Sitting of 24 January 1983

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

    Airline Operators (Viability)
    Mr. Dobsonasked the Minister for Trade when next he plans to meet the chairman of the Civil Aviation Authority to discuss the viability of airline operators.
    The Under-Secretary of State for Trade (Mr. Iain Sproat): I meet the chairman of the authority at intervals to discuss this and other subjects.
    Mr. Dobson: When the Minister next meets the chairman of the Civil Aviation Authority, will he draw to his attention the extreme reservations—indeed, the violent oppostion—expressed by the Association of British Travel Agents to the CAA licensing Freddie Laker Holidays? Will he accept that this concern is expressed by an organisation whose main function is to ensure that holidaymakers are not robbed by various cheapjack outfits and to ensure that such outfits do not start up in future?
    Mr. Sproat: I am absolutely certain that Mr. Dent, as chairman of the Civil Aviation Authority, is all too well aware of the views of other travel agents and tour operators.
    Mr. Robert Atkins: Does my hon. Friend recognise that many small, independent airlines have gone through the recent recession without subsidies, grants or any other assistance and have done very well during that time? What steps will he take to persuade the chairman of the Civil Aviation Authority, on a continuing basis, to be more reasonable in the authority's approach to granting licences to these small airlines?
    Mr. Sproat: The chairman of the Civil Aviation Authority is, at this very moment, undertaking a review of his organisation. No doubt the extremely important question that my hon. Friend has put today is one that the chairman will be considering very closely.
    Mr. Woolmer: If the Minister is anxious to help the viability of British airlines, will he stop trying to make British Airways sell off the profitable parts of its business? Will he look again at this apparent madness of deregulation in the British air industry, which already has excess capacity? Specifically, what is his assessment of the deregulation on the Glasgow route where all the signs are that, yet again, one airline is being helped at the expense of others, with the result that excess capacity is arising and that, sooner or later, more jobs will be lost and the airport industry will be made more insecure?
    Mr. Sproat: The answer to the first part of the hon. Gentleman's question is "No, Sir". With regard to the second part, the British Midland route from Glasgow to
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    Heathrow has been extremely successful. I have not met a single passenger, as I visit Scotland rather more than the hon. Gentleman—and who does not think that the Government's decision is extremely wise.
    Mr. Teddy Taylor: Does my hon. Friend recall that it is now almost two years since his predecessor said that, in consultation with the CAA, he was hoping to resolve all the problems about the rules for flying balloons? Will my hon. Friend take extraordinary steps, with his real zeal and enthusiasm, to sort out this long-standing problem, the uncertainty over which has put more than 200 Southend jobs at risk?
    Mr. Sproat: My hon. Friend raises an extremely important problem. In arguing for a relaxation in the rules governing balloons and, indeed, banners, he is raising a vital matter for many sections of British industry. I can assure him that I and my colleagues in the Department of the Environment are giving urgent consideration to this matter.

    Loyalty Arrangements
    Mr. Colvinasked the Minister for Trade if he will meet the General Council of British Shipping to discuss the draft European Community competition regulation on loyalty arrangements.
    Mr. Sproat: Yes, Sir. I am writing to both the general council and to the British Shippers Council to invite them to discuss further the Government's proposals regarding the regulation.
    Mr. Colvin: Has my hon. Friend seen the report in today's Financial Times that shipping faces its toughest year for 50 years? Does he agree that to proceed with a scheme to reduce the loyalty arrangements from 100 per cent. to only 70 per cent. at the present time is likely to deprive conference lines particularly of their high value cargoes, leading in the end to a further reduction in our Merchant Navy, to the detriment of both our trade and the defence of the nation?
    Mr. Sproat: My hon. Friend does well to draw attention to the extremely difficult times through which our Merchant Navy is passing. However, I remind him that there is no compulsion on shippers to reduce their loyalty arrangements to 70 per cent. If shipowners give good value for money they can certainly keep the 100 per cent. arrangement.
    Mr. Woolmer: What will the Minister tell the GCBS about the state of British shipping and what the Government intend to do about it? What other country is standing by and doing nothing to protect or help its merchant fleet? Our fleet was once the pride of the nation. What will the Minister do to stem the job losses and the outflow of shipping orders?
    Mr. Sproat: I shall tell the hon. Gentleman what I am doing, not merely what I am going to do. Last week I saw the GCBS to discuss the matter and I also saw the National Union of Seamen. Tomorrow I shall be seeing the Merchant Navy and Airline Officers Association and I shall see the radio operators later this week. When we have had a chance to consider all their views we shall put together our own views on what should be done about an extremely difficult situation, which does not affect only the British fleet, but is a result of the world wide recession.
    Mr. Higgins: Is my hon. Friend aware that those of us who have made a lifetime study of the shipping industry and have always felt that the advantages of competition are very strong believe, nevertheless, that the EC's doctrinaire attitude on the issue is misguided and that the conference system and loyalty arrangements have much to be said for them, from the point of view not only of the industry, but, in the long term, of the consumer? Will my hon. Friend take the toughest possible line with the EC?
    Mr. Sproat: My hon. Friend states a widely held view. It is shared by the shipowners, but the shippers have a different view and it is in an attempt to reconcile the two views that I am calling a meeting with both groups.
    Mr. Woolmer: Does not the Minister recognise that his "hands off" approach is not satisfying even his right hon. and hon. Friends who are ideologically committed to competition? When will the Minister tell the shipping industry that he will stop talking and start acting?
    Mr. Sproat: A useful prerequisite of action is a discussion of the present situation. I do not think that anyone could do more than I am doing by consulting all the seafaring unions and the GCBS.

    Balance of Trade
    Dr. John Cunninghamasked the Minister for Trade what is his present forecast for the balance of trade for 1983, indicating separately his forecasts for the balance on invisible trade, visible trade in oil and visible trade in non-oil goods.
    Mr. Ron Lewisasked the Minister for Trade what is his present forecast for the balance of visible and of invisible trade for 1983.
    The Minister for Trade (Mr. Peter Rees): It is not the practice to forecast at this level of detail. Such a forecast would be subject to too many uncertainties.
    Dr. Cunningham: It will be obvious that I cannot thank the Minister for that particularly unhelpful reply. Is not the Minister seeking to disguise the likelihood that Britain will become a net importer of manufactured goods? Is not that a grave prospect for this country in our present economic crisis, and will the hon. and learned Gentleman tell us whether he regards the recent 12 per cent. devaluation of sterling as being of assistance to our seriously deteriorating trade balance?
    Mr. Rees: I would not care to forecast the next year's figures with any confidence. The forecasts range from minus 0·6 per cent. from Cambridge, as one might expect, to plus 3·5 per cent. from the London Business School. I prefer to leave astrology to the Opposition.
    As regards the 12 per cent. depreciation, we are entitled to ask whether the Opposition Front Bench is still enamoured of the idea of a 30 per cent. devaluation. That may be a recognition of what would inevitably follow from the arrival of a Labour Government at the seat of power. There is no "quick fix" for British industry by that route. However, I hope that our industry will take advantage of the recent depreciation of sterling to increase its exports still further.
    Mr. Kenneth Carlise: Does my hon. and learned Friend agree that it is misleading to draw too detailed a conclusion from an analysis of our trading performance,
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    but that the overall balance is important? Does he also agree that our trade surplus has been one of the brightest spots of our economic performance over the past year?
    Mr. Rees: I am grateful to my hon. Friend for reminding the House that it is likely that for 1982, as in 1981 and 1980, we shall have had record surpluses on our current account.
    Mr. Archer: Does the Minister's coyness about giving figures have anything to do with the fact that the surplus about which he has spoken rests solely on the oil surplus and that that is the only cloak for the Government's nakedness? Is he content with the fact that manufacturing production has fallen to its lowest level for 15 years and is 18 per cent. below the level at the time when the Government took office? Do the Government accept that their policies may have something to do with that?
    Mr. Rees: No, I do not. I remind the right hon. and learned Gentleman that our service industries make a considerable contribution to the surplus on our current account and that about 11·5 million of our fellow countrymen are employed in those industries.
    Mr. Dorrell: Does my hon. and learned Friend agree that the proposals announced by the Leader of the Opposition at the weekend would result only in this country being insulated from its most important trading partners, which would lead to a deterioration in our economic prospects and more unemployment?
    Mr. Rees: My hon. Friend is right to remind the House that the Leader of the Opposition stated at the weekend that the present free trade system is a major obstacle to world recovery. Apart from his cavalier disregard of the interests of British exporters and consumers, the right hon. Gentleman's memory presumably extends back to the 1930s, when retaliatory protectionist measures of the type that would inevitably follow from his policies resulted in a drop in world trade of about 40 per cent. in three years, with disastrous unemployment consequences.

    Manufactures (Imports)
    Mr. Spearingasked the Minister for Trade if he will state the actual and estimated figures of United Kingdom imports from, and exports to, the rest of the European Community of manufactures for the year 1982.
    Mr. Peter Rees: In the 11 months January to November 1982 United Kingdom exports of manufactures to other EC countries totalled £12·7 billion and imports were £l7·2 billion. Figures for the whole year will not be available until the publication of the December trade figures.
    Mr. Spearing: As the figures for the whole year will be even worse than the deficit of £5 billion in manufactured goods that the Minister has announced, is it not clear that the forecasts of positive and substantial benefits to trade, which were made in the Government White Paper on the European Community in 1971, are proving to be wrong and that the "substantial" benefits are negative? Does that not mean that the burden of the CAP is not offset by any advantage and that we should negotiate to leave the Common Market at once?
    Mr. Rees: No such conclusion should be drawn from the hon. Gentleman's spurious analysis. He conveniently overlooks the considerable surpluses in our trade in invisibles and oil with the EC.
    Mr. Squire: Does my hon. and learned Friend agree that as the Community covers a range of trades it is unlikely that singling out one item would provide a good or bad reason for membership?
    Mr. Rees: I agree with my hon. Friend that the analysis of the hon. Member for Newham, South (Mr. Spearing) was extremely limited and misleading.
    Mr. Archer: Does the Minister agree that this may not be the appropriate time for the Government to embark on staff cuts of 25 per cent. at the British Overseas Trade Board, apparently with a view to ending the sponsoring of outward trade missions? Does he believe that in such circumstances British exporters can compete with foreign producers whose Governments do not bear their misfortunes with such fortitude and who regard export drives as their business?
    Mr. Rees: I am satisfied that, as our trade figures demonstrate, we give adequate support to British exporters.
    Sir Anthony Meyer: Is not the coverage of imports by exports very much better with the EC than with any of our other industrial trading partners? Can my hon. and learned Friend explain how the establishment of a free trade area, instead of a common market with the EC, would help to resolve our problems?
    Mr. Rees: I am entirely unable to follow the consequences of the policies on the EC apparently propounded by the Labour party.
    Mr. Deakins: In what way, if any, has our total trade in manufactured goods benefited as a result of entry into the EC, and in what way will it benefit with continued membership?
    Mr. Rees: I am unable to understand why the hon. Gentleman should overlook, as many of his hon. Friends have, our trade in oil products and services which give—
    Mr. Spearing: Jobs. That is the answer.
    Mr. Rees: —an entirely different picture. I remind the House of the figure that I gave in reply to an earlier question, when I said that about 11·5 million of our countrymen are employed in service industries.

    Doorstep Selling
    Mr. Greville Jannerasked the Minister for Trade whether he will introduce legislation to give a right to doorstep buyers to return goods within three days of the purchase thereof, and thereupon to be reimbursed of the purchase price.
    Mr. Georgeasked the Minister for Trade if he will introduce legislation to protect consumers from doorstep selling.
    The Minister for Consumer Affairs (Dr. Gerard Vaughan): At present a person who signs a hire purchase agreement on the doorstep can cancel the agreement up to three days after receiving a copy of the agreement through the post. I am proposing shortly to lay an order extending this to five days for all credit sales.
    Mr. Janner: I welcome that announcement, belated though happy, but ask the Minister whether he will now extend the rules, by new legislation, extending cooling-off periods for those who buy from doorstep salesmen for cash, bearing in mind that evil minority of such salesmen who, by confidence tricks and pressures, cause people to enter into cash sales on their own doorsteps.
    Dr. Vaughan: I am glad that the hon. and learned Gentleman welcomes the earlier announcement. However, the majority of abuses are in hire purchase and not in cash sales. That is why I am taking action to tighten up hire purchase agreements.
    Mr. George: Does the Minister agree that the abuse of consumer production law with regard to the purchases of cash goods from doorstep salesmen is considerable and appalling? Will he bring about some changes, and have some discussions with crime prevention officers about one type of gross abuse by doorstep salesmen—the selling of security goods such as burglar alarms, often to very gullible purchasers?
    Dr. Vaughan: I am prepared to look into this matter. As I said to the hon. and learned Member for Leicester, West (Mr. Janner) on 20 January, I am looking at doorstep selling in the general context of fairer trading We are having discussions in Europe on a directive that would include cash sales. We are of the view that Britain has much to contribute to the views on doorstep selling, and I shall be watching the directive carefully.

    Counterfeit Products (Taiwan)
    Mr. Canavanasked the Minister for Trade what recent representations he has received about the import of counterfeit products from Taiwan; and what further action he intends taking.
    Mr. Peter Rees: In the past six months we have received only one direct representation about imports to the United Kingdom of counterfeit products from Taiwan. We urge British companies to secure protection for their products by registering their patents, trademarks and designs in Taiwan. Although like most Governments we do not have diplomatic relations with Taiwan, the authorities there are fully aware of our concern. Stricter measures were announced in Taiwan in August 1981 to govern trademark offences. Recently much stiffer penalties for convicted offenders have also been announced in Taiwan. In addition, my Department will soon be setting up an anti-counterfeiting unit to strengthen its handling of such problems.
    Mr. Canavan: When will the Minister take effective action to deal with complaints from Smith and Wellstood, which recently won a victory in Holland in its efforts to stop the sale of cheap Taiwanese imitations of its solid fuel heating stoves, only to find that the counterfeit stoves could still be sold in other countries such as Belgium? In view of the jobs involved in Bonnybridge in my constituency, will the Minister tell the Taiwanese authorities that if this malpractice does not stop he will impose a trade boycott on Taiwan?
    Mr. Rees: As I said, we do not maintain diplomatic representation in Taiwan, but if the hon. Gentleman feels that any particular details in the Smith and Wellstood

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    case—which is well known to my Department—need further consideration, I should be delighted to receive him and representatives of the company.
    Mr. Stanbrook: Has my hon. and learned Friend seen the report in The Times on Saturday of the confiscation in Nigeria of millions of pirated books, including many English titles, allegedly from Taiwan? Is it not the case that this is causing loss to the British book publishing industry of about £40 million to £50 million a year? If so, will my hon. and learned Friend inquire into this and do something about it?
    Mr. Rees: It is because of the concern that both I and my hon. Friend the Minister for Consumer Affairs feel about this that we are setting up the anti-counterfeiting unit.
    Mr. Cryer: Is the Minister satisfied that the measures taken both in Taiwan and by his Department will stamp out, for example, the type of counterfeiting that a group of Members of Parliament found, when worsted cloth was being labelled "Made in Huddersfield"? Will the hon. and learned Gentleman endeavour to do something to stamp that out?
    Mr. Rees: The House will recognise that it is not easy for us to stamp out counterfeiting of this type in foreign countries. However, our aim is certainly that it should not penetrate to the United Kingdom market.
    Mrs. Kellett-Bowman: While I accept that counterfeiting can be a serious problem, may I point out that lack of knowledge is also a serious problem? In view of his reply to question 6, will my hon. and learned Friend continue pressing his colleagues in the European Community to establish a uniform system of origin marking, with proper policing, so that this gives some security to the producers of textiles, and also gives consumers a knowledge of what they are supposed to be buying?
    Mr. Rees: My hon. Friend will appreciate that origin marking can be used as a means of preventing the free circulation of goods inside the European Community. Subject to that reservation, we are in favour of introducing such a system into the United Kingdom.
    Mr. Archer: Is this not just the type of instance where international regulation of trade should be at its best? With regard to what the hon. and learned Gentleman said a few moments ago about free trade, is not the present free trade system based on the assumption that all Governments alike should renounce responsibility for their respective economies and leave them to the free market forces? Is not that precisely what has brought about the present world recession, about which the Government are always talking?
    Mr. Rees: I am afraid that the right hon. and learned Gentleman has not applied himself long enough or deeply enough to this problem. If he had he would realise that free trade is not incompatible, for example, with our own trade mark and copyright legislation.

    Aircraft Noise (West London)
    Mr.Greenwayasked the Minister of Trade if he will hold local consultations concerning the level of aircraft noise in Ealing and west London; and if he will make a statement.
    Mr. Sproat: No, Sir. Adequate consultation facilities already exist through the Heathrow airport consultative committee. I am satisfied that the interests of all those affected by aircraft noise in Ealing and west London are adequately represented.
    Mr. Greenway: Is my hon. Friend aware of the continual and severe suffering of my constituents from aircraft noise, including military and civil helicopter noise and pollution? May I ask him to use all his best efforts to reduce it? Is my hon. Friend aware of any plans for an expanded use of Northolt airport for civil aircraft? Is he aware that the community would be opposed to such an expansion?
    Mr. Sproat: With regard to the first part of my hon. Friend's question, his constituents could not have a doughtier fighter in their cause than himself. I shall certainly do everything that I can. With regard to Northolt, that is a question for my right hon. and hon Friends at the Ministry of Defence, but I can tell my hon. Friend that consultations are going on between them and the British Airports Authority and its chairman, Mr. Payne, with regard to business aviation.
    Mr. Jay: Could not the Government at least assist the people of west London by not building a fifth terminal at Heathrow airport?
    Mr. Sproat: The right hon. Gentleman has been a member of the House long enough to know that it would be improper for me to make any further comments about the fifth terminal at Heathrow while the present inquiry continues.
    Mr. Haselhurst: Can my hon. Friend confirm that, with the introduction of the Boeing 757 into service next month, another step will be taken in the direction of diminution of noise in the vicinity of Heathrow?
    Mr. Sproat: That is a good point. There is no doubt that the newer generations of aircraft are much quieter. This will have a profound effect on the problems mentioned by my hon. Friend the Member for Ealing, North (Mr. Greenway).

    Video Cassettes
    Mr. Timothy Smithasked the Minister for Trade if he will estimate the annual value of the illegal trade in video cassettes.
    Mr. Sproat: As my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) said in moving his own Bill last Friday, the trade and the British Videogram Association estimate the total retail value of pirate video cassettes sold in the United Kingdom at about £100 million a year. This represents, in terms of numbers of pre-recorded video tapes, about 65 per cent. of the market.
    Mr. Smith: Is my hon. Friend aware that one company alone—Thorn-EMI—on its own reckoning is losing between £15 million and £20 million of business a year? In the light of that information, was not the Second Reading of the Copyright (Amendment) Bill on Friday most welcome? Will the Government do all they can to ensure that the Bill has a speedy passage through both Houses of Parliament?
    Mr. Sproat: Yes. The House, the trade and the whole country owe my right hon. Friend the Member for

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    Bournemouth, West a considerable debt. In general, the Government very much support the approach that my right hon. Friend adopted in that Bill.
    Mr. Straw: Although I accept what the Minister said about the need for the strongest possible enforcement of the law against the pirating of video cassettes, does accept that in the longer term the trade can assist itself by ensuring that on the whole, pre-recorded items are sold on video discs, which cannot be copied, rather than on video cassettes?
    Mr. Sproat: In this area I am afraid that making any judgment about the swift advance of technology is extremely rash. That may be the position at the moment, although I cannot confirm it or otherwise. But we have to be aware that in few other areas is technology moving as fast as it is here. However, the hon. Gentleman's comments will be taken into consideration.
    Mr. Stokes: Is my hon. Friend aware that last Friday I visited one of the largest distributors of video cassettes in the country, which is situated in my constituency? This new firm was started by four young men aged about 25. It has a turnover of about £4 million and now employs nearly 50 people. Is my hon. Friend aware that if it were not for this piracy and illegal action it could employ many more than that number?
    Mr. Sproat: My hon. Friend makes an extremely important point. Indeed, I can add to his experience. I understand that in the last two years alone video cassettes have given employment to about 20,000 people. This is just the kind of advanced technology that the House and the country most want to support.
    Mr. John Fraser: As the Minister knows, the Opposition supported the Bill last Friday. What discussions have there been between Trade Ministers, the Home Office and the Metropolitan Police about enforcing the law? As the House recognises, the trade in illegal video cassettes is not far removed from other forms of organised crime.
    Mr. Sproat: The hon. Gentleman is correct. We have been having close discussions with the Home Office, and these will be reflected in our approach to the Bill introduced by my right hon. Friend the Member for Bournemouth, West when it reaches its Committee stage.

    Hong Kong
    Mr. McNallyasked the Minister for Trade if he will make a statement on the policy of Her Majesty's Government towards trade relations with Hong Kong following his recent visit there.
    Mr. Peter Rees: My visit was designed to reinforce the Government's policy of maintaining and improving trade relations with Hong Kong.
    Mr. McNally: Is the Minister aware that increasingly in the next 10 or 15 years Hong Kong's magnificent trading performance will be overshadowed by political uncertainties? Will he make sure that that is in his mind and those of his officials when dealing with Hong Kong's trade practices? Will the hon. and learned Gentleman also make sure that the People's Republic of China is aware that it could well destroy a goose that lays golden eggs for it if it created a mood of uncertainty about Hong Kong?
    Mr. Rees: It is this Government's intention to maintain and promote the stability and prosperity of Hong Kong.
    Mr. Foulkes: Has the Minister read the report of the Adam Smith Institute which predicts that 20 per cent. of world trade will go through free ports such as Hong Kong by 1985? Since there are no free ports in the United Kingdom, is the hon. and learned Gentleman not worried that the working party set up by the Chancellor of the Exchequer has been hijacked by Customs and Excise? What action is he or the Secretary of State taking to make sure that the Under-Secretary of State, the hon. Member for Aberdeen, South (Mr. Sproat), who is in favour of free ports, is not summarily kicked off that working party?
    Mr. Rees: No such outcome is likely. The question is a matter primarily for my right hon. and learned Friend the Chancellor of the Exchequer, but I can assure the House that there will be a useful and constructive input from my Department and, I am sure, from my hon. Friend the Under-Secretary of State.

    Manufactures (Imports-Exports)
    Mr. Ioan Evansasked the Minister for Trade what is the percentage change in the seasonally adjusted volume of manufactured imports and of manufactured exports since May 1979 to the latest available date.
    Mr. Peter Rees: Between May 1979 and November 1982, imports of manufactures rose by 2 per cent. and exports fell by 10 per cent.
    Mr. Evans: Since joining the Common Market we have lost 2 million manufacturing jobs, and the position has deteriorated particularly since 1979. What is the Department doing to make contact with the Department of Industry and the Treasury to try to revive our manufacturing sector?
    Mr. Rees: The hon. Gentleman overlooks, for example, the fact that our unit labour costs are rising by only about 5½ per cent., which is far below that of our major competitors. Productivity is up by 13 or 14 per cent. since 1980 and, again, is rising faster than that of our continental competitors. I am confident of British industry's ability to acquit itself well.
    Mr. Bill Walker: Does my hon. and learned Friend agree that one of the sadnesses is that our traditional industries have declined? I exclude from that statement the Scotch whisky industry, which has had a remarkable export record. If all the other traditional industries had adapted to meet the changing demands of consumers abroad, they could probably have had a similar record.
    Mr. Rees: I am happy to pay tribute to the remarkable export record of the Scotch whisky industry.
    Mr. Archer: In view of those devastating figures, do the Government now acknowledge any responsibility for the fact that last year showed a total of more than 12,000 company liquidations—the worst year ever recorded? Is this the Government who fought the last election on the promise to care for small businesses? How does it accord wth the promise of the Prime Minister at Darlington during the last election campaign, when she said that the Labour party
    "are the party of unemployment. We are the party of opportunity"?
    Mr. Rees: The right hon. and learned Gentleman should cast his mind back and note that every Finance Bill introduced by this Government has done something for small businesses and the formation of new enterprises.

    Exports (Statistics)
    Mr. Knoxasked the Minister for Trade if he will list the 12 countries that took most British exports in the most recent year for which figures are available.
    Mr. Peter Rees: In the 12 months to November, the United States of America was the biggest market for United Kingdom exports, followed by the Federal Republic of Germany, Netherlands, France, the Irish Republic, Belgium and Luxembourg, Italy, Sweden, Saudi Arabia, Nigeria, South Africa and Switzerland.
    Mr. Knox: Will my hon. and learned Friend confirm that all the European Community countries except Greece and Denmark are included in that list? Is there any guarantee that we should still be able to sell as much to those countries if we were outside the EC?
    Mr. Rees: There is no guarantee whatever. Nor is there any guarantee that, for example, American non-oil investment would continue at its present rate in the United Kingdom rather than in the continental countries of the European Community.
    Mr. Dobson: Was it a direct objective of Government policy that Britain should become a net importer of manufactured goods, or is it just an accident?
    Mr. Rees: It was not a direct element of the United Kingdom's Government's policy. But I remind the hon. Gentleman, as I have reminded the House in other contexts, that we are a net exporter of oil and of services.

    Balance of Trade
    Mr. Altonasked the Minister for Trade what is the latest available monthly figure for the United Kingdom balance of trade and the corresponding figure 12 months ago.
    Mr. Peter Rees: The current account of the balance of payments in November 1982 was in surplus by £700 million, compared with £108 million in November 1981.
    Mr. Alton: Will the Minister confirm that that increase is due primarily to our increased oil revenue and that during the past 12 months the balance in manufacturing industry has declined by one-third?
    Mr. Rees: No, I will not confirm that, but I will confirm that the increase was due to rather low figures in November 1982. Perhaps that provides a rather unusual answer to the hon. Gentleman's question, which he may not have expected.
    Mr. Campbell-Savours: Does the hon. and learned Gentleman accept that there is a difference between planned trade and the unilateral introduction of protectionist policies, which are the last stand of the free trader?
    Mr. Rees: I have never understood either of those two formulations, which I suspect come from the fevered minds of those in the Labour research department.
    Mr. Adley: As the Opposition seem keen to remind my hon. and learned Friend of past events, may I draw his attention to the 1964 general election and the fact that the
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    right hon. Member for Huyton (Sir H. Wilson) fought it on the slogan of "An £800 million deficit"? Will my hon. and learned Friend ask the Opposition what they would produce as a slogan for a Government who have been able to produce a £700 million surplus in one year?
    Mr. Rees: I suspect that their slogan would be a 30 per cent. devaluation.
    Dr. John Cunningham: Is the Minister aware that, in spite of his bluster from the Dispatch Box today, the CBI is forecasting a fall in new orders, particularly in new export orders? Against that background, and of evidence from firms that have improved their efficiency, cut their costs to the bone and paid wage increases below the rate of inflation, how does he expect British exporting manufacturing industry to survive?
    Mr. Rees: As I said at an earlier point in these exchanges, I am not here to trade forecasts with the Opposition Benches, because there are many and various such forecasts. I have noted the CBI's figures. I have also noted the Industry Act figures for November. The House will recall that the Chancellor of the Exchequer, who has access to the best possible information, thinks that possibly the Industry Act figures in November were a little gloomy.
    Mr. Marlow: Is it not right that the CBI figures were put forward before the change in the exchange rate, particularly against the franc and the deutschmark, and, since that change has come about, are not the prospects for our manufacturing industry with regard to exports much healthier than they were before?
    Mr. Rees: It is possible that with its renewed competitiveness, British industry will be able to take advantage of the depreciation of the pound. The Opposition Front Bench may not have noticed that there has been a depreciation against the yen of about 18 per cent., which may possibly make a difference to our prospects in Japan.

    Visible Trade (Balance)
    Mr. Woolmerasked the Minister for Trade what was the balance of visible trade in goods other than oil in 1978, and in the latest 12-month period.
    Mr. Fosterasked the Minister for Trade if he will state separately the balance of non-oil and of oil visible trade for the latest 12-month period.
    Mr. Peter Rees: In 1978 the non-oil balance was in surplus by £442 million and the oil balance was in deficit by £1,984 million. The non-oil balance for the 12 months to November 1982 was in deficit by £2,390 million, while the oil balance was in surplus by £4,283 million.
    Mr. Woolmer: Do not those figures show the enormous benefit that the Government have derived from oil and the devastation that the country and industry have suffered as a result of the total mismanagement by the Government of the benefit that oil should have given our industry and economy? How have the Government managed to squander a national asset of oil and to so devastate our manufacturing industry that it will not be there to rescue the economy when the oil begins to run out?
    Mr. Rees: I would be the last to underestimate the contribution made by oil to the fortunes of this country,

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    but to talk about the devastation of British industry is to underestimate the volume of British exports, which demonstrates that we still have a sound, leaner and more competitive industry to face the years ahead.
    Mr. Dorrell: Does my hon. and learned Friend agree that some of the fastest growing markets for manufactures in the world are to be found in the newly industrialising countries in the Far East, precisely the countries from which the Opposition are so keen to insulate this country?
    Mr. Rees: I entirely agree that the growth rate of the ASEAN countries is enviable, and they are markets in which British exporters distinguish themselves.
    Mr. Stoddart: Does the Mininster realise that he is guilty of an attitude of disgraceful complacency towards British manufacturing industry? Is he aware that North Sea oil has a finite life and that by the time the Government have finished, and North Sea oil begins to run out, British manufacturing industry will be completely destroyed?
    Mr. Rees: I do not know on what possible evidence the hon. Gentleman could make that assertion.
    Mr. Kenneth Carlisle: Is my hon. and learned Friend aware that the majority of manufacturers in this country want us to remain in Europe, where our biggest market is, and that despite the roughness of conditions they do not want us to drift towards trade protectionism, because they know that their future lies in free trade?
    Mr. Rees: As a country that exports 30 per cent. of its gross domestic product, we certainly believe in a free but firm market.
    Mr. Spearing: Does the Minister agree that although exports of services and oil add considerably to the surplus that he announced just now, in terms of manpower costs and employment per £1,000 of exports they are very small indeed compared with manufactured goods, and that the deficit in manufactures which he also announced is therefore related to unemployment in this country?
    Mr. Rees: The hon. Gentleman's proposition might be true of our oil exports but it is certainly not true of our invisible export service industries, which are labour-intensive.

    Advertising (European Community Directive)
    Mr. John Fraserasked the Minister for Trade what progress has been made in negotiations on the European Community draft directive on advertising.
    Dr. Vaughan: Discussions are still continuing in Brussels on this directive. Our aim is that it should be compatible with our own system of self-regulation.
    Mr. Fraser: Why do these things take so long, when, about three years ago, we had virtually reached agreement with the Commission about the terms of the directive, which would leave the Advertising Standards Authority largely in the present position, but with a legal back-up? Why is it not possible to move faster in these matters, instead of spending, as in the direct selling directive, up to six years of negotiations while we delay doing anything in this country?
    Dr. Vaughan: I do not accept that these things are taking so long. We have speeded up a great deal since the Labour Government were in office. In Europe we are
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    pursuing a policy of self-regulation wherever possible, and my Department, instead of waiting for European directives to come to us, is now going into Europe and pursuing British policies in that direction.

    Package Tours (Advertisements)
    Mr. Gwilym Robertsasked the Minister for Trade if he will take steps to protect holidaymakers from misleading advertisements for package tours; and if he will make a statement.
    Dr. Vaughan: The ABTA code, which was developed in consultation with the Director General of Fair Trading, requires brochures and advertising issued by ABTA members to contain clear, comprehensive and accurate information. This offers the holidaymaker a considerable degree of protection.
    Mr. Roberts: Does the Minister accept that, in spite of the good work done by ABTA, there are many holidaymakers who are still disappointed when the reality of the holiday in many ways does not live up to the dream? As there are probably 5 million Britishers whom operators hope will travel overseas towards the sun this summer, is it not important that something further is done to protect those people?
    Dr. Vaughan: I sympathise with what the hon. Gentleman says about holidays that have gone wrong, and I hope that what he says is not based on personal experience.
    Mr. Roberts: Not at all. I stay in this country.
    Dr. Vaughan: The answer for holidaymakers is to go to reputable companies, which obey a code of conduct and have safeguards for the customer.
    Mr. Squire: Does my hon. Friend accept that there is concern on both sides of the House, not only about holidaymakers, but about the general matter of payments in advance for services and goods? Will he continue to bear that in mind in considering the Cork recommendations in this connection?
    Dr. Vaughan: Yes, we are well aware of that. I hope that with the discussions going on we shall not have to wait for the whole of Cork to be put into legislation, but will be in a position to pull out some action to deal with the current abuses.
    Mr. Dobson: If the Minister has time, will he turn his attention to the present television advertising by Sir Freddie Laker? Will he say whether he believes that those advertisements are telling the truth when Sir Freddie Laker says that people's money is safe with him? Will he confirm that he would have said this last time Sir Freddie made personal advertisements, despite the fact that that occurred between the time when the Civil Aviation Authority had warned Ministers that that company was at risk and before the company went bust?
    Dr. Vaughan: I always have time to take note of what appears in advertisements, because it is important that customers should not be misled. If the hon. Gentleman has some additional special points to put to me, I should be happy to look at them.
    Mr. John Fraser: As no one has outbankrupted the Laker holiday company, is it right that someone should be allowed to go back into the trade so easily after such massive losses in the conduct of the business?
    Dr. Vaughan: As the House knows, we are considerably concerned about this kind of action. On the other hand, we practice a free market, and it would be difficult to legislate against that at the moment without handicapping genuine honest traders.

    Merchant Fleet
    Mr. James Johnsonasked the Minister for Trade if he intends to introduce new measures to reduce the decline in the British merchant shipping fleet.
    Mr. Sproat: I am considering what can sensibly be done to assist the shipping industry through a difficult period and help stem the decline of the United Kingdom fleet, and have already set in hand an examination of costs connected with the transfer of ships to United Kingdom registry. The tasks of maintaining and improving international competitiveness and meeting the competition must lie primarily with the industry itself.
    Mr. Johnson: Does the Minister mind if I tell him that workers and management in the docks say that they seem to listen to nothing but endless talk on this subject? Will he say in what fashion the Government intend to take positive action to lift the industry out of its gloom?
    Mr. Sproat: I am aware that those who run the docks at Hull and elsewhere in the United Kingdom are acutely conscious of the difficult times through which the British Merchant Navy is going. I am sure that the hon. Gentleman will be glad to know that last week I saw the National Union of Seamen and the General Council of British Shipping. This week, I am seeing the Merchant Navy and Airline Officers Association and the radio officers. I shall be giving the closest consideration to the ideas that they put to me.

  OVERSEAS DEVELOPMENT

    Club Méditerranée
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs if he has received any recent communications from the Club Méditerranée concerning its plans for building in the Turks and Caicos Islands.
    Mr. Brocklebank-Fowlerasked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with Club Méditerannée concerning the establishment of a holiday village on the Providenciales in the Turks and Caicos Islands; and when he expects it to fulfil its agreement.
    The Minister for Overseas Development (Mr. Timothy Raison): On 21 January I had discussions in London with Monsieur Trigano, the president of Club Méditerranée. He informed me that he is in active discussion with a number of contractors and assured me that a binding contract would be signed by 31 March. I made it clear that, unless a contract satisfactory to the Turks and Caicos Islands Government is signed by then, the Turks and Caicos Islands Government will initiate legal proceedings.
    Mr. Spearing: I thank the Minister for that reply, his first since taking up his new office. May I draw his attention to the reply given by his Department to the Foreign Affairs Committee in Cmnd 8386, in which the Government refute the recommendation that the Minister should be told when a consultant's figures are changed? Is the right hon. Gentleman aware that the figures were "cooked" and changed in respect of this hotel development? Does he not think that the whole of the reply deserves his attention and perhaps reappraisal by the Government?
    Mr. Raison: I have no reason to believe that the reply was wrong. However, in view of the hon. Gentleman's kindly welcome to me, I shall look into the matter.
    Mr. Bowen Wells: I congratulate my right hon. Friend on taking up his office and on his reply today. Does he not agree that the establishment of a tourist industry on the Turks and Caicos Islands is the only way in which the islands can look forward to an economically viable future?
    Mr. Raison: I am grateful to my hon. Friend. I believe that this project is potentially of great value to the islands.
    Mr. Brocklebank-Fowler: May I add my congratula-tions to the right hon. Gentleman and ask him when he expects construction of the airport to be completed? How many other jobs and new industries, apart from Club Méditerranée, does he expect will be started in the Turks and Caicos Islands in the coming year?
    Mr. Raison: Again, I am grateful to the hon. Gentleman. I believe that the airport project should be completed soon. I cannot give the hon. Gentleman a specific list of the number of other works now going on. There are, however, other significant developments on the islands.
    Mr. Banks: I welcome my right hon. Friend to his new position on the Front Bench and his statement today. Does he not agree that the construction of the airport, which was agreed in conjunction with Club Méditerranée originally, will be of tangible benefit to the islands and will open up opportunities for other developments in addition to that which he has announced today?
    Mr. Raison: I agree with my hon. Friend—who, again, I thank—that there are other opportunities. Nevertheless, I stress that it is essential to get on with the Club Méditerranée project.
    Mr. Foulkes: I congratulate the Minister on meeting Monsieur Trigano so quickly after taking over. How can he guarantee that Monsieur Trigano will meet his promises? In the past, Monsieur Trigano has been rather long on promises and short on performance. What guarantees have been given that he will perform as he says and get this project off the ground by 31 March?
    Mr. Raison: If Monsieur Trigano does not get on with his guarantees I have made it clear that the Turks and Caicos Islands Government will initiate legal proceedings.

    Angola
    Mr. Ginsburgasked the Secretary of State for Foreign and Commonwealth Affairs what is the policy of Her Majesty's Government concerning economic aid to Angola.
    Mr. Raison: Her Majesty's Government's policy in Angola is to concentrate on English language teaching. A small team of English language teachers was appointed in 1981 to assist the National Language Institute in Luanda. In addition, small items of equipment are provided to Angola under the heads of mission gifts scheme.
    Mr. Ginsburg: I join hon. Members in congratulating the right hon. Gentleman and also welcome his reply. Does he agree that there is scope for further aid to Angola, especially if the problem of the seven British detainees can be resolved? Will he accept that the cost to the Angolan Government of keeping seven British detainees in prison for 18 years must be considerable and that it would be within the resources of this country to make such a sum available if the problem could be satisfactorily resolved?
    Mr. Raison: I understand the hon. Gentleman's concern for his constituent. I do not think that it would help the prisoners if we were to link our aid programme direct to the question of their future treatment.
    Mr. Sever: In welcoming the Minister to his new responsibility on the Front Bench, may I apologise for the absence of my hon. Friend the Member for Greenwich (Mr. Barnett) who is indisposed? Will the Minister confirm that, prior to his departure for discussions taking place later this week with colleagues in Africa on the future of that continent's development, he will announce to the House that it is no longer his intention, as reported, to stay in South Africa en route to the talks?
    Mr. Raison: I am greatly looking forward to my visit to southern Africa this week. The fact is that I felt it my duty to be here to answer questions. The only way in which I could answer questions today was to catch the particular aircraft on which I am flying.
    Mr. Proctor: May I add my congratulations to my right hon. Friend on his new appointment? Further to the supplementary question raised by the hon. Member for Dewsbury (Mr. Ginsburg), is my right hon. Friend aware that a constituent of mine is also incarcerated in Angola? Will he draw the attention of other Foreign Office Ministers to the urgent need for a meeting between our ambassador in Angola and President Dos Santos at the earliest opportunity?
    Mr. Raison: I understand my hon. Friend's concern for his constituent. We are currently seeking clemency for the prisoners at the highest level in the Angolan Government.

    India
    Mr. Greville Jannerasked the Secretary of State for Foreign and Commonwealth Affairs what funds were made available for the Republic of India in the years 1981 and 1982, respectively; and how much he intends to make available in 1983.
    Mr. Raison: British aid is planned by financial rather than calendar year. For the financial year 1980ߝ81, gross aid to India totalled £141 million and for 1981ߝ82, £102 million. For the current financial year, I expect gross aid to be about £111 million.
    Mr. Janner: I join in welcoming the Minister to his comparatively peaceful new life. Has he had time to acquaint himself with the awful tragedy of the November cyclone in the state of Gujarat, which killed hundreds of
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    people, destroyed thousands of cattle and ravaged the countryside? What specific help is he proposing to give to former Chief Minister Babubhai Patel and his team in coping with the disaster? What assurance can he give to citizens of Gujarati origin in Leicester and elsewhere that he is aware of the problem and will help where possible?
    Mr. Raison: I am aware of the sad consequences of the recent cyclone in Gujarat. The Government of India did not ask for international assistance. However, the ODA's disaster unit arranged through Oxfam for the local purchase of up of £23,000 worth of roofing materials.
    Mr. Sever: Will the Minister confirm that there are immediate proposals in hand at any time, when such a disaster occurs, for relief to be offered to requesting countries? Will he investigate the possibility of making advances to countries that have suffered from disasters, without their necessarily having to ask for aid?
    Mr. Raison: There is a system, I understand, by which immediate disaster relief is made available. I take the hon. Gentleman's second point. Nevertheless, we must be sure that Governments concerned want aid before pushing it on them.
    Mr. Deakins: Is the Minister happy that our aid to India, with a population of 700 million, should be so disproportionate when compared with the aid that we propose to give to the 1,800 people on the Falkland Islands?
    Mr. Raison: I believe that both programmes are entirely necessary. What we are doing in the Falkland Islands is right, but it is proper that much the largest proportion of our aid programme should go to India.

    Employment (United Kingdom)
    Mr. Welshasked the Secretary of State for Foreign and Commonwealth Affairs what consideration his Department gives to the effect on employment in the United Kingdom when deciding on overseas aid expenditure.
    Mr. Raison: The basic aim of our aid programme is to assist developing countries in their efforts to raise living standards. In carrying out the programme we seek to ensure that aid is used where possible in ways that are also of benefit to Britain, including employment.
    Mr. Welsh: Is the Minister aware that there seem to be no figures for employment created in this country as a result of overseas aid? Would he agree that that is wrong? The country should know that investment overseas creates employment in this country. Will he produce the figures to show the nation the good that we obtain from helping our brothers and sisters through overseas aid?
    Mr. Raison: There is no doubt that the amount we spend on overseas aid produces considerable employment in this country. I am advised that it is technically difficult to quantify the figure precisely.
    Later—
    Mr. Kenneth Carlisle: On a point of order, Mr. Speaker. During Trade Questions, eight Opposition hon. Members were not present to ask their questions. Is that not disrespectful, both to the Chair and the House, and a waste of taxpayers' money?

Metropolitan Police (Reorganisation)
3.30 pm
Mr. Frank Dobson: On a point of order, Mr. Speaker. Has the Home Secretary told you that he wishes to make a statement about the reorganisation of the Metropolitan Police?
Mr. Speaker: I can give a reply at once. The Home Secretary has not said that.

Water Industry (Dispute)
3.31 pm
The Secretary of State for the Environment (Mr. Tom King): With permission, Mr. Speaker, I shall make a statement about the industrial action in the water industry.
The House will be aware that from last Monday night the unions representing manual workers in the water industry imposed an immediate ban on overtime and call out for emergencies. They also announced that with effect from midnight last night there would be a national strike.
The latest reports show that there have been some adverse consequences arising from last week's industrial action, which have affected normal water supplies in a number of local areas. Where it has not been possible to repair burst pipes, a supply has been maintained by stand-pipes or tankering as appropriate.
In the south-west, Manchester and parts of Wales, the water authority has advised the public, as a precaution, to boil any water to be used for drinking or cooking. Reports at midday today show that about 2,000 properties are without their normal supply. Water authorities have dealt this morning with bursts in major water mains in Eltham in south London and in the centre of Coventry. No major pollution has been reported.
My Department is in close touch with the reports from the water authorities, which are seeking to maintain adequate services to their customers. As I informed the House last Tuesday, contingency steps have been taken by the Government in the event of water undertakers asking for assistance to maintain essential services.
The House will be aware that intensive discussions have been taking place under the auspices of ACAS in an attempt to resolve this serious dispute. On Friday agreement was reached on a procedure involving negotiations under an independent chairman appointed by ACAS. It was agreed also that his powers should further extend to those of a mediator so that he could recommend terms for a satisfactory settlement. The talks began on Saturday morning. At that stage the employers increased their offer. It was rejected. After further discussions the independent chairman, acting then in his role as mediator, made recommendations for a settlement. The main recommendation was for an increase of 7·3 per cent. over 16 months plus a further 0·5 per cent. from an increase in the five-year service supplement. The employers have said that these recommendations are broadly acceptable.
I understand that the trade union side of the National Joint Industrial Council is meeting this afternoon to consider these recommendations, and that the full NJIC will meet this evening. I hope that it will be possible for agreement to be reached at this evening's meeting and thus to end, at the earliest moment, the industrial action in the water industry, which could otherwise have increasingly serious consequences all over the country.
Mr. Gerald Kaufman: Is the right hon. Gentleman aware that the circumstances are potentially exceptionally grave? Millions of households are already being seriously inconvenienced and many more could face far worse hazards unless the dispute is settled quickly.
Is the right hon. Gentleman further aware that all of these lamentable developments are the result, specifically

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and solely, of his reckless meddling? On 11 November, when the employers' group in the water industry was willing to offer up to six per cent., he put intolerable pressure on it to offer no more than four per cent. That irresponsible interference was the direct cause of the breakdown in negotiations on that day. The employers did not return to the negotiating table until last week. Meanwhile, the right hon. Gentleman has been in constant contact with the employers' side and has been pressing it not to go beyond five per cent. After nearly three months of such pressure, the right hon. Gentleman suddenly says today that the present offer is reasonable. If it is a reasonable offer today, why did he veto the November offer? More than two months have been lost and a strike has come about precisely as a result of his intervention.
Will the Secretary of State give a categoric assurance that the employers' group now has the power to settle as a free agent, without any further back-door pressure from him, so that, in the words of paragraph 8 of the mediator's recommendations, the employers can make
"an understanding, positive and determined response."?
Does the Secretary of State agree that it is vital that the dispute is settled quickly on reasonable and honourable terms? Will he not take any provocative action that could prejudice any settlement? The health and well-being of the people must be paramount.
Mr. King: I accept the right hon. Gentleman's opening remarks about the gravity of the situation were there to be prolonged action in the water industry, but in his remarks about the earliest stages of the negotiation he overlooked one of the complicating factors in the dispute. In shorthand it might be referred to as "the upper quartile". Two claims were presented by the unions. One was in relation to what might be called "the going rate" for pay this year, and the other was for a fundamental adjustment in basic rates of pay.
The right hon. Gentleman totally misrepresents the history of the matter. He said that the employers' opening offer was 4 per cent. and no more. That is not correct. They offered 4 per cent. and, as was provided for under the national agreement, said that if that were not acceptable bacause of the complicated background to the claim, arbitration was available. That is the background, and the employers acted in accordance with that.
The House will notice from my statement, which I hardly think could be described as provocative, that I hope that it will be possible for agreement to be reached at this evening's meeting. This afternoon I do not wish to enter the post-mortems into which the right hon. Gentleman might like to lead me. It is important for the country for the dispute to be resolved on a sensible basis. Under the terms of an agreement jointly signed by both parties, the mediator has put forward his recommendation. I hope that it will be considered seriously.
Mrs. Shirley Williams: Will the Minister accept that we share his view that the strike will have grave repercussions to many if it continues and that it is intolerable that in a civilised country people should have to boil water in order to be safe?
As this is a traditionally moderate union which has not struck in recent history, might it have reached the conclusion that the Government's policy is to yield to those with muscle, such as the miners, and to stand firm against those without, such as the National Health Service workers? Will the right hon. Gentleman consider the
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possibility of recommending that an additional small sum should be paid, in an attempt to achieve a no-strike agreement in this crucial public service industry, along the lines that follow from accepting arbitration as a rule in such industries?
Mr. King: I would make the small point to the right hon. Lady that three unions are involved in the matter, not one, although I accept that there is one major union.
The right hon. Lady will be aware that the complicating factor—if I may put it that way—in these negotiations has been around for some considerable time, and it is the growing sense of grievance over the upper quartile issue which the unions particularly requested should be included in the independent chairman's terms of reference. That is the background to the dispute, whether or not it is an historically moderate union. It is obviously important that the independent chairman, acting in his role as mediator, should be able to make some pronouncement on this difficult issue.
At the moment I do not wish to enter into the pros and cons of no-strike agreements. Whatever system is adopted, it is fundamental that basic agreements should be offered if there is any question of paying a premium for them.
Sir Charles Fletcher-Cooke: Will my right hon. Friend give the public some guidance on the use of water? Is it not a fact that there is no shortage of water over vast areas of Britain? Is my right hon. Friend aware that many well-intentioned people in such areas are advising, and to some extent directing, people not to wash their cars or use water in the normal way? Is not that advice ill-conceived?
Mr. King: There is good sense in showing economy in the use of water at present. It depends on the part of the country that is involved. Where there is filtration, such economies lessen the load on the filter plants.
I am grateful to my hon. and learned Friend for drawing attention to the fact that from reports of bursts or other problems it is easy to imagine that an alarming situation is developing, well beyond the extent of the real problem. I reported to the House that about 2,000 houses are without normal supplies today. I have sought to ascertain how many houses are normally without supplies, but that figure is not available to me at the moment. I believe that in the course of an average day there is one major and about 70 small bursts. It is extremely important to put the matter into perspective. For the vast bulk of people services will continue without any interruption whatever.
Mr. Robert C. Brown: I agree that it is extremely regrettable that people have to boil water in a civilised country, but is the Minister aware that that would not be necessary if the Government had acted in a civilised manner?
Is the right hon. Gentleman further aware that his right hon. Friend the Member for Chingford (Mr. Tebbit) is very keen on lecturing the trade unions about ballot votes and that my union balloted 4:1 in favour of strike action because of his intervention with the employers? Will the right hon. Gentleman now take the advice that I offered him last Tuesday evening in the House and stop lying on the employers and give them an opportunity to enter into honest negotiations with the employees to settle the dispute today?
Mr. King: I wonder where the hon. Gentleman had been during the last week, because intensive discussions

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have been taking place. The hon. Gentleman talks about procedures in a civilised country. I should have thought that in the circumstances arbitration was a civilised way in which to resolve matters of this kind. I hope that the agreement which was signed on Friday by both parties and witnessed by Mr. Pat Lowry, the chairman of ACAS, on the procedure to be followed, and which was entered upon on Saturday, will now be followed through. That is a civilised and appropritate way to resolve a difficult dispute and I hope that it will lead to a satisfactory conclusion.
Mr. David Penhaligon: Will the Minister quantify the risk of drinking unboiled water? Is it a practical proposition for children to drink only boiled water in some primary and secondary schools in the remoter parts of Britain? In many such schools one fears that facilities do not exist to produce cooled boiled water for the children to drink.
Mr. King: The warnings that have been given so far—as, for instance, in Manchester, where advice was given as a precaution—were given not so much because it was thought that there was any concern about the quality of the water, but because of worry about the maintenance of some of the precautionary arrangements to check on the chlorination of the water. In other words, the warnings were the result of worry about the reliability of the control systems rather than about the quality of the water.
I hope that the water authorities will always err on the side of caution. I cannot quantify the exact health risks in any particular area, because they depend upon the nature of any incident. However, I give the undertaking to the hon. Gentleman and to the House that I will do all that I can to ensure that if the dispute persists—I hope that it will not—the water authorities will err on the side of caution in giving advice to their customers.
Sir Albert Costain: Will my right hon. Friend give some guidance to local authorities about water supplies for swimming pools and fountains?
Mr. King: I shall certainly bear my hon. Friend's point in mind. That is one of the matters that would arise under our contingency provisions were they to be necessary.
Dr. John Cunningham: Is it not a singularly inept achievement of the Government that, as with the steel workers, they have brought an historically moderate and reasonable group of workers to a national strike? While I accept what the Minister says about the current talks, which we all hope will succeed, will he say now, unequivocally, that he has withdrawn all pressure on the employers to enable them to reach agreement in the talks without any strings?
Mr. King: Without wishing to enter into the particular attitudes and posture of an individual union, I should tell the hon. Gentleman that the claim that was under consideration was for an increase of earnings of about 20 per cent. It will obviously be for hon. Members to determine whether that is an appropriate response in the present case, but that is why there have been difficult discussions.
The matter is now under the auspices of ACAS and a mediator has made a recommendation. The employers have said that that is broadly acceptable to them and there
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is no question of Government involvement. The matter must now be resolved between the employers and the unions.
Mr. Tim Renton: Is my right hon. Friend aware that the rule book of the General and Municipal Workers Union—the union most involved—says that no cessation of work shall take place unless two-thirds of the members belonging to the branch or body immediately concerned vote in favour? Is he further aware that only 60 per cent. of the national membership voted in favour of the strike and that in my region—the southern region—only 57 per cent. of those who voted were in favour? Does that not show a clear need for independent supervision of national strike ballots in public sector monopolies? If the NJIC does not vote to end the strike tonight, is there not a crying need for a new national strike ballot, to be independently supervised, on the basis of the revised wage offer?
Mr. King: I am aware that anxiety has been expressed about the ballot and the proportion of those who voted in favour of strike action. I hope that my hon. Friend will forgive me if I do not go into that more deeply. My first interest is to see whether there will be a satisfactory outcome to this evening's meeting.
Mr. Ioan Evans: Does the Minister agree that, on the first day of the dispute, 3 million people were affected by it? Will he undertake to give the House daily reports of the number of people who are without a water supply or who have to boil water? Will he reconsider the provisions of the Water Bill, which abolishes the National Water Council, and which may have created a climate in the industry that has contributed to the dispute?
Mr. King: The hon. Gentleman has made a brave attempt, as a Whip to the Committee on that Bill, to remind everyone of its existence. Nevertheless, he cannot drag it into this dispute. I shall try to keep the House informed of any important developments in the dispute. As my right hon. Friend the Leader of the House is present, I do not want to anticipate the frequency of those reports, but I hope that I shall discharge my duties directly to the House.
Several Hon. Members rose—
Mr. Speaker: Order. I am mindful of the fact that the first main business for today is an abbreviated debate which the Liberal party has initiated. I propose to call three more hon. Members from each side and then to move on.
Mr. Michael Morris: As the unions have chosen to go on strike, and as water authorities have a statutory responsibility to provide householders with piped water, does my right hon. Friend agree that there is a strong case for ensuring that people who are without a water supply should be helped and that registered private sector plumbers should be brought in to repair leaks and reconnect the water supply?
Mr. King: That depends on the stage of the system at which leaks occur. It is for water authorities to consider those matters. They are anxious to maintain their services to their customers. It is proper that they should try to do so in the most effective way.
Mr. Reg Race: Does the Secretary of State realise that workers who usually receive less pay than the national average must sometimes wade through raw

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sewage to do their job for the community? Does he agree that it is time that the Government recognised the longstanding and important claim from that group of workers for comparability with gas and electricity workers? Does he further agree that the claim has not been dealt with properly by the national negotiating machinery? On whose authority did the Secretary of State intervene in the negotiations and insist that the employers reduce their offer to 4 per cent.?
Mr. King: The hon. Gentleman has raised another point about which there is much misunderstanding. He referred to wading through sewage. The House will be aware that local authorities are responsible for most sewerage work and that it is not the main responsibility of those who are involved in this claim.
With regard to the claim for comparability with other groups of workers, which the hon. Gentleman feels has not been dealt with satisfactorily under the negotiating arrangements hitherto and in the NJIC, I understand that the claim for comparability was incorporated in the independent chairman's terms of reference at the specific request of the unions. Under the agreement the independent chairman became the mediator, and the hon. Gentleman will be aware that he commented on that claim.
Mr. David Madel: As further negotiations are scheduled, does my right hon. Friend agree that hopes of progress depend upon the imaginative interpretation of the bonus and efficiency payment schemes that were suggested by the mediator? Does he also agree that it is up to local management and local unions to develop procedures to deal quickly with local emergencies? Does he further agree that if the strike drags on the Government are entitled to ask the TUC to intervene to end it?
Mr. King: I hope that, as the procedure was agreed and the statement on it was signed by both parties under the covering signature of Mr. Lowry, there is no question of asking for further external intervention.
With regard to my hon. Friend's second point about a positive response, which was obliquely referred to by the right hon. Member for Manchester, Ardwick (Mr. Kaufman), the employers have made it clear that there is scope for increased earnings in the water authorities and water companies. I do not wish to say any more about that now. Employers have made clear their willingness to respond constructively in that respect. I hope that some progress can be made.
Mr. Bob Cryer: Is the Secretary of State aware that the Government appear to have a highly selective view of arbitration? Does he remember that for month after month the National Health Service workers wanted just that and yet the Government held out against them? Is not the lesson to be learnt that workers have been forced to go on strike due to selective intervention on the employers' side by the Government? Will he assure the House that he will keep his nose out of these affairs and allow the dispute to be settled between employers and employees as soon as possible?
Mr. King: By a slip of the tongue, I may have said "offered" when I meant "honoured" in an earlier reply. Arbitration is specifically included in the national agreement for the industry. Unilateral access to arbitration was specifically included. The honouring of agreements is important, whatever terms and arrangements may be included in them.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend agree that, bearing in mind the legend that water workers are moderate, caring and compassionate, the settlement that has been offered is generous when one compares it with the wage settlements that many people in my area are forced to accept? Does he further agree that there comes a time when those who have a monopoly power should not be allowed to abuse it, especially when they have been offered an arbitration award which most people who work in industry in the west midlands would regard as the dreams of avarice?
Mr. King: I have given the relevant figures. I am anxious not to enter into a discussion of the merits of the claim, as I do not want to prejudice the outcome of this evening's discussions. Against the background of industrial circumstances in the west midlands, of which I am fully aware, I hope that people in the water industry feel that this is not an unreasonable settlement.
Mr. Norman Atkinson: Will the Secretary of State reconsider the figures that he has given the House? Is he aware that he has grossly misled hon. Members on two counts? First, does he agree that local authority sewerage workers will be influenced by the settlement that is reached with water workers? Secondly, is he aware that he was wrong to say that the money on the table, arising from the claim, amounts in aggregate to 20 per cent.? Will he explain why the present 5¼ per cent. year-on-year offer is much lower than the original one? Is that the result of his intervention?
Mr. King: With respect to the hon. Gentleman, there is some confusion in the questions that he has just asked. The 20 per cent. is the basis of an assessment which could be made of a claim which involves some comparability and some adjustment for the going rate for the year. That is different from the offer that is on the table. With regard to local authorities, the bulk of sewerage work is the responsibility of local government. The offer, which the independent chairman, acting as mediator, said should be on a 16-month basis, is not at all unreasonable.

BILL PRESENTED
  DISPOSAL OF DEAD BODIES
  Mr. Harry Greenway presented a Bill to give next-of-kin the right of disposal of the body when the deceased person has left no instructions to the executor: And the same was read the First time; and ordered to be read a Second time upon Friday 11 February and to be printed. [Bill 59.].

Statutory Instruments, &c.
Mr. Speaker: By leave of the House, I shall put together the Questions on the four motions relating to statutory instruments.
Ordered
That the Rating of Industry (Scotland) Order 1982 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft African Development Bank (Immunities and Privileges) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Commonwealth Telecommunications Organisation (Immunities and Privileges) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Commonwealth Foundation (Immunities and Privileges) Order 1983 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Garel-Jones.]

Opposition Day
[5TH ALLOTTED DAY]
Motion made and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]

Opposition Day

  Regional Impact of Unemployment
  3.58 pm
  Mr. Cyril Smith: I have taken part in many debates on unemployment. I have often said that it is doubtful whether any such debate takes one person off the dole queue. I accept that that is likely to be the outcome of today's debate as well, but it is right that debate should take place and continue.
  One of the functions of parliamentary opposition is to press constantly for Government action and to spotlight the Government's weaknesses. If this Government have a weakness, it is in their unemployment record.
  I do not intend to rehearse all the humane arguments against unemployment. Suffice it to say that unemployment is soul destroying; it eats at the fabric of our future as a nation because it teaches a whole generation how to live without working; it allows skills and knowledge to be wasted when they should be used; and it takes away self-respect and human dignity. It is, indeed, evil.
  My right hon. and hon. Friends refute and deny the assertion that we cannot control inflation without high unemployment. We believe that that is a myth and a lie. It is not a question of one or the other. It is possible to control inflation and reduce unemployment at the same time, provided that there is a properly devised incomes strategy.
  It is grossly untrue to say that much unemployment was due to mass overmanning before the "blessed Lady" showed industry where it was going wrong. I resent deeply that jibe at management, but that is the constant jibe from No. 10 Downing Street. If industry was so grossly overmanned before 1979, that is a reflection not on the Labour Government but on the management of British industry. I do not believe that management was so grossly inefficient before 1979 that it employed about 2 million bodies more than was necessary to be efficient. If there was, or is, overmanning, the majority of it is in the administration of the public sector. It is interesting to record that most labour shedding is in the private sector rather than in the public sector where there might have been some overmanning.
  My third argument is relevant to the debate on unemployment, but it is not confined to any region; it applies to them all. It is an important matter which the Government should examine. I refer to the scandal that the Government penalise thrift when dealing with the long-term unemployed. Over one million people have been on the dole for more than a year. Many are over 55 years of age and became unemployed through no fault of their own. They have saved for their retirement in five, seven or 10 years' time. Today their savings—not massive fortunes but small amounts—prevent them from receiving benefit because after one year they move from unemployment benefit to supplementary benefit. They have saved that money to assist them in retirement. The present rules are disgraceful and distasteful. I hope that the Government will find a way to assist the long-term unemployed so that their savings for retirement are not taken in account.

