Sitting of 15 March 1983

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

PRIVATE BUSINESS
GREATER LONDON COUNCIL (GENERAL POWERS) (No. 2) BILL
Lords amendments agreed to.
ASHRIDGE (BONAR LAW MEMORIAL) TRUST BILL
Considered; to be read the Third time.

Oral Answers to Questions
  SOCIAL SERVICES

    Support Services (Privatisation)
    Mr. Haynesasked the Secretary of State for Social Services what evidence he has that privatising support services can produce expenditure savings.
    Mr. Lofthouseasked the Secretary of State for Social Services what level of savings he expects to achieve as a result of encouraging the privatisation of support services to hospitals.
    The Secretary of State for Social Services (Mr. Norman Fowler): There is the potential for substantial savings in some hospitals. Ministry of Defence experience with service hospitals suggests that for cleaning, savings ranging to 20 per cent. could be made.
    Mr. Haynes: Is the Secretary of State aware that I have seen the reports and figures that he boasts about relating to the privatisation of services in the National Health Service? Is he further aware that the figures and reports that he puts forward at the Dispatch Box do not ring true when compared with the real figures? When will the Secretary of State and the Government move away from political dogma, let National Health Service workers get on with the job they were appointed to do, and stop suggesting that pockets in the private sector should be lined?
    Mr. Fowler: It is a bit rich to be lectured by the hon. Gentleman on political dogma. I have no idea to which reports the hon. Gentleman is referring. If he is referring to the Ministry of Defence reports to which I referred in my answer, I can tell him that substantial savings have been made by contracting-out. Indeed, savings of up to 60 per cent. were made in one hospital.
    Mr. Lofthouse: Will the Secretary of State consider purchasing some of the human kidneys that are being purchased by the private sector from the United States at a cost of £3,000 each—thereby continuing the policy that
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    the rich shall live and the poor shall die—for those on National Health Service waiting lists who have no chance compared with patients in the private sector?
    Mr. Fowler: We shall do everything possible to promote greater co-operation between the private sector and the National Health Service, because the Government wish to reduce NHS waiting lists.
    Mr. Beaumont-Dark: Does my right hon. Friend agree that if privatising support services means that more money will be available for patient care, that is a proper use of public money? I thought that the object of the National Health Service was to help those who are sick.
    Mr. Fowler: I agree with my hon. Friend. The money that is saved can be used to provide more services for patients. I thought that that was what the welfare state and the National Health Service were all about.
    Mr. Ennals: Will the Secretary of State confirm that ever since the National Health Service was established health authorities have been free to contract-out work, but it was found that tenders were inadequate or that the work carried out was unsatisfactory? Does the right hon. Gentleman accept that the only new item that he has introduced is to relieve contractors of paying VAT, at the taxpayers' expense? Will he do the same for the voluntary organisations?
    Mr. Fowler: The activities of the voluntary organisations are not my responsibility. The rest of the right hon. Gentleman's question is wrong. Contracted-out expenditure rose from £135 million in 1980–81 to £160 million in 1981–82. Health authorities are showing confidence in contracted-out arrangements.
    Mr. Michael Morris: On the question of savings as Tadworth is now to be run by a conglomerate of charities, will they be able to buy in services free of VAT?
    Mr. Fowler: The position of charities is a matter for my right hon. and learned Friend the Chancellor of the Exchequer, and my hon. Friend will know his response to that.
    Mrs. Dunwoody: Is it not true that the Secretary of State can make his cowboy charters work only by relieving contractors of VAT and ensuring that they have the benefit
    of free office space, free telephones, free protective clothing and free laundry services? Has the right hon. Gentleman made any calculations of how much that will cost the health authorities?
    Mr. Fowler: The hon. Lady has made an extremely silly point. Her description of the public sector is ludicrous. Our first concern must be the interests of the patients. I would expect the Opposition to support, not attack, this policy if it provides more money for patient care.
    Mrs. Dunwoody: Will the right hon. Gentleman undertake not to insist on a regional authority going ahead if the cost of a private sector contract is higher than the cost of having the work done by the NHS?
    Mr. Fowler: I gave the hon. Lady that assurance last time. We shall not insist on health authorities taking on contracts that are more expensive just because they are in the private sector. However, the hon. Lady should recognise that the other side of that coin is that if the private sector can do it more cheaply, it should be allowed to do so.

    Supplementary Benefit (Life Insurance Policies)
    Mr. Marlowasked the Secretary of State for Social Services if he will increase the level of surrender value of life insurance polices which is disregarded before payment of supplementary benefit.
    Mr. Fowler: We have received a number of representations about wholly or partly disregarding the surrender value of life assurance policies for supplementary benefit purposes. We are keeping this aspect of the capital rule in mind.
    Mr. Marlow: Is not my right hon. Friend deeply concerned that those who have saved a nest egg find, when they fall on hard times, that it is addled because they have to spend nearly all of it before they can receive any support from the state, while those who have blown the lot on booze, bingo and the Costa Brava are baled out straight away? Will my right hon. Friend speak to the insurance companies, ensure that people are not penalised and can, at least, obtain the fully paid-up value if they are forced to surrender their policies?
    Mr. Fowler: Obviously we shall keep that aspect of the capital rule in mind. I have much sympathy with my hon. Friend's first point.
    Mr. Joel Barnett: Is the Secretary of State aware that many elderly people have been paying small sums of money for policies that are intended to meet burial costs, because of the inadequacy of the death grant? Will the right hon. Gentleman at least disregard the smaller elements in those surrender policies?
    Mr. Fowler: The Government are actively reviewing that matter. I have great sympathy with the right hon. Gentleman's point, but I am not in a position to make any announcements at present.
    Mr. Wrigglesworth: Will the right hon. Gentleman look at the case of one of my constituents and consider disregarding a compensation payment that was paid to someone on supplementary benefit after he had suffered a bad accident? Could the compensation for all the damage caused be disregarded for supplementary benefit purposes?
    Mr. Fowler: I shall look at that case.
    Mr. Cormack: Is it not entirely incompatible with the philosophy that we seek to advance to penalise thrift in this way? Will my right hon. Friend give us an assurance that at least policies of £5,000 or less will be disregarded?
    Mr. Fowler: I have much sympathy with my hon. Friend's point. However, I am not in a position to make an announcement now, although I shall consider what he has said.
    Mr. Foster: Why cannot the Government at least be generous to some categories of the poor and unemployed by completely disregarding the surrender values of insurance policies? Has not the DHSS estimated that it would cost less than £250,000 to do so?
    Mr. Fowler: I note the pressure on this matter by the Opposition. As I have said, I am not in a position to make an announcement, but, if an announcement is made, I imagine that the Opposition will welcome it.

    Statutory Sick Pay Scheme
    Mr. Hendersonasked the Secretary of State for Social Services what progress is being made towards the introduction of the new statutory sick pay scheme.
    The Minister for Social Security (Mr. Hugh Rossi): The statutory sick pay scheme will be introduced on 6 April. In preparation for it, all employers have received copies of an "Employers' Guide" and the further information contained in the national insurance contribution tables which were recently sent out to them. This effort has been supplemented by an advertising campaign and by help provided by officials who have given seminars and general advice.
    Mr. Henderson: What reassurances has my hon. Friend given to those small business men who expressed anxieties about the scheme? What savings does he expect from the scheme in terms of the number of staff employed and the costs?
    Mr. Rossi: We estimate that the scheme will save about 3,000 civil servants and up to £90 million on the public sector borrowing requirement. We are giving small businesses all the help we can and we have tried to make the paper work as simple as possible for them. We shall remind those who have been in the habit—as many of them have—of paying employees who are sick for a short time their ordinary pay that they will be able to recoup statutory sick pay in future.
    Mr. Rooker: Will the Minister confirm that he still has the support of small businesses for the introduction of the scheme, as the Government claimed on Second Reading of the Bill? Has he received any requests from small businesses to exclude them from the operation of the Act?
    Mr. Rossi: Many small businesses have given us their support, as have the small business organisations. We have gone a long way towards meeting their requests in matters of detail. Obviously, many small business men have not studied the issue in detail and are worried, as anyone would be, by prospective change. However, their fears are exaggerated. Once they become used to the working of the scheme it will become second nature to them.

    District Management Teams
    Sir David Priceasked the Secretary of State for Social Services whether he is satisfied with the efficiency of district management teams as the base for the running of the National Health Service; and whether he will make a statement.
    The Minister for Health (Mr. Kenneth Clarke): I am sure that the revised arrangements for running the NHS, which form the basis of the 1982 reorganisation, will lead to a better managed service and that teams properly accountable to their authorities under the new structures and arrangements will discharge their functions more efficiently. As my hon. Friend knows, a management inquiry has recently been set up, headed by Mr. Roy Griffiths, to advise us further on the effective management of manpower and related resources in the NHS.
    Sir David Price: Is my hon. and learned Friend aware that, in the absence of a clearly designated chief executive in each district, there is often a good deal of doubt about who is in overall day-to-day charge?
    Mr. Clarke: The Health Service has had the system known as consensus management for several years. We look to the new chairman and to members of the district and regional health authorities to provide the leadership that the NHS needs. It is to them that the teams of officers should be properly accountable.
    Mr. Pavitt: Will the Minister reconsider the appointment of his team to consider efficiency and reorganisation? Does the hon. and learned Gentleman recall that last time this happened and business consultants familiar with business methods were called in the McKinsey committee charged the taxpayer £250,000 to make a complete mess of the NHS? When the hon. and learned Gentleman receives the report of the consultant team, will he please take it with a large pinch of Sainsbury's salt?
    Mr. Clarke: The most recent reorganisation of the Health Service has eliminated a tier of management and led to much clearer accountability and improved performance. The inquiry headed by Mr. Griffiths is to advise Ministers on good management practice generally.The more good management practices that are adopted by the Health Service, the better able it will be to devote its resources to the care of patients.
    Mr. Crouch: Will my hon. and learned Friend confirm that he still sees a real advantage in decisions being taken at the district level, because it is nearer to the patient?
    Mr. Clarke: Exactly. We have also strengthened the position of what is known as unit management below the district level, so that, in an individual hospital, there can be a clear line of accountability to an administrator and a senior nursing officer.
    Mr. Cryer: Will the Minister ensure that the district management teams also enforce the 1962 code of practice about the hospitality of drug companies? Is the hon. and learned Gentleman aware that drug companies often provide much lavish hospitality in the form of meals and booze to hospital administrators in their attempt to sell drugs? Does he accept that that contributes to the massive cost of providing drugs and that the drug companies make massive profits from the NHS?
    Mr. Clarke: There are strict rules about such things in the Health Service, as there are in the rest of the public
    sector, and they should be adhered to. We continue to make them clear whenever we have the opportunity. The pricing system enables us to recoup any expenditure on pricing and advertising above the permitted level, and each year we recoup sums of money for the Health Service.
    Sir William Clark: Is my hon. and learned Friend aware that many of us think that consensus management has led to inefficiency and been responsible for much of the overmanning within the NHS? Is it not about time that we got the old-fashioned matron back in charge?
    Mr. Clarke: Consensus management has its critics. It is one of the matters upon which Mr. Griffiths and his team will no doubt be advising us.
    As to the old-fashioned matron, the new reorganisation has enabled us to re-establish clear accountability for nursing services in units such as large hospitals. The Whitley council has chosen to call the modern successor to the matron a director of nursing services. I hope that such officials will carry out the same services as the
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    matrons did, but many of them are now male and would rather not be called matrons. I hope, too, that they will carry out their duties with the same efficiency as a matron.

    Pharmacists (Emergency Cover)
    Mr. Hoyleasked the Secretary of State for Social Services if he will ensure that additional funds are made available to the pharmaceutical Whitley council so that adequate payments at a figure no less than that paid to other professions in the National Health Service can be paid to pharmacists for providing emergency cover.
    The Under-Secretary of State for Health and Social Security (Mr. Geoffrey Finsberg): No, Sir.
    Mr. Hoyle: Will the Minister ensure that more funds are available so that proper payment can be made to this deserving group of workers instead of the mere pittance that is on offer at the moment? Does it not show the strength of feeling on this matter that both sides of the Whitley council are asking to see the Secretary of Slate to urge him to do just that?
    Mr. Finsberg: A sum of money was made available specifically for this purpose. The sensible thing would have been for the Whitley council to accept this sum in order to build for the future upon the new long-term arrangements that we are ready to discuss.

    Unclaimed Benefit
    Mrs. Renée Shortasked the Secretary of Slate for Social Services how the levels of unclaimed social security benefits are calculated; and if he will estimate the current total of unclaimed benefit.
    The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): The method varies. The FIS calculation is described in "The Take-Up of Family Income Supplement: Note on the Estimate derived from the Family Finances Survey", copies of which are in the Library. I will place in the Library shortly a note describing the calculation for other social security benefits for which there is a significant take-up problem. I cannot add further to the information that I gave to the hon. Lady
    last month about amounts of unclaimed benefit
    Mrs. Short: I am obliged to the Minister for that reply. In the reply that he gave me on 4 February he said that the amount of unclaimed supplementary benefit, which was known only up to 1979, was £355 million and that there was another £55 million for other unclaimed benefits. Is it not high time that he and the Department explained to those claimants who are clearly living in poverty, because they are not getting what they are entitled to, how and where to claim, and made sure that the money that has been voted by the House is used for that purpose?
    Mr. Newton: We are trying in a number of ways to improve the take-up. The hon. Lady will know that we have completed a large television advertising campaign on FIS. As a result of our efforts last year, one-parent benefit take-up has risen substantially. Attendance allowance claims were up by 16 per cent. last year and mobility allowance claims were up by 22 per cent. We are doing well on important matters.
    Mr. Rooker: Given that benefit rates have increased by approximately 40 per cent.since 1979 and that there

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    has been a vast increase in the numbers requiring means-tested supplementary benefit, is it not a reasonable assumption that, in terms of supplementary benefit, there must now be well over £500 million a year—approximately £10 million a week—unclaimed by people who deserve it and which, as my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) pointed out, the House has deemed they should receive?
    Mr. Newton: I should not care to confirm the hon. Gentleman's figure, but it is likely that the figure is higher than the £355 million in 1979.
    There is one matter that I did not mention when answering the supplementary question asked by the hon. Member for Wolverhampton, North-East (Mrs. Short). We have just issued guidance to local authorities about a system that we hope will identify virtually all pensioners claiming housing benefit who might also be eligible for supplementary benefit. I hope that that, too, will improve take-up.
    Mr. Viggers: If large amounts of benefit are unclaimed—and no doubt they are—is that not a strong argument for simplifying benefits wherever possible?
    Mr. Newton: Yes, but a balance must be drawn between simplifying benefits and making them fair to individual claimants. That is a matter with which all Governments have to wrestle.

    Chronically Sick and Disabled Persons Act
    Mr. Woodallasked the Secretary of State for Social Services what recent action has been taken to ensure the fuller implementation of section 2 of the Chronically Sick and Disabled Persons Act.
    Mr. Ioan Evansasked the Secretary of State for Social Services what recent steps he has taken to improve the implementation of section 1 of the Chronically Sick and Disabled Persons Act; and if he will make a statement.
    Mr. Rossi: Local authorities are aware of their duties under sections 1 and 2 of the Chronically Sick and Disabled Persons Act 1970, and implementation is a matter' for them.
    Mr. Woodall: Will the Minister make it clear, as has the Royal Association for Disability and Rehabilitation, that keeping disabled people on waiting lists for a long time is illegal? Will the hon. Gentleman give a categoric assurance about the advice that he is giving to local authorities on this important matter?
    Mr. Rossi: Lists are a conglomeration of individual cases. If individual cases are referred to me, they will be investigated.
    Mr. Evans: Is the Minister aware that full identification of the disabled is a prerequisite to ensuring that help is given to those who most need it? Will the hon. Gentleman make it clear that section 1 of the Act relates not to sample surveys but to the full and individual identification of the disabled in every locality?
    Mr. Rossi: Identification is an important responsibility of local authorities. As far as I am aware, they are doing their best to discharge their duties under the Act.
    Mr. Wigley: Will the Minister confirm that it is no excuse for local authorities to plead poverty so as not to undertake their statutory responsibilities under the Act?
    Mr. Rossi: Yes, Sir.
    Mr. Nicholas Winterton: Is my hon. Friend aware of the exhibition in the Upper Waiting Hall entitled "Communications for the Aged and Disabled"? Will he encourage local authorities to visit the exhibition within the next few days, because it would not only help local authorities to save money but ensure that the aged and infirm were able to lead a more meaningful life?
    Mr. Rossi: I am aware of the part played by my hon. Friend in mounting the exhibition, and I recommend all to see it if they can spare the time.
    Mr. Ashley: The implementation of the Act will reduce discrimination against disabled people. Has the Minister received a letter from Peter Large, who was chairman of the committee that produced a report advocating legislation against discrimination, in which he accuses the Minister of grossly misleading the House of Commons in a recent debate? If so, what was his response, and will he place a copy of it in the Library?
    Mr. Rossi: I have not seen that letter, and I refute the imputation.
    Mr. Terry Davis: Will the Minister reconsider the answer that he gave to my hon. Friend the Member for Hemsworth (Mr. Woodall)? Is there not some evidence of a trend among local authorities to institute waiting lists for people who have applied for help under the Act? How many local authorities are now operating waiting lists and
    how many people are on them? Will the hon. Gentleman use the default powers if he receives evidence of local
    authorities operating waiting lists as a dodge to avoid the responsibility that has been placed upon them by an Act of Parliament?
    Mr. Rossi: One specific allegation was referred to me, the matter was looked into, and I understand that the problem has been resolved. I deplore the maintaining of waiting lists for those whose need has been recognised and where the local authority should be discharging its obligation to the community. As I said, under the Act my responsibility is to individual families. That is the legal advice that I have been given.

    Voluntary Organisations (Co-operation)
    Mr. Freudasked the Secretary of State for Social Services whether he is satisfied with the co-operation between his Department and voluntary organisations.
    Mr. Newton: The Department has close, frequent and cordial contacts with well over 200 voluntary organisations, but if the hon. Member has a particular problem in mind I shall be pleased to consider it.
    Mr. Freud: Does the Minister accept that the Government's health priorities mean that the responsibility of caring for severely handicapped and disabled children is being left to voluntary organisations? Will he at least rid these organisations of the burden of paying VAT, as he has rid the health authorities of that burden?
    Mr. Newton: I am sure that the hon. Gentleman will understand if I say that I believe the main thrust of his question is directed at someone who will be at this Box a little later. After the announcement by my right hon. Friend the Secretary of State about Tadworth Court hospital yesterday and the help for various important

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    voluntary organisations that care for many severely handicapped and dying children, the Government can hardly be accused of not offering help to voluntary organisations.
    Mr. Carter-Jones: What representation has the Minister made to the Chancellor of the Exchequer about charging VAT to voluntary organisations? Will he publish this information in the Official Report?
    Mr. Newton: The hon. Gentleman must think that I am green as well as damp.
    Mr. Viggers: Is my hon. Friend aware that Voluntary Service Overseas is worried that returning volunteers—about 600 a year—do not have proper class 1 contributions because adequate arrangements cannot be made for their contributions while they are giving overseas service? Has the Minister given any attention to this point, and can he hold out any hope to the organisation and the volunteers?
    Mr. Newton: I am aware of the problem. It is rather complicated, and, if I may, I shall write to my hon. Friend about it.

    NHS Budget
    Mr. Easthamasked the Secretary of State for Social Services what has been the average annual increase in the National Health Service budget in real terms since May 1979.
    Mr. James Lamondasked the Secretary of State for Social Services what has been the growth in the hospital and community services budget since May 1979 after taking account of pay and price movements in the Health Service.
    Mr. Freesonasked the Secretary of State for Social Services how much money has had to be spent over the past four years in the National Health Service budget to cope with the increase in demand caused by demographic change.
    Mr. Fowler: Growth in services in the National Health Service as a whole between 1978–79 and 1982–83 is expected to be about 6 per cent. in real terms, an average annual increase of 1½ per cent. The hospital and community health services growth figure for the same period is 5½ per cent. in real terms. Demographic changes—notably the increased numbers of old and very old people—will have increased hospital and community health services costs by 3·4 per cent. Separate estimates of the cost of demographic changes to the family practioner services are not made, as expenditure on those services is determined largely by demand and therefore naturally allows for any extra costs arising from changes in the population structure.
    Mr. Eastham: Is not the Minister deceiving the House, as the figures clearly do not include inflation and pay rises? Since 1979 no fewer than 640,000 more pensioners have needed these services. There is an ever-increasing number of 75 and 85-year-old pensioners who place a terrific burden on the National Health Service. When will the Minister hand some real money to the National Health Service?
    Mr. Fowler: The hon. Gentleman is absolutely and utterly wrong. Of course the figures include pay and
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    prices. If he wants the economic costs—the costs compared with the RPI—[can tell him that there has been a 16 per cent. expansion of the National Health Service in England over the past four years.
    Mr. Lamond: Are not these figures prepared to try to conceal what the country knows, which is that health standards have deteriorated sharply under the Secretary of State's leadership? For example, is it understood that the Secretary of State includes in the figures, as increased investment in the National Health Service, prescription charges, which have increased sevenfold since the Government came to office? Does not this statistical distortion arouse a gasp of envy even from that wizard at distorting statistics—the Secretary of State for Employment?
    Mr. Fowler: I am not sure what response the Secretary of State for Employment would make. If the hon. Gentleman wants a further measure of the growth in hospital services over the past four years he has only to look at the number of medical staff. We are now employing 4,000 more doctors and dentists and 45,000 more nurses and midwives. That is this Government's record; a Government committed to the National Health Service.
    Mr. Freeson: If one takes account of the enforced expenditure on demographic and other similar changes within the National Health Service and calculates that as a whole, one produces the net result that there has been a decrease in real terms in expansion of the service. Is that not having an effect on areas such as mine—an inner city area whose hospital and community services are under threat? When will the Minister do something about such areas?
    Mr. Fowler: The right hon. Gentleman is coming to see us about conditions in his area. However, it is absurd to suggest that the provision of more services for more old people, and making modern treatments more widely available, somehow does not count as growth. Of course it does, and that is what we have been seeking to do with the National Health Service.
    Dr. Mawhinney: Does my right hon. Friend accept that the fast growth in the population of new towns causes the population figures that he uses to allocate money to the regions to be, of necessity, out of date? What help can he give the third generation new towns with their health problems, which have been caused by this rapid expansion?
    Mr. Fowler: We shall continue to review the system. However, as my hon. Friend is aware, we are trying to continue the Labour Government's policy, which was to reallocate resources to the most under-provided legions.
    Mr. Mike Thomas: Does not the Minister's reply prove the old adage that there are
    "Lies, damned lies and statistics."
    Once demographic change, the effects of inflation and medical advances have been taken into account, the Government have cut public spending on the National Health Service. The only way in which they can claim an increase is by taking into account the dramatic increase in charges to patients, who are paying for the increased services instead of it coming from public expenditure?
    Mr. Fowler: The hon. Gentleman is, as always, wrong. He got it wrong when he went to the Darlington by-election and attacked us on the same ground, when he said:
    "Mr. Fowler's claims for Health service spending are only true in the sense that the words he uses are literally correct".
    Mr. Mike Thomas: That is right.
    Mr. Waller: I congratulate my right hon. Friend on the way in which he has ensured that the Government have maintained finance for the National Health Service. Bearing in mind the high cost of keeping people in hospital, does he agree that the best way forward is to encourage people to live a lifestyle that will give them the best chance of avoiding going into hospital? Will he devote more resources to preventive medicine?
    Mr. Fowler: That is plainly important. We have a new chairman and director of the Health Education Council and I look forward to a new effort in this area.

    Optical Charges
    Mr. Roy Hughesasked the Secretary of State for Social Services whether he will ensure that optical charges will not rise in real terms in 1983–84.
    Mr. Kenneth Clarke: Charges for all family practitioner services, including charges for ophthalmic services, will increase only in line with costs in 1983–84.
    Mr. Hughes: Will the Minister bear in mind that the maximum charge is now £15·50 compared with £6·15 when the Government took office, an increase of no less than 152 per cent? Will he also bear in mind that there has been a 39·2 per cent. increase in income from charges above the retail prices index? Are not these increased charges deplorable for such a basic and essential service?
    Mr. Clarke: The maximum charge to which the hon. Gentleman refers is increasing by 50p next year, which is 3 per cent., and below the present level of inflation. We believe that it is right that people should make a modest contribution to these services to continue the development of the National Health Service. People on low incomes and those in full-time education aged 19 and below are exempt from all these charges.
    Mrs. Knight: Does my hon. and learned Friend recall that successive Health Ministers, including hon. Members who are now in opposition, have repeatedly told opticians that they must meet their salaries and overheads out of the profit from the sale of private frames? If any arrangement is to be made to alter the cost of frames this state of affairs must be borne in mind.
    Mr. Clarke: We have recently increased substantially the fees paid to opticians for sight testing and other National Health Service work. I am glad that we have reached agreement with the profession on a proper range of fees for its Health Service work. Charging for private frames is a matter for the optician and the patient. I believe that there is some concern about this. I am glad to say that the cost of private frames appears to be dropping substantially in the present year, probably thanks to the arrangements that we have reached on the forward level of remuneration for National Health Service work.
    Mrs. Dunwoody: This third increase will bring the increase since the Government came to office to 152 per cent. Is the Minister really saying that this can be justified in terms of the need for proper optical care?
    Mr. Clarke: The hon. Lady knows that her figure is arrived at only by making use of selective years. The previous Government neither abolished the charges nor raised them in their last years in office. We have therefore caught up a little on the gap that opened up in the late 1970s. We have now reached a reasonable level of charges, with exemptions for those who have difficulty paying. The hon. Lady cannot advocate giving up the revenue produced and, at the same time, suggest that she wants to develop and improve the treatment of patients under the National Health Service.

    Patients (Statistics)
    Mrs. Faithasked the Secretary of State for Social Services what information he has as to the number of inpatients and outpatients, respectively, treated in National Health Service hospitals in 1982–83; and what was the equivalent figure for 1978–79.
    Mr. Geoffrey Finsberg: Hospital activity statistics are collected centrally on a calendar year basis. The 1982 figures are not yet available. In 1981 there were 5·76 million inpatient discharges and deaths, 0·71 million day case attendances, and 35·57 million outpatient attendances in National Health Service hospitals in England. This compares with 5·37 million inpatient discharges and deaths, 0·56 million day case attendances, and 33·95 million outpatient attendances in 1978, representing increases of about 7 per cent., 27 per cent., and 5 per cent. respectively.
    Mrs. Faith: Does my hon. Friend agree that those figures are a matter for congratulation and reflect the fact that there are 40,000 more nurses and many more doctors working in the National Health Service, and that the National Health Service has been organised more efficiently since the Government took office?
    Mr. Finsberg: I am delighted to confirm that my hon. Friend, unlike most Opposition Members, understands the fact that we are spending more in real terms on the Health Service.
    Mr. Campbell-Savours: Do not increased inpatient and outpatient attendances derive in part from the increased incidence of lead poisoning in children? Will the Minister give an assurance that he intends to consult his hon. Friends to ensure the early introduction of legislation to ban the sale of small lead figures and other lead toys to children, who otherwise will be in increased danger?
    Mr. Finsberg: I am sure that this is a matter that my hon. Friend the Minister for Consumer Affairs is examining. I shall be delighted to talk to him on this issue.

    Inner London (NHS Expenditure)
    Mr. Dubsasked the Secretary of State for Social Services what is the present level of National Health Service spending in inner London compared with the level in 1978–79, expressed at current prices.
    Mr. Kenneth Clarke: The revenue expenditure of the five inner London area health authorities in 1978–79 was

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    £482 million. In 1981–82, the latest year for which figures are available, revenue expenditure was £739 million. Both figures are at 1978–79 cash prices.
    Mr. Dubs: Is the Minister aware that those figures will be extremely puzzling to the many people concerned with the Health Service in inner London? Is he aware that every district health authority in the inner London area is now faced with swingeing cuts in expenditure and is unable to cope with the problems of providing a decent service? Will the Minister now give the real answer to the question?
    Mr. Clarke: The problem in inner London is that there needs to be a switch away from the provision of acute beds and acute services to further development of the priority services for the elderly, the mentally ill and the mentally handicapped. The process of switching involves some change. Local consultation has to decide where those changes should take place. The figures that I have given are accurate. People should realise that it is the pattern of service that needs to be changed. The overall level of expenditure is quite generous against a background of falling population.
    Mr. Eggar: Will my hon. and learned Friend undertake to study carefully the North-East Thames region proposals, which specifically favour inner London at the expense of outer London health authorities?
    Mr. Clarke: The problem faced by the region is that population has grown fastest in the suburban areas, where growth in services has been slower, while there has been over-provision of acute beds in inner London. The authority may have eased the flow of resources to follow patients and population to the suburbs. It is, nevertheless, steadily redirecting resources while at the same time trying to develop priority services for the elderly, the mentally ill and the mentally handicapped throughout the region.

  PRIME MINISTER

    Engagements
    Mr. Montgomeryasked the Prime Minister if she will list her official engagements for 15 March.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Montgomery: Has my right hon. Friend noted the recent demands of the so-called alliance for the complete abolition of the national insurance surcharge? Does she not think that these demands come strangely from the SDP—most of whose members, as Labour Members, voted for the introduction of the 2 per cent. surcharge in 1976—and from the Liberals, who voted for an increase from 2 to 3½ per cent. in 1978?
    The Prime Minister: My hon. Friend should not be surprised at the inconsistencies from the party below the Gangway. May I be fair to the Liberal party—[Horn. MEMBERS: "Oh".] I shall be fair to the Liberal party, which voted against the introduction of the national insurance surcharge in 1977, promptly entered into a pact to shore
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    up the Government who had introduced the surcharge and voted for the increase of that surcharge in 1978. Its spokesman then said:
    "This is not a tax on employment, … but a tax on spending".—[Official Report, 5 July 1978; Vol. 953, c. 502.]
    He lost his seat at the next general election.
    Mr. Roy Jenkins: Can the Prime Minister say whether it is now deliberate Government policy to announce the main lines of the Budget in advance to the Sunday newspapers or whether Cabinet secrecy has just become unprecedently lax?
    The Prime Minister: Perhaps the right hon. Gentleman has not appreciated that we have, by request, introduced an autumn statement with details of the options. Anyone who studied it clearly and seriously could come up with all sorts of things that may or may riot be true.
    Mr. Ancram: Will my right hon. Friend confirm today that she will yet again be demonstrating her interest in, and concern for, Scotland by attending the Conservative party Scottish conference in May, in sharp contrast to the disdainful absence of the Leader of the Opposition from the Labour party Scottish conference this weekend?
    The Prime Minister: Yes. I assure my hon. Friend that I shall, of course, be attending the conference at Perth in May. I look forward to it.
    Mr. James Hamiltonasked the Prime Minister whether she will list her official engagements for Tuesday 15 March.
    The Prime Minister: I refer the hon. Gentleman lo the reply that I gave some moments ago.
    Mr. Hamilton: Will the right hon. Lady say once and for all whether it is her intention to make Scotland an industrial wasteland? Is she aware that a further 721 redundancies have been announced at the British Steel works in Lanarkshire? For a change, will she tell Mr. MacGregor to forget about Ravenscraig, which is doing well, and to concentrate investment on putting a Concast plan in the Clydesdale works to ensure that the works will continue to be viable and competitive?
    The Prime Minister: I believe that the hon. Gentleman is referring to redundancies announced yesterday, to which
    I understand reference was made in the House yesterday. The redundancies announced are a direct result of the end of the boom in the United States oil exploration industry. BSC's decision means that the numbers now will be back to where they were at pre-boom levels just before 1981. [Interruption]These were peak boom levels for the tubes division. The Government have not received any proposals on Ravenscraig from the British Steel Corporation. I understand that a great attempt is being made to secure extra orders for Ravenscraig. That is, of course, what keeps a factory going—not speeches or requests to keep it open.
    Mr. Best: Does my right hon. Friend agree that a military solution can never provide a firm and final formula for peace, and that, in the absence of reciprocal measures, one-sided disarmament is just as much a military solution as one-sided aggression?
    The Prime Minister: One-sided disarmament is dangerous for the future of democracy, freedom and

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    justice, which we are determined to protect and defend. I agree with my hon. Friend that we must keep defence forces that are strong enough to deter, if we are to keep the peace.
    Mr. James Lamondasked the Prime Minister if she will list her official engagements for Tuesday 15 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Lamond: Did the right hon. Lady hear her economic mentor, Professor Milton Friedman, the other night, when he said that wage increases were not a factor in inflation? If she agrees with that, why will she not stop attacking every reasonable wage claim that is made by workers in this country? Why has she cut the miserably small award made by the wages council to the shopworkers?
    The Prime Minister: Because wage increases are a factor in unemployment. The higher the wage increases, the fewer the jobs. We have learnt that lesson time and again.
    Mr. Temple-Morrisasked the Prime Minister if she will list her official engagements for Tuesday 15 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Temple-Morris: Has my right hon. Friend had time to study the index of industrial production figures out today, which show that manufacturing production is 2·5 per cent. up in January, as against December? Is that not another sign, which should be welcomed by both sides of the House, that the policies of Her Majesty's Government are succeeding?
    The Prime Minister: Yes, I saw the figures that came out earlier today. They are indeed welcome figures, although they are for only one month. They tune in with a number of hopeful figures that are coming from the United States, where, like here, there is an increase in manufacturing production, good news in the car industry, good news in the construction industry, good news on inflation, good news on lower interest rates, and good news on retail sales. That is a very good background to the statement that we shall receive later today.
    Mr. Foot: Has the right hon. Lady had a chance also to consider the latest crime figures that have been published? Does she see any connection between the record crime figures and the record unemployment figures that have been achieved by her Government?
    The Prime Minister: The crime figures are disturbing, and the situation would probably be even more difficult if this Government had not put extra resources into providing extra police and equipment. In answer to what the right hon. Gentleman says about a link with unemployment, I understand that there is research that does not link crime statistics with unemployment. If the right hon. Gentleman studies the increases in figures over the years he will find that the year-on-year increases in statistics of recorded offences went up by about 10 per cent. in 1974, when unemployment was only just over 500,000, about the same amount in 1977, and the same amount this year. That does not seem to show a link wih unemployment.
    Mr. Foot: What has become of the promises that the right hon. Lady made about law and order and how she would deal with rising crime? Will she at least give an undertaking, particularly in the light of the statement by Lord Salmon about the infringements of liberty that are involved in the Police and Criminal Evidence Bill, that she will now take urgent steps to withdraw the parts of the Bill that involve those infringements?
    The Prime Minister: I have read those comments, but the provisions of the Police and Criminal Evidence Bill are based on the recommendations of the Royal Commission on criminal procedure. The Bill does not give the police carte blanche to search for and seize confidential information from innocent citizens. Indeed, it rules out entry to homes or any premises unless a judge has reason to believe that the evidence needed would otherwise be disposed of. The consent of a judge is required.
    Mr. Foot: Does that mean that the right hon. Lady agrees with Lord Salmon's proposition that the proposals in the Bill are monstrous?
    The Prime Minister: I can hardly agree with that proposition when the Bill contains proposals that were based on the recommendations of the Royal Commission on criminal procedure.
    Mr. Hal Millerasked the Prime Minister if she will list her official engagements for Tuesday 15 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Miller: Does my right hon. Friend accept that there will be a warm welcome for the undertaking given by the Spanish Government in Brussels yesterday to introduce tariff quotas for cars as a recognition of the justice and strength of our case? Does she further accept that there is still a long way to go before parity of tariff treatment is achieved and, in particular, that discrimination still exists on a wide scale against smaller cars, which are those sent to this market and in which we are particularly interested?
    The Prime Minister: I agree with my hon. Friend that the arrangements that have been made represent a great improvement on what existed before. Obviously one cannot get everything one wishes, but it is an advance, and I hope that the car industry in this country will take advantage of it. In general, we are nearly in balance in our trade with Spain. The difference this year is slight. We exported £959 million worth of goods to Spain, and we imported £1,002 million worth of goods. So the balance is adverse only to the extent of £43 million. It is good news for the west midlands that we have substantially increased the export of components for motor vehicles to Spain over the past two years. We can do it, and I think that the new agreement is a chance to increase exports.
    Mr. Joan Evansasked the Prime Minister if she will list her official engagements for 15 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Evans: Bearing in mind that the Labour Government had to import oil at a cost of £7,000 billion to £8,000 billion each year, and that this Government have had the benefit from North Sea oil of about £40,000 billion, what is the Prime Minister's attitude to the new

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    OPEC arrangement of confining production and limiting the price? Did she accept the OPEC decision, or does she believe in Milton Friedman's market forces?
    The Prime Minister: Of course, OPEC is hardly a market force, as the hon. Gentleman knows. I think we would take the view that is taken by most countries that, in general, the fall in the price of oil that has occurred will benefit the world economy, but that too sharp a fall would be damaging, because of the uncertainty that it would cause. I think that that would be the view taken generally. We are not members of OPEC, and sooner or later we have to follow the market price, as it emerges.
    Mr. Wigley: Has the right hon. Lady had time to study the employment policies of Norway, where it was announced on 22 February that because unemployment there had reached the unacceptable level of 4 per cent. it was introducing a crash programme of jobs in local government and doubling apprenticeships? When can we look forward to reaching 4 per cent?
    The Prime Minister: The special employment measures here, all told, from September this year—in fact, during this year—will be of the order of £2 billion a year, of which half goes to special training measures. Unemployment in other European countries is similar to
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    ours, especially taking into account the fact that some of them sent their guest workers home and that a number of them also have permanent conscription.
    Mr Chapmanasked the Prime Minister if she will list her official engagements for Tuesday 15 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Chapman: On the question of law and order, so properly raised by the Leader of the Opposition, does my right hon. Friend accept that many Londoners are grateful that there are 4,000 more Metropolitan policemen on the beat in parts of the metropolis? Does she further accept that there is increasing concern that so many thousands of hours are wasted by those policemen in having to control political demonstrations? Will she ask her right hon. Friend the Home Secretary to look into that aspect?
    The Prime Minister: I am sure that we are all grateful to my right hon. Friend the Home Secretary for increasing the number of policemen in the Metropolitan police force to undertake various forms of policing. There are more policemen on the beat and there is much closer contact with the community. I agree that if the police have to devote their time to too many demonstrations, especially at the weekends, they cannot fight crime in the areas from which they come. That can create difficulties, particularly in some of the London constituencies.

