have given are correct. I believe that the going rate increase of 5·5 per cent. approved by the mediator and the chairman is too high. It is much more than will be obtained by workers in private industry and by many people in far less secure jobs. Nevertheless, that is the decision and it must be accepted, but I hope that the country realises the implications.
Sir Kenneth Lewis: Does my right hon. Friend agree that the most important thing now is to get back to normal working in the interests of the consumer and especially of those who have been badly affected by the dispute and have had no water for the past few weeks or have had to get it from standpipes? Will he therefore press the authorities to use every means—I believe that that was his own phrase—including the use of private contractors, to put the system right as quickly as possible and not to wait for that to be achieved through overtime working, which would take far longer?
Mr. King: As I said, I have asked the water authorities to use all available means. Obviously I hope that the manual workers will return to work immediately and make their contribution, but it would clearly be intolerable if the authorities did not use every other means available to them. The suggestion that people should be kept waiting for three or four weeks to be fitted into an overtime rota would, I believe, be totally unacceptable to everyone in this country. Therefore, I wish the manual workers to make a major contribution and I want contractors to come in as well so that those who have already suffered distress for far too long may be reconnected at the earliest possible opportunity.
Mr. David Penhaligon: Will the Minister explain the position of local authority employees who do the same or very similar work? Does he agree that they are now at an unfair disadvantage?
Mr. King: I certainly hope not. There are separate negotiations for the separate groups of workers. On the wider issues, as the hon. Gentleman knows, both the mediator and the chairman specifically declined to make any recommendations in respect of any comparability claim in this matter. That is a very important decision.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that this has been one of the most botched-up wage negotiations in recent times? Does he further accept that this will be one of the most damaging and divisive settlements in this wage round? Does he agree that if gas, electricity and other public service workers seek the same increases, inflation

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will rise again and workers in the private sector will be disadvantaged? Is it not time that public sector workers were told that prices cannot continue to rise if industry is to recover?
Mr. King: I certainly endorse the second part of my hon. Friend's remarks. That is exactly the feeling of what I said about the going rate established in this case. It is far too high. It is significantly above the current rate of inflation and it is more than can be justified. I very much hope that all public sector workers recognise, as I am sure that many do, the importance of settling for sensible pay levels because the most important thing for them and for all of us is to see private industry recover as well.
Mr. Terry Davis: In the light of the settlement and the doctrine of collective responsibility, how does the Secretary of State justify the Government's refusal to make better offers to those who carry out vital life-saving work in the Health Service?
Mr. King: As I have made clear, each claim must be settled on its merits and it would not be right for me to comment on other claims now. In this dispute, the Government followed the proper procedures for the case. Negotiating procedures were available and open to be used, and it was obligatory on those concerned to use them. The challenge and the tragedy of this dispute is that the unions declined to observe the final stages of an existing national agreement. It was indeed an unhappy dispute, but the problem originally stemmed from failure to honour the national agreement.

Foreign Affairs Council (General)
3.57 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): With permission, Mr. Speaker, I will make a statement on the general aspects of the Foreign Affairs Council which met in Brussels on 21 and 22 February, at which my right hon. and noble Friend the Secretary of State for Trade and I represented the United Kingdom. With the permission of the House and, I gather, at the request of the Opposition, I will deal with trade matters separately.
The Council agreed that the 1984 elections to the European Parliament should be held throughout the Community in the period from 17 to 20 May 1984. This means that we in the United Kingdom will vote on Thursday 17 May 1984.
The Council had a further discussion of the European Parliament's proposals for a uniform procedure for future elections to that Parliament. It is now accepted that it will not be possible to reach agreement on a uniform procedure in time for the 1984 elections, but the Council decided that a further effort should be made to see whether agreement could be reached on a common basis for extending the franchise.
There was a first discussion of the Commission's paper on Greenland's application to withdraw from the Community. This subject will be on the agenda of the March Council, when there will be a more detailed discussion.
Ministers took note of the Commission's report on seals. This report will provide the basis for a review by the Environment Council on 28 February of the case for further Community action.
The Commission introduced briefly its green paper on the future financing of the Community, which is one of the documents debated by the House on Monday. The Council agreed to discuss the paper further at its March meeting. I reminded my Community colleagues that the United Kingdom would certainly wish these budgetary matters to be discussed at the European Council—that is, at the summit meeting—on 21 and 22 March.
There was a preliminary discussion in the Council of the Community's attitude towards a new international sugar agreement. I made clear our support for the Community joining a new agreement and pressed for the Community to play a realistic, full and constructive part in the negotiations.
Finally, there was a ministerial negotiating conference with the Spaniards at which Community declarations on the customs union and on the European Coal and Steel Community were presented to the Spaniards.
Mr. Ioan Evans: Hon. Members know that direct elections are to be held between 17 May and 20 May. Opposition Members are pleased to note that there is a failure to agree on a uniform electoral system. We welcome the decision that the European elections in the United Kingdom will be conducted not on a proportional representation system but on the traditional British system of first past the post. We support opposition to the proportional representation system because it provides no real connection between the electors' first preference and the final result. It also breaks the vital link between specific communities and their elected representatives.

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That link would be severely weakened if Members of Parliament were chosen through party lists or multi-Member constituencies.
Given the long delay in reaching a conclusion about refunds for the 1982 budget, and the increasing role of the European assembly in determining the form of refunds to the United Kingdom, what progress has been made in determining Britain's contribution to the Common Market in 1983? What views have been expressed by the Government on the Commission's green paper on the future financing of the Common Market, with the various options for increasing the EC budget that were dealt with in the debate on Monday?
In view of the clear demand by the people of Greenland to withdraw from the EC, will the Minister ensure that there will be no undue delay in meeting the wishes of the people of Greenland as that will set an important precedent for the British people?
Mr. Hurd: I note what the hon. Gentleman has said about the electoral system. As he knows, the Community is about to discuss its long-term restructuring of finances. What the Government have said, and what I made clear yesterday in the Council, is that Britain must insist that in parallel with that long-term discussion, which we thoroughly support and wish to succeed, there must be urgent discussions about an interim solution for Britain in 1983 and later. My right hon. Friend the Financial Secretary to the Treasury made clear in the House on Monday the Government's general views on this. There was no substantial discussion on it in the Council yesterday.
I advise the hon. Gentleman against hitching himself to the Greenland wagon. The matter will take a long time. We have just received the first Commission report. It is clear that many matters of substance will have to be discussed. We have no desire to stand in the way of the decision of the people of Greenland. Matters of substance have to be discussed. During our discussions this week in the Council with the member states of the Community, it became clear that they wanted to establish that there would be no premium for a country wishing to leave the European Community.
Mr. A. J. Beith: How can it possibly be claimed that with five years between elections there has not been time to agree on a common electoral system, especially as the European Parliament has brought one forward? Is not the truth that the Government have held up the timetable because of the Prime Minister's personal determination never to see any kind of proportional system used in any election in Britain, and that the Labour party supports that view because anything which makes a mockery of British participation in the European Parliament is welcome to it?
Mr. Hurd: The hon. Gentleman is quite wrong. This is a turbulent question in virtually every member state. It is a question not only of whether one is in favour of proportional representation but of which system one wishes to agree upon. However, it has not been possible to reach agreement.
Sir John Biggs-Davison: Is it not open to our partners to reach agreement by adopting our system? Will Her Majesty's Government continue their resistance to the adoption of any system of proportional
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representation for the European assembly, bearing in mind that if it were adopted that would certainly be used as a precedent for our national elections to this House?
Mr. Hurd: Discussion will continue on this matter in the Community. It is clear that there will be no change in the European elections in 1984.
Mr. Nigel Spearing: Apart from constitutional issues, the general Council appears to be dealing with matters which are the prime responsibility of the Exchequer and the agriculture, industry and energy Departments. Will the Minister comment on that?
Secondly, in respect of the finance green paper, can the Minister tell the House whether there are other Governments who do not wish to expand the Community's budget?
Mr. Hurd: The general affairs council tends, from time to time, to deal with general affairs.
The answer to the hon. Gentleman's second point is yes, there are.
Mr. Anthony Nelson: Is my right hon. Friend aware that many hon. Members believe that the ideals and potential of the European Community, which many hon. Members uphold, will not be interfered with if a differential system of electioneering operates throughout member countries?
Mr. Hurd: I do not think there is necessarily a connection between what the European Parliament does and what individual member states do in their national elections. For the time being, that is a subject on which progress towards a uniform system will continue to be slow and complicated.
Mr. David Ennals: To move into less controversial waters, could the Minister add a few more sentences to the sentence he uttered about the decision on seals and the environment Ministers' conference on 28 February?
Mr. Hurd: The German Presidency, the German Foreign Minister, was anxious to impress on everyone his view that this was a matter of high political interest and importance. We all concurred with that. When my hon. Friend the Under-Secretary goes to the environment Council next week he will wish to discuss with his colleagues the latest position, the clear pressure for action combined with the response of both the Canadian and Norwegian industries in suspending the impending culls of baby seals.
Mr. Robin Squire: Is my right hon. Friend aware that there are hon. Members on this side of the Chamber who are disappointed that 10 years has not been sufficient to enable Britain and her partners to find a common system, whatever that system may be? Before my right hon. Friend embraces too openly the congratulations of the hon. Member for Aberdare (Mr. Evans), he should appreciate that the present system is the only system under which the Labour party has a chance of being the majority party, either in that Parliament or in this one.
Mr. Hurd: I am not embracing anyone on this subject. I am trying to stay clear of it. I am reporting on a Council meeting at which it became clear to everybody that there would not be a change in this respect for the European elections next year.
Mr. Robert Parry: Will the Minister ask his right hon. Friend, when he next meets the Council of Ministers, to express his concern and the concern of the House about the repression of human rights in Turkey, especially the torture and imprisonment of the leaders of the Turkish peace association, and call for the early release of its president, Dr. Dikkerman, a former ambassador, who is critically ill?
Mr. Hurd: That subject was not discussed in any detail. I know that strong views are held. I am sure that the hon. Gentleman will reflect on the fact that Turkey has set itself a timetable for a return to democracy. Will we help her to achieve that and to improve the position regarding human rights by ostracising or by encouraging her?
Mr. David Ginsburg: Does the Prime Minister intend to call a general election for Thursday 17 May as that date features in the Minister's statement? More seriously, will the right hon. Gentleman confirm that there are no legal or expenditure problems which could arise if elections are held on that date?
On the method of election, will the right hon. Gentleman recognise that the sense of disappointment resulting from his statement about working out a common method extends to what has been heard from the Opposition Benches since it represents a serious retreat from the worthy position of the Leader of the Opposition?
With regard to extending the franchise, will the right hon. Gentleman say that the Government will stand firm on the position that they adopted in Opposition when they favoured an extension of the franchise for the European elections?
Mr. Hurd: The hon. Gentleman's first question is for the Prime Minister. The second question is for the Home Secretary.
The Government wish to extend the franchise. There is difficulty—I am sure the hon. Gentleman understands this—in legislating in this House in one way and then finding that there is a common Community position in a different direction based on another principle. The Government wish to extend the franchise to British citizens living in the Community for European elections. However, we want to do so in a way that is compatible with what other countries do. This is a complicated technical question, but I think that it will be discussed at a slightly faster rhythm than the electoral system.
Mr. Albert McQuarrie: My right hon. Friend has said that he does not want to go into the subject of Greenland, but has his attention been drawn to the fact that if Greenland is permitted to leave the Community British fishermen will have to pay for the right to fish in Greenland's waters? In any future discussions within the Community on Greenland's withdrawal, will the right hon. Gentleman safeguard the interests of the British fishing industry?
Mr. Hurd: Yes, Sir. I think that my hon. Friend is referring to the Danish proposal, but this will be a negotiation on matters of substance. In the negotiations with Greenland we intend that the interests of the Community and of British fishermen in particular will be strongly upheld.
Mr. Peter Hardy: The Minister has referred to Spain. Will he give an assurance that the
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present trading situation, which is grossly unfair to our steel industry, and especially our special steels industry, will be brought to a fair balance at an early date?
Mr. Hurd: With your permission, Mr. Speaker, I shall deal with that point on the following statement.
Mr. Michael Brotherton: Although I welcome the fact that there is to be no change in the electoral system in the short term, will my right hon. Friend assure the House that there will be no change in any electoral system as far as this country is concerned without the full approval of this House?
Mr. Hurd: It would be presumptuous of me to answer that question, but I am sure that my hon. Friend is right.
Mr. Tam Dalyell: Can a "slightly faster rhythm" be given to putting on the agenda the fraud and fudging that is now associated with end user certificates in the arms trade? In particular, should not Ministers discuss the alleged sale of Exocets to the Sudan—[Interruption]—which cannot be said to be an unimportant subject? Either it is true or it is not. If it is true, it should jolly well be discussed by European Ministers.
Mr. Hurd: I read the press story. Of course, that subject did not come up at the Foreign Affairs Council and is not a matter for it. It is essentially an issue for us to investigate and we can then take any decisions that may arise.
Mr. Tony Marlow: My right hon. Friend said that discussions on new forms of finance for the Community and on our budget rebate would be taking place in parallel. Will he give a categoric assurance that there will be no linkage between the two and that Britain will get a fair deal from the European budget irrespective of when and whether there is a new system for that budget? Will he also give a categoric assurance that the Government will not agree to any further sources of European finance, as there is no evidence as yet—indeed, the evidence is rather to the contrary—that European institutions manage to spend money more efficiently than we do and particularly as any further expenditure given to Europe will lead to a diminution in the authority of the House?
Mr. Hurd: We want a new system, because the present system causes the imbalances. We want to get away from having to negotiate temporary refunds. The fact that we want a new system does not mean that we agree to additional own resources. It means that the present system is not working properly. Therefore, we want that longterm discussion to succeed, but at the same time we cannot wait for it to come to a conclusion before getting further interim measures.
Dr. J. Dickson Mabon: From his discussions with Ministers, can the right hon. Gentleman say how many member states have said that they intend to follow the European Parliament's recommendation and institute a modified form of proportional representation in their countries and how many intend to adapt their national systems of proportional representation for the elections on 17 May?
Mr. Hurd: I do not know the answer to that. I think that all member states will now examine their positions in the light of the failure to agree on a common system. I do not know what the result of those reflections will be.

Foreign Affairs Council (Trade)
4.14 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): With permission, Mr. Speaker, I will make a statement on the trade aspects discussed at the same Foreign Affairs Council on 21 and 22 February.
The council endorsed the agreement reached with the Japanese by the Commission providing for export restraint by Japan, agreed that the Commission should pursue vigorously the opening of the Japanese market, and should by July this year review the state of the Community's trade relations with Japan and make any necessary proposals for further action.
The problems that the Community is having with the United States of America over agricultural trade were discussed. The council endorsed the continuing efforts of the Commission to resolve these problems with the United States of America and agreed that the presidency—the German Foreign Minister—should send a message to the United States Secretary of State underlining the political need to work together to avoid any worsening of the problems.
Finally, the Commission gave the council an interim report on its continuing talks with the Spaniards on problems relating to the EC-Spain 1970 agreement. My right hon. and noble Friend the Secretary of State for Trade underlined British concerns, welcomed the Commission's undertaking to pursue further its efforts with the Spanish Government, and made it clear that we looked for precise improvements in the operation of the agreement and the question of tariff imbalances.
Mr. Peter Archer: The House will wish me to thank the right hon. Gentleman for that statement, but would he be surprised if it gave rise to something less than dancing in the streets? On the agreement with Japan, is it true that the matter that occasioned great anxiety in the Community was the import of video tape recorders from Japan? Will the right hon. Gentleman confirm that the agreement limits the import of video tape recorders from Japan to 4·5 million per year?
Is it true that of the 5 million imported into the EC last year, about half were imported into the United Kingdom? If the purpose of the agreement is to help to protect and nourish a European industry in high technology consumer goods, do not this country's interests lie in producing more video tape recorders in Britain? What industrial policy do the Government have in mind to ensure that a limit on the import of Japanese tape recorders does not result simply in the import into Britain of higher priced French and German recorders? Can the right hon. Gentleman confirm that the agreement includes 8 mm video tape recorders, which many people believe will in any event shortly replace the present 16 mm ones?
Have the Government now realised that the EC and the United States of America are in danger of moving towards a subsidy war in which more and more taxpayers' money will be poured into surpluses to be exported at knock-down prices to the Soviet Union? Whatever the view of other European Governments, is it not in the interests of this country to get rid of the common agricultural policy and to ensure that any future subsidies are reflected in lower prices to our consumers?

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On the talks with Spain, are not the French Government insisting on resolving the problems for French agriculture before the EC proceeds to Spain's accession?
Are the Government displaying a corresponding zeal on behalf of the car, steel and footwear industries in Britain? Will the right hon. Gentleman now answer the question that I put on Monday to the Minister for Trade, which somehow escaped answer? How long is it likely to be before the British car industry sees an end to the situation in which Spanish cars can be imported into the United Kingdom at a rate of duty that is slightly more than one tenth of the duty paid by British exporters of cars to Spain?
Mr. Hurd: I confirm that the overall ceiling for video tape recorders in the new arrangement negotiated by the Commission is 4·5 million units. I understand, subject to correction, that that covers all types. We had to take into account British industry's need for kits as a result of the arrangements negotiated with the Japanese. The Secretary of State pressed that point at the council and received an assurance that the Japanese could supply, under the new arrangements, adequate numbers of video tape recorder kits at economic prices to meet the needs of our industry.
As the House knows, we want to change the operation of the CAP in a fairly radical way. We also want to avoid the subsidy war and the clash between these two trading giants. Because we are worried about the political implications we agreed that the German Foreign Minister should represent those worries at this stage to the United States Secretary of State while discussions with the Americans are still going on about the technical problems.
As regards Spain, we are dealing with the defects, well recognised throughout British industry, of an agreement in 1970 between the Community and Spain. Part of that is the implementation of the agreement and the way it is carried out, and part of it is the tariff imbalance to which the right hon. and learned Gentleman referred. My right hon. and noble Friend pressed hard again yesterday for the Commission to take vigorous and continuing action to alleviate both those problems. We are also taking every opportunity—I shall have an opportunity tomorrow when a Spanish Minister comes here—to impress our concerns vigorously on the Spaniards themselves.
Sir Julian Ridsdale: Is my right hon. Friend aware how much one welcomes the industry-to-industry talks to try to correct the imbalance of trade between Japan and the EC? Will he assure the House that these talks will not bar the way to getting high technological Japanese investment in the United Kingdom?
Mr. Hurd: That is an important point on which I agree with my hon. Friend.
Mr. Bob Cryer: I notice that the Minister said that the Community has reached agreement about export restraint by Japan, and will review the position after 12 months with a view to taking further action. What is he doing about the volume of cars, which is four times greater, coming into the United Kingdom from other EC countries? Does the Minister not realise that if Japanese cars represent a problem, imported EC cars represent a far greater problem? This year our car production has been at its lowest since 1957. Over the last 10 years there have
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been 1 million fewer vehicle units. If we do not do something about it the EC will take over our motor vehicle industry and destroy it.
Mr. Hurd: I would argue in return that Japan is a special case. As a Government we do not want to get into the business of erecting restrictions against every supplier whose goods our customers wish to buy. We certainly do not want to get into a trade war with other members of the Community in which we would stand to lose more than we would gain.
Sir Charles Fletcher-Cooke: Is my right hon. Friend aware that we very much admire the brevity and conciseness of his statements about the Council of Ministers but that he sometimes overlooks the functions of the Council and the functions of a legislature? We never seem to get reports about how draft directives and draft regulations are treated by this important legislature. For example, can he tell us what progress, if any, there has been with those old friends, the product liability directive or the fifth directive on company law? Several of these matters have now been before the Council for about 10 years. When shall we hear something about them?
Mr. Hurd: I have the impression that these statements are so long as to be somewhat wearisome, and I hesitate to add to them. As my hon. and learned Friend knows well, we have a system by which the scrutiny committee examines precisely the documents in which he is interested, and decides which of those ought to be discussed fully in the House. Debates are then arranged. That is a better system than trying to go into the details of each directive and draft regulation at the time of statements.
Mr. Arthur Lewis: The Minister will probably not have had time to listen this morning to Radio 4. Will he ask for a transcript of a programme in which a prominent American made a frightening statement about the possibility of the United States entering a trade war against Common Market countries and threatening to take serious action? If that were to happen, it could have a deleterious effect on Britain and on the rest of the Common Market and would upset all the plans and discussions that the Minister had yesterday.
Mr. David Ginsburg: Name him.
Mr. Lewis: I will not because I cannot remember his name. I have asked the Minister to get a transcript so that he can judge the matter. It was a prominent person, and his statement was frightening. The Minister should not sit there grinning and sneering. He should get the transcript and look at it because what was said was frightening.
Mr. Hurd: I shall certainly follow the hon. Gentleman's advice. There are protectionist voices on the other side of the Atlantic. I agree with the hon. Gentleman about the bad results for us if we got into a major trade war with the United States. There are also protectionist voices in the House. We have heard some of them this afternoon, and the same comment applies.
Mr. Jim Spicer: Does my right hon. Friend accept that, of course, hon. Members understand that priority should be given to discussions with Spain? At the same time, the Portuguese are indulging in unfair trading practices. Will my right hon. Friend give an

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undertaking that in the coming months he will examine what Portugal is doing in advance of its entry into the Community?
Mr. Hurd: Staring at us at the moment is the problem with Spain. If my hon. Friend has particular problems as regards Portugal that he wants us to study or act upon, no doubt he will let us know.
Mr. K. J. Woolmer: In regard to Spanish trade and the high tariff barriers that Spain exercises against our commodities, may I draw the Minister's attention again to the way in which the French are prepared to hold up Spanish accession to protect their agriculture, while Spain exercises a 30–32 per cent. tariff on wool fabric and a 33–36 per cent. tariff on knitted woollen garments? Is this not a demonstration that the French are prepared to talk about the principle of Europeanism but look after France, while this country appears to be selling British interests down the river in the interests of Europeanism?
Mr. Hurd: I remind the hon. Gentleman that Spanish accession, when it occurs, will solve the problem that he has raised. That is to say, at the end of the transitional period, which remains to be negotiated, the tariff imbalance would disappear. Therefore, we must not cut off our nose to spite our face. We have made it clear that since the earliest possible date for Spanish accession is later than expected, we cannot be expected to wait until then to solve our problem. That is why, both in the Council and directly with the Spaniards, we are emphasising the need for action by them on both aspects I described—the way the existing agreement is carried out and the tariff imbalances that it contains.
Sir Anthony Grant: Does not the Commission deserve congratulations, rather than carping, on the sensible arrangements it reached with Japan? Would not the most likely cause of a trade war, from which Britain would suffer as mach as anyone, be the implementation by us of the fatuous import control policy advocated by the Opposition?
Mr. Hurd: I am sure my hon. Friend is right. The arrangement negotiated by the Commission and approved yesterday by the Council is a step forward as regards the Japanese. It is not a complete answer but it is a step forward, and it would he sensible to welcome it as such. I agree entirely with the comment in the latter part of his remarks.
Mr. Ron Leighton: Does the Common Market believe in the virtues of unrestricted free trade? If so, why does it seek to raise obstacles to imports from Japan? If on the other hand it believes in trade management should not the Minister realise that our trade deficit with Germany is three times as great as our trade deficit with Japan? Should he not consider negotiating trade management with Germany before industry in places such as the west midlands is destroyed completely?
Mr. Hurd: Germany is an open market in which we can sell without hindrance. That is a major difference with Japan. The treaty of Rome and the Community show a general instinct towards free trade and competition but all member states agree that in certain industries and in certain circumstances it is necessary to protect our own. That is what we are doing through the arrangement we have been describing.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those lion. Members who have been seeking to catch my eye throughout.
Mr. Hal Miller: On the subject of trade with Spain, will my right hon. Friend accept that the tariff disparities in the case of the automotive industry are not just limited to the 37 per cent. tariff on the 108 per cent. of the cif value but that internal taxes raise it to an effective 66 per cent? Will he accept that his right hon. Friend the Secretary of State for Industry stated publicly in October that these discrepancies were grotesque and intolerable and that the situation was very much in the "Action" file. Is he aware that action is needed in the light of the fact that the Spanish industry is now bigger than ours and that further access to this market of a new Vauxhall model is about to take place? Does there not have to be some definite timetable for a conclusion to these negotiations?
Mr. Hurd: My hon. Friend is right. We are dealing not only with a tariff imbalance that appears in the agreement but with the way in which the Spaniards, through their administrative processes, implement the agreement and their own arrangements. That bears particularly hard on our car industry. We are dealing with an agreement between Spain and the Community. We are seeking to tackle it on a Community basis because that is the best way. We are continuously and energetically—my right hon. Friend, my hon. and learned Friend the Minister for Trade and Foreign Office Ministers—impressing on the Commission the need for action. We are also taking every opportunity to ram home our concerns direct to the Spanish Government.
Mr. Ginsburg: Will the right hon. Gentleman accept that there is a genuine, cautious welcome for what he says about the need for export restraint by Japan and the agreement that has been reached and also for what he says about opening up the Japanese market? This is a very difficult market to penetrate. Will he consult the Secretary of State for Trade to see what more can be done to assist British firms to gain entry to that market?
On the question of Spain, there are, of course, difficulties. Will he also accept, however, that it is important that Spain should enter the European Community to demonstrate that the spirit of internationalism—there is a newly elected democratic Government in Spain—is not totally dead on these Benches?
Mr. Hurd: One reason why it is important that Spain should enter is precisely that it would solve a problem of which hon. Members on both sides of the House are painfully conscious. As the hon. Gentleman says, there are other reasons. We shall continue to support the negotiations.
Mr. Keith Best: Is my right hon. Friend aware that one of the best means of dealing with Japanese imports is to encourage inward investment of Japanese companies into Britain so that their goods can be manufactured by British labour? Is he further aware that Wales has a larger number of Japanese companies than any other comparable region in the EC? Does he not agree that one of the principal reasons for those companies setting of in Wales is that this country is a member of the EC? Does

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he not think that this process would be seriously inhibited and jeopardised if this country were to withdraw from the EC, as advocated by the Opposition?
Mr. Hurd: My hon. Friend puts it well. Nothing would knock new investment in this country from overseas more firmly on the head than any real likelihood of our withdrawal from the Community.
Mr. Tam Dalyell: Are we to understand that the Department of Trade or the Foreign Office are investigating the alleged sale of Exocets to Sudan? If the Council of Ministers is not the right forum to discuss end-user certificates, which is the right forum? It has become a dangerous fiasco when politicians in Third world countries, or other countries, can apparently pocket some £200,000 for signing a certificate for arms going to an undesirable place. That is the situation.
Mr. Hurd: The right approach, so far as the hon. Gentleman is concerned, is either to table a question on the matter or to write to a Minister whom he thinks should be able to reply.
Mr. Teddy Taylor: As the Common Market spent over £7 million a day last year dumping cheap food on world markets and as the surpluses are growing steadily, does not the Minister think that the best contribution we could make would be to put forward any kind of meaningful plan to reduce the amount of surplus? Was there any talk in these discussions about the horrifying information revealed by the Minister for Trade yesterday to the effect that our deficit in manufactures with the Common Market last year was over £5,000 million? That is equivalent to a drain of about 700,000 British jobs.
Mr. Hurd: There was no discussion on the second point. As regards the first point, I broadly agree with my hon. Friend. We have consistently stated in our approach to these long-term discussions that the priority must be to get effective control of the agricultural spending. All the other proposals put forward by the Commission, some of them good and some not so good, will not achieve the end that we have in mind unless there is more effective control than exists at the moment.
Mr. Nigel Spearing: Does not the range and importance of the matters on which the Minister has reported reflect the extent to which the Government and this House can no longer decide on them? In respect of the agricultural war with the United States, is it the
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contention of the Commission that the United States is subsidising its exports to a greater extent than the Commission and the EC? Can the Minister say what the rough proportions are? If not, is it not time that the EC cut down the subsidies?
Mr. Hurd: It is abundantly clear that here one has two major agricultural producers, the Community and the United States, both of whom, through different practices, spend a great deal of money protecting their agriculture and achieving surpluses which it is then difficult to dispose of. We have seen recent American sales of subsidised flour to Egypt, which is not a traditional American market. It is a symptom of the problem which we will get into if we are not careful.
Mr. Anthony Beaumont-Dark: Will my right hon. Friend accept that most Conservative Members will agree that where competition is fair, British industry must shift for itself because we are a large exporting nation and industry must take its chance with other fair competition? Is he not aware that the Spanish situation is a great deal different? Many of us are disturbed by the emphasis that the Minister places on the EC negotiations, which is like trying to move through a sea of treacle. Will my right hon. Friend accept that the problem we are talking about is urgent and exists now? Will he agree that Spanish car exports to this country are growing at a rate of over 30 per cent. a year and that if the Government do not soon take action, unilateral if necessary, because the situation is so unfair, at least another 20,000 jobs will be lost in the west midlands? Is he aware that those jobs can be saved if resolute action is taken now rather than continuing to talk for month after month?
Mr. Hurd: Anyone who has visited Birmingham, Manchester or other main industrial centres recently will agree with my hon. Friend's analysis. This is something that is sorely felt and where urgent action is required. It will, I think, be much better to achieve that action on a Community basis for the reasons that I have already given. As regards unilateral action, I hope that it will not come to that.

Foreign Affairs Council (Trade)

  BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 11 MARCH
  Members successful in the ballot were:

  Sir Victor Goodhew

  Mr. Harold Walker

  Mr. Edwin Wainwright

Electoral Law Reform
4.38 pm
Mr. Michael McNair-Wilson: I beg to move:
That leave be given to bring in a Bill to amend the residential qualifications necessary for inclusion on an electoral register.
The motion relates to the reform of the Representation of the People Act and in particular to the entitlement of persons to vote. As the law stands a person entitled to vote as an elector at a parliamentary election in any constituency is one who is resident there on the qualifying date, that is, 10 October. That definition, like so many others in our law, seems eminently sensible and all-embracing. Clearly, someone living in a particular constituency wants to be able to vote there. In the course of my speech I hope to show that that definition is open to abuse, and that it has been abused.
Our electoral system is subject to a number of restrictions to preserve its integrity. For instance, people living in a constituency, no matter that they have lived there for a long time and are ratepayers, who fail to return their electoral registration form by a certain date are precluded from having their names included in the electoral register for the subsequent year. Persons on holiday may not have a postal vote because, it is argued, they do not have to be on holiday and can choose between coming home to vote and staying away. As section 1 of the Representation of the People Act makes clear, a person is not entitled to vote as an elector at a parliamentary election in any constituency in Northern Ireland unless he was resident in Northern Ireland during the whole period of three months ending on the qualifying date for that election.
I cite these examples of limitations that we have built into our electoral system because each, in its own way, is meant to safeguard the system against abuse—an intention with which I suspect we all agree. The House will therefore imagine my surprise when I was informed that 19 of the women who have been living in tents and caravans on common land outside RAF Greenham Common in my constituency for many months—although the byelaws governing the common specifically forbid camping—had applied successfully to be included on the local electoral register. How was it possible, I wondered, for people whose residential claim was based on an
956
illegality, legally to become electors at national and local elections in a constituency that was far removed from their homes?
The answer, so far as I have been able to discover, seems to lie in the fact that there is now no qualifying period for residence before applying to be included on the electoral register of any constituency, although earlier this century such a residential qualification existed, and, as I hope I have shown, one still exists in Northern Ireland.
The second factor seems to be that trespass, as a claim to residence, has been accepted since the case of Ford v. Beal in 1877, when a Mr. James Beal with his wife and children went to live in his mother-in-law's house, although she had not sought permission from her landlords for that to happen, as the rules governing her house required. Mr. Beal applied to be on the local electoral register, and his request was upheld.
From what I have read of the case, I am not convinced that it is on all fours with the women who are on common land at Greenham. Indeed, I am not clear whether Mr. Beal knew that he was breaking his mother-in-law's tenancy agreement, or whether her landlords sought to have him evicted. What I do know is that the Greenham women are aware that they are breaking the byelaw about camping on the common, and some of them have been successfully evicted by Newbury district council because of that byelaw. In other words, the 19 women have deliberately flouted the laws relating to the common to enable themselves to benefit from electoral law, and I, like many of those whom I represent, believe that to be an intolerable abuse. The Bill that I seek to introduce will remedy that situation. It will be very short, and will add a paragraph to the Representation of the People Act to the effect that a person will not be entitled to vote as an elector
"if his claim as a resident is founded on illegal occupation of common land".
I submit that this change, although small, is significant, and will prevent the abuse to which I have referred.
Question put and agreed to.
Bill ordered to be brought in by Mr. Michael McNair-Wilson, Mr. John Heddle, Mr. R. A. McCrindle, Mr. Patrick McNair-Wilson and Mr. Michael Morris.

Electoral Law Reform
  ELECTORAL LAW REFORM
  Mr. Michael McNair-Wilson accordingly presented a Bill to amend the residential qualifications necessary for inclusion on an electoral register: And the same was read the First time; and ordered to be read a Second time upon Friday 4 March. [Bill 89.]
Orders of the Day
  British Shipbuilders Bill
  As amended (in the Standing Committee), considered.
  British Shipbuilders Bill
    New Clause 1

      FORMULATION OF POLICIES AND PLANS
      '(1) It shall be the duty of British Shipbuilders, after consulting any relevant trade union to formulate from time to time when it considers appropriate, or the Secretary of State so requires, corporate policies and plans regarding the carrying out of its activities in the most efficient manner.
      (2) In making their formulation, British Shipbuilders will have full regard to improving productivity, decentralising management and operational centres, industrial relations and such other matters as the Secretary of State may specify in writing.
      (3) The Secretary of State shall lay before each House of Parliament—

      (a) a copy of any corporate policy or plan made under subsection (1) above, or

      (b) where the Secretary of State is of the opinion that the disclosure of any part of the policy or plan is against the national interest, a copy of the policy or plan excluding that part.

      (4) Section 7 of the 1977 Act (Formulation of the Corporation's policies and plans and conduct of the operations) shall cease to have effect.'.—[Mr. Willey]
      Brought up, and read the First time.
      4.45 pm
      Mr. Frederick Willey: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Ernest Armstrong): It will be for the convenience of the House to take at the same time amendment No. 4, in schedule, page 6, line 5, column 3 at end insert 'Section 7.'
      Mr. Willey: This is partly an enabling Bill and partly grease to help privatisation. In that regard it is generally unacceptable, but an amendment was accepted in Committee that is both important and relevant to this debate. It provided some guidelines to the national interest. The Government withdrew their proposals and accepted section 4 of the 1977 Act, as it stood, which provides that full regard will be paid to certain important matters. The first, was co-operation with shipping and having a maritime policy. The second was accession to international organisations, which is important in relation to the European Community and the OECD. Then there is fair international competition on equal terms. The section also provides that full regard should be paid to regional policy, particularly on unemployment. The fact that we are retaining these provisions, not removing them, as the Government originally intended, is relevant to this debate.
      Incidentally, in my view it would be better, in dealing with amendments of this nature, to deal with all the sections in part I of the Act comprehensively, so that the new provisions are clear and easy to follow.
      Section 7 of the 1977 Act provides for the formulation each year of a corporate plan for the corporation's operations, covering, in particular, capital investment, research and development, the profit and loss, and employment of persons. Employment of persons was not
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      in the original provision, but was added, and of course the Secretary of State can add other matters. These matters are dealt with in the new clause.
      We had a long discussion about these provisions in Committee, when the Conservative Members and the Liberal Member voted against section 7. The new clause provides for the repeal of section 7, so there should be broad agreement with what we seek to do.
      I am not against corporate plans and policies. They have established themselves in one form or another in the nationalised industries, and generally they have been a good thing. However, we are against the definitions in section 7. First, section 7 provides for an annual corporate plan. That is quite unreal. It was unreal in the circumstances in which section 7 was accepted. Major investment programmes in the coal and steel industries had been agreed with the Government. However, those were not annual but long-term assessments. If we are dealing with corporate plans the first thing that we must recognise is that we are inevitably dealing with corporate and long-term issues that cannot be adequately dealt with on an annual basis. It has been quite impossible to have annual plans as envisaged by the Act in view of world economic conditions and the world shipbuilding market. Such plans have been unreal, have not given any effective guidance and have largely been useless.
      I am not saying that a good deal has not been done, because it has. There have been capital investment programmes and if one reads the annual reports of British Shipbuilders it can be seen that there has been a good deal of effective corporate planning, but I am concerned about the annual corporate plans that have not been effective. That is proved, above all, by the Select Committee's report. The argument used to be that every now and again a Select Committee will look at a nationalised industry, and we had a Select Committee for that purpose. However, that has gone in the tidying-up of the departmental Select Committees. The remarkable thing is that although there is a casual reference to corporate planning, practically nothing at all is said about corporate plans in the Select Committee's report and inquiries. One would have thought that it would have been primarily concerned with the corporate plans, the changes made and why they have not turned out to be annual plans. I should have thought that the Select Committee would have been expected to deal with such things, but it has not. That is a reflection on the present provisions for the corporate plan.
      How many people are there in the Department engaged upon the corporate plan and how many are there in British Shipbuilders? That activity has not been profitably used. The new clause proposes corporate plans from time to time when British Shipbuilders feels that they are appropriate or when the Secretary of State requires them. That seems sensible. In view of the way in which such plans have exhaustively engaged the Department and the corporation, I should have thought it was now time to provide such flexibility. There is a safeguard, because the Secretary of State can intervene if he feels that the corporation is not providing a corporate plan sufficiently early.
      The purpose of the new clause is not only to get away from the concept of annual corporate plans but to provide more realistic guidelines. I have suggested that we should pay attention to efficiency, improving productivity and decentralising management and operational centres. Decentralisation is necessary today because some of the yards are in peril. I was worried that among the matters

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      that the Government have removed from the Bill is the provision for decentralisation—a matter that British Shipbuilders has tried to deal with effectively.
      Shipbuilding is an assembly industry and the corporation recognises that industrial relations are of great importance. In addition, section 4 provides guidelines for the Secretary of State as to what is in the national interest. We must pay attention to shipping, the EC and the intervention fund. I was much encouraged by what the Minister said about the intervention fund. At any rate, we are all right until July and after that we shall have to hope for the best. At least the Minister is trying hard.
      There must be competition on equal terms. We may have to deal with that unilaterally if necessary. In Committee we discussed the loss of the order for the cable-laying ship to Korea. Korea and the far east reduced their prices by 30 per cent. That results in unfair competition, which we are against. Those are the sort of points that should be reviewed, but not necessarily every year.
      We should probaly now be reviewing diesels. British Shipbuilders should be considering that matter in the light of the report which the Government have. I am not being dogmatic about this because it is for the Government to act in the light of their experience in the past few years; I am suggesting that we should do something topical, realistic and effective. We must take effective steps now and not at the speed at which the corporate plans are considered at the moment. If the Government do not like the proposals it is up to them to suggest others. It was the Conservative party which voted against section 7—the matters which determine the corporate plan. In the light of that I should have thought that they are bound to say what their experience has taught them.
      There is a case both for making the timing more flexible and for making the guidelines more realistic. Having said that, my last recommendation is that the corporate plan should be made public. I accept that there is a case for the exclusion of some matters and I do not want to argue about it. It is a difficult problem, about which I am not being dogmatic. Commercial confidentiality is important and there are other confidential matters in the world market. However, those problems could be met by sensible disclosure. In the present circumstances it is necessary that the plan that British Shipbuilders produces in consultation with the Government should be made public. We should know what its views are and they should be placed before Parliament. I have stressed throughout our debates on public corporations that relations with Parliament are important and I hope that these proposals will, in principle, be accepted. The Government should take the opportunity which they are now afforded to improve the provisions with regard to the formulation of the corporate plans.
      5 pm
      Mr. James Hill: New clause 1 is good in parts. We dealt with this matter in depth in Committee. I see that the hon. Member for Southampton, Itchen (Mr. Mitchell) has an amendment down further to expand clause 1.
      The opening statement in a research note issued by the Library puts the matter in perspective. It states:
      "The whole of this Bill relates to the powers and duties of British Shipbuilders. It is not therefore directly a privatisation measure like, for example, the British Aerospace Act 1980. A closer analogy would be the Iron and Steel Act 1981 which
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      amended the legislation governing the British Steel Corporation. This Bill is simply to provide a means for the chairman of British Shipbuilders to form small companies and then, within the wisdom of his management, to privatise those small companies."
      In other words, it seeks to allow the assets of those companies either to be purchased back by the former owners or, indeed, to allow new shareholders to be brought in. So, it is not an all-embracing Bill. It does not have the same scope as the Transport Act 1981 which set up Associated British Ports. It does not have the same impact. In fact, there were doubts in Committee that certain of the companies could ever be put on to the private market for the obvious reason, which was quoted time and again, mainly by the right hon. Member for Sunderland, North (Mr. Willey), that so many of these yards were almost at death's door. They had no orders, their labour forces were demoralised and they had to compete in world markets where the only policy was to submit the lowest tender, regardless of profitability. It was mentioned many times that Japan, Taiwan and Korea were our natural enemies in shipbuilding and that many British yards could not compete.
      Many solutions were suggested. It was argued that we should have a scrap and build policy, that fiscal taxation measures could be introduced to help the British shipowner or that there could be slightly higher subsidies for British Shipbuilders, mainly for the merchant yards. The Bill, if it receives Royal Assent, would enable Vosper Thorneycroft, a yard in which I and the hon. Member for Itchen are interested, to be privatised.
      There is a certain logic to new clause 1 which the Government did not accept in Committee. It gives the chairman of British Shipbuilders every possible avenue to formulate the assets of the company in any way he wishes—the design, development, production, sale, repair, and maintenance of ships and so on. The hon. Member for Itchen wishes to broaden this out into any sphere, including ship repairs, to obtain profitability.
      There are good points in new clause 1. Nevertheless, I know that the right hon. Member for Sunderland, North would not like to see the assets of British Shipbuilders sold off. The Opposition made it clear in Committee that warship building is the profitable side of the industry and helps to keep the merchant shipbuilding side afloat. It was made only too clear in Committee that the profits of the warship side of the industry were almost a complete balance for the losses in the merchant shipbuilding side.
      If this was a straightforward Bill not to privatise in any way, new clause 1 would probably be acceptable. But the right hon. Gentleman is missing the point. This is a partial privatisation Bill. New clause 1 certainly involves
      "corporate policies and plans regarding the carrying out of its activities in the most efficient manner"
      but his idea of "the most efficient manner" would not necessarily be mine.
      Mr. Don Dixon: I wish to confine my remarks to subsection (2) of the new clause, which deals with industrial relations. I do so because, if new clause 1 is not accepted, there will be no provision in the Bill to deal with industrial relations in the shipbuilding industry.
      I agree with the hon. Member for Southampton, Test (Mr. Hill) that, at present, the workers in the shipbuilding industry are demoralised. The Bill revokes section 5(2) of the Aircraft and Shipbuilding Industries Act 1977, which gives British Shipbuilders powers to promote industrial democracy. I do not know whether the Government are

      961
      interested in industrial relations, but having heard the statement of the Secretary of State for the Environment about the water dispute and having witnessed the mess he made by interfering in that industry, I should have thought he would have some concern for industrial relations and an interest in working with the people in the industry.
      To give some idea of the improvements in industrial relations since vesting day in 1977, when the British Shipbuilding industry was nationalised, one must go back to when the industry was in private hands. When the chairman of British Shipbuilders was first appointed, he said:
      "We are breaking down old-fashioned and deep-rooted attitudes and substituting informed, active and hard-headed involvement with participation."
      That is an important statement. The chairman of British Shipbuilders recognised the poor state of industrial relations that prevailed when the industry was in private hands.
      I have worked in the industry all my life as, indeed, have some of my colleagues in the Chamber. When one considers the conditions that prevailed before nationalisation one can understand the concern of the workers in the shipbuilding industry if a provision about industrial relations is not included in the Bill. The Aircraft and Shipbuilding Industries Act led workers in the industry to believe that they had industrial democracy, for which they accepted the loss of 25,000 jobs, the closure of nine shipyards, the closure of ship repair yards and engine works. They did so because they thought they had some say in what was happening in the industry.
      The Bill, which we are told is an enabling Bill, means that the workers have been conned since 1975. Had they not had so-called industrial democracy, they would have put up a fight against losing 25,000 jobs, with not one compulsory redundancy to date.
      I worked in the shipbuilding industry before nationalisation. In one of the shipyards that I worked in we put lugs on plates so that the welders could weld the plates together. A lug was a small piece of metal. The welders' rods were inches from the shipyard workers' fingers. The employers refused to supply gloves for the workers. Every day we finished up with sceptic burns on our hands because of the attitude of the owners of the industry.
      Before nationalisation the whole industry was fraught with demarcation disputes. I recall the famous one in Liverpool, when a six-month strike took place because the joiners claimed that they should be boring the holes on small pieces of plate instead of the drillers. One should consider such things when one talks about the British shipbuilding industry.
      Before nationalisation there were virtually no industrial relations. The management was the worst in the country. There was no consultation on any innovations in the yards. That was one of the reasons for the hostile reaction from the workers. In 1977 we thought that Utopia had come and that the British shipyard workers at last would have some say in the industry in which they were investing their lives.
      I recall the strike at Hawthorn Leslie, when the management stopped the greasing allowance that the shipwrights got for going underneath the ship and greasing the ways so that the ship could be launched. We got the princely sum of 7s. 6d., which would be 37½p today, for going under the ship and greasing it. We put our hands in
      962
      big barrels of grease and slapped it on the ways before the launch of the ship. At the same time as it stopped that allowance the management had a champagne party for the guests who were invited for the launching of the ship. Such conditions used to prevail in the industry.
      There was no pension scheme. Nothing happened if someone was killed or died at work. The widow or any other dependants had to rely on the workmen having a whip round. Those were the conditions before nationalisation.
      The hon. Member for Southampton, Test said that the morale of the British shipyard workers was low. Something about industrial relations should be written into the Bill. Section 5(2) of the 1977 Act, in which industrial democracy was supposed to be promoted, has been revoked. Therefore, there will be no co-operation by people who work in the industry.
      Before 1977 there were 168 bargaining units in the shipbuilding industry. These have been reduced to two—one for the manual workers and one for staff. That gives one an idea of what happens when one gets the co-operation of the workers. If the Government want confrontation, the best way to do so is to ignore industrial relations. As I said in Committee, if one took all the directors and put them on a luxury yacht, filled it with caviar and red and white wine and sent it to the Mediterranean, ships would still be built because they are built by the workers and not by the directors. It is about time the Government realised that.
      One of our first major achievements was to get the 168 bargaining units down to two. Demarcation disputes are vitually eliminated now. There is an amalgamation of trades. At one time there were various separate trades, such as the burners, the caulkers, the shipwrights, the platers, the joiners, the painters and the French polishers. Most of them have been amalgamated and there is no demarcation. The industry wants some assistance, not the Bill.
      5.15 pm
      I shall not take long, because my right hon. Friend the Member for Sunderland, North (Mr. Willey) has explained the reasons for the corporate plan. I want to emphasise my point about industrial relations. If the Government ignore industrial relations, there will be a confrontation with the industry at the worst possible time. I hope that the Minister will accept the new clause. Without it there is nothing in the Bill about industrial relations. That has been completely eliminated by the revocation of section 5(2) of the 1977 Act. I hope that the Minister will accept the new clause.
      Dr. J. Dickson Mabon: I support the new clause, which the right hon. Member for Sunderland, North (Mr. Willey) moved with considerable force.
      The 1977 Act has not worked out as its authors intended. New clause 1(4) refers to the withdrawal of section 7 of that Act, which was about having an annual corporate planning policy. That is sensible. It has proved impossible, in view of the immense problems facing the industry, to have an annual corporate policy. It is difficult to have a corporate policy at all. However, that does not mean that there should not be an effort by British Shipbuilders to have a corporate policy, which, as the hon. Member for Yarrow—
      Mr. Dixon: Jarrow.
      Mr. R. C. Mitchell: A Freudian slip.
      Dr. Mabon: I agree that there is a considerable difference.
      Mr. Dixon: The right hon. Gentleman will be saying "Harrow" next.
      Dr. Mabon: I apologise to the hon. Gentleman. I have the 'flu and cannot speak very clearly. I never went to Harrow, but to a state school.
      Section 7, in its attempt to get an annual corporate policy, was a mistake because such a policy has been difficult to secure. I have been associated with the industry all my life. My father was also associated with it. The workers wanted industrial democracy in its real and old-fashioned sense as a result of nationalisation. It is one of the few industries in which it has been resented and resisted by even the most progressive employers for many years. There were a few exceptions, but on the whole the industry was riddled with prejudice against industrial participation by the workers.
      The 1977 Act was important. It is therefore sensible that, if we are amending the original Act with such substantial amendments, we should mention industrial relations and democracy, as the hon. Member for Jarrow (Mr. Dixon) said.
      I do not see the objection to the clause. No doubt the Minister will try to make a case. I hoped that he would speak immediately after the amendment had been moved so that we could hear an acceptance by the Front Bench, in principle if not in text, of the new clause. The argument of the hon. Member for Southampton, Test (Mr. Hill) was awfully doubtful, even downright silly, when he said that the new clause could not be incorporated because elements of privatisation could come into it. I do not agree with elements of privatisation but the Bill does not say that there will be any. It is simply an enabling measure. The meaning of new clause 1 would not be affected by privatisation. Privatisation would not upset the balance. I doubt whether the Minister will claim that the Bill will denationalise the larger part of British Shipbuilders. A fraction of the industry may be privatised. If the Government intend to denationalise the industry, they have not said so in the House.
      Dr. John Cunningham: I am grateful to the right hon. Gentleman for giving way. Perhaps he will reflect on what he has just said. Surely the warship building yards, the profitable part, is the largest part of what is likely to be left of the industry because of its decline, and that is exactly the bit that the Government want to privatise.
      Dr. Mabon: I hope that that is not so. The Government do not confess to it. Nevertheless, I am willing to accept the hon. Gentleman's postulation that it might be so. The fact remains, however, that a large part of the industry will continue to produce ships of peace rather than ships of defence or war. In those circumstances, new clause 1 still stands. I am simply rebutting the argument of the hon. Member for Southampton, Test who said that new clause 1 cannot be incorporated because it prevents privatisation. It does nothing of the kind. The new clause can stand, even within the Government's compass and within the view of the hon. Member for Whitehaven (Dr. Cunningham), who argues that the bulk of the warship building side will be denationalised.
      Mr. Hill: When the chairman of British Shipbuilders gave evidence to the Select Committee he said that a corporate plan was largely out of date and that he was now mainly interested in cash limits and the intervention fund. He said that they were crucial to British Shipbuilders. In any form of selling the assets, the corporate plan that is suggested in new clause 1 would have to be incorporated in an agreement to sell those assets. There is no chance of a private firm that buys up an asset wanting to be tied to an annual corporate plan.
      Dr. Mabon: I am not advocating an annual corporate plan. Events have proved it to be nonsense. Nevertheless, I should be extremely surprised if a man such as Robert Atkinson opposes the idea of a corporate plan. I am not asking Ministers to say whether the chairman agrees with the new clause 1. That would be quite improper. Nevertheless, I should be surprised if he disagrees with it. It is sensible for any chairman of any corporation, whether private or public, to have a corporate plan, albeit not annually. Moreover, it is important for such a chairman to have a corporate plan that involves consultation with unions and, more directly, with employees.
      We are debating the submission of such a plan to Parliament, not an annual submission. This admirable new clause would provide for a submission being made at some time when it has been agreed within the industry. I should be surprised if the Minister took refuge in the argument that was loyally but mistakenly advanced by the hon. Member for Southampton, Test. That is a bad argument. There is a good argument for having a corporate plan. Clause 2 deals with improving productivity. Is that not the theme of many of the chairman's speeches to many groups of shipbuilders? That is certainly true of the lower Clyde. The chairman wants improved productivity, but he must work out how to achieve it. To do that he must have the co-operation not merely of the unions formally, but of the men who are directly involved. No one opposes improved productivity. The argument is about how one achieves it. The hon. Member for Jarrow rightly mentioned industrial relations. The Minister might want to suggest to the chairman that other matters might be included in the corporate plan.
      Decentralising management is another issue. I remember earlier discussions on the Bill when some of us felt that decentralising British Shipbuilders could be on a estuarial or riparian basis rather than the present functional division between offshore, commercial and warship sections. It is not true to argue that British Shipbuilders is a decentralised nationalised industry. It has become, alas, highly centralised. I strongly regret that. That is why I welcome new clause 1. It would help towards decentralising management. Nowhere is that more true than on the lower Clyde. It is to our regret that we do not have the element of decentralisation that we used to have in the early days of nationalisation.
      New clause 1 is not cosmetic or merely a genuflection to industrial relations and the rest. It is sensible and tries to build on the earlier legislation. Not all Governments get things right and not all Acts are perfect. The annual corporate plan was a mistake. I confess that readily. Nevertheless, that does not mean that we should now throw out the baby with the bathwater. Moreover, I do not believe that the extract of the evidence of the chairman of British Shipbuilders to the Select Committee, to which the hon. Member for Southampton, Test referred, is