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  An endowment policy is also taken into account in assessing the £2,500 earnings limit. I accept that there must be a safeguard and that if one suddenly becomes unemployed one should not be able to stick all one's savings into an endowment policy and have it discounted, but surely if an endowment policy has been held for 12 months before unemployment it should be discounted. Something should be done about the scandalous £2,500 limit.
  We seek once again to spotlight not only unemployment and the evil of it, but the Government's unwillingness to take the necessary steps to tackle it. We also seek to spotlight the growing polarisation between north and south that is emerging from the unemployment pattern.
  We want a united Britain, not a divided Britain. The facts and figures cause serious concern in relation to north versus south, polarisation and regional development. For example, it is interesting that the majority of the 100 parliamentary constituencies with the highest unemployment rate are represented by Labour Members. Indeed, only two of the 100 constituencies are held by Conservatives. Only eight are in the south of England. However, almost all the 100 constituencies with the lowest unemployment rate are in the south-east. Consequently, very few Tory Members have direct constituency experience of high unemployment.
  It is interesting to examine the constituencies held by Ministers responsible for employment. The hon. Member for Barkston Ash (Mr. Alison), who is the Minister of State, Department of Employment, is 580th in the list. The hon. Member for Eye (Mr. Gummer) who has just joined the Department as Under-Secretary after having asked three questions about employment since 1979—two of them were written and the third was about apprentice thatchers—is 517th in the list. The hon. Member for Norfolk, South (Mr. MacGregor), who is the Under-Secretary of State for Industry, is 464th in the list of constituencies with unemployment problems. My charge is not unfair.
  Rochdale has suffered badly. About 18 per cent. of its potential working population is unemployed. I see kids leaving school resigned to their fates. I see factories demolished brick by brick. They will not start up again when the economy improves. Other companies in my constituency struggle to exist. Until 1982 Rochdale had a Left-wing council which raised rates by 77 per cent. in two years. That did not help. All these matters cause me concern and I hope that the House is equally worried.
  Thousands of immigrants live in Rochdale—a factor which is not common throughout the country. The evil of unemployment is serious to the ethnic minorities. Many immigrants are unskilled and have few job opportunities.
  At the end of 1982 manufacturing output reached its lowest level for 16 years. Capacity in the construction industry is almost 20 per cent. below what it was in 1979 when the Government came to power. Investment by manufacturing industry has dropped by nearly 50 per cent. since 1979 and company liquidations in 1982 were about treble those in 1979. We are experiencing a sorry mess.
  If one examines the problem on a region-to-region basis, from the midlands to Scotland and from the midlands to Wales, one sees how the regions vary in their suffering. In Scotland 333,000 are unemployed—15·3 per cent; in Wales, 174,000ߞ16·9 per cent; in the west midlands, 355,600ߞ16·1 per cent. The increase in the
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  west midlands and in many other regions is interesting. There is an increase of 183 per cent. in Shropshire, 198 per cent. in Herefordshire and Worcestershire, 236 per cent. in Staffordshire, and 208 per cent. in Warwickshire. Those are percentage increases in the 1982 figure compared with the 1979 figure.
  In the south-west, 194,000 people are unemployed—11·8 per cent. In Yorkshire and Humberside, 292,000 people are unemployed—14·5 per cent. The increase in Humberside is 136 per cent., in north Yorkshire, 136 per cent., in south Yorkshire, 178 per cent., and in west Yorkshire, 185 per cent.
  In the north-west, 430,000 people are registered as unemployed. That is 15·8 per cent. of the working population. There has been an increase of 199 per cent. in Greater Manchester alone between 1979 and 1982. The increase in Lancashire has been 166 per cent. In Merseyside the increase is 82 per cent., despite the fact that the level in 1979 was already a disaster. In Cheshire the percentage is 184. The figure in the north-east is 226,000, or 17·5 per cent.—an increase of 120 per cent. in three years. It is interesting to note that, even though Scotland is in the extremely serious position of having 15 per cent. unemployed, the figure for the north-east, 17·5 per cent., is even worse.
  In East Anglia and Essex, the figure is 78,700, or 11·3 per cent. In the east midlands it is 170,000, or 11·9 per cent. In that area the increase has been very steep since 1979. In Derbyshire, the increase is 203 per cent., in Leicestershire, 188 per cent., and in Northamptonshire, 259 per cent. In Devon and Cornwall, 71,581 people are unemployed. In the south-west as a whole, the figure is 194,000. In the south of England, excluding Greater London, the figure is 367,000, or 9·7 per cent.
  Those figures show unemployment of between 15 and 17 per cent. in the north of England, and 11 to 12 per cent. in the south of England. They are extremely serious. I do not attempt to minimise or underestimate the seriousness of unemployment in the south, but those figures demonstrate the great danger of polarisation between north and south unless the Government are determined to act on a regional basis. Region after region, from the midlands to Scotland and from the midlands to Wales, has suffered as a consequence.
  I entirely accept that a proportion of unemployment is due to world conditions. That is why we should take a lead in the world and not merely within the borders of the United Kingdom. Instead, we seem to be scraping the heels of people with less experience, drive and initiative than us.
  I reject the official Opposition's solution to unemployment. I do not believe that the solution is to become an allotment holder divorced from the rest of Europe or the world. We must not be inward looking. We must not demand the right to export without conceding the inevitability of imports. That is no way forward. We need stimulus, not initiative-killing drugs. We need a clear commitment to a mixed economy. We need an end to political tampering. We do not need privatisation, or denationalisation as it used to be called, on the one hand, and nationalisation, on the other. We do not want industries moving from one system to the other according to the Government in power. In terms of restructuring and reorganising industry, we should declare a truce on whether industries should be state or privately owned. We must let all state industries get on with running the job that

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  they have been given, and we must let private industry know that its future is secure and that it will not be under threat from any future Government.
  Mr. Bob Cryer: The hon. Member seemed to be critical about planning trade. What about the multi-fibre arrangement, which is vital to the textile industry? What is vital to the textile industry in planning trade may well apply to other industries.
  Mr. Smith: The great thing about the multi-fibre arrangement is that it is multilateral and allows for imports. It is not about stopping imports but about limiting them. There is a difference between the two.
  We need investment to reduce unemployment. Neither I nor my party believes that it is possible in four years to reduce unemployment to—and I stress the word "to"—1 million. We believe that it is possible in the first two or two and a half years of a Government's life to reduce unemployment by 1 million. It is much more honest to tell the people that the long-term solutions are long term and will take much longer. None the less, short-term remedies can be applied if we really want to get industry moving again and to reduce the size of the dole queues.
  Sewer pipes and water mains in all parts of the country are crying out for renewal. Clapped out railway stock needs replacement. There is a desperate need to conserve energy. Our ageing population is crying out for more care and protection through, for example, an increase in the home help service. At a time of such needs in our society, 3 million people are paid not to work. It is madness that we pay people not to work but are unable to devise methods by which from the same funds we can pay some of them to work.
  Mr. A. J. Beith: Did not my hon. Friend hear the Secretary of State for the Environment say today that we have one major mains burst and 70 minor bursts in the water system on every working day? Is not that clear evidence from the Government's mouth for the need for investment in that area?
  Mr. Smith: I am grateful to my hon. Friend for his intervention which supports my argument. It is particularly true in the north-west. It is not insignificant that the first major problems in the water dispute have arisen in Greater Manchester, because the pipes that were laid in the north-west were laid earlier than those in many other parts of the British Isles. They have had far more wear and use and are in need of earlier replacement.
  The Government talk about controlling public expenditure. When will they contol public expenditure on unemployment? The figure is £15,000 million. I do not like the word "billion"; it slips out too easily, and people fail to understand its significance. "Billion" is a useful word for the Government, but £15,000 million per year is being spent by the Government to keep people on the dole. Such public expenditure is nonsense when part of it could be used to pay people to work instead of paying them not to work.
  Many regions require special help. I am not suggesting that we turn them all into development areas. If we did that, the development area status would be quite useless. Many regions require injections of capital for essential regional tasks that would create work particularly in the worst-hit regions.
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  There is a need for new hospitals. I am told that Telford and south-east Northumberland need new hospitals. The north could certainly do with one or two new hospitals.
  There is a need for new prisons. We hear about prisoners being four to a cell in cells built for one. We talk about trying to cut the crime rate, yet we breed crime by putting non-potential criminals and criminals in the same cell. Money spent on improving the prison service would be well spent and would provide many jobs.
  Special tasks need to be done in other regions, such as roadworks and housing. Those are general schemes for all regions. There is the Severn barrage. A recycling plant in south Wales requires building. There is a need to extend gas supplies, particularly in Devon and Cornwall. Even in my constituency of Rochdale, part of the north-west industrial area, some housing estates are unable to obtain gas supplies because the north-west gas board will not agree to the laying of such supplies. This is happening at a time when we are not short of gas and when there are people on the dole who would be well able to help to supply gas.
  I have mentioned the modernisation of railways in places such as Minehead and Chippenham, where the Westinghouse Brake Company is located. The building of new railway stock and the components that would be necessary as a consequence would provide work for many people.
  It was ludicrous to hear the Government talk last year about closing railway workshops and putting the men employed there on the dole, because any hon. Member who goes to any London station in the afternoon and watches the trains pull out to the south and south-east will realise what sardines must feel like when they are packed in a tin. It is staggering that we can talk about closing railway workshops and reducing the amount of railway stock at a time when there are 3 million unemployed.
  Work could also be done on the Sheffield canal basin scheme. Safety barriers are required on many of our motorways, and on other roads such as the A627 in Greater Manchester. I know full well that that road would benefit from the provision of safety barriers. People could also be employed to clean the beaches at Durham, because there is a need to develop tourism and attract tourists. The cleansing of beaches in Durham and elsewhere would do much to attract more tourists. In Devon there is a need for schemes to assist with the prevention of floods.
  The list is endless, and all the costs can be ascertained. Within the economy, it would be perfectly feasible to have a small injection of capital—small compared with the £15,000 million a year to keep people on the dole—of between £1,000 million and £2,000 million a year to carry out most of the schemes to which I have referred. That would have a marked and long-standing impact on the dole queues and would help to reduce them in our worst-hit regions.
  I hope that the Government will think seriously about investment. They should pay particular regard to regional investment and regional schemes. That can and should be done, because it would help greatly towards reducing the size of the dole queues.
  This will need drive, vision, will and determination. I do not believe that the Government have created unemployment for the joy of it. It is nonsense to suggest that. However, I believe that they lack the will to deal with it. If they do, they should get out and be replaced by a

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  Government who are determined to work for Britain, who will put party doctrine in the dustbin and who will promote real partnership as the only real way forward.
  4.24 pm
  The Minister of State, Department of Employment (Mr. Michael Alison): The hon. Member for Rochdale (Mr. Smith) spoke with his usual eloquence and conviction about unemployment generally and about its local and regional impact. I am glad that his common sense and grasp of reality made him avoid crude and sweeping indictments about the Government being responsible for the level of unemployment in Britain. Indeed, he had the grace to say that he did not believe that we had created unemployment deliberately in some pernicious or cynical way.
  The present Government are not responsible for the growth in the level of unemployment in Britain, and the factual evidence is that overwhelmingly the British population does not believe that the Government are responsible.
  The hon. Gentleman did not get far into his speech before advocating two specific governmental responses to the level of national and regional unemployment. He wanted, first, a slightly different pattern and mix of public spending and, secondly, so far as I could judge, he inevitably wanted more public spending.
  At the outset of the debate, I ask both the hon. Gentleman and the House to recall, by way of background, the experiences of recent history, which teach us some sharp lessons about Government expenditure; about inflation, which public expenditure so easily begets; and about unemployment, which clearly flows from inflation. I shall take those three obvious factors in their reverse order.
  The harsh reality is that unemployment in the United Kingdom has risen unevenly but persistently over the past 20 years. During the 1960s, total registered unemployment averaged about ½ million; in the 1970s, the average level of unemployment more or less doubled; and since 1980, the figure has doubled again. That increase in unemployment was accompanied by rising inflation over most of that period.
  Inflation averaged under 4 per cent. in the 1960s. It is almost incredible to recall that now, although we are again getting pretty close to that figure. It averaged more than 12 per cent. in the 1970s, but we all remember the Labour peak of 27 per cent. inflation in 1977 which lurks behind that average figure.
  I have seen and read many papers, articles and studies all arguing about the causes of inflation—about whether the growth in the money supply, wage costs or other factor costs are primarily responsible for persistent and long-term rises in the general price level. However, one case that I have never seen seriously argued is that in the pattern of rising unemployment and inflation since the 1960s, about which I have reminded the House, the unemployment was the cause of the inflation, and not the other way around—in other words, that we should let inflation rip as the cure-all for unemployment.
  We must now accept that in the medium and long term inflation is the cancer that destroys the living cells of employment. If, as a result of allowing public expenditure to grow as a proportion of overall domestic expenditure and the quantity of money in circulation to grow more rapidly than the growth in real output, the unemployment
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  trends that I have described could be reversed, the trick would already have been done. But we know that both public expenditure and domestic money supply, in relative terms, sky-rocketed in the 1970s. For example, between 1969 and 1979, total domestic expenditure increased by no less than 308 per cent. at current prices but by only 23 per cent. at constant prices. Thus, nearly 8 per cent. of the increased money demand resulted in an increase in output, and more than 92 per cent. resulted in an increase in prices.
  Mr. Robert C. Brown: If inflation is the cancer responsible for the enormous unemployment that we are now suffering, how can the Minister equate that with the fact that during the depression of the 1930s, when we had enormous unemployment, there was nil inflation?
  Mr. Alison: That was an entirely different epoch in our history. However, it follows that a persistent and long period of stable prices has a much greater chance of bringing real jobs to the economy than a persistent and rising level of inflation, such as we have had since the second world war. We must grapple with the post-war phenomenon, because it is the environment in which we now live.
  For that reason, the persistent and overriding priority in the economic policy pursued by the Government has been to reduce inflation. That is the route that we believe leads to the prize of more jobs and lower unemployment. There is no doubt that the Government's policies have succeeded in bringing about a marked reduction in the rate of inflation. At 5·4 per cent. the annual rate of inflation has fallen faster for the past six months than in any other major industrial country. Our record is now better than for almost 13 years. The Government are set to be the first in more than 20 years to achieve in office a lower average increase in prices than their predecessors. We are now doing better in the battle against rising prices than Europe, or the major industrialised countries as a whole, and we are still aiming at the 5 per cent. target for early this year. That is better news than almost anyone predicted as being possible 12 months ago. It shows what we can do, but America, Germany and Japan still have lower inflation rates than ours. From now on the struggle to keep reducing inflation will be tougher. We are now on the path to price stability and predictability, which in turn makes lower interest rates possible. That is probably industry's greatest need. Since the autumn of 1981, the reduction in interest rates has benefited industry by nearly £2 billion a year.
  Mr. Cryer: The Minister is dealing with what he calls the post-war position and suggests that public expenditure would generate inflation. Why are the Government, in the post-war position in the Falklands, proposing to spend massively there in order to regenerate the islands' economy? They have done the same in the Turks and Caicos islands where they have built a huge runway to regenerate that economy. However, public expenditure in the United Kingdom is apparently not a solution to regenerate our economy.
  Mr. Alison: The hon. Gentleman does himself no service in any serious argument about the problems by taking one item out of the overall public expenditure programme. Many items in the programme will be increased whereas others will be reduced. The

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  Government have overall public expenditure under control for the first time in many years. That is one reason why interest rates have fallen.
  I make no apology for painting this rather broader economic perspective by way of background to the Government's response to the hon. Member for Rochdale. He, the Liberal party, and—more widely—the SDP have put forward several proposals for major public expenditure to create employment. The hon. Gentleman sketched in some of those proposals this afternoon. As I understood it, the Liberal programme aimed at taking 1 million people off the dole queue over three years. That was what we were told at the Bournemouth conference. The hon. Gentleman has now brought it down to a reduction of 250,000 to 300,000 over one year. The SDP has raised the stakes a little by promising a reduction of 1 million in the number of unemployed over two years.
  Both parties include in their public expenditure strategies more expenditure on public sector capital projects to increase investment and especially to increase investment-led job creation prospects. They would also argue—certainly the Liberal party spokesman in the House of Lords did not dissent from it in the Select Committee report on unemployment—for more current expenditure on low-skilled jobs in the public sector, such as the National Health Service and local government. They would probably also argue for further selective employment measures, including job creation grants in the community and voluntary sectors. Again, the hon. Gentleman's speech hinted at that.
  Many of the ideas canvassed by the Liberal party, both today and at the Bournemouth conference, are already reflected, at least in part, in the Government's programme of spending priorities and economic objectives. On capital investment, for example, the House will recall that investment in nationalised industries—British Rail comes within this broad programme—was cut in real terms by the Labour Government every year from 1976 onwards. The fall was stopped in this Government's first year and reversed sharply in 1981–82, when cash investment spending rose by more than 18 per cent. In the current year, 1982–83, another 18 per cent. increase has been authorised.
  The construction industry is showing real signs of recovery—[Hon. MEMBERS: "Where?"]. I am in no doubt about the difficulties faced by the industry, but there are already signs that it is responding to increased demand, especially in housing. During the first 11 months of 1982, housing starts were 25 per. cent. more than in the same period in 1981. New orders received by contractors for all construction work in the first nine months of 1982 were noticeably higher than those for the same period in the previous year.
  However, the Government believe that the case for adopting what the hon. Gentleman suggested this afternoon or any other proposals must be considered within the wider framework of the policies needed to defeat inflation. Higher public spending on employment measures or infrastructure will require a mix of lower spending in other areas, higher taxation or higher borrowing, with a consequent upward pressure on interest rates.
  Mr. Harry Cowans: Will the Minister give way?
  Mr. Alison: I am dealing with the speech of the hon. Member for Rochdale. I shall give way if I have time during this short debate.
  Each of the consequences that I mentioned carries a penalty that falls ultimately upon industry and so upon jobs. The balance of advantage and disadvantage in specific proposals cannot be properly evaluated without taking a view on how they are to be financed and the further effects that arise. To implement all the proposals put forward by the hon. Gentleman this afternoon, and others put forward by the SDP, would mean a major addition to planned public expenditure. That could all too easily undermine the success over inflation, on which the prospects of a lasting improvement in competitiveness, and ultimately employment, must depend.
  Mr. Gordon Wilson: Is the Minister aware that ceilings will be placed on public expenditure on regional development? There were reports in the Sunday Standard in Scotland yesterday that some of the industrial development money currently earmarked for Scotland will, as a result of the review being conducted by the Government, be transferred to other parts of Britain. Will the right hon. Gentleman repudiate that and say that the Government have no intention of doing so?
  Mr. Alison: I cannot repudiate a report about which I have just learnt from the hon. Gentleman. I hope that he will allow me to take note of his point, to research the matter and to give him an answer as and when I can.
  Mr. Cowans rose—
  Mr. Alison: I shall give way in a moment, but only if I get on reasonably well.
  I remind the House briefly about what the Government's substantial programme of special employment measures is achieving. The programme has proved itself to be compatible with much lower interest rates than we have seen in Britain for years, and with falling inflation. We recognise that, while there is a need for special employment measures in the short term, they must be consistent with or work in favour of the increased efficiency of the labour market. Within that constraint, we are doing more than ever before to help. Our expenditure on special measures will be almost £1½ billion in the current financial year and almost £2 billion next year.
  Our main priority is to tackle youth unemployment. It is only right to devote considerable resources to programmes of training and work experience for school leavers and others in younger age groups who might otherwise have to wait for some time before acquiring useful skills and the habit of work. The youth training scheme, which will be fully operational from September, will build on the experience of the present youth opportunities programme. It represents a major development in youth training in Britain and will form a bridge between school and work. In 1984–85, the first full year of operation, we shall spend over £1 billion on training young people and, as a result, Britain will gain a better trained work force, better able to meet the needs of industry. I am not quite sure whether this is the policy of the Liberal party, but I believe that the right hon. Member for Crosby (Mrs. Williams) has either said or hinted that it is the SDP's intention to double the length of the youth

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  training scheme programme. I ask the right hon. Lady to bear in mind that the first full year for which we are budgeting is costing £1 billion. I wonder whether she has worked out whether, in the second year, the programme could cost less than £1 billion. Certainly a substantial increase in public expenditure seems to be anticipated in that area.
  Mr. Cowans: I am grateful to the Minister for giving way. I appreciate that he does not have much time to spare. The Minister lays stress on reducing inflation. Of course, that is vitally important, but it is germane to ask what is the cost. In the process of reducing inflation, is manufacturing industry to be destroyed? Are the north-east and similar regions to become industrial deserts? Is high unemployment to be endured? Prices will fall if everyone is unemployed, but if the policies that the Minister considers to be successful destroy our ability to compete in world markets, an inflation rate of nil will not do this country one iota of good.
  Mr. Alison: History plainly shows that allowing inflation to rise leads to an increase in unemployment, and that there is always a lag between the achievement of price stability and the pick-up of employment. We are confident that employment will pick up on a plateau of more stable prices. All the national economies that have managed to keep inflation down to a much lower level than we have over a long period have a persistently better record of high employment. The Japanese and the Germans are the most self-evident cases. Getting inflation down, and keeping it down, offers us the best prospect of an increase in employment.
  The young workers scheme, which started last January, directly tackles the problem of youth unemployment among those aged over 18 by helping employers to take on young people at realistic wage levels, which reflect their relative lack of experience and, frequently, their need for training. The scheme is already helping about 137,000 young people.
  The other major group that needs help is that of the long-term unemployed. I am glad that the hon. Member for Rochdale has pointed out that it is frustrating for the public to see those on the dole getting money for doing nothing when it might, in principle, be desirable to try to find jobs for them. The House of Lords Select Committee on Unemployment canvassed the same idea. The Committee suggested that the Government should aim to get about 300,000 people into public works programmes of various sorts, direct from the unemployment register, and preferably from among the long-term unemployed. That is exactly what we aim to do through our community programme.
  About a quarter of our total expenditure is being directed to special employment measures for the long-term unemployed—for those over 25 who have been unemployed for 12 months or more and those aged between 18 and 25 who have been unemployed for six months or more. The Government are only too anxious to help those who have experienced what the hon. Gentleman rightly described as the profoundly demoralising effects of being out of a job for a long time. We recognise that the skilled may lose their skills, and others even their basic working habits, after a long period of unemployment. It was in 1981 that we introduced the community enterprise programme, the forerunner of the present community
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  programme, which provided temporary jobs on projects of benefit to the community for those who had been out of work for the periods that I have described.
  From 1 October last year, the community enterprise programme was incorporated into our new community programme, the largest-ever initiative in Britain to help the long-term unemployed. The programme is intended to provide up to 130,000 places at a gross cost of approximate £400 million in the build-up year 1983–84, and it will cost about £583 million in 1984–85. That is not a bad step in the direction of the 300,000 whom the House of Lords Select Committee on Unemployment thought that we should be trying to get off the register.
  Mr. Richard Wainwright: The Minister must be aware that the words on the Order Paper for the debate are
  "The Regional Impact of Unemployment".
  When will he be coming to the regions and to the effect of unemployment on the regions, about which my hon. Friend the Member for Rochdale (Mr. Smith) spoke so eloquently?
  Mr. Alison: The whole idea of the community programme, with which I am dealing at present, is precisely to try to have the most significant impact where the greatest number of long-term unemployed are to be found. The programme is specifically geared to have the response that is most likely to be forthcoming where unemployment is highest. If there is long-term unemployment in the hon. Gentleman's constituency, the whole range of resources of the community programme—provided that he can find or encourage sponsors—will be available in his locality. The very word "community" shows that the programme is designed to spark or elicit a response exactly and precisely where the greatest number of unemployed and the greatest number of long-term unemployed are to be found.
  With regard to regional employment policy—going slightly wider in the economic sense—the programmes available from the Department of Industry and so on are topics that my hon. Friend will be seeking to cover in his wind-up speech.
  At the end of December 1982, a total of about 12,000 places had been formally approved under the community programme. Agreements have also been made with managing agents for 34,000 places, and a further 50,000 places are now under negotiation. Therefore, we are going a long way already towards filling out the capacity of the community programme to take off the register 130,000 of the long-term unemployed—most significantly in the areas where those long-term unemployed are more than proportionately represented.
  The remaining quarter of our special employment measures expenditure goes on a series of measures that are not aimed at particularly identifiable groups but generally help the unemployed in ways consistent with the development of the labour market. For example, the job release scheme, which started in 1977, and helps to do something for older people, is designed to encourage workers who are nearing state pension age to give up work early and so release their jobs for unemployed people. The job release allowance is currently being paid to about 75,000 people and the estimated cost of the scheme this year is £244 million.
  In addition, we are testing the effectiveness of the enterprise allowance scheme. We recognise that many

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  unemployed people would like to start up in business, but the fact that in doing so they lose their entitlement to unemployment or supplementary benefit may deter them. The scheme compensates for the loss of benefit by providing a weekly taxable allowance for the first year while the business is being established. It is currently operating as a pilot scheme in five areas.
  So far the take-up has been encouraging. At the end of November, about 1,600 people were receiving the allowance under the pilot scheme. We must, however, be sure that this is the best and most cost-effective way of helping such people before deciding whether to extend the scheme to other parts of the country. We are always ready to consider new ways of helping the unemployed.
  Our newest employment measure was introduced on 3 January this year. That is the job-splitting scheme, which is designed to help employers split full-time jobs and so open up part-time jobs for unemployed people. It offers a Government grant of £750 to employers who split jobs under the scheme provided that the part-time jobs created are filled by unemployed workers or those in the same establishment who are facing redundancy. Although the scheme is in its very early days, the initial response from employers has been encouraging.
  This extensive package of measures reflects our real determination to help all those worst hit by the recession and, we believe, provides a constructive alternative to unemployment.
  In conclusion, I return to my earlier theme. Of course we all want the level of unemployment to come down, but this will happen only when British industry becomes more competitive and world trading conditions improve. It is profitable firms which create jobs, so the more goods and services that our firms can sell at home and abroad, the more new jobs we shall see in all regions throughout the country. The Government's task is to create the right environment in which firms can prosper. We have already made a good deal of progress on this front; inflation and interest rates, for instance, have been considerably reduced. But industry has its part to play, too, by continuing to increase productivity and improve the quality and design of its goods. Meanwhile, we are helping those groups worst affected by the high level of unemployment through the considerable scale and range of special employment measures that I have enumerated this afternoon, many of which synchronise—and are not at all incompatible—with the objectives mentioned by the hon. Member for Rochdale. These will go a long way to making things better, but the public expenditure implications of doing more must be weighed carefully. We are doing as much as we can afford, consonant with keeping inflation on its downward trend. My hon. Friend the Under-Secretary of State for Industry, when he replies, will have something to say about the scope of the Industry Act and the Department of Industry in channelling specific aid to areas of particularly high unemployment.
  4.51 pm
  Mr. Giles Radice: We are debating a highly important topic. The hon. Member for Rochdale (Mr. Smith) made a useful contribution in introducing the debate, although occasionally he appeared to be making a tour of the marginals which the Liberals hope to win at the next election. I noticed one or two of the prime targets.
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  Chippenham was mentioned, and so were one or two south-western constituencies, but, frankly, it was nothing like the blatantly electioneering speech of the Minister, in which he seemed completely to ignore the subject of the debate, which is the impact of unemployment on the regions.
  Nobody would have thought that we have more than three million unemployed, by whichever count we use. Nobody would have thought that six regions have more than 15 per cent. unemployment and that only one region has unemployment under 10 per cent.—the south-east region, with 9·7 per cent.
  Whichever way one considers the figures, there has undoubtedly been a catastropic increase in unemployment in all the regions since the general election. I shall use the Government's figures which are on a new claimants basis. For every 100 unemployed in the north when Labour left office, 215 are unemployed today. The equivalent figure for Scotland is 216; for Wales, 226; for the north-west, 243; for Yorkshire and Humberside, 272; for the east midlands, 281; for the south-east, 288. But of course the highest increase of all is in the west midlands, where for every 100 unemployed when Labour left office there are 319 today
  If one compares the regional rates of unemployment in May 1979 and December 1982, one again finds an appalling increase. In those far-off days of May 1979, which many people in my constituency may regard as glorious days—
  Mr. Gordon Wilson: Labour doubled unemployment, too.
  Mr. Radice: In the north at that time 7·7 per cent. were unemployed—much too high—but today the figure is 17·5 per cent. In Wales the figure was 7 per cent. Today it is 16·9 per cent. In Scotland, 6·9 per cent. were unemployed in May 1979; today the figure is 15·3 per cent. In the north-west, 6·2 per cent. were unemployed in 1979; the figure is now 15·8 per cent. In Yorkshire and Humberside, 5·1 per cent. were unemployed in May 1979; now the figure is 14·5 per cent. The astonishing figure is, again, for the west midlands. In May 1979, 4·8 per cent. were unemployed; today, the figure is 16·1 per cent. Northern Ireland is, in a sense, an exception. The figure was 10·1 per cent. in May 1979. Today it is double that at 20·1 per cent. Excluding Northern Ireland, the north is still top of the league for rates of unemployment, as it was in 1979. The new challenger is the west midlands.
  I am glad that the Minister has not rested his case on the fact that there has been some slight narrowing of differentials between the most depressed regions and the rest. That is not because of the success of the Government's regional policy. Any narrowing of differentials has been caused by the whole of the United Kingdom becoming a depressed area.
  I wish to examine a little more closely two of the regions—the north, because my constituency is in that region and because, apart from Northern Ireland, it is still top of the league, and the west midlands, because its economy has deteriorated rapidly over the past three years. The northern region has had structural problems for a long time, but regional policy had a number of successes. Between 1967 and 1973, 50,000 new manufacturing jobs were created by regional policy. There was also considerable diversification in the economy, so that by

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  1979 we were facing a future with some hope. But now, according to The State of the Region Report, one in five males is unemployed, and if that rate continues it is calculated that all men will be unemployed by the end of the century. (Interruption.] I hope that that will not happen, but with the present Government anything can happen.
  In the northern region the figure for long-term unemployment is considerably above the national average. More than one person in three has been out of work for more than a year and one in eight for more than two years.
  With regard to youth unemployment, 75,000 young people are available for work. I accept that some of them are on youth opportunities schemes, but today the vast majority of young people in the northern region are leaving school with no prospect of obtaining permanent employment. A number of areas are appalling blackspots, where unemployment in September 1982 was well over 20 per cent. In fact, it is worse today.
  In Wearside, Hartlepool and north-west Durham, in which Consett is counted, there have been unprecedented redundancies. In 1978 there were 14,000 redundancies, and in 1980 there were 36,000. In 1981 the figure was 40,000, while in 1982 it was 30,000, and more redundancies were announced in the new year in steel and shipbuilding. We have had redundancies in all the staple industries of the north—heavy engineering, shipbuilding, steel, chemicals and construction. That is what the Conservative Government have done to the northern region. [Interruption.] The hon. Member for Hertford and Stevenage (Mr. Wells) should realise that this is no laughing matter.
  In 1979 the west midlands was one of the most prosperous and thriving areas of the United Kingdom. It is now one of the United Kingdom's most depressed areas, and it is not assisted by the Government's regional policy. The turnround has been appallingly swift. From a position of relatively few redundancies, the West Midlands county council area shows that in 1980 there were 37,000 redundancies; in 1981 31,000; in 1982 26,000; and further redundancies have been announced this year at Lucas.
  The growth of long-term unemployment in the west midlands mirrors that in the northern region. Forty-four per cent. of the unemployed in the West Midlands county council area have been out of work for more than a year. The vast majority of young people in the region are not likely to find a job.
  The main reason for the appalling increase in unemployment in the regions is the failure of the Government's economic policy, though one would not have thought so from what the Minister said. The combination of high interest rates, cuts in public spending and an overvalued currency has dealt nearly all of British industry a devastating blow from which it shows little signs of recovery. I should like the Under-Secretary of State for Industry to give us concrete signs of a recovery in manufacturing, engineering or construction. If he is proud of the Government's policy, let him tell us whence the recovery is coming.
  Of course there is a world recession, but one of the main reasons for it is that other Governments, particularly the United States Government, have been following our Government's example. Until recently the United Kingdom has been cheering President Reagan in all his actions, instead of advising him to change his policies.
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  I agree with those who say that regional policies alone cannot solve our problems. The trouble is that the Government's stance on regional policy has, if anything, made matters worse. The Minister will not take my word for that, so I shall quote Gudgeon, Moore and Rhodes, considerable experts on regional policy, who have been studying the matter for at least 20 years. Their considered assessment is set out in December's "Cambridge Economic Review". They say that the Government's present policy stance
  "in the face of a rapidly deteriorating regional situation is.… firstly to incur less expenditure, secondly to concentrate regional aid on the northern conurbations"—
  as a northern Member I do not totally oppose that, but I will deal with that issue later—
  "thirdly to subsidise capital expenditure rather than employment; and finally to limit policy almost entirely to manufacturing which is everywhere in decline or at the very most growing more slowly than other sectors."
  That is an objective assessment of the Government's regional policy. It is a case which the Government must answer and we want to hear their answers today.
  Let me deal with one of the Minister's best arguments. He says that expenditure on regional preferential assistance has increased, but if that expenditure is related to unemployment one sees that it has declined. That is the criterion for regional assistance. The aid per unemployed person in 1978ߝ79 was £441 and in 1980ߝ81 it had fallen to £231.
  I do not argue that at a time of overall recession regional policy can produce the same results as it did in the 1960s and 1970s. For one thing, there is now less footloose industry, if any, and for another the problems are different and, mostly thanks to the Government, more intense.
  As my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), the shadow Chancellor of the Exchequer, argued so cogently last week, we need a different overall economic strategy which is geared to the creation of jobs and is based on economic expansion, increased public spending and public investment, a more competitive currency and an agreement on incomes with the trade unions.
  In addition, we shall need, not a contracted or weakened regional policy, but a reformed, expanded and more dynamic policy. My hon. Friends the Members for Kingston upon Hull, East (Mr. Prescott) and for Stalybridge and Hyde (Mr. Pendry) have already done much work on that subject.
  Sir William Elliott: Having followed the affairs of the northern region for many years, I am amazed at some of the hon. Gentleman's comments, particularly his suggestion that the northern region was one of the most prosperous in the country in 1979.
  Will the hon. Gentleman explain what he meant when he said that a Labour Government would need an agreement with the trade unions on incomes? Is he suggesting that there would be an incomes policy?
  Mr. Radice: I believe that we must have a national economic assessment. When one looks at the successful countries, such as Austria and Sweden, or at any country that is trying to expand its economy, it is clear that there must be a broad agreement with the trade union movement on the direction of economic policy. Our Government do not bother about that, which is one reason why we have 3 million unemployed.

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  I must correct the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott), because I did not say that the northern region was prosperous in 1979. I said that the west midlands was prosperous. I merely pointed out that, thanks to regional policy, the northern region was able to face the future with more hope at that time.
  It is clear that we shall need a wider coverage of regional assistance. It will have to cover, for example, the west midlands, which, on any criteria, is a depressed area.
  Mr. Gordon Wilson: If the hon. Gentleman proposes that regional policy should be extended, does not it follow that the benefits to other areas, such as Scotland and Wales, will be correspondingly reduced? There is a limit on the amount of footloose industry and if incentives are given to areas such as the west midlands, which has only recently suffered the problems of unemployment, that will be to the disadvantage of depressed areas that have suffered from high unemployment for decades.
  Mr. Radice: Obviously we need more resources devoted to regional policy. The Opposition want to see a reformed regional policy which is not related so much to capital grants and actually includes a limit on such grants, which already account for more than half of all regional assistance. If the main criterion is the creation of jobs, the current priority given to capital grants must be wrong.
  We need to devote more assistance to subsidising employment and we must give far more attention than any Government have given to helping service industries, because they will be the source of many new jobs. We must also broaden the development agency concept, which has been successful in Scotland and Wales and is working effectively in the west midlands and in London.
  In its last manifesto the Labour party committed itself to development agencies for the English regions, and that idea was strongly supported by the northern region because we believe, rightly, that regions must have a much greater influence than at present over direction of their regional economies. One cannot just direct regional policy from the top. That was one of the troubles of the past—there was not enough input from the regions.
  We also need to ensure that public spending takes more account of regional needs. Labour's plans for spending and investment need to be concentrated in the regions. I hope that that is where many of the jobs will come. In short, we shall need a much stronger rather than a weaker regional policy. What is so depressing for northern Members of Parliament, and for a Labour Member of Parliament representing a constituency with a high level of unemployment, is the lack of concern—
  Mr. Cowans: I have been listening carefully to my hon. Friend's eloquent speech, but will he concede that in any regional policy the national Government must not concentrate on only one region? This Government, while shedding crocodile tears about losses of jobs in the regions, have either closed all regional offices or depleted them to such an extent that there has been a considerable loss of jobs—this is relevant to the northern region—in the income tax and travel offices. One could list a number of those offices, and I am sure that this applies in other regions where the Government have brought about a loss of jobs, while shedding crocodile tears about wanting to create more.
  Mr. Radice: My hon. Friend is right. Any Government who are serious about regional policy have to be serious about their own occupations and spending. They have to see that they take account of regional needs and that nationalised industries take account of regional needs. One thing about the northern region, for example, is that many of the centres of decision making are outside the region. That is also true, although perhaps to a lesser extent, of Scotland and Wales. If there had been more centres of decision making—this applies to the nationalised industries as well—in the northern region, we might have done better out of the recession.
  What has been so depressing about listening to unemployment debates over the past three years in the House is the lack of concern shown by the Conservative party about these issues. The Government appear to believe, and we have heard it again today, that a reduction in inflation will automatically bring unemployment down. I am glad that my hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown) reminded us that in the 1930s, when we last had mass unemployment, prices were falling. It is not surprising that prices fall when there are 3·5 million unemployed, when output is down by 15 or 16 per cent. and when one is in a deep world recession that affects commodity prices. The real trick is to combine expansion and full employment with stable prices, and the Government have not even bothered to attempt that.
  Be that as it may, it is clear that the Government's political strategy is that they hope that when the election comes people will forget about unemployment. We heard a hint of that today. It may be that there are not many Tory Members of Parliament with direct experience of unemployment in their constituencies. Incidentally, there are not many Liberal Members who have direct experience of unemployment in their constituencies. I have just been looking at the league table.
  Mr. Gordon Wilson: The hon. Gentleman cannot say that about SNP Members of Parliament.
  Mr. Radice: Even if the Government think that they can ignore the problems of the northern region, as they have done, and those of Scotland and Wales, there are many marginal seats in the north-west and the midlands, particularly the west midlands, which the Government need to win if they are to be returned at the next election.
  Mr. Gordon Wilson: So do the Opposition.
  Mr. Radice: If the Government are prepared to brush aside the economic and social arguments for a strong employment and regional policy, there is a strong political argument to which they must pay attention. If, through lack of concern, stupidity or pride, they go on ignoring unemployment, they will be defeated at the next election and will richly deserve that defeat.
  5.16 pm
  Mr. D. A. Trippier: I begin by warmly congratulating the hon. Member for Rochdale (Mr. Smith) who initiated this debate in his inimitable style. He was most fluent and articulate. This is not the first time that I have complimented the hon. Member. It was my pleasure to serve with him for many years on the metropolitan borough council of Rochdale and before that on the county borough council of Rochdale. They were happy and memorable years.

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  Whatever may be the differences between us politically, he correctly identified the problems. The solutions may be different, but the hon. Member for Rochdale cares. He cares very much, and I suspect that he knows that I care too. I hope the hon. Member for Chester-le-Street (Mr. Radice) realises that when he talks about the Government showing a lack of concern it is so much nonsense. No political party has a monopoly of concern over the unemployed.
  I have complimented the hon. Member for Rochdale on a number of occasions. I think that I can say to him, perhaps slightly tongue in cheek, that I hope that our friendship will extend so far that he will be in the fortunate position of persuading the Liberal party in Rossendale not to put up a Liberal candidate against me at the next election. He might care to consider that.
  I said that the hon. Member for Rochdale identified the problems—particularly the problems between north and south—correctly, but I do not think that he identified the problems within the regions particularly well. I have never forgotten the time when the sub-region of north-east Lancashire, in which my constituency lies, made an appeal to the Secretary of State for Industry for regional assistance. It seemed to me to be complete nonsense that the case that I was trying to fight on behalf of Rossendale, as was my local authority, could be identified with other problems that were within that sub-region, say in Clitheroe. Unemployment in Clitheroe was extremely low, whereas in Rossendale it was very high. I pointed this out to my hon. and learned Friend who is now the Minister of State at the Home Office, but who was formerly a junior Minister at the Department of Employment, and he agreed with me. It seemed nonsense that we were asking the Government to give blanket assistance to the whole sub-region.
  I wish to try to convince the hon. Member for Rochdale that there are problems within constituencies that are not shared by adjoining constituencies. His constituency and mine touch, yet whereas Rochdale, fortunately, has diversified much more successfully away from textiles, we have enormous problems in Rossendale where 45 per cent. of the working population is employed in textiles and footwear. That must make it a unique constituency. The vast majority of that percentage is employed in the footwear industry.
  The hon. Member for Rochdale knows that I have spoken on many occasions in the House on behalf of the footwear industry, as he has spoken on behalf of the textile industry. I put it to him that it may be a better argument, and one that will carry the House with us, if, instead of asking for regional assistance, we ask for selective industrial assistance. For example, we could ask for assistance in the textile industry or the footwear industry. The hon. Member knows that that would not be a precedent. Selective assistance was given to the woollen textile industry not that long ago. Many of us on both sides of the House would be prepared to support a similar case again. I am sure that the hon. Member would.
  We in Rossendale are fortunate in that the Government have recognised that we have a structural problem. It is obvious that we have a structural problem if we still have 45 per cent. of our workpeople employed in textiles and footwear, and it is a mystery that we managed to get into this position without diversifying into new, more modern and more competitive industries. Whereas areas such as
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  Rochdale have become well known for spring manufacturing—Burnley has diversified, Bury has diversified and Blackburn has also diversified, all towns around us—we are not in that fortunate position.
  I know that the Secretary of State for Industry would not have given us development area status if we had not convinced him that we were prepared to help ourselves within the community. I shall return to that later in my speech when I discuss the formation of the Rossendale community enterprise trust.
  There was a great deal of antagonism when Rochdale and Rossendale received development area status, as I am sure the hon. Member for Rochdale will acknowledge. The reason was simply that all the surrounding areas asked themselves "Why them and not us?" The answer lies basically in the structural problems. But, in addition, I am grateful to my right hon. Friend the Minister of State and to my hon. Friend the Under-Secretary of State who is responsible for small businesses, the hon. Member for Norfolk, South (Mr. MacGregor), for what they have done for my constituency with the enterprise allowance scheme. This was referred to by my right hon. Friend. It is very much a pilot scheme, though in my view my right hon. Friend understated its success. He said that the take-up had been encouraging. But in my constituency and in others in north-east Lancashire selected for the scheme the money ran out not all that long ago and we had to persuade Ministers in the Department of Employment to go knocking on the Treasury's door for the scheme to be allowed to continue.
  I make a further appeal to my right hon. Friend today asking him to continue the scheme after March. It is very successful. It is very appropriate. It is cost-effective, and it does not cost a great deal. The Government pay £2,000 a year to assist in starting up a business. In my view, that is very cost-effective and extremely cheap.
  I am also grateful, I think, to the Secretary of State for the Environment for giving my constituency an enterprise zone. I say "I think" because it can be a mixed blessing. Members of Parliament who get enterprise zones in parts of their constituencies invite hostility from the parts of their constituencies which do not get them. There is an argument, which I have heard advanced by hon. Members on both sides of the House, to the effect that all that an enterprise zone does is remove labour from one area to another, which is robbing Peter to pay Paul. Having studied the position more carefully, I am satisfied that an enterprise zone assists business start-ups. When a business is started, it can hardly be described as taking labour from one area to another.
  With the package of the enterprise allowance scheme and enterprise zones plus the grants which are available through the area having development area status—those three ingredients—we have the recipe for success. However, to draw them together it is necessary to set up an organisation such as a community enterprise trust which can guide those whom we call entrepreneurs through the dark and dismal paths through which they must go to start up businesses. I was extremely impressed two years ago when I visited the St. Helen's trust, which has been an enormous success in the north-west of England, and saw what was being done there.
  It has to be emphasied that such a trust will work only if it does not itself have any money to hand out to new businesses and it is not too closely tied to the local authority. Many trusts have been formed, especially in the

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  north-west of England. Membership of the governing bodies has come partially from directors of industrial companies in the area who have felt a moral obligation to help in the community to combat unemployment. Their main aim is to create jobs. Membership has also come partially from the local authority, although in my view it should never have a majority vote on such a governing body. But, most important of all, such a trust must have a director. In our case, we have a secondee from the National Westminster Bank, and he is an excellent director of the trust.
  The trust has been going for about 18 months and we can safely say that we have been responsible for encouraging the start-up of 400 new businesses, some very small—one and two-man businesses—and some rather larger. The task of the director has been to become an expert on the numerous grants that are available both from national and local government. Even Members of Parliament, however much we may flatter ourselves, are not experts on the various grants. It is necessary to have someone who can get hold of the chap who walks into the office saying that he wants to start a business, who can take him to see either the green field site—preferably the developed site—and show him the units, who can help fill in the application forms which have to be submitted to the Government or to the local council and which are a headache for many people, and who can work closely with him. He also has to encourage firms of solicitors and chartered accountants, without whom, unfortunately, no business can operate successfully, to give their time free interviewing prospective start-ups, between the hours of 5 and 6 o'clock in the evening for example. We have two firms of chartered accountants and three firms of solicitors in the area which are prepared to provide this service free.
  The community is working together. It is not wholly the responsibility of the local authority that unemployment is so high. It is not the responsibility of the sitting Member of Parliament for Rossendale or of the last Member, and it is not the responsibility of this Government or of the last one. We are all in this together, and we all have to work on it. It is an exercise in pulling ourselves up by our bootstraps. It is an exercise in self-help. I have received enormous encouragement, especially from my hon. Friend the Member for Norfolk, South, in all that I have attempted to do.
  I cannot miss this opportunity with the Budget looming up, to make a plea for some consideration for small businesses and others of my constituents. Many Conservative Members who represent industrial or semi-industrial constituencies are very anxious that, in considering his Budget, my right hon. and learned Friend the Chancellor of the Exchequer should ignore the appeals that may be made to him by, for example, the Institute of Directors asking him to reduce the standard rate of income tax by 1p or 2p in the pound. Instead, my right hon. and learned Friend should listen more carefully to what the CBI is saying, since the confederation believes that it would be better to have the indexation of personal tax allowances.
  I hope that my right hon. and learned Friend will listen to me and to other Conservative Members who represent industrial constituencies when we say that we would rather have indexed personal income tax allowances. I have said already that the vast majority of those employed in textiles
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  and footwear are low paid. Many of them would very much appreciate personal tax allowances being increased. It would take many of them out of the tax net. It would also restore the incentive to work, which the Conservative Party spoke about a great deal prior to the last election. I cannot fail to make the point that we gave the pledge at that election that we would reduce taxation overall.
  I see that the CBI is asking for a de-rating of some 15 per cent. on business properties. I wish to try to persuade my right hon. and hon. Friends that this is perhaps not the way to proceed. It would require primary legislation. Although I have much sympathy with the idea, it is much more important to raise tax allowances, for all the reasons that I have tried to give.
  I conclude by making an appeal about the temporary short-time working compensation scheme. Many hon. Members representing constituencies with traditional industries, such as textiles and footwear, are familiar with the scheme. I did not like the Labour Government's idea of introducing the temporary employment scheme. It was at the time a much abused form of subsidy. It was not used for the purposes for which it was originally intended. At the risk of being crude, it was an absolute rip-off.
  The temporary short-time working compensation scheme is more accountable. The trouble is that it is not sufficiently flexible. The rules that govern it are so stringent and so tight that many of the firms operating in the two industries I have mentioned—just as much in Rochdale as in Rossendale—are teetering on the brink and are worried about whether they will go to the wall. I plead with the Minister to persuade his right hon. Friend the Secretary of State for Employment to examine this issue again, preferably before March, to see that the scheme is allowed to continue and to become more flexible. I do not have to outline the details of what I want. I have made two representations and brought lobbies from the trade unions and the employers to see Ministers. We all stand together on this matter. I plead with the Minister to be more flexible.
  It will be realised from my remarks that I have much to thank the Government for—the fact that Rossendale has been made a development area, the fact that we have an enterprise zone and also the enterprise allowance scheme. Those benefits, together with the continued success of the Rossendale enterprise trust, will ensure that the Rossendale valley becomes strong and vigorous once again.
  5.31 pm
  Mrs. Shirley Williams: I should like to thank my hon. Friend the Member for Rochdale (Mr. Smith) for introducing the debate and for the excellent manner in which he presented the case to the Government. Without boring the House by repeating the figures that he gave, which ranged from 17·5 per cent. unemployment in the north-east down to the much more acceptable 9·7 per cent. rate in the southern counties, it should be stated, as hon. Members know, that those figures do not represent the true situation. All the proportions and all the absolute figures should probably be increased by between 25 and 30 per cent. to take account of the substantial number of people who are not registered or the number of people who, while registered, can no longer claim benefit.
  My hon. Friend the Member for Rochdale put his finger on an extremely important point. The greater the

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  proportion of long-term unemployed—they now exceed one-third of the total—the larger the number of people who disappear from the dole figures because they have savings exceeding £2,500 and therefore cannot claim any form of benefit. There is a profound irony about a Government who are committed to the concept of thrift and savings penalising people to this extent, not only by refusing them supplementary benefit but by taking them out of the unemployment figures altogether. This has happened only as a result of the change in the Secretary of State's manner of collecting the statistics.
  It is also true to say, as the hon. Member for Chester-le-Street (Mr. Radice) remarked, that the figures represent, not a single stagnant situation, but a situation that is dynamically going down, if that is a possibility in physics. In recent weeks, I have travelled, like, I suppose, many hon. Members, from the north to the south of this country, from Scotland, through the north-west to the west midlands and London. It is striking to learn in every regional centre about yet another round of redundancies either here or on the way. The hon. Member for Chester-le-Street referred to some of them.
  The hon. Gentleman referred to Manchester Steel and to Lucas Industries, where, I believe, 1,800 jobs are at risk. One can add the shipbuilding industry, where another 2,300 jobs are about to be lost in the north-east. One can refer to the 1,400 jobs lost last week in the car components and car parts industry of the west midlands. One can refer to the disappearance in the north-west, part of which I represent, of the Bowyer's meat company in Walton, Liverpool, and to the suggestion that even Halewood, that great project of an earlier regional policy, is severely at risk.
  When the forecasts for the Government hint at the possibility of another 300,000 unemployed this year, one has to say that the first month of the year shows them to be well on target. I make that point because I sometimes think that the Minister—a hard-working and decent Minister—sounds increasingly like a man who is bringing struts and girders to hold up a collapsing building. All the special employment schemes, well-intentioned though they are, were designed mainly to deal with temporary cyclical unemployment. They are being used today desperately to try to hold back the tide of what can only be described as a level of unemployment that is beginning to add up to the collapse of a large part of the industrial economy.
  Hon. Members will be aware that what is being seen now is very different from the brief recessions of the mid-1970s or the late-1950s. Factories are no longer being mothballed. They are no longer being closed down but maintained. More and more the story is one of machinery being sold off, much of it abroad, at second hand, and factories being made derelict and sold off for their site value. The evidence is clear in receiver's reports for one firm after another.
  There is no point in going on with this despairing litany which the House knows well, except for the purpose of saying that those hon. Members, whatever their party, who represent the north-east, the north-west, Scotland and Wales sometimes have the sense that the sheer despair that is overtaking our cities and villages is not fully appreciated in Downing Street, in the Cabinet and in Whitehall.
  I see no point in continuing to say what has been so eloquently expressed so many times. I should like, rather, to underline the dilemmas faced by the two historic parties
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  and then to mention precise areas where the Government could now make a substantial change in the level of unemployment. The first dilemma is that faced by the Government in their growing recognition that any steps towards reflation and recovery of the economy put at risk their own precious inflation record. The Government have not been able to persuade themselves, let alone anyone else, that they have permanently broken inflationary pressures other than through an intolerable level of unemployment.
  I say this to the Government. Bit by bit, other countries that share their monetary views are changing their minds. Only two weeks ago President Reagan signed a massive public works scheme amounting to $13 billion in the United States. Soon, the Government will be the only Canute glumly watching the sea when everyone else has left for safer pastures. The Government's dilemma—it is a dilemma—is how they can bring about a recovery without putting their one achievement at risk.
  The reason goes one stage deeper, and I do not believe that any Minister has yet seriously addressed himself to the topic. In the desperate attempt to cut public expenditure, the Government necessarily created redundancies, which in turn created Government public expenditure on unemployment benefit. This, in turn, led the Government to chase further public expenditure cuts, which in turn increased the number of unemployed, and which in turn again increased public expenditure on unemployment benefit. Simply, the Government are caught in a Catch 22 situation.
  One result has been that last year, 1981ߝ82, the Government had a larger share of the gross national product going into public expenditure than the Labour Government had in 1978ߝ79. The reason was, of course, that expenditure on unemployment benefit alone went up from £5,000 million to £16,000 million in those three years. As the hon. Member for Newcastle upon Tyne, West (Mr. Brown) said, the Government are chasing their tail and they see no way out of the vicious circle they have created.
  I do not deny that the Labour party is thinking hard about how to get back to a high level of employment. I pay tribute to the Labour party for pursuing that goal, which my party, too, pursues. However, the Labour party has a dilemma which comes in two parts. First, the party is being driven towards the logic of an incomes policy. The hon. Member for Chester-le-Street said as much, and what he says is true. Incidentally, he did not say a wages policy; he said an incomes policy. There is an important difference. One cannot escape from an incomes policy if one reflates without inflation.
  The second part of the Labour party's dilemma is how to get reflation without an outflow of capital over a short period of weeks, which would put the party's whole policy at risk, without imposing a form of protectionism. The difficulty here is that, whether one calls protectionism the planned growth of trade or by some other attractive euphemism, we all know that the world is poised for a beggar-my-neighbour feud of retaliation.
  The Labour party, like the Government, thinks that it is seriously addressing itself to our economic problems. But I want to point out to Labour Members that the last Special Commissioner for Trade for the United States Administration, Mr. Robert Hormats, who resigned six weeks ago because he did not like what the Reagan Administration were doing, is on record as having said that

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  if any substantial European Government were to adopt protectionist policies, the inevitability of massive retaliation—the United States has limited itself to selective controls, as we have—is quite immense. However much hon. Gentlemen may shout, there is a clear distinction between massive protection and some measures of selective protection, which I agree do not go as far.
  Mr. Radice: The Labour party is not putting forward a policy of protectionism. We say that it is necessary to plan trade and that there may be a case for selective import controls. However, there is also a dilemma for the right hon. Lady's party. If her party ever came to power, how would it reflate the economy when it has no relationship of any kind with the trades union movement and, on the contrary, has done all that it can to oppose that movement at every turn?
  Mrs. Williams: I should be prepared to accept the hon. Gentleman's charge more readily if it were not for the fact that his party gave mine no support when we moved amendments requesting industrial democracy and the acceptance of the fifth directive in our deliberations on the Employment Bill before the Christmas recess. What the hon. Gentleman said about protectionism may be true. All I can say is that it was not the impression given in the speech of his right hon. Friend the Leader of the Opposition at the weekend, which I read carefully and which specifically indicated a movement from the Labour party's previous support for limited systems of selective import controls.
  I want to deal now with three areas which I hope the Minister will consider. They have nothing, or little, to do with the argument that rises in public expenditure would make them impossible. The first area concerns the enterprise allowance scheme, of which the hon. Member for Rossendale (Mr. Trippier) spoke. He is more fortunate than my hon. Friend the Member for Rochdale, in that the enterprise allowance scheme neatly stops at the border of his Conservative constituency and neatly excludes my hon. Friend's Liberal constituency.
  Mr. Trippier: The point has been made several times that the decision to give me an enterprise allowance scheme may have been political. What nonsense. Within the area we have Accrington, which has a Labour Member of Parliament, Burnley, which is also Labour, Nelson and Colne, which is Conservative, and my constituency. I cannot let the right hon. Lady get away with that.
  Mrs. Williams: I never believed that the Government had it in as much for the Labour party as for the Liberal party, so my point stands. Perhaps I might be allowed to develop the point.
  The enterprise allowance scheme has been limited to a small number of pilot schemes. The scheme appears to be successful, or going very well, as the hon. Member for Rossendale said. However, last week's Financial Times implied—perhaps the Minister will comment on this when he winds up the debate—that the enterprise allowance scheme was now at considerable risk, that no further applications would be taken after March, and that the Government would review the scheme and decide whether it could continue. That is a devastating reaction to what most of us regard as one of the few promising schemes that
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  the Government have brought forward and, incidentally, one that is totally compatible with the Government's philosophy, because it is an attempt to persuade people to set themselves up on their own and not be a burden on the state. If this attractive mouse of a scheme is not now to be supported, what hope is there for the much larger schemes which many of us here would like the Government to adopt? The second area, also affecting small businesses and high technology, relates to the disturbing fact that the Government, in the shape of the Department of Industry, are now reconsidering the minimum loan guarantee scheme for small, high-tech businesses. That scheme is pathetic. Last year it was worth £150 million—big deal! In Germany the scheme is worth £1,400 million. The British scheme is made available at commercial rates. The German scheme was made available at a 9 per cent. fixed rate of interest.
  If all that does not make hon. Members' blood run cold, perhaps I should quote a letter addressed to the editor of The Economist this week by the managing director of an electronics company, which says that Japan is now making £20 billion a year of subsidised low-interest loans available to high-tech small business, while we are making £150 million available and the loan rates are not even subsidised. When the Government call, as they frequently do, for more competitiveness, I wonder whether they begin to realise what we are up against with the amount of Government support that less dogmatic Governments give to their small businesses and to their public sector, in high technology.
  The third area is infrastructure, or the basic foundation of industry. The Minister said, and he said it sincerely, that he wanted us to address our minds to public expenditure. Regional support has fallen in 1982 price terms from £1,300 million in 1975ߝ76 to £600 million in the current year, 1982ߝ83. My hon. Friend the Member for Rochdale mentioned this, as did my hon. Friend the Member for Truro (Mr. Penhaligon), who spoke about regional support. It has fallen to £600 million in real terms. The crucial aspect of this regional money is that two-thirds of it, £400 million, has gone to capital assistance. As the hon. Member for Chester-le-Street said, under the Government there has been a major shift towards capital assistance and away from subsidies or support for individual jobs.
  I should like to leave the Government with the thought that in net terms it costs between £4,000 and £5,000 to create a job in energy conservation. The returns on energy conservation are about 30 per cent. a year in savings on fuel bills. In other words, the scheme more than pays for itself over a four or five-year period. The French Government have announced an energy conservation scheme that will create 330,000 permanent jobs over the next three or four years. We have virtually nothing. We are cutting what we had. For the £40,000 that we are spending on regional assistance to create one measly job, the Government could create eight jobs in energy conservation.
  The Minister asked about the two-year scheme for training put forward by the Liberal party and my party. That scheme accepts the concept of splitting starter jobs for school leavers so that they spend half their time training and half in work. That scheme has already been tried by GEC in Coventry, with great success. The tragedy is that the Government's job-splitting scheme does not include any allowance towards a split school leaver job if the other

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  half of the time is spent on training and not another half job. I believe that that is a great mistake by the Government.
  We have tried to put forward concrete suggestions for creating more jobs for the same amount of money. The Government seem unaware of the scale of despair that is now engulfing a large part of the country. The right hon. Lady the Prime Minister is presiding, not over a united kingdom, but over a divided one, and one in which the divisions will grow more profound unless more radical steps are taken to deal with the current levels of regional unemployment.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Paul Dean): Order. The winding-up speeches are expected to begin at about 6.25 pm. Many hon. Members still wish to speak, and short speeches will help everyone.
  5.52 pm
  Mr. Mark Lennox-Boyd: The right hon. Member for Crosby (Mrs. Williams) described the unhappy regions of England. If she had gone to Lancaster, she would have learnt that in the Lancaster and Morecambe travel-to-work area unemployment is 13·9 per cent. which is higher than the English average but lower than the north-western average. It is no comfort to my constituents to know that matters are worse elsewhere.
  The area from which I come has had a continuing problem for the past few months. My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman), who is in the Chamber, will know as well as anyone else that we had disappointing news before Christmas.
  I want to make three general comments about unemployment as it affects both the regions and the nation. I know that my first comment is regarded by many people as highly controversial. I shall qualify it. To my great surprise, although on analysis I can see how it is reasoned, I believe that people do not blame the Government for unemployment. I say "To my great surprise", because it is plain that previous Governments were blamed. I make the qualification that what I have just said does not deny the fact that the Government's policies are understood by people to have an immensely important effect on unemployment. The opinion polls show such a continuing degree of support for the Government that it is difficult, when the polls also show that unemployment is a major public preoccupation, not to conclude that the public find that there are other extremely important factors which are not directly the Government's responsibility.
  The hon. Member for Chester-le-Street (Mr. Radice) said that it was well known that the Government have doubled the level of unemployment. The hon. Member for Dundee, East (Mr. Wilson) said "You did as well." That is perhaps the single most shining fact that leads the public to conclude that the dreadful levels of unemployment that we are suffering are not directly the Government's responsibility and that the Government's capacity to affect them can only be marginal. If we fail to recognise that fact, we shall fail constantly to face the problems realistically and sensibly.
  Shortly before Christmas, my hon. Friend the Member for Rossendale (Mr. Trippier) was given an enterprise zone. I was given a domestic computer for Christmas. It is an object that in W. H. Smith costs less than half today's
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  national average weekly wage. It gave me, as I am sure it will give anyone who has sought to be familiar with such machines, even greater cause for worry. Just as the slide rule is an antique instrument today, I believe that in a decade or perhaps a little more the occupation of clerk will be as antique as the copywriter or scrivener.
  I believe that many thinking members of the public realise that as well, and accept that it will take at least a decade, if not longer, to overcome the problems of unemployment. When we do, we shall have different employment structures. There will be much earlier retirement, job sharing and a much shorter working week. Hon. Members should foster that understanding as the right hon. Member for Down, South (Mr. Powell) did in last Wednesday's debate on the economy when he said that we were facing a revolution as significant as the industrial revolution of 150 years ago.
  In my constituency the financial hardship arising from unemployment, hard though it is, is the least of the difficulties faced by an unemployed person. I believe that isolation, moral degradation and psychological depression are far harder for people to face. During the recess, many hon. Members may have seen Professor Dahrendorf's progammes on the state of our nation. He made one remark that I consider significant. He said that unemployment was not the problem of the future; the problem of the future was lack of activity. He said that the working week inevitably will be shorter and inactivity, whether enforced and involuntary or voluntary, will be the problem that we shall have to face.
  This is a debate on the regional impact of unemployment. As hon. Members have said, it is important to distinguish between two factors—whether the Government should be spending more, and how should they be spending within the regions. It is upon the latter point that I wish to concentrate my concluding remarks.
  The Government's policies for the regions are well founded. The only possible qualification that can be made is about the funds that are made available and that relates more to an economic debate than to one on regional unemployment. The Government are seeking to extend their policy in three ways. First, there is the development of city areas such as Liverpool, Rochdale and Wigan. There is the Merseyside task force, the enterprise agencies and the enterprise zones. It is of fundamental importance that regional policies should be more concentrated upon the city areas than upon the regions as has been the case in the past because it is within the city areas that there is the significant and high unemployment.
  Secondly, Government help is being directed towards activity, as Professor Dahrendorf suggested. Increasingly, those schemes will be combined with others undertaken by local people. In recent months in my constituency, organisations, formed by people who feel that they can make a contribution to the problem of inactivity, have been cropping up. We have heard from hon. Members about similar schemes in their constituencies. In the course of the next few years it will be the duty of Governments to foster such activities.
  Finally, the Government should help those areas of Britain where unemployment is high by spending money to improve the infrastructure of services in such areas—for example, roads. In doing so, we should first consider the cost, secondly whether such expenditure can improve an existing resource, and thirdly whether, having spent that money, that resource will create more jobs. One such

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  scheme is the M6 link road which is in my constituency. That is a project to link the M6 to the port of Heysham. I need not embarrass the Ministers because the Under-Secretary of State for Transport is not present. However, I shall continue to press the scheme with all vigour because it fulfils the criteria which I have mentioned. The port of Heysham is a resource with a potential which has not been fully exploited. If its communications with the M6 can be improved, the port of Heysham will be improved immeasurably, making it more likely that jobs and prosperity will be created.
  6.4 pm
  Mrs. Renée Short: We are grateful to the hon. Member for Rochdale (Mr. Smith) for giving us the opportunity to have a brief debate on regional policy. I am sorry that the Minister did not deal with the Government's positive proposals to help the regions. That is what we want to hear today and I hope that we shall do so when the Under-Secretary of State for Industry replies.
  This is a serious debate on a depressing subject. Despite what the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) said about people not blaming the Government for unemployment and the economic position, the fact remains that unemployment stands at the highest level in living memory, with the highest inflation rate, until very recently, and with widespread poverty among families, affecting young and old alike. The most depressing part concerns the stopgap measures now being used to help young people gain experience. While they are all right as far as they go, at the end the young person goes back to social security pay or whatever he is entitled to and does not get a job, which was the function of the youth opportunities programme and other such schemes.
  We are in a no-growth economy and if the Government continue in office future prospects will be grim. The National Institute of Economic and Social Research forecasts only a 1 per cent. growth in 1983–84, with ever-rising unemployment. If the Minister has better news for us we shall be delighted to hear it. The Prime Minister is told continually by Labour Members and by many in industry, including the employers' associations, that she must stimulate output by cutting taxes on industry and increasing Government expenditure. However, all that we hear from the right hon. Lady is that British industry must become more competitive by shedding even more labour, thus increasing still further the unproductive work force, which must be supported on social security and unemployment benefits. If that recipe is continued, unemployment will go on rising, despite the Government's method of counting the unemployed.
  That is the picture of what has happened in the west midlands. Basic industries such as steel, other metals, car, building and building components—basic industries on which our former prosperity was based—are all in a seriously depressed condition. Five years ago over 40 per cent. of the work force in the west midlands was engaged in the metal industry, yet those industries have now gone to the wall. Unemployment in the west midlands is now very high—above the national average. My constituency, which prospered for so long in the production of industrial goods of high quality that were sought all over the world and which exported well-developed high technology
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  products to developed and undeveloped countries alike, now has an unemployment level of 18 per cent. That is appalling. Every week we hear of more short-time working, more closures and lay-offs, particularly in the motor components industry, and there are no jobs at all for the thousands of men, women and young people who are unemployed today.
  The Prime Minister says that we must become more competitive and produce goods that people want to buy while at the same time she is reducing their ability to buy. The right hon. Lady complains that industry is not standing up to competition from the EC and the Far East. Firms are being forced to cut back on the investment capital that they need to modernise. The Prime Minister is not prepared to do anything to ensure that imported goods are of the standard of quality and safety that we expect. Therefore, the market is flooded with tons of cheap, tasteless, shoddy and frequently dangerous consumer goods.
  Why are we not more discriminating? I am not suggesting that there should be overall import control but why do we not employ selective ones? Why do we allow tons of rubbish to come into our shops? Why do we not use the mechanism that exists in the EC? We could use the same regulations to control the standard of goods and raw materials that come to Britain. That has been done in France, Belgium and Germany, yet every industry in Britain is threatened by the continuing stream of poorly made and substandard goods, whether they be clothing, toys, household equipment, gadgets of all types, televisions, computers and even motor cars. We therefore have a throw-away syndrome. We buy cheap, shoddy and poorly designed goods that soon break down, throw them away and buy a similar replacement. All the while, our jobs in manufacturing are disappearing.
  The scheme that is employed in the EC means that British firms which export to countries such as France, Belgium and Germany must comply with stringent certification requirements. That process can take two or three years. That is a jolly good way of holding back imports from foreign firms. Moreover, firms that want to export to those countries must pay for certification. Therefore, not only is there freqently a delay of two or three years but the firm must pay about £30,000 to obtain the necessary certification if the outcome of the tests is successful. If they do not achieve certification, the firm just loses money.
  Why do we not do something to protect our firms from unfair competition from abroad? Why do not the Government realise that every unemployed person in Britain represents a loss of revenue to the Treasury in income tax—which has increased from about 32 per cent. to 36 per cent.—insurance contributions and other welfare payments and, above all, in the contribution made by working people to the gross national product? The unemployed only consume. They make no contribution to the GNP, however much they may wish to do so. Moreover, it is expensive to pay people to be unemployed when they could be producing goods that we should export.
  The revised plan of the West Midlands county council describes the situation in the west midlands. I should like the Minister to answer the points that it raises as they are important for our manufacturing industry. It says:
  "the dramatic rise in unemployment, now over 17 per cent. in the county as a whole, rising to over 30 per cent. within certain inner city areas, with youth employment an even more serious

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  problem. These levels are showing signs of becoming permanent and even increasing as the recession deepens, with long-term unemployment now a major problem. Rising unemployment is accompanied by serious social consequences. The West Midlands, once the workshop of the world, is facing the worst economic crisis in its history. It has suffered from being too heavily reliant on a narrow range of declining metal-based industries and having too low a proportion of fast growing service industries."
  Because we have such a small proportion of manufacturing industries producing consumer goods we have to import such goods, when we should be exporting them to our competitors.
  6.14 pm
  Mr. Hal Miller: I am happy to follow the hon. Member for Wolverhampton, North-East (Mrs. Short). I strongly agree with her about the importance of British standards, the remedies that they offer for unsatisfactory goods and the need to develop the necessary quality assurance as a basis for our exports. I was a little puzzled by the rest of her speech. She seemed to assume that Government spending would create jobs in the service industries. That concept is foreign to Conservative Members.
  The right hon. Member for Crosby (Mrs. Williams) gave an engaging travelogue for last week while most of us were detained in the House until quite late at night. I notice that she was pictured on a beach in Devon with her hounds of war, in an un-Canute like attitude, with the tide going out rather than coming in, as support for the SDP ebbs.
  Mrs. Williams: The tide was rising and it was Sunday.
  Mr. Miller: The tidal predictions seem to be out of kilter with the astrological ones, never mind the political ones.
  Unemployment has made the greatest impact in the west midlands, but if one listens to the speeches of Opposition Members one fails to gain any impression of what is happening in the country. The trend for unemployment over the country as a whole has diminished remarkably since the dark period of October to November 1980, when 103,000 people lost their job each month. The current rate is about one-fifth of that.
  We should also bear in mind that last year about 600,000 new jobs were created every month. That represents about 20,000 new jobs each day. Moreover, four out of five school leavers were getting employment. The rise in unemployment last year was lower than in other major manufacturing countries. There were 15,000 more new firms created than went out of business. Those figures put the picture into perspective.
  The problem in the west midlands is serious. Firms there must take note of what the Prime Minister has said. It is necessary to be able to compete. The purpose of my speech is to try to persuade the Government to establish the necessary conditions of competition for British firms, especially those in the west midlands. I have urged my right hon. and hon. Friends for some time to put together what I call a competition package to create an environment in which firms can compete and in which people are given confidence to compete.
  In the west midlands, that package should comprise the removal of internal discrimination against our region, the first and foremost of which is regional aid. At the moment the west midlands is suffering the fastest growing rate of
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  unemployment in Britain, and faces the highest level of unemployment bar one other area. There is therefore no reason to continue with regional aid.
  I am glad to note from what my right hon. Friend the Prime Minister has said and from what my hon. Friend the Minister of State, Department of Industry said during Question Time last week that regional policy is being reviewed to examine the extent to which it effectively creates jobs. I sympathise with the right hon. Member for Crosby, who asked the same question in a slightly different form.
  That internal discrimination against the west midlands extends to the special taxes on our main products, such as the special car tax and VAT on company cars. We are also discriminated against internally by being barred, as a result of Government decision, from the receipt of EC funds for specific projects. I have argued for some years that industrial aid should be concentrated specifically by sector. I congratulate the Under-Secretary of State for Industry on the success of his small engineering firms investment scheme, which I hope will be continued after the next Budget.
  External discrimination against the west midlands is another factor. We have been much encouraged by the Prime Minister's strong lead against the gross inequalities and disparities in Spanish tariffs and Japanese trading practices. Other examples of discrimination mean that we do not enjoy full, fair and reciprocal trade arrangements for our products. In the interests of brevity I shall not go through the whole list, but I must mention the collapse of the EC steel cartel as judged by the prices at which steel and steel products are landed in Britain. This involves bars, washing machines and cars.
  The Opposition make much of the unfair trade in imported vehicles. Let us examine the rise in the number of imported vehicles since 1975. The increase in imports can mostly be ascribed to Ford, Vauxhall and Talbot. The percentage of registrations from other exporters to Britain without plants here rose in that time from about 32 to 35 per cent. Tied imports rose from 1·5 to 22·5 per cent. That is where the damage is being done. The Government should take up seriously with Ford and Vauxhall the establishment of additional manufacturing plants in Britain to retain the design capacity and therefore the purchasing source. That is what is so important to the components industry, and that is why we are so perplexed in the west midlands about the reported decision by BL to import 30 per cent. of its components. BL has to buy complete foreign gear boxes, if not larger items, from abroad because we do not have the opportunity to supply the components since decisions about the source of supply are taken abroad.
  Mr. David Alton: What would the Conservative party do about the even worse problem of the possibility announced on Friday of Ford taking 13,000 jobs away from Halewood and moving them to Japan to manufacture cars there?
  Mr. Miller: Halewood's productivity record is lamentable. Because of pressure on Ford to make more in Britain, it has had to address itself to operating more competitively.
  The hon. Member for Wolverhampton, North-East referred to another area of competitive policy in the west midlands—the need for us to be involved in the new

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  technology industries. It is disturbing to think that, although the west midlands houses about 36 per cent. of the country's manufacturing industry, there is only 10 per cent. support for the Minister's innovation scheme, when the reverse is true for the southern region. We must, therefore, pay particular attention in the west midlands to developing skills in training and after-training, so that we can update our industry to compete in future business.
  Discrimination has been exercised against the west midlands in the provision of infrastructure. Our motorway system is not complete. The largest exporting area of the country still has no direct motorway connection with the east or south coast ports. Time does not permit me to mention several other infrastructure problems. The west midlands has been discriminated against. The discrimination has spread to private authorities and it is widely believed in the west midlands that clearing banks, for example, have directed that a lower priority be given to investment in the west midlands. Pension funds are diverting investment from the west midlands because of its low growth prospects.
  I call on the Government not only to recognise the region's problems, but to respond with Conservative philosophy, involving the ability and the will to compete. Following that line and what has been started by the Prime Minister and the Secretary of State for Industry will give back to the region the confidence to enable us to commit ourselves to make a success of this Government's policies and those of the next Government, which we believe will be drawn from the Conservatives.
  6.26 pm
  Mr. Richard Wainwright: When the Liberals chose the subject for today's debate, we knew that no Cabinet member would dare put in an appearance. One of the faults of the Cabinet, in so far as it now plays any part in our affairs, is that it contains no voice from the stricken manufacturing areas of Britain. Knowing that the Minister of State, Department of Employment, normally tries to be helpful and considerate, we accepted that he would speak at the beginning of the debate. I am sorry to have to say that, although the Minister of State may be grossly overworked clearing up the havoc caused by the Prime Minister and the Chancellor of the Exchequer, for one reason or another his speech today was not just a discourtesy, but an insult to the House—a twofold insult. He ignored the subject of the debate.
  The motion covers the regional impact of unemployment, not because we complain that one region suffers more than another in the league of misery, but because the unemployment rate over many years in some of the regions threatens our industrial base. There comes a time, when double-digit unemployment persists for many years and shows no sign of abating, when the research and development and ancillary industries of some major industries are severely threatened. We wanted a debate on that subject, as we have made plain. The Minister of State simply used the Front Bench as a pulpit or podium for a press conference to advertise some of his temporary and palliative schemes.
  The second part of the insult is that the Minister propounded nothing more than superstition. It is a superstition that, by means that no one on the Government Front Bench can explain inside or outside the House, just
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  because the inflation rate is low there is bound to be economic recovery. There has never been an explanation of that superstition. I am astonished that any Minister could suppose that a drop in inflation, built largely on the misery and poverty of the primary producing countries, could create recovery in this country.
  Our industries will not recover until a large part of the under-developed world receives a proper price for the products which it sends to the West. The Minister of State must know that. The present state of financial affairs is a hindrance to recovery. Three years ago the real rate of interest which a business man would compute when deciding whether to build up his stocks was negative. He could estimate that, if he conducted his business properly, at the end of the year he would benefit more from inflation of the value of his stocks than he would suffer from what he was paying in interest. That is a negative real rate of interest. Under this Government, the real rate of interest for most businesses is approaching a positive 8 per cent., and for small and new businesses, in which the Under-Secretary is rightly interested, it is approaching 9 or 10 per cent. That is a serious negative point when we are talking about industrial recovery.
  The perfect example of real inflation is the graveyard, and that is what is happening in many of our regions today. That is why we have initiated this debate. The hon. Member for Chester-le-Street (Mr. Radice) admirably stressed that an incomes policy has an essential part to play in the Labour party's ambitious headline-catching schemes if reflation is to stand any chance at all. We wish that the Labour party would listen to the hon. Member for Chester-le-Street instead of ignoring his persistent and correct plea for an incomes policy.
  The hon. Member for Rossendale (Mr. Trippier) was eloquent in support of his own constituents, as he has every right to be, but we do not agree with him in what we regard as his parochial approach to stimulating the economy. The problem can be tackled only on a regional footing. The footwear and textile industries in his area are in danger of losing the base on which their future depends, and that cannot, with respect, be put right just by bringing prosperity to Rossendale.
  The hon. Member for Rossendale also made a plea for selective assistance to industries. The trouble is that the selection is done in London by people who are not familiar with industry. In trying to pick winners, they have often put worse money after bad and have misused resources. Decisions should be made in the region.
  My right hon. Friend the Member for Crosby (Mrs. Williams) made a constructive rather than partisan speech. She reminded the Government of something that they ought to take to heart—that it is no good smugly comparing their performance with that of some previous Government. That cuts no ice with hard-pressed manufacturers and their work forces today.
  What is important, and what the Government never face up to in their smugness, is what our competitors are doing today. My right hon. Friend clearly drew attention to the fact that on all these fronts—research, development, training and the rest—we are underperforming compared with our competitors. The Government are smug about productivity. Any dubious claims that they make for improved productivity pale compared with the immense improvement in competitor nations.