Budget Statement
3.30 pm
Mr. David Ennals: On a point of order, Mr. Speaker. I gave you notice this morning that I wished to raise a point of order on the extensive leaks of this afternoon's Budget statement, about which—
Mr. Speaker: Order. Perhaps I may save the right hon. Gentleman's time. No one can tell yet whether there has been a leak—at least, I cannot tell. It is not a matter for me whether, as we shall discover as time advances, there has been a leak.
Mr. Ennals: Further to that point of order, Mr. Speaker. One well-known journalist, on the front page of The Standard today, said:
"At Westminster, MPs were speculating whether Sir Geoffrey could have many surprises left with the Treasury already leaking the general shape of the tax package."
I submit—[Interruption.]
Mr. Speaker: Order. The House must be patient for a moment so that we can discover whether there is a point of order on which I can rule.
Mr. Ennals: I submit, Mr. Speaker, that when we have heard the Chancellor of the Exchequer's speech we shall know whether the extensive leaks of the past three days were true. The example that I have in mind is the suggested increase from £25,000 to £35,000 in the amount of mortgage eligible for tax relief.
Mr. Speaker: Order. That is not a point of order with which I can deal.
Mr. Ennals rose—
Mr. Speaker: Order. The House should now be allowed to continue.

Broadcasting of Parliament (Annual Review)
3.32 pm
Dr. Edmund Marshall: I beg to move,
That leave be given to bring in a Bill to provide for the annual review of arrangements for the broadcasting of parliamentary proceedings.
When the present arrangements for sound broadcasting of the House were agreed in 1976 they had my support. While I could see difficulties arising from those arrangements, I believed that such difficulties should be put to the test of experience. If they proved to be real, we could apply our mind to them.
One potential difficulty that gave concern to many hon. Members centred on the question of editorial control of parliamentary broadcasting and whether the tapes of our proceedings would be subject to excessive cutting with extracts interspersed with the chatty comments of the radio reporters. The anxiety was that parliamentary broadcasting would be used by broadcasters for their own ends and that the House would lose control of the way in which its proceedings were being presented at large.
It seems to me that that anxiety has been justified by the changes that were brought about last autumn in the format of "Yesterday in Parliament" on BBC radio each morning. The old format was factual and objective, giving the listener a clear impression of what had happened in
Parliament on the previous day, showing that our prime function is not to entertain but to deliberate on the serious issues in the life of the nation. But the new format of "Yesterday in Parliament" is deliberately angled to be entertaining, with a jazzing-up of the presentation by a lively commentary.
The reason given by the BBC for the change is simply that people switched off when the old style of programme came on. It is wrong that the broadcasting of our proceedings should be determined by the size of the audience. Parliament must not become the pawn of the audience researchers and ratings. Therefore, the House should remind the broadcasters that the ultimate control of the broadcasting of our proceedings is in our hands, not theirs.
To support that basic principle, I quote from page 79 of "Erskine May":
"no doubt can exist that if either House desire to withhold their proceedings from the public, it is within the strictest limits of their jurisdiction to do so, and to punish any violation of their orders".
Although I do not wish to withhold our proceedings from the public, broadcasters need to be reminded of the correct position as it is described in "Erskine May".
My Bill provides for the introduction of formal machinery for a definite annual review of parliamentary broadcasting. A report would come to the House each year on whether any changes in the arrangements are desirable. That would help to keep the broadcasters on their toes and reassert the sovereignty of the House in all matters relating to its proceedings.
Question put and agreed to.
Bill ordered to be brought in by Dr. Edmund Marshall, Mr. Jack Dormand, Mr. A. J. Beith, Mr. Stephen Hastings, Mr. James Molyneaux, Mr. Tim Rathbone, Mr. Norman St. John-Stevas and Mr. Phillip Whitehead.

Broadcasting of Parliament (Annual Review)
  BROADCASTING OF PARLIAMENT (ANNUAL REVIEW)
  Dr. Edmund Marshall accordingly presented a Bill to provide for the annual review of arrangements for the broadcasting of parliamentary proceedings: And the same was read the First time; and ordered to be read a Second time upon Friday 15 April and to be printed. [Bill 100.]
WAYS AND MEANS

  Budget Statement
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them that, at the end of the Chancellor's speech, as in past years, copies of the Budget resolutions will not be handed around in the Chamber but will be available to hon. Members in the Vote Office.
  3.38 pm

  INTRODUCTION
  The Chancellor of the Exchequer (Sir Geoffrey Howe): The longest Budget speech that I have been able to trace was given by Mr. Gladstone on 18 April 1953—[Interruption.]
  Mr. Deputy Speaker: Order. Perhaps the Chancellor would like to start again.
  Sir Geoffrey Howe: I am content, Mr. Deputy Speaker, to recognise that, although Liberals have long lives, they do not live that long. The date to which I refer, of course, was 1853. The speech lasted for about 4¾ hours. The then Leader of the Opposition said of the speech:
  …it was so extensive that it is impossible, without consideration, to weigh its disadvantages and advantages".
  That could have its merits in certain circumstances. But I can assure the House that I shall not try to rival Mr. Gladstone. Instead, I shall try to follow Disraeli, who delivered a Budget speech in 1867 lasting only 45 minutes. I am afraid that I cannot quite match that; but at least this will be one of the shortest—perhaps the shortest—of my Budget speeches, or at any rate the shortest so far. And that will not be its only attractive feature.
  I begin, as last year, by making it clear that I shall today be proposing further significant cuts in the taxes paid both by businesses and by individuals. These proposals will be consistent with our medium-term strategy for effective control of the money supply, for lower public borrowing, and for further progress on inflation.
  The requirement we saw, and the country accepted, in 1979, was for resolve, for purpose and for continuity. My proposals in this Budget are rooted in that same resolve, and will maintain that purpose, and that continuity. They are designed to further the living standards and employment opportunities of all our people and to sustain and advance the recovery for which we have laid the foundations.

  WORLD ECONOMY
  In 1979 it was clear that the long-term decline of Britain's relative position in the world economy called for a fresh start, for a radical new beginning. And it soon became apparent, as the effects of the second oil price shock hit home, that that fresh start would have to be made in an international setting that was increasingly difficult.
  Last year world output and trade were lower than generally expected. In the major industrial economies output fell; and more than 30 million of their people were unemployed.
  Developing countries have faced similar difficulties. Weak markets for their products, high oil import costs and

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  high interest rates have led to a sharp rise in their short-term debt. They have had to cut their imports; and that has added to the fall in world trade.
  It is worth recalling that in 1979–80 the world price of oil rose by about 2½ times, and that it was this sharp rise, coming in the aftermath of the 1973 surge, that triggered off the deepest economic recession the world has experienced since the war.
  Now, however, there are signs that the worst of the problems of the world economy are beginning to abate.
  Oil prices have now weakened. For the world as a whole this means lower inflation, and hence an encouragement to increased activity.
  More important still, there are clear signs that the world is breaking the inflationary habits of the 1970s. In many countries the rate of increase in prices has fallen more steeply than expected.
  At the same time, interest rates have declined substantially almost everywhere, including, of course, here. In the United States, though real interest rates remain high, three-month rates have almost halved from last summer's peaks.
  Looking ahead, 1983 should see recovery in the major economies gathering pace as the year goes on. This should be accompanied by a recovery of world trade.
  Even so, we cannot expect a year of trouble-free progress. Transition from a period of high inflation is bound to be uncomfortable, internationally as well as nationally. The process of adjustment by major debtor countries has to be encouraged, and world recovery nurtured and sustained.
  There is a major task here for the international financial institutions, which deserve—indeed require—our full support. The need is not for blue-prints for new institutions but for increased commitment—political and financial—to the existing ones. That is why, as chairman of the Interim Committee of the International Monetary Fund, I worked this winter for an early increase in the resources available to the fund for lending to countries in difficulty, and why I pressed for a major increase. The decisions reached in the Interim Committee in February require ratification by national Parliaments, including this House. But their effect should be substantially to increase the usable resources at the fund's disposal—and I hope that the House will share my view that this is a wholly welcome development.
  The agenda for international discussion remains a full one. Differences in performance by individual industrial countries remain wide and create tensions which are reflected in the foreign exchange markets. The threat of protectionism, which in the, long run benefits nobody, continues to grow. The efforts of the United States Administration to cut back their daunting structural deficit are crucial to the prospects for interest rates and future inflation, and hence recovery prospects, for us all.
  It is sometimes suggested that countries which have made most progress against inflation should speed the recovery process by a resort to reflation. But nothing could be more dangerous for recovery.
  Lower inflation and lower interest rates are themselves the right foundations for economic recovery, a recovery which can be sustained. The days when Governments by spending more could guarantee to boost activity are far
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  behind us—as the right hon. Member for Cardiff, South-East (Mr. Callaghan) pointed out almost seven years ago. But lower interest rates, and lower inflation, reduce costs and provide the opportunity for greater real growth of activity.
  The prospect now is for just such a recovery. It will be gradual, but it should be steady, provided anti-inflationary gains are not thrown away; and the international consensus is that they must not be thrown away.
  This is the heart of the strategy agreed at last year's Versailles summit and recently reaffirmed by the Interim Committee. Carrying it through will need persistence and political will, but it is backed by a broad measure of international commitment, on which we hope to build in the series of international meetings leading up to the Williamsburg summit.

  THE DOMESTIC ECONOMY
  At home as abroad, the need is for steadiness and resolve.
  Government spending is being restrained. The public sector deficit, as a percentage of our domestic product, is now one of the smallest in the industrialised world. Monetary growth is towards the middle of the eight to 12 per cent. target range; and inflation, at 5 per cent., is lower than at any time since 1970.
  Last year saw a surplus on our balance of payments current account of some £4 billion. In 1983, too, we now expect a significant surplus. Total official external debt now stands at around $12 billion compared with $22 billion when we took office. This overseas debt burden is now smaller in relation to our trade than at any time since the second world war.
  In our own economy domestic demand has been growing—at almost 3 per cent. a year in real terms—since the spring of 1981. This is a stronger growth of demand than in most other industrial countries. Indeed, in the industrial world as a whole demand has tended to fall. With this weakness in overseas demand and a rise in our imports, total output in this country increased last year by only 0·5 per cent. This year we expect domestic demand to grow by over 3 per cent. and output to rise by some 2 per cent. This is likely to be in line with, or a little faster than, the projected growth in world output.
  In the last quarter of 1982, output in the construction industry was 6 per cent. higher than a year before. In the three months to January housing starts were more than 13 per cent. up on the previous quarter. And for manufacturing industry too the prospects look better. After a slight fall last year, the current evidence suggests a rise in 1983. Figures published today show a 2½ per cent. rise in manufacturing production in January, which follows a 1 per cent. rise in December. All these are clear indicators of recovery, and should be welcomed in all parts of this House.

  UNEMPLOYMENT
  Unemployment, however, remains intractably high, even although it has been rising more slowly than in 1980 or 1981. In many countries it has recently been rising faster than here. Over the past year, for example, it went up by 1ֵ6 percentage points in the United States, by 2ֵ3 percentage points in Germany, and by nearly 4 percentage points in the Netherlands, as against only 1ֵ4 percentage points here.
  Because unemployment throughout the Western world is likely to remain high for some time, we have established a wide range of programmes, designed to help particularly those without jobs who are bearing the sharpest pains of the long recession. These special employment and training measures will next year bring direct help to almost 750,000 people. We now propose to extend this help in four further ways.
  First, some 90,000 men between the ages of 60 and 65 now have to register at an unemployment benefit office if they wish to secure contribution credits to protect their pension rights when they reach 65. From April, they will no longer have to do this. Even if those concerned subsequently take up part-time or low-paid work on earnings which fall below the lower earnings limit for contributions, their pension entitlement will be fully safeguarded.
  Second, there are some 42,000 men over 60 who are registered as unemployed and on supplementary benefit but who have to wait a year, or until they reach 65, before they qualify for the higher long-term rate of benefit. From 1 June they will qualify for the higher rate as soon as they come on to supplementary benefit. For this purpose they will in effect be treated as if they had already reached retirement age.
  Third, the job release scheme. As the House knows, this scheme allows men over 62 and women over 59 who so choose to retire early, and so to make room for employing someone else who wants a job. I can now announce a new scheme for part-time job release. It will apply to the same categories of older people who are willing to give up at least half their standard working week, so that someone else who is without a job can be taken on for the remaining half. The allowances will be paid at half the full-time rate. The scheme will take effect from 1 October and should provide part-time job opportunities for up to 40,000 more people who are at present unemployed.
  Fourth, enterprise allowances. These encourage unemployed people to set up in business by paying £40 a week for their first year to offset their loss of unemployment benefit. Pilot schemes were set up in five local areas in early 1982. The response has been very encouraging and there is already evidence that many of the 2,000 or so new businesses created under the scheme are generating extra jobs. I can now announce that from 1 August to the end of March 1984 enterprise allowances will be available throughout the country, within an overall cash limit of £25 million in 1983–84. Individual allowances will run on for a full year, so that the scheme will cost a further £29 million in the next financial year. The net public expenditure cost is about two thirds of this gross cost. It should help some 25,000 unemployed peole to set up in business. We shall be monitoring the scheme closely, and I hope it will show a continuing benefit to those concerned and to the whole economy.
  The gross cost of these four measures is estimated at £55 million in 1983–84 and £55 million in 1984–85. In 1983–84 we shall be spending over £2 billion in all on the full rang of special employment and training measures.
  There is one other matter which has, I know, been a cause of concern to hon. Members on both sides of the House. As the House will recall, the November 1980 uprating of unemployment benefit was abated by 5 per cent. We said then that we would review the position once the benefit was brought into tax. That happened in. July last year. As my right hon. Friend the Secretary of State for Social Services said when the House last considered the issue, the Government accepted in principle the case for restoration of the abatement. It is right now to redeem that pledge. In the uprating that takes place in November this year, the abatement of unemployment benefit will be restored in full.

  INFLATION
  But it is not enough simply to mitigate the effects of the unemployment. It is our purpose as well to secure a sustainable growth in job opportunities. So we must look for a larger share of rising demand to be translated into British output and British jobs.
  Progress on inflation is crucial to the prospects of higher output and lower unemployment. High inflation destroys savings, impairs efficiency and undermines stability. So lower inflation is good in itself. But it also underpins a return to lasting growth and to new jobs.
  Lower inflation will lead to higher real demand and output, provided we hold to the medium-term financial strategy. Lower inflation helps consumer spending, as savers no longer have to put aside so much simply to maintain the real value of their capital.
  Lower inflation encourages higher spending by companies, both on stocks and on investment. For lower inflation contributes to lower interest rates, so improving cash flow; and lower inflation helps keep down other costs. This is one reason why industrial profitability, though still by historic standards very low, has begun to recover. This too should encourage new investment and the creation of new jobs.
  Lower inflation and interest rates also ease the burden of mortgage interest, helping house buyers and in turn house building.
  With lower inflation the cash programmes of the public sector go further: they buy more goods and services.
  Lower inflation will provide the stability and confidence needed for further progress in securing the improvement in Britain's economic performance needed to reverse the long years of relative decline.
  Finally, of course, inflation has long been the enemy of good sense in pay bargaining, and so too the enemy of jobs. The understanding that Government will riot finance higher inflation has done much—though still not enought—to bring common sense back into wage bargaining. The way in which excessive pay increases destroy jobs is now much more widely understood.
  More moderate pay settlements combined with improved productivity are two of the reasons why last year, in a shrinking world market, British manufacturers succeeded in enlarging their market share. Still lower pay settlements and still higher productivity remain vital to our competitive position. Provided they come through, British

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  business is now better placed than for many years to make inroads into markets at home and overseas—and provided we go on achieving success against inflation.
  Inflation was on a rising trend when we came to office. It peaked at some 22 per cent. in 1980. The reduction since then has been dramatic, with retail price inflation now down to 5 per cent. The benefits of this transformation are felt throughout the country—it results from the firmness and consistency of the policies we have pursued in the pasts four years.
  We shall not change course. Downward pressure on inflation will be maintained. With the lower exchange rate some check in our progress now is unavoidable. In the fourth quarter of this year inflation in retail prices may for a time be running at about 6 per cent., a little above what it is now, but still substantially below its level of a year ago. And it seems likely that the rate of increase of the GDP deflator—which is a measure of prices across the whole economy—will continue to fall, from 7 per cent. in 1982–83 to 5½ per cent. next year.
  The trend of rising inflation that appeared irresistible has been decisively broken. We are now certain to be the first Government for a quarter of a century to achieve a lower average level of inflation than did their predecessor. In the next Parliament it will be our purpose to do even better.
  One weapon we shall certainly continue to use is effective monetary policy. That nonetary policy has a key part to play in the fight against inflation is recognised by the markets and by Governments abroad. However much they nay deny it now, it was, of course, a pillar of the last Government's counter-inflation policy—and rightly so.
  In judging manetary conditions we look at the measures of money supply and at other financial indicators such as the exchange rate, real interest rates, and of course at progress in reducing inflation itself. The Red Book includes a full discussion of these matters. Until now, Chancellors have published their thoughts rather like Chairman Mao, in a little Red Book. This year, however, the book is larger and very much easier reading. There are no more pages and much more information at almost the same price. I shall only tru to summarise it at this stage.
  Since the last Budget, financial conditions have developed much as I foreshadowed. In the year to February, the growth of all three target aggregates was within the target range of 8 to 12 per cent. Other financial indicators also pointed to moderately restrictive monetary conditions.
  But with the satisfactory development of financial conditions and rapid progress in reducing inflation a significant fall in interest rates was possible. By mid-November, short-term rates had fallen to 9 per cent. They subsequently moved up to around 11 per cent., but they are still very substantially below the 16 per cent. of November 1981. The House will have seen that, following the recent easing in market rates, there has this morning been a further cut in bank base rates.
  For most of the year the exchange rate was strong. The weakening in November and December seemed mainly to reflect external factors such as concern about oil prices and sharp movements in the world's other major currencies. Opposition statements and election uncertanties, here and abroad, may also have played a part in currency movements.
  But this winter's movements in sterling rates were certainly not due to any laxity in the Government's financial policy. On the contrary, our monetary and fiscal objectives were achieved. Provided we continue to meet them—and we are determined to do so—our policies give no reason to expect anything more than a temporary rise in inflation from the fall in the exchange rate that has taken place.
  The lower exchange rate gives industry an opportunity to improve its competitiveness, but only if other costs are tightly restrained. I make no apology for repeating that this requires still greater moderation in pay bargaining. Without that there would be only a temporary improvement in our competitive position and no long-term help in providing a sustainable basis for the improvement in output and employment that is now within our grasp.
  That is why I cannot emphasise too strongly our view that devaluation brought about by monetary and fiscal laxity would be damaging and that to seek it as a deliberate act of policy would be a grave mistake. It would be a signal to the world of a willingness to accommodate rising inflation—inflation that would undoubtedly be fuelled by demands for higher wages to offset its effects. Confidence would collapse and jobs would be destroyed.
  That is not the way we intend to go. That is why, by contrast, last year's medium-term financial strategy again set out a declining path for monetary growth in future years. After growth of 8 per cent. to 12 per cent. in 1982–83, a target of 7 per cent. to 11 per cent. was suggested for 1983–84. I confirm now that the 1983–84 target will indeed be 7 per cent. to 11 per cent. Once again it will apply to both broad and narrow measures of money, though, as I said last year, M1 may for a time grow rather faster than indicated by the range. Given the prospect for inflation, this range gives scope for a healthy rise in output.
  The establishment of the medium-term financial strategy has been more than justified by its value as a framework of fiscal and monetary discipline. Another innovation has similarly proved its worth, namely, our decision to diversify our funding policy.
  We have made available indexed as well as conventional assets; and we have secured a larger contribution from the personal sector in the form of national savings. I intend to continue this policy.
  The Department for National Savings is close to achieving this year's target of £3 billion. For the coming year I am again setting a target of £3 billion. Nearly £2 billion worth of indexed gilts have been issued over the past year and it has been possible to dispense almost completely with long-term fixed interest stocks, which has helped to bring long rates down very nearly as much as short rates.

  PUBLIC SECTOR BORROWING
  Control of money needs to be supported by firm control of public sector borrowing, otherwise the result is to push up interest rates and create strains that sooner or later prove intolerable. Other countries understand this. All too many have had to learn the hard way.
  A substantial reduction in the trend of public sector borrowing over the medium term is a necessary part of the process of reducing inflation. We have made good progress. During the latter half of the 1970s public borrowing represented on average about 6 per cent. of

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  gross domestic product. In 1975–76 the figure was nearly 10 per cent. By 1981–82 it had fallen to 3½ per cent. of GDP.
  For the year now ending I budgeted for a public sector borrowing requirement of £9½ billion. The outturn is likely to be substantially lower, principally because oil revenues during the current year have been very much larger than could have been expected. The latest estimate of the outturn for this year's borrowing requirement is about £7½ billion—or 2¾ per cent. of GDP. However, the year is not yet over and there are large sums on the expenditure side yet to be brought to account and on the revenue side to be collected. So this year's outturn figure is still subject to a considerable margin of error.
  For 1983–84 last year's Budget Statement suggested a PSBR of 2¾ per cent. of GDP as consistent with the desired trend to lower borrowing. That is equivalent to about £8 billion at the level of money GDP now forecast. In judging whether that figure is still appropriate I have taken account of developments over the past year and of the main uncertainties which now confront us. On interest rate grounds, there is a clear case for continued fiscal restraint. Interest rates, though lower than they were, are still undesirably high both in nominal and in real terms. The fact that the exchange rate has now moved to a lower level eases the financial pressures on companies, but we need to remember that holding to the medium term financial strategy as inflation falls is the best way of helping the recovery of output.
  I have also had to consider the implications of the recent fall in North sea and other oil prices. Of course, lower oil prices reduce the value of our own oil production. But North sea oil accounts for only 5 per cent. of our national income and tax on it for only some 6 per cent. of Government revenues. Moreover, the health of a much larger part of our national economy depends on the state of the world economy. Though sharp swings in the oil price are in no one's interest, moderate reductions mean lower inflation abroad and lower prices here. The fall in the general level of world oil prices is therefore to be welcomed. A more prosperous world will in time mean more output and jobs in Britain.
  It follows from this that it would be unnecessary, as well as impractical, to react to every deviation in the oil market by changing the general level of taxes. The forecast published in the Red Book reflects the prices currently offered by BNOC to North sea producers. Clearly there could be a change in oil prices sufficient to affect the balance of revenue and expenditure in the Budget, though not all the effects would be one way. There is no simple arithmetical guide for dealing with this, let alone allowing for it in advance. Much would depend on the extent of the change and the attendant circumstances. If any further reduction in oil prices seemed likely to compromise the success of our economic strategy, I would be ready to take appropriate corrective action; but the lesson for today is that it is prudent to keep planned borrowing down.
  Taking these factors into account, I have decided to hold to the previous plan and provide for a PSBR in 1983–84 of 2¾ per cent. of GDP—that is, some £8 billion. Last autumn I announced measures with a revenue cost of some £1 billion in 1983–84. Most of this was directed to reducing the burden on private industry and commerce. It included a cut in the national insurance surcharge.
  After allowing for that and for the other changes announced in November, the latest forecasts suggest that
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  a borrowing requirement of £8 billion in 1983–84 permits further real tax cuts with a net cost to the PSBR of some £1· billion. The full year revenue costs of my proposals will be rather larger than that.
  The Red Book gives revenue and expenditure projections for the period up to 1985–86. These allow for a further reduction in public sector borrowing as a percentage of GDP over the medium term. There is of course no certainty about the precise figures, but they show how lower borrowing can be combined with lower taxes within the framework of policies designed to reduce both inflation and interest rates. This was indeed illustrated by my last Budget.

  PUBLIC EXPENDITURE
  Central to the restraint of borrowing is the restraint of public expenditure, and the key to effective control of public expenditure is that finance must determine expenditure, not expenditure finance.
  The House debated last week the public expenditure White Paper which set out our plans for the years to 1985–86. Public expenditure is being held within the levels set in earlier plans. The ratio of public expenditure to GDP, which is the measure of the burden which public expenditure places on the rest of the economy, has been reduced from 44½ per cent. in 1981–82 to a planned 43½per cent. in 1983–84.
  In working to get and keep public spending down we have been helped by an important institutional innovation which we have introduced—cash planning. Improved control of expenditure has been an essential factor in making possible the tax reductions I am announcing today.
  The additions to certain public spending programmes which I am announcing today will all be met from the contingency reserve and so will not add to the planned total of expenditure.
  We have also maintained a strict control over the running costs of Government, in particular manpower. By the end of this month we shall have reduced the numbers of the Civil Service to 651,000—a fall of 80,000 since 1979. The target of 630,000 by April 1984 which we set ourselves on taking office and which some thought unattainable is thus now within reach. Civil Service numbers will by next year be lower than at any time since the war.

  SOCIAL SECURITY AND CHARITIES
  I now turn to social security. This is much the biggest single element in public expenditure—more than one-quarter of the total.
  About half of social security expenditure is on benefits for pensioners. The costs are borne mainly by contributors and we had in November to announce further increases in national insurance contribution payments, which take effect from next month.
  The House will remember that, because prices have been falling faster than expected, the provision in last November's uprating for the rise in prices in fact exceeded it by 2ֵ7 per cent.
  The forecast method of uprating, which gave rise to this situation, has never worked well, for a forecast made at Budget time of what the rate of inflation will be at the time the uprating takes place in the following November is necessarily uncertain. Increases can therefore be larger or smaller than intended. There have been years when prices

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  have been under-estimated, as in 1981, when there was a 2 per cent. underprovision, which we made good in the following year, and other years such as 1980 and 1982, when the error has gone the other way. In each case there has necessarily been a year's delay before the error of the previous year could be corrected.
  The system of trying to forecast inflation, introduced in 1976, is a fragile basis for calculations of such importance to millions of our fellow citizens. Given the experience of the past seven years, the Government believe that it would now be right to restore the more certain system that prevailed before 1976. This is the system by which benefit upratings are calculated on what has actually happened to prices, rather than on what might happen in future—if the forecast proves right.
  From this November, therefore, we shall return to the historic, or actual, method. The necessary legislation will be introduced immediately.
  The uprating this November will be based on the rise in prices in the 12 months to May of this year. That figure will be announced by the Department of Employment in the usual way, and will be the basis for the uprating statement as soon as possible after that. We have chosen the May figure because it is the latest month we can use as the basis of the calculation and still make sure that all recipients get their increase in November.
  The uprating will be based on whatever the May figure turns out to be. At this stage, of course, it is impossible to say exactly what it will be.
  It seems likely, however, to be in the region of 4 per cent. Of course, in November, as I have already told the House, the annual rate of inflation may for a time be running at about 6 per cent., but if we had retained the old system, and taken full account of last year's 2ֵ7 per cent. overpayment, the increase in benefits would have been significantly smaller than is now proposed.
  There will be no question of asking pensioners to return any of the pension money they have already received, no question of any so-called clawback. Beneficiaries will retain the full benefit of the extra payment they are now receiving; and part of it is likely to continue into 1984.
  Linked public service pensions will be raised in November by the same percentage as benefits. For unemployment benefit, the increase will be in addition to the restoration of the 5 per cent. abatement which I have already mentioned.
  On the basis I have described, the position for pensioners over the lifetime of this Government is this. Between the November upratings of 1978 and 1983 prices are likely to have risen by some 70 per cent. and pensions by some 75 per cent. Our pledge to maintain the value of the pension over the lifetime of this Parliament will thus have been more than fulfilled.
  There is one other social security benefit to which we attach no less significance. It plays a major part in easing the unemployment trap, and so in our strategy of improving incentives for everyone. It is important for families, and particularly for the low paid. Indeed, it is the benefit which provides the greatest help to many of the poorest families in the country. I refer, of course, to child benefit.
  I am glad to be able to tell the House that from November 1983 the rate of child benefit will be increased from £5.85 to £6–50. One-parent benefit will be
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  correspondingly increased to £4.05. On the basis of our inflation forecast, both benefits will then be worth more than ever before. I know that the House, and the country, will welcome this news very warmly.
  The Government also give special priority to help for the sick and disabled, and for widows, and I am proposing further measures to increase that help.
  In my first Budget I exempted from tax war widows' pensions and widows' child dependency allowances. In 1980 I introduced a bereavement allowance to benefit widows in the tax year of their husband's death. However, because their income in that year is already covered by other allowances, many newly widowed women receive no financial benefit from that allowance. Accordingly, it will now be extended to cover the year after the husband's death as well, at a cost of some £30 million in a full year. This means that more than twice as many widows will benefit.
  We also intend to provide significant new help for about 55,000 invalidity pensioners. Until now the so-called invalidity trap prevented them from receiving the longterm rate of supplementary benefit. I announced earlier that the unemployed over 60 will now be entitled to the long-term rate. We shall extend this concession to those over 60 who are sick and disabled, so that they, too, will qualify straight away for the long-term rate. In addition, I am glad to be able to tell the House that people under 60 who have been on incapacity benefits for a year will also qualify for the long-term rate. This will get rid of the invalidity trap—and quite right, too. There will also be an increase from £20 to £22ֵ50 in the amount which disabled and chronically sick people can earn before their benefit is reduced.
  While we need to ensure that social security benefits go to those most in need, I am concerned that we should not discourage people from saving. We shall therefore increase from £2,500 to £3,000 the limit above which savings disqualify people for supplementary benefit. There will be an additional disregard of £1,500 for the surrender value of life assurance policies. We shall also increase to £500 the corresponding limit for single payments of supplementary benefits to help with exceptional expenditure.
  We will also help over 11,000 war pensioners by replacing the existing vehicle scheme by a more flexible and equitable cash allowance, set at a rate which will preserve the war pensioners' traditional preference over civilian benefits.
  These measures, taken together with the increase in child benefit and one-parent benefit and the ending of the abatement of unemployment benefit, will cost over £140 million in 1983–84 and around £400 million in 1984–85. The increases over the existing provision in the social security programme will be charged to the contingency reserve. This is in addition to the cost of the extension of the long-term rate of supplementary benefit to the over-60s, to which I referred earlier.
  But caring means more than cash. Many of the key needs, for example, of the elderly, are met by voluntary groups and charities. If they are to do all they can, we must help the helpers.
  Once again we have been pressed to reimburse charities for VAT on their taxable purchases. But, however exhaustively and sympathetically we examine this proposal, the difficulties remain and cannot be swept aside. I have been able in previous years to extend VAT

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  reliefs for the disabled and charities serving them. But a VAT refund scheme would be expensive to operate and indiscriminate in its effects, benefiting not only those charities which do valuable work in the community but also—and sometimes disproportionately so—many other bodies with very limited or controversial aims which do not command public support. So, as before, I have been forced to conclude that we are right to channel our help in other ways.
  But I intend to give some extra help. In 1980 I introduced substantial new tax reliefs for convenanted donations to charities, by allowing relief against higher rates of income tax up to a ceiling of £3,000 a year; and last year I increased the limit on exemption from capital transfer tax for gifts made within a year of death from £200,000 to £250,000. I propose now to carry these two measures further by raising to £5,000 the ceiling on higher rate relief for gifts made by deed of covenant and by abolishing the ceiling on exemption from capital transfer tax for charitable bequests. All outright gifts and bequests to charities will now be entirely free from CTT.
  I have had representations about the position of companies which would like to second their staff, with pay, to charities. At present the employee's salary is not allowable for tax because it is not an expense incurred by the company wholly and exclusively for the purpose of its business. For normal business expenses we must continue to stick to that general principle. But I am satisfied that it is right to make an exception in this limited case. Companies which lend staff to work for charities and continue to pay their salaries will now be able to treat the cost as an allowable expense for tax purposes.