      965
      representative of all of the chairman's evidence. I do not accept that he is against a corporate plan. If he is, what does it matter? We shall have to overrule him. We shall have to say "We are sorry, chairman. We insist on having a corporate plan."
      I cannot see the objections to new clause 1. I hope that Ministers will address themselves to that. Where are the objections? I would have preferred to make my speech later to see what arguments Ministers deploy. My right hon. and hon. Friends and I wholeheartedly agree with the right hon. Member for Sunderland, North. I hope that the Government will not regard the issue in a partisan way. A large part of British Shipbuilders will remain in public hands. It deserves to have a corporate plan and to have this type of description of it in statute so that Parliament will be consulted. I earnestly beg the Government to incorporate this new clause.
      Mr. Anthony Nelson: I greatly welcome the principal objective of the bill, which is to privatise British Shipbuilders in part or its subsidiaries. However, I share the views of those hon. Members who have already spoken in that neither the long title of the Bill nor its provisions exclude some aspects of new clause 1.
      The long title of the Bill which is to
      "Make further provision with respect to the functions and activities of British Shipbuilders"
      should encompass exactly the objectives to which new clause 1 refers. Moreover, the Bill changes the law and refers to several prohibitions that relate to British Shipbuilders which are not solely concerned with privatisation. Clause 2(1) confers on British Shipbuilders the duty to exercise its powers in the most efficient manner. That is a proper responsibility and, in itself, has nothing to do with privatisation. The new section 4A(1) is a prime example of the way in which lawyers and draftsmen have a field day in tautology when they draft Bills. It says:
      "It shall be the duty of British Shipbuilders so to exercise its powers as to secure that the carrying on of the activities that have fallen to be carried on under its ultimate control is organised, so far as regards the direction thereof, in the most efficient manner."
      Why does it not simply say "It shall be the duty of British Shipbuilders to act efficiently" because that is what the subsection proposes?
      5.30 pm
      In sympathy with the right hon. Member for Sunderland, North (Mr. Willey) and with my hon. Friend the Member for Southampton, Test (Mr. Hill), may I say that we should review critically the provision of section 7 of the Aircraft and Shipbuilding Industries Act 1977 which imposes a statutory duty on British Shipbuilders to produce an annual corporate plan. With the benefit of hindsight, that has been not only an onerous responsibility but of dubious benefit to British Shipbuilders, its employees and Parliament. I suggest to my hon. Friends the Under-Secretary of State and the Minister of State, who have enormous personal experience of industry and companies, that few major companies or corporations must produce both an annual report and a complete new annual corporate plan, which requires extensive negotiation, agreement in committees and consultation, rightly, with trade unions and other interested parties. That is an onerous and expensive duty that could reasonably be removed.
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      I have not scoured the Official Report of the Standing Committee to ascertain whether an amendment to that end was moved. When my hon. Friend replies, I hope that he will direct his attention sympathetically to those points and to the need that many people accept for more discretion to be given to British Shipbuilders to decide when it is appropriate for it to come forward with a new corporate plan. Even in the absence of that legislative requirement under section 7 of the 1977 Act, British Shipbuilders must act efficiently and achieve commercial targets. If it decides that that is its overriding objective and that a new corporate plan is necessary, it is responsible and commercial enough to produce such a plan.
      The new clause is deficient and is in the interests of neither British Shipbuilders nor the House. However, some parts of the new clause are fairly responsible. Few hon. Members would contend that improvements in productivity, proper consideration of the decentralisation of management and better industrial relations were undesirable. However, the new clause also seeks to repeal section 7 of the previous Act. Therefore, we must consider the provisions of section 7 that worked well but that are not included in the new clause. There are many such provisions, and section 7 places a responsibility on the corporation to include in its corporate plan specific considerations relating to matters such as capital investment, research and development, employment of workers, forecasts of income and expenditure and profit and loss and a variety of other matters.
      The right hon. Member of Sunderland, North may argue that such provisions would be included in the subsection of his new clause that states
      "and such other matters as the Secretary of State may specify in writing."
      That is not good enough. I should be reassured if the commercial criteria that British Shipbuilders must include in its corporate plan were laid down in law and referred to the financial objectives contained in section 7 but omitted in the new clause.
      Mr. Willey: I do not disagree with the hon. Gentleman. My point was that his colleagues criticised those provisions in Committee. The Government must advise us about this matter. They have had experience during the past few years of running annual corporate plans—not very successfully—and they should decide about any revisions. That is why I made no revisions.
      Mr. Nelson: I am grateful to the right hon. Gentleman. Perhaps there is little difference between us.
      I hope that my hon. Friend's reply will be satisfactory and that the House need not divide on the new clause. If we were to accept the new clause, well-intentioned though it is, it would be deficient because it would exclude from the duties laid on British Shipbuilders several important financial and commercial criteria that must be included in its corporate plan. A corporate plan that does not, above all, uphold the objectives of making a return on capital and making a profit will not be in the interests of either the Government or the employees of British Shipbuilders.
      British Shipbuilders is currently faced with a major pay claim, and the Amalgamated Union of Engineering Workers is insisting that it will be both militant and intransigent in pressing its claim. During a period of keen world competitiveness, we must remind British Shipbuilders statutorily and in public that we look to it and its employees to respond to the considerable sums of

      967
      public subvention that have been made available and to fulfil some of the worthy objectives of section 7 of the previous Act.
      Dr. John Cunningham: That is all very well, but does not the hon. Gentleman recognise that each year for the past four years the unions in the shipbuilding industry have accepted a wage settlement below the rate of inflation? They have agreed to yard closures, job losses and redundancies because they were promised that the industry would become leaner and fitter and would survive. But the result, after four years, is that the unions have been told that they must accept more closures and redundancies and less Government support. Does the hon. Gentleman believe that they will accept that?
      Mr. Nelson: The unions may have to accept it, deeply regrettable though it may be. I share with the hon. Gentleman any tribute paid to British Shipbuilders' workers, who have made sacrifices in recent years. The changes in that industry, as in other major industries such as steel, have been traumatic on both a coporate and a personal scale. But, as the hon. Gentleman rightly says, the purpose is to enable British Shipbuilders to survive and to create a more competitive national corporation so that orders, such as the CEGB order that we discussed last week, are not lost as readily as they are. It is not enough to say that we, as trustees of the public purse, should pay ever-increasing sums of public money in financial support and should increase the borrowing powers of such national corporations without reminding those concerned in the industry that they must play their part. By and large, they accept that responsibility, but, if some recent union statements are to be believed, the pay claim—if settled in full—would greatly damage the corporation. Everyone would regret that, most of all those in the industry, and if the claim is settled in full a difficult world position would become even more difficult.
      It would be unwise for the House to accept the new clause, because it would be a prescription for unprofitable coporate plans. The criteria in the new clause, worthy though they are, exclude some important criteria contained in the previous legislation. Section 7 may be deficient in its requirement for annual corporate reports. It is especially deficient because section 18 of the 1977 Act states that British Shipbuilders should provide the Secretary of State with an annual report. Therefore, the corporation must produce not only an annual report but a corporate plan. I believe that a corporate plan is superfluous.
      I am sure that the Minister will respond sympathetically to what has been said. With those cautionary words, I urge my hon. Friends to view with some scepticism whether the provisions of the new clause would be to the benefit of British Shipbuilders and whether in fact they exclude a number of other important criteria.
      Mr. R. McTaggart: I should like to believe that debates on this new clause and on other new clauses and amendments during the Bill's passage had made everyone aware of the need for a strong shipbuilding capacity to provide for the future needs of this country. Shipbuilding is of vital importance to Great Britain as an island. Its success or failure will have a tremendous impact on the United Kingdom economy. That impact will be felt whether shipbuilding is in private or public hands. It is, therefore, imperative, in the nation's interest, that the Bill
      968
      should contain provisions to ensure that British Shipbuilders operates as efficiently as possible and strives to lead the field in industrial relations.
      Subsection (1) of the new clause provides:
      "It shall be the duty of British Shipbuilders, after consulting any relevant trade union, to formulate from time to time when it considers appropriate, or the Secretary of State so requires, corporate policies and plans regarding the carrying out of its activities in the most efficient manner."
      Several advances have been made since the formation of British Shipbuilders in 1977. The work force now has specific agreements on flexibility. I remember, from working in the industry, the old demarcation rules which my hon. Friend the Member for Jarrow (Mr. Dixon) mentioned. I remember the strikes that those demarcation rules caused and the trouble that then ensued. We did not just have different wage rates among different trades; we had different wage rates within trades. It caused a great deal of jealousy and back-biting and brought out the worst in the workers.
      Since vesting day, British Shipbuilders has had a national procedure for settling disputes. We have trimmed 170 different wage agreements negotiated annually to two wage agreements which now have a common pay anniversary in the industry throughout the country. There have also been casualties.
      I should like to pay tribute to the management of British Shipbuilders and to the trade union negotiators who have taken part in the talks throughout that period. The loss of 25,000 jobs in relative calm since vesting day is no mean feat, especially when unemployment rages at about 4 million. About 12 shipyards have closed since vesting day. They were previously building the merchant ships which carried abroad the cargoes needed to help this country's balance of payments.
      We cannot underestimate the agreements reached by those negotiators during that period. However, the work force still has deep-rooted suspicions, because all too often in the past it has seen management techniques which resulted in agreements going to the wall once the work force was seen to have conceded something. I hope that every Member of the Committee and the House will make it his duty to allay the workers' fears and prove that the House has a genuine desire for a strong and thriving shipbuilding industry.
      Subsection (2) of the new clause states:
      "In making their formulation, British Shipbuilders will have full regard to improving productivity, decentralising management and operational centres, industrial relations and such other matters as the Secretary of Sate may specify in writing."
      I believe that that provision should be welcomed. It is a positive and just step. Surely no one can be under any illusion that the loss of 25,000 jobs, the closure of 12 yards—to ensure the industry's survival and the maintenance of a shipbuilding capacity in this country—and the putting forward of legislation which does not just split the corporation, but takes away the need for British Shipbuilders to promote industrial democracy, will not cause bitterness. The old suspicions and distrust will be felt.
      5.45 pm
      I may well be naive. The hon. Member for Southampton, Test (Mr. Hill) stated that some people have said that the Bill is about the introduction of private capital and others have said that it is about the hiving-off of the warship building division into private hands. If the industry is to be successful, presumably the new owners

      969
      will require greater efficiency from the work force. They will want even more productivity agreements, and they will be wanting ships delivered more quickly in order to become more competitive. I do not see how that can be achieved if we take away from the work force the safety net of the need to promote industrial democracy and say to the workers and trade union officials, who may be thought to have been stabbed in the back, "We want your co-operation for further job losses so that the private sector can be made more profitable." I do not believe that the trade unions would agree to that. It is a recipe for confrontation.
      I feel that if the Bill is to succeed in allowing privatisation, it should contain that part of the new clause relating to industrial relations. I strongly urge every hon. Member, particularly Conservative Members, to support the new clause.
      Mr. W. E. Garrett: The hon. Member for Chichester (Mr. Nelson) was probably right in his criticism of the new clause when he said that it did not match up to what was needed. However, it is not beyond the wit of the Government, even at this stage in the Bill's progress, to formulate words that would incorporate the principles so ably enumerated by my right hon. Friend the Member for Sunderland, North (Mr. Willey) when he moved the new clause. Those of us who have sat in on the rather lengthy Committee proceedings are well aware that we never discussed industrial relations because there was no clause covering them. We were well aware that the principal object of the Bill was to allow the Government, when they wish, to privatise certain sections of British Shipbuilders.
      If the new clause is accepted it would allow at some time, a corporate strategy for the industry, whether private or public. The House should heed the warnings given by my hon. Friend the Member for Jarrow (Mr. Dixon), who has an intimate knowledge of the industry in which he worked for so many years. Those of us on the Committee were aware of his expertise on shipbuilding and the industries associated with it.
      I have lived most of my life on Tyneside, and I represent a constituency where most of British Shipbuilders' employees work. It is true that morale is at a low ebb, for a variety of reasons. If it was felt that privatisation would mean a lessening of the structure of industrial relations, morale would sink further still. Many in the House will remember the appalling industrial relations that used to exist in the industry. Many of us have sat back and read media criticisms of trade unionists, whom they called Luddites. Had they known the industry at all, they would have realised that the real Luddites were the management. But two wrongs do not make a right. We have passed that stage, and it is an unpleasant factor in the industrial history of Britain.
      Since the shipbuilding corporation was created, it has been an undeniable fact that industrial relations have improved beyond belief, and beyond anything that I dreamt of when I was an active member of the Amalgamated Union of Engineering Workers on Tyneside. I fear that if the Government do not make a statement about future industrial relations as they will be affected by their policy on privatisation we could heap up
      970
      more trouble for ourselves. Neither the public nor the private sector will gain any benefit from that. Certainly the workers will not.
      The Under-Secretary of State should take note of some of the sincere advice that has been offered in the debate. I support the new clause, but am prepared to consider carefully any similar Government initiative. It is not beyond the power of the Government to insert something into this short Bill to meet the deep concern that has been expressed in the House today.
      Mr. R. C. Mitchell: Both the hon. Member for Southampton, Test (Mr. Hill) and the hon. Member for Chichester (Mr. Nelson) welcomed the new clause in principle, but ingeniously found reasons why they could not vote in favour of it. It is a good clause, and I shall invite my hon. Friends to vote for it.
      As I said on Second Reading, the Bill is basically an enabling measure. It gives a tremendous amount of power to the Minister, whoever he may be. Hon. Members wo served on the Committee will remember that we tried to reduce that power, which enables the Minister to instruct British Shipbuilders to do many things, such as to sell the warship yards and so on. We did not succeed. The new clause provides that British Shipbuilders should produce a corporate policy, which should be laid before each House of Parliament. That is one more opportunity for Parliament to exert some control over the Executive's actions at any given time.
      We cannot have a corporate plan for shipbuilding in isolation. We must recognise that shipbuilding, shipping and defence are interlinked. If there is no demand for ships, there will be no demand for shipbuilding. As we realised during the Falklands crisis, the merchant navy is important as part of our defence forces. We must press the Government for a maritime policy covering all the aspects to which I referred.
      Everyone will agree that productivity has improved in the shipbuilding industry, especially during the years since nationalisation. But there is still some way to go, and we have not yet reached the ultimate in productivity in the shipyards. There is a need for further, continuous discussion between management and unions.
      My right hon. Friend the Member for Greenock and Port Glasgow (Dr. Mabon) said that one of his disappointments since nationalisation has been the centralised control of British Shipbuilders. When the nationalisation Bill passed through the House, under the auspices of the right hon. Member for Manchester, Ardwick (Mr. Kaufman) I said that we did not want a centralised body that made decisions and then transmitted them to the various yards. I fear that British Shipbuilders has become too centralised. It does not allow enough initiative to local yard managers for local decision making. I hope that that will be reversed during the next few years.
      Industrial relations have also improved tremendously—since nationalisation. Before that, they were in an appalling state. But again, we still have a long way to go. There are still too many trade unions negotiating in that area. There are about 16 now, whereas previously they numbered 27, so we have made some progress. We must take the next step and move away from direct confrontation to a system where those who work in the shipyards play a part in the decision-making process. Most people believe that to be a part of industrial democracy. It is not simply collective bargaining—the

      971
      men working in the yard have a part to play in decision-making. That is not a new concept in the shipbuilding industry. It was successfully tried at Fairfields many years ago. We must get away from the "we-they" attitude and recognise that we are all "us", and that both sides have the same object in mind, which is to maintain a profitable shipbuilding industry.
      If the Government follow their present economic policies, and if the world recession continues, there will be a danger—especially in civilian shipbuilding—that we shall have no shipbuilding industry at all. So there is some urgency in the matter. I hope that, as a first step, the Government will accept the new clause. I have not heard any legitimate reason for opposing it. If the Government cannot accept its wording, I hope that they will introduce something similar.
      The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): I have a great deal of sympathy with the general intentions expressed this afternoon by the right hon. Member for Sunderland, North (Mr. Willey) and represented in the new clause. The Bill, as amended in Committee, reflects the Government's positive response to many of the arguments put before the House this afternoon, including the plea in the last few words spoken by the hon. Member for Southampton, Itchen (Mr. Mitchell).
      The issues were discussed in Committee when we dealt with the part of the Bill that repeals section 5 of the 1977 Act. The new clause covers much the same ground as section 5, and, for the same reason as I supported the repeal of section 5, I believe that we should not accept the new clause.
      6 pm
      I was surprised by the right hon. Gentleman's suggestion that it was better for a corporate plan, or something of that nature, to be produced from time to time rather than annually. I agree that the corporate plan must be relevant, alive and up to date, but it must also be timely, and it needs the discipline provided by an annual framework. We entirely accept the principle of the annual corporate plan and the information that it presents to the Government.
      I am not opposed to regular management reviews, the promotion of industrial democracy, the decentralisation of operations, the improvement of productivity, and so on. Those matters are all very important and should be kept constantly under review by British Shipbuilders, and the corporate plan is the right and appropriate vehicle for that purpose. Our objection to the new clause is simply that the matters described in it either should be the natural concern of the management of a commercial organisation, to which statutory exhortation adds nothing, or covered elsewhere in the legislation.
      In effect, with some differences more of detail than of substance, the right hon. Gentleman's new clause reconstitutes section 5 which we took out of the legislation and disposes of section 7 which is essentially the one providing the corporate plan. As we said in Committee, section 5 has not been used by British Shipbuilders since 1978. The power of British Shipbuilders to submit an occasional report was used in 1978 for the first and only time. The practice of the management of that nationalised industry therefore suggests that management itself prefers
      972
      the vehicle of the corporate plan and finds it sufficient for its purposes, rather than the occasional submission of a plan as is envisaged in the new clause.
      Mr. R. C. Mitchell: Will the hon. Gentleman tell me where else in the legislation provision is made for the corporate plan to be laid before Parliament?
      Mr. Fletcher: I shall take up that point in due course.
      It is important to note that section 7 of the 1977 Act is not repealed by the Bill. Section 7 requires British Shipbuilders to produce art annual corporate plan and to consult the trade unions before doing so. I emphasise that fact for the benefit of the hon. Member for Jarrow (Mr. Dixon), who has suggested today, as he did in Committee, that the corporate plan does not make sufficient allowance for the trade union interest to be taken into account. He prefers the section 5 solution which, as I have said, was used only once to the regular annual corporate plan as under section 7. I remind the hon. Gentleman that section 7 provides:
      "It shall be the duty of each Corporation, after consulting any relevant trade union, to formulate in each year"
      and so on.
      I should point out to my hon. Friend the Member for Chichester (Mr. Nelson), with whom I disagree about the way in which the private sector might deal with this, that section 7 lays down the kind of basic information expected from a nationalised industry. I suggest that most private companies, however they may describe the process, perhaps on a five-year rolling basis or in some other form, will consider the matters set out in section 7—

      "(a) capital investment,

      (b) research and development,

      (c) employment of persons,

      (d) forecasts of income and expenditure on profit and loss account"

      and other essential matters.
      Mr. Nelson: There is no disagreement between us about the contents of a corporate plan, but only about the timing and whether it would be every year.
      Mr. Fletcher: I suggest that most businesses do this every year, however they describe the operation. Indeed, I believe that, if anything, they would probably do it more frequently. There is nothing to prevent BS from making more frequent use of the corporate plan, or amending it during the year as circumstances change and as management considers necessary.
      Mr. Dixon: The Minister said that section 5 had not been invoked since 1978. Subsection (2) of that section instructs BS
      "to promote industrial democracy in its undertakings".
      If that has not been invoked, the men in the industry have been conned since 1977. It was because they believed that they had industrial democracy that they accepted the 25,000 redundancies, the loss of the shipyards and the drop from third to 19th in the wages league. They accepted all that because they believed that BS was bound by section 5. The Minister is therefore saying that the workers have been conned.
      Mr. Fletcher: I do not think that there is any question of that. All the hon. Gentleman's references to industrial relations in BS have not stemmed from section 5. My point was that if section 5 was so important it would have been used more frequently since the nationalised industry was established and not just in 1978.

      973
      The first sentence of section 7 requires that the trade unions be consulted not just about industrial relations but about a whole series of matters which lie at the heart of the industry's planning and of consideration by the board of BS. I believe that it is far more important for the workers to be consulted about the corporate plan, with all the consequences that might flow from decisions surrounding that plan, than to have some attractively worded provision with the phrase "industrial democracy" painted all over it which may ultimately be far less meaningful than the presentation of the corporate plan and consultation with the trade unions about it.
      Mr. Hill: The Bill will naturally enable BS to set up subsidiary companies, which may or may not then be sold to the private sector. Will it be a condition of sale that the arrangement in section 7 be carried through in the conveyancing of the contract of sale?
      Mr. Fletcher: I think that that would depend entirely on the situation surrounding the sale. A prospective purchaser might wish to carry forward the best practices of BS in industrial relations. I doubt whether that would be laid down in a contract of sale, but I suppose that it is not impossible. The important thing is that this part of the legislation would not apply to a part of BS which was privatised and in effect changed ownership so that it was no longer a nationalised industry and thus no longer subject to the terms of the legislation.
      The new clause suggests that the corporate policy or plan shold be concerned with the efficient manner in which the activities of the corporation should be carried out. British Shipbuilders will have a duty under the new section 4A(1), to be organised
      "in the most efficient manner".
      Any commercial organisation that is concerned about its financial results must keep that under frequent review.
      The new clause is also concerned with the decentralisation of management and of operational centres. I am also in favour of decentralisation to profit centres. British Shipbuilders is organised in a decentralised fashion. [Interruption.] I hear the groans. I have sympathy with them in the sense that the problem arises about order intake and the allocation of orders. That is a prime test of decentralisation in shipbuilding, steel or any other nationalised industry. That is a hurdle that nationalised industries are unable to get over, partly because of political interference across the spectrum of politics in the House. As long as an industry is nationalised, Members of Parliament and others—I say nothing of Ministers or former Ministers—will feel that they have the right to exercise or to try to exercise some influence over where orders are placed. That is a serious criticism of nationalisation and not of the structure of British Shipbuilders. Given its obvious inhibitions, I entirely agree that British Shipbuilders does everything possible to operate in a decentralised manner. There are ways in which that can be measured.
      The head office and central services of British Shipbuilders employ only a few hundred people compared with the 64,000 employed in the separate and publicly accountable subsidiaries. That degree of decentralisation may be preserved. Under the new section 4A(2), the
      974
      Secretary of State's consent will be required before British Shipbuilders can make any substantial change in its organisation.
      I say to the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) that, if necessary, the Secretary of State could also use his powers under section 7 to specify decentralisation as a matter to be considered in the annual corporate plan.
      Dr. Mabon: The Minister has pressed hon. Members on the argument of quantitative decentralisation, hence his quoting of figures at this centre and that. However, there is also qualitative decentralisation, which involves the question of where decisions are made. That is the criticism.
      6.15 pm
      Mr. Fletcher: That is more a criticism of nationalisation than of the organisation and structure. [Interruption.] It is; because Ministers are inevitably deeply involved in nationalised industries. That is also relevant to the point that I made earlier about the allocation of orders.
      Sir David Price: Does my hon. Friend agree that the real test of decentralisation, whether in a privately or publicly run organisation, is how much of the profit made by a profit centre within the group can remain within that profit centre and how much of that profit has to go to head office?
      The dilemma facing the House is that it wants the profitable yards to subsidise the unprofitable yards, yet at the same time it is talking about decentralisation. If there is real decentralisation in terms of profit centres, I do not understand how there can be both.
      Mr. Fletcher: I agree entirely with my hon. Friend. Several tests can be applied. That is one which is extremely important.
      An aspect of the new clause with which I am less sympathetic is that any plan produced under the new clause would have to be laid before Parliament. That is fine, sounds great and is, perhaps, as it should be. However, there must be a safeguard to protect not just the national interest, which could be prejudiced by the publication of sensitive information, but the commercial interests of the corporation. From what he said this evening and from the comments he made when the matter was discussed in Committee I have no doubt that the right hon. Member for Sunderland, North recognises that. It is not in the best interest of British Shipbuilders, leaving aside the national interest, that such an important document, full of sensitive information, and of great interest to competitors, should be laid before the House and so become a public document.
      Mr. R. C. Mitchell: Bearing in mind the leaks that have recently occurred from Ministries, should the corporate plan be laid before the Minister?
      Mr. Fletcher: Fortunately, the privatisation of British Shipbuilders will at least remove that source of information for our competitors. However, one final reason for rejecting the new clause that cannot be ignored by the House is that the Government, as part of their public expenditure planning, set all the nationalised industries a financial framework. It would clearly be inappropriate to do that without first considering the plans and the cost of those plans in respect of each nationalised industry. It is

      975
      necessary to have annually a fully considered plan from British Shipbuilders and from other nationalised industries to enable the Government to put together their total public expenditure considerations for the year ahead.
      In an industry that is subjected to the frequent changes in market prospects with which British Shipbuilders has to cope, regular reviews of its corporate plan are absolutely essential. Given those points and the other considerations I have mentioned, the Government cannot accept the new clause.
      Dr. John Cunningham: I congratulate my right hon. Friend the Member for Sunderland, North (Mr. Willey) on the effective and persuasive way in which he moved the new clause. It is a serious attempt to improve a pretty awful Bill. Even the hon. Members for Chichester (Mr. Nelson) and for Southampton, Test (Mr. Hill), who spoke from the Government Back Benches see some merit in what has been proposed. The new clause has received unanimous support from the opposition Benches, not only from my hon. Friends the Members for Jarrow (Mr. Dixon) and Wallsend (Mr. Garrett) but from the spokesman for the Social Democratic party, the right hon. Member for Greenock and Port Glasgow (Dr. Mabon).
      The proposals have had a good reception. That is not surprising since they involve matters that are of considerable importance to the future of our shipbuilding industry as well as to productivity, decentralisation, industrial relations and the corporate plan. There is nothing ideological about what is proposed in the new clause. It is regrettable that the Minister devoted so few of his remarks to the importance of industrial relations in the shipbuilding industry, especially in view of the dramatic improvement that has taken place in that aspect of the industry's affairs since British Shipbuilders was established. That is one of the reasons why the corporation has survived to date, although it has faced serious difficulties.
      One of the slight differences of opinion that arose between myself and the right hon. Member for Greenock and Port Glasgow involved the Government's real reasons for not wanting these provisions in the Act. I suspect there is some truth in what the hon. Member for Southampton, Test said, that the Government do not want any impediment to their intentions and proposals to break up, privatise, sell off and close down different aspects of the shipbuilding industry.
      We all agree that—as the Minister said—that we should not need to legislate for good management practices. In an ideal world we would accept his assertion, but the real world is rather different, and it has been necessary to legislate for several matters and not least, improvements in industrial relations as well as the development of industrial democracy.
      Almost the whole of the private sector of British industry has been running round terrified about proposals from the EC on worker participation and involvement. Far from giving the proposals a wide welcome, all sorts of reasons are being advanced both publicly and behind the scenes as to why they should be rejected. Therefore, we do not accept the Minister's argument in respect of industrial democracy or any other aspect of the new clause.
      Mr. Michael Colvin rose—
      Dr. Cunningham: I shall not give way. I want to be brief because there are other amendments to debate, as well as Third Reading.
      The fact that the Government do not want these measures to be reintroduced—having taken some of them out of the 1977 Act—reflects a change in attitude about how our industries should be run and managed. As we often said in Committee, no one in British Shipbuilders has asked for such a thing to be done. The Government are on their own in making the changes.
      The Minister's speech was in the form: "Oppose gently. Be nice, but say there are good practical reasons why these proposals cannot be incorporated into the Bill." It is a speech that we have all heard many times in the House. It was singularly unconvincing in this instance. In Committee, we tried to improve the Bill by incorporating some of these provisions. We wanted to discuss them again on Report and we shall certainly invite the House to join us in voting for them.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 223, Noes 284.

      Division No. 77]

      [6.22 pm

      AYES

      Abse, Leo

      Dewar, Donald

      Adams, Allen

      Dixon, Donald

      Allaun, Frank

      Dormand, Jack

      Alton, David

      Douglas, Dick

      Anderson, Donald

      Dubs, Alfred

      Archer, Rt Hon Peter

      Duffy, A. E. P.

      Ashley, Rt Hon Jack

      Dunwoody, Hon Mrs G.

      Ashton, Joe

      Eadie, Alex

      Atkinson, N. (H'gey,)

      Eastham, Ken

      Barnett, Guy (Greenwich)

      Edwards, R. (W'hampt'n S E)

      Barnett, Rt Hon Joel (H'wd)

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

      Beith, A. J.

      Ellis, Tom (Wrexham)

      Benn, Rt Hon Tony

      English, Michael

      Bennett, Andrew (St'kp't N)

      Ennals, Rt Hon David

      Bidwell, Sydney

      Evans, Ioan (Aberdare)

      Booth, Rt Hon Albert

      Ewing, Harry

      Boothroyd, Miss Betty

      Faulds, Andrew

      Bray, Dr Jeremy

      Fitch, Alan

      Brocklebank-Fowler, C.

      Ford, Ben

      Brown, Hugh D. (Provan)

      Forrester, John

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

      Foster, Derek

      Brown, Ronald W. (H'ckn'y S)

      Foulkes, George

      Brown, Ron (E'burgh, Leith)

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

      Campbell, Ian

      Freeson, Rt Hon Reginald

      Campbell-Savours, Dale

      Freud, Clement

      Canavan, Dennis

      Garrett, John (Norwich S)

      Cant, R. B.

      Garrett, W. E. (Wallsend)

      Carmichael, Neil

      George, Bruce

      Carter-Jones, Lewis

      Gilbert, Rt Hon Dr John

      Cartwright, John

      Golding, John

      Clark, Dr David (S Shields)

      Gourlay, Harry

      Clarke.Thomas (C'b'dge, A'rie)

      Graham, Ted

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

      Grimond, Rt Hon J.

      Cohen, Stanley

      Hamilton, James (Bothwell)

      Coleman, Donald

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

      Concannon, Rt Hon J. D.

      Hardy, Peter

      Conlan, Bernard

      Harrison, Rt Hon Walter

      Cook, Robin F.

      Hart, Rt Hon Dame Judith

      Cox, T. (W'dsw'th, Toot'g)

      Hattersley, Rt Hon Roy

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

      Haynes, Frank

      Crowther, Stan

      Healey, Rt Hon Denis

      Cryer, Bob

      Heffer, Eric S.

      Cunliffe, Lawrence

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

      Cunningham, G. (Islington S)

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

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

      Homewood, William

      Dalyell, Tam

      Hooley, Frank

      Davidson, Arthur

      Horam, John

      Davies, Rt Hon Denzil (L'lli)

      Howell, Rt Hon D.

      Davis, Clinton (Hackney C)

      Hoyle, Douglas

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

      Hughes, Mark (Durham)

      Deakins, Eric

      Janner, Hon Greville

      Dean, Joseph (Leeds West)

      Jay, Rt Hon Douglas

      977

      Jenkins, Rt Hon Roy (Hillh'd)

      Robinson, P. (Belfast E)

      John, Brynmor

      Rodgers, Rt Hon William

      Johnson, James (Hull West)

      Rooker, J. W.

      Jones, Barry (East Flint)

      Roper, John

      Jones, Dan (Burnley)

      Ross, Ernest (Dundee West)

      Kaufman, Rt Hon Gerald

      Ross, Stephen (Isle of Wight)

      Lambie, David

      Sandelson, Neville

      Leadbitter, Ted

      Sever, John

      Leighton, Ronald

      Sheerman, Barry

      Lestor, Miss Joan

      Sheldon, Rt Hon R.

      Lewis, Arthur (N'ham NW)

      Shore, Rt Hon Peter

      Lewis, Ron (Carlisle)

      Short, Mrs Renée

      Litherland, Robert

      Silkin, Rt Hon J. (Deptford)

      Lofthouse, Geoffrey

      Silkin, Rt Hon S. C. (Dulwich)

      Lyon, Alexander (York)

      Silverman, Julius

      Lyons, Edward (Bradf'd W)

      Skinner, Dennis

      Mabon, Rt Hon Dr J. Dickson

      Smith, Cyril (Rochdale)

      McCartney, Hugh

      Smith, Rt Hon J. (N Lanark)

      McDonald, Dr Oonagh

      Soley, Clive

      McElhone, Mrs Helen

      Spearing, Nigel

      McGuire, Michael (Ince)

      Spellar, John Francis (B'ham)

      McKay, Allen (Penistone)

      Spriggs, Leslie

      McKelvey, William

      Stallard, A. W.

      MacKenzie, Rt Hon Gregor

      Steel, Rt Hon David

      McNamara, Kevin

      Stewart, Rt Hon D. (W Isles)

      McTaggart, Robert

      Stoddart, David

      Marks, Kenneth

      Stott, Roger

      Marshall, D(G'gow S'ton)

      Strang, Gavin

      Marshall, Dr Edmund (Goole)

      Straw, Jack

      Marshall, Jim (Leicester S)

      Summerskill, Hon Dr Shirley

      Martin, M(G'gow S'burn)

      Taylor, Mrs Ann (Bolton W)

      Mason, Rt Hon Roy

      Thomas, Mike (Newcastle E)

      Meacher, Michael

      Thomas, Dr R. (Carmarthen)

      Millan, Rt Hon Bruce

      Thorne, Stan (Preston South)

      Miller, Dr M. S. (E Kilbride)

      Tinn, James

      Mitchell, Austin (Grimsby)

      Torney, Tom

      Mitchell, R. C. (Soton Itchen)

      Varley, Rt Hon Eric G.

      Morris, Rt Hon A. (W'shawe)

      Wainwright, E.(Dearne V)

      Morris, Rt Hon C. (O'shaw)

      Wainwright, H. (Colne V)

      Mulley, Rt Hon Frederick

      Walker, Rt Hon H. (D'caster)

      Newens, Stanley

      Warden, Gareth

      Oakes, Rt Hon Gordon

      Watkins, David

      O'Halloran, Michael

      Wellbeloved, James

      O'Neill, Martin

      Welsh, Michael

      Orme, Rt Hon Stanley

      White, Frank R.

      Palmer, Arthur

      Whitlock, William

      Park, George

      Wigley, Dafydd

      Parker, John

      Willey, Rt Hon Frederick

      Parry, Robert

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

      Pavitt, Laurie

      Wilson, Gordon (Dundee E)

      Pitt, William Henry

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

      Powell, Raymond (Ogmore)

      Wilson, William (C'try SE)

      Race, Reg

      Winnick, David

      Radice, Giles

      Woodall, Alec

      Rees, Rt Hon M (Leeds S)

      Woolmer, Kenneth

      Richardson, Jo

      Wrigglesworth, Ian

      Roberts, Albert (Normanton)

      Wright, Sheila

      Roberts, Allan (Bootle)

      Roberts, Ernest (Hackney N)

      Tellers for the Ayes:

      Roberts, Gwilym (Cannock)

      Mr. George Morton and

      Robertson, George

      Mr. Harry Cowans.

      Robinson, G. (Coventry NW)

      NOES

      Aitken, Jonathan

      Benyon, Thomas (A'don)

      Alexander, Richard

      Benyon, W. (Buckingham)

      Alison, Rt Hon Michael

      Berry, Hon Anthony

      Amery, Rt Hon Julian

      Best, Keith

      Ancram, Michael

      Bevan, David Gilroy

      Arnold, Tom

      Biffen, Rt Hon John

      Aspinwall, Jack

      Biggs-Davison, Sir John

      Atkins, Rt Hon H.(S'thorne)

      Blackburn, John

      Atkins, Robert(Preston N)

      Blaker, Peter

      Atkinson, David (B'm'th,E)

      Body, Richard

      Baker, Kenneth(St.M'bone)

      Bonsor, Sir Nicholas

      Baker, Nicholas (N Dorset)

      Bottomley, Peter (W'wich W)

      Banks, Robert

      Bowden, Andrew

      Beaumont-Dark, Anthony

      Boyson, Dr Rhodes

      Bendall, Vivian

      Braine, Sir Bernard

      Bennett, Sir Frederic (T'bay)

      Bright, Graham

      978

      Brinton, Tim

      Hawkins, Sir Paul

      Brittan, Rt. Hon. Leon

      Hawksley, Warren

      Brooke, Hon Peter

      Hayhoe, Barney

      Brotherton, Michael

      Heddle, John

      Brown, Michael(Brigg & Sc'n)

      Henderson, Barry

      Browne, John (Winchester)

      Hicks, Robert

      Bruce-Gardyne, John

      Higgins, Rt Hon Terence L.

      Bryan, Sir Paul

      Hill, James

      Buchanan-Smith, Rt. Hon. A.

      Hogg, Hon Douglas (Gr'th'm)

      Buck, Antony

      Holland, Philip (Carlton)

      Budgen, Nick

      Hooson, Tom

      Burden, Sir Frederick

      Hordern, Peter

      Butcher, John

      Howe, Rt Hon Sir Geoffrey

      Carlisle, John (Luton West)

      Howell, Ralph (N Norfolk)

      Carlisle, Kenneth (Lincoln)

      Hunt, David (Wirral)

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

      Hunt, John (Ravensbourne)

      Chalker, Mrs. Lynda

      Hurd, Rt Hon Douglas

      Channon, Rt. Hon. Paul

      Irvine, Rt Hon Bryant Godman

      Chapman, Sydney

      Irving, Charles (Cheltenham)

      Churchill, W. S.

      Jenkin, Rt Hon Patrick

      Clark, Sir W. (Croydon S)

      Jessel, Toby

      Clarke, Kenneth (Rushcliffe)

      Johnson Smith, Sir Geoffrey

      Cockeram, Eric

      Jopling, Rt Hon Michael

      Colvin, Michael

      Joseph, Rt Hon Sir Keith

      Cope, John

      Kaberry, Sir Donald

      Corrie, John

      Kershaw, Sir Anthony

      Costain, Sir Albert

      Kitson, Sir Timothy

      Cranborne, Viscount

      Knight, Mrs Jill

      Critchley, Julian

      Knox, David

      Crouch, David

      Lamont, Norman

      Dickens, Geoffrey

      Lang, Ian

      Dorrell, Stephen

      Langford-Holt, Sir John

      Douglas-Hamilton, Lord J.

      Latham, Michael

      Dover, Denshore

      Lawrence, Ivan

      du Cann, Rt Hon Edward

      Lawson, Rt Hon Nigel

      Dunn, Robert (Dartford)

      Lee, John

      Durant, Tony

      Le Marchant, Spencer

      Eden, Rt Hon Sir John

      Lennox-Boyd, Hon Mark

      Edwards, Rt Hon N. (P'broke)

      Lester, Jim (Beeston)

      Eggar, Tim

      Lewis, Sir Kenneth (Rutland)

      Elliott, Sir William

      Lloyd, Ian (Havant & W'loo)

      Emery, Sir Peter

      Lloyd, Peter (Fareham)

      Eyre, Reginald

      Loveridge, John

      Fairbairn, Nicholas

      Lyell, Nicholas

      Fairgrieve, Sir Russell

      McCrindle, Robert

      Faith, Mrs Sheila

      MacKay, John (Argyll)

      Farr, John

      Macmillan, Rt Hon M.

      Fell, Sir Anthony

      McNair-Wilson, M. (N'bury)

      Finsberg, Geoffrey

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

      Fisher, Sir Nigel

      McQuarrie, Albert

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

      Major, John

      Fletcher-Cooke, Sir Charles

      Marland, Paul

      Fookes, Miss Janet

      Marlow, Antony

      Forman, Nigel

      Marshall, Michael (Arundel)

      Fowler, Rt Hon Norman

      Marten, Rt Hon Neil

      Fox, Marcus

      Mates, Michael

      Fraser, Rt Hon Sir Hugh

      Maude, Rt Hon Sir Angus

      Fraser, Peter (South Angus)

      Mawby, Ray

      Fry, Peter

      Mawhinney, Dr Brian

      Gardiner, George (Reigate)

      Maxwell-Hyslop, Robin

      Gardner, Sir Edward

      Mayhew, Patrick

      Garel-Jones, Tristan

      Mellor, David

      Gilmour, Rt Hon Sir Ian

      Meyer, Sir Anthony

      Goodhart, Sir Philip

      Miller, Hal (B'grove)

      Goodlad, Alastair

      Mills, Iain (Meriden)

      Gorst, John

      Mills, Sir Peter (West Devon)

      Gow, Ian

      Miscampbell, Norman

      Gower, Sir Raymond

      Mitchell, David (Basingstoke)

      Grant, Sir Anthony

      Moate, Roger

      Gray, Rt Hon Hamish

      Monro, Sir Hector

      Greenway, Harry

      Montgomery, Fergus

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

      Moore, John

      Griffiths, Peter (Portsm'th N)

      Morris, M. (N'hampton S)

      Grist, Ian

      Morrison, Hon C. (Devizes)

      Grylls, Michael

      Mudd, David

      Gummer, John Selwyn

      Murphy, Christopher

      Hamilton, Hon A.

      Myles, David

      Hamilton, Michael (Salisbury)

      Neale, Gerrard

      Hannam, John

      Needham, Richard

      Haselhurst, Alan

      Nelson, Anthony

      979

      Neubert, Michael

      Stainton, Keith

      Nott, Rt Hon Sir John

      Stanbrook, Ivor

      Onslow, Cranley

      Stanley, John

      Oppenheim, Rt Hon Mrs S.

      Steen, Anthony

      Osborn, John

      Stevens, Martin

      Page, Richard (SW Herts)

      Stewart, A.(E Renfrewshire)

      Parkinson, Rt Hon Cecil

      Stewart, Ian (Hitchin)

      Parris, Matthew

      Stokes, John

      Patten, Christopher (Bath)

      Stradling Thomas, J.

      Pawsey, James

      Taylor, Teddy (S'end E)

      Percival, Sir Ian

      Tebbit, Rt Hon Norman

      Peyton, Rt Hon John

      Temple-Morris, Peter

      Pink, R. Bonner

      Thompson, Donald

      Pollock, Alexander

      Thorne, Neil (Word South)

      Porter, Barry

      Thornton, Malcolm

      Prentice, Rt Hon Reg

      Townend, John (Bridlington)

      Price, Sir David (Eastleigh)

      Townsend, Cyril D, (B'heath)

      Proctor, K. Harvey

      Trippier, David

      Pym, Rt Hon Francis

      van Straubenzee, Sir W.

      Rathbone, Tim

      Vaughan, Dr Gerard

      Rees, Peter (Dover and Deal)

      Viggers, Peter

      Rees-Davies, W. R.

      Waddington, David

      Renton, Tim

      Wakeham, John

      Rhodes James, Robert

      Waldegrave, Hon William

      Ridley, Hon Nicholas

      Walker, B. (Perth)

      Ridsdale, Sir Julian

      Walker-Smith, Rt Hon Sir D.

      Rifkind, Malcolm

      Wall, Sir Patrick

      Rippon, Rt Hon Geoffrey

      Waller, Gary

      Roberts, Wyn (Conway)

      Walters, Dennis

      Rossi, Hugh

      Ward, John

      Rost, Peter

      Warren, Kenneth

      Royle, Sir Anthony

      Watson, John

      Sainsbury, Hon Timothy

      Wells, Bowen

      St. John-Stevas, Rt Hon N.

      Wells, John (Maidstone)

      Shaw, Giles (Pudsey)

      Wheeler, John

      Shaw, Sir Michael (Scarb')

      Whitelaw, Rt Hon William

      Shelton, William (Streatham)

      Whitney, Raymond

      Shepherd, Colin (Hereford)

      Wickenden, Keith

      Shepherd, Richard

      Wiggin, Jerry

      Silvester, Fred

      Wilkinson, John

      Sims, Roger

      Williams, D.(Montgomery)

      Skeet, T. H. H.

      Winterton, Nicholas

      Smith, Tim (Beaconsfield)

      Wolfson, Mark

      Speed, Keith

      Younger, Rt Hon George

      Speller, Tony

      Spence, John

      Tellers for the Noes:

      Spicer, Jim (West Dorset)

      Mr. Carol Mather and

      Sproat, Iain

      Mr. Robert Boscawen.

      Question accordingly negatived.