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  It is important to have a world dimension in our minds when tackling the problem of the collapse of industry in the regions, as my right hon. Friend said.
  The hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) was intensely depressing. His broad approach was a polite form of Luddism. He said that for 10 years employment prospects will be blighted by the application of the home computer. When he talks about the computer compared with the clerk, he must remember that, whereas the clerk needs only a pen, somebody must design and make the home computer. It also has to be installed, and if it is to be of any use it must have a terminal to other people's computers. That means a tremendous amount of installation. It also has to be serviced.
  My own company went over to computers, reasonably successfully, in 1968. Ever since we seem never to have had the computer supply people out of the premises. Above all—this shows that every invention properly applied increases jobs—the application of advanced technology such as the computer makes things cheaper, and leaves more money in people's pockets to buy other goods and to spend on other services. I do not accept that we must resign ourselves to high unemployment for purely technological reasons.
  I understand the concern of the hon. Member for Wolverhampton, North-East (Mrs. Short). Substandard goods undoubtedly get in at our ports. That problem must be solved. I am sure that the hon. Lady does not wish to fall into the error, made by some of our complacent business men when we had an Empire that was forced to buy our goods, that imports are necessarily substandard. A lot of stultifying nonsense has been talked about cheap goods from Hong Kong and Korea, many of which admirably meet the demands of a throw-away society.
  The hon. Member for Bromsgrove and Redditch (Mr. Miller) pleaded in an interesting and special way for help for the west midlands, which it very much needs. I greatly regret that two of my hon. Friends have been unable to take part in this brief debate.
  The fact is that the way in which the economy is run or not run at the moment does enormous damage to most of our industrial regions because it imposes blanket restrictions on the whole of the United Kingdom which should really apply, if they apply at all, only to one or two regions in the south-east.
  The perverse insistence of the Government on keeping an artificially high pound, because of their superstitious reverence for continually falling inflation, may just get by in some prosperous towns of the south-east of England, but it has been disastrous for many of our exporting industries in the regions. Overnight—and I have examples of this which I can gladly let the Minister have—manufacturers who spent years building up foreign markets suddenly found that because of perverse policies on sterling they were priced out of those markets. When that is added to the interest rates which they have been made to pay, their businesses collapse and their workers swell the numbers of unemployed.
  When local government tries to palliate this misery and to put some expenditure into the economy to get people into jobs, the Secretary of State for the Environment clobbers them. That has been highly inimical to the regions. The Government have also continued the appalling practice of previous Governments by refusing to let European Community regional aid add substantially to the resources of the regions and have insisted that it must
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  simply be used as a substitute for what the Government would have paid anyway. A typical example—and I have time to give only one—is the Government's apparent attitude to Manchester's claim for the next big airport. That project would bring real confidence and hope not simply to Manchester—I am not pleading for one particular city—but to the whole of the north of England, yet this opportunity will apparently be allowed to slip by.
  The Minister of State lectured us on the evils of excessive Government spending. I understand that Government spending rouses in the mind of any Government supporter terrible guilt feelings about the prodigal waste of money spent on local government reorganisation which the Conservatives initiated and on the wild 1973 overspending in the National Health Service. They are now putting that reorganisation to rights. Another form of extravagance which they went in for included the property boom, which will always be associated with the name of Lord Barber.
  The whole point of urging regional expenditure is that the money will be spent in the regions where people know what is going on. It will be spent under their very eyes. I continue to believe that we would never have had the white elephant of the Humber bridge—£100 million to get people to nowhere—had it not been for a centralised decision in this Chamber. That was partisan politics at their worst. Had the decision been taken by a regional administration, the money would have been spent instead on schools, hospitals and other worthwhile projects.
  I hope that the Minister winding up the debate will refer to the enterprise allowance, which for far too long has been a tiny pilot scheme, because everyone knows that it would meet a great economic and human need. I also hope that he will say something about development agencies for England. We are full of admiration for the Scottish and Welsh development agencies, and it seems odd that the great regions of England, which are more populous, are denied such admirable bodies.
  The Minister might also look at an interesting device which has helped the regions enormously in the past—the regional employment premium. That was a way of keeping sterling strong in London and the south-east while at the same time allowing for a mini-devaluation in the regions. Many hon. Members who were Members at the time of the regional employment premium will testify that it did much to keep regional business healthy.
  Excessively high unemployment has continued for a long time. The United Kingdom was the first country to experience serious and self-inflicted slump. The regions that have been worst affected are rapidly losing hope. They now need a sign that the Government have confidence in giving the regions the chance to help themselves. Self-help is supposed to be the motto of the Prime Minister, but she denies the regions any chance of helping themselves. She first knocks them down and then trusses them up so that they cannot even look after some of their own needs. We believe that were the great regions and nations of our country left to choose their own way democratically, they would work together for Britain and help to get themselves and the whole country out of deep depression.
  6.42 pm
  The Under-Secretary of State for Industry (Mr. John MacGregor: Out of courtesy to the Liberal party,

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  I have agreed to speak briefly. I therefore hope that hon. Members will understand if I am unable to answer all the points that have been made.
  It is necessary to look first at the background to regional unemployment, which inevitably means looking at the background of unemployment generally, before looking at the remedies. The hon. Member for Colne Valley (Mr. Wainwright) criticised my right hon. Friend the Minister of State for concentrating on national employment policies, but the hon. Gentleman did precisely the same thing. I therefore hope he will understand if I spend only a short time discussing regional policy specifically.
  Although Opposition Members recognise that the recession had a part to play in unemployment, they criticised the Government and drew attention to statistics. It is worth looking beyond the reasons for unemployment, because if we do not get the reasons right we shall not get the remedies right. It is necessary to point out that in the post-war era unemployment has climbed to historically high levels in most other countries. Therefore, a mere recital of the rise in unemployment levels is not an impressive way of dealing with the problem.
  Some hon. Members also recognise that, because of the recession, fewer mobile international firms are seeking to take up individual projects. They therefore look sharply at all the factors—not just at the grants—that must be taken into account.
  Mrs. Elaine Kellett-Bowman: Last autumn the Government increased Lancaster's derelict land grant from £167,000 to £1·35 million, provided that it was spent by the end of March. Does my hon. Friend accept that if Lancaster had the funding to improve its derelict industrial sites, which he was kind enough to visit, and knew the amount of funding in advance so that it could initiate a smooth programme, it would go a long way towards solving its own employment problems?
  Mr. MacGregor: My hon. Friend has made her point and I shall try to respond to it later. I have, of course, seen those problems myself. She will forgive me if I do not interrupt my theme by dealing with that matter now. There is no doubt that what she said is important, and I am glad that she was able to make that point.
  We are getting more than our fair share of international companies in this period of world-wide recession. It was interesting that my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) was the only hon. Member to refer to the impact of the technological revolution on unemployment. He made a profound speech, which I think the hon. Member for Colne Valley misunderstood. I do not think that my hon. Friend was in any Luddite way resisting this process of change. He was drawing attention to the exciting possibilities that exist and referring to the real challenge of competition involved in meeting that technological change.
  Anyone who has visited as many firms as I have in the last two years will have noticed the astonishing speed of change, not only in the processes, but in the products that companies are now making to keep abreast of the markets. That has a profound effect on jobs—a matter that has not been brought out in the debate.
  I do not agree with the hon. Member for Rochdale (Mr. Smith) that prior to our taking office there was very little overmanning. Perhaps he was trying to protect
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  management, but many managers have told me that overmanning did exist and that it was essential that it should be tackled. The same has been said by many ex-employees of firms that have gone out of business. One need only examine the level of overmanning in industries such as the British Steel Corporation and British Leyland prior to 1979, and compare it with international competition, to realise that it must have been a factor in unemployment. [HON. MEMBERS: "That is a management problem."] I acknowledge that it is a management problem, just as restrictive practices were a union problem. The fact is that it existed and had to be dealt with during a difficult economic recession.
  Demographic trends currently, but only temporarily, tend to be against us, and a final factor in unemployment, which goes wider than technology, is the speed of change in the types of product in the market place, their design, what they can achieve and the new materials used in their construction. Compared with even 10 or 15 years ago, we now face stiffer and more numerous competition from the newly industrialised countries. Such competition has come from fast moving companies in other industrial competitor nations.
  That is demonstrated by British consumers through their choice in the shops, especially if our own companies fail to keep up to date or do not get the design right. The hon. Member for Wolverhampton, North-East (Mrs. Short) was wrong to talk about shoddy goods from overseas. The problem is that many of them are very good, and if we are again to build up our employment that element must be tackled by many companies and their work forces.
  It was significant that Opposition Members talked in terms of more Government expenditure. Not one talked about industries and firms producing more effectively the goods that consumers both at home and abroad will buy. The video industry is an example. As was revealed clearly over Christmas, this is the fastest growing consumer market, and consumers in their thousands have demonstrated their desire for those products. Here is a huge potential for jobs, yet decisions—admittedly taken by management as much as by others—not to go into that market were taken during the period of the last Government. There is a lesson to be learnt. We shall create future jobs only by being competitive and aggressive in the market place.
  Those are all reasons for the current level of unemployment, including the levels in the regions. If we are to tackle the problem, we must address our minds to all those matters.
  It is only fair to say a word about the policy proposals put forward by the Liberal party, as it initiated the debate. Although I did not hear much new in the speech by the hon. Member for Rochdale, he drew attention to the large amount of Government spending on unemployment benefits. He urged the Government to pay the unemployed to work, from the same funds and using the same money. That was an interesting thing to say. Did he mean that he will be looking for work creation schemes, including some of the capital schemes of which he spoke, at wages similar to current unemployment benefit? I must assume that from the phraseology that he used. If he did not mean that, does he not realise that the cost will be very much higher, and the implications for the PSBR and interest rates must immediately be taken into account.

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  The hon. Member or Rochdale also spoke about a range of schemes involving public expenditure on sewerage and so on. It was a substantial list. As my right hon. Friend the Minister of State said, the Government have significantly increased annual capital expenditure in public sector industries. Such a policy, used purely as a remedy for dealing with unemployment, is expensive. My right hon. Friend the Minister of State referred to the £300 million that we shall be spending on the community programme. That is precisely what the hon. Member for Rochdale recommends, but it does not make a substantial dent, in the way that he seems to imply, on unemployment.
  The difficulties about so many of the capital schemes of which the hon. Gentleman spoke is that they are capital and not labour-intensive. He will acknowledge that this is not a magic solution and that the Government have been moving in that direction both in relation to capital expenditure on nationalised industries and through the community programme.
  Mrs. Shirley Williams: Would the Under-Secretary of State say that about house improvements, house modernisation and energy conservation, all of which come out at considerably lower cost than the capital investment in motor cars that we have had previously?
  Mr. MacGregor: In house improvement under the construction programme one provides—I hate to use the word "creates" in this context—more jobs than many of the major capital-intensive projects. I accept that, but we have introduced some new incentive schemes that move in that direction.
  There are limits to the extent to which one can go in any of those directions if one is not to clobber industry in other ways by imposing much higher interest rates and huge extra industrial costs. The hon. Member for Colne Valley shakes his head, but he must know, if he goes out and talks to industry, that that is what industrialists are saying all the time.
  I am very sorry indeed that I shall not have time to discuss some of the policy proposals put forward by the hon. Member for Chester-le-Street (Mr. Radice). I hope that he will allow me to concentrate today on the alliance programme.
  Mr. David Steel: The Minister is missing the point. My hon. Friend the Member for Rochdale (Mr. Smith) and other hon. Members who have spoken are not saying that we would spend the same amount of money on future employment projects, but that that money would replace completely wasteful expenditure by expenditure that would be productive.
  Mr. MacGregor: The hon. Member for Rochdale said "the same funds". It therefore behoves the Liberal party to say exactly where that wasteful expenditure is taking place.
  The hon. Member for Colne Valley drew attention to the document "Back to Work", with which I shall now deal. Paragraph 3/19 states:
  "The money supply would grow somewhat, in order to hold down the rise in interest rates, under our strategy of managing the exchange rate."
  On the point about holding down the rise in interest rates, I say to the right hon. Member for Crosby (Mrs. Williams) that it ill-behoves her to attack the Government's loan guarantee scheme on the ground of
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  interest rates if, through her party's policy, she is advocating only holding down the inevitable rise in interest rates. We believe that it is better to get interest rates down generally and not to introduce certain schemes.
  The other point that emerges from the document is that the Liberal party believes that it can pursue a policy of managing exchange rates. Recently, we have had many debates that demonstrate the difficulties of such a policy. The next paragraph of the document says:
  "The exact rise in interest rates which comes about depends on market opinion and not on mechanical economic relationships."
  The House will note that it is talking about a rise in interest rates.
  Mr. Richard Wainwright: Read on.
  Mr. MacGregor: I have only limited time, as the hon. Gentleman knows. The document has two implications for interest rates and exchange rates that have not been thought through.
  The hon. Member for Colne Valley complimented the hon. Member for Chester-le-Street on acknowledging the need for some form of incomes policy. As the hon. Member for Chester-le-Street said, the wording of the document is deliberately vague because the Liberal party knows that that is the Achilles heel of its proposals and that it will be almost impossible to achieve. It has resorted to a fudge of words which it believes will get it the best of all worlds.
  Although we have debated Government regional policy a great deal in recent months, it is interesting to compare what the hon. Member for Chester-le-Street wants and what industry wishes. There is a complete contrast. The Labour party offers much higher public expenditure, reflation and much higher interest rates. As one will find from going round firm after firm, what they most want is a strategy of lower inflation, lower general interest rates and action on industrial costs. Firms also wish us to continue with action to improve the supply side of the equation and they recognise the need to improve technology nationally, not just in the regions, important though that is.
  The right hon. Member for Crosby got some details wrong. The loan guarantee scheme is directed not only at high technology firms, but also at all small businesses. There are many other ways in which we are devoting resources to improving the impact of technology on industry, through support for innovation schemes—my right hon. Friend the Minister of State, Department of Employment, is doing a great deal in that area—and through the tax system. It is unfair directly to compare the way in which we do things with what happens in other countries, unless the right hon. Lady examines our general policies in providing incentives in the form of grants and allowances for technological innovation.
  We have had many regional policy debates and the subject has been much discussed in the House. The Government's position is clear. As the evidence, such as it is, shows, regional policy is more effective if it is concentrated. The hon. Member for Chester-le-Street should examine closely the Labour party's proposals, because he urged that the money should be spread much more widely throughout the country. That is not the best regional policy.
  Last year the Government spent £876 million on our regional economic policy. In addition, one must take into

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  account a large proportion—about 30 per cent.—of the £313 million spent on urban policy, because much of that programme now has a regional and economic impact. It represents significant public expenditure. The fact that we have reduced coverage from 44 to 27 per cent. of the working population has been a clear policy of concentrating on the areas of greatest need.
  Many suggestions have been put forward in the debate about regional policy. From the point of view of industry and the regions, it is important that there should be considerable continuity and stability in regional policy. If such policy is always being chopped about, industry has no chance to plan properly. The policy is being carried out over a five-year period.
  It is known that the Government are undertaking a review of their policy, as the Opposition and as many other Governments have done. Officials have completed the first stage of the review. That was to examine the working of current regional economic policies and to identify ways in which regional policy might be made more effective. However, we must decide whether to embark upon a second stage of work and it is still far too early to say when that stage will come.
  As my hon. Friend the Member for Rossendale (Mr. Trippier) said, the impact on regional policy and the restructuring of local economies of all that we are doing to encourage small businesses and new business start-ups will make a significant contribution to economic regeneration. In all those ways, the Government have a clear and consistent regional economic policy that will succeed.
  Mr. Tristan Garel-Jones: I beg to ask leave to withdraw the motion.
  Motion, by leave, withdrawn.

  Epsom and Walton Downs Regulation Bill [Lords]
  Order for Second Reading read.
  7 pm
  Mr. Charles Morrison: I beg to move, That the Bill be now read a Second time.
  The House may ask why the hon. Member for Devizes has successfully caught your eye, Mr. Speaker, to introduce this Bill. Normally, of course, my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton)) would have introduced the Bill, but he has been struck down by reason of his service in the Government Whips' office. As the House knows, although Whips are silent in the Chamber, they are allowed to speak outside. So it was that one day my hon. Friend's eye fell upon me, all unsuspecting as I was, and as I am always willing to please a Whip—who in this case is much bigger than me—I accepted his invitation to introduce the Bill on behalf of my hon. Friend and its promoters.
  I declare a remote interest in that I try to ride horses and I am a member of the British Horse Society. Thus it is not impossible that I might wish to ride on Epsom or Walton downs. Secondly, I have had a minute interest in three horses that might have been Derby horses but were not. That is common to most racehorse owners. It is worth mentioning in passing that while the Derby, which is our greatest flat race, is involved intimately with this Bill, at this time in British racing history the future of our most famous steeplechase is at risk. Unless those who are appealing for money to save the Grand National are successful, we shall see no more Grand Nationals. It is probably out of order to make an appeal from these Benches, but I hope that those who are appealing will achieve great success.
  The purpose of the Bill, which is promoted by Epsom and Ewell borough council, is to re-enact with amendments and additions the provisions of the Epsom and Walton Downs Regulation Act 1936, except those provisions that have become redundant. The 1936 Act will cease to have effect shortly by reason of section 262(9) of the Local Government Act 1972—the details of which will be at the finger tips of all hon. Members. This Bill seeks to regulate the various rights and interests over Epsom and Walton downs and to update the provisions of the 1936 Act.
  The downs cover an area of some 600 acres. Epsom downs and a small portion of Walton downs are the propery of Metropolitan and Country Racecourse Management and Holding Limited, a wholly owned subsidiary of the Horserace Levy Betting Board, subject to a lease in favour of United Racecourses Ltd. The remainder of Walton downs is owned by Mr. Stanley Wootton, who resides in Australia. He was the owner in 1936 and his part of Walton downs is subject to a lease in favour of the levy board.
  Before the passing of the 1936 Act, the downs were the subject of conflicting rights and interests. There were the interests of the Epsom Grand Stand Association Ltd., which has become United Racecourses Ltd., and of the owner, which lay in the use of the downs for horse racing and training. The public also had certain rights of access to the downs for air and exercise under section 193 of the Law of Property Act 1925.

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  The purpose and achievement of the 1936 Act was threefold. First, it set up a body of conservators with the duty of preserving the downs in their natural state of beauty and with power to make byelaws for the control of the downs. Secondly, the Act continued the rights of the public to air and exercise on the downs since section 193 of the Law of Property Act 1925 ceased to apply to the downs when common rights were extinguished by the 1936 Act. Thirdly, the Act defined the rights of the Epsom Grand Stand Association and of the owner over parts of the downs essential to the continuance of the racing industry and to safeguard other users.
  The downs have been famous for horse racing for centuries. The Derby has been held there for more than 200 years and it continues to attract hundreds of thousands of visitors from all over the world and many television viewers. It is probably still the most important flat race in the world, being a major test of horse breeding and stamina and of a trainer's skill. The 1936 Act provides for the maintenance of the training gallops on the downs at the expense of the trainers. Race horse training is a flourishing and important industry in the borough of Epsom and Ewell. Racing provides employment for several hundreds of people in the area.
  If the 1936 Act were to lapse, which would be the effect of rejecting this Bill, the position would revert to pre-1936 days, but the downs would not become a common again. The conservators would cease to exist and the public would lose the statutory rights that they now enjoy. Obviously that cannot be seriously contemplated and the rights of the public should not be so prejudiced. To secure the protection of those legitimate interests, the council, with the support of the conservators, United Racecourses Ltd. and the Horserace Betting Levy Board, decided to promote the Bill. Before the Bill was drafted, a working party was set up in 1980 to report on the terms of the Bill to replace the 1936 Act. Extensive consultations were carried out, and, despite conflicting rights and interests, wide agreement was reached. Following consultation and debate, the council, which represents to the best of its ability the interests of the general public, announced the provision in this Bill of a fair compromise among the users of the downs.
  The terms of the 1936 Act relating to horse riding were not clear. Therefore, at the request of riders, a provision was included in this Bill to give them statutory rights to ride on extensive areas of the downs.
  For the protection of the public, and to prevent danger and damage on the training gallops, the riders would have to keep to the areas and rides referred to in the Bill. Those areas and rides have been extended, at the expense of the training gallops and of the remaining public using the downs for recreation, in an attempt to meet the demands of local riders and were further extended in the other place. A petition against the Bill from the British Horse Society and the Epsom Riders Protection Association, which I believe was formed in 1981, was laid before the House of Lords. The Bill now provides an inalienable legal right which did not exist in the 1936 Act, to ride on the designated areas and rides, which are set out on maps.
  The promoters have also given a number of undertakings, including one to set up a consultative committee of representatives of the conservators, United Racecourses Ltd., the Epsom and Walton Downs Training Ground Management Board, the Epsom Riders Protection Association and the British Horse Society for the purpose
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  of consultation on the future management and control of the tracks, rides, paths and areas for what is termed hack riding.
  The only petition to be placed before this House has been that of the Epsom Riders Protection Association. The British Horse Society has not petitioned because I believe that its members consider that a reasonable compromise has now been achieved. It is important, however, to note that the promoters have undertaken to seek further amendments to the Bill to provide that riding on the downs, where hack riding is not permitted, or is permitted only at certain times, should be an offence only under a byelaw confirmed by the Home Secretary. It is proposed that those amendments should be submitted to the Committee to which the Bill will be referred if it is given a Second Reading. The Bill will then be most carefully considered in Committee, and both the promoters and the petitioners will have an opportunity to explain their different attitudes—if they are different—to the various parts of the Bill, and, of course, evidence can be called.
  The promoters hope that the Bill will be read a Second time so that they may be allowed to put forward their case in Committee in the usual way. I strongly support them in their endeavours.
  7.13 pm
  Mr. Andrew F. Bennett: I do not at this stage want to oppose the Second Reading of the Bill, but I hope that the promoters will be able to go further than has been suggested by the hon. Member for Devizes (Mr. Morrison) towards meeting the fears and worries of various groups about the Bill. Therefore, I have put my name to the blocking motion that the Bill be read six months hence to ensure a short debate this evening. I hope that there will be no need for the matter to be debated again in the House and that the problems that have been mentioned will be met by the promoters before Report.
  Many people have asked why I am concerned with a Bill which deals with a part of the country that I do not represent. I have always taken an interest in questions of rights of way and access, and it is on those grounds that I am concerned about the Bill.
  I have no great enthusiasm for horses, whether for racing them or riding them. When I go out walking, I often find that they are a positive nuisance because of the way in which they wear out or damage footpaths. People who have had to clamber over mud that has been created by horses on footpaths may well have some lack of sympathy for them. That is one of the specific problems raised by the Bill. By suggesting that horses should keep to far more firmly defined areas, certain paths or tracks may become even more impassable and difficult for joint use between people who want to ride over them and people who want to walk on them.
  I agree with most of the description of the history of the matter that has been given by the hon. Member for Devizes, but I suggest that the promoters could have done one simple thing if they wanted to avoid controversy. They could have promoted a simple enabling Bill to reconstitute the Epsom and Walton Downs Regulation Act 1936, taking into account the local government changes. It would have taken very little time and effort to get it through the House. Indeed, I believe that the Government should have done it. They could have taken all the local government provisions that existed before the local government reorganisation of 1974 and introduced a

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  simple enabling Bill to extend the provisions to the new authorities. This House has spent far too much time in going back over local government Bills whose duty and need were created merely by local government reorganisation.
  The Bill goes considerably further than was strictly necessary. If it had been necessary simply to re-enact the 1936 measure, that could have been done fairly easily. I am well aware that there were several proposals in the Epsom area for inquiries into the way in which the downs were being managed. Many groups have suggested that the 1936 Act was not working particularly well but, as I understand it, the 1966 report on the downs and the council committee report of 1972 decided in the end that on balance the existing form of management and the existing way in which the different conflicts of interest were resolved were fair. In view of that evidence, it would have been better for the promoters of the Bill simply to re-enact the 1936 Act rather than to establish a new set of rules and to alter and vary the balance between the conflicting interests that want to use the downs.
  The first area of conflict arises over the interpretation of the 1936 Act as to who has the right of access to air and to exercise on the downs. Is it merely people on foot or is it also people who are hacking? I believe that the clear interpretation of the 1936 Act is that the right of access was there for everyone, and that the right exists over virtually the whole of the area. As hack riders and others are sensible people, a division of the area on realistic grounds has operated over the years and has been fairly effective until relatively recently. The hack riders restricted themselves and kept well clear of the area that can be described as the gallops.
  It is unfortunate that the spirit which existed for such a long time could not be re-established. If the promoters had been a little more diplomatic and skilful on occasions, they could have re-established that measure of cooperation, and many of the problems that have been put to me—and, I believe, to many other people—over the past few months would not have had to be voiced in this House.
  It is suggested that most local groups were involved in discussions about the preparation of the Bill and that it had the consent of almost everyone. Judging by the correspondence that I have received, that is not the case. There is considerable conflict, some of which is real but some stemming from the fact that, although the workable compromise seemed to be running satisfactorily, once one group of people saw the working compromise threatened from one direction they began to dig in their heels and demand that the letter of the 1936 Act be observed rather than the spirit in which it has operated for a long time. Certainly, from my discussions with the Epsom Riders Protection Association, it seems that they are reasonable people who are asking for reasonable provisions.
  I have been surprised by the number of people who have lobbied me saying that I should not take up the time of the House with a discussion of the matter and that the whole issue could easily be settled in favour of the racing lobby. I shall not describe to the House the type of pressures that people have tried to exert but, on the whole, those pressures have been totally counter-productive. Whereas I was in a little doubt about some of the issues before, the way in which some people have suggested to me that I
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  should take no further interest in the Bill and allow it to proceed shows that they are keen to bulldoze it through the House quickly.
  If one reads the reports of the proceedings in the other place, one can fully appreciate some of the fears that have been voiced. One noble Lord suggested that the Derby itself would be at risk if the Bill was not passed. Anyone who has read those proceedings could feel that the racing lobby has pressed its case hard and perhaps did not ensure that the fairest of hearings and considerations were given to the matter. I suggest to those who feel strongly about it and feel that there may be a risk to the racing interests that they should be pressing the promoters to achieve a compromise with the groups concerned rather than spending their time pressuring me and other hon. Members to allow the measure to be passed quickly.
  I recognise that the local council is in some difficulty. It would have been nice to have considered it as a totally neutral body in the preparation of the Bill and in the difficulty of trying to reconcile the conflicting interests. It is not a totally neutral body. One or two people have written to me suggesting—I am sure unfairly—that the council is more concerned about its box in the grandstand than in trying to hold the ring between the different conflicting interests. I recognise that the council has to consider the jobs involved. The racing industry has lobbied hard about the number of jobs involved in the training establishments and the number of jobs involved on racing days. That is an important consideration for any local council, but I suggest that the local council should have looked a little more closely at the number of jobs involved in the riding stables, for hacking horses and the tuition of young people. Perhaps the council could have been a little more neutral in its consideration.
  Mr. Clement Freud: Does the hon. Gentleman accept that, whereas one can hack virtually anywhere, one can train racehorses and race only on that particular stretch of land?
  Mr. Bennett: I accept that the racecourse is important for the promotion of all the races and, in particular, the Derby. No one would dispute that. But the case for all the trainers using that particular area of land is not quite so overwhelming, because, as I understand it, there are other private areas within the vicinity of some of the stables used by some of the trainers. Therefore, it is not essential that they use those areas. I am certain that the hon. Member for Isle of Ely (Mr. Freud), who knows far more about these matters than I do, is aware that in other parts of the country there are many other opportunities for training horses. For most of those living in that area there is some limit on the distance that they can go or their children can go if they want to enjoy horse riding. In Stockport, there are certain areas which are over-used by young riders because they cannot get out further to areas which may not be used so much because of expense, difficulties with transport, and so on. It is a matter of balance as to how large an area should be for training.
  I am also under the impression that the number of horses being trained in the area has dramatically fallen since 1936 when, I am told, more than 1,000 horses were being trained. Now the figure is down to between 300 and 400. I do not know a great deal about the racing industry. Perhaps the training is now much more vigorous and scientific than it was then and that therefore the amount

  715
  of space required has increased. The figures therefore may not be a perfect guide, but they suggest that there has been some decline. Therefore, it should be possible to try to marry the two sets of interests—the legitimate interests of those who want to train horses and the rights of individuals to go on to the downs for their own pleasure of simply riding a horse.
  There is still an opportunity for the council and the promoters to get together with the protection association and to reach an agreement before the Bill even reaches Committee. If, as I am continually told by those who are keen to see the Bill rushed through, the matter is urgent, there is a quick and simple way for the promoters to proceed—they should get agreement from all interests. If they achieve agreement, they can go to Committee with the petition withdrawn and an agreed set of amendments. There may have to be short Committee proceedings while the Government Departments make their representations, although my understanding is that Departments do not have many observations to make about the Bill and that therefore the Bill could go through Committee quickly. With controversy out of the way, the Bill could return to the Floor of the House for Report and Third Reading without further delay.
  My guess is that, if the promoters followed that course, they would have their Bill by early March. Therefore, if the matter is urgent, that would be a sensible way for the promoters to proceed. If, on the other hand, they are not prepared to try to meet the legitimate rights of individuals in the area, they may well delay their Bill considerably. If the petition has to be heard by the Committee, and it is heard in the detail in which petitions are normally heard—some of those who present the arguments on such petitions, particularly on occasion councils, seem to enjoy arguing at length—the proceedings in Committee may take a considerable time. If at the end of that there is still dissatisfaction, the Bill will have to return to the Floor of the House for Third Reading and for amendments to be tabled and debated, which, again, can take a considerable time. It is a cumbersome process which takes time and costs money.
  I should have hoped that the promoters could meet the legitimate views of those who are unhappy about the Bill and thus avoid that long and cumbersome process, particularly if, as it is continually rumoured, there might be an early election which could interrupt that fairly long process.
  The riders' protection association believes that the areas designated in the Bill for hack riding are inadequate and too restricted. The maps of the areas available under the 1936 Act and those proposed in the Bill show that the total area has been greatly reduced. It has been suggested that the riders have 40 miles of routes, but those are generally routeways or pathways rather than open areas.
  If riders are restricted to using the same small pathways all the time, those routes will become worn fairly quickly and problems will arise over preserving the routes and closing them for resurfacing. Previously riders were free to spread out over a much wider area. It could be argued that in those circumstances damage would be spread over a wider area, but it could also be claimed that less damage was done and natural regeneration was easier. I am told that more damage has been caused to the downs by excavations and the all-weather rides for the training of horses than by hack riders.
  716
  Hack riders are also worried about the fact that two or three maps showing designated areas will he put in legislation. We know the present number of horses being trained in the area and the number of hack riders on the downs, but those numbers may vary considerably over the next 10 or 15 years. More people may wish to hack over the area and there may be fewer horses trained in the area. In addition, some trainers may prefer to use private training areas rather than the downs. It has been put to me that it would be better for such matters to be dealt with in local byelaws than in an Act.
  The riders' protection association tells me that five sixths of the area that riders were entitled to use will be lost and that much of the natural beauty of the area has been reduced. Many wild flowers and shrubs that were features of the area have disappeared, not because of the hacking on the downs but because of the training of horses and the use of the racecourse.
  It should be possible for the promoters to ease the fears of the riders and to reach agreement with them in the next day or two. The minimum requirements include a proper route along the south side of Walton downs, which must be considerably wider than is currently proposed—perhaps going back to the width provided in the 1936 Act—and riders not being restricted to narrow routes that will be difficult to negotiate at most times. That could be best achieved by reverting to the wording of the 1936 Act which provided rights for walkers and riders. There could then be local negotiations on byelaws to serve the interests of trainers, the racecourse and local hack riders. Such byelaws could be varied from time to time as needs changed. The removal of the right of access on foot or horseback will make it much harder for those who wish to press the rights of hack riders to negotiate on their behalf.
  One clause includes the right to close the 40 miles of rides for reseeding. The Bill should be tightened up to make it clear that, as at present, if an area has to be regrassed an alternative route ought to be made available. There may be occasions when that is not possible, but there ought to be a presumption that if a designated route has to be closed alternatives should be provided.
  The riders' protection association and others are worried about the proposals to increase the number of race meetings at Epsom. Most people who attend sports meetings thoroughly enjoy themselves, but there are sometimes problems for those living near sports grounds and racecourses. I get the impression that the Epsom course is no exception.
  A major problem is the time taken in preparing for a race meeting and clearing up afterwards. At present, there are nine days of racing a year, but the Bill proposes a possible extension to 16 days. I suspect that most people would not object to such an extension, but if there are to be 10 days of preparation and 10 days of clearing up for each meeting, many of the areas designated in the Bill will be restricted for large parts of the year. It ought to be possible for those 10-day periods to be reduced. I understand that it is not proposed to move immediately from nine days to 16 days, but I understand the legitimate fears of local people.
  It would be fairly easy for the promoters to give an undertaking that if they press for extra days the preparation and clearing-up time will be reduced, along with the restrictions on hack riders and other groups. I have received a number of letters about the restoration of the

  717
  downs after race meetings. People have tripped over holes left after the removal of pegs used in temporary structures at Epsom.
  I have also received a letter about third party liability of hack riders and horse trainers. I do not think that there should be any problem about that. Most riders are members of their national association and have insurance cover and any race horse trainer will have third party liability because of the nature of his trade. It is not one that I should want to press.
  I hope that the promoters will make it clear that they wish to change all the penalties from criminal offences to byelaw offences. I understand that the hon. Member for Devizes received an undertaking along those lines, but that in correspondence later the promoters suggested that they were changing only one of the provisions, not both. I hope that that misunderstanding can be cleared up.
  I should not like to see a measure such as this held up or delayed in any way. It is important that the promoters get together in urgent discussions with the petitioners to ensure that any differences of view can be resolved. I do not believe that they cannot be resolved because I am under the impression that the Epsom Riders Protection Association is made up of reasonable people and that the promoters could get their point across so that there might be better management of the area in the interests of the trainers, the racing fraternity and the people of the area, not only those who wish to hack but the far larger majority who wish to walk. I hope that the Bill will not have to come back to the House for us to argue over a further stage because of failure to reach agreement between all the interested parties.
  7.42 pm
  Mr. George Gardiner: Like the hon. Member for Stockport, North (Mr. Bennett), I am glad that the House has a chance to discuss the Bill before it goes further. I certainly supported the hon. Member in his efforts to block the Bill to ensure that such a debate could take place.
  Perhaps I should explain my constituents' interest in this measure. It could be divided into two. First, there is a ward in my constituency lying to the east of the downs, and thus to the east of the racecourse, which is, not surprisingly, called Tattenhams ward. Whatever goes on on the downs, whether of a racing nature or anything else, has a direct effect upon the lives of the people in that ward. Secondly, throughout my constituency there are many more who use the downs for recreational purposes, whether on horseback or on foot.
  I am sure that we are grateful to my hon. Friend the Member for Devizes (Mr. Morrison) for explaining in his introductory speech the conflicting interests that occur. These conflicts are not necessarily simple to define. We have, understandably, heard a good deal of a conflict between the horse racing industry and the public as a whole. It is fair to say as well that there is a conflict within the public interest. There is often a conflict between those who use the downs for their recreation on horseback and those who go on the downs on foot.
  We have heard of a number of hazardous episodes reported in the local press over recent years, where horse riders have come dangerously close to families who are picknicking or walking on the downs. I can tell hon.
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  Members that my constituency mailbag on this issue divides fairly evenly between hack riders complaining about the activities of conservators and the Epsom and Ewell borough council, and members of the public on foot—the pedestrian public—complaining about the activities of the hack riders. There are a number of facets to the conflict here.
  It is also worth mentioning in this context that it is not entirely sensible to argue that the problem could be met simply by enabling legislation to renew the 1936 Act. The recreational use being made of this area is now far heavier than it was in those days. Far more people drive out from London and from the different parts of my constituency to the downs for recreational purposes at the weekend. At the same time, there has been an expansion in the popularity of hack riding. The public demands being put on the downs are now far greater than they were only a few years ago.
  The bodies that have endeavoured to represent the interests of local residents in the process of formulating new legislation are the residents' associations, and I include among these the Tattenhams residents' association drawn from the ward that I have described. It will be within the knowledge of most hon. Members that that residents' association joined with others outside my constituency, associations that are similarly affected by whatever goes on on the downs, into a joint committee that met through 1980ߝ81 to draw up and define their requirements.
  The representatives of that joint committee got together with the working party described by my hon. Friend the Member for Devizes in the middle of 1981 and a compromise between those interests was worked out. The compromise covered agreement on such matters as car parking, the erection and removal of temporary stands, the fencing of enclosures and the protection of residents close to the racecourse. A great deal of work was put into that by representatives of residents' associations.
  I am now finding considerable hostility expressed from those quarters to making many more compromises in the process of getting the Bill on the statute book. As one of them put it to me in a letter that I received just before Christmas,
  "Our Joint Committee went to considerable trouble to achieve the best possible provisions in the new Bill so as to equally serve all interests. This meant making concessions at times which must not be jeopardized by one minority seeking to obtain a disproportionate advantage for only their activity."
  That is the view that is coming fairly strongly from the residents' association.
  As the hon. Member for Stockport, North fairly told the House, there are problems remaining concerning the hack riders. One particular objection was that any offences in the Bill, as put before another place, brought down the wrath of the criminal law upon offenders, which was seen as a disproportionate penalty or legal sanction to be applied. I am sure that we shall be interested to see the form that the concession on this point takes when the Bill goes before a Committee.
  The hon. Member for Stockport, North has stated in some detail, and therefore I shall not repeat it, that the Epsom Riders Protection Association is not satisfied with the Bill and the degree of access that is allowed to it under the proposed measure, and wishes to pursue the matter

  719
  further. Thereby, it finds itself unfortunately in conflict, not only with the promoters of the Bill, but with the representatives of local residents associations, too.
  At this juncture, it may be said, without prejudging the issue, that the correspondence that I received before the Bill came before the House demonstrates that among hack riders and members of the Epsom Riders Protection Association there is a very strong feeling that a certain vendetta has been waged against them by the conservators over a period of time under the 1936 Act, and there is a feeling among them that the provisions of the 1936 Act have been bent on certain occasions to their disadvantage. Such a feeling in those circumstances hardly creates the most friendly atmosphere for the amicable discussion of the proposed provisions of a new measure which, nevertheless, I believe to be necessary. My hon. Friend the Member for Devizes was correct to point to the hazardous situation that we would face if the 1936 Act were allowed to lapse without being replaced by some further legislation.
  Understandably, the argument has been in terms of the conflict involving hack riders, but there are other provisions in the Bill which are of great importance to some of my constituents. I refer especially to clause 16, which covers the gipsy caravans which arrive in very large numbers for the annual Derby meeting.
  Very soon after I was elected to the House in 1974, I discovered that this was a matter of considerable aggravation for my constituents living in the area not far from and adjacent to the racecourse. These caravans are not the picturesque conveyances which might have come to the downs meeting in years gone past but large and luxurious mobile homes often needing to be towed by heavy lorries, and often bringing noisy, heavy generating equipment with them. Increasing numbers of such caravans were coming each year. They were causing considerable aggravation for local residents, and the presence of caravans dotted round the downs in an uncontrolled way also inhibited their freedom to use the downs for recreational purposes. Over the years since, efforts have been made through the gipsy authorities to reduce the numbers arriving, and we thought that those efforts were achieving some success until 1981, when a record number of caravans came for the Derby meeting. There were some 347 in all. Furthermore, they arrive not just for the Derby meeting but a considerable time beforehand, and they stay for some time afterwards.
  My constituents living locally will welcome the provisions in clause 16, which have been worked out in consultation with the National Gypsy Council, for a properly constituted site for such caravans and for power to require the removal of caravans that are not situated within that designated area. I offer that as at least one example of the reason why local residents require fresh legislation. The 1936 Act was not adequate to meet their needs in this respect.
  This argument has been a long and painful business for many of us. I should like to think that the difficulties can be resolved before the Bill goes before a Committee, as did the hon. Member for Stockport, North, though I have my doubts. One of the reasons why I was happy to promise my support in blocking the Second Reading of this measure before Christmas was that that allowed additional time for the promoters' and the petitioners' agents to meet to see whether some agreement could be reached. Unhappily, it appears to have been impossible, so I
  720
  imagine there is no alternative now but for these issues to go before a Committee. We hope that they will be resolved there.
  I join other hon. Members in hoping that the Committee will succeed in reconciling the conflicts which remain over the measure so that we can get an Epsom and Walton Downs Regulation Bill on the statute book in the interests of the public as a whole.
  7.55 pm
  Mr. Clement Freud: Unlike the hon. Members for Reigate (Mr. Gardiner) and Stockport, North (Mr. Bennett), I am totally in favour of this measure. I should very much like to see it enacted sooner than later, and I agree with the hon. Members in hoping that it will not go before a Select Committee.
  It is crucial to remember that the very reason for Epsom's prosperity and existence is horse racing. We have 600 acres of downs. We have fairly co-operative trainers. But it is important to remember that Epsom is about training race horses. Race horses are trained and spectacles are put on which attract people, to the great financial benefit of the surrounding district. Inevitably, considerable annoyance is caused to people who live nearby. But that is common to every event anywhere. It is common to every theatrical performance, every jamboree and every concert. I am sure that our neighbours in Westminster infinitely prefer it when the House is not sitting. I am surprised that we have not had a petition asking us to have shorter sittings and to stop banging car doors at night.
  Racing and Epsom are synonimous. If there is as much room for hacking, let those hacks hack where there is space and where they do not interfere with valuable bloodstock in the very limited space provided on which race horses may gallop. The hon. Member for Stockport, North had some sort of idea that horses could race anywhere and that hacks could hack anywhere. He suggested that there were trainers who did not need the gallops on the downs. I agree that there are, but they belong to the up-market branch of racing. The small trainer has no chance to buy land on which to race his horses. He needs the facility of the downs and he needs the security of those gallops. It is exceedingly dangerous for a race horse to be unleashed on a 1¼-mile gallop and find people walking, hacking or flying model aeroplanes there.
  It is right that precedence should be given to race horses. Trainers are very good. They do not train horses in the afternoons, but they would not expect the hacks to churn up the gallops any more than a race horse should be allowed to train on ground which was not suited to it.
  A faint elitism has crept into the debate, as though hacks were Socialist and racing was somehow Conservative or up-market. It is quite wrong to suggest that. It costs £10 an hour to hack. I am not sure that it is not the hacks that are the elite and the race horses that are the working part of Epsom.
  Mr. John Golding: Will the hon. Gentleman accept my assurance that in my constituency at least there will be far more support for the stable boys and the horses than for the young girls and hacks?
  Mr. Freud: I am glad to hear that. As the hon. Member for Devizes (Mr. Morrison) declared an interest, I suppose

  721
  that I, too, should declare an interest in that I have owned horses for many years, I have ridden horses, and if I were younger and thinner and a better jockey I should still be riding horses, and I would hope very much to ride at Epsom. However, that is unlikely.
  I want to see Epsom to go on as an amenity, first, so that trainers can train their horses safely, apart from the provision of other facilities on the racecourse. Secondly, I ask that consideration be given to those who hack and those who walk and those who fly model aeroplanes and those who make love in the dark, and those gipsies who have their caravans there, because that is all part and parcel of the Epsom as we know and love it. I hope that the Bill will be given a speedy passage through the House.
  8.1 pm
  The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I hope that it will help the House if I make a brief intervention now to give the Government's views and to applaud the way in which my hon. Friend the Member for Devizes (Mr. Morrison) introduced the Bill. I must emphasise that the Bill is a private Bill, promoted jointly by Epsom and Ewell borough council and United Racecourses Ltd. They are the leaseholder and operator of the Epsom downs racecourse. It is important to understand the background, because the Bill repeals and re-enacts, with amendments, an existing regulation Act of 1936, which would otherwise have lapsed at the end of 1984 as a result of section 262 of the Local Government Act 1972.
  The Bill contains a wide range of provisions concerning regulation of the use of the downs, and under the 1936 Act and the Bill the downs are controlled by a body of conservators composed of representatives of the borough council, United Racecourses Ltd., and the owner of part of the downs. I make it clear that I have a dual interest—not only as spokesman on behalf of the Government, but as a near neighbour of my hon. Friends the Members for Epsom and Ewell (Mr. Hamilton) and for Reigate (Mr. Gardiner). In fact, the downs form one of the high parts of the boundary between our constituencies. Certainly it is a most important part of the region for our respective constituents, so all of us have a detailed interest in this important lung for the people who live on the outskirts of London and on the threshold of Surrey.
  What has been said by hon. Members on both sides echoes the fact that we acknowledge the traditions and the vital importance of Epsom downs for horse racing, the training of race horses, and horse racing generally, as well as being a focal point for a host of varied recreation and leisure pursuits. I agree with my hon. Friend the Member for Devizes that the Derby is the focal point of the flat racing season, and I admired his customary eloquence and resourcefulness in managing to get in an important reference to the Grand National, which is held in an area which is diametrically opposed to ours, the north-west of England. I echo his assessment that that important steeplechase should be preserved to form part of "Great Britain Ltd.," and I hope that all those who are involved will acknowledge that.
  All of the activities that now take place on Epsom downs must help the local economy, and between them they provide immense pleasure for many thousands of people. The downs are a valuable asset to the area, and
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  they are an international focal point on Derby day. At that time of the year they are a sight that is never to be forgotten.
  However, the House should understand that the varied nature of the pressures on the downs must bring its problems. I am sure that the conservators are right in wanting to continue and improve the regulation of the downs in a way that reconciles the interests of the various users. I congratulate them on bringing forward a comprehensive Bill which is uncontroversial to such a large extent.
  If there is a slightly controversial area, it is the one to which my hon. Friend the Member for Reigate referred when he spoke of the anxiety of his constituents—and, to a certain extent, the anxiety that my constituents would express—about the problems of controlling gipsy caravans. I am glad that he noted that the Government, too, echoed the concern that the promoters' proposals should not set a precedent for powers in excess of those normally available to local authorities once their areas achieved designation under the Caravan Sites Act 1968.
  Following discussions with the promoters, however, we are now persuaded that in the special circumstances surrounding the Derby meeting at Epsom, a measure of special control is justified, and the Bill as amended in another place includes powers to deal speedily with any problems caused by the haphazard parking of caravans on the downs outside the official caravan site area on which my hon. Friend touched. However, we did not feel able to condone extensive powers to deal with other lesser problems such as compliance with site conditions. The Committee in another place reflected the Government's view by curtailing the powers originally proposed in that Bill.
  I said that a number of the measures were largely uncontroversial, but I recognise the inherent concern expressed on behalf of horse riders. A number of hon. Members have spoken this evening and many have written to me on this matter, and I appreciate and respect their feelings. Naturally, horse riders seek as much freedom as possible to continue to ride across the downs. Nevertheless, it is not for me on behalf of the Government to judge whether the conservators' proposals for controlling hack riding are justified. If the House gives the Bill a Second Reading, I believe that the conservators will be required to demonstrate to the Committee the justification for the proposals. I am sure that many people who are deeply worried about this matter will welcome the assurances that my hon. Friend the Member for Devizes gave in his opening remarks. Equally, the Epsom Riders Protection Association, which petitioned against the Bill, together with the conservators will have an opportunity to present their case to the Committee. I am confident, and I think it echoes the sentiments of Members on both sides, that the Committee will give a hearing to both sides. I hope that hon. Members will understand that I recommend that the Bill be given a Second Reading so that the issues may be fully discussed in Committee.
  8.6 pm
  Mr. Denis Howell: I welcome the Bill and commend it to my right hon. and hon. Friends. In saying that, I entirely agree with the course taken by my hon. Friend the Member for Stockport, North (Mr. Bennett), enabling us to have a rare debate on sporting matters and related conservation matters, to

  723
  which the House should give much more time. For that reason alone I am glad that he has provided us with an opportunity to listen to the discussions and arguments, although I do not share my hon. Friend's views on many points, as will emerge in my speech.
  First, the Derby is affected. My hon. Friend said that it was not affected by the Bill. It is affected, and it is affected for the good. That is one reason why I support the Bill. The Derby is one of the great sporting festivals of this nation. The Minister said, and I took the same view when I was in office, that the great sporting festivals of our country are to be cherished, supported and improved. We all feel well, not just because we back the winner, but because the British put on these great sporting occasions as only they can do. That is a source of great national pleasure and pride. It is important to make that point.
  Mr. Harry Greenway: May I say, in defence of the right hon. Gentleman's hon. Friend the Member for Stockport, North (Mr. Bennett), that I am sure he would agree that the Derby has in no sense been threatened in recent years. There is no threat to the Derby whatsoever, and in that sense his hon. Friend was quite right.
  Mr. Howell: I hope that I have made it quite clear, and I shall enlarge my views in a moment. The Derby will be affected for the better as a result of the Bill. I agree that my hon. Friend is not trying to do anything that would impede the continuance of the Derby as one of the great national sporting occasions. I know that to be the case. One or two tributes should be paid to people involved in the long history of the matter. Now that the Bill tries to reconcile different interests, tribute should be paid to Mr. Stanley Wootton, a noted trainer, who, in a most remarkable gesture, made much of this land available for all time on a 999-year lease at a peppercorn rent. It would be wrong if hon. Members failed to express their appreciation of that wonderful gesture. It was the action of someone who wished to leave a heritage for future generations.
  I was interested to receive a letter from the mayor of Epsom and Ewell, one of the few Labour mayors in that borough's history. I think that he is, in fact, the third Labour mayor, on which he should be congratulated. One of his most illustrious predecessors was a colleague, Mr. Chuter Ede, who, I recall, discussed these matters with me. This shows how long back into history these issues go, as well as revealing my age. It was Mr. Chuter Ede who proposed that action should be taken to close the downs on certain occasions and to introduce regulations in the interest of racing, of which he was a keen follower. These matters were pursued during my time as Minister by two distinguished chairmen of the Horserace Betting Levy Board, Lord Wigg and Lord Plummer. Both have been concerned to obtain the support of the House for the type of proposals contained in the Bill.
  Why do I say that the Bill enhances the prospects of the Derby? There has been mention of gipsies. Ministers within the Department of the Environment are never far removed from the gipsy problem, as the Minister, the hon. Member for Reigate (Mr. Gardiner) and I know. I congratulate the local authority and the conservators on managing to achieve a sensible agreement with the National Gypsy Council. That is a most remarkable achievement. It is a credit to the local authority, the
  724
  conservators and the gypsy council that the problem can apparently be resolved by providing a site for at least 200 caravans with the proper facilities that are so desperately needed. This must benefit local inhabitants and everyone else.
  The second reason that the Bill is important is that it takes powers on race days to restrict access and improve facilities along a strip of land following the course from Tattenham Corner to the finish. That is years overdue. One sees from the grandstand, especially on Derby day, disgraceful scenes of ladies having to queue up for totally inadequate public conveniences. It is shocking that one of our great sporting events provides such appalling facilities for the public. I understand that the Bill proposes to take action to remedy that matter. It has to be remembered that 100,000 people are present on Derby day. It is right that they should have adequate and proper facilities. I understand from my talks with the promoters that improved facilities on this strip of land is one of the main objectives. That will be welcomed by everyone in sport, not least by those who are so inconvenienced by lack of elementary civilised amenities.
  I wish now to deal with some of the difficulties that seem to have arisen. I share the general view that these difficulties can probably be explored at greater length in Committee. If, however, one studies the proceedings that have taken place in the other place, it will be seen that considerable progress has already been made. It would be wrong to suggest that hon. Members should start discussions and arguments de novo. We are doing no such thing. As the second Chamber to receive the Bill, we should acknowledge concessions that have already been made without in any way seeking to prevent the objectors, in this case, the Epsom Riders Protection Association, from pursuing their points. I understand that the British Horse Society—several hon. Members are among its supporters—have now dropped an objection that was raised in the other place. This suggests that considerable concessions have been obtained, at any rate, to the society's satisfaction.
  For the first time, all these miles of rides are hallowed in statute. About 80 acres out of a total of 600 acres are allocated for riding, associated with 12 miles of rides. That provision is no small contribution to the leisure activities of the horse riders, whom many hon. Members support.
  Mr. Greenway: The council of the British Horse Society, on which I am a serving member, stood on an objection to the provisions in the Bill which would make trespass on the downs in areas not assigned to hack riders a criminal offence. The council stated that if the promoters withdrew that provision it would withdraw its objection to the Bill. That is how matters stand. I shall have something more to say if I am successful in catching Mr. Deputy Speaker's eye.
  Mr. Howell: That is a matter, I am sure, that can be discussed in Committee. I have tried to inform myself about the situation. We are talking, I understand, of an offence that would be dealt with in the same court and would be subject to the same fine. The question is whether it would be an offence against the byelaw or an offence against the Act. The effect on the offender would be the same in either case. I can understand that some people should think it better that the offence should be dealt with by means of a byelaw. The issue should be pursued in Committee.

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  I am critical of the manner in which the Epsom Riders Protection Association has shaped its objections. Its letter seems to suggest that the Bill is concerned with the gain of the racing industry. It says:
  "Unfortunately, the Council have backed a small industry."
  This is not a small industry. It is an industry that attracts the active involvement and interest of millions of people who want a sensible, honest and honourable flutter once or twice a year. It is therefore wrong for the letter to use the description that it does. It is unfortunate that the association has drafted its objection in those terms. As the House has heard, 100,000 people turn up on the major occasion. Many thousands turn up when there is no racing at all to enjoy picnicking or walking on the downs. All our life in sport is spent in reconciling conflicting interests. In this case, there are conflicting interests to be resolved between horse riders and picnickers on bank holidays and other days when people wish to visit the downs.
  Racing is a major industry. It is one of our great successes and ought not to be described as it was in that letter. There has been reference to the commercial interests of racing, as if there were no other commercial interests operating on the downs. Most of the riders represent a commercial interest in one way or another. There is a commercial interest in providing and housing horses. Horse trainers pay £130 a year for each horse that uses the downs, whereas—I am not suggesting that they should pay anything—all ordinary horse riders pay nothing for access.
  We must remember also that the horse riders are not limited to Epsom downs, as are the horse trainers. Small horse trainers must have gallops over Epsom downs, whereas hack riders have a considerable amount of ground available in the near proximity, for example, Headley heath, Banstead common and Epsom common and the acres of open space now known as Mole valley. That is all additional space, which is available to those people who wish to ride horses.
  Specific differences exist in relation to the width of the horse rides. We know that they should be adequate and that ground suffers if people trample over the same ground all the time. I am advised that most of the horse rides go over the golf course. We have spent a great deal of time talking about the interests of the racing fraternity and horse riders, but we must consider also the interests of the golfers.
  I am told that the golf club would object strongly to an unduly wide access road going across the golf course. As a golfer of little performance, I believe that anything that increases hazards for ordinary golfers is something that the House should look at with suspicion. So far as I can see, that would arise here.
  Mr. Andrew F. Bennett: Has there been any problem during the past five years between hack riders and golfers? As I understand it, that has not been a major problem.
  Mr. Howell: One of the differences that still remains is the width of the ride. I am told that the Epsom Riders Protection Association wishes to provide rides of 20 metres wide for the horses. That is about the width of a cricket pitch and the golfers say that that is far too wide for any one of the rides across the golf course. That problem can no doubt be examined in Committee. If those
  726
  facts are accurate, I have a great deal of sympathy for the golfers and their interests vis a vis trainers and horse riders, and it is something that the House must consider.
  Mr. Bennett: On that part of the golf course, custom and practice, which have been observed effectively, are that riders never stray on to the fairways, but have been able to ride over much of the rest of the course without causing any problems. That is what they want to continue. They do not want to encroach on to the golf course because of their wish to protect the interests of both the golfers and themselves.
  Mr. Howell: That does not coincide with the information that I have been given. I have been told that there have been some difficulties, but that on the whole they have been solved with good will. If the 12 miles of rides are to be 20 metres wide, there would be considerable difficulties for the golfers. It is a point that needs to be looked at in Committee but that point should be made now.
  Mr. Greenway: I know that the right hon. Gentleman shows great good will in these matters. If he supports a view that 20 metres is too wide, what is an adequate width?
  Mr. Howell: I should not like to answer that. One of the points to be looked at in Committee is the surface upon which horses are ridden at certain critical points near the golf course. I am told that there are about 100 riders continually ploughing up one small area. One point that ought to be investigated is whether a rather more suitable surface should be provided, which would mean that 20 metres would not be needed. Horses could use a narrower ride if there were a proper surface. That is the sort of give-and-take solution that I should have thought reasonable.
  Another point about which there may be some difference is the desire of some riders to remove the restriction that they cannot gallop before 12 noon. That brings us to a matter of considerable importance. Those of us who have an interest in racing know that a highly trained racehorse is a delicate animal. One therefore has to have regard to proper control at all times. I should have thought that it was wrong for hack riders to be on the downs when they are being used for training. Hack riders should not go on to land that has not yet been galloped on but which will be galloped on within the next day or two or week or two. Those of us who have been to Epsom downs to see the training know that there is a sensible system of giving the trainers an extra yard or two of new ground each day. If the hack riders go on to the new land before it has been used by the race horses considerable damage may be done.
  This is a good measure to have reached the House. For many years many people have tried to legislate sensibly for the racing industry, which is of great importance and interest to the country. They have done it in discussions with diverse bodies such as consumers, the local authority, the National Gypsy Council, golfers, model aircraft fliers and people representing conservation and amenity interests. Despite the great conflicts that exist, a commendable Bill has been brought before us. I am pleased that concessions were made in another place. I hope that in Committee, which is the right place, there can be further discussions to reach as much agreement as is possible. However, at the end of the day I have not the slightest doubt that it is in the national sporting interest for the Bill to be put on the statute book.
  8.29 pm
  Mr. W. R. Rees-Davies: I shall be brief, because the arguments have been well canvassed. I, like many hon. Members, have had to read a great many Bills, but I have seldom seen a better drafted, more comprehensive and better presented Bill. One must thank United Racecourses Ltd., the Horserace Betting Levy Board, the conservators, Epsom and Ewell borough council, and the eminent solicitors, Messrs. Sharpe, Pritchard & Co.—indeed, all those associated with the production and promotion of the Bill, not least my hon. Friend the Member for Devizes (Mr. Morrison) for the way in which he has presented the Bill to the House this evening.
  One matter that has been touched upon but not dealt with fully is the problem that arises from the fact that the Epsom downs are not only a national but an international institution. Last year I had the pleasure of shepherding 200 American tourists there in three large buses. I had a drink with them and told them something about the downs. I am happy to say that I had been given the winner, so I gave it to them as well, which made me all the more popular. People come from all over the world, not just for the Derby, but to use Epsom downs in many ways.
  Clause 11 deals with byelaws and is extraordinarily well drawn, as is the one about the gipsies. They need to be effectively controlled and to do that is a difficult task, as has been said. Immeasurable trouble has been taken to see that everybody's interests are considered fairly. United Racecourses Ltd. is beginning to make considerable improvements at Epsom. It is right that it should take the power to have 16 days racing.
  Some years ago I was a member, and had been for a good many years, of the Epsom racecourse. At one time I had a box there, although I cannot afford one any longer. No doubt my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) will be there at the right moment to enable us to have a box during the Epsom meeting. I do not think that he has a box, but, as the Member of Parliament for Epsom and Ewell, I hope that he has certain privileges on that occasion, and rightly so too.
  We need more racing days. Therefore, I hope that the trainers and those associated with Epsom will expand somewhat in the years ahead, despite a slight falling off in the past. I hope that Mr. Neligan and those associated with him will be able to ensure that the number of racing days is increased.
  Clause 10 allows the conservators to consider the use of the downs for any recreational purposes that are thought proper. There is a specific provision that the downs cannot be so used for more than five days in any one year and that
  "not more than 25 hectares of the downs shall be set apart for the holding of any such event."
  Both here and at Liverpool, for the Grand National, it is necessary to ensure that the fullest and most effective use is made of the land for recreation for the enjoyment of the public.
  Nowadays, all those involved with racecourses are trying to find ways to make effective use of the courses when they are not being used for racing. I hope that greater use will be made of them. Nevertheless, the byelaws set down careful controls. In this modern age, unlike the days of 1936, one wants effective regulations to ensure that there is effective control over not only the racecourse but the full 600 acres.
  728
  It has been said that golfers have a golf course on the downs. They are entitled to their golfing under conditions that are reasonable and effective.
  It is right that those who want to hack should be able to do so, but they must recognise that it is far better to set an area apart for them at times that are suitable than to give them the opportunity to roam at large. That would be most unsatisfactory.
  There must be effective control over camping, caravanning and the selling, hawking and hiring of commodities. In the last century there used to be many pornographic shows on Epsom downs on Derby day and others. There were all types of tenting and hawking, and little control. Many criminal offences were perpetrated. Happily, there is now effective control over that major international event.
  I hope that the Bill will pass through the House without any great difficulty. It is a measure of the success of the sponsor and promoters that, with the exception of hacking, they have managed to achieve the support of local people as well as the general public. There is no need to make trespassing a criminal offence. Substantial fines can be quite sufficient. I give a warm blessing to the Bill and hope that it will become law soon, without any great opposition.
  8.36 pm
  Mr. John Ryman: I had not intended to speak, but I have to say that I strongly support the Bill. Without covering the ground that has been covered by hon. Members on both sides of the House, I should like to draw attention to the parlous state of British racing. The industry is unhealthy and needs every conceivable aid that is available, both from the House and from the Government.
  In foreign racing, the prizes are much higher than in Britain and they have the benefit of our bloodstock expertise. As the Rothschild commission reported to the House some years go, the prospects for British racing are poor and every effort must be made to help the industry.
  I join in the congratulations offered to the sponsor and promoters, because the Bill will help the racing industry. The fundamental problem is that it needs more money. If one visits British racecourses and notices the condition of some of them, especially the smaller ones, it is as plain as a pikestaff that, unless there is an injection of capital, racecourses will deteriorate further. Unless there are financial incentives for people to take a greater interest in racing, the industry's future is not good.
  Much has been said about trainers. The cost of training racehorses has now become so exorbitantly high that few people can afford it. Therefore, if trainers require the facilities that the Bill provides, those provisions should be approved.
  I understand the points that have been made on behalf of hacking riders. They have been vastly exaggerated. Some poor points have been made on their behalf. I am all in favour of hack riders, and horses, and strongly favour anything that helps riders, horses or the industry. Some ridiculous arguments have been made on behalf of the Epsom Riders Protection Association. I can only assume that the hon. Members who made them have done so with their tongues in their cheeks. No doubt the Committee will consider the arguments in detail at the appropriate time.
  Nobody wants to obstruct the Bill. It makes an important contribution to British horse racing. However, I am appalled by the timing. Tonight we had a debate on

  729
  regional unemployment which could last only three hours. We have spent almost two hours discussing this Bill which, important though it is, cannot be compared with the problems of unemployment. Perhaps we have taken up too much time discussing the Bill's detailed provisions.
  I commend the Bill to the House. I hope that the petitioners and objectors, on further reflection, will agree that reasonable objections can be met in due course so that they need not be pressed now. It is important that the House should be seen to support the racing industry. The Bill provides a means of support and I commend it.
  8.40 pm
  Mr. Harry Greenway: I do not oppose the interests of race horse owners or anybody else connected with them. The House will know of my strong support for racing. I thank my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) for explaining how trespass may be dealt with in the Bill and for his new suggestion that it could be covered by the imposition of heavy fines. Perhaps we can consider that, even at this late stage.
  The right hon. Member for Birmingham, Small Heath (Mr. Howell) spoke eloquently from the Opposition Front Bench. He said that 20m is a sufficiently wide space for a group of hack riders or a single hack rider to manage. The problem might be more difficult if the 20m strip goes across a golf course or other awkward area, although I concede that there may be a case for telescoping a strip for short spaces.
  I am a fully qualified riding instructor and for many years I have taught children and adults to ride. I know that one must be careful when going from a wide ride to a narrow ride because it can lead to problems. We must remember that horses are not machines. They are not motor cycles. They can suddenly do the unpredictable. They can take off and gallop away from a ride, whether it is 20m or 50m, for no reason. I have such incidents in mind when I consider how trespass is dealt with in the Bill.
  I have a life-long interest in horses and riders, but I have always been most interested in the disabled child or the underdog who has no chance to ride because of his birthright. I refer to children in inner London schools and deprived children. I am most interested in protecting their rights. In doing that, one cannot allow the rights of ordinary hack riders to be eroded because the two are interdependent. I have taken children from deprived areas or homes to ride on the downs. That has brought them new insights into life and undreamt of happiness. Access to the downs and to the countryside is of the greatest importance to those individuals.
  I declare two interests. I occasionally ride race horses and enjoy it, be it on the flat or over hurdles or fences. I am light enough to do that. Within the past three years I have raised about £6,000 for charity having ridden twice the length of Exmoor—30 miles—on quite a difficult horse and survived.
  My second interest is that I am an unpaid nationally elected member of the council of the British Horse Society. I know exactly what has transpired in council meetings on this issue. There has been no council meeting since that at which the council stated that it would oppose the Bill in its present form unless the clauses making trespass on the downs a criminal offence were removed in
  730
  favour of byelaws dealing with trespass. I want to be certain before I leave the Chamber that that will be faithfully done, as I am in some doubt about that following the behaviour of the promoters.
  The access point is of the greatest importance. People living in cities need access to the countryside and they must have it. This is what national parks are all about. In my view, people living within an area containing a facility such as Epsom and Walton downs have a natural right of access to it. The determination of people to limit access or, as when this Bill was first produced, to deny it altogether must be considered carefully.
  Reference has been made to heavy pressure having been brought to bear in connection with the Bill. A certain amount of pressure has been put upon me not to oppose the Bill, and I do not oppose it in its broad principles. I am unhappy about some of the pressure to which I have been subjected, and I shall deal with that later. I regret that the public is losing access to 80 per cent. of the downs, but I accept that.
  I want to read a letter that I received from the Epsom Riders Protection Association. That body has been referred to many times. I shall read not one of its general letters but one addressed specifically to me. Before the Bill came up for Second Reading on the first occasion I told the promoters that if they persisted in including clauses that made trespass a criminal offence, I would oppose the Bill. They replied that they were willing to remove all clauses that regarded trespass as a criminal offence and to deal with the matter under byelaws. That was late on the day that the Bill was to be read a Second time.
  Although the Bill had been in prospect many months—this is what I mean by heavy pressure—the promoters did not appear here until the eleventh hour. Having received their assurance, I went to the Private Bill Office and asked "What value is the assurance of the promoters when they promise that they will redraw the Bill and recommend to the Committee considering it that trespass will not be dealt with under any clause as a criminal offence but will be dealt with under byelaws?" The Clerks to the House advised me that it would be more than it would be worth to go back on that assurance. Professionally, it would not be done in any circumstances. With that assurance, I returned to those gentlemen and said "I shall withdraw my opposition and support your Bill because you have given me your word. That is good enough."
  I was therefore surprised to receive from the Epsom Riders Protection Association a letter dated 14 January which stated:
  "Dear Mr. Greenway,
  Epsom Downs Bill.
  Yesterday I received from the Promoters' agents a copy of the proposed redrafting relating to your objection to the criminal offence provision in the Bill. We have today met the Promoters and voiced our concern that although subsection (3) of Clause 15 has been deleted and is now dealt with under the byelaw provisions for Clause 11, there still remains a criminal offence provision in Clause 15 for contravention of subsection (4)(a). This criminal offence is now drafted in subsection (5). It is our contention that this should not be a criminal offence and should be dealt with under byelaw provisions of Clause 11. The Promoters did not give the impression of being prepared to re-draft this at the meeting this morning and as we consider it to be equally as onerous as the offence previously under subsection (3) now deleted perhaps you would be prepared to support us again in this?
  Yours sincerely,
  T. Staplehurst."
  In all equity, I give Mr. Staplehurst and his friends my support. I feel that I may have been seriously let down. I

  731
  hope that the Minister, with whom I had a 30-second conversation before the debate, will be able to reassure me. If not, I shall oppose the Bill.
  Mr. Ryman: The hon. Gentleman is obviously troubled about whether the sanction should be by way of the creation of a criminal offence or by breach of a byelaw. Is not he making a lot of fuss about nothing? Surely the procedure for enforcing the sanction is exactly the same, in that the person offending will appear at a magistrates court, and if convicted will be fined.
  Mr. Greenway: I take the hon. Gentleman's point. I am not a lawyer, but I am voicing an objection made by people who have taken legal advice. I am doing so honourably and honestly. Whether this will make any difference in the end is not essential to the point. If that is so, why do the promoters appear to have gone back on their word?
  The promoters appear to have gone back on their word, but I hope that that is not so. As I came into the Chamber just after the debate started, I received a letter from the town clerk and chief executive of Epsom and Ewell objecting to a letter from me in which I pointed out what the Private Bill Office had said about being assured that the promoters would not go back on their word. I said I hoped that that was the case. This letter has come on top of all sorts of other pressures. For example, there was a meeting on the day that the Bill was due for Second Reading, and that only a few minutes before the measure was due to come before the House. A letter was placed in my hand as I walked into the Chamber. I am not happy about that. The Epsom Riders Protection Association may have reason to feel exasperated at the way in which it has been dealt with.
  I have made my point strongly and firmly. I shall be happy to take back all that I have said if the Minister can assure me that the promoters do not intend to make trespass a criminal offence and that this will be dealt with under byelaws, even though the technical point made by the hon. Member for Blyth (Mr. Ryman) may be perfectly valid. That is what I and the British Horse Society council asked for. We said that we would settle for no less, and that remains our position.
  8.54 pm
  Mr. John Golding: The hon. Member for Ealing, North (Mr. Greenway) said that horses are not machines or motor cycles. The horses that I back and the cars that I drive have one thing in common: they suddenly stop before they get to their destinations. I support horse riders too, but I principally support those who ride race horses. The debate has polarised between riders of race horses and other horse riders, but that is not the issue. It is between those who ride and train and obtain their employment through race horses and those who are hacking. Possibly the hon. Member for Ealing, North is used to supporting hacks. We see many before us tonight, but I strongly support the Bill because it supports horse racing.
  Having said that, I would feel as sore as the hon. Member for Ealing, North if I were to be twisted in the way that he seems to believe that he has been. I cannot understand why, a few weeks ago, the promoters did not agree to a byelaws compromise.
  In the minds of ordinary people there is a difference between being brought before the beaks on a charge of
  732
  breach of a byelaw or a breach of a statute. To lawyers that may seem nonsense, but the distinction appears to matter to the people concerned. They would prefer to be dealt with under the byelaws. When I asked at another meeting why the promoters would not make a concession to avoid much kerfuffle in the House, I was told that it was because the Home Office might make difficulties about making the byelaws. If the Home Office will not make the byelaws, what right has the Minister to commend the legislation to the House?
  I understand that the Home Office is sensitive because of byelaws that were made—which got a friend of mine in Birmingham into much trouble—about the control of dogs in parks. I understand that, but is the Home Office prepared to make the necessary byelaws? If the answer is "No", what value has the Minister's support? If the answer is "Yes", why do the promoters not compromise?
  In opposing the hacks and supporting the race horses, I support the Bill, but I shall also support amendments that will provide a satisfactory solution for those who wish to be charged under the byelaws rather than statutes.
  8.58 pm
  Mr. K. Harvey Proctor: I had not intended to speak and I shall be brief in supporting my hon. Friend the Member for Ealing, North (Mr. Greenway) and some of my constituents who have raised points similar to those expressed by him.
  I should feel uneasy about supporting the Bill if contravention of the rules contained in it were to be made a criminal offence. Would my hon. Friend the Member for Devizes (Mr. Morrison) reassure me about the provision in clause 15(5) about a horse that might bolt? Will he consider the defence of reasonable excuse to have been triggered in the case of a horse bolting in such circumstances? With that brief comment, I look forward to hearing my hon. Friend's reply.
  9 pm
  Mr. Charles Morrison: With the leave of the House, I shall say a few words in an attempt to sum up this interesting debate that has drawn to it several experts on racing and others, such as the hon. Member for Stockport, North (Mr. Bennett), who have attempted constantly to look after the interests of ramblers and riders.
  I am especially grateful for the wholehearted and unequivocal support of my hon. Friend the Minister with responsibility for sport, whose intervention was, as always, wise and helpful. I was also grateful for the support of the right hon. Member for Birmingham, Small Heath (Mr. Howell) whose knowledge of sport is paralleled only by that of my hon. Friend the Under-Secretary of State. I was grateful for the full-blooded support of the hon. Member for Isle of Ely (Mr. Freud) and my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies), whose compliments on the drafting of the Bill are much appreciated. I was also grateful to the hon. Member for Blyth (Mr. Ryman), who drew attention to the parlous state of racing.
  The problems raised by several hon. Members in their constructive and helpful speeches stem from the fact that Epsom and Walton downs have been subject for many years to multiple use. As my hon. Friend the Member for Reigate (Mr. Gardiner) said, there is bound to be some conflict between the users. The users include not only racegoers and race horse trainers but many riders, walkers,

  733
  golfers and model aeroplane fliers. There must be a compromise between the demands of the users, who must operate a policy of give and take.
  I have referred to the support of the hon. Member for Isle of Ely. His support for racing was a little too wholehearted, because he gave the impression, perhaps inadvertently, that there were no interests besides racing. However, that is not so. The Bill is before us today because there are other users of the downs. The need for compromise was emphasised by my hon. Friend the Member for Reigate, who said that from time to time there had been dangerous incidents. However, the fact that he said that shows that there is a need for a Bill to regulate the use of the area.
  The hon. Member for Stockport, North asked why the 1936 Act could not be reconstituted by means of an enabling Bill. There is a simple answer to the hon. Gentleman's question. The original intention of the promoters was to introduce an enabling Bill, as the hon. Gentleman suggested. However, further inquiry and consideration revealed two points. First, a number of the provisions of the 1936 Act had become outdated, and so it would not have been good enough to introduce an enabling Bill based on that Act. Secondly, a new Bill was needed specifically to try to meet the requests of those who ride across the downs, the hack riders whose interests had not been adequately safeguarded in the 1936 Act.
  The hon. Member for Stockport, North also referred to the legitimate rights of riders and others. That may have been a perfectly reasonable point, but unless there is new legislation before the 1936 Act runs out there will be no legitimate rights. That important point must not be forgotten in the general consideration of the Bill.
  I was glad to note that my hon. Friend the Member for Reigate referred with pleasure to the provisions of clause 16. The information I have been able to gain leaves me in no doubt whatever that caravans have in certain respects become an increasing nuisance. The caravans appearing on the downs nowadays bear no relation to the old-fashioned gipsy caravans that appeared in the paintings of Sir Alfred Munnings and were vehicles of great charm. Sadly those days have gone. The modern caravan is more often than not a rather scruffy mobile home.
  The right hon. Member for Small Heath drew attention, among other things, to the needs of golfers. I have ascertained that, by chance, there was a complaint by the golfers only this morning—there has not been time to establish whether it was justified—about riders inadvertently straying on to golfing ground. That shows that there is an occasional problem about the need to maintain an area for use by golfers.
  I was glad that the right hon. Gentleman made two other points. First, he drew attention to the fact that Mr. Wootton had made a generous lease in respect of the use of Walton downs. A host of people must be very grateful to Mr. Wotton for that. The right hon. Gentleman also referred to the inadequate facilities on Epsom racecourse on major racing days. I have no doubt that he is right in saying that if the Bill becomes law it will benefit racegoers who wish to enjoy the Derby and other race meetings.
  My hon. Friend the Member for Ealing, North (Mr. Greenway) raised an important point which was also referred to by my hon. Friend the Member for Basildon (Mr. Proctor). My hon. Friend the Member for Ealing,
  734
  North is better known than anyone in the House for his strong support for riding and riders. I felt particular sympathy with him when he said that horses are not motor cycles. He and I have had considerable experience in that regard, often ending in pain and other tribulation.
  My hon. Friend was particularly concerned with the possibility of hack riders finding themselves in a position in which they could be guilty of a criminal offence. Indeed, that could happen under the Bill as drafted. He said—so did the British Horse Society—that he would prefer breaches of the legislation to be dealt with by means of byelaws, and that the promoters have not given an undertaking to introduce an amendment. There is some misunderstanding, because there is a distinction—it was certainly in the minds of the promoters, if not in the mind of my hon. Friend—between the criminal offence, referred to in clause 15(3), of a rider riding where he or she should not ride, and the criminal offence, under clause 15(5), which arises where land is temporarily taken out of use so that it might be rehabilitated in its own interests and in the widest possible interests of riders and other users of the downs. There has clearly been some misunderstanding between my hon. Friend and the promoters on those two points.
  I was informed of the misunderstanding earlier today, and the promoters have only recently been made aware of it. I have had the opportunity of a brief discussion with them on the subject and they have undertaken to look at it very carefully. Clearly they wish to be as sympathetic as possible, as they have always tried to be when points have been raised on the provisions of the Bill.
  Mr. Andrew F. Bennett: As I understand the position, the promoters are now saying that if somebody strays from the areas in which he is supposed to be and goes on to areas on which he has known over the years that he should not go, he may be prosecuted under the byelaws. But if, inadvertently, he goes over an area which is being reseeded, that will be a criminal offence. Surely, if we get nothing else out of the debate, we should have an assurance that the two offences will both be treated under the byelaws. That would be a simple undertaking to give.
  Mr. Morrison: The hon. Gentleman is not quite accurate. He said first what the promoters are now saying, as he understands the position. He intervened before I had finished what I was saying. I was going on to say that the promoters wish to look at the point with great sympathy but that, not having had the chance to have proper consultation about it, they prefer not to be dogmatic in any concession tonight. However, I have no doubt that they will make a concession. I certainly hope so, because I take the hon. Gentleman's point about the apparent rather artificial distinction between two different offences. I hope that my hon. Friend will take that as a reasonable assurance. The matter will be considered as soon as possible.
  Mr. Greenway: My hon. Friend will correct me if I am wrong, but the promoters find it rather difficult to have to face suggested changes under pressure of time and yet they are lawyers, but those same people expected me to be able to reconsider several redrafted clauses, although I am not a lawyer, less than an hour before the Bill was originally due for its Second Reading. So I have little sympathy for them and I do not quite know who they think they are. I take it that I have the support of my hon. Friend

  735
  and the great sympathy of the promoters. However, that is not enough. They should give a categoric assurance, quite frankly through my hon. Friend, because that is what I consider they gave me when I first considered their suggestion for meeting my point under pressure of time. There is only one of me but about six of them.
  Mr. Morrison: I have gone no further than a Minister speaking from the Front Bench normally would when asked to make a concession on the Second Reading of a Bill. If a Minister had a question fired at him during the debate or if he were requested earlier in the same day to make a change in the Bill, it would be unlikely if, in summing up that same evening, he would be prepared to be totally categoric in accepting the point. My hon. Friend can take it that it is as good as certain that a concession will be made, but I cannot in all honesty be absolutely categoric and dogmatic because I am not a promoter of the Bill.
  Mr. Greenway: I am grateful to my hon. Friend, who is a personal friend as well as an hon. Friend. I take that as a strong assurance and it helps me to overcome what I felt was earlier dishonoured by the promoters and not by him.
  Mr. Golding: Will the hon. Member for Devizes (Mr. Morrison) make it clear to the promoters that the Bill is at risk if they do not support the hon. Member for Ealing, North (Mr. Greenway)? It would be nonsense for such a good Bill to be at risk because there is a question of an undertaking not being honoured.
  Mr. Morrison: The hon. Member for Newcastle-under-Lyme (Mr. Golding) has almost taken the words out of my mouth. There will be no question of twisting arms, but he can rely on me that if any arms have to be twisted they will be. I am sure that the promoters will have been even more impressed by having heard the strength of the views expressed by my hon. Friend the Member for Ealing, North and the hon. Gentleman about clause 15 and criminal offences.
  I conclude by thanking hon. Members for their interesting and constructive comments on the Bill. As I said earlier, the promoters have clearly demonstrated that they are ready and prepared to make necessary concessions, but it must be accepted in the ultimate that a compromise will not be an ideal for everyone who makes use of an area subject to multiple use. I emphasise again that there will have to be give and take, but I have no doubt that any outstanding problems will be ironed out in Committee. Therefore, I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time and committed.