  HOME OWNERSHIP, HOUSING AND CONSTRUCTION
  I come now to housing and the construction industry. The whole House is anxious to see more activity in this sector. Within the public expenditure plans there is provision for capital expenditure on construction in 1983–84 of over £10 billion, a 10 per cent. increase on this year's expected outturn. We want this money used effectively for the purpose for which it is intended.
  One of our highest priorities has always been the extension of home ownership. This Government have done more than any other to encourage this. Since we came to office almost half a million public sector tenants have bought their homes; and the fall in mortgage rates over the past year has made it easier for first-time buyers to meet the costs of a mortgage.
  But it is now clear that the £25,000 limit on mortgage interest tax relief is beginning to hinder a growing number of families who want to buy their first home, or to move. I have therefore decided to increase the limit—this figure may reassure the right hon. Member for Norwich, North (Mr. Ennals)—to £30,000. This will cost some £50 million in 1983–84. It will help potential home owners and the construction industry alike. At the same time, I intend to remove an anomaly whereby a borrower may get tax relief in excess of the ceiling for both an ordinary mortgage and an interest-free loan from his employer.
  I also propose to extend mortgage interest relief of the kind already enjoyed by many employees, whose duties prevent them from living in their own homes, to self-employed people, like tenant farmers and tenant licensees, who have a contractual requirement to live in
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  accommodation provided for them but who are also buying their own homes. This will be accompanied by a similar extension of the capital gains tax relief applying to a private residence.
  We want to help people not only to own their own homes but also to keep them in good repair. Last year I announced a major attack on disrepair by increasing the rates of repairs grants. This has proved very successful. Expenditure in 1982–83 will be twice that in 1981–82 and a further increase is expected next year.
  We have already announced that the higher rates are to continue until the end of 1983–84; and local authorities have been told they may spend without limit on all improvement grants next year. To ensure that we get the greatest impact from this initiative, the limits on expenditure eligible for grant will be increased by 20 per cent.
  Our main aim, of course, is to help people to help themselves. But there are some areas, particularly in the inner cities, where decay in the private housing stock is so bad that concerted action is needed. We are encouraging local authorities to tackle such areas by the process known as enveloping—where the authority repairs the external fabric of whole terraces or streets of houses on behalf of the owners. This has proved a cost-effective way of improving an area, and we will be allowing local authorities to undertake additional expenditure in 1933–84 on any approved enveloping scheme.
  These two measures are likely to lead to additional expenditure of some £60 million in 1983–84. In addition, my right hon. Friend the Secretary of State for the Environment is today announcing further measures to encourage local authorities to make full use of the resources available to them for capital investment.
  Today I can announce three further steps to help the construction industry.
  First, in 1981 I introduced a scheme to defer development land tax on developments for the owners' own use. The scheme, which is due to end in April 1984, has proved valuable, and I propose to extend it to April 1986, at a cost of £4 million in a full year.
  Secondly, stock relief will from today be available for houses accepted by builders in part exchange on the sale of a new house for the personal use of an individual or his family. This will cost £5 million in a full year.
  Thirdly, I propose to increase from 10 per cent. to 25 per cent. the proportion of office space in buildings qualifying for the industrial buildings allowance—an allowance which I increased in 1981. The cost will be about £25 million in a full year.

  INDIRECT TAXES
  I come now to the indirect taxes.
  I propose no change in the present rate of value added tax.
  In successive Budgets I have sought to establish the sensible presumption that the excise duties should be adjusted broadly in line with the movement of prices from one year to the next. This is essential if we are to maintain the right balance between direct and indirect taxes.
  This year, too, I intend to follow the same approach. But our success in reducing inflation means that the increases I shall be announcing will be much smaller than in recent years. The additional revenue I shall be seeking

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  from duty changes this year is about half of the comparable figure in 1980 and 1982 and about a quarter of that in 1981.
  I start with the duties on alcoholic drinks. I propose to increase the duties from midnight tonight by amounts which represent, including VAT, about 25p on a bottle of spirits, 5p on a bottle of table wine, 7p on a bottle of sherry and 1p on the price of a typical pint of beer. On cider, which is increasingly competing with beer, I propose a similar increase of 1p a pint.
  As for tobacco, I propose to increase the duty by the equivalent, including VAT, of 3p on the price of a packet of 20 cigarettes. There will be consequential increases for cigars and hand-rolling tobacco, but no increase for pipe tobacco. That is not just in deference either to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) or to the right hon. Member for Huyton (Sir H. Wilson), but it gives me the opportunity to reassure the right hon. Member for Huyton that the pipe in his pocket has not been devalued. These changes will take effect from midnight on Thursday.
  Next,the oil duties. I am conscious of the concern felt by a number of my hon. Friends about the effects of increases in duties on petrol and derv. But at a time when world oil prices are falling it would not be right to allow the real value of the duties to be eroded significantly. I propose therefore to increase the duty on petrol by about 4p a gallon, including VAT. In the case of dery I propose an increase, including VAT, of about 3p a gallon. These changes will take effect for oil delivered from refineries and warehouses from 6 pm tonight.
  As in the last two years, I propose no change in the rate of duty on heavy fuel oil. The real burden of this duty will thus have been reduced since 1980 by some 20 per cent. This will be of considerable continuing assistance to industry, since it will help to hold down its energy costs.
  I also propose a number of changes in the rates of vehicle excise duty. For cars and light vans the duty will be increased by £5, from £80 to £85. On goods vehicles, the new duty structure introduced last year allows me to spread the burden more fairly. In order to bring the rates of duty more nearly into line with the costs the various categories of lorry impose on the road system, I propose to increase the duty on some 190,000 heavy vehicles. This means that I shall, on the same lines, be able to reduce by approximately 10 per cent. the rates of duty on some 315,000 lighter commercial vehicles. These changes will take effect from tomorrow.
  The total effect of all the changes in excise duties will be to raise additional revenue of some £600 million a year. But let me emphasise again that this implies virtually no change in the real burden of indirect taxes in 1983–84. The immediate effect will be to add about 0ֵ4 per cent. to the overall level of prices. This has been taken fully into account in the price forecasts which I have given to the House.

  OIL TAXATION
  I come now to North sea tax. The development of the North sea is a notable achievement of private enterprise and the result of a huge co-operative effort involving hundreds of companies and thousands of people. We want this to continue into the future, despite changes in oilfield economics. Tax is not the only factor in sustaining North sea potential. Steps taken by the industry to cut costs and the future level of oil prices will be at least as important. But the tax structure must adapt as well.
  I am therefore proposing a substantially more favourable regime to assist the companies as they move on to develop new fields, and, in order to help finance new activity, a package of relief on current fields. The industry will benefit from these changes by more than £800 million over the next four years, starting with £115 million in 1983–84.
  To encourage further exploration and appraisal, I propose immediate relief against petroleum revenue tax for expenditure incurred after today in searching for oil and appraising discovered reserves.
  For future fields I propose two important new incentives. First, the oil allowance, which is the quantity of oil production exempted from PRT, will be doubled for such fields. Secondly, my right hon. Friend the Secretary of State for Energy will be taking steps to abolish royalties for these fields. The changes will apply to future fields where development consent has been given on or after 1 April 1982, with the exception of the relatively more profitable southern basin and onshore fields. I am ready to discuss with the industry whether there is a need to extend these incentives to the southern basin fields. If I were to be persuaded of the need, any extension would be backdated to development consents issued after today.
  Most existing fields make good profits, but to improve current cash flow I have decided progressively to phase out advance petroleum revenue tax. As a start, the 20 per cent. rate will be reduced to 15 per cent. from 1 July, and APRT will disappear completely by the end of 1986.
  An Inland Revenue press release will give further details, and also describe other proposed changes in oil taxation. They include, following the consultative document published last May, proposals on PRT reliefs for expenditure on shared assets such as pipelines, and for charging related receipts. The proposals will give significant additional relief on expenditure and will exempt tariffs on 500,000 tonnes of oil a year from each field using a pipeline. This will encourage the shared use of these assets.
  I believe that my proposals will provide the industry with the right fiscal incentives for the further successful development of the country's North sea resources.

  NATIONAL INSURANCE SURCHARGE AND COMPANY TAXATION
  From one key industry I turn now to business and industry as a whole. Our living standards and jobs depend on our ability to sell and compete, producing the right goods and services at the right time and the right price. The main responsibility for achieving this lies with industry and commerce. But the Government can help by reducing the burdens they place on business. These can be twofold. High inflation and excessive public borrowing have in the past kept interest rates and business costs higher than they need have been. We have made progress in putting that right. But Government also impose direct burdens on business, and here too we have acted to help cut costs. I have given high priority to reducing the national insurance surcharge, the tax on jobs first introduced and then increased by our Labour predecessors.
  In last year's Budget, I cut MS from 3ֵ5 per cent. to 2ֵ5 per cent. In November I announced that, for 1983–84, the rate would be further cut to 1ֵ5 per cent. On top of this I made special arrangements to enable half of that further cut of 1 per cent. to be brought forward into 1982–83.
  I now propose that the rate be reduced from 1ֵ5 per cent. to 1 per cent. from August 1983. As before, the benefits will be confined to the private sector. This cut is worth another £215 million in 1983–84 and nearly £400 million in a full year.
  The surcharge was 3ֵ5 per cent. when this Government took office. We are now well on the way to abolishing it. the reduction from 3ֵ5 per cent. to 1 per cent. will be worth nearly £2 billion to private business in a full year.
  On corporation tax, we issued a Green Paper over a year ago. I am grateful for the many thoughtful responses, which we have examined carefully. There is one impression that stands out, and that is the overwhelming desire on the part of industry for stability in the corporation tax regime. I recognise the force in this. Change is not costless. I have therefore concluded that there should be no change in the broad structure of the present arrangements. As regards the taxation of inflationary profits, I await the outcome of the accountancy profession's further considerations.
  There are, however, some useful changes on which I can make a start today.
  At present, advance corporation tax can be carried back two years to be set against corporation tax. I propose to extend this over a period to six years. I also propose that the incidental business costs of issuing acceptance credits and of issuing certain convertible loan stocks should be allowable expenses for corporation tax purposes. There are other areas where we need to make progress, including the tax treatment of groups and capital allowances for the mineral extraction industries. I am authorising the Inland Revenue to look further at these issues, and to consult on them where necessary.
  On the taxation of international business, I have considered carefully the responses to the latest round of consultation. I have decided not to proceed this year with measures concerning company residence and upstream loans. Both need further consideration.
  On tax havens, however, I propose to move clauses which take account of the recent consultations. These will not come into effect until April 1984.
  This change should be considered alongside one other proposal that flows from the corporation tax Green Paper.
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  At present, credit for foreign tax on overseas income is only allowed against such part of a company's corporation tax liability as remains after deduction of ACT. As a result of representations received in response to the Green Paper, I propose that from April 1984 this double tax relief should be allowed against the full corporation tax liability before ACT is deducted.
  As I have said, my proposals on tax havens and on ACT and double tax relief have to be seen together Between them they will not involve any increase in the total burden of tax on international business, but they do mean a switch in the tax burden away from those who remit profits home and on to those who accumulate surplus cash balances in tax havens overseas. I am sure that the House will agree that this is right.
  To turn to a different area, I announce each year the future scale rates for measuring the benefits from company cars. Recent increases have been at a rate of 20 per cent., but the levels still fall short of any objective measure of the true benefit. This year I am proposing further increases with effect from April 1984; but they will be held to about 15 per cent. These increases will also apply from the same date to the new car fuel scales which come into operation next month.
  I have also decided to legislate to bring back into tax the benefit from scholarships provided by employers for the children of their higher paid employees. There will be a transitional exemption for awards made before today so that scholarship income in respect of an existing award will continue to be exempt until the child leaves his present school or college.
  I propose, too, to remove an anomaly by which some people have their tax bills artificially reduced because their employers do not account for PAYE at the right time and then pay over too little. I also propose with effect from April 1984 to increase substantially the tax measure of the benefit gained by an employee who occupies rent free, or at a very low rent, expensive accommodation owned by his employer.
  The House will be aware of instances of tax avoidance through the exploitation of group relief, and through the exploitation of so-called second hand bonds. I propose legislation to deal with these abuses and also to improve the arrangements for collecting DLT on disposals by nonresidents.
  Now I wish to say a word about banks. I said last year that we would be giving further thought to the problem of how best to ensure a sufficient contribution to tax revenues by the banking sector. I have examined the position with great care in the light of current circumstances, and have concluded that it would not this year be sensible to tighten the tax regime for banks.
  Finally, for the company sector, I propose some changes that are designed specifically to help small and medium-sized companies. At present the so-called small companies rate of corporation tax is 40 per cent. and applies to taxable profits up to £90,000. The 52 per cent. rate is payable at £225,000. I propose to reduce the 40 per cent. rate to 38 per cent., to raise the lower limit of £90,000 to £100,000, and to raise the upper limit from £225,000 to £500,000.
  Between these two limits profits are subject to a marginal rate which stood at just over 66 per cent. when this Government came into office. I have already reduced

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  it to 60 per cent. The changes that I am proposing today will bring it down to 55ֵ5 per cent.—only a little above the main 52 per cent. rate.
  These changes will concentrate the help that I can give on the many small and medium-sized companies with taxable profits of up to £500,000. The cost will be £40 million in 1983–84 and £70 million in a full year.

  ENTERPRISE
  Small and medium-sized enterprises are a major source of new wealth for the nation and, above all, of new jobs. I shall, therefore, propose today a further series of measures which will foster their growth, greatly extending those which I have already introduced, and whose results are already evident. I am told that Britain now offers a more attractive tax environment than Germany for venture capital and for the microelectronics revolution. That was not so five years ago.
  I now propose further action in a number of areas.
  I want more people to share in the ownership of the companies for which they work. It is both a good incentive and a good way for people to build up a capital stake. The measures so far introduced have already brought us to the position where about 250,000 employees receive shares each year.
  But I want to make these employee profit-sharing schemes more attractive and more flexible, while still open to all employees. Already companies can give tax-free shares to employees each year up to the value of £1,250. I propose to add an alternative limit of 10 per cent. of the employee's earnings, up to a maximum of £5,000. This new freedom will provide still further encouragement to management, upon whom so much depends.
  Share options for senior managers also provide an important incentive. Last year I introduced arrangements to spread the income tax burden that can arise when an option is exercised. I propose this year to increase the instalment period from three years to five years.
  Save-as-you-earn linked share option schemes already cover over 100,000 employees. The monthly limit on contributions with tax relief now stands at £50. In order to encourage further growth I propose increasing it to £75. The total cost of all these share incentive measures will be £20 million in 1983–84 and some £35 million in a full year.
  I also want to ease the path for employees of a company who seek to buy the business for which they work. The transformation that followed the employee buy-out of the National Freight Company shows how valuable this can be. In order to help those who borrowed to take part in this buy-out, and to encourage similar success, I propose that where an employee-controlled company is being set up the employees should benefit from interest relief on loans they take out to buy shares in it.
  Capital taxes can suffocate enterprise. Last year we took the major step of indexing capital gains. It is clearly appropriate to provide a period of stability to let the new structure settle in. We have already announced that administrative measures will be introduced to help large institutional investors. I now propose that, as the legislation provides, the annual exempt amounts for individuals and for trustees should be increased in line with inflation; and I propose to increase to £20,000 the limits on the relief for small part disposals of land and for residential letting.
  I propose to double the present retirement relief, raising it to £100,000. This will further encourage entrepreneurs to keep money in their business where it can work to best effect. I have received a number of representations that other features of the present relief cause difficulty, and we shall therefore be conducting further consultations later this year.
  The cost of the CGT measures I have announced will be £15 million in a full year. There will be no cost in 1983–84.
  On capital transfer tax, I propose to increase the threshold and rate bands broadly in line with indexation. As a result the threshold will rise from £55,000 to £60,000.
  I am concerned that the prospect of capital transfer tax may still discourage those who are contemplating investing capital in small businesses. It may also be one of the factors reducing the number of farms available for letting. I therefore propose to increase relief for minority shareholders in unquoted companies and for let agricultural land from 20 per cent. to 30 per cent.
  The cost of these changes in capital transfer tax will be £20 million in 1983–84 and £55 million in a full year. Other minor changes to CTT and CGT are set out in Inland Revenue press notices.
  I propose two other measures to help small firms. The VAT registration threshold will be increased with effect from midnight tonight from £17,000 to £18,000, at a cost of £5 million in a full year.
  I propose to increase from £200 to £1,000 the de minimis limit for assessment of investment income apportioned to the members of a close company.
  I come to the question of innovation and technology. I have already announced an increase in the proportion of office space in buildings qualifying for the industrial buildings allowance. This additional flexibility will be of particular value in the high technology industries, which often need relatively large amounts of space for design and computer-based activities. It will cost about £25 million in a full year. On the tax side I also propose to extend the 100 per cent. first year allowance for rented teletext receivers until May 1984, and for British films until March 1987. The full year cost of these two measures will be £10 million and £30 million respectively.
  On the public expenditure side, I propose a range of measures for the encouragement of industry and enterprise worth £185 million over the next three years.
  The west midlands has been particularly hard hit by the current recession. Small engineering firms are even more important in that region than in other parts of the economy. They need help to modernise and rebuild their strength. I propose, therefore, to make available an extra £100 million over the next three years to enable my right hon. Friend the Secretary of State for Industry to reopen the small engineering firms investment scheme.
  The scheme is already a proven success: 1,750 applications were received last year and more than 1,400 offers of assistance have been made. It is open to qualifying firms in any area, but, as one would expect, a high proportion of the first allocation went to firms in the west midlands. This new, and much larger, allocation should bring substantial further help to the region, as well as to small engineering firms generally.
  In information technology, further assistance will be available to enable firms to evaluate the benefits of computer aids for production management, and for the development of innovative software products.
  At the moment grants are available for research and development, but there is no special facility for encouraging the marketing and investment stages of the innovation process. To fill this gap a new scheme will be introduced, which will be of special value to small and medium-sized companies.
  There will also be an increase in expenditure on the Department of Industry's manufacturing and design advisory services. These provide small firms with a free introduction to private sector consultancy services, and have proved highly successful.
  My right hon. Friend the Secretary of State for Industry may have an opportunity, later in this debate, to describe these measures in more detail. Taken together with measures previously announced, they will mean that Government assistance on new technology and innovation will have doubled since this Government took office.
  Last year I extended the small workshop scheme by two years for very small industrial units. The scheme is proving very effective in promoting the provision of premises for new businesses. This year I want to encourage the conversion of more old buildings into productive workshops. I propose to allow all such units in a single converted building to qualify for 100 per cent. first year allowances if on average they meet the size requirements.
  Now I come to the important matter of finance for business, on which I have major improvements to propose.
  Companies and monetary policy alike would both benefit from a revival of the corporate bond market. Lower long-term interest rates are the key to this. But there are also a number of ways of giving companies greater flexibility in the nature and timing of the bonds they issue.
  A consultative document on deep discount stock was issued on 12 January. It set out a range of options, and I am grateful to those who responded.
  I now propose to introduce attractive tax arrangements for this stock. The borrower will get relief on an appropriate accruals basis, but the investor will pay tax only at redemption or on sale. There was considerable support for such tax treatment.
  Companies will still be able to issue conventional or indexed bonds. My proposal extends their range of options.
  I also propose certain reliefs to enable companies to issue Eurobonds in this country and to ensure that full tax relief is available for discounts paid on acceptance credits.
  We shall be issuing on 21 March a consultative document on the possibilities for the simplification of stamp duty.
  The loan guarantee scheme is another important innovation that we have introduced. My hon. Friend the Under-Secretary of State for Industry has conducted a thorough review of the scheme with the help of outside consultants. He will be making a full statement tomorrow. It is clear that the scheme has usefully encouraged lending to the small firms sector. Nearly £300 million has been lent to some 9,000 companies, about half of them new businesses. As a result, the scheme is now close to its present ceiling of £300 million. This ceiling will therefore be raised to £600 million to enable the scheme to run its full three-year course to May 1984, and we may need to seek the House's approval for an increase in the statutory limit for this purpose.
  On 3 March I informed the House about the publication of the report of the working party on free ports, under the
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  chairmanship of my hon. Friend the Economic Secretary to the Treasury. I can now tell the House that the Government accepts the report and will implement its recommendations. Legislation will therefore be introduced in the Finance Bill to enable selected free port sites to be designated.
  Free ports are a new trading concept for the United Kingdom and I regard it as essential to make a careful test of the facilities they offer. As the report recommended, the first step is to establish free ports on an experimental basis in a limited number of locations. Widespread consultation will be needed before the sites are chosen.
  Last, but far from least, the business start-up scheme. This scheme, announced in my 1981 Budget statement, offers uniquely generous tax incentives to outside investors in small companies. It is not bettered anywhere in the world. But I now intend to better it.
  When I introduced the scheme I thought it right to give priority to investment in business start-ups, where there is often the greatest difficulty in raising outside equity finance.
  I now propose a major extension of the scheme. It was due to end in April 1984. The life of the new, extended scheme will run to April 1987. From 6 April the coverage will be greatly widened to include not only new companies but qualifying established unquoted trading companies as well. I propose also to double the allowable maximum investment in any year from £20,000 to £40,000. A number of other changes will be made to improve the scheme. In particular, the 50 per cent. limit on qualifying shares will be dropped. The cost of these changes is difficult to estimate, but could be £75 million in a full year.
  Those proposals will transform the position of unquoted trading companies seeking outside equity. It is a further move towards removing the bias in the tax system against the personal shareholder, and a further measure to encourage wider share ownership. By concentrating help on those companies which do not have ready access to outside capital the scheme will assist many more small and medium companies to realise their undoubted potential for growth. The new, extended scheme will be known as the business expansion scheme.
  Our constant concern as a Government has been to improve the competitive environment for businesses and people who work in them. These proposals mark a further major step in that direction.

  FISCAL BALANCE
  In judging the right balance to strike in this Budget I have taken into account the measures I announced in the autumn which will directly reduce business costs. I have also taken account of the lower level of the exchange rate. As I said in my Budget speech two years ago, exchange rate changes alter the distribution of incomes between companies and persons. A higher exchange rate boosts personal spending power, but it squeezes the profits of companies exposed to international competition. Consequently, in my 1981 Budget, personal income tax thresholds remained unchanged in order in part to be able to offer some help to companies.
  The same considerations led me to direct over two thirds of the real tax reductions in my 1982 Budget towards business and industry in order to help cash flow and rebuild profits. In this Budget, too, the measures I have announced so far go largely in the same direction. Taken

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  together with the net effect of the changes that I announced last autumn, they will provide help for business and industry that is worth around £1¼ billion in a full year.
  And that is less than half the story. For, if revenues from taxes paid by business—apart from the North sea industries—were the same share of total taxes in 1983–84 as they were in 1978–79, then these businesses would have to pay some £3 billion more than is forecast for the coming year. But profits have fallen, and over the years I have acted deliberately to lighten that load in recognition of the case for helping business which has been strongly, and rightly, argued in debate after debate, and from all quarters of this House. I do not believe any hon. Member would suggest that business and industry should pay more tax.
  But I have had to recoup the £3 billion, alongside the need both to hold down borrowing—not least to secure lower interest rates, and hence reduce business costs—and to finance public expenditure. Although spending is now being restrained, it is worth noting again that there are few hon. Members who have not called for increases rather than cuts.
  It is considerations of this kind which have led to the burden of tax on people, under successive Governments, becoming so unacceptably high. The House and the country must face this reality: spending at current levels, which some still regard as too low, together with current levels of tax on business, which many regard as too high, have brought successive Governments to a position where there has been no alternative to high levels of tax on people.
  But the fact is that reductions in personal taxation themselves help business and employment. Indeed, it is the individuals who work in business who largely determine business success. Yet for years in Britain the tax system and the tax burden have discouraged individual effort, commitment and enterprise. By strengthening incentives through lower personal taxes, Government can help increase the commitment to business success at every level. And when the state takes less of what people earn there is less justification for excessive pay demands and settlements. Cuts in personal tax provide a vital stimulus for lasting growth and jobs.
  Happily, because we are reining back public spending—though not yet far enough—the choice is less stark now than in the past. I am able to combine the significant measure of direct tax relief to industry and enterprise which I have just announced with a substantial measure of direct tax relief to people.
  Acknowledged unfairnesses and anomalies produced by the overlap between the tax and social security systems give further compelling reasons for moving in that direction. It makes no sense that people on low incomes should be paying tax at all. And low tax thresholds are of course an important part of the poverty and unemployment traps. These traps mean that some of those out of work who could find a job, and some of those in work who could find a better one, do not do so because they would end up no better off, with all or more of their increase in income taken in tax and national insurance contributions, or lost in benefits forgone.
  That is the situation that demands reform. But those who claim to have found a quick, cheap way to dispose of the poverty and unemployment traps deceive themselves. The problem has grown up almost entirely
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  because Governments for 30 years or more have increased benefits in line with earnings, but raised personal tax thresholds only in line with prices, which have grown much more slowly over the years. In 1950 the tax threshold for a married man was about two thirds of average earnings. Today it is barely more than one third.
  A situation that has built up over 30 years cannot be put right in one Budget or even in one Parliament. These problems have arisen, and the point cannot be emphasised too strongly, not because Government spend too little, but because successive Governments have spent and taxed too much. The substantial increase which I have proposed in child benefit will improve work incentives for the low paid; and several of the measures we have taken since 1979 have reduced the unemployment trap. But it is only by limiting public spending, as we have done, that we can begin to get to grips with the problem along the lines I now propose.

  PERSONAL TAX
  In 1979 I reduced the basic rate of income tax from 33 per cent to 30 per cent. and cut the top rates. That was one of the first, and most radical, of the many changes that found a place in my first four Budgets. This year we can cut personal taxation again. But I do not propose any further reductions in rates. For the reasons I have just given it is thresholds and allowances that must take priority.
  Two years ago, in order to curb inflation and allow lower interest rates, income tax allowances were not raised at all. That was a difficult decision, but necessary in the circumstances, and it has since brought great benefits. It was the firmness of that 1981 Budget which paved the way towards the lower inflation and lower interest rates which today offer the prospect of lasting economic recovery.
  It is right that the benefit of the sacrifices of 1981 should be enjoyed now by those who made them then.
  Last year I increased tax thresholds and bands by 14 per cent. This year I also propose an increase of 14 per cent. But because inflation is today so much lower, that now represents a real increase of not 2 per cent. as last year, but 8·5 per cent.
  Income tax thresholds will be increased for the single person from £1,565 to £1,785 and, for the married man, from £2,445 to £2,795. The additional personal allowance paid to single parents, and the widow's bereavement allowance, will be increased in consequence from £880 to £1,010 The age allowance for a single person will go up from £2,070 to £2,360, and for a married person from £3,295 to £3,755.
  Corresponding increases will be made in the higher rate thresholds and bands and the threshold for the investment income surcharge.
  Effect will be given to these changes under PAYE as from the first pay day after 10 May. For a married man on the basic rate they will be worth £2 a week. The cost to the PSBR, above indexation, will be £1 billion next year. Including indexation, the total revenue forgone will amount to some £2 billion in 1983–84 and £2·5 billion in a full year. Some 1,250,000 fewer people will pay tax in 1983–84 than if thresholds had remained at their present levels.

  CONCLUSION
  At the start of my speech I referred to the objectives this Government adopted in 1979, objectives to which we have held and still hold. From my first Budget we have pursued those objectives with consistency and firmness of purpose and so laid the foundations for sustainable recovery.
  This is a Budget for that recovery: a Budget for the family, a Budget for enterprise—and, most of all, a Budget for Britain's continuing recovery. I commend it to the House.
  Mr. Deputy Speaker: Under Standing Order No. 94, the first motion, entitled "Provisional Collection of Taxes", must be decided without debate.

  CONCLUSION

    PROVISIONAL COLLECTION OF TAXES
    Motion made, and Question,
    That pursuant to section 5 of the Provisional Collection of Taxes Act 1968 provisional statutory effect shall be given to the following motions—

    (a) Spirits (Motion No. 2).

    (b) Beer (Motion No. 3).

    (c) Wine (Motion No. 4).

    (d) Made-wine (Motion No. 5).

    (e) Cider (Motion No. 6).

    (f) Tobacco products (Motion No. 7).

    (g) Hydrocarbon oil (Motion No. 9).

    (h) Vehicles excise duty (Motion No. 10).—[Sir Geoffrey Howe.]

    put forthwith, pursuant to Standing Order No. 94 (Ways and Means Motions), and agreed to.
    Mr. Deputy Speaker: I shall now call on the Chancellor of the Exchequer to move the motion entitled "Amendment of the Law". It is on that motion that the Budget debate will take place today and on succeeding days. The remaining motions will not be put until the end of the Budget debate next week and they will then be decided without debate.

  Budget Resolutions and Economic Situation

    AMENDMENT OF THE LAW
    Motion made, and Question proposed,
    That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of—

    (a) any amendment with respect to value added tax so as to provide—

    (i) for zero-rating or exempting any supply;

    (ii) for refunding any amount of tax, otherwise than by a provision relating to supplies to, and importation by, a government department, within the meaning of section 19 of the Finance Act 1972:

    (iii) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

    (iv) for any relief other than relief applying to goods of whatever description or services of whatever description; or

    (b) any amendment relating to the surcharge imposed by the National Insurance Surcharge Act 1976 and applying to some only of the persons by or in respect of whom the surcharge is payable, other than—

    (i) an amendment providing for a different rate of surcharge to be paid by the bodies specified in section 143(4) of the Finance Act 1982; and

    (ii) an amendment relating to the Commission to be established under the Act resulting from the National Heritage Bill [Lords].—[Sir Geoffrey Howe.]