    Clause 1

      MODIFICATION OF BRITISH SHIPBUILDERS' FUNCTIONS
      Mr. R. C. Mitchell: I beg to move amendment No. 1, in page 1, line 21, at end insert:
      `and such other activities as may from time to time appear to them to be desirable and which can be carried out within their existing shipyards'.
      This is a simple amendment but one that may well be very important, given the present state of the shipbuilding industry and its likely state over the next few years. We all know the position. We are in a world recession and there is no demand for merchant ships. We are facing severe competition, particularly from far eastern yards in Korea and Taiwan. The order books for merchant shipping do not look hopeful. The Government's deflationary policy is making the recession worse, with the result that the outlook for British shipbuilding is worse than it might otherwise have been.
      We have the same picture in naval shipbuilding because Government defence cuts will probably reduce the number of naval vessels ordered over the next few years. I hope that the Government will soon decide about the next type
      980
      22 frigate and that the order will be placed at Vosper Thornycroft. I understand that the decision will be made shortly.
      The position would be no better if some of the more extreme policies advocated by some members of the Labour party were put into operation. If those in the Labour party who believe in a siege economy and massive import controls, which would lead to restrictions on exports, had their way, the result would be disastrous for shipping. The decrease in the amount of goods moving from one country to another would reduce the demand for shipping, and therefore for further shipbuilding.
      Clause 1(3) states:
      "British Shipbuilders shall have power to carry on the following activities, namely—
      (a) the design, development, production, sale, repair and maintenance of ships and slow speed diesel marine engines".
      I understand that in a court case one firm is claiming that British Shipbuilders is building engines, which it should not be under current legislation. The amendment would allow British Shipbuilders to extend its activities within its existing shipyards.
      About three years ago I visited Lubeck, a north German shipyard which had no orders for ships for the next nine months. It could not get new ship orders but it did not sack all the work force. It got an order for two large mechanical diggers for Libya. Those diggers were being built in the shipyard by the yard's work force. That seemed to be an eminently sensible idea. As I understand it—if I am wrong the Minister will correct me when he replies—if British Shipbuilders wanted to do that it could not do so under the present legislation. It would be outside the permitted range of activities. If there is to be a reduction in demand for shipping, it seems a good idea that the shipyards should turn to other activities. That would be a far better solution than sacking the work force and seeing it dispersed. When the upturn in the economy arrives and the demand for shipping increases, it will be difficult to recover the work force if it has been dispersed.
      The amendment provides more flexibility for British Shipbuilders to extend its building activities beyond ships and diesel marine engines. I am not arguing that these activities should involve manufacturing in factories. The amendment refers to activities
      "which can be carried out within their existing shipyards."
      I see no reason why the Minister should oppose the amendment. The greater flexibility that it would provide for British Shipbuilders could be helpful over the next few difficult years.
      Mr. Hill: I am pleased to follow the remarks of the hon. Member for Southampton, Itchen (Mr. Mitchell). The hon. Gentleman may have failed to notice that clause 1(3)(d) states that consent for any activity can be given by the Secretary of State. I can understand the hon. Gentleman's anxiety. There are perhpas three forces that have come together. The first is the privatisation of Associated British Ports with a successful 34 times over-subscribed share flotation, which will mean more activities within the Southampton port area.
      The second force is the fact that the Chancellor of the Exchequer has set up a policy committee which is examining whether, in the national interest, certain ports and airports should be customs free. I understand from a whisper in the Lobby that the policy committee has come

      981
      out with a firm recommendation that this would be in the national interest. We await with great eagerness the Chancellor's statement on Budget day.
      Mr. Mike Thomas: I wish to be clear what the hon. Gentleman is saying and to establish its relevance. Is he suggesting that it might be possible for British Shipbuilders, in the ground currently occupied by its shipyards, to establish free ports or duty-free zones?
      Mr. Hill: I am not suggesting that. If, however, the hon. Gentleman waits—[Interruption.]. Impatience is always a virtue in a politician but, in this case, it is not merited. The policy committee may persuade the Chancellor to bring forward a policy for free ports.
      The third force at work is the Bill now before the House. There is the need for British Shipbuilders to set up subsidiary companies that will eventually be placed either former owners or the market place. Within my area of Southampton, these three policies could come together.
      The hon. Member for Itchen has not stated exactly what these other activities might be. He has mentioned two diggers that are being assembled. That would hardly seem sufficient work to obtain the Secretary of State's consent. It seems to me that if there were increased trade in Southampton due to the fact that the port is customs free, ship repairers, under the management of British Shipbuilders, could well turn to other activities. Although my hon. Friend the Minister will say that these matters are adequately covered under clause 1(3)(d), it seems to me that, if this is the case, he should dismiss the amendment. If they are not adequately covered, it appears to me that there would be no harm in adding the amendment to the clause.
      6.45 pm
      Mr. Mike Thomas: The real purpose of the Bill, demonstrated by the hon. Member for Southampton, Test (Mr. Hill), as the cloven hoof came out from under the cloak, is to facilitate the sale of parts of British Shipbuilders to the private sector. This will be possible only by assuring those parts of British Shipbuilders that there will be sufficient public work, principally from the Ministry of Defence, to ensure that they are profitable. Otherwise, no one in his right mind in the private sector would wish to purchase them.
      It is interesting that the Government regard the Bill as very much a one-way street. There will be no problem in a private sector company engaged in a myriad of activities—mining of diamonds, mechanical engineering or whatever—purchasing what is currently a part of British Shipbuilders and adding shipbuilding to its range of activities when the Government finally move to breaking up the corporation and selling off the profitable bits. No one will then say that it is ultra vires for a firm currently involved in heavy engineering but not in shipbuilding to become involved in shipbuilding. That will presumably be advanced by the Government, if they are still surviving at that point, as a wonderful reason why this outfit is well fitted to add shipbuilding to its activities.
      The amendment proposed by my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) represents a reasonable and modest extension of the
      982
      possibilities for British Shipbuilders and makes it a two-way street. The hon. Member for Southampton, Test has already mentioned the provisions that exist within the Bill. I can, therefore, see no reason why the Government should not make this modest addition.
      I speak as an hon. Member who has two shipyards in his constituency. The only achievement of this Government in shipbuilding has been thousands of redundancies. I am glad to see the hon. Member for Wallsend (Mr. Garrett), in whose constituency the other shipyard in the Swan Hunter group is located, nod in agreement. In my case, one of the two shipyards in the constituency has been put on a care and maintenance basis. That is the Government's achievement in shipbuilding on my patch on the Tyne. My hon. Friend the Member for Itchen will forgive me if I say, in this context, that the only part of his speech with which I disagreed was the direction in which any orders for type 22 frigates should go. No doubt all hon. Members have their views on that matter. Hon. Members from both sides of the House representing constituencies on the Clyde and elsewhere will have their views about where the orders should go.
      One of the consequences of lack of work is that even with the redundancies already declared and those still to be declared, there are still men and women in British Shipbuilders' yards who have little work to do. One of the more pernicious aspects of the Government's general policy, reflected here in shipbuilding policy, is the way in which they seem to wish to keep men and women idle when there is work to be done. We see roads that are unrepaired, and houses that are unfit to live in and that need bathrooms, insulation, draught-proofing and repairs of various kinds. We see the crumbling fabric of our Health Service, where construction workers could readily be put to work. The Government's policy seems to be based on the premise that it is somehow virtuous to keep people idle when there is work to do.
      I come to an example of that policy. If my hon. Friend's amendment were accepted, work could be created in the shipyards for the men and women who already work there, but who currently do not have enough work, and, as a result, have redundancy hanging over their heads. I see no reason why the amendment should be opposed. However seductive the speech that the Minister is about to make, may be, I doubt whether it will convince me that the amendment should not be accepted. If part of the Government's plans is that it will be legitimate for almost anyone who chooses to engage in a bit of shipbuilding and that that will be guaranteed to be profitable by Government orders, but that it will be illegal for British Shipbuilders to become involved in other activities, that will be wholly illogical and wholly improper. I hope, therefore, that the Minister will accept the amendment.
      The Minister of State, Department of Industry (Mr. Norman Lamont): I hope that my hon. Friend the Member for Southampton, Test (Mr. Hill) will forgive me if I do not follow him down his beguiling path of free ports, privatisation, and the flotation of docks, all meeting in one. He will understand that I am not in a position to say anything about free ports today, although I want to say something later about one of his points.
      I understand why the hon. Member for Southampton, Itchen (Mr. Mitchell) thinks that his amendment is an attractive proposition. He would argue that it gives flexibility to British Shipbuilders—something that we

      983
      have said is one part and purpose of the Bill. However, for reasons that I shall explain—they are not quite as sinister as those attributed to us by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas)—I am afraid that I shall have to recommend the House to reject the amendment, because of the regard and consideration that we must give to the private sector and the competition between the public and private sectors.
      The hon. Gentleman's amendment is not quite as restrictive as he may think. It refers not to activities carried out in shipbuilding yards, but to activities that are capable of being carried out in British Shipbuilders' yards. I do not know whether the hon. Gentleman deliberately intended that, but I must stress that it means that activities could be carried on in new establishments, and British Shipbuilders would be able to create new establishments for the purposes of those activities. The amendment speaks of activities
      "which can be carried out",
      and that is why I stick to what I have said.
      Mr. Mike Thomas: Is the Minister saying that if the wording of the amendment were "such other activities as may from time to time appear to them to be desirable and which were to be carried out within their existing shipyards", it would be acceptable?
      Mr. Lamont: The hon. Gentleman must not charge at everything. I was only trying to explain the exact meaning of the amendment, so that the House could be informed. It was an observation in passing. I did not say that it altered the merits or demerits of the amendment.
      My hon. Friend the Member for Test was right when he said that British Shipbuilders can diversify and move into other areas, provided that it does so with the consent of the Secretary of State. In my view, that is the right balance and the right degree of freedom for British Shipbuilders.
      The present circumstances of British Shipbuilders are not dissimilar from those of a company in the private sector. Companies are limited by their memoranda of association as to the activities in which they may engage. If they want to change those activties, they have to obtain the consent of 75 per cent. of the shareholders. That is not miles removed from the idea that British Shipbuilders, in order to diversify into another area, should get the consent of the Secretary of State.
      Mr. R. C. Mitchell: Can the Minister give an under-taking that if British Shipbuilders were to approach him and ask to diversify, he would look at the matter very sympathetically?
      Mr. Lamont: Of course, if British Shipbuilders comes to us with a proposition for diversifying, we shall look at it, but we would have to have regard to the effect on the private sector. The hon. Gentleman asks me whether I will look at the matter sympathetically. I can tell him that the British Steel Corporation has come to the Government on a number of occasions and asked to form a joint venture with the private sector. On occasions we have allowed that to happen. The British Steel Corporation—this is the point that my hon. Friend made—has been able to do that only because the statute governing British Steel has been altered in the same way as the statutes relating to British Shipbuilders are now being altered by the Bill. This Bill will have a little of the effect that the hon. Gentleman seeks.
      Dr. J. Dickson Mabon: The Minister said that he would look sympathetically on such a proposition within the context of the present statute, as I understood him. Can he, off the cuff, give an example where either a previous Secretary of State or the present Secretary of State has assented to something of this nature from British Shipbuilders?
      Mr. Lamont: No, we have not given such an assent during the lifetime of this Government, but I have told the House that there have been a number of occasions on which British Steel has formed joint companies with the private sector. One of the purposes of this Bill is to allow joint companies to be formed between British Shipbuilders and the private sector.
      In asking British Shipbuilders to seek the approval of the Secretary of State if it wants to diversify on its own, I believe that we have got the balance about right. We have to have regard to the overlap between the public and private sectors. All nationalised industries are sources of complaint about unfair competition. On British Shipbuilders and British Steel we get continual allegations of unfair competition, taxpayers' money being used to subsidise prices, thus damaging employment in the private sector. I accept what the hon. Gentleman said about a firm in Germany that diversified to save jobs. That may be attractive, but it would not be so attractive if the effect were to displace jobs in the private sector. This is one of the criteria against which one should judge a proposition of this nature: what will the impact be on the private sector, and will it damage in any way employment or the health of companies in the private sector?
      The hon. Member for Newcastle upon Tyne, East said that this was an unfair balance. The phrase he used was that this was a one-way street, because if the private sector wanted to move into competition with the public sector there would be no objection. He wanted to know why the public sector could not compete with the private sector. The cases are quite different. We have to have regard to the uses to which taxpayers' money is put and the effects of possible unfair competition.
      Although I understand the motives of the hon. Member for Southampton Itchen, (Mr. Mitchell) in tabling the amendment, I regret that l must advise my hon. Friends to vote against it in the event of a Division.
      7 pm
      Mr. R. C. Mitchell: I am not happy with the Minister's reply but in view of certain assurances that he has given, and on the understanding that we may want to return to this matter after the Bill has been debated in the other place, I ask the leave of the House to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 2

      ORGANISATION ETC. OF BRITISH SHIPBUILDERS' ACTIVITIES
      Dr. Oonagh McDonald: I beg to move amendment No. 2, in page 3, line 8, leave out 'the national interest' and insert
      'national defence and security, and a draft of the direction has been approved by resolution of the House of Commons'.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this we may take amendment No. 3 in page 4, line 20, leave out subsection (7).
      Dr. McDonald: We have tabled amendment No. 2 because of the damage done by the Bill to the Aircraft and Shipbuilding Industries Act 1977. As one of its duties, the 1977 Act laid upon British Shipbuilders the duty to consider national defence and that has been removed by the Bill. The amendment has been tabled to ensure that the Secretary of State is obliged to take national defence and security into account instead of just the national interest because that concept is extremely vague and has been made even vaguer by the Government's refusal to define "national interest" in the way in which it was defined in the original Act. Therefore, any direction which the Secretary of State gives to British Shipbuilders must come before Parliament and be approved. That is to ensure that any of the directions which might be given as described in clause 2 are considered in detail by the House.
      Amongst the directions which the Secretary of State might give to British Shipbuilders is the direction to dispose of any of its wholly owned subsidiaries or to ensure that one of its wholly owned subsidiaries is jointly owned by public and private enterprise. In other words, this is the part of the Bill which makes the Bill an enabling one, allowing for the privatisation of part of British Shipbuilders.
      We are all entirely clear about the part of British Shipbuilders of which the Government would like to dispose—the companies in the warship building division so that the profits from Ministry of Defence contracts can go into private hands. That is really what the Bill is all about. It is aimed at selling off the wholy owned subsidiary companies in the warship building division, the only profitable part of British Shipbuilders. That is understandable enough when papers such as the Financial Times can describe the present state of world shipping by saying that there are just too many ships. Only warship building is likely to make any money at the moment. The amendment would mean that if the Secretary of State decided to sell off one of the companies the plans would come before the House of Commons for consideration so that we would be able to take into account such issues.
      If the profitable elements of British Shipbuilders go into private hands, what will happen to merchant shipping? That will be a consideration entirely in line with our insistence that national defence and security must be considered. Traditionally, merchant shipping has been the fourth arm of our defences. The Falklands war showed how important merchant shipping is, not just for our economy but for our defence. The Falklands war also showed the decline in the British merchant fleet which has taken place since 1975 when, under a Labour Government, shipping was doing well and there were 1,600 ships flying the British flag compared with the expected 913 ships at the end of 1983.
      Therefore, if the profitable part of British Shipbuilders is sold off, the implications are extremely important for national security and national defence. It could mean a loss of capacity for building British merchant ships, ships which would be wholly owned by British companies and which would fly the British flag. That would seriously weaken our nation's defences. If the Falklands war had occurred in 1985 rather than last year, on present trends there would have been no merchant fleet to use—nor a
      986
      Navy—in order to carry out the Prime Minister's directions to rescue the Falklanders from Argentina's attack.
      On the other hand, if we considered a draft direction which the Secretary of State had brought forward to sell off part of the warship building division it would cause the House of Commons to look closely at the Government's plans for warship building and their treatment of British Shipbuilders. The position was admirably summed up in the first report of the Select Committee on Industry and Trade in the 1981–82 Session where the evidence received was summed up when it said that British Shipbuilders protested that the Government typically
      "suddenly withdraw orders, cancel orders, keep limiting us with financial constraints, do not tell us what orders we are going to get and do not help us to sell our ships overseas".
      The Select Committee commented:
      "We are not surprised that this should be the 'subject of very strong protestation from British Shipbuilders to both MoD and the Navy'".
      It goes on to quote Mr. Atkinson's cri de coeur:
      "You cannot turn a tap on and off in warship building because of the very great national skills involved."
      The amendment would enable Parliament, not just the Select Committee—although its work has been extremely important and valuable—to scrutinise any draft direction which the Secretary of State brought before it. It would give Parliament the opportunity to consider the relationship between Government and British Shipbuilders and the whole process of warship building and to decide whether the Government were advancing Britain's defence and security by their actions. We would be able to consider not only the Government's behaviour but whether privatisation would help to maintain or improve our warship building capacity. Once we began to examine the privatisation proposals in detail, we would see that that was not the case because to take out one company would mean the loss to that company of the skills and technical knowledge which had been built up not just by one company but by the whole group of companies in the warship building division—the exchange of information; skilled workers; technical skills and advanced technical knowledge. There would not be such a flow of information from the warship building division of British Shipbuilders to any one company that was so privatised.
      The amendment obliges the Secretary of State to bring his plans before Parliament to enable Parliament to consider closely everything that the Government were doing in relation to warship building and, therefore, in relation to the nation's defence and security. That would enable not only Parliament but the people to see that the Government are failing miserably in this respect.
      Mr. Dixon: I am glad that my hon. Friend the Member for Thurrock (Dr. McDonald) has referred not only to warship building but to merchant shipping, to which the amendment is directed. National defence and security mean not only warship building. As an island we depend on our merchant fleet for our trade. Indeed, 98 per cent. by weight of our trade is carried by sea. Therefore, we require not only a merchant fleet but a capacity to build and maintain it and, indeed, to safeguard it.
      As my hon. Friend said, the Falklands war showed Britain's dependence on a merchant fleet. But the fleet's continued decline will make further dependence almost impossible. It is already a fact that the fortress Falklands

      987
      policy cannot be carried out solely by United Kingdom ships. We have had to charter foreign ships to be sent to the south Atlantic.
      Over the past seven years the number of British registered ships has fallen from 1,614 to 900. United Kingdom owned and registered tonnage has fallen by almost one third since the beginning of 1981. Our capacity to have and to maintain a fleet is vitally important.
      The Bill will not only hive off the warship section of our shipbuilding industry but will make it impossible for a merchant shipping capacity to be maintained. That is why we believe that the merchant shipping part of the British shipbuilding industry is important to our security.
      At present, the fleet has been cut back and no training is taking place. I read in Lloyd's List of 10 February 1983 that, although the West German fleet has declined, West Germany is increasing training for personnel. We have reduced the amount of training for our personnel. When an order for a liner was given by the P and 0 company to the Finnish shipbuilding industry, my right hon. Friend the Member for Salford, West (Mr. Orme) wrote to the Prime Minister drawing her attention to the effect that this could have on our shipbuilding industry. In her reply, the Prime Minister said:
      "The problem for both United Kingdom yards"—
      she was referring to the Tyne shipyard and Harland and Wolff—
      "was not the building of the engine or the steelwork of the ship but having or being able to recruit in time the large number of skilled outfitters required. A joint approach would not therefore have helped them to meet P & O's delivery date."
      According to the Prime Minister, that £80 million order went to Finland because we did not have the skilled tradesmen required for the outfitting. If that is so, how on earth can we depend in future on our capacity to build ships? In 1978–79 31,000 apprentices and trainee technicians were recruited. This year, only 10,670 have been recruited—fewer than 50 per cent. of the 1979 figure.
      We require investment, training and the capacity not only to build ships in future but to train seafarers. We have the naval architectural college in Newcastle, Sunderland polytechnic and South Shields marine and technical college, all of which train seafarers. If we do not have a combined maritime policy for shipbuilding, whether it be warships or merchant ships, the security of our islands will be diminished. Therefore, I hope that the Minister will accept the amendment.
      Mr. Norman Lamont: I am sure that the House will not be surprised that I cannot recommend that the amendment be accepted.
      Dr. John Cunningham: Why not?
      Mr. Lamont: I am glad that the hon. Member for Whitehaven (Dr. Cunningham) is so easily surprised. The reason for that is that the effects of the amendment, whether intended or unintended, would wreck the Bill.
      The effect of the first part of the amendment would be that the Government would be able to give a direction only if that direction furthered national defence and security interests. It is difficult to see how privatisation could fulfil that objective.
      Dr. John Cunningham: I do not think that it can.
      Mr. Lamont: The hon. Gentleman says that he does not think that it can, and, indeed, that is not the purpose of privatisation. There are reasons other than furthering
      988
      national security for giving a direction. It may be that assets will be more productively employed in the private sector. It may be the Government's view that the organisation will be more efficiently run in the private sector. But defence and security, important though they are, are not obviously the only national interest.
      7.15 pm
      Mr. Mike Thomas: I hope that the Minister will forgive me for charging at him again. Does not the national interest—the hon. Member for Thurrock (Dr. McDonald) put it rather well—consist of what the Government define to be the national interest at any particular moment? Why on earth does the Minister go through all this convoluted nonsense when what he wants is the power to give a directive whenever the Government decide that they want to do so with no restrictions? Is that true?
      Mr. Lamont: The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) is complaining about the vagueness of the term "the national interest" as incorporated in the Bill. One has some sympathy with that complaint. We debated it at some length in Committee. But the Committee had to consider whether it was better that the Secretary of State had complete unchallenged power or whether some attempt was made to qualify it. That is why the words were inserted in the Bill. However, the political purposes of the legislation will not be satisfied by defining "the national interest" so narrowly. Of course, defence and security is an important national interest, but it is not the only one. Other legislation—the Iron and Steel Act 1982, the Gas Act 1980, the Transport Act 1981 and the Oil and Gas (Enterprise) Act 1982—has given Governments the power to make directions. All those industries have strategic or defence implications. None of them has confined those directions only to where they furthered defence interests.
      Mr. R. C. Mitchell: Will the Minister give an example of where his having to take due account of the national interest would restrict him in his decision?
      Mr. Lamont: The Government are unlikely to put forward a proposition unless they think that it will further the national interest. But the hon. Member for Southampton, Itchen (Mr. Mitchell) will understand that words in the Act are there not only for the convenience of the Government but so that other people can base legal actions and have some safeguards arising from the qualifications to the Government's power.
      Dr. John Cunningham rose—
      Mr. Lamont: That is why the provision was put in the Bill. The provision qualifies it. It is there for citizens who might wish to take a legal action against the Government or who felt that they could mount an action on the basis that the Government had not satisfied what was written into the legislation.
      Dr. John Cunningham: Have not my hon. Friend's amendment and the question from the hon. Member for Southampton, Itchen (Mr. Mitchell) completely exposed the Government's position in this matter? The Government are forcing the Bill through on ideological grounds regardless of the national defence and security interests. Is that not why the Minister has suddenly become flustered?
      Mr. Lamont: There is no reason why defence interests should be damaged in any way by the legislation. It is a different proposition to argue that one must further defence interests before one can take any act of privatisation or denationalisation. That is an absurd proposition, which will not commend itself or be remotely persuasive to any Conservative Members.
      We have taken powers in the legislation to safeguard defence interests. We have taken certain powers to ensure that the control of defence industries does not fall into hands that the Government consider undesirable. Provisions relating to the ownership of defence interests are carefully written into the legislation.
      Mr. Mike Thomas: The Minister referred to the narrow point of the definition in the courts of the national interest and the rights of individuals and others. The hon. Gentleman cannot be serious. Can he give us any instance of an individual or organisation having the chance of going to court to obtain a ruling that an action of the Government was not in the national interest when legislation gives the Government the power to give any instruction they choose, in the national interest?
      Mr. Lamont: If the hon. Gentleman thinks that that is so inconceivable, he should explain why he voted for the original 1977 legislation, which incorporates the same concept of the national interest as defined by the Secretary of State. He supported it then, but for some reason today he finds it a wholly unacceptable argument.
      The second part of the amendment also has the consequence of a wrecking amendment because most, if not all, the orders, to discontinue, restrict activities or dispose would relate to members of a specific class. Therefore, to apply an affirmative procedure to the orders would make them hybrid. They would be subject to the procedure for private or hybrid Bills. To have to adopt such a laborious and time-wasting procedure would not be attractive for the Government. It would blunt the powers considerably.
      Therefore, I am afraid that for those reasons I cannot accept the amendment. I emphasise again that there is no reason why, if warship building were in private hands that should endanger our defence policies in any way any more than the fact that the aerospace industry is in private hands and is one of the most competitive and successful of our industries. Therefore, I urge my hon. Friends to reject the amendment.
      Dr. McDonald: The Opposition believe that the Minister's response was amazing.
      I make it clear that the amendment is not intended to be a wrecking amendment. Throughout the lengthy progress of the Bill through Committee, when we did not hear satisfactory answers from either of the Ministers, although we gave them plenty of time to consider every aspect of the Bill, we have been concerned that the duties that the 1977 Act laid on British Shipbuilders were being transferred to the Secretary of State, not as duties, but as powers. He has powers to give all sorts of directions to British Shipbuilders, including the power to privatise wholly-owned subsidiaries in the warship building division. The Minister said in reply that privatisation should be allowed to go ahead regardless of national defence and security. That is what he implied in his remarks. The Government are fond of accusing the Labour party of being the party of ideology and unreality. In his
      990
      reply I thought that the Minister was momentarily going mad through his ideology. It was a matter of privatisation at any cost to the nation's defence and security. To suggest that those are not matters that cause the gravest concern to Members of Parliament that should therefore be considered by the House is extremely odd.
      It is vital for strategic reasons that we retain a warship building capacity through British Shipbuilders. Part of the argument is that if some of the companies at present owned by British Shipbuilders are privatised, that could affect our ability to defend ourselves in certain respects—for example, it could affect the merchant shipbuilding capacity, which might be damaged. It is an important aspect of the nation's defence.
      One can conduct those arguments in general terms, but they are much better conducted if one looks at a detailed proposal. That is part of our reason for suggesting that a detailed proposal should be considered in the House, yet the Minister seems to think that that is odd and that it would be better if his right hon. Friend were allowed to press ahead with privatisation regardless of its impact on our shipbuilding capacity.
      The EC, which is currently examining shipbuilding in the Community, insists that it is extremely important for it to maintain its warship building capacity for strategic reasons. That is our point. That is what we want to be maintained. We can see the possibility, indeed the probability, of our defence being weakened by selling or flogging companies in the warship building division to private enterprise, so that the profitable part of British Shipbuilders disappears. We are well aware of the Minister's reason for wanting to do that. It is that the profits would go into the hands of private enterprise and private persons, and some might give money to the Conservative party.
      For the Minister to say that the Government's purely ideological decisions should not be trammelled or considered by Parliament, as our amendment suggests, is an extraordinary and unsatisfactory reply to our arguments in support of the amendment. Therefore, I must press the amendment to a Division.
      Question put, That the amendment be made:—
      The House divided: Ayes 204, Noes 276.

      Division No. 78]

      [7.27 pm

      AYES

      Abse, Leo

      Carmichael, Neil

      Allaun, Frank

      Carter-Jones, Lewis

      Alton, David

      Cartwright, John

      Anderson, Donald

      Clark, Dr David (S Shields)

      Archer, Rt Hon Peter

      Clarke, Thomas (C'b'dge, A'rie)

      Ashley, Rt Hon Jack

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

      Ashton, Joe

      Coleman, Donald

      Barnett, Guy (Greenwich)

      Concannon, Rt Hon J. D.

      Barnett, Rt Hon Joel (H'wd)

      Conlan, Bernard

      Beith, A. J.

      Cook, Robin F.

      Benn, Rt Hon Tony

      Cowans, Harry

      Bennett, Andrew (St'kp't N)

      Cox, T. (W'dsw'th, Toot'g)

      Bidwell, Sydney

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

      Booth, Rt Hon Albert

      Crowther, Stan

      Boothroyd, Miss Betty

      Cryer, Bob

      Bray, Dr Jeremy

      Cunningham, G. (Islington S)

      Brocklebank-Fowler, C.

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

      Brown, Hugh D. (Provan)

      Dalyell, Tam

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

      Davidson, Arthur

      Brown, Ronald W. (H'ckn'y S)

      Davis, Clinton (Hackney C)

      Brown, Ron (E'burgh, Leith)

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

      Campbell, Ian

      Deakins, Eric

      Campbell-Savours, Dale

      Dean, Joseph (Leeds West)

      Canavan, Dennis

      Dewar, Donald

      Cant, R. B.

      Dixon, Donald

      991

      Dormand, Jack

      Newens, Stanley

      Douglas, Dick

      Oakes, Rt Hon Gordon

      Dubs, Alfred

      O'Halloran, Michael

      Duffy, A. E. P.

      O'Neill, Martin

      Dunwoody, Hon Mrs G.

      Orme, Rt Hon Stanley

      Eadie, Alex

      Palmer, Arthur

      Eastham, Ken

      Park, George

      Edwards, R. (W'hampt'n S E)

      Parker, John

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

      Parry, Robert

      Ellis, Tom (Wrexham)

      Pavitt, Laurie

      English, Michael

      Pitt, William Henry

      Ennals, Rt Hon David

      Powell, Raymond (Ogmore)

      Evans, loan (Aberdare)

      Radice, Giles

      Ewing, Harry

      Rees, Rt Hon M (Leeds S)

      Faulds, Andrew

      Richardson, Jo

      Fitch, Alan

      Roberts, Allan (Bootle)

      Ford, Ben

      Roberts, Ernest (Hackney N)

      Forrester, John

      Roberts, Gwilym (Cannock)

      Foster, Derek

      Robertson, George

      Foulkes, George

      Robinson, G. (Coventry NW)

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

      Rodgers, Rt Hon William

      Freeson, Rt Hon Reginald

      Rooker, J. W.

      Garrett, John (Norwich S)

      Roper, John

      Garrett, W. E. (Wallsend)

      Ross, Ernest (Dundee West)

      George, Bruce

      Ross, Stephen (Isle of Wight)

      Gilbert, Rt Hon Dr John

      Ryman, John

      Golding, John

      Sandelson, Neville

      Gourlay, Harry

      Sever, John

      Graham, Ted

      Sheerman, Barry

      Hamilton, James (Bothwell)

      Sheldon, Rt Hon R.

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

      Shore, Rt Hon Peter

      Hardy, Peter

      Short, Mrs Renée

      Harrison, Rt Hon Walter

      Silkin, Rt Hon J. (Deptford)

      Hart, Rt Hon Dame Judith

      Silkin, Rt Hon S. C. (Dulwich)

      Haynes, Frank

      Silverman, Julius

      Heffer, Eric S.

      Skinner, Dennis

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

      Smith, Cyril (Rochdale)

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

      Smith, Rt Hon J. (N Lanark)

      Homewood, William

      Spearing, Nigel

      Hooley, Frank

      Spellar, John Francis (B'ham)

      Hoyle, Douglas

      Spriggs, Leslie

      Hughes, Mark (Durham)

      Stallard, A. W.

      Janner, Hon Greville

      Stewart, Rt Hon D. (W Isles)

      Jay, Rt Hon Douglas

      Stoddart, David

      John, Brynmor

      Stott, Roger

      Johnson, James (Hull West)

      Strang, Gavin

      Jones, Barry (East Flint)

      Straw, Jack

      Jones, Dan (Burnley)

      Summerskill, Hon Dr Shirley

      Lambie, David

      Taylor, Mrs Ann (Bolton W)

      Leadbitter, Ted

      Thomas, Jeffrey (Abertillery)

      Lewis, Ron (Carlisle)

      Thomas, Mike (Newcastle E)

      Litherland, Robert

      Thomas, Dr R. (Carmarthen)

      Lofthouse, Geoffrey

      Thorne, Stan (Preston South)

      Lyon, Alexander (York)

      Tinn, James

      Lyons, Edward (Bradf'd W)

      Torney, Tom

      Mabon, Rt Hon Dr J. Dickson

      Varley, Rt Hon Eric G.

      McCartney, Hugh

      Wainwright, E. (Dearne V)

      McDonald, Dr Oonagh

      Wainwright, R. (Colne V)

      McElhone, Mrs Helen

      Walker, Rt Hon H. (D'caster)

      McGuire, Michael (Ince)

      Warden, Gareth

      McKelvey, William

      Watkins, David

      MacKenzie, Rt Hon Gregor

      Wellbeloved, James

      McNally, Thomas

      Welsh, Michael

      McNamara, Kevin

      White, Frank R.

      McTaggart, Robert

      Whitlock, William

      Marks, Kenneth

      Wigley, Dafydd

      Marshall, D(G'gow S'ton)

      Willey, Rt Hon Frederick

      Marshall, Dr Edmund (Goole)

      Wilson, Gordon (Dundee E)

      Marshall, Jim (Leicester S)

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

      Martin, M(G'gow S'burn)

      Wilson, William (C'try SE)

      Mason, Rt Hon Roy

      Winnick, David

      Maxton, John

      Woodall, Alec

      Meacher, Michael

      Woolmer, Kenneth

      Millan, Rt Hon Bruce

      Wright, Sheila

      Miller, Dr M. S. (E Kilbride)

      Mitchell, R. C. (Soton Itchen)

      Tellers for the Ayes:

      Morris, Rt Hon A. (W'shawe)

      Mr. Lawrence Cunliffe and

      Morris, Rt Hon C. (O'shaw)

      Mr. Allen McKay.

      Morton, George

      992

      NOES

      Alexander, Richard

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

      Alison, Rt Hon Michael

      Fletcher-Cooke, Sir Charles

      Amery, Rt Hon Julian

      Fookes, Miss Janet

      Ancram, Michael

      Forman, Nigel

      Arnold, Tom

      Fox, Marcus

      Aspinwall, Jack

      Fraser, Rt Hon Sir Hugh

      Atkins, Rt Hon H. (S'thorne)

      Fraser, Peter (South Angus)

      Atkins, Robert (Preston N)

      Fry, Peter

      Atkinson, David (B'm'th,E)

      Gardiner, George (Reigate)

      Baker, Nicholas (N Dorset)

      Gardner, Sir Edward

      Banks, Robert

      Garel-Jones, Tristan

      Beaumont-Dark, Anthony

      Gilmour, Rt Hon Sir Ian

      Bendall, Vivian

      Goodlad, Alastair

      Bennett, Sir Frederic (T'bay)

      Gorst, John

      Benyon, Thomas (A'don)

      Gow, Ian

      Benyon, W. (Buckingham)

      Gower, Sir Raymond

      Berry, Hon Anthony

      Grant, Sir Anthony

      Best, Keith

      Gray, Rt Hon Hamish

      Bevan, David Gilroy

      Greenway, Harry

      Biffen, Rt Hon John

      Griffiths, E. (B'ySt. Edm'ds)

      Biggs-Davison, Sir John

      Griffiths, Peter (Portsm'th N)

      Blackburn, John

      Grist, Ian

      Blaker, Peter

      Grylls, Michael

      Body, Richard

      Gummer, John Selwyn

      Bonsor, Sir Nicholas

      Hamilton, Hon A.

      Bottomley, Peter (W'wich W)

      Hamilton, Michael (Salisbury)

      Bowden, Andrew

      Hannam, John

      Boyson, Dr Rhodes

      Haselhurst, Alan

      Braine, Sir Bernard

      Hawkins, Sir Paul

      Bright, Graham

      Hawksley, Warren

      Brinton, Tim

      Hayhoe, Barney

      Brittan, Rt. Hon. Leon

      Heddle, John

      Brooke, Hon Peter

      Henderson, Barry

      Brotherton, Michael

      Hicks, Robert

      Brown, Michael (Brigg & Sc'n)

      Higgins, Rt Hon Terence L.

      Browne, John (Winchester)

      Hill, James

      Bryan, Sir Paul

      Hogg, Hon Douglas (Gr'th'm)

      Buchanan-Smith, Rt. Hon. A.

      Holland, Philip (Carlton)

      Buck, Antony

      Hooson, Tom

      Budgen, Nick

      Hordern, Peter

      Burden, Sir Frederick

      Howe, Rt Hon Sir Geoffrey

      Carlisle, John (Luton West)

      Howell, Ralph (N Norfolk)

      Carlisle, Kenneth (Lincoln)

      Hunt, David (Wirral)

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

      Hunt, John (Ravensbourne)

      Chalker, Mrs. Lynda

      Hurd, Rt Hon Douglas

      Chapman, Sydney

      Irvine, Rt Hon Bryant Godman

      Churchill, W. S.

      Irving, Charles (Cheltenham)

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

      Jenkin, Rt Hon Patrick

      Clark, Sir W. (Croydon S)

      Jessel, Toby

      Clarke, Kenneth (Rushcliffe)

      Jopling, Rt Hon Michael

      Cockeram, Eric

      Joseph, Rt Hon Sir Keith

      Colvin, Michael

      Kaberry, Sir Donald

      Cope, John

      Kershaw, Sir Anthony

      Corrie, John

      King, Rt Hon Tom

      Costain, Sir Albert

      Kitson, Sir Timothy

      Cranborne, Viscount

      Knight, Mrs Jill

      Critchley, Julian

      Knox, David

      Crouch, David

      Lamont, Norman

      Dickens, Geoffrey

      Lang, Ian

      Dorrell, Stephen

      Langford-Holt, Sir John

      Douglas-Hamilton, Lord J.

      Latham, Michael

      Dover, Denshore

      Lawrence, Ivan

      du Cann, Rt Hon Edward

      Lawson, Rt Hon Nigel

      Dunn, Robert (Dartford)

      Lee, John

      Durant, Tony

      Le Marchant, Spencer

      Dykes, Hugh

      Lennox-Boyd, Hon Mark

      Eden, Rt Hon Sir John

      Lester, Jim (Beeston)

      Edwards, Rt Hon N. (P'broke)

      Lewis, Sir Kenneth (Rutland)

      Eggar, Tim

      Lloyd, Ian (Havant & W'loo)

      Elliott, Sir William

      Lloyd, Peter (Fareham)

      Emery, Sir Peter

      Loveridge, John

      Eyre, Reginald

      Lyell, Nicholas

      Fairbairn, Nicholas

      McCrindle, Robert

      Fairgrieve, Sir Russell

      MacKay, John (Argyll)

      Faith, Mrs Sheila

      Macmillan, Rt Hon M.

      Farr, John

      McNair-Wilson, M. (N'bury)

      Fell, Sir Anthony

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

      Finsberg, Geoffrey

      McQuarrie, Albert

      Fisher, Sir Nigel

      Major, John

      993

      Marland, Paul

      Shaw, Sir Michael (Scarb')

      Marshall, Michael (Arundel)

      Shelton, William (Streatham)

      Marten, Rt Hon Neil

      Shepherd, Colin (Hereford)

      Mates, Michael

      Shepherd, Richard

      Maude, Rt Hon Sir Angus

      Silvester, Fred

      Mawby, Ray

      Sims, Roger

      Mawhinney, Dr Brian

      Skeet, T. H. H.

      Maxwell-Hyslop, Robin

      Smith, Tim (Beaconsfield)

      Mayhew, Patrick

      Speed, Keith

      Mellor, David

      Speller, Tony

      Meyer, Sir Anthony

      Spence, John

      Miller, Hal (B'grove)

      Spicer, Jim (West Dorset)

      Mills, Iain (Meriden)

      Sproat, Iain

      Mills, Sir Peter (West Devon)

      Stainton, Keith

      Miscampbell, Norman

      Stanbrook, Ivor

      Mitchell, David (Basingstoke)

      Stanley, John

      Moate, Roger

      Steen, Anthony

      Monro, Sir Hector

      Stevens, Martin

      Montgomery, Fergus

      Stewart, A.(E Renfrewshire)

      Moore, John

      Stewart, Ian (Hitchin)

      Morris, M. (N'hampton S)

      Stokes, John

      Morrison, Hon C. (Devizes)

      Stradling Thomas, J.

      Mudd, David

      Taylor, Teddy (S'end E)

      Murphy, Christopher

      Tebbit, Rt Hon Norman

      Myles, David

      Temple-Morris, Peter

      Neale, Gerrard

      Thompson, Donald

      Needham, Richard

      Thorne, Neil (llford South)

      Nelson, Anthony

      Thornton, Malcolm

      Neubert, Michael

      Townend, John (Bridlington)

      Newton, Tony

      Townsend, Cyril D, (B'heath)

      Nott, Rt Hon Sir John

      Trippier, David

      Onslow, Cranley

      van Straubenzee, Sir W.

      Oppenheim, Rt Hon Mrs S.

      Vaughan, Dr Gerard

      Osborn, John

      Viggers, Peter

      Page, Richard (SW Herts)

      Waddington, David

      Parris, Matthew

      Wakeham, John

      Patten, Christopher (Bath)

      Waldegrave, Hon William

      Pawsey, James

      Walker, B. (Perth)

      Percival, Sir Ian

      Walker-Smith, Rt Hon Sir D.

      Peyton, Rt Hon John

      Wall, Sir Patrick

      Pink, R. Bonner

      Waller, Gary

      Pollock, Alexander

      Walters, Dennis

      Porter, Barry

      Ward, John

      Prentice, Rt Hon Reg

      Warren, Kenneth

      Price, Sir David (Eastleigh)

      Watson, John

      Proctor, K. Harvey

      Wells, Bowen

      Pym, Rt Hon Francis

      Wells, John (Maidstone)

      Rathbone, Tim

      Wheeler, John

      Rees-Davies, W. R.

      Whitelaw, Rt Hon William

      Renton, Tim

      Whitney, Raymond

      Rhodes James, Robert

      Wickenden, Keith

      Ridley, Hon Nicholas

      Wiggin, Jerry

      Ridsdale, Sir Julian

      Wilkinson, John

      Rifkind, Malcolm

      Williams, D. (Montgomery)

      Rippon, Rt Hon Geoffrey

      Winterton, Nicholas

      Roberts, Wyn (Conway)

      Wolfson, Mark

      Robinson, P. (Belfast E)

      Young, Sir George (Acton)

      Rossi, Hugh

      Rost, Peter

      Tellers for the Noes:

      Sainsbury, Hon Timothy

      Mr. Carol Mather and

      St. John-Stevas, Rt Hon N.

      Mr. Robert Boscawen.

      Shaw, Giles (Pudsey)

      Question accordingly negatived.

  British Shipbuilders Bill
  7.39 pm
  Mr. Norman Lamont: I beg to move, That the Bill be now read the Third time.
  For a three-clause Bill to have had 16 sittings in Committee must be a record. It shows the interest in and strong feelings about it. Although we have had 16 sittings, it is right for me to set out again the Government's position on what are undoubtedly extremely important issues.
  The Bill has been described as a privatisation measure, but it is an enabling Bill that makes privatisation possible by two routes—outright disposal and the introduction of private capital. To open both those routes to privatisation, the Bill loosens the statutory straitjacket on British Shipbuilders. It replaces the corporation's statutory duties to engage in shipbuilding and related activities by powers. From now on, British Shipbuilders will be free to choose whether to engage in the activities that it has powers to carry out according to its commercial judgment. It will make it possible for private capital to be injected into British Shipbuilder's subsidiaries.
  The way will be clear for the corporation to act jointly with other companies, if it so wishes. I emphasise "if it so wishes" because there was confusion among Opposition Members when we talked about joint ventures. It was their impression that the Government were making an announcement about the imminent creation of some joint ventures. The important provision is that the Bill unambiguously givers British Shipbuilders the statutory cover to engage in joint ventures if it wishes. That is not the only way to privatisation, but the Bill makes it clear that the joint venture route is now available.
  British Shipbuilders will be free to decide its own areas of operation, but the decision on where to draw the line between the public and private sectors cannot be left to only one part of the industry. Nationalised industry chairmen and boards do not always fall over themselves to surrender part of their empire, so the Bill also gives the Government new powers to direct British Shipbuilders to cease or to restrict activities or to dispose of assets. Naturally, we hope that any disposals will take place as a result of agreement and that it will not be necessary to use those powers.
  Powers to restrict an activity are also provided for the purpose of strengthening the Government's position when dealing with unfair competition. All hon. Members are aware of the many disputes that arise between the public and private sectors in the area of overlap. I have often received complaints from hon. Members on both sides of the House about the overlap between public and private enterprise. Hon. Members know of the anxieties that have been expressed by private sector ship repairers and engine builders about alleged unfair competition from British Shipbuilders.
  These powers would be relevant if British Shipbuilders were to engage in unfair competition with established shipping interests. I emphasise that British Shipbuilders has no plans so to do, but there is understandable concern that, in the present depressed markets for both shipbuilding and shipping, British Shipbuilders might be tempted to enter the market to employ unsold ships. If necessary, the Government would consider using the new powers to prevent the corporation from doing so.

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  In Committee, Opposition Members emphasised the difficulties faced by the corporation and argued that the timing of the Bill was wrong. They argued that it was wrong to change even the statutory framework within which the industry operates. I am not persuaded by that argument. The important feature of the Bill is that it gives the corporation the opportunity to make decisions about its own establishment and activities. When the Bill is enacted, the board will have a greater opportunity to decide in which activities it wishes to be involved. It can decide whether to work in co-operation with the private sector in joint ventures. At present that is not possible, and any doubt about the matter is plainly absurd.
  British Shipbuilders faces a difficult market. The world markets for merchant shipbuilding, ship repair and offshore work remain depressed. As the half year results show, British Shipbuilders will this year considerably overrun its loss target. But one bright spot is that since the introduction of the Bill British Shipbuilders has received £585 million worth of orders for new naval ships, partly to replace our Falklands losses, and another frigate will be ordered this year. The prospects in other markets remain uncertain.
  It is unlikely that British Shipbuilders can secure orders for merchant ships without subsidy. The House will be glad to know that the European Commission recently agreed to our proposal that the Government should make available £20 million of intervention fund from January to July 1983. The fifth directive on shipbuilding aids, under which shipbuilding support is authorised, expired at the end of December 1982, and the Commission's previous approval covered only July to December 1982, for which the amount was also £20 million. The directive has since been extended until the end of 1984. We shall be approaching the Commission in due course about a further tranche of intervention fund to start after the expiry of the present one.
  The Government recognise the difficult and uncertain position of the corporation, and after considering British Shipbuilders' corporate plan we have accordingly decided to increase the corporation's external financing limit from this year's £122 million to £160 million for 1983–84. Within that framework, the corporation will be required to have a continuing duty to make substantial and early progress towards providing an adequate return on the capital employed by the corporation and its subsidiaries.
  Another point made frequently in Committee, and repeated a moment ago by the hon. Member for Thurrock (Dr. McDonald), was that the Bill would damage our defence capability. Our main defence need is for a strong and efficient naval shipbuilding capacity. I see no reason why that should be affected whether naval shipbuilding is in the private sector or in a mix of the public and private sectors. An element of privatisation could even assist warship building. Opposition Members have agreed that investment in that area has suffered because of greater than expected losses in other parts of British Shipbuilders.
  Privatisation could lead to the injection of more capital, which might improve the competitiveness of the industry. That is needed because the warship yards' export performance has not been impressive recently. Some hon. Members said that it weakened our national defence because the Bill has repealed section 2 of the 1977 Act. That section required that British Shipbuilders, not the Government, should have full regard to the requirements of national defence. That is an absurd argument.
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  The needs of national defence cannot be determined by companies or corporations, however eminent. De Fence must be decided by the Government, and it would be ridiculous, as hon. Members came close to suggesting in Committee, to decide that the capability of our Navy and the balance between surface ships and submarines should be decided by a corporation, or that the industry should have a view of defence needs that is independent of the Government. However, hon. Members cannot seriously believe that argument. They moved behind it as a convenient way to argue that matters should remain as they are and that capacity should always be maintained regardless of need and cost.
  Individual organisations must work within the framework of the Government's defence policy. As the MOD is an enormously important customer for British Shipbuilders, plainly the corporation will, without a specific provision in the legislation, pay close attention to the MOD's needs.
  Another argument deployed in Committee was that the privatisation of warship building, if it happened, would weaken the merchant yards and make closures more likely. I recognise the genuine anxiety felt on that point, but I think that it is a mistaken argument. Any sense of security built on the back of warship building results is, I am afraid, misplaced. The warship building side of British Shipbuilders makes substantial profits. To some extent, those profits mask losses elsewhere and in merchant shipbuilding. With or without warship yards, merchant shipbuilding makes losses. Those losses will not go away or become any smaller because the warship yards stay within British Shipbuilders.
  The corporation knows the position; Ministers know it and Labour Ministers in government knew it; and if Labour Members were in government again they would know the position, and would be bound to look at the losses on merchant shipbuilding standing alone. At all stages of the Bill, because I have wanted to lessen the anxieties expressed by Opposition Members, I have emphasised that merchant shipbuilding is at present unlikely to attract private capital I have also emphasised that the Government will, of course, continue to support merchant shipbuilding for the foreseeable future.
  Our support for the industry and the merchant shipbuilding side has been substantial. The figures speak for themselves. Losses in the merchant shipbuilding division in 1981–82 were running at around £36 million. Last year losses on offshore were £14 million. Hon. Members will also be aware of the ship repair problems. Losses of £9 million were declared on ship repair last year. Many hon. Members will know from their constituencies of the action that has been taken on the Tyne. All that has meant a continuing need for Government support. British Shipbuilders has certainly had that from us—to the tune of well over £600 million since we came to office. Of course, it is never enough for Opposition Members, but it is substantial support and commitment by the Government.
  Our support for the corporation has not all gone into the funding of losses. British Shipbuilders' capital expenditure has greatly increased under the Government. In 1981–82 it doubled. This year it will almost double again, and it is expected to rise further to £90 million in 1983–84. A great deal of that investment will be used to apply new technology—computer-aided design. It is in the application of new technology to a traditional industry such as this

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  that we have the best chance of facing competition from the far east about which we have understandably and rightly heard so much.
  Mr. Dixon: The Minister says that the Government's investment in British Shipbuilders will offset competition from the far east. How does that square with the fact that the seven largest Japanese shipbuilders have already earmarked £626 million for investment in plant and equipment this year? That is almost six times as much as the Government intend to invest in British Shipbuilders.
  Mr. Lamont: The hon. Gentleman interrupted me. I was about to say that even this level of support will not make the problems go away. British Shipbuilders will still be left in an extremely difficult position in the market. I am not saying, and did not say, that investment on this scale solves the problems faced by British Shipbuilders. All that I was saying was that the investment has been, contrary to the allegations made by Opposition Members in Committee, increased substantially, and it is only by doing that that we can hope to be competitive. It is not the only answer to our problems, but we must have that investment if we are to become competitive.
  Another example of substantial investment is that planned at Vickers. It will make a substantial difference to that company. It will also make a substantial difference, quite apart from its commercial merits, to the conditions under which the work force operates at Vickers. I thought that they were remarkably depressing and difficult when I saw them. I had great sympathy for the people who had to work in such conditions. They will be improved substantially by the investment.
  The shipbuilding industry faces a deep recession, and the 2,000 redundancies announced recently were a painful but inevitable and necessary response to the market. The Government are also providing help with the cost of redundancies through the shipbuilding redundancy payments scheme which has been extended three times since we came into office.
  The House will be aware that British Shipbuilders has taken the line that any extra earnings this year must be related to real productivity gains. Sir Robert Atkinson has said that he will not ask the Government for subsidies for wages. It is a realistic response to the present crisis of significantly higher losses and a deepening shipbuilding recession. Sir Robert Atkinson is also right in assuming that the Government would not be willing to find money to finance wage claims which widen the competitive gap and make it even harder for the industry to secure orders. A responsible industry must have regard to itself and its actions as well as help from the Government.
  As well as facilitating privatisation and giving greater opportunities to British Shipbuilders, we have used this legislation to tidy up certain provisions and remove others that struck us as unnecessary. Some anxiety has been expressed about the repealing of section 2(8) of the 1977 Act which requires the corporation to
  "promote industrial democracy in a strong and organic form."
  In repealing this provision, there is no slackening of the Government's wish to encourage the development and maintenance of good industrial relations. Good though those industrial relations have been, I do not believe that
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  the legislative provisions had anything to do with them. They have been achieved by co-operation on both sides, and that is how they will be achieved in the future.
  I appreciate some of the anxieties that have been expressed. However, I believe that the Bill holds out some opportunities for British Shipbuilders. First, it enables the promotion of joint ventures with the private sector. Secondly, it enables the introduction of private capital into parts of the corporation. It will also allow the transfer of certain activities to the private sector. I should have thought that every hon. Member would agree that the first two of those objectives were good. It is absurd that joint ventures and the injection of private capital are not allowed at the moment, or that there should be any doubt about it.
  My hon. Friends and I believe that the third objective could create a shipbuilding industry that was more adaptable and competitive and therefore more able to generate viable, lasting and secure jobs. The history of nationalisation has been that it cannot preserve jobs. It can only delay and therefore probably increase job losses. We are not saying that the whole industry can, will or should be denationalised, but the Government say that Great Britain is unique in Europe in having a monolithic state corporation. France, Germany, the Netherlands, Norway and Sweden have shipbuilding industries that are either private or a mixture of public and private.
  To have a conspicuously different structure could be justified only if we had a conspicuously more successful result, which we do not. For that reason, the Government believe that there is plenty of scope, even while building on what has been achieved in the past few years, for altering the balance between the private and public sectors in shipbuilding. There is an opportunity to allow a breath of private capital and enterprise into the state-owned industry. It is a modest but realistic message that we send today, and in that spirit I commend the Bill to the House.
  8 pm
  Dr. John Cunningham: I listened to the Minister with considerable interest, and, perhaps to his surprise, I welcome some of his remarks. However, although we may find words on which to agree, we certainly have no general agreement about the need for the Bill or its impact on the British shipbuilding industry.
  It should have been no surprise to the Government, or anyone outside the House, that the Bill took such a long time in Committee. The Minister referred to it as a three-clause Bill, but it is, effectively, only two clauses as the third refers to its title. The fact that we took 16 Committee sittings to discuss the Bill is a measure of our fundamental opposition to its proposals. We regard the whole measure as an irrelevance, coming from a Government who are besotted with the idea of privatisation. They appear to be more concerned with that ideology than with industrial strategy or policies to end the massive crisis in the shipbuilding industry, which can only be heightened by the Government's proposals.
  There is a deep and fundamental gulf between the Government and the Opposition about the proposals. We oppose the intention of privatisation, and also the type of legislation—an enabling Bill that takes away duties from a public corporation that were enshrined in the 1977 Act, and transfers considerable and wide-ranging powers to the Secretary of State for Industry. As we have said many times, if a Labour Government had taken upon themselves such powers, we would have attracted epithets such as

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  totalitarian and anti-democratic. Not only are such powers becoming a feature of the Government's approach to industry; they are not even subject to decisions by Parliament. One can be no more draconian than that. We are certainly opposed to that aspect of the Bill.
  The Government are especially inept in their timing to be introducing the measure when there is such a manifest crisis not only in the British industry but throughout Europe. The Japanese and the Koreans are expressing anxiety about their shipbuilding capacity. Their total dominance of the world shipbuilding scene is well known to anyone concerned with shipbuilding and associated industrial activities.
  The Opposition are not alone in opposing the Bill. On Second Reading—and again in Committee—we asked Ministers whether, at any time, the management of British Shipbuilders had sought such proposals. They failed to answer. We know the answer: that the industry—neither union nor management—did not ask for or seek any aspect, any scintilla or any shred of what is included in the Bill. So there is opposition there also.
  Opposition comes not only from the industrial unions and the shipyard workers, but from the Shipbuilding and Allied Industries Management Association, the Merchant Navy and Air Line Officers Association and the Engineers and Managers Association. There is concern among the marine engineering equipment manufacturers about the likely impact of the Bill. In no way can the Government say that the Bill and its intentions have been widely welcomed, or gained support as the Bill has progressed. Indeed, it is not even clear whether those organisations that were previously the owners of the shipbuilding industry welcome the Bill. I shall return to that point later.
  As my hon. Friend the Member for Thurrock (Dr. McDonald) pointed out, the position in European shipbuilding is causing grave concern, and the European Parliament has expressed strong views about that. The excess world capacity was discussed at some length in the context of policies for shipbuilding in the Community. The European Parliament expressed the view that our industry and its existing capacity should be defended. There is nothing to be gained by a further rundown, which would be on top of a major reorganisation of the shipbuilding industry in Europe, which has been accompanied by a severe reduction in capacity and a severe loss of jobs. I hope that the Commission and member Governments will take note of those views. Further large cuts in capacity would be counter productive. The inevitable outcome of privatisation will be a reduction in capacity, closure of shipyards and more shipyard workers on the dole.
  I said that the Government appear to be besotted with the idea of privatisation. Certainly their rather touching adherence to the argument that market forces should be allowed to determine what happens in shipbuilding has no supporters. We do not accept that market forces are operating at the moment, and we are in rather good company in saying that. The Under-Secretary of State well knows what C. y. Tung, one of the largest shippers in the world, had to say about that. He was quoted in Lloyd's List on 10 February as saying:
  "For the first time in many years the C. Y. Tung group is not considering ordering new ships."
  He went on to say in a number of almost throwaway lines that the offers that were being made to shippers to buy ships from shipbuilders worldwide were astonishing in their generosity.
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  The idea that market forces will resolve the situation and leave us with a shipbuilding industry is unreal. If we do not intervene and support shipbuilding far more effectively than the Government have, there will be closures, rundowns and redundancies, and major industrial communities will be torn apart. A truly frightening crisis faces our shipbuilding communities at the moment, particularly on the Clyde Tyne and the Wear, where the merchant shipbuilding yards are concentrated. The fear is expressed in the efforts of the county councils, the metropolitan district authorities and other authorities responsible for those communities, both by taking action themselves and by making representations to Parliament and to the Government, to stave off the disaster that they believe is staring them in the face.
  In such a situation, it is lunacy to talk about introducing private capital or selling off part of the shipbuilding industry. I cannot bring myself to believe that the Minister of State believes that, in the current worldwide crisis in shipping and shipbuilding, he will be able to persuade people to invest substantial sums of money in British shipbuilding. All the evidence, not only at home but internationally, suggests that it is highly unlikely if not impossible that he could do so.
  Mr. Robert C. Brown: Is it not likely that the only area in which private capital could be encouraged would be in naval shipbuilding? Would not the selling off o f naval shipbuilding, which is the only area of shipbuilding that is guaranteed to be profitable, spell doom for yards such as Swan Hunter on the Tyne?
  Mr. Cunningham: I agree with my hon. Friend.
  The view of the chairman of British Shipbuilders, who was appointed by the present Administration, is that the integrity of the industry should be maintained. He believes that that is the best guarantee of our maintaining a capacity and capability in shipbuilding, in the national interest. That is the view of the chairman and, I believe, of the board as a whole. It is also the view of the unions in the industry and a view that Labour Members unanimously share. The proposal to hive off, privatise or break up the corporation will spell disaster for major shipyards. The irony is that Swan Hunter on the Tyne is not only our foremost merchant shipyard but one of our most important warship building yards. It is the largest mixed shipbuilding yard in British Shipbuilders.
  Despite the current crisis, the corporation is still working extremely hard worldwide to find orders and doing what it can to keep men employed, but it believes that the outlook for merchant shipbuilding is bleak and it is difficult to dissent from that conclusion. Against that background, the Government and the House must surely agree that every order is vital to keep people at work. It is therefore astonishing to learn, as we did a few days ago, that the CEGB has been a party, directly or indirectly, to the placing of an order, using British taxpayers' money, with a Korean shipyard.
  A large number of questions remain unanswered. Flow did ITM of Teesside come to be involved in the first place? I believe that the competence of that organisation is questionable, as is the manner in which it claimed that BS had been invited to tender—a claim subsequently refuted by the corporation chairman. We must therefore conclude that the truth has not been told in this matter. I lay that charge not against Ministers but against ITM.
  Mr. Dixon: Lloyd's List of 3 February referred to that order going to South Korea in the following terms:
  "A spokesman for Sunderland Shipbuilders said: 'ITM did not ask us to tender. We have heard that the order for the barge is now being placed with a Korean shipyard and everyone here is extremely angry."'
  That is contrary to what the Secretary of State for Energy told the House a week or so ago.
  Dr. Cunningham: I believe that the Minister was acting in good faith when he said that. I believe that he, like BS, has been misled.
  The matter goes further. I received a communication from the managing director of a Hampshire company specialising in navigation systems and underwater instrumentation. I shall not quote the whole of his long letter, but it shows how Britain is losing business. He said:
  "After many months of discussions and expensive preparation, my Company tendered for designing and manufacturing the highly specialised underwater acoustic navigation equipment required to guide the Trenching Machine which buries the cable laid by the vessel in question. We lost to a French Company, who are our arch-competitors world wide.
  My grievance is that the whole business was totally mismanaged by the Company to whom the CEGB had delegated the task of investigating and specifying the required equipment. Although guided by detailed proposals from ourselves and at least one other British Company … the gentleman in charge managed to produce the most un-professional specification I have ever seen in my life. The terminology was grossly inaccurate and obviously biased towards the French in that he described some of the equipment required usind the trade name adopted by the French Company!"
  That is the view of the managing director of one of our marine equipment manufacturing companies on this whole sorry business. I do not quote the name of the company simply because I was unable to contact the man who wrote the letter, although I spoke to his secretary today.
  I am told that it is possible that another public corporation—British Nuclear Fuels Ltd.—will place an order for a vessel with a Japanese yard. The Minister of State shakes his head. I am pleased that he does so so spontaneously, as it would be the most grotesque insult to the shipbuilding workers on Tyneside and Wearside and throughout the corporation if another public sector order went to a foreign yard, to be paid for with taxpayers' money, while thousands of our own shipyard workers face life on the dole.
  I said that I might be able to welcome something that the Minister of State had said. I welcome what he said about the external financing limit of BS. I am not so sure that the Prime Minister will welcome it, or that his own right hon. and hon. Friends will be very happy about it. Nevertheless, it is a sign that the Government are beginning to face the reality that if we intend to maintain a shipbuilding industry in this country we shall have to pay for it. Whether the Government like it or not, that is the reality of the position.
  Opposition Members are in no doubt that Britain should be paying whatever is appropriate to maintain a shipbuilding industry. Britain is a maritime nation. The Opposition believe, as we said when moving the new clause in Committee, that there should be a national maritime strategy. Although it is rapidly declining, Britain has a large merchant fleet which played a vital part in the Falklands campaign. Britain has the largest navy in western Europe. That is a major factor in NATO. In the debate on defence, the remarks of my hon. Friend the Member for Thurrock about the Opposition amendment must have totally escaped the Minister. We would
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  abandon the Trident programme and invest in conventional defence forces. That is a far better guarantee for our shipbuilding industry than the Trident programme will ever be.
  Britain, fortunately, is a country with a major oil province offshore. The requirements of our oil and gas fields will necessitate a capability for vessels and modules. Of course, they should be built in British shipyards. Britain still has a fishing industry. Public sector industries such as the CEGB, British Nuclear Fuels Ltd. and the British Steel Corporation use merchant vessels. In any other country in Europe there would be absolutely no doubt as to where those contracts would be placed. They would be placed in that country's yards.
  My hon. Friend the Member for Jarrow (Mr. Dixon) pointed out in Committee that, of the EC countries, Britain has the worst record for building national vessels in its own yards. In Italy, France and West Germany 90 per cent. of all orders are built in their own yards. In Britain I regret to say—I speak from memory—the figure is less than 50 per cent. That is a measure of the difference in approach between our European partners and ourselves. It is nothing to do with market forces. Let us be clear about that. This issue concerns policies for maximising industrial advantage. That is the approach that we should adopt in the development of a maritime policy.
  The Government seem indifferent to the future of some of our shipbuilding communities and quite willing to accept a further decline in our industries. I am told—and I shall be interested in the Government's response—that the permanent secretary at the Department of Industry was instructed to tour the country to talk to the former owners of the shipyards and to inquire whether they would be interested in either putting capital into the industry or buying back their assets. This took place at about the same time that the Government were facing a claim from the same people at the Council of Europe in Strasbourg for increased compensation following the Aircraft and Shipbuilding Industries Act 1977. There is an air of unreality about all this.
  I have a copy of the press notice following those deliberations in Strasbourg. On page 3, it says:
  "The respondent Government"—
  that is Her Majesty's Government—
  "maintain that Article 1 of the Protocol does not, either expressly or by implication, guarantee a right to compensation in case of nationalisation of the property of a State's own nationals. The nationalisation of the relevant companies on the terms laid down in the 1977 Act was a lawful measure which the Government of the time were entitled to take"—
  that is the previous Labour Government—
  "and did not involve any breach of the Convention requirement that deprivation of property be in the public interest. They"—
  this Conservative Government—
  "maintain that the compensation was assessed in accordance with the compensation provisions of the 1977 Act, which provisions met the international law requirements of adequate, prompt and effective compensation even if, contrary to the Government's contention, such requirements applied to the applicants, as United Kingdom nationals."
  The Government have been saying, first, that there is no right to any compensation and, secondly, that the compensation paid was adequate. At the same time, the permanent secretary has been despatched to talk to these people about—
  Mr. Norman Lamont: I am sure that my hon. Friend the Under-Secretary of State will say something more and at length, but I should point out that the press release that