  Airey Houses (Repair Grants)
  9.19 pm
  The Under-Secretary of State for the Environment (Sir George Young): I beg to move,
  That the draft Grants by Local Authorities (Appropriate Percentage and Exchequer Contribution) (Repairs Grants for Airey Houses) Order 1982, which was laid before this House on 8th December, be approved.
  On 7 September my hon. Friend the Minister for Housing and Construction announced that the Government were proposing to make financial assistance available to private owners of Airey houses. Airey houses are a type of prefabricated house designed by William Airey and Sons (Leeds) Limited and built in the 1940s and 1950s for local authorities and other public bodies. Recently, many have been found to have serious defects. It is estimated that about 2,000 of this type of house are now in private ownership, all in England and Wales.
  In the exceptional circumstances of the case, the Government consider that they should assist owners who bought their houses at prices that can now be seen to have been based on a substantial overvaluation.
  Under the scheme announced by my hon. Friend, a private owner who has bought an Airey house at a "defect-free" price will have the option of following two courses. He will either be able to apply to his local authority for a repairs grant towards the cost of remedial work or, in cases where the owner did not wish to undertake repairs or where repairs were not practicable or cost-effective, he would have the option of seeking the purchase of his home by the local authority or Government Department that originally owned it. It is for the individual owner to decide whether he wishes to take advantage of the scheme and, if so, which of the two options he wishes to exercise. The order concerns the first option, that of repair.
  To enable local authorities to make grants to owners of Airey houses for the repair of their homes three statutory instruments are required. Two are subject to the negative resolution procedure and were laid before the House on 17 January. They set the limit on the expense that will be eligible for grant aid—the eligible expense limit—at £14,000 in Greater London and £10,500 elsewhere. They also seek to ensure that no owner of an Airey house is ineligible for a grant because the rateable value of his house is too high by enabling authorities to give grants on any house outside London that has a rateable value of less than £275. The rateable value limit would otherwise be £225. In London the rateable value limit remains unchanged at £400.
  The order concerns the rate at which a grant may be given by an authority and the proportion of the costs of that grant that will be met by the Exchequer. The order provides that authorities may make a grant up to a sum equal to 90 per cent. of the eligible expense limit. It also provides that in those exceptional circumstances the Exchequer contribution will be 100 per cent. Local authorities will be reimbursed in full by the Exchequer for the grants that they make to Airey house owners.
  Local authorities will not be legally obliged to grant applications, but I hope that the knowledge that there will be full reimbursement will encourage them to treat all applications for grant sympathetically.
  The arrangements for repurchase are being dealt with administratively. They will be set out fully in a circular

  737
  which we shall issue shortly to all local authorities. The circular will also explain to authorities the arrangements approved by the House for repairs grants.
  Mr. Joseph Dean: Will the Under-Secretary tell us, so that I do not have to raise the issue in my own speech, whether repurchase will be optional or compulsory?
  Sir George Young: All the arrangements that I have outlined are optional, but we hope that as 100 per cent. compensation from the Exchequer will be available to local authorities they will exercise the discretion allowed to them under the order.
  Mr. John Evans: The Under-Secretary has made one or two important announcements, including the fact that all the arrangements are optional. Local authorities may exercise their option and pay grants to people who have purchased Airey houses, but, because of the Department's intransigence, local authorities have to refuse grants to those who have purchased Parkinson houses and are in exactly the same position as the owners of Airey houses.
  Sir George Young: The hon. Gentleman seeks to extend the order to other types of property. I understand his argument. As my hon. Friend explained in the statement on 7 September, the circumstances surrounding the Airey houses are unique, and the buildings to which the hon. Gentleman is referring, which are Parkinson houses, are in no way comparable. I wrote to the hon. Member recently and set out the reasons why Parkinson houses are not comparable to Airey houses. That is why the order does not extend to them. No doubt, Mr. Deputy Speaker, if the hon. Member catches your eye he will seek to develop his arguments further.
  I referred to the circular that we shall issue shortly to local authorities. This is at present with the local authority associations and the Building Societies Association for comments. I take this opportunity to thank the association and individual local authorities for their help and co-operation so far in this scheme. If we can achieve the same degree of co-operation in its execution, we shall succeed in giving real help to Airey house owners who through no fault of their own would otherwise face a bleak future. I commend the order to the House.
  9.25 pm
  Mrs. Ann Taylor: The Minister has spoken briefly about the order, which the Opposition shall not be opposing. It is an initiative from the Government that we welcome. This is an unusual day, one of those rare occasions on which a Minister accepts his moral obligation, in this case to some people with housing problems. The Opposition think that it is right that the Government should accept responsibility for the defects that have been found in this type of system-built housing that was approved by Governments, and which local authorities were encouraged to adopt. We have no disagreement with the Government.
  The regulations and the circular that goes with them give the unfortunate owners of Airey houses the opportunities, which the Minister has outlined, to receive a 90 per cent. repair grant, or to sell their homes back to the local authority or other public bodies. I hope that the
  738
  Minister will go on to deal with other public bodies, such as the National Coal Board, that have sold Airey houses to sitting tenants. Their position is unclear from the statutory instrument, and from what the Minister has said.
  Airey homes have been popular. On the whole they have given good service to the tenant and have lasted for about 30 years. We have these problems that we are discussing because the expected lifespan of Airey properties was about 60 years and, as the properties were relatively inexpensive to build, they were popular with local authorities as well as with tenants. Most people expected the properties to last for 60 years, and it was on this basis that several thousand of the 26,000 Airey home dwellers decided to buy. Many of the purchases took place in the 1970s on a voluntary basis, when local authorities were willing to sell to sitting tenants. There was then another wave of sales under the right-to-buy legislation.
  The fire hazards and the structural weaknesses of the concrete columns were discovered. I should mention here my hon. Friend the Member for Penistone (Mr. McKay) who, when he was chairman of the building department of Barnsley council, instructed the first dismantling of an Airey house for examination. It was his work of examination that led to the full revelation of the scale of the problem.
  The order is not simply about Airey houses. It is about a small minority of Airey houses, those that have been sold to private buyers. Many may be touched by the Government's concern for the unfortunate owners who found that they had bought a pig in a poke and were left with an unsaleable or potentially unsafe property. The Government's generosity to these unfortunate people is unprecedented. The repair grants of 90 per cent. will cover repairs, redecoration and even the cost of survey fees. If repairs have already been carried out at the owner's expense, ex gratia payments will be made.
  If the owner-occupier decides to wash his hands of the affair and resell to the local authority, he gets 90 per cent. of the difference between current market value and the defect-free value as an ex gratia payment from the Government. Even legal and survey fees will be covered. The Government will shoulder the burden of responsibility by reimbursing the local authority 100 per cent. of the cost of the repair grant and by assuming the cost of the ex gratia payment to bridge the gap between current market value and defect-free value on resale.
  So what is the problem about this statutory instrument? What is the fly in the ointment? Despite the generous compensation to unfortunate owner-occupiers, there is no compensation for the unfortunate owner if it is a local authority. Here we have one rule for some owners and another rule for others. I do not think that the Minister has considered the position of the owner-occupier's neighbour who has not bought his house from the local authority. He cannot get a repairs grant. The circular to which the Minister referred says that the repairs in those circumstances are the clear responsibility of the local authority, as landlord, to carry out and that an Exchequer contribution will not be made in respect of such grants. What we have not heard from the Minister is why this problem is the responsibility of the Government if the house is privately owned but not if it is occupied by a tenant. Why do we have these two sets of rules?
  I wonder whether the Minister realises the full impact of this problem for local authorities. If he does not, I am sure that some of my hon. Friends will enlighten him from

  739
  their own experience. If the hon. Gentleman recognises the problems of local authorities, why has not he helped them? Why is there no help for them in the order?
  The cost of repairing these properties, according to the Government's estimate, is more than £10,000 each. Many other estimates put the figure much higher if a proper job is to be done. The cost to some local authorities is tremendous. I know that my hon. Friend the Member for Leeds, West (Mr. Dean) will want to develop this, but Leeds, for example, has 2,250 Airey houses. It faces a bill of £22·5 million to put all those properties in good order. In Doncaster, with nearly 900 houses, the bill is estimated to be more than £14 million. My right hon. Friend the Member for Bristol, South (Mr. Cocks) has been campaigning for help. Bristol, with 330 houses, will have to spend about £3·5 million just to put right some of the defects of Airey properties.
  The Government's circular says blandly that expenditure by local authorities in repairing Airey homes in their ownership will be eligible for housing subsidy in the normal way. They say that as though that is of great help to local authorities. Although it may be of some help to some authorities that are still in receipt of subsidy, the vast majority, including Leeds and Doncaster, will see this as a hollow statement because the majority of housing authorities no longer receive any subsidy from the Government. They will have to meet the bill themselves.
  Local authorities such as Leeds, Doncaster and all the others with many Airey properties will have to look to their long suffering tenants or to their ratepayers to foot the bill. This is on top of all the rent increases that this Government have already forced on tenants. In Doncaster, for example, it has been calculated that if Airey houses are to be repaired rents will have to go up by £1·16 per week in addition to all the other increases that have already been imposed.
  The uncertain future and the daunting repair costs of Airey houses are causing worry and distress to everyone, but why do the Government feel that the worry and distress of the owner-occupiers are a matter about which they should be concerned, while the equal worry and distress of local authority tenants can be glossed over? In many areas, Airey houses are becoming unlettable. Again I take Doncaster as an example, where many of the Airey houses have to be boarded up when they become vacant because no tenant is willing to take the risk of moving in. That, of course, means an increasing loss of rents to the local authority—another pressure on local authorities that they can well do without at present.
  The Government are leaving local authorities very much to their own devices when it comes to repairs. Although the Minister referred in his statement of 7 September to the unique circumstances of Airey houses, he is doing nothing special to assist local authorities to deal with the problem. Although repairs will be eligible for subsidy, where subsidy is still given, Airey houses will have to compete with all the other local authority needs for their share of investment in housing, and that means competing for limited resources.
  On the repurchase option, which the Minister is anxious should be offered to the buyers of Airey houses, the Government, although generous to the owner-occupier, are far from generous to the local authority. The local authority has to fund the purchase at current market values. It gets no allowance for its survey or its legal or administrative costs, and when the repurchase is complete
  740
  it will be faced with a repair bill of upwards of £10,000. Once the house is in good order, the local authority may have to sell the property again to the tenant, and at a massive discount.
  Mr. Joseph Dean: I was interested to hear my hon. Friend's last few words. Is it not true that within the space of five years a person could qualify for two maximum discounts on the purchase of a council house?
  Mrs. Taylor: My hon. Friend is right. It is certainly possible for a tenant to qualify for two amounts of discount. Where an Airey house was sold on a voluntary basis by the local authority and then repurchased under the regulations and the circular that the Minister has now produced, the tenant could, in a short period, exercise his right to buy under the 1980 Act, and get a further discount on the same property.
  Sir George Young: Will the hon. Lady recognise that in those circumstances the cost floor provisions might well bite, and that that would insulate the local authority against a subsequent loss?
  Mrs. Taylor: It might—as the Minister says, it might—insulate the local authority against a subsequent loss, but he should remember that we are talking about properties that are quite old, and that therefore the cost floor does not really apply when we are talking about current market values. I doubt whether that cost floor would give protection to most local authorities in the case of properties that are the best part of 30 years old.
  I have tried to calculate some of the costs to the local authorities. With houses originally purchased in the early 1970s, the tenant may get a cash gain of up to £10,000 because of the possibility of the tenant getting a discount twice and the local authority having to pick up the bill for the overall repairs, which the Minister is seeking to persuade local authorities to pay.
  In fact, I do not believe that there will be any great rush to buy refurbished Airey houses. The scare that has taken place means that many people have lost confidence in Airey properties, and I therefore do not imagine that Airey houses will have a large resale value. It is virtually impossible to get a building society mortgage on such property, and, even if the proposed certificate of repair that the Minister is considering were introduced, I am sure that building societies would not want to consider the purchase of Airey properties. That is one problem that the Minister has so far failed to deal with.
  The Opposition could not, and would not, want to object to what the order does. We acknowledge that Airey houses present special problems. They are not, however, as the Minister claimed, unique. There are other types of system-built houses that have problems. There are the Caspan houses in Leeds, and many others. My hon. Friend the Member for Newton (Mr. Evans) has raised another example of system-built housing that creates many problems for local authorities and for the those who have purchased their own homes.
  The question that remain unanswered is why the Minister is helping these few people. Why should he choose those who have purchased Airey houses for this help? I suspect that the reason probably lies in the Government's determination to prop up their council house sales policy, at the expense of all else, to allay the fears of those whom the Government want to push towards

  741
  exercising the right to buy. So long as people who have bought their own council houses are faced with bills of this magnitude others may be deterred from exercising their right to buy. That would be completely against all that the Government want.
  The Opposition believe that the order displays the Government's dual standard—one set of rules for owner-occupiers and another for tenants. While we approve of the order, we cannot but condemn the duplicity that lies behind it.
  9.40 pm
  Mr. John Heddle: Unlike the hon. Member for Bolton, West (Mrs. Taylor), who welcomed the order grudgingly, I welcome it enthusiastically. I congratulate my hon. Friend the Minister for Housing and Construction on his statement on 7 September last year and my hon. Friend the Under-Secretary of State on the announcement that he has made tonight.
  Like the hon. Member for Leeds, West (Mr. Dean), who has taken a close interest in these matters, I feel that I am qualified to speak in the debate because I raised the plight of the Airey house owner and tenant in an Adjournment debate on 25 June last year. I congratulate the Government on the swift, sympathetic and constructive action that they took in September and have taken again now.
  The hon. Member for Bolton, West misled the House, probably inadvertently, when she suggested that the cost of repairing and bringing back into life and into active occupation these Airey houses would be about £10,000. I am sure that the hon. Member for Leeds, West agrees that there are a large number of construction companies in Yorkshire and elsewhere, certainly in Staffordshire, as I know, which have made a specific study of the inherent structural problems of Airey houses and have devised foolproof 25-year package proposals to enable these Airey houses to come back into useful life.
  I ask the House to disregard the somewhat sensational figure of £10,000 to which the hon. Lady referred. To my knowledge, Taylor Woodrow Construction (Midlands) Ltd. will, in almost any circumstances, be prepared to carry out for local authorities, on a package basis, the revitalisation and regeneration of these properties for between £2,000 and £5,000.
  Mr. Michael Welsh: Is the hon. Gentleman prepared to say which building society will provide a mortgage if these houses are put up for sale after the package is completed?
  Mr. Heddle: I am grateful to the hon. Member for Don Valley (Mr. Welsh) for raising a matter to which I wish to refer. I ask him to bear with me for one or two moments.
  In my Adjournment debate on 25 June I reminded the House of a document that was circulating during the time when these houses were constructed immediately in the post-war period. This document was given to me by my hon. Friend the Member for Folkestone and Hythe (Sir A. Costain), whose firm at the time was closely connected with the construction of these properties. I wish to remind the House of the quotations that I made from the document. It is pertinent to bear in mind that at the time one Government Department on one side of Whitehall
  742
  thought that Airey houses were of a permanent nature, while another Government Department on the other side of Whitehall, co-operating with the first Government Department, suggested that the houses, being of a prefabricated nature, had a temporary life.
  I quote from a letter which Sir Edmund Airey, the chartered architect from Leeds who designed the properties, wrote to my hon. Friend the Member for Folkestone and Hythe. He said that the system
  "has been selected by the Government as the quickest and most effective means of providing additional new permanent houses to meet the urgent needs of rural areas."
  Another document circulating in Whitehall at that time had this sentence:
  "The system complies with the recommended structural and physical standards laid down by the Inter-Departmental Committee on House Construction appointed by the Ministry of Works, and has been approved by the Ministry of Health for adoption by local authorities."
  There are two schools of thought, and I hope that the Minister will be able to shed some light on one aspect, if not tonight, by subsequent correspondence. The document that I have just read states specifically that Airey houses were erected in accordance with the specifications and guidelines laid down by the then Ministry of Housing. It seems that there was no intention that the properties should have a limited life, although they were of necessity of prefabricated construction, and it was assumed that buildings known as prefabs, which were constructed after the war to fulfil a specific and urgent need, had a limited life.
  I wish to direct the attention of the House to the philosophy and ethics of a local authority selling, under the right-to-buy provisions, properties built under some form of prefabricated specification some 20 or 30 years ago to fulfil a temporary need. A number of purchasers—former tenants of local authority-owned Airey houses—having bought their houses under the right-to-buy provisions of the Housing Act 1980, find themselves in a Catch 22 situation. Wishing to buy a permanent home for themselves, their heirs and assigns, they have found themselves buying a house of temporary and prefabricated construction with a limited life. The order underlines the Government's wisdom and common sense in underwriting the defects which were built into the properties, and which the purchasers could not have found out about, even by employing the most prudent and astute surveyor, because it is clear that the structural defects to which the order refers could not have been found.
  I raised this matter in the Adjournment debate in June last year because I have about 172 Airey houses in my constituency. I should like the Minister to clarify the rateable value limit, to which I heard him refer. As I understand it, compensation or grant payable under the Housing Acts relates specifically to a rateable value limit of £225 outside the Greater London area. Will the Minister confirm that if an Airey house owner has improved and extended his property at his own expense subsequent to exercising his right to buy, he will still be able to obtain the repairs grant to which the order refers if the rateable value limit has exceeded the £225 ceiling?
  Three matters have been raised in discussions with my local authority, the Lichfield district council. They concern the redevelopment potential of Airey houses in rural areas. In Colton, Hill Rideware and Alrewas in my constituency, and elsewhere, Airey houses are not concentrated, as are other forms of local authority

  743
  housing, in inner city and urban areas. I am sure that many hon. Members will confirm that. Several Airey house developments were carried out in groups of between two and 14 on the fringes of the most charming villages. Many provided—and still do—perfectly adequate accommodation for agricultural employees and for those employed in the rural community.
  It would be wrong to suggest, as the hon. Member for Bolton, West did, that because one Airey house in 10 or 20 has a minor structural defect—the percentage has not been computed—they all have. Many are still sound in wind and limb and will continue not only to be sound, attractive properties, but mortgageable.
  It is suggested that, while most sites can be developed on a one-for-one basis, some sites—I am talking now of rural sites—have scope for redevelopment to provide more dwellings. It is suggested that a site-by-site appraisal be undertaken. Not only the Association of District Councils, but the Building Societies Association would like to see that. Redevelopment potential, the land value, the housing need and the condition of the properties could be considered, and that in turn would result in specific financial implications for each location.
  It is wrong for the House to be persuaded by Labour Members that all Airey houses are defective. That brings me to my last point, which was raised by the chief surveyor of the Bradford and Bingley building society in correspondence with me after my Adjournment debate and before my hon. Friend the Minister made his announcement on 7 September 1982. That correspondence refers to those who fall outside the order, those who have not yet bought their Airey house, but who, by qualification of years, are able to do so under the right-to-buy provisions of the Housing Act 1980.
  The chief surveyor says:
  "If the Government were to undertake to put right all structural defects then the cost may well prove prohibitive"—
  we do not know—
  "but the solution may be for the Government to foot the bill for the initial survey, which in many cases may prove that the house is not deteriorating and would put many people's minds at rest. Further, it would also mean that the occupiers had a document guaranteeing present structural stability, thereby allowing future sales to continue and give confidence to the building societies in respect of their Lending Policy."
  That is why I told the hon. Member for Don Valley that the building society movement is prepared to give the majority of these properties a completely clean bill of health. I suggest that the obvious agency to provide the Government with that information is the district valuer's department of the Inland Revenue. Provided that the district valuer is prepared to give the properties a clean bill of health, the building societies will be prepared to put their money where the district valuer's mouth is and therefore allow many Airey home occupiers to rise to their lifetime's aspiration of home ownership under the right-to-buy provisions of the Housing Act 1980.
  9.54 pm
  Mr. Joseph Dean: Some hon. Members, and certainly the Minister, will be aware that some time ago, possibly on 13 December in a debate on tenants' rights, I raised the broader issue of industrialised building and how it was fast gathering momentum that could become a deluge of adversity for the housing policy of the present Government and any future one.
  Although I support the order, dealing with Airey houses alone is rather like dealing with one small rivulet of a
  744
  volcano that is about to explode. In the debate of 13 December I quoted £3 billion as being the sum necessary to put right the hundreds of thousands of industrial and semi-industrial houses that have been built in the public sector. That figure has never been denied or commented upon.
  In that debate I asked why we deal with some people in the housing sector differently from others. I have always been led to believe that the Government should be evenhanded in their treatment of the community. I see no difference between a family that lives in an Airey house which it has purchased from the local authority and the family next door that rents a house from the local authority. For both families, the house is their home. It is disgraceful to say for political purposes that the owners of the house that has been purchased have priority and are socially and financially superior to the others.
  My hon. Friend the Member for Bolton, West (Mrs. Taylor) quoted figures for Leeds. On 13 December I said:
  "The hon. Member for Lichfield and Tamworth (Mr. Heddle) had a first-class debate on Airey housing. That is another facet of industrial building that is deteriorating. People who have bought the houses will have to spend substantial sums—considerably more than they can afford—to remedy the construction defects.
  The Minister gave these people certain guarantees, but hundreds of thousands of council tenants live in Airey houses that are deteriorating. The city of Leeds has over 2,000 Airey houses and it will cost approximately £20 million to remedy the defects. The Minister has made no promises about council houses. He has not told Leeds that he will underwrite a large proportion of the money needed to do these repairs."
  Later in the debate I asked the Under-Secretary of State for the Environment whether he intended to answer some of the points that had been raised by my right hon. and hon. Friends. He appeared to be dwelling, as does the Minister in Committee on the Housing and Building Control Bill, on replies to his own Back Benchers. He said:
  "With regard to Airey houses in Leeds, the Government will take into account the costs that Leeds will have to bear to put it right when they come to calculate the HIP allocations of the years in which the expenditure will fall."—[Official Report, 13 December 1982, Vol. 34, c. 47ߝ64.]
  In other words, he was saying "Well, lads, we may allow you some more as long as you pay yourself."
  I am sorry that the Minister for Housing and Construction is not present. I do not mean that in any disrespectful way to the Under-Secretary of State. Hon. Members who serve on the Housing and Building Control Bill Committee will be aware that I raised the problem with him last Thursday. I said:
  "I had not intended to speak again but I shall take up that completely inadequate and extremely partisan response. I do not know what special persuasive powers the hon. Member for Lichfield and Tamworth (Mr. Heddle) has. It seems that the Minister's policy was determined by a bias towards his own Back Benchers. When he pays lip-service and tribute to the way that his Back Benchers represent their constituents, I assume that that could apply equally to every member of the Committee, although a political viewpoint divides us.
  Some time ago the hon. Member for Lichfield and Tamworth had an Adjournment debate on what the Government had done about Airey houses. On Monday night, an order will go through giving substantial financial assistance to ex-council tenants who bought their own Airey house and who are now landed with a liability."
  The Minister's reply was appalling. He said:
  "I make no criticism of him,"—
  that is me—
  "but if the hon. Member had made representations to us about the considerable number of council tenants in Leeds who were

  745
  of the same nature as those mentioned in the representations that I have received from my hon. Friend … I should have been delighted to refer to them."
  Obviously, the Minister had not read what happened in the housing debate in December. I have raised the issue on at least two occasions in the Chamber.
  What I find even more frightening is that the Minister also said:
  "I am only sorry that the hon. Gentleman has not mentioned the fact that one of the major sources of difficulty for council tenants in Leeds is that the local authority has not issued the statutory right-to-buy application forms. That should be of grave concern to all hon. Members representing Leeds constituencies.—[Official Report, Standing Committee F; 20 January 1983, c. 398ߝ99.]
  The only conclusion that people who have entered into contracts with local authorities as tenants of Airey houses can draw is that the Government have a vendetta against them. Their only hope of assistance, apart from another rapid escalation in rents, is to buy their houses. That is the policy of the party that advocates democracy. The only right that they are giving to Airey tenants is the right to occupy a house in poor repair. The Minister obviously does not read our debates and he draws a distinct line between people who rent their houses and owner-occupiers. Even-handed treatment is demanded by everyone, and people are entitled to it.
  I learnt the technique of reading letters in the Chamber from the Minister of State, who always seems to have a large supply at hand from people who support his policies. I received an unsolicited letter this morning. It came from people on an estate in Leeds which is due for major repairs by the local authority because it is deteriorating. They do not live in Airey houses, but 15 families are faced with a bill which almost matches the £10,000 mentioned in the order. They will receive no assistance. They blame the local authority for selling the houses to them. I blame the Minister and the Government for making the local authority sell the houses.
  I hope that the Minister will say that the door is not closed to discussions on aid for tenants or owner-occupiers of houses built by industrialised systems in the public sector, since the Government fully approved them. A responsibility lies with the Ministers involved, from whichever Government they come. I hope that sympathetic treatment will be extended to all in that difficulty.
  10.4 pm
  Mr. Vivian Bendall: I congratulate the Secretary of State and the Under-Secretary on their press release issued on 7 September. It was welcomed by many extraordinarily worried people. However, I am far from happy about a number of matters. I join the chorus of concern in that I agree that local authorities could have a tremendous problem in some areas. London faces a particular problem, because many of the Airey houses were originally commissioned by the GLC. Those houses have now been passed to the local boroughs. The situation in London is different from elsewhere in the country.
  I agree with the comments made in an Adjournment debate by my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle), who said that a special local authority grant should be given in some shape or form in respect of Airey houses. I hope that the Minister in due course will give that further consideration.
  746
  My constituency and the London borough of Redbridge are fortunate in that the Airey houses that have been examined by local authority officers have been proved not to have defects. There is concern, and rightly so, among many private sector owners—this has also been mentioned by my hon. Friend the Member for Lichfield and Tamworth—about the problem of selling Airey property. They frequently cannot be sold because of the survey situation and the building society loan.
  I am particularly perturbed—I have raised the matter in correspondence with the Secretary of State—about the question of repairs and surveys. It has already been stated, again by my hon. Friend the Member for Lichfield and Tamworth, that an ordinary survey and certainly a building society survey, let alone a full structural survey, would never have discovered the problems in the columns that occurred in the early type of construction. It is not only Airey houses that have these problems. Others have been mentioned. In my constituency, some Orlitt-built houses may well have similar problems.
  The columns are an important factor when examining the Government's proposals and suggestions to alleviate the problem of the private owner. Any structural defect in an Airey house will not be discovered by an ordinary surveyor but will require a specialist surveyor, such as a structural engineer, who will have to make bore holes and use a boroscope to discover the conditions of the columns. That is the only way to guarantee that that property is sound.
  It is not even as simple as that. The Minister has admitted on numerous occasions in correspondence to me that if a property is sound today it will not necessarily be sound in seven, 10, 12 or 15 years' time. It has been recommended that a check be taken at reasonable intervals to see that the columns are in a good structural condition. If that is the case, and this is important, I have been unable to get an assurance from the Minister that the cost of the survey will be borne by the Government through their agents, the local authorities, unless it is proved that there are defects and that structural work is needed.
  We are not talking about £50, £80 or £100 but of figures well in excess of £100. Even if associations form together to get one company to look at a given number of properties, the cost will be between £150 to £200 for each property. If that is the case, that owner must pay that £200. If work needs to be carried out and if defects are discovered, he can receive payment for the cost of the structural examination. If no defects are found, I understand that the owner will have to bear the cost. That might enable him to dispose of the property. On the other hand, it may not be easy to dispose of it because a number of people may be highly suspicious. As a result, another structural survey or examination may have to be carried out at some future time, and if no defects are found the cost will again be borne by the individual.
  It would alleviate much of the problem if the Government took on board the cost of the full structure defects survey. That would give confidence to those who wish to purchase their properties and it would alleviate the building society problem faced by those wishing to dispose of their property.
  What about repurchase by the local authority? According to the Minister, the onus is not on the local authority to purchase if it desires not to do so. What will happen if a local authority decides not to carry out the

  747
  repairs on behalf of the Government? Will the owner have any redress by way of appeal, or will that person suffer simply because he lives in that local authority area?
  What will happen if defects are discovered in a second major survey? Will the Secretary of State and his Department review the amount of grant available to those who have purchased Airey houses and take inflation and rising costs into account?
  If local authorities repurchase, will they pay the full market value or pay less than the price at which the owner originally purchased? If the owner wishes to purchase another local authority property, will he receive any discount that he originally enjoyed?
  These are all ambiguous areas. I shall not detain the House because I know that other hon. Members wish to speak. I make these points because they are giving concern to my constituents and my local authority. I am in correspondence with the Minister and I shall continue to remain in correspondence with him, at least until all these questions are fully and adequately answered.
  10.14 pm
  Mr. Allen McKay: My hon. Friend the Member for Bolton, West (Mrs. Taylor) welcomed the order and did not do so in a grudging fashion. I am sure that all hon. Members welcome it, because it is generous. Indeed, it is so generous that it makes one suspicious. It means that we must look at it carefully, because it is unknown for the Government to be so generous. The Government are blatantly treating the owner-occupier differently from the local authority. I have no axe to grind in relation to the owner-occupier, because the order is generous, and rightly so.
  I take the point made by the hon. Member for Lichfield and Tamworth (Mr. Heddle) about a package deal. The matter first came to light because of a fatality in my constituency. I was chairman of the local authority committee concerned. It was an Airey-type house that caught fire. Such houses do not catch fire more quickly than other old houses, but the terrific speed at which the fire spread left us in no doubt that an investigation should take place. The house was completely gutted within five minutes and a little girl lost her life.
  We decided to carry out an inspection and use preventive means in all Airey houses by the installation of rock wool in the cavities, plaster boarding the walls and ceilings, building up the party walls and insulating the roof. A sum of £400,000 was set aside for those purposes to be spent over two years.
  It soon became apparent that some of the concrete posts had cracks of varying lengths, mainly at the base of the posts. We decided to alter the contract and to replace the posts that had cracks of more than 200 mm. It became apparent also that the problem was far greater and more widespread than we had thought. Therefore, a full analysis of the problem had to be undertaken. We drew the contractor into the investigation. All of the Airey houses were inspected, either by taking away the skirting boards or by using a boroscope, under the supervision of our own structural engineer. He agreed that 110 dwellings were so damaged that they were critical and should be demolished. Fifty-six category B dwellings had damaged posts and could not be guaranteed for more than five or six years. A further 64 dwellings had little damage and could be proofed.
  748
  To make sure that the structural engineer and our architects were correct, the Building Research Establishment was commmissioned to provide a second opinion. It confirmed our worst fears that the repair and replacement of individual posts was possible, but that if three damaged posts were positioned together or in a critical position, the structure must be considered unsafe. There could be no guarantee whatever that the other Airey houses would not fail in a similar way in the near future. A re-inspection had to be undertaken every two years.
  We examined the options, taking into account the capital and revenue costs over 10 years, the social impact of the options in each village and the physical effects of each option. Public meetings were held in every village with Airey houses and the necessity of the houses being pulled down was put to the people concerned. We decided not to replace three-bedroom houses with three-bedroom houses, but to take into consideration the size of the family in each house. If there were only two in a family, we suggested a two-bedroom house.
  We said to the people concerned that repairs and improvements to modern standards would cost £3,807,000 and that the revenue per annum would be over £492,000. The capital cost of demolition would be £398,550 and revenue per annum would be £123,500. Demolition and rebuilding by the local authority would have a capital cost of more than £5 million and the revenue per annum would be more than £600,000. We decided to plump for demolition and replacement by local authority housing associations from private builders, but that capital cost was estimated at £2,979,000, with an annual revenue of £365,000. That is where the difference arises, because the local authority will not be reimbursed for those costs.
  The houses are usually in pairs. A house bought from the local authority may be one half but the other half may be a local authority house that must be demolished. The owner of the private half must decide whether to sell. Sometimes owner-occupiers overestimate the value of the house and underestimate the cost of the repairs needed. They forget that the local authority is constrained by valuation rules. As soon as the Government announced the grants available, some of the contracts between the local authority and the tenant or the owner-occupier fell through because the owner-occupier believed that the local authority should pay more.
  The Government say constantly that allowances for Airey houses are contained in the HIP allocations, but there is no evidence to support that statement. If there is an allocation in the HIP programme, the spiralling downwards of the allocations is far worse than we believed. There is pressure on other housing activity, which is reaching breaking point in my authority. But because of the financial implications of the replacement of the Airey house, and because the local authority decided, rightly, that one of its main priorities was to replace the houses, new building has stopped, improvements have gone further back and slum clearance has been stopped.
  As the Airey houses were built as a result of a Government initiative, it is up to the Government to assist the local authorities with the problem that they have inherited. The Government have accepted responsibility for those houses, through the announcement in September 1982. If the Government are to be fair to the public sector, they should consider three matters. They must allocate specific additional capital. That could be accomplished under the specific provisons made in the improvement

  749
  grants that are coming into force. Local authority tenants could be permitted to apply for a grant as they do for improvement grants. If the Department of the Environment wishes to control the additional allocation, it could remove the element from the general consent to borrow and make approval subject to project control form submission.
  The Government could also make specific Housing Corporation allocations to housing associations. At present, the housing associations are dependent on finance from the capital receipts of local authorities. The Government continue to hound the local authorities about the use of capital receipts. If they must use their capital receipts to finance everything that they wish to undertake, they will run out of money very quickly. My local authority has put aside money to replace Airey houses, but the Government are putting pressure on local authorities to use capital receipts. If they do not do so, they will be penalised, so what will happen to the Airey house programme during the next 10 years?
  That is something that the Government could do to assist local authorities. They could provide revenue support for the net annual revenue costs of all necessary work and they could continue to be liable for all buildings. Although a house may have been pulled down, there may still be 30 years' mortgage repayments on it. That is a cost additional to that of replacing it with a new house. The Government have inherited responsibility for the Airey houses. Although they have treated the owner-occupiers generously—I applaud that—they should consider carefully their treatment of the local authorities. The financial burden of the replacement of the Airey houses is crippling my authority and shoving everything that we have looked for further and further back.
  I have been considering the Barnsley side of the authority, but I should also mention the Sheffield side, which has 264 Airey houses. The secretary and research officer of the tenants' association, Leena Jones, talks about getting
  "equal treatment in terms of financial assistance for local authorities"
  and adds:
  "We feel that the Government is treating us as second class citizens not entitled to the same consideration and assistance as owner occupiers."
  That is what we find all the way through. The local authorities are doing their best to rid us of the problems associated with the Airey type houses. Considerable work and effort have been put in by valuable teams of councillors and officials such as the one of which I was chairman. They now need the backing of the Government, because without it local government finance will be crippled.
  10.25 pm
  Mr. Arthur Palmer: It is inevitable, in a debate of this kind, that there will be a fair amount of repetition, but it is important that the Minister should understand that doubts about the completeness of his policy are being expressed all over the country and not from just one area.
  I have always thought that the Airey houses in my constituency were reasonably popular with the tenants. When I get complaints—and I certainly get many—about local authority housing in Bristol, they come mainly from
  750
  the tenants of Victorian properties that have been acquired out of necessity by the local authorities over a long period. They do not come from the tenants of the specially built houses such as Airey houses. However, we must accept that serious construction defects and difficulties have been found in them, and those faults must be taken seriously.
  My right hon. Friend the Member for Bristol, South (Mr. Cocks), the Opposition Chief Whip, is precluded by custom and practice from contributing to the debate. He and I went, together with the officials of Bristol housing department, to see one of the Airey houses that had been stripped to its bones. I confess that, not being a building expert, I could not see a great deal wrong with it, but I was told that unless action was taken—this was the view of the Government's experts—the house might collapse in the fullness of time.
  As has been said already in the debate, the Government are rightly generous to the purchasers of the Airey houses, but they are far from generous to the local authorities which have been left with stocks of Airey houses which have now no great value.
  My hon. Friend the Member for Bolton, West (Mrs. Taylor), who opened the debate for the Opposition, mentioned a figure of 330 houses for Bristol—I think the figure is actually 380—of which about 100 have been sold. The concern of the Bristol housing authorities is to know what they are to do with those tenanted houses if they are to be put in any kind of order, because the cost will fall on the other tenants of the city council. Indeed, the Bristol housing department has been so anxious that it asked my right hon. Friend the Member for Bristol, South and myself to make representations to Ministers at the first opportunity. We asked the department to make a list of all the difficulties which, from the local authority point of view, arise from the present incomplete policy of the Government.
  We have been provided, Mr. Deputy Speaker, with a list as long as your arm of the authority's doubts and qualifications. I shall not dare to quote all the points as there would not be time, so I shall select one or two of them and pass the others on to the Minister in due course. Bristol city housing department states:
  "If Airey houses which have been sold are to be repurchased by the Bristol city council, funds will have to be allocated to pay their current market value, as the Government reimbursements will only cover the difference between the latter and the 'defect free' value of the house. In the majority of cases the local authorities will have to bear the whole cost of repairs in addition."
  That is a substantial point. It continues:
  "As it could be said that there is no real market for these houses at present, assessment of 'current market value' could be a costly and time consuming exercise. Some provision for arbitration between the local authority and the owner, in the event of failure to agree on 'current market value', and 'defect free value' will be necessary—perhaps the district valuer"
  will have to make the decision.
  Bristol city housing department raises a further point. It asks:
  "Will expenditure under the scheme count against the local authority's Housing Investment Programme Allocation?"
  That important question must be answered.
  Bristol city housing department continues:
  "Some Airey houses will still be subject to a pre-emption clause, and the clause limiting the resale price. Repurchase in these cases and ex gratia payment arrangements might not be appropriate."

  751
  There is a very large ownership of council houses in Bristol going back many years. I can sum up the problem in the words of the Bristol city housing department:
  "Although the proposals made by central Government rightly seek to protect the interests of purchasers of Airey houses, there is no commitment to protect the interest of the local authority tenants who, in the absence of a rate fund contribution or central Government subsidy, will have to meet the whole cost of the repairs through the Housing Revenue Account."
  Those are substantial points raised by an experienced and responsible local authority housing department. The Minister should make haste to reassure local housing authorities that their grave doubts and worries on Airey housing in this new situation will be put right.
  10.33 pm
  Mr. John Evans: In the only part of the speech of the hon. Member for Lichfield and Tamworth (Mr. Heddle) with which I agreed, he said that purchasers of Airey houses could not have known of the built-in defects in their houses no matter how prudent and careful they had been at the time of purchase. I press those words on the Under-Secretary of State because those words apply precisely to other forms of systems-built or prefabricated houses. They certainly apply to the houses to which I drew his attention in correspondence—the Parkinson frame houses. There are many other types of development with which there have been problems. I am sure that the House will return to this again and again, in Question Time, in Adjournment debates and in debates on housing policy because the Minister knows that far from being unique—the words he used both in a letter to me and in response to my earlier intervention—there is nothing unique about the Airey houses. The problems are symptomatic of many other houses.
  I should like to concentrate on Airey houses because there are 60 or 70 such houses in my constituency, which were built by Warrington rural district council some years ago in some of the most attractive villages in my constituency. They have been taken over by Warrington borough council or Warrington district council and about 15 of the houses have been sold.
  I welcome the order and particularly the Government's decision to extend grant payments to individuals who purchased their houses between 14 May 1981 and 7 September 1982. Two or three of my constituents in that category were extremely worried and they now know that they will qualify for assistance.
  Of course, the order applies only to those who have purchased their houses. It is significant that the hon. Member for Lichfield and Tamworth did not refer to local authorities and their tenants. Hon. Members on both sides have asked repeatedly about the position of councils and their tenants who will have to foot the bill.
  I understand that Warrington borough council has an allocation of £40,000 for Airey houses in its HIP allocation. I am not sure what it is supposed to do with that money. We do not know whether the council can use it for repairs to its own Airey houses or whether it is for the repurchase of Airey houses. In either case, it is not enough.
  Clearly, the burden will be borne by Warrington tenants with no assistance from the Government. The policy of the borough council has been that charges for repairs, maintenance, management and so on should be borne by
  752
  tenants. Unless it changes its policy, tenants will have to pay the cost of dealing with the council's stock of Airey houses.
  Three years ago, Warrington district council, a most prudent housing authority, received £2 million from central Government for its housing account. It now receives not a single penny. There is no question of Government assistance; the cost will have to be met by council tenants.
  The Airey houses have been built on blocks of two, four, six, eight or 10 and are fairly widely scattered. In Warrington only one or two houses in such blocks have been sold. If an owner accepts the Government's generosity and has his house put right, but the local authority decides that it cannot afford to make good the defects in the rest of the block and moves out the tenants, will one or two owner-occupiers be left in a derelict block? Alternatively, if the council decides to modernise the block it will face a potential cost of £10,000 per house.
  The hon. Member for Lichfield and Tamworth accused my hon. Friend the Member for Bolton, West (Mrs. Taylor) of using sensationalist figures, but my hon. Friend and I got the figure of £10,000 from the Under-Secretary.
  Mr. Joseph Dean: The circumstances that I quoted regarding the letter that I received this morning were a carbon copy of the circumstances described by my hon. Friend. There are houses in my constituency which are not Airey houses. They are interdependent, in rows, and some have been sold. The corporation is finding the money to put right the structural defects on its own. The quantification for those who have bought the units to put theirs right is £10,000. The corporation does not have the money and is not going to get any.
  Mr. Heddle: I accept that the hon. Member has used the figure of £10,000 because that is the maximum figure to which my hon. Friend referred. However, I ask the hon. Gentleman, and the hon. Member for Bolton, West (Mrs. Taylor), to produce evidence that the cost of revitalising these properties is necessarily as high as £10,000.
  I should be happy to produce for the hon. Members figures from construction companies such as the Shepherd Construction company of York, and Taylor Woodrow Construction (Midlands) Ltd. of Stafford, that have carried out extensive research in South Wales, Staffordshire, Barnsley Penistone, the Don Valley, and Leeds, that show that the average cost of putting even the more serious examples of these properties into good habitable and mortgagable repair is about £2,500 to £5,000.
  Mr. Evans: I advise the hon. Gentleman to take seriously some of the letters that he receives from building organisations. Up and down the length and breadth of Britain, local authorities are pulling down properties that building companies guaranteed would last for 60 years. Most people who have been in local authority for any length of time have cause to regret some of the statements that they believed from building organisations.
  I point out to the hon. Member for Lichfield and Tamworth that until such time as the Minister takes up the point made by his hon. Friend the Member for Ilford, North (Mr. Bendall) and conducts and finances a full structural survey, none of us will know precisely how much the cost will be. That is why we are entitled to use, not our figures drawn from thin air, but the Minister's figure of £10,000.

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  In the case of Warrington we are faced with a potential bill of over £500,000 to repair the Airey houses, on the Minister's figures.
  Mr. Allen McKay: That is what Barnsley council did. It took and examined each and every house separately to decide what was wrong with the house. We found, for example, that in one area, of the 18 houses there, 260 posts, or 60 per cent. of the posts used, were broken, and the houses had to be pulled down. Will my hon. Friend take into consideration the fact that in repairing houses one can clean the windows and put new curtains in, or one can clean the windows and put the old curtains back? That is the difference in money.
  Mr. Evans: I am grateful to my hon. Friend. I am sure that all hon. Members will take notice of what he says on this subject, because he has as much experience as any other hon. Member.
  What happens if the council persuades purchasers to sell their properties back to the local authority, and then, because of the colossal cost involved with the potential problems, to which the hon. Member for Ilford, North rightly drew attention, the local authority demolishes the block? What does it put in its place? As long as there is a Tory Government with their ridiculous right-to-buy hung around the necks of local authorities they would be lunatics to build semi-detached houses, because they would be faced with having to sell those houses in three or four years' time at colossal cost to the ratepayers and the taxpayers.
  I suspect that, because of the special nature of the sites involved, which are small sites of two, four, six, eight or 10, the costs would be exceedingly high, and we could be talking of anything up to £20,000 a year to be put back. The only thing that a local authority can do in these circumstances is to put old age pensioners bungalows on the sites, because they are not covered by the right-to-buy provisions. But if we do that, what do we do with the people at present living in the houses in these villages? They have lived there for many years, and their children go to the village schools. There are no other council houses in the villages that I represent. Where do they go? Do they have to accept council houses in central Warrington, miles from their employment, their children's schools, their friends and their families?
  The Government have not thought through the problems involved. It is all very well to treat 2,000 out of 24,000 or 26,000 people generously and ignore the remainder, who still depend on the local authority for their housing. Unless the Minister returns to this theme and approaches the problems in a more rational and reasonable way, he will be creating enormous difficulties for the future. His only sensible course of action is to tackle the problems of all prefabricated houses, including the Airey houses, on a rational basis by conducting the sort of survey suggested by the hon. Member for Ilford, North, and then presenting to the House the bill which will have to be incurred if we are to make these houses reasonably habitable again. If he does that, he will get the Opposition's support for the order. He will also get our support to carry out a wider and much needed housing programme.
  10.47 pm
  Mr. Michael Welsh: I have a great interest in the subject-matter of this debate, because I shall have an Adjournment debate next Monday on the Airey houses in my local authority area. I thank hon. Members on both sides of the House who have contributed to this debate, because their speeches will make the Minister more aware of the problems being experienced by local authorities and may persuade him to come up with a different answer from mine when I raise the matter on Monday. The House may have the rare experience of seeing the Opposition win an argument.
  I welcome the order, so far as it goes, although I do not welcome the money part of it. However, the hon. Member for Lichfield and Tamworth (Mr. Heddle) spoke of a clean bill of health for these houses. I remind him that the National Coal Board's surveyors and architects gave tenanted houses in Doncaster a clean bill of health, and several tenants decided to buy their houses, only to find that no building society would grant them mortgages.
  The Minister has before him a letter from me on behalf of a Mr. Sutton, of Campsell, who has been told by the Halifax Building Society that it will not give him a mortgage and that if he spends what the Minister says he will allow it is still doubtful whether a mortgage will be granted. I am awaiting the Minister's reply to my letter. I am sure that he will be writing to me as soon as he can, because this decision of the building society is a very serious matter, yet the Suttons got a clean bill of health when they decided to buy their house, and there are 197 similar houses in the Doncaster metropolitan borough.
  The trouble with the order is that it makes insufficient money available. People who have already bought their houses—and I hope that no more decide to do so until their properties are brought up to a standard which is considered reasonable by a building society—find themselves saddled with a big headache, despite their houses having been given a clean bill of health, and one cannot but feel extremely sorry for them. We must help them all as much as possible. I am sure that that is the Minister's intention.
  We hear that the proposed grant was increased even before it came before the House from £9,000 to £10,000, and that is very acceptable, even when we consider that in London it is to be £14,000. But everything depends on the 90 per cent. about which we have been told. Very few people in the country who have rehabilitated their houses have got the full 90 per cent. of the present hardship figure of £8,500. So it is possible to get less for refurbishing an Airey house than people are getting under the old system, because of the break-up of the grants. With repair grants one gets a certain amount for certain items.
  No authority could be more benevolent to owner-occupiers than Doncaster. I was chairman of the technical services committee which comes under the public health department. I and my committee said that we should be as generous as possible to owner-occupiers who wanted revitalisation grants, and that where there was any doubt the grants should be given. I believe that I was right. Governments of both parties allocated these grants but few got the full grant because of the way it was broken down and allocated. One has to fill in long lists. One gets so much for a kitchen sink, and so much for other items. With Airey houses it is a matter of big structural damage, not

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  repairs as such, and for that reason people get less under this generous-looking grant than in the case of pre-1965 houses, which received £8,500.
  Perhaps the Minister will have another look at such cases to make sure that people do not suffer. It is a matter that must be borne in mind when seeking refurbishment grants. The matter cannot be worked out by rule of thumb or by just looking at it. It has to be worked out correctly and attract allocation.
  I am surprised that the £10,500—90 per cent.—is good enough. I and my hon. Friend the Member for Penistone (Mr. McKay) were involved in a full-scale survey of one such house. Even the girders were eaten away. One could even put one's finger through them. No one is to blame. It was something that was not properly looked into at the time, and the Government of the day accepted it. However, the estimate to bring such houses up to a standard that would be acceptable for mortgage purposes is £15,000, and it may be higher. The director of housing, who eventually has to find the money in some way or other, could give a complete breakdown. A sum of £15,000 or more is necessary to make the properties acceptable for building societies to give mortgages.
  If the sum that is needed is £15,000, and we are allowing only 90 per cent. of the £10,500, it means that people who want to bring the properties up to standard would then have to find a considerable amount of money—about £6,000. If people want to sell the property later, or leave it to their children, they will have to take out another mortgage. This is the Catch 22 situation, as the hon. Member for Lichfield and Tamworth said. They cannot get a second mortgage because now they cannot even get a first mortgage. They could not get a second mortgage, over and above the allocation, because the building society would not give one. The Minister may tell me that I am wrong, but I do not believe that the local authority would give a second mortgage—or would have great difficulty in giving a second mortgage—on properties on which building societies would not give a first mortgage. That is a terrible situation for these poor people to find themselves in.
  Therefore, this order may not help a lot of people. The grant is not enough. If people cannot get another mortgage, it is no good having the property repaired. It is no good patching good stuff on to bad stuff, because it breaks away and is not worth doing. That would be very bad. Most of the people in my area have bought their houses from utilities like the National Coal Board. I wonder whether the local authority will have to buy back the houses under the generous terms that the Minister stated.
  On many issues, equity under this Government is not apparent. Money is available for houses built before 1963 because the structure is sound. A mortgage can be obtained. Hon. Members should be seeking to ensure that those with Airey type houses also receive enough money to enable a mortgage to be obtained at a later date.
  Some structures of Airey type houses in the Doncaster area leave much to be desired. Those who have bought such houses face difficulties. I hope that the Minister will be able to re-examine the position to ensure that people who, by accident, have bought the worst houses do not suffer. It is a strange world when owners who repair their houses may still be unable to sell them because a mortgage
  756
  cannot be obtained. If they do not make repairs and the houses cannot be sold back to the authority, their position will become worse through no fault of their own.
  The Minister should allow a grant that is big enough to permit the houses to be revitalised and gain a certificate guaranteeing that a mortgage will be available for anyone wishing to buy them at a later date. That is what the owners of the houses want. I hope that the Minister will be able to produce such a scheme.
  10.58 pm
  Mr. Stanley Newens: The order has been eagerly awaited by Airey house owners in my constituency. Ever since they first discovered that their houses could be subject to serious defects they have experienced considerable worry. I am anxious that the order should be implemented as soon as possible.
  There are a number of Airey houses in Harlow and adjacent areas, but in only a few of them is there any evidence of serious faults. I want to address my remarks to the hon. Member for Lichfield and Tamworth (Mr. Heddle), because that does not signify that the owners are not faced with serious problems. All those who have purchased Airey houses have found that they are blighted and that it is impossible to sell them. Building societies do not just refuse to advance a mortgage to people who inquire about buying them; they will not even send a surveyor to inspect the property.
  In those circumstances, owners are trapped and cannot move. It is difficult to sell some houses in the present economic climate, but it is impossible to sell Airey houses. It is not good enough that local authorities have the option of purchasing or providing the help given by this order. I believe that the Minister must reconsider carefully that aspect of what he proposes this evening.
  If any local authority fails to avail itself of the powers to purchase or make the grants provided for under the order, owners who live in that local authority area will be severely penalised compared with owners of Airey houses in other areas. I do not necessarily blame the local authorities. Some of my hon. Friends have pointed out the tremendous difficulties with which local authorities are faced. The order does not assist Airey house owners who are faced with a local authority which refuses to purchase. The order is not clear enough.
  In my view, the policy of selling council houses is bound to give rise to such problems. On this occasion the Government are anxious to state that they are not legally liable and that the payments are ex gratia and not a precedent, because they are aware, as some of my hon. Friends have said, that there are many other houses that are subject to structural defects. I believe that one of the aims of selling council houses is to shrug off responsibility for repairs and maintenance. Airey houses illustrate that that policy is fraught with problems for those who decide to buy.
  I wish to raise another point that has not been clarified. What is the position of the owner who does not avail himself now of the right to which he is entitled and discovers in 10 years time or later that his house has a structural defect? Will he still be eligible for the grants and the arrangements that prevail now? It is important to clarify that, because all hon. Members know that we sometimes meet individuals who, for one reason or another, have not taken advantage of their rights at a

  757
  particular time. We need to know whether there will be any time limit on applications for grants for repairs and the right to purchase.
  Mr. Bendall: I support the hon. Gentleman on that important issue.
  Mr. Newens: I am grateful to the hon. Gentleman for his support. I am aware from his speech that in his constituency he has met many of the problems that I have met in mine.
  I fear that, although we are discussing what appears to be a comparatively limited problem tonight, the problem of Airey houses is likely to be repeated in many other system-built houses over the years. In those circumstances, the problems of Airey houses may pale against future ones. Therefore, although I am anxious to support the order in so far as it goes, I want to point out that it is still grossly inadequate.
  The Minister knows that I have had experience of the Government's policy for the new towns, where they have failed to meet their responsibility to remedy design defects in system-built houses. Although the scheme goes a certain way, it is not adequate, and I hope that the Minister will be prepared to consider some of the points that have been made by hon. Members.
  I, and I am sure other hon. Members, will monitor matters carefully. If it is found that constituents are still suffering, we shall return to the Minister or his successor to demand an adequate scheme to meet the problems faced by the owners and occupiers of Airey houses.
  11.6 pm
  Mrs. Ann Taylor rose—
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Does the hon. Lady have the leave of the House to speak again? [HON MEMBERS: "Aye".] It appears that she does.
  Mrs. Taylor: At the end of this important and difficult debate, I want to put a suggestion to the Minister which I hope that the Government will think worthy of consideration. The Minister has listened carefully to the anxieties expressed by all hon. Members. There is a measure of agreement that the information that the Minister gave the House is inadequate because of the grave concern about Airey housing. The hon. Member for Ilford, North (Mr. Bendall), amongst others, has expressed such anxiety.
  In view of all that has been said, I suggest that the Minister should consider whether to withdraw the order and deal with the problem on a wider scale so that the problems of tenants as well as owner-occupiers can be taken into account and that he should think again about the limited assistance that is given by the order.
  I hope that the Minister will not simply stick by his earlier statement but will genuinely consider the points that have been raised. He would have the full support of Labour Members if he were to withdraw the order and bring it back later on a far wider basis.
  11.8 pm
  Sir George Young: I am somewhat surprised by the latest intervention of the hon. Member for Bolton, West (Mrs. Taylor). Every speaker in the debate has welcomed the order which the Government have laid before the
  758
  House. Not to proceed with it, not to enable owners of Airey houses to have the support that everybody has agreed they should have, would be far from productive and would not be welcomed at all.
  In the course of my remarks I shall deal with the wider issues which the hon. Lady has raised about the assistance available to local authorities, but I do not think that her hon. Friends would welcome any delay in the extension of assistance to those who have bought Airey houses. Indeed, when the hon. Lady spoke at the beginning of the debate she said that this was an act of unprecedented generosity. Modesty prevented me from describing the order in those terms, but as she has done so I think that that is an apt description and a compelling reason why it would be wrong to withdraw it.
  The hon. Lady raised an important issue, and it was also raised by many other hon. Members. She asked why private owners are different from local authority owners of Airey houses. Today's debate has been a knock-up for the debate which the hon. Member for Don Valley (Mr. Welsh) will have on the Adjournment in exactly a week's time, when he will raise the subject of assistance for local authorities which are owners of Airey houses.
  Perhaps I might anticipate that debate and attempt to deal with it. Public bodies, such as local authorities, already receive public funds. The resources that are available to a local authority to tackle these problems far exceeds those that are available to an owner-occupier. The Housing Act 1980 makes local authorities' costs for capitalised repairs eligible for subsidy. In determining the HIP allocations the Department's regional offices take into account, where appropriate, the incidence of need for work on Airey houses in the same way as any other special local need. One hundred per cent. of the national loan charges on the qualifying costs, which is 70 per cent. of the admissible costs, will be reckonable expenditure and will count in the calculation of local authorities' subsidy entitlement. That is why there is a difference between the owner-occupier and the local authority. The former does not at the moment have access to public funds, whereas the local authority does.
  The hon. Lady asked me about discounts. If she examines the Housing Act 1980, she will discover that an owner-occupier who sells his Airey house back to the local authority is not entitled to count for discount purposes the years that he may have counted for the original purchase. Therefore, he is not entitled to count the years twice. The cost floor provisions may bite if the costs of putting the Airey house back into good condition is as high as some hon. Members have suggested.
  Mrs. Ann Taylor: Does the right hon. Gentleman agree that there is a difference between those who fall under the right-to-buy legislation and those who bought before 1980, when local authorities were willing to sell without any special legislation? Does he also agree that those who sell their homes to local authorities and then buy them back if they are resident for three or five years before they operate their new right to buy will qualify for the full discount on the period since the repurchase by the local authority?
  Sir George Young: Yes. The hon. Lady is right, but that is subject to the cost floor provisions, which would stop the local authority making a loss on the transaction.
  Mrs. Taylor: I apologise for intervening again, but is the Minister now saying that the full cost—the current market value—which the local authority must pay the owner of an Airey house would become a new cost floor? If not, surely the cost floor would be the low cost of when the house was originally built?
  Sir George Young: I shall write to the hon. Lady if I am wrong, but the cost floor for calculating the second sale is not the defect-free price but the price that takes account of the defect when the local authority bought it back from the owner-occupier. Otherwise, I agree, it would introduce a high cost floor that would be unrealistic in the light of the property's condition.
  The hon. Lady asked whether houses that are sold by other public bodies will be eligible for repair grants from local authorities. They will be eligible.
  Several hon. Members asked why we had singled out Airey houses for this treatment. The hon. Member for Newton (Mr. Evans) was one. The Airey house is unique. Not only is there a risk to human safety from a concealed design fault, but it is a risk that can be present at any time, which affects a substantial number of owners and which potentially involves them in unusually costly repairs. It therefore seemed right to facilitate the early inspection of privately owned houses and remedial action as necessary by providing the owners with financial assistance in the face of potentially heavy costs. No other case that hon. Members have presented, today or in writing, has produced the same balance of considerations.
  A few hon. Members asked about the likely cost of repairs. It would be misleading to give any amounts, as the cost will vary considerably. It would be wrong to give examples. The figures in the order are maxima and they are based on our assessment of costs on 1 January 1984. We hope that the cost in many cases will be substantially less.
  My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) referred to his Adjournment debate on 25 June last year. No doubt it was in part in response to his eloquence on that occasion that we have moved as we have done. The rateable values he asked about have been raised to take account of the importance of ensuring that everyone is eligible. We are satisfied that they are generous enough. We raised them after consultation with the valuation office. If by any chance somebody owns an Airey house that is over the top of the rateable values, we shall have a look at that. If that were the case, they would have quite a good reason for asking for their rateable value to be reduced in the light of defects in the property.
  My hon. Friend the Member for Ilford, North (Mr. Bendall) asked about the costs of the initial survey on which he has written to me. Defects in the posts of Airey houses cannot be detected without a survey as they are hidden within the wall cavity except in a few places where they appear as window mullions, so two surveys may be necessary. The first survey is to establish whether the supporting columns are at risk and whether there is a problem worth serious investigation. That could be carried out at a small cost. If, following this initial survey, no repairs are considered necessary, the cost of the survey will have to be borne by the owner as there is no power to pay grant.
  However, if works are considered necessary, a further major survey will probably be needed as a preliminary to
  760
  the repairs. If local authorities consider the subsequent repairs to be eligible for grant aid, they will doubtless consider the cost of both of the surveys leading directly to those repairs to be eligible for grant aid subject to the overall eligible expense limits.
  Mr. Bendall: What would the Minister consider to be a small cost? The figure that I gave tonight of between £150 and £200 is not a small cost in relation to what would be considered a normal price for a structural survey of around £100 or just under.
  Sir George Young: In the hypothesis that my hon. Friend puts forward, if somebody has a first survey carried out and no repairs are necessary, he has saved the 10 per cent. that he would have had to find out of his own pocket if he proceeded with the repairs. The owner of the Airey house has to find something out of his pocket. I suspect that the first survey cost might be less than the cost which he would have to find to make up the difference between the 90 per cent. and the totality. The object of the order is to extend assistance to people who have defective properties. If properties are not defective, the order does not extend assistance to them.
  The hon. Member for Leeds, West (Mr. Dean) asked about the difference between private owners and public owners. I explained that briefly earlier on. If he is not satisfied with what I said, he may be able to pentacle his hon. Friend the Member for Don Valley to give him a minute or two of his Adjournment debate next Monday when we can return at greater length to the question of local authority owned Airey houses.
  Mr. Joseph Dean: I do not see any point in repeating an argument. I raised the case of a person who has bought an Airey house living next door to a council house tenant with the same type of house, same length of tenancy and same income bracket. To both of those families that unit has one purpose only—it is their home; it is where they live. Why differentiate in favour of one against the other?
  Sir George Young: The Government do not differentiate in the way suggested by the hon. Gentleman. We have made it quite clear that we will include in local authority HIP allocations for next year the costs of putting right the defective Airey houses. For the private owner, we are introducing special assistance in the order. Thus, the Government are making help available to both types of Airey houses. The assistance comes through different channels to reflect the different resources available to local authorities as against owner-occupiers. The Government are making resources available to owners, be they private or public, who live in Airey houses to meet their problems.
  Mr. Allen McKay: What happens to the authority that is in receipt of a subsidy? If it is in the HIP allocation and the allocation has gone down since the Government came into power, it will merely reduce the allocation still further.
  Sir George Young: The HIP allocations have been increased by the amount of money that those local authorities think is necessary next year to meet the defects in the Airey houses. That is how we have met their needs.
  Several hon. Members asked what would happen if a local authority refused to buy. Local authorities have made it clear that they support the scheme, and I see no evidence whatsoever that they will refuse to buy back properties that

  761
  are offered to them. Indeed, they would be singularly bloody-minded if they did so as 100 per cent. of the cost comes back from the Government. I am sure that no Labour Member is suggesting that his own local authority would act in that way and inflict considerable hardship on someone in its area, given that there is no financial obligation on the local authority.
  The limits are set out at January 1984 costs. There is no time limit on application for grant, but there is a time limit on the period during which people can serve notice on the local authority to buy back the home. That time is set out as 7 September 1985.
  Mr. Newens: What will occur if an investigation shows that the building is apparently in a reasonable state of repair but something happens 10 years later that brings a structural defect to light? Is the hon. Gentleman saying that there will be no limit on the claim for grant? I hope that he is.
  Sir George Young: Unless the House rescinds this order, the entitlement to grant will remain indefinitely. There is no time limit on that.
  A number of the other points raised will be clarified in the circular to be sent to local authorities. This will deal with defect-free prices, which the hon. Member for Bristol, North-East (Mr. Palmer) raised. Perhaps I can deal with some of the other points by way of correspondence, but, in the light of the general support for the order, I hope that the House will agree that it can proceed.
  Question put and agreed to.
  Resolved
  That the draft Grants by Local Authorities (Appropriate Percentage and Exchequer Contribution) (Repairs Grants for Airey Houses) Order 1982, which was laid before this House on 8th December, be approved.

  PIG INDUSTRY LEVY BILL
  Ordered,
  That, in respect of the Pig Industry Levy Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. Berry.]

  Initial Teacher Training (Dartford)
  11.22 pm
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
  Mr. Bob Dunn: I am delighted and pleased to have obtained tonight's Adjournment debate on the subject of the removal of initial teacher training from the Thames polytechnic Dartford site. The decision to do so, as announced and confirmed by my hon. Friend the Under-Secretary, was for those who know and admire the levels of excellence achieved at Dartford a bitter and significant blow—bitter because it was unexpected, and significant because the decision, if enacted, will end almost 100 years of physical education training at the Dartford college.
  Since 1895, a quality and range of education opportunities for women, and from 1968 for men, have been offered and improved at the Dartford site, a known and nationally famed centre of excellence. I am conscious that in this debate I speak as Member of Parliament for the Dartford constituency, but I wish and hope to express the views of many thousands of people at local, regional and national level who have reacted strongly and are opposed to the decision taken by my hon. Friend.
  On 8 November 1982, in a press notice, the Department of Education and Science announced its final decision on initial teacher training. In paragraph 6 on page 4 of the statement a list of criteria was published which the Department took into account when considering the distribution of places. There were 11 criteria, and it is our contention that, on the vast majority, if not all, Dartford college registered very well. The mechanics of registering have been brought to the attention of my hon. Friend on the two occasions on which he received deputations led by me.
  Thames polytechnic Dartford college maintains two specialised teacher training courses—a BEd degree in movement studies, which is for women teachers in physical education, and a BEd (Primary) degree, which is a degree course for the training of teachers in primary schools, specifically in the Inner London environment.
  Paragraph 3 of the press notice of 8 November, in the section entitled "Notes to Editors", states:
  "In its advice ACSET showed actual and projected pupil numbers for the period 1970ߝ1995. Primary numbers in England, which reached a peak in 1973 of over 4·6 million, are projected to fall to less than 3·4 million by the mid-1980s and then to increase. Secondary numbers in England, which reached a peak in 1979 of over 3ߝ8 million, are projected to fall to less than 2·8 million by the start of the 1990s and then to increase."
  The two courses to which I referred will be wound down and will stop by the mid-1980s, at a time when, according to paragraph 3, the school population at primary level will start to increase. The birth rate has now been increasing for some years. The Advisory Council on the Supply and Education of Teachers recognises that, and the Department of Education and Science has accepted its advice. My right hon. Friend the Secretary of State is on record as saying that
  "the number of children in primary schools will begin to rise again in the mid-1980s. The logic of the situation impels us to treble the number of newly-trained primary school teachers."
  In view of that statement and of the consensus that exists, it would appear to be wrong to close the Dartford site when there should be an increased recruitment of primary school teachers.