    [Relevant documents: European Community Documents Nos. 10337/82, Annual Economic Report 1982–83, together with the final version as adopted by the Council, and 10480/82, Annual Economic Review 1982–83, together with paragraph 7 of the Fourth Report from the Select Committee on European Legislation, House of Commons Paper No. 34-iv of Session 1982–83, and paragraph 4 of the Eleventh Report from the Committee, House of Commons Paper No. 34-xi of Session 1982–83.]
    5.2 pm
    Mr. Michael Foot: It is part of the ritual of Budget day that the first speaker from this side of the House congratulates the Chancellor of the Exchequer on his performance. I certainly do not wish to depart from that tradition, at least for the first few minutes of my speech. I naturally accord him congratulations of the kind that previous Chancellors of the Exchequer have been accorded on the way in which they have presented the Budget to the House. I congratulate the right hon. and learned Gentleman on that basis.
    Those of us who have been in the House for some time with the right hon. and learned Gentleman know that he has a great capacity for being clear when he wants to be and that when he is obscure it is also intentional. We must take that into account, particularly when examining the right hon. and learned Gentleman's proposals for dealing with pensioners. It appears that the right hon. and learned Gentleman may have received some assistance from the Secretary of State for Employment on these matters, and if that is so we must examine them all the more carefully. We shall do so with great care during our Budget debates and I shall return to that shortly.
    The Chancellor of the Exchequer recalled some previous Chancellors of the Exchequer, such as Mr. Gladstone and Mr. Disraeli. In my judgment, he was not

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    quite as witty as Mr. Disraeli or quite as wise as Mr. Gladstone. Indeed, he reminded me more of another 19th century Conservative Chancellor of the Exchequer, particularly when he approached the more agreeable parts of his speech. I refer to Sir Robert Peel, of whom it was said that his smile was like a silver plate on a coffin. The right hon. and learned Gentleman approached the issue somewhat in that spirit. He announced his measures with a certain grisly bonhomie, and we must give him credit for that.
    If I may say so without any disrespect, perhaps the wisest words that have been uttered today were those said by Mr. Deputy Speaker just as the Chancellor of the Exchequer began his speech. He said that the Chancellor should start again, and that is no doubt what the right hon. and learned Gentleman should have done. Both we and the country wish that we could return to that day four years ago when the right hon. and learned Gentleman presented the first of his Budgets. I remind the House, and particularly those who cheered a few minutes ago, that it was Mr. lain Macleod who, I think, suggested that the Budgets that received the loudest cheers were those that brought disillusion the quickest. When the words of the Chancellor of the Exchequer are examined, disillusion often follows very quickly.
    That will be true of this Budget, mainly because the Chancellor of the Exchequer has made no real effort to deal with the fundamental industrial and economic situation facing Britain. This Budget, this Chancellor of the Exchequer and this Cabinet are squalidly inadequate to deal with the problems of industrial decay and mass unemployment that face the nation. The overriding factor in the world in which we live is hyper-unemployment. That is the major problem that faces the nation. The Government claim that they have not in any way caused that hyper-unemployment. Indeed, they say that they can do nothing about it. The right hon. and learned Gentleman says that unemployment is intractably high. Of course it is appallingly high, but the right hon. and learned Gentleman uses the word intractable to suggest that nothing can be done about it. The Government have sought to preach that to the country over the weeks and months.
    The Government say that the situation is worse in other countries, that our unemployment is just part of the world slump, that nothing can be done about it or that there is no alternative. We must show the country how this Budget merely extends that interlocking network of falsehoods and does nothing to deal with the problems.
    The Chancellor of the Exchequer referred with some pride to his 1981 Budget, but that Budget is one of the reasons for the record unemployment in this country today. The clearest and starkest failure has been the destruction of jobs. The Government have destroyed jobs on a scale unknown since 1945. In three and a half years, one in 10 jobs in this country has been destroyed. This Government will be the first since the war to have destroyed jobs. For 35 years after the war jobs were created, but in three short years this Government have reversed all that. In few other countries have jobs been destroyed at all, and where they have been, the scale of destruction has been negligible compared with that in Britain.
    Job destruction in manufacturing has been even more spectacular. More than one fifth of manufacturing jobs
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    have been lost in Britain. Again, that is on a scale unmatched in any previous period of British history or by any other country in the present period. Although the Government have recently cited one or two other countries—I think that the Chancellor of the Exchequer mentioned them again today—such as the Netherlands or Germany, where the rise in unemployment is similar to our own, they are the exceptions and in neither case is the scale of job loss anything like as great as it is here. That is the result of the collapse in output. Nothing that the right hon. and learned Gentleman said will restore the situation.
    None of this is surprising if we look at what has happened to production. The fall in output under this Government far outstrips anything suffered by any other country for which figures exist. With the exception of Canada, no other industrial country has suffered a loss of output during the period for which the Chancellor has presided over our economic affairs.
    The right hon. and learned Gentleman has predicted recovery once again today, although his predictions are a great deal more tentative than they were a few years ago. This time he plumped for a figure of 2 per cent. as the likely increase. Up till now output has fallen by 5 per cent. from the first half of 1979, so a huge increase is called for and there is a huge backlog to be made up. Even with the increase predicted by the Chancellor, manufacturing will be 18 per cent. down from the second quarter of 1979, and the construction industry will be 10 per cent. down. Of all the trivial measures in this trivial Budget, nothing was more trivial than that offered to the construction industry. The measures offered to it were pitiful.
    The Budget fails to deal with the real world. I went the other day to the Shildon works, which is part of the real world. The threatened closures there will add to the heavy unemployment figures. They will destroy a whole community and help to spread the industrial disease to many other parts of the country, because the coal and the steel used at the Shildon works will no longer be required, and that will have its reverberations.
    The Government do not seem to understand the interlocking industrial measures between these great industries. They hit one industry and do not understand how that hits the others. What do they think will happen in the years to come? Are we not to want any of the wagons made at Shildon? In two or three years' time, once the Government have destroyed the industry, scattered the community and destroyed the capacity and the skill to produce these wagons in Britain, we shall have to import them. What is happening at Shildon is what has happened up and down the country. One can multiply it on a huge scale. It is only an example of the catastrophe wrought by this Government.
    Why does not the Prime Minister listen to her favourite industrialist on this subject? The Government appear to deride spending and the Chancellor almost repeated the creed that spending is a dirty word. However, Mr. MacGregor said a few months ago:
    "Greater spending on major projects, like roads, bridges and sewers, is called for … It was tragic that the Prime Minister was having to tell local authorities to avoid spending money on capital projects. This would be costing jobs in the British Steel Corporation."
    One can multiply that up and down the country. That is why we have a steel crisis.
    If the right hon. Lady and the Chancellor do not understand that, they had better ask Mr. MacGregor

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    whether he agrees with us. The collapse of the market in steel and the injury to the market in coal are reverberating from one major industry to another, but they may not understand these things in Finchley or Surbiton, where they do not produce the real wealth of the nation.
    The right hon. and learned Gentleman had the nerve to speak of small businesses and what he was proposing to do for them. He spoke of his start-up scheme for small businesses. What about his close-down scheme for smallbusinesses? The Prime Minister and the Chancellor have been responsible for closing more small businesses than any other Government in British history. Bankruptcies have been running at an all-time record of 30 a day during recent months. That is what is happening to the small businesses of this country. Under this Government company liquidations have been 50 per cent. higher than under the previous Government. In 1982 the number of liquidations was twice as great as in any year before 1979. The Government should have a little diffidence in approaching the problem of how they are to help small businesses. There is a long queue of small business men whom they have driven to the wall.
    All this is partly due to the policies and the theories to which the Prime Minister and the Chancellor are wedded. They are wedded to the course outlined by the right hon. and learned Gentleman today. The most menacing phrase that he used was that he was determined to continue along the same course. The course is one of impoverishment for the industry and people of this country.
    That was the indictment by someone who is as expert on these matters as any of the monetarist theorists who advise the Government. It would be a poor compliment to him to mention him in the same breath as the Government's advisers. Perhaps hon. Members have read the article that appeared in The Observer a few weeks ago by Sir Alec Cairncross on the obligations of Governments to those who become unemployed and on employment policy. He said, and this is very much concerned with what is not in the Budget:
    "The most remarkable thing about the depression into which the world has plunged is that Governments seem determined to wash their hands of it as if it were none of their business".
    We had another exhibition of that nature today.
    Sir Alec went on to say:
    "Employment policy, born in 1944, is officially dead. Yet it has been Governments that have brought about the depression and their policies that are continuing to drive up unemployment and put the world at risk.
    There is no mystery about the world slump. The prime cause has been the efforts of Governments to try to get on top of inflation by tight monetary and fiscal policies. These have reduced purchasing power and effective demand well below the potential of which their economies are capable."
    That is what is happening in this country and in so many other countries where similar policies are applied. It applies also to the right hon. and learned Gentleman's boasts about bringing down inflation. Of course, in a world slump prices go down. One can cure inflation by the methods of the world slump. In the 19th century, Cavour said that any fool can govern by martial law and any fool can cure inflation by massive slumps. The necessity is to try to deal with the problem without forcing us into a recession.
    That is what Sir Alec Cairncross said in the article in which he gave his warning a few months ago, before the inflation rate started to go up again. He said:
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    "Inflation has not been 'cured'. The fact that it is lower now than it was last year, or the year before, provides no insurance that prices will not increase faster once employment at last begins to rise again".
    While we are cursed by a Government who are determined to make none of the efforts necessary to escape the slump of a recession in which we are fixed, that will always be true.
    Some of the measures that the right hon. and learned Gentleman has proposed deal with taxation. I understand that some Conservative Members do not like to discuss the real world outside before we come to these problems, but this is real enough for those who are queuing on the dole queues, on a scale that the country has not known for generations. The taxation policies of the Conservative party, and in particular the taxation policies introduced by the right hon. and learned Gentleman in his first l3udget, have been a major contribution to the recession arid are a breach of the election pledges on which the Government were elected. Far from reducing income tax at every level, the Government reduced it at only one level, the very rich level. Today's measures do not make up for the heavier taxation imposed over the past year—nothing like it.
    Only one tiny bit of the £9 billion taken away by the Government has been restored. Nothing like the 9p mentioned by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), which would have been required to restore what has been taken away, has been proposed. Nothing has been done about the increase in VAT introduced by the Chancellor of the Exchequer in his first Budget, contrary to his election pledges. The increase in VAT from 8 to 15 per cent. in 1979 is still taking £5 billion out of the economy. It is all part of the Government's determined, persistent deflationary policy. There is a list of people who have had huge sums taken from them by the Government's taxation policies and have not had them restored by what the Government have done today.
    Today's Financial Times article on the background to taxation was not by Labour party propagandists but by a brokers Laing and Cruickshank, who say:
    "The United Kingdom tax burden in 1982 represented 32·5 per cent. of total national income. This has risen steadily during the period of the present Government from 28·4 per cent. in 1979."
    That is the background against which these taxes are proposed. Some of the huge increases and burdens imposed upon different sections of the community have been partially restored. We are glad to see child benefit increased, although we believe that it should be increased further. We introduced child benefit and it was one of the major social reforms of the period. We want to see it built up, and although we welcome the increase we believe that it should have been a £2 increase.
    We are glad that the mean, miserable and utterly indefensible 5 per cent. cut for unemployed people has been restored. However, the mass of unemployed people who have been thrown out of their jobs through no fault of their own have considerably lower incomes than would have been the case if the Government had sustained the forms of employment insurance and benefit that they inherited from us.
    The right hon. and learned Gentleman attempted to claim that the 5 per cent. pension increase—if we accept his figure—was a tremendous advance. We shall examine with the utmost care how he is proposing to deal with pensions, how he is proposing to change from the present

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    system and the percentage inflation figure to be applied. Even so, pensions do not come within miles of the form and rates of advantage to pensioners that were provided by the Labour Government.
    During the period—[Interruption.]—from 1974 to 1979 the value of the pension was increased by between 20 and 25 per cent. The right hon. and learned Gentleman is proposing and boasting today about an increase which in real terms is less than 5 per cent. The increase during the Government's term of office is far smaller than that sustained by the Labour Government. The right hon. and learned Gentleman should at least return to the rates for pensions that we established, and he should restore the link between earnings and pensions introduced by our legislation.
    We welcome any relief that will assist in bringing people out of tax. If the Chancellor had taken the advice that we offered two or three years ago many people would not have been in tax throughout the period and taxation would have been considerably lighter, and in that case many more people would have been in employment.
    That brings us back to the major reason why we say that the Budget, the Cabinet and the Government are utterly incapable of dealing with our problems. I quote again what Sir Alec Cairncross said on this subject—[Interruption.] —I know that Conservative Members are determined not to listen to what he said about how we might be able to restore some employment, but none the less, they have to listen. He said:
    "We cannot escape from the present depression without a large increase in demand and there is no likelihood of such an increase without an initiative on the part of Governments. It is pure fantasy to suppose that output is bound to recover by itself;"—
    which is the Chancellor's theory—
    "that, amid the scenes of industrial collapse, new businesses will be founded and flourish in the number required while old businesses take heart as never before."
    That is what the right hon. and learned Gentleman said in his peroration would happen, but the exact opposite has happened.
    The Chancellor says that the Government will not change course. We are determined that the country shall have the opportunity to change course. The loss that the country has suffered during the industrial collapse of the past three years is of historic proportions. It has been greater perhaps in terms of wealth than even the 1930s, although the comparisons are not so easy to make. Keynes said:
    "There is the far greater loss to the unemployed themselves, represented by the difference between the dole and a full working wage, and by the loss of strength and morale. There is a loss in profits to employers and in taxation to the Chancellor of the Exchequer. There is the incalculable loss of retarding for a decade, the economic progress of the whole country."
    During the Chancellor's tenure of office he has held back this country's advance by something like a decade. We are now told that the same course will be persisted in. These measures certainly will not change it.
    There is to be a continued trail of human misery for the poorest in the community—the increasing number of people who have to rely upon supplementary benefit to keep families together. A huge mountain of waste for the nation is involved in these figures. There are deep divisions in our society between rich and poor, north and
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    south and between those who want to secure our escape from this position and those who are denied the right to do so by the Government's policy.
    The Budget offers no prospect of recovery to the real world outside even though it received a few ephemeral cheers in the House today. The country needs an entirely new course, and the sooner the Government get out and allow us to put it into operation, the better.
    5.27 pm
    Mr. David Atkinson: I congratulate my right hon. and learned Friend on another first-class, sound and responsible Budget statement. What a contrast this Budget statement has been with those that we have had at the end of the fourth year in office of every previous Government during the past 18 years.
    The House will recall that by this stage in the life of every Government since 1964, every Chancellor has reversed the economic strategy upon which his Government had been elected. Chancellors have either been compelled to reduce public expenditure when they would have increased it, or increased public expenditure when pledged to reduce it. Each one introduced wage or price controls when he had pledged not to. The result was that in almost every case inflation and, consequently, unemployment were higher at the end of each term in office than at the start. Each Government subsequently, and many would say deservedly, lost office as a result.
    The great hope for the unemployed today lies in the fact that my right hon. and learned Friend has at least clearly taken control of public expenditure. Inflation and interest rates have fallen as a result, and this must mean new jobs in due course. I am, of course, disappointed that my right hon. and learned Friend has not yet reduced public expenditure in real terms. If he had, he would, by this year, and certainly today, have been able to cut the basic rate of income tax beyond what it is at the moment. I believe that this is what he set out to do in 1979. I appreciate fully the reasons why he has not yet been able to achieve this aim.
    No party anticipated at the last election the depth of the recession following the rise in the price of oil that took place within weeks of that election. Without the cost of today's unemployment and the massive support that the British taxpayer still gives British industry, we would now be enjoying much lower personal taxation. The aim of my right hon. and learned Friend or his successor must be to reduce the basic rate of income tax. At least no other party in this country aims to spend less of the nation's income and wealth than do this Government. I hope that the country will bear that in mind when the next election comes.
    I congratulate my right hon. and learned Friend for keeping his cool over the past four years and for sticking resolutely to his medium-term financial strategy. His refusal to panic means that Britain is today better placed than other countries to prosper from the upturn that more and more evidence suggests is now occurring on the other side of the Atlantic and will, in due course, come to Europe. A feature of every one of my right hon. and learned Friend's Budget statements has always been his enterprise packages for industry in general and small businesses in particular. He has not let us down this time. I welcome particularly the further reduction in Labour's tax on jobs, the national insurance surcharge. Abolition of

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    the remaining 1 per cent. must surely be a manifesto commitment for the next election if my right hon. and learned Friend has not been able to achieve it before then.
    I welcome particularly the further reduction in small companies' rates of corporation tax, the measures to help the building industry, the measures to encourage greater share ownership in companies and especially the expansion of the enterprise allowance to help unemployed people to create new businesses. One of the most encouraging statistics published recently has been the increase in the number of self-employed people to its highest ever level at over 2 million. I know from my experience that there is nothing better for those so inclined than to accept personal responsibility for working for oneself, running one's own business and enjoying the job satisfaction that is to be gained from the service that one gives others. Our continuing aim must surely be the removal of all unnecessary obstacles to and restrictions on enterprise including, where possible, any avoidable burdens placed on small businesses by the imposition of value added tax.
    Here I come to my first complaint about today's statement. I believe that an opportunity has been missed. My right hon. and learned Friend announced that he has increased the value added taxable turnover threshold to £18,000. I welcome this as the greatest value of the registration limit since value added tax was introduced. If my right hon. and learned Friend had announced that he was raising the value added taxable turnover threshold to £30,000 a year, no less than 300,000 small businesses would be freed of the burdensome commitment of charging and administering VAT. The gross loss of revenue to the Exchequer would be £65 million which works out at £217 a business. Since the average cost of collecting VAT per business is £105, the net loss of such a move of revenue to the Exchequer in removing these 300,000 small businesses from VAT liability would be £32 million. That represents £112 per business which, I suggest, will be made up in no time from the corporation tax that will be generated by the activity resulting from being freed of such constraints.
    We will be told that such a move is contrary to article 24(2)(c) of the European Community directive on VAT. The logic of my argument surely applies to every similar sized business throughout the European Community. As this year is the European Parliament's year of small and medium-sized businesses, designed to focus on the role and needs of the smaller business in Europe, it would be an appropriate year for Britain to urge on the Community that it can make a major contribution towards improving the climate for enterprise by raising the real level of VAT threshold and freeing many small businesses from this commitment—
    Mr. John Evans: Does the hon. Gentleman not agree that the greatest opportunity missed today was the Chancellor's failure to reduce VAT back to 8 per cent., its level when the Tory Government took office, which would have affected millions of people?
    Mr. Atkinson: We have always made it clear that we prefer to encourage incentive in the economy by reducing direct taxes instead of indirect taxes. I believe that that is right. I hope that my right hon. and learned Friend will consider that such an initiative would earn the gratitude of every small business in this country and in Europe.
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    There are two other disappointments that I should like to express about VAT that are directly relevant to businesses in my constituency. I appreciate that they may be regarded by some hon. Members as significant. They are, however, significant to the industries and businesses concerned. I am sorry that my right hon. and learned Friend has not responded to the representations from the industry to remove VAT from—no less—ice cream. Far more ice cream is eaten today as a food than as a confectionery. Food is VAT-free. Ice cream is not. That anomaly, I regret, has not been corrected. I hope that the Government will introduce an appropriate amendment in Committee.
    My next complaint concerns the continued imposition of VAT on language schools, of which there are many in my constituency. The teaching of English as a foreign language is education. As hon. Members know, education is zero-rated for VAT. The schools, however, are not zero-rated because they are regarded as businesses. Yet language schools are everywhere classified as schools of further education. They are also an export business. They have long been a source of earnings to this country, competing strongly against teaching organisations and schools that do not suffer from the imposition of VAT in other countries. I hope that further thought will be given to eliminating this anomaly.
    My retired constituents—there are many of them—will be delighted by my right hon. and learned Friend's announcement that he has been able to abandon his proposed clawback of last year's award because he had underestimated his success in reducing inflation. If it had been the other way round, there would have been instant demands to make up the shortfall. I had thought at this stage that I would be saying that a better system could surely be found than that under which pensioners have to wait half a year before receiving their announced increase, by which time they believe that it has been eroded by inflation. Instead, I can congratulate my right hon. and learned Friend on his plans to return to the old system based on the actual rise in prices. This will put an end to much cynicism among pensioners.
    One disappointment that pensioners, like all those who have accepted a greater responsibility for their health needs, will feel is about my right hon. and learned Friend's failure to use his statement to introduce tax reliefs for individual and family subscribers to private health insurance schemes. These people, by and large, do not use the National Health Service extensively. However, they still pay for it and, in my view, they deserve tax relief. This is just as important as the raising of the mortgage tax relief threshold for young couples buying their first home.
    I shall nitpick no more. The Chancellor of the Exchequer has again presented a first-class Budget. It may well be his last. I believe that this country will have cause to thank my right hon. and learned Friend for the foundations that he has laid for the prosperity that has been brought closer by his statement today.
    5.39 pm
    Mr. Roy Hughes: The Budget is the occasion when the Chancellor of the Exchequer presents his progress report to the nation. He tells us what additional revenue is required and what concessions, if any, can be made to the taxpayer. He is the manager of the nation's economic affairs. It could be said of the

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    present incumbent of that important office that he is a record-breaker in a unique way. He has brought about record unemployment, a record fall in output, together with minimal investment in our manufacturing industry, which is vital for the future of our country. It is apparent that manufacturing industry has been brought to its knees, as the director general of the CBI, Sir Terence Beckett, points out from time to time.
    The verdict on the Chancellor's management of our economic affairs is borne out by the length of the dole queues. So the whole purpose of my intervention, which will be very brief, is to pose the fundamental question: will the Budget reverse the upward trend in unemployment? The answer must be a categorical no.
    Let me deal with the specific proposals in the Budget. There is to be a massive intervention in pay-as-you-earn. There is to be £2 per week for a married man paying the standard rate of income tax. That is a monumental proposal in view of the present economic state of the country. I do not doubt that it is a step in the right direction, but it is minimal, to say the least.
    In the proposals that were put forward a week or so ago by my right hon. Friend the Member for Stepney and Poplar (Mr. Shore), the shadow Chancellor, he suggested that those on or below £250 a week would pay less taxation and those above that figure would pay more. It is not difficult to see the egalitarian nature of those proposals. My right hon. Friend's suggestions on tax allowances would take 1 million people out of tax. The Chancellor's proposals are pretty puny by comparison. The same applies to the increases in child benefit. We proposed an increase of £2 a week. Compared with that, the Chancellor's measure is inadequate.
    Then there is the need to help those who are in the unfortunate position of being unemployed, particularly as a result of the slump, which is essentially Government-created. Again, the help for those people is inadequate, to say the least. At one time my constituency of Newport was a booming industrial town, but now it has almost 20 per cent. male unemployment. A group of social workers carried out in certain districts a study in my constituency into the effects of unemployment. It vividly illustrated the poverty, despair and mental illness caused by unemployment. I should have thought that the Chancellor's prime duty today was to try to combat the massive unemployment that has swept our country.
    The Chancellor of the Exchequer could have helped by a massive increase in social spending, and not only for the younger elements in our society. One cannot help but admire the way in which the pensioners put their case. A range of options was open to the Chancellor today to help pensioners. The Christmas bonus could have been doubled to £20. That would have been most welcome. The Chancellor could have introduced free television licences, at a pretty low cost. I, and no doubt many other hon. Members, have received many representations about an increase in the death grant, but the Chancellor chose to do nothing about that.
    Pensioners need a better deal on heating arrangements. Many of the ailments and complaints of old people can be attributed to that source. Then, too, the Chancellor could have done something about a national concessionary scheme for fares on public transport, to keep old people mobile and interested in affairs, and to enable them to visit
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    relatives, go shopping and visit places of interest which they were unable to do during the course of their hard working lives. In particular, he could have helped pensioners who have a little capital—those who have saved a little money during their working lives. The supplementary benefit scheme should be modified on a sliding scale to ensure that those people are not unduly penalised for their small amount of capital.
    The upper ceiling of national insurance contributions of £220 could have been abolished, with no hardship to the people in that income bracket. The 45 per cent. tax band could have been lowered. The change in the mortgage relief limit from £25,000 to £30,000 is again a gift to the better-off section of the community and is most unfair when one thinks how council house tenants have been hammered with increased rents.
    There is the usual taxation of motorists. This year it has been made more plausible in that it is alleged that it is merely keeping in line with inflation. That does not alter the fact that the motorist is always caned, year after year. What is more, the money is not going back into our roads.
    The Labour party has put forward proposals to help the poor and the needy. Such proposals are met with cynicism. We are asked how they will be paid for by the same people who readily vote £10 million for the Trident project. The steelworks at Llanwern is fighting for a concast plant to preserve jobs. I understand that the cost will be about £100 million. I compare that with the £800 million that is to be spent on a runway at Port Stanley airport in the Falklands.
    Perhaps the greatest scandal of all is the £15 billion that is paid annually to people in the dole queues. Above all else, we must put those people back to work so that they can do something useful and produce new wealth. I agree that the Chancellor has moved a little this afternoon, but what he has done is a mere pinprick compared with what is needed to answer Britain's problems. The position is essentially one of despair, when our people need hope.
    The media, in support of the Conservative Party, have not focused on the real issues of unemployment at all. They have merely been involved in the character assassination of some Labour leaders, whether it be my right hon. Friend the Member for Bristol, South-East (Mr. Benn), Mr. Scargill, Mr. Livingstone or Mr. Tatchell. Some people are being fooled by that, but all the people cannot be fooled all the time. I forecast that after the general election we shall see a Labour Chancellor steering Britain once again on the road to recovery.
    5.51 pm
    Mr. John Lee: That my right hon. and learned Friend the Chancellor of the Exchequer had a fairly pleasant task in the drawing of his Budget was because of the courage and steadfastness that he has shown in his earlier Budgets, despite criticisms from Back Benchers—including, from time to time, me. However, overall the Budget is excellent. It is prudent and humane yet enterprising. It strikes a fair balance between benefits to industry and help to the individual and the family.
    The further reduction in the national insurance surcharge will be most welcome to industry. The reintroduction of the small engineering firms investment scheme will be much appreciated by many engineering firms in Britain—those in north-east Lancashire as well as those in the west midlands to which my right hon. and

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    learned Friend referred. In addition, the reduction in interest rates during the past 12 months and again today will be welcome.
    For the family and for individuals there is the restoration of the 5 per cent. abatement in unemployment benefit for which several of my hon. Friends have campaigned, and all credit to them for doing so. A further 1·25 million people are being taken out of tax by the increase in personal allowances. The pension increases are welcome. Between 1979 and 1983 they have increased by 75 per cent. compared with a 70 per cent. increase in prices. There is also a welcome increase in child benefits, help for bereaved widows, the removal of the invalidity trap, as it was described by my right hon. and learned Friend this afternoon, and the capital threshold for the provision of supplementary benefit has been raised to £3,000.
    A series of measures have been announced this afternoon to help and encourage the establishment of new businesses. The business start-up scheme has been improved, the loan guarnatee scheme has been extended and free ports have been announced. I particularly praise the decision to go national on the enterprise allowance scheme. I have perhaps spoken more on the enterprise allowance scheme than any other Back Bencher. I have seen the scheme work successfully in one of the pilot areas in my constituency in north-east Lancashire. We have led the field nationally in the application of that scheme. It has been operational for just over a year and more than 1,000 people have applied to start business under it.
    In my local authority of Pendle 200 people started up in business because of the enterprise allowance scheme and the vast majority are extremely successful. They cover a range of business activities—service industries, retail businesses and small manufacturing operations. Having monitored and promoted the scheme in north-east Lancashire, my experience has been that many of the businesses that were set up under the scheme would probably have been set up anyway. That was one criticism of the amount of money that has been spent on the scheme. However, I am convinced that the fact that there was £40 a week available for small businesses for 12 months has finally pushed some of those who were hovering on the brink to start up in business on their own. It has provided them with that extra guaranteed liquidity and income in the vital first 12 months when a business is most at risk. It was an excellent innovation. In addition, it has helped to bring some small businesses out of the black economy.
    I am delighted that the Chancellor announced a £25 million national cash limit for that scheme for 1983–84 which is designed to provide about 25,000 new small business opportunities for applicants under the scheme. I encourage all hon. Members to do everything possible in their constituencies to promote the enterprise allowance scheme. It is a first-class scheme, as I have seen from its operation.
    I made my maiden speech in the Budget debate of June 1979 in praise of the Budget presented then by my right hon. and learned Friend. I am happy this afternoon to make what will probably be one of my last speeches in this Parliament, in support of my right hon. and learned Friend's 1983 Budget.
    5.57 pm
    Mr. Jim Craigen: Everyone expected that this would be a good Budget. After four
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    years of this Administration, we deserved at least one good Budget. There seemed little doubt of that, because the Chancellor has two forthcoming by-elections on his mind. Frankly, I think that Budget day is a somewhat overrated occasion. With the complexity of present-day issues I wonder whether it is the best way to manage the nation's economy.
    The Chancellor missed an ideal opportunity to make amends for the adverse measures that he imposed on the low-paid in Britain when he abandoned the 25 per cent. lower band rate. After spending some time this afternoon talking about the problems of those on low incomes he more or less dismissed the opportunity to put right that error. It is not good enough to suggest that to restructure tax would take more than a Parliament. After all, he has had a longer term than most Chancellors in which to do something in that area. The Government have cheated the low-paid, because there is little incentive in the Budget for those families that are in difficult financial circumstances. Those who made the sacrifices in 1981 will not necessarily be the beneficiaries of the 1983 Budget.
    One is pleased that the pledge to restore the abatement of unemployment benefit is being redeemed on this occasion, but what a struggle it was to convince the Government that that should be done. What anguish there was on the Government Back Benches on the various occasions when abatement was debated. A good many Government Back Benchers were sorely tried on those occasions. Some of them had the courage to vote against their Government on the issue and others abstained.
    It appeared to me that as the Chancellor was unfolding the four special measures to deal with the problem of the long-term unemployed he relied even more than he did last year on measures such as job splitting and part-time employment. In effect, three of the schemes are designed to take people off the unemployment register in circumstances where it is felt that there would be no other way of removing them from it. This hardly seems an inspiring approach at a time when the Manpower Services Commission is warning that by the end of this year 1·25 million people will be in the long-term unemployed category, although I believe that the figure is more likely to be 1·5 million.
    In addition, a dangerously large number of people have been unemployed for more than six months hut just under 12 months. For the time being it appears that we will have to rely totally on the rather inadequate community programme, which proposes only 130,000 jobs, some of which will be full-time and some of which will be part-time. This, in effect, is the mismatch between the level of long-term unemployment and the provision which the Government feel it necessary to make.
    One always welcomes measures to help the construction industry, because, by and large, it is a cost-effective means of introducing employment opportunities into the community. The Chancellor mentioned the special problems of inner city areas. I know something about such areas and one of the greatest difficulties facing many of our inner city areas is that, by constant retrenchment on the rate support grant and on the availability of Government support for local authorities around the country, those with responsibility for inner city areas are having to cut back on the level of services.
    Maintenance and repair budgets are invariably a prime target for local authority economies. The maintenance and repair budget under the various departmental headings is

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    usually quite substantial. It is easy to make what appears to be a saving today but which, in a few year's time, becomes a false economy. When the Chancellor is trying to juggle types of assistance that might be made available to inner city areas he should bear in mind that the level of assistance available to local authorities largely determines the quality of services in those areas.
    My hon. Friend the Member for Newport (Mr. Hughes) referred to public transport. Many of our constituents depend upon public transport. There is little in the Budget to suggest that the Government recognise the need to assist the bus industry and the travelling public. This involves not only pensioners travelling about but people travelling to their work or the unemployed, who find it rather difficult to bear the travelling costs of job search.
    We like to see measures designed to assist the development of small businesses, although my experience from talking to business men is that problems arise not in starting up a small business but in keeping it going. Here the level of demand is the great determining factor in how successful many of these small businesses will be. If a careers adviser were suggesting new growth areas for would-be applicants in the foreseeable future, work as a liquidator or a receiver would be good suggestions. There has been an unhappy buoyancy in that corner of the market.
    With regard to inflation, which has become central to this Government's economic policy—in so far as one can discern an economic policy—the retail prices index has now taken on an importance in the management of economic affairs which it does not deserve. We should examine more closely the way in which the retail prices index is compiled and the shift that has taken place in the weights attached to the measurement of the retail prices index. It means different things to different people in different parts of the country. There is little doubt, especially on a day on which the Chancellor has announced an increase to £30,000 for interest relief on mortgages, that many folk could not consider a £30,000 mortgage, far less get hold of one.
    While I am in favour of measures to assist home ownership, the number of people now in the home buying category who are benefiting from the reduction in interest rates is influencing the measurement of the retail prices index. If we consider this more closely, we see that those who pay rent are disadvantaged because there has been a sizeable jacking up, as a result of Government policies, in the level of rents. That trend has been accentuated by measures such as mortgage interest relief at source. Such a measure may not help the building societies cash flow, but it helps the cash flow of those paying mortgages. It therefore widens the gulf between the north and the south, in that the preponderance in the south is of home ownership, whereas the preponderance in the north is largely of rented accommodation. I earnestly suggest that the way in which the retail prices index is made up should be examined. There are all sorts of implications for wage bargaining, as the Chancellor pointed out this afternoon, for the allocation of Government resources to the rate support grant and indeed, for the general conduct of economic management in this country.
    There is an absence from the Budget of adequate measures to deal with unemployment. What is happening on the unemployment front should worry Members of
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    Parliament. A teacher told me the other day that he had asked his class of 16-year-olds how many expected to get a job when they left school. Not one hand out of 24 went up. When he asked how many of them expected to get a job by the time they were 21, only three hands went up. That is depressing. The enterprise allowances will not overcome that brick wall, which, unfortunately, faces too many young people when they leave school.
    This country needs a sense of direction. There is no doubt that more people are ceasing to be kidded by the fiscal measures every March or April in the Budget. There is a lot more cynicism and sophistication about those matters than politicians will openly admit.
    When the Chancellor was unfolding the contents of his Budget I wondered where the money that was being handed out was coming from for many of those small and, at the end of the day, relatively unimportant little schemes or projects that he mentioned to stimulate activity here and there. It was interesting that he paid special attention to the west midlands. That area has felt the full blast of the Government's economic mismanagement. I should have liked to hear a little more about special measures to help areas such as Scotland, which have equally lost out due to the Government's economic policies.
    We have now had five budgets from the present Chancellor. I suspect that he is still keeping his options open in case there is a sixth Budget, because the election could be in 1984. However, I hope that for the sake of the economy we are spared a sixth Budget from him.
    6.12 pm
    Mr. Chris Patten: As the hon. Member for Glasgow, Maryhill (Mr. Craigen) said, the Budget is one of the great ceremonial moments in our political and economic calendar. Taken with the public expenditure White Paper, which we debated in an even more crowded Chamber last week, it represents a distillation of the Government's economic strategy and political philosophy. It is in that sense that I shall talk about the Budget.
    I should first, however, like to make one or two microjudgments about the Budget. I am extremely pleased that the Chancellor increased tax thresholds as he did. It is the best way of helping the poorer-paid workers and undoes some of the problems that resulted from the Budget in 1981. The Chancellor believes that his decision that year was unshakeably right. It is part of the Chancellor's admirable consistency and charm that he believes that most of the decisions that he has taken about the economy have been unshakeably right. We are all entitled to our opinions. At least on this occasion I agree with what he has done about the thresholds. I also agree with what he has done on child benefits. I am pleased about the restoration of the 5 per cent. abatement in unemployment benefit, on which some of us have made speeches and done other things in the past. I am also delighted that he has not clawed back the pension as at one time he seemed to be threatening to do. I did not think that that was likely as there will be an election in the next 12 months, and even Treasury Ministers—we hope all of them—have elections to fight.
    I was also pleased that the Chancellor made a further cut in the national insurance surcharge, albeit only a small 0·5 per cent. cut in that iniquitous tax on jobs. That is that, as far as the Budget is concerned. There are one or two measures to help small businesses. I do not think that it is