  1003
  the hon. Gentleman has read out does not represent the Government's views or the views that they advanced in the case.
  Dr. Cunningham: I was about to come to that point. The hon. Gentleman has made an interesting challenge about what is written in the document. The document is official, and I should be happy for the Minister to look at it in a moment. It is headed "Council of Europe press release". It is printed on official headed paper and sets out the conclusions of the deliberations in Strasbourg. If they are not the conclusions, or if the Government do not accept that they are the conclusions, they should tell the House their real position.
  I think that it was in August 1980 that the previous Secretary of State for Industry, the right hon. Member for Leeds, North-East (Sir K. Joseph), said in public—in Committee, in the House, and elsewhere—that the compensation paid was unfair and inadequate. I understand that that view has recently been reitereated by Ministers. However, in the Council of Europe, the Government have apparently been telling an entirely different story in defence of their case. That demands some explanation. We maintain that the compensation paid was fair and adequate and the Government have apparently been agreeing to that in private but denying it in public.
  But what of the taxpayers' interest now? The Government are trying to privatise the industry and to obtain a fair price for the taxpayers' assets and investments. They have argued in Strasbourg that there should be no change in the previous compensation terms, while at the same time saying publicly that they were inadequate. What price will the taxpayer get for British Shipbuilders against that background of confusion and—I shall withdraw my next remark if it is unparliamentary—duplicity? Some double talking is apparently going on. The outcome of all this cannot possibly help to obtain a realistic price for the taxpayer from the disposal of any assets. Once again, following Amersham International, Britoil, and Associated British Ports, there is likely to be a fiasco in the handling of public assets because of the Government's attitude to privatisation.
  I reiterate our view that the Bill is an irrelevance to the position, problems and future of shipbuilding in Britain. It has increased uncertainty—no, it has increased fear in the shipbuilding communities since its introduction and throughout its consideration. It has destroyed the confidence of potential customers for vessels, particularly since it has been demonstrated that the Government cannot even ensure that in the public sector orders go to British yards.
  It is enabling legislation but its provisions will be used to break up the British Shipbuilders. Let the buyers beware. Let there be no doubt in the House and outside in the industry that the next Labour Government will recreate a publicly owned shipbuilding corporation in the national interest as part of a maritime strategy for Britain.
  8.30 pm
  Mr. Hill: To clear up one point, I was in Strasbourg when the case was presented by the former owners of Vosper Thornycroft, Southampton, to the European Commission of Human Rights. After long deliberations, with both sides presenting their cases, the Commission
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  said that there was a case to answer. It only went as far as that. We must not read more into it than is there. The case will go on for some time. The process in Strasbourg is not famed for speed. The Government will present their case and at the end of the day obviously will take cognisance of the finding of the Commission.
  Mr. Lamont: What my hon. Friend has said is right, but he might also like to know—because it relates to what the hon. Member for Whitehaven (Dr. Cunningham) said—that the Government have not been arguing that adequate compensation has already been paid when they said that some companies were treated unfairly. What the Government are arguing before the Commission is that the compensation arrangements under the 1977 legislation did not involve a breach of the convention or international law requirements. That is the position. My hon. Friend will understand that I cannot say a great deal more about it.
  Mr. Hill: Having put that on record and having been supported by the Minister, I hope that the Opposition will realise that that is one red herring that they can pull in. In the next Parliament we shall still be discussing the court case in Strasbourg.
  Mr. Harry Cowans: The hon. Gentleman will do it from the Opposition Benches.
  Mr. Hill: It will be discussed on both sides of the House.
  The Southampton interest in the Bill is twofold. We have Vosper Thornycroft, the warship building division, and we have the very able firm of British Ship Repairers of Southampton. During the Falklands campaign British Ship Repairers did not get enough prominence for the work it did. One of its convenors pointed out to me that it was always reported that Vosper Thornycroft had done the ship repairs. To the public and sometimes to the journalists from the local newspapers the two firms did not appear to be separate. Therefore, it is right to make a public acknowledgement here of the able work that British Ship Repairers of Southampton did to keep the merchant fleet and the warship fleet in readiness, to convert ships into hospital ships, and to provide helicopter pads where necessary. It was a tremendous effort. The enabling Bill will have a direct effect on British Ship Repairers of Southampton.
  Vosper Thornycroft, if British Shipbuilders considers that it is a subsidiary that can be formed, will he most attractive to private capital, to be sold off as a subsidiary company or to become a joint venture. I should like to see private capital going into Vosper Thornycroft (Woolston) Southampton because it desperately needs more orders and more modernisation. The attraction of private capital with the obligation that this will bring increased efficiency and make the yard more commercially orientated can only do good.
  Joint ventures are a different animal. I should hate to think that either of the two hon. Members representing Southampton would ever push a joint venture. On the other hand, the former owners of Vosper Thornycroft (Woolston) Southampton might be interested, especially if there is the promise of some compensation following the court hearing in Strasbourg to enable them to purchase back Vosper Thornycroft Warship Builders, Southampton. The yard has an excellent record as naval

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  warship builders. It has built for the Brazilian navy. It has been successful in winning some magnificent orders. Unfortunately, its research, development and design work for the warship division of British Shipbuilders is done almost entirely in Southampton. This represents an added cost that is not always recognised by other warship yards within British Shipbuilders.
  Vosper Thornycroft's lifeblood is the occasional Ministry of Defence order. With an order for a type 22 frigate, or perhaps two, it would once again be able to build its business from a firm base. As a yard, it is interested in defence and security. It is involved in high technology and keeps up to date with progress on weaponry. Indeed, in defence and security, the yard cannot be topped. When national interest or national security is threatened, Vosper Thornycroft is the first to put its efforts and its work force at the disposal of the Government.
  The hon. Member for Whitehaven (Dr. Cunningham) wondered why Italy achieved so many orders. The first report from the Select Committee on Trade and Industry on British Shipbuilders contains on page 103 complete coverage of all the subsidies that operate in Europe. I shall not weary the House with the details. It is shown, however, that Italy has a combined subsidy on merchant shipbuilding of 55 per cent. while we, in the United Kingdom, although the figures might be a little out of date, have a combined subsidy of 37 per cent. The report relates to the 1981–82 Session. It is, however, clear that the reason for Italy achieving so many home market orders for merchant shipbuilding is associated with the 55 per cent. subsidy.
  As a pro-European, I sometimes think that the competition policy in the European Community is very restrictive of our traditional industries. Perhaps we did not get into Europe early enough to play our part in laying down the ground rules. We, being the high-minded people that we are in government, abide by every rule in the book, and sometimes we as a Government are criticised because we do that. However, there is no way round it.
  Dr. John Cunningham: The hon. Gentleman is making a telling point. He is really saying that other European Governments do more to support their industries than his Government do.
  Mr. Hill: I do not think that I would ever say anything quite as blunt as that, but it is common knowledge in the Lobbies here that some of our European partners do not always play the game according to the rules, and that sometimes they cut corners, especially in steel production and shipbuilding.
  However, that is not the complaint this evening. The Opposition complain this evening that, at long last, this enabling Bill will enable the chairman of British Shipbuilders to come forward with schemes to form subsidiary companies to do what he can to make his conglomerate—because that is what it is—more efficient. I am sure that the House will respond at the end of this debate with an overwhelming vote in favour of the Bill.
  8.41 pm
  Mr. Willey: The Minister spoke about a deep recession. My hon. Friend the Member for Whitehaven (Dr. Cunningham) talked about a crisis. It is not only a
  1006
  crisis, but it is a crisis that has got far worse since we began our discussion of the Bill. We can be fraternal and say that world shipbuilding is suffering a crisis. We can be fraternal and say that Europe is suffering a crisis. We can read about what is happening in Germany, Sweden, France and Spain, but it is no comfort to us. We have to look at our present crisis, particularly in the form of redundancies.
  Shipbuilding is an assembly industry, and we should realise that more than half of the costs of a ship come from outside the yard. We have to double the redundancy figures to see the true figures in areas such as the north-east coast.
  We are told that we are following the policy on steel: "We are shedding workers, but we shall save the yards." We shall see. We must realise that not only has the crisis worsened since we began our discussions, but that the Bill has contributed to the worsening of the crisis.
  My hon. Friend the Member for Jarrow (Mr. Dixon) and others spoke about industrial relations. There is no doubt that industrial relations have worsened as a result of the steps that are being taken in the Bill. It is equally true that this Bill has greatly aggravated the problems of merchant shipbuilding. It has jeopardised merchant shipbuilding, and that is why it has particularly affected us, and why we have four Members who represent the north-east coast on these Benches now. We have reached almost the minimum capacity that we can carry in merchant shipbuilding. We have only five yards left, of which four are in the north-east. In fact, one is a mixed yard—Swan Hunter.
  One matter that I raised in Committee, and I raise it again, concerns Mr. John Parker. He was the principal person involved in merchant shipbuilding. I complained that he went to Harland and Wolff. He not only went, but it is now agreed that he went by Government request. British Shipbuilders now says that it was obliged to accede to that request. I want to know where the priorities lie. The north-east is the main area for merchant shipbuilding in Britain but that is what has happened. We see our calamities being aggravated.
  The position in the north-east is extremely serious. It has been described as frightening and it is. At the moment, the problem centres upon Sunderland Shipbuilders, but again we can see what is happening. I welcome the appointment of Mr. Hubert Rice on the forthcoming retirement of Mr. Derek Kimber, but it is significant that Mr. Hubert Rice is to be chairman of Swan Hunter. One would have thought that at the moment his interest should be centred on Sunderland Shipbuilders. Tributes are paid in Sunderland to the work done by British Shipbuilders in what was Doxfords but all that is at grave risk. Shortly we shall be told that we are saving the yards, that they are being mothballed. That has already happened in Sunderland. It will be no comfort to us if we lose a yard. That is the position that we face in the north-east. It is a grave and alarming position and something must be done about it.
  There are many priorities with which the Government should deal other than the Bill. There are many things that should take priority over privatisation. I was glad to hear the Minister of State mention the £90 million, which is important to investment in new equipment systems. We need to concentrate on marketing, particularly since Mr. Parker has gone. We want to improve export credit guarantees. We want—I emphasise this and it is the view

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  of the shipowners—more generous credit terms for United Kingdom shipbuilders. That is urgently needed now. We must have some help and some British orders placed with our yards rather than see them close.
  We want, as I argued on Second Reading and as I have mentioned time and again—some action following the Falklands war. We want a strategic merchant fleet with defensive aids. That should be considered and decisions should be made and the work should be placed with British shipyards. We need a better system of flexible financial packages—I have had experience of that over the past few months—for Third world countries. I know all the difficulties but we must tackle the problems and improve the position. We must look seriously at the public support that is given to shipbuilding in comparison with what has been done in other countries. The Minister of State says that we are in the middle of the road, as though that is an answer, but it is not. We know Italy's policy on shipbuilding which it has followed for 30 or 40 years. I welcome the £160 million, but we must see that we get comparable public support and use it to the best advantage. As I have said scores of times now, we must deal with Korea, Taiwan and the far east. We must show that we will not put up with the present position and, if necessary, we shall take steps unilaterally. We must say that it was nonsense that last year they cut prices by 30 per cent. It is nonsense that they have been allowed to expand the shipbuilding industry at a time of world crisis.
  We must pay attention to the evidence of the Trade Union Congress to the Select Committee about the conduct of nationalised industries in placing orders and get that matter cleared up. I agree that it is muddled but it seems frightful that it should ever have happened. I do not wish to be controversial. I wish to give the maximum possible support to this basic industry.
  I conclude by agreeing with the hon. Member for Tynemouth (Mr. Trotter). He is not present—he is probably in Korea or Taiwan. He said on Second Reading that we should recognise that our national interest lies in the Merchant Navy, and that we need a shipbuilding capacity to enable us to maintain it. After the Falklands war, that should be readily recognised. These are two great national assets without which we cannot survive. I hope that this debate has removed the irrelevance of privatisation and has emphasised the serious position that faces British shipbuilding today.
  8.51 pm
  Mr. Colvin: It is a pleasure to follow the right hon. Member for Sunderland, North (Mr. Willey) whose utterances in Committee have been particularly interesting. On the whole, we have enjoyed the deliberations of the Standing Committee. Notwithstanding some of the political views that have been expressed, it has been interesting to hear at first hand from hon. Members who have had lifelong experience in the shipbuilding industry. If nothing else, we have come out of Committee a great deal more knowledgeable than we were when we went in.
  I am sorry that my hon. Friend the Member for Tynemouth (Mr. Trotter) is not present this evening.
  Mr. Willey: I am obliged to the hon. Gentleman for giving way. I regret to hear that illness has prevented the hon. Member for Tynemouth (Mr. Trotter) being here. We all wish him a speedy recovery.
  Mr. Colvin: I am grateful to the right hon. Gentleman. He has taken the words out of my mouth. I shall not repeat them, but I endorse his thoughts.
  It has been suggested by many people that this has been a long Committee stage for a Bill with only three clauses, but page for page, it has not been anything like as long as the original Aircraft and Shipbuilding Industries Act 1977, which took two years from First Reading through to Royal Assent. Page for page, we have done a faster job.
  My hon. Friend the Minister of State in his opening remarks was quite right to remind the House that the Bill is only an enabling measure. There is no ideological rush to denationalise the shipbuilding industry. To sell off the whole or part of British Shipbuilders or to introduce private capital presupposes that there are buyers around or people who will be interested in investing in that industry. As the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said, nobody in his right senses would do that at present. The hon. Gentleman is probably right because in part or in whole British Shipbuilders does not look an attractive buy.
  Nevertheless, that is no reason for not passing this enabling legislation. I was glad to hear from the opening remarks of my hon. Friend the Minister of State that, in spite of the time that will elapse between now and the beginning of privatisation, Government financial support for the industry will continue. That is, indeed, welcome news.
  I was interested in remarks of Opposition Members about the apparent ease with which they think the warship builders could be privatised and I should like to take up the remarks of the hon. Member for Whitehaven (Dr. Cunningham). I did not read the press statement from which he quoted but I did see a report in The Times this morning relating to the approaches that are being made by the Department of Industry to the original owners of the warship building companies with a view to perhaps sounding them out on repurchase.
  According to the newspaper report, the previous owners have asked for two assurances. Perhaps the Minister will comment on them and let us have his views. The former owners, who are probably the most likely buyers of the warship builders want, first, improved compensation for their assets which were taken over by the Labour Government in 1977. I sympathise with that and endorse what the previous Secretary of State for Industry, my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said on the matter when he commented that the original compensation payments were grossly unfair. We know that as a result there are now nine separate applications before the European Commission of Human Rights. I gather that the commission has ruled that some of those applications are admissible. However, a comment on the matter from the Minister would be welcome.
  The second assurance that the former owners have sought is that adequate compensation will be paid if a future Labour Government were to renationalise. The hon. Member for Whitehaven said that that was part of Labour party policy, but he was careful to exclude any remarks about compensation. Perhaps the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) will comment on that matter when he winds up as it is important and will no doubt influence potential buyers.
  I doubt whether those two assurances can be given, so I also doubt whether the sale of British Shipbuilders in part or in whole, not even the warship builders, can be a

  1009
  foregone conclusion. Most certainly it will not proceed with haste. However, that is no reason for not passing this enabling measure.
  The best analogy with this measure which illustrates the realistic attitude of the Government towards the policy of denationalisation that they are pursuing is surely the Civil Aviation Act 1980, which provided for the introduction of private capital to British Airways. There has been no rush to privatise British Airways. The enabling measure has concentrated the minds of those in the corporation, both management and employees. That has had an immediate effect on productivity. If this Bill is passed, it will have a similar beneficial effect on both management and employees in the various parts of British Shipbuilders.
  Before one can sell part or whole of a company one has to be able to write a prospectus. Before one can write a prospectus, one has to be able to show a profit. Before one can make a profit, one has to be competitive. We should give credit to British Shipbuilders for the way in which it has increased productivity and competitiveness over the years. It is true that it has reduced the number of bargaining units from 168 to only two. It is true that it has cut out leapfrogging and that demarcation disputes are now a thing of the past. It is true, alas, that 25,000 jobs have gone. It is true that it now has central wage bargaining. That is good and splendid. However, it does not take legislation to bring those things about. I was interested in the remarks that were made on clause 1, when it was assumed that, by passing a law, one would make people realistic and improve industrial relations and productivity.
  Mr. Cowans: Will the hon. Gentleman tell the House that all those improvements, all the good industrial relations, all the investment and all the advanced ideas happened only under nationalisation? None of them occurred under private enterprise.
  Mr. Colvin: Nationalisation was coincidental with the start of a world recession. I believe that it is the feeling of realism among management and workers in British industry, rather than the ownership of the firms concerned, that has brought about the improvements to which the hon. Gentleman referred. Since the second world war we have had five men doing four men's work. In the past three or four years, the fifth man has gone. In labour terms, we are now competitive.
  I shall return to my analogy with British Airways and the problems of privatisation. With British Airways, it was never thought that privatisation was possible. That is why passing an enabling measure such as this concentrates the minds of those who are involved. It hastens higher productivity and improved profits.
  British Shipbuilders can survive, either in part or in whole, whether state-owned or owned by private shareholders or, perhaps, a combination of both, only if the world shipping industries are healthy. We know that there is a vast overcapacity of shipping in the world today. An enormous tonnage is laid up. We know also that the British share of world shipping is shrinking as other maritime nations emerge.
  However, there are still healthy sectors that are growing. For example, offshore vessels are still in demand and being built in British shipyards. The high technology ships for which we have a high reputation are still in demand and we can win orders for them. Unfortunately,
  1010
  with regard to the very large crude carriers, what The Sunday Times said on 15 February is true—Korea rules the waves. However, Korea will rule the waves only for as long as it is making a profit out of building those ships. Korea will soon decide that it does not want to go on making ships any longer when it no longer makes a profit. That will happen when China starts to build ships. The competition from China will drive Korea out of business, and China is not exactly renowned for its freedom, industrial democracy, or care about profits and profitability.
  We must not conclude this debate on a note of utter gloom and despondency. I welcome the Minister's statement about the increase in the intervention fund. That at least is good news. I endorse what the right hon. Member for Sunderland, North has said—the need for more help remains. To know what help we should be giving our shipbuilders and shipowners, it is vital that we find out what other countries do. At the moment, there is no proof of the financial incentives and help given by other Governments either to their shipbuilders or to their shipowners. Until we have solid facts we cannot plan the measures of support that we should be giving.
  We must re-examine a scrap-and-build policy whereby we scrap two ships for every one that is built. I was glad to note a reference in Lloyd's List the other day to the international maritime industries forum which is examining a scrap-and-build policy once again. In that, there is some hope that we can get the type of help that our shipbuilders require.
  The Bill fulfils a commitment by the Conservative party to reduce the role of the state where possible. It is based not on dogma, but on common sense, and if enacted it might open up new prospects for an important national industry.
  9.4 pm
  Mr. Ernie Ross: The Third Reading and Committee stage of the Bill demonstrate the lack of a concerted effort by the Government to come to grips with an industry in a severe crisis. The Opposition, which have a different approach to nationalised industries and to British engineering, have a responsibility to make clear those differences. Although we may welcome some of the Minister's comments we must put on record the different strategy that we would have adopted had we been in power, and that we will adopt when we are returned to power after the next election.
  It is an essential objective of every trade union to defend the industry in which its members work. If there is no industry, there will be no members and no wealth to support our people. The Government are determined to de-industrialise the nation that gave birth to modern industry. Many Opposition Members have experience in shipbuild-ing and other industries. Some hon. Members are sponsored by trade unions that have promoted the idea of defending British engineering, not from chauvinism but from patriotism. Moreover, that is a vital demand of those who work in the industries, and it is in the interests of those whom we represent.
  The Government have introduced the Bill for ideological reasons that are as relevant to the modern world as are leeches to modern medicine. It has nothing to do with resolving the problems of British engineering

  1011
  and, more important, British shipbuilding, but supports the Government's contention that on some distant, undeclared day everything will come right.
  One need only read the speeches of my right hon. and hon. Friends in Committee to see that the Bill is unnecessary. It is an attempt to privatise and it cannot work. If the enabling legislation reaches the statute book, the weaker yards will be abandoned or will collapse and even larger Government subsidies will be required if they are to survive. If the specialist yards were hived off they could not meet delivery dates without the assistance that they receive from the present mix in British shipbuilding. It is a mystery how a change in ownership of a yard would enable it to compete more effectively in world markets. It would have to reduce costs dramatically, and improve delivery dates and productivity or it would need major capital investment, which is hardly likely with privatisation. It would require the co-operation of the trade union movement, which increasingly expresses concern about its role in the industry. The Government believe that the trade unions should accept low wage increases and job losses without long-term security. If the industry is handed back to those who brought it near bankruptcy, trade union co-operation is unlikely.
  Furthermore, British Shipbuilders' centralisation of research and development has cut research duplication and wasteful multiple estimation in tendering. Privatisation is not in the commercial interests of British shipbuilding, the employers or the employees. An integrated industry can better survive the world shipbuilding crisis.
  British Shipbuilders has the ability to build warships, Polaris submarines, computerised frigates, trawlers, pilot boats, tugs, feeder ships, coasters and fishing patrol vessels. Hiving off will only divide the work force who would be competing with one another. That would not be good for the industry.
  I said in Committee, and I repeat, that the Government's determination to have privatisation has nothing to do with real interest in the industry. It has more to do with the Conservative party policy group report on the nationalised industries which was put together by the Financial Secretary to the Treasury. It was leaked in The Economist in May 1978. It has more to do with political dogma than any understanding of how British engineering works.
  I am sponsored by a trade union—AUEW-TASS—which includes and represents many naval architects, engineers and designers employed in British Shipbuilders. During nationalisation I fully supported the building up of specialised teams. Privatisation puts at risk centralised control of materials, research, development and design for the corporation. British Shipbuilders has gained an advantage from the new technology that it was able to introduce following nationalisation. The advent of new technology has led to tremendous problems of adjustment—displacement of jobs, the obsolescence of many skills, the need to learn new skills and adapt to new working environments. All those problems were handled by the trade unions because they understood that it was their industry. The industry was nationalised not just for the benefit of the work force but for the country's long term benefit.
  If the yards are hived off that interest is bound to receive a setback and the work force will not be encouraged to continue to work together so effectively. When one looks at British Shipbuilders' demands for quicker production,
  1012
  engineering and planning, leading to advanced outfitting, detailed production scheduling, material control, greater control over suppliers and subcontractors, superior shop floor organisations with improved supervision of working practices, job flexibility, communication, information, tighter control of dimensional accuracy at all stages of production leading to the virtual elimination of re-work, involvement of shop floor workers as the first line in a quality control system, how will all that be achieved by this enabling legislation? How will the co-operation of the work force, which is so essential if these aims are to be achieved, be guaranteed if the industry is hived off?
  The shipbuilding unions are clear about their specific demands. The CSEU says that it wants increased Government aid in both the short and long term. It wants the introduction of a scrap and build programme and financial incentives to British owners to buy British. It is important that the House realises that there is a change of mood at all levels of the work force. That change of mood is not taking place where we believed initially that it might when job reductionssss were asked for. We thought that when job reduction were demanded, the work force would refuse to accept them. After discussion, however, it decided that it would accept a reduction in the work force. The Government would do well to be aware of the change of mood. The workers in every yard in this country are against privatisation. They have accepted wage increases below the level of inflation over the past few years in order to remain competitive. They have had to accept the closures and redundancies to improve efficiency and productivity. The workers are saying that it is "not on" to give the industry back to those who brought it to the state of bankruptcy that existed when we nationalised it. The Government had better be prepared for the reaction in these yards if any of this nationalised industry is sold.
  What has been the Government's role? Despite tonight's statement of an increased subsidy, their attitude shows little recognition of the serious crisis in world shipping. They constantly lecture the House and the shipyard workers. The Bill does nothing for the morale of the industrial team, which is united against it. They are also united in their determination to ensure that this island nation maintains a shipbuilding industry capable of providing for merchant and defence needs. The Government are wholly unsympathetic to the crisis facing merchant shipping. That is not unconnected with their lack of concern about merchant shipping orders.
  I draw to the Minister's attention an article in The Scotsman of 16 February, and the comments of Jim Murray, the leader of the union side of the shipbuilding negotiating committee. He said:
  "God helps those who help themselves and, to be quite frank, at the present time with the policies being pursued by the present Government and British shipping interests, it is questionable as to whether or not we qualify for divine help. We make that: point perhaps in rather light vein, but in much more serious vein, we would illustrate the point much more forcibly—the replacement Atlantic Conveyor.
  The world outside must have thought that as a nation we must have gone stark staring bonkers. If Government and shipowners can act in the way that they did on that very sensitive situation then our task and our joint efforts become that much more difficult."
  My right hon. and hon. Friends have made it clear that we expect financial incentives from the Government. How do they intend to respond to that? We want not only financial incentives for the domestic industry, but easier

  1013
  credit terms and packages for the developing world, which is anxious to place orders for ships in our yards but cannot raise the finance. It needs easier credit terms.
  The intentions of the Bill are criminal. Instead of recognising British Shipbuilders as a national strategic industry, instead of examining how that industry—which has achieved so much with so little help—can be stimulated and encouraged, instead of trying to help British shipbuilding through a difficult period, the Government have decided to reward their political friends by putting up for sale yet another of our national assets.
  The Bill is unnecessary. It makes no industrial or economic logic. It asks the House to believe a scenario that is a nonsense. No one will buy the non-profit-making yards. If the naval yards—Yarrows, Vickers and Vosper Thorneycroft—are sold, the remainder will collapse without massive Government finance. Yet again, the Government fork out to line the pockets of the Prime Minister's friends. The Bill will fulfil an election pledge. I challenge the Government to say tonight how privatisation will help the industry. Why do neither workers nor management support it? Why is it that members of all unions, including the National Union of Seamen, want completely different alternatives to the privatisation measure?
  I doubt that the House will hear the answers to those questions. That is why I shall join my right hon. and hon. Friends in voting against this unnecessary measure.
  9.18 pm
  Mr. R. C. Mitchell: I regret that the hon. Member for Southampton, Test (Mr. Hill) has temporarily left the Chamber. I wanted to congratulate him because at least one third of his speech was almost a word-for-word reproduction of my Second Reading speech. I congratulate him on reading it. If I have achieved something during the passage of the Bill, perhaps it is the conversion of the hon. Gentleman.
  It is not my intention to make a constituency speech today as there will be other opportunities for doing that. I want to deal with the Bill as a whole. I shall advise my hon. Friends to vote against the Bill because it is completely irrelevant and does nothing whatsoever to tackle the underlying problems affecting shipbuilding today. It will not produce one more order for a merchant ship or warship. It is a piece of ideological dogma.
  Both the Government and the Labour party seem obsessed with ownership. Privatisation has become a virility symbol for the Conservative party as nationalisation has been for the Labour party for many years. We are reaching the nonsensical situation in which one side nationalises and the other side privatises. Whether nationalised or privatised, the industry faces similar problems. The problems of management, getting orders, and competing against foreign shipbuilders are similar whether the industry is in public or private ownership.
  I believe that the shipbuilding industry should remain in public ownership. I voted for public ownership in 1977, not necessarily taking the view of the majority of my shipyard workers who had grave doubts about it at the time. But now the morale of the workers, especially in the warship yards, is liable to be affected. Indeed, it has already been affected by the defence cuts and the fact that, because of the Government's defence policy, the workers
  1014
  cannot see where future orders will come from. I agree that far too much is being spent on Trident and that more should be spent on conventional weapons.
  The Bill will create another uncertainty. What is to happen? Are we to be privatised? Are we to be sold off or not? The only people who are never asked for their views are the workers in the industry. Nobody ever asks the workers whether they want to be nationalised or privatised.
  Dr. John Cunningham: That is not true. The workers in the yards are consulted by their trade unions. I am sorry to hear fatuous laughter from the Government Benches. The trade unions have a far better understanding of how the shipyard workers feel about these issues than the Government have.
  Mr. Mitchell: That may well be true, but that would not be difficult. It does not necessarily follow that, at any moment, the official line put forward by a trade union represents the view of the majority of its members. The trade unions are consulted, but not necessarily all the people who work in the shipyards. In 1977, I asked for a poll to be taken of the shipyard workers to find out whether or not they wanted to be nationalised. That is the only real way to achieve consultation.
  Mr. W. E. Garrett: On the north-east coast, trade unionists are consulted at meetings held by the various unions. The facilities are there for them to attend. They attend in large numbers and discuss the issues, and the full-time officials take away the views of those members. That is the basis on which decisions are reached.
  Mr. Mitchell: I am sure that a consultation process goes on, but the hon. Gentleman knows as well as the rest of us that not all trade unionists attend branch meetings. A relatively small proportion turns up to discuss things. There is therefore a case for consulting the workers in a different way. For example, the great majority of shipyard workers in the north-east may well have favoured public ownership in 1977, but that does not mean that the same necessarily applied in Southampton or elsewhere. However, I shall not labour that point.
  The other reason why the Bill is thoroughly bad is, as I said on Second Reading, that it puts still greater power in the hands of Ministers. I dread to think of that power in the hands of some official Opposition Members who would like to be Ministers. I dread to think of such power in the hands of some extremely Left-wing potential Ministers. If it were in the hands, for example, of the right hon. Member for Bristol, South-East (Mr. Benn), I hate to think what the end result might be. The Bill takes power from Parliament and gives it to the Executive. More and more enabling Bills are doing just that and more and more real power is being transferred from this place to secret Cabinet rooms.
  As the right hon. Member for Sunderland, North (Mr. Willey) said, instead of playing around with irrelevant Bills like this, Ministers should be working out a proper maritime strategy in consultation with Ministers from other Departments. The Falklands crisis clearly showed the need for a strong Merchant Navy sailing under the British flag. The number of ships sailing under the British flag falls every month. It also clearly showed that the Merchant Navy is the fourth service—the fourth arm of defence. A naval operation cannot be mounted without its

  1015
  assistance. The Government should be considering that and deciding what kind of Merchant Navy we need and the kind of ships required. They should be consulting shipowners about how ships can be adapted. They should be doing all that instead of playing around with this Bill.
  The Government should also be dealing with the problem of competition and considering how Korea manages to undercut this country so severely. I strongly oppose the CEGB placing orders in Korea, but purely from the taxpayers' point of view the cost of the ship will be considerably less than if it were built here. There is a considerable price difference, mainly because Korea is doing in shipbuilding what Japan has already done in many other industries—heavily subsidising to dominate the market. Once it has dominated the market, things may change, but that is how those countries operate. We always seem to take the Simon Pure attitude that we should not subsidise because it is not playing the game. The fact remains that all our competitors are doing just that.
  I was alarmed at the speech of the hon. Member for Dundee, West (Mr. Ross), which showed all that is wrong with British industry today. The hon. Gentleman is still fighting the old class war.
  Mr. Ernie Ross: Absolutely.
  Mr. Mitchell: I am glad of that confirmation. The hon. Gentleman is still fighting the old class war, but British shipbuilding and British industry generally need the recognition that management and employees are not diametrically opposed but have the same objectives. If the industry is not profitable, there will be no jobs. It is a question of working together, not of automatic opposition. Until that feeling gets through to shipbuilding as well as to everywhere else, this country will not be successful.
  9.31 pm
  Mr. Dixon: I wish to quote from the annual report and accounts of British Shipbuilders for the year 1981–82 when Robert Atkinson, the chairman of British Shipbuilders, summed up in a couple of sentences the position of Britain as a maritime nation. He said:
  "Britain as an island nation is, and always has been, a strong maritime nation needing sea power, and by necessity this must continue to be the case. Shipbuilding plays a vital part in our nation's prosperity and in its protection. We have a capability that needs to be sustained and recognised as a national asset because a shipbuilding capability is not something that can be used intermittently; to be available when required. To be effective it needs continuous use, it needs continuous improvement and continuous investment in men and materials; once that capability is allowed to disperse, it will not be recoverable. Shipbuilding, like shipping, is a national strategic industry and needs a declared national maritime policy. Britain remains one of the few major maritime nations in the world where the national requirements of shipping and shipbuilding are not linked.
  Therefore, it seems to me reasonable that since we are required to be internationally competitive we should be able to rely on adequate Government support such as is received by all those overseas shipbuilders with whom we have to compete".
  Since he has been chairman, he has served under two Secretaries of State for Industry and three Under-Secretaries of State for Industry. I have more confidence in his statements that I have in the Government Front Bench, from whom we shall shortly hear.
  The Bill is irrelevant to the needs of the British shipbuilding industry. When we talk about competition, we are talking about international competition. To quote
  1016
  Robert Atkinson again, this time in the November issue of Shipbuilding, he said, and I believe the hon. Member for Southampton, Test (Mr. Hill) referred to this:
  "There's no future in boxing by the 'Queensberry Rules' if your opponents are engaged in 'all-in wrestling'".
  That is what happens to British shipbuilding when it competes with Korea, Japan and other far eastern nations.
  The hivingoff of the warship yards from British Shipbuilders will do it harm. The merchant shipping section will, to use a pun, go down the Swannee. Britain will have no merchant shipbuilding capacity left if the warship yards are hived off. It is against the unions' advice, the advice of the chairman of British Shipbuilders and that of everyone concerned with ships and shipbuilding
  The Minister spoke about introducing or inviting private capital into the shipbuilding industry. When the shipbuilding industry was in private hands it was unable to get private capital invested. There was the Paton report in 1962, the Geddes report in 1966 and the Booz Allen report in 1972. Those reports on the British shipbuilding industry talked of the lack of investment in the British shipbuilding industry. That is the reason why it was uncompetitive.
  What is required is some help from the Government but the Bill helps in no way whatsoever. I agree with my hon. Friend the Member for Dundee, West (Mr. Ross), who spoke about the attitude of the workers in the shipbuilding industry. The Bill will cause confrontation. There has already been a conference. They will not accept the fragmentation of the shipbuilding industry. They will not accept the compulsory redundancies that the Bill may bring.
  There was a Select Committee on Industry and Trade in the Session 1981–82, which interviewed the Confederation of Shipbuilding and Engineering Unions, British Shipbuilders, the Minister and Government officers and made recommendations. Not one of the recommendations is included in the Bill. Nothing that the Select Committee said is included in the Bill. The Bill will not help British Shipbuilders. It will only hinder it at a time when world shipping is in recession. Despite the requirements of shipbuilders and the shipping industry, the Minister has come along with a totally irrevelant Bill, which will cause only confrontation with workers in the shipbuilding industry.
  9.35 pm
  Mr. W. E. Garrett: The hon. Member for Bristol, North-West (Mr. Colvin), who is not in his place, referred to the previous shipbuilding Bill, which took two years to go through its parliamentary stages. I was a member of the Committee that considered the Bill and I well recall the vigour with which the Bill was debated and the acrimony generated on both sides. The then Conservative Opposition were very keen when it came to defending their corner and the private sector.
  The significant factor about our 16 Committee sittings and tonight's debate on this Bill is the subdued torte of Ministers and their supporters. In Committee, there was a fair bit of humour and some knowledge was gained, because we learnt much from my hon. Friend the Member for Jarrow (Mr. Dixon) about the problems of industrial relations and working practices in the industry and about some of the characters who worked in the industry. He enlightened many a long weary hour in Committee.

  1017
  However, when Ministers replied to some of the points put in Committee they were polite and very low key for their temperament—I have seen them display a bit more vigour on other occasions—and at one point I wondered whether they had lost their passion for privatisation and whether something terrific might happen. I wondered whether the Bill would collapse and whether we would all be able to go home to think about it. However, that did not happen and we are now debating the Bill's Third Reading.
  I refer the Minister to something that he said early in his opening remarks. He said that the Bill had freed British Shipbuilders from a straitjacket. That is not my impression. I am under the impression that any straitjacket has been replaced by a noose, which can be pulled at any time. When it is pulled, it will kill off British Shipbuilders. Depending on how it is pulled, it will kill it quickly or by slow strangulation. My hunch is that it will be slow strangulation. Either way the Bill could be fatal for the British shipbuilding industry. The industry could fall between the two stools of private and public sector and in the end both would collapse.
  I am also at a loss to understand the Minister's quiet satisfaction with the EC's fifth directive, which approved a loan of £20 million for the first six months of this year. It is not the EC's money but our money. It is the British taxpayers' money. Why should it approve money that is raised by the taxpayers and which we should spend? The hon. Member for Southampton, Test (Mr. Hill) said that he was committed to the principles of Europe. If he is still a committed supporter now, we should pity him, because it shows an extremely closed mind.
  I should like to reinforce two points. First, the labour force is demoralised. If any hon. Member doubts that, he should go to the north-east coast and see what is happening there. It is no good beating about the bush. One can see all the early signs of further industrial trouble. I warn Ministers that they will bear some responsibility. When industrial trouble breaks out, I hope that they will understand and have broad enough minds to realise that they had some part to play in the troubles that will inevitably come.
  Regrettably the Government will kill off the industry if they pursue the division of responsibility instead of trying to heal the nation's industrial relations wounds. They should be bringing together sectors of industry instead of separating them. If they pursue this policy, more and more British industry will be destroyed. The only way that destruction can be stopped is by society at large being prepared to think out issues. If they do, they will reject some of the privatisation policies that have been advanced during this Parliament.
  I do not like to be prophetic, but if any hon. Member thinks that this is the last Bill on the shipbuilding industry with which he will be involved in his parliamentary career he will be disillusioned. Whichever party wins the next election, there will have to be further legislation to iron out the anomalies arising from the privatisation of the industry. If the Conservative party were to win the election, the Minister of State and his colleagues might again be in Committee Room 10 or 11 explaining to us why privatisation created more problems for the industry. They will say that they tried it and it was not very good, so they are going back to a public or semi-public body.
  1018
  The Minister may be in the same job. Perhaps he will be a grade higher. If he is, I shall be delighted to sit in the Committee and listen to him giving the explanations.
  9.42 pm
  Mr. Harry Ewing: I begin by paying tribute to my right hon. and hon. Friends who served on the Standing Committee. We kept the Bill in committee for 16 sittings not as a mere exercise to demonstrate the length of time such a small Bill could be kept in Committee but because we regarded the Bill as so important. Throughout the debates on Second Reading, in Committee, on Report and now on Third Reading we have been told that this is only a paving measure, as though that was a minor thing. We have been told that there is nothing to worry about. If the Bill is so minor we are entitled to ask the Minister why the Government went to all the trouble of introducing it.
  It was appropriate that the final contribution from the Opposition Back Benches should have come from my hon. Friend the Member for Wallsend (Mr. Garrett) who has in his constituency the biggest shipyard in the British Isles, apart from Harland and Wolff in Northern Ireland. He and my hon. Friend the Member for Jarrow (Mr. Dixon) have that intimate knowledge of shipbuilding that ought to have made Ministers sit up and take notice.
  One of the significant features of all the debates is that we have had no response from Ministers to any of our questions. Ministers have singularly failed to produce anyone who is in favour of the Bill. British Shipbuilders is not in favour of it. To comfort the hon. Member for Southampton, Itchen (Mr. Mitchell), who was antagonis-tic to the "them and us" situation, I would point out that the Engineers and Managers Association, which represents the management of the shipbuilding industry, is not in favour of the Bill. None of the trade unions involved in the industry is in favour of it. Now we learn that the Government are in such great difficulty that they are sending the permanent secretary to the Department of Industry round former private owners to see whether they are in favour of it. It has become apparent that no one is in favour of the measure.
  It was the hon. Member for Bristol, North-West (Mr. Colvin) who, at about 9 o'clock, gave the game away. The hon. Gentleman said that this was the honouring of an election promise. That is what the Bill is all about. It means that the Government can take the Bill to their annual conference and wave it to the well-bedecked ladies and other delegates, claiming that it is one more election promise fulfilled. I am sure, however, that the damage done to the shipbuilding industry in the process will not go unnoticed by the delegates who will face the consequences whenever the Conservatives meet in conference again. The one defence of the Bill is that it honours an election promise.
  The Bill, as the Minister says, is an enabling measure. It enables a tremendous amount of damage to be done. It is a paving measure towards privatisation. Clause 2 will devastate the traditional shipbuilding areas, not least Clydeside. I hope that the Scottish Office Minister will address himself to this matter against the background of Sir Robert Atkinson's announcement last week that there will be an additional 30,000 redundancies in the shipbuilding industry. I hope that the Minister will say

  1019
  how many of the redundancies he expects will take place in Scottish shipyards. The Bill will devastate the shipbuilding industries on Tyneside and Wearside.
  The measure is irrelevant to the shipbuilding industry. It has already been argued that the measure will not produce a single additional shipbuilding order. That is true. It will do nothing to stabilise the maritime fleet that is in such difficulties. Much of the tonnage is laid up. The tonnage that is not laid up is engaged in slow steaming in order to save money. The Government have failed to come forward with any proposals to give additional credit or preferential treatment for those customers prepared to order vessels that are constructed in British yards.
  Export credits guarantees are also important. These have not, however, been discussed. Debate has been only about the sacred policy of privatisation, the petard upon which the Conservative party has become hoisted. Before the hon. Member for Southampton comes back with his reference to my hon. Friend the Member for Dundee, West (Mr. Ross)—
  Mr. Hill: On a point of order, Mr. Speaker. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) is actually addressing the hon. Member for Southampton, lichen (Mr. Mitchell). We do not always see eye to eye.
  Mr. Ewing: Actually, I was itching to find out what constituency the hon. Member for Southampton represents. I recognise now that it is Southampton, Itchen and not Southampton, Test. The people of Southampton, I am sure, if they have studied the remarks of the hon. Member for Itchen will have great difficulty in distinguishing between the two hon. Members without my adding to the confusion. I accept therefore the strictures of the hon. Member for Southampton, Test (Mr. Hill).
  Before the hon. Member for Itchen comes to the reference that he made to my hon. Friend for Dundee, West I should like to say that his approach to that question was a little simplistic. We are not dealing with an industry that has been nationalised for many years. We are dealing with an industry that was in private hands until 1977. During the time that it was in private hands, as the hon. Member for Itchen knows well, labour relations were a disgrace. The whole industry was a shambles. It was almost bankrupt. That was the reason that the hon. Member for Itchen, then a Labour Member, supported the then Labour Government in taking the shipbuilding industry—I leave aside for a minute the aircraft industry—into public ownership.
  The industry has been in public ownership only since 1977. Therefore we are entitled to compare its performance when it was in private hands in recent years with its performance when it was in public hands in recent years. It is not a "them and us" situation. The record proves conclusively that the industry was much more successful during its period of nationalisation. It is not a diplomatic argument. It can be proved conclusively that the industry was much more successful under public ownership than it was under private enterprise. In the halcyon days under private enterprise, when the industry made substantial profits, the great weakness was that the people making the profits were not re-investing. Major investment in the industry and its modernisation have taken place since 1977, when it was nationalised. It was all done with the co-operation of the work force which, as
  1020
  the hon. Member for Bristol, North-West rightly said, accepted 26,500 job losses during that period. Now the work force is threatened with this privatisation measure, which tosses to the winds all the efforts that have been made since 1977. There is a complete lack of concern on the part of the Government at the damage that will be done to the industry when this measure reaches the statute book.
  The Minister of State opened his remarks by saying that the Government are attempting to attract private capital into the industry. However, he forgot to explain the change that the Government made to the Bill in Committee, whereby those who are buying part of the industry will be indemnified. They will be underwritten by the taxpayer until the contract is completed. Those who are concerned about the taxpayer are concerned about the underwriting of these orders. If any of the subsidiaries is sold off, the orders sold with that part of the industry will be underwritten by the taxpayer until the contract is completed.
  The Minister need not bother to point to his watch. We are talking about 30,000 lives which are at stake. It is not a trivial matter. We are talking about the families and the lives of 30,000 people in the shipbuilding industry. We shall not cover that subject in a few brief minutes.
  Not only are the orders to be underwritten by the taxpayer, but any contract that is made in the period between now and the Bill reaching the statute book, and then sold to private enterprise, will also be underwritten, under clause 2. Whatever the Government say, the Bill is a shining example of bungling incompetence in its drafting, its implications, and everthing that it does to the shipbuilding industry.
  I shall not detain the House, but I do not want to avoid the question that was put by the hon. Member for Bristol, North-West about compensation. Before facing that question head on, I want to say to the Under-Secretary who is to reply that he is under an obligation on behalf of the Government to clear up the matter that is before the European Commission of Human Rights. The Minister of State has not cleared up the matter. The Government take the view that under the compensation provisions of the 1977 Act the then Labour Government acted correctly. That is accurate as far as it goes, and that is what the Minister of State said, but page 3 of the document, to which my hon. Friend the Member for Whitehaven (Dr. Cunningham) referred, says that the Government consider that the compensation was adequate. If the hon. Member for Bristol, North-West, is correct in saying that those companies that are thinking of buying back part of this industry want additional compensation for the assets that were nationalised in 1977, the Minister has an obligation to say whether the Government are prepared to meet that demand. That is not an unimportant matter and it must be answered by the Minister when he replies to the debate.
  The Labour party's position is clear. We have made it clear before and make it clear again tonight. No one, but no one, will make any profit from buying these assets. The Labour party has never confiscated anything but we are making it clear that anybody who buys any assets from British Shipbuilders will have those assets reacquired by a future Labour Government and will not make any profit from them.
  In conclusion, the Bill, as has been said so often, is an irrelevant measure. I invite all right hon. and hon. Members to join us in the Lobby in voting against the Bill on Third Reading tonight.
  9.55 pm
  Mr. Alexander Fletcher: The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) has shown his usual courtesy towards the House by ignoring the agreement on the wind-up speeches. It is not the first time that he has done that and no doubt he will try to do it again.
  There has been the tiniest chorus—
  Mr. Harry Ewing rose—
  Mr. Speaker: Order. The House is anxious to come to a decision after hearing the Minister.
  Mr. Ewing: On a point of order, Mr. Speaker. I would not have raised a point of order had my integrity not been impugned by the Minister. The Whips will confirm that the agreement was for each Front Bench speaker to speak for 15 minutes and I stuck strictly to that. It would be in order for the Minister now to apologise.
  Mr. Fletcher: That is a rather shocking statement from the hon. Gentleman.
  It would be wrong to say that there has been a chorus of protest about the Bill from Labour Members. [Interruption.] Muttering that I am a liar does not make me one. It would be wrong to suggest that there has been a chorus of protest from Labour Members because there have not been enough present to make a chorus. However, the word "irrelevant" which has echoed around the rather empty Labour Benches this evening is nothing less than a misunderstanding of the Bill or of the state of the British shipbuilding industry today. If there is one thing that the industry needs it is the opportunity to be flexible, to obtain the resources of the private sector and the opportunity for joint ventures and the other prospects that will open up to British Shipbuilders as a result of the Bill.
  In opening the Third Reading debate my hon. Friend the Minister of State said that the industry was in a straightjacket. It is indeed in a legislative straightjacket which prevents the industry from having the same flexibility and business arrangements that other parts of British industry are able to undertake and participate in. That is the main reason for the Bill. If one takes a serious view of the industry today, one must agree that it needs that flexibility in order to survive. It is in a fight for survival in a world market that is experiencing one of the worst recessions in 50 years.
  I regret that I do not have time to answer all the points that have been raised—[Interruption.] I understand that there is time now. One point that was raised by my hon. Friend the Member for Bristol, North-West (Mr. Colvin) related to nationalisation compensation. The European Commission of Human Rights has found that seven of the applications presented to it are procedurally in order, but that implies no view as to their merits, which are now under consideration.
  There should be no doubt about the Government's case. Our argument is simply that the compensation arrangements under the 1977 Act did not involve a breach of the convention or the international law requirements. The Government are arguing no more than that the legislation did not breach the convention requirement concerning the public interest. That is not to say that the legislation cannot be criticised on wider grounds. That is the case that the Government are making clear to the commission. That is the position, whatever context may have been included in some press reports or whatever shine may have been put on it by the Opposition—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the British Shipbuilders Bill may be proceeded with, though opposed, until any hour.—[Mr. Lang.]
  Question again proposed, That the Bill be now read the Third time.
  Mr. Fletcher: The Bill should be seen in the context of the industry as a whole. Over the past three years the industry has passed through a period of restructuring and reorganisation which, as many hon. Members have rightly said, has been a traumatic experience. The chairman and the work force in the industry have done a great deal, but, despite the claims of Opposition Members, including the hon. Member for Stirling, Falkirk and Grangemouth, the industry has still not reached the productivity levels that existed before nationalisation. This is a matter of regret to everyone involved. No doubt it is related to the state of the market, but it is nevertheless a fact, despite the investment which has taken place at a higher rate in recent years than previously.
  The Government have given the industry a great deal of support—£600 million since we came to office. It is now facing a serious world recession and the prospects for all the merchant yards—the hon. Member for Dundee, West (Mr. Ross) mentioned the yards on the Clyde—are gloomy. The chairman recently announced redundancies.
  The problems facing the industry underline the fact that it will have a much better chance of survival if it is not kept in a straitjacket in the public sector. If it is able to use the resources of the private sector and if it is able to be more flexible, it has a better chance of surviving the present difficulties. That would bring the industry alongside the shipbuilding industries of most of our European competitors. We are the only country in western Europe which has a wholly nationalised shipbuilding industry. Neither we nor the industry benefits from that.
  There is a need to develop the industry's strength. The attraction of the Bill is to enable it to attract private investment. Obviously the warship building side will attract the greatest interest. These businesses should not be starved of capital or investment because of losses elsewhere in the industry. In the past, capital investment has suffered because of demands for cash to meet deficits elsewhere. The fact remains that a large part of the corporation will remain within the public sector. That was said clearly by my hon. Friend the Minister of State on Second Reading. The Government will continue to support merchant shipbuilding in this country.
  The corporate plan has been considered and, in view of market difficulties, the external financing limit has been increased from £122 million in 1982–83 to £160 million in 1983–84. The corporation has a continuing duty to make progress towards providing an adequate return on the capital employed in the industry.
  The shipbuilding industry has a difficult time ahead and management and work force will need to work together to gain orders. The Government will continue to support the industry's efforts and the Government will use the Bill, as and when opportunities arise, to bring in private sector partners to the industry covering all of its activities. The need for that is perfectly obvious to everyone in the country and in the House who is concerned about the future and the prospects of the shipbuilding industry. We are merely putting the industry on the same footing as its European competitors. That is one of the reasons for

  1023
  bringing the legislation before the House. It is a very important reason. Accordingly, I commend the Bill to my hon. Friends.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 285, Noes 213.