  763
  During the past few months my hon. Friend has been subject to much pressure. During that time he has been most courteous in his response and he obviously has a difficult decision to make. But I would not be here tonight if I believed that the last ditch was approaching. I wish to argue the case for the retention of teacher training at Thames polytechnic, and the case for the BEd(Primary) and the BEd (Physical Education) for women is strong. First, the degrees are designed to ensure the closest relationship between theory and practice. Secondly, a substantial programme of school experience proceeds through all years of the degrees. Thirdly, students, especially in the BEd(Primary) degree course, pay close attention to the multi-ethnic inner city school and its relationship with the community. Fourthly, there is also in the BEd2(Primary) course a close relationship between the School of Education and Teaching Studies and the ILEA Environmental Studies Centre at Horton Kirby.
  Fifthly, the BEd(Primary) course covers the whole of the primary age range and the whole of the primary curriculum, so that students at Dartford are equipped to teach in both infant and junior schools.
  Sixthly, the BEd (PE) course has been designed to take into account the latest thinking on such degrees, as expressed at the recent Sheffield conference. Finally, there are outstanding facilities for physical education at the Dartford site of the polytechnic.
  The loss to north-west Kent and the loss to my own community of the Dartford college would be enormous, and I know that my hon. Friend will bear that in mind when he replies.
  On 19 January, my predecessor in this place, Lord Irving of Dartford, raised in another place the future of the Dartford site. He received a reply from the Earl of Swinton which appears in the House of Lords Hansard for that day. Lord Irving spent a great deal of time outlining the history of the Dartford site since the arrival of Martina Bergman Osterburg in this country in the 1880s. In the Dartford site we have a unique institution, because it was the first institution of its kind in the United Kingdom. Very shortly we shall be celebrating the centenary of institutions initiated by Madame Bergman Osterburg in this country. It would be a paradox if in a few years we were to celebrate her centenary with postage stamps and other items of recognition having closed the pioneering college which she set up in Dartford in 1895.
  All-party support exists against the decision to remove initial teacher training from the site. I have support from my own colleagues from north-west Kent. I have support from Lord Irvine, who is a member of the Labour party. The hon. Member for Woolwich, East (Mr. Cartwright) would have been here tonight to give me support but for a prior constituency engagement.
  My hon. Friend and I live in the real world. I accept the difficulties under which he has been operating. If we cannot have that which I seek, perhaps we can seek something else. Perhaps he will allow ILEA to reschedule the number of places for physical education throughout the colleges, and therefore maintain a physical education presence at the Dartford site.
  When Madame Osterburg died on 29 July 1915, she left the institution to the nation. Since that time it has passed, in the form of a trust, through a number of hands, finally ending with Thames polytechnic. It is for us in north-west Kent an article of faith that we maintain the physical education presence at Madame Osterburg's college. To do
  764
  less than that would be a gross injustice to a fine radical lady—radical in the non-Socialist sense—who came to Dartford and set up a pioneer course which is famous throughout the world.
  I appeal to my hon. Friend to show us a small light tonight—if possible, a bigger light—and to comment on what I have had to say, and also on the massive public demonstration that he has received against the proposal to remove initial teacher training from the Dartford college of Thames polytechnic.
  11.34 pm
  The Under-Secretary of State for Education and Science (Mr. William Waldegrave): I am grateful to my hon. Friend the hon. Member for Dartford (Mr. Dunn) for the courteous way in which he has introduced this short debate. He has been kind enough to say that we have difficult decisions to make. It has not been enjoyable for anyone to have to undertake them. Equally, those of us who have seen him in action in this House will not doubt the sincerity of his commitment to his constituency, and particularly the care that he has taken over the issue. As he has mentioned, he brought to me two delegations, which have argued the case, and he has also raised this Adjournment debate tonight. My hon. Friend has put before the House the basic context of the diminution of teacher training, which now seems to us to be necessary, faced with the demographic trends. I shall add one or two figures to the ones he gave.
  In 1971 initial teacher training was undertaken in 42 universities and 184 public sector institutions. Between them, these institutions produced an output of 40,000 newly trained teachers each year. The Labour Government, realising that the commitment to teacher training was far greater than the country needed, reduced plans in 1977 to a system based on 31 universities and 76 public sector institutions in England and Wales, with a planned total of 39,000 initial teacher training students and 20,000 planned admissions.
  There must still be further reductions. My hon. Friend referred to the advice that my right hon. Friend the Secretary of State received from the advisory committee on the supply and education of teachers. The advice pointed to a considerable reduction in the overall need for newly trained teachers, following the sharp fall in the birth rate and the school population, which is down by more than 1·5 million—or more than one-sixth—in the decade from the mid-1970s. We have concluded that planned annual admissions to initial teacher training courses should be reduced from 20,000 in 1981 to 15,650 in 1983 rising thereafter as we begin—as my hon. Friend correctly predicted we would need to begin—to increase the training of primary teachers. I emphasise that, in the respect that the Secretary of State departed from the exact advice of ACSET, he called for rather more of diminution in the training of secondary teachers thinking that, because we were training more secondary teachers than could sensibly be expected to find jobs—within limits we must provide a sensible choice for local authorities—we should cut the number of training places for secondary teachers but should increase, beyond what ACSET originally recommended, the training of primary teachers. We believed that the system could respond even more quickly than ACSET thought it could in that respect.
  The savings in teacher training form part of the projected savings in higher education as a whole that the

  765
  Government have put before the House in two White Papers. In so far as resources remained in teacher training, as we think unnecessarily, there would be further savings to be found elsewhere. Equally, if we can tailor the teacher training system to what we see as the needs of the country, more resources will be available elsewhere for higher education as a whole. We came to the conclusion that with this roughly 20 per cent. cut overall in places it would simply not be educationally sensible to spread the remaining butter more thinly across a similar number of institutions.
  The primary and secondary intakes now proposed for 1983, 1984 and 1985 will produce a total in 1985 of 27,000 initial teacher training students—about 20 per cent. fewer than was intended when the present system was designed. We therefore came to the conclusion that, if all institutions were not to become weak and the teaching group subjects too small, we had to diminish the number of institutions involved.
  As I look down the records of entries in 1981, as opposed to planned targets, I repeatedly find groups of one or two students following particular options. The advice of Her Majesty's Inspectorate is clear on this matter; that is not educationally good sense. So we came to the conclusion that a smaller number of institutions should be involved in teacher training. Partly in our minds was the thought that when the demographic fluctuations, which would undoubtedly take place again in the future hit us—demographic change is always unexpected—and if we had fewer but on the whole rather larger centres, the capacity to alter size of intakes without doing anything drastic to the number of institutions would be greater. With some exceptions it has been our intention to try to concentrate resources in rather larger groups.
  My hon. Friend knows from his experience in the Department the sort of discussions that we have undertaken and the painful exercise was carried out against the background to which he referred. There has been some misunderstanding about the way in which we used the criteria. We did not go down a checklist and tick off the criteria against a single institution. All the criteria were comparative. We had to look at the whole national system against the criteria and to look for arguments for adding to the basic system. We altered the original prosposals, because we concluded that some special cases should be added to the central system.
  After the cutbacks of the 1970s it would be surprising if the remaining institutions did not score highly on most of the criteria. The ones that it might have been easy to withdraw had long since been withdrawn. All the remaining institutions were providing a valuable service.
  The situation in physical education is in some ways even more radical than that in initial teacher training overall, not only because of the need to reduce the number of institutions, but because the European Commission's 1977 directive on equal opportunities for women compelled us to do away with sex discrimination in course intakes and to admit men and women to all physical education training establishments.
  That meant that the size of a viable unit should be bigger—about twice the size. Apart from the educational benefits of larger units, the European directive compels us to move to larger units. That is what we have done. There were 34 institutions undertaking bachelor of education
  766
  programmes in physical education and that will be reduced to 10. The average intake will be almost doubled from 16. The intake at Dartford was below average—about 11 in 1981.
  I read with great interest the speech in another place by my hon. Friend's predecessor as hon. Member for Dartford who movingly outlined the history of the Dartford college. I am sure that the influence of what has gone on at Dartford has spread through physical education not only in this country, but world-wide.
  I can say, without raising hopes or expectations too high, that it is not inconceivable that some physical education could continue with the existing facilities. We are willing to consider any proposals—the obvious source is the Avery Hill college—for the use of the facilities. In terms of London higher education establishments, the distance between the colleges is not all that great, though there would be some inconvenience, and I could see advantages to Avery Hill in using those facilities. We would put no obstacle in the way of practical proposals to use those facilities. I do not want to be misunderstood as saying that we should return to the Thames polytechnic for an entry quota, but we should be prepared to—
  Mr. Bob Dunn: Is my hon. Friend saying that it would be up to ILEA to make proposals, for the Thames polytehnic, and that those proposals would involve some rescheduling of the ILEA umbrella, especially in south London?
  Mr. Waldegrave: I am saying that we would not want to reschedule entry targets between institutions, but if ILEA or Avery Hill as an institution, made proposals for the use of the Dartford college facilities, we would put no obstacles in the way of that. To some extent, one can see, as can those who appreciate the history, as my hon. Friend does, and as his predecessor does, that there would be some satisfaction in seeing the activity continued on the site. I repeat that I am not saying, I am afraid, that we would want to, or are in a position to, return to the Thames polytechnic for an entry quota.
  We did not give the distribution of the places, whether in physical education or, more broadly, in initial teacher training, between the various institutions of ILEA to ILEA as an authority—which is a proposal put to me by ILEA—because, although we considered the idea and discussed it with ILEA representatives, the Secretary of State, I and senior officials, came to the view that we could not properly fulfil our duty if we simply devolved to another authority the difficult choices involved.
  We have the duty not only to judge, on the advice of the inspectorate, and other advice, the quality of what goes on in the colleges; we also have the duty, which is without the capacity of ILEA to undertake, to try to make a strategy across all three sectors—the voluntary colleges, the university and the local authority. That was why,'after toying with the idea and discussing it with ILEA representatives, we felt that we had to undertake the thankless task of making the decisions ourselves. That is what we have done.
  I repeat that in this case the potential advantages of a liaison between Avery Hill and the Dartford site are attractive. In that sense the intentions of Madam Osterberg's will would, if they were to come about successfully, be met. My advice is that in strict legal

  767
  terms, the proper excercise of statutory powers by the Secretary of State, can, with the advice of the Charity Commissioners, alter the terms of the will.
  I am grateful to my hon. Friend the Member for Dartford for giving me the opportunity to give an encouraging sign of co-operation. However, on the broader front, in terms of the reorganisation, which we all hope will be the final one—teacher training has had three periods of reorganisation over the past 10 years. We have provided the nation with a well-founded system that will mean that we are in a position to respond flexibly to the future.
  In terms of the general structure, I do not wish to give my hon. Friend any hope that we can be persuaded to restore initial teacher training as a whole to Thames polytechnic. We could do that only at the cost of
  768
  weakening other institutions or of diverting resources, for which there are pressing needs elsewhere in the higher education system. We would be training people in skills for which we are already training more than car, find jobs at the secondary level. The resources, the students of the proper quality, will not be available to increase even faster than we are at the primary level.
  It is the intention of Ministers to stand on the final decisions that have been taken, although where there are intelligent things that can be done at the margin to make the best use of resources we shall be willing to listen and help. I am grateful to my hon. Friend for giving me the opportunity to say so.
  Question put and agreed to.
  Adjourned accordingly at eleven minutes to Twelve o'clock.

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  Mortgage Interest Payments
  Mortgage Interest Payments
  Offshore Roll-up Funds
  Offshore Roll-up Funds
  World Banking System
  World Banking System
  Industrial Buildings Allowance Act
  Industrial Buildings Allowance Act
NORTHERN IRELAND
  Irish Republic (Gas Supplies)
  Irish Republic (Gas Supplies)
  Council for Educational Development
  Council for Educational Development
  Disabled Persons (Northern Ireland) Order 1982
  Disabled Persons (Northern Ireland) Order 1982
  Youth Training Programme
  Youth Training Programme
  Assembly Committees (Information)
  Assembly Committees (Information)
OVERSEAS DEVELOPMENT
  Commonwealth Development Corporation
  Commonwealth Development Corporation
  Zimbabwe
  Zimbabwe
  London School of Tropical Hygiene (Grants and Scholarships)
  London School of Tropical Hygiene (Grants and Scholarships)
  Palestine Refugees
  Palestine Refugees
SOCIAL SERVICES
  Regional Health Authorities
  Regional Health Authorities
  State Pension
  State Pension
  Hospitals (Equipment Supplies)
  Hospitals (Equipment Supplies)
  Vaccine Damage
  Vaccine Damage
  Federation of Alcoholic Rehabilitation Establishments
  Federation of Alcoholic Rehabilitation Establishments
  Specialist Claims Control Exercise (Norwich)
  Specialist Claims Control Exercise (Norwich)
  "Fields of Recruitment"
  "Fields of Recruitment"
  Benefits
  Benefits
  Neonatal Intensive Care Cots
  Neonatal Intensive Care Cots
  Medical Research (Funding)
  Medical Research (Funding)
  Cigarettes (Carbon Monoxide)
  Cigarettes (Carbon Monoxide)
  Invalid Care Allowance
  Invalid Care Allowance
  Supplementary Benefit
  Supplementary Benefit
  Community Service Volunteers
  Community Service Volunteers
  Greenwich
  Greenwich
  Hearing Aids
  Hearing Aids
  One-parent Families
  One-parent Families
  National Health Service (Catering and Domestic Services)
  National Health Service (Catering and Domestic Services)
  Widowed Mothers' (Allowance)
  Widowed Mothers' (Allowance)
  St. William's Hospital, Rochester (Cobalt Machine)
  St. William's Hospital, Rochester (Cobalt Machine)
  Chrysoidine Dye
  Chrysoidine Dye
  Cervical Cancer
  Cervical Cancer
  Mentally Handicapped Persons
  Mentally Handicapped Persons
  Earnings Rule
  Earnings Rule
  Retirement Pension
  Retirement Pension
  Geriatric Beds (West Midlands)
  Geriatric Beds (West Midlands)
  High View Hospital, Exhall
  High View Hospital, Exhall
  Voluntary Redundancy (Unemployment Benefit)
  Voluntary Redundancy (Unemployment Benefit)
  Supplementary Benefit Regulations
  Supplementary Benefit Regulations
  Pensions
  Pensions
  Mental Health Tribunals
  Mental Health Tribunals
  Housing Benefit (Birmingham)
  Housing Benefit (Birmingham)
FOREIGN AND COMMONWEALTH AFFAIRS
  Convention on the Law of the Sea
  Convention on the Law of the Sea
  Vietnamese Refugees
  Vietnamese Refugees
  Brasilia (Ministerial Visit)
  Brasilia (Ministerial Visit)
  Passports
  Passports
  Falkland Islands (Franks Report)
  Falkland Islands (Franks Report)
  Mr. Davidoff
  Mr. Davidoff
WALES
  Departmental Forms
  Departmental Forms
  Remedial Teachers
  Remedial Teachers
  Disabled Persons (Housing)
  Disabled Persons (Housing)
  Welsh Language (Ombudsman)
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  NHS (Consultants and Registrars)
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  Industrial Projects
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  Companies (Financial Assistance)
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  Hospital Waiting Lists
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  Mentally Handicapped Persons
  Mentally Handicapped Persons
  Disabled Persons
  Disabled Persons
  Housing Corporation (Development Programme)
  Housing Corporation (Development Programme)
SCOTLAND
  Salmon and Freshwater Fisheries
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  Scottish Health Education Group
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  Children Act 1975
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  Electricity Disconnections
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  Building Control Regulations (Review)
  Building Control Regulations (Review)
  Census
  Census
  Unemployment Statistics
  Unemployment Statistics
  Sub-cellular Sub-unit Vaccines
  Sub-cellular Sub-unit Vaccines
  Meals Service
  Meals Service
  Elderly Persons
  Elderly Persons
  Psychogeriatrician Consultants
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SCOTLAND
  Home Helps
  Home Helps
  White City Greyhound Track
  White City Greyhound Track
  Glasgow College of Technology
  Glasgow College of Technology
  Harris
  Harris
  New Towns
  New Towns
  16 to 18-year-olds
  16 to 18-year-olds
  A80
  A80
  Offensive Weapons
  Offensive Weapons
  British Rail
  British Rail
INDUSTRY
  Industrial Assistance (Welwyn and Hatfield)
  Industrial Assistance (Welwyn and Hatfield)
  Shipbuilding
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  French Industry (Loan Conditions)
  French Industry (Loan Conditions)
  Post Office Closures
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  Sector Working Parties
  Sector Working Parties
  Steel Industry
  Steel Industry
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  European Community (Bulk and Carbon Steels)
EDUCATION AND SCIENCE
  Nursery Education
  Nursery Education
  Clinical Depression (Research)
  Clinical Depression (Research)
  Subcellular Sub-unit Vaccines
  Subcellular Sub-unit Vaccines
  Sex Education
  Sex Education
  Examination Statistics
  Examination Statistics
  British Library (Boston Spa)
  British Library (Boston Spa)
  Gifted Children
  Gifted Children
  School Meals
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  Sex Role Differentiation Project
  Sex Role Differentiation Project
EMPLOYMENT
  Unemployment Statistics
  Unemployment Statistics
  Youth Training Scheme
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  Unemployed Persons (Training)
  No-strike Agreements
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  Training Schemes (Statistics)
  Training Schemes (Statistics)
  Enterprise Allowance Scheme
  Enterprise Allowance Scheme
  Youth Opportunities Programme
  Youth Opportunities Programme
  Wider Opportunities Courses (Women)
  Wider Opportunities Courses (Women)
  Factory Inspections (Yorkshire and Humberside)
  Factory Inspections (Yorkshire and Humberside)
  Health and Safety
  Health and Safety
  Manpower Services Commission (Schemes)
  Manpower Services Commission (Schemes)
  Job Splitting Scheme
  Job Splitting Scheme
  Equal Pay Act
  Equal Pay Act
  Dock Workers (Severance Payments)
  Dock Workers (Severance Payments)
  Night Shifts (Women)
  Night Shifts (Women)
  Training Schemes (Discrimination)
  Training Schemes (Discrimination)
TRANSPORT
  Serpell Committee
  Serpell Committee
  Rail Crossings (Staffordshire)
  Rail Crossings (Staffordshire)
  >M54 (Birmingham)
  >M54 (Birmingham)
  Motor Coaches (Speed Limits)
  Motor Coaches (Speed Limits)
  Departmental Staff
  Departmental Staff
  National Road Maintenance Condition Survey
  National Road Maintenance Condition Survey
  Road Maintenance
  Road Maintenance
  Hayes Bypass
  Hayes Bypass
  Heavy Goods Vehicle Testing (Privatisation)
  Heavy Goods Vehicle Testing (Privatisation)
  Ports of London and Liverpool
  Ports of London and Liverpool
  M1
  M1
  Lead-free Petrol
  Lead-free Petrol
  A57
  A57
  Holyhead (Post Facilities)
  Holyhead (Post Facilities)
  Serpell Report
  Serpell Report
  Public Inquiry (Inspector)
  Public Inquiry (Inspector)
AGRICULTURE, FISHERIES AND FOOD
  Humber Laboratory
  Humber Laboratory
  Land Settlement Association
  Land Settlement Association
SOLICITOR-GENERAL FOR SCOTLAND
  Animal Welfare (Protests)
  Animal Welfare (Protests)
ENVIRONMENT
  Nature Conservancy Council (Management Agreements)
  Nature Conservancy Council (Management Agreements)
  Tenant's Exchange Scheme
  Tenant's Exchange Scheme
  Home Ownership
  Home Ownership
  Welwyn and Hatfield (Vacant Land)
  Welwyn and Hatfield (Vacant Land)
  Kings Court Estate, Waterloo, Merseyside
  Kings Court Estate, Waterloo, Merseyside
  Housing (Multiple Occupation)
  Housing (Multiple Occupation)
  Derelict Land
  Derelict Land
  Housing (Newham)
  Housing (Newham)
  Housing Associations (Shared Ownership Purchase)
  Housing Associations (Shared Ownership Purchase)
  Departmental Staff
  Departmental Staff
  Property Services Agency
  Property Services Agency
  Exclusive Brethren
  Exclusive Brethren
  Welfare Rights Centre (Liverpool)
  Welfare Rights Centre (Liverpool)
  Local Government Audit Commission
  Local Government Audit Commission
DEFENCE
  RAF Aircraft (Accidental Losses)
  RAF Aircraft (Accidental Losses)
  Expenditure
  Expenditure
  Assisted House Purchase Scheme
  Assisted House Purchase Scheme
  Fuel Expenditure
  Fuel Expenditure
  Defence Budget
  Defence Budget
  Stanley Airfield (Shelling)
  Stanley Airfield (Shelling)
  Port Stanley (Bombing)
  Port Stanley (Bombing)
  HMS Sir Galahad
  HMS Sir Galahad
  Falkland Islands (WRAC Personnel)
  Falkland Islands (WRAC Personnel)
  Goose Green (Hotel Meals)
  Goose Green (Hotel Meals)
  Task Force Personnel (Driving Licence Fees)
  Task Force Personnel (Driving Licence Fees)
  Falklands Campaign (Royal Fleet Auxiliary Employees)
  Falklands Campaign (Royal Fleet Auxiliary Employees)
  Falklands Campaign (Hardship Allowance)
  Falklands Campaign (Hardship Allowance)
  RFA Fort Austin
  RFA Fort Austin
  Ascension Island—United Kingdom (Vessels)
  Ascension Island—United Kingdom (Vessels)
  Falkland Islands (Danish Vessels)
  Falkland Islands (Danish Vessels)
  Safe Domina
  Safe Domina
  Falkland Islands (Vessels)
  Falkland Islands (Vessels)
  Phantom and Chinook Purchases
  Phantom and Chinook Purchases
  Falkland Islands (Engagements)
  Falkland Islands (Engagements)
  Polaris
  Polaris
  Public Relations
  Public Relations
  Nuclear Tests (Radiation Compensation)
  Nuclear Tests (Radiation Compensation)
  RAF Lindholme
  RAF Lindholme
  Falkland Islands (Franks Report)
  Falkland Islands (Franks Report)
  Zimbabwe
  Zimbabwe
  Falkland Islands (Military Contingency Plans)
  Falkland Islands (Military Contingency Plans)

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

Land: Vacant and Under-used Acreage
Lord Gainford: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many acres currently recorded on the local authority registers of vacant and under-utilised land for England are in local authority possession.
Lord Skelmersdale: My Lords, the six-monthly returns for the end of December are currently being analysed, but at the count on 1st July last, local authorities owned 61,000 acres, nearly two-thirds of the total of all publicly owned land on the registers.
Lord Gainford: My Lords, I thank my noble friend for his Answer. May I ask him whether he is able to say if Her Majesty's Government can give any direction to these councils to make use of this land rather than to frustrate possible housing development?
Lord Skelmersdale: My Lords, if I may correct my noble friend on one point, not all of this land is in the remit of the councils. Quite a lot of other public land is included. So far as directions are concerned, my right honourable friend is actively considering this matter in respect of a number of sites on the registers. The procedure would be to invite the owning public body to state whether there is any reason why a
2
direction should not be given and, in the light of its reply, to consider what action to take.
Baroness Birk: My Lords, is it not a fact that much of this land remains vacant or under-used because of the cutbacks in the rate support grant and the capital control restrictions which were introduced by the Local Government Act 1980? Is it not also true that the Government are, perhaps unintentionally but nevertheless actually, adding land to these registers every week as firms close down, largely due to Government policy?
Lord Skelmersdale: My Lords, so far as the last point is concerned. I should have thought that the land in question there would be privately owned. I agree, however, that there are advance sites, factory sites, for which local councils and others would have the responsibility. So far as the capital allocation, and so on, goes with the rate support grant, or the GRE as I understand it is now called, my understanding is that there is a capital underspend by councils. I do not believe, therefore, that this can be a reason. However, I agree with the noble Baroness that there may be good reasons why some sites should be retained and put to use in the public sector. Naturally, the Secretary of State cannot properly make directions without considering the merits of each case.
Baroness Fisher of Rednal: My Lords, could the noble Lord give any advice to local authorities in the West Midlands area in particular, where large industrial establishments have been completely closed down, which has resulted in acres of dereliction? Can the Minister give any encouragement to local authorities about what they are to do with that land?
Lord Skelmersdale: My Lords, as a general tenet, I should think that if they are able to use that land they should use it. If not, they should allow somebody else to make use of it. However, as I have already said, my right honourable friend cannot do anything without considering each case on its merits. If the noble Baroness has in mind any particular area of land to which she would like to draw my attention, naturally

3
I shall do what I can in that case to give her the advice which she seeks.
Baroness Fisher of Rednal: My Lords, may I ask the noble Minister to tour the West Midlands area and see these derelict sites? If he could do something about getting industry on to these sites we should be only too grateful.
Lord Skelmersdale: My Lords, if that is an invitation, I shall be most grateful to accept it. However, I would point out that this has not happened during the lifetime of this Government only. Some of these sites have been derelict for very many years.

Motor Bicycles and Riders: Conspicuousness
2.41 p.m.
Baroness Macleod of Borve: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps are being taken to make motor bicycles and their riders more conspicuous by day and by night.
Lord Lucas of Chilworth: My Lords, the Transport and Road Research Laboratory is still evaluating the relative merits of a number of likely ways of improving both daytime and night-time conspicuity of motor cyclists. The results of this evaluation should be available early in the summer and our conclusions will be announced at that time.
Baroness Macleod of Borve: My Lords. I thank my noble friend for his Answer. May I be the first to congratulate him on a very well deserved and, if I may say so, popular elevation to the Front Bench and wish him well? Having said that, may I say how unhappy I am—rather, may I ask him to accept that I am very unhappy about his Answer, because the Government have been looking for some time at this particularly difficult problem? Does my noble friend know that in the August issue of Magistrate, a copy of which I have in my hand, it is said that one out of four deaths among males between the ages of 15 and 19 is due to motor cycle accidents? Would my noble friend agree that that is a very high figure? Could I therefore ask him to do something about this particular problem with the utmost urgency?
Lord Lucas of Chilworth: My Lords, I thank my noble friend for her very kind remarks. I am quite sure that her unhappiness is not associated with them. The noble Baroness will probably remember, as indeed the House will remember, that in 1980 the Transport and Road Research Laboratory produced a report which was found to be not acceptable by a majority of people. Further studies were therefore undertaken. A very great degree of seriousness and speed is involved. which is why these other reports and investigations will be completed later this year. I am happy to be able to tell the noble Baroness that the 1981 figures for motor
4
cycle deaths and serious injuries are marginally lower than those for 1980.
Viscount Hanworth: My Lords, surely the noble Lord, Lord Lucas of Chilworth, will agree that no research is necessary to show that the use of headlights on a motor cycle in daylight is beneficial; and that instead of waiting until the end of this year we should get on with some legislation that would make that compulsory now?
Lord Lucas of Chilworth: My Lords, the noble Viscount is not correct in his assertion that there is total acceptance of the use of headlights being an aid. In fact it can be a disadvantage. The series of tests which is now being undertaken is to determine the effectiveness of motor cycles using headlights both by day and in inclement weather.
Lord Underhill: My Lords, may I also congratulate the noble Lord, Lord Lucas of Chilworth, upon his promotion to the Government Front Bench? We wish him well—but not too well! May I say also that we welcome the research being carried out by the Road Research Laboratory but urge that it should not research only into the conspicuity of motor bicycles by the use of headlights but should also examine the possibilities of fluorescent harnesses and the important question of "learner plates", which are of absolute importance to the novice, untrained motor cyclist? Will the noble Lord accept that these points are not being urged from any persecution of motor cyclists but because, despite what the noble Lord has said about there being a slight diminution in the number of accidents, the figures are so serious that action is needed in the interests of motor cyclists as well as in the interests of other road users?
Lord Lucas of Chilworth: My Lords, I thank the noble Lord, Lord Underhill, for his remarks. All deaths on the road are serious, and the Government accept this as being a very serious matter. The research and inquiries now being undertaken and made embrace all areas of conspicuity—particularly that of motor cyclists. That is one of the reasons why these inquiries may perhaps be taking rather longer than usual.
Lord Glenkinglas: My Lords, does my noble friend not agree that it is a matter not just of clothing or headlights; it is the appalling nature of motor cycle riding, such as that seen in London, which is the cause of so many accidents?
Lord Lucas of Chilworth: My Lords, I cannot totally accept that argument. It may be a contributory factor.
Lord Strathcarron: My Lords, does my noble friend not agree that a simple reflective belt and shoulder strap such as that worn by the police makes the rider very conspicuous by both day and night; and that it has the further advantage that the strap is cheap to buy and is also suitable for the safety of pedal cyclists and aged or infirm pedestrians?
Lord Lucas of Chilworth: My Lords, I thank my noble friend Lord Strathcarron for that helpful supple-

5
mentary question. The Government would agree, as all sensible road users must agree, that any kind of reflective clothing and any kind of clothing which draws to one's attention the presence of a motor cyclist, pedal cyclist, pedestrian, or any other road user is most helpful. As the House will be aware, these reflective items are very inexpensive and are available quite freely from car accessory shops and also from RoSPA.
Lord Leatherland: My Lords, is it not a fact that the noise of an approaching motor cycle makes known the fact of its presence to other road users; and is it not a fact that we prosecute large numbers of motor cyclists each year for making an excessive amount of noise when using the road?
Lord Lucas of Chilworth: My Lords, I believe that the noise is probably most evident when the motor cycle has already passed. There are regulations in respect of noise levels of motor cycles, but I cannot add anything as regards the number of prosecutions of the type mentioned by the noble Lord, Lord Leatherland.

Seat Belts: Accident Statistics
2.48 p.m.
Baroness Macleod of Borve: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they are taking to monitor road accidents after the wearing of seat belts is made compulsory on 31st January with a view to reporting on whether injury was or was not caused by wearing the belt.
Lord Lucas of Chilworth: My Lords, a number of studies will be made to provide information on any changes in the severity and nature of injuries sustained in road traffic accidents, including any that might be attributable to seat belt wearing.
Baroness Macleod of Borve: My Lords, while thanking my noble friend for that reply, and in view of what the Government told us during the debate we had last July—that seat belt wearing would be compulsory for only three years, and that there would be a monitoring of any deaths resulting from the wearing of seat belts or otherwise—will my noble friend undertake to insist upon a further statistic in Table 34 of Road Accidents—Great Britain which will show the numbers of those killed or seriously injured as a result of wearing seat belts?
Lord Lucas of Chilworth: My Lords, the preparations which have already been made to monitor accidents will provide information on the level of seat belt wearing, the effect on traffic fatalities and any changes in the severity or nature of injuries resulting from such road traffic accidents. It is not believed that the kind of injuries sustained in road traffic accidents can be positively set as a result of the wearing of seat belts or otherwise. Certainly whatever information comes out of the monitoring will be freely available.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether one of the studies which is to be made will be on the whiplash injury resulting in people breaking their necks, and whether there is the need for head restraints? Is the noble Lord aware that not having head restraints and wearing a seat belt might be very dangerous?
Lord Lucas of Chilworth: My Lords, the Government favour voluntary installation of head restraints, but to date there is no firm information to suggest that there is at this time a case for compulsion.
Lord Underhill: My Lords, in addition to the point covered by the original Question, will arrangements be made, if at all possible, to ensure that the monitoring also gives information as to whether or not injuries were avoided or lessened because of the wearing of seat belts?
Lord Lucas of Chilworth: My Lords, certainly any of the monitoring that reveals figures will have some suggestion as to the cause and effect.
Lord Mottistone: My Lords, has my noble friend been able to assure himself in the time he has been at the department that the monitoring, when it takes place, is going to be fairly conducted in order to present a really balanced view as to whether the compulsory wearing of seat belts is necessary?
Lord Lucas of Chilworth: My Lords, in answer to my noble friend Lord Mottistone, I can tell him that I am perfectly satisfied that all relevant features with regard to an accident, whether or not seat belts are being worn, will be taken into account.
Lord Monson: My Lords, may I ask the noble Lord—whom I, too, should like to congratulate—whether the Government also intend to monitor injuries caused to motor cyclists, pedal cyclists and pedestrians as a result of car drivers being prevented by their seat belts, particularly the static seat belts fitted to older cars, from leaning forward at intersections in order to ascertain whether or not the road is clear?
Lord Lucas of Chilworth: My Lords, the accident investigation units employed on this task will certainly take all relevant facts into account.
Lord Collison: My Lords, will the noble Lord ask the people doing the survey to take into account the possible danger involved when a person is wearing a seat belt and there is a collision, not head-on but when the car is struck amidships, and the belt prevents the person from being able to swing free? Whiplash can cause accidents, and, indeed, I know of a death from that cause. I am sure the noble Lord will appreciate that I am not against the use of seat belts; in fact, I voted for them. But I think a statistic of that kind, showing how many accidents involve these side-on collisions, would be useful and informative.
Lord Lucas of Chilworth: My Lords, I have to tell the noble Lord, Lord Collison, that lateral accidents are, of course, of extreme danger. The effects they may

7
have relative to the wearing or non-wearing of seat belts are continually being investigated. But there is little doubt in the figures presented to your Lordships by the Government and, indeed, by a number of Members of your Lordships' House during last summer, that the wearing of seat belts will tend to reduce the severity of any accident, whether frontal or lateral.
Lord Derwent: My Lords, is not my noble friend's baptism of fire somewhat excessive and therefore hard-hearted?

The South African Embassy: Security
Lord Hatch of Lusby: 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 propose to take over the security risks revealed by the courts as emanating from the South African Embassy.
The Minister of State, Foreign and Commonwealth Office (Lord Belstead): My Lords, it is our longstanding policy to investigate specific allegations supported by firm evidence of unlawful or otherwise unacceptable activities by members of the staffs of foreign missions in London. Where such allegations are substantiated we shall take appropriate action. On this basis, the Government have already taken action in regard to a member of the South African Embassy's staff.
Lord Hatch of Lusby: My Lords, while thanking the Minister for that reply, may I ask him two questions? Can he tell the House whether the newspaper reports of 17th December were correct in reporting that Warrant Officer Joseph Klue of the South African Embassy was sent home on 23rd November at the request of the Foreign and Commonwealth Office, "for activities incompatible with his official status"—a euphemism for spying? If so, can the noble Lord tell the House what action—not whether any action, but what action—has been taken since? Secondly, can the noble Lord tell us whether newspaper reports in September were correct in saying that Ben Van der Klashorst, a first secretary at the embassy, left the embassy and returned to South Africa after the successful prosecution of three British arms dealers at the Old Bailey involving arms smuggling of over £1 million?
Lord Belstead: My Lords, so far as the first question is concerned, the answer is, yes; Warrant Officer Klue was withdrawn following an approach by the Foreign and Commonwealth Office to the South African Ambassador. We had good reason to believe he was engaged in activities incompatible with his official status in this country, and he will not be allowed to return. So far as the noble Lord's second question is concerned, the Government are still considering a report on that case.
Lord Elwyn-Jones: My Lords, has there been evidence of break-ins by South African agents, security or otherwise, into the premises of anti-apartheid organisations and African National Congress premises in London? Am I right in thinking that that element has been revealed in more than one criminal case in recent months?
Lord Belstead: My Lords, the noble and learned Lord may have a particular case in mind. If it is the same one that I have in mind, legal proceedings connected with that affair are still pending; therefore, the noble and learned Lord will perhaps forgive me if I do not comment further upon it.
Lord Hatch of Lusby: My Lords, can the noble Lord answer my first supplementary question: what action was taken after the Foreign Office asked for the removal of Warrant Officer Klue? Does the noble Lord not agree that these cases, which are coming up so often, reveal that based in the South African Embassy are a number of agents who are acting illegally and are collecting information? This has been substantiated by the South African Foreign Minister, Mr. Botha, who said that intelligence was gained by Warrant Officer Klue and used against the enemies of the Government. against the opposition to the Government in South Africa. Is it not clear that here is a centre of illegal activities, and can the Government not tell us clearly what action they have taken and are proposing to take?
Lord Belstead: My Lords, the answer to the noble Lord's question was given in my original Answer. A single member of the South African Embassy, Warrant Officer Klue, was withdrawn. Therefore, there was no further action that anybody needed to or could take.
As regards the assertions made by the noble Lord in the second part of his supplementary, I repeat that Britain has always made it clear that if evidence to support allegations of improper activity is produced it will be fully investigated and appropriate action will be taken. This will continue to be our approach; but that is our even-handed approach to all allegations which are made, not just those allegations concerning the South African Embassy.
Lord Brockway: My Lords, is the Minister aware that his replies have been reassuring, but nevertheless is there not an extraordinary contrast here? Let us suppose the Soviet Embassy had been guilty of these things. Imagine the reaction that there would have been in this country. Should we not show to the South African Government a determination that these actions should end?
Lord Belstead: My Lords, that is precisely what Her Majesty's Government have done; but I am at pains to make clear that Her Majesty's Government would take precisely that action whichever Government was concerned.
Lord Bellhaven and Stenton: My Lords, can my noble friend say whether South Africa poses a threat to this country, and whether it has missiles trained on our principal cities?
Lord Belstead: My Lords, I think that goes a little wide of the original Question.

The Water Industry Dispute
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. 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.
Water Bill
Brought from the Commons, read a first time and to be printed.

Mobile Homes Bill [H.L.]
3.3 p.m.
Report received.
Clause 1 [Duty to offer agreements]:
Lord Bishopstonmoved Amendment No. 1:
Page 2, line 6, after ("shall") insert ("be made without direct or indirect charge and shall").
The noble Lord said: My Lords, before I speak to this amendment it would be appropriate for me to congratulate the Minister on his elevation. It is no secret that we have not always seen eye to eye, especially on this particular measure. Now that he has been promoted, with more power as well as responsibility, I have no doubt that he will use it in order to ensure that there is greater agreement whenever the occasion warrants it.
This Bill, to which we return after two days on which Committee proceedings were held, is one of some importance. Although some noble Lords may have the impression that mobile homes are like holiday caravans and not of any great consequence, in fact they provide a not insignificant part of our permanent housing stock. The House will be aware that the department sought from the officials of the Department of the Environment a review, in June 1975, with the terms of reference to review, in consultation with interested bodies, the problems of mobile home residents and the contribution that mobile homes make towards meeting the nation's housing needs in particular, and to consider legislative provisions as they affect owners and residents, planning considerations, terms and conditions, and so on.
It was following that review that a very helpful paper containing many recommendations was published by the department. Those of us who are concerned with the legislation have been helped by all forms of interested bodies and individuals, and particularly, of course, by those who depend on a mobile home as their main place of residence. I believe that the figures suggest that about 25 per cent. of the people living in mobile homes are elderly people, and about 28 per cent. of younger people do so. So we have to recognise some of the problems and the shortcomings of the previous legislation on mobile homes.
10
Many of these shortcomings have been detailed at some length in the report to which I refer, and to which the Committee referred on previous occasions. As I have said on a number of occasions, it is the task of the Opposition, and of other noble Lords, to make constructive suggestions which might be thought necessary to close some of the loopholes. This is one of the problems which some of the elderly people and the younger people in particular experienced. They are not able to go into all the legal aspects of the terms and conditions, and so on, in the making of agreements. They are subject to a fair amount of harassment, as we all recognise. There have been press campaigns and the media has drawn attention to these shortcomings.
Amendment No. 1, which refers to Clause 1, seeks to ensure that there are safeguards against the making of unjustified premium charges. We know that when people go on to a site they must have the site owner's permission and agree to a site rent and to other charges—service charges, water, electricity, amenity charges, and so on. But sometimes charges are levied mainly for making an agreement. Clause 1 requires the site owner to offer an agreement to the occupier. The amendment proposes in subsection (4) that basically the offer should be made without any charge.
Amendment No. 1 replaces Amendment No. 11 which was debated during the Committee stage and was a new clause to prevent or prohibit premiums. That amendment was defeated but we thought the matter was important enough to bring forward an alternative. The new amendment is narrower in scope but it is directed at the primary problem of site owners who charge for an agreement. The owner will still be free to sell a caravan to the occupier and to charge a pitch fee. As I said, the previous amendment was concerned with site owners requiring premiums which not only added to the cost for those wishing to use the sites on which a mobile home is placed but in some cases is a form of imposition of having to pay up on demand or else go to another site. The Minister knows, and the House must know, that the alternative sites which are sometimes suggested as a way out are not easily available because planning consent is necessary and there are not all that many sites around.
The DoE 1977 Report, to which I referred, said of the 1975 Act:
"The Act does not appear to deal with the premium payments of any kind if they are charged outside the terms of the agreement. It is not yet certain which, if any, of these additional charges are open to challenge in the courts."
As I said earlier, a range of charges can be levied by site owners on mobile home owners. Some are reasonable but others are imposed that are quite excessive. We wish to stop the making of agreements where premiums are imposed. Premiums are a form of key money which noble Lords will know is forbidden under the Rent Act 1977. I hope the mention of that Act does not give the Minister blood pressure. However, it has been augmented by the Housing Act, 1980, for which the Minister's party was responsible. Indeed, he may claim credit for that measure.
Clause 1 requires a site owner to offer an agreement to the occupier, and this amendment requires that the offer should be made without a charge being levied on the agreement. I am certain that mobile home owners

11
everywhere regard it as an abuse for direct or indirect charges to be levied when an agreement is made, because they are not relevant or justified and they are being imposed merely for granting an agreement. I am referring to any sum over and above the fair market price.
The subject of the payment of premiums was debated earlier in Committee. I quote the Minister, at column 16 of the Official Report for 6th December 1982, when he said:
"Premiums are charged not as a condition of granting an agreement, but, in effect, as a condition of granting the right to station the new mobile home in the first place".
He also said:
"It is not our intention to prohibit this sort of premium".
He went on to say, at column 17 of the Official Report for 6th December:
"If the premium is excessive [the occupier] can simply go to another site. He certainly does not have to accept it".
If one considers the point I made earlier that these sites are not in abundance and there are no easy alternatives, then the mobile home owner who wants to position his home on a site is in a cleft stick. The Minister knows that there is a shortage of mobile home sites. It is not a question of going to an adjacent site down the road or even in the same village or the same county, because such sites are in very short supply. As regards other forms of housing—private and publicly owned houses—there is a choice, but there are only a limited number of mobile homes and a limited number of sites on which they can be placed. Therefore, there is really no freedom and the occupiers have to pay up if they wish to live on certain sites. Surely the Minister would agree with the principle of the amendment, and that therefore he ought to do something about it even if the wording needs to be reviewed. With those comments I beg to move Amendment No. 1 standing in my name and the names of other noble Lords.
Lord Evans of Claughton: My Lords, I should like to speak briefly in support of the amendment moved by the noble Lord, Lord Bishopston, and to explain to your Lordships that I am here in a fairly unfamiliar role for me, speaking on mobile homes, because my noble friend Lord Avebury is in India—whether or not he is inspecting mobile homes there I do not know, but I am standing in for him. I should like to join with the noble Lord, Lord Bishopston, in congratulating the noble Lord the Minister on his elevation. I had intended to write to him, but the newspapers which I received said that the noble Lord had been promoted but did not say precisely what his promotion was. I must say that I am very delighted and I am sure that it will be a great help to your Lordships' House to have the noble Lord in this new, more powerful and more influential role. I hope that our influence upon him will be the greater now that he can have the self-confidence of the higher title.
I should like to say very briefly that I support this amendment. I am sorry that the Government would not go further to prohibit premiums. If owners are allowed to make charges without, so far as I can see, any control on the amount charged, then I must say, as a solicitor, that I fear from my experience in this world
12
that it will very often be used on sites where there is a shortage of caravans, as a way of increasing the profit to be made by the owner. Already he or she has sufficient ways of making a profit under the terms of the Bill, and I should have thought that this would be a reasonable limitation.
One knows, from what we have read and seen during debates on previous housing legislation, how much difficulty there is over charges—charges to do with flats and so on about which we had a number of debates in your Lordships' House. I should have thought that this was an opportunity to try to ensure that charges were not made another synonym or euphemism for an additional profit to the owner. I support the amendment.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, I should like to say "thank you" to both the noble Lord, Lord Bishopston, and the noble Lord, Lord Evans of Claughton, for their kind remarks and congratulations. I certainly take the responsibility part without question, but I am intrigued by the power that has been mentioned. I cannot say that I have noticed much of that vet, but it is early days and you never know. Certainly before I go further I should like to say that I do indeed claim credit, along with the Government, for the 1980 Housing Act.
This amendment is concerned with the same issue as one of those moved by the noble Lords, Lord Bishopston and Lord Avebury, in Committe. The amendment before us today is very much milder in tone than that proposed in Committee, which sought to make it a criminal offence to charge a premium in these circumstances. But I must say that I still cannot accept it. The arguments put forward by the noble Lord, Lord Bishopston, and indeed by the noble Lord, Lord Evans, are such that I think I ought properly to explain precisely why I take that view.
The discussion that we had in Committee on this subject was, I felt, not quite as clear as it might have been. The first point I should like to establish is the distinction between, on the one hand, a charge that a site owner might seek to make when he offers agreements to all the residential occupiers on site and to those who come on to the site in the future, as a condition of the agreement; and, on the other hand, the premium or profit that a site owner makes when he arranges for a new mobile home to come on to his site. In the second case we are talking about the profit that a site owner makes on the expenses he incurs in transporting the new home to his site, connecting it up to services such as the water supply, electricity et cetera. These profits are made separately from what may happen when the agreement itself is offered. I think that the noble Lords are seeking to prohibit both these type of charges by their amendment, but they are different and it is crucial that we should look at them separately.
The first type of charge at which this amendment is aimed is one that a site owner might seek to make as a condition of offering an agreement. It is presumably envisaged that the site owner would say to an occupier something like, "Here is a statutory agreement that I am obliged to offer you. If you want to accept it, you must pay me £1,000" or whatever the amount may be.

13
The Bill does not allow a site owner to make that type of statement. It imposes an absolute duty on him to offer an agreement to all residential occupiers, present and future. There are no conditions on that offer and the occupier is completely free to accept the agreement if he chooses. If a site owner asks for an extra payment in these circumstances, then the occupier should refuse to pay it.
It could happen, I suppose, that a site owner who asked for this type of payment might withdraw his offer of an agreement if the occupier refused to pay, but in that case the site owner would have failed to fulfil the duty on him to offer an agreement and that is a critical point. The occupier could then, if necessary, go to court to enforce that duty, as he would have to do in these circumstances if this amendment were accepted. So far as that type of charge is concerned the Bill already has the effect that the noble Lords are seeking.
The Bill does not—as the amendment would—prevent a site owner from making it a term of the agreement that the occupier should pay for the administrative expenses which the owner incurs in making the offer of an agreement. It does not seem to me unreasonable that he should be able to recover these expenses provided that the charge he makes is itself reasonable. If the administrative charge is unreasonable then the occupier, of course, would be able to challenge it.
That is the position as regards charges which might be made when the agreement itself is offered. The issues that they raise are, as I have said, different from those which arise on the premium or profit which a site owner makes when he brings a new mobile home on to his site. My understanding is that it is a fairly normal practice for a prospective occupier to select the mobile home that he wishes to buy and to agree with the site owner that he should bring it on to site. This can be at an earlier stage and it is quite separate from the offer of an agreement required by the Bill. The site owner then acquires the home from the manufacturers and arranges for it to be transported to his site and connected to services. The occupier then pays a total price to the site owner, which includes an element of profit for the site owner. It is this profit which I described in Committee as an important part of a site owner's income. I made the point then that an occupier who considered that the profit which an individual site owner made was unreasonable could go elsewhere.
The noble Lord, Lord Bishopston, said that in certain parts of the country it is difficult for prospective occupiers to go elsewhere because demand outstrips supply, which I accept. But here we are talking about people who are considering whether or not to buy a mobile home. I do not think it realistic to argue that such people are likely to be forced to buy a mobile home at an extortionate price. They have an element of choice. A site owner who seeks an excessive profit is likely to find himself without any occupiers. For that reason I am unwilling to accept that this form of profit for site owners should be prohibited.
The effect of banning these profits would be either to increase the pitch fees paid by all occupiers or to drive site owners out of business. I do not think that either result is desirable. I hope that I have said enough to
14
persuade the noble Lord to withdraw the amendment. In so far as it prohibits charges which are made as a condition for offering an agreement, frankly, it does not add significantly to the Bill's provisions. In so far as it goes further than the Bill in restricting a site owner's profits, for the reasons that I have given it is not acceptable.
In conclusion, I should like to repeat something which I raised many times in Committee when we were talking right across the provisions of the Bill. Throughout the Bill we seek to provide a balance between the needs of the occupiers and those of the site owners. It is the Government who have brought forward this Bill because we recognise that there are shortcomings in the 1975 Act, which, in fact, went a long way to improve the position which appertained prior to that date. We want to do this as equitably, and as fairly all round as we can. We had considerable consultations, and the Bill is the result of those consultations. Although one can always argue that one side or another is disadvantaged to a greater or lesser extent, on balance with this, as with other amendments before and now, I think that we have it just about right. I hope the noble Lord will think that that is so.
Baroness Ewart-Biggs: My Lords, I should like to say a few brief words. I am compelled to speak in this debate mainly in my capacity as an ex-diplomat's wife—and a mobile home is truly mobile in that capacity. I do not think the point that the Minister has made is absolutely satisfactory because he said that if it was wrong, meaning that if the occupier did not think it was right to pay this charge, he could refuse and go elsewhere or go to court. That must mean that the Minister thinks that these charges are wrong. Surely this particular amendment would simplify the position in that if the owner is not able to make his profit he must increase the profit he makes when selling the caravan, or he must increase the charges that he makes through his pitch fees.
Surely the noble Lord, Lord Bellwin, must agree that there is an identically parallel situation as regards flat dwellers. My noble friend has already mentioned this, but I shall repeat it because I believe it is a very important point. If it was wrong for key money to be paid for a flat or a house for a home dweller, surely we should try to protect mobile home dwellers in the same way from the power that the owner of the land has in this particular case.
Lord Bellwin: My Lords, I hasten to say that I do not accept that the circumstances are the same as those for flat dwellers—not at all. Bit if the noble Baroness is right and if the circumstances were the same. I would have to turn her argument round on her by pointing out that if one looks at the effect upon flat dwellers who wish to have accommodation one sees that although the Rent Acts have had many good effects no one can deny the bad effect which has dried up the availability of supply; and if the noble Lord, Lord Bishopston, is right—and I do not quarrel with him about this—that there are parts of the country where site accommodation is also difficult, he should be as concerned as I am that we should do nothing to make the likelihood of that less likely, if I can put it that way.

15
Therefore, I cannot accept the point that the noble Baroness makes. I would simply fall back on my last observation. We are not talking about an exact science: these are judgments; this is a point of view. In trying to get a balance, as we are in this case, it may well be that if you see the argument more in one direction than another you think that it comes down slightly on the wrong side. I think the Bill gets it about right.
Lord Bishopston: My Lords, the Minister has said that he is not yet quite sure what powers he has as a Minister of State. Having been one for five years, all I can say is that he probably has more powers than he thinks. I do not think he will have to say to us, "I shall consult on this" but, "I can actually say that I will agree to it". On this occasion I do not expect him to say that he accepts the amendment, but I should like to think that, considering the merits of what we seek to do, he will look at it again.
The noble Lord said that the occupier can go to court. That is all right, but it can take time. Many of the people we are dealing with are, as I have said, elderly; some are family people; and some are not too well aware of the legal intricacies of legislation which may or may not affect them. To go to court can also be costly. At this stage I shall not refer to Clause 5 of the Bill, which defines what is "the court". That will be raised in debate later on this afternoon. But it will certainly he very costly for people to go to court. I should have thought that legislation ought to be as helpful as possible by laying down, within reason, the details of what can or cannot be done.
Another more serious aspect of this is not only the cost but the aspects referred to in the DoE report, to which I have referred. At paragraph 3.55 the report refers to ways in which the site owner can discourage the making of an agreement which is necessary under the Bill. Having mentioned in the previous paragraph one way in which site owners can discourage occupiers from having an agreement, it goes on to say:
"This is not the only way in which some site operators have apparently sought to avoid entering into Mobile Home Act agreements. The large number of representations received by the department have left little doubt that a combination of lack of time, misunderstanding, ignorance, in some cases fear and the deliberate and often successful attempts at evasion have limited the rights that the Act sought to give. Among the pressures put on residents was a threat of increased site rents only for those who chose to enter into an agreement, exorbitant fees charged for the agreement itself and provision for additional capital sums to be paid annually by future residents to whom an agreement has been assigned".
Then the next paragraph reads:
"It is also unclear how far the Act has succeeded for those who have agreements in outlawing certain restrictive practices. The Act"—
this, of course, is the Mobile Homes Act 1975—
"does not appear to deal with premium payments of any kind although that is outside the terms of the agreement. It is not yet certain which, if any, of these charges are open to challenge by the courts—connection charges and premiums charged to tenants entering sites usually to he paid outside the terms of the agreement".
There is some doubt about this and it is not good enough to say that people can go to court to get their rights taken care of and the measure defined.
The Minister has said, again rightly, that we seek a balance between the site operators and the occupiers.
16
I agree, but he must realise that the main advantage is with the site owners. They have the sites and, due to shortage of alternative sites, if someone wants to put a mobile home on a site, the operator can say, "These are my terms."
I accept the Minister's point when he says that all this can be in the charges, but the charges should not include something for merely making the agreement. It is rather like going into a shop and buying a commodity off the shelf where the price is 20p and the shopkeeper saying, "You can have it at the price of 20p but I will charge another 5p for selling it". That is really only possible when there is a shortage of that commodity, but we do not expect that kind of thing to go on, especially when other forms of home ownership are covered by the Rent Act 1977 and the Housing Act 1980, which prohibit key money.
I hope that the Minister will look at this again, in view of the comments made by noble Lords. To give the Minister a chance to use his powers, I shall seek to withdraw the amendment at this stage.
Amendment, by leave, withdrawn.
3.33 p.m.
Lord Bishopston Lord Bishopston moved Amendment No. 2:
Page 2, line 29, at end insert—
("( ) For so long, after the expiry of the required period, as the owner fails to offer the occupier an agreement under this Act, the owner shall, notwithstanding the terms of any agreement, not be entitled to increase the amount of any payments due from the occupier.").
The noble Lord said: My Lords, this amendment also is important, indeed more important, and also seeks to clarify the Bill and close the loopholes which need closure, if the rights of the mobile home occupiers are to be safeguarded and if the site owners and operators are to be clear about their rights and responsibilities. The Bill does not impose any realistic sanction on the owner who fails to offer an agreement—I touched on this briefly when dealing with the last amendment—and the occupiers' right to apply to the courts is not sufficient. The amendment seeks to deal with the non-complying owner by effectively preventing him from increasing pitch fees or other charges as long as he is in default. We discussed this at the Committee stage and this is a variation of the amendment moved then. However, it is a little less demanding, which I think should please the Minister, but we consider it important. Because the Bill does not do so. the amendment seeks to impose an effective sanction on site owners who fail to offer an agreement. The 1975 Act provided for agreements to be made but only a percentage of occupiers made or completed agreements. so not all are covered now.
The review to which I made reference covers this in paragraph 331 and it is, I think, relevant to this situation. The paragraph says:
"Mobile home owners normally station their home on a site and occupy a pitch merely under a contractual licence. The type of contract varies considerably but the majority have no more than an oral agreement to occupy some part of a site. The DoE survey carried out mainly before the Mobile Homes Act 1975 came into operation showed that only one-third of site owners had offered written agreements to their residents and about one-quarter of residents had signed such an agreement. Half those without agreements would have liked them but even written agreements

17
rarely give the residents much security and fixed terms were the exception".
It is obvious from correspondence from various parts of the country that there is no protection where there is no agreement. This amendment seeks to provide some protection pending the making of an agreement, because without agreements there is no protection for occupiers and no satisfactory position for site owners, because neither party is aware of the legal situation, except that the site owner is as such in a much stronger position than the occupier who is afforded little or no protection or security. We shall be told that the occupier has a right, as I said earlier, to take his case to the courts to define and enforce his rights. The snag is that the occupier may be unaware of his rights or afraid to enforce them for fear of the consequences. I gave an earlier quote from the DoE report which indicated the discouragement which can be placed upon an occupier to have an agreement. The right of the occupier to go to court is not really enough safeguard, apart from the fact that few would want the trouble, or indeed the costs. The Bill should provide that a site agreement should be unenforceable for as long as no statutory agreement has been offered.
As the noble Baroness, Lady Trumpington, said at the Committee stage of the amendment we debated last time—and, of course, it is the spirit of this one—it is in keeping with Section 65 of the Consumer Credit Act 1974 in respect of improperly executed credit agreements and to get the matter sorted out by the court could be a procedure to discourage occupiers seeking justice; it could be costly and could involve someone seeking legal aid. Those were the points, which I hope I paraphrase rightly, mentioned by the noble Baroness, Lady Trumpington, last time. So the amendment aims to deal with the non-complying site owner by effectively stopping him from increasing pitch fees or other charges for so long as he is in default. The Minister has said that he wants to stop cluttering up the courts—and how much we all agree with him—but if he intends to send people to the courts to get rights for these relatively small or minor but nevertheless important legal points, he will have queues there. We are trying to help the Minister to take this matter away from the courts by putting it into the Bill and letting everyone know exactly where he stands. This is another loophole which my noble friends and I believe should be closed.
Lord Evans of Claughton: My Lords, may I from these Benches once again lend my support to this amendment moved by the noble Lord, Lord Bishopston. I think the position is that, though the overwhelming majority of landlords and site owners are fair and reasonable people, no one, on the Government Benches or elsewhere, would be so naïve as to think that all site owners and all landlords are the very essence of every possible virtue. The fact of the matter is, as the noble Lord, Lord Bishopston, has said, that the difference in bargaining strength and the difference in power between the owner and the occupier is very considerable. The owner is in a much stronger position than even the occupier with an agreement. The occupier without an agreement, reluctant as he may be to take legal advice or to think he cannot afford legal advice, and indeed, reluctant as he may be to do anything to anger the owner, might be willing to put up
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for a very long period with a totally unprotected position as an occupier without an agreement.
The best way to concentrate the mind of the owner—the probably very rare case of the unscrupulous owner—is to prohibit him, as this clause does, for increasing the amount of payments made by the occupier until a satisfactory agreement has been entered into. I should have thought that this was a very reasonable amendment, and one that the Government might agree to accept.
Lord Bellwin: My Lords, the purpose of this amendment is to impose a penalty on a site owner who fails to offer an agreement under the Bill within the required period. The penalty would be that the owner could not increase the payments due to him from an occupier to whom he had not offered an agreement. Like the first amendment we considered a few moments ago, this one deals with a subject we discussed in Committee, and again does so in a less severe way than the earlier version.
My Lords, I argued in Committee that it would be wrong to assume that site owners would go to great lengths to avoid their obligation to offer an agreement under this Bill. An essential feature of this Bill is that it will not impose on site owners anything like the burden the Rent Acts impose on private landlords. We should not, therefore, expect that site owners will seek to avoid the obligations created by the Bill in the way that private landlords are said to avoid those of the Rent Acts. That said, I accept of course that there may be some site owners who will fail to offer agreements within the required period and that there must be protection for occupiers against them. The Bill already provides that protection. It enables an occupier to go to court to require the making of an agreement if one is not offered when it should be. I am not convinced that this amendment would take us much further.
We are told that the amendment would deter site owners from failing to offer agreements. Can we really be sure that a site owner who has ignored the obligation on him to offer an agreement under the Bill will pay any more attention to the effect of this amendment? The occupier who is not offered an agreement will still have to go to court to enforce his rights. If this amendment were to have effect, he would have to go to court to recover fees that he should not have paid. And if the problem is that the occupier did not claim his agreement because he did not know his rights, this amendment is not going to enable him to discover what those rights are.
The Bill as it stands offers a straightforward sanction for an occupier who is not offered an agreement. He can go to court or to an arbitrator to get one and on terms that the court considers just and equitable. He has the same recourse if the terms of the agreement that is offered to him are unacceptable. I do not believe that this amendment would in practice strengthen that protection, as its promoters claim. I think there is also some danger that it could be confusing. Might it not tempt an occupier who had been offered an agreement, and had neither accepted nor refused it, to claim subsequently that the offer had never been made? And might that not mean more court action rather than less? The Bill will give a solution to an occupier who is

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genuinely not offered an agreement, and one that it would be very difficult to abuse. It is, I believe, both an appropriate and an adequate sanction for the Bill and I hope that, on reflection, the noble Lords will feel able to withdraw the amendment.
Lord Bishopston: My Lords, I am sure that we are disappointed at the Minister not being more forthcoming on this. Without an agreement there is no protection. We believe that if the making of an agreement is delayed, maybe for reasons of uncertainty, and this we are trying to correct in this Bill, or because the site operator, as I said earlier when quoting the DoE document, is not keen on an agreement being made for obvious reasons, then there is no protection for the mobile home occupier.
We debated an amendment on somewhat the same lines at the last stage, when the Committee met, and this amendment has been varied in order to make it more likely that the Minister may be forthcoming on it. If the Minister cannot give any indication that he is prepared to look at it again, then we ought to test the feeling of the House on the matter.
The Lord Chancellor: My Lords, I do not know whether I ought to put the Question now, or whether the noble Lord wants to make the Statement now and have the Division afterwards? If I do not receive any indication, I shall put the Question now.
Lord Bishopston: My Lords, I think that it would be desirable in order to complete this amendment.
3.45 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 58; Not-Contents, 103.

DIVISION NO. 1

CONTENTS

Amherst, E.

Hanworth, V.

Amulree, E.

Hatch of Lusby, L.

Ardwick, L.

Houghton of Sowerby, L.

Aylestone, L.

Jenkins of Putney, L.

Bacon, B.

John-Mackie, L.

Banks, L.

Kennet, L.

Beaumont of Whitley, L.

Kilmarnock, L.

Beswick, L.

Leatherland, L.

Birk, B.

Llewelyn-Davies of

Bishopston, L.

Hastoe, B.

Blyton, L.

Lloyd of Hampstead, L.

Briginshaw, L.

Mayhew, L.

Brockway, L.

Molloy, L.

Bruce of Donington, L.

Oram, L.

Clancarty, E.

Peart, L.

Cledwyn of Penrhos, L.

Ponsonby of

Collison, L.

Shulbrede, L. [Teller.]

Cooper of Stockton

Reilly, L.

Heath, L.

Sainsbury, L.

Derby, Bp.

Shaughnessy, L.

Diamond, L.

Stewart of Alvechurch, B.

Donaldson of Kingsbridge, L.

Stewart of Fulham, L.

Elwyn-Jones, L.

Stone, L.

Evans of Claughton, L.

Strabolgi, L.

Ewart-Biggs, B.

Taylor of Mansfield, L.

Fisher of Rednal, B.

Underhill, L.

Gaitskell, B.

Wallace of Coslany, L.

Gladwyn, L.

Wells-Pestell, L.

Grey, E.

Wigoder, L.

Hale, L.

Wootton of Abinger, B.

Hampton, L. [Teller.]

20

NOT-CONTENTS

Adeane, L.

Long, V.

Alexander of Tunis, E.

Lucas of Chilworth, L.

Ampthill, L.

Lyell, L.

Auckland, L.

McAlpine of Moffat, L.

Avon, E.

McFadzean, L.

Belhaven and Stenton, L.

Mackay of Clashfern, L.

Bellwin, L.

Macleod of Borve, B.

Beloff, L.

Marley, L.

Belstead, L.

Masham of Ilton, B.

Bessborough, E.

Merrivale, L.

Boardman, L.

Mersey, V.

Broadbridge, L.

Middleton, L.

Buckinghamshire, E.

Mottistone, L.

Campbell of Alloway, L.

Newall, L.

Campbell of Croy, L.

Nugent of Guildford, L.

Chelwood, L.

Orkney, E.

Clifford of Chudleigh, L.

Pender, L.

Clitheroe, L.

Plummer of

Cockfield, L.

Saint Marylebone, L.

Cottesloe, L.

Porritt, L.

Cullen of Ashbourne, L.

Portland, D.

Daventry, V.

Rankeillour, L.

Davidson, V.

Renton, L.

De Freyne, L.

St. Davids, V.

Denham, L. [Teller.]

St. Just, L.

Dilhorne, V.

Saint Oswald, L.

Eccles, V.

Sandford, L.

Effingham, E.

Seebohm, L.

Ellenborough, L.

Sempill, Ly.

Elliot of Harwood, B.

Skelmersdale, L.

Energlyn, L.

Stamp, L.

Faithfull, B.

Stanley of Alderley, L.

Ferrers, E.

Stodart of Leaston, L.

Fortescue, E.

Strathcarron, L.

Fraser of Kilmorack, L.

Strathclyde, L.

Gainford, L.

Strathspey, L.

Gardner of Parkes, B.

Sudeley, L.

Glanusk, L.

Swansea, L.

Glasgow, E.

Swinton, E. [Teller.]

Glenarthur, L.

Terrington, L.

Glenkinglas, L.

Thomas of Swynnerton, L.

Hailsham of

Thorneycroft, L.

Saint Marylebone, L.

Trefgarne, L.

Harmar-Nicholls, L.

Trumpington, B.

Hayter, L.

Vaizey, L.

Henley, L.

Vickers, B.

Hylton-Foster, B.

Vivian, L.

Ilchester, E.

Ward of Witley, V.

Kinloss, Ly.

Westbury, L.

Kinnaird, L.

Wise, L.

Lane-Fox, B.

Wynford, L.

Lauderdale, E.

Young, B.

Lawrence, L.

On Question, amendments agreed to.

The Water Industry Dispute
3.53 p.m.
Lord Bellwin: My Lords, with the leave of the House, I will repeat a Statement being made in another place by my right honourable friend the Secretary of State for the Environment. The Statement reads as follows:
"Mr Speaker, I wish, with permission, to make a Statement about the industrial action in the water industry.
"The House will be aware that from last Monday night, the unions representing manual workers in the water industry imposed an immediate ban on overtime and call-out for emergencies. They also

21
announced that, with effect from midnight last night, there would be a national strike.
"The latest reports indicate that there have been some adverse consequences arising from last week's industrial action, which have affected normal water supplies in a number of local areas. Where it has not been possible to repair burst pipes, a supply has been maintained by stand-pipes or tankering, as appropriate. In the South-West, Manchester and parts of Wales, the water authority has advised the public, as a precaution, to boil any water to be used for drinking or cooking. Reports at midday today indicate that some 2,000 properties are without their normal supply. Water authorities have dealt this morning with bursts in major water mains in Eltham, in South London, and in the centre of Coventry. There have been no major pollution incidents reported.
"My department is in close touch with the reports from the water authorities, who are seeking to maintain adequate services to their customers. As I informed the House last Tuesday, contingency steps have been taken by the Government in the event of water undertakers asking for assistance to maintain essential services.
"Mr Speaker, the House will be aware that intensive discussions have been taking place under the auspices of ACAS in an attempt to resolve this serious dispute. On Friday, agreement was reached on a procedure involving negotiations under an independent chairman appointed by ACAS. It was also agreed that his powers should further extend to those of a mediator so that he could recommend terms for a satisfactory settlement.
"These talks began on Saturday morning. At that stage, the employers increased their offer. That offer was rejected and, after further discussions, the independent chairman, acting then in his role as mediator, made recommendations for a settlement. The main recommendation was for an increase of 7.3 per cent. over 16 months, plus another 0.5 per cent. from an increase in the five-year service supplement. The employers have indicated that these recommendations are broadly acceptable.
"I understand that the trade union side of the NJIC is meeting this afternoon to consider these recommendations and that the full NJIC will meet this evening.
"I very much hope that it will be possible for agreement to be reached at this evening's meeting and thus to end at the earliest moment the industrial action in the water industry, which could otherwise have increasingly serious consequences all over the country".
My Lords, that is the end of the Statement.
Baroness Birk: My Lords, we thank the Minister for repeating that Statement. All in this House are aware that this is a very serious matter; already millions of people are having to boil water. The situation could rapidly worsen within two or three weeks, by which time the sewerage system would become unusable, with sewage flowing into the rivers. Under the law, the Government have a statutory obligation to provide all
22
water users with a wholesome supply of water. Under EEC and British legislation, they have the further statutory obligation to maintain the quality of river water. How do the Government intend to fulfill those legal obligations?
In November, the employers were ready to negotiate at around 6 per cent., until the Minister, who is now the Secretary of State for the Environment, 'phoned to stop that and insisted on 4 per cent. Without going further into figures, I would only say that we on this side feel that, in view of the range of wage increases today and the cost of living, 4 per cent. is a very low figure for people who have not earned very much and who appear to be near the bottom of the wage increase list.
Since that time the employers have not returned to the negotiating table until last weekend, so there has been the great delay of nearly three months, during which time the whole situation has worsened. Is it not a fact that yesterday's recommendation by the mediator amounts to 5·9 per cent. over 12 months, which is slightly less than the chairman of the National Water Council was prepared to offer in November? I have translated the percentage of the 16 months into the 12 months and have given the figure in that way. Thus, we have not only had a two-month delay, which has brought us to this grave and highly dangerous situation, but the intervention of the Minister was the direct cause of the breakdown, and we are all aware that once there is that sort of breakdown and that type of delay, there is unfortunately then produced a psychological climate which makes agreement and negotiation even more difficult. Will the Minister give an assurance that the mediator will now be free to negotiate without interference, and that the Government will not take any provocative action that will prejudice theoutcome?
Finally, does not the Minister agree that it is imperative that the dispute be settled rapidly on reasonable and honourable terms? It is ridiculous that in 1983 we should be on the brink of a breakdown of this kind in a country which we consider to be civilised and socially aware.
4 p.m.
Lord Evans of Claughton: My Lords, from these Benches I should like to say that we welcome the recommendation of the mediator of a 7·3 per cent. payment over 16 months, because in any terms this is a low-paid industry. We recognise that the workers did not necessarily agree to accept the mediator's recommendation. However, would not the noble Lord the Minister agree that, as the noble Baroness suggested, it would be a great tragedy should the country get into grave difficulties if workers who are in a particularly strong position to put pressure on the Government abuse that position? From these Benches we hope that the meeting this evening will reach an agreement that will be acceptable to both sides.
Finally, we accept that there are dangers in the emergency brought about by this action, but would not the noble Lord the Minister agree that it is important that the householders in this country should not be panicked into a belief that matters are more serious than they are? I think that the noble Lord the

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Minister might agree that, judging from what one reads in the papers and from what one has heard, people are being driven into panic when that situation does not yet justify it. I hope that he can reassure them.
Lord Bellwin: My Lords, on that latter point I should like to say at once that I am very grateful to the noble Lord, Lord Evans of Claughton, for bringing it out. He is absolutely right; there is certainly no need for any panic, or anything even approaching that. The fact is that the sewerage system will not become unusable. The noble Baroness, Lady Birk, said that the situation could worsen within two or three weeks, but I am sure that all your Lordships hope that we shall not be in this situation in two or three weeks' time. Indeed, if it lasted that long, it would of course be worse than it is today, but even then there would be no cause to believe that there would be anything like the disastrous situation which the noble Baroness fears.
I am not going to respond in any belligerent tone, nor am I going to rise to the bait following the way in which the noble Baroness put her observations, other than to say this: the noble Baroness, Lady Birk, tried to imply that my right honourable friend the Secretary of State (as he now is) had insisted on 4 per cent. I think that that is quite wrong; that is not the case. The fact is that the Government have intervened neither more nor less than Governments have ever interfered in matters of this kind.
I still believe that at this moment it would be wrong for us to start to discuss a matter that is delicately poised. It was announced in the Statement—was it not?—that negotiations are taking place this afternoon, and that there will be a further meeting this evening. Anything that we now say that would exacerbate that situation would not be helpful, and therefore I now prefer not to proceed on that point.
The fact is that the mediator is there; he has the opportunity. He is absolutely independent, and I think that that is a plus. The trade union is under an agreement to go to arbitration, which it has chosen not to do. But at least the mediator is acting in this capacity. I think that that is a good thing, and I hope that it will reach a conclusion.
I agree with both the noble Baroness and the noble Lord, Lord Evans, when they say that it would indeed be a tragedy if the situation were to develop at all. I sincerely hope that it will not. The fact is that here, as in so many other things, one is trying to see, and to hope, that there will be equity. I should remind the noble Baroness that the statutory obligation regarding provision lies not with the Government, but with the water authority, and I am sure that it knows that very well indeed. So far as my response to the Front Bench is concerned, I think that if I go no further than that, it will probably be more helpful than would otherwise be the case.
Lord Nugent of Guildford: My Lords, I should like to thank my noble friend for repeating the Statement, and to say how sorrowful it is to me to see this great industry in this parlous condition. I speak in particular in the light of my own experience. I was chairman of the NJIC, and in the past I have conducted similar negotiations. Is my noble friend aware that workers in
24
the industry are not as acutely under-paid as some noble Lords might have suggested? The average earnings are £136 a week, and the average value of the award would be £8-plus per week. Those figures are not negligible. Is my noble friend also aware that I cannot help thinking that the majority of water workers, who are public-spirited, decent men, would be ready to settle for that kind of figure?
Therefore I most earnestly hope that at the NJIC meeting this afternoon the leaders of the three unions will have the usual good sense that I have seen them exercise so many times in the past, and will accept the offer which the independent arbitrator has made and which the employers seem disposed to accept, so that this very dangerous dispute may be settled. There is no doubt that as each day goes by more people will be cut off as bursts occur and main valves have to be turned off. Therefore water supplies to houses will disappear. In the course of a week or two very large numbers of houses all over the country, and indeed industries, will be without water. I feel sure that that is not something which those who work in the industry would want to see. I most earnestly hope that they will accept the proposal this afternoon and bring this very dangerous dispute to an end.
Lord Bellwin: My Lords, I am most grateful to my noble friend, with his vast experience of the industry. In reply to one of his points. I would say that, yes, I am aware of the earnings level to which he referred. It is about an average of the pay of all manual workers. I said, and I still think, that I should not comment in detail on the proposed settlement itself while it is in its present stage of negotiation. But—and I am sure that I speak for everyone in your Lordships' House—I indeed endorse the wish that the matter be settled very speedily.
Lord Diamond: My Lords, as I, too, am most anxious not to say anything that touches too closely on the exact proposals that are under consideration, I should like to proceed from the particular to the general. I wish to ask the Minister whether he does not consider that the situation is yet a further example of the unsatisfactory nature of the method that we have of solving pay disputes. I should like to ask the Minister when the Government have it in mind to introduce proposals which will make it unnecessary for trade unionists to put to maximum inconvenience fellow trade unionists, and their wives and their children, in order to pursue their undoubted right to secure a fair day's pay for a fair day's work.
Lord Bellwin: My Lords, on the latter point, the very fact that there is a dispute at all arises because, on the one hand, there are those who have to take account of the ability to pay on the part of those who, at the end of the day, pay the bill—bearing in mind also what is paid to others—while, on the other hand, there are those, as the noble Lord said, who feel that they need to have more money to take home. There will always be differences in such a situation and that is what negotiation and discussion are all about. The noble Lord asked, is not the situation a further example of the unsatisfactory nature of solving pay disputes? Well, indeed it is. But when there is a perfect way of doing it, I shall be very pleased to hear about it.
Lord Boardman: My Lords, is my noble friend aware that in the private sector there are a number of firms which, while unfamiliar with the systems, have the skills and competence to deal with a great deal of the maintenance and repair work that at the moment is not being done? If this unfortunate strike continues, will he consider encouraging the Water Council to make use of those facilities, and so relieve some of the hardship and industrial loss that otherwise will follow, and also show that a monopoly of this kind must not be used to abuse the public?
Lord Bellwin: My Lords, I hear what my noble friend says. There are many who have spoken similarly and who have sympathy with that view. I think that for today, however, I should prefer not to comment on that. We are most anxious that this matter should be settled. What the future would hold in that way, is, I think, and I would suggest, properly for another occasion rather than for today.
Lord John-Mackie: My Lords, may I ask the noble Lord who gave the advice not to fill the bath, et cetera? He mentioned the fact that people should not panic but there is all the difference between panic and precaution. I have a whole yard of cattle to get watered. My son suggested filling the swimming pool but I persuaded him that it was Government advice not to do this. I am wondering whether my advice to him not to do it was right.
Lord Bellwin: My Lords, only time will tell.
Lord John-Mackie: My Lords, who gave the advice?