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    unfair to say that the impact of those measures is unlikely to exceed by a substantial margin the magnitude of their cost.
    I refer now to the overall impact of the Budget. I do not want to sound too excitable. It is sometimes said about those of us who believe that the present levels of unemployment are too high, which at one time we were told would be a passing phenomenon as inflation was abated, but which are now more permanent, that we are underestimating the robust spirit and independent-mindedness of those who are out of work for six, nine, 12 or 18 months. It is also said that we underestimate the political cynicism of the 87 per cent. of the population who have jobs.
    That might all be true. Perhaps that is what the world is like. Perhaps we can be reasonably relaxed about so many young people spending so much of their lives on the dole, even after they have done a training scheme. Perhaps we shall not have to pay the consequences in terms of the alienation of that generation from society, although I would not have thought that that was necessarily the lesson that one would take from Northern Ireland. Perhaps our industrial democracies can withstand the strain on our social fabric and institutions of continuing high unemployment. Perhaps The Times was right in the staggeringly insensitive and intellectually Neanderthal leading articles on the economy recently that made Montagu Norman sound like a cross between William Beveridge and John Maynard Keynes. Perhaps The Times was right to argue that numbers do not matter when one is talking about unemployment, whether it is five, 50, 500, 5,000, 50,000, 500,000 or 500 million. Perhaps that is right, but I do not believe it for a moment. People who suggest that that is so are taking a terrible risk and are almost literally playing with fire.
    I am not claiming that we can tackle the problem of unemployment and the recession alone. In that sense the Budget is to some extent irrelevant. It does no harm. It is conceivable that it may have done a little good. However, even within the constraints in the international sphere that stop us doing much more on our own, we could have done more to hurry recovery along and make sure that it is not anaemic and shortlived.
    I have disagreed with the Treasury for a long time about the level of the public sector borrowing requirement. It is too low, it is restrictive and has a contractionary effect on the economy. I accept that it is true that the markets believe what the Chancellor tells them about the central importance of the PSBR as a yardstick of fiscal rectitude, but let it be said that it is a yardstick that no other country like us would dream of using. If that is so, it is time to educate the markets as well as the Treasury. We should remind them that by any economically literate criterion, the country is in a surplus on its accounts. That is what the Institute for International Economics in Washington said before Christmas last year. It is true, as the stockbrokers Lang and Cruikshank said recently, if one adjusts the figures for inflation. It is interesting that only Treasury Ministers nowadays, when looking at their own sums, suffer from the money illusion. It is true, as the stockbrokers, Simon and Coates said, if one adjusts for unemployment.
    As Helmut Schmidt, whom we used to quote a great deal as our favourite Social Democrat, said in an article in The Economist a few weeks ago, the British fiscal stance is too contractionary and we could and should be a great
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    deal more expansive in the next few weeks and months. We should read that article to the markets and explain to them that it is a little odd to expect the American economy by being more expansionary in fiscal policy to pull us out of the recession, when we seem to be unwilling to try to escape by being a little more expansionary at home. I accept that even with a slightly larger PSBR and even if we had been able to scrap, as we should have done, the national insurance surcharge, we could not have made a great deal of difference.
    My main criticism of the Government in that sense is that we have not always done even that little which we could effectively do. But for substantial results we shall have to look forward to the Williamsburg summit and to the agreements reached there. I hope that there will be an agreement on stabilising exchange rates; I hope that there will be an agreement that the OECD countries should do a little more to concert the expansion of our economies. In other times we might have used the word "reflation".
    There are one or two comforting signs. We saw Mr. Volcker giving evidence to Congress the other day and saying:
    "We cannot build a successful policy against inflation on continued recession."
    Then we heard Mr. Shultz speaking to Congress and saying:
    "the only lasting solution to the income-earning problem of the less developed countries, as well as the serious problems of the industrialised countries, is sustained economic growth".
    I am sure that that is absolutely true.
    What we need is not the discovery of a new plan, a new theory, but a display of old-fashioned political will to make the international decisions to concert an economic recovery. It is time the visible hand of politicians rather than the invisible hand of the market took a part in the proceedings. Only if we do that will we stand the remotest chance of restoring our prosperity, of saving welfare capitalism—I am serious in making that point—and thus safeguarding our democracies. I believe that the threat of this recession is much more profound than any of the leaders of our democracies have been prepared to accept.
    6.22 pm
    Mr. Tom Clarke: The hon. Member for Bath (Mr. Patten) made, in the circumstances, a most gracious and thoughtful speech. I thought during the Chancellor's speech—the right hon. and learned Gentleman paid more attention to the pipe which is used by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) than to other matters—that he might have been more grateful for the contribution of the hon. Member for Bath in persuading not just the Chancellor himself but the Government and their supporters to take the view that the decision on the 5 per cent., which has led to at least two Divisions since I came to the House., was a mean-minded decision. It is one which I am sure we are all very grateful is being reversed. I therefore think that the hon. Member for Bath deserves the thanks of the House, if not of the Chancellor, for his contribution to that change of mind.
    The Budget presented this afternoon seemed to me to be a very dull Budget presented in a very dull mariner. It offers very little hope to my constituents and will lead to great disappointment in Scotland, and indeed in many other parts of the United Kingdom. It cannot be divorced from the problems that we face as a nation—economic and

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    industrial problems and problems of the social fabric of our society, problems which the Chancellor and the Budget failed to address.
    We are discussing this Budget at a time when unemployment stands in real terms at about 4 million. In my constituency over the last few days even more redundancies have been announced in the steel industry. At the Imperial plant in Airdrie and the Calder plant at Coatbridge—tube manufacturing plants which have a very proud record and which have provided tubes for oil and for the North sea—redundancies were announced by the British Steel Corporation even ahead of the decision of OPEC. Those of my constituents and their families who have had to face these decisions and deal with the realities of them will find very little, if any, comfort, in the measures that we have heard about this afternoon.
    The Chancellor has addressed himself to a number of issues which have led to a great deal of debate, discussion and speculation not just in the press over the past few weeks but over the past four years. I believe that as a nation we were entitled to expect more from the Chancellor in view of the sacrifices that we as a nation have made since the 1979 election. This is a pathetic little mouse of a Budget which will lead to very little improvement in our economy and our industry or the rightful aspirations of our people.
    That might have been forgiven if as a nation we were poorer in resources than we are, but this Budget has been presented by the Chancellor at a time when we have oil revenues, and other great resources which are being squandered in a way that not only is intolerable to our people but would, I believe, have been rejected by such people as Ian Macleod, who would not have been proud to present the kind of Budget that the House has heard today.
    There is a need for the House to address itself to the prospects for real job creation. In my constituency more than 10,000 people are unemployed. Like my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen), I find that young people are disenchanted. There are simply no job opportunities available. What we expected to hear about in our debate last week on the Government's White Paper on public expenditure and in today's debate was measures which left open to local authorities, public agencies and others the prospect not just of improving services but of ensuring that more jobs became available. That simply has not happened.
    The Chancellor referred to local government and to the Civil Service. I should like to refer to them too.
    First, in recent months the Government have apparently taken the view that capital has been provided and that there is evidence of underspending in local government. This evidence, incidentally, does not apply to Scotland and it might be helpful if Ministers pointed that out from time to time. Even in England and Wales, however, it is not good enough for the Government, having criticised local authorities for three and a half years for alleged overspending, now to remind local authorities that capital is available, if only because the local authorities have to address themselves to the real problems which they face.
    One of the problems is that local authorities, in drawing up their budgets for capital expenditure, have to bear in mind the revenue consequences of that commitment. If the rate support grant is not to reflect the real level of wages
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    Settlements, inflation and the rest the local authorities are not being helped by the Government's reminding them that capital is available without taking revenue into account.
    We have continually heard in recent weeks references to the reductions in the Civil Service. It would be helpful if Ministers from time to time, acting as enlightened employers—although I agree that that would be an unusual role for this Government—would recognise that civil servants have made a remarkable contribution to that achievement. If there is a reduction to the extent that we have heard about this afternoon, the burden on the civil servants, particularly in Departments such as the DHSS and others dealing with the public and the increasing public demands, ought to be recognised. They are making a greater contribution to bringing about these reductions than any Minister has acknowledged. The Government should not go too far in that direction, and they should remember that morale in the Civil Service is not high.
    The Government still owe an answer to the British people whom they promised reductions in taxes at the last general election. There was no substantial attempt to meet that commitment in today's Budget. VAT has still not been reduced to the level at which it stood when the Labour Government fell, and no account has been taken of the increased fuel charges that people now have to pay.
    In my constituency, 80 per cent. of the electorate live in council houses. Although I welcome the very modest improvement for owner-occupiers, such measures offer no help or hope to people living in council houses. We need a sign that the Government appreciate the need to invigorate our industry, to give hope to manufacturing industry and to examine the imports that are being allowed almost to wreck the economies of some parts of the United Kingdom. The Budget provides no such sign and will be a great disappointment to many people, especially those in Scotland.
    Finally, when the Prime Minister took office she quoted St. Francis of Assisi. I remind the right hon. Lady and her colleagues that St. Francis also said that we should seek not just to be understood but to understand. Nothing in the Budget suggests that the Government understand the enormous problems facing our country. I only hope that the many people, especially young people, who will be profoundly disappointed by the Budget will not cease in their campaign for a more responsible Government and a new society, which I believe can be offered only by the Labour Government that I believe will follow the general election.
    6.32 pm
    Mr. John Stokes: I am sorry that the Leader of the Opposition could not remain, as he made some rather ungracious remarks about my right hon. and learned Friend the Chancellor. The right hon. Gentleman referred to Disraeli, Gladstone and Peel. He then went on to Italian history with references to Cavour and so on. In all modesty, I should inform the House that the comment on Peel was made by Disraeli himself. He said that Peel's smile was like not the silver plate but the brass plate on a coffin. That was at a time when the Tory party was undergoing similar convulsions to those now afflicting the Labour party.
    I listened with great attention and interest to my hon. Friend the Member for Bath (Mr. Patten). If he does not address the House very frequently, he certainly regales us with regular articles in The Times. Incidentally, I note that

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    he criticised the editorship of The Times rather heavily. I do not always agree with what my hon. Friend says. Certainly, he must accept from me, as one whose constituency has probably twice as much unemployment as his, that I care every bit as much as he does about unemployment. I do not believe, however, as my hon. Friend appears to believe, that the Government can do a great deal about it. That is the difference between us.
    My constituents—hardworking, honest decent, patriotic people who have never suffered hard times before—never complain to me. They do not blame me, the Prime Minister or the Government. They know that the troubles besetting us now are due partly to history, partly to the world slump and partly to the many mistakes made by management and unions in the past 30 years. To imagine that those problems can be solved by a Budget is absolutely puerile.
    Mr. Chris Patten: Whatever my hon. Friend's constituents think about the recession and the slump, does he believe that the policies pursued by Governments in all the industrial democracies in the past few years have anything to do with the present level of demand in the world economy?
    Mr. Stokes: My hon. Friend has anticipated my next comment. I agree entirely that more should be done on the international scene about all kinds of things.
    What we want from the Budget is encouragement, hope and better morale. Morale is as important in peace as in war. I believe that my right hon. and learned Friend the Chancellor, despite his typically quiet tone, has given us both confidence and hope. Industry needs help to reduce its costs and my right hon. and learned Friend was right to concentrate on assisting our vital manufacturing base. Individuals, too, need help and hope, and the reductions in personal taxation will go some way towards that. My right hon. and learned Friend has presided over many Budgets. He has stuck to his principles and I believe that in time he will see his reward. The strict control of borrowing and spending has reduced inflation significantly. In time, that will have profound and beneficial effects on every aspect of commercial and industrial enterprise.
    I welcome the cut in national insurance surcharge, although it is not great. I should have liked to see more help to reduce energy costs in industry. The burden of rates still bears very hard on industry, and some Labour-controlled councils seem not to realise the benefits that factories bring to their communities and the losses suffered if they are driven away.
    Industry looks anxiously for a substantial reduction in interest rates. Today's 0·5 per cent. decrease is welcome, but, in view of the fall in inflation to 5 per cent., interest rates are still far too high and place too heavy a burden on the new and expanding industries so greatly needed in the midlands with its more traditional engineering and metal working base. Governments cannot do everything, of course, and I believe that the fall in the pound will now give exporters much that they need and expect to expand their overseas markets. I also believe that the fall in the price of oil will probably do more to increase production and the sale of products both here and elsewhere not just in the West but in the underdeveloped countries.
    I am glad that my right hon. and learned Friend has not hit the motorists too hard as they always seem to have to
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    bear a heavy burden. I accept the changes in taxation on tobacco and wines and spirits, which are roughly as I had guessed.
    I also welcome the increase in defence expenditure. I believe that the proportion of our taxes devoted to defence will be borne cheerfully by all but a sullen minority who are prepared to see us overrun by the Soviets.
    Above all, I welcome the help given in pensions, child benefit, widows benefits and all the other increases in social security benefits.
    I also welcome the help given to small firms and to small business men starting up their own firms, an operation that is already going well in the midlands.
    Health Service charges impose a huge burden on the economy. If they can be re-cast to give better value for money, only the most prejudiced will object.
    I wish that regional aids could be abolished. They have done nothing but harm to the west midlands. It would be far better to get the economy right as a whole, throughout the United Kingdom, than to try to tinker with regions. Nevertheless, I accept gratefully the help given to small engineering firms as we have so many in my Part of the world.
    The increase in the house mortgage allowance is to be welcomed. I hope that it will help the housing market and the building industry.
    My right hon. and learned Friend has rightly reduced personal taxation although I am sorry he was unable to reduce the standard rate of income tax. Even now taxation on lower incomes is too high; there is still not enough difference between those receiving social security benefits and those in work but in receipt of low earnings. There must be every incentive to work.
    I welcome the raising of the investment income surcharge threshold. Every effort must be made to encourage savings which can be channelled into profitable investment. Investment by itself may be useless. It must be profitable and must be used properly.
    The Chancellor is not an excitable man. He has not given us an exciting Budget, but he has given us a sound and sensible Budget such as we would expect from him. It will be well received not only in this country but throughout the world. As l said earlier, Governments can do only so much. As a historic Tory, I believe in original sin, as I am sure my colleagues do too. Therefore, efforts must be made by all of us. We cannot expect the Government to pull all of our chestnuts out of the fire. It is up to all of us to put the past behind us and to make the most of the opportunities that the Chancellor has given us.
    6.42 pm
    Mr. Richard Page: I congratulate my right hon. and learned Friend on his Budget. Perhaps he needs to be congratulated not so much on his Budget today as on those of the four previous years, by which he has been able to create the basis for this Budget without the consequent and attendant inflation and growth of the public sector borrowing requirement that might have resulted some time ago.
    I welcome very much the increase in the tax thresholds. It will put a little more money into people's pockets. I make a fervent appeal: when people have that extra money in their pockets, for God's sake let them make sure that they buy British goods if the quality is the same, because the purpose is to create jobs in this country rather than in manufacturing industry abroad.

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    I shall resist the temptation to range long and far over the Budget and confine my remarks to two specific sectors, the small business sector and North sea oil. I am delighted that the Government have confirmed their commitment to the small business sector. The measures proposed by my right hon. and learned Friend today mean that over 100 new measures have been introduced to help smaller businesses. Those are in addition to the changes that have taken place because of the movement on inflation.
    In a previous Budget my right hon. Friend—if I may call him that—the Member for Down, South (Mr. Powell) said that the solution to this country's problem lay with the people. I echo that sentiment. In the past there has been a widespread belief that Government can solve all our problems and that individuals do not have to do anything. That is a view that is apparently still held by Opposition Members. Within the country there is a growing belief that the solution lies in our own hands if only we are prepared to grasp it. The Government have helped to remove some of the barriers and the people, especially through the small business sector, will bring about improvements.
    Whenever I have spoken in the past about the small business sector I have ended up, like Oliver Twist, asking for more. I shall try not to do that now, because my right hon. and learned Friend has removed more from my list of wants and my begging bowl is getting smaller.
    A major reason why our industrial competitors and other nations abroad help their small business sector is that it gives political stability to the economy. The smaller business sector gives a broader economic base. We have only to look at the strike record, or rather the non-strike record, of the small business sector to see the validity of that point.
    I welcome the improvements to the loan guarantee scheme. I know from personal experience that this has helped businesses to get started and has contributed to the battle to win back business which has been sliding abroad. More and more small firms are moving into the export market. It is only by exporting and turning aside import penetration that we will create new jobs.
    I am delighted to see the improvements proposed to the business start-up scheme. I have been a critic of the scheme for some time. I hope that confidence will once more be generated in the accountancy profession and that more and more people will be able and prepared to put their money into this imaginative scheme.
    Time moves against me and I shall find it difficult to mention many parts of the Budget that I should have liked to mention. I must express appreciation of what is proposed about small firms corporation tax. I and colleagues in the small business sector have made continual representations about the inhibiting effect of the profits limits on development and growth. I am pleased that the rate of corporation tax for small companies is to be reduced from 40 to 38 per cent.
    I also echo what was said by my hon. Friend the Member for Nelson and Colne (Mr. Lee) about the enterprise allowance being available throughout the whole country. No doubt more and more people will be prepared to take the plunge and start in business on their own.
    On the North sea oil regime, in Committee on the Finance Bill for the last two years I and several of my hon. Friends have expressed our concern over the fact that the tax regime is having an inhibiting effect on the
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    development of small fields. Unless we can find new, large fields in the North sea we shall have to rely on the smaller fields to provide oil for self-sufficiency. Our previous tax regime held us back from developing. What my right hon. and learned Friend has proposed will be a valuable step forward in ensuring self-sufficiency and profitable oil fields for the future.
    It is a good Budget. It has been quietly produced and presented. It is an imaginative Budget which will help many areas of the economy. It will provide a basis for growth without inflation, and for real jobs. I very much welcome it.
    6.49 pm
    Mr. Peter Bottomley: If my right hon. and learned Friend the Chancellor had not announced an increase in the old-age pension and in child benefit I would have made a major speech criticising him strongly. I have been criticised on occasions for trying to do so much for the elderly and for people with children. It would be right on another occasion to develop what the Chancellor has said. I would welcome it much more if we could be assured that he will follow this year's good deal for the retired and for those bringing up children with similar proposals in future years. We have a responsibility to look after those who cannot look after themselves—those are the two main groups.
    Next year, the effects of the Budget on the economy will be far less than the effect of the levels of pay settlements. I ask everyone who wants the Chancellor to generate more effective demand to realise that they have the opportunity to do that for themselves. If the average level of pay settlements in the next two or three years is consistent with low inflation, Chancellors will be able to gear the economy towards more effective demand. That will continue to be more competitive, more jobs will be generated and there will be more surplus for schools, health, personal social services and all the other good things that we ask for.
    The Government have done well. Conservative Members who have argued for better old-age pensions, better child benefit and the restoration of the 5 per cent. abatement in unemployment benefit have done both the Government and the country a service. I am glad that we have been successful and that my right hon. and hon. Friends on the Front Bench have listened to our arguments. I hope that we have made them courteously and I am glad that they have been effective. If people want the country to prosper, I hope that they will listen to us more and more, that we remain the Conservative Government so that we can have a good impact on the country's government, and that we can discharge effectively our functions as politicians.
    6.51 pm
    Mr. Austin Mitchell: Like all of the present Chancellor's Budgets, this one has come in with a whimper rather than a bang and, as usual, at the whim of a banker. Moreover, the Budget statement was delivered with all the wit, repartee and lightness of touch of a reading of Kelly's directory for 1928. It has come in with a whimper because it has been so well trailed. It is clear that the lobby was called in on Saturday morning and effectively told the Budget's contents so that we could read them all in Sunday's papers. That was the type of thing that Dalton had to resign for in 1947. It is now the normal

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    practice of the Government to hold back a few little goodies, which can be handed out at the last minute as a surprise gesture, once the public have been well prepared. That is now the technique of Budget preparation.
    We have had a nice series from the Chancellor. In 1979, we had bludget when he bludgeoned the doubling of VAT out of the pockets of the people. Since then, we have had three budgets of fudge-it in which the Chancellor has moved furniture to distract attention from the depressing realities all around, and now we have been given grudge-it in which he has grudgingly given back some of the tax that he has been taking over the years.
    It is an irrelevant Budget in which the Chancellor has turned a quick myopic gaze over the wreckage of industry that is strewn around the country and averted his eyes towards the election. This is a pre-election Budget from a Government who are so contemptuous of the people that they serve that they believe that they do not have to do much to win the election, but it is essentially an election offering.
    The Budget is also irrelevant in terms of the promises that were held out in 1979. We were promised tax cuts, but taxes, even after this Budget, represent a bigger share of the average working man's earnings, and a bigger share of gross national product than before 1979. The Government promised to cut spending but have increased it. After this Budget, spending will be higher as a proportion of GNP than it was before 1979. The Government promised to make us competitive, yet they have crippled British industry's competitiveness.
    Most important is the fact that the Budget is irrelevant to the real problem in Britain today—industrial decline on a scale that has never before been seen in Britain. The scale of our decline is unique in the advanced world, yet we were the world's first developed country. The decline has been precipitated by interest rates which remain high, even after the minimal 0·5 per cent. reduction that was announced today, because the Government are determined to keep them high to defend an over-valued pound. British industry must pay the price for the high exchange rate by being crippled by high interest rates. The depression has been engendered by the slump in demand and an overvalued pound. Despite its recent fall, the pound is still over-valued as compared with the currencies of our major EC competitors.
    All of those policies, which are implicit in the monetarist approach, have led to the ruin of British industry. If we want a monument to the Chancellor's achievements, we have only to look around us at the state of British industry. Its condition will not be improved by today's Budget. Our depression is the worst of any advanced industrial country, our rate of unemployment is higher and our rate of production loss greater. Manufacturing production has fallen by about one fifth. One has to ask why that should be so when we have the best prospects as, for the first time, oil provides us with a chance to expand through the balance of payments problem which has bedevilled British industry and the economy since the second world war.
    Oil not only makes us richer than most of our competitors, it gives us the opportunity to grow through depression and expand through the balance of payments
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    problems. However, oil revenue is being thrown away because the effects of the balance of payments are being used to finance a flood of imports and destroy British jobs. Moreover oil tax revenues are being used to support those who have been made unemployed by the balance of payments effect. The oil revenues have been thrown away because the Government are obsessed with the piggy bank economics that were discredited in the 1920s, which have been irrelevant since Keynes, but which are still the Government's dominant approach.
    What has been created by the depression that has been worse here than in any other advanced country and out of which it will be difficult to break? Not industrial success and a springboard for growth, but a graveyard. Today, the Chancellor has painted up the gravestones but left us locked in the graveyard, and the Prime Minister's sermons drift lightly and ecclesiastically over the scene. The only way out of the graveyard is by a massive boost to the economy and demand, combined with an improvement in the competitiveness of the pound by reducing interest rates. If we are to increase demand, we have to stop it washing overseas. The change in the hire purchase regulations last year simply financed a flood of imports and thus washed overseas.
    The opportunity for a boost has never been greater because the scale of depression has never been greater. Such a boost would improve the circumstances of the less well-off and stimulate the economy by pumping money into it and the pockets of the people, especially those who contribute most to consumer demand. We could even use that increase in demand to cushion the inflationary consequences of the expansion that must occur. For the Chancellor to argue, obsessed with piggy bank economics as he is, that the only boost to demand that we can afford is minimal because the inflationary consequences would otherwise be so great, merely demonstrates the irrelevance of his attitude.
    Simply putting unemployed people back to work would save £5,000 on each such person as £5,000 represents the revenue that is lost from someone not working and the cost of supporting that person.
    We can borrow more. The Government are borrowing less, as a proportion of GNP, than any other advanced industrial country. That is clear from the most recent issue of Lloyds Bank Review. It is clear that our scale of counter-cyclical spending is less than that of any other country. If the worst came to the worst, we could print money. That is effectively what the Americans are doing. They are expanding the money supply to stimulate the economy and bring down interest rates.
    It would help if we did not have such a supine business community which has accepted depression and all that has gone with it. Greater love hath no man than that he lay down his firm for his prejudices. That has been the CBI's attitude. It has been prepared to sacrifice firms to support the ruinous policies that the Government have pursued.
    The Budget is irrevelant because it is a wasted opportunity. That is a national tragedy because as industry declines our competitiveness and our ability to survive are ruined.
    Debate adjourned.—[Mr. Garel-Jones.]
    Debate to be resumed tomorrow.

  British Railways Bill
  Order for Second Reading read.
  7 pm
  Mr. Patrick McNair-Wilson: I beg to move, That the Bill be now read a Second time.
  This is the twentieth miscellaneous provisions Bill of its kind since the reconstitution of British Rail in 1962. It comes at a time when the railway industry is very much in the public eye. It would be difficult for anyone in this debate not to be aware of the recent report into the general activities of British Rail. Although I shall be dealing with the specific points in the Bill, I should make it clear that the British Railways Board recognises the need for efficiency and for making the service as acceptable to its customers and passengers as possible. However, the board can boast a great achievement and a first-class record.
  In the 1980 corporate plan it was decided that there should be a slimming down of the work force by about 38,300. About two thirds of the target has been achieved this year, and 24,000 employees have left the railways. The external finance limits that were established in 1982 will be the guidelines for the industry.
  However, not everything is perfect and many areas must be improved. A disturbing factor in the future profitability of the railways is ticket evasion. The latest figures for ticket evasion in London and the south-east show that it costs British Rail about £12 million a year. There is a long way to go before we cure all the ills of the system.
  This Bill sets out to continue the modernisation that has been part and parcel of previous legislation. It is a slow and relentless attempt by the board to make the system more competitive. That means, inevitably, that occasionally action is required that will provoke local controversy.
  One of the most significant parts of the Bill is the decision to establish a rail link with Manchester Ringway airport. It takes into account the argument about the third London airport and of general airport policy. Other parts of the Bill deal with more mundane matters such as the closing of level crossings and footways, the extension of facilities and the improvement of some facilities to make them more efficient. If I am fortunate enough to catch your eye, Mr. Deputy Speaker, and with the permission of the House, I shall deal with those matters in more detail later in the debate.
  Clause 3 deals with the incorporation of the general Act and is a standard clause in such Bills. Clause 4 relates to the Compulsory Purchase Act 1965 and is again a standard clause in such Bills. Clause 5 is the first area of contention. It gives power to undertake certain works, the first three of which relate to the construction of the new railway to connect Manchester international airport at Ringway with the Manchester to Wilmslow line via Styal. That work is part and parcel of the airport authority's general plan from 1985 to 1990. It will have far-reaching consequences, because for the first time it will provide access to the airport for rail passengers from many parts of the north of England and from as far away as the east coast. If the Stansted airport expansion ever takes place, or if it is delayed, all those factors will affect the decision. However, there can be no doubt that the airport at Manchester is now of international significance and it is right that such a proposal should go ahead as quickly as possible. I hope that the House will approve the proposal.
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  The fourth work relates to the constituency of the hon. Member for Stockport, North (Mr. Bennett) and to his constituents in the Woodmoor residents association. It deals with the construction of a short length of railway at Hazel Grove to enable a through weekday passenger service to be introduced between Liverpool and Sheffield. As someone with business interests in Sheffield, I know how badly needed that link is. The link will enable passengers to travel that journey without changing. The board is prepared to admit the problems currently faced by passengers in Manchester who have long walks between trains. This construction will solve the problem and will enable the Liverpool, Warrington, Manchester and the Manchester, Sheffield and east coast railways to be combined in a single service through Stockport. That will mean a direct service from Stockport to the Mersey, across the Pennines, to Scotland, the east coast and Europe.
  That short line will have a significant effect on the economic and industrial infrastructure of the area. However, I recognise that it will be necessary to acquire a small portion of land which is not owned by the British Railways Board, and which adjoins Norbury churchyard. Discussions have taken place and every possible provision has been made to ensure that there is no interference with graves or memorials in the churchyard.
  Clause 6 deals with the infilling of a disused canal in Leeds. I mention it only because it is an example of how a comparatively small amount of work can be used to get round the problem of maintenance that is currently besetting this piece of line, where the bridge can be supported in a different way and money saved as a result.
  Clauses 7 to 18 deal with the closures and extensions to which I referred earlier. As I said, I shall be happy to deal with hon. Members' specific points later. Clauses 19 to 27 deal with land acquisitions and related provisions. Clause 19, with which schedule 4 should be read, relates to a section of line that is liable to flooding in heavy rain. My hon. Friend the Member for Derbyshire, South-East (Mr. Rost) is concerned with this matter. In the Draycott area of the Derby to Trent railway there is a dip in the track which tends to flood. The board proposes to remove the dip in the track and to construct a new drainage system. I recognise that the constituents of my hon. Friend the Member for Derbyshire, South-East and especially Erewash borough council and the Breaston parish council are concerned that any plans to do that may be detrimental to other flood prevention plans. I assure my hon. Friend that the board's intention is to work out with the local authorities and others a scheme that will not interfere with flood prevention in any way.
  The board is determined to cure this serious problem affecting the railway system. I trust that it will be possible to work out a comprehensive scheme for flood prevention in the area, and that my hon. Friend and the two local authorities to which I have referred will accept the board's proposals.
  Clause 28 in part V of the Bill deals with the problems faced by my hon. Friend the Member for Portsmouth, North (Mr. Griffiths). Sealink UK Limited, which is a subsidiary of the British Railways Board, has a plan to overcome the serious problem that affects the Portsmouth area. The new powers sought in clause 28 are that Sealink should be able to levy charges on the users of the floating landing stage and pontoon in Portsmouth harbour beside the railway station. The British Railways Act 1963 enabled the Portsmouth Harbour Ferry Company Limited

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  to have a 20-year lease of the use of the pontoon and landing stage. That lease expires in July. The history goes further back than that.
  British Rail and its subsidiary, Sealink, are involved in this problem because of the Joint Portsmouth Railway Extension Act 1873. The Portsmouth Harbour Ferry Company operates ferries from the landing stage to Gosport, which enables passengers to travel a short distance by ferry, whereas if they went by road they would face a journey of between 15 and 18 miles. The 20-year lease allowed the company to use the facility for an annual payment of £1,500. While it is true that the company has occasionally given ex gratia payments to meet the rising costs of maintenance and repair, the moneys that have been forthcoming cover a fraction of the true costs of keeping the facility operational.
  The facility, which is used by others as well as the ferry, is regarded as an important local amenity. If it is not properly maintained and repaired, it will be endangered. Since there has always been a common hard near to the facility, the clause seeks to allow Sealink UK Limited to raise charges upon those who use the facility and to regulate its use. Many people would be happy for the position to go quietly rumbling on and to make no change at all. Were that to happen, the facility would become another burden for the British Railways Board to carry. That would be the worst possible solution in the long term. The facility, which came into being in the second half of the 19th century for special reasons, must be seen in the true light of the present position.
  Hampshire county council has spent considerable sums of money on the Gosport part of the Portsmouth—Gosport journey. Those in the area recognise that money must be spent.
  Mr. Peter Viggers: Is my hon. Friend aware that there have been discussions among Hampshire county council, Portsmouth city council, Gosport borough council and the Portsmouth Harbour Ferry Company, and does he join with me in hoping that those talks lead to a compromise solution which is acceptable to all parties locally? If the proposals in this clause were to be continued, and if they were put to the House, the clause and the Bill would meet opposition.
  Mr. McNair-Wilson: I am grateful to my hon. Friend for that statement. He reflects my anxiety and that of other groups.
  An agreed solution is required. If any charges are made, they must be reasonable. No firm figure has been agreed. Several figures have been suggested, one of which was 5p per person. It is important to recognise that if nothing is done the facility will eventually vanish because it will not be properly maintained. It is in the interest not just of the ferry company but of those who use the facility to ensure that it is put on a proper commercial footing.
  Mr. Albert Booth: If the intention of the promoters is for an agreed solution to be found to the problem, why is the Bill proposed in terms that would give Sealink the power to charge any fee that it thought fit? That is hardly commensurate with the promoters wishing to have an agreed solution.
  Mr. McNair-Wilson: The right hon. Gentleman knows that no figures appear in the Bill. The intention of the clause is to arrive at an acceptable figure. Local
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  criticism—my constituency is not a million miles away—is that the charges to be levelled must not be grossly extortionate. The problem is to raise sufficient funds to keep the facility operational. I assure the right hon. Gentleman that he will not find any money figures in the Bill. The proposal will allow Sealink to levy charges for the use of the facility in keeping with the cost of maintenance that must be faced in this day and age rather than when the initial concession was given in 1963. If other hon. Members wish to raise this matter, I shall try to provide further assurances.
  Clauses 29 to 32 are the miscellaneous provisions.
  The Bill marks another milestone on the road to clearing up some of the problems that inevitably face a railway industry with such a long history. I trust that the House will give the Bill a Second Reading because the matters to which I have referred require urgent attention. If the British Railways Board is given these miscellaneous provisions, I am convinced that several problems can be dealt with. However, I give no assurance that it will not be necessary in future to bring further matters before the House.
  7.19 pm
  Mr. Andrew F. Bennett: I had rather mixed feelings when I put my name to the blocking motion, because although it seems that some measures in the Bill will be very worth while for my constituents and the country as a whole, there are items that are of concern to them. Through the hon. Member for New Forest (Mr. McNair-Wilson) I hope that we shall be able to elicit an assurance from the British Railways Board that the problems will be dealt with sympathetically. I also hope that we can elicit from the Minister an assurance that the Goverment will give assistance in the areas for which they have some financial responsibility.
  I very much welcome the proposals for the rail link into Manchester airport. Manchester airport is an excellent example of municipal enterprise, first by the old city of Manchester, and more recently by Greater Manchester council. In building up the airport over the years they have shown the same foresight as their forefathers demonstrated in building the Manchester ship canal, and just as that brought prosperity to Manchester at the turn of the century, so Manchester international airport has brought great prosperity to the Greater Manchester area and to the northwest in general. It is perhaps a little sad that in the 1950s agreement could not be reached on Manchester and Liverpool going for one airport between the two cities, instead of having independent developments. However, it is now clear that Manchester international airport serves the area extremely well and has brought many jobs into it.
  The airport serves not only Greater Manchester but the rest of the north-west and is the nearest major airport for most of north Wales, much of Cumbria and, increasingly, Yorkshire and even Humberside. Many of those who use the airport come from the Sheffield and Leeds areas. Indeed, the region that it serves stretches well down into the midlands. Therefore, the airport serves a large part of the United Kingdom and is very effective. In addition to serving a large catchment area, it runs direct flights to many European destinations as well as some to the United States of America and Canada. To those hon. Members who live in the Greater Manchester area it offers quite an attractive alternative means of getting to the House. Sometines I can get from my house in Stockport to the

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  House of Commons in two hours. Admittedly that involves the shuttle flying promptly on time. Nevertheless, the service is very good.
  The airport is now well served by road, and particularly by the M56, the M63 and the M61. The airport is much more convenient than many people think, even if one wants to use the railway in conjunction with a short bus ride. Getting to Manchester airport compares extremely favourably with the difficulties faced by those leaving London for Gatwick or Heathrow, even with the existing system using buses or taxis from the railway station. Any rail link to the proposed third London airport at Stansted would be far less convenient than a link to the Manchester airport. Therefore, Manchester has already established itself as a proven international airport with good communications.
  Clearly, the airport would be enhanced by a direct rail link into it. I very much welcome the proposals in the Bill to put a loop off the Wilmslow to Manchester via Levenshulme railway line into or, very close to the airport's terminal buildings. The piece of railway is very short, and in some ways that shows how modest are the proposals for Manchester. One could have envisaged a much more elaborate scheme that would have involved linking that railway line to the old Cheshire railway at Ashley, which would have provided a loop into Manchester and made it much easier to have longer connections into Manchester airport. However, the proposals — modest though they are—will make it possible to have direct links from Wilmslow and from the centre of Manchester to the airport, and will link the airport with the rest of the Manchester rail network and with the rest of the rail network. Therefore, I welcome that proposal.
  As the proposal is so modest, we should have an assurance from the Government that they will ensure that British Rail has the money to build that railway. It would offer good job opportunities to those in the construction industry and provide quite a bit of extra work for British Steel and others, because of the materials involved in its construction. If the Government want to show the people of Greater Manchester that they care about creating jobs, they could invest the money in this small and modest project and be sure of obtaining a very good return on it. The Government should think at least of doing that before giving any consideration to a further terminal at Heathrow or any commitment to anything at Stansted. Manchester is potentially London's third airport. Once the rail link is established, many people living on the north side of London, let alone in the midlands, will be able to get to Manchester airport more easily than to Heathrow or Stansted.
  The Minister's interests lie with Birmingham, but I would also argue that in many ways the Manchester airport link would provide a good service for Birmingham. If a good rail link is provided to Manchester airport, there will be great scope for ensuring that its work is integrated with the work at Birmingham and Liverpool, Speke airports. In that way it will be demonstrated that one can reach the many centres of Europe from provincial Britain without having to go through London. The way in which transport planning often assumes that people must go in and out of London gives rise to great resentment. Those in the know about Manchester airport realise that one can fly from
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  Manchester to European destinations and get connections to many parts of the world. Therefore, I hope that the Minister will make it clear that he supports the link proposed and that he will put up the money for it.
  In the Budget statement we heard briefly that the Government were considering free ports. I have some reservations about the idea of free ports, but if there are to be any, Manchester international airport must put forward a strong claim to be considered. Free ports involve bringing in commodities, adding considerable value to them and then sending them out again, and clearly there are skills available in the Greater Manchester area and very close to the airport which would make Manchester a good
  The rail link will be important not only for passengers but for freight. A large amount of freight now passes through Manchester airport and I should like more to go by rail than by road. On the whole the freight still goes out on passenger planes and therefore it is important to consider those two groups together. I hope that the line can be used for freight and that when part loads go out with passenger traffic there will be increasing encouragement of the freight handling that goes with it. I hope that the Minister will give us that assurance.
  Much of the track involved in the Bill will be run over by the sleeper trains. Last week a useful Adjournment debate was instigated by the hon. Member for Liverpool, Wavertree (Mr. Steen). A few of us had an opportunity to tell British Rail that it must reconsider its proposal to withdraw the sleeper service to Manchester. It would have been perfectly legitimate for hon. Members to have obstructed this Bill in order to persuade British Rail to be a little more responsive about the whole question of the sleeper service. British Rail's solicitor and its parliamentary agents have been extremely helpful about the Bill, but its attitude to Members of Parliament over the withdrawal of the sleeper service has been disgraceful.
  It has been difficult for hon. Members to have discussions with British Rail, and it has dragged its feet. I hope that the Minister can give us a progress report on the negotiations. There is little point in British Rail proudly saying that as a result of these proposals it will be able to run freight from Kings Cross through Sheffield, through the Pennines and into Stockport and Manchester and up into Scotland, if at the same time it is talking about removing basic services such as the sleepers.
  I appreciate that British Rail does not have the money to put into new sleeper rolling stock on those lines, but there is a strong argument for refurbishing the old stock that has been withdrawn from the London to Scotland route and London to the west country route and to keep going the sleeper service to the north-west, Yorkshire and other areas. In particular, British Rail should have taken a little more trouble at least to consult hon. Members who use the service frequently, and other interest in the area, about its proposals, rather than, as appears to be the case, withdraw the sleeper service by stealth.
  What is more, it is the fault of British Rail that the number using this service has declined. Three years ago, following a fire and asbestos problems, it reduced the Manchester service from two carriages to one carriage. One attendant had looked after two carriages. He then had to look after only one carriage, so this reduced his efficiency. Furthermore, fewer berths were available. Many hon. Members and other users of the sleeper service found that they could not regularly get the bookings that they wanted and started looking for alternative services.