  Division No.79]

  [10.4 pm

  AYES

  Aitken, Jonathan

  Eggar, Tim

  Alexander, Richard

  Elliott, Sir William

  Alison, Rt Hon Michael

  Emery, Sir Peter

  Amery, Rt Hon Julian

  Eyre, Reginald

  Ancram, Michael

  Fairbairn, Nicholas

  Arnold, Tom

  Fairgrieve, Sir Russell

  Aspinwall, Jack

  Faith, Mrs Sheila

  Atkins, Rt Hon H. (S'thorne)

  Farr, John

  Atkins, Robert (Preston N)

  Fell, Sir Anthony

  Atkinson, David (B'm'th,E)

  Finsberg, Geoffrey

  Baker, Nicholas (N Dorset)

  Fisher, Sir Nigel

  Banks, Robert

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

  Beaumont-Dark, Anthony

  Fletcher-Cooke, Sir Charles

  Bendall, Vivian

  Fookes, Miss Janet

  Bennett, Sir Frederic (T'bay)

  Forman, Nigel

  Benyon, Thomas (A'don)

  Fowler, Rt Hon Norman

  Benyon, W. (Buckingham)

  Fox, Marcus

  Berry, Hon Anthony

  Fraser, Rt Hon Sir Hugh

  Best, Keith

  Fraser, Peter (South Angus)

  Bevan, David Gilroy

  Fry, Peter

  Biffen, Rt Hon John

  Gardiner, George (Reigate)

  Biggs-Davison, Sir John

  Gardner, Sir Edward

  Blackburn, John

  Garel-Jones, Tristan

  Blaker, Peter

  Gilmour, Rt Hon Sir Ian

  Body, Richard

  Goodhart, Sir Philip

  Bonsor, Sir Nicholas

  Goodlad, Alastair

  Bottomley, Peter (W'wich W)

  Gorst, John

  Bowden, Andrew

  Gow, Ian

  Boyson, Dr Rhodes

  Gower, Sir Raymond

  Braine, Sir Bernard

  Grant, Sir Anthony

  Bright, Graham

  Gray, Rt Hon Hamish

  Brinton, Tim

  Greenway, Harry

  Brittan, Rt. Hon. Leon

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

  Brooke, Hon Peter

  Griffiths, Peter (Portsm'th N)

  Brotherton, Michael

  Grist, Ian

  Brown, Michael (Brigg & Sc'n)

  Grylls, Michael

  Browne, John (Winchester)

  Gummer, John Selwyn

  Bruce-Gardyne, John

  Hamilton, Hon A.

  Bryan, Sir Paul

  Hamilton, Michael (Salisbury)

  Buchanan-Smith, Rt. Hon. A.

  Hannam, John

  Buck, Antony

  Haselhurst, Alan

  Budgen, Nick

  Hawkins, Sir Paul

  Burden, Sir Frederick

  Hawksley, Warren

  Butcher, John

  Hayhoe, Barney

  Carlisle, John (Luton West)

  Heddle, John

  Carlisle, Kenneth (Lincoln)

  Henderson, Barry

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

  Hicks, Robert

  Chalker, Mrs. Lynda

  Higgins, Rt Hon Terence L.

  Chapman, Sydney

  Hill, James

  Churchill, W. S.

  Hogg, Hon Douglas (Gr'th'm)

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

  Holland, Philip (Carlton)

  Clark, Sir W. (Croydon S)

  Hooson, Tom

  Clarke, Kenneth (Rushcliffe)

  Hordern, Peter

  Cockeram, Eric

  Howe, Rt Hon Sir Geoffrey

  Colvin, Michael

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

  Cope, John

  Howell, Ralph (N Norfolk)

  Corrie, John

  Hunt, David (Wirral)

  Costain, Sir Albert

  Hunt, John (Ravensbourne)

  Cranborne, Viscount

  Hurd, Rt Hon Douglas

  Critchley, Julian

  Irvine, Rt Hon Bryant Godman

  Crouch, David

  Irving, Charles (Cheltenham)

  Dickens, Geoffrey

  Jenkin, Rt Hon Patrick

  Dorrell, Stephen

  Jessel, Toby

  Douglas-Hamilton, Lord J.

  Jopling, Rt Hon Michael

  Dover, Denshore

  Joseph, Rt Hon Sir Keith

  Dunn, Robert (Dartford)

  Kaberry, Sir Donald

  Durant, Tony

  Kershaw, Sir Anthony

  Dykes, Hugh

  King, Rt Hon Tom

  Eden, Rt Hon Sir John

  Kitson, Sir Timothy

  Edwards, Rt Hon N. (P'broke)

  Knight, Mrs Jill

  1024

  Knox, David

  Ridley, Hon Nicholas

  Lamont, Norman

  Ridsdale, Sir Julian

  Lang, Ian

  Rippon, Rt Hon Geoffrey

  Langford-Holt, Sir John

  Roberts, Wyn (Conway)

  Latham, Michael

  Rossi, Hugh

  Lawrence, Ivan

  Rost, Peter

  Lawson, Rt Hon Nigel

  Royle, Sir Anthony

  Lee, John

  Sainsbury, Hon Timothy

  Le Marchant, Spencer

  St. John-Stevas, Rt Hon N.

  Lennox-Boyd, Hon Mark

  Shaw, Giles (Pudsey)

  Lester, Jim (Beeston)

  Shaw, Sir Michael (Scarb')

  Lewis, Sir Kenneth (Rutland)

  Shelton, William (Streatham)

  Lloyd, Ian (Havant & W'loo)

  Shepherd, Colin (Hereford)

  Lloyd, Peter (Fareham)

  Shepherd, Richard

  Loveridge, John

  Silvester, Fred

  Lyell, Nicholas

  Sims, Roger

  McCrindle, Robert

  Skeet, T. H. H.

  MacKay, John (Argyll)

  Smith, Tim (Beaconsfield)

  Macmillan, Rt Hon M.

  Speed, Keith

  McNair-Wilson, M. (N'bury)

  Speller, Tony

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

  Spence, John

  McQuarrie, Albert

  Spicer, Jim (West Dorset)

  Major, John

  Spicer, Michael (S Worcs)

  Marland, Paul

  Sproat, Iain

  Marshall, Michael (Arundel)

  Squire, Robin

  Marten, Rt Hon Neil

  Stainton, Keith

  Mates, Michael

  Stanbrook, Ivor

  Maude, Rt Hon Sir Angus

  Stanley, John

  Mawby, Ray

  Steen, Anthony

  Mawhinney, Dr Brian

  Stevens, Martin

  Maxwell-Hyslop, Robin

  Stewart, A. (E Renfrewshire)

  Mayhew, Patrick

  Stewart, Ian (Hitchin)

  Mellor, David

  Stokes, John

  Meyer, Sir Anthony

  Stradling Thomas, J.

  Miller, Hal (B'grove)

  Taylor, Teddy (S'end E)

  Mills, Iain (Meriden)

  Tebbit, Rt Hon Norman

  Mills, Sir Peter (West Devon)

  Temple-Morris, Peter

  Miscampbell, Norman

  Thatcher, Rt Hon Mrs M.

  Mitchell, David (Basingstoke)

  Thompson, Donald

  Moate, Roger

  Thorne, Neil (llford South)

  Monro, Sir Hector

  Thornton, Malcolm

  Montgomery, Fergus

  Townend, John (Bridlington)

  Moore, John

  Townsend, Cyril D, (B'heath)

  Morgan, Geraint

  Trippier, David

  Morris, M. (N'hampton S)

  van Straubenzee, Sir W.

  Morrison, Hon C. (Devizes)

  Vaughan, Dr Gerard

  Mudd, David

  Viggers, Peter

  Murphy, Christopher

  Waddington, David

  Myles, David

  Wakeham, John

  Neale, Gerrard

  Waldegrave, Hon William

  Needham, Richard

  Walker, B. (Perth)

  Nelson, Anthony

  Walker-Smith, Rt Hon Sir D.

  Neubert, Michael

  Wall, Sir Patrick

  Newton, Tony

  Waller, Gary

  Nott, Rt Hon Sir John

  Walters, Dennis

  Onslow, Cranley

  Ward, John

  Osborn, John

  Warren, Kenneth

  Page, Richard (SW Herts)

  Watson, John

  Parkinson, Rt Hon Cecil

  Wells, Bowen

  Parris, Matthew

  Wells, John (Maidstone)

  Patten, Christopher (Bath)

  Wheeler, John

  Pawsey, James

  Whitelaw, Rt Hon William

  Percival, Sir Ian

  Whitney, Raymond

  Peyton, Rt Hon John

  Wickenden, Keith

  Pink, R. Bonner

  Wiggin, Jerry

  Pollock, Alexander

  Wilkinson, John

  Porter, Barry

  Williams, D. (Montgomery)

  Prentice, Rt Hon Reg

  Winterton, Nicholas

  Price, Sir David (Eastleigh)

  Wolfson, Mark

  Proctor, K. Harvey

  Young, Sir George (Acton)

  Pym, Rt Hon Francis

  Rathbone, Tim

  Tellers for the Ayes:

  Rees-Davies, W. R.

  Mr. Carol Mather and

  Renton, Tim

  Mr. Robert Boscawen.

  Rhodes James, Robert

  NOES

  Abse, Leo

  Alton, David

  Adams, Allen

  Anderson, Donald

  Allaun, Frank

  Archer, Rt Hon Peter

  1025

  Ashley, Rt Hon Jack

  Forrester, John

  Atkinson, N. (H'gey,)

  Foster, Derek

  Barnett, Guy (Greenwich)

  Foulkes, George

  Barnett, Rt Hon Joel (H'wd)

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

  Beith, A. J.

  Freeson, Rt Hon Reginald

  Benn, Rt Hon Tony

  Garrett, John (Norwich S)

  Bennett, Andrew (St'kp't N)

  Garrett, W. E. (Wallsend)

  Bidwell, Sydney

  George, Bruce

  Booth, Rt Hon Albert

  Gilbert, Rt Hon Dr John

  Boothroyd, Miss Betty

  Golding, John

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

  Gourlay, Harry

  Bray, Dr Jeremy

  Graham, Ted

  Brocklebank-Fowler, C.

  Hamilton, James (Bothwell)

  Brown, Hugh D. (Provan)

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

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

  Hardy, Peter

  Brown, Ronald W. (H'ckn'y S)

  Harrison, Rt Hon Walter

  Brown, Ron (E'burgh, Leith)

  Hart, Rt Hon Dame Judith

  Campbell, Ian

  Hattersley, Rt Hon Roy

  Campbell-Savours, Dale

  Haynes, Frank

  Canavan, Dennis

  Heffer, Eric S.

  Cant, R. B.

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

  Carmichael, Neil

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

  Carter-Jones, Lewis

  Homewood, William

  Cartwright, John

  Hooley, Frank

  Clark, Dr David (S Shields)

  Hoyle, Douglas

  Clarke, Thomas (C'b'dge, A'rie)

  Hughes, Mark (Durham)

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

  Hughes, Robert (Aberdeen N)

  Cohen, Stanley

  Janner, Hon Greville

  Coleman, Donald

  Jay, Rt Hon Douglas

  Concannon, Rt Hon J. D.

  Jenkins, Rt Hon Roy (Hillh'd)

  Conlan, Bernard

  John, Brynmor

  Cook, Robin F.

  Johnson, James (Hull West)

  Cowans, Harry

  Jones, Barry (East Flint)

  Cox, T. (W'dsw'th, Toot'g)

  Jones, Dan (Burnley)

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

  Kaufman, Rt Hon Gerald

  Crowther, Stan

  Lambie, David

  Cryer, Bob

  Leadbitter, Ted

  Cunliffe, Lawrence

  Leighton, Ronald

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

  Lestor, Miss Joan

  Dalyell, Tam

  Lewis, Ron (Carlisle)

  Davidson, Arthur

  Litherland, Robert

  Davies, Rt Hon Denzil (L''lli)

  Lofthouse, Geoffrey

  Davis, Clinton (Hackney C)

  Lyon, Alexander (York)

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

  Lyons, Edward (Bradf'd W)

  Deakins, Eric

  Mabon, Rt Hon Dr J. Dickson

  Dean, Joseph (Leeds West)

  McCartney, Hugh

  Dewar, Donald

  McDonald, Dr Oonagh

  Dixon, Donald

  McElhone, Mrs Helen

  Dobson, Frank

  McGuire, Michael (Ince)

  Dormand, Jack

  McKelvey, William

  Douglas, Dick

  MacKenzie, Rt Hon Gregor

  Dubs, Alfred

  Maclennan, Robert

  Duffy, A. E. P.

  McNally, Thomas

  Dunwoody, Hon Mrs G.

  McNamara, Kevin

  Eadie, Alex

  McTaggart, Robert

  Eastham, Ken

  Marks, Kenneth

  Edwards, R. (W'hampt'n S E)

  Marshall, D (G'gow S'ton)

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

  Marshall, Dr Edmund (Goole)

  Ellis, Tom (Wrexham)

  Marshall, Jim (Leicester S)

  English, Michael

  Marshall, M (G'gow S'burn)

  Ennals, Rt Hon David

  Mason, Rt Hon Roy

  Evans, loan (Aberdare)

  Maxton, John

  Ewing, Harry

  Meacher, Michael

  Faulds, Andrew

  Mikardo, Ian

  Fitch, Alan

  Millan, Rt Hon Bruce

  1026

  Miller, Dr M. S. (E Kilbride)

  Smith, Cyril (Rochdale)

  Mitchell, Austin (Grimsby)

  Smith, Rt Hon J. (N Lanark)

  Mitchell, R. C. (Soton Itchen)

  Spearing, Nigel

  Morris, Rt Hon A. (W'shawe)

  Spellar, John Francis (B'ham)

  Morris, Rt Hon C. (O'shaw)

  Spriggs, Leslie

  Newens, Stanley

  Stallard, A. W.

  Oakes, Rt Hon Gordon

  Stewart, Rt Hon D. (W Isles)

  O'Halloran, Michael

  Stoddart, David

  O'Neill, Martin

  Stott, Roger

  Orme, Rt Hon Stanley

  Strang, Gavin

  Palmer, Arthur

  Straw, Jack

  Park, George

  Summerskill, Hon Dr Shirley

  Parker, John

  Taylor, Mrs Ann (Bolton W)

  Parry, Robert

  Thomas, Mike (Newcastle E)

  Pavitt, Laurie

  Thomas, Dr R. (Carmarthen)

  Penhaligon, David

  Thorne, Stan (Preston South)

  Pitt, William Henry

  Tinn, James

  Powell, Raymond (Ogmore)

  Torney, Tom

  Radice, Giles

  Varley, Rt Hon Eric G.

  Rees, Rt Hon M (Leeds S)

  Wainwright, E. (Dearne V)

  Richardson, Jo

  Walker, Rt Hon H. (D'caster)

  Roberts, Allan (Bootle)

  Wardell, Gareth

  Roberts, Ernest (Hackney N)

  Watkins, David

  Roberts, Gwilym (Cannock)

  Welsh, Michael

  Robertson, George

  White, Frank R.

  Robinson, G. (Coventry NW)

  Whitlock, William

  Rooker, J. W.

  Willey, Rt Hon Frederick

  Roper, John

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

  Ross, Ernest (Dundee West)

  Wilson, Gordon (Dundee E)

  Ross, Stephen (Isle of Wight)

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

  Ryman, John

  Wilson, William (C'try SE)

  Sandelson, Neville

  Winnick, David

  Sever, John

  Woodall, Alec

  Sheerman, Barry

  Woolmer, Kenneth

  Sheldon, Rt Hon R.

  Wrigglesworth, Ian

  Shore, Rt Hon Peter

  Wright, Sheila

  Short, Mrs Renée

  Silkin, Rt Hon J. (Deptford)

  Tellers for the Noes:

  Silkin, Rt Hon S. C. (Dulwich)

  Mr. Allen McKay and

  Silverman, Julius

  Mr. George Morton.

  Skinner, Dennis

  Question accordingly agreed to.
  Bill read the Third time and passed.

  British Shipbuilders Bill

    HOUSING AND BUILDING CONTROL [MONEY] (No. 2)
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act of the present Session to make further provision with respect to the rights of secure tenants in England and Wales and, in connection therewith to amend the objects of certain housing associations and housing trusts and to amend the law of England and Wales relating to the supervision of building work, the building regulations and building control, it is expedient to authorize—
    (1) the payment out of money provided by Parliament of any expenses incurred by the Secretary of State in providing assistance in relation to any proceedings or prospective proceedings;
    (2) the payment of any sums into the Consolidated Fund.—[Mr. Stanley.]

  Families (Government Policy)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
  10.18 pm
  Mr. Keith Best: Within a short space of time recently the family has once again been in the focus of public attention on two occasions. The first was the publication of "Families in the Future" by the study commission on the family. I pay tribute to the commission's work and to the responsible way in which it has brought the problems of the family under scrutiny. I am glad that the Department of Health and Social Security and the Social Science Research Council will continue to fund this body. The second occasion was an article in The Guardian of 17 February referring to confidential Cabinet documents emanating from the family policy group set up by the Prime Minister. Its purpose was as set out in one of the alleged confidential memos of Mr. Ferdinand Mount:
  "We are concerned with the overall well being of the family and not solely or specifically with the provision of welfare by the state and other public agencies (which is how Family Policy is sometimes interpreted)."
  In that same article reference was made to the Conservative manifesto of 1979, which stated:
  "We want to work with the grain of human nature, helping people to help themselves—and others. This is the way to restore that self-reliance and self-confidence which are the basis of personal responsibility and national success."
  It is no new idea that the family is the bulwark against the state and survives independently of it, and is therefore a bastion of freedom. Any politician who acknowledges this must be led to two conclusions. The first is that the state must not inhibit, indeed should encourage positively, family stability even though it is done at the expense of the state in terms of control, both financial and administrative.
  The second conclusion is that those who fall outside the definition of the typical family, or those whose family breaks down, need succor. That can be provided in some circumstances by voluntary organisations and friends, but in a welfare state where none should fall below the safety net of adequate food, heat, shelter and health care ultimately that succour must be provided by the state. Government who fail to do so cast the first stone against the family.
  If one peers through the heavy haze of hysteria that enveloped The Guardian article, we are in fact left with no more than the laudable proposition that, wherever possible, as many people as are capable should try to be more independent of the state, assume greater responsibility and, by corollary, greater freedom in the management of their own affairs. It is a Government responsibility to seek to create the correct environment in which this can occur, just as they must create a proper climate in which industry can prosper. It is refreshing to find the leadership of our party addressing its mind to these issues in the family policy group.
  What we in the Conservative party must never do, however, is to forget those who are weakest in society, physically and economically: the old, the very young and those who have fallen on hard times. To do so would be to turn traitor to our traditions and the history of our party, which has contributed so much to social reform and which has moulded my political philosophy.
  1028
  Let us take a lesson from the United States of America. Many ideas which are put forward here and are greeted with horror and animadversion are standard practice in the United States, which I visit regularly, and in which the individual has greater freedom than in any other society I know. Yet, as an American told me last weekend "You do not see people starving in the streets here, but you do there". The freedom of many cannot be fashioned out of the misery of the few.
  The Prime Minister's initiative may lead to the formulation of an explicit family policy, which at present we do not have, although the study commission on the family urges strongly the need for a family perspective. I believe that this is right but, of course, it begs the question as to what is the family? Certain trends stand out over the past 20 years. First, there has been an increase, in fact a doubling, of one-person households, typically elderly people living alone or young people on their own, often prior to marriage. Secondly, the proportion of all families that might be regarded as typical—a married couple with dependent children—has declined from 38 per cent. in 1961 to 32 per cent. in 1980. Thirdly, the number of one-parent families with dependent children has increased; they formed only 2 per cent. of all households in the early 1960s but made up 4 per cent. by the late 1970s. Are these changes desirable or inevitable? Is there anything that the Government can do by way of a comprehensive policy to strengthen what might be regarded as a typical family?
  I believe that there are certain measures that the Government can follow which seek to provide a greater stability for the family. In my speech on 17 December 1982 at c. 603 in a debate on family policy initiated by my hon. Friend the Member for Woolwich, West (Mr. Bottomley) I touched only briefly on the need to ensure that there are no fiscal disincentives to family life. Indeed, I should like to think that there were positive incentives. Unfortunately, that is not the case. As this area is not the responsibility of my hon. Friend I shall not develop it at length, but I know that he will pass my views to my right hon. and learned Friend the Chancellor. Clearly, we have to take into account the change from child tax allowances to child benefit, but families with children still suffer a heavier fiscal burden than others.
  Various ideas have been canvassed in a Green Paper "The Taxation of Husband and Wife" Cmnd. 8093, published in December 1980. This emphasises the difference of approach by the Inland Revenue and the DHSS in their treatment of married persons and co-habitees. Should we treat all people as single, even though married, or treat all cohabitees as married couples for tax purposes? In paragraph 66 of the Cmnd. Paper is the proposition
  "In practice, therefore, the choice for the basic tax unit seems to rest between the married couple (ie continuing to aggregate husbands' and wives' incomes) and an individual."
  What is unsatisfactory at present is that two Government Departments treat the same people in different ways.
  No debate in this House is complete without reference to child financial support and, in particular, child benefit. Fortunately, we no longer argue about whether child benefit and its beneficial redistributive effects are good or bad. The advocates of child benefit are on both sides of this House. It is the first of what many of us hope to be many steps towards a full tax credit system. We must now concentrate the argument, however, upon its level. The Child Poverty Action Group has submitted that there

  1029
  would have to be an increase of 55p in order to restore the benefit to its April 1979 level and that would cost £302 million in a full year. The value of £9 in 1955–56 fell back in the 1970s before rising to £9·30 in 1979–80. It has since fallen back to £7·60 for 1981–82. As a proportion of average earnings, the value of child support was also higher in 1979–80 than it is today. Compared, therefore, with earnings, the value of child support has not kept pace with rising living standards. When the Chancellor is considering his Budget, however, I hope that he will bear in mind one thing—that an increase in personal tax allowances, which we all expect and hope for, should be matched by a commensurate increase in child benefit, otherwise families with children will fall behind yet again.
  Because benefits have fallen behind and because taxation for families has increased more than that for single people—and among two-parent families 95 per cent. have earnings as their main source of income—a wife often has to go out to work to increase the family's earnings which, of course, increases taxation that is paid. At the moment we seem to be locked into a vicious downward spiral. What is the effect upon the children who, in legal matrimonial matters, are of paramount importance?
  There is no reason why spouses should not work, but there must be adequate support for children. There is no real acknowledgement of the fact that bringing up children is a full-time job in itself. One proposal from the family policy group was to encourage mothers to stay at home by at least removing fiscal discrimination against them, and that reputedly, was supported by the Chancellor. As every child can testify, and I do so strongly myself, there is nothing like a mother's love. A mother's presence is important to a child's development. Consequently, if women are to stay at home to satisfy that need to look after a family while it is growing up, thus sacrificing career prospects, either a tax credit financial allowance must be made available directly, or greater fiscal regard must be given to the financial position of the spouse. Otherwise we create family poverty.
  A large proportion of Britain's children live in poor families and, at present, their numbers are growing for different reasons. Long-term unemployment means that many children will spend part of their childhood within families which, therefore, depend on supplementary benefit that is hardly generous if, indeed, it is adequate. Excluding housing costs this year, it is £69·80 for a married couple with two children aged between five and 10.
  As the study commission on the family concludes
  "A combination of factors—unemployment, low wages and an increase in those family types most in need—means that today a large proportion of British children live either below the poverty line or near to it. The most recent figures show that 880,000 are in families with incomes of the supplementary benefit level and, altogether, there are some 2,360,000 children in families with incomes below 140 per cent. of the supplementary level."
  It is small wonder, then, that I ask the Government to concentrate on what I term "families at risk". Supplementary benefit is not a proper basis of permanent income for so many families, nor was it designed as such.
  It is the family that provides the great bulk of personal care for the elderly, and in that respect the family is far more important than the social services. I am glad that the
  1030
  Government have acknowledged that and are now doing a great deal in encouraging care of elderly people within the family. The public perception, however, is different and my hon. Friend needs to do far more to publicise that.
  I believe that there is an essential element of reciprocity in elderly people living with a family in order that they can take over some of the responsibilities of bringing up the children so as to enable the young parents to go out and enjoy themselves occasionally. In return, the elderly are cared for. I believe that we should let both young and elderly ask not what they can do for each other but what each other can do for themselves. I hope that my hon. Friend can tell me more of what we are doing to encourage people to care for the elderly within our homes. My own aunt can be fairly said to have devoted much of her life, thus denying herself certain pleasures and freedoms, to looking after my grandmother.
  That necessarily means that adequate home help and nursing assistance provision must be made. If that can be done, if more can be cared for within the home, then, while I accept that there will always be a need for homes for the elderly who have no relatives to care for them or who are very confused, it will be a pleasure to see institutions close.
  I hope that my hon. Friend will say something about the welcome announcement recently by my right hon. Friend the Secretary of State of £15 million being made available for intermediate treatment for children in trouble. We should not forget that many problems arise out of the concept known as the "latchkey child", whose parents are both out at work when he or she returns from school, to find an empty house and the temptation to go astray. As recently as 1921 fewer than one in 10 married women were working. Today, about half of all married women are in paid employment. Nowadays a woman can be earning as much as or more than her husband, and a woman may well enter married life with savings of her own. Yet women are still treated as subsidiary to men in taxation. Are not these ideas now outmoded?
  Children can also be at risk in a family from which one parent is missing altogether—the single-parent family—some 40 per cent. of whom have supplementary benefit as their major source of funds. I should like to acknowledge the assistance given by the Government already and, of course, it is important to ensure that supplementary benefit levels do not lose their real value but are maintained in line with prices.
  One cost that is particularly high is heat. I welcomed in November 1980 the increase in heating additions to their highest ever real value and more than fully price-protected. In the year from November 1982 more than £300 million will be spent on this. That is a real achievement. The old electricity discount scheme which last operated in the winter of 1978–79 helped only those with electricity. The new scheme concentrates on the poorest, including an entitlement to the lower rate of heating addition—£1·90 per week—for most supplementary benefit householders with children aged less than five. This measure will help many single-parent families. Moreover, the Government have improved the earnings disregard and there is now a day-care initiative for the under-fives which, again, will be of assistance. I repeat a plea. The Government have thought it right to provide pensioners with a £10 Christmas bonus to help them over the festive season. I believe that the single-parent families are a section of society that is equally, if not more,

  1031
  deserving of such treatment. A £10 Christmas bonus for single-parent families would cost £7·3 million in a full year and would enable many children to have a happier Christmas—with presents—than they enjoy at the moment. Only today, the secretary working in my chambers told me how she has to buy the Christmas presents for the two young children of her single-parent daughter as well as provide clothing, because the daughter cannot manage on her present income.
  Finally, I am sufficiently old-fashioned to believe that marriage should still be looked upon as forming the basis of the family in normal circumstances. Marriage carries many responsibilities, particularly on breakdown, which an increasing number of people feel does not result in fairness to both parties in many cases. But how many rights does marriage confer? It is time that we started giving more rights in acknowledgement of the responsibilities. When marital breakdown occurs we still need to do far more to investigate the prospects of reconciliation than is done at present and, when the break is irretrievable, we should concentrate on bringing the parties together to discuss and agree on many more aspects of financial provision and care and access for the children than there is machinery for doing within the existing structure of the courts. I welcome the publication of a consultative paper about the establishment of a family court, although many of us will never be satisfied until we ae something along the lines that was suggested in the Finer report. Nevertheless, this is a beginning. I hope, also, that we shall see the institution of a statutory conciliation service integral to the family court, since such a service has proved itself beyond measure in various places such as Brighton and Bristol.
  The concept of conciliation is important because a determination reached by agreement rather than by the court's arbitration is likely to be that much longer lasting. At present an inter-departmental committee on conciliation, as set up by my right hon. and noble Friend the Lord Chancellor, is considering evidence on conciliation. I was informed recently by my right hon. and noble Friend that it was hoped that the committee would finish its work by January this year, but the volume of work involved has caused the timetable to slip by only two months, and it is now expected that the report will be delivered to Ministers in March. No decision has yet been taken on the publication of the report, but Ministers are aware of the strength of feeling on this subject and will certainly take account of it. I hope that my hon. Friend the Under-Secretary of State will pass on my strongest representation that the committee's report should be available to hon. Members, in order that we may consider fully its implications, which will lead to a proper debate about the role of conciliation within the matrimonial jurisdiction of the courts.
  Ms. Jane Streather of One Parent Families has written to me expressing support for the Bristol courts' family conciliation service, which is threatened with closure unless the Government provide £40,000 for 1983–84 and guarantees funding for a further two years. She tells me that her organisation believes that a national network of conciliation services is necessary to take the bitterness out of divorce, promote the well-being of children, and save public money. Evidence demonstrates that expensive and sometimes destructive legal proceedings can be avoided by helping couples reach agreed decisions. Conciliation gives priority to children locked into parental battles over
  1032
  custody, access, housing and property. It is voluntary and confidential and can lead co reconciliation. One in six of the cases dealt with by the Bristol courts' conciliation service ended in saved marriages, even though solicitors were filing divorce petitions. A conciliation service saves public money, not only in obviating the need for court welfare officer reports but in rendering unnecessary the time spent on assessing legal aid applications. The cost of the Bristol service averaged £43 per head in 1981–82 whereas legal aid costs for High Court and county court proceedings averaged £403 per head in 1980–81. In the context of this debate, one of the most important aspects of conciliation is that it allows no State interference into private affairs and gives couples control over decisions and responsibilities.
  It was the Finer committee which wanted husbands and wives to be encouraged to agree through conciliation by a neutral third party rather than have a court decision imposed on them, and I hope that my right hon. and noble Friend will take on board the great strength of judicial and lay opinion in favour of such a course. In so doing he would be effecting no more than was called for by the Law Commission in its summary of recommendations on the financial consequences of divorce.
  "Everything possible should be done to encourage recourse to conciliation rather than litigation".
  In my submission to the inter-departmental committee, I stated that between 1 March 1981 and 30 September 1981 there were 30 referrals to the Brighton in-court conciliation service which led to 17 agreements reached, of which only two subsequently broke down. In Eastbourne/Hastings, of 18 total referrals 10 agreements were reached and only two subsequently broke down. I believe that conciliation has a vital role to play in the administration of justice in matrimonial jurisdiction and will be in the best interests of the potential litigants as well as making savings in costs.
  A family perspective by Government does not involve just the inevitable cry for more resources. It is something much more subtle. It requires a comprehension of the overall situation confronting families, particularly the families that are most disadvantaged, such as those that I have mentioned today. If the Government can demonstrate a commitment to that perspective and show that their measures are considered in the light of that perspective, a substantial advance will have been made in the stability of our society based upon the family unit which, after all, has endured longer than the House of Commons and longer than the oldest religion in the world.
  10.35 pm
  The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): If this debate were to have a subtitle, it would have to be "Perseverance Rewarded". It is perhaps within the knowledge of the Chair, as it is certainly within my knowledge, that my hon. Friend the Member for Anglesey (Mr. Best) was frustrated in an endeavour to raise this subject last month. With his usual persistence, he has returned to it today, and I am glad that he has done so. Apart from congratulating my hon. Friend on his persistence, I should also congratulate him on the number of words that he managed to pack into 15 or 16 minutes. I am not sure that I can match him in delivery or indeed in consequence to deal with all the points that he raised.
  My hon. Friend was kind enough to indicate—at least, I hope that this is what he was indicating—that it would

  1033
  not be right for me to comment at length on specific benefit levels and tax allowances or the structure of the tax system so close to Budget day.
  I was glad that my hon. Friend acknowledged the fact that in the past two or three years the Government have taken a number of steps which reflect the importance that we attach to some of the issues that he raised. We have fulfilled our pledge to maintain the November 1980 value of child benefit. The supplementary benefit scale rates for children have been improved by 100 per cent. for the under-fives and the 11 to 12-year-olds and by 65 per cent. for other children, compared with an increase in the retail price index excluding housing of only 56 per cent. in the same period.
  My hon. Friend also mentioned the relatively new policy of automatic heating additions for families with children under five. I could also add to the items that he mentioned the improvements that we have made in the family income supplement, including some improvements in eligibility directed especially towards single parents, as well as the real increase in one parent benefit and the strenuous and successful efforts that we have made to increase the take-up of that benefit.
  Whatever the family is—the concept is not always so easy to define as some people assume, it is certainly far more than simply a financial unit whose interests can be seen solely in terms of the size and level of welfare benefits. More than anything else, I believe, it is an institution whose hallmark is mutual care and responsibility of people for one another, and it is on those aspects that I shall concentrate.
  I was glad that my hon. Friend referred to the work of the study commission on the family and its recent report, "Families in the Future", as we certainly attach value to the work that it has done. That is why, in concert with the Social Science Research Council, the Department is funding a successor body to the study commission. We shall share the costs of the centre with the Social Science Research Council by providing a grant of up to £90,000 per year for three years, possibly to be extended. Among other tasks, it is intended to continue the valuable analysis of research and other data concerning families and public policy. We hope that it will be able to work on various suggestions that it has itself made of possible ways in which a family perspective may be maintained within Government.
  In considering what the Government can, are and should be doing to strengthen, support and assist the family, we must be clear on one thing. Government help can be a relatively minor activity compared with what families can do for themselves and for each other. Indeed, the policies of the Government concerning the personal social services are based firmly on a recognition that the family is the front-line provider of social care in the United Kingdom.
  Between the informal care provided by families, relations and friends and the statutory services lies the important contribution of the more formal voluntary systems of providing care. The various arms of Government provide considerable financial assistance to voluntary organisations, a large proportion of which are concerned with helping families or members of families who have problems of old age, mental handicap or growing up as responsible adults. The most recent figures
  1034
  show that central Government gave a total of about £140 million in grants direct to all kinds of voluntary organisations in 1981–82. The total of my Department was £13·75 million. In the same period, social services departments in England made grants of some £22 million to voluntary organisations. A significant amount of help is going to support this kind of activity. Within those totals, much is going to organisations specifically concerned with the kind of areas on which my hon. Friend touched.
  I wish to mention some of the initiatives that central Government have announced recently that in various ways will further help support and strengthen families and enable them in turn to assist and be in better contact with their members. Several of them were mentioned by my hon. Friend in his speech. I deal first with care in the community and joint finance.
  One of the main anxieties that has been expressed about my Department's policy of providing care in the community has been that sufficient funds would not be available to the local authority social services and other relevant local services to provide the necessary nursing and domicilliary support to the elderly, the handicapped and disadvantaged children when they came out of the institutions which have hitherto looked after them to live with or be nearer to their families and friends.
  Joint finance money is one of the main sources of such additional help and it has been possible since 1979–80 for the Government to increase the funds available from £34·5 million to an expected £96 million in 1983–84. That is a substantial increase. The 1983–84 figure includes an extra £6 million announced in July last year of which £1·5 million will be used to fund pilot projects to develop and assess the effectiveness of community care schemes. Over the next five years, we propose to make available up to £15 million for such pilot projects. We hope to extend the range of projects for which joint finance can be provided if legislation now being considered by the House is passed.
  Secondly, I refer to a recent initiative involved with mental illness in old age. To help the initiative proposed by the Health Advisory Service, the Government are providing an extra £6 million over the next three years. Each regional health authority has been asked to nominate by June of this year at least one development district where the extra money would help to create suitable services more quickly than elsewhere and which would act as an example to other districts.
  Thirdly, we have been making renewed efforts to get mentally handicapped children out of hospitals, which are not the right places for them to grow up. Health and local authorities have been asked to get together to review the needs of all such children in hospital and to set a date by which they expect to get each child out.
  Fourthly, and this is something to which my hon. Friend referred, there is the question of the under-fives. As my right hon. Friend the Secretary of State announced on 6 December, we are setting aside £2 million a year for the next three years to encourage projects to help such families. The money is intended mainly for use in the voluntary sector to assist projects to make child-minding more effective or to promote home visiting and community self-help schemes.
  One of the groups that we have especially in mind is the one-parent family group, to which my hon. Friend made several references.

  1035
  Lastly, I refer to the recent initiatives concerning children in trouble. The first of those is concerned with drug abuse. The sum of £2 million is being made available in 1983–84 to encourage new ways of tackling drug misuse and to provide support for parents, who are recognised as being very important in counteracting the effects of addiction. The special funds will help to implement some of the recommendations of a report on treatment and rehabilitation of the Advisory Council on the Misuse of Drugs.
  The other important initiative concerns intermediate treatment. The range of community-based facilities which has grown up over the past few years to help young people who have been in trouble with the law—which the Government want to develop more fully and which is known generally as intermediate treatment, or IT—is, we believe, of very considerable importance. Essentially, it is a way of dealing with young people in trouble that is half way between removing them from home to some residential or custodial institution, and leaving them at home under the passive supervision of a social worker or probation officer.
  The sorts of programme run under the IT umbrella vary widely, but they are all designed to involve the youngster in a range of positive activities under the guidance of concerned adults. One of the main advantages of such schemes is that they keep the child within the family and the community and thus do not multiply, in some cases, the disruptive consequences of removal from home. Local authorities have increasingly recognised the value of IT. They are expected to have spent some £9 million on it last
  1036
  year—20 per cent. more than the preceding year—and their expenditure is estimated to rise by a further 30 per cent. in 1982–83.
  We, too, as a Government have recognised the value of IT. This year, the Government increased the grants we make available to voluntary bodies for this purpose by some 40 per cent. in real terms to well over £1 million. Recently, as my hon. Friend knows, my right hon. Friend the Secretary of State announced that there would be a further substantial increase of £15 million over three years for a special development programme. Claims for this money may be made by inter-agency voluntary organisations, whether newly established or existing, to provide IT facilities for young people.
  I fear that the time remaining to me in this brief debate will not allow me to do full justice to everything that my hon. Friend has said about the law in relation to marital breakdown and the administration of the law. As my hon. Friend knows, some developments have been put forward about family courts in a consultation paper issued recently by the Lord Chancellor. I do not have time to comment as fully as I should like on what my hon. Friend has said about the importance of conciliation services. As he knows—and indeed, said—an interdepartmental commit-tee of officials is looking at these matters now, and it is, therefore, difficult for me to comment further tonight.
  I have ranged widely in my speech, just as my hon. did. For that I make no apology. I am grateful to my hon. Friend for having brought such wide-ranging matters to the attention of the House.
  Question put and agreed to.
  Adjourned accordingly at thirteen minutes to Eleven o'clock.

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

Lord Quinton
Anthony Meredith Quinton, Esquire, having been created Baron Quinton, of Holywell in the City of Oxford and County of Oxfordshire, for life—Was, in his robes, introduced between the Lord Vaizey and the Lord Thomas of Swynnerton.
Lord Prys-Davies
Gwilym Prys Davies, Esquire, having been created Baron Prys-Davies, of Llanegryn in the County of Gwynedd, for life—Was, in his robes, introduced between the Baroness White and the Lord Cledwyn of Penrhos.

Football Hooliganism: Control Measures
2.43 p.m.
Baroness Lane-Fox: 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 when they last held discussions with the association football authorities about violence at soccer matches.
Lord Skelmersdale: My Lords, my honourable friend the Minister for Sport reconvened last November the liaison group (of representatives from the Government, the Football Association and representative bodies) originally set up to oversee arrangements for the World Cup finals in Spain. This group meets frequently to discuss and agree measures to combat football hooliganism. The Minister regularly has discussions with the Football Association chairman, most recently on 10th and 15th January and 2nd February this year.
Baroness Lane-Fox: My Lords, in thanking my noble friend for that very encouraging Answer, may I ask him this question: is he able to confirm that, in areas where harsher penalties are imposed by magistrates, there is less violence than in other areas?
Lord Skelmersdale: Yes, my Lords, that is absolutely true. Recent examples include the West Midlands, where fines ranging from £200 to £450 have been imposed; also, there was a particular community service order totalling 150 hours and a prison sentence of two months plus 66 days for the non-payment of
748
previous fines. As a result, the West Midlands is very low in this hooliganism. The Magistrates' Association Sentencing Committee are circulating all magistrates with the results that I have just announced.
Baroness Lane-Fox: My Lords, may I further ask my noble friend this question: does he agree that one of the most effective penalties is to make offenders spend their time at attendance centres on Saturday afternoons?
Lord Skelmersdale: Yes, my Lords, I most certainly do. The other penalty that I am particularly keen on is the community service order.
Lord Underhill: My Lords, will the noble Lord the Minister agree that it is not solely a football problem but a social problem? May I ask the Minister whether he is aware that, as one who has for nearly half a century supported one of the friendliest teams in the Football League, where there is very little trouble, I believe that it is important that not only the chairman of football clubs but also the managers should be involved in this matter, because the conduct of players on the field is very important as well? In addition, supporters' clubs attached to football clubs ought also to be called into consultation.
Lord Skelmersdale: My Lords, I certainly take Lord Underhill's point. It struck me, as it has my honourable friend, that many of our great football clubs are in what are currently deprived inner city areas. The Government are going a long way to improve these areas.
Lord Inglewood: My Lords, is my noble friend able to let me know who pays for the very extravagant police power that one sees at football matches? Is it the clubs which pay, or does the cost, even at overtime rates, come out of the normal Vote? Is my noble friend aware that the numbers of men who are posted to football grounds to police the matches tend to leave large areas of cities and surrounding areas blank?
Lord Skelmersdale: My Lords, the policemen inside the ground are there at the invitation of the club concerned. I assume from this that the club pay for their time while the policemen are on duty. I must confess that I am not sure about this answer and I shall have to write to my noble friend.
Lord Somers: My Lords, does the noble Lord agree that, in view of recent events in Australia, this is not merely a football problem but, unfortunately it also extends to cricket?
Lord Skelmersdale: Yes, my Lords, but this Question on the Order Paper relates specifically to football hooliganism and to neither cricket nor Australia.
Baroness Bacon: My Lords, further to the question which was asked about the police, may I ask whether the noble Lord is aware of this aspect? It is not only the cost of the police involved but the fact that, on Saturdays, in areas round cities and in areas a long way

749
from the cities where the matches are taking place, there are hardly any policemen to deal with the crime that is being committed in those places, because they are all near the football ground.
Lord Skelmersdale: My Lords, I do not have first-hand experience of this, but I take the word of the noble Baroness for it, and I shall most certainly take it up with my right honourable and honourable friends in the Home Office.
Lord Mackie of Benshie: My Lords, is the noble Lord aware that Scotland was recently invaded by very large numbers of Welshmen, to the total delight of the inhabitants, and has the violence something to do, perhaps, with the shape of the ball?
Lord Skelmersdale: My Lords, it depends whether one takes one's mind off it.
Lord Gainford: My Lords, has my noble friend the Minister any information as to research on why supporters must indulge in this "yobbo-isation" and therefore on how to prevent it happening rather than having to impose heavy penalties after it has taken place?
Lord Skelmersdale: Yes, my Lords, research is going on. I am happy to be able to say that the Government currently have a research contract with Leicester University on the causes of football hooliganism.
Lord Wallace of Coslany: My Lords, is the noble Lord the Minister aware that, when one refers to supporters, the people who cause violence are not supporters? In the main, the troublemakers are organised gangs and it is the organised gangs that have to be sought out and summarily dealt with. So far as the cost of the police services is concerned, as one who is president of a very famous supporters' club known for its peaceful persuasion, I think that I am right in saying that the club have to pay the police for their services inside the ground. This is one of the problems which clubs face.
Lord Skelmersdale: My Lords, of course I accept the noble Lord's word on that. I am sure that he is right. Regarding whether it is the supporters or the supporters' club which is involved, I think that on very, very rare occasions it could be a small minority of people in the supporters' club, but almost entirely it would be outsiders, as the noble Lord suggests.
Baroness Trumpington: My Lords, would my noble friend agree that, although this Question may not concern Australia, football hooliganism in this country has done more harm to Britain abroad than almost anything else?
Lord Skelmersdale: Yes, my Lords; that is why we are taking the subject so seriously.
Lord Inglewood: My Lords, as my noble friend was not able to give a very satisfactory answer to my first question, may I ask whether he is aware that over the season police escorts must be provided on something
750
like 1,000 trains? May I ask him where he thinks these policemen can be drawn from?
Lord Skelmersdale: My Lords, my understanding is that it is not the policemen on the beat who are involved in this but British Transport Police.

BBC "Checkpoint": Ministerial Representation
2.52 p.m.
The Marquess of Ailsbury: 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 why, when invited by the BBC "Checkpoint" programme to provide a spokeman to deal with generalised complaints about the prison and legal systems, they failed to so so.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, the request was for participation by a Minister. By the time the programme producer had made clear what was wanted it was too late to make the necessary arrangements. Other help, however, had been given on what I must describe as a generous scale.
The Marquess of Ailsbury: My Lords, I thank the the noble Lord for that reply, but would he not agree that discussion in these fields goes down a road so predictable that the noble Lord's office boy could not have lost his way? Would it not have been very much better for this large but politically unsophisticated audience to have heard a few platitudes—such as the allocation of scarce resources, the failures of successive Governments and so on—rather than to have been left with an impression of lofty bureaucratic disdain so unlike the noble Lord?
Lord Elton: My Lords, had the programme succeeded in getting my right honourable friend they would not have been rewarded with platitudes. In fact, the exact nature of what was wanted was not revealed until Monday, 31st January, and that was only two days before the programme was broadcast. Regrettably, Secretaries of State are not available "off the shelf" in that way. That was why my right honourable friend could not participate.

Transport: Rural Areas
2.53 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 what action they have taken to encourage the provision of adequate transport services in rural areas.
Lord Lucas of Chilworth: My Lords, the Government are fully aware of the importance of transport

751
services in rural areas and are encouraging county councils in the use of their transport co-ordinating and revenue support powers to meet the needs of their areas. Through the 1980 Transport Act and our other measures we are fostering the development of new and flexible services, where they can help meet the needs of rural areas, and particularly where conventional buses are no longer viable. The noble Lord, Lord Gainford, will probably be aware of the many successful post buses, particularly in Scotland, and of the community buses and other initiatives in East Sussex, together with the social car schemes being run by the Women's Royal Voluntary Service and other bodies.
Lord Gainford: My Lords, I thank my noble friend for that lengthy and encouraging reply. May I ask whether he has any information as to how local communities are reacting to these improved services? Also, has he any assurance to give as to the provision of regular bus services where railways have been closed?
Lord Lucas of Chilworth: My Lords, my understanding is that those communities served by community buses or other services are greatly encouraged and helped by them. The Government would most certainly like to see further initiatives being taken in this area.
Lord Underhill: My Lords, would not the Minister agree that the de-licensing which was provided for in the 1981 Transport Act has proved a complete and utter failure as regards improving the bus services in rural areas? Would he not also agree that considerable concern is at present being voiced over the bus revenue support, as a proportion of the accepted expenditure for the transport supplementary grant, which has fallen from 19.2 in the year 1982–83 to 14.2 next year? Is he further aware that there has been particular concern, especially in the shire counties and in the National Bus Company, as to whether the authorities will be able to keep up their revenue support for the essential bus services?
Lord Lucas of Chilworth: My Lords, I could not accept that the trial areas and the de-licensing arrangements are totally ineffective. That is not the case, particularly in certain areas—Hampshire being one of them—which have made great use of the facilities provided. As regards the support, transport supplementary grant is only a small proportion of the finance available to county councils for that expenditure. I note, of course, the concern expressed by the noble Lord, Lord Underhill, and I will certainly bring it to the attention of my right honourable friend.
Lord Winstanley: My Lords, will the noble Lord and the Government take steps to encourage the extension of post bus schemes to other areas? Would the noble Lord agree that these services are of immense value to people in rural areas which are lucky enough to have post buses, such as the Lake District and parts of the Yorkshire Dales? Since those services are very valuable to people in rural communities and also of immense value to the Post Office itself, would it not be wise to encourage the establishment of more post bus services?
Lord Lucas of Chilworth: My Lords, indeed, yes, is the short answer. The regional transport officers, the county co-ordinating officers, are continually having discussions with the Post Office regional directors who are empowered to use their discretion in providing post buses for this purpose. However, the criteria are rather strict and it is not always practicable or possible to enlist the services of the Post Office, whose first priority of course is the carrying of mail.
Lord Glenkinglas: My Lords, would my noble friend bear in mind that the family of my noble kinsman who asked the Question and my own family live in the same part of the world, where the situation has been getting steadily worse, with no easy solution? Would he agree that the only thing that would help would be for any Government to stop putting up the price of petrol?
Lord Lucas of Chilworth: My Lords, I do not know exactly which part of the country the noble Lord is referring to. I cannot think that the Government are totally responsible for the price of petrol. In fact, most of the community bus services would be running on diesel and there is already a subsidy for the bus services of about £100 million in duty rebate.
Lord Clifford of Chudleigh: My Lords, is the noble Lord aware that the community councils and associations of parish councils in the South-West are very disturbed about the implications of the Serpell Report?
Lord Lucas of Chilworth: My Lords, that may be; but the Question on the Order Paper has nothing to do with Serpell and your Lordships will recall that we shall be debating that report next week. I am quite sure that we could deal with this point on that occasion if it should be raised.
Lord Cledwyn of Penrhos: My Lords, can the noble Lord confirm whether the bus grants to industry to help with bus replacement are in fact being phased out? Can he indicate how he thinks this will affect rural transport in particular? Also could he say clearly whether or not the grant to rural areas for bus services is being cut by 25 per cent.? Is that the case or is it not?
Lord Lucas of Chilworth: My Lords, I regret that I am not able to answer the noble Lord's first question. However, I can tell him that the 1983/84 TSG settlement accepted bids of £320 million for bus revenue support, which is an increase of 25 per cent. in cash terms over the previous year.