Mobile Homes Bill [H.L.]
4.11 p.m.
Report stage resumed.
Lord Bishopston Lord Bishopston moved Amendment No. 3:
Page 2, line 30, leave out subsections (3) and (4) and insert—
("(3) Where the owner has offered the occupier an agreement under this Act within the required period—

(a) if the terms of the agreement so offered are unacceptable to the occupier, the occupier may, within six months of the offer, apply to the court for an order requiring the making of such an agreement;

(b) if the occupier already occupies the mobile home as his only or main residence, he may accept the offer at any time;

(c) where paragraphs (a) or (b) above do not apply, the offer shall he treated as withdrawn six months after the date on which it was made.").

The noble Lord said: My Lords, I beg to move Amendment No. 3. This amendment is similar to one which was discussed at Committee stage without Division a week or two ago. It seeks to replace subsections (3) and (4) of Clause 2 with a new subsection (3). The new subsection deals with the situation where an owner has made an offer under the Act. If it is unacceptable, the occupier may apply to the court. The period during which that may be done is extended from three months to six months. We believe that the period of six months is a reasonable one, three months being really quite inadequate and not enough time for the occupier to recognise the inadequacies or shortcomings of the offer made by the
26
site operator and, indeed, to seek advice from Citizens Advice Bureaux or from legal sources, or to see a solicitor, possibly seeking legal aid, and to make an application to the court. There are problems where agreement is not being made or where the terms are not clear.
The amendment seeks to deal with the position where the owner has offered an agreement but where it has not been accepted or challenged. As the House will know, at present, according to the Bill, the mobile home occupier who, through ignorance or inertia, does nothing about it is in a vulnerable position. It is all very well for some to say that people should know and should exercise their rights; but a good percentage—25 per cent.—of mobile home occupiers are elderly. Half of them are over 40 years of age—which, of course, is not too old—and about 28 per cent. are young people with families. There are some categories here in which those involved may not be able to enforce their rights, or know what they are.
We also think the time of three months is too short if the occupier has had to act in that relatively short space of time to get to know his rights, to seek legal aid and so forth. It is really not long enough. The noble Baroness, Lady Trumpington, claimed in Committee that she thought that three months was too short, and that a period of six months was more acceptable. I am sorry she is not here to give her support today to what I am saying. We believe that on the period aspect the noble Lord the Minister has some sympathy. He said, in fairness, that it is an arguable point, and he stressed this twice. If he thinks that six months is too long and the rest of us think that three months is too short, I really think there is a chance of some compromise between those periods. Perhaps he can have a look at this.
The third part of the amendment safeguards the position of the site owner who has made an offer to a prospective occupier, and in that event the offer would be treated as withdrawn after six months. This amendment has already had some indication of support from the other side of the House, and certainly from noble Lords who are supporting it, and I believe that the merits of the case are worth considering. I hope that the Minister will be able to come to some agreement within the period I have suggested.
Lord Evans of Claughton: My Lords, may I say briefly but, I think, with considerable strength that I believe that three months is far too short a time and that six months is more appropriate. It is the period set up for similar kinds of action under the Landlord and Tenant Acts. I do not want to suggest in any way that the legal profession goes in for delays. I can assure you it does not; it does what its clients ask it to do. Very often, clients ask solicitors to delay things. For all the things that may be needed to be done before the occupier takes the matter to the courts, I can say with complete certainty that three months is not a long enough period. As the noble Lord, Lord Bishopston, has said, it may be shorter than six months. From my experience of similar kinds of problems, I believe that s six months' period would be appropriate in this case. I think that this should be given serious consideration by the Government.
Lord Bellwin: My Lords, I am not without sympathy for what is being said here, but it is not quite that straightforward. There is one respect in which I am quite sure that the approach which the amendment takes is balanced too far against the site owners, and that concerns the position of occupiers who are on a site at commencement. The amendment would place no time limit on their ability to accept, refuse or challenge any agreement. This would place the site owners in an uncertain position in respect of everyone who was on site at the commencement. Apart from anything else, site owners would never know when they were likely to be taken to court. That does not seem to be fair. I am not even sure that it would be entirely in the interests of occupiers to have forever in which to decide. I do not think that there is any possibiliy that the Government would be prepared to accept that aspect of the amendment.
For the rest, we are talking about numbers. Given that the offer of an agreement will be accompanied by the notice that we will prescribe, advising the occupier to read the Government's booklet and stressing the importance of the time limit, I am still inclined to believe that three months is adequate. Having said that, I accept that this is an absolute judgment. Certainly, the noble Lord, Lord Evans, when he talks about the legal requirement, and so on, makes a fair point. I cannot today accept this amendment as it is. We are coming now to the later stages as far as your Lordships' House is concerned. May I say—and I am choosing my words carefully—that we will consider this point again, assuming that the noble Lord withdraws his amendment. I cannot undertake what we will decide, nor even, if we did decide, that we would have the opportunity to do anything in your Lordships' House; but I know from discussions with colleagues following the debates during Committee stage that no one is saying that this is a closed issue. If your Lordships will bear with me and perhaps withdraw the amendment with that in mind, without an undertaking other than that we are not unsympathetic to the point that is being made, perhaps we can move on.
Lord Bishopston: My Lords, I am sure that the House are pleased at the tone of the Minister's reply to this amendment. The amendment is an important one and I suspect that he is not fully happy with the six months' period. Nevertheless, his reply justifies my seeking the consent of the House to withdraw the amendment.
Amendment, by leave, withdrawn.
4.20 p.m.
Lord Bishopstonmoved Amendment No. 4:
Page 3, line 5, at end insert—
("(7) The Rent Officer shall, on the application of the owner or the occupier, specify the extent to which he considers to be reasonable sums payable by the occupier in pursuance of an agreement under this Act and the occupier shall not be liable to pay more than the sums so specified.
(8) In determining for the purposes of subsection (7) above what sum is or would be reasonable—

(a) regard shall be had to all the circumstances (other than personal circumstances) and in particular to—

(i) the character and locality of the protected site;

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(ii) the place within the protected site where the mobile home is, or is to be, stationed;

(iii) the services available to the occupier on the protected site; and

(iv) rates payable by the owner in respect of the protected site; and

(b) there shall be disregarded—

(i) the condition of the mobile home;

(ii) the fact that the agreement was offered or made under this Act.").

The noble Lord said: My Lords, this amendment is one of real importance. We were very concerned in the earlier stages with the problem with which this amendment seeks to deal. This amendment would give power to the rent officer to deal with an assessment which he might consider fair to both the site owner and the occupier, thereby keeping the balance and setting out criteria for that purpose. That is very important. Rent officers, as we all know, have the experience required and would be competent, and—most important—they are respected by all concerned. The Minister has paid tribute to them in the past.
The amendment seeks an independent check on the reasonableness of the charges made. The Bill gives power to the court to deal with charge fixing situations in an agreement, but the criterion which we recommend to the House is taken from the Rent Act 1977. At the same time it does not take into account scarcity value, which I think is an important point. Occupiers, as we know, have the right not only to expect security of tenure, but also to be protected from excessive charges. Clause 2(5) refers to the power of the court to make an agreement under the Bill on such terms as is considered just and equitable in the circumstances. The interpretation of the term "court" in Clause 5—to which I have made reference on previous occasions—is not such as to give us confidence, for it covers a county court or an arbitrator. There is an amendment later from the Minister about the county court.
The arbitrator can be anyone whom the parties agree to as someone to arbitrate in their dispute. It could of course be a friend or relative of the site owner if the mobile home occupier agrees to it. Some of the people who live in mobile homes to which I have made reference may well not be aware of their full rights, and the site owner can say, "I am sure you will agree to Mr. A or Mrs. B arbitrating in this situation". Indeed, it could be a site owner; it could be a friend; it may be a greengrocer or somebody known to both parties as a fair person. It may not be the county court which comes near to people's expectations as a place where they can get justice and advice on what is a reasonable rent.
A rent officer may not make decisions acceptable to both sides, but the reputation of rent officers being experienced in the matters referred to them is such that I feel sure their decision would be accepted as being from someone who acts fairly. The rent officer would accept that the site owner must be allowed a fair rent, a fair return on his capital, and the occupier. with less bargaining power, should at the same time be protected from exploitation. There is this balance of fairness between the two parties—the balance that the Minister on numerous occasions said was so desirable—and rightly so. There is harassment by bad

29
site owners. We all know this. It has been accepted by the DoE. Some occupiers may not like to seek a fair rent arbitration for fear of the consequences. When they do, we should ensure that at least they get a fair hearing based on uniformity—and this is important—of criteria by those experienced in the work of rent assessment.
We debated this question in Committee on a slightly different amendment. The Minister will be aware of the amendment in which we said that the arbitrator should be someone appointed by the president of the Royal Institution of Chartered Surveyors as somebody who would be experienced in this matter. That was not acceptable to the Government. I am sure we are anxious that where the county court does not become involved, the definition of the court as an arbitrator—the arbitrator can be anyone—is something which should be looked at.
The Minister, as I have said before, sees the Acts of 1977 and 1980 as not being relevant to mobile homes legislation. We accept that the two Acts cannot apply to mobile homes, but there is no reason why the rent officer, with his vast experience and in view of the way in which he is accepted by all concerned, should not use the provisions of this measure in the circumstances to which it applies. That surely is a very reasonable proposition to make.
Referring to rent officers on 2nd December, at column 1340 of Hansard, the Minister said:
"I think there is general acceptance that they have skills and knowledge which enable them to hold a reasonable balance, at least one which makes a very hard situation tolerable. I gladly pay tribute to them—and I know quite a lot about the way in which they work".
That is a great tribute indeed coming from the Minister, who with his experience in local government has been in touch with rent officers over a long period of time. The Minister has said that he is not happy about rent officers being brought in and that the courts are able to deal with the rents. They do not always know the criteria because they deal with so many other matters. They are not sure to what extent they get brought in on rent matters. In the case of the two Acts to which I have referred, the rent officer does that work. We see no reason why he should not be brought in again. This amendment tries to bring in somebody who is experienced and is accepted by all concerned, and who has the ability to bring in a degree of uniformity as between one side and the other. That is the ideal person to do the job.
Lord Evans of Claughton: My Lords, I suspect that one of the great success stories of the post-war world is the creation of the rent officer. Rent officers seem to be fairly well accepted by their creators, by the tenants and by the landlords. The atmosphere in which they conduct their proceedings is informal. They act fairly rapidly, and there is very little criticism of their decisions. I wish that could be said of a lot of other organisations that have been created since the war. They are the ideal people for the purpose.
The problems about going to the courts under the charging clause are apparent. To the uninitiated, the atmosphere in a rent officer's office is very different from the rather daunting atmosphere of a court. The necessity of initiating proceedings of various kinds is rather frightening official procedure to the average
30
layman. As the noble Lord, Lord Bishopston, said, in any event the question whether the charges are fair or unfair is difficult for a county court judge or registrar to answer. With the excellent opinion in which the rent officers are held on such a broad front, I would have thought that the Minister might have welcomed this amendment as an improvement to the Bill.
Lord Bellwin: My Lords, we are actually going over an amendment identical to one we went over in Committee, and it will probably be no surprise if I make the same arguments now as I did then. The first of them is that the rent officer service is not equipped to deal with pitch fees on mobile home sites. I am second to none in my admiration for rent officers. I said it on the last occasion, and I happily say it again. I know precisely how they operate. The fact is that the rent officer's job is to fix rents for houses and flats within the Rent Acts; but registering fair rents for tenants of houses and flats is not the same thing as fixing a pitch fee which an owner-occupier of a mobile home should pay. Not only are mobile homes in themselves quite different, but surely the critical point is that we are not here concerned with the rent for accommodation. Mobile home owners are paying for a licence to occupy land and to receive certain services.
The noble Lord, Lord Bishopston, says that rent officers could acquire the expertise to deal with mobile home sites. I am sure that he is right about that: I expect they could. What he does not explain is why rent officers should have to do so. If he believes that rent officers are the only people who can arbitrate fairly between a site owner and an occupier, then I have to say that I do not share that belief. I believe that people other than rent officers can also act as arbitrators. Surely, it is not impossible that a person may be known to both site owner and home occupier whom both would find acceptable to resolve the dispute between them.
I hope we are not again going to spend a lot of time discussing the appointment of an arbitrator. I made many points in Committee. The choice of an arbitrator is a free one to be made between the site owner and the occupier. It might be helpful if I add that the general law relating to arbitration will itself protect occupiers from the worst abuses that noble Lords are trying to guard against. If an arbitrator is not impartial and disinterested, his decision can be set aside by the court. In appropriate circumstances it is also possible to apply to the court before going to the arbitrator for his appointment to be set aside under Section 24 of the Arbitration Act 1950. The chances that the site owner would get away with appointing, for example, his agent or his brother-in-law as an arbitrator are therefore severely limited.
I should like to make a further point about the rent officer service. In Committee the noble Lord, Lord Jacques, argued that to bring them into this Bill would have a great psychological value for occupiers. It would also have a psychological impact on the site owners. They know as well as anyone else the effect that the Rent Acts have had on private landlords. They do not want their mobile home sites to be affected in the same way, and I do not believe that your Lordships' House would want them to apply to these sites for fear that they would have this effect.

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We are back once again to this whole matter of a balance. I strongly contend that the owner-occupied mobile homes do not need the rent officer service; nor can we be sure that bringing rent officers in would have the desired result. We clearly have a difference here, but the Government are adamant about it and the noble Lords may feel able not to press their amendment.
Lord Bishopston: My Lords, the noble Lord the Minister quoted my noble friend Lord Jacques, but I should like to quote from what he himself said at col. 1342 on 2nd December, during the Committee stage. I quote:
"The point that the noble Lord makes about going to court is the most important part of what he was saying, if I may say so. People do not want to go to court. People dislike this; they fear the costs; they fear it might involve them in all kinds of traumas. So they do not want this, and I understand it."
This, I think, is the point, apart from the costs concerned. The Minister keeps saying they can go to court. but that is really not a satisfactory way of doing it. Although one accepts the county court as being part of our judicial system—and very commendable it is—I suggest that on the matter of rents they are not as au fait with the criteria as the rent officer is; and the matter of going to an arbitrator is really more worrying still because arbitrators can be anyone on whom the two parties agree. It may, for example, be some relative of the site owner who is known to both as a fair person; but what on earth does he know about rents? What does he know about the uniformity of values throughout an area? I would suggest this would not be a fair way of getting arbitration.
We tried, with one amendment, to get the Chartered Institute of Surveyors to recommend arbitration people who would be not only acceptable but fair to both sides. Now we are suggesting rent officers. I believe this is an area which the Government must look at again. Although I feel inclined to press this, I believe that the Government should be given another opportunity to look at this matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Successors in title]:
4.35 p.m.
Lord Bellwinmoved Amendment No. 5:
Page 3, line 6, at beginning insert ("(1)")
My noble Lord said: My Lords, Amendment No. 5 is a paving amendment to amendments Nos. 6,7 and 8 and, with your Lordships' agreement. I will speak to this group of amendments together. They apply to the inheritance provisions of the Bill. An amendment to these provisions was tabled at the Committee stage by the noble Lords, Lord Avebury and Lord Bishopston, and proposed most eloquently, if I may so, by the noble Baroness, Lady Fisher. In my response to the noble Baroness, I accepted that the provisions as they stood in the Bill, which followed those of the Mobile Homes Act 1975, had given rise to some concern. I promised to consider the possibility of a change. I am pleased that we have been able to make that change.
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These amendments will extend the Bill's provisions in a way that meets the case argued by the noble Baroness, but avoids the less desirable results that we feel her amendment, as it then was, would have had.
The Bill, as presently drafted, enables a member of an occupier's family who was living with him at the time of his death to inherit the full benefit of the statutory agreement which the deceased occupier held. These amendments will not change that provision, though they will clarify it a little. The amendments will come into play if the occupier does not have a member of his family living with him at the time of his death. In that case, the person to whom the deceased occupier leaves his home will inherit the right to sell the mobile home on site and assign the agreement relating to it. He should, as a result, be able to recoup the value of the investment which the deceased occupier made in buying the home. The amendments will not, however, enable this heir to come and live in the mobile home—unless, of course, he makes a new agreement with the site owner to do so. It is primarily in this last respect that these Government amendments differ from the amendment proposed in Committee by the noble Baroness, Lady Fisher. Her amendment would have allowed the person who inherited the mobile home to come and live in it, without any say in the matter for the site owner, possibly at the cost of disturbing the other occupants of the site. The Government amendments will avoid that possibility. At the same time, they will achieve the essential aim of enabling someone who buys a mobile home to leave the value of his investment to his heirs.
I hope it will be helpful to your Lordships if I explain the effects of this amendment a little more fully. Its drafting is, I must confess, a little complicated. If no member of an occupier's family is living with him at the time of his death, the person to whom he leaves his mobile home will be entitled to sell the home on site and assign the agreement. The heir in these circumstances will not be entitled to come and live in the mobile home; nor will he be entitled to make a gift of the home under paragraph 9 of Schedule 1, Part I. During the period between his inheriting the home and selling it—the "pre-sale period"—he will be liable for the occupier's obligations under the agreement. He will, for example, be responsible for paying the pitch fee and for keeping the mobile home in good repair as the agreement requires. The site owner will also continue to be liable for his responsibilities during this period. He will be able to exercise his right to terminate the statutory agreement during this pre-sale period, on the grounds of breach of agreement or on the grounds that the mobile home will not last another five years, if a five-year point falls within the period. He will not, of course, be able to terminate the agreement on the grounds that it is not being occupied as an only or main residence.
The way in which these amendments are drafted will, therefore, give some protection to a site owner. If the person who inherits a mobile home does not pay the pitch fee or allows the home to fall into disrepair, the site owner will be able to protect himself. But, more importantly perhaps, these amendments will give a new kind of protection to mobile home occupiers. Many occupiers are retired people and I know that there has been anxiety about the existing

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inheritance provisions of the Bill. These amendments should remove that anxiety. They will enable people to buy their mobile homes in the confidence that they can pass on the value of their investment to their heirs. They represent an important and valuable change to the Bill's provisions. The change is one which I felt your Lordships were looking for in Committee and I hope that it will be welcomed now. I beg to move.
Baroness Fisher of Rednal: My Lords, before I speak to the amendment, may I ask the Minister to accept my best wishes on his appointment. We are all pleased that his abilities have been recognised by the Government.
I welcome the amendment provisions and thank the Minister for honouring the undertaking which he gave on the second day of the Committee stage. I welcome also the Minister's elucidation of the clause. I found the greatest difficulty with Clause 3. I read and reread it, and the more I read it the more confused I became. The Minister's knowledge has resulted in an interpretation which I believe executors of wills and solicitors will very much welcome. Clause 3 was drafted in a very confused way. May I ask the Minister whether there is any possibility of the clause being reworded a little more simply so that there is no dubiety about it? There is dubiety about the clause.
I have in my hand one of many letters which were sent to me after a broadcast of "Today in Parliament". One of the letters says:
"It would be nice if the owner of a caravan was able to pass on this to his next of kin, but can I tell you what happened to my husband and I when left a nice little mobile home, only to be told by the site owner that it was not worth anything and that it had got to be removed".
In those circumstances, people who inherit will undoubtedly find themselves in difficulties if the site owner says that there is no value attached to the mobile home and that it has got to be removed. No doubt solicitors will have to make a decision about this. They will have to decide whether or not the property is of any value.
I hope I understood the Minister correctly when he said that the intention is that the person who is left a mobile home will be able to sell it and assign the agreement but will not be entitled to live in it. It may be, however, that the site owner could give an entitlement if the person who is left the mobile home is considered to be satisfactory. That seems to cover all that we expected, or 99 per cent. of what we expected. Therefore, all I have to do is to thank the Minister for looking at our amendment and for going so far towards meeting our point.
Lord Bellwin Lord Bellwin moved Amendments Nos. 6, 7 and 8:
Page 3, line 6, leave out second ("shall").
Page 3,line 8, leave out ("(a)").
Page 3,line 9, leave out from ("such") to end of line 17 and insert ("successor.
(2) Where an agreement under this Act is lawfully assigned to any person, the agreement shall enure for the benefit of and be binding on that person.
(3) Where a person entitled to the benefit of and bound by an agreement under this Act dies at a time when he is occupying the
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mobile home as his only or main residence, the agreement shall enure for the benefit of and be binding on—

(a) any person residing with that person ("the deceased") at that time being—

(i) the widow or widower of the deceased; or

(ii) in default of a widow or widower so residing, any member of the deceased's family; or

(b) in default of any such person so residing, the person entitled to the mobile home by virtue of the deceased's will or under the law relating to intestacy but subject to subsection (4) below.

(4) An agreement under this Act shall not enure for the benefit of or be binding on a person by virtue of subsection (3)(b) above in so far as—

(a) it would, but for this subsection, enable or require that person to occupy the mobile home; or

(b) it complies with the requirements of paragraph 6(1) or 9 of Part I of Schedule 1 to this Act.").

Clause 5 [Interpretation]:
4.44 p.m.
Lord Bellwinmoved Amendment No. 9:
Page 3, line 22, at beginning insert (" (1) ")
The noble Lord said: My Lords, this is a paving amendment for Amendment No. 14. With your Lordships' agreement, I shall speak to the two amendments together. Two amendments were put down when the Bill was in Committee to provide a definition of the word "family". One was put down by my noble friend Lord Campbell of Croy, the other by the noble Lords, Lord Avebury and Lord Bishopston. I did not feel able to accept either of those amendments as drafted, but I offered to consider the possibility of introducing an alternative definition at a later stage, I am glad to have been able to follow up that offer with the Government amendments which are now before your Lordships.
The word "family" appears at two points in the Bill—in Clause 3, which deals with the inheritance provisions of the Bill, and in Schedule 1, Part I, paragraph 9, which enables an occupier to give his mobile home and assign his agreement to a member of his family. It is the second of these references which has given rise to a request for the word to be defined. Site owners are concerned that occupiers may pretend to give their mobile homes and assign their agreements to people whom they claim to be second cousins twice removed in order to avoid paying commission on a sale when they are in fact receiving payment from their imaginary relation. I said in Committee that I considered this anxiety on the part of site owners perhaps to be exaggerated. None the less, I recognise their concern.
I am also aware that there was a general feeling in Committee that it might be helpful to give the courts some indication of Parliament's intentions in using the word "family". The definition provided by the Government's amendment is taken from section 50(3) of the Housing Act 1980, where it us used in relation to succession rights for secure tenancies. I believe that it combines the advantage of clarity with that of bringing in those members of a family whom it is desirable to include. The amendment will apply the definition to the references to "family" in both Clause 3 and Schedule 1.

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Before I sit down, may I deal with the questions that were raised on the definition proposed by my noble friend in Committee, in case anybody wants to raise the same points about this definition. I understand—what I say now must of course be subject to the interpretation of the courts—that the definition provided by our amendment would include a mother-in-law because of the reference to "any relationship by marriage as a relationship by blood". It would also include adopted children by virtue of the provisions of the Children Act 1975, but it would not include second cousins twice removed.
I hope that this amendment will meet the need for a definition which the Committee perceived and I invite your Lordships to accept it. I beg to move.
Lord Campbell of Croy: My Lords, my noble friend has very kindly put down this amendment in order to meet, as he generously stated, an amendment which I moved at the Committee stage. I should like to thank him and to congratulate him for introducing these two amendments.
The purpose behind the moving of my amendment at the Committee stage was that I thought that a degree of closeness was necessary: that to leave it wide open would encourage claims based on very tenuous relationships. As my noble friend has said, the Government have adopted a formula which is to be found in the 1980 Act. I am sure that with the assistance of expert draftsmen this amendment carries out broadly the purpose which I had intended at the Committee stage.
Another degree of relationship was raised at the Committee stage: whether there would be difficulty about the common law wife. I see, however, from the last line of the amendment that that situation is covered. At the Committee stage I said that I thought there would not be great difficulties in Scotland with regard to Scots law but that I was not sure about England and Wales. I assume that the last line of Amendment No. 14 covers the position for England and Wales also. Where there are any arguments about this it is for the courts to decide, but I believe that putting a definition like this into the Bill will avoid a great deal of disappointment and misunderstanding.
It will also save a great deal of time because, with this in the Bill, cases about distant relationships will not be brought up. Again, I would like to thank my noble friend for having, in the space of time before Report stage, met the point I raised at Committee stage.
Baroness Fisher of Rednal: My Lords, may I thank the noble Lord the Minister from this side of the House for this amendment. The noble Lords, Lord Campbell of Croy and Lord Avebury, put arguments at Committee stage on the subject of definition, and it so happened that we on this side of the House had exactly the same sort of amendment to put down but the noble Lord, Lord Bellwin, became the "second cousin removed" and got there before we did. It is for that reason that we welcome this amendment. We welcome it because we believe it is important in Government legislation that definitions of this type
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should follow legislation. I believe the noble Lord would agree that when we have a debate on the legal interpretations of Acts of Parliament, it is a good thing that the same definitions in respect of family membership are applied to all sorts of legal interpretations. It is for this reason that we welcome the amendment and are pleased that it is following the Housing Act 1980.
Lord Evans of Claughton: My Lords, this is a very generous amendment which the Government have put down, although I do not feel that it is quite as generous as the noble Lord, Lord Bellwin, was suggesting. For example, second cousins twice removed are excluded, quite rightly, but I understand that even first cousins once removed are excluded—which is also quite right. I see also that the child of a mother and reputed father is included, but not the child of a father living with a woman who is not the child's mother; they are excluded and the male sex suffers relative to the female sex. Again, that is probably an accepted principle although it is one that I believe should be noted; that there is in fact a slight lacuna there. People who live together as husband and wife are included. It strikes me that this is a situation which is going to cause a great deal of excitement and interest. Without being unduly delicate in your Lordships' House, one is aware that on the northern coasts of Wales and elsewhere, some of these mobile homes are love nests in the old-fashioned sense of the word.
I wonder about the extent to which living as husband and wife will be freely defined. We have in the North of England an expression with which I am sure the noble Lord the Minister is familiar, which is "living tally". Perhaps the noble Lord the Minister can confirm whether this will extend to those rather uncertain relationships which exist on a fairly short-term basis. I do not know. As the noble Lord the Minister has said, that is a matter for the courts to decide. I must say that this is very much to be welcomed on the grounds already mentioned, because it should eliminate a great deal of uncertainty and possible litigation.
On Question, amendment agreed to.
4.54 p.m.
Lord Bishopstonmoved Amendment No. 10:
Page 3, line 23, at end insert (", except in relation to paragraphs 5 and 6 of Part I of Schedule 1,—").
The noble Lord said: My Lords, having got rid of the last amendment, which was one of "relative" importance, we now go on to Amendment No. 10, and I should like to speak to Amendment No. 13 also. Amendment No. 10 is also an important amendment. I am not sure what will be the response of the noble Lord the Minister. He will, perhaps, not be quite so forthcoming as he was on the previous amendment, but we are always hopeful. These are new amendments, and they seek to modify the definition of the word "court". I will read what Clause 5 says because it is very important that the House should know what is meant by "the court", which has to assess rents and to decide on termination of agreements and a number of other matters of importance to the two parties concerned. As a magistrate myself—as other noble Lords are—and

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knowing what courts are like, we all have the greatest confidence in them, whether they be magistrates' courts or county courts. But in Clause 5, which is the interpretation clause, "the court" means:

"(a) in relation to England and Wales, the county court or, where the parties have agreed in writing to submit any question arising under this Act or, as the case may be, any agreement made under it to arbitration, the arbitrator;

(b) in relation to Scotland, the sheriff or, where the parties have so agreed, the arbiter;".

So "the court" is not just a dignified forum of justice, accepted as the protector of all our rights, but can be an arbitrator.
As I have already mentioned, the arbitrator can be someone who is related to the site occupier. These are important aspects when one realises the powers which are being given to the arbitrator, not to the established court, which is a well-known part of our judicial system. "The court" could be an arbitator who could be a friend or relative of the site owner, as long as he is accepted by the occupier. But the occupier may be under pressure or may accept through fear or ignorance; then "the court" is not the impartial and understanding institution which is so much a part of British justice.
I have mentioned the powers of the arbitrator in relation to the interpretation contained in Clause 5. If we now look at paragraph 6(1) of Schedule 1, we see a reference to the power of the court to terminate the agreement. So this arbitrator, who could be biased towards the party seeking arbitration, can also have the power to terminate the agreement. This far from impartial situation could in some cases mean that the future security of the mobile home occupier will be at stake. I consider that it is intolerable that a person chosen by the site owner should have the absolute power to terminate any agreement; it makes a mockery of the Bill. We have debated this point at length earlier, when we recommended that arbitrators be appointed or recommended by the county surveyors' institution. This amendment seeks to promote more justice by modifying the definition of the word "court". I beg to move.
Lord Bellwin: My Lords, the Bill provides that agreements under the Bill may be terminated on a number of grounds by the court, and "the court" is defined in the following way. In England and Wales it is the county court or if the parties have agreed to submit to arbitration any questions or disputes about agreements under the Bill, an arbitrator. In Scotland it is the sheriff, or again, if the parties have agreed to arbitration, an arbitrator. These amendments are in part consequential on a later amendment, Amendment No. 17, but their effect, when taken with this later amendment, would be to enable only the county court in England and Wales, and the sheriff in Scotland, to terminate agreement. The arbitrator would be cut out altogether. For the moment, I shall concentrate my remarks on the value of arbitration in these circumstances, rather than on the grounds for termination.
We have spent a good deal of time during the passage of this Bill in discussing its arbitration provisions. One might almost think that what we were proposing in the Bill was something new and dangerous, and that it was designed to harm the interests of
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mobile home occupiers. But the occupiers who responded to the consultation paper we issued in February last year wanted arbitration just as much as the site owners did; they wanted an alternative to court action to be available. This amendment would remove that alternative for an important area of disputes under the Bill—disputes over the termination of an agreement.
I am well aware that noble Lords are worried that the arbitration provisions may be abused. They are apparently unwilling to accept that the freedom to choose an arbitrator that the Bill provides is adequate protection against abuse. I hope that what I have said about the arbitration system itself when we were discussing the rent officer will reassure them. As I understand it, the noble Lord, Lord Bishopston, is particularly concerned that an occupier will commit himself to a choice of arbitrator who turns out not to be impartial, perhaps by accepting a named individual in the agreement or in some other way. If that should happen, the occupier can apply to the court to have the appointment changed or cancelled. Even if he was aware that the site owner and the arbitrator were connected and he accepted the appointment in spite of that knowledge, the Arbitration Act of 1950 allows him subsequently to apply to the court for the existing appointment to be revoked on the grounds that he may not be impartial. So it is simply not the case that an occupier is not protected from a site owner who tries to use his agent or his brother-in-law as an arbitrator.
I hope I have said enough to show that the danger that an occupier will find himself stuck with a biased arbitrator is by no means as great as has been suggested. This amendment has also been justified on the grounds that the termination of an agreement is a special sort of issue which only a court should be allowed to resolve. I certainly do not deny that the question of whether or not an agreement should be terminated is important, but I do not see that its importance prevents an arbitrator from dealing with it. Is an arbitrator not capable of deciding whether someone is still living in his moblile home or not—the first ground for termination in paragraph 6—and is it not likely that an arbitrator could actually do a good job in deciding how long a mobile home will last—the second ground for termination in paragraph 6?
I made the point earlier on that many occupiers have asked us to ensure that arbitration is available. It can offer a quicker and cheaper means of resolving disputes than the court. It seems to me that the arbitration provisions in the Bill are fair and valuable to both occupiers and owners, whatever the dispute. I think that if the noble Lord, Lord Bishopston will carefully consider what I have said, as he so often asks me to do, he will recognise that this is the case. After all, there is nothing political in this in any way: we are simply trying to find a fair and sensible way of going about it. I do believe that the amendment is not needed.
Lord Bishopston: My Lords, I feel that this is a very important matter. It is so easy for people who do not know too much about the law to sign on entry into a site an agreement which has a clause which says that the site owner shall decide on his own arbitration. If you sign that agreement you have very little say at all;

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you have signed away your rights under the measure which talks about agreement between the two parties. It is all very well for the Minister to say that if you do not like what the arbitrator decides you can go to the court. Surely arbitration means that you accept the decision of the aribtrator. Would not the court say, "You put this to arbitration and now you do not like what the arbitrator has decided you come to a second forum"? In that case why not go to the court straight away? That is what the amendment is about—going to an acceptable forum where the ruling will be such that both sides will see that justice has been done, even if they do not agree. I have never known of a situation where you can have arbitration and then if you do not like the result you can go to someone else to have it reconsidered, if that is what the Minister was saying.
I still think the principle at stake is one which should receive further consideration by the Government, and certainly by my noble friends and myself. I should like the Minister to comment on the points I have made about people having the right to go to another forum if they do not like what the arbitrator says. This must surely be unique.
Lord Bellwin: My Lords, I have some difficulty in following the noble Lord. Only a few moments ago he was saying that he was concerned about the courts being clogged up by applications; now he is saying, do not have an arbitrator but go to the court. He really will have to make up his mind which he wants. As far as I am concerned, the prime matter here is whether or not both sides can receive equity without the necessity of having to resort to the courts. Yet there can be no harm, at the same time, in retaining an opportunity—should all else fail and everyone be unhappy—for either side to fall back on it. There can be no harm in having the first as a desirable option, which occupiers themselves have said they want, and at the same time, if all else fails, having the right of recourse to the court. I see nothing wrong in that. I just could not say that we would deny the opportunity for arbitration as an option should the parties decide to have it.
Lord Bishopston: My Lords, I can accept what the Minister says, that we do not want to clutter up the courts. But I should like the Minister to reconsider the matter from the point of view of the status of the arbitrator, who should be someone not only impartial but also experienced in the matters which would be referred to him. It is not only about rent levels but is also about reasons why someone should terminate an agreement and get off the site. We suggested last time the Royal Institute of Chartered Surveyors. If the noble Lord could have another look at that, we should be grateful. With those comments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Lord Bellwinmoved Amendment No. 11:
Page 3, line 25, after ("court") insert ("for the district in which the protected site is situated")
The noble Lord said: My Lords, with your Lordships' agreement, I will speak to Amendments
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Nos. 11 and 12 together. These are purely technical amendments and need not detain us long. Their effect would be to provide that the appropriate court to deal with a dispute arising under the Bill would be the court which has jurisdiction for the area in which the mobile home is situated. Without these amendments, I understand, there might be some doubt in Scotland as to which sheriff is the right one. The second of these two amendments, No. 12, will remove that doubt. No. 11 makes parallel provision for England and Wales. I beg to move.
Lord Bishopston: My Lords, this seems to be a matter of drafting and clarifying the powers of the court for the area concerned.
On Question, amendment agreed to.
Lord Bellwinmoved Amendment No. 12:
Page 3, line 29, after ("sheriff") insert ("having jurisdiction where the protected site is situated")
On Question, amendment agreed to.
Lord Bishopstonmoved Amendment No. 13:
Page 3, line 30, at end insert—
("In relation to paragraphs 5 and 6 of Part I of Schedule 1, "the court" means, in relation to England and Wales, the county court and, in relation to Scotland, the sheriff.")
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 10. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bellwinmoved Amendment No. 14:
Page 4, line 11 at end insert—
("(2) A person is a member of another's family within the meaning of this Act if he is his spouse, parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece; treating—

(a) any relationship by marriage as a relationship by blood, any relationship of the half blood as a relationship of the whole blood and the stepchild of any person as his child; and

(b) an illegitimate person as the legitimate child of his mother and reputed father;

or if they live together as husband and wife.")
The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
Schedule 1 [Agreements under Act]:
Lord Bishopstonmoved Amendment No. 15:
Page 5, line 14, leave out ("and")
The noble Lord said: My Lords, I beg to move Amendment No. 15, and would also, with your Lordships' leave, speak to Amendment No. 16. The amendment is aimed to ensure that the terms of the agreement under the Act shall be in such form as may be provided by the Secretary of State; in other words, it permits the Minister to lay down model terms which we believe should be included in the statutory agreements. The DoE Report of 1977 came to the conclusion that the statute itself should impose implied terms into all residential agreements. The present Bill has not accepted that, and this amendment seeks to combine the advantages, but not

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necessarily the mechanics, of the implied terms with the approach adopted by the Bill.
In Clause I the Bill provides that the agreement must comply with the requirements of Part I of the schedule and must include terms concerning the matters mentioned in Part II. Beyond that the Bill does not give guidance to anyone as to what agreements should look like and what they should contain, and it will be an expensive waste of resources for all concerned, including the site owners, if lawyers all over the country have to sit down to devise agreements which comply with the Bill. We do not believe that that is in the interests of either the owner or the occupier.
Moreover, we also say that, even while complying with the schedule, there will be considerable room for unfairness and injustice in the preparation of agreements. As an example, a site owner may in the agreement reserve the right to make site regulations and provide that the resident must comply with those regulations. It would be very difficult for even the well-informed and determined resident to challenge such a term if the site owner, or indeed his successor later, makes unreasonable regulations. The owner would be able, under paragraph 5 of the schedule, to terminate the agreement and deprive the resident of any protection under the Bill. We believe that the Government must have in mind what a new statutory agreement should be. Why not prescribe the basic terms? There would be no need to cover every detail and individual terms could still be added to cover arrangements on a particular site.
I do not know why, but the Government appear to think that the Bill contains provisions on the lines proposed by the amendment, and we may be told that. On the second day of the Committee stage, the 6th December, the noble Lord, Lord Bellwin, said:
"The Bill says that it will be obligatory to offer an agreement. The terms of that agreement will be those which we will prescribe".
He went on to say that,
"the Secretary of State prescribes what the notice should say and what has to be involved in an agreement".—[Official Report. 6/12/82: col. 21.]
Surely that is wrong, but it is precisely what the amendment seeks to authorise. Even if the Government remain unconvinced of the need to prescribe the form and terms of the agreement it would be a very useful reserve power. It does no more than give the necessary powers and if the need arises once the Bill is in operation the power could then be used to deal with the problems. This would be much more satisfactory than coming back for yet another look at the Bill after it has been enacted. I believe it would help everyone concerned if such model terms were available. I therefore beg to move.
Lord Evans of Claughton: My Lords, we congratulate the Minister for agreeing to define "families" to simplify matters for everyone. I beg him to accept the amendment, or something similar, for the same reason. I put to the Minister the kind of thing that I expect to happen from experience of other kinds of agreement in landlord and tenant relationships or quasi relationships. The landlord, or the owner in this case, has a printed form which he has had prepared by his solicitor, his association, or whatever. One of these
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forms he hands to the prospective occupier and says. "Do you mind signing that? I shall sign this copy and we shall swap them". The chap agrees because he is anxious to get the site and he signs the form. As the noble Lord, Lord Bishopston, says, he then finds afterwards, because he has not bothered to consult the Citizens' Advice Bureau or a solicitor, that he has committed himself to something which goes beyond what he had thought on looking through the agreement. In other words, there is some small print that he has not looked at in the sense that the noble Lord, Lord Bishopston, mentioned in referring to regulations to be made by the owner at some future time. That is already not uncommon between landlord and tenant.
I should have thought that the Government would have been well advised to follow the precedent set in earlier landlord-tenant legislation where the form of notices, and so on, is set out in statutory form. For example, in the Landlord and Tenant Act the notice to terminate a business tenancy is set out in statutory form. I should have thought that from everyone's point of view, for the sake of simplicity, first, for the sake of accuracy, secondly, and for the sake of protection, thirdly, it would be very useful and advantageous if a model agreement could be used in such circumstances set out in the Bill and required to be used in that form in any relationship or agreement drawn up between the owner and occupier.
I hope that the Government will either say that they will think again about this and produce something or, if I may say with the greatest possible respect—which, as your Lordships know, means something quite different—that the Minister will reconsider what he has been saying in previous discussions, because I believe he has misled himself in the belief that there is something in the Bill which in fact is not there at all. I ask him to reconsider the matter very carefully.
Lord Bellwin: My Lords, I thought that the noble Lord, Lord Evans of Claughton, was doing very well until he came to his last sentence and spoilt it all. I wonder whether the noble Lord will feel the same after he has listened, as he always does, to what I have to say on the subject. I shall be interested to know that. We are now in a field where he has practical experience of having to make it happen, if I may put it that way and of having to deal with such matters.
We discussed this amendment in Committee and I said at the end of our debate that we could not accept the amendment but that I would read what the noble Lord said. I have read the Official Report, and very interesting it was. However, I am afraid that I still cannot accept the amendment. What was particularly interesting about the speeches made in Committee was the extent to which noble Lords are trying to give the Secretary of State powers that he does not want. That is quite a reversal. Not only is it now being proposed to give the Secretary of State the power to prescribe the form of an agreement, but the amendment will enable him to be able to add, by regulation, to the matters listed in the Bill that the agreement must cover. This is an odd argument to have on a Bill. Normally it is the Government who seek order-making powers and Oppositions who resist them. In this case it is the reverse.

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The amendment would enable the Secretary of State to prescribe the form of an agreement. I do not believe that this would take us significantly further than the Bill already does. Part I of Schedule 1 lists a number of requirements with which agreements must comply. Part II lists matters which agreements must cover. It does not say how they are to be covered. It does not say what services a site owner is to provide, nor what the basis for the yearly rent reviews is to be. Unless we are prepared to change that and control the contents of agreements in detail—and we are not prepared to take that control—surely it will not help anyone for us to prescribe the form in which the contents of the agreement are to be expressed. In any case, as I have said many times, an occupier who does not like the agreement offered to him can ask the court to order the making of a new one. The notice that we will be prescribing will emphasise to occupiers their ability to challenge agreements and will tell them to read the Government booklet on the legislation.
The second aspect of the amendment is that it would enable the Secretary of State to add to the list of matters which an agreement must cover by regulation. I have said that the Secretary of State does not want this power, but if he had it I am not at all sure that he could use it effectively. Unless he used it very soon after the Bill achieves Royal Assent it would be too late to affect the contents of agreements that are to be offered at commencement. There is no realistic way in which regulations can affect agreements retrospectively.
Even if we wanted to take a power to make regulations retrospective, it would be well nigh impossible to ensure that all those who held agreements were aware of the new terms added by them. Its is at commencement that agreements are to be offered to all occupiers then on site. It is with the contents of those agreements that we must be immediately concerned. It seems to me that if we feel there are matters which should be covered in agreements under the Bill we should ensure that the Bill deals with them, rather than create a power to add new subjects which will by very difficult for us to use effectively. I want to be as helpful as I can. After all, your Lordships are trying to give the Secretary of State more powers and I should not like to be thought ungrateful.
There are two issues which were mentioned in Committee and again today which are not covered by Schedule 1 to the Bill. The two issues which are not covered are arbitration and the site rules. Surely we have already spent enough time on the subject of arbitration, and therefore I would only add now that the Bill itself allows site owners and occupiers to use arbitration if they wish. The agreement between them does not have to provide for it, but if they do not want to use an arbitrator I do not think that we should force them to do so. In view of our earlier discussions, I should not have thought that your Lordships would wish to require the use of an arbitrator either. I am dealing with this matter at length because I take entirely the point that both noble Lords who have spoken made, that this is an important matter and I hope that your Lordships will agree that I treat it as such.
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The site rules are a different matter. The first point that must be made about them is that if the site owner wishes to enforce them, he must provide for them in the agreement which he offers the occupier. He does not have to spell them out in the agreement but he will have to allow for their existence, as does the standard agreement for the 1975 Act provided by the National Federation of Site Operators. In that case the occupier should be able to challenge the relevant term in the agreement to make sure that the rules will not be unacceptable to him. There is perhaps a slight danger that an occupier will not know the site rules. It will be possible for the Bill to contain a requirement that a copy of the site rules should be made available to occupiers, perhaps at the time when they are offered an agreement, if noble Lords thought that that was desirable. The amendment before us at present would not have that effect.
I have gone into the matter in detail and I think that that shows the respect—and I use the word advisedly in view of the fact that it was used to me—I have for the matter, and it is proper that I should do so. However, I hope, in view of my explanation, that noble Lords, particularly the noble Lord, Lord Evans of Claughton, will say, "Well, there may be a point here". I live in hopes, my Lords.
Baroness Ewart-Biggs: My Lords, in spite of what the noble Lord the Minister has said, I should still like to support the amendment because as I understand it this model agreement is merely a skeleton which can be tilled by both occupier and owner as it applies. I cannot see any reason why the occupier should go to the expense of challenging the agreement if he does not agree with it. I should have thought that that was one of the things that the Bill was trying to avoid. Can one not see the amendment as something that is providing a simplification and a safeguard in some cases? To my mind it is something that would really stand the Bill in very good stead and stand the test of time. Moreover, it will try and keep a good relationship between the occupier and the owner. From the many letters I have read that have been published in the press, it seems to be a tragedy that on these sites which do, after all, constitute small villages, the relationship can sometimes be very much aggravated through misunderstandings that could possibly be avoided by this particular amendment.
Lord Tordoff: My Lords, I should like briefly to intervene and pick up one point which the Minister made. I can well understand that he can take some amusement from the fact that noble Lords are trying to give the Secretary of State increased powers, when on many occasions we are trying to decrease those powers. Indeed, on such occasions it is either that Secretaries of State are trying to take powers from other areas, such as local authorities—and we have seen quite a bit of that in recent times—or that they are asking for open-ended powers. In a case like this where the Secretary of State is being asked to take powers to defend the weak and to assist those people who do not read Government publications as much as we do, there is a much more valid reason for making the type of insertion in a Bill which this amendment seeks to do.
Lord Bellwin: My Lords, of course the noble Lord would not expect me to agree with his side observations about the purpose for which the Secretary of State should have powers; nor do I. But let me remind him, if he will allow me, that again it is the Government who are bringing forward this Bill. We are doing so precisely because we are concerned about the 1975 Act which was originally introduced as a Private Member's Bill by he who is now my right honourable friend the Secretary of State—and want to try to improve the balance between the two sides here so as to make it all work better. We are concerned that the occupiers should in no way be disadvantaged; indeed, quite the contrary. If we did not feel like that we would not have introduced the Bill in the first place. We are saying that we want to get the best Bill and to get it as right as we can.
At the end of the day there will be those who will say, "Yes, it is an advance"— everyone has said that—"but we would have liked it a little more our way". Others will say, "It goes too far that way". I have listened with respect—and I mean respect —to what has been said because again it is not a question of an exact, precise judgment here. One has to take a view on balance and that is why we take the view that we do. We do not say that you are wrong. I do not say that at all. All I am saying is that we feel that, in the totality of what we are trying to do here, the way in which we have it now seems to hold the balance. Only time will tell.
Lord Bishopston: My Lords, the Minister is right to claim credit and we would give credit to the Government for bringing forward the Bill, but it does not follow that because the Government have brought forward the Bill it is automatically all right. Even the Government themselves would not accept that. Of course, the House is very anxious, in the light of the enormous press publicity and the concern which has been made clear to many organisations and through various bodies, about the loopholes in the 1975 Act.
Having said that, of course, we are all constructively trying to help the Government. We say that they have provided a skeleton. At the same time we say, "Make no bones about it, there is still a lot of flesh to go on" and the House is anxious to deal with that. I know that the Minister, now being a Minister of State, would not be any more impressed if we had inserted, instead of "Secretary of State", the "Minister of State", because the principle is the same, However, we believe that this amendment, or something like it, would help those involved on both sides of the mobile homes business to have the type of model terms which are essential to a good agreement. Living in hope, as we all do, I beg leave to withdraw the amendment, in the hope that we might come back to it again at a later stage.
Amendment, by leave, withdrawn.
[Amendment No. 16 not moved.]
5.28 p.m.
Lord Bishopstonmoved Amendment No. 17:
Page 5, line 38, leave out ("owner") and insert ("court").
The noble Lord said: My Lords, I beg to move Amendment No. 17. This is another important amendment. I would not like to talk about the relative
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importance of the amendments because they are all intended to try to help those concerned and also to stop any loopholes. This amendment was not moved in Committee. Paragraph 5 of the Schedule allows the owner—and I stress "the owner"—to terminate a statutory agreement and in effect to evict the occupier. It is, of course, true that he would have to go to the county court, and the Minister will doubtless tell me that. But the court has only limited powers under the Caravan Sites Act to delay the actual eviction. This power could be used for a minor breach; for instance, there could be a dispute about what is grown in the garden or a breach of some unreasonable term like preventing visits from relatives or friends which was not challenged by the occupier at the outset.
It is surely wrong and at variance with all similar legislation that the owner should be the draftsman, the judge, the jury and the effective executioner. We believe that it should be the court that decides whether a breach is sufficiently serious to merit termination of the agreement, because it is on the continuity of the agreement that the security of tenure depends.
This amendment ties in with an amendment that we tabled to Clause 5 on "Interpretation", to which I have made numerous references already and which seeks to ensure that for the purposes of this paragraph only a court, and not an arbitrator, can act. I believe that this is a very important amendment and, in view of the situation which faces the occupier, whose bargaining power is much less than that of the site owner, I hope that the Government will be able to say that they can go some way towards accepting the spirit of the amendment that I now propose. I beg to move.
Lord Evans of Claughton: My Lords, this is an important amendment. I do not know whether I am unfairly inviting the Minister to speculate on what the courts would do but, as the noble Lord, Lord Bishopston, said, perhaps the Minister can assure us that the courts would say that the owner would not be entitled to terminate the agreement, et cetera, if the breaches were of a minor nature or if the owner's actions were unreasonable; because there have been cases under the analogous position of leases where the courts have refused to order eviction of a tenant when the breaches are fairly minor. It is extremely serious because, as the noble Lord, Lord Bishopston, said, these could be for quite trivial matters. Some of us, of course, might welcome a rule which prohibited visits from relatives at our mobile home, but I was thinking of something really serious like being prohibited from wearing a daffodil on St. David's Day or not being allowed to have a Liverpool FC pennant in your window. If the courts do not feel that they have the jurisdiction to say that that is such a trivial breach of covenant that they will not enforce it, then it is very important that the decision should not be made by the landlord on quite capricious grounds such as that, but that the court should decide it. As I say, if paragraph 5 is exercised purely at the discretion of a landlord, it must be amended for natural justice.
Lord Bellwin: My Lords, I have listened carefully to what the noble Lord has said and obviously I sympathise with the thrust of that. But, again, I

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wonder whether he will still feel the same anxiety about it after I make my points. The Bill provides for agreements to be terminated in a number of ways. An occupier can terminate his agreement at 28 days' notice. A court can terminate an agreement either on the grounds that the occupier is no longer living in his mobile home or on the grounds that the mobile home is, having regard to its age and condition, having a detrimental effect on the amenities of the site, or is likely to have such an effect within five years. Finally, a site owner can terminate the agreement on the grounds that the occupier has breached its terms, provided that he has first served notice on the occupier that he is in breach and that the occupier has failed to remedy the breach within a reasonable time. It is, of course, to this last ground that the amendment applies. Its effect would be to require a site owner to go to court to terminate on the grounds of breach of agreement.
The provision enabling a site owner to terminate for breach of agreement without court action is taken from the 1975 Act. Agreements under the 1975 Act have, where they have been made, on the whole worked very well and it has not been our intention to disturb the system used by that Act unless there was good reason for doing so. I am not aware that this particular provision has caused problems. It was not mentioned in any of the responses to our consultation paper earlier this year. Given the large number of occupiers and pro-occupier organisations who responded, I think it is fair to say that, if there had been problems on this point, they would have been raised. I wonder whether, therefore, the case for this amendment is a very strong one, although the noble Lord, Lord Evans, certainly made me think about it. I wonder what he would say about the point that I have just made, that we really did get the most comprehensive and extensive responses to consultations, yet no one made this particular point as a matter for concern.
Another point that I should make about this amendment is that the Bill will allow a site owner to terminate an agreement on the grounds that it has been breached without going to court, but it will not allow him to evict an occupier without court action. The Caravan Sites Act 1968 provides that a residential occupier cannot be evicted without court action. That surely is a very important provision, and therefore is it right to say that the Bill would leave occupiers unprotected by the courts? I do not think it is. However, I look forward with interest to hearing what the noble Lord, Lord Evans of Claughton, has to say on this because he is very involved in this matter.
Lord Evans of Claughton: My Lords, before the Minister sits down, I would point out that that is precisely the point about which I was speculating. If, before eviction, the owner goes to the court and says, "I want to evict this occupier" for some totally trivial reason, I was speculating whether the courts would not say: "This is totally trivial. Go away." If that is the case, we do not need this amendment.
Lord Bishopston: My Lords, I think that this is a very important amendment because, although the Minister seems to suggest that there has been no pressure for this kind of thing, in fact the DoE review says at paragraph 333:
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"Residents normally have to comply with certain site rules. On some sites these cover no more than the essential requirements for people living close to each other—restrictions on noise at night, keeping certain pets, parking, and so on, On other sites the rules have been used to intrude unnecessarily into the lives of residents by, for example, prohibiting visitors from entering the site and specifying what can and cannot be grown in gardens".
These are some of the points to which the noble Lord, Lord Evans, referred. Therefore, these are some of the rules which can be broken on the allegations of the site owner and the termination of the agreement may follow. Perhaps I may read again the paragraph which we want to amend. Paragraph 5 of Schedule 1 says:
"The owner shall be entitled to terminate the agreement for any breach of a term of the agreement if, after service of notice to remedy the breach, the occupier does not remedy the breach within a reasonable time".
I have just mentioned some of the possibly unfair ways referred to in the DoE report in which the site owner can press for the occupier to comply with the terms of an agreement as he sees it. We believe that where the security of tenure is concerned, it should be the court, and not the site owner, who shall be entitled to terminate the agreement. This is a very important matter and I wonder whether even at this stage, the Minister is prepared to say that he will have another look at it because it is a matter of fundamental importance to those concerned.
Lord Bellwin: My Lords, with leave of the House—and I suppose that I should have been saying that all along because we are on Report—of course, we read everything that is said and we think about it. If I had really thought that the way in which the noble Lord, Lord Evans, in particular, had put the matter would have led to that kind of situation, I would certainly have said, "Yes, we will". I can only say to the noble Lord, Lord Bishopston, that we will read what has been said very carefully and think about it. I can say no more. That is as far as I can go.
Lord Bishopston: My Lords, I am far from happy with that reply, but at this stage I still live in hope and I think that we might live to look at the matter again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.40 p.m.
Lord Bishopstonmoved Amendment No. 18:
Page 6, line 7, after ("a") insert ("substantially").
The noble Lord said: My Lords, I beg to move Amendment No. 18 in the names of myself and other noble Lords. Sub-paragraph (2) says:
"The court shall be entitled to terminate the agreement at the end of a relevant period if, on the application of the owner, the court is satisfied that, having regard to its age and condition, the mobile home—(a) is having a detrimental effect on the amenity of the site".
We want the provion to say "substantially detrimental effect" because "detrimental effect" could in the opinion of anyone be something of a fairly minor nature. The amendment narrows the criteria for allowing the termination of an agreement due to the condition of a mobile home. An existing problem is that owners compel residents to buy new caravans from them at regular intervals, even though the condition of the first van is perfectly habitable. The

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formulation in paragraph 6(2) is much too loose and will allow this sort of practice to continue. It has always been argued that any mobile home has a detrimental effect on a site's amenity. It will be very easy indeed for the owner to put pressure on the occupier and threaten eviction on the grounds that a van is having, or will have, a detrimental effect, whatever that may mean. We ask what kind of security is that because the occupier will, in practice, have to buy a new van or leave. That could be very costly. The noble Lord the Minister knows of the periodic turnround of vans where an owner expects a new van to be brought from him, and as something like £2,000 or £3,000 can be involved, with new agreements and so on, it may be a costly matter indeed.
The amendment narrows the scope for eviction and the pressure to buy new vans and it will mean that the court could only terminate an agreement if satisfied that the condition and age of the mobile home meant that it was having, or would have, a "substantially" detrimental effect on a site's amenities. I think this amendment should go into the Bill. I beg to move.
5.42 p.m.
Lord Evans of Claugton: My Lords, we are still in the area of nuances of meaning of words. This is a considerable softening of the previous suggestion put forward in the Committee stage—"fit for human habitation", I think, being the criterion. I should have thought that it would be farly important that this word "substantially" should be inserted here. The owner already has, as the noble Lord, Lord Bishopston, has said, considerable powers and means of requiring new caravans and so on to be bought from him. One ought, in all conscience, to have the word that is suggested, "substantially", inserted because again, subject to interpretation by the courts, it would appear that as it stands now a site owner has complete carte blanche to tell an occupier that he must have a new caravan at very frequent intervals indeed, at substantial cost to the occupier and probably considerable profit to the site owner. I should have thought that this was a reasonable amendment that the Government might consider accepting.
Lord Bellwin: My Lords, I suppose the test is how substantial is "substantial". Where does one begin? The fact is that I believe that the Bill's existing provisions and the test which they impose are not light. The court or the arbitrator is required to consider the age and condition of the mobile home. He must be satisfied that, having regard to those factors, the mobile home is having a detrimental effect on the amenity of the site; that is, causing the site as a whole to suffer. It would not be enough for the site owner to argue that a mobile home was ugly or was of a different make from the others on the site. He must show that the age and condition are such as are harming the site. It is unlikely to be an easy matter for a site owner to persuade a court that an agreement should be terminated on those grounds when the mobile home has, in reality, a good many years' life left in it. I doubt it.
It is not only the site owner who suffers if a mobile home is in poor condition remaining on the site; it is the other occupiers as well. Their enjoyment of the site
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is affected if the amenity is damaged. More important, the price they can charge when they come to sell their homes will be affected by the state of their neighbours' homes. Do we really want to provide that an agreement can be terminated only when the effect of the age and condition of a mobile home has become substantially damaging to the amenity of the site and its value? I do not think so.
I think that everyone accepts that the life of a mobile home is finite. There comes a point when it has to be removed. We are talking about where the line should be drawn. I think that the Bill draws it in the right place. It provides strong protection for the occupier concerned and at the same time safeguards the site owner and the other occupiers on the site. The amendment would shift the balance in a way which I think is not desirable. I am far from convinced. I say again, when one starts talking about words such as "substantial", how substantial is "substantial"?
Baroness Ewart-Biggs: My Lords, if I might add one short word to the argument, it is that the amendment surely is not a very strong one. Adding just one word, surely, is only trying to protect occupiers on those very few sites where the site owner does not behave in a completely equitable way. There can be no doubt that some occupiers do suffer. Again there are the letters, that I do not think one can totally disregard, which have been published. I shall read one short extract where an occupier describes the situation on his site. He says:
"If your caravan is more than two years old on some sites, five years on others, your caravan is too old and must £… be taken off site"—
or you must sell it to the site owner for a pittance. This seems such a very moderate alteration to the meaning, but it could actually protect that tiny minority of people whom the Minister has so often said he is wishing to protect by the Bill.
Lord Bishopston: My Lords, there are two points here. One is the point about the occupier having difficulty in selling a mobile home to anyone else because, as we have said before, the number of sites with planning permission are so few. Where it is a condition that the van is therefore sold to the site owner the amount offered by him for it, even a £15,000 van, could be £2,000 or £3,000. After all, he can decide because if the occupier cannot sell it to anyone else then the site owner will buy it at his price. The second point is that he will decide on a new van being sold to the occupier at his price, on which he gets a profit. A third point is the one where we return to the disagreement on the meaning of the word "arbitrator". If it is to be Joe Bloggs who will decide on the condition of a mobile home—as I said, I do not want to weary the House on this; it could be a friend or relative of the site owner—then the interpretation would not necessarily be the one which would come from the courts. We have already debated the determination of agreement by the courts rather than the arbitrator. On the ground that the Minister might look again at the status of the arbitrator, which would give us more assurance, I am prepared to seek leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bishopstonmoved Amendment No. 19:
Page 6, leave out lines 24 to 32.
The noble Lord said: My Lords, I seek to delete paragraph 8(2) and (3) which do away with the owner's rights to purchase a departing occupier's home in preference to anyone else. This is a point on which I touched very briefly a moment ago. In other words it abolishes the right of first refusal conferred by the Bill on the owner. We all know that considerable abuses have taken place where site owners have insisted on purchasing a van from a departing occupier. We ask the question, why should a site owner be entitled to first refusal? He makes a profit where he sells the first caravan; his continuing expenditure will be met by pitch charges and he can make a further profit, as I said a moment ago, when a van requires renewal because of its condition. The statutory rights of the owner seem to be in conflict with at least two principles of Government policy. The first is the restriction of free competition, and the second is the restriction of mobility of residents—two important points, as I am sure the House would agree. The site owner should be able to purchase a van from a departing occupier in fair competition with other potential purchasers. This is relevant to the last amendment.
In Committee the noble Lord, Lord Bellwin, thought that Amendment No. 22, which also sought to abolish arrangements for commission or discount, was too sweeping, but he conceded, in columns 42 and 43, that there was "some merit" in the arguments supporting that amendment at that time. I suggest that the present amendment is more modest. It seeks only to delete the first right of refusal, and I believe that the Bill would be strengthened by its incorporation. I beg to move.
Lord Bellwin: My Lords, may I just say, as I said on an earlier amendment, that I think there is some merit in this point. I certainly cannot undertake that we shall bring this matter in here at this stage, or whatever, but I feel, as I felt before, that there is some merit in this argument. I would not want just to turn it down. If the noble Lord withdraws his amendment I promise him that we will consider this. I will undertake that the matter will be considered.
Lord Bishopston: My Lords, I thank the Minister for his reaction, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.51 p.m.
Lord Bishopstonmoved Amendment No. 20:
Page 6, line 45, at end insert—
(" .—(1) If any question arises whether the withholding of an approval required by paragraph 8 or 9 above was unreasonable it is for the owner to show that it was not.
(2) Such an approval—

(a) may be validly given notwithstanding that it follows, instead of preceding, the sale or gift in question;

(b) cannot be given subject to a condition, and if purporting to be given subject to a condition shall be treated as given unconditionally; and

(c) shall be treated as given if unreasonably withheld.").

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The noble Lord said: My Lords, still continuing our campaign to close some of the loopholes in the measure, I shall make my comments as brief as possible. The purpose of this amendment is to bring the arrangements for the giving of approval, that is to the assignment or gift, closer to those adopted by the Housing Act 1980. In other words, the burden of proof should be on the owner to show that lack of approval was not unreasonable. The approval may follow the sale, assignment or gift. The approval cannot be made conditionally. Finally, the approval should be treated as given if unreasonably withheld.
The drafting is in keeping with the Housing Act 1980, but of course it is capable, like many amendments, of some improvement. In Committee the Minister said that this amendment tipped the balance too far in favour of the occupier. The balance is, as we have said on many occasions, too heavily weighted against the occupier, and this amendment is needed. The Minister said on 6th December (at col. 48) that the corresponding provision was needed in the Housing Act 1980 because:
"It is clearly important that a renting tenant should be able to get on with improving his home if the landlord is being difficult about the improvements".
We feel that this amendment is needed here for precisely the same reason, because the site owner might be "difficult" about approval for the more important and pressing need to sell the mobile home to a new occupier. The owner can only veto a sale by reasonable approval if he has been unreasonable, and neither the seller nor buyer is likely to take the risk. The amendment shifts the burden of proof to the stronger party and improves the procedural arrangements. The amendment is tied in some ways to the last amendment, and I think it would help the Bill. I beg to move.
Lord Bellwin: My Lords, this amendment deals with another aspect of the sale of a mobile home, and the basis on which a site owner may withhold his consent to a sale. The amendment will also apply to the provisions for the gift of a mobile home. It is another amendment that we had at Committee stage, and substantially there is not much I can add to the points I made then. The Bill uses the same approach as the 1975 Act to the site owner's consent to the assignment of an agreement; that is, it stipulates that consent must not be unreasonably withheld.
The amendment would bring in the wording of Section 82 of the Housing Act 1980. But, as I said in Committee, Section 82 is concerned with a tenant's right to improve the accommodation he has rented from the landlord. If he makes these improvements the people affected are him and his landlord and no one else. But the transfer of the ownership of a mobile home affects other people as well. It affects the other occupiers on the site. I could develop this argument at quite some length, which I suspect is not the thing to do just now. Therefore, I have to say to the noble Lord that I cannot accept this amendment. I hope I have indicated a willingness, wherever I feel there is need to do so, to look at or to make adjustments, but I do not feel that I could accept this amendment.
Lord Bishopston: My Lords, living in hope, we feel that this is a matter which can be looked at again, and

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I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bishopstonhad given notice of his intention to move Amendment No. 21:
Page 6, line 45, at end insert—
(", . The occupier shall be entitled to give the mobile home and to assign the agreement to any person by virtue of a testamentary disposition.").
The noble Lord said: My Lords, I do not intend to move this amendment because I believe that this has been dealt with amicably with amendments of the Minister earlier on.
[Amendment No. 21 not moved.]
5.55 p.m.
Lord Campbell of Croymoved Amendment No. 22:
Page 7, line 7, after ("home") insert ("except where the re-siting is for the purpose of carrying out essential work to the site or for re-development").
The noble Lord said: My Lords, I beg leave to move Amendment No. 22. I wonder whether the provisions in this part of the Bill have fully taken into account situations where improvements of site are to be carried out. I move this amendment to indicate that there could be some doubt and misunderstanding about this. I think that everyone concerned is in favour of improvement of sites where this is necessary, or can be done, and where the owner is proposing to carry out such improvement. But during the process of redevelopment of a mobile home site it is not always possible to accommodate occupiers on broadly comparable land when they have to be moved. If there were strict enforcement of the proposed terms of this part of the Bill, the desirable or necessary development of a site might be held up, or made difficult, to the detriment of both the owners and the occupiers.
It could also be possible that sites would not be approved even though local authorities were requiring such improvement. If my noble friend is satisfied that the wording here covers those situations, of course I shall be content. I believe that these improvements would very often be carried out with the occupier's agreement. I hope that the Government will consider whether there should be something in the Bill on the lines of my amendment to cover the situation. I beg to move.
Lord Bellwin: My Lords, I think that the Bill covers this, but it would help my noble friend if I were to say why I think so. The Bill at present provides that if an agreement allows a site owner to resite a mobile home elsewhere on the site the new location must be "broadly comparable". This sub-paragraph re-enacts an important provision in the 1975 Act with two minor changes. First, the Bill does not use the earlier provision which enables an owner to move a home to another part of the site temporarily while essential works, say, are carried out, subject to reinstatement either in the same position or a reasonably equivalent one. And secondly, the Bill replaces the phrase "reasonably equivalent" with "broadly comparable". This sub-paragraph is designed to ensure that if a site owner has the right to re-station a mobile home, the occupier does not suffer as a result.
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It is surely right that occupiers should be able to live on a site that they have chosen, secure in the knowledge that if the owner does move them they will not be worse off. This amendment would remove the obligation to resite upon broadly comparable land, if the resiting were for the purpose of carrying out essential work or development. It would substantially weaken the protection offered to occupiers by this paragraph. It would enable site owners to move homes on site almost at will, perhaps to worse or smaller locations, if they claimed they were carrying out essential work or redeveloping the site. It is not hard to imagine a situation in which an unscrupulous site owner could move homes around without good reason on one or other of these pretexts. It seems to me right that if a mobile home has to be moved—and it will usually be in the interests of the site owner that the move is made—the move should be to a "broadly comparable position".
There may be occasions when a site owner is forced to resite a mobile home in order to comply with regulations imposed by the local authority. But if he thinks the requirement is unreasonable, he should contest it with the local authority, not penalise the occupier. As I said, I am not aware that this paragraph, which re-enacts a provision of the 1975 Act, has caused problems. I wonder, therefore, whether my noble friend will feel able to withdraw this amendment.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for what he has said. I think everyone in all parts of your Lordships' House agrees with the principle of this part of the Bill to which he drew attention just now. The only question that arises is as to whether an improvement would actually be held up or prevented. I certainly would not wish to give to any unscrupulous owner any kind of provision to enable him to do what my noble friend suggests. and therefore I realise that the wording of my amendment could be defective in that respect. Having made the point, and hoping that the Government will bear it in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6 p.m.
Lord Campbell of Croymoved Amendment No. 23:
Page 7, line 8, leave out ("incurred in consequence of the requirement") and insert ("of the removal of the mobile home to other land").
The noble Lord said: My Lords, a simple point is raised here. The amendment seeks to ensure that there would be excluded from the costs and expenses to be borne by the owner any charges which should properly be paid by the occupier. As the passage is worded in the Bill at present, it is not clear that that distinction would be made. I beg to move.
Lord Bellwin: My Lords, the Bill provides that, if an agreement enables a site owner to resite a mobile home elsewhere on the site, the costs of that move must be paid by the owner. The costs of moving involve not only the physical moving of the mobile home from one pitch to another, but also the costs of reconnecting essential services such as water, sewerage and so on. The 1975 Act required a site owner to reconnect services. It did not specifically provide for him to meet

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the costs of doing so, though I think it reasonable to say that a court might well have held that such a provision was implied into the wording of the 1975 Act.
The amendment would, however, ensure that a site owner was liable only for the cost of the removal of the mobile home to another pitch. The cost of reconnection of services would fall upon the occupier. I do not believe that that is acceptable or is what my noble friend has in mind. It would be inequitable for an occupier to be worse off as a result of a move which had been initiated by the owner and which he had not asked for. If the site owner requires the move, he should pay for it.
In practice, of course, what is likely to happen is that a site owner will seek to offset the costs of restationing mobile homes by increasing pitch fees for all occupiers on the site. That effect is not, I think, unacceptable. If a mobile home is moved in the interests of the site as a whole—perhaps to carry out essential works as part of a redevelopment scheme—then the site as a whole should benefit and it is reasonable to expect the occupiers, as a whole, to pay for it. What is not reasonable is that a significant part of the cost should fall on an individual occupier, especially when he may not particularly want his mobile home moved. I am confident that my noble friend will read my remarks carefully and take the equity of the point. Accordingly, I hope he will withdraw the amendment.
Lord Campbell of Croy: My Lords, again, I am grateful to my noble friend for those comments and, again, I am the first to agree that the drafting of my amendment probably fails to meet the situation I described. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bishopston Lord Bishopston moved Amendment No. 24:
Page 7, line 9, at end insert£—
("Service charges
11.—(1) If the occupier requests the owner in writing to supply him with a written summary of the costs incurred by the owner in respect of services available on the protected site in the relevant period defined in sub-paragraph (4) below, the owner shall do so within six months of the end of the period or within one month of the request, whichever is the later.
(2) The summary shall set out these costs in a way showing how they are or will be reflected in the sums payable by the occupier and must be certified by a qualified accountant as in his opinion a fair summary complying with this requirement and as being sufficiently supported by accounts, receipts, and other documents which have been produced to him.
(3) The occupier may require the owner in writing to afford him facilities for inspecting the accounts, receipts, and other documents supporting the summary and for taking copies or extracts from them and the owner should then make reasonable facilities available to the occupier.
(4) The relevant period mentioned in sub-paragraph (1) above is—

(a) if the relevant accounts are made up for periods of 12 months, the last such period ending not later than the date of the request: and

(b) if none are made up for such a period, the period of 12 months ending with the request.