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  I am aware that many hon. Members started flying between destinations at that point because of the decline in the sleeper service. Therefore, I hope that the Minister will be able to tell us that British Rail will be more responsive. If British Rail is not more responsive on the sleeper service, it may be tempting one or two of us to return to the Bill at a later stage and press BR to take a little more notice.
  Mr. Peter Snape: Is not the railway management carrying out its usual practice in these matters, in that when it wishes to withdraw a service or close a railway line it makes the service as unattractive as possible to its essential customers, drives them away to using some other form of transport and then produces figures to illustrate that the service is losing a great deal of money and must be closed?
  Mr. Bennett: I did not wish to delay the House for too long tonight by talking about the sleeper service in detail, but in many ways that is what the management did with the service. People had to get on the train half an hour later and get off half an hour earlier. The management did little petty things that made the service a little less attractive.
  The line and works at Hazel Grove are referred to in the Bill. Here British Rail has not been as sensitive as it might have been. A group of people in Woodsmoor—not, as the hon. Member for New Forest said, my constituents, but within the Stockport area—have been aggrieved for a long time about the bridge over the railway line. Without any consultation, British Rail suddenly closed the level crossing and stuck a footbridge across which was clearly a monstrosity. That resulted in many people being attacked when walking over the bridge because of the way that it was constructed, and that caused many local problems.
  For a long time British Rail treated the issue with little concern for public opinion. It has now, as a result of a court action, had to settle with Greater Manchester council that it accepts that the level crossing should have been kept open and that something had to be done about the bridge. The Woodsmoor residents put in a petition against the Bill but, sadly, as they were not conversant with parliamentary private Bill procedure, they got the petition in a little late.
  Rather than the promoters at least hearing the petition, they objected to the vires of the petition because it was late. The Woodsmoor residents decided to withdraw the petition and return to it when the Bill goes before the House of Lords. The promoters would have done better to let those people have their voice heard at this stage and to see how far they could meet the objection. I hope that the promoters will make it clear that they will deal with the matter of the level crossing, that it will be restored and that the bridge will be taken down. In that way, that concern of the Woodsmoor residents will be dealt with before their petition has to be heard in the House of Lords.
  I welcome the works at the Hazel Grove. I realise that there are one or two people who will say that that will make extra noise on the line. However, I have little sympathy with that argument, because the line used to carry old coal trucks and limestone trucks without automatic braking systems. Often, when those trains stopped, the clanking could be heard all over Stockport. Any increase in traffic now will not go back to the noise volumes that existed on British Rail until fairly recently. Therefore, I welcome the proposals for the link at Hazel Grove.
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  The link will mean that it will be possible for the trains to run, as the promoters say, from Sheffield, through Stockport, into Manchester Piccadilly, and out to Liverpool. It will give a through service, with a considerable increase in convenience for individuals, as it will save them trailing across Manchester.
  I have one query about the amount of traffic that will go through the junction at Knott Mill and Deansgate. That is a fairly tight piece of railway line and I am a little concerned about whether it will be able to cope with the amount of traffic. We are also talking about traffic going from Sheffield up to Scotland along that line, using the new Windsor link, which came in a previous miscellaneous provisions Act. There are questions about whether there will be sufficient capacity to take the number of trains that the promoters have been suggesting will go through.
  This piece of line will have one other effect. It will give us a first-class route from Sheffield to Stockport, through to Manchester and Liverpool, and will link up with the other line going to the airport. It will also mean that main line trains will be withdrawn from the section of railway line that comes up from Strines, Marple Bridge, Romily, Bredbury, Brinnington Reddish, Gorton and into Manchester. That makes sense for the main line trains, which will come through that bit quicker, and there will be a better service. However, one has to ask what implications it has for the piece of line that will lose its main line trains and will also probably lose a great deal of freight.
  I fear, as do many other people, that once those through main line trains are taken off that line, and once the goods are taken off, British Rail will tell Greater Manchester transport executive that the line has now to be paid for by local commuter trains. That has considerable implications, because it will mean either that the fares must go up on that line, or that the Greater Manchester council will have to pay an extra subsidy. As I understand the Transport Bill that is going through the other place, there will be considerable problems for Greater Manchester transport executive if it wants to spend extra money on subisidising that line.
  I do not wish to go back over the arguments on the Transport Bill. It is clear that the Opposition have a different view from that held by the Government, but I hope that the Minister will give us assurances that if Greater Manchester transport executive has to put in an extra subsidy to cover this line, that will be given special consideration in working out the grants for the Greater Manchester transport executive. It is already pressed up against the wall by the Government's legislation, and must not now find that it has to take on extra responsibilities for the line and does not have any leeway. I wrote to the Minister on this subject last week, and I hope that he will be able to say whether it will be possible for Greater Manchester transport executive to get extra Government assistance to cover the costs of this line.
  I hope that the Minister and British Rail will give a categoric assurance that there will not be a dramatic increase in fares for people using those stations. If, however, there is such an increase, I hope that there will not be talk of closing the line because fewer people are using the service. I trust that allowing British Rail to put in about 100 yards of new track at Hazel Grove will not result in its removing an important and valuable commuter service to Manchester.

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  If British Rail is looking for savings on the line at that point, it should look for them, not on the commuter services, but on the lines from Hazel Grove into the Mersey valley and Cheadle Heath. If the link is put in, British Rail will have two lines running parallel to each other. British Rail took out a small section of track at the Bridge Hall estate. It has told me that it has considered putting back that piece of track but that it would be expensive because of one of the bridges involved. That bridge is a traffic hazard and will have to be reconstructed for road traffic reasons. If the track beside the Bridge Hall estate from Hazel Grove to the Stockport line towards Cheadle Heath is reconstructed, four or five miles of track which carries freight only could be removed, which would have considerable advantages.
  I hope that the Minister will assure us not just that British Rail will have the power to instal a link to Manchester airport but that the Government will give it the resources to do it quickly. It will do a great deal to assist jobs and to help the north-west to achieve considerable economic success.
  I welcome the Hazel Grove line, but will the Minister make it clear that the Greater Manchester transport executive will have the money to ensure that the old line used by the main line trains will not be put at a disadvantage or suffer any closures? I welcome the opportunity to raise these issues. I hope that we shall have the assurances for which we have asked so that the Bill can make speedy progress through the House.
  7.42 pm
  Mr. Peter Rost: I welcome the assurances given by my hon. Friend the Member for New Forest (Mr. McNair-Wilson) who has so ably moved the Second Reading. I hope that British Rail will find satisfactory agreed solutions to the objections from my constituents.
  I understand that there is plenty of good will. British Rail and its parliamentary agents have given every sign in correspondence that they wish to meet the objections. The objections have not yet been made, which puts me in a slight difficulty about supporting the Bill at this stage. I refer particularly to clause 3 which deals with the acquisition of land.
  A large part of my constituency is subject to flooding. The river Derwent flows through the area that we are discussing where British Rail wishes to acquire land. The Derwent of course runs into the Trent. The residential areas of Draycott, Breaston and Borrowash and other parts of the constituency have a long history of flooding. The three parishes, Draycott, Borrowash and Breaston, which are most worried about the Bill's proposals, are supported by Erewash borough council particularly in regard to clauses 19 and 20.
  Although Erewash borough council has a most competent technical services team headed by Stanley Martin, who I have no doubt will reach a sensible solution to the problem with British Rail, there has been a fair amount of difficulty because the legislation was rather thrown at the parishes without proper consultation. It has added to the problems that must now be resolved.
  The railway line runs either through or on the edge of the built-up areas where there has been considerable flooding in the past. There is now at long last a more
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  advanced flood alleviation scheme under way. I should like to detail the problem as seen by people in this part of Derbyshire. British Rail is rightly worried about the regularity with which its tracks get flooded, which is why it proposes to alleviate the problem. British Rail's proposals allow for increasing the capacity of the track-side drainage culverts to accommodate all the flood water and discharging the culverts into a small water course to the south of the A6005, the Draycott road, adjacent to the site of the old Draycott railway station.
  I know the area intimately and one of the reasons why the local residents are a little up in arms about the proposals is that British Rail closed the railway stations some years ago and the residents do not even have the benefit of the use of the railway.
  The water course flows in a generally south-easterly direction eventually forming the water course on Sawley lane, Draycott at Wilne Cross. It is important to understand how the railway track becomes flooded. A number of water courses flow in a southerly direction draining the higher land of Risley to the north and discharging into the river Derwent to the south. At times of heavy rainfall—we have plenty of that in this part of Derbyshire—the water courses become fully charged and in extreme conditions overflow into the adjacent fields and eventually—because the land generally falls north to south—the flood water finds its way on to the railway track which lies in a cutting. As the present track-side drainage is incapable of accepting all this flood water, the track remains flooded for a considerable period of time. It is a problem which British Rail wants to remedy.
  The discharge to the water course is acceptable and controlled at the moment. However, if British Rail's current proposals go ahead, although the quantity of flood water would remain the same, its rate of discharge would increase substantially causing unacceptable flooding downstream of the discharge point at the old Draycott station. Much of this flooding could affect housing. British Rail proposes to transfer the flood water from four catchment areas and discharge it into a completely different catchment area which is highly likely to exacerbate flooding in the Sawley lane area of Draycott.
  The Erewash technical services department has worked hard since it heard of the proposals on preparing an alternative solution. It has now finalised the alternative solutions which it believes will be technically feasible and which would cure the problem of flooding. In other words, the flow of floodwater can be controlled so that it does not flood the railway track. Indeed, the local authority maintains that the scheme that it has prepared would be more economical than British Rail's proposals. The problem that faces me is that the meeting between British Rail and my local authority, when these new proposals will be put to British Rail in detail, is not scheduled until next month. We do not really know whether British Rail will find them acceptable. Nor do we know how these proposals will be financed and to what extent British Rail will be prepared to meet its share of what is, after all, an overall flood prevention scheme. The local parish councils are anxious that the Bill should not proceed until there are firm assurances that an amicable solution has been reached.
  A further problem concerns my constituents. It relates to clause 21 giving British Rail temporary access over adjoining property in seven places to enable it to move plant and equipment to and from the working site while the

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  flood prevention scheme goes ahead. Of course British Rail needs to have access to carry out the work, but there is much concern over the method that may be used to transport soil from the site and that this will be detrimental to the local environment. There is enough heavy traffic already in the area. We are talking about built up areas that have perhaps inadequate residential roads for carrying a great volume of traffic transporting heavy soil over a long period. I hope that my hon. Friend will be able to say more about this aspect.
  I do not wish to object to the Bill in principle. I relate my comments specifically to the clauses dealing with the acquisition of land and the part of Derbyshire I represent where British Rail intends to alleviate flooding. Alternative proposals are prepared and will be discussed with British Rail. Until that happens, however, there is far too much uncertainty about the future for me to say that I can feel happy about seeing the Bill receive a Second Reading. No doubt my hon. Friend will be able to give further assurances. The problem that really concerns my constituents is how, if British Rail is given leave to proceed with the Bill and the unspecific clauses which allow it to purchase land, they will be able to oppose the proposals should British Rail find that it cannot meet the objections. This is the difficulty. That is why I have sought to put these points while feeling confident that a sensible compromise solution will be found. I hope that such a solution can be reached long before the Bill proceeds through Committee and back to the House.
  7.54 pm
  Mr. Albert Booth: The hon. Member for New Forest (Mr. McNair-Wilson) referred to continuing substantial reductions in British Rail staffing and the contribution that the Bill will make to modernisation of the railways. The hon. Gentleman certainly tempts hon. Members to comment on the small effects of the Bill on the vast areas of British Rail that are in danger of collapse and the thousands of miles of the network that may have to be taken out of service as a result of shortage of investment. However, it is not my purpose to go further into those matters. I wish to stay fairly strictly within the terms of the Bill.
  I am grateful to the hon. Member for New Forest for expanding on the statement by the promoters and giving hon. Members more information about the purposes of the Bill. There is a desperate paucity of explanation in the statement by the promoters about the purposes of the Bill, from clause 7 to clause 31. I am concerned about the badly and loosely drafted clause 13(2). This criticism applies to many parts of the Bill. Clause 13(2) provides:
  "Notwithstanding the provisions of the specified enactments"
  a number of gates at level crossings may be closed between certain hours. One turns in vain to the Bill to see which enactments are repealed for this purpose. They are not shown. Page 3 of the Bill states that
  "'the specified enactments' means the Act of 1839, section 9 of the Act of 1842, section 47 of the Act of 1845, sections 5, 6 and 7 of the Act of 1863".
  Those who care to carry out historic research of our statutory records will no doubt be able to relate the provisions of clause 13(2) to those Acts. It is not, however, a good way of dealing with legislation.
  Clause 14(4) proposes that British Rail should have the right to close certain crossings as public rights of way and, in fact, to prevent the passage of vehicles across them
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  while leaving landowners effectively with rights of passage across those crossings. This seems to me to beg the question how the clause will assist the modernisation of British Rail. One can understand that in certain circumstances a saving might be made by closing a crossing to everyone for vehicular passage. I cannot, however, understand—it is not explained by the promoters—how one can save money by leaving a passage open to landowners on one side but denying vehicular access to the public. It seems a strange way of limiting public rights.
  A more serious limitation of existing statutes is to be found in clause 22. The clause contains a limitation of the rights that this House legislated in the Compulsory Purchase Act 1965. The clause appears to place a limitation on the rights that this House legislated in section 8(1) of the 1965 Act. That was an important right. Section 8(1) provides:
  "No person shall be required to sell a part only—

  (a) of any house, building or manufactory, or

  (b) of a park or garden belonging to a house, if he is willing and able to sell the whole of the house, building, manufactory, park or garden, unless the Lands Tribunal determines that—

  (i) in the case of a house, building or manufactory the part proposed to be acquired can be taken without material detriment to the house, building or manufactory, or

  (ii) in the case of a park or garden, the part proposed to be acquired can be taken without seriously affecting the amenity or convenience of the house."

  The Compulsory Purchase Act goes on to lay down a way of determining the compensation that will be due.
  This House, in legislating to ensure that if persons are subject to compulsory purchase they will have the right to say whether they want the whole of their property or garden purchased, as opposed to part of it, took an important decision. I shall not enter into an argument about the merits of the decision. I am prepared to accept that I and other hon. Members at that time took a good and valid decision. My argument now is that that decision should not be set aside for the purposes of this Bill. This is not the first time that a British Railways Bill has sought to limit or interfere with basic rights of compensation in acquiring land or premise's. So, in my opinion, this part of the Bill needs considerable justification.
  In clauses 23 and 24 there is an interesting juxtaposition of compulsory purchase rights. In clause 23, we are asked to agree that the board should have a right of compulsory purchase over certain lands affected by the Bill, provided that it purchases it before 31 December 1988. That is not an unreasonable proposition. One would not want that right to be used at any time in the future. Clearly it is only fair that the present occupiers of the land should know, at least within a limited period, whether the board will exercise its statutory right to buy them out. I accept that between now and 1988 is not an undue restriction on the British Railways Board. It should be able to determine whether it will exercise a compulsory purchase right by that date.
  However, in clause 24 we are asked to extend a previous right of compulsory purchase laid down on exactly the same basis, and to extend a right that the House gave British Rail to carry out the purchase by 1983 up to the year 1988. What assurance is there that if we pass the Bill, with clause 23, in 1986 or 1987 we shall not have another clause such as clause 24 in a British Railways Bill

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  asking us to extend clause 23 further? Again, this is an attempt to confer on the promoters a right which the House has been reluctant to grant, in the light of much experience of dealing with compulsory purchase powers arising from planning consent provisions, in the interests of a fair balance between the wider public interests and those of individual owners of property.
  In clause 28 a wide and sweeping power is sought. I am glad to see in his place the Chairman of the Select Committee on Statutory Instruments, my hon. Friend the Member for Keighley (Mr. Cryer). He will appreciate how sweeping the power is. The clause says:
  "Notwithstanding anything in any enactment, the company may"—
  the clause then says what the company may do, ending with the words:
  "as the company may think fit".
  The company may make the regulations, terms and conditions, and determine when it will
  "demand, take and recover or, as the case may be, waive such charges"
  in the operation of a landing stage. Frankly, that is not the language of a promoter who is seeking to reach a fair and balanced solution to an admitted problem. The days are past when it was possible to enshrine in legislation charges, tolls, and so on. Inflation overtakes such provisions. There was a time when the House could say in confidence that a penny toll for taking a pig or a twopenny toll for taking a cow or horse across a river was good legislation. That time is past.
  However, we need to find a way to resolve this problem, and it is not to give those, be they private or public, who have a monopoly right over forms of transport an unqualified power to determine the conditions in which it shall be used. One can say that about Sealink, knowing full well that the Government have taken powers to require the British Railways Board to sell Sealink, so that after many years as a publicly owned operation it might be a private operation. What I am saying does not relate to the question whether it should be private or public. I am arguing that clause 28 is not the way to resolve the problem. In the event of a dispute about proper charges to maintain a transport facility, we need arbitration or some method to determine those charges.
  Although I am conscious that British Rail is beset with many problems, and although I do not share the confidence of the hon. Member for New Forest that it can operate happily within its external financing limits over the next year, I welcome the minor provisions in the Bill which allow British Railways to extend small parts of its network. Let us hope that the two and a quarter miles to Ringway are but the start of many more great and valuable extensions of the British Rail network.
  8.8 pm
  The Under-Secretary of State for Transport (Mr. Reginald Eyre): It may be helpful if at this point I intervene to give a brief indication of the Government's view on the Bill.
  The Government have considered the content of the Bill and have no objection to the powers sought by the British Railways Board. However, I should point out that my right hon. Friend the Minister of Agriculture, Fisheries and Food, for reasons connected with the use of agricultural land, has reservations about the need to take powers in
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  clause 5 at the present time for the construction of a rail spur to Manchester airport, when plans for the airport have yet to be finalised.
  I understand that the promoters of the Bill are aware of this reservation and will discuss it with the Ministry in the near future. I hope that in that way it will be possible to iron out any difficulties.
  The hon. Member for Stockport, North (Mr. Bennett), who referred particularly to the successful development at Manchester airport—I noted all that he said—raised three preliminary points and then came to his main point. I shall take them in that order. The hon. Gentleman first asked about Government support of the proposed rail link to the airport. I am sure that he understands the procedure that applies in railway development of this kind. It is up to British Rail to come forward in due course with its proposals, which the Government will then consider.
  The hon. Gentleman's next point concerned British Rail and freight use. I appreciate the practical element in what he said, and I am sure that it will be considered.
  The hon. Gentleman then referred to a subject that was dealt with in an interesting Adjournment debate last week—the sleeper service to the north-west. The hon. Gentleman will understand that I cannot add to the speech that I made on that occasion, but I remember vividly his contribution.
  The hon. Gentleman has written to my right hon. Friend the Secretary of State for Transport on behalf of the Greater Manchester passenger transport executive about the effect of the board's proposals for the Hazel Grove connecting line and the entitlement to transport supplementary grant. The hon. Gentleman referred to that matter again this evening. I understand that the board is examining with the passenger transport executive the effect of diverting services from Sheffield via Hazel Grove. We shall have to await the results of that examination, but I can say that if, as a result of diverting some traffic away from the existing route, the passenger transport executive were left bearing the costs of the line, that would be taken into account in setting the level of revenue support for the transport supplementary grant in the appropriate year.
  The right hon. Member for Barrow-in-Furness (Mr. Booth) made a short speech. I always find his speeches on transport matters of great interest because of his great enthusiasm for detail. His points will be answered by my hon. Friend the Member for New Forest (Mr. McNair-Wilson) on behalf of the promoters, as will the points raised by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost). I must remind the hon. Member for Barrow-in-Furness of the relevant parts of the Serpell report which do not support his remark that thousands of miles are likely to collapse.
  Mr. Booth: There is no need to look at the Serpell report. One has only to look at the rail policy document that was signed by every member of the British Railways Board. That said that if investment was not increased above the 1981 level, within a decade thousands of miles of track would have to be closed down. Investment has not risen above the level; it has fallen.
  Mr. Eyre: The right hon. Gentleman was implying that there was an imminent state of collapse. I must remind him that the Serpell report conceded the areas in which there are problems. The right hon. Gentleman and I both know

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  that there are maintenance problems. We have developed the wise policy of earmarking part of the PSO grant to carry out such work. I believe that the right hon. Gentleman agrees with that policy. We are continuing it on a more extended basis during the current year, therefore assisting British Rail to deal with the problem.
  I recommend to the House that the Bill be given a Second Reading and be allowed to proceed in the usual way to Committee where its provisions can be considered in detail.
  8.14 pm
  Mr. Frank R. White: I rise briefly to support my hon. Friend the Member for Stockport, North (Mr. Bennett), particularly in his reference to clause 5 and the provisions relating to the developments at Manchester airport. A few years ago it would have seemed very strange that an hon. Member who represents Bury and who lives in Bolton should be extolling anything to do with Manchester. Although we live in the same part of the country, the insular nature of northern towns puts Manchester very much at arm's length. However, the reorganisation of local government and the fact that we are Greater Mancunians, not Lancastrians, has brought us together and made us mindful—probably not early enough —of what Manchester has meant to the region.
  Something that binds Manchester with the conurbations of the north-west is, of course, the railway. It was only in 1980 that we celebrated the 150th anniversary of the first passenger line from Manchester to Liverpool. What drew Bolton and Manchester together was the fact that the next railway line was a coal-carrying line from Bolton to the Atherton and Leigh area. Shortly after that Bury was developed as a railway town with its own railway station. The network that had spread throughout the north-west by the late 1840s was fantastic.
  In view of what the railway has meant to the industrial development of the north-west, the north-west group of hon. Members, of which I am privileged to be the chairman, has no difficulty in supporting British Rail's provisions in that area. Indeed, we have gone out of our way to foster good relationships with the north-west division of the British Railways Board. We have had a first-class relationship with Mr. Anderson and have kept up to date with future developments and plans by means of briefings and meetings. It is much to our regret that that relationship has been marred by the very points that were raised by my hon. Friend the Member for Stockport, North.
  I hope that the Minister, in his contacts with Sir Peter Parker and those representatives of British Rail who are here today, will make that point clear. Forty Members of Parliament from the north-west could have been here tonight to block the Bill on the basis of the disrespect that has been shown to them by Sir Peter Parker. I regret having to name in that way an efficient and honourable member of a nationalised industry.
  However, when the north-west group of Labour Members writes to the chairman of a nationalised industry, as we did in December outlining our fears and requesting a meeting on various British Rail developments in the north-west, including the sleeper service, it is just not on that first, we should have to wait weeks for a reply and, secondly, that after a second letter we should be fobbed
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  off with the observation that the chairman had been advised against a meeting with local Members of Parliament on a constituency matter.
  My hon. Friend and I are representatives of those hon. Members who share a sense of anger at the way that we have been treated by British Rail in the north-west over some outstanding items, particularly when we have always co-operated to the utmost with British Rail both in the north-west and nationally. However, we understand that the British Railways Board has been under pressure as a result of the Serpell report and the problems that my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) has outlined. Therefore, we have not pushed the matter but have preferred to deal with it in personal correspondence. It is because of the rebuff that we receive that we have taken the opportunity tonight to remind the powers-that-be where their attention should be directed.
  We heard that the proposals in clause 5 leading to the development of a link to Manchester airport and the development of Manchester airport were important to the regional economy. I believe that it was described as being as important to Manchester and the north-west as was the development of the Manchester ship canal. That cannot be overemphasised. The Manchester ship canal was a great arterial waterway from the seas of the world into the heart of the industrial north-west. Regrettably, it is now little used. We would let that facility die, fade away and silt up at our peril. The state of our canal system is another matter about which my right hon. Friend the Member for Barrow-in-Furness is aware.
  The new Manchester airport is as important to the development of the north-west as the Manchester ship canal once was. It is important to the whole of the north. At a recent meeting of the north-west group of Labour Members, a presentation was made on the development of the Ringway airport by the Northern Regional Consortium. This is not just a Manchester case for the development of a Manchester airport. It is a consortium of all the northern local authorities—the north-west region, Yorkshire and Humberside and the northern region—each recognising that the development of an international airport at Manchester would bring great economic benefits to the north. Anything that can weld Liverpool and Manchester together is a miracle, but it must have something extra if it can bring Yorkshire and Lancashire together. When it can go up to pease-pudding land in the north-east and bring that region into a united effort, the Government must sit up and take notice.
  The 1978 White Paper, "Airport Policy", recognised the need for a classification of regional airports and for a regional airport strategy. It recognised that Manchester should be classified as a gateway international airport. Since then there have been efforts to develop that policy but it is of concern to us that there appears to be a lobby in the south for the development of other airports, for new terminals at Gatwick and Heathrow and for a completely new airport at Stansted. We believe that that would be a retrograde step and would take away resources that would be valuable to the north-west. The whole of the north resolved, in considering "Airport Policy", that priority in transport investment for improvements in accessibility to regional airports should be displayed by Government. If one can get the industry and commerce of the northern regions and local authorities together, that will be a significant achievement.