Falkland Islands: Injuries by Mines
3 p.m.
Baroness Macleod of Borve: 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 members of the armed forces have been injured by mines in the Falkland Islands since the end of hostilities.
Lord Glenarthur: Four, my Lords.
Baroness Macleod of Borve: My Lords, while thanking my noble friend the Minister for his reply, may I ask him whether any of the men have died as a result of their injuries, and whether the soldiers have returned to this country for treatment? May I also ask him whether he is aware of the admiration which is felt in this country for the diligence which the soldiers have displayed, and are continuing to display, in clearing mines on the Falklands which were left by the Argentinians?
Lord Glenarthur: My Lords, of the four servicemen injured by mines, one is currently receiving treatment at Queen Elizabeth's military hospital in Woolwich, two have returned to duty and one is on terminal leave prior to medical retirement. So far as my noble friend's second point is concerned, I am very grateful for it and will certainly ensure that her views, and those of your Lordships, are passed on to my right honourable friend the Secretary of State and, through him, to those concerned with this difficult and odd operation.
Lord Hatch of Lusby: My Lords, can the noble Lord tell the House whether any of these mines that are injuring British forces on the Falklands were manufactured in this country? If they were, can he tell us whether they have been sold, either directly or indirectly, to the Argentines since October, 1979, when the noble Lord, Lord Carrington, gave a warning about the dangers from the Argentines, as shown in the Franks Report?
Lord Glenarthur: My Lords, eleven different types of mines, including anti-personnel, anti-vehicle and anti-tank, have been identified as coming from five different countries—Spain, Italy, Israel, Argentina and the United States. I know that the noble Lord has a Question down on this subject in the course of the next week or so.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether any assistance—for example, by way of the provision of maps—has been given to this clearance by the Argentine Republic?
Lord Glenarthur: My Lords, maps are in existence that cover the known minefields within the area of the Falkland Islands. It is extremely difficult to locate all the mines, and the procedure at the moment is that those areas which contain mines are clearly marked off. Clearance work is not able to go on the whole time, because suitable means have not yet been found for identifying all the mines.
Lord Boyd-Carpenter: My Lords, I think my noble friend did not apprehend by question. I asked whether assistance had been given by the Argentine Republic.
Lord Glenarthur: My Lords, so far as maps are concerned, I am afraid I cannot answer my noble friend. But I can say that some help from volunteers from the Argentine in identifying minefields was forthcoming. But, of course, prisoners were not used in the clearance as this would have been contrary to the Geneva Convention.
Baroness Sharples: My Lords, can my noble friend say how many dogs are going out, as I saw on television last night, to help the troops in the Falklands to discover the mines?
Lord Glenarthur: My Lords, I am afraid I cannot answer my noble friend, but I shall certainly find out and let her know.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Bellwin will, with the leave of the House, repeat a Statement that is to be made in another place on the industrial situation in the water industry.
With the leave of the House, I should like, in the normal way, to say a brief word about the timing of the first short debate this afternoon, which is standing in the name of my noble friend Lord Boyd of Merton. Following the principle that the mover should be entitled to approximately 15 minutes and that the Minister should rise to reply no later than 20 minutes before the scheduled end of the debate, may I suggest that other speakers should limit their speeches to a maximum of eight minutes? Perhaps I may point out to your Lordships that if any noble Lord should speak for longer than that he will do so at the expense of later speakers in the debate.

Nuclear Material (Offences) Bill
Brought from the Commons, read a first time, and to be printed.

Staffordshire Bill [H.L.]
3.5 p.m.
The Deputy Speaker (The Earl of Listowel): My Lords, on behalf of my noble friend the Chairman of Committees, who is absent owing to illness, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time—(The Earl of Listowel).
On Question, Bill read a second time, and committed to the Select Committee.
The Earl of Shrewsbury The Earl of Shrewsbury rose to move, That it be an Instruction to the Select Committee to whom the Bill is committed that before allowing Clause 85(2) and the inclusion of the Stafford Shire Hall Act 1853 in Part II of Schedule 5 to the Bill, the effect of which is to permit the removal of the St. John's Market in Stafford to another location, they should carefully consider:
(1) the interests of the Stafford Market traders in the continuance of the market on its existing site; and
(2) the interests of the inhabitants of Stafford and the needs and requirements of the people using the market.
The noble Earl said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I

755
must first thank your Lordships for allowing me the opportunity to speak on this Bill. I should stress that I have no argument against any part of the Bill save for Clause 85(2) and the inclusion of the Stafford Shire Hall Act 1853 in Part 2 of Schedule 5, both of which seek to repeal that Act. If these particular passages are allowed to remain in the Bill and the Bill becomes enacted, then a body of traders in Stafford will have their livelihoods very seriously endangered, and there will be the very real risk that these people will be forced out of business. In addition, a very large number of townsfolk will lose a substantial number of suppliers on whom they rely, but they will also suffer great inconvenience. With your Lordships' permission, I will explain the facts behind my Instruction.
There has been a chartered market in Stafford since 1206, in the time of King John. Since then, 16 further charters have been granted up to 1827, followed by two further Acts of Parliament, culminating in a third Act, Stafford Corporation Act 1876. In 1853, through the generosity of local businessmen, St. John's Market Hall was built. The Stafford Shire Hall Act 1853 ensured that market traders could continue their businesses in the hall, and Sections 28 and 29 of that Act ensured that the shire hall could not be encumbered with mortgages or any charges by the council. This Act now stands in the way of the Stafford Borough Council, which has other plans for the property, which I will explain further.
At present, there are 120 small traders in Stafford, and they enjoy what is a prime shopping site. In 1979, Stafford Borough Council decided to develop the shire hall, and to do this it required that the market traders be moved to a new site at the rear of a proposed development. However, this site is, in fact, a tertiary shopping area, and is out of the way for the vast majority of the market traders' customers. There is a very great deal of local feeling against the borough council's requirements of the market traders, and, indeed, a petition was presented to Stafford Borough Council, signed by 26,557 inhabitants of Stafford, asking the council to leave the market traders where they were. Unfortunately, this petition was totally ignored by the borough council, and in January, 1982, the borough council sold the surrounding area to an institution for development, although under the Stafford Shire Hall Act 1853 the council had no such powers so to do. The market traders took their grievances to the High Court, and on 15th October, 1982, judgment was given in favour of the market traders against Stafford Borough Council. The borough council then took the case to appeal, and lost.
It is patently clear that, because the Stafford Borough Council has been unable to succeed in the courts in moving the market traders from their present prime shopping site to a tertiary shopping site, as it is blocked by the terms of the Stafford Shire Hall Act 1853, it now seeks to repeal that Act with the offending clauses in the Staffordshire Bill. Should it succeed, it will, of course, rectify its own mistakes and all will no doubt be well for it. But in doing so, it will effectively destroy the livelihoods of some 120 market traders and their employees, and will take away a good deal of the freedom of choice enjoyed by some 26,500 of its own ratepayers.
It would appear that the borough council wishes to act against the feelings of a substantial number of its ratepayers, and when the matter has already been dealt with successfully by the market traders' association in the courts it seems somewhat unfair of the council to attempt to repeal the Act as a last resort, enabling it to move the market traders, and thus seriously endanger their businesses. I urge noble Lords to give this Instruction their consideration. I beg to move.
Moved, That it be an Instruction to the Select Committee to whom the Bill is committed that before allowing Clause 85 (2) and the inclusion of the Stafford Shire Hall Act 1853 in Part II of Schedule 5 to the Bill, the effect of which is to permit the removal of the St. John's Market in Stafford to another location, they should carefully consider:
(1) the interests of the Stafford Market traders in the continuance of the market on its existing site; and
(2) the interests of the inhabitants of Stafford and the needs and requirements of the people using the market.—(The Earl of Shrewsbury.)
The Earl of Listowel: My Lords, so far as the procedural aspects of the Instruction moved by the noble Earl are concerned, I would only say that the Instruction is directed to provisions in the Bill which are already opposed by a petition deposited by the Stafford Branch of the National Federation of Market Traders. For this reason I can see no procedural objection to its acceptance by the House. I would add that it is usual for a Select Committee, when there is an Instruction, to make a special report of their conclusions to the House.
Lord Sandys: My Lords, as a Midlander I intervene very briefly to support my noble friend Lord Shrewsbury who a few moments ago so ably moved this Instruction. Brevity may be welcomed, so may I respectfully invite your Lordships to approve this Instruction and also to nourish the hope that the Select Committee may find time in the course of its deliberations to pay a visit to this ancient borough of Stafford and see the problem at first hand.
On Question, Motion agreed to.

Overseas Students' Fees
3.12 p.m.
Viscount Boyd of Merton Viscount Boyd of Merton rose to call attention to the fees presently charged to overseas students in British universities and other institutions of higher education with particular reference to the effect on Commonwealth students; and to move for Papers.
The noble Viscount said: My Lords, this is a short debate and many noble Lords want to take part—I am glad of that—so in any case my speech would not have been long. There is another reason why it should be even shorter. When I balloted for the place which has led to this debate I feared that any reply which the Minister made might not meet aspirations. However, the Statement made in another place by the Foreign Secretary and the one made here by the noble Lord, Lord Belstead, has transformed the situation. My first duty is to congratulate the noble Lord and his

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colleagues upon this change. A noble Lord said to me last evening, "They have shot your fox". I replied, "No shot could have been more welcome".
After the Statement, I must confess that my first instinct was to withdraw the Motion, because I am not all that keen on making speeches, but on reflection I thought I should not lose a good opportunity for myself and others to congratulate the Government and make other comments. We had also been told that an explanatory paper was to be issued, and this seemed to provide a good opportunity to discuss it.
So far as I am concerned, this is no moment for recrimination but an opportunity to join together in planning wisely for a much more hopeful future. I fear that it is not possible to ignore altogether what has happened. In November 1979 Her Majesty's Government announced that from the academic year 1980–81 overseas students would pay the full cost of tuition, in addition to the very heavy costs of lodging and provisions. This was done without consultation with the universities and with friendly countries who are deeply involved.
In April 1980 it was announced that, for fee purposes, students from EEC countries would be treated as home students. There were many strange consequences and one in particular has attracted much public attention. A Greek student from Athens, because of the EEC arrangements, will pay tuition fees of £480, while a Greek student from Cyprus, a Commonwealth country, will pay many thousands of pounds.
I agree that, when cuts are widespread and widely imposed over the country as a whole, student grants cannot be wholly exempted. I agree also that at that time the student subsidy policy was rather indiscriminate and needed to be changed, but few can deny that to increase fees by such a large amount and so abruptly was bad in timing and has been very unfortunate in result.
This decision created great controversy in Parliament and outside and several hundred questions have been asked in Parliament about it. The noble Lord, Lord Stewart of Fulham, initiated a debate here, and after the publication of the Overseas Students Trust Report no fewer than 160 Back Benchers in another place signed an Early Day Motion that the key recommendations should be adopted.
Many noble Lords have far more experience and knowledge of modern university problems than I, but my own modest involvement embraces the universities of Oxford and Exeter and close contacts with those in Leeds—with a thousand overseas students—and Hull, and also a considerable knowledge of Malaysian students and their problems and of the problems of students from Canada, in particular from British Columbia and Alberta, besides a close association at one time with the London School of Hygiene and Tropical Medicine. This school makes a great contribution to international co-operation over health. Last year, two-thirds of the overseas students offered places could not obtain the necessary funds. And in the field of human nutrition—a huge problem for the Third World—only two of the 12 candidates from overseas who were offered places were able to accept.
Another personal note is that in the 1950s I was very fortunate to serve for a very long time as Colonial Secretary. Indeed, a certain book of records, in which I must confess a personal interest, records me as the longest serving Colonial Secretary appointed this century—an honour which, since the department has been abolished, can never be taken away. In that capacity I had innumerable contacts with literally thousands of graduates and undergraduates from the Commonwealth who had come to British universities, where they found not only standards of excellence but long traditions of friendliness and hospitality. I was always very conscious of the fact that among the audiences I had repeatedly to address were people who in a few years' time would be in positions of authority in their own countries. This sometimes coloured the observations that I made.
Though we must not ignore the problems of countries other than the Commonwealth, perhaps in my few concluding remarks I may concentrate on the Commonwealth. I rejoice that the Commonwealth will benefit substantially by more than half of the £46 million made available. This will provide, as we know, a great many advantages. There will be more awards under the Commonwealth scholarship and fellowship plan, an expansion of the ODA programme to the poorer Commonwealth countries and a new discretionary award scheme. I am very glad that we shall attract students who will not only benefit themselves but will be of advantage to our own economy. Nor do I quarrel with the plan that a relatively small proportion of our aid will go to overseas students—a minute contribution in relation to all that we give in that field.
The plan also provides for an expansion of the ODA's programme in poorer Commonwealth countries. I particularly welcome the help that is being given. As for Malaysia, which at one time provided the greatest number of our students, I was glad to see how warmly they have greeted the recent announcement. Cyprus is recognised as a special problem. The shared funding scheme which is planned with Hong Kong seems to be a very sensible way out of these difficulties. I hope that this can be arranged for other countries. Nor, I hope, shall we forget the problems of Mauritius. Many Government departments are involved: the Foreign and Commonwealth Office, the Departments of Education and Trade and the Treasury. I hope that if not already evolved; machinery will be quickly evolved by which Government departments can work together without disagreements which hold up changes in policy.
There are various other observations which I should have liked to make, but, because of the Statement and the large number of speakers who wish to take part. I have no more to do but say how grateful we are, those of us who have been keen on this, for the help we have had from various bodies in the last year or two.
The policy on overseas students by the Overseas Students' Trust is a remarkable document and noble Lords who have not been able to read it will, I hope, do so. There is also an invaluable standing committee on student mobility chaired by Sir Roy Marshall, who is now Vice-Chancellor of Hull University; before that he was Secretary General of the Committee of Vice-Chancellors and Principals, and before that Vice-

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Chancellor of the University of the West Indies, where I was fortunate enough to serve on his council for a number of years.
I am also extremely grateful to many noble Lords in this House who have been helping in the past to get changes made in education grants. The noble Lord, Lord Beloff, is not, I think, in his seat but I should like to say what a major contribution he has made both in print and in speech. How happy he must be about this fund, not only because of this news but also because of the recent statement that the University of Buckingham, which he did so much to start, has been given university status and a Royal Charter.
Above all, thanks are due to the British Government, who have had the wisdom to change this policy, and not least to my noble friend Lord Belstead, for all he has done to help these wise and imaginative proposals. I beg to move for Papers.
3.21 p.m.
Baroness David: My Lords, I must first congratulate the noble Viscount, Lord Boyd of Merton, on being so lucky as to have his name drawn out of the hat at this propitious moment, just before the Government's Statement and the policy document—and I gather that the draw was made in front of the television cameras, too! I am also delighted that the noble Viscount did not withdraw his Motion, because there is a lot to be said about the document, which, after all, is all about how the fees are going to be reduced and how they are going to be changed.
Much as we welcome the Government's change of attitude on overseas students' fees and their recognition that it is in the national interest to provide more help to overseas students, we regret that the amount of money, particularly new money, is so small. The kind of headline to be seen in most newspapers on 9th February was, "£46 million for overseas students". It was misleading, as were some of the comments. For example:
"Universities and polytechnics will gain millions of pounds as a result of the Government's rethink on overseas students' fees announced this week."
That sum of £46 million is for three years; the Overseas Students' Trust suggested £35 million for one year; and only £25 million of that £46 million is new money, £21 million being a re-allocation of ODA funds. That leaves just over £8 million of new money per year, and that is not a vast amount.
We must remember that the existing subsidy of students who began their courses before September 1980 amounts to some £10 million to £15 million in the current year, and this will be reduced to £3 million to £5 million in 1983–84 as students complete their courses. So the net support for overseas students in new money in 1983–84 will not necessarily be increased as a result of the new policy. I hope that the Government, having made a start, will consider increasing the funds and developing their policy. There is recognition that the policy will be developed further in paragraph 9 of the document. When the noble Lord the Minister replies I hope he will tell us a little more about the plans and also about how the Government intend to conduct the regular review
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which they say will be required. How will the monitoring be carried out, and by whom? Can the Minister tell us in rather more detail than either the Statement or the document does how the concessions are going to work, how they are going to be implemented, whether the Government envisage all students benefiting from the new schemes, and whether it will be when they start their courses in the autumn of 1983?
According to the document, £13·7 million will go to Hong Kong, Cyprus and Malaysia, leaving £32·3 million for the whole of the third world and developing countries—not quite £11 million per year. Can the Minister say what numbers of students from developing countries are here now as compared with 1979? The inadequacy of help to the third world seems to me to be a grave weakness. The Foreign Office has felt the need to make concessions to Hong Kong, Cyprus and Malaysia for various reasons, but the international dimension—the North-South dimension—is not so much in evidence. The needs of the poorest countries are given less weight. Is the developing policy that we are promised going to expand in that area? Or are we to assume that the Government are not so much interested in the wider international scene and are concentrating on what is more immediately (to use their phrase) in the national interest, basing their policy largely on the responsibilities of the past rather than on opportunities for the future? I hope that the Minister will enlarge on this third world aspect, and how it fits into a coherent long-term policy.
To turn to the academic issues and the universities' aspirations to be international institutions of scholars and scientists, I want to speak particularly of postgraduates. Our provision for them is of the highest importance. Most countries except Cyprus have their own undergraduate provisions. Where we can give the most help is in the postgraduate sphere. I am told that one-year postgraduate awards are much needed; a sort of "topping up" year, particularly important in computer sciences and mathematics and as an introduction to research. Most grants are for three years—maybe unnecessarily. On the other hand, sometimes four years might be necessary. Flexibility is what is needed, and could consideration be given to this?
Paragraph 12.6 of the document deals with research interests, and this is the only section in the document which refers to postgraduates or, indeed, to the Secretary of State for Education and Science. The overseas students' research awards scheme has been a success; and may we assume from the passage at the bottom of page 8 that the scheme will be broadened and extended, and that the point I made just now about flexibility can be examined in this context? Paragraph 12.8 refers to marginal costs. There is no doubt that there could be many overseas students here if institutions were allowed to fix their own fees. The document says that it might be possible to accept the OST recommendation that fees should be set at no-subsidy levels covering the marginal expenditure incurred plus an apppropriate contribution for overheads. This is slightly less definite than one was led to believe from the Statement made on 8th February that,

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"the Secretary of State is favourably inclined towards the trust's recommendations".
Can the Minister please clarify that point and the Government's attitude? I am well aware that there must be consultations and that the maintained sector may find all this a very difficult exercise.
I know that my noble friend Lord Caradon is intending to speak about the Foreign Office and the general organisation of the scheme, and so I shall leave that to him. But I do wish to emphasise the imperative need for all the departments and Ministers involved to get together and co-operate. That is a point made strongly by the noble Lord, Lord Beloff, in a recent article in The Times, and I hope he will be making the same point again today. I did not get an answer from the Minister when I asked on 8th February whether the Department of Trade was co-operating in finding some money from its Vote, as the trust had suggested. It appears from the document that it is not doing so. That is a great shame, considering the trading intrerests involved in having overseas students here.
The trust's suggestions that there should be scholarships in areas of advanced engineering and technology on the Department of Trade's Vote, and that collaboration with industry and commerce should be explored, have a rather woolly and not at all convincing response in paragraph 15.2. I quote:
"Discussions with industry of a possible trade-related scheme under which the Government would provide some assistance for companies' expenses on overseas students did not make sufficient progress to justify setting up such a scheme".
It would seem that the Department of Trade, or the noble Lord, Lord Cockfield, would not play, because we know from a letter in the Daily Telegraph on 25th January from the chairmen of a number of big international companies that they were willing to play and had indeed already put in £12 million last year for sponsored training. But they asked for some investment from public funds, not unnaturally. I hope that pressure will be put on the department.
I believe that all of us here are totally convinced of the benefits to both sides of having overseas students here, educated alongside home students. We are of course very pleased that the Government have changed course and given their blessing to this scheme. Although it is a small scheme at the moment, we hope that it will grow and become a larger and more successful scheme.
3.29 p.m.
Lord Gladwyn: My Lords, the Government, in our opinion on these Benches, have a quite deplorable record on overseas students. Instead of reducing the admittedly excessive total number—that at one time threatened to put a strain on our resources—by, for instance, some suitable scheme of quotas discussed with all the educational establishments concerned, they firmly turned down the suggestions of the United Kingdom Council of Overseas Students Affairs and the Council for Education in the Commonwealth for some kind of commission to elaborate a sensible overall policy for submission to the Government. Instead of that they suddenly put up fees to cover what was always called the full cost of educating overseas students which, besides being based on largely bogus
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statistics, effected a drastic reduction in a savage and brutal manner which in the end, of course, favoured the rich and penalised the poor. Of course it also discriminated against all Commonwealth students who, unless excepted, had to pay the full cost.
All in all, it was a deplorable display of a shortsighted policy. Now, after three years of barely modified persistence in this unfortunate policy, the Government have had, to a limited extent, a change of heart. They have adopted a few—I repeat a few—of the recommendations of the excellent report of the Overseas Students Trust, which has already been referred to, and that, so far as it goes, is all to the good. But let me just say at this point that we entirely agree with the point made by Lord Beloff in The Times the other day, that it is the actual governmental machine which is at fault. We made suggestions for reforming this years ago. It has now been modified slightly, I believe, but we are still saying that we must get better co-operation than we have had up till now to get suitable and sensible decisions quickly achieved.
I have already said that the Government have had a change of heart, and in my original welcome of it in this House I am afraid I went too far. I find on further examination that the £46 million which they now, unless I am wrong, intend to spend in support of additional overseas students over three years, compares with the £35 million per year suggested by the Overseas Students Trust, which apparently had a considerable effect on governmental thinking. There is a great difference between what was suggested and what the Government have now agreed to.
The exact subsidy to students, who began their courses before September 1980 and are now in their fourth, fifth, or sixth years of study at the lower level of fees, amounts to £10 millions to £15 millions per year in the current year, and this subsequently will be reduced to some £3 million to £5 million in 1983–84 as students complete their courses, as the new arrangements, even if fully implemented, are unlikely to involve the expenditure of more than £10 million of the £46 million in the first year. I speak subject to correction, but I think that is so. Thus the net support for overseas students, albeit on a more selective basis, it is true, will not necessarily be increased as a result of the new measures.
Let us now take a closer look at the admittedly welcome concessions to Hong Kong, Malayasian and Cyprus students. These arrangements will necessarily be limited if they are to be provided for within the total budget allocation and the number of students being assisted under the whole package, which is apparently limited—again I hope the Minister will tell me if I am wrong—to 5,000 to 6,000 students. There were, after all, in 1980–81 no less than 19,700 students from these three countries in British universities, polytechnics and colleges of further education. Besides, if these countries have a good case for special treatment, so, obviously, have other countries in the Commonwealth, notably Mauritius, which has already been referred to.
What about support services? Will these be safeguarded and improved so as to cope with the increased number of students who are expected and, indeed, apparently encouraged? Will the FCO or the Department of Education and Science, and more

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especially the Home Office, be giving new guidance here, or will it be left to the voluntary bodies in conjunction with the institutions concerned, to maintain the necessary standards?
Finally, like the noble Viscount, Lord Boyd of Merton, I draw attention to Chapters 3, 4, 5 and 6 of the wholly admirable report on student mobility entitled Educational Interchange—a Commonwealth Imperative, containing the paper prepared by Sir Roy Marshall of Hull University on behalf of a number of distinguished persons headed by the noble Lord, Lord Carr of Hadley.
The first proposal is that the Commonwealth Scholarship and Fellowship plan should be strengthened and expanded and made more representative and Pan-Commonwealth by greater commitment from countries at present making small contributions—Britain offering to match such additional support by a proportionate increase in its own contributions. The committee says that it is,
"convinced of the value of exchanges among all Commonwealth countries. But we believe that more should be done during the present decade to increase the flow of scholars and fellows between developing countries and from developed to developing countries in the Commonwealth".
I ask the Government: do they agree with that recommendation? Are they likely to put it into effect?
To this end the committee's report made detailed proposals in the second section headed "The Commonwealth Higher Education Programme", one of the main features of which is the strengthening of appropriate parts or sections of higher education institutions in the Commonwealth countries, so that as many of them as possible become centres of advanced study and research. These centres should be in a form consistent with national development plans and the centres should be able, willing and ready to serve more than national needs—that is to say, to contribute to the needs of other countries in the region.
The report emphasises, of course, that there is nothing in all this which would prejudice bilateral aid arrangements for the development of post secondary education in Commonwealth countries, but there should also be multilateral aid and the Commonwealth scholarship and fellowship plan should play a key role both here and in its own right, and in conjunction with other multilateral agencies. Do the Government favour this very intelligent proposal? Or do they not favour it? We should like to know.
The agreement reached by the Commonwealth Heads of Government in Melbourne was that activities carried out by the Commonwealth for the scholarship and fellowship plan should be restored by 1983–84 to the level obtaining in 1978–79, and that necessary resources should be made available over the three year-period. This implies that Her Majesty's Government will find some of the necessary funds, and I hope to hear from the noble Lord who winds up this afternoon whether they are willing to do so. That is a very important point.
I trust, finally, that the Government will in any case pay the most serious attention to these and other excellent suggestions and, indeed, take up one or two more of the suggestions made by the Overseas Students Trust which, if adopted, would substantially
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lessen the great resentment felt up till now in Commonwealth circles as a result of the policy that the Government have pursued uninterruptedly up to the present time. It is still not too late for the Government to mend their ways and, having made some, if only rather inadequate, concessions as regards overseas students generally, they may perhaps, be in the mood to agree to some far-reaching reforms as regards those poor students coming, more especially from the poorer Commonwealth countries.

The Water Industry Dispute
3.38 p.m.
The Minister of State, Department of the Environment (Lord Beliwin): My Lords, by leave of the House I beg to repeat a Statement being made by my right honourable friend the Secretary of State for the Environment in another place. The Statement reads as follows:
"With permission, Mr. Speaker, I wish to make a statement to the House about the water industry dispute.
"The House will note that following the findings of the chairman of the Committee of Inquiry set up by ACAS, agreement was reached last night in the National Joint Industrial Council for a settlement of the pay dispute and an end to the strike.
"The terms of the settlement are as follows:

(i) the increase in the base rate should be 7·3 per cent. over 16 months, equivalent to 5·5 per cent. on an annual basis. This is exactly as recommended by the mediator on 23rd January;

(ii) a number of the employers' proposals made in their offer on 6th February were adopted. These were improved payments under the national productivity scheme equal on average to approximately 55p per week; an extra day's holiday for employees with 10 years' service; the introduction of a scheme for the payment of wages by cash transfer, for which the chairman proposed £75 rather than the employers' offer of £50 as a single lump sum payment; and a minimum rate of £5 for employees taking part in local schemes for greater flexibility in working hours rather than the £4 offered by the employers which will apply to only a limited number of employees. In addition, there will be with effect from 1st April 1984 a one-hour reduction in the working week.

(iii) the chairman's findings and the settlement go beyond what had previously been on offer in only two significant respects—

(a) £5 bonus payments are to be consolidated into the basic rate, which will increase average earnings by about 2 per cent. and

(b) the service supplement payable to those with over 5 years' service is to be paid to those with more than 2 years' service and to be raised, as in the employers' offer, from 2·5p per hour to 5·2p per hour. This adds 0·4

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per cent. to average earnings over and above the employers' previous offer.

"The House will note that the chairman made no recommendation in support of the union's central claim for comparability with other groups.
"I should now tell the House the present position in the country. Ninety-one thousand properties are without normal mains supplies and 8.2 million people have been advised as a precaution to boil water. The quality of effluent from many sewage treatment works has deteriorated, but there have been very few serious effects on rivers. The House will appreciate the hardship and distress represented by the figures. Nonetheless, it will also recognise the fact that after 4½ weeks' strike over 99 per cent. of users continue to receive their water supplies. The water authorities and companies deserve every credit for this substantial achievement in keeping their systems running. The exceptional efforts of their staffs have maintained this essential service and safeguarded public health, and I pay full tribute to them.
"But, having said that, the House will recognise how damaging this dispute has been for all concerned. The water authorities and companies have been unable to maintain their normal service to all their customers, many of whom have suffered real hardship. The manual workers went ahead with the strike in spite of an offer worth more than £10 per week on average. They have gained little more than £3 per week on average on top of that offer. In the process they have lost many hundreds of pounds. For many of those involved it will take two to three years to recover the difference. The cost of the water settlement cannot be found by raising water charges this year. Nearly all the water authorities have already set their budgets for next year. It will have to be met by further economies in operating and manpower costs.
"The message of this dispute is clear. In industrial action of this kind there are no winners. There were always arbitration procedures available in the industry to resolve this dispute without a strike. The employers offered this on 11th November and again throughout the dispute.
"This has been an unnecessary strike. I trust that normal working will be resumed immediately and a full service restored to every customer as quickly as possible."
My Lords, that is the end of the Statement.
3.42 p.m.
Baroness Fisher of Rednal: My Lords, may I thank the Minister for reading to us the Statement that was given in another place. The Minister has spelled out quite clearly the terms of the settlement, and of course those were published fully and in great detail in today's national press. Therefore, I do not wish to dwell on the figures or the percentages, because the Minister obviously has to use the figures to his best advantage, to damp down any suggestion that the Government have retreated from their pay policy. The Minister draws attention in the Statement to the financial loss that is incurred by individual manual workers. What I would say to the Minister is that principles are not always equated to pounds, shillings and pence.
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The Minister in his concluding remarks said that "this has been an unnecessary strike". We on these benches would agree entirely with those words "unnecessary strike". We would argue that the dispute should never have happened, that it was mishandled from the start, and that criticism can quite easily be levelled at the Government for their role in the affair. We on these Benches would agree that great inconvenience has been caused to some consumers; but it should also be recognised that that inconvenience was minimised because of the emergency cover and the code of conduct operated by the trade union movement. It is to be hoped that with the return to work tomorrow amicable relations at all levels will be quickly restored, and that there will be no threats and no victimisation.
We on this side would draw the Government's attention to the significance of the findings being carried under the sole signature of Mr. Johnston the chairman. We should like to praise him for his exemplary skill and the speed of his decision. My final word to the Minister would be to remind the Government that Mr. Johnston was called on the field as an umpire and he has made a decision. To all those noble Lords in the House who are football supporters, I would say they must acknowledge that the referee's decision is final.
3.45 p.m.
Lord Rochester: My Lords, from these Benches we would like to join in thanking the Minister for having repeated the Statement. We, too, are glad that a settlement has at last been reached in this long-drawn-out and damaging dispute. Maybe none of the parties involved emerge from it with much credit. Certainly, as the Statement says, there are no winners; we are all losers. Clearly the need now is for normal working to be resumed as soon as possible.
For the rest, are there not lessons to be learned from the absence of workable pay determination policies in the public services, and particularly in those which are essential to the support of life? As dispute has followed dispute in one such service after another in recent years, has it not been demonstrated that when the pay of any one group is examined in isolation attention is focussed on the problem from the viewpoint of the particular people concerned rather than from that of others affected by it? There are many people besides water workers employed in these key occupations, including gas and electricity workers, who are next in the pay queue. For our part, we still have to see what the knock-on effects of this settlement, about which we are seriously concerned, will be on them.
Has not the time come at least to consider whether, despite the attendant difficulties—and I do not underestimate them—agreed long-term procedures should be established over the widest practical area under which, when negotiations concerning the pay and employment conditions of any such group result in failure to agree, the dispute could be referred to a single independent third party for decision? If in a free society people employed in these key occupations perceive themselves to be treated unfairly, how, except by some such means, can they be persuaded to behave with sufficient responsibility to ensure that the community does not suffer continuing disruption?
Lord Bellwin: My Lords, I am grateful to the noble Baroness and the noble Lord for their comments. If I may very briefly respond, the noble Baroness, Lady Fisher, said that I presented the figures to the Government's best advantage. I was presenting the figures; whether they are to the Government's, the trade union side's, the National Water Council's or anybody else's advantage is something I cannot control; I present the figures as they are. The noble Baroness said that principles are not always equated to pounds, shillings and pence. I would probably agree with her philosophy, if that is what it was; but I think that this whole dispute, like so many other disputes, brings into account philosophies and all that goes with them, and I fear I cannot be helpful by proceeding down that road.
The noble Baroness said that the dispute was mishandled from all sides. I seem to recall that I have heard that said about every dispute I know of. It is merely a question of degree. Some would say more or less in different circumstances. The noble Baroness said that criticism could be levelled at Government. Criticism is always levelled at all Governments all the time. I would not take anything from her on this particular issue as I am sure she will expect. Yes, I do take her point that the inconvenience to users was minimised by the trade unions who gave emergency cover and the like. Of course, that is certainly so and I gladly agree. I also agree with the noble Baroness that there should be no threats of victiminisation. That never gets anyone anywhere. I do not believe that there is cause to expect that there will be. I have not heard anything that would indicate that.
As regards the umpire's decision and the referee's decision being final, I am sure it is. Everyone said that it would be on this occasion, and again I have heard nothing to indicate to the contrary. The noble Lord, Lord Rochester, said that there were lessons to be learned. Indeed, one would hope that the lessons would be learned. One always hopes that that is so after a strike of this kind. I fear, if I may speak for myself, that I sometimes wonder whether lessons are learned, but time will tell.
As regards a knock-on effect, of course there is bound to be concern about that. I would only say that the concern should also be about who pays at the end of the day. It is all very well simply to talk about the water authorities paying, but the fact is that I gave instances which indicate that the workforce will be paying quite a price for what has happened. The industry will pay quite a price. Will it be the users who will have to pay? Perhaps not in the current year because the budgets are finalised, but the money must come from somewhere. It will come from manpower and it will come from other ways of doing things, but, yes, a price will have to be paid. There is nothing for nothing.
The noble Lord made the point of whether we should go to third parties for a decision. When the noble Lord has the answer to how one overcomes those disputes in such a way as to prevent them from being as damaging and harmful as they are, he will have found something that I and many others would love to hear about.
Baroness Seear: My Lords, in the Statement, as I understand it, a considerable amount of the increase is to be given in exchange for increases in productivity and changes in working practices. Can the Minister assure us that we shall have evidence of the increases in productivity and changes in working practices before payments are made, or are the increases being made in anticipation that these desirable consequences will follow? Further, the press has used the figure of a 12 per cent. increase. Is it the Minister's calculation that this is in fact what the settlement amounts to? If that is true, we have paid an extremely heavy price for this settlement. It is nearly half as much again as the increase in average earnings over the past year and is practically double the inflation rate.
Lord Bellwin: My Lords, as to the first point concerning evidence of increases in productivity and whether this will have to be shown prior to payments being made, I think not. I think that I read out from the Statement quite a list of items which attract these additional payments. I would not be able to say that any productivity benefits would be there before the increases were paid. They will be paid and, as always, there is the hope that there will be increases in productivity. But on guarantees that this will be so beforehand, I think that I will have to say "no".
As regards the 12 per cent., that in fact is the union's figure and it is the unions who should explain just how they have arrived at it. I am told that the NWC would be very interested to know of it. The figure I have is 10.4 per cent., but I stress that that is over 16 months so that the extent of the increase that so concerns the noble Baroness, and others, is not as great as she fears. I think, if my sums are right, that the 10.4 per cent. over the 16 months equates to 7.8 per cent. over 12 months.
Lord Diamond: My Lords, now that it has become, and is becoming, ever clearer that the Government's stance on incomes policy is not proving effective, may I, echoing largely what the noble Lord, Lord Rochester, said, ask the Minister when the Government are proposing to bring forward a scheme or series of proposals to this House which will aim at enabling groups of workers to have their comparative remuneration judged in relation to all other groups of workers at one time and not seriatim? When is the noble Lord proposing to bring forward such proposals, because that is what lay at the heart of this strike and that matter is still unresolved?
Lord Bellwin: My Lords, the noble Lord, Lord Diamond, refers to the Government's stand on an incomes policy. I believe I am right in saying that the Government do not have a stand on incomes policy. We do not believe in an incomes policy as such. That policy has not been found in the past to work at all and we have no reason to believe that it will be any more successful in the future.
The noble Lord asks when the Government will bring forward a scheme enabling groups to have comparability and so on. I think that is a word that has not added greatly to the benefit of either the workforces or the country as a whole in the past. The fact is that it leads to leapfrogging and to assessments

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which are simply and very frequently palliatives merely to get over the situation. To have an overall programme, which I believe the noble Lord is referring to, is certainly something which, so far as I am aware, the Government have no intention of embarking upon at the present time.

Overseas Students' Fees
3.58 p.m.
Debate resumed.
The Lord Bishop of Coventry: My Lords, may I with some apprehension try to bring your Lordships' attention back to the subject of student fees? My own interest in this particular subject stems from two sources. The first is that before joining the Bench of Bishops I was head of an institution of higher education, and therefore I have had first-hand experience of dealing with overseas and, more particularly, Commonwealth students. Anyone with that experience knows what enormous loyalties are forged in this country and what a strong ambassadorial role such students perform when they return to their own countries.
The policy of full cost fees obviously has had the effect of reducing students, but that, I submit, is not the important area in this respect. It is in the area of good relations, of Commonwealth loyalties, where the greatest damage has been done. This is an area which does not permit of precise calculations. It has had the effect, no doubt unwittingly, of denying a very honourable tradition in our British universities and colleges.
Secondly, I speak as a Bishop and Members of this House may remember that there was a unanimity of concern on the part of Bishops in the British Isles. I quote from a letter which was sent at that time to the Foreign Secretary:
"The welfare and proper development of many overseas countries depends upon the building up of an educated leadership, and we believe that this country's continued contribution to that end. through the availability of educational opportunities, far outweighs any economies that may be effected by the present proposals".
That contribution of building up an educated leadership is what has been put in jeopardy by the 1980 proposals. It has been a sad experience, more especially when we realise that we may be passing over that particular contribution to other countries, and therefore will lose a sphere of influence.
With those fears in mind I wish to welcome the measures announced by the Foreign Secretary in the House of Commons on 8th February. Not only should they attract more overseas students to this country, but they will be seen, I hope, as a much more friendly attitude to those countries which have been greatly hurt by the 1980 policy.
In the study undertaken by the Overseas Students' Trust the underlying philosophy was said to be one of looking at overseas student policy as essentially an aspect of overseas policy generally, and that it should be framed within the wider context of Britain's international relationships and responsibilities. The study says:
"Britain has numerous interests at stake in this field, with potential benefits to be realised in the areas of diplomacy and
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cultural relations, trade and commerce, higher education and research, Britain also has responsibilities both as a wealthy nation in a world that is largely poor, and as a former colonial power, still the hub of an independent Commonwealth. It is therefore necessary for Britain to recognise and assert the importance of encouraging overseas students to come to the United Kingdom and to adopt a positive, welcoming stance towards them.".
I agree with that, but in case this sounds a little like perpetuating a colonial cultural package, let it be said clearly and emphatically that the overseas students themselves make a very important contribution to our institutions of higher education, and we are the beneficiaries. Inasmuch, therefore, as the study's philosophy can be discerned in these new measures, they are warmly to be welcomed.
The Churches themselves have been prominent among those working for mitigating the measures promulgated two years ago. They have taken the line, however, not of criticising or arguing against the economic merits of that policy, but have rather concentrated upon those features which seem to them obviously unjust. It remains to be seen what precise effect the extra funding will have in practice, and fears of course have already been expressed that it is too little too late to undo the political and developmental damage that the policy has caused. We hope that this will not be so, but probably the least acceptable feature of the former policy, which apparently has not been amended and which we feel therefore will need continued resistance, is the discriminatory charges for a student from a third world country who must—depending upon the subject that he chooses—pay between £2,700 and £7,000 in fees for the next academic year, while someone from the EEC will pay only £480 on any undergraduate course. I hope that the Foreign and Commonwealth Secretary will give attention to this blatent inequality and do something to redress the balance in favour of Commonwealth country students.
Let me balance that plea by saying that the main thrust of the new proposals is one of British self-interest. Nevertheless, the inclusion of additional awards for the Commonwealth Scholarship and Fellowship Plan and for the bilateral aid programme must be seen as a step in the right direction. This represents a major boost for Commonwealth countries. No doubt it will still be some time before we know how students are to be identified for selection and just how many student months are to be financed, but there is now hope generated by these new measures.
I said earlier that the real concern of this debate could not be measured by statistics but was rather in the realm of international friendships and Commonwealth ties, of prestige and leadership. I believe that there has been a reduction, a significant reduction, in the number of students, although I think it is true from recent studies that have been made of recruitment from 10 Commonwealth countries that the predictions made by the Government about keeping up student numbers have, in fact, not been all that wrong. But having conceded that, it remains the case that the harm done in terms of broken trust and disillusioned friendship has been very considerable and is undiminished as conveyed by, among others, overseas Church leaders.

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Therefore, it is greatly to be hoped that the new announcement signals a change of heart towards our erstwhile friends. It is a first step, and it must be repeated and emphasised that it is but a first step, towards a much more acceptable and coherent policy. But it is essential that these proposals be acted upon and that they be not allowed to atrophy. We hope that a series of beneficial amendments to the policy, including the concession for specific categories of Commonwealth students, as recommended by the Commonwealth Standing Committee on Student Mobility, will be ushered in. With those caveats, I believe that these proposals are to be warmly welcomed.
4.7 p.m.
Lord Garner: My Lords, in spite of the exigency of the timetable, I am sure that it will be the wish of the whole House that I congratulate the right reverend Prelate the Bishop of Coventry on a very remarkable and extremely vigorous maiden speech. In a sense, this is for me also a maiden speech as it is the first time that it has fallen to my lot ever to speak immediately after a maiden speaker. I am particularly happy that I am able to do so on this occasion and to thank the right reverend Prelate for giving us such a broad and firm picture of the scene as he sees it, and for expressing so vigorously his hopes as regards what the Government announcement may lead to in the future. The remarks that I shall make will be very much in line with those thoughts.
I want in the main to welcome the Government announcement, but at the same time we ought not to forget the very serious damage that we have done to ourselves over recent years—first, politically in our relations with countries overseas and particularly with the Commonwealth. My goodness! when we cause such bitterness in a country like Malaysia something has really very seriously gone wrong. Secondly, as regards education we have deprived ourselves not only of having a number of students who might otherwise have come here, but of the advantage that comes from international exchange in our own universities and schools. Thirdly, the way in which matters operated hit with particular ferocity some of the institutes of higher learning in this country. I think particularly of SOAS about which we may be hearing later, but I mention also the Royal Postgraduate Medical School at Hammersmith, with which I was connected. Undoubtedly since the 1980 decision they have felt that they lost in reputation, they lost academically, they lost goodwill, and they lost financially. The school was forced into making a series of drastic reductions and was placed under very considerable strain. There is no doubt that its ability to carry out its main programme of training and research was seriously affected, and I am sure that that was true of a number of other establishments as well.
In addition, of course, there were many inequalities and anomalies in the way in which matters operated. Therefore, I do not think that we ought to disregard the fact that what did happen was in my view wrong in terms of international relations, in terms of Commonwealth co-operation, in terms of education, in terms of logic and I would add, indeed, in terms of morality.
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One failing that was brought out in our practice at that time was that there was really no coherent and co-ordinated policy. The trust report rather more politely, perhaps, said that there was no focus on policy. One of the reasons for that, and it has already been touched on, was that there was too much infighting in Whitehall, with each department pressing its own particular case and being allowed to get away with its own concerns, with no overall guidance on policy. In particular, wider considerations very often had to give way and were not properly balanced against the financial arguments.
For a time an overlord was appointed in the person of Sir Anthony Kershaw, who did an extremely good job, but for reasons which I have never fully understood, or which certainly have never been fully explained, that appointment lapsed and was never revived. That OST study recommended continuing machinery to co-ordinate official action and to develop policy, with the FCO playing an initiating and co-ordinating role. Those final words are, to my mind, very important, because clearly the FCO voice has not always been listened to in the past or had all the effect that one might have hoped.
We are gratified to see the firm way in which the Foreign Secretary has grasped the situation now and is supporting the present proposals. Of course, we all know of the keen interest of the noble Lord who is to wind up the debate and of his long experience in various departments in this matter; we know the warmth of his heart, which we are sure is always working in the best interests. I do not expect the noble Lord to comment on what I have somewhat irreverently said about the past, but when he winds up perhaps he will give us some assurances about the future and particularly about the role that he sees the FCO and FCO Ministers playing in the future.
It is very easy to criticise the announcement. One can say that it is merely tinkering with the problem; that it is only a response to pressures; that there is no real substantial new money and, indeed, no bold and new scheme. Nevertheless, I choose to take the view that it marks a most welcome change. It is instructive to see how this came about. Partly, of course, it was a response to the inherent justice of the case and also to the very considerable pressure that there was both abroad and at home, and perhaps not least in your Lordships' House. But above all it was a response to the Overseas Students Trust.
It is interesting, and I think perhaps characteristic of the way in which we British conduct our affairs, that A Policy for Overseas Students was prepared not by the Government but by an independent, privately financed body. Of course, it is fair to say that the Government gave all possible co-operation and in return, of course, the trust formulated its proposals in a very practicable form and in a way that was most likely to appeal to the Government. I think that this operation reflects very great credit on both sides. Certainly the trust itself deserves the utmost tribute for its ingenuity, its thoroughness and the good sense which it has shown, and the Government have been able to build on this.
I turn very briefly to the future. Whatever reservations one has—and, of course, one can have many because one can always ask for more—I hope that the

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announcement will bring about a total change in the political and psychological atmosphere and lead to better relationships with many countries round the world. I particularly welcome the emphasis on the Commonwealth. Recently I have been worried that not all Governments' attitudes have shown the warmth and sensitivity towards some Commonwealth matters which they might have done, and in a recent debate I pointed to various straws in the wind which troubled me. I freely confess today that the announcement is a positive haystack in the opposite direction, and I am very pleased about that. I should like to say in particular that, as a former chairman of the Commonwealth Scholarship Commission, I am delighted at the extra allocation to the scheme which will enable it to take on another 100 scholars a year.
There is much to be welcomed here. To my mind the main thing is that the Government are committed to the view that it is in the national interest that more money should be available for overseas students, and that for that we should be immensely grateful. For the rest, everything will depend on continuing evidence that things move in the right direction, that the momentum is maintained, that the general considerations are kept firmly in mind, in the way in which I have suggested, and that the many admirable proposals are followed through with imagination, energy and enthusiasm.
4.15 p.m.
Lord Vaizey: My Lords, with great respect to the noble Lord who has just sat down, to some extent I think that he has overstated the problem. He spoke about depriving ourselves of international exchange in the universities, and so on. Perhaps I could give some actual figures. In 1970 there were 24,000 overseas students in Britain in higher education; in 1979 there were 56,000; and this year there are between 48,000 and 50,000, but the figures have not yet been firmed up. I do not think that a drop of between 6,000 or 8,000 on a total of 56,000 is depriving ourselves of international students.
Moreover, this is a question of the use of resources. At the same time as there has been a slight drop in the number of overseas students in higher education, no fewer than 52,000 more home students have been admitted to British universities and to the rest of British higher education. The resources are primarily voted by Parliament and by the local authorities for the needs of our own students. Of course, I strongly support the existence of foreign students and Commonwealth students in our universities and other institutions of higher learning, but it is the case that in a time of limited resources the need to meet the demands from the very large group of 18 and 19 year-olds now passing through the system must come first.
I must ask, rhetorically I hope—because as we all have to speak briefly, it would be irritating if we were interrupted—whether any party in the House really wants to devote increased resources to more overseas students or whether they wish to see the existing number more fairly chosen. I suggest that that is the central question. Certainly the evidence would suggest that the need to contain this explosion in overseas student numbers has been recognised for well over 12
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years by Governments of different political complexions, and it is an explosion if the numbers go up from 24,000 to 56,000 in one decade.
The first action was, of course, taken by my much lamented deceased friend, Tony Crosland, who began the process of fees discrimination. The next proposal came from the right honourable Member for Crosby, who now speaks for the Social Democrats, but who for a considerable time was the guardian angel of education in the Labour Party. She proposed to introduce the quota system. I am totally opposed to quotas because they substitute public judgment for the judgment of individual academic institutions about admissions, and that is something to which personally, am opposed.
This Administration, for better or for worse, went further than Tony Crosland in introducing the so-called full fees scheme. It has yielded increased resources to institutions of higher learning. It has not vet particularly reduced the numbers in institutions of higher learning. Furthermore, I am given to understand, on reasonably good authority, that it is expected that the numbers in higher learning coming from overseas will remain reasonably constant throughout the 1980s. So I think that it is not very helpful to overstate the problem which faces us.
The problem which faces us is a very simple one. It is that you could not charge full fees to students from the EEC because of the machinations of the Treaty of Rome and that the full brunt of the policy therefore unfortunately fell on the Commonwealth and, let it not be forgotten, American students who, in many universities, are much the most important overseas element. The new system is to be welcomed. Whichever Vote it has been transferred from and whether it is new or old money, £46 million is not to be sneezed at. It is certainly sufficient to enable the present numbers planned throughout the 1980s to be maintained.
I differ from those who just say that the policy of discrimination has been a discrimination against poorer nations. For over 30 years now, on and off, I have worked for the United Nations and its agencies. All I can say is that my experience is that many students in our universities from the very poor countries are exceedingly well off and many students here from rich countries are exceedingly poor. It just is not the case that if you identify a student from a country with a very low gross national product per head, that student is a poor student. I think one needs to be a little more careful and more discriminatory about that.
Lord Gladwyn: My Lords, would the noble Lord—
Lord Vaizey: The noble Lord, Lord Gladwyn, has spoken at great length. It is a short debate. I think it is a convention of the House in these short debates that one does not on the whole interrupt all the time.
Lord Gladwyn: My Lords, it is not a question of discriminating against poorer countries so much; it is discriminating against poorer students. There can be poorer students from rich countries, of course.
Lord Vaizey: My Lords, that was precisely the point I made. We cannot just categorise students by where they come from. We do not categorise students in this country by where they come from. We categorise them by parental income, or their own personal income. That surely is the sensible way to conduct a policy, unless we are going to say to the entire world, "For goodness' sake, all come to the United Kingdom, because all students who land at the ports of our country will be educated for nothing". So far as I know, nobody has yet advocated that particular policy.
It is sensible for the Foreign and Commonwealth Office and the Department of Overseas Aid to have chipped in here and to have helped the Department of Education and Science. That basis of bipartite funding is a highly sensible one. It enables the interests of the students, the interests of the universities, and the interests of the country to be balanced. I deeply regret—and I say this in all sincerity—that the Department of Trade is not participating. It is extremely narrow-minded and short-sighted. Even if it had been only £½ million or so chipped in by the Department of Trade, at least it would have recognised the extremely important argument that the people whom we educate here sometimes—not always—go back as ambassadors for British trade and industry.
Before I sit down—and I am conscious of the time—there is one point, and I think I know the answer already because my noble friend on the Front Bench Lord Belstead has already written to the noble Lord, Lord Spens, on the question. When people say "Cyprus", the fact of the matter is that a bit of Cyprus is not within the jurisdiction of the Government of Cyprus. Therefore, it is important that the students who, for ill or for better, happen to live in the Turkish area of Cyprus are not cut off from the funds available for Cypriots. After all, the United Kingdom is the university centre for Cyprus. I understand from my noble friend—I always call him my noble friend, and he is my friend—Lord Spens that this point has been dealt with in a letter to him by the noble Lord on the Front Bench. If he could confirm that, I should be most obliged. I have taken only eight minutes, I am glad to say.
4.23 p.m.
Lord Caradon: My Lords, it is obvious and true that we on these Benches, and indeed noble Lords throughout the House, welcome the decisions which have recently been announced and the statement which was circulated a few days ago, and the opportunity for this debate. We are grateful to the noble Viscount, Lord Boyd, who spoke to us first this afternoon. I regret that he was not a member of the Government when these decisions were taken, when I believe that the decisions would have been different.
We should not allow ourselves, in this welcome, to enter into any euphoria over the matter. What has been achieved is a remarkable change, but we should not rejoice in this House that one Minister has repented when there are so many who are in much greater need of repentence. We should look carefully at what has been brought forward, welcoming it, certainly, but realising that it is extremely inadequate. In terms of finance, I could be corrected but I think
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that roughly the amount which will be spent by this Government, even under the changed attitude we now hear, will represent about 15 per cent. of what was spent on this purpose by the previous Government.
Therefore, it is not a question of any sudden change for the better. There has been a major change, and we welcome it, but it is inadequate. I agree with what has been said by the Overseas Students' Trust, which has given such remarkable leadership in this matter throughout and which I hope will continue to do so because it is still necessary. The cuts which were adopted—a reckless reaction, I call it—the decision suddenly to incur all the ill-feeling and the misunderstanding throughout the Commonwealth, and indeed throughout the world, was a decision of which we can rightly be ashamed. It should be changed, but it should be changed with a view not merely to giving the minimum but with a view to developing, on the basis of what has been decided and done, a new, constructive and developing policy for the future.
Therefore, I looked carefully at the statement which was distributed to us a few days ago. I looked to see whether there was any indication there that those who wrote it—I do not know when it was written—had a concerted plan for future development in this matter. I looked at the questions of organisation; the question of control; the question of leadership. As I looked through the paper presented, I took encouragement from several things which were said. In paragraph 7 they speak of a "consistent and intelligible policy towards overseas students". That is exactly what we need. Then, on another page they speak about "regular review". Yes, I hope so. What we have achieved so far is indeed a minimum.
Then, going on further, we see later in the report other encouraging indications that, for instance, the Foreign and Commonwealth Office is to be given a special function, a special leadership. This, I believe, is essential, because it is the question of our relations with the rest of the world which is so much at stake. Then there is talk about "continuing machinery within Government in co-ordinating forward action". Again, that is what we have been wanting.
So we have here in the paper distributed all kinds of (what can we call them?) implied promises about future actions, but the indication of a consistent and co-ordinated plan is lacking. I believe that instead of the report (which is, of course, seeking to please everyone concerned) we should see a more definite and deliberate attempt to create a scheme for the future which can develop and which can give to all concerned, including the outside world, and especially the Commonwealth, a hope that we are now on a different course from the disastrous one on which we were required to embark three years ago.
It is essential that we should have a developing and constructive plan, with an organisation which can carry it out under the leadership of those who are not concerned merely with saving the money but are concerned with our greatest asset in the world, which is the good reputation that this country has, particularly in regard to education. The unkindest cuts of all were the cuts on students, children, and particularly those in territories where they had little opportunity to complain or reply. We have now an opportunity, not