(5) In this paragraph "qualified accountant" has the same meaning as in Schedule 19 to the Housing Act 1980.")
The noble Lord said: My Lords, this is the final amendment of the day. We have gone through the
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amendments rather quickly, but I hope we may return to some of them later. They are all of great importance to the occupiers of mobile homes, who, as I said earlier, represent a not insignificant percentage of the population. We are speaking in the main of permanent homes, not holiday caravans where one can endure a situation for a week or so before deciding not to go again. These are homes in which people live and many expect them to be their final homes.
We believe that the amendment, which concerns charges and the right to information, is very important indeed. It is in relation to the part of the schedule concerning the re-siting of mobile homes, and I quote the first part of it to stress its importance:
"If the occupier requests the owner in writing to supply him with a written summary of the costs incurred by the owner in respect of services available on the protected site in the relevant period defined in sub-paragraph (4) below, the owner shall do so within six months of the end of the period or within one month of the request, whichever is the later."
We are saying that the occupier has a right to know about the charges being imposed by the site owner, including electricity, gas and amenity charges, charges for looking after the site and other charges. If the site operator is asking the mobile home owner to pay certain charges, surely the occupier has a right to have certified accounts. The amendment gives the occupier rights to information about service charges. That information may also be needed by the court or arbitrator; if they do not have that information, how can they do justice to those who appear before them? There is a growing awareness of the need of residents for this sort of information. The amendment draws on Schedule 19—perhaps I should not say that too loudly—to the Housing Act 1980, which gives leaseholders this kind of information. Further, paragraph 8.1.7 of the relevant DoE report concluded:
"In addition, residents should have a right to certain information about the costs of service analagous to those already enjoyed by private tenants and leaseholders".
Surely the Minister will not say that other people, living in different forms of housing, should not have a right to this information—how much they pay for electricity, gas and other charges—so they can see whether the charges are fair. After all, some site owners can get an enormous profit in various ways, as I said earlier, apart from saying that the van is old and needs replacement. The site owner can in those circumstances buy the home at his price and make a jolly good profit on the sale of a new one. In all those ways the occupier is subject to the site owner's pressures. The amendment provides merely for a written summary of costs, certified by an accountant and supported by receipts, and the occupier would also be entitled to inspection facilities. If one is being asked to pay a bill, one should have a right to ask how that bill is made up. I should have thought that that was the minimum we could expect.
The Bill would be strengthened by the inclusion of the amendment. If, as the Government indicated in Committee, an amendment similar to this would go too far, they should introduce their own amendment to give these rights to information about service charges. Justice must support the amendment and I hope the Minister will either say he accepts it or will undertake to give the matter further thought between now and the next stage of the Bill.
Lord Evans of Claughton: My Lords, the amendment would and should fill a gap which now exists in the Bill. Perhaps the words may not completely satisfy the Government, as the noble Lord, Lord Bishopston, said, but I should have thought that they would accept the principle of the words and introduce an amendment of their own at a later stage to give this kind of right to information to occupiers.
I recall, as I am sure the Minister does, spending hours discussing the trying problem of service charges and how to give people the information they need. One thinks of the number of Bills that have been before this House and another place trying to deal with the problem of service charges, particularly in London flats. Perhaps the problem is not of the same depth in the case of mobile homes, but in many cases the vans are the main homes of the people concerned, not just temporary holiday homes, and I should have thought that anyone who, either perforce or because he chooses, lives in a mobile home as his principal residence or as his main place of abode would be entitled to very full information about any charges the site owner is imposing, both so that the information is available so that he or someone on his behalf can check it, and, frankly, so as to keep fairly close control on site owners, who may in certain cases be tempted (who knows?) to exaggerate a little the charges they are making.
I feel strongly that the Government should either accept the amendment or undertake to introduce one which would give these people the kind of rights the Government have rightly given tenants—council tenants and lessees—in other legislation. I hope they will give a favourable reply on the amendment.
Baroness Ewart-Biggs: My Lords, I wish to support what the noble Lord has just said. To me the major aim of the amendment is to bring the rights of mobile home dwellers closer into line with the rights already enjoyed by private tenants and leaseholders, and that seems entirely appropriate. The reasons why people, especially young couples and elderly couples, choose to live in mobile homes are not going to change. They cannot afford a mortgage; they do not want to become yet another name on an endless council housing list. Surely anything to balance the rights of mobile home dwellers with those of people who live in ordinary houses should be supported.
On this point I wish to remind the Minister of something that he said during the Committee stage, when he referred to the 1975 Act. He said that he only wished that someone at that time had tried to anticipate the things to which our attention was being drawn. I think that the Minister was quite right. But I only hope that in 10 years' time the Minister's successors will not be using the very same words when referring to the imperfections that we have, sometimes vainly, been trying to draw to his attention today.
Lord Bellwin: My Lords, the question really turns on the extent to which it is fair to compare. The fact is that the amendment would go much wider than Schedule 19 to the Housing Act 1980. It would require site owners to provide summaries of costs, irrespective of whether pitch fees are related to the cost of the services. When this matter was raised at Committee
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stage, I drew attention to the dangers of comparing the position of mobile home occupiers and tenants of flats. I do not believe that there is a valid comparison between the two. My understanding is that pitch fees are normally inclusive of services. They are normally all paid in one sum, and there is normally no provision in the agreement for the inclusive fee to be related to service costs. The amendment would, therefore, place an obligation on the site owner which could significantly affect the way that he keeps his accounts, but which would not be material to the agreement that he has with the occupier. Unless the agreement itself restricted increases in the pitch fee to increases in costs borne by the owner—and it is most unlikely that that would be the case—it would not be of any use to an occupier to have access to greater information about the costs.
As I have previously mentioned, an occupier is quite entitled to challenge the agreement that he is offered if he considers that it does not provide enough information about the yearly review of the sums payable by him, or the provision of services available on the site. Those are matters which agreements must cover. I recall that at Committee stage the noble Lord, Lord Avebury, was particularly concerned that occupiers did not have enough information about their electricity charges, for example. Where electricity is one of the services provided on site, there is nothing to prevent an occupier from asking that his agreement should include satisfactory terms about the charges to be made for it, including, for example, a reference to the maximum rates which the area electricity boards set for the resale of electricity. I do not think that the amendment is any more relevant or necessary now than it was when we discussed it in Committee.
When the noble Baroness, Lady Ewart-Biggs, reminds me of the importance of having a balance in regard to what is right on both sides, I should like to remind her that in regard to a previous amendment I told my noble friend Lord Campbell of Croy why I felt that it would be wrong to accept his amendment. That was because it would swing the balance in favour of the site owner, whereas we were trying as hard as we could to maintain the fairest possible balance all round. I think that that is what we are doing throughout the whole of the Bill, and that applies to the present amendment.
Lord Bishopston: My Lords, the amendment deserves much more time than it is to be given today, and I hope that we can come back to it again, or that at least it will be considered later. Surely the Minister is treating mobile home occupiers as second-rate people, because he is not giving to them the kind of rights that are afforded under the Housing Acts to other tenants, and that is really quite unjustified. Surely in matters of the resale of electricity the prices charged should be what one might call the current prices. It is possible for the site owner to buy electricity at one price and to sell it at a much greater price, and at an unjustified profit, to the occupiers of mobile homes, who as we have said are mainly elderly people. In fact the elderly, and young people with families, represent the majority of the type of people living in mobile homes.
If the Minister is saying that the legislation is fair in

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so far as the rents can be demanded on the basis of being fair, I would ask: how does one know that they are fair when it is not known how the charges are made up? How do the court and the arbitrator, who have to assess whether the rent demanded is fair, know what is justified if they do not know how the bills are made up? Surely the occupiers have a right to this kind of information. As I said, the Minister's own DoE report concluded that residents should have a right to certain information about costs of services and so forth. I do not intend to press the amendment now, but I hope that the Minister will look at it in the wider context of the powers of the owner and the court generally.
Lord Bellwin: My Lords, before the noble Lord sits down, and with the leave of the House, I should like to make perhaps a last comment at this stage. It is most unreasonable for the noble Lord to say that the Bill attempts to treat mobile home occupiers as second-class citizens. If that were the case, the Bill would not have been produced. I should like to remind the noble Lord that in 1975 it was not his Government who produced a Bill to deal with mobile home occupiers. Everything that I have said throughout all the stages of the Bill, and on all the amendments, has been in an attempt to show how we are trying to hold a fair and reasonable balance, not least on behalf of the occupiers. That is what we have done, that is what we shall go on doing, and I do not accept what the noble Lord says as to that.
Lord Bishopston: My Lords, I should like to clarify the position. I am not saying that the Government are treating these people in a second-class way. I said just now that I supported the Government, and I praised them for bringing forward the legislation, but bearing that in mind, as well as the fact that we are trying to improve the legislation, I should not like that kind of accusation to go out. It is important that we close as many loopholes as possible. I believe that the Bill has had the support of noble Lords in all parts of the House, and we have been constructive, as well as brief, in our attempts to help the Government to produce a Bill that will be worthy of the job that they are seeking to do. With those comments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Agricultural Marketing Bill
6.17 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, I beg to move that the Bill be read a second time. I am glad to see that the Bill is to be the vehicle by which the noble Lord, Lord Northbourne, will make his maiden speech, and we much look forward to hearing what he has to say. The Bill represents the culmination of a lengthy and constructive debate which has taken place within the agricultural and food industries in recent years, on the importance of improving the marketing of our produce—both on our own market and abroad. The Bill seeks to establish the framework within which improvements in marketing can take place.
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Among our producers and manufacturers there has been a growing recognition that it is no longer enough simply to be efficient at producing. Production is not an end in itself. If the product does not sell, then the producer, the processor, the retailer—none of them will be rewarded. They are all interdependent upon one another.
The record of agricultural productivity in this country is one of considerable achievement. Our food industry, as well, has achieved a high degree of efficiency, and the efficiency of our food distribution trade is second to none. But we cannot stand still. Industries in other countries are also highly efficient. and they are looking to an expansion of their markets. The free exchange of agricultural produce within the Community, the advances of modern technology which allow rapid transport of perishable foods which never used to happen in the past, and the increasing sophistication of consumer demand for food—all those factors mean that even greater account must be taken of what the market wants. That means producing exactly the type of produce which is demanded by the market. It means making sure that the quality product gets the reputation which it deserves, and it means that the consumer must be made aware of its availability, of its reliability, and of its value for money.
To achieve that requires very effective communication between the industry on the one hand and the consumer on the other. That means co-operation between producers, processors, wholesalers. manufacturers, distributors and retailers—all those who are links in the chain from the producer to the consumer.
We have already seen a number of initiatives being taken to improve the marketing of our home-grown produce. The Kingdom Cox campaign set out to improve the grading and the organisation of apple supplies. It has achieved substantially higher sales of the English Cox apple. The Charter Bacon Scheme aims to achieve quality and consistency of supply of British bacon. The "Great Brits" promotion of premium grade potatoes is beginning to prove its worth in its test market in Scotland.
Among the many initiatives which have been helped by the Central Council for Agricultural and Horticultural Co-operation, we have seen: the launch of Puffin new potatoes; Froqual frozen vegetables; the first appearance of British frozen lamb to help producers extend the marketing season for home-produced lamb; the remarkable achievement of Grampian Pig Producers in creating new markets for their produce in close collaboration with the trade; and the promotion of English fresh vegetables in West Germany.
In November last year, we saw what an impact could be made at the major French food fair, SIAL, by the co-ordinated efforts of a number of fresh produce sectors—milk, meat and vegetables—working in conjunction with the British Food Export Council to present a showcase of high quality British food products. It was an impressive achievement.
All these activities indicate a willingness on the part of producers and manufacturers to pool their efforts to achieve better results on the market. But, unlike our European counterparts, no single body exists in this

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country to bring together marketing expertise across a number of sectors in joint initiatives. The Central Council for Agricultural and Horticultural Cooperation has done wonderful work in encouraging better marketing in the co-operative sector, but its scope, as its name implies, has necessarily been limited to co-operatives alone, and therefore to basic agricultural and horticultural produce.
The United Kingdom is one of the last of the major food-producing countries to seek to organise itself in this sphere. In France, there is SOPEXA; in Germany, the CMA; and the Danes, the Dutch and the Italians all have their own organisations aimed at improving the co-ordination of marketing efforts at home and abroad. In this, Britain lags behind. I hope that the Bill now before the House will remedy that position.
Following much discussion within the agriculture and food industry, the Government are proposing in this Bill to establish a central marketing organisation for agriculture and food which has as its objective the improvement of the marketing of our food and agricultural produce—both at home and abroad. We propose to call the new organisation Food from Britain. Our intention is to build Food from Britain on the basis of the existing Central Council for Agricultural and Horticultural Co-operation, and therefore to develop fully the marketing expertise which the Central Council has acquired over the years. But Food from Britain's remit will go much wider than that of the Central Council. It will bring together in a single forum all parts of the agricultural and food industries to work towards the common objective of improving our marketing performance.
In the long run, we see Food from Britain as an industry organisation, run and financed by the industry which it serves. But the Government recognise the importance of giving Food from Britain an effective start. We intend, therefore, to see the organisation properly financed from the outset on a scale sufficient to launch it on a proper basis. The Government will provide pump-priming funds for the first five years, in order to help Food from Britain establish itself and reach full operation. In total, up to £14 million will be made available in the period 1983–84 to 1987–88 inclusive for new marketing initiatives. The money will be paid as grant-in-aid.
The support of the food and agriculture industries is crucial to the success of this venture. The Government will be financing the greater part of Food from Britain's marketing budget at the outset, but the Government's contribution will reduce as these industries contribute on increasing scale. Industry contributions will be voluntary, by such means as subscriptions, contributions to joint projects, and payments for services. By the end of the five-year period, we envisage that the full marketing budget of Food from Britain will be provided by industry. The success of Food from Britain will depend on its ability to convince the agriculture and food industries that its services are worthwhile. And this is as it should be.
Food from Britain will continue to support and to encourage co-operative development in exactly the same way as the Central Council for Agricultural and Horticultural Co-operation now does. The Government financial support for co-operative activities will
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continue, as now, at a rate of some £1½ million per year, and co-operative grants which now total about £3 million to £4 million per year will also continue unchanged. Nothing in the Bill which is now before the House in any way diminishes the commitment of the Government to the co-operative sector. Indeed. we believe that co-operatives will stand to gain from the bringing together of marketing and co-operative development within a single new organisation.
Perhaps I may refer briefly to the provisions of the Bill. Clause 1, together with Schedule 1, sets up Food from Britain and gives it a council of 13 to 15 members. The Government are proposing a small, effective council for Food from Britain because it will be concerned with marketing throughout the food chain. A body which consisted of representatives of every sector and region would, in our view, be too large to work effectively. In making their appointments to the council, the agriculture Ministers will have regard to all sectors of the food and agricultural industry throughout the United Kingdom.
Clause 2 transfers to Food from Britain the present functions of the Central Council, which are to improve and develop co-operation. The details of these functions remain enshrined in the Agriculture Act 1967 and in no way have been changed or diminished. It also gives Food from Britain powers to co-ordinate and to develop marketing in the widest sense in the areas of agriculture, horticulture, fish (other than fresh sea fish, which is dealt with by the Sea Fish Industry Authority) and food produce. The powers are deliberately given wide definition so that Food from Britain has maximum scope to develop and implement a flexible strategy. We hope, therefore, that in time Food from Britain will co-ordinate market research; act as a forum to achieve more coherent marketing within and between sectors; encourage better quality and presentation of produce; promote joint ventures; provide advice and information; and, above all, concentrate upon the priorities of quality, consistency and value for money.
Clause 3, with Schedule 2, provides for the dissolution of the Central Council for Agricultural and Horticultural Co-operation, and for the transfer of all its rights, obligations and property to Food from Britain. Clause 4 enables statutory bodies in the agricultural field to contribute towards the cost of the marketing activities of Food from Britain, if they so wish. Clause 5 lays down standard requirements which apply to any non-Crown body for accounting records and preparation of an annual report. Clause 6 gives Food from Britain powers to borrow temporarily up to £500,000, a provision which is intended to cover short-term cash flow problems only. The clause also enables Food from Britain to make grants or loans.
Clause 7 will enable Ministers to make grants and loans to Food from Britain and to remunerate the members of the council as appropriate. I should add that funding by the Government of co-operative functions will continue to be provided for in Section 58(9) of the Agriculture Act 1967. Clause 8 deals with the interpretation of various terms used in the Bill. Clause 9 names the Act, provides for it to cover Northern Ireland and provides for repeals in Schedule 3 which are mainly consequential on the transformation of the Central Council for Agricultural

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and Horticultural Co-operation. The clause also makes provision for the coming into force of the Bill by statutory instrument. It is intended to do this two weeks after the Bill receives Royal Assent, in order to set Food from Britain in full operation as soon as possible.
I very much hope that the Bill will receive the support of your Lordships. It reflects the Government's view that there is a very great deal to achieve in the better marketing of our food and agricultural products—an achievement which will be available for the producer, the manufacturer, the retailer and the consumer. It demonstrates our belief that British produce can develop overseas markets and can achieve a reputation for quality, variety and consistency of supply for which it should be well noted. Food from Britain can provide the framework by which this can be done and the results will be a stronger and more effective marketing performance by our industry in the coming years. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read a second time—(Earl Ferrers.)
6.30 p.m.
Lord John-Mackie: My Lords, in opening for the Opposition on this Bill, I too should like to say that we are looking forward to hearing the maiden speech of the noble Lord, Lord Northbourne. The noble Lord, like his father, is looking to the land. His father not only looked to the land but wrote about it. He was also a very prominent member of the agricultural war committee in his native county. We look forward to hearing from the noble Lord and for his experience to be made available to this House.
The noble Earl, Lord Ferrers, in his usual crisp and clear way, has put forward the reasons for the Bill. He has gone over the whole gamut of what is there now and has put it to us that the co-ordination of all these functions is the main object of this bill. I could not agree with him more. I welcome the Bill although it has taken a long time to reach this stage. The Minister admits that he started looking at this matter in 1979, and by about the middle of that year he brought together four or five people to study the situation. Now here we are, three weeks into 1983, having it launched. The Bill should be good with all the deliberations that have gone on in that time.
There were inklings of it at the Oxford farming conference in 1981 when one of the Minister's advisers, Miss Detta O'Cathain, gave an excellent paper. We all thought that the Bill would be coming fairly soon. That was two years ago and the Bill is not yet on the statute book. The problem with the designated committee which we have at the present moment is that it is running into spots of trouble. I shall not mention them. I do not think that a director has been appointed yet. Some members of the NFU are making criticisms. I trust that will be sorted out before 16th February, when we are to meet on the launching of this Bill.
Looking at the Bill, we see that it gives power to the Food from Britain organisation to develop and coordinate the marketing of agricultural and food produce at home and abroad and to take over the
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Central Council for Agricultural and Horticultural Co-operation. Having seen that body (the CCAHC) on to the statute book as a junior Minister in 1967, I am glad to see that the Minister of State in another place, in the Second Reading speech there of this Bill, envisages a strong role for it under an almost autonomous body, so far as one can gather from what he said, called a co-operative development board with its own chairman from the main council. I welcome this very much because it is essential to make full use of all the expertise of the CCAHC.
The other point on which the Minister is to be congratulated is on not having nominated or statutory members. I have been a member of, and chaired, many bodies that had statutory members. There is no doubt that many are very good; but too often it is just "Buggins' turn" from the parent body. One usually gets a number of people who are just simply filling in a space. I think that it is an excellent idea that there is to be no nomination of statutory people on this body. The Scottish NFU wants more consultation, but that should be all. I doubt whether Douglas Cargill, the chairman-designate, would have obtained the job if he had been a nominee of the NFU, although they consider him a good choice. He has great experience in co-operatives in the North-East of Scotland. He is a founder member of Grampian Pig Producers, a body which took over when the bacon factory closed down in Aberdeen. That has been a huge success. He is a past chairman of Grampian Growers, a body that deals with a tremendous amount of bulbs, flowers, potatoes, and so on from that area. That would make him, as the Minister of State suggests, a first-class chairman of the development board, the successor to the CCAHC, within the Food from Britain organisation. This should satisfy many of my noble friends who are worried about the position of the council. Mr. Cargill happens to be a cousin of my wife. which I would suggest is a recommendation as well.
My noble friend Lord Blease, because of commitments in Northern Ireland, is unable to be here today but hopes to take part in other stages of the Bill. In a note to me he states that in general terms the Bill is welcomed by the Ulster farming community. It is hoped that the already well-developed agricultural marketing provisions in the Province will be further improved and strengthened by the Food from Britain measure. However, apart from the vital questions concerning effective liaison and Northern Ireland representation on a new Food from Britain Council, other important matters regarding Northern Ireland agricultural interests require to be clarified. For example: will Northern Ireland food producers still be able to market Ulster butter, milk, bacon, eggs, potatoes or other agricultural products under their own labels where these are well established, or will all these become swallowed up in the proposed new marketing operation? I hope that when the noble Earl comes to reply he will be able to assure my noble friend Lord Blease that the latter is not the case.
Now let me make a few points about the present situation. We are producing today at farm gate prices over £10,000 million worth of temperate foods. This is about 75 per cent. of our needs. So over £3,000 million more has to be produced to become self-sufficient. I shall not attempt to forecast whether this

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can be done; but when one remembers that in the mid-1960s we were producing only 13 million tonnes of grain, and today we are well on our way to producing 23 million tonnes, one wonders how much food we can produce in this country if we carry on at that increase. However, we export round about £3,400 million worth of food and drink, of which only about £2,200 million is food. There is an enormous export of Scotch whisky which takes about £900 million of the main figure. All that food has to be replaced by buying food over and above the 25 per cent. shortfall that I have just mentioned. Although the Food from Britain campaign is pushing home-produced food, it is getting considerable publicity in that it has to sell a lot more abroad. It has to be remembered that the more we sell abroad, the more we have to buy to bring up our supplies to satisfy 100 per cent. needs.
According to the noble Lord's Ministry, from which I received some figures, more than 50 per cent. of the cost of food to the consumer is in processing, packing, distribution, retailing, et cetera. So we are really speaking of about £1,000 million worth of food at farm gate prices, or maybe slightly less than that which is to be exported. This means that nine-tenths of food production is sold at home. Even suppose Food from Britain succeeds in doubling our exports, it still means that far the biggest job that it will have to do will be to market the home sales of £8,000 to £9,000 million worth. I note that the Bill does put home food first and export afterwards.
I gather from the Food Processors' Federation that more than 50 per cent.—and it is a very high figure which I was unwilling to believe when I heard it—of home-produced food reaches the consumer in processed form. This puts 50 per cent. more on to the price before it reaches the consumer. That is called "added value". I have always been suspicious of that expression because I feel it is often only added expense. If one takes potatoes, for example, I have looked at potatoes which are sold in the supermarket, nicely washed and in a polythene bag, and then I have gone and brought 561bs. in a paper bag fresh off the farm. You will find that if you take the 2 cwt. plus that each individual in Britain eats in a year, they are paying to have them washed and put into polythene bags, and it comes to £7 or £8 more. Of course I know that potatoes are not always sold in that way. Root vegetables in particular do not keep so well after they are washed, and I think that we should be teaching housewives to buy them, as far as possible, in the state in which they come off the farm. The point I am really emphasising is that if Food from Britain is to give real help to home producers, then they have to concentrate on what is sold at home. I appreciate that consumers, processors and, of course, the economy come into the picture as well but, as the noble Earl said, none of these will benefit unless the production is there.
Over 50 years ago, in the very early 'thirties, I was often frustrated by not being able to sell my produce. I had printed some notepaper with a heading, which also appeared on the back of the envelope: "Buy British Farm Produce". That was in very large print. Some people wrote and asked whether there was a body they could join; a lot of people laughed at me, and nobody wrote wanting to buy anything; but I felt I might be sowing a seed that could germinate some
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day. Therefore I am only too pleased to support this Bill. It may help to answer my plea which was made over 50 years ago.
6.42 p.m.
Lord Tanlaw: My Lords, I should like to thank the noble Earl, Lord Ferrers, for his presention of this Bill which will, we hope, become a very useful one. Like the noble Lord, Lord John-Mackie, and the noble Earl, I am looking forward very much to the maiden speech of the noble Lord, Lord Northbourne, and to hearing his expertise on this subject. My noble friend Lord Mackie of Benshie is unable to be present today but I know he would be particularly interested to take up the point which was made by the noble Lord, Lord John-Mackie, about potatoes. I have no doubt he was right in what he said, although my own technical knowledge of that subject is small.
It is said sometimes that quangos come and quangos go; that there are good quangos and had quangos; and there are some that change their spots. The latter kind is what we have in this Bill—one that changes its spots. The Central Council for Agricultural and Horticultural Co-operation changes into Food from Britain. It is also true to say that this transformation has provided "teeth" for the first time for the council. In Clause 2 of the Bill, the functions of the central council are not only transferred but given extra powers in that Food from Britain may undertake activities to develop and co-ordinate the marketing of agriculture and food produce. It is this part of the Bill that I welcome very greatly and have great hopes for, along the lines which were explained by the noble Earl in his presentation of the Bill this evening.
If there is any criticism, or clarification to be made by the noble Earl in his winding-up speech, I would hope that not too much emphasis is put on promotion. in the terms that he has described. Of course it is essential, if it is to be a successful marketing operation, but not promotion without the proper guarantees of quality control and really positive attempts by the Government or by the Food from Britain Council to establish criteria and quality which are agreed with the distributors and the markets as a whole and which will ultimately benefit the consumer. I think this is a very important and significant Bill for producers, like myself—if I may take this opportunity to declare my interest as a producer of Scottish beef and hill lamb.
It is very important that Food from Britain has clearly stated objectives, which at the moment I am not clear about, but no doubt they will emerge during the Committee stage. Both as regards home and overseas markets, these objectives should he defined and should include the quality standards which I have mentioned. These must be maintained and fulfilled before Food from Britain will go as far as promoting it. I feel that a blanket promotion simply to promote food which is produced in Britain could do considerable harm to the producers in this country, especially if bad food came under the umbrella of this marketing procedure.
There is no need for me to remind the House. as has the noble Earl, of the success of some marketing programmes. The noble Earl mentioned the British ones, but there are also successful imported ones, and

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we have been on the receiving end of those. There have been campaigns for New Zealand lamb and Danish bacon. The point I wish to make here concerns the maintenance of recognised standards of quality which they adhere to, and the consistency of the product. If we do not learn from their experience, I am afraid we are going to fail. Tonight I am only interested in talking about Scottish beef; but whether it is apples, lamb or anything else, if we do not stick to these points, I have a feeling that there will he great disappointment from everyone connected with this project.
The only aspect I should like to select this evening is just one example of the many areas in which Food from Britain is going to assist in terms of marketing and which will, I hope, benefit from the new powers given in Clause 2 of the Bill. It is, of course, the need to improve production of beef—in this particular case, Scottish beef—in much the same way as improvements in quality have affected the pig trade in, for example, the reduction of back fat over the last 20 years.
I am sure that your Lordships will forgive me if I say—many of you will be experts in this matter—that there are different types of beef. I may say that Scottish beef is basically a suckler beef which takes 18 to 20 months to produce from cows and calves fed on nothing but grass. Then there is barley beef, on the other hand, which means that the animals are intensely fed indoors and receive little exercise to speak of in order to maximise the increase in weight. That kind of beef is produced in only 12 months. Then there is English beef which is calved on the dairy farms and is fed on a mixture of grass, cake and milk.
So there are three different types of beef which, possibly, I have described very badly; but when it comes to marketing, the housewife does not have much indentification as to the feeding patterns of the meat she is buying from the butcher. I should like to make the point, because of my declared interest, that those of us who work the most difficult parts of Britain— in the hill and upland areas—have beef which takes 18 to 20 months to mature. On the other hand, they are getting the finest diet, a natural diet of grass. There is no forced feeding or unnecessary fat; but we do not get any extra price for this quality. I mention this because another report, which has been brought out by the Royal College of Physicians, says that fat meat is bad for us. I hope to develop this point during the debate which my noble friend will introduce into your Lordships' House next month.
The point I am making is that the three different types of beef are not classified. There is no definition of "Scottish beef". We know it is the best and finest in the world, and yet there is no definition of it so that we can, as a co-operative of producers, maintain the standards to get a better price in the markets.
I also draw the attention of the noble Earl to the report of the West of Scotland Agricultural College, entitled Auction Markets: Fat Cattle Sales. It is the No. 3 Report. This is an area in regard to which they have said, quite clearly, that the auction markets do not have any grading system for those of us who produce beef. They say that it is quite possible for the auction markets to make a grading on visual grounds alone,
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between over-fat animals and those of lean and good consistency, and also between those which have been fed on grass and those which have been fed on barley. They say that this would be beneficial for the market, but I am not sure whether it would for the buyers, because, at the moment, the heavier the carcase the bigger the price. So there is no incentive for the producers of beef to concentrate on quality beef.
I hope that this is a factor which will be taken into account in this new Bill and in these new powers that are available. The information is available—certainly, if we talk in terms of Scottish beef—and I have a feeling that now, for the first time, this can actually be implemented. One of the reasons why it has not been implemented before is this: Why should the auctioneers carry the burden and trouble of the extra cost of grading? But there are funds now available to put this right.
I think also that, for instance, there should be a marking on the carcase of Scottish beef calves for slaughter, which would indicate to the end-consumer that it is beef that has been grown on grass, rather than on barley, or that there should be a quality label attached to it. The new Food from Britain organisation could do a lot to educate butchers. Why do the butchers not clearly indicate on the meat on their counters that which is grown from grass, that which is grown from barley or that which is force-fed? I believe that people would be willing to pay extra for quality and they want to know. The quality is made quite clear in other products.
I also believe that producers' co-operatives should begin to be formed. Those of us who work on hill farms should co-operate together, in order to produce the kind of animal that is wanted for the market. It is the only business of which I know where we are working together to produce for the market, but have no idea what the market wants. Very roughly, we take our chance on the mood of the buyers on the day. The objectives behind, and definition of, the beast that we are trying to produce are not before us.
These are just some of the points that I hope will be taken into consideration by the Government. I am not asking them to do all the work on this. I am asking them to give some real incentives to the markets, to those of us who produce and to the breeders to fulfil the objectives which the noble Earl has put forward. On the other side of the coin, if support is not forthcoming—I have given the example of the Scottish beef campaign—if the Government are not, in the next five years, going to assist auctioneers and auction markets in. for example, Scotland, to improve the quality and grade the stock that is coming up for sale, and if they are not going to have representation on the Food from Britain board, or board of directors or whatever they will have, by men who are competent to put forward the ideas that I have expressed, of maintaining the quality and the name of Scottish beef, then it will be a tragedy.
Certainly, there will be no support whatsoever from the industry to pay a penny towards any organisation that does not do the least of the things which I have described. I have no doubt that, when he replies, the noble Earl will say, "Of course this is something that is bound to happen". If so, the industry, whether it be

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the producers, the meat buyers or the butchers, will welcome this Bill and will be happy to support something which is in their interests, right down the line from the producer to the consumer.
6.55 p.m.
Lord Northbourne: My Lords, I must ask your Lordships' indulgence for my maiden speech. I should like to thank you for the kind welcome which you have already given me and I should particularly like to thank the noble Lord, Lord John-Mackie, for the very kind remarks that he made about my father. As the son of a distinguished farming father, I am rather proud to be able to make my first speech in your Lordships' House on an agricultural subject. I have to declare an interest, in that I am the managing director of a substantial farming business and our most important activity is growing, packing and marketing vegetables.
The need for this Bill is emphasised by the existence of a world surplus of almost all major agricultural commodities. British food production is increasing and British food consumption is static. It is, perhaps, interesting that the French housewife spends a much higher proportion of her income on food than her British counterpart. I have personally been able to avoid any inconvenience on this score by marrying a French wife, but the problem for the industry obviously remains.
I should like to touch on the matter of co-operatives in agricultural marketing. I know that the subject has been discussed at some length in another place. My remarks are not related to any kind of political view, but only to my own personal experience. I am a member of three agricultural co-operatives connected with marketing and for 10 years I was a director of one of them. My experience suggests that, although cooperatives have a very important role to play, they also have their limitations.
The success of a co-operative depends on the loyal support of its members, and members look to the cooperative to offer them a service. The very essence of good marketing is strict control of quality and regularity of supply, and the members of a cooperative are sometimes reluctant to accept the necessary disciplines for a fully effective marketing effort. For this reason, I believe it is difficult for a co-operative to have quite the same sharp, commercial cutting edge as an independent business which markets its own products.
I particularly welcome the fact that the whole food chain, and not just agricultural and horticultural produce, is covered by the provisions of this Bill. Unfortunately, traditionally, agriculture and the food industry have tended to develop along separate lines and, sometimes, in competition with one another.
In 1977, I was responsible for instigating a seminar at the Centre for European Agricultural Studies at Wye, which was entitled Europe as a Food Exporter. The main conclusion which came out of that seminar—and I believe it is equally true today and equally true for Britain—was that the greatest opportunities for increasing the export of agricultural and horticultural produce lie in the export of processed and prepared food.
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It is interesting to reflect that 100 years ago nearly all food was prepared either on the farm or in the kitchen. By contrast, today the vast majority of the food that we eat is factory processed. One noble Lord mentioned 50 per cent., but I suspect that even more than that is either processed or at least graded and packed. Noble Lords, who may recently have tried, for example, to buy an apple in a supermarket, may have been confronted by the problem that they had to buy four of them in a plastic tray, with a bit of plastic wrapping over them. I think that the noble Lord, Lord John-Mackie, had the same problem with his potatoes.
Today, the supply of raw materials for the food industry is one of the principal roles of the agricultural and horticultural industries, and the food industry can offer us new and useful outlets for our products. Indeed, not all such ideas are new. For example, I ask your Lordships once again to consider the humble potato which, when it is dressed up in fancy dress, sells as potato crisps to an enormous market. It has developed a major new outlet for potato producers. Similarly, I have always greatly admired the genius of the man who thought of taking anchovy and making it into Gentleman's Relish—and even giving it a Latin sub-title for good measure.
A great deal of what can be said about the Bill has already been said, and I therefore intend to be very brief. I should like finally to refer to Clause 8, which defines a number of terms used in the Bill but does not actually define the term "marketing". I suggest that marketing must not be seen just as packaging and promotion, although both have a part to play. The noble Lord, Lord Tanlaw, made this point. It simply is not good enough to shout "Buy British" if the product is not right or if the price is not right.
I suggest that good marketing is identifying specific products which the consumer wants, or which the consumer would want if they were available, then learning how to produce them at the right price and how to deliver them where they are wanted and when they are wanted, and to a reliable standard of quality, and only then making sure, through promotion, that the customer knows that the product is available. That is the kind of co-ordinated marketing which I hope Food from Britain will bring to the industry. If it succeeds, then an increasing number of customers will choose to buy British.
7.2 p.m.
Lord Sainsbury: My Lords, I consider it to be a privilege and a very great pleasure to be the first to congratulate the noble Lord, Lord Northbourne, on his excellent maiden speech. I am sure I speak for all quarters of the House when I say that, with his experience as a large producer and with his keen marketing sense, we all look forward to his future contributions when he speaks on agriculture and allied problems.
In welcoming the Agricultural Marketing Bill and congratulating the Minister of Agriculture, Fisheries and Food upon his initiative, I must of course declare an interest, since the firm with which my name is associated is obviously concerned. Also, one of my kinsmen was one of the five marketeers who were asked to assist the Ministry and the Government by examining the problems of the marketing of British agriculture and food products.

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We have in the United Kingdom food producers who compare favourably in efficiency with any in the world, but we have been less efficient in marketing. We have not always taken into sufficient consideration consumer choice and demand, probably because of the emphasis placed on price guarantees under the common agricultural policy, which has led farmers to concentrate upon securing volume of output.
What is good marketing? In my opinion, it is ensuring, first, as has already been stated, a high quality product with continuity of supply, properly graded, in good condition and packed in suitable containers—deciding whether the market requires a consumer pack or a bulk pack. There is a clear need to establish a realistic, commercially viable specification, and, if standards are established, they must be properly enforced. Retailers have, in the past, found that this is not always done satisfactorily. It is vital that the consumer does not lose confidence in the product.
Good marketing is not simply a public relations job of inventing a brand name and spending a large sum of money on television—although, of course, advertising has a role to play. There is obviously a need for an organisation that has the power to co-ordinate marketing efforts, such as the French and the Germans have. There is equally obviously a need to co-ordinate market research. In the export field, in my opinion, it is particularly important to make a study in depth of the market you want to penetrate before you start exporting there—something in which, in the manufacturing industries, the Japanese have excelled.
A very small proportion of the agricultural product that leaves the farm reaches the consumer in the state in which it left the farm gate. There are many links in the chain between the farm gate and the consumer's shopping basket. To take two obvious examples, milk is collected from the farm in tankers, pasteurised, bottled and delivered by the milkman to the housewife's doorstep. Peas may be grown under contract and, after harvesting, delivered to factories for freezing, canning or drying before they reach the wholesaler and retailer. It is probably true that there has been less co-operation and communication between the links in the chain of distribution in Britain than there has been with some of our overseas suppliers. The new organisation will have an important role to play in encouraging the dissemination of market information.
One of the great difficulties in marketing is predicting accurately future demand. Here the large retailer is in a good position from his experience to provide forecasts from which the producer can benefit as much as anybody. Of course it has always been easier for countries like Denmark, Holland and New Zealand to maintain high quality standards because such a large proportion of their total production went in export, and strict quality control could be exercised both at packing stations and at the point of shipment. Also, whereas we have been pioneers of co-operation in the retail field, until comparatively recently we have not developed on any great scale the producer marketing co-operatives. This is the exact opposite of what happened in the three countries I have just mentioned where producer co-operation brought the necessary discipline which is essential for good marketing.
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An example of a comparatively recent successful marketing co-operative in the United Kingdom is the East Lincolnshire Growers, which was formed in 1964. Its 36 members range from a rather small farm of 150 acres to a very large one of 7,500 acres. All their root and vegetable crops are marketed through the co-operative. They have learnt to grow for the market and their current turnover is, I understand, some £7 million a year. This is a real success story. The promotion of producer marketing co-operatives was no doubt given impetus by the formation in 1967 of the Central Council for Agricultural and Horticultural Co-operation. It is to be welcomed that the Bill transfers the functions of the council to the Food from Britain organisation.
There is one other matter in the Bill on which I should like to comment in the light of my experience of serving on many committees of the Ministry of Food and other bodies during the last war and afterwards. It concerns the size and composition of the council of Food from Britain. I believe that members of the council should be selected on the basis of their experience and the potential contribution that they can make as individuals—and not because they are the nominees of sectional interests. Once one starts appointing on a representative basis, the size of a council or board invariably grows to unmanageable proportions. Therefore, I fully support the Minister in his policy of not having nominated membership and the limitation on the size to 13 to 15 members.
May I conclude by wishing Food from Britain every success under its able young chairman, Nicholas Saphir. I have known members of his family for many years and they have great experience and a fine record in the marketing field.
7.13 p.m.
Lord Stodart of Leaston: My Lords, it was the custom in another place, as it is in your Lordships' House, for the speakers who follow a maiden speaker to compliment him and say that the House would join unanimously in hoping that the maiden speaker would be heard on many occasions in the future. I have known one or two of my former colleagues in another place say privately that they rather wish they had not uttered those words of hope that the new Member would be heard on many occasions thereafter. But on this occasion I will say only that the keen anticipation that was expressed about the maiden speech of the noble Lord, Lord Northbourne, has been succeeded by a feeling of all-round satisfaction.
I find this a particularly interesting debate because marketing and the idea of exporting food, especially to Europe, was all the rage when I held the same office as that of my noble friend Lord Ferrers precisely 10 years ago. I have looked up some of the answers I gave to supplementary questions in another place and see I said, among other things, that a firm of consultants was making a study with the Government paying 90 per cent. of the cost; that investigations were covering cheese, meat, soft fruits, vegetables and flour; that the Central Council for Agricultural and Horticultural Co-operation was in the closest touch with cooperatives in the Community; and best of all, perhaps, and the greatest pearl of wisdom, that the need to co-ordinate the export of agricultural produce was

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being actively explored. How right the poet Longfellow was to mention what he did about the "mills of God".
There has been a considerable change in thinking on food production in the United Kingdom over the past 10 years and for this my right honourable friend the Minister and my noble friend Lord Ferrers and his colleagues deserve hearty congratulations. Gone is the attitude voiced by the former Board of Trade when, in giving evidence to the Select Committee on Agriculture some 12 years ago, it decried import savings by increased food production at home as being of little or no value. The noble Lord, Lord John-Mackie, referred to the fact that 75 per cent. of our needs for temperate foods are now produced compared with 60 per cent. some 10 years ago. I suspect that about the only temperate foods in which we are not self-sufficient are sugar, dairy produce, lamb and possibly (I am not sure about this) beef. This is a stupendous performance in what is one of the more densely populated countries of the world, especially when two other factors are taken into account. The first is the area of land which goes out of production, which is running at more than 50,000 acres a year. If one works that out, it means that an area almost exactly equivalent to the county of Norfolk has disappeared from agricultural production since the war.
The second factor is that the labour force in agriculture is only 3 per cent. or thereabouts of the labour force of the country as a whole. That shows the excellence and adaptability of farm workers. But as the noble Lord, Lord Sainsbury, has said, this great effort has tended to collapse at the farm gates. One tends to say, "Here it is. Come and get it". No one who has been to the food shows in Paris and Berlin, as I have done, has come home without feeling that we have been losing out to our competitors in Europe. Therefore, better marketing is again the call of the day—but spoken of and listened to with more assurance now because much more money is available at the launching pad. For this too, agricultural Ministers deserve a good deal of credit.
There are three points I wish to make. The first is that the United Kingdom is famous as a producer of red meat. The noble Lord, Lord Tanlaw, has referred to Scotch beef. I have often thought when looking in shop windows that more beef is labelled "best Scotch" than the whole of Scotland produces; and the best of Welsh and English lamb is rightly famous too. But I hope your Lordships will forgive me if I make one further point, which is not totally irrelevant. It is that efficient marketing can hardly succeed without efficient slaughtering. This branch of the industry has been encountering tremendous difficulty. Hardly any well-known name—I have no interest now to declare—has failed to make headlines in the last year in a way that they would much rather not have done. The main cause, of course, is over-capacity. It is not, I think, a matter for the Government, but it is certainly one for ratepayers, with I believe every municipal slaughterhouse, I suspect without exception, running at enormous losses.
I am looking forward with the keenest interest to what I am quite sure is going to be a success story, because one thing I have learned in 50 years of farming is that nature does not allow farmers to grow crops that
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combine high quantity with super quality. My noble friend has mentioned Charter Bacon and the Great Brit. Potato Adventure; and I wish them both the best of luck. But I am bound to say that throughout my 50 years of farming it has paid me better to grow a large crop and sell it at a lower price than vice versa. I have been offered premiums for smaller crops of high quality—and once I was even invited to send wheat to Canada in order that it might be made into biscuits—but even that operation did not pay me as well as the higher crop that I sold at a lower price. I am bound to say that I think that Food from Britain, which is, of course to market food at home as well as abroad, has got to bear this in mind.
The last points I have are somewhat sundry. My noble friend has said that the Bill does not include the marketing of sea fish. Perhaps he will tell me if I am right in remembering that shellfish probably are included, being statutorily different from sea fish, having a recollection of a very successful stand run by the Highlands and Islands Development Board at one of the parish shows with Orkney crabs.
Secondly, is Food from Britain going to involve itself in the export of such things as Scotch whisky? If it is, I hope there will not be overlapping between the fairly efficient Scotch Whisky Association and the Food from Britain campaign. Thirdly, I am fascinated to know whether the Food from Britain campaign is going at the same time to push the sales of butter and dairy products, which it obviously is, and also urge people to buy margarine, because the area of oilseed rape is fairly high in this country and increasing, and if it is to advocate margarine I am just wondering how the chairman of the Milk Marketing Board, who I think is a member of the Food from Britain team, is going to react.
Finally, I wonder this. Does anybody really know what the consumer really wants? I ask this because a fortnight ago I listened on my radio to a member of the staff of the Meat Research Institute saying that on no account should meat have any fat at all, and anyone who thought that fat gave even a hint of a flavour to the meat needed his head seeing to, because it did not; whereas in the Daily Telegraph on the same day there was an account of a small agricultural enterprise in Devon which was breeding the rather old vintage types of pigs, the Middle Whites and the Wessex Saddlebacks, all of which I recollect gave an enormous amount of fat, and it was inundated with orders from people who were tired of the stuff they were getting in the butchers' shops now. With those words, I wish Food from Britain all the luck in the world.
7.25 p.m.
Lord Collison: My Lords, I, too, wish to congratulate the noble Lord, Lord Northbourne, on his maiden speech. I enjoyed it very much, and quite obviously he is going to prove a very great asset in this House; like others, I hope we shall hear him often. I would also, if I may, apologise to the noble Earl, Lord Ferrers, because I was a few minutes late in taking my seat when he opened the debate; I am awfully sorry. The amendments on the previous Bill went through much more quickly than I expected. I am sorry to have done that, with the great regard and respect I have for the noble Earl.

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This Bill has been widely welcomed. It was welcomed in the other place and has been welcomed here, and I join with those who welcome it and wish all good to the organisation which it is going to set up. I rise in order to call attention to the proposals which the Government have made and which affect the Land Settlement Association. If I throw a note of discord into this debate, it is not in relation to the Bill itself but in relation to what is being done to the LSA.
My interest in the Land Settlement Association has been a long one. I was a member of the executive committee for many years, first appointed 25 years ago. I became vice-chairman in 1964 and remained as vice-chairman until I became chairman in April 1977, a post I held until I retired in December 1979, when Sir John Colfox was appointed by the Minister, the right honourable Peter Walker. At that time the Minister was kind enough to write me what was a very nice letter which I greatly appreciated. He thanked me for my services over the years, and he said in that letter, if I may quote:
"You have seen many changes in the structure of the association and the smallholdings scheme since you were first appointed and can he justly proud of the high regard in which it is held today".
That was at the end of December 1979. I am not quoting those kind words of the Minister in order to draw credit upon myself. There were many others, of course, who had contributed before me and have contributed after me: there are many others to whom credit was and is due: the previous chairmen, successive members of the executive committee, and a very dedicated and loyal staff. I mention it only to stress the changed attitude of the Government since then, and it is a relatively short time ago. I am sure your Lordships will appreciate my regret at the developments that have taken place.
The Land Settlement Association was set up to help people without much capital to establish themselves in agriculture as smallholders producing for the domestic market. To make this possible the Land Settlement Association built up integrated marketing and production machinery. There were tenancy agreements with each tenant, who was specially vetted before he was allowed into the scheme and who had to have a certain amount of capital, but clearly not enough to start on his own. Tenants could obtain a grant from the LSA and get bank loans which were underwritten by the Government. The LSA acted as the Minister's agent in these matters.
In all my time, these arrangements seemed to be working well. I visited many of the estates, particularly during my time as chairman, and was told by many tenants that they had successfully built up their own businesses, and they expressed appreciation of the Land Settlement Association, which had given them a chance to get their feet on the first rung of the agricultural ladder.
I have not buried my head in the sand. That would be stupid, and I know, as we all do, that horticulture has run into difficulties. Indeed, problems were beginning to affect the industry at about the time I left the LSA. At that time some tenants and some estates began to demand more freedom to conduct their own affairs. They were beginning, but only just beginning,
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to express criticism of the way in which the scheme was operating. Now, since I have left, those criticisms have built up and, reacting to those criticisms, the Minister announced on 1st December 1982 that he was convinced that the tenants of the estates should take over responsibility for the marketing of their own produce and declared his intention of terminating the current LSA marketing arrangements from the beginning of April 1983, and also of terminating the agency agreement and enabling tenants to purchase their holdings if they so wished and if they were able to do so.
This decision, though welcomed by some, caused consternation among many growers. My honourable friend, Mr. Stanley Newens, in a speech in another place on 20th December—reported in Hansard at column 736—said he had received a large number of letters expressing considerable anxiety about the decision. Many tenants believed that they would be seriously damaged and even bankrupted. They pointed out the difficulties they would face as a result of the very short time they had been given to make alternative arrangements. Those difficulties were intensified by the withdrawal by the Minister of his guarantee to the banks.
I am glad, therefore, that on 19th January the Minister, in reply to a Question asked by Mr. Anthony Nelson in another place, said that he was prepared to arrange for the continuation of the association's centralised marketing services up to 31st December 1983. But the Minister added that all other aspects covered by his announcement of 1st December 1982 will remain unaffected. Of course, the Minister hopes that alternative marketing arrangements can be made in time, but the growers are still faced with considerable problems, despite what I think is the tardy recognition by the Government that they had a point that the Minister has partially met.
LSA tenants, like everyone else in the industry, have been adversely affected by the problems which face horticulture generally. Many have run into debt. The Minister's withdrawal of the guarantee to the bank will make it very difficult to obtain the loans they need to keep going. Apparently the growers will still receive an account from the LSA from the end of December 1982, which has to be confirmed to have queries rectified, and to be paid to the estate office by—it was—28th February. Although I am not sure about this, it may now be by 31st December. The point is that failure to do so will result in two months' notice to quit.
Thus, the growers' prospects of ever getting on their feet and getting their feet on the first rungs of the ladder will be nil. Despite the extension of time, as I understand it the Government are asking for all the assets of the existing scheme—grading equipment, lorries and tractors—to be disposed of by 31st December, which I assume is the new date, and the new organisation can take over only if it can be formed in time.
My concern is for the growers. It is for the tenants. It is clear that many problems still remain for them. The Minister says that he consulted the tenants. I wonder how far that consultation went. Were all the tenants involved consulted? I was very keen to create consultative machinery. As the noble Earl knows, I

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thought it right to do so. I worked for it and we obtained a joint consultative council. However, I do not know how far this consultation went. I certainly hope that it went the whole way and that all the tenants were involved. I certainly hope that the consultation will continue on the many problems which will arise and will affect the tenants as a result of the Minister's decision. As Mr. Newans said in another place:
"Even the attraction of buying … at 50 per cent. of its valuation is not very brilliant to those tenants who are unable to pay up what they owe forthwith, as the Minister has made it plain that, before buying, a grower must clear any outstanding debts to him." (Official Report, Commons, 20/12/82: col. 738.)
This remains true even if the extension of time to December 1983 applies.
I am not arguing for no change. I know that many growers wish for more autonomy and the freedom to market their own produce. However, it seems to me that, despite the extension, the Government have acted with undue haste and rather more than ruthlessly. They will cause embarrassment to many of the growers, who are worthy men, and also to the growers' families.
I ask myself: what is behind this precipitate action? What is the Government's motivation? It is apparently based on criticism by some growers. There are 500 of them on 10 estates, but in one fell swoop the Government have destroyed the whole of the structure which the LSA has administered in the past, I believe reasonably successfully, as the Government's agent. It looks very much as if the Government are thinking on the lines of what is called privatisation. I do not know, but it seems that way. It seems that criticism by some growers has been used as an excuse for the Government's action. Thus will disappear a scheme which was designed to assist those who could not otherwise have entered the industry. If adjustments were necessary, could these not have been made without bringing down the whole fabric of the scheme, instead of the Government getting out from under and abdicating what I see as their responsibilities?
The Government appear, I am afraid, to have made up their mind. If that is so, I sincerely hope that they will give careful and sympathetic consideration to the problems that will hit many tenants and their families. Again I say that they are worthy men and women. I hope that the Government will be flexible in dealing with them in order to give what help they can in the difficulties that will certainly arise in the future as a result of the Government's termination of the LSA scheme.
7.40 p.m.
Lord Stanley of Alderley: My Lords, I welcome the idea behind the Bill, for as a member of a number of agricultural co-operatives and, indeed, chairman of one for the past four years, I am more than conscious of the failure of farmers to bother to market their produce. So if I now air a few reservations, I hope that your Lordships will accept them as constructive, although I suspect that I shall, not for the first time or even for the last time, be chided by my noble friend and other Members of your Lordships' House for not joining in the general euphoria.
I am concerned that the council appreciates the inherent lack of interest—indeed, almost
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opposition—by farmers to organise their marketing, although I note that the Minister, Mr. Peter Walker, realised this in the third paragraph of his original press notice on 7th June. The failure to market our produce has been brought about in part by the system of support we have lived under for a number of years. Although it is, and has been, an exceptionally good system, it has not encouraged aggressive marketing, and in this connection I would entirely agree with the noble Lord, Lord Sainsbury. It is probably true to say that if a similar sum of money to that suggested in the Bill were given to farmers to improve their returns, it would be better spent lobbying the CAP in Brussels. I hope that my noble friend and the council will recognise that, and also the fact that many farmers—and I certainly include myself as one of the sinners—prefer to devote their energies to production rather than to marketing. Some accept this failing and join a co-operative. That brings me to my second worry, which is our co-operative movement which will come under the council when this Bill is enacted.
As the noble Lord, Lord Northbourne, so ably pointed out—and I should like to congratulate him on a superb maiden speech—the co-operative movement in the United Kingdom is totally different from that which operates on the continent. Our successful cooperatives, as the noble Lord said, are inclined to be small because we still believe in the "small is beautiful" philosophy; whereas our continental sisters are large and impersonal.
I personally would not wish to see our co-operatives grow into big brother organisations, but I think—although I may be putting words into his mouth—the Minister, Mr. Peter Walker, suggested in his statement to the press on 7th June that they should or might go that way. The snag with our small co-operatives is that they are inclined to be unprofessional, and when asked to shoulder extra burdens—and I envisage that this Bill may well put those extra burdens on them—their organisation is not up to it. Perhaps their two biggest difficulties seem to be the loss of personal contact with a member and getting the correct relationship between the farmer director and executive. There is a question of commitment and bite, as was mentioned earlier.
I hope that the council will appreciate this very real problem. One way in which they could help is to stop appealing to the loyalty of the co-operative—and I should like to point out to my noble friend that it is not a regiment that we are talking about, and you do not have the same loyalty to your co-operative as you do to a regiment—and try instead to make sure that returns received from co-operatives are better, because that is what will keep the co-operatives working successfully. That was brought out so ably by my noble friend Lord Stodart of Leaston, and, indeed, the noble Lord, Lord Tanlaw. However, I wonder how they will do that, because the Bill does not give the council power to control production. Indeed, I do not think that it should do so. But if such is envisaged, then your Lordships should think hard and long in particular about the method of appointment to the council. Here I seem to be at slight loggerheads with some. I am obviously concerned, sitting on these Benches, that should another Minister ever be in charge of appointments—although of course I cannot see that

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ever happening—a total turnover in the members should not occur. But, perhaps more seriously, I would ask my noble friend who the Minister will consult before appointing members to this council.
Finally, I am concerned as to what the council can do to help market British food; how they can do it; and when they can do it. The idea is perfect, but would any commercial undertaking put 15 totally strange people together and tell them to get on with it? The members of the council have an awesome problem, not least a personality one, of getting on and getting to know each other on the council. I really do wish them well, but I would not be surprised if they failed. I know that my noble friend will accuse me, and probably correctly, of being a Jeremiah. Therefore I repeat: the idea is right; the job badly needs doing, but perhaps those of your Lordships who saw Shakespeare's Richard III last night would appreciate that many of his objects were correct, although perhaps some of his methods were somewhat suspect. I hope that my remarks, if nothing else, will give the council an insight into the suspicious nature of a backwoodsman farmer with whom they will have to work and whom they will have to educate.
7.47 p.m.
Lord Mountevans: My Lords, I, too, join other noble Lords in congratulating the noble Lord, Lord Northbourne, on his lucid and stimulating maiden speech. In several respects he has pre-empted me, but I think that perhaps in several respects I was a party to my own downfall because I had the pleasure of helping him in the Printed Paper Office the other night. It is a pleasure to welcome the noble Lord to our House and I hope that we shall hear from him often.
I feel that I should declare an interest, albeit a distant one. I have worked for the British Tourist Authority for over 10 years, at home and abroad. Throughout that time I have been selling Britain to foreigners as a tourist destination—an activity which it seems to me parallels the overseas rôle envisaged for Food from Britain. My approach to the Bill before us tonight has been influenced by my experiences over the last decade. All but one of the BTA facts that I shall quote is published information, but any opinions that I may give, although discussed with senior colleagues within the authority, are my own.
I strongly welcome the Bill because I believe that any attempt to market British goods or services abroad is, in present circumstances, an effort greatly to be desired. while a body' which sets out to develop and co-ordinate such marketing is even better. Marketing abroad is a skilled and costly task, better fulfilled, I feel, by concerted effort than in dribs and drabs. Marketing abroad literally involves keeping our goods and services in the overseas shop window. A great deal of effort is needed not only in that generality but in attention to detail, to ensure that the customer is aware that our goods are of the right quality, arc available in the right place at the right time and are available at a price which he or she feels constitutes good value for money. Reading the Bill and the list of members designate of Food From Britain's council and looking at the experience that they have between them, I feel confident that the requirements I have listed and the criteria will be met.
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I am a little less confident about the funding envisaged for Food from Britain—although I hope that the noble Earl the Minister will reassure me. It is, I understand, the intention that all marketing activity will be funded 100 per cent. by the industries concerned by the five years ending 1987–88. My reservations stem from the fact that for more than six years I have been running the budget of the British Tourist Authority's Joint Marketing Schemes. Quoting from the British Tourist Authority's last annual report, it says that this:
"budget attracts external funding for BTA activity and reflects Government's continued emphasis on 'self help'. The budget is allocated to co-operative ventures which are in line with BTA's marketing plan and objectives."
These plans and objectives we have to sell to our promotional partners before we can go out and sell abroad. The funds for co-operative activity must be got in before they can be got out. Once we have them. our spending plans are still subject to exchange rate fluctuations; I am sure that several noble Lords will have seen The Standard tonight, reporting that sterling took another hammering against the dollar.
A fact which will I think affect Food from Britain, as it does us, is the harsh reality that at times when the sterling exchange value falls and makes the goods that we or Food from Britain are selling more attractive in overseas terms, it also makes the very overseas promotion of the goods or services we are selling more expensive. Food from Britain will doubtless have both strategic and long-term plans as well as practical plans. The time scales for planning these two facets will, I am sure, differ, and I am worried that Food from Britain's plans might go awry if it cannot sell its plans to its co-operators. Are the period of Government support through 1987–88 and the sum envisaged of £14 million by way of that support both inviolate facts, or will both be subject to review as time progresses? I ask the question against the backgound of experience that I have cited, but I also have in mind that Food from Britain's potential co-operators may disagree with that body about allocation of marketing resources to home and foreign markets.
Turning to matters of less substance, I would appreciate clarification of Schedule 1, paragraph 6, as to whether the words:
"… Food from Britain may appoint committees consisting of or including persons other than members of Food from Britain".
permit those council members to serve on such committees. I hope that the members may so serve, as, looking again at the BTA's annual report, as well as those of a number of other statutory bodies, I notice that committees are frequently chaired by members of the parent board or council. It seems to me that this practice is sensible in that, as such, council members constitute an important channel for conveying and explaining policy one way as well as receiving experience in the other direction.
I notice that Food from Britain may charge for the services that it provides. I should like to ask the noble Earl the Minister whether services include advice, as I am a little concerned that the small businessman, the small operator, the small producer—call him what we will—who may well have a greater need of guidance than larger entities, will be put off from seeking such guidance by virtue of the fact that he may have to pay.