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  The Greater Manchester international airport authority, in its presentation to Members of Parliament, said:
  "The airport could be a national asset. It would be wrong to argue that it should go into an area which needs its economy boosting if the location was indefensible in overall transportation planning terms."
  But, for Manchester, that is not the case. For example, Manchester is just as accessible as London, not only from the north-west region but also from the north, Yorkshire, Humberside and the midlands. My hon. Friend the Member for Stockport, North made the interesting point that about 50 per cent. of Britain's manufacturing industries lie within 75 miles of Manchester airport. There is scope at comparatively modest cost for improving the transport links still further.
  Mr. Andrew F. Bennett: Will my hon. Friend stress the point that the number of manufacturing industries within 75 miles of Manchester airport gives considerable potential for flying out replacement parts for orders gained overseas? A large amount of such work is now going through Manchester airport.
  Mr. White: I agree with my hon. Friend.
  I emphasise that if the Government are really concerned about the regeneration of the old industrial areas which have suffered so much as a result of the contraction of basic industries, an international airport should be available for new markets and for salesmen from all over the world. Many of those who come to Britain to look for inward investment opportunities get off the plane at Heathrow and do not go any further than a 30-mile radius of London, whereas if the facility was available at Manchester the facilities, skill and locations and the resources at our disposal would be impressed upon them and the spin-off might be the regeneration of the old industries.
  The case has been made by the Northern Regional Consortium and the importance of the economy has been emphasised. What the northern regions want to see above all is commitment from the Government. I am pleased that the Minister has said that the Government support the Bill. That is an important step in recognising our need. At the North-West Industrial Development Association there has been discussion on the development of the regional strategy and the regional economy. It stressed the importance of a Government commitment. In a recent report it said:
  "The case for a substantial Government commitment to the economic future of the north-west of England is undiminished. Such a commitment is evident already in the south-east as illustrated by the M25, the London orbital motorway, the Thames barrage, the proposal for a £103 million bridge across the Thames, and the recent revival of interest in the Channel tunnel. Moreover the British Airports Authority proposals to expand Stansted as London's third international airport would, if implemented, add substantially to the imbalance of investment already evident between the south-east and the north-west of England. It will pose a substantial threat to the future of Manchester International airport, one of the key growth points in the north-west economy still awaiting a direct rail link."
  The Minister's statement tonight in support of this modest proposal answers that fear and I hope is the start of a redevelopment of transportation policy in the north-west which will provide the vital infrastructure for the redevelopment of our industrial base.
  I started my speech by saying that the original development of railways more than 150 years ago was a
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  vital ingredient of the first industrial revolution. It was supplemented by the Manchester ship canal. The development and future of Manchester international airport is also a vital ingredient.
  The Greater Manchester passenger executive and British Rail have recently completed a rail strategy for the Greater Mancheser area. I am pleased to note that within that strategy there is a re-equipment proposal for the Bury line, which runs into one of the most modern passenger rail-car interchange developments in the north. I look forward to the development of that investment. The point is made in the rail strategy that it is vital that a link to the Manchester international airport should be completed. It would add to the development of the airport which would add to the infrastructure of the region. That, in turn, would bring the development of new industries and the prosperity which makes such a transportation policy feasible.
  We had the network 150 years ago. Perhaps it was developed in a hopscotch fashion. It was built up as demand arose. Three transport authorities in our area are analysing their transport demand and have a vision of what transportation should be in the Greater Manchester area in the future. Within that has been the development of the rail link to Manchester international airport.
  I support the Bill because it gives legislative effect to that vision. I thank the Minister for his support for the Bill and urge the House to do likewise.
  8.30 pm
  Mr. Peter Griffiths: A motion in my name has stood on the Order Paper in the past few weeks seeking that the Bill be given a Second Reading in six months' time. That is normally a device to show either a modest objection to a part of the Bill or a determination to see that it is strangled at birth. In placing the motion on the Order Paper my motives and intentions were to do exactly as the motion said, and to give time between when the Bill was published and its Second Reading for British Rail to give evidence of its good intentions, particularly with regard to part V, clause 28.
  It is not my intention tonight to seek to prevent the Bill from receiving a Second Reading. However, I have the greatest reservations about the Bill's terminology and the lack of vigour with which the preliminary consultations that one would have thought would take place before the Bill was brought to the House were pursued.
  I realise that it is not entirely within the province of British Rail to decide when the House will debate the Bill. That depends on many factors. However, when a miscellaneous provisions Bill is brought forward, which raises numerous local matters—some of which cannot be described as mundane, as they were by my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison), because they may be of the greatest significance to the area concerned—we should not be told that British Rail has good intentions about carrying out discussions after Second Reading and perhaps before or during the debates in Committee. We should know that those consultations have taken place and that there is broad local agreement.
  I shall confine my comments to part V, clause 28. I welcome very much the cogent statement by the right hon. Member for Barrow-in-Furness (Mr. Booth) on this part of the Bill. Tonight we are not discussing British Rail's good intentions. We are not discussing hypothetical discussions that it might have with other parties. We are discussing the Bill, which is in black and white and which

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  contains terminology which, after the closest examination, can be seen only as sweeping and in some ways alarming. I hoped that my hon. Friend the Under-Secretary of State would say that the Government Front Bench was concerned at the seeking of such sweeping powers by a nationalised industry, certainly by a subsidiary of a nationalised industry, which, as the right hon. Member for Barrow-in-Furness said, could become a private company in the near future.
  Those of us in southern Hampshire who know the history of the development of the railway to Portsmouth harbour will know that under the original scheme the pier, the harbour station and a landing stage were not built in a disinterested fashion by benevolent railway companies. The Joint Portsmouth Railway Extension Act 1873 placed an obligation on the railway company to provide and maintain a public landing stage.
  Going back a little further, we know that as early as 1847 the two railway companies which at that time operated competitively in the Portsmouth area were required to provide a public landing stage with connection to the town. I emphasise the phrase "required to provide". This was because a public landing stage was seen as a place of public resort and an advantage to the city of Portsmouth which balanced the privilege which was given to the railway companies to build a pier, a carriageway and a station into the Portsmouth harbour instead of using the common hard for the purpose of bringing their ferry boats from the Isle of Wight to shore. In return for that privilege they provided a public landing stage.
  There is no doubt that the intention at the time was that this should be retained as a landing place to which the public had free access in every sense of those words. To support that, I draw attention to the Act of 1873, where we see in section 10:
  "the two companies shall be at full liberty to use the said public landing place and approach for all purposes"—
  and then, I emphasise:
  "but not so as to prejudicially affect the public use thereof".
  The imposition of a charge surely affects the public right, and prejudicially affects it. If there were a modest charge, or provision for whatever charge was imposed to carry with it a right of appeal to some public authority to see whether it was reasonable, if the Bill indicated that this charge was to be a modest one, there might be merit in supporting this particular clause of the Bill. However, the fact of the matter is that it is hard to imagine a more sweeping power than that which is claimed for Sealink UK Limited under clause 28, subsection (2) of which says:
  "Notwithstanding anything in any enactment, the company may—

  (a) from time to time demand, take and recover or, as the case may be, waive such charges for the use by the public of the landing stage and approach; and

  (b) make such use thereof subject to such terms, conditions and regulations;

  as the company may think fit."
  There is no indication here that the charges are to be modest or reasonable, and I fear very much that the implication is that there is an intention to seek to make the pontoon and the public landing place either profitable or at least self-supporting.
  There was never any intention in 1847 or 1873 that this should be so. This was a public provision made by the railways in return for the privileges they received. What is happening now is that British Rail is seeking to shuffle off the responsibility that has lain upon it and its predecessors for 140 years. It might be assumed that it will
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  be possible for British Rail to come to some amicable agreement over this matter and there are numerous suggestions as to what might happen. What we know, however, is what is proposed by British Rail.
  We also know the strength of the opposition to the proposals as they stand at the moment. Petitions against this particular provision have been made by the Hampshire county council, the Portsmouth city council and the Portsmouth Harbour Ferry Company. If my hon. Friend the Member for Gosport (Mr. Viggers) speaks later he will no doubt draw attention to the attitude of Gosport district council. I have no reason to suppose that it differs greatly from that of the bodies that I have mentioned.
  There is unanimous objection to British Rail's proposal. The public representatives oppose it on behalf of the local people. The main user of the pontoon—the Portsmouth Harbour Ferry Company—also objects strongly. The pontoon is also used by Crown employees, by Portsmouth harbour watermen and by members of the public. Local Members of Parliament will know from their postbags how strongly individual members of the public object to the imposition even of a relatively modest charge for use of the pontoon. Why should the public have to pay to enter what has always been a place of public resort?
  Until the 1970s, the cost of the ferry service between the pier and Gosport was relatively modest, but with the rapid rise in the cost of fuel the cost of the ferry service has also risen. I fear that if the further burden of charges for access to the pontoon were added to the already increased charge the service would be severely damaged. The people of Gosport and Portsmouth find the ferry the most convenient way to pass from one town to the other. The alternative is a road journey that may take half an hour or longer, depending on the time of day. There would be no advantage in diverting the traffic to the roads and great disadvantage in damaging the excellent ferry service.
  It has been suggested that the ferry company, as the main user of the pontoon and landing stage, might wish to take responsibility for that, but I fear that there would be just as much local objection to that company having power to levy charges as there is to British Rail doing so. The most sensible suggestion seems to be that some kind of consortium of the local authorities and the ferry company should be formed or that one of the local authorities should take complete responsibility for the pontoon.
  Those suggestions should be investigated, but that would require more than just commercial negotiations. It would involve not just a renewal of the 20-year service agreement between the ferry company and British Rail, which would be fairly simple, but a major political decision by Hampshire county council and Portsmouth city council. The extension of municipal ownership is not something that the city council would lightly undertake.
  These matters should certainly be considered, but they should have been considered long before the Bill was introduced. There is no guarantee that if the Bill receives a Second Reading today the negotiations that we wish to see will proceed with speed and vigour to a satisfactory conclusion. I do not suggest that there is other than good will on the part of all the parties concerned. There is good will and a willingness to find a solution, but we cannot give our approval in the House of Commons to what it is suggested may be the attitude of persons outside. We are being asked to give our approval to a Bill, the provisions of which I have read into the record and with which I will

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  not weary the House again. They are different from the bromides that might be offered to us in the sense of protestations of good will on behalf of British Rail and its Sealink subsidiaries.
  I express the gravest reservations about the Bill. Had it been a matter of my own choice I would rather we had been able to say, "Come back in six months when you have carried out the discussions and then we will give your Bill a fair wind." We are not in a position to do that tonight. Therefore, I ask my hon. Friend the Member for the New Forest (Mr. McNair-Wilson), in so far as he is able to commit the sponsors of the Bill, to give us an assurance in clear and unequivocal terms that there is an intention to come to a solution that is acceptable to the public representatives of Hampshire and Portsmouth, to the commercial users of the pontoon, the Portsmouth Harbour Ferry Company and the Portsmouth watermen, and to those ordinary members of the public who for 140 years have had access to the place. If we are given that assurance then it should not be necessary to divide the House this evening.
  Nevertheless, I must make it clear that should agreement not be forthcoming at later stages of the Bill, I could not permit such easy progress when the Bill returns to this Chamber, having been considered in Committee. I say that in all seriousness, because that would be the attitude of the people of Portsmouth and southern Hampshire. They would require that the Bill be fought unless a solution is found to the problem which is of such great concern to many hundreds of people who daily need to use the services of the Portsmouth Harbour Ferry Company.
  8.47 pm
  Mr. Bob Cryer: I want to raise briefly one or two items on this private Bill which has been promoted by British Rail. I welcome the extension of British Rail's network to Manchester airport at Ringway. I hope that the discussions which the Minister said would take place between the British Railways Board and the Ministry of Agriculture, Fisheries and Food will solve any difficulties which the Ministry has brought to his attention. This is an excellent development by British Rail. Where massive numbers of people are involved, British Rail should seek to serve them.
  I ask British Rail to bear it in mind that currently at Leeds-Bradford airport a £13 million extension is being constructed and that there is an abandoned track there of a railway that used to run to Yeadon. In the same context as Manchester, with a municipally owned airport and an increasing number of passengers, British Rail should consider the possiblity of serving that airport with an extension of the railway network if it has a vacant track bed which could be adapted either in whole or in part for such a purpose. That would be a useful development.
  The introductory part of the Bill refers to the general duties of British Rail. It says:
  "It is the duty of the board … to provide railway services … and … to provide such other services and facilities as appear to the Board to be expedient, and to have due regard, as respects all those railway and other services and facilities, to efficiency, economy and safety of operation:".
  I echo some of the comments that have been made today about the withdrawal of sleeper services. The British Railways Board is proposing to withdraw the King's Cross
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  to Leeds sleeper service on the ground that the decline in the number of users of that service means that the board cannot afford even to refurbish the sleeping coaches.
  The board claimed that new coaches, which cost a great deal, would be necessary. When I challenged that I received a letter, not from the person to whom I wrote, but from an assistant to whom my letter had been passed, who said that even refurbishing could not be met out of the usage. However, he did not give the usage or the proportion of revenue that is ascribed to the sleeper services, either supplement or passenger revenue.
  The board also claimed that the inter-city service between King's Cross and Leeds is now provided by high-speed trains, that it is a good service and that it has been speeded up since the introduction of the HS125s. As I pointed out, however, the HSTs are now roughly 10 minutes faster than the 1938 West Riding Limited service which was introduced on the same route using Sir Nigel Gresley's Streamlined Pacifics. Although I recognise that there has been an increase in speed, the railways did not regard the introduction of West Riding Limited in the late 1930s as sufficient reason for the withdrawal of sleeper services. Nor do I regard the introduction of the HSTs as sufficient reason for withdrawing the sleeper services.
  British Rail must make out a much fuller case before it can justify that decision. The sleeper services will not bear, and have never borne, the full cost of train movements between King's Cross and Leeds, I am sure that if and when the sleeper service is withdrawn, the night parcels train that carries newspapers will be maintained, that the shunting facilities at King's Cross and Leeds will also be maintained, both for the newspaper parcels and other services, and that the only cost that will be reduced or removed will be that of porterage and coaching stock.
  As a considerable number of sleeping cars will be available because of the introduction of new cars, it cannot be beyond the wit of British Rail to refurbish on a limited scale to provide the service. The service is relatively slow. The maximum speed, which is entirely satisfactory, is 80 miles an hour. The train is so designed that the occupants are not disturbed by excessive speeds. Therefore, the problem is not one of refurbishing coaching stock that has to go at the high speeds of which British Rail is capable.
  I want to draw my anxiety about the King's Cross to Leeds sleeper service to the Minister's attention because in a recent Adjournment debate he said that he had nothing to add. That debate was limited. I merely want him to draw the attention of British Rail to the wider area of worry in the House about the withdrawal of sleeper services, which comes not only from the north-west but from Yorkshire and Humberside.
  If the services are withdrawn, a potential use of British Rail will also be withdrawn, and it does not necessarily follow that people will automatically use the high-speed train service as British Rail suggests. They may be diverted to motor cars or the air service that is available from Heathrow, thereby causing yet another diminution of what I regard as a valuable facility for business men who want to go to Yorkshire and spend a full day in Leeds and the surrounding cities. They can do that by using the sleeper service. I strongly hope that the Minister will draw British Rail's attention to the anxiety of Yorkshire Members of Parliament, as he will do with regard to hon. Members from the north-west.
  New railway works are proposed at Stockport, Disley and Whaley bridge. British Rail is diverting the

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  Nottingham to Glasgow service via Manchester, and I am anxious that the capital investment proposed should not be based on a design to improve the speed of that service, which would result in greater justification for the closure of the Settle to Carlisle railway. The service between Nottingham and Glasgow has been diverted through Manchester since May 1982, and is a tortuous and lengthy service. The Nottingham, Leeds, Keighley, Skipton, Settle, Carlisle service to Glasgow was much better.
  Many people believe that what is proposed will lead to the closure of the Settle to Carlisle railway, which is one of the most magnificent railways in the country. It goes through starkly beautiful countryside. It has maintenance problems, as do all railways, but it is believed that the stories of withdrawal and the rundown of services is a prelude to British Rail presenting a case for the closure of this magnificent railway. The line is an important diversionary route to the west coast. When blockages occur, when there are derailments, or when the overhead catenary equipment needs attention, trains can be diverted through Hellifield, Settle and Carlisle to Glasgow. Closure of the line would cause severe operational difficulties.
  I recognise that the works proposed in the Bill are primarily for another purpose, but if they facilitate the north-south movement, it must not be at the expense of the Settle to Carlisle line. If British Rail proposes to close that splendid scenic route, which has not been exploited to its full potential, there will be strenuous opposition in the House. An organisation called Friends of the Settle-Carlisle has support on both sides of the House, and that support will be strengthened and widened if British Rail decides to close the line. That is a warning to British Rail. People such as myself will be keeping an eye on the service in the hope that the board can be put under pressure to improve it this summer—not at some dim and distant stage in the future—so that the maximum use can be made of the railway and the revenues increased by providing a decent service, including a Sunday service.
  The hon. Member for Portsmouth, North (Mr. Griffiths) mentioned the powers for Sealink UK Limited. I suspect that the hon. Member for Gosport (Mr. Viggers) will also refer to that. Clause 28 gives absolute powers, which are not unusual, to Secretaries of State. I am not happy for Secretaries of State to be given such powers, although they are accountable to the House. Hon. Members would like to think it is full accountability, but that is debatable. To hand over that power to a subsidiary of the British Railways Board and, moreover, a subsidiary that might be sold, is highly unsatisfactory.
  British Rail is not easily accountable to the House, so a private company would be even less accountable. Hon. Members can table questions to the Secretary of State for Transport about meeting the chairman of the British Railways Board to discuss investment. We can raise a wide range of issues in that way. However, it will not be easy for hon. Members to raise questions about a private company. If a private company takes over Sealink, it can be assumed that the rights and duties of Sealink will be transferred to it.
  There is an absolute power over charges. The Bill says:
  "Notwithstanding anything in any enactment, the company may"
  do certain things. That pushes aside any existing legislation or safeguards. The company will be able to do anything about charges. British Rail has the right to levy charges on the railways. The board is indirectly
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  accountable to the House. Many discussions take place in the House on railway services. The British Railways Board takes its liabilities in that respect seriously. Accountability may be remote, but it will be even more remote if a private company is concerned. A private company will seek not only to provide a public service but to maximise its revenue in a manner that may not be to the taste of the users of the service.
  I do not like private legislation—concern has been expressed about it—that gives absolute powers to private bodies. Some hon. Members may recall that I objected to sections of the Lloyd's Bill. An easy solution might be for the Secretary of State to introduce an instrument levying the charges, which could then be subject to the negative procedure of the House. That would be an entirely satisfactory safeguard. The House deals with hundreds of such instruments every year. The vast majority are not objected to or prayed against, to use our archaic phrase. It would be a simple matter to apply to the Secretary of State, who could lay the order in the usual way. If people felt aggrieved, a prayer could be tabled and debated. Another safeguard would be to give local authorities the power to approve the charges by way of a byelaw if people felt that the involvement of the Secretary of State was too grand for a relatively minor matter.
  Following the accumulation of legislation, Secretaries of State in various Departments deal with all sorts of minor and humdrum matters and are subject to delegated powers. Either way, hon. Members should examine private legislation carefully. I have much hesitation in handing over unqualified powers to the British Railways Board, although it has occupied a unique statutory position by virtue of the powers of the component railway companies of British Rail. Bearing in mind the possibility of privatisation, it was interesting to hear the reservations expressed by Conservative Members. I share with them the view that when such charges are made they must be subject to a proper negotiating process and some degree of accountability. In my view, the clause does not provide it.
  9.4 pm
  Mr. Peter Viggers: The Bill has the broad support of the House and the debate has been marked by several well-informed and thoughtful speeches from Conservative and Opposition Members and by the fact that the minority parties have not found it necessary to disturb the even tenor of the Bill's progress by attending it.
  The powerful speech of my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) has dealt comprehensively with clause 28, which I have severe reservations about. I shall merely supplement his remarks briefly and add some minor points of my own.
  As far as clause 28 is concerned, this Bill is too early. There is no consensus in south Hampshire as to what should be done about the Portsmouth pontoon except to say that the proposal in clause 28 is unacceptable. There is no doubt that in 1873 the railway companies accepted a duty to provide a pontoon and jetty in exchange for a benefit and that Sealink is now seeking to extricate itself from that duty. There can also be no doubt that the manner in which Sealink proposes to implement its powers is unacceptable. To give a small example. I understand that British Rail intends to impose a single fare for passengers going one way only between Portsmouth and Gosport and to do so on the Portsmouth side. Meanwhile, the

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  Portsmouth Harbour Ferry Company has decided to do the same, and to impose a single fare on the Gosport side. Of course both would like to diminish their overheads by imposing a single fare but have so far failed in their discussions to decide where it should be imposed.
  It would clearly be unacceptable for broad powers to be given to British Rail through Sealink to impose any charge that it sees fit, so the proposal is unacceptable in broad terms. Indeed, it is also unacceptable in detail, because the ferry is very important locally. I think that I can claim to know the ferry as well as any hon. Member, because I used it for five or six years on the way to school. There are two ways to get from Gosport to Portsmouth, or vice versa. One can use the ferry across the half-mile strip of water that marks the entrance to Portsmouth harbour, or one can travel about 15 miles by road. Of course, travellers by road will almost inevitably go by car, while those travelling on the ferry will either use bicycles or, more probably, go by foot and then take advantage of the bus services in Gosport and Portsmouth, and/or the train services in Portsmouth.
  If passengers start travelling more by road, the bus and train services, as well as the ferry, will lose passengers, it has been estimated that if a charge of 5p were made on the ferry, it would lead to about a 5 per cent. loss of custom, and that loss of custom would also be felt by the bus and train services. Therefore, we are in a classic vicious circle and a way out of it must be found in order to protect the ferry company and its services, as well as the bus and rail services.
  I join my hon. Friend the Member for Portsmouth, North in not opposing the Bill at this stage. However, I should like to use two examples to underline the importance of the ferry and the pontoon to the area. First, the Gosport side of Portsmouth harbour is developing as a tourist centre, with the submarine museum and other tourist facilities. It is now more than ever necessary to develop good services across the mouth of Portsmouth harbour. In addition, there are wider proposals for the development of Portsmouth harbour as a tourist centre, with services possibly going through from the Portsmouth and Gosport side one day to the fine Roman castle at Portchester. Perhaps one day the munitions museum in the Gosport area will also be developed. In addition, the Victory has now been supplemented by the Mary Rose. The whole area is developing as a tourist centre and it is vital that the Portsmouth pontoon should be available not only for the ferry company but for the other boat services that may one day come in connection with the development of those tourist facilities.
  Therefore, I hope that the local authorities will adopt a constructive approach when discussing this proposal with British Rail. I have every reason to believe that they will do so and, indeed, have done so. The Portsmouth Harbour Ferry Company, which is most concerned in the immediate future of the Portsmouth pontoon, will also adopt a constructive approach. Above all, British Rail, promoting the Bill, should not feel that because the Bill was not opposed at Second Reading it will not be opposed later on in its progress.
  I put down a marker, and join my hon. Friend the Member for Portsmouth, North and other right hon. and hon. Members to say that the proposal in clause 28 as it stands is unacceptable. Unless a reasonable arrangement can be worked out among British Rail, the local authorities
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  and the ferry company, there will be opposition later during the course of the Bill. In case they have not done their homework, they should know that there are a thousand ways in which individual Members can oppose the progress of a private Bill.
  9.10 pm
  Mr. Patrick McNair-Wilson: With the leave of the House, Mr. Deputy Speaker perhaps I may reply to the debates. Several important points have been raised by hon. Members, such as those raised by the hon. Member for Stockport, North (Mr. Bennett). I should like to thank him for his general welcome for the airport proposals and assure him that British Rail is anxious to find the most practical way to restore the level crossing to which he referred. I make it clear that it was not British Rail that took up the position over the petition to which the hon. Member referred. The Standing Orders Committee did so, and it was its ruling that was upheld. Nevertheless, I take the point that he made about the suggestions for the bridge, and that will be noted.
  My hon. Friend the Member for Derbyshire, South-East (Mr. Rost) spoke of the objections made by his constituency that have not yet been met. That is true, but the proposals from the Erewash borough council have not been received. We understand that they are coming this week, and I can assure him that when they are received they will be most carefully studied. I hope that a comprehensive plan for the flooding problem can be arrived at.
  The right hon. Member for Barrow-in-Furness (Mr. Booth) referred to level crossings and the problems that he felt had not been sufficiently spelt out. Clause 13 gives the details of three crossings and their closure times at night. I make it clear that his objections to clause 14, which is also about the closures, is that by these means the board is seeking powers to reduce the status of level crossings from public to private crossings. The present-day use of the crossings does not justify the cost of retaining crossing keepers, and the powers will enable the board to withdraw the crossing keepers from eight crossings, which will bring about a considerable saving. That is the thinking behind this part of the Bill.
  However, as to the point made about the compulsory purchase provisions—
  Mr. Booth: Before the hon. Member leaves the point about level crossings that change status from public to private, will the private owners who are served by them have to open and close the gates to gain access to a road and, if so, why should not members of the public do the same to gain the same access?
  Mr. McNair-Wilson: Persons who need to make use of the crossings to gain access to their properties will still be able to do so, but persons having alternative means of access to their properties will not be able to use the crossings. The Bill makes provision for such persons to be compensated for the loss of such rights, which may go some way to meet the point that the right hon. Member made. The appropriate local authorities have been consulted about each proposal. The matter will, if necessary, be further considered in Committee. That is where I hope that the important point that the right hon. Member makes about the 1965 compulsory provision will be fully explained. I can give him that assurance.

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  The right hon. Member for Barrow-in-Furness further referred to the vexed question of the charges in clause 28, and I shall deal with the whole of the Portsmouth problem in a moment.
  The hon. Member for Bury and Radcliffe (Mr. White) made some important points about the north-west. He also made clear the difficulties that he is having in establishing proper communications with the chairman of the British Railways Board. I assure him that those comments will have been noted, and I hope that some new relationship can be established. I am grateful to him for his reiteration of the importance of the rail links with Manchester to which other hon. Members have referred.
  My hon. Friend the Member for Portsmouth, North (Mr. Griffiths) made a strong appeal for the provisions in clause 28 to be set aside until further consideration had taken place. He pointed out that he had earlier put down a blocking motion. Were we to have acceded to his request and delayed the matter for six months, the position would have been even more critical than it is now because six months from now brings us to September and, as I pointed out earlier, the lease to the ferry company runs out on 8 July. There is some need to press on with establishing a new relationship.
  There seems to be some misunderstanding about the exact position of the pontoon facility. Much has been said about the 1873 Act and my hon. Friend referred to an earlier date in the 19th century. The 1873 Act authorised the extension of the railway system from Portsea to the Royal Naval dockyard. In so doing, it prevented access to the common hard which is still there. The pontoon facility came into being for that reason. It was not, as has been suggested by my hon. Friends the Members for Portsmouth, North and Gosport (Mr. Viggers), that in exchange for some facilities—perhaps the ability to build an extension of the railway—the railway company felt that it had to provide another public facility. The company
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  provided it because by building the railway it had prevented people from using the common hard which was the normal place for them to land. It must be made clear that those who have suggested that the pontoon is a public facility are not strictly correct. It is a facility that has been provided for the public because of what was done in 1873 —shutting off access to the common hard. The common hard still exists. People may continue to use it.
  The important fact that must be faced, which was raised by the hon. Member for Keighley (Mr. Cryer), is how to overcome the existing deficit. I explained that the ferry company pays £1,500 a year. I have the maintenance budget for the landing stage for 1983. It talks in terms of £42,000. Somehow we must ensure that the cost of maintaining the facility is paid for either by those who use it or in some other way. I do not believe that it is sensible to continue with an arrangement that started in 1963, as I explained earlier, and which has been clearly overtaken by events, and expect the problem to go away if nothing is done. The problem will not go away. It must he dealt with, and I contend that it must be dealt with before the
  I share the desire of my hon. Friends the Members for Portsmouth, North, and Gosport, to see an agreed solution. Let us hope that that will happen, but a solution must be found because without it it will not just be a problem for those to whom my hon. Friends have referred who use the facility, but for the ferry company as well.
  With those few comments on the points that have been raised I should like to thank hon. Members for the manner in which they have received the various proposals. I hope that the Bill can now proceed to Committee and its remaining stages and that it will eventually become part of the modernisation process of British Rail.
  Question put and agreed to.
  Read a Second time and referred to the Examiners of Petitions for Private Bills.

  Small Businesses (Staffing)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]
  9.20 pm
  Mr. David Myles: I am pleased to have secured this Adjournment debate on the evening of the Budget. I congratulate my right hon. and learned Friend the Chancellor of the Exchequer on what I would call a steady-as-you-go Budget. It keeps absolutely to the financial strategy that has marked the period of office of this Government. I am also honoured and pleased that one so senior as my right hon. Friend the Financial Secretary has seen fit to remain until this time of night, although it is not so late as some Adjournment debates, to reply. Those are the nice things that I have to say.
  While everyone rightly deplores the fact that we have such a high rate of unemployment, most also accept that there is no simple solution to the problem. However, it would appear not be widely recognised in Government quarters that a vast area of potential employment is ignored or frustrated. My right hon. and learned Friend has shown recognition in his Budget of small businesses, although not so much of the self-employed. He has achieved, in a number of measures, gradual and constructive progress along the road to encouragement of small businesses.
  I wish to concentrate mainly on small traders or business men who would be willing to employ one person. An example is a tradesman, perhaps a plumber, a joiner, a painter or a radio and television engineer who wants to set up in business on his own account. It is possible that he has been declared redundant. However, he still possesses the skills of his trade. He is told by Government and everyone else that it would be a good idea to establish his own business. I recognise that a tremendous number of people are following this course. Without the burden of overheads he finds that he is trading competitively. In no time at all, he is overwhelmed with work and decides to take on an employee. It may be a friend or someone else who possesses the same skills. Because he wants the operation of taking on an employee to be above board, he notifies the Inland Revenue and all the public offices that should be notified.
  After a time, which can be considerable, he receives through the post a voluminous official paid envelope of the type I hold in my hand. It contains tax table A, tax table B, national insurance contribution tables, forms P7, P8, P45, P46, P11, P15 and 30BZ. Sixteen moves are needed to fill in P11, if the employees are paid once a week, and seven moves to fill in 30BZ. The man will receive numerous letters to explain the forms, but not a single letter of courtesy or explanation.
  When I took up the matter with the Inland Revenue, I was told, "We send out so many of those envelopes that we do not have time to send individual letters." What do people in the Inland Revenue think that the poor employer has time for? He has to sift through all these leaflets and try to decipher what he is liable for—and he is liable, because he sees there warnings about what will befall him if he does not comply fully with the instructions which either he does not understand or he does not have time to comprehend. He is liable to be punished if he fails to complete the VAT forms correctly, or if he fails to remit the employee's PAYE tax, or if he fails to return the required census information.
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  I could go on, but in this short debate there is not time. However, I should point out that I have been inundated with letters from the National Federation of Self Employed and Small Businesses, the forum of private business, and a number of other organisations representing small businesses, as well as from many small business men, saying, "Thank goodness, at last, someone is drawing our plight to the attention of the Government."
  The same tradesman then receives details of the national insurance scheme. He has to send contributions, regardless of whether he is making a profit. He is bombarded with regulations from bodies such as the Health and Safety Executive. Lurking in the background, because they do not communicate with him, are a wages council or a wages board, and a trade union or trade association, which require him to pay a certain amount to the employee. They do not tell him, but he is expected to know. Indeed, they can penalise him for not having obeyed instructions. There are 34 wages councils, and I am pleased to know that my right hon. Friend the Secretary of State for Employment has said that he is not happy about them.
  The man will then receive a 59-page booklet which explains how he is to pay the first eight weeks' sickness benefit. This is complicated. I do not want to decry the scheme, but the onus is on the employer to complete and return the statutory sickness pay forms, and failure to do so could result in a £500 fine.
  If the small trader has not already dismissed any notion that he may have had of employing someone, he may face even greater problems later. Regulations about working conditions may demand structural changes in work premises, and thus understandably inhibit the employment of full-time staff. Here I quote Mr. Anderson, the chairman of the National Federation of Self Employed and Small Businesses in my area. He says:
  "We employ only part-time staff in our Coffee/Gift shop. However if I took on one full-time employee I would have to provide two extra toilets (one male and one female) for staff. I believe I also have to have a rest room. Unfortunately, it would leave no space for customers".
  That speaks for itself.
  "There is also the problem of obligatory redundancy payments whereby on the termination of a business, the employee may receive more than the man who has invested his money, risked his family and perhaps borne financial loss in order to build up the business."
  We must also remember that if that man goes out of business he is not entitled to any unemployment benefit and he cannot even opt to pay a higher rate of insurance in order to do so. Could anybody blame that poor fellow if he were to throw all the bumf in the waste paper basket and tell his new employee that he is sorry but there is no way that he can be an unpaid civil servant and run a business.
  I do not exaggerate the strain that such intolerable administrative burdens place on the small employer. I have an extract from a Scottish newspaper of 11 September 1980. That quotes 16 small business men as saying that their businesses are up for sale because of Government red tape. The small employer has enough to battle with in this time of recession without having to take on the machinery of bureaucracy, especially when it appears that the machinery is geared against him. Therefore, I ask the Minister to take steps to simplify the procedure, not only by removing some of the major disincentives but by offering some positive incentives. The EC's suggestion

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  that an allowance might be given towards the cost incurred by small and medium sized firms in complying with tax and other regulations is one possibility.
  The subject of the private employer is a hobby horse of mine. I take as an example a highly qualified young lady who has benefited from a university training for one of the professions. She may work a year or two and then meet the man of her choice and get married. Before long she will start a family. Now she may not have any bent towards or interest in housework and looking after children. She wants to follow her profession and would like to have someone to look after the house and the children—there are plenty of people with such skills and inclination—but she is not allowed to do that because she cannot set the wages of such a person off against taxation.
  Perhaps she is married to a thrusting young executive and lives in a surburban house with a large garden. Perhaps they will have benefited from the mortgage advantages announced in the Budget today. Perhaps neither her husband nor she has the time or inclination to look after the garden but wants to see it looking well and thus keep up the tone of the neighbourhood. Therefore, they would like to employ a gardener. There may be an unemployed man down the road who would love to be a gardener but they are unable to employ him for the simple reason that they cannot set off his wages against taxation.
  Therefore, that young couple will pay the housekeeper and the gardener in cash. There will be no record and thereby thrives the black economy. I am led to believe that the black economy is estimated to be 5 per cent. of the GNP. Not only can they not employ a gardener and set off his wages against taxation, but a factory down the road with large grounds which employs five gardeners to cut the grass about three times every week can do so with the blessing of the Inland Revenue.
  Surely at this time of high unemployment we should allow all wages paid to be tax deductible. I am certain that thousands of jobs could be created overnight if we took that relatively simple step. Surely we have departed from the "Upstairs, Downstairs" mentality when it was thought to be demeaning to work for a private employer. The Government have done much to return this country to sanity. I hope that what I suggest will be the next step.
  9.36 pm
  The Financial Secretary to the Treasury (Mr. Nicholas Ridley): I congratulate my hon. Friend the Member for Banff (Mr. Myles) on his good fortune in getting the Adjournment debate. It was even more fortuitous that he got it on Budget night. He raised most important issues, to which I shall refer. I thank him for what he said about the Budget. We shall return to those matters in the rest of the week. I am grateful for his welcome for the proposals of my right hon. and learned Friend the Chancellor of the Exchequer.
  There is no difference between my hon. Friend and the Government on the importance of small employers and people starting up on their own, beginning to take on employees and, from there, going ahead to expand. That is absolutely essential to the Government's strategy. I think that my hon. Friend will agree that over the years we have done an enormous amount to make that easier for people who have the enterprise and skill to set up on their own.
  My hon. Friend may know that I was the Minister responsible for small businesses in 1971 when the Bolton
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  report was first published. We stripped away the impediments and difficulties that Mr. Bolton saw at the time, yet now, 12 years later, it is incredible how many more difficulties have been found and stripped away and how it is a continuing operation to improve the position of small business men. One never seems to reach a position where all is satisfactory.
  So true is that that in some ways we have in the Budget anticipated my hon. Friend's speech. My right hon. and learned Friend announced the extension of the loan guarantee scheme, the increase of the registration ceiling for VAT to £18,000 and, perhaps even more important, the business expansion scheme, which my hon. Friend will find to be the greatest help to small businesses, particularly those that want to expand, and which assistance is unique in the Western world to those who want to get equity to expand their businesses.
  In some ways my hon. Friend has anticipated my speech tomorrow because if I have the good fortune to catch Mr. Speaker's eye, Mr. Deputy Speaker, I shall conclude the debate on the Budget measures. I wanted to say a little about annual accounting for VAT, which my hon. Friend and many others have said is suitable for simplifying the life of small business men. We have also looked carefully at annual accounting for pay as you earn, which I should dearly like, but the cost in terms of revenue delay and the complications of doing so are such that it is not immediately possible for us to contemplate doing it.
  What I have been able to distil out of that study is the possibility of encouraging employers to pay their employees net of tax. If my hon. Friend will bear with me I shall expand on that subject tomorrow. That is a useful way forward for small employers who find life too complicated.
  My hon. Friend also raised a number of matters which impinge on the complications of taking on employees. I am sure that my hon. Friend will accept that some of those matters are not for me—for example, the statutory sick pay scheme, census information and the activities of wages councils—but he will also accept that my right hon. and hon. Friends who deal with those matters are active in trying to find ways of simplifying and improving the situation.
  We have made continued progress in reducing the number of forms and returns with which small businesses have to deal. It is only fair to pay tribute to the Inland Revenue in that context. The Inland Revenue has greatly reduced the amount of paperwork and the complication of the paperwork with which the small business man is asked to deal. PAYE and national insurance contributions have given cause for a great deal of thought in the Treasury. I have spent a great deal of my time trying to find ways of simplifying the system. At the heart of the system—this is what we must try to preserve—is the fact that PAYE raises about £45 billion revenue and covers 1 million employers throughout the country. It is an extremely efficient method of raising tax. Indeed, it is the envy of the world because it is so simple to administer and costs so little to raise the money. But my hon. Friend was absolutely right to say that it depends on employers to administer it. On so many aspects of PAYE, the onus is on the employer to get the sums right and to pay up the money. I absolutely accept that an argument can be made for the Government to reimburse or assist with compliance costs. This matter will come before the House when we consider the report on the powers of the Revenue

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  departments, which is soon to be published. If concessions are made to cover employers' costs in administering the tax system, tax must be increased elsewhere in order to recoup that money. It is a vicious circle.
  The burden is greatest for the smallest employers. They cannot always afford computers and modern office machinery, although those are becoming cheaper. In most parts of the country accountants can now be found to do payrolling at a modest cost to employers. The accountants will set up the system, will check it at the end of the year and, if necessary, will administer the monthly figures that have to be returned. As I will explain if I catch Mr. Speaker's eye tomorrow, the employment of net-of-pay techniques can be helpful in this respect.
  We have been simplifying the income tax system. The first simplification was to take child allowances out of codings and to substitute child benefit. More recently, life assurance premiums have been taken out of codings and on 4 April mortgage interest relief will be taken out of codings. Those two will then both be reimbursed at source. Gradually and step by step, the coding of income tax is becoming ever more simple. Indeed, for those in work it is a question only of whether they are married or single or are earning wives. In due course, if we succeed in solving the riddles involved in the Green Paper on the taxation of husbands and wives, which is before the House, it may be possible to simplify even further. That basic simplification of the coding system and of income tax allowances has been part of the Government's strategy to make the system simpler. We hope to proceed further with that to make it easier for people to administer. That is one side. The other side is the extent to which they comprehend what is required of them. My hon. Friend is quite right in saying that many small businesses find it almost impossible to understand what is required.
  I have asked the Inland Revenue to produce a new leaflet. My hon. Friend may say that there are too many leaflets already, but I think that a new leaflet, designed specifically for the first-time employer and setting out the details very clearly, will be an asset. I have a first draft of this and perhaps my hon. Friend would like to see it. When we have a completed draft we shall let him have a copy of it because I should welcome his comments and those of the small businesses with which he has discussed this issue to make sure that we get it as intelligible and simple as possible.
  In addition, there is a general review of stationery and forms—we would welcome his comments on that too—to ensure that anybody who wants to devote the majority of his time to running his business properly can in a few minutes understand what is required of him in terms of calculating PAYE and national insurance contributions.
  My hon. Friend mentioned that some of his small business constituents had not had the courtesy of a letter from the Inland Revenue. I am sorry about that. He also said that there had been some delay in replying to correspondence. If he would let me have particulars of any discourtesy or delay on the part of tax inspectors I should be only too pleased to follow the matters up. I want to make it clear that in the vast majority of cases the Inland Revenue serves taxpayers extremely well. The Inland Revenue is as sensitive as I am to the need to make that service universally acceptable, and the only way that we
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  can do that is by seeing that specific instances of slipshod or discourteous behaviour or delay are brought to my attention so that I can have them investigated.
  The problem of the simplification of the PAYE and national insurance contribution systems can be solved only in the context of further and more deep-seated reforms of those systems. We are constantly pushing to simplify, to explain and to make things easier. I think that my hon. Friend would be reassured to know that the Government are not content with that. We are constantly looking at ways of making the burden on the small firms easier to stand and the regulations easier to comply with.
  The level of that burden, of course, is a different matter. It depends on how much revenue my right hon. and learned Friend the Chancellor of the Exchequer has to raise, but I should not like my hon. Friend to think that what he has said falls on deaf ears. The Government are acutely sensitive to the need to solve the problems that he has put before the House this evening.
  My hon. Friend asked whether certain expenses could be deducted from corporation tax for small businesses just setting up. He instanced the worthy technological woman who marries and has a family and then wants to get back to her calling and to have somebody to look after the children. This is perhaps the most deserving case in the spectrum that this problem throws out. We must start with the law. The law says that the expenses of a business are allowable against practical profits only if they are incurred for the purpose of earning the profits of the business. Those words have been tested over many decades, and they do not include expenses of the sort that my hon. Friend has in mind.
  Expenses such as domestic help so that one can go out to work, or assistance with child care so that the wife can leave the children and go out to work, come into the category of putting one in a position of being able to carry on a business. That is quite different from expenses incurred for the purposes of earning a profit. For instance, the cost of travelling from home to work is necessary to put one into the position of being able to carry on a business. One might say that having to wear clothes is an expense incurred in going to work, but it is an expense necessary to carry on a business rather than for the purpose of earning profits. The same is true of minding the garden.
  My hon. Friend must appreciate how difficult it would be to draw a line. If the basic distinction between the two definitions that I have given were altered, the line would have to be drawn in a new place. I could claim that to go to work I have to travel, that I must have a house from which to travel and somebody to mind my garden and my children. I might even claim that it is necessary for me to have food and clothing to be in a position to go to work. That comes close to including all expenses of the good life. Clearly, one cannot exempt all those expenses from tax.
  Where would the limit be? My hon. Friend argues from the case of the deserving young wife in a small business and he makes a compelling argument. One might argue, however, that for those who are self-employed or who employ fewer than 10 people all those expenses should be tax deductible. Or should it be based on the type of work that they perform? Either system creates great difficulties. It may be argued that if one is at work all day it is necessary to employ a butler to uncork one's claret. Is that to be allowable against tax? Such a system comes close to being a butler's charter and my hon. Friend touched on the historical difficulties involved in that type of rule.