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only to welcome the 15 per cent. of what was previously spent on this purpose, but also to look forward to a new, dynamic and ambitious policy in the future.
4.30 p.m.
Lord Diamond: My Lords, since so many of your Lordships have already spoken on the essence of the Motion, and bearing in mind that there is great pressure on time, I shall limit my comments to what is essentially the duty of the Government to give full information on figures relating to student fees and to the overseas aid programme in general. Every year to date since the Government took office expenditure on overseas aid has fallen in real terms. If one starts with a figure of 100 for the first year, the figures for the subsequent years are as follows: the second year, 95; the third year, 93; the fourth year (that is to say, the current year), 87. I should like to repeat those figures: 100, 95, 93, 87. That is to say, the figures show a falling trend, and they are extracted from a Written Answer that I receive from the Government only two months ago.
As we know, in addition to the real terms—and they provide the true cost—there are obviously cash figures, but cash figures are useless in comparing costs over a period of years because the measuring rod—the pound—has been diminishing over that period, and we all understand that very well. Therefore if it is wished to make a comparison, all that one can have regard to are the cost figures. Those figures the Government, and only the Government, have, and in my view it is the Government's duty to see that the House is given full information about them, especially when they are under notice to do so. This is particularly important for overseas aid where, if one looks at the true cost as I have indicated, one sees that the expenditure has fallen every year since the Government took office. But if one looks at the meaningless cash figures—meaningless for this purpose—one finds that in most of those years the cash payments have increased.
I regret to say that the noble Lord, Lord Belstead, who always deals with these matters with his customary full courtesy, has on two recent occasions failed to give with the candour which I think is due to the House the information that was being asked of him. The first occasion was on 30th November, as reported at col. 1137 of the Official Report. The noble Lord, Lord Belstead, was then being pressed by the noble Lord, Lord Hatch of Lusby, who was searching for the cost comparison, but without success. Finally, the noble Lord, Lord Hatch, asked:
"Would he"—
that is to say, the Minister—
"not … agree that it is a well-known fact that the present British Government have quite openly cut overseas aid and have not tried to disguise it?".
The reply of the noble Lord, Lord Belstead, as reported in Hansard, was:
"My Lords, I think it is for the House to judge what the figures show. I will give the figures".
He then proceeded to set out the cash figures for the four years since the Government took office.
I was quite incensed by that way of replying to the question, and I therefore intervened later to ask the
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Minister to be good enough to give the cost figures, saying that unless he did so, he would in effect be giving figures that were neither full nor accurate. The noble Lord, Lord Belstead, replied to me, as reported at col. 1138,
" … would I not be right in thinking that it is a little difficult to give real-term figures for a financial year which has not yet ended".
I was quite astonished to receive that reply, because we were of course talking about four years, three of which had ended. Although the fourth year had not yet ended, it is entirely the normal custom, and to my personal experience has been so for 40 years, for the Government to rely on their most reliable forecasts, together with their estimates of the inflation figure, which the Government have used for a variety of publications. It is quite customary for figures to be given on that basis, and indeed when, following the reply, I put down a Question for Written Answer, the Government had no difficulty in giving me the answer that I required. Therefore it was available at the time that the noble Lord was giving the House quite inadequate (in my view) information.
The second occasion to which I wish to refer was on the 8th of this month—reported at col. 1118 of the Official Report—when the statement that we are now discussing was made. My noble friend Lord Kilmarnock had suggested (as reported at col. 1123) that,
"the aid programme is already falling in real terms".
The noble Lord, Lord Belstead, replied:
" … he"—
that is, the noble Lord, Lord Kilmarnock—
"seems to have overlooked the fact that the ODA programme is being increased by some 10 per cent. for the next financial year";
whereupon I asked the noble Lord whether he was talking about real terms, which allow the possibility of comparisons being made, or cash terms. The noble Lord did not answer that question conclusively. He said (as reported at col. 1124):
"The planned forecast for next year is an increase in the … budget of some 10 per cent."
So I then repeated my question, asking whether it was real terms or cash terms, and the noble Lord, Lord Belstead, said, (as reported at col. 1125):
"No, my Lords, … cash … ".
I repeat, the cash figures show a rise in most years. The true figures show a fall. I think it is important that the House should be given full figures, full information, when a Government are asked, not on the nod, as it were, but have had full written notice of the information that is likely to be required—
Lord Soames: My Lords, will the noble Lord allow me to intervene for a second? I remember the occasions to which the noble Lord has referred. I was present in the House at the time, and I recall then thinking—perhaps the noble Lord will give me the benefit of his thoughts on this aspect—that where aid is to be spent in this country, for instance in relation to students, I see his point in minding so very much about real terms. But when the aid is to be spent in the recipient country, surely what matters is the exchange rate of the pound in relation to the currency of the country concerned, and that situation has nothing to do with whether we are speaking in real terms in this

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country, because the inflation rate in the recipient country matters more than the rate in this country.
Lord Diamond: My Lords, I am quite sure that when the noble Lord was himself a Minister it was his habit to give full information, and when that information is asked for it is the duty of the Government to provide it. The specific point that the noble Lord is making is totally irrelevant; it is taken into account in both sets of figures; and what we are talking about is a trend, a comparison. When there is a trend that is going down, I do not think that it is helpful for a Minister to give replies which indicate to anybody who does not know the true facts that the trend is going up. I think that it is as simple as that, and I regret very much that I have found it necessary to make this speech. I repeat, the noble Lord, Lord Belstead, is always courteous, and I hope that in future he will always be as candid and as frank as his leader always is.
4.39 p.m.
Lord Greenhill of Harrow: My Lords, I shall not speak for more than three minutes. I am quite sure that even the Government themselves would admit that in the matter of the overseas students they handled the situation in a particularly insensitive way. The old system was indeed unsatisfactory and was abused, but the manner in which it was terminated caused damage to individuals, to famous institutions—such as the School of Oriental and African Studies—and to British commercial and international interests.
The Government have now made amends—not spontaneously, but thanks to the devoted work of many private interests, private individuals and companies, including multinational companies, which so frequently are thoughtlessly and ignorantly criticised in certain parts of this House. Departments in Whitehall—and some departments only—were very helpful in keeping this subject alive and I think credit must be due to the Foreign Office and in particular to Lord Carrington for pushing this matter ahead. Nevertheless, initially a costly mistake was made.
I have no detailed critical comments on what is not proposed. Of course, the sums are not big enough, but there is a new and useful measure of flexibility and those best able to judge our interests can now do so. In particular, it is important that the Foreign Office should be allowed to exercise firmly a co-ordinating role. There are improvements which should be made, and no doubt will be made, over the passage of time, and further plans will be considered.
However, I have one suggestion to make. In view of the public interest, I think that it would be both courteous and useful if the Government made a special gesture to those who have voluntarily concerned themselves with these matters. I should like to suggest that the Secretary of State for Foreign Affairs or one of his senior Ministers should once or twice a year call an informal meeting of interested parties at which progress could be reviewed and suggestions made to him across the table. This could be done with little or no paperwork but in this way I believe that the Government's current proposals could best be carried forward; and, not only in this country but abroad, the Government's real interest in this very important matter would be revealed.
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I know that there is to be formed in Whitehall an interdepartmental group but it is not always easy to reconcile interdepartmental interests, as the noble Lord, Lord Beloff, very wisely and correctly pointed out in a recent article in The Times. I think the presence of senior Ministers at the type of meeting which I suggest would be helpful in smoothing out departmental problems and conflicts. I hate to add to the Secretary of State's burdens but this chore, I think, would be, for him and for all of us, time will spent.
4.42 p.m.
Lord Hunter of Newington: My Lords, I should like to speak briefly about the university point of view and particularly the universities of the Commonwealth. One interesting thing is that for five or six years after 1969 things just drifted in the university world. In retrospect it is difficult to see why not. The reason, I think, was the romantic notion of universities that all students should be admitted for the same fee, regardless of origin. In fact, as late as 1975 a joint committee of the University Grants Committee and the Vice-Chancellors' Committee recommended that differential fees should be abolished, fees should be modest and overseas student numbers (which had been escalating rapidly, as has been said) should be controlled by the universities themselves, guided by the University Grants Committee—the system which is used for home students.
It is interesting to note that at that time 17 out of 27 Commonwealth countries charged larger fees for overseas students. In the event, the Government made the announcement about full-cost fees in 1980. Thanks to the good offices of the Secretary-General of the Commonwealth Secretariat, His Excellency Sir Shridath Ramphal, it was possible for the Association of Commonwealth Universities to put a paper to the Commonwealth Education Ministers' Conference in 1980. The education ministers encouraged the Commonwealth Secretary-General to set up a consultative group on student mobility.
From my point of view, the scene then moves to the meeting of executive heads of Commonwealth universities in Hong Kong in March 1981. At that meeting it was decided to have further detailed discussions with the Commonwealth Secretary-General, who was then in the process of establishing his consultative group which was to be chaired by the retired Secretary-General of the association, Sir Hugh Springer, and had in its proposed membership six Commonwealth vice-chancellors who participated in that conference. The immediate urgent task was to prepare a report for the meeting of the Commonwealth Heads of Government in Melbourne in September 1981. Acceptance and implementation of the recommendations of the Commonwealth Secretary-General's group by the Heads of Government gave the Commonwealth guidelines for the future and, I believe, gave us a basic machinery wider than our domestic one.
The recommendations of the Commonwealth Standing Committee about consultation is vital. Had such an arrangement existed in 1979, much of the anger caused by the Government's decision on full-cost fees would have been defused and the process of consultation itself might have ended with some tempering of that decision. The crucial need, which

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cannot be quantified in financial terms, is to establish a more diverse pattern of the movement of students between Commonwealth countries. In the past, Britain has been by far the largest receiver. This is still true but times are changing. Britain is finding on a number of fronts that it cannot do everything. Can we accept that the principal training ground in one activity or another may be in Canada or in Malaysia? Educational institutions and centres of excellence must be established in other Commonwealth countries, making them attractive places for students to work and contributing to the development of those countries.
So, my Lords, a number of things have come out of the 1979 crisis which are good. Hopefully, the Government will not make unilateral decisions in the future. Hopefully, the United Kingdom universities will be more practical in the face of events and become more concerned to make their contribution to national and Commonwealth affairs wherever that contribution is needed and whatever it is. Another good thing that has happened is a closer working relationship between the Commonwealth secretariat and the Association of Commonwealth Universities. I am sure that nothing but value can come out of this for the Commonwealth and for Britain. Links between their universities and between them and the Commonwealth secretariat have never been stronger; and, as the Commonwealth Secretary-General recently reminded us, "educational interchange is a Commonwealth imperative".
4.49 p.m.
Lord Beloff: My Lords, I think that it is about 15 years since I first made a speech against the principle of differential fees for students of different origins. That was in the congregation of the University of Oxford at the time when the differential was first introduced. At the University College at Buckingham, to which my noble friend Lord Boyd has been good enough to refer, we from the beginning regarded it as a principle that the fees should be the same for students of any origin. I believe this still to be the correct principle, although I can fully understand and appreciate the fact that if this leads, in a particular country, to pressures on its resources above those which it can reasonably be expected to undertake, some method must be found of limiting the inflow.
In my view, it would have been far better if home students' fees had been raised to the full-cost position of overseas students' fees at the expense of the direct grant to universities. It is partly because we have a wholly illogical way of financing our higher education that we get ourselves into tangles of this kind. It is my impression that it is not the height of the fees which puts off quite a number of overseas students who are supported in one way or another but the mere fact that they know that they are paying more for something for which their neighbour on the laboratory bench is paying less. However, I think that this is probably by now a counsel of perfection so we are left with the idea of how we assist a reasonable number of students from overseas to benefit by what this country has to offer. It seems to me by and large that the Overseas Students' Trust have produced a scheme which if built upon and fully implemented is a reasonable way of dealing with this particular issue.
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One must remember that this is in a way a world issue. My noble friend Lord Vaizey referred to the explosion of people seeking to study overseas. It does not, of course, apply only to this country. If one looks at most of the advanced countries—and, indeed, some of the less advanced ones—one finds in that period a similar explosion. What has made it particularly difficult for this country is that our general provision for students is so lavish. Our staff/student ratio, even with the current cuts, is so generous that for France or West Germany to admit a few thousand more marginal students has much less of a financial impact than would be the impact upon us if we left the doors open as they were 15 years ago.
On the other hand, this leads one also to some practical considerations—one or two of which have been mentioned in the course of this debate. We should look carefully at what the real demand is and find out whether shorter courses, to which I think the noble Baroness referred, would be something which the universities might like to explore. One of the reasons why Buckingham has been so successful in attracting students, particularly from Hong Kong, Malaysia and the Caribbean is precisely the fact that their courses are so intense, of shorter duration; and of course the cost of staying in this country is for many overseas students quite as much a deterrent as the actual fees charged for their studies.
We can all look back on these 15 years as years of quite extraordinary neglect on the part of so many institutions, not only in Government, not only Government departments. The Department of Education and Science seems to have been sleepwalking through much of it. Apparently they did not even know that the provisions of the Rome Treaty would force them to admit European students at the same level as British ones, which was interpreted, though quite wrongly, as some kind of evidence of racial prejudice against the third world. There has also been, I think we must admit—indeed, the noble Lord, Lord Hunter of Newington, has admitted it—a certain amount of sleepwalking on the part of the universities themselves in that they were unwilling to face the problem, to understand the Government's point of view, to understand the financial pressures and to see what they could offer out of their own wisdom.
We are not through the wood yet. I think that these proposals deserve support. I was distressed but not surprised to read the all-out attack on them by the National Union of Students, which seems to be a body which even now has no comprehension of the costs of study. But—and other noble Lords have mentioned this—we shall have to keep a watching brief. One reason is that although the Foreign and Commonwealth Office have now clearly been convinced, as many of us were convinced long before they were, that this is a matter affecting Britain's international standing and reputation, we do not seem to have persuaded the Department of Trade that, in spite of the very strong evidence brought by industrialists, not only in words but in their own contributions to scholarship schemes, it is a matter of commercial significance; and that to alienate fast-growing countries on the rim of Asia—or, indeed, Latin America for that matter—is not exactly the way to promote our exports in the next generation.

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I think it is essential that continual pressure be brought upon the Department of Trade to admit at any rate the principle. If they put £10,000, the cost of one student, into the pot, that at least would be a gain of principle. So long as they persist in maintaining that not a penny of all the money they have spent on promoting British exports can be spared to bring here the engineers, the entrepreneurs and the Government Ministers of the future, one despairs of that part of Whitehall. Therefore, it is very important that the committee or group to which the document circulated by the FCO refers insists—if necessary, by the Foreign Secretary going to the Prime Minister on the subject—that it must include a representative of the Department of Trade, and that the Department of Trade cannot opt out of this, the Foreign and Commonwealth Office having made an admirable start. If one thinks about what we feared six months ago, we have made very great progress, and, with vigilance on all sides, I hope that can be something to build upon.
4.56 p.m.
Lord Maclehose of Beoch: My Lords, I intervene in this debate because as governor of Hong Kong I saw at first hand the deplorable political impact of the original decision on fees for overseas students, and the major diversion of Hong Kong students from the United Kingdom to North America that resulted. I was also involved in successive initiatives by the Hong Kong Government to keep the academic link with the United Kingdom going; first, by stop-gap measures funded entirely by Hong Kong, and, secondly, by long-term proposals aimed at joint funding. The most charitable description of the response up to till now was that the Government appeared to be in some disarrary.
However, the new policy paper makes clear that a heroic effort has been made at last to get things back on the rails and to produce what did not exist before: an overall and financially controllable policy for dealing with overseas students. The whole paper is a most workmanlike document, and I welcome it unreservedly. To me it is particularly satisfactory that the joint United Kingdom/Hong Kong funding proposals will enable Hong Kong students in 1983–84 to pay the same fees as United Kingdom or EEC students, thus eliminating the sense of discrimination which they and other overseas students felt so deeply, with the results referred to by the noble Lord, Lord Garner.
My main concern now is that the favourable political impact of the new proposals should not be lost by the way they are implemented, either through delay or bad mechanics. First of all, timing. I understand that many students will be making their decision for the academic year 1983–84 as early as March, so time is short. On the other hand, the paper covers a very wide field of recommendations likely to come to fruition at different times. I hope that those schemes which can be implemented quickly will be acted upon at once. I am thinking in particular of Hong Kong, where a ready-made proposal has been on the table for months. But in general may I ask whether the Government will accept that once a scheme is agreed it will not be held
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up, for instance, to allow it to be announced with other similar schemes?
I hope also that there will be no delay to enable comparability between similar schemes for different countries or territories to be made. If major differences in comparability emerge over the years, that will be the time to consider the reasons for them and their acceptability.
A further point on timing. The implications of the House of Lords decision of 16th December will be a major factor in students' decisions about academic 1983–84. The paper states that an anouncement will be made in due course. Perhaps the noble Lord the Minister could say whether it will in fact be soon; or, if he cannot, at least indicate when he expects it will be made.
With regard to mechanics of implementation, paragraph 1 3(ix) on page 1 3 of the Government Paper places responsibility for co-ordination on the Foreign and Commonwealth Office, whereas the trust recommended that its role should be both initiating and co-ordinating. I do hope this change of wording does not represent a weakening of central co-ordination and responsibility. My impression has been that this issue has been bedevilled by the multiplicity of government and non-government agencies and groups involved and the difficulty of getting an agreed policy out of their differing degrees of enthusiasm or reluctance. I hope, therefore, that the Foreign and Commonwealth Office will exercise responsibility for co-ordination with vigour and firmness and interpret it as a mandate to take responsibility for seeing that the intentions of the policy paper really are carried out. It will be a difficult job and I hope that sufficient people of the right level will be allocated or co-opted to do it and that close ministerial supervision will be maintained.
Paragraph 9 of the paper indicates the need to monitor and review progress. With so much ground to make up, this is vital. I should like to know whether the Government envisage a progress report and, if so, after how long a period. In view of the vital role played by the Overseas Students' Trust, perhaps the Government would consider either associating the trust with this process of review or constituting some new "ginger group" to do so or otherwise act as suggested by the noble Lord, Lord Greenhill. In conclusion, like other speakers, I should like to congratulate the noble Minister on the broad sweep of the policy set out in the paper and to wish his department success in implementing it.
5.2 p.m.
Lord Tedder: My Lords, all of us associated with higher education must welcome the Government's announcement of an extra £46 million to be made available for helping overseas students, and particularly those doing postgraduate work. Despite what has been said, I am afraid I am still not clear whether the £46 million includes the £21 million which is already going to Commonwealth students through the offices of the Overseas Development Administration. This is almost entirely for technical training in polytechnics, and the effects on universities will be small.
As other noble Lords have emphasised, it is extremely important that everyone concerned should

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know as soon as possible how the extra students should apply and how they are to be selected. Is the selection to be done by the DES or the University Grants Committee? We must also know what part the universities are to play in the selection. If the extra students are to come in October, as other noble Lords have pointed out, we should be making decisions now about who is to be admitted and where they are going to go.
The noble Lord, Lord Maclehose, has just spoken about Hong Kong. Other dependent territories, such as the Falklands, Bermuda and Gibraltar, have been mentioned as countries that will benefit from the scheme. In addition, Cyprus and Malaysia have been mentioned and we must hope that the smaller, poorer independent Commonwealth countries will be eventually treated similarly. I have in mind particularly the small countries of Southern Africa, such as Lesotho, Botswana, Swaziland and Malawi.
We must move slowly away from encouraging undergraduates to come and study in the United Kingdom and increasingly put our emphasis on postgraduates. If we encourage and finance postgraduate students from the developing countries to come and work in colleges and universities in the United Kingdom, as many noble Lords have emphasised, the benefit would not be all one way. The need for developing countries is in science, medicine and engineering; and we must make certain that this is where most of the money is spent. There is always the danger that social science students will be recruited because they are cheaper, and more students can be taken for the same cost. As time goes by and the universities in the developing countries lose their expatriate staff, we must hope that what at present is a one-way traffic from the developing countries to the United Kingdom will in the future become a two-way exchange, to our mutual benefit.
I am very anxious not to be controversial today, but may I put in just a gentle note of complaint? British universities are complex organisations governed by a series of interlocking committees. The principal products of universities are new knowledge and students, including research students, who are produced on a four-year or a three-year cycle. Therefore, any major change affecting students takes at least four years to work its way through the system. Commonwealth students coming to Britain this October to do research will not be expected to graduate with their Ph.Ds until summer 1986.
One of the troubles of democratic government is that in order to obtain the benefit of their policies during the lifetime of a single Parliament successive Governments have been too precipitous in the way they have dealt with the universities. Few people today would deny that the response to the famous report prepared by the noble Lord, Lord Robbins, and his colleagues was too positive. Similarly, I believe that the famous cuts imposed by Her Majesty's Government on the universities recently will, in course of time, be seen to have been too abrupt and precipitous.
One of the results of the too precipitous implementation of the Robbins Report was the quite anomalous staff age structure that most universities have to manage with at the present time. Speaking of my own department, we have a staff of 19 members, of whom only one is under 40 (and he is 39). The
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Government have recently attempted to alleviate the situation by providing money for "new blood" posts. Alas! again the action for this year has been precipitous and the universities have been required to put forward proposals in a matter of weeks.
I have made my gentle complaint; and now may I return to the substance of my speech and to the problem highlighted by this debate. We must all rejoice in the Government's decision to put forward £46 million over the next three years to help overseas students, particularly those from Commonwealth countries. Having made this important decision, we must hope that ample time is provided to decide in detail how the money is to be spent.
5.7 p.m.
Lord Gore-Booth: My Lords, I hope your Lordships will forgive me if I make a very short speech: in fact, perhaps the shortest of the debate this evening. It is simply this: having worked with the School of Oriental and African Studies and with other similar and allied institutions, I regard this occasion for speaking as being a very happy one to take part in very briefly.
I simply want to say that for many years one has not only watched but tried, whenever one could, to keep this process in motion, so that we might arrive not too late at what seems to be a complete examination of what we have all been doing over quite a number of years to produce something, so that we can stand back (but not just yet) and say to ourselves and to all those who have worked on this situation—and I should like particularly to refer to my noble friend Lord Greenhill of Harrow—that we could produce a university system and all the other adjuncts. After all these years during which all of us who have worked, thought and tried very hard on these matters, I have a feeling that, though one does not say we are at the end of any road in an operation like this, nevertheless we will be able to say, perhaps not to ourselves but to all those involved in this splendid work: "Well done, good and faithful servants!"
5.10 p.m.
Viscount Buckmaster: My Lords, as treasurer of a voluntary committee of friendship for overseas students in London, it gives me great pleasure to welcome the initiative of the noble Viscount, Lord Boyd. Perhaps I may explain that these committees of friendship endeavour to give a welcome to overseas students in Britain, to introduce them to hostesses both in London and in the country and to enable them to profit from their stay here and derive as much benefit as they can from the many cultural activities available for them. We have in our group about 800 students of nearly 70 different nationalities, of whom about one-third are from the Commonwealth. The largest groups are, as one might expect, from the EEC and the Far East; that is, Malaysia, Hong Kong, Singapore and so on.
It goes without saying that I also warmly welcome, not only on behalf of my own committee but on behalf of similar organisations, these splendid new measures which have recently been announced, in an area where Government policy has all too often been murky and maladroit. When I was in government service I was

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told—and, indeed, I think it was the noble Lord, Lord Greenhill, himself who told me; I am sorry he is not here with us now—that Her Majesty's Government speak with one voice. To those of us outside this immediate scene, it has appeared that all too often the departments concerned with overseas students have spoken with voices that are divergent, discordant—in terms of interdepartmental bickering as to the sharing of costs—and detrimental to the best interests of this country.
We in this country, and the students, have suffered too long from the "go-stop" policy. Some years ago, in the 'fifties and 'sixties, during the period of rapid expansion of higher education in Britain, more and more overseas students were admitted to fill more and more places in the new universities. The result was that many of these students were of a quality which could not benefit from what we could offer. Of course, several speakers have spoken of the change in policy which favoured the EEC against Commonwealth students. I should particularly like to mention that those few students who managed to come here from the old Commonwealth countries, and those who could not come, felt how wrong it was that there should be discrimination against them, and felt that they were kith and kin, compared with those who came from EEC countries.
I want to mention, in particular, the case of Malaysia, which, as your Lordships probably know, gave rise to a right royal rumpus: and the Government of Malaysia decided, ultimately, that they could not send any more students here at all. In the case of Cyprus, as many of your Lordships are probably aware, their educational system was wholly linked to that of Great Britain, with the result that they just could not go anywhere else.
This new policy was not only unkind: it was also very short-sighted, because this myopic assessment took no account of the potential commercial spin-off deriving from the presence of overseas students in Britain. It must be accepted that if a man has, as a student, made useful commercial contacts in this country, he is likely to develop those in the future in preference to any others. In the last analysis, of course, he will have to place his contracts where the marketplace dictates, but it is surely up to us to ensure that he is given the maximum opportunity to look to this country first. I would mention, briefly, the very important flow of foreign finance which the presence of these students generates, in the form of grants from organisations such as the Ford Foundation and the many companies which finance students from Malaysia, Singapore and so on. So much for finance.
Let me now deal very briefly with the students themselves. We who have the pleasure of welcoming them here find them a very likeable lot. They fit in well, and the hostesses who have to look after them are greatly impressed by the quality of those from the developing countries. What is more important, the presence of these students here acts as a powerful catalyst in breaking down racial, political and colour barriers. In this, I am reminded of the saying of the late King of Swaziland, King Sabhuza II, who said that harmony derives from the playing of the black and white keys.
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Of course, we benefit greatly from these students in many ways. We benefit from what they can show us in the way of their cultural patterns, their way of life and so on; and we must not overlook the very important research input. I must take this opportunity to pay a very warm tribute to all those organisations who help us in so many ways—the hostesses who organise parties for students and take them to concerts, theatres and so on; the Victoria League; the Women's Institute, and other bodies.
Now, my Lords, what of the future? I think we would all agree that we must, somehow or other, evolve a high-level, far-reaching, long-term policy. The present arrangements seem sound, but having put our hand to the plough we cannot turn back. The field is ready for ploughing, but the plough is heavy and the furrows are deep. We therefore need four powerful horses to pull it, and their names are Foco, Eddy, Hom and Trad. These are four admirable beasts. The best is Foco, not least because he comes from the ploughman's own stable. Eddy is a splendid animal, but he normally goes best only when in blinkers. As for Hom, one feels that his thoughts are generally elsewhere and that he would be happier ploughing larger pastures nearer home. But as for Trad, as the noble Lord, Lord Vaizey, has mentioned, I am afraid that he does not feel at all happy in the team and may well bolt from it.
I feel that we have a splendid ploughman in the form of the noble Lord the Minister, and I believe that he and his colleagues will be able to harness this team and to plough their furrows deep and true. We shall never be able to plough the whole field. In other words, we shall never be able to bring to Britain all the overseas students who want to come, and who can profit by education here. But we must, surely, plough as much of it as we can; and, having ploughed and sowed the field, what a rich harvest we shall in due time reap!
5.20 p.m.
Lord Bowden: My Lords, may I begin by saying how very much I welcome the new proposal which has been put forward. I should like very briefly to refer to one particular problem which the new system seems likely to pose to the institution over which I once presided. In Manchester we have always had a very powerful and long-lived tradition of welcoming foreign students.
I well remember that at a conference in Moscow the president of Moscow University spoke about the way in which they recruited students for their engineering school. He said that they sent people all over the world, that they offered scholarships and grants to students, that they made every possible effort to welcome them and that there were representatives of 74 countries in Moscow. I said that my university had never sent out emissaries to attract students; we allowed them to come if they wanted to; we welcomed them when they arrived but made no effort to attract them; and in my quite small engineering school there were representatives of 70 countries. That made, I thought, a very good debating point, but I was totally outclassed by the rector of the University of Tiflis in Georgia who said that he believed in sending students abroad, as his university had been doing ever since the days when students were sent to study in Athens with Plato, Socrates and Aristotle. There is no reply to a remark of that kind.

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My institution has a very long tradition of accepting foreign students, and at the moment it has many. However, it is very puzzled by the consequences of the new regulations which are not yet sufficiently understood either by the institution or by the University Grants Committee. I hope that, either now or in writing, the Minister will be able to give me an answer. There is a quota of 3,980 English students and the institution has provisionally accepted another 800 or 900 foreign students. Presumably they will pay the full cost of their education, which is substantially more than the fees paid by English students.
Can the Minister tell me whether the ruling of the House of Lords implies that these students are to be counted as English students and part of our quota? Will they pay the same fee as English students? The figure at issue is about £¾ million. When I spoke to the bursar, registrar and acting principal this morning they said that they could not discover, to within £¾ million, what their budget will be next year when the change has taken place and almost all the student body is to be classified as home students, wherever they may come from. To lose £¾ million is a matter of very great importance to any university.
My point is that my institution has suffered more than any other in the country from this ambiguity because of its long and well-established tradition of welcoming foreign students. Students have come to this institution from every country in the world. May I ask the Minister to make some effort to discover the answer to that question because it will have a most profound effect next year upon my institution.
5.24 p.m.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, I am grateful to my noble friend Lord Boyd of Merton for initiating this debate. Central to the discussion is the remarkable study of the Overseas Students' Trust. I am very glad that my noble friend decided not to withdraw his Motion. It has been very valuable to the Government to hear the many views which have been expressed. Even though some of them have not always been entirely easy to hear, nonetheless it is right that noble Lords, with their experience in this field, should have had the first major opportunity in Parliament to debate this most important subject. For that debate to have been introduced by my noble friend, who has such great experience of so many Commonwealth countries, is particularly important. My noble friend Lord Boyd of Merton has also given your Lordships the opportunity to hear the first speech of the right reverend Prelate the Bishop of Coventry, who spoke in forthright terms not only of the past but of the future. We hope that he will frequently return to take part in our debates.
My noble friend Lord Vaizey gave figures which illustrated what happened during the 1970s. If he will allow me, I shall do so, too. It is worth remembering that in the academic year 1971–72 there were some 38,000 overseas students in this country. That is over 15,000 fewer students than there are today. In 1978–79 there were around 85,000, and the subsidy for their fees was being given in an entirely indiscriminate way. That is not to say that the Government wanted to control the number of overseas students by
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a system of quotas. I am very glad to be able to record that the Government most certainly agree on this point with the Overseas Students' Trust and with my noble friend Lord Vaizey.
The Government's policy since 1979, which has come in for criticism from your Lordships, has been to replace the open-ended, indiscriminate arrangements by a more selective policy. Although it is a fact that support for overseas students is running this year at £65 million, which is a great deal of money, nonetheless we recognise that it has become clear that many foreign students are obliged to seek education elsewhere when they may very well have wanted to come here and when it was also in our interests that they should do so. That led to the conclusion by the Government that we needed a more coherent policy. It was with this in mind that we encouraged and co-operated with the Overseas Students' Trust in their study, which provided us with precisely the basis which was needed to put together the measures which constitute the new framework.
My noble friend Lord Boyd of Merton and the right reverend Prelate the Bishop of Coventry spoke of the desirability of students coming here, in terms not only of the education which they receive but also of the friendships and the close national links which can be forged as a result. Therefore, the first point to which I wish to draw attention in the Government's package is the new discretionary awards scheme which should enable us to adapt part of our resources to the needs of the time.
To my noble friend Lord Beloff and to the noble Baroness, Lady David, who both spoke about the trade-related advantages of supporting overseas students I would say that it is within this new scheme that we shall have the means of providing for students whom we wish to encourage—for trade and for commercial reasons. May I also add that we shall be ready to consider any ideas or suggestions from British firms and industries which are in our mutual interest, including fund-sharing arrangements.
Led by my noble friend, many of your Lordships have spoken about the Commonwealth. The provision of more Commonwealth scholarships and fellowships in this package reflects, I hope your Lordships will agree, the value which we place upon our Commonwealth links. The extra scholarships under that scheme are a direct reply to the first recommendation which the noble Lord, Lord Gladwyn, quoted from the report of the Commonwealth Standing Committee on Student Mobility. Indeed, we have moved ahead of that recommendation, which asked this country to match extra support for the Commonwealth scholarship and fellowship plan from other countries. We are still not advanced sufficiently far in our discussions with the Governments and organisations concerned to say exactly how the £46 million will be distributed. But to come back to the Commonwealth, what I can repeat—my noble friend was good enough to say it—is that more than half the money will go among the various schemes to countries of the Commonwealth as a whole. In particular, in this package we are also providing the means to increase student numbers from certain specified countries. We have responded positively, therefore, to the cost-sharing scheme for

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their students, so helpfully provided by the Hong Kong Government.
The strength of our relationship with Hong Kong was an important factor in our decision to make additional funds available. We hoped to be able to agree administrative arrangements with the Hong Kong Government for the implementation of that scheme in 1983–84 without any hold-up for other arrangements which we may be considering at the same time—and I give that assurance to the noble Lord, Lord Maclehose of Beoch, who probably did more than any other man in the administration of Hong Kong to improve the social services, the health services and particularly the education services of the territory.
The Overseas Students' Trust also singled out, rightly, Cyprus as a country with a unique combination of claims to special consideration. Our own ties with Cyprus at both a political and personal level are strong, and as the noble Lord, Lord Caradon, pointed out, Cyprus has no university. The details of how we administer the Cyprus scheme must still be worked out but it is clear—and I make this plain in reply to my noble friend Lord Vaizey—that whatever arrangements we make should benefit students from both communities. Both Greek Cypriot and Turkish Cypriot students must have the opportunity to make use of the money that will be available.
Malaysia is also in a special position. Over the years she has sent large numbers of students here for further and higher education, more than from any other country. We value our longstanding academic and professional ties with Malaysia and wish them to continue. We are now discussing with the Malaysian Government how to use the funds that have been made available to the best advantage. I am confident that they can be put to very good use.
A vital part of our new measures is additional support for the bilateral training programmes of the Overseas Development Administration. My right honourable friend the Minister of State for Overseas Development has now authorised an increase in the number of training places offered to overseas Governments in receipt of aid in order to take up more than £4 million of additional money in 1983–84. That is the first step of the package so far as the ODA is concerned. It will be possible to offer between 700 and 800 new places next year, and it is our intention to sustain the number of those new awards in later years. We believe that the higher education requirements of the poorer developing countries of the Commonwealth can be met in this way. This is our reply to the second recommendation of the student mobility report which was quoted also by the noble Lord, Lord Gladwyn.
The noble Baroness, Lady David, asked me a specific question about the numbers of students coming now from developing countries compared with those who were coming here in 1979. So far as this is concerned, with those who come from developing countries funded by the ODA's technical co-operation scheme the hope of the Government was that it would have been possible to sustain those numbers at the level which had been achieved in 1979.
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I must admit that in practice this did not prove entirely possible. But the funds now being made available under this scheme should help to restore the situation. With regard to private students from developing countries, I cannot give the noble Baroness any up-to-date information.
There is in the package, finally, a small sum for the British Council specifically to encourage and assist British institutions to publicise and sell their educational services abroad and to forge links with institutions overseas. There are a substantial number of other measures which the Government have been able to accept and which will make existing arrangements and procedures more effective. They include a number of questions relating to fees, to the ORSAS scheme, and to the co-ordination of Government policy. Again, if the noble Baroness, Lady David, will forgive me for being rather uncommunicative, there is not much that I can add about the ORSAS scheme other than that which is printed in the Paper which has been put in the Library of your Lordships' House—except that, as the noble Baroness knows, the firm intention is to see that the full number of places under the ORSAS scheme shall now be fully taken up.
I am sorry that I have previously not satisfied the noble Lord, Lord Diamond, on the subject of the amount of money made available for overseas aid. There is a genuine problem here about giving a true picture because, as my noble friend Lord Vaizey pointed out and as my noble friend Lord Soames pointed out in his intervention, aid is spent in foreign currency and therefore it is impossible, given the fluctuating exchange rates, to provide other than sterling figures. However, I am certainly glad to give the figures for overseas aid during the time of the present Government, in what we call "cost terms", for the years 1979 to 1983. The figures are £1,031 million, £983 million, £960 million, £892 million and £936 million. If the noble Lord will forgive me for adding my own view of what those figures show, it is that when one is making available a 10 per cent. increase in cash terms for next year in the amount of overseas aid, at a time when inflation is running at only 5 per cent., it is really not a bad deal for students.
The noble Lords, Lord Maclehose of Beoch and Lord Bowden, both asked about the recent judgment of the House of Lords. I am afraid that I cannot give any indication now of when an announcement might be made by my right honourable friend the Secretary of State for Education and Science on the effect of that judgment, but I know that my right honourable friend is fully seized of the importance of it and of the urgency.
The noble Baroness, Lady David, asked me to be absolutely clear about the Government's attitude to the question of flexible fees. The position is that my right honourable friend the Secretary of State for Education and Science is attracted by the recommendation of the Overseas Students' Trust that institutions should have more flexibility in fixing their own fees. But as the noble Baroness herself said, consultations are in progress at present and we do recognise that in accepting a proposal of this kind there is the risk that resources could be diverted from home students because institutions could not guarantee that their overseas fee levels would cover all related costs.

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Nonetheless, I repeat that we are certainly attracted to this and want now to see what the UGC and the local authority associations have to say.
As I listened to my noble friend Lord Beloff I reflected that we have not shut the door on this issue. It really is a question of great complexity and many of the issues are for the longer term. Our policy must be adaptable to meet changes, and it must be sensitive to the requirements not just of countries but also of individuals. The noble Lord, Lord Garner, asked me about departmental responsibility in the future and made some wise as well as generous remarks. I can assure the noble Lord that his remarks will be taken note of. I believe that I should reply to the noble Lord in this way. The many organisations which have been doing such enormously valuable work in this field will wish to be assured, as well as the noble Lord, that the interdepartmental group which made the initial study of the OST report—which in turn reported to Government Ministers—will continue to be in existence, so we shall have the means to mount progress: which is something about which the noble Baroness, Lady David, asked me and on which the noble Lord, Lord Greenhill of Harrow, also commented. Whether some further information arrangement needs to be set up requires more consideration. It may be that an informal arrangement—perhaps in the nature of a round table as suggested by the noble Lord, Lord Greenhill of Harrow—will be a practicable way of proceeding. Certainly I give an assurance that this will be carefully considered. I wish to give an assurance today on behalf of the Government that consultation with Ministers most certainly will continue.
The Government are aware of the depth of feeling on this subject and of the need for a comprehensive and a flexible policy. In the words which my noble friend Lord Carr of Hadley used in the foreword to the Overseas Students' Trust, we do need a "policy for all seasons" and we are confident that the measures announced will provide the foundations for just such a policy.
Viscount Boyd of Merton: My Lords, I rise to thank the Minister for his reply and beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Defence and Rearmament Publicity
5.40 p.m.
Lord Hale Lord Hale rose to call attention to the need to extend the British Code of Advertising practice issued by the Advertising Standards Authority to include published or postered statements purporting to provide accurate information on defence and rearmament; and to move for Papers.
The noble Lord said: My Lords, I rise with difficulty as I nearly always do now. I had been hoping to be assisted in this debate—or at least to have his gifted presence—by my very old friend the noble Lord, Lord Paget of Northampton. He told me that he would have great difficulty in coming and it is quite typical of his generosity that while he has been in hospital, looking after a relative, he has turned up today to take part. He is, in a sense part of the res gestae.
There was a little word in The Times some months ago, which was very well-intended and very kindly intended, but it rather had the facts about me mixed up so considerably that I felt that if I ever had the chance I should like to clarify the situation—not with any feeling that I matter or am of the slightest importance. I was not conscripted into the army in 1939. I went as a pacifist. I took the line that many pacifists do. I had had some experience of politics. I had been, for many years, on the local county council. I had saved the deposit in one parliamentary election. I had married during another and had had two children. My wife accompanied me on a cheap trip to visit Mussolini and I hitchhiked to the Soviet Union. I explained that I wanted to go on one of the free trips for visitors. My Labour agent in Oldham, because I was now the candidate for Oldham, had got a trip. I had said that I should like to go with him if I could and he said to me, "All you have to do is to put down your trade union". I put down the Law Society and I visited that country of great potential and, we thought, of great promise.
I ask many of your Lordships to think when dealing with wars and alarms and so on that perhaps to many of us—who had read of the Russians, talked of Russia, heard of Russia, heard of its slavery, heard of the repression of the Tsars, heard of the people who had suffered for a century—the news of the fall of Tsardom came as a breath of fresh air and as something of high hope and promise. Sometimes I wonder whether, on either side, we have shown any monopoly of wisdom.
On my way back from Russia I was deported from Germany by Mr. Hitler. It was not a very exciting experience because we were the victims of a deliberate repressive travel regulation passed while we were actually in the sleeper on the train coming through from Vladivostok. We were locked up under Nazi guard on a station and deported back to Poland and thence back to England. It was very soon after that that I was sitting with my noble friend Lord Paget of Northampton, paying my first visit to stay with him—although we had known each other intimately for a very long time—and we talked of the coming tragedy and of what could be done.
When speaking with Wickham Steed, the editor of The Times and the United Nations Union, Wickham Steed was taking precisely the same line that I took: that one could not toy with this situation, however hopeless and useless it might be. At 16 stone I was not perhaps at my athletic peak—this was the thing to do. I apologise for wasting your Lordships' time in this way.
What I do want to say about that experience is that if one is to give information about arms, Government information and so on, one has to start by having something to show them. We did not have any at that time. I had lectured on Bofors guns which I had never seen—and could not have understood if I had seen them—because I was the only one who could give a lecture. In a way we organised matters with something like the efficiency of Transport House. I was shortly posted with one rusty machine gun, with no firing capacity, in charge of the Rolls Royce works (which never supplied a cup of tea) and was beginning to feel—I would not use the great phrase of Nurse Cavell with anything other than admiration, but it could be

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used in another sense—that patriotism was not enough.
The pay in those days was for me 24 shillings a week, of which my wife got seven shillings, my son and daughter four shillings and three shillings each. Of course I was lucky. This leads one to think that, if we are to consider the question of advertising weapons, armaments and so on, we have got to take very serious thought about it, and that is what I really hope to do.
The noble Lord who is in charge of this debate said to me that in a sense it covers a wide sphere and would need the attention of more than one department, and we did agree, to start with, that the sense of the matter, the essence of the matter, was advertising, how you use it, how you deploy it, how you do it with fairness, how you do it without exercising Governmental authority on an issue which of course is of vital political importance.
So I will start with advertising and just say this. So far as I was concerned, my friend Ernest Fernyhough invited me 30 years ago to accompany him to an interview at the Ministry of Transport where he was discussing the question of the regulation of poster advertising on railway property with two critics from the railways. We went in the presence of the Tory Minister, a nice man called Gurney Braithwaite, something of a pococurantist, a goodnatured man who hoped to enjoy the afternoon. It was not terribly rewarding. We ran out of texts at an early stage when we were arguing what could be exhibited. The actual text to be exhibited, or which was under consideration, was, "You cannot buy a hospital with the money you spend on shells". I would personally have said that that was non-controversial. I would also have said that it was one of the rare examples of sound economics that had come before me at that time. The railways were not willing; they thought it was highly controversial and they refused to exhibit it. We suggested possibly 'God is Love' as something that might be exhibited. We finally even, believe it or not, asked—and I am now repeating something which is contained and published in a Parliamentary speech 25 years ago and has nothing whatever to do with any current affairs—"If the Archbishop of Canterbury preaches on 'God is Love', can we pay for the exhibition, on the railway, of a poster to that effect?" and they said no. The point of course does become rather increasingly important, but it is not fair to introduce something of that kind into a non-controversial debate, and I propose to leave it at that.
It was at this time—I am now talking of the period of the post-war Governments—that with my wife I commenced a series of walks all over France, up and down the country on foot, as one usually walks, up to the Pyrenees, through Andorra into the Béarn country and along the Loire, even following the track of Robert Louis Stevenson's donkey. We were happy to visit a country where advertising had already gone a long way towards the necessary restriction. You could go and see the Fontaine de Verglus without hearing about Coca Cola's merits. Something seems to be coming over what nowadays one calls the environment, which used to be a nice word and now it seems to deal entirely with brothels, ugliness, vices, and things to be cleaned. There I think a great deal of friendliness was
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being perpetuated, and one was seeing something begin to develop which was worthwhile.
When I had to suffer a separation that comes to us all I found myself living about 60 yards above Sydenham Hill station almost in a direct line, 64 steps down, 64 steps up, wandering along the railway, walking through Victoria Station, often through lavatories swimming in urine, a sort of Hellespont that could be crossed only by clinging onto a wooden support. It seemed to me that if we were to do anything towards cleaning up Victoria—and it had, of course, been the express intention of our advertising friends that it should be cleaned up—it would mean either a task force summoned by Sir Peter Parker or a labour of Hercules, and for myself I would have laid a bet on Hercules being cheaper and more efficient. But, my Lords, I have not been to Victoria for 18 months; I have not seen a yard of it. For that reason I labour under quite a few difficulties today in trying to make the point.
The second point which necessarily arises in considering this rather extraordinary proposition—which, I must say, I read first of all with astonishment and which is, of course, referred to in both the letter of the noble Lord, Lord Beloff, to The Times and the letter to The Times which I have handed to the noble Lord, Lord Paget of Northampton, to read—is how you can spread this propaganda, how far you can use it and on what media you in fact so use it. The Motion refers to the Advertising Standards Authority, and I have studied as best I can the many papers which are put together to create its particular credo. When I asked for a little further information I was told it would not be available before the debate, and, on the whole, I think that is right. It is a semi-judicial organisation or tribunal, and it is probably perfectly justified in saying, "No, we will perhaps give it to the Government, but we are not giving it to a speaker who is speaking rather off-the-cuff".
Without trying to be humorous or funny in any way, perhaps I should ask how long I have spoken, because I am unable to see the clock.
Lord McGregor of Durris: Twenty one minutes, my Lords.
Lord Hale: Then I must clearly very quickly come to a close in the interests of your Lordships.
I suggest that if anyone is fortunate enough to have a copy of the catalogue of "A Caravanserai in Piccadilly", which is celebrating its 275th anniversary, they will have something printed in such rewarding colours that they could provide for a comfortable air-raid shelter decoration. You could have appetites satisfied by the colours. You would have a whole history of England in which battle after battle in Africa was won by one general with half a dozen bearers, and some quite heavy hampers, Fortnum and Mason bags and packages; and you might have something which could provide the necessary supplies.
I conclude by saying one thing. I wanted to speak about truth. It is my case that truth is the one solid material from which understanding and peace can be built. It is only built on that. Kipling's epitaph on the soldier in the first world war was:
"If they want to know why I died,
Then tell them my parents lied."