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for it. Even if the advice given is only, "Go out and join a co-operative", I hope that it will be freely given and will be given free.
I should like to raise one other small point; it concerns the use of the word "behoof" in the last line on page 7 of Schedule 1. Recently I attended what was in some respects the most interesting debate that I have had the pleasure, indeed the advantage, of hearing in your Lordships' House. It concerned the volume and the complexity of statute law and it makes me ask whether a word such as "behoof" still has a role to play in modern legislation.
I have spoken of my enthusiasm for this Bill and for the concept that it embodies. I see Food from Britain as a cousin in the family of statutory bodies. In fact, I am not the first person to see this; BTA and Food from Britain were bracketed together during the Standing Committee stage in another place. With the ready assistance of the Minister, we have already been introduced and I greatly look forward to meeting Food from Britain's chairman-designate within the next few days. I am sure that we shall find much to talk about, and I hope that we shall find scope for fruitful co-operation. I wish him, the council, Food from Britain and the Bill godspeed.
7.54 p.m.
Lord Wise: My Lords, I understand that it is the general practice for only the first three following speakers to congratulate a maiden speaker, but notwithstanding that fact I would very much like to congratulate the noble Lord, Lord Northbourne, on his fine maiden speech. I think that his wide knowledge and business expertise will surely be a great asset to this House, and I most certainly look forward to hearing him on many occasions in the future, and not only on agricultural affairs.
My noble friend Lord Stanley referred to himself as a backwoodsman farmer. Whether or not that is so, I do not think I would call him that, but I most certainly am. It is for this reason that I wish very briefly to speak and express my general support for this Bill. In his opening remarks my noble friend the Minister spoke of the achievements of the agriculture Ministry, and it is recognised that the efficiency and record of agricultural production is second to none. This production is obviously of inestimable value to our balance of payments position.
However, I think we farmers must now appreciate that our job no longer finishes at the farm gate. We must get out and take a greater interest in the selling of our products. Surely we cannot expect the consumer to buy British produce irrespective of its quality and its price. This means that we must use less of our managerial skills in increasing production efficiency, and devote more to increasing our marketing efficiency. We must take more notice of our grading and presentation and only present goods of the highest quality and conformity. I think that this is one aspect in which we have tended to fall down in the past.
I have a friend who grows a very large acreage of vegetables of all kinds in Norfolk; he probably grows as many as anyone else in the county. I know that he discards quite a considerable percentage of his produce as not being up to standard. However, he has a good
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and steady market for all the produce that he presents to his buyers; his grading is such that there is complete uniformity and, as he says, "First-class produce will always sell". I am certain that he would agree with the noble Lord, Lord Northbourne, that this is not always possible to achieve with co-operative systems. As the noble Lord, Lord Tanlaw, has said, the grading of all produce—not only of meat—is of paramount importance, but there must—and I think that Food from Britain should take great notice of this—be incentive for quality.
I am convinced that some degree of co-operation is essential in any marketing strategy, but I was glad to hear my noble friend Lord Ferrers say that the independent sections will not lose out under this Bill, and Food from Britain will be able to co-operate and will not be in competition with the small organisations which have already established their market outlets without any Government aid. I hope that that is so; I think I understood my noble friend to say so.
In the highly competitive food market both for export and at home it is essential that there is a well organised outlet for all commodities, especially those such as vegetable and horticultural products, and poultry and pigmeat, for which there is no intervention buying. For this reason I welcome the Bill and hope it will go far towards achieving this and thereby ensure a fair return for the primary producer and all the processors, retailers and wholesalers, plus value for money from the consumer.
7.59 p.m.
Lord Beswick: My Lords, this Bill has been given an unusually generous welcome from all political parties and it is a welcome which I support. The character of this piece of legislation, if I may say so, speaks well for the attitude and the aptitude of agriculture Ministers including the noble Earl, Lord Ferrers. I allow myself to add that if only the Treasury and Treasury Ministers were characterised by the same constructive and expansionist attitudes then our economy might be in much better shape.
My immediate interest in this Bill springs from my special interest in the co-operative movement in Britain. The Bill in its working, if not in its present wording, has much to do with co-operation as noble Lords have recognised, both in the production and in the marketing of agricultural produce. Some would say that it is a shortcoming of the Bill that there is no specific reference in the wording to the potential advantages of developing agricultural co-operatives.
I noticed that in the other place the Secretary of State listed those organisations that might have been expected to have had representation on Food from Britain. He named all the farmers' associations, the country landowners, even the Consumers' Association, but not, strangely, the British Co-operative Movement. Yet it is far and away the biggest organisation of consumers in this country. It is the largest farming organisation in the country and, with due respect to my very dear friend, the noble Lord, Lord Sainsbury, it is still the biggest retailing organisation.
I take this opportunity of congratulating the noble Lord, Lord Northbourne, on his maiden speech, which I found especially interesting in his references to

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co-operation. He was very realistic, as were those practical farmers from the bush now sitting on the Back Benches, the noble Lord, Lord Stanley, and the noble Lord, Lord Wise. What they were saying was that if we are to have co-operative organisations they have to be good. That is right. I would agree with that. I would say that that goes for cricket teams as well.
I was glad to hear the noble Earl, Lord Ferrers, say that the co-operative concept will have a contribution to make, but I would press him to expand this a little further for two reasons. The first relates to the Central Council for Agricultural and Horticultural Co-operation. My noble friend Lord John-Mackie, and indeed the noble Lord, Lord Sainsbury, and the noble Lord, Lord Stanley, paid tribute to the work of the central council, but it is now to be brought within the Food from Britain organisation. The apparent idea is that the CCAHC will retain its old responsibilities within the new structure. I am not completely convinced about the reasoning here. I am not sure that it is strengthening the central council's position. I am myself a great believer in decentralisation. I believe that if responsibilities are to be an incentive and a motivation, they must be seen, and seen clearly, from outside.
Of course, much will depend on the actual organisational structure of Food from Britain. It might be said that this is not a Second Reading matter, but the Minister has touched upon it in two respects. We are told that the vice-chairman of the parent organisation will be the chairman of the central council or its successor. If the chairman was the vice-chairman of Food from Britain by virtue of his being the chairman of the central council, that would emphasise the importance of the central council's future role. But, of course, it could work the other way. It could mean a blurring of the responsibility, and I should be most grateful if the noble Earl would spell out a little more about the concept as he sees it of the importance in the Food from Britain organisation of the central council's work.
The other relevant point that has arisen concerns the funding of the central council. It is stated that there will be Government funding for Food from Britain but phased out over five-years. On the other hand, I believe, though I should like confirmation, that Government funding for the central council will be continued after the five-year period. If there is this differentiation that would seem in itself to be an argument for having the central council still outside on a separate basis.
Over many years I have known some very interesting cases where Government funding, intended for a specific department or a specific project of a large organisation, found its way to support other activities within the same organisation—worthy activities, of course, but different. Accountants are very ingenious individuals in this respect. I should be grateful if the Minister could say a little more about the intended and continued role of the central council.
There is one other matter on which I should like to comment and on which, again, I seek assurances, that relates to the Land Settlement Association, about which my noble friend Lord Collison has spoken. If I may say so, there is no one better qualified than he to
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speak about the Land Settlement Association. As he indicated, on 11th August last year the Secretary of State applauded in a press notice, from which I quote,
"the considerable progress made in planning for the long term future of the Land Settlement Association".
Then on 1st December of the same year the same Secretary of State stated that the marketing arrangements of the LSA would be terminated as from the beginning of April 1983. In other words, the long-term future, about which encouraging words were spoken in August, turned out to be less than seven months. By any criterion that is a strange turn around. In another context it would be called a U-turn. Can the noble Earl say what happened in the autumn of 1982 to justify such a change of attitude?
After representations and, as Lord Collison said, especially representations made by my Co-operative Party friends in another place, the Government again changed their mind and agreed to extend the time for termination until December this year. This concession is welcomed, but the noble Earl may understand that some suspicions still remain. Has there been a change of heart as well as a change of date because the heart did not seem to be in the right place last August. Many of these LSA tenants, good, hard-working men as they are, have been doing business with the sort of financial problems that are not unknown in Britain in 1983. The closure in March would have meant permanent closure for some of them.
I have heard it said that maybe the possibility of closure was one reason for this date being so extraordinarily inappropriate. One reason for this suspicion, which I hope the noble Earl will be able to dissipate, appears to exist because tomato growing—and these growers are especially concerned with tomato growing—has marketing problems, surplus problems. These people manage to produce something like 8,000 to 10,000 tonnes of tomatoes a year. The surplus problem is emphasised by an answer the other day given in the other place that 85 per cent. of the large EEC intervention stock of tomatoes was last year rendered unfit for human consumption. I hope that the Minister will be ready to say that there was no question of restricting production and making it difficult for all these LSA growers to remain in business. I am not here myself trying to suggest that we should go back to the old LSA set-up. Of course, it was open to criticism. Its original concept was not entirely realised, and improvements no doubt were possible.
I put three specific questions to the noble Earl. Will he make it absolutely clear—and I think it will be in his interests and remove a lot of suspicion if he will—that the original sudden death announcement about the LSA marketing scheme was not intended to eliminate some sections of the LSA estates? Secondly, will the Minister give assurance that all practical assistance will be given to the growers in this transitional period, both by way of advice—probably from the central council—in the establishing of co-operative marketing arrangements and also in suitable financial assistance? Thirdly, will the Government, under the Agency Agreement they have with the LSA, make sure that the position of the LSA staff, some of whom have served loyally for many years, will be safeguarded?
I am told that many of the LSA tenants are only too ready to strike out on their own. Far be it from me to

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discourage individual initiative, and I can well understand the temptation to buy land today at cut prices. That can indeed attract buyers. Some of those buyers may well make their own satisfactory local marketing arrangements, but there is a good deal of evidence to suggest that co-operation pays, in every sense of the word, in the marketing of agricultural and horticultural produce. When the first fine flush of being a land owner wears off there will be some of those former tenants who rise to the Government bait who will be glad that others had the good sense and tenacity to ensure the establishment of a co-operative marketing system when the present arrangements end.
Finally, I would ask the Minister if he would tell me a little more about this cut-price sale of the LSA land. It was stated in the Commons, and not contradicted, that the price at which the land will be offered will be 50 per cent. of cost. This surely cannot be true. Not 50 per cent. of original cost, I imagine. Probably the noble Earl can tell us what the facts are. The vacant possession price of grade one land in England last year was on average £2,689 an acre. Will the noble Earl be good enough to say at what sort of price this public asset of LSA land will be offered to the private purchasers? I have asked a number of questions. There are quite a number of people outside who will be interested in the answers, and I look forward to hearing what the noble Earl has to say.
8.13 p.m.
Lord Saint Oswald: My Lords, I rise in this debate partly because I wish to be among those to congratulate the noble Lord, Lord Northbourne, on his maiden speech, and to agree with the confident prediction made by the noble Lord, Lord Sainsbury, that we can look forward to many valuable contributions from him in future debates. Unlike some others I have had the advantage of knowing him for a number of years, giving me some awareness of the enterprise and energy with which he produces and markets grain and vegetable crops, seeking fresh territories to develop and make fruitful. He is therefore speaking to us with real knowledge, as most speakers in this House do.
He even sought my advice on one occasion with an impressive scheme in mind to plant a specific crop in a part of Spain with which I was familiar, but in this instance his creative intention was inhibited or curbed for the time being. It occurred to me that adventurous Englishmen in the first Elizabethan era went to Spain to pillage; he was going to plant and improve the territory of Southern Spain, with lettuces on a vast scale, as it happens.
Like him, though on a far smaller and less original scale, I have to declare an interest in this debate and in this Bill. Farming, as I do, in Yorkshire and Lincolnshire, lately but increasingly I have been exporting to new and previously hardly considered markets. I have sold rose bushes to Zambia and Zimbabwe, to West Germany, and, more surprisingly, to the Netherlands, who in the past have been so successful in penetrating British markets. I have sold cows to Iran, and so modestly assisted the balance of payments in that direction.
None of this is altogether easy, and apart from imagination and alertness it often requires the overcoming of artificial handicaps. In the agricultural
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and horticultural fields my managers have described to me frustrations imposed upon our production. It is recognised that Britain does not obtain an equitable share of the home market in dairy products. The milk flows prodigiously from British udders, but cheese and butter and other dairy products from overseas appear in profusion on the shelves of the supermarkets of our land. Is this a weakness in marketing methods? We are undoubtedly efficient pig producers, but bacon and ham from other sources flow in for consumption at British tables. It may be, as my noble friend the Minister has implied, that marketing is the key, and he mentioned some telling examples.
There are other examples somewhat less telling and less hopeful. I am assured, without being directly involved, that Britain produces cheaper quality lambs than any other member of the European Community, and yet our share of the Community market is relatively small. Is this also a failure of marketing methods and skills, and would it to some extent be redressed by the provisions of this Bill? My noble friend beside me said in his speech that we do not meet our own production needs in lamb. If that is so the question may well lie less in marketing than in productivity. That is one of the things that could be looked at.
The emphasis throughout this Bill is consistently on food, and therefore I felt that I ought to discover for myself whether flowers and flowering plants were actually included, as I find they are. Rose growing is a field in which I am directly and almost emotionally involved. As a long-serving and identifiable European, I can commit myself to probe where it seems that inequities between our partners and ourselves exist. Is it the case that for horticultural products the Dutch Government provide a highly preferential gas tariff for growers which gives them the edge over our own growers paying steep oil-fired heating costs with no preferential treatment of special allowances from the Government? I am specifically not arguing that under-the-counter advantages should be given to us. I am arguing, as a good European, for tighter regulations and fair trading, so that quality growing and good marketing cannot be offset by the methods of others.
We import, as is right, from our partners in the Community, but have in the course of trade discovered a problem of quite a different nature from that which I mentioned earlier. It is believed by those engaged at first hand in horticultural trade between the Continent and the British Isles that the looser discipline on road vehicle tonnage of wagons gives the Continental growers, or some Continental growers, an advantage over our own. As an example which has come directly to my experience, a single Dutch wagon can carry more tonnage on Dutch soil than an English wagon is permitted to carry on English soil. A built-in disadvantage becomes apparent; a disadvantage which can be critical in highly competitive trade.
Finally, I have one specific question which should not, I think, need asking but upon which still unsatisfied ignorance exists and of which I have given prior notice to the Minister who will wind up this debate. Should VAT be paid on consignments of agricultural and horticultural produce going overseas; should it be paid at this end or not? That question has been put to Ministry officials in Yorkshire, who have

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admitted that they do not know the answer. There must be a specific answer, and I hope to receive it, for the benefit of many in doubt, from the lips of my noble friend Lord Ferrers when he replies to the debate.
I, among almost all others who have spoken, can give my uncritical blessing, for what it is worth, to the Bill, and to its future. I am probably echoing a passage in the speech of the noble Lord, Lord Northbourne, when I say that, so long as the purpose of Clause 2 comes to signify what it says, the original purpose of bringing the Ministries of Agriculture, Fisheries and Food under one roof and under one direction will have been carried an important step nearer to reality.
8.21 p.m.
Earl Ferrers: My Lords, I am grateful for the welcome your Lordships have given to the Bill. Almost without exception, noble Lords have welcomed its provisions, and I am grateful to them for that because the introduction of Food from Britain is a milestone in the life and production of marketing in this country.
I wish at the outset to add my sincere congratulations to the noble Lord, Lord Northbourne, for what I thought was a model maiden speech; it was short, uncontroversial, knowledgeable and fun to listen to. It came, of course, from his substantial knowledge as a farmer who is well versed in co-operatives. I have always thought that the law of a co-operative should be that everyone should be prepared to put in more than he gets out; and if all are prepared to put in more than each gets out, each gets out more than he puts in.
The noble Lord rightly commented that 100 years ago all food was prepared either in our farms or our kitchens, whereas now the bulk of it is manufactured or processed before it is eaten. That is the nature of the game we are in; that is the monumental change which has taken place and that, in a nutshell, is one of the reasons for Food from Britain. The tremendous move to processing inevitably involves marketing, and it is our desire to see that marketing is as efficient as possible. The noble Lord referred to the definition of "marketing". I can confirm that, although it is not actually defined in the Bill, it is interpreted as widely as possible.
I was grateful to the noble Lord, Lord John-Mackie, for his welcome of the Bill, particularly as it came not only from the Opposition but from a former holder of the office I have the honour of holding at present in the Ministry of Agriculture. He made a passing reference to the fact that the Bill had taken a long time to come forward, and that whereas it is now 1983, it was being talked about in 1979. I would only advise him of the remark made by my right honourable friend when asked that very question. He said, "We have not had Food from Britain for the last 2,000 years. If we take a few more months to get it right, I do not think the country will be much the worse off".
I was glad that he and the noble Lord, Lord Sainsbury, agreed it was good that there should be no statutory members of the council, and the noble Lord, Lord John-Mackie, was glad it was not a question of Buggins' turn. He is absolutely right. The point is to choose lively minds; they make things work and, on
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the whole, Buggins' turn is not a recipe for scintillating activity. That is why this recipe has been produced in the Bill. My noble friend Lord Stanley asked who was consulted over it. I would remind him that the Bill gives the agriculture Ministers power to appoint the people, and they should have interests in connection with agriculture; I do not have the precise wording in front of me. The matter is considered with people, but there are no specific strictures to take official soundings or recommendations.
The noble Lord, Lord John-Mackie, asked a question which his noble friend Lord Blease would have asked about Northern Ireland: whether Ulster produce would be able to continue to be marketed under that name. Yes, it will be. Food from Britain will help to develop the marketing of food from the regions, and there will be no loss of regional identity. In saying that, I am glad that the wish of the noble Lord, Lord John-Mackie, of 50 years ago has become a fact and is no longer just a dream. I am glad that it is the party to which I happen to have the good fortune to belong which has been able to introduce it, while appreciating the fact that the noble Lord did not have the good fortune.
The noble Lord, Lord Tanlaw, said promotion must not be at the expense of quality and consistency. He is absolutely right. The powers given to Food from Britain in Clause 2 to improve marketing are very wide. It will be up to the Council of Food from Britain to determine its own strategy within that framework, and I am sure it will place particular emphasis on improving the marketing of quality products which are geared to the demands of consumers. Food from Britain will not be in the business of endorsing Britishness just for its own sake. It will aim to ensure that the best of British food—including Scottish, Welsh and Ulster food—is available both here and abroad.
The noble Lord gave a bleat (if that is the right word) for Scottish beef producers—that they should get better prices—and he said he wished to draw that to my attention. I respectfully suggest that there is not much point in doing that. He gave a classic example of how, with an excellent product which in his view should commend better promotion, better success and a better price, promotion should be available to achieve that, and I have no doubt that Food from Britain will take that on board. But of course it is up to those who produce, if they feel they are not marketing their goods properly, so to organise themselves. And from what Lord Tanlaw said, he seemed to indicate there was scope for improvement there.
The noble Lord, Lord Sainsbury, spoke about marketing. If the record of one who is so distinguished and who has such a distinguished household name does not show him to know how to provide what the consumer wants, I do not know what does. He said we were the best producers in the world but that we had slipped over marketing. I agree entirely, as does my right honourable friend, as he knows only too well. It has been my right honourable friend's intention and desire to see improved the marketing not just of British agricultural produce but of British food and the noble Lord is right to say that marketing involves discipline.
My noble friend Lord Stodart wished success to the Bill and I was grateful to him for that. Like the noble

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Lord, Lord Tanlaw, he also said that the United Kingdom produces the best beef in the world, and there is no doubt that there are opportunities for promoting that in a better way than has been done in the past. He quite rightly referred to the slaughterhouse difficulties. As he said, good beef cannot be produced if there are not available good slaughterhouses. My noble friend is quite right; there is overcapacity. Slaughterhouses in this country have been going through a very difficult time. He is also quite right to say that no Government can be disinterested, though in fact the matter is not a responsibility of Government.
My noble friend asked whether Food from Britain will he involved in the marketing of Scotch whisky, butter, or margarine. Food from Britain may be concerned with the marketing of any food and drink, whether it be whisky, butter or margarine, and there is a place for all products on the market. Food from Britain will work closely in co-operation with all the existing organisations, to add to their efforts and so strengthen our achievements both at home and abroad. My noble friend asked whether shellfish are included under the Food from Britain organisaton. Shellfish are included in Food from Britain's activities.
The noble Lord, Lord Collison, apologised for missing my opening remarks, due to the fact that in the preceding business amendments went rather quickly. I can sympathise with that view; I nearly missed my own opening remarks, if I may so put it. The noble Lord expressed concern about the Land Settlement Association. Indeed, the noble Lord's deep inside knowledge, which has been gained from 25 years' experience on the association's executive committee, has made him uniquely qualified to speak on the Land Settlement Association. I am very grateful to him for the remarks that he made on that matter, on which the noble Lord, Lord Beswick, also made various comments.
I should like for a minute to consider the Land Settlement Association. I can understand the sorrow of the noble Lord, Lord Collison, at seeing disbanded something in which he was deeply involved. He is quite right; the growers are worthy people. They are what one describes as the salt of the earth, prepared to work with their families for all hours, frequently for very modest returns. They do it because they want to be independent and because they are determined to make a success of it.
It is a sad fact that horticulture has had a difficult time over the last few years. The Land Settlement Association has had a very difficult time. There are people in the association who have difficulties, and whatever might have been the course of the association's activities they would still have had difficulties. Our business as a Government has been to try to extricate as many growers as possible from the difficult position in which they find themselves. The noble Lord, Lord Collison, asked what consultations there had been. I can tell him that 18 months ago I attended a growers' conference in Cambridge. Many growers, and many Members of Parliament representing them, have come to see me and to tell me of their plight.
The noble Lord, Lord Collison, asked, why had the Government been so precipitate? The cry from the growers has been—I am now generalising—that the
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Government must act, and must act quickly, because otherwise individuals will be in difficulties. That is what we have tried to do. We wanted to give growers the opportunity to take over the responsibility for the marketing of their own produce. It is clearly far more appropriate for growers themselves to do this, rather than for the Government to do it. It is also something for which a large number of LSA growers have asked, and indeed it was very much in line with one of the recommendations of the Wise Committee, which was made as long ago as 1967.
So often there came the complaint that the Government were involved and that the Government were telling growers what to do, whereas they wanted to organise themselves; and that is what we have tried to enable them to do. We feel that it is right to offer the tenants the opportunity to buy their holdings at tenanted value. The noble Lord, Lord Beswick, asked, at what kind of value were they to be offered? The holdings are to be offered at tenanted value, which depends upon the value of the land and the assessment that a valuer makes of that. This in fact represents an attractive deal for those who wish to buy. Those who chose to remain as tenants will, of course, have security of tenure for their lifetime.
The response to our announcement has been encouraging. The main worries of the tenants concern the timetable for the close-down of the LSA's marketing services, and the announcement that my right honourable friend made last week has, I think, gone a long way to removing those worries—
Lord Beswick: My Lords, will the noble Earl allow me to intervene for a moment? Did I understand him to say that the holdings are being offered at the full value? If that is so, where did the 50 per cent. idea originate?
Earl Ferrers: My Lords, the holdings are being offered at tenanted value, and I am sure that the noble Lord, Lord Beswick, will know the difference between tenanted value and freehold value. I do not mean that in any disparaging way. Very often the tenanted value is in the region of, maybe, 60 per cent. of the freehold value. That is a fact of life. I am not saying that that is the figure that will be given in each individual case. But one of the facts is that tenanted value is about 60 per cent. of the freehold value. Whatever figure is assessed, the occupant will be able to purchase the holding at tenanted value. If he so wished, he would then be in possession of something that he could sell thereafter at freehold value. That is why it is quite an attractive proposition for the tenant.
The noble Lord earlier asked what is being done about Government accountability—I think that those were almost his words; that the Government were selling off land at lower than market value. In fact it is not lower than market value, because the market value is the value of the land with the tenant on it. It receives a greater value only when it becomes freehold. By doing this, we shall be giving the tenants who, in many cases, have spent a lifetime on their holdings, the opportunity to purchase them, the opportunity to own their own homes. We shall be giving them the opportunity to run their own businesses, to run their own co-operatives, as opposed to being dictated to by

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Government; and we shall be extricating the Government from a business which in fact they should not be in.
The noble Lord, Lord Collison, said that it started in the 1930s. He is quite right. The LSA started under very difficult circumstances. It tried to encourage people who were out of work to take on a new job and a new life. That was appropriate in the 1930s. But people have gone in and have found that they did not achieve quite the results that they had expected—
Lord Collison: My Lords, in all my time with the LSA I never gained the impression that the tenants thought that they were being dictated to by Government. They saw the Land Settlement Association, which was of course the Government's agent, as an entity in its own right, and therefore they did not say that the Government were interfering, though sometimes they criticised the LSA for doing certain things, or for requiring certain things that they did not like.
Earl Ferrers: My Lords, I think that the dictation to by Government—if that is the phrase that I used; and it was probably not the best of phrases—was due to the fact that growers were obliged to market all their products through the LSA. If in their view the LSA did not market them as well as it should have done, the growers were struck with no other outlet.
Lord Beswick: My Lords, I apologise for interrupting, but if one follows the argument, one finds that the old arrangement was not so completely satisfactory. What advice, what financial arrangements, are to be forthcoming for the transitional period?
Earl Ferrers: My Lords, there have been a number of statements by my right honourable friend explaining what is to be done. I think that it would be difficult for me to go into them in detail now. But I would say that we originally set a deadline for April of this year. There were complaints that that was not long enough for LSA tenants to make their own arrangements for their own co-operatives. We have extended the deadline to December 1983 for those who wish to continue to market through the LSA. For those who make their own co-operative arrangements meanwhile, that is in order. There have also been extensions for facilities with regard to their financing.
The noble Lord, Lord Beswick, asked whether there was any link between the resolution of the problems of the LSA and the tomato marketing report. I can tell him that there was absolutely no link whatsoever. There was no intention of deliberately removing the LSA in order—as I think the noble Lord said—to eliminate some section of tomato growers from the market. He asked what advice was to be given to the LSA estates in the meanwhile. The advice will be available (and is already available) to the estates from the LSA and from the Central Council of Agricultural and Horticultural Co-operation. The usual grant-aided assistance for the estate co-operatives will be available.
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The noble Lord asked about redundancy terms for LSA staff. These are being agreed with the LSA staff through the usual procedures, and I hope that many in any event will be soon re-employed in the successor co-operatives. LSA employees will also be able to buy their houses.
My noble friend Lord Stanley asked whether Food from Britain will encourage larger co-operatives. Food from Britain will continue the work of the Central Council and will encourage the development of co-operatives of whatever size the members may wish. It will not impose upon them any blueprint for their organisations.
The noble Lord, Lord Mountevans, referred to the £14 million available over five years. Clause 7(1) enables the Ministers to make grants to Food from Britain. We have indicated what the Government's intention is; and it is to give £14 million over a five-year period. Food from Britain can co-opt outside people for work on the boards of the organisations. Will there be a charge for services?—Of course, the only services for which there would be a charge would be such things as publications or substantial market research or the setting up of promotional activities, but not for advice to the small man who goes along to ask a question. The noble Lord asks whether it was necessary to use the word "behoof". I am bound to say, that I, too, think it is a quite extraordinary word; but the Scots have very extraordinary language and apparently it is essential in Scottish law. Considering that we are dealing with cloven-footed animals as well, I do not know that it is totally inappropriate to have this word "behoof" in the Bill.
The noble Lord, Lord Wise, asked whether, if small, independent traders are doing good marketing jobs, Food from Britain will interfere. Food from Britain will not interfere if all parties are content; and the small producer will continue as now.
My Lords, there are a number of other questions which some noble Lords have asked but to which I fear time prevents me from answering. I would merely say, if I may, that we have seen a continuing and significant improvement in the productivity and efficiency of our agricultural sector. We are now 75 per cent. self-sufficient in the types of food that we can grow in this country and that, itself, is a remarkable achievement. To a great extent, these achievements have been in isolation from each other. Each sector has tended to view others as rivals without discerning the degree of common interest among them. The potential benefits to the nation as a whole from joint ventures to achieve the same goal ought to be able to bring about quite considerable improvements. We want to see British food on the tables of the world. I hope that this Bill will encourage that to happen.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

ECC 1st Report: Trade Marks
8.45 p.m.
Lord Scarmanrose to move, That this House takes note of the report of the European Communities Committee on Trade Marks (1st Report, 1982–83, H.L. 21).

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The noble and learned Lord said: My Lords, I beg to move that the House takes note of the report of the Select Committee on the European Communities upon certain proposals made by the European Commission for establishing in the Common Market a Community trade mark. These proposals of the Commission were published in November 1980. Similar proposals earlier had been under consideration for a considerable number of years. The proposals are to establish a Community trade mark and to do so by means of two instruments, a regulation and a directive. The documents published in November 1980 were a draft regulation and a draft directive.
The regulation would establish a new Community body, a Community trade mark office; and the task of that office would be to grant Community trade marks, to maintain a register of Community trade marks and, subject to an appellate procedure, to deal with oppositions to grant of a Community trade mark and with applications for removal of such marks from the register, and for declarations of invalidity. The marks to be registered would be marks for goods and also for services.
It is important to bear in mind that if the draft regulations were to be implemented there would be a Community trade mark system covering marks applied to goods and marks applied to services. The Community trade mark would be valid in every member state. In order to get it, it will be necessary to make only one application. One registration would secure the comprehensive cover for trade marks now available in the Common Market only by eight registrations in eight different national systems. One must make eight applications at the moment and get eight registrations in order to secure the only trade mark protection available at this moment in the Common Market.
The Community trade marks system being proposed by the Commission would replace all that by one application and one registration; and the mark so registered would be valid, recognised and enforceable throughout the length and breadth of the Common Market. It is important to bear in mind when considering this proposal that the Community trade mark would not be in substitution for those eight national systems now prevelant in the member states; it would be additional. The fact that it would be additional gives rise to the need for the draft directive, which is the second of the two instruments under scrutiny in this report.
The purpose of the draft directive is to approximate the national trade mark laws so that they harmonise with the provisions of the proposed regulation establishing the Community trade mark. The idea is that the approximation should go no further than is necessary to enable the Community trade mark to co-exist harmoniously with the national trade marks. Of course, the draft directive will have a greater impact in some member states than it will in others. It will have a particularly heavy impact in the United Kingdom and in the Republic of Ireland. The reason for that is that those are the two member states in which unregistered trade mark rights are of fundamental importance and are protected and enforceable under the common law.
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Such in the barest outline is the scheme of the two draft instruments emanating from the Commission which the House is now considering in this short debate. Let me say at once that the evidence is that the Governments of all the member states and many influential bodies, institutions and persons in the trade and industry of the Community regard the establishment of a Community trade mark as a logical and desirable development in the Common Market. Let me emphasise at the outset that this is the view of our own Comptroller-General of Patents, Designs and Trade Marks. In evidence to Sub-Committee E, Mr. Davis said:
"If one looks upon the Community almost as a single trading entity, it seems strange that one can be opposed to a Community trade mark. The problem is simply one of reconciling it with existing systems".
But there is another view strongly held—and strongly held among people who understand and have at heart the good health and future of British trade and industry. Their view can be summed up that these proposals which I have outlined are basically unsound; that they require complete rethinking and redesigning. In the light of that clear-cut and very important difference of opinion among people who really understand this subject matter, Sub-Committee E, which had the task on behalf of the Select Committee of scrutinising these instruments, sought to produce a report which would help in the onward negotiations that of necessity still have to take place over a period of years. The Committee hope that the report, of which the House is being invited to take note this evening, will assist in the further examination of these important proposals not only by the Commission but by member states, the Council of Ministers and of course by those in trade and industry directly affected by them.
It is an appropriate moment to take stock of where we stand with these proposals, for any suggestions that may now be made either in this House or elsewhere—or, indeed, by her Majesty's Government—will come at a time when they can go into the melting pot from which it is to be hoped ultimately a satisfactory system will emerge. In what has been—as is quite clear, I expect, from the sketch that I have given—an anxious and difficult scrutiny, the sub-committee has had the advice and guidance of, if he will allow me to say so, a quite outstanding specialist adviser: Professor Cornish. Professor Cornish is of international repute—and, indeed, national repute as well—in this field.
He is the author of one of the most imaginative legal textbooks that I have ever read. He has not only assisted the sub-committee in the preparation of its report, but has produced two working documents which those of us in the sub-committee who had the privilege of reading them considered to be of such importance and of such constructive assistance in the future negotiations that lay ahead that we have, with his permission, incorporated them as two appendices, Appendices A and B, in the report. Appendix A is Professor Cornish's assessment of the draft regulation; Appendix B is his analysis of the possible effect of the draft directive upon our national law. These documents deserve careful consideration even though in a short debate such as this one it is impossible to do

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justice to them. With the assistance of Professor Cornish, the sub-committee has taken a very considerable body of written and oral evidence and indeed we are grateful—as I hope the House will also feel grateful—to those who have taken the time to prepare and give such evidence.
Before it is possible to reach a conclusion as to whether the proposed Community trade mark and the system embodying it is logical and desirable, one must ask the question: are the proposals which embody the mark feasible and practical? As the work of the Committee continued, it became clear that three major problems had to he solved, and that many minor modifications to the draft instruments had to be met either in toto or by some satisfactory compromise before it would be possible to say that these proposals were feasible and practicable. The blunt fact has to be stated in order that by further work it can, we hope, be overcome; but the blunt fact is that, as the two instruments now stand. they will not do.
What is the difficulty? The difficulty is the different approach between the law of the United Kingdom and that of the Republic of Ireland and the law of other member states on the rights which we may call "trade mark rights". In the United Kingdom the registration of a trade mark is not the basic protection offered to traders who seek to establish goodwill by the use of distinctive marks in relation to goods and services. Trade mark registration—and of course one registers trade marks in the United Kingdom under the provisions of the Trade Marks Act 1938—is no more than an additional protection to that afforded by the common law to unregistered rights and registered rights as well; and the common law, of course, protects the rights, registered or unregistered, by means of the action known as the action for passing off.
We are in a field in which a lot of words are used which really mean very little to laymen and perhaps not very much to many lawyers. The action for passing off is a very simple action in principle, although infinitely complex in its many applications. It was described by Lord Halsbury in the leading case of Reddaway v. Bonham in these terms:
"Nobody has any right to represent his goods as the goods of somebody else".
It is as simple as that.
But of course what the action for passing off, with its injunctive remedies and its remedy in damages, does is to protect the actual goodwill of the trader, whether or not he has a trade mark and whether, if he has a trade mark or trade marks, he has registered them or not. As it is put succinctly in Professor Cornish's book,
"actual good will in trade is the fundamental value protected by British law".
The law of the other member states is very different in its approach. It does not approach the problem of protecting trade marks from anything like the common law stance which I have briefly described. In France and the Benelux countries and some others, what matters is registration. You get nowhere until you register your trade mark, and priority on the register is what matters. Furthermore, in these countries the use of a trade mark, once registered, cannot be challenged save by an application to declare
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it invalid or to remove it from the register. There is nothing remotely resembling common law rights.
In some member states, notably Germany and Denmark, there are rights in addition to registered rights which bear comparison with our common law. They have rights relating to the redress of unfair competition. Indeed, in Germany there is a very well-developed law dealing with unfair competition. But these instruments now under consideration—the proposed regulation and the proposed directive—are much closer to the French model than they are to the German, and their basic approach is that registration is what matters. There is accommodation, of course, in these instruments for common law rights, because the object of the directive is to ensure that the Community trade mark can co-exist with national systems; but the accommodation, in the view of those who have studied it, is not at present adequate.
Having considered the evidence, and having considered the matters which I have mentioned and which lie beneath those which I have mentioned, the Committee did reach the overall conclusion that a Community trade mark is a logical and desirable development in the Common Market; and indeed, to quote again from Mr. Davis, it would be, "very strange if it was not."
In presenting this report for your Lordships' consideration, it is my earnest hope—and here I speak personally—that, in the negotiations which lie ahead and which will begin just as soon as the views of the European Parliament are available to the member states and to the Commission, Her Majesty's Government will follow a determined line, resolved to secure that those changes which are necessary to make a Community trade mark feasible and workable alongside the British system are indeed secured—because, again I repeat, unless they are, these proposals just will not do.
I will now, if I may, mention three vital matters which have to be resolved before we can properly say that these proposals are feasible. The first matter is the protection of unregistered common law rights. The second matter on which I will touch briefly is the protection of British registered rights; that is to say, rights registered under the Trade Marks Act 1938.The third matter is the protection of service marks. We are bound in this House to be concerned to ensure that the British trader, who has unregistered rights protected at common law, will be able to exercise those rights effectively after the establishment of a Community trade mark. I will not go into detail, but I will indicate briefly those matters which require to be dealt with before we can be certain that the owner of unregistered rights will retain that necessary protection.
First, the owner of a prior unregistered right must have the right to oppose the grant of a Community trade mark. He should be in no worse position to raise an opposition than the proprietor of a registered national trade mark. And yet, under these proposals, under the draft regulation, the proprietor of a registered trade mark has the right to oppose the grant of a Community trade mark, but the proprietor of an unregistered prior right has not.
Secondly, the owner of an unregistered prior right must be given the opportunity to initiate proceedings to restrain the use of a Community trade mark

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indentical with or confusingly similar to his protected, though unregistered, mark, without the necessity of having to go to the lengths of establishing the invalidity of the Community trade mark.
At the cost of wearying your Lordships, let me tell you what the position is at the moment. In our law, with the fundamental rule being the protection of the trader's goodwill, whether his mark is registered or not, somebody with a prior unregistered right can restrain the owner of a subsequently registered conflicting mark from using that mark. Under the proposals of the Commission, that right will not be there and the two provisions which really need to be reconsidered in this context are the following. They are so important that I will quote them.
First, Article 82 of the draft regulation reads:
"Without prejudice to Article 45, the national laws of the Member States shall not apply in relation to the validity or use of Community Trade Marks."
Then the preamble and introduction to the draft directive—every one of hese words is important—reads:
"This directive excludes the application to trade marks of other rules of law of the Member States, such as the provisions relating to fair competition."
The third matter in regard to the protection of the owner of unregistered rights to which I wish to refer is that it should be clearly acknowledged—and it is not in these proposals—that, if such an owner of a prior unregistered right exercises the right which the draft regulation would give him of bringing proceedings after the grant of the Community trade mark to declare the Community trade mark invalid, it should be open to the national courts, in their discretion, to grant such a plaintiff an interim injunction against the use of the Community trade mark pending the outcome of the litigation. At the moment, if such proceedings are begun under these proposed instruments, the owner of the subsequent conflicting Community trade mark could go on using it in the course of litigation which might well be protracted, causing, clearly, very serious damage—perhaps, irretrievable damage—to the owner of the prior right.
So much for the necessity of protecting the man who has to rely on his common law rights. It is equally important, however, to protect the registered proprietor of a British trade mark. I can be short about this. The matters are important and difficult, I regret to say, to explain in a short compass, but registration in Britain of a trade mark is not the easy, almost formal business that it is in a country like France. Because France attaches importance to registration, almost anyone can get something registered. The fight begins later as to whether the registration should be cancelled, or declared invalid, or removed.
In British law, however, as I have already mentioned, the registrar has a discretion to refuse an application to register a mark which is put before him. What is important is that before he does so he is required to undertake, in the register, an official search and examination for prior registered marks. That is a peculiarity of English law not to be found in the law of other member states. It is of great value to traders who have already registered marks, because they can rely, without any action on their part, upon the registrar
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examining the register and refusing to register the later mark put forward if he finds a prior, conflicting mark. That obviates the expense and necessity of the trader himself searching the register. That will be lost under these proposals. It may be difficult to persuade our friends in the Common Market to introduce into their Community system anything comparable with official search and examination. We may have to face that possibility. Therefore, for the first time now we are looking at something which may require legislation in the United Kingdom if the Community trade mark is to come.
Not only is this official search and examination a great advantage to traders in this country; it will also present them with a genuine obstacle if the Community trade mark comes. The official search and examination is only one reason why it is more difficult to get a British registration than it is to get, for instance, a French, a German or a Belgian registration. Since registration will be the linchpin of the Community trade mark, this means that it will be easier than it is here to get yourself into a position to preserve your rights or to attack other people's activities if you register in the Community register or in a Continental register. You may not be able to get yourself registered here, whereas you would be able to get yourself registered abroad. This may indeed be an obstacle that we should seek to eliminate if these proposals are to come. If we cannot persuade, as I think it may be impossible to persuade, the Commission and other member states to introduce official search and examination into their systems, we may have to consider legislation so as to produce a system of registration nearer to that in use in the Continental states.
The other matter where it is necessary to secure protection for the owner of a registered right is that under these proposals a prior trade mark owner will lose his right to object to a conflicting later mark if he acquiesces in its use. This is a sound principle, but it must he made clear that by "acquiescence" is meant acquiescence in the use of a mark in the state or states where the owner of the prior mark trades. It would be quite absurd, and unjust, to expect of a trader who trades only in, let us say, member states A and B that he should be on the lookout as to what is going on in member states X, Y and Z. Of course, where others are using a trade mark in competition with his goods, then he must act or lose his rights, but it should not go further than that.
The third matter—and I apologise for the length of my speech but take courage from the fact that there will not be many speeches this evening—is the need to protect service marks. There is a very serious omission in our law. We protect registration marks applied to goods but not marks applied to services. In 1974, the Mathys Committee recommended that our law should be amended so as to cover services as well as goods. If we enter a Community trade marks system without having put our house in order and without having gathered into the folds of the Trade Marks Act 1938 protection for service marks, a large and developing section—largely the high technology sector—of British trade, industry and business will be at a serious disadvantage compared with Continental competitors. I will not take time on this but commend to Her

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Majesty's Government favourable consideration of the Bill introduced by the noble Lord, Lord Campbell of Alloway, recently in your Lordships' House—the Trade Marks Act 1938 (Amendment) Bill, the object of which is to extend registered trade marks protection to service marks.
How stands it at the end of the day? The committee accepted—and I hope that your Lordships' House will endorse its view—that, notwithstanding the difficulties which I have been at pains to outline, a Community trade marks system is logical and desirable, but it will not be feasible or practical unless solutions are found to the problems I have mentioned; and unless modifications into which I have not been able to go in the time at my disposal along the lines sketched by our specialist adviser in Appendices A and B are sought in the negotiations which are about to start, and they or something similar are obtained. There is also undoubtedly a need, if we are to enter into a Community trade marks system, for some United Kingdom legislation in due course: legislation dealing with the difficulties of registration and with the problem of official search and examination; and legislation dealing with service marks.
I conclude by reminding the House that there is a fear among British business people that we may be exchanging the swift, simple and relatively inexpensive remedies provided by the Trade Marks Act 1938 for something that will prove slow, costly and, in one specific respect, disadvantageous to those who have to rely on their common law rights. These fears can be dispelled only by a determined conduct of negotiations on behalf of British interests in the negotiations which are to begin, along the lines indicated in the report. If they are, it can only be to the benefit of the whole European community, for the result will be a Community trade marks system which is satisfactory to all member states whatever the differences in principle of their own national laws. My Lords, I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on Trade Marks (1st Report, 1982–83, H.L. 21)—(Lord Scarman).
9.25 p.m.
Lord Mishcon: My Lords, from these Benches I wish to pay a tribute—and I am sure I speak for all your Lordships—to the excellence of the report we are now considering, and to the typically lucid and forceful manner in which it has been introduced by the noble and learned Lord, Lord Scarman. He has the great ability, blessed as he is with that logical and clear mind, accompanied by such felicity of language, to address us on the most complex subjects in such simple and intelligible terms, and he has done that for our general benefit this evening. In adding the membership of Sub-committee E as recipients of our gratitude, I can do so without any immodesty, because, through other duties in your Lordships' House, I was unable, as a member of that sub-committee, to participate in the preparation and approval of this particular report.
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There is no doubt about the importance of this matter to our trade and industry. Trade mark laws, as the report says,
"underpin the goodwill that the trade mark owner builds up as he actually uses and advertises his mark".
There are obviously conflicting pressures upon those laws in which a balance has to be struck: those of the new entrants into a market who want quickly and cheaply to test whether they are blocked in their proposed user and who also want to get their protection before they have got far with their particular product; there are contrary pressures from those who have existing trade marks and who want to make sure that their protection has not been watered down. A
fortiori, holding the balance, as has been particularised for us so clearly tonight by the noble and learned Lord, in attempting harmonisation between the laws of different nations within a community of nations, is even more difficult, not least because of the different emphases, aims and legal traditions of the respective countries in regard to this subject.
As a major example of this, we have, as the noble and learned Lord emphasised, built up in our legal tradition, in our legal system, a common law protection, quite apart from the statutory trade mark registration commenced in 1875; that is the action known as the passing off action. I quote, if I may, the alternative definition in the report to that of Lord Halsbury to which the noble and learned Lord drew our attention:
"It protects the reputation of our established trader against imitations which would tend to lead purchasers into believing that they were getting his goods or services which they were not".
Denmark, Italy and West Germany tend to be like us in this respect. France, Greece and the conjoint Benelux system regard the fundamental factor as registration, as against use.
We are indeed faced with a complex task when we look at harmonisation and the setting up of a Community register. This report, if I may say so, has made a monumental contribution to helping us to get to grips with the problems so vividly outlined to us by the noble and learned Lord—which I therefore do not intend to repeat, especially at this hour—and to giving us guidelines so that, in the negotiations ahead, we can try to give adequate protection to our own people.
Apart from the most useful evidence which the committee obtained from all those intimately concerned, the report contains pointers which are of great import. The appendices to which the noble and learned Lord, Lord Scarman, referred are particularly helpful, and I am glad that he paid such an eloquent tribute to the specialist advisers' assessment of the draft regulations and directive in the light of that evidence which forms Appendix A. After going into the difficulties created particularly for this country by the absence of any search or examination in the proposed Community Register, Appendix A deals with the issue so constructively and incisively, in paragraphs 55 to 57, that I take the liberty even at this hour of quoting a part of paragraphs 56 and 57 of the appendix to which I refer:
"The proposed Community system would give industry a single alternative means to eight national registrations for securing a trade mark that has effect throughout the Common Market. The system will become self-financing unless perhaps it proves to attract very

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little custom. While there is no way of predicting accurately how much it will be used in preference to the existing national systems, or what it will contribute to lowering trade mark barriers within the market, it is likely to contribute something significant towards the major objectives seen by its proponents, even if it does so only gradually.
From a British perspective, however, the introduction of a Community alternative built upon different premises from those of the national system could be a source of disruption and misapprehension to British business which would incur costs over a substantial period of time. In particular, the absence of any search or examination in the Community system would throw upon those with registered rights the need to monitor Community applications for later conflicting proposals. As already suggested, if this came about, the British would probably be drawn to consider whether the national system should not be similarly adapted. That would be a major change and one quite contrary to the strong recommendation of the Mathys Committee in 1974. It presents a problem hut for which the Commission's plans, if suitably amended in detail, could be unequivocably endorsed".
Reference should also be made, though I shall deal with this in one sentence only, to Appendix D, which sets out in such admirable detail the potential effect of the directive on existing British trade mark law. I am quite sure that British industry and commerce will be very much in the committee's debt. I should indeed have said in the debt of your Lordships' House as a whole, for, without this House and without this committee of your Lordships' House, much of this, or indeed similar vital work in the EEC field, would never be done.
I wish that I could be as complimentary to the Government as I wish to be to your Lordships' House and to the committee. I am so glad that the noble and learned Lord referred, in his usual moderate terms, to the matter about which I want to say a few words in conclusion. The draft directive and regulations presuppose a trade mark not only for goods but also for services. When the regulations and the directive become effective, those with national registration of trade marks for services will have certain essential rights. Those who have not, will suffer.
We do not have registration of trade marks for services, and your Lordships have been reminded by the noble and learned Lord, Lord Scarman, of the short Bill recently granted a Second Reading in this House and which on Wednesday of this week is to have its Committee stage. It was introduced as your Lordships have been told, as a Private Member's Bill by the noble Lord, Lord Campbell of Alloway, who I see with pleasure is to speak later on in this debate. The Bill aims to protect our vital service industries and to give us some important experience by providing for registration of trade marks for services in line with the recommendation of the Mathys Committee which reported many years ago. The Government's response on the Second Reading of the Bill was negative and unhelpful in the extreme.
The Government advocated through the courteous voice of the noble Lord, Lord Lyell, a dangerous delaying policy when the Government must know that waiting can well be disastrous for the service industries and put them at a grave potential risk and disadvantage. I had to say then, and I in no way retract that statement, that I regarded the speech of the noble Lord, Lord Lyell, on behalf of the Government on that Second Reading as nothing short of disastrous. I appeal to the Government—and I hope very much that the appeal will be successful—supported on this
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occasion, as the Government will note, by the voice of the noble and learned Lord, Lord Scarman, on the Cross-Benches with all the authority that he commands, that they should think again upon this very important matter and give the support to the Bill of the noble Lord, Lord Campbell, which it so much deserves.
I conclude by again expressing our appreciation of the excellence of this report to its authors and in particular to the noble and learned Lord, Lord Scarman.
9.38 p.m.
Lord Renton: My Lords, first let me say that I am very glad indeed that the noble Lord, Lord Mishcon, said what he did about the importance of the Bill which has already been given a Second Reading in your Lordships' House, introduced by my noble friend Lord Campbell of Alloway. I should make it clear at the outset that I am not quite so hopeful, as was my noble and learned friend Lord Scarman and the noble Lord, Lord Mishcon, of this draft directive and these draft regulations being capable of adaptation in such a way as to make them acceptable in this country. I think that there are some fundamental difficulties and I shall be referring to them.
I have sat for the past two Sessions, and still do, at the feet of the noble and learned Lord, Lord Scarman, in Sub-Committee E. Most of our work has involved the scrutiny of draft directives and draft regulations issued by officials of the European Commission in Brussels in pursuit of their laudable aim of approximating, under Article 100 of the Treaty of Rome, some very different laws of member countries. It has been a complex and difficult task for us to scrutinise those drafts, but we are indebted and grateful to the noble and learned Lord, Lord Scarman, for his prodigious energy in mastering them and for the clarity with which he has led us through those vast labyrinths. Sometimes I must confess that it has been a rather turgid task.
Although Article 100 of the Treaty of Rome refers to "approximation" of laws, the word "harmonisation" has come to be used more often to describe the process. But it seems to me that those two expressions have different meanings. "Aproximation" means something not far short of assimilation in our language and I think in the French language, in which the same word was used in the original draft. But "harmonisation" presumably means something less, something different. It means the elimination of conflicts between laws and legal systems which are at variance with each other, so that trade may flow more smoothly through the Community.
There is a valuable work available in the Library of your Lordships' House called the Oxford Companion to Law, the present edition being that of 1980. It says:
"Harmonisation of laws is an alternative to approximation. In English approximation goes further than harmonisation or co-ordination, but falls short of unification".
In the Oxford English Dictionary one finds that "harmony" is mostly a musical term but, to the extent that one can find a current meaning for it, it means "consistency" in this context or the "process of making consistent".

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On most of the occasions on which we have had to consider their drafts, the gentlemen in Brussels have expressed them as being "in order to approximate". But if they really are attempts to assimilate, as I have sometimes suspected that they are, then instead of creating harmony and removing conflicts, they may even cause conflicts. It is in that context that I think we need to examine this draft regulation and draft directive, and with that danger in our minds.
The problem here—and it has been referred to by the noble and learned Lord Lord Scarman, and the noble Lord, Lord Mishcon—is that in the EEC there are three distinct systems affecting trade marks. Of course, each system covers only part of the EEC. I need not go into the details of these three systems because they are well set out early in our report in our comments in paragraphs 5 to 8 inclusive. One must bear in mind that the traders in each system have not only become accustomed to the way in which it works, but have acquired rights which they will never willingly relinquish.
In paragraph 72 of Appendix A we find that our splendid expert has pointed out that, in so far as it interferes with rights, the draft directive may be in conflict with Article 222 of the Treaty of Rome. The gentlemen in Brussels recognise the difficulties and so, instead of trying either to approximate or even to harmonise the three systems, they have introduced a fourth system to cover the whole of the Community—this Community trade mark—while leaving the three systems to go on operating each in its own limited sphere, unless it conflicts with the new and fourth system of the Community trade mark.
Of course, that in itself involves problems of reconciliation in order to enforce the Community trade mark. We are up against this problem, that the Community trade mark involves a form of registration which confers its own rights which will have to be protected on a Community basis. In order to ensure that that is effective, each country will have to alter its laws in order to incorporate what are described in paragraph 18 of our part of the report as the five techniques for adjusting conflicts between earlier and later claimants to similar marks.
Unfortunately, those five techniques do not adjust the conflicts. I venture to say that they even create fresh conflicts. We recognise this. We have pointed it out in paragraph 36. As the noble and learned Lord, Lord Scarman, has mentioned, there are two problems. We feel that full protection should be given
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to common law rights which in our country are enforceable by passing off actions and which traders will not relinquish—the bone is in the dog's mouth; they will not let it go.
Secondly—this is a very serious problem to overcome—the proposed new Community trade mark system would make no provision for official search for prior conflicting registrations, nor would it make provision for an examination based on such a search. The result would be two alternative systems operating in the United Kingdom for registering rights. Each of those systems would be operating on different principles. It would be chaotic.
We have also seen in the draft directive and regulation, and in giving evidence, that those concerned have conceded harmonisation in this matter is not their aim. Indeed, it could not be an aim in the way they put it forward. What has not been mentioned by them, as far as I remember, is that by superimposing a new system of registration for the Community as a whole further disharmony would be created. it would be a self-defeating exercise. Therefore, it follows, in my opinion—I am speaking personally—we should advise Her Majesty's Government not to agree to the drafts as they stand. As I have said, I seriously doubt whether they could be made more satisfactory and acceptable to the United Kingdom, if they were amended. But one must be candid. There would obviously be advantages as the noble and learned Lord, Lord Scarman, has pointed out, and as we say in our report, if—and it is a very big "if"—a suitable Community system could be contrived and introduced which did not give rise to conflicts which I have mentioned.
It is tempting to say that in our country we have registration of patents which works well and is self-sufficient; they stand on their own without common law rights to enforce them. We have over a large part of the country registration of ownership of land and titles to land and over land. To the extent that we have it, that works well also. A European may very well say, "What are you fussing about? In some spheres you have got very well used to registration; you have shown that it works".
But that is not all in this case, because we have these common law rights which we find work smoothly, with our rights of ownership within the meaning of article 222, and we cannot lightly disregard them. Therefore, although this is an important matter, and in a perfect world and uttering a counsel of perfection one could wish that there could be something better in the Community, in my own humble, respectful opinion I do not think that the proposals in the draft directive and draft regulation provide the answer.
9.51 p.m.
Lord Lloyd of Kilgerran: My Lords, I also should like to congratulate the noble and learned Lord on his speech and on having chaired Sub- Committee E with his usual charm, competence and remarkable insight in dealing with basic problems—on this occasion international problems associated with the development of Community trade marks. There is no doubt that his long and lucid speech this evening and his report will be read with great interest throughout the Community, and indeed throughout the industrial world, as an important contribution to progress in the long history of trade mark discussions on the European trade marks, which have already lasted over two decades.
I agree with the noble and learned Lord, Lord Searman, that the sub-committee were very fortunate indeed in having had the services of such a distinguished lawyer as Professor Cornish as their specialist adviser. I have no hesitation in saying from my experience of these international trade mark matters that Professor Cornish's two papers, already referred to, are themselves alone a great contribution to progress in this difficult field of European trade marks. But, as the noble Lord, Lord Renton, has indicated, there are profound difficulties.
The evidence from United Kingdom industry submitted to the committee was most discouraging to those who wished to see an EEC trade mark adopted in industry in the near future. Most witnesses, as the noble and learned Lord said, supported the theory of having one trade mark for the EEC, but all from industry rejected the present proposals. Thus, at page 45, the representatives of the Chartered Institute of Patent Agents, who are in close touch with UK industry, submitted that the proposals were quite unacceptable. At page 53, the Institute of Trade Mark Agents thought that with appropriate amendments there could be a workable system.
It is perhaps significant that only three companies gave evidence directly to the committee. Thus the Wellcome Foundation, in an interesting memorandum at page 142, stated that the British industry and commerce does not need new experimental ideas in the field of trade marks, but rather requires to be left alone with existing concepts which should be made to work more consistently. At page 143, British-American Cosmetics Limited, owners of over 1,200 trade marks in the EEC, were wholly against the EEC trade mark registration system as it stood. The Mars Group of Companies, in a long memorandum at pages 121 to 130, suggested that the proposed legislation in theory was acceptable, but that it was conditional upon the adoption of a large number of amendments. I thought that the memorandum of the Association of the British Pharmaceutical Industry at page 106 was particularly helpful. This UK industry has a vast export trade. The association's view was that the present drafts should be entirely abandoned and rewritten, as they were totally misconceived in the context of British industry.
At the beginning of his speech, the noble and learned Lord, Lord Scarman, mentioned the long history of international discussion on trade mark matters. As I have indicated, to my personal
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knowledge they have lasted over 20 years. Many of us take the view that much of this history ranks so far as some of the most boring and useless in the history of any jurisprudence.
To add a personal note, I have with me a small book of 100 pages which enshrines speeches made in Washington DC on 10th and 11th November 1962, over 20 years ago, at a conference called by the Georgetown University Law Centre to discuss the then proposals for a European trade mark convention. Georgetown University invited seven lawyers from countries of the EEC, and I had the honour of being asked to give the British view relating to the then Common Market law, which seemed to he understandable in that period.
The basic European trade mark model at that time had been prepared largely by a German lawyer, an old friend of mine, Dr. Rotsche, who, at the conference, had been designated father of the Common Market trade mark, which was then expected to be born very soon. Unhappily, however, that was not to be the position. After discussing aspects of the proposed convention, I said:
"Once the basic principles of the unique form of trade mark rights are understood, it should not be difficult to formulate a European trade mark law which will not hamper or restrict unnecessarily the commercial activities of the business world".
I concluded my speech on that occasion—when a welcome was given by all lawyers to that trade mark convention of 1962, which then we all understood and thought would be practical and useful to the Community—by quoting (I apologise if I am taking up your Lordships' time, but I think these words are very relevant) almost as a warning from some of the lectures given by the late Lord Radcliffe, in Illinois in 1960 under the title, "The Law and its Compass". This is a passage which, as I said then and believe today, still indicates in general terms the basic approach towards drafting the new trade mark law:
"Law needs at all times a compass to steer by. I hope I do not say anything impertinent if I say that it is not lawyers themselves who are most conscious of this need. It is possible to perceive that the lawyer often stands too close to his subject to see clearly in what direction he and his fellows are going".
lie concluded by saying:
"What drives us back from time to time to search further, to question outright what are our purposes, is the insistence of the layman"—
I interpose by saying that I would include on this occasion British industrialists—
"the man who is not versed in law, but who stands for something more, for some indication of a sense of right and wrong that is not merely provisional or just the product of historical proceeds".
In the light particularly of the reports of Professor Cornish to which I have referred, I suggest—and this is my personal view—that it would be helpful now if United Kingdom industrialists were to take up the initiative in this matter of an EEC trade mark law to ensure that something may be produced which will not hamper or restrict unnecessarily the commercial activities of the business world. I mention to the Government that there is a danger that British industry may have foisted upon it a trade mark law which, even in the long term, will be a source of disruption and great expense, and will be damaging to industry.

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I should like to echo the concluding remarks of the noble Lord, Lord Renton, when he wondered whether it was wise to proceed further in the near future with EEC proposals of this kind. Naturally, one does not wish to introduce any political atmosphere, but I think it worth quoting the view of the committee to be found on page xxxviii. The committee state—and I commend the passage to the Government:
"The uncertainties surrounding the effectiveness of a Community mark system go not so much to the legality of the proposal as to the political wisdom of establishing it at this stage of the Common Market's development".
10.1 p.m.
Lord Campbell of Alloway: My Lords, like other noble Lords, I wish to congratulate the noble and learned Lord, Lord Scarman, and the members of the Select Committee, in particular all those who have already spoken in this evening's debate, on the report. As has been truly said, it is a monumental contribution to the subject. I should also like to thank in particular the noble and learned Lord, Lord Scarman, for his authoritative endorsement of 'the need for the Trade Marks Act 1938 (Amendment) Bill to protect our high technology and our service industries. Further, I wish to thank the noble Lord, Lord Mishcon, and my noble friend Lord Renton for the kind and constructive things that they have said in this regard.
The report is of vast importance to industry and consumers, for these symbols of competition—trade marks—are designed to avoid imitation, eliminate confusion, underpin goodwill, and afford a measure of consumer protection. As usual, we Anglo-Saxons are the odd men out so far as our Napoleonic Code partners are concerned. As has been explained, far more eloquently than I can explain it, by the noble and learned Lord, Lord Scarman, this is because the registration system for trade marks developed from the common law of "passing-off", and both systems operate side by side, giving primacy to reputation which is established by use.
So the question is, whether to set up a Community trade mark for goods and services which is unitary throughout the European Community; whether we should accept the proposed régime, which conflicts with our own law, and so involve by the directive amendments to our own law to ensure that both systems remain in step. We are concerned here with what was referred to by the noble and learned Lord, Lord Scarman, as the "heavy impact of the directive"—a graphic and accurate description.
In my submission the draft regulation and directive are unacceptable without substantial amendment. The case for the amendments—and I say this in order to be brief—is made out with compelling clarity in paragraphs 36 to 38 of the report. Some are of fundamental importance, such as paragraphs 36 and 38(a), which involve a basic amendment of Article 7 of the regulations to allow opposition to the grant of a Community trade mark based on common law rights, as distinct from prior registration under national law; as has already been said, the only priority claim acknowledged, for example, in France. Other amendments are of minor consequence; such as, for
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example, paragraph 37(a) where changes of detail are required in connection with the rights conferred by a registered trade mark. But there is also the important question, and the very difficult question, of injunctive relief. This is neither the time, nor, I suspect, the place, in which to consider the difficulties that arise in that connection. But I point to them so that my noble friend the Minister may perhaps take aboard that there is a very serious difficulty that arises in connection with injunctive relief on which no doubt his department will advise him in due course.
Although it is not the object of these proposals to harmonise national laws, as far as we are concerned, that would be the effect, resulting in very substantial amendments. It is wholly idle to pretend to the contrary. No doubt in the long run there will have to be a measure of compromise. Other member states have their problems in this sphere—but not as great as ours. If compromise reflects the art of negotiation, then this report provides the essential material. If the reality of the situation is—and here, with the utmost respect, I differ a little from the approach of my noble friend Lord Renton; and your Lordships may think that it is the reality of the situation—that sooner or later we shall have to compromise, so be it. But I am approaching it from a slightly different angle from the equally tenable intellectual approach of my noble friend Lord Renton.
I am approaching it from the problem that the reality of the situation is that sooner or later we shall have to compromise, that this report is gold dust because here is the material for our negotiators to use when they seek to negotiate to achieve the compromise; so that at least our Ministers shall go to the negotiating table armed not just with some departmental brief but, one may also hope, with your Lordships' unqualified approval of the reservations contained in this invaluable report and that they, our Ministers, shall heed this warning that the two instruments as they stand will not do.
10.10 p.m.
Lord Lyell: My Lords, I am sure that the whole House will agree that we have had an outstanding debate this evening. Speaking for my own part as one of the non-lawyers to have my name on the list of speakers this evening, it has been a privilege and a pleasure to hear such a massive and complicated subject so excellently and cogently described for us by such a leading expert as the noble and learned Lord. Lord Scarman. It has been a tremendous education to your Lordships and, I may say, to Government spokesmen who appear from time to time in this position when—as has been pointed out by several of your Lordships this evening—all is not necessarily sweetness and light on this particular subject. I shall spare my comments on the various criticisms that have come my way in respect of my earlier deeds at this Box. I shall have a few words to say about them later.
I hope that your Lordships will hear with me if I preface my remarks on the report which is before the House this evening with one or two general observations on the subject of trade marks since we believe in setting forth the Government's position on

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this complicated, important and difficult subject at the outset. As I am sure noble Lords are aware, trade marks play an important part in the commercial success of many companies, both large and small, in the United Kingdom by providing that vital link between the goods or services on offer and the customer. Satisfied customers will look for the same trade mark when they make future purchases. Because of this a company can found its marketing on a trade mark which may consequently acquire real commercial value in its own right.
Clearly if the system is insufficiently secure to prevent unauthorised people from using the trade mark, there will be various adverse effects. Not only will the company lose sales but its reputation will be damaged. The consumer too will suffer by not receiving the goods he expected. Hence the importance of trade mark protection for companies and consumers alike. Any proposals therefore for amending our trade mark laws must be examined with the greatest care—as indeed they have been in the report which has been presented under the aegis of the noble and learned Lord, Lord Scarman. With this care in mind, we unreservedly congratulate the Select Committee for the careful attention they have given to these proposals for a Community trade mark system.
As your Lordships will be aware, every country in the European Community has its own system of trade mark protection effective in its own territory—a British registration, for example, is only effective in the United Kingdom. This proposal for a Community trade mark has an altogether broader scope. It treats the Community as a single market and allows a trader to get a registration which is both effective and is protected throughout the Community. Of course, the Community mark will not transform the Common Market overnight; but it will be another step in the direction of a unified market.
Goods carrying a Community trade mark will circulate freely thoroughout the Community, and traders will therefore be encouraged to think of the Community as their domestic market. Thus, we fully support the view that a Community trade mark is a logical development of the Common Market.
At the same time, it is clear that there will be a continuing need for our national system. We have heard that reiterated time and time again this evening with great strength and great clarity. There is a high proportion of companies which trade in a single country, and they will therefore be interested in national trade marks only. The Community trade mark, therefore, will need to co-exist with the national systems of the individual member states. These national systems differ from each other in the scope of the exclusive right granted and in many other respects, and this could obstruct the free flow of goods. This point alone calls for the harmonisation of national trade mark laws in the Community, and this is sought by the directive.
One more reason for the directive is to reduce the anomalies that could exist between Community trade marks and national trade marks, which could well cause difficulties for traders. It has been argued at various stages, though not necessarily in your Lordships' House, that it is sufficient to harmonise the various national laws and that the proposal for a
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Community mark should be shelved until more progress has been made towards an integrated market. No doubt every Community proposal meets the same response, but the Community trade mark is itself a factor in integrating the market. It is a way in which such progress can be made. The Community trade mark will certainly not come about tomorrow, and I am sure that now is the right time to be looking at these proposals and identifying the problems which exist, as has been done with great clarity by this report, and working towards a system which is acceptable to everybody.
Perhaps I may now consider some of the major issues dealt with in the report. I hope that your Lordships, and indeed the noble and learned Lord, Lord Scarman, will forgive me, but it would be impossible at this hour, and indeed virtually impossible without an endless peroration, to cover all the major and important issues bound up with this subject contained in the report.
As your Lordships will have noted, the report concludes that a Community trade mark system is feasible, subject to certain fundamental difficulties being overcome. The first difficulty which has to be overcome is the need to give full protection to common law rights. It was most gratifying to hear the forthright declaration of the noble and learned Lord, Lord Scarman, on this subject. Perhaps I may explain at this point that the owner of a trade mark in the United Kingdom can acquire rights in two different ways. In the first way, mere use of the mark gives him rights at common law—the so called "passing off" rights. In the other way, he can acquire rights by registration. When a trader acquires a mark, he acquires the right to prevent others from using his mark and, in addition, a number of other rights as a result of its use.
The first problem that we encounter with the regulation and the directive is that they would deprive the proprietor of a registered trade mark of these additional rights. This would have very serious consequences throughout the Community and, as a result of representations made by us to the European Commission, it is clear that the draft will be revised in order to avoid this situation.
One more difficulty raised by the report, still dealing with common law rights, arises because the regulation would not permit the user of an unregistered trade mark—a trade mark which has only common law rights—to oppose a later application for a Community trade mark. He would need to wait until the application had been registered and then would need to seek invalidation of the registered mark. All this would take time and, frankly, because of the increased difficulty in removing a mark from a register as opposed to its becoming registered, would place the user of an unregistered mark at a considerable disadvantage.
We have also made proposals to the Commission in order to safeguard the position of the users of unregistered marks. These proposals, I am glad to say, have been well received by other member states. We look forward to seeing amendments to the regulation to meet this most important point.
Perhaps I may refer at this point to the problem of service marks, which is tied up with the Bill of my

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noble friend Lord Campbell. The Government did not support my noble friend's Bill at the Second Reading just before Christmas, on the grounds that the time was not ripe, having regard to the present Community proposals and the current state of the trade marks registry. If the draft proposals are amended to give full protection to common law rights, as urged by the report, many of the fears voiced by users of unregistered service marks would disappear. If these are not amended, as we have urged in Brussels, then we shall have time to consider what precisely should be done.
So far as the trade marks registry is concerned, at the present time there are serious delays in processing new applications. This is a very severe disadvantage for British business, and we are making very strenuous efforts to improve the position. But it would not help British business, nor would it help the registry, to, perhaps, double the delays by adding service marks to the statute book at the present time.
Lord Mishcon: My Lords, before the noble Lord the Minister continues and because the House is so anxious, as has been made clear in this debate, could he tell the House why the Government could not consider support for a Bill which would contain a starting date for registration which was sufficiently far ahead to enable the clearing up, which he thinks is a barrier in the trade marks registry at the moment, to take place?
Lord Lyell: My Lords, if the noble Lord believes that my noble friend's Bill meets the criteria that he mentioned, I hope that I have given a preliminary answer as to why we were not able to support it. If I am correct in assuming that the noble Lord wishes me to give further reasons why we could not support my noble friend's Bill, perhaps he could wait, because we are going to deal with it in two days' time. But if he is asking a further question which is away from my noble friend's Bill, or is about wider powers, then I am afraid that I could not give him an answer tonight. Perhaps I may study his remarks and write to him.
Lord Mishcon: My Lords, I hope that the noble Lord will not think I am too persistent. I was not, in fact, mentioning a point which he had not himself brought to the attention of the House as a reason for not supporting the Bill, and that was the present congested state of applications in the trade marks registry. If the noble Lord the Minister wishes to take time to consider the remark and cannot answer tonight, then, of course, I shall be courteous enough to bow to that. But what I am asking him specifically is: if this is one of the points that he wishes to bring into this debate, could he inform us why the Bill could not have support with a starting date for registrations which takes into account the relief of the congestion which is now taking place?
Lord Lyell: My Lords, I shall certainly have to write to the noble Lord, because we are treading over the ground that was covered extensively by many of your Lordships on 22nd December last year. But I can assure the noble Lord and your Lordships that I shall read carefully what he has said, and I hope that I may
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be in correspondence with him. But I could not go further on my noble friend's Bill than I have gone tonight in relation to this debate on the noble and learned Lord's report.
Lord Campbell of Alloway: My Lords, would the noble Lord—
Lord Lyell: My Lords, if the noble Lord will be brief.
Lord Campbell of Alloway: My Lords, I am always brief. Could the noble Lord consider why this should be the seventh excuse that Her Majesty's Government have given for not introducing service marks legislation and why, if it is a good excuse, and a genuine excuse, it was not produced before?
Lord Lyell: My Lords. I do not have the Hansard for 22nd December with me, but—
Lord Campbell of Alloway: I do.
Lord Lyell: My Lords, the noble Lord says that he does, but I beg him and the House not to cover again all the ground that we covered on 22nd December. We are going to have a chance to do that on Wednesday. So far as I am aware, this problem of congestion did arise. I think that I may well have mentioned it, but I do not have Hansard with me.
May I, however, attempt to answer the question which has been raised by the noble Lord, Lord Mishcon? If I only skirt around it, I hope he will forgive me; I shall complete my answer in writing. I am informed that if a consensus emerged that the present British system of search and examination could not exist side by side with the Community system and that as a result the British system should be abandoned, we believe that there would be no sense in setting up an expensive search and examination system for service marks now, only to disband it again in a few years' time. That is a preliminary answer to the question that has been raised by the noble Lord, Lord Mishcon. I promise that I shall study the full thrust of the noble Lord's fairly weighty questions. During the two interventions which he made, he covered a number of points. I shall certainly read Hansard with great care and will write to the noble Lord.
I revert to the report which is before us this evening and turn back to the second major difficulty which was referred to in the conclusions contained in the report. It concerns the contrast between the British system, which involves a search and examination based on the search, and the proposed Community system, which makes no such provision. To put it plainly, the United Kingdom system is based on the public interest. That is to say, a careful search is made through trade marks already registered and we will not register a mark which conflicts with one already on the register. Over the years, this search has come to be regarded as extremely reliable. This is a great advantage to commerce in this country. If a firm applies to register a mark and nothing is found in the register, it is reasonably safe for the firm to go ahead and base its business on that mark.

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Unfortunately, in connection with the Community mark, a complete search would involve eight national registers. Some of these registers are, to say the least, of uncertain accuracy. In any case, they involve several different languages. The problems involved here are probably insuperable, although we would not say that definitely. For this reason, the system adopted for the Community mark is one in which owners of existing marks must protect themselves by keeping track of what is being placed on the Community register, and opposing as necessary. The report touches on this point and indicates, quite properly, that a state of possible confusion of marks in the market place is not a good one. They refer to the need for an acceptable solution.
There is no perfect solution, but I am sure that your Lordships would wish to know that we have already proposed adopting a British type system as regards Community marks. That is to say, prior Community marks at least should he searched to ensure that Community trade marks do not conflict with one another. In the long run, it may be that computerisation will offer the possibility of comprehensive searching of all national and Community marks, but of course we are not there yet.
As the report points out, we would still have the problem that there would exist in the United Kingdom marks on two different registers. A mark on the national register could be presumed valid, in view of the strict national procedures prior to registration. On the other hand, a mark on the Community register would not have the same presumption of validity. Of course this is a far from ideal situation. Whether these two systems could co-exist happily is difficult to say, but, if the number of Community marks ever became a significant proportion of the total number of registered marks used in this country, then attitudes to the necessity of searching for British marks would very likely be changed.
There is one further matter which is not dealt with by the report but which I feel I should draw to your Lordships' attention because of the concern of industry. This is the effect of the directive on existing registered trade marks. The purpose of the directive is to ensure that trade marks enjoy uniform protection under the legal system of all member states. This is perfectly feasible for post-directive marks, but we have considerable doubts about applying the directive to existing marks—in other words, making the directive retrospective in application.
The directive will have the effect that it will change the rights attached to certain marks, and therefore perhaps bring into conflict many existing rights on which long-established business and commercial dealings are based. The effect of the directive could well be to disrupt well-established trading patterns without any compensating advantages. If I mention that there are at the moment 250,000 trade marks on the British register, your Lordships will appreciate the size of the problem. Your Lordships will also gather that we are not at all convinced that making the directive retrospective is at all necessary.
The report raises a number of other points of detail and in general the Government would not dissent from the conclusion arrived at. However, we will just raise a note of caution on the fascinating issue (to a layman
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at least) of international exhaustion. Under the proposals, if a manufacturer sells trade marked goods in one country, he may not use his trade mark rights to stop a third party from buying up those goods in the first country and re-selling them in a second country. That is to say, once the goods have been sold in one place, the trade mark right has been "exhausted". This principle of exhaustion of rights already applies within the Community and arises out of the free movement of goods principle of the EEC Treaty.
This seems fine when applied to the Community. However, the proposals would extend this principle on a worldwide basis, subject to certain exceptions. The report concludes that the list of exceptions is inadequate to safeguard British industry and it proposes some additions to the list. It is not immediately clear that the unilateral adoption of this principle of international exhaustion by the Community would be of lasting benefit unless our non-Community trading partners were to do the same. Situations may arise where our Community industries would be disadvantaged by cheaper versions of their products coming into the Community, without the compensating advantage of cheaper versions of Community products being free to flow in the opposite direction. We shall need to look very carefully at the list of exceptions to ensure that Community industries are not disadvantaged by the adoption of such a principle. Indeed, we shall look at the principle itself; it may be that exceptions are not enough.
Your Lordships will also be aware that this Community trade mark proposal envisages the establishment of a Community trade marks office to deal with the applications. The Government have proposed London as the home of the Community trade marks office, and I would like to take the opportunity of repeating that proposal most forcefully this evening.
Your Lordships will be aware—as will anyone who has attended this debate or who reads it in Hansard—that the United Kingdom has a long tradition in trade marks, both nationally and internationally. Our trade marks registry is one of the oldest in the world, and, as the trade mark lawyers among us will know, it is situated nearby, in Chancery Lane. It is surrounded by a wealth of expertise in trade mark agents, patent agents and specialist lawyers. London is firmly established as one of the most experienced centres for trade mark activities of any city in the world and in our view would provide an ideal home for the Community trade marks office.
I have taken the opportunity of doing a little advertising and giving a gentle "plug", even at this late hour, for our great City of London. But, returning to the report itself, I will attempt to answer some of the points made by your Lordships. If I miss any, I assure your Lordships that I shall read Hansard very carefully; and I will certainly write to the noble Lord, Lord Mishcon, who raised a point of substance.
The noble and learned Lord, Lord Scarman, and the noble Lord, Lord Mishcon, both made powerful speeches. The only comment that I had before I stood up was, "My noble friend's Bill—nothing to report." Alas! that has been changed since I got to my feet. But I have nothing to add beyond what I have said this

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evening; we shall be coming to my noble friend's Bill on Wednesday.
My noble friend Lord Renton added—if I may put it this way, in all humility—very much "the Lyell touch" to our deliberations this evening. He spoke for me when he mentioned that he considered the attitude of traders to be that of "dogs with bones in their mouths". I do hope we shall be considering paragraph 36 in the main report as "the bone in the mouth report", and it might become as famous as the Terrapin v. Terranova case, let alone Hoffman Laroche v. Centrafarm BV, also mentioned in the evidence. I believe that the touch of my noble friend Lord Renton brought this subject of trade marks as it affects traders really to life in your Lordships' House. We also note the strong recommendation not to accept the regulation or directive.
Lord Lloyd of Kilgerran made his apologies to me and my noble friend and I pass them on to your Lordships; he had a train to catch. He quoted the evidence at the end of the report from many sections of industry, the pharmaceutical industry and the Wellcome Foundation. I note that he skipped the submission from the Scotch Whisky Association; possibly that was the error of a Welshman skipping over Scotland's influence on this major report. He mentioned the Association of British Pharmaceutical Industries and others, which brought back to me, and I am sure to others, memories of six years ago to the day when we started our deliberations on the Patents Bill, which became the Patents Act 1977. Perhaps the noble Lord has gone off to sixth anniversary celebrations. I shall note the noble Lord's comments with care.
My noble friend Lord Campbell raised one or two very valuable points, apart from his Bill, which we shall be considering later. I was particularly grateful for his reference to the report before us as gold dust for our negotiators. I think he has put it aptly, and I am grateful for that little nugget this evening. I think it encapsulates the debate beautifully for our future deliberations.
I have gone on longer than I intended at this fairly late hour; I hope I have not rambled. I do stress that the Government strongly welcome this report, and in particular we appreciate its constructive approach to the proposals before us and assure your Lordships and the authors of the report that their analysis of the areas of difficulty will be of particular value to us in our continuing negotiations in Brussels.
Lord Mishcon: My Lords, before the noble Lord sits down, he referred to international exhaustion, and I wonder whether he is aware of the fact that there is also exhaustion in Members of your Lordships' House. Would he be good enough, if he sees fit, to pass on to his noble friends who arrange the business of the
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House that it is really regrettable that a matter of such national and international importance on the work of a committee which worked so hard should be taken so late at night?
Lord Lyell: My Lords, my noble friend has added "late but not light". I shall certainly pass on the concern of the noble Lord to my noble friend the Chief Whip. I understand that the usual channels were in conversation earlier with the noble and learned Lord who introduced the report.
10.40 p.m.
Lord Scarman: My Lords, having heard the recent exchanges between the noble Lord, Lord Mishcon, and the Minister, I do not know whether I now rise as the white rabbit looking at his watch or as the dormouse waking up from the tea party. Whichever it is, this has been a stimulating and constructive debate. Each noble Lord who has contributed to the discussion has brought to it something new, something original, something sensible and almost always something constructive. One cannot often say that of a debate, whether it is in good time or rather late. I also welcome the attitude of Her Majesty's Government to the report, and I am delighted to hear the use that they hope to make of it in their deliberations.
I end by saying, let us not reject the principle in the proposal for a Community trade mark. The principle must be sound in any great trading area. In the great markets of the United States of America, Canada and Australia where, of course, there are different systems of law within a federal structure, one finds that in each great area it has been necessary, or it was found necessary, to introduce a unified trade mark law. That is all that we are trying to do in the European Common Market area which is now a worthy rival of those great trading areas. We would be very unwise to do without it.
Therefore, at the end of this debate I say to the Government, let us adopt the attitude of the Comptroller-General of Patents, Designs and Trade Marks, and see what we can do to reconcile this principle with existing national systems which must continue. If I were a betting man I would say that, perhaps sooner rather than later, the Government will be reconsidering their attitude to reforming the national law of the United Kingdom in regard to the protection that it affords to service marks. If they do they will have a double welcome from myself, as I sit down, thanking the House for the attention it has paid to this report and this subject.
On Question, Motion agreed to.
The House adjourned at seventeen minutes before eleven o'clock.

  THE METROPOLITAN POLICE COMMISSIONER'S REPORT ON PROBLEMS AND PRIORITIES
  THE METROPOLITAN POLICE COMMISSIONER'S REPORT ON PROBLEMS AND PRIORITIES
  DIOXIN: LIMITATIONS ON USE
  DIOXIN: LIMITATIONS ON USE
  AVRO VULCAN EXHIBIT AT RAF MUSEUM, HENDON
  AVRO VULCAN EXHIBIT AT RAF MUSEUM, HENDON
  REGIONAL HEALTH AUTHORITIES: FINANCIAL ALLOCATIONS
  REGIONAL HEALTH AUTHORITIES: FINANCIAL ALLOCATIONS
  FALKLAND ISLANDS GARRISON: MULE TRANSPORT
  FALKLAND ISLANDS GARRISON: MULE TRANSPORT
  CIVIL DEFENCE
  CIVIL DEFENCE