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  We are not doctrinaire or dogmatic about this. We breached the rule about business expenses in the Finance Act 1982, which allowed companies to second members of staff on full pay to enterprise agencies and for this still to count against corporation tax. My right hon. and learned Friend the Chancellor announced today that the same concession would apply to staff seconded by tax-paying companies to work for charities. I think that my hon. Friend would agree, however, that the House as a whole would find both those cases acceptable. I am not sure that it would find the employment of child minders, gardeners or, at the extreme, more fanciful characters so acceptable.
  My argument is therefore not based on a doctrinaire objection. It is simply very hard to see where the line could be drawn and held. I suspect that wherever my hon. Friend suggests it should be drawn the cost might become very heavy.
  For those reasons, we have not felt able to take the step that my hon. Friend advocates. The concept of the personal allowance is designed to take into account, broadly speaking, the domestic and family responsibilities of taxpayers. There are three categories of personal allowance—the married man's allowance, the wife's earned income allowance and the working single parent's allowance. They are supposed, each in its rather rough
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  justice fashion, to compensate people for the expense of not staying at home and minding the children or looking after the spouse or the garden but going to work instead. That is the origin of the personal allowance. I do not claim that personal allowances fit every circumstance—far from it—but that is how the tax system, as we have it, seeks to take care of the sort of problem that my hon. Friend has raised.
  Before my hon. Friend can force the logic of his argument upon the Government, he must deal with the problems of definition and of helping the people that he and I might want to help without helping many people that both he and I would agree were not deserving of the help of the taxpayer because of what they seek to do.
  I repeat that I am grateful to my hon. Friend for bringing these matters to the attention of the House. I hope that I have shown the deep thought and consideration that we have given to them already. I hope that he will continue to give us the benefit of this views, despite the fact that, although I can go with him almost the whole way on the first half of what he said, I find difficulties about accepting the second half of his argument.
  Question put and agreed to.
  Adjourned accordingly at four minutes to Ten o'clock.

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ENVIRONMENT
  Urban Programme (Docklands)
  Urban Programme (Docklands)
  Homes Insulation (Asbestos)
  Homes Insulation (Asbestos)
  Multi-occupation Houses (Improvement Grants)
  Multi-occupation Houses (Improvement Grants)
  Land Registers
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  Sheltered Housing
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  Local Authorities (Capital Underspend)
  Local Authorities (Capital Underspend)
  Water Industry (Graduate Engineers)
  Water Industry (Graduate Engineers)
TRANSPORT
  A40 (Road Signs)
  A40 (Road Signs)
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  Transport (Expenditure and Grant)
  Transport (Expenditure and Grant)
  Regional Cycling Officers
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  Roads (Statistics)
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  Motor Vehicles (Atmospheric Pollution)
  Motor Vehicles (Atmospheric Pollution)
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  Roads (Expenditure)
  Railways Act 1974 (Grants)
  Railways Act 1974 (Grants)
  Motor Cyclists (Tests)
  Motor Cyclists (Tests)
  Consultation Arrangements
  Consultation Arrangements
WALES
  Mental Health Act Commission
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  Orthopaedic Treatment (Gwynedd)
  Orthopaedic Treatment (Gwynedd)
  Psychogeriatric Care
  Psychogeriatric Care
  Homes Insulation
  Homes Insulation
  "Road Accidents: Wales 1981"
  "Road Accidents: Wales 1981"
  Road Construction Contracts
  Road Construction Contracts
  Employment Statistics
  Employment Statistics
  Training Opportunities Scheme
  Training Opportunities Scheme
  Youth Opportunities Programme
  Youth Opportunities Programme
  District Councils (Capital Expenditure)
  District Councils (Capital Expenditure)
  European Regional Development Fund
  European Regional Development Fund
FOREIGN AND COMMONWEALTH AFFAIRS
  BBC (Monitoring Service)
  BBC (Monitoring Service)
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  Prince Philip Dental Hospital, Hong Kong
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  Embassies (Scientific and Technical Staff)
AGRICULTURE, FISHERIES AND FOOD
  Sizewell Inquiry
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  Herbicide 2,4,5-T
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NORTHERN IRELAND
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EMPLOYMENT
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ENERGY
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NATIONAL FINANCE
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SOCIAL SERVICES
  Mobility Allowance
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  Elderly Persons (Psychiatric Problems)
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  Unemployed Persons (Voluntary Work)
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  Elderly Persons (Homes)
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  Unemployed Persons (Voluntary Work)
  Widows (Benefit)
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  Prepayment Prescription Certificates
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  Family Income Supplement
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  Medical Staff (Statistics)
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  Privatisation
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  Chiropractic Treatment
  Chiropractic Treatment
  Attendance Allowance
  Attendance Allowance
  Nurses (Pay)
  Nurses (Pay)
  Health and Social Security (Expenditure)
  Health and Social Security (Expenditure)
  Hospitals (Closure and Change of Use)
  Hospitals (Closure and Change of Use)
  Child Poverty
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  Nurses and Midwives (Pay)
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  Optical Charges
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  One-parent Families
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  Opticians (Advertising)
  Opticians (Advertising)
  Mrs. Hilda Heath
  Mrs. Hilda Heath
  Pensions
  Pensions
  Welsh Language Forms
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  Housewives (Invalidity Benefit)
  Housewives (Invalidity Benefit)
  Elderly Persons (Care Services)
  Elderly Persons (Care Services)
  Attendance Allowance
  Attendance Allowance
  Merseyside (Departmental Staffing)
  Merseyside (Departmental Staffing)
  Marrow Transplant Facilities
  Marrow Transplant Facilities
  Attendance Allowance Board
  Attendance Allowance Board
  Community Resource Centres
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  65-year-olds
  65-year-olds
  Retired Persons (Medical Treatment)
  Retired Persons (Medical Treatment)
  Dr. Charles Entwistle
  Dr. Charles Entwistle
  Geriatric Beds
  Geriatric Beds
  Sodium Valproate
  Sodium Valproate
  Geriatric Patients
  Geriatric Patients
  Heating Costs
  Heating Costs
  Allowances and Benefits
  Allowances and Benefits
  Hospital Property (Design Standards)
  Hospital Property (Design Standards)
  Health Services (Expenditure)
  Health Services (Expenditure)
  Social Security Payments
  Social Security Payments
  Benefits
  Benefits
  Social Security Spending
  Social Security Spending
  Family Practitioner Committees, Wembley
  Family Practitioner Committees, Wembley

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

£1 Commemorative Coins
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 special commemorative £1 coins are to be minted to mark the introduction of the new metallic pound.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne): My Lords, three types of commemorative £1 coins are to be minted to mark the introduction of the new metallic pound: there will be a silver proof piedforte with a limit of 10,000 pieces; there will be a sterling silver proof version of the same diameter and weight as the circulation piece with a limit of 50,000 pieces; and there will be a base metal proof version included in sets of other United Kindom coins with a limit of 125,000 sets.
Lord Gainford: My Lords, I thank my noble friend the Minister for that interesting Answer. Can he please tell me whether there is any estimation of what value will be placed on these coins by future coin collectors? Is there any risk of the coins being confused with other coins already in circulation? From the consideration of the value of money as it is at the moment, is there any danger now of the "quid" becoming a "bob"?
Lord Trefgarne: My Lords, I hope that the coins will appreciate in value on the collectors' market after they have been issued, but I am referring of course to these commemorative issues. As to the other point that my noble friend makes, I should tell your Lordships that I have a pound in my pocket. There it is, and I hope it will not be confused with anything.
Lord Leatherland: My Lords, would the Minister make it possible for these coins to be distributed to Members of this House on the basis of one of each specimen to every Member, so that we may pronounce our opinion upon them?
Lord Trefgarne: My Lords, if the noble Lord likes to send me his order with his cheque I shall be happy to see that he gets one.

Schools: Religious and Moral Education
2.38 p.m.
Lord Sandford: 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 schools omit religious and moral education from the syllabus for some or all of the children attending them.
The Earl of Swinton: My Lords, the Government do not collect detailed information about the curriculum provided in individual schools, but we have made it clear that we expect local education authorities, governing bodies and schools to live up to their statutory responsibilities for the provision of religious education.
Lord Sandford: My Lords, I thank my noble friend for that reply. May I ask what is the purpose of having Her Majesty's Inspectorate of Schools if they are not able to keep his right honourable friend supplied with important information of this kind?
The Earl of Swinton: My Lords, Her Majesty's Inspectorate of Schools are extremely busy. I think that there are some 25,000 schools—or is it 250,000?—I shall have to write to my noble friend regarding that figure. The Inspectors gets round on average to each school about every 100 years, so it would take them an awful long time to find out what is happening.
The Lord Bishop of Rochester: My Lords, in the light of the requirement on every local authority to produce an agreed syllabus for religious education, may I ask the Minister what encouragement and what additional resources are the Government giving to the authorities to implement such syllabuses throughout the whole of the maintained sector of education?
The Earl of Swinton: My Lords, I can tell the right reverend Prelate that there is no such grant for producing a new syllabus, but many authorities are doing it at this very time, and I think a number of authorities are engaged in producing new agreed syllabuses.
Lord Blyton: My Lords, is the Minister aware that when I was chairman of an education committee my biggest difficulty was to get the various denominations to agree on an agreed syllabus for the schools on religion? It is very difficult for education committees with the different denominations to get agreement among them.
The Earl of Swinton: My Lords, I am delighted to say that I found myself in the same position as the noble Lord, Lord Blyton, in that I also was involved in getting an agreed syllabus when I was a member of an education committee. It was a long and complicated task. But I understand that things are a bit easier these days, and it is something which is not too difficult to obtain now.
Lord Alexander of Potterhill: My Lords, as every school in England and Wales provided religious instruction before the passing of the 1944 Education Act, is it possible that compulsion may be negative rather than positive?
The Earl of Swinton: My Lords, I suppose that that could be the case. I should like to say that every school in England and Wales does provide religious education. On the other hand, the Government very much hope that they will.
Lord Brockway: My Lords, have the Government considered the report of the Committee of Moral Education of which a Roman Catholic bishop is the chairman? Might not this be the solution in view of the many different religions now represented in schools, and even some who have no religion?
The Earl of Swinton: My Lords, the Government consider that moral education is an essential constituent of the school curriculum. Perhaps I might be permitted to quote from the school curriculum document which says:
"Moral education in schools seeks to promote integrity, considerate behaviour and the pupil's understanding of the relationship between action and beliefs … Awareness of moral values is encouraged by appropriate and well-planned assemblies, as well as by good pastoral care. The school needs to make explicit to parents, pupils and the school community its aims in moral education; and the head teacher and his staff need to keep curricular, pastoral and other provision under review so as to ensure that these aims are translated into effective practice."
I do not think there is too much difference between the Churches and others on what constitutes moral education.
Lord Nugent of Guildford: My Lords, is my noble friend aware that the value of religious education in the schools depends primarily on the individual teacher, that it is the spark of Christian love in the teacher which touches the children and makes the education worthwhile? Is he satisfied that the teacher training for religious education is adequate to meet the need?
The Earl of Swinton: I am grateful to my noble friend for making that point, my Lords. I think that perhaps we should be careful when using the word "Christian" in this context; it is not in the 1944 Act. "Religious education" is, but "Christian education" specifically is not. I would say that what my noble friend says is obviously very true: that the example of a teacher's behaviour, particularly applying to moral perhaps rather more than religious education, is most important. As for training, I understand that last October there were about 45 newly-trained religious education teachers without posts, which shows that if there are vacancies they can be filled by appropriately qualified teachers.
Lord Glenamara: My Lords, is the Minister aware that what he said about the 1944 Act may mislead a great many people? Is he aware that when the Act was passed it was certainly the intention of Parliament that it should refer to Christian teaching? While we are all in favour of moral teaching in the schools, may I ask whether he accepts that it surely is the birthright of children in this country to be taught about the Christian story? Does he agree that that is not being done in a great many schools, contrary to the law? What are the Government going to do about that?
The Earl of Swinton: I am no lawyer, my Lords, so I think it would be best if I read from the 1944 Act. Section 26 refers to religious instruction and says:
"religious instruction given to any pupils in attendance at a county school in conformity with the requirements of subsection (2) … shall be given in accordance with an agreed syllabus adopted for the school or for those pupils and shall not include any catechism or formulary which is distinctive of any particular religious denomination".
As I read that—I am a committed Christian and I am proud to stand up and be counted—I do not see the word "Christian". I think that is the whole balance of the argument; we have many ethnic minorities in this country now, many of whom are devout Moslems or have various other religions. That is one of the complications, and it is something that has to be faced up to.
Lord Glenamara: Of course there are ethnic minorities, my Lords, and provision must be made for them, and I agree that they are in large numbers, but may I ask the noble Earl whether he agrees that there should be Christian teaching in our schools? Would he further agree that that is not so in a great many schools? What do the Government propose to do about that?
Viscount Eccles: My Lords, further to that supplementary from the noble Lord, Lord Glenamara—and while I agree with him that when the Act was passed we all thought of Christian education—may I ask my noble friend to say what happens when there is no teacher on the staff who feels competent to teach Christian education? Is the law then allowed to lapse?
The Earl of Swinton: My Lords, I think we shall get very involved if I try to answer two questions at once. To answer my noble friend Lord Eccles, I was not here in 1944 and I was not responsible for the wording of the Act. Whatever the spirit of the Act—we have had this argument many times in relation to many measures in your Lordships' House when certain words are not included in an Act; the statute can be interpreted only in the way it is worded—I personally would love to see Christian education taught in every school in the country, but whether or not that is practicable I do not know. Of course, the choice is open to many parents to send their children to an aided school, where they can get the teaching of their particular denomination.
Lord Sandford: My Lords, does my noble friend think it is satisfactory for him to say that he hopes religious education will be taught in all our schools, but not to be in a position to tell the House the answer to my quite clear Question as to the number of schools in which religious education is not being taught? Does he agree that, whereas head teachers have a wide discretion as to what they teach and how they teach it in relation to all other subjects, in respect of religious education Parliament has expressed the will that it should be taught to all children in all schools for the whole of their school life, primarily according to agreed syllabuses which are certainly based on the Christian faith, but also in respect of other denominations and other faiths by withdrawal classes? Is it not really necessary for my noble friend, his right honour

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able friend and the local education authorities to bestir themselves and see that the will of Parliament is properly complied with?
The Earl of Swinton: My Lords, there seems to be an awful misunderstanding about what the Act actually says. It does not say that all children in every school should be taught religious education. It says that religious education shall be taught in every school, and it does not specify the amount of hours or number of children who will be taught it. It is easy to ask me why I cannot produce the figures. Somebody could get up next week and ask me how many schools in the country are teaching German, French, Spanish or whatever; we should need an army of civil servants going round every school finding out these very detailed facts.
Lord Nugent of Guildford: Nevertheless, my Lords, is my noble friend aware that it does just happen that religious education is the only specific item of education referred to in the Act?
The Earl of Swinton: That is a very fair question, my Lords.
Lord Alexander of Potterhill: My Lords, before the passing of the Education Act 1944 religious education was given in every school in England and Wales. If the names of the schools where religious education is not given were reported to the Minister, then quite clearly action could be taken; but in the absence of the names I think it would be unsound to assume that the facts were necessarily valid.
The Earl of Swinton: My Lords, I am very grateful to the noble Lord, Lord Alexander of Potterhill, for saying that, which is of course true. I think that what my noble friend Lord Sandford is saying is that not every child in every school is being given religious education, but that is really not the point. It is very difficult to prove or disprove whether religious education is playing some part in the curriculum. There may not even be a class for religious education, but it may come into the teaching of morals, English, or history. It would be very difficult to prove in a court case that religious education was not given. However, if any noble Lord wishes to bring forward examples of schools where it is not taking place, I should be delighted to take them up with my right honourable friend.

Apprenticeship Training Grants
2.51 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what proposals they have in regard to the apprenticeship system in view of the present economic situation.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, a major
600
target of the Government's new training initiative is to reform the existing apprenticeship arrangements by removing unnecessary restrictions and by substituting agreed standards of competence. The Government have made considerable funds available to support the training of first year and redundant apprentices, but it is primarily for employers to identify and to take action to meet their own long-term skill training needs.
Lord Molloy: My Lords, would not the noble Earl the Minister agree that it is a very grim situation where we have to refer to redundant apprentices? Would he not agree that we are approaching the most barren of balances? Skilled craftsmen and skilled technicians are losing their jobs, and, as the noble Earl said, would-be apprentices are redundant before they even start work. Have the Government any plans in mind to try to arrest such a situation in the future?
Earl Ferrers: My Lords, I quite agree with the noble Lord that it is a very depressing state of affairs where apprentices are made redundant; but in a recession many very unpleasant things happen, of which that is one. The noble Lord asked what are the Government going to do. We are providing training grants relating to young people of £1,850 for any employer who takes on an unemployed person and trains him. That same grant is available to employers who normally take on apprentices, provided that they take on three additional unemployed young people for every two people whom they have as apprentices. In that case both the additional three and the two whom they normally take on will be reckonable for payment of the grant.
Lord Molloy: My Lords, may I express my gratitude for the detailed information that the noble Earl has given the House? May I ask whether he would be prepared to consider that information of the kind that he has given to the House be made available as widely as possible, including to both sides of industry, so that on that basis regional councils might be established covering industries as they vary from one part of the country to another? If that were done, then when the Government bring into force what the noble Earl enunciated a moment ago, people will be ready to take full advantage of it.
Earl Ferrers: My Lords, it is certainly our intention to try to make certain that as many people as possible know the facts. However, as I am sure the noble Lord will be aware, the whole of the youth training scheme is designed to guarantee a full year's vocational training to every 16-year-old school-leaver who cannot find a job. The scheme also aims to provide—though it does not guarantee—12 months of foundation training for 16-year-olds who are already in employment, and for unemployed 17-year-olds. That is a very considerable step, and about £1,000 million is going towards it.
Lord Cledwyn of Penrhos: My Lords, can the noble Earl say whether any part of the figure that he mentioned is available to apprenticeship schemes as well as to youth training schemes? It is important to distinguish—is it not?—between the two. Would not

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the noble Earl agree that whereas it is no doubt important to have the youth training scheme for 12 months, an apprenticeship scheme for three or five years is infinitely more important in terms of the country's future?
Earl Ferrers: My Lords, there are arrangements for training which are carried out via the industrial training boards, and the Manpower Services Commission makes grants to them. But the point that I should like to make perfectly clear to the noble Lord, Lord Cledwyn of Penrhos, is that where those employers who normally take on apprentices take on three additional unemployed people, they will receive the £1,850 grant for the additional three, as well as for the existing two, who without the three would not have been reckonable for grant purposes.
Lord Cledwyn of Penrhos: My Lords, are they young people who undertake youth training schemes, or are they apprentices? In regard to the group of three and the group of two, can the noble Earl distinguish which are apprentices and which come under the youth training scheme?
Earl Ferrers: My Lords, the two will be apprentices, the three will be from the ranks of unemployed; but both groups will be reckonable for the same grant.
Lord Kilmarnock: My Lords, will the noble Earl agree that the four- and five-year fixed term time-served apprenticeships, to which the noble Lord, Lord Cledwyn of Penrhos, referred, do not necessarily form the right basis for the skill mixture that will be required in the future?
Earl Ferrers: My Lords, I am very grateful for that supplementary question, since the whole purpose of this particular aid is to try to blur the distinction between those who were unemployed and those who are apprentices. It is part of the Government's desire to try to help the training of young people, and I would only re-emphasise the fact that the particular grant to which I referred relates only to the first year of training.

International Monetary System: Role of Gold
2.56 p.m.
Lord Boothby: 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 role, if any, they expect gold to play in the new international monetary system now under consideration by the International Monetary Fund and the central banks.
Lord Trefgarne: My Lords, I understand that neither the fund, nor central banks, have any plans to restore gold to a formal position in the international monetary system.
Lord Boothby: My Lords, arising from that Answer, may I ask the noble Lord whether he is aware that for a century prior to 1914—during which period the French Revolution and the Napoleonic Wars took place—there was no inflation and trade flowed freely across frontiers, entirely due to the fact that gold was the basis of every major currency in Europe? Do the Government realise that the whole world is now suffering from a desperate shortage of liquid reserves, and that gold bullion is one of those reserves and has been for over a thousand years? Are the Government also aware that when the Americans demonitised the dollar, and with it rendered every currency in the world intrinsically valueless, they plunged us all into a deep economic recession, from which we have not yet recovered, and do not look like doing so?
Finally, may I ask the noble Lord whether Her Majesty's Government will now persuade the Americans, and themselves, that the only hope of escape is by devising a viable international monetary system, with gold as the basis—a gold exchange standard, based on gold at the right price? Will the Government not realise that unless something is done to clear up the monetary situation we shall not get out of the present mess?
Lord Trefgarne: My Lords, I am not sure that I wholly agree with the noble Lord. Certainly there is some room for improvement within the international monetary system, but I fancy that a better way forward would be towards the development of the special drawing right system, perhaps tying the special drawing right to a basket of international currencies. There are real, genuine difficulties in the way of bringing gold back to the role that the noble Lord suggests, not least the difficulty of reaching agreement as to the price at which that should be, and not least the point that I am not certain that there is sufficient gold in the world for the purpose.
Lord Blyton: My Lords, is the Minister aware that when we were on the gold standard, having been put on it by the late Winston Churchill, we had nothing but unemployment and poverty, right from 1926 until 1931? I hope, for God's sake, that, as bad as our position is today, we are not going back to that situation.
Lord Trefgarne: My Lords, I am not sure that the noble Lord is right in his cause-and-effect analysis. The way forward, as we see it, is for the principal trading nations of the world to follow prudent and sound economic policies.
Lord O'Brien of Lothbury: My Lords, would the noble Lord not agree that whatever international monetary system may eventually replace the present régime of floating rates, it must be based on the universally accepted and highly liquid store of value? Furthermore, would he agree that no national currency is likely to fulfil that role satisfactorily? Would he further agree that at the moment there is no sign that the special drawing right is filling itself out to fulfil that role?
Lord Trefgarne: My Lords, I agree that the way forward is by the creation of a store of value, as the

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noble Lord said, but I am sorry to say that I also have to agree that the special drawing right is not yet in a position to fulfil that role. We would be happy for it to become stronger than it is, at least, and perhaps that is why the way forward is, as I described to the noble Lord, Lord Boothby, by tying the special drawing right to a basket of international currencies.
Lord Shinwell: My Lords, is the noble Lord aware that I regret very much that he failed to agree with my noble friend Lord Boothby? After long years of propaganda in the other place and in your Lordships' House, is it not time that there was agreement with him?
Lord Trefgarne: My Lords, I think that the noble Lord, Lord Boothby, certainly deserves an "A" for effort.
Lord Stewart of Fulham: My Lords, am I not right in supposing that among the chief suppliers of gold today are the Soviet Union and the Republic of South Africa? Would the noble Lord agree that an arrangement which increased the influence of those two countries in the world would not, on the whole, be beneficial?
Lord Trefgarne: My Lords, there is undoubtedly some strength in what the noble Lord says. South African gold supplies are already very much integrated into the world monetary system, but that is certainly not the case as far as the Soviet Union is concerned, who are, indeed, major gold producers.
Lord Bruce of Donington: My Lords, would the noble Lord agree that far more important than the role of gold in any future international monetary system is the role of the commercial and central banks, which needs to be more carefully examined in the future—bearing in mind that over the past few years many of them have behaved with the grossest irresponsibility?
Lord Trefgarne: My Lords, I do not think I agree with that. I think that if one looks at the difficulties in Latin America, for example, which have occurred recently—and I am thinking of Mexico and Brazil—certainly the international monetary community (if that is the right phrase) have done a splendid job in preventing what could have been very serious difficulties in that part of the world.
Lord Boothby: My Lords, is not the answer to the noble Lord, Lord Blyton, that the misery of the 1930s was caused simply because we went back to the gold standard at the wrong parity of exchange, as was admitted by the then Chancellor of the Exchequer, Mr. Winston Churchill?
Lord Trefgarne: My Lords, the observation of the noble Lord, Lord Boothby, if I may say so, is a lesson of how wrong it is to try to prepare our arrangements for this year based on the experiences of, perhaps, 50 years ago.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that dinners will be available at the usual time this evening. The Report stage of the Data Protection Bill will be adjourned at approximately 7.30 p.m. for approximately one hour, and during this adjournment the Second Reading of the British Fishing Boats Bill will be taken.

Copyright (Amendment) (No. 2)Bill [H.L.]
Lord Willis: My Lords, I beg leave to introduce a Bill to amend Section 1 of the Copyright Act 1956 so as to extend the definition of authorisation of infringement of copyright. I beg to move that this Bill be now read a first time.
On Question, Bill read a first time; and to be printed.

Dartford Tunnel Bill [H.L.]
3.7 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord Aberdare.)
On Question, Bill read a second time and committed to a Select Committee.
Lord Tordoff Lord Tordoff rose to move, That it be an Instruction to the Select Committee to whom the Bill is committed that they should carefully consider whether the power of the councils to charge tolls for the use of the tunnels should not cease on completion of the M.25 motorway of which they will be an integral part.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. In a Written Answer published yesterday from the noble Lord, Lord Lucas of Chilworth, to my noble friend Lord Evans of Claughton, the following words occur:
"Successive Governments have followed the principle that tolls should be charged on estuarial crossings which are exceptionally expensive to construct, and which offer exceptional advantages to their users, as compared with alternative routes.".
The Written Answer concludes with the words:
"The Government are not considering the abolition of tolls".
My Lords, I should like your Lordships to dwell on the words "offer exceptional advantages to their users, as compared with alternative routes", because I intend to return to them later. I make no secret that we on these Benches take a different view on the subject of estuarial crossings and tolls from that taken by the Government. In saying that, I want to make it clear that that is not what I am here to talk about today. The general matter of tolls on estuarial crossings is something which will have to wait for another day. I understand the position of respective Governments; I merely say that ours is different on the major principle.
Today's Motion refers specifically to an Instruction to be put to the Select Committee relating to the

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Dartford Tunnel, and specifically to the time when that tunnel becomes an integral part of the M.25 motorway. I do not have to tell your Lordships that the M.25 is an important strategic link in the movement of goods and people between the North of England and the Channel ports and vice versa and a means of reducing congestion on the roads of Greater London.
I should like to start with one or two general points on the financing of the Dartford Tunnel. In another part of the Written Answer which Lord Lucas was good enough to supply to my noble friend, he said:
"Tolls are limited by statute to levels which will cover the full costs of the structure, including operating costs and interest charges, over a specified period.".
I would suggest that experience tells us that the tolls are falling short of achieving that end. It is true that the Dartford Tunnel produces an operating surplus and that after the payment of operating costs and maintenance costs the operating surplus in 1977–78 was £1·7 million and that in the last year, 1980–81, it was £3·73 million. While it may be covering its operating costs, it is not reducing the capital debt charges. These are growing continuously. They have grown from £5·4 million in 1978, through the opening of the new part of the tunnel, to a level of £62·7 million in 1982. Interest charges are now running at an annual rate of around £8 million. The ratepayers of Kent and Essex are saddled with these charges, and there is no chance, in my submission, of these being paid off at any time in the foreseeable future.
It was against this background that the Essex County Council persuaded Kent County Council to join in a delegation to see Mrs. Lynda Chalker to invite the Department of Transport to take over the charges of the tunnel. This was turned down by the Department of Transport for the not surprising reason that the Treasury would not wear it. Kent then insisted on going ahead with this Bill—somewhat against the wishes of the Essex County Council, I understand—on the threat that, if it was not a joint Bill, Kent would promote it and would precept Essex, anyway.
One notable point about the Bill is that, unlike the earlier Bill, no time limit is written into it. It is true that in Clause 33, page 23, line 29, we have the following words:
"So soon as the excess sum and all moneys borrowed by the Councils … have been repaid together with interest thereon and the maintenance fund and the reserve fund … are fully funded the power to demand, take and recover tolls … shall cease".
But that will not happen at the present rate of tolls. It is true that doubling or trebling of tolls could perhaps begin to make inroads into these capital charges. That might be feasible were there no alternative routes for the users of the road. But in practice, as we know, there are several options open to users of the tunnel. They can go through the Blackwall Tunnel. They can use the Central London bridges, but neither of these is a sensible alternative if we really want to reduce the congestion on London's roads. Every time that I travel into London in the morning by car and listen to the local radio I hear that a lorry has broken down in the Blackwall Tunnel. Although I have never been through the Blackwall Tunnel myself I feel that I know it intimately. It is clearly a black spot in the London
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network of roads. The Dartford Tunnel is likely to offer considerable relief to that.
This would be bad enough without the advent of the M.25. What I am suggesting to your Lordships this afternoon is that the M.25 brings a new dimension to the problem. Its purpose, as we know, is to provide an efficient ring road round Greater London, to divert heavy traffic from the populated areas and, as I said earlier, to provide an easy route from the manufacturing heartlands of our country to the Channel ports and the return. It is also an integral part of the whole strategy of the development of East London. When it is functioning it is expected that about 10 per cent. to 15 per cent. of the traffic at present using the A.2/A.1/M.1 corridor will be diverted on to the M.25 and that as much as 25 per cent. of the heavy goods traffic on those routes will use the M.25.
I suggest that if these tolls continue, and particularly if they are increased, this will be a significant disencentive to people using that route. Instead of using that route, people will continue to drive through places like Newham, Greenwich, Tower Hamlets and the whole of the East End development will be inhibited. It is also possible that people who are inhibited from using the Dartford Tunnel because of the tolls will divert westwards. It is slightly ironic that the crossing of the Thames on the westward side between Egham and Staines has been paid for by the Government as part of the construction of the M.25.
The problem of diverting traffic westward is that it will get into the already saturated conditions—or the conditions which are expected to be saturated—round Heathrow, with the consequent knock-on effect of Heathrow traffic being diverted back on to the local roads again. There is a considerable amount of traffic already using this area and this will be increased when the M.25 is opened on its western sector, even if for no other reason than the traffic moving between Heathrow and Gatwick.
I return to the quotation from the Written Answer of the noble Lord