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We saw a history in which the noble Marquess, Lord Lansdowne, made a gallant and noble effort to try to bring hostilities, already long over their time, like me, to a conclusion. He was howled down as a man who was robbing us of the profits of war and who was going to collect our indemnities and our compensation. That was not to be. Before long British troops were feeding German children on the Rhine. We started a history of horror based entirely upon falsehood and nothing else; based on the cry of revenge and the lie, and the cruelty which built up the gas chamber and the hatred.
I had hoped today to speak a little more coherently, and a little more understandably. I am grateful to the noble Lord for his courtesy in assisting me. I will not trespass upon your Lordships' time any longer.
6.8 p.m.
Lord McGregor of Durris: My Lords, I must declare an interest in that I am the present chairman of the Advertising Standards Authority, an office in which I have followed three Members of your Lordships' House—the noble Lords, Lord Drumalbyn, Lord Tweedsmuir and Lord Thomson of Monifieth. My intention is to discuss the Motion of the noble Lord, Lord Hale, but I shall not enter into any controversial matters concerning the propriety or impropriety of Government advertising in the circumstances or for the purposes that I understand the noble Lord, Lord Hale, to have in mind. But I am grateful to him for giving me the opportunity to clarify the position of the ASA on an issue which enters public discussion from time to time and about which there is some misunderstanding.
The authority is not the creation of Government, and receives no public funds. It was set up and is financed by the advertising industry under a constitution which ensures its independence of that industry. The authority is governed by a council of which the majority of members, as well as the chairman, are required to be independent of the commercial interests affected by its activities. The function of the authority is to maintain high standards of advertising in the printed word, in posters and in the cinema. This function is discharged. first, by adjudicating on complaints from the public about advertisements which may be in breach of the British Code of Advertising Practice; second, by monitoring national representative and random samples of all printed advertisements and, when necessary, by sampling all advertisements for particular products or services; and third, by ensuring that the British Code of Advertising Practice is kept up to date. It works within the law as it affects advertising. This self-regulatory system rests upon the support of those engaged in the advertising industry, and it has the constant support of the very large majority of them.
Most people now accept the authority's rulings as a matter of course, although it possesses no legal sanctions. Its methods of enforcement are, first, publicity, because no advertiser likes to appear in the monthly reports of the authority as having had complaints against him upheld. In a very small number of cases, when an advertiser fails to respond to the requests of the authority to withdraw or to alter an
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advertisement, the authority may go to the press and ask for a well-established procedure to be invoked under which that advertiser's advertisements will not be accepted for publication. Thus the authority can deploy very powerful sanctions against delinquents. But it never attempts to compete with the law that affects advertising, and it thinks of itself as a complementary system, the aim of which is to set standards rather than to secure convictions; to persuade, not to coerce.
For the purposes of the British Code of Advertising Practice, an advertisement is defined as a paid-for communication, addressed to the public or a section of it, with the intention of influencing the opinions or behavior of those to whom it is addressed. The object of the code is the regulation of commercial advertising in the broadest sense, including recruitment advertising. To the extent that a commercial relationship with consumers is involved, the code covers advertisements even by those who are not themselves principally engaged in commerce. Any advertisement which, for example, seeks donations from the public is considered, for these purposes, as involving a commercial relationship with consumers.
The code explicitly excludes from its ambit certain types of advertisements,
"concerned with matters of political, religious, social or aesthetic controversy".
provided that the advertiser's identity is clearly stated. In addition, the code does not apply to police or other official or statutory notices. The reason for these exclusions is that the authority cannot adjudicate upon such claims in an acceptable manner.
The code requires advertisers to have available before offering an advertisement for publication substantiation for all descriptions, claims and comparisons which relate to matters of objectively ascertainable fact. Such substantiation is required to be presented to the authority upon demand. In many advertisements concerned with matters of political controversy, adjudications would be no more than statements of the authority's beliefs, prejudices or preferences. Moreover, it would be an impertinence, besides being a folly, on the part of the authority or, indeed, of any other body which might be charged with its duties in respect of commercial advertising, if it were to attempt to adjudicate upon matters of political doctrine or policy, which are the direct concern of political parties and of Parliament.
This is not to say that statements of policy by Governments or by parties that use paid-for space always fall outside the authority's jurisdiction. The authority has adjudicated upon and, indeed, has upheld complaints against Government advertising in circumstances in which that advertising has played a commercial or quasi-commercial role; for example, recruiting advertisements for the Armed Forces or advertisements promoting national savings and the like. But that is the limit beyond which the authority ought not to go.
For those reasons, I think it would be unwise to ask the authority to consider departing from its established procedure down the road suggested by Lord Hale's Motion.
6.15 p.m.
Lord Paget of Northampton: My Lords, I was greatly honoured when the noble Lord, Lord Hale, asked me to speak on his Motion. I have known him for a very long time. We were young men faced with the slump of the Thirties, which we are remembering only too acutely again now, and we represented the Leicestershire and Derbyshire miners. There were very different conditions in those days. It was the noble Lord, Lord Hale, who brought me into the Labour Party and of the decisions that I have taken in my life there can be few, if any, which I have regretted less. I certainly, never for a moment, have been tempted to leave the party and to join another when that party which I love very dearly has found itself in troubles which I hope will soon be behind it.
We came into Parliament together in 1945. I remember enjoying one of the very pleasant privileges of an ex-Member of the other place of dining in their dining room with a party of old 1945 Members, including two who became Prime Ministers. We were reminiscing about those times and talking of our friends and of exciting things that had happened in the House. I remember that all of us came to the unanimous conclusion that Leslie Hale, as he then was, had been the best of the lot and that in 1945 he was the finest parliamentarian that any of us heard.
A great deal of time has passed since then and we have moved into other spheres. But I was delighted to hear raised what I feel is a very underrated issue and one of very great importance indeed. How does democracy communicate with its people? It is our job—the job of we parliamentarians—to tell the people what our policies are; it is for us to do it. In that process of explaining to the people, which it is our responsibility to do, we educate not only them but ourselves. It is only by getting down and meeting the criticisms and putting across what you are saying, that you really understand what you are committing yourself to.
In that process we built up for ourselves a number of standards and those standards are not by any means always obeyed. Certainly when I was in another place there were certain Members in both parties who we knew did not obey them. They had the contempt of both parties. But those standards were peculiar to themselves. I am not going to try, to list them now, but they built up and became a very important link in the relationship between the parliamentarian and the constituents or—speaking in this House—perhaps one should say the people. I believe that this was deeply important. We should not hire someone else to do our job. That is what employing public relations and advertising professionals amounts to. It is our job to do it in the way we have learned and according to the standards that we apply. If we employ other people who have different standards—and the noble Lord, Lord McGregor, has just been telling us how that very admirable system works—once they come into our sphere, their standards become as much forgotten as ours. If the parliamentary client approves, it is good enough for them; after all, it is a parliamentarian's job, and who are they to correct his ethics? The parliamentarians are saying, "These are professionals we have hired, and who are we to question how they do it?"
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The result of that sort of advertising and that sort of presentation is something which, in terms of truth, falls a long way below what either would do alone. I am referring particularly—and I do not want to take many minutes—to the suggestion, which I believe has been satisfactorily sat on, that Government money should be employed to hire people to counter the political campaign which is being mounted against the nuclear weapons. That is a political campaign mounted by political people. If the Government do not have a good enough case and, with all the mass of the media listening to them, cannot put over that case, it is time for them to realise that it is a bad one. If, in the process, they find that it is indefensible, their attitude must be to say, "We must change it", not, "We must hire someone to undertake a defence which we are incapable of producing".
After all, I think that there is broadly a very solid case for the Government's defence policy. But it is not just defence that they are presenting, Nuclear weapons are not weapons of defence. It offends truth to call them so. They are weapons which have a certain function. It is not nuclear weapons or the threat of them which have kept the peace in Europe for these years; nor is it the capacity of NATO to meet the Russians. There is no such capacity. I think that most of us who have any sense of realism know that if the Russians advanced they would find little difficulty in overrunning the defences in central Europe, which are impossibly placed.
The vital point of Europe is that it provides a security line by the guarantee that crossing that line means that there will be no shower of nuclear weapons; because, by the SALT agreements negotiated by the Americans and the Russians as to long distance missiles, they have mutually put each other out of bounds. The vital thing is the knowledge that, however confident the Russians may be about winning the first battle, until they have means of crossing the Atlantic, they do not know who will win the last. It means that the crossing of a certain line means war, with no knowledge as to when that war will stop—a war, which on any view will take a long time, against a power of greatly superior economy and a much greater capacity to be able to finance and hold the situation as it goes on. That is what NATO is for and that is what it is about. It is to carry the assurance that America is involved and that that line means a battle across the Atlantic. That is what you need to explain to the people.
I also think that one should try to explain to the people why, if at all, nuclear weapons in our hands or on our territory are necessary for the achievement of that objective. There may be a case both ways. I personally do not think that British nuclears are necessary. It is because I am a pacifist; it is not because I am a funk. It is not because I think that the Americans should do it all. Very broadly, by their agreements with the Russians, they have excluded themselves from this nuclear trouble. It is because I do not think that it makes sense to spend great sums on weapons from the use of which we are effectively deterred. Our vulnerability is such that, in any circumstances whatever, it would require a homicidal maniac to press the button.

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However, this is a political debate to put across. If you bring in the publicity men, their object will not be to reduce the matter to argument, to discussion and to logic, and to be careful give and take. It will be to produce the slogans which will carry an election. It would be reducing a political debate to sloganism, That is what I care about and, therefore, I think that this is a subject to which, in terms of our political and parliamentary philosophy, we should give very careful consideration.
6.28 p.m.
Lord Auckland: My Lords, this has been a very wide-ranging debate; it has almost generated into a defence debate, and it is none the worse for that. But I think we must be very careful in how far we exceed the powers of the Advertising Standards Authority. I have been reading through their book, which contains very stringent controls on advertising, and particularly on products. We are concerned with the Motion of the noble Lord, Lord Hale, on matters relating to defence and rearmament. The real difficulty here is that defence and rearmament, particularly these days, are very fast moving. We are living in an age of both conventional weapons and nuclear weapons, and any advertising, whether it is by Government or by private sources, is bound to have the problem of catching up with the times.
The noble Lord, Lord Paget, touched on this very sensitive matter of the Government's proposed (and I emphasise the word "proposed") idea of spending £1 million on advertising nuclear weapons. I must confess that I have some reservations on this as an advertising compaign by an advertising agency. I believe that this is a matter for Government Ministers to propagate, and I believe that the present Government Ministers can do this very effectively and perhaps more effectively than an advertising agency. In advertising as a whole we must guard against actively propagating false emotions on matters relating to life and death.
We have had examples in the pharmaceutical industry—an industry with which I had a little experience in management training some years ago. Here it is easy to advertise a product or make claims for it to cure arthritis, or to cure diabetes, but due to the admirable work of the ASA it is confined to medical journals. They alone can advertise drugs which have to be obtained on prescription. I believe that the code which the ASA have produced will do far more good and be more effective than any interference from any central Government in trying to go beyond the ambit of that code.
6.31 p.m.
Lord Ardwick: My Lords, I must congratulate my noble friend Lord Hale on his ingenuity in finding a way to bring before this House a problem which looked threatening when it emerged a few weeks ago, but has since happily disappeared; the proposed employment of public funds to preach a message on a subject which has ceased to be bipartisan and is now at the centre of political controversy. I mean, of course, the nuclear weapons question.
The problem came to light shortly after the Prime Minister had appointed the most flamboyant orator in the Cabinet to the Ministry of Defence; a man who can move mass audiences, and think fast and clearly
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before the television camera and the challenging television interviewer. One saw, and indeed sympathised with, the right honourable lady. She was, and indeed is, faced with a nuclear disarmament campaign which challenges Government policy and which can organise marches, rallies, and demonstrations; a campaign which can benefit from the remarkable fortitude of the uncommon ladies of Greenham Common.
I do not wholly go along with my noble friend Lord Paget. I think that a great protest movement of this kind is difficult to counter. I remember the embarrassment caused by a smaller protest movement during the days of an early Labour Government, when a housewives' league was formed to complain about food prices and rationing. We could not organise a counter campaign demanding that the Government should keep food prices up, and should keep rationing going. It is difficult to have such a negative. Nor can the Government today organise anti-CND demonstrations.
The Conservative Party organisation has, I believe, founded a body called The Campaign for Defence and Multilateral Disarmament, and Mr. Winston Churchill is the leader of it. But, of course, it must work under considerable difficulties. It cannot organise the kind of highly emotional demonstrations run by the CND. It cannot have slogans such as "Keep the bomb and keep the peace!" or, "Conservatives for cruise", or "Tories for Trident". No, the answer can only be given in a rational way, and the leadership must come from party spokesmen led by the Minister of Defence.
Can the Government case be fortified in any way? Here somebody in the Government had the idea of using the rip-roaring techniques of advertising to aid the Government case. The idea seems to have been toned down later, and the campaign was finally intended just to inform the public where they could get at the facts of the nuclear controversy and the other side of the nuclear logic with its strange paradoxes.
The Government in defence of this were able to cite a precedent, or apparent precedent, a pro-NATO, pro-nuclear, campaign launched by a Labour Government round about the year 1969, as a background to a recruiting drive. But there was a vital difference. The Conservative Opposition in those days shared the Labour Government's views on defence. There was no question at all of the Labour Government storing up a political advantage which might benefit them at the next election. But today the two great parties diverge, and diverge seriously, on the nuclear issue. The subject is likely to be at the heart of the next general election, and the next general election might now, for all we know, be only a month or two away.
Therefore, the idea of using public money to propagate a policy under attack from the Opposition parties seemed to be monstrous. No critic, no paper, spoke so vigorously as the Daily Telegraph, always a friend of Tory Governments, but always a candid friend. Three weeks ago they published a leader headed, "Defence is Not Soap". It began:
"There are legitimate, and illegitimate, ways of putting to the people the Government's case against one-sided disarmament".
One-sided disarmament, I might say, is Fleet Street's

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excellent translation into Saxon of the cumbrous Latinate word "unilateral". The leader went on:
"The legitimate and difficult way is for Ministers to win the debate rationally with their own rhetorical skill and conviction".
Later the paper defined the illegitimate way which,
"is to spend taxpayers' money on an advertising campaign of political propaganda."
The leader finished up:
"If Conservative Party and Government spokesmen are not doing their job, they should be removed, not supplemented by advertising out of public funds".
The Government had what one commentator described as bucketfuls of obloquy poured on their head, and so they have wisely dropped the idea of an advertising campaign, or so I understand.
Therefore, the proposal made by my noble friend of having such advertising brought within the scope of the Advertising Standards Authority to check that it conforms to the British Code of Advertising Practice is unnecessary. It is also, as the noble Lord, Lord McGregor, pointed out, impracticable.
"All advertisements should be legal, decent, honest and truthful"—
these are the introductory words of the code. To quote Francis Bacon:
"But what is truth? asked jesting Pilate. And would not stay for an answer".
Wisely the code imposes no restrictions in regard to expressions of opinion, or assertions of fact, or claims, in advertisements concerned with matters of political, religious, social or aesthetic policy. To suggest that it should behave otherwise is to suggest that it should become a political and religious censor, a kind of latter day Star Chamber.
Quite a lot of government advertising is done. It is about £18 million worth in a year. But it is concerned with such politically innocuous subjects as road safety, seat belts, how to apply for family income supplement and, in times of full employment, there is need for advertisements for recruiting for the armed services—not necessary at this moment, I believe.
I am one who wishes that there could be more Government advertising. Citizens are entitled to explanation in simple form of Acts of Parliament, which may provide them with welfare, or impose obligations upon them. The newspapers, aided by the electronic media, can describe such things, but as a rule only once; they cannot go on describing them. The only way to provide the necessary repetition and perhaps to make the required impact is to use advertising. For long I have thought that Governments are too economical in their use of advertising. But, of course, they must keep away from political controversy in their advertising. Sometimes I have suspected Governments of preferring to do good by strealth simply because the more people are unaware of their state entitlements, the less the Government have to pay out.
6.41 p.m.
Lord Glenarthur: My Lords, I am sure that we are all grateful to the noble Lord, Lord Hale, for giving us the opportunity to debate advertising standards, particularly in relation to defence issues—which is
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what his Motion does. The noble Lord made a most interesting, thought-provoking and moving speech—something that we all expect from him, a man of very great experience in both your Lordships' House and another place—and we are grateful to him. The noble Lord pointed out quite clearly that his Motion covers two distinct departments within the Government: advertising falls within the remit of the Department of Trade, while defence falls of course within its own department.
Before replying to the main points raised in the course of the debate, perhaps I can clarify the position in respect of the Advertising Standards Authority and the British Code of Advertising Practice, which are referred to in the Motion, though I doubt whether I can do so more ably than did the noble Lord, Lord McGregor of Durris, in his capacity as chairman of the authority. The Advertising Standards Authority is an independent body set up by the advertising industry to ensure that its system of self-regulation works effectively in the public interest. The code of practice is concerned with commercial advertising. It imposes no restrictions in regard either to expressions of opinion or to assertions of fact upon claims in advertisements concerned with matters of political, religious, social or aesthetic controversy; and that is a point that was made by the noble Lord, Lord McGregor. Apart from the various controls on, for example, tobacco advertising, exercised by the Department of Health and Social Security on health grounds, there are no controls imposed on commercial advertising except by the industry itself through the Advertising Standards Authority.
My noble friend Lord Auckland raised a particular point of which he gave me notice, and I can tell him that there are numerous laws which cover advertisements of various types, dealing with matters ranging from accommodation agencies to hire-purchase terms, and many other areas. However, this is quite another matter from controls on published advertisements. I hope that that answers the point that my noble friend raised.
I should make it quite clear that the Government have not taken any final decision on whether to conduct a public information exercise on nuclear defence issues of the kind reported in the press, and to which the noble Lord, Lord Paget of Northampton, referred. The main concern of the Government in considering the exercise is to increase public understanding of the very complex issues involved in our nuclear disarmament and defence policies. Indeed, it is the duty of Government to explore means of providing facts and information in a clear and forthright way, especially at a time of high public interest in the subject.
The Government have welcomed and encouraged the present debate on nuclear defence both in your Lordships' House and in another place, as well as in the country at large. It is true to say that under this Administration there have been more parliamentary debates about nuclear policy than there have been under any other Administration. Furthermore, that is only right and natural because it is this Administration which has had to make the important and difficult decisions about modernisation of the British and NATO nuclear forces that have hitherto enjoyed the

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support of successive Governments since the inception of the NATO Alliance.
But if Government nuclear, defence and disarmament policies are to be the subject of public debate, it is the responsibility of Government to ensure, in the public interest, that the debate is an enlightened and educated one, based on an informed appreciation of the facts, and is not conducted on the basis of ignorance and fear. In the latter context, I am bound to say that there is a lot of misleading information about which seeks to prey on the public's natural anxiety about nuclear weapons. In response to this, what the Government have been considering is not a propaganda campaign, as has been suggested tonight by noble Lords, but a means of achieving a better awareness of the issues and the facts—I particularly stress "the facts"—by publicising the Government material which is available on the subject of disarmament and deterrence.
I have stated that no decisions have been taken on this public information exercise—
Lord Paget of Northampton: My Lords, of course the information should be made as broad as possible, but is an advertising agency with a large number of commercial accounts the right instrument through which to do it?
Lord Glenarthur: My Lords, perhaps the noble Lord will bear with me for a moment while I elaborate my argument a little further. Just now I stated again that no decisions have been taken on this public information exercise. However, whatever the outcome, I should draw your Lordships' attention to the existence of a clear precedent—and this was referred to earlier in the debate. In 1969 the Labour Administration ran a publicity campaign to promote British and NATO defence policies, including possession of nuclear weapons, involving full-page newspaper advertisements—very good advertisements, I think it is fair to say—which invited readers to send for a booklet; and I have copies of the advertisement with me here. Allowing for inflation, the expenditure of the Labour Government at that time on their publicity campaign was comparable to the £1 million that has been widely quoted as the cost of the exercise now being considered by the Government.
There have been claims that circumstances have changed since then; that there is no precedent. Perhaps at this stage I may quote from some of the advertisements which, after all, deal with facts. I wish briefly to refer to one advertisement that featured in The Times on Tuesday, 5th August 1969. It states, at the beginning:
"It is probably true that no one on either side of our divided world actually wants war. The risks are too great. There could be no winners".
Then it goes on to state:
"The risks are too great because both sides have nuclear weapons. If one side was without them, there would be no risk for the other. Aggression would become a much more attractive proposition".
If we are dealing with facts, I would ask: what has changed? The nature of the threat to the peace and freedom which we have enjoyed in Europe for the past 38 years or so has not changed; if anything, the threat has grown. Nor has there been any change in Government
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policies of support for NATO, for deterrence and for multilateral disarmament, which have enabled our very enjoyment of peace and that very precious freedom. These policies, I must stress, have enjoyed the support of all Governments, Conservative and Labour, since World War II—
Lord Paget of Northampton: My Lords, if he says that the defence situation has not changed since 1969, the noble Lord should really read the speech of Lord Carver (who has unique experience of that) as to the extent to which it has changed, why he thinks—and I agree with him on this—that the situation of 1969 does not apply now and why Britain's security and safety is not improved by maintaining nuclear arms.
Lord Glenarthur: My Lords, the noble Lord is perfectly entitled to his views on what is said by the noble and gallant Lord, Lord Carver, but I am bound to say that the Government do not necessarily share either his views or those of the noble and gallant Lord. For their part, the Government seek to draw public attention to their continuing support for NATO and their policies of deterrence based on the possession of sufficient weapons, nuclear and conventional, to deter attack at any level, coupled with a relentless search for balanced and verifiable measures of multilateral disarmament.
What are the facts and information that the Government might be promoting that have caused such an outcry? The noble Lord, Lord Ardwick, when he referred to the advertisements said that he doubted whether the Government in his Administration's day had actually disagreed with the Opposition—with this party. I doubt whether his party consulted with the then Opposition before they came to employ the advertisements—
Lord Ardwick: My Lords, I wonder if the noble Lord is certain of what was the convention on these things. I remember that on one occasion I wrote a very simplified version of a White Paper on Mr. Richard Crossman's pensions schemes. The Conservative Opposition were consulted on that and, indeed, had to agree before even a popular version of a White Paper could be produced.
Lord Glenarthur: My Lords, if I was wrong then, of course, I apologise to the noble Lord. But what are the facts and information that the Government might be promoting that have caused such an outcry? They are facts such as Britain's membership of NATO, an organisation set up by the countries of Western Europe and North America after the Second World War because of the fears caused by Russian expansion in Europe; facts such as NATO being a purely defensive alliance whose members regard attack on one as an attack on all and are pledged to assist each other; that the alliance has no aggressive intention against any other country and has publicly stated that its weapons, nuclear or conventional, will never be used in Europe except in the event of attack; facts such as that the greatest threat to our security springs from the Soviet Union and the Warsaw Pact allies, and that the Soviet Union has immense conventional and nuclear forces, far more than can reasonably be required for purely defensive purposes—and these are all facts which were

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discussed very fully last week in your Lordships' House.
Deterrence is only one side of the coin. On the other side, the Government seek to provide information about their and NATO's twin aim of negotiating balanced and verifiable disarmament and arms control measures—for example, how Britain has played an active part in multilateral arms control and disarmament agreements negotiated since 1945. These include the 1963 treaty banning nuclear tests in the atmosphere, the 1968 non-proliferation treaty preventing the spread of nuclear weapons and the British-inspired 1972 ban on biological weapons. Other information might describe how this Government continue to take part in a number of international negotiations such as the conference on co-operation in Europe, where we and our allies have proposed significant military confidence-building measures applicable to all of Europe; the mutual and balanced force reductions talks in Vienna, where we continue to work for the reduction of NATO and Warsaw Pact forces in central Europe; the 40-nation committee on disarmament in Geneva, where we are discussing a number of subjects; and the Government's support for the present talks between the United States and the Soviet Union on reducing intermediate-range nuclear weapons in Europe and they welcome the resumption of negotiations on strategic weapons and the commitment of the United States to seek significant reductions in the level of these weapons through strategic arms reduction talks.
These are all facts, not propaganda. It is only right that the public are made aware of them. There are also a number of other pieces of misinformation on, for example, cruise missiles. I do not propose to go into further detail here because they have already recently been given a full airing, but they are details which have helped raise public concern, and, if the public are concerned about any Government policy, it is the duty of that Government to explain their policies in detail. This Administration was elected on policies which included a commitment to strengthen and modernise the country's defences while at the same time supporting negotiations for realistic and verifiable multilateral disarmament. The NATO twin-track decision on cruise missiles, for example, is entirely consistent with these policies.
To sum up, the Government have not taken any decision on whether to conduct a public information exercise on nuclear defence issues of the kind reported in the press and referred to this evening. Nonetheless, the precedent of such an exercise was clearly set by the Labour Government in 1969. There is currently a high degree of public interest in nuclear defence and disarmament issues and it is the duty of Government to provide as much detailed information as possible in order to encourage enlightened and meaningful debate.
I say once more that we are not talking about propaganda. Propaganda and misleading information there may be in abundance; but it is not this Government's intention to counter like with like. As I have made clear in my speech, the Government are only interested in providing the facts about their policies, the facts about the issues at stake and the facts about
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what has been achieved. The issue is a vital one for this country's future and that of the Western world. On it may hinge our continued enjoyment of the peace and freedom we all cherish.
Lord Hale: My Lords, I rise to thank the noble Lord for his generous and kind response and for the information he has given, and to thank the other speakers for their information. I apologise for my own temporary encumbrance and I ask leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Princes Risborough Laboratory: Timber
6.58 p.m.
Lord Todd Lord Todd rose to ask Her Majesty's Government how they will ensure that closure of the Princes Risborough Laboratory will not reduce their commitment to a research programme and capability in timber at the Building Research Establishment.
The noble Lord said: My Lords, my Unstarred Question concerns the Princes Risborough Laboratory which I shall refer to henceforth, for the sake of brevity, by the initial letters PRL. PRL began life in 1925 as the Forest Products Research Laboratory under the aegis of the Department of Scientific and Industrial Research. After the demise of that department in the 1960s, the PRL was bandied about among various departments until finally, in 1972, it came to rest in the Department of the Environment being made a part (or a kind of outstation) of the Building Research Establishment. Originally PRL was concerned entirely with timber, but since 1972 it has diversified its work to take on various aspects of building and environmental research, and indeed I think that today only about 60 per cent. of its work is concerned at all with timber.
My reasons for putting this Unstarred Question this evening are twofold. They concern, first of all, two reports of your Lordships' Select Committee on Science and Technology, the first in 1980, the second in the summer of 1982, and, on the other hand, the Rayner Review of the Building Research Establishment. The Select Committee called for more timber research; this in effect meant strengthening PRL. The Rayner Review suggested that PRL should be closed in order to save money.
Her Majesty's Government have now announced the closure of PRL and the transfer of facilities for timber research from Princes Risborough to the Building Research Establishment at Garston. I do not know whether the Government regarded this as a potentially embarrassing announcement to be given minimum publicity, but they certainly made it in the time-honoured way for such announcements. It was in fact made in a Written Answer in another place on the last day before the Christmas Recess.
Be that as it may, the statement also contained the important phrase:
"this move does not imply any reduction in commitment to a research programme and capability in timber at BRE".
My question to the Minister is how he is going to honour his undertaking. I shall not weary your

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Lordships by rehearsing all the Select Committee's recommendations. One, however, I must stress. It concerns the need for more research into wood properties and into wood as a material. Timber research has been diminishing fairly steadily in recent years, both in resources and in manpower, and this diminution is something which we have to stop.
The Government's declared policy of increasing domestic timber production is certainly something that we would all welcome because at present we import something like 92 per cent. of our requirements of wood and wood products at a cost of something like £3 billion per annum. But what if the home-grown timber is not of a nature to satisfy market requirements? There is only one way to ensure that a policy will work, and that involves more research.
The Committee in its report drew attention to the weakness of the links between those concerned with the growing of tree crops and the end users of forest products. These links ought to be close, but I am afraid that they are not. Silvicultural practices and the choice of species determine the nature and the quality of the wood which is their end product. Those practices and choice of species ought to be conditioned by the requirements of the end users of the products. Yet at the moment most timber research, including that carried out not only by PRL but by the Timber Research and Development Association (the so-called TRADA), the private sector research organisation, is concerned with imported timber. It is primarily concerned with the uses to which existing imported timber can he put and not the selection of silvicultural practices to give suitable timber quality. Although the Forestry Commission continues to commission research at PRL this is on a small scale—much smaller than the committee thought was desirable.
Research into forest products is at low ebb. The incorporation of PRL into the Building Research Establishment undoubtedly contributed to this state of affairs, since it necessarily moved PRL's orientation away from forest products and wood quality towards timber as a material for the construction industry. Both with PRL and TRADA the main emphasis now lies in helping to make optimum use of existing materials with a large part of their effort devoted to wood protection; there is much less emphasis on matters such as predictive work or newer species.
To correct these shortcomings, which the committee believed they observed, the Select Committee suggested that the Government might consider integrating forest products research at PRL with forestry research under the Forestry Commission. The Government decided that the advantages of this proposal were outweighed by the disadvantages. I respect that opinion and I do not wish to argue against the Government's decision. In their belated Statement of February 1982 in response to the Select Committee's Report of 1980, the Government noted that work at PRL had become diversified to include materials other than wood and admitted that at that time only a small amount of research is being devoted to research on wood as a material as compared with that on the use of wood in construction. They also went on to say:
"The Select Committee made some interesting proposals about research into wood properties and the end use of timber. We accept that more effort should be applied to work on wood properties and regard will be had to this in planning future research programmes".
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This was taken by some of us—perhaps optimistically—to mean that the work of PRL on timber quality would be increased.
I now turn to the review of the Building Research Establishment carried out under the guidance of Sir Derek Rayner (as he then was) whom we have recently welcomed to this House. That review concluded that PRL should be closed and its facilities for timber research transferred to the main BRE at Garston. The review said that,
"savings of some £343,000 p.a. should arise from transferring work from the Princes Risborough Station and disposing of that site".
On the face of it then, the work of PRL is merely being transferred to another station in the next county and the Government have presumably done their sums—they are certainly in a much better position than I am to judge whether the transfer will save them money. Why then, your Lordships may ask, should I be concerned about the closure of PRL? I fear that I must admit to disquiet on three counts.
When the Select Committee visited PRL in 1980 they concluded from what they saw there that the strength of the laboratory depended a great deal on the continuity of its research effort and the accumulated knowledge handed down from its days as the Forest Products Research Laboratory. That continuity has already suffered a great deal from serious cutbacks. I understand that there has been something like a 25 per cent. drop in the manpower of the station, and I seriously question the laboratory's ability to survive in anything near intact condition if it is put through the interruption of total removal to the next county. The head of PRL said to us in evidence last summer:
"a move from Princes Risborough to Garston would inevitably result in a substantial interruption in the work programme and probably some loss of key expertise due to the staff not wishing to move".
The Building Research Establishment, in its analysis of the Rayner Review, also drew attention to loss of expertise through premature retirement of some senior staff.
We must also consider and seek to allay the anxieties of PRL's staff. Their union representatives are opposed to the move and they expect cuts in the BRE's manpower and funding to continue at the rate of 6 per cent. to 7 per cent. a year. They believe, too, that some of the specialist timber facilities at PRL will not be reproduced at Garston and that the interdisciplinary character of its work will be disrupted and to a degree destroyed by the move.
Finally, I have an uneasy feeling that reduction in resources for timber research that we have seen in recent years will continue. Wood as a material was the raison d'etre of PRL and its work on that topic was a major factor in its acquiring, as it did in its days as a forest product research laboratory, a worldwide reputation. When it goes to Garston wood will be just one material among many others. This clearly suggests downgrading, unless some very specific assurances are given. Secondly, and perhaps more importantly, past experience certainly suggests that when the next squeeze on Department of the Environment funds comes, wood research is going to be high on the list of things to be squeezed out.
These, then, are my anxieties. The Government pronouncement ought to be reassuring because it said

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that the closure of PRL does not imply any reduction in their commitment to a research programme and capability in timber. Of course, it does not say how big that research programme or how great the capability are likely to be. As a result, I want now to put to them a specific question: how will they ensure that this commitment they have stated will entail no reduction in the quality and quantity of PRL research? How will they honour their statement to the Select Committee that more effort should be applied to work on wood properties?
To that main question I should like to add five subsidiary questions, of which I have given the Minister notice. First, how many of the professional staff at PRL engaged on timber research will be lost as a result of the transfer through redundancy, early retirement or reluctance to make the move? Secondly, does the Forestry Commission support the move to Garston? Thirdly, was the Forestry Research Co-ordination Committee consulted before the decision to close PRL was taken? Fourthly, what is the Government's estimate of the net savings attributable to the closure of PRL after deducting the costs of transfer to Garston? Finally, what are the Government plans for the future of the PRL site?
7.12 p.m.
Lord John-Mackie: My Lords, I am sure that everyone interested in forestry and timber will be very grateful indeed to the noble Lord, Lord Todd, for putting down this Question. The way he has put the Question and gone over all the arguments leaves very little more to be said by anybody else. Naturally, I found most interesting his account of the history of PRL and the situation that has developed over the years, and then the Government's decision to close it. I would just say that when one thinks of the importance of timber research and the fact that we import something like £3 billion-worth of timber and wood products per year, not to mention our own home timber,the saving (if I heard the noble Lord correctly) of £340,000 is a mere bagatelle compared with the enormous amount of money we spend on timber. When we consider the research that is needed to get this timber used properly, surely that saving is just a fleabite.
We know that our home timber industry is small compared with the enormous amount of timber that we import, but it is getting more and more important as the years go on. At the present time it is about 8 or 9 per cent. of our total use of timber, but before the end of the century it will have doubled to about 16 or 17 per cent. Quite frankly, if the Government would give a proper go-ahead to both the Forestry Commission and the private sector it could double again by the year 2025, and production could be doubled by 2050. That is another question, but it is essential to the home timber industry that they should be given the opportunity to develop research, which would prove the value of timber beyond all reason.
I am not an authority on research, but I saw quite a lot of timber research going on when I was at the commission and, for instance, there was the question of stress-grading. I believe quite a lot of research is still required on this. For instance, quite a lot of sitka
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spruce can be used in construction work, where its value is almost twice as much as pitwood, and so on, where it goes at the present moment. So we can see what could happen to the value of our home production in every way.
I remember seeing one sawmill where they had put in a stress-grader almost before their time, one might say. They found they were not getting the value of the use of this machine at all, although they had bundled it up and given a certificate as to the figures from the stress-grader. They found they could get better value for the timber if they bundled it up and put a red stamp on the end, as if it were foreign wood, and they got a better price in that way, which was ridiculous. I also understand that quite a lot of work is being done (although I am quite a babe in arms in these matters) as regards the laser-scanning of wood in sawing logs. All this is giving a fillip to home production, and it would be terrible if it were neglected.
Also, there is a lot of fertilising of wood today. Some experiments were made to discover the value of fertilisers, and there were quite fantastic results in the size of the tree. But we do not yet know whether the wood is as good or as strong as it would be if it were left without fertiliser.
All the research into these matters must be kept going. I was worried when the noble Lord, Lord Todd, talked about his concern over the considerable diminution of research. I understand there are only about four people on the job at the present moment, and we all know that a move like this can upset the staff considerably. We hope that the Government will give us some guarantee that they will see that this does not happen.
I shall be interested in the Minister's answers as to what the Forestry Commission are going to do about the matter. I have so many friends there, and they are as worried as anyone else about this move. They do not think it will be to their advantage at all. There is a committee headed by the Commissioner for Forest Products, Dallas Mithen, which is looking into the whole question, and I hope it will do some good.
My Lords, I do not want to say any more, except that I am looking forward to hearing what the Government have to say on this very important subject, and I hope it is something that will help us meet our debts.
7.18 p.m.
Lord Dulverton: My Lords, in speaking after the noble Lords, Lord Todd and Lord John-Mackie, I wish to proclaim my feeling of responsibility in following such instructed people. Under the noble Lord, Lord Sherfield, I was a member of the sub-committee of Lord Todd's Committee on Science and Technology dealing with forestry, and I had many dealings with the noble Lord, Lord John-Mackie, when he was chairman of the Forestry Commission.
My other interest in this subject is that in various ways I am involved in the world of forestry and I am going to echo so much of what the two previous speakers have said that I almost feel I ought to sit down rather than continue speaking. However, I am not going to sit down because I want to suggest to my noble friend on the Front Bench that he has heard the views of a scientist on the Cross-Benches; he has heard the

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view of an ex-chairman of the Forestry Commission on the opposite Benches; and now I would claim to be speaking partly for the private sector of forestry and, as my noble friend will know, the Government have proclaimed their intention that the private sector should expand. I, too, feel the need to voice concern about the future that has been planned for the PRL.
As we have heard again this evening, the Select Committee called for an increase in the volume and quality of research, both into the growing of timber and into its use and conservation when grown. There were particular references in the report of the Select Committee to the importance of the Princes Risborough Laboratory and the move is, as we have heard, causing concern to the scientists, to noble Lords opposite, to the Forestry Commission and to the private sector, mainly on three counts. The noble Lord, Lord Todd, has referred to some of them.
One is the abandonment of the specialised plant and equipment which is in existence at the PRL, and the feeling of doubt as to whether these will be fully replaced, except at greater expense than the Government may be willing to provide in the proposed new home. The second point of concern, as the noble Lord, Lord Todd, said, is the staffing question. I understand that it is contemplated that the complement of staff now existing will be cut down by some 25 per cent. in numbers, but also that some of its most highly qualified members will not wish, for one reason or another—maybe domestic reasons, or because of lack of confidence over the laboratory's move and future—to accompany it. That will be a very great loss. The third cause of fear is that, in pursuit of measures for economy in expenditure, the work of the laboratory, far from being expanded as the Select Committee suggested should be the case, will suffer from further financial cuts and be seriously reduced in its scope and potential.
I wonder whether the little gathering that remains here in the House is aware of what goes on at the PRL, which over the past 50 years has built up an international reputation in all aspects of timber research and technology. It is one of the world's foremost research laboratories in that sphere. It is organised in two main divisions: first, the timber technology division and, secondly, the components and structure division. The noble Lord, Lord Todd, has told us a lot of what it does and I shall not repeat that. But it is very widespread in scope and all of it leads to savings, economies and more efficiency in the use of timber, as well as in the manner of its growing in order to provide the best possible article.
The noble Lord, Lord Todd, referred to the improvements in saw-milling techniques, with computer optimisation procedures and laser measurement techniques, which significantly increase the yield of the logs. The design and performance of load-bearing timber structures has improved enormously over the last few years, as well as standards of insulation—a most important attribute of timber in housebuilding.
In slightly lighter vein, as a sidelight upon the PRL's work and keeping a little nearer home, your Lordships may or may not know of the expertise which the PRL is exercising on very difficult problems connected with the restoration of the ceiling of this Chamber, particularly
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in relation to the restoration of the fine Victorian gilded carvings which were nearly perished. I hazard the thought that, without the PRL's expertise, it might not be possible to restore them at all.
Incidentally, the cause of all the damage to the ceiling is attributed by the PRL to the,
"high temperatures attained by the roof timbers at various times during the building's history".
It does not specify the source of such a damaging degree of hot air, nor is it suggested that any localised influence was responsible for the falling of that massive log of timber a year or two ago on to the seat opposite, which—fortunately, vacant at the time—was so often occupied by a Member who is held in such universal affection by the House.
If, as may be, the move from Princes Risborough to Garston is firm and irreversible, can the Government give the House a definite assurance that the fears that we have all expressed are groundless? Timber and timber products are being consumed annually in this country to the tune of £3,000 million-worth, over 90 per cent. of which comes as imports. But the contribution of home-grown timber will rise dramatically over the next quarter of a century, provided that the forest industry is given confidence.
It would seem a bit pennywise—I will not say the rest of that little quotation—to make modest savings on research into the better and more efficient use, the preservation and, where called for, the restoration and growing to better specifications of this truly massive quantity of timber. The expenditure will be trifling in relation to the saving to the nation.
Responsible Ministers will know of the deep concern of the recently established Forestry Research Co-ordination Committee and of the Homegrown Timber Advisory Committee, among all others involved with, and concerned in, the world of timber and forestry. The PRL is an asset of which we should be proud, and of which we most certainly have need. We need, in this country alone, its work to expand. I hope that we may be unequivocally assured that this is what will happen. The confidence of the whole forest industry, which has not been very well supported by Government over the past 10 years, but which Government wish to encourage to grow, could be substantially affected by the answer that my noble friend will be giving to us.
7.28 p.m.
Lord Sherfield: My Lords, I rise to support the initiative of the noble Lord, Lord Todd, in asking this Question and to endorse what he said. As the noble Lord, Lord Todd, observed, the sub-committee of your Lordships' Select Committee on Science and Technology, of which I was chairman, produced two reports on the scientific aspects of forestry. In each of them, they made strong recommendations about the need to strengthen the research effort in forest products, with particular reference to home-grown timber. In both, we criticised the reducing efforts being devoted to this research and expressed concern at the run-down at the PRL. In our second report, we expressed our greater concern at the proposal, which was already then on the cards, to close the Princes Risborough Laboratory altogether and to transfer the work to the Building Research Establishment.

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The committee felt that this was bound to lead to disruption of research programmes, loss of valuable staff and disturbance of facilities which it might not be possible to reconstitute effectively in a merged establishment. The committee were fortified in their recommendations by a visit to the PRL, and, if it is asked why the sub-committee did not visit Garston, the answer is that the work there was far removed from the committee's terms of reference.
We are told that the closure of the PRL will save £343,000, though this figure has been challenged, and I must say that its precision to the nearest £1,000 alone makes it suspect. I am all for economy in Government expenditure and, of course, it is obvious that a number of small economies can reach a respectable sum. The sum of £300,000 sounds a lot of money, as indeed it used to be. But, alas!, after years of high inflation, it comes near to the region of candle-ends. As an old Treasury official, I am a keen conserver of candle-ends, but when one is operating in the candle-end region it is desirable to pause and count the value, in non-money terms, of what is being axed or dispensed with. It does not seem to me that the Government can have done this exercise in the present case.
As was clearly brought out in the recent debate in your Lordships' House on the Ordnance Survey, the Government are disposed to gloss over or to disregard the authoritative views of scientific and similar bodies in pursuit of what are relatively minor economies or secondary economic purposes. This is yet another illustration of the fact that, some recent speeches notwithstanding, forestry has few friends in Whitehall—especially not in the Treasury and apparently not even in the Department of the Environment. Its importance for the national economy in the future is consistently overlooked and underrated.
As the noble Lord, Lord Todd, said, the Government have given an assurance that this decision will not mean any reduction in the commitment to a research programme and capability in timber research. The noble Lord, Lord Todd, has asked the major questions as to how this commitment can be or will be honoured, but I should like to put a few supplementary questions to the Minister. If these are too detailed for reply this evening, then perhaps he will write to me for the information of the Select Committee which, I think I can assure him, will not lose interest in this question.
The Princes Risborough Laboratory has built up a computerised data bank of information on wood research, including that being carried out in the universities and in industry. Will this be continued at Garston and will it be developed as a central reference point for wood research, to which all practitioners and researchers can have access? As the noble Lord, Lord Dulverton, has mentioned, a number of senior key scientists are not far from retirement. Recruitment is therefore needed now so that some of the knowledge and experience of the key men can be retained and not lost when they retire. Will this be allowed? Secondly—and this will be an important marker—will the rank of the new head of timber research on the forthcoming retirement of the present director of the Princes Risborough Laboratory be maintained?
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Next, the Princes Risborough Laboratory has a unique timber collection, part of which I have seen. It contains both small specimens and large boards. What is to become of it? It is extremely valuable and forms the basis of one of the most important keys to the identification of timbers in the world. The Princes Risborough Laboratory also houses the national collection of Basidiomycete Fungi, a term which I understand conceals the identity of the common mushroom. It is a unique and important collection. Where is it to go? Finally, the Princes Risborough Laboratory possesses a splendid library on all aspects of the growth, properties and utilisation of wood. Is this to be retained as a unit, integrated with the library at Garston, or dispersed?
In conclusion, I express the hope that the Minister will be in a position to answer this debate with some constructive replies and some firm reassurance on both the primary and pertinent questions posed by the noble Lord, Lord Todd, and other noble Lords, and the secondary questions which I have put to him.
Lord Inglewood: My Lords, at this late hour may I make a general plea for the case which has been made this evening by the noble Lord, Lord Todd, and other speakers. At the same time may I make one special point. We must not risk losing one side of our work. Comparable establishments abroad have worked very closely with us and we hope that they will look towards us in the future as they have done in the past. However, I doubt whether some of the suggested changes will necessarily leave us in the same position of strength. These establishments are concerned with timber research, which is a major and possibly an increasing need for the whole of Europe, which is short of raw material. Europe cannot produce all the timber that it needs, nor can every country cover the whole of this field of research. We want all these different institutions to work closely together for the common good. When the Princes Risborough Laboratory closes and is given another form we must be sure that we do not lose one side of that very important work.
7.36 p.m.
Lord Skelmersdale: My Lords, I am grateful to the noble Lord, Lord Todd, for raising this question today. As he remarked—or almost remarked—it gives me the opportunity to expand on the Written Answer given in another place on 22nd December of last year. Even if I was not before, tonight's brief debate has made me fully aware of the concern expressed by your Lordships' Select Committee over the adequacy of the research effort available to the forestry industry, something which my noble friend Lord Dulverton referred to as the natural fears which have arisen over the move of the Princes Risborough Laboratory from Princes Risborough to Garston. It might be appropriate if I commented at this point on what was said by my noble friend Lord Inglewood. Nobody who has spoken tonight would deny the tremendous expertise and international following of the laboratory itself. But this is not a geographical fact. It stands uniquely on its own as a research establishment, due to its own efforts and those of its staff over the years, wherever it happened to be situated.

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Before taking up the more detailed points made by noble Lords, may I outline the background against which the decision to transfer timber research facilities to Garston was taken. The noble Lord, Lord Todd, outlined the early history of the Forest Products Research Laboratory, dating—I believe he said—from 1927. The more modern history starts in 1972 when the Princes Risborough Laboratory became one component of the building research establishment by the amalgamation of the Building Research Station at Garston, together with its Scottish laboratory at East Kilbride, the Forest Products Research Laboratory at Princes Risborough and the Fire Research Station at Borehamwood.
Although most of the work at Princes Risborough is carried out for the Department of the Environment as the customer, some of the work is on behalf of the Forestry Commission, a fact to which reference has been made this evening. Much of the timber research programme flows from a concern with current changes in the source and nature of timber supply, with the use of the new composite materials continually appearing on the market and with the most appropriate and advantageous use of the increasing supplies of home produced timber. To answer again my noble friend Lord Dulverton, yes, most certainly we want to see this continuing and, if I may make a rather nasty pun, to which I can return later, mushrooming. The use of timber in construction is changing, and timber frame housing is being used on a steadily increasing scale. Again, I shall probably return to that point. Therefore, we can foresee a continual strategic need for a balanced programme of research on timber.
As the noble Lord, Lord Todd, and other noble Lords have already pointed out, the adequacy of United Kingdom timber research, and in particular the timber programme at Princes Risborough, was one of the major topics considered by your Lordships' Select Committee in its report in 1980 on scientific aspects of forestry. The Committee considered that the total research effort available in support of the forestry industry lacked the coherent approach that is a feature of research in other areas. It recommended that a new forest product research laboratory under the Forestry Commission should be established, integrating forest research with the forest products work carried out at Princes Risborough.
My noble friend Lord Mansfield replied in a Written Answer on 22nd December last that the Government accepted that the Forestry Commission should co-ordinate the broad strategy of forestry research through the establishment of a Forestry Research Co-ordination Committee, which would act as a forum to identify research requirements and opportunities. This committee has now been formed, and the head of Princes Risborough Laboratory is a full member. I note with interest that the committee has selected the subject "Wood science and processing" as the first for detailed review.
I cannot underline the following sentence more clearly. The Government fully accept the importance of sustaining a timber research programme. Ministers are concerned, however, to achieve maximum efficiency in the public service and to rationalise facilities and capability wherever possible. Reviews of support services under the general guidance of the then
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Sir Derek Rayner were initiated at a number of governmental laboratories. The study at the Building Research Establishment was no exception, and this indicated that the main headquarter site at Garston was under-utilised, as was the site at Princes Risborough.
It was recommended that use of the Princes Risborough site should cease and that the laboratory's activities and capability should be transferred to Garston. Several advantages could be seen to flow from this suggestion. One of the principal benefits of the transfer will be the reductions in running costs achieved by concentrating the laboratories on a single site. Overall management of the establishment will be simplified by the reduction in lines of communication (the two sites are, after all, some 30 miles apart) and the timber research programnme will benefit from immediate access to the resources of the main station. A valuable site will also be released for alternative use.
So the decision was justified on managerial grounds supported by appropriate cost studies. What this debate has really been about is the effect of this. All the research at present conducted at Princes Risborough is to be transferred to Garston. I will tell the noble Lord, Lord Sherfield, that this includes the data bank, the timber collection and the library, about which he asked. I must confess to being slightly embarrassed to reveal a gap in my horticultural knowledge. I have never grown fungi, either edible or inedible. However, after the very generous warning the noble Lord gave me in advance, I have taken particular advice and the answer is that not only it is possible to move the very valuable mushroom collection but it will be done.
Generally speaking, the move will be in two main phases, with around 30 staff being involved in the first and the remaining staff following, on completion of the building programme. The duration of the move will be kept to a sensible minimum, consistent with the need to give completion dates with a reasonable degree of certainty. This will help to preserve the sense of identity of the timber research activity and reduce the management problems which would result from a more extended series of moves. Staff involved will be offered normal public interest terms of transfer.
Maintenance of a capability in timber at the Building Research Establishment requires the provision of specialised technical facilities not at present available at the Garston site. Prominent among these are a biodeterioration laboratory, a sawmill and controlled temperature and humidity facilities which, in the nature of the material, timber research demands. Other accommodation required can be based in existing buildings with some degree of refurbishment.
At this point I must correct an impression given earlier this evening by the noble Lord, Lord John-Mackie. There are certainly not only four research staff on timber. The number engaged in timber research at the Princes Risborough Laboratory is 32 scientists, of which four are paid for by the Forestry Commission. The rest are funded by the Department of the Environment. Three experienced professional staff are due to retire, in the normal course of events within the next three years. It would certainly be premature to estimate at this point how many, if any, of the rest of the professional staff will be reluctant to move. But I

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should stress that this decision is on them, and them alone.
It is estimated that the amalgamation of the research facilities will allow the saving of some 20 posts in the clerical, junior technical and industrial grades. There will, however, be some natural wastage at both Princes Risborough and Garston over the next five years, and no redundancies are likely to arise as a result of the move. All non-professional staff will be offered posts, and the non-mobile staff will have jobs sought for them locally.
Whilst the sense of identity is clearly important, there is no intention to isolate Princes Risborough staff from those of Garston. Such opportunities as exist for integration between programmes of research will be taken. There is also the spin-off of the works canteen where, in my experience, one can, just by talking over a cup of coffee or lunch, obtain an enormous amount of outside thought, which very often crystallises or completely changes the tack of a project on which one is working.
The future use of the site at Princes Risborough is still under consideration by the Property Services Agency. The site will not be available for at least three years, and it is difficult to foresee future needs at this point.
The noble Lord, Lord Todd, referred to work on the effects of silvircultural practice on the properties and yields of timber. I can tell the noble Lord that this is currently in progress at the PRL, paid for by the Forestry Commission. The work on property requirements for end use is part of the programme commissioned by the Department of the Environment, but is producing a spin-off for British timber, and links between the two are now being strengthened in a new programme for the Forestry Commission. The noble Lord, Lord John-Mackie, took up this point as well, and talked mostly about home-grown timber. The bulk of the research—some 70 per cent.—is into timber for house building. Timber-framed house building has increased from 16 per cent. in 1979 to 29·5 per cent. in 1982, expressed as a percentage of the total new build. The timber involved may be either home-grown or imported, and both types are being researched at the laboratory.
Several noble Lords mentioned laser-scanning, which I must confess was a completely new subject to me. This is part of a new technique now being developed at the Princes Risborough laboratory to increase the yield of sawn timber obtainable from logs from British forests. It involves using computers to guide the sawing pattern, and promises to increase the yield obtained by several per cent. This programme is almost complete, and one hopes that it will be taken up by the British industry.
My noble friend Lord Dulverton spoke about the stress-grading of timber. The technique of mechanical stress-grading for structural timbers was developed at the Princes Risborough laboratory. This was applied to home-grown spruce, and it was found that the yield of structural quality material obtained was considerably increased—almost double in some cases. Current research paid for by the Forestry Commission concerned ways in which the forest could be managed
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so as to obtain bigger yields of higher quality material as measured by the stress-grading technique. This work will be transferred with the rest of the research.
The subject of the staff and finances in future also came up. When timber research is undertaken at Garston instead of at the Princes Risborough laboratory the subject will continue to be a major element of the research programme of the Building Research Establishment. Timber is an essential material for building, for the reasons I have already explained. The future size of the Building Research Establishment cannot be stated with certainty, but it will be important to maintain an adequate and viable team to undertake research on timber.
The noble Lord, Lord Sherfield, although he was very kind in giving me advance warning of one or two of his questions, has floored me with some of the others. If I may, I will take up his offer to write to him. But, on recruitment, I can say that the Building Research Establishment is undertaking limited recruiting at present and several officers will be assigned to the Princes Risborough Laboratory. It is anticipated that future losses will be replaced as they arise within the Building Research Establishment's overall manpower targets. I have no announcement that I can make on the grading of the senior post. That is currently being considered by my department and I understand that it is intended to replace the present head of the Princes Risborough Laboratory with a candidate of the same grade.
The noble Lord, Lord Todd, asked me in the course of his speech what I found the most interesting question of the evening, which was: how really is the timber research programme formulated? The research programme formulation at Princes Risborough Laboratory follows the customer-contractor principle adopted by the Government for their commissioned research and development work, as a result of the report of the committee of the noble Lord, Lord Rothschild, of 1971. This requires the Department of the Environment, for example, as customers, to define their research requirements and that the Building Research Establishment or, as the case may be, the Princes Risborough Laboratory's contractors, shall respond by preparing projects to meet those requirements. The primary customers for the work are the construction industry directorate in the Department of the Environment, with its concern for building regulations in its sponsorship of the industry, and also the Property Services Agency. The Forestry Commission is, as we now know, also a customer.
The noble Lord also asked about whether this research was of direct benefit to the United Kingdom forestry industry, as did other noble Lords. I hope I have been able to explain that the work is of direct benefit to the United Kingdom forestry industry, particularly in the testing and stress grading of timber, which is of especial relevance in the wider use of British grown timbers.
As far as the reduction in size of the Building Research Establishment goes, the Government are rightly concerned with the size of the public sector and, indeed, the public service generally. Steps have been taken already to increase efficiency and encourage more private sector funding of research. However, Ministers do naturally accept the great value and high

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quality of the Building Research Establishment's work and recognise the need to sustain a commercially independent national capability for construction and research.
The great value of the Princes Risborough Laboratory's work and the high esteem in which it is held by the industry are well recognised. I repeat the assurance already given by my right honourable friend the Secreatry of State for the Environment that the move of the Princes Risborough Laboratory to the main Building Research Establishment site at Garston does not imply any reduction in our commitment to a research programme and capability in timber at BRE.

Matrimonial Homes Bill [H.L.]
Reported from the Joint Committee without amendment, and recommitted to a Committee of the Whole House.
House adjourned at seven minutes before eight o'clock.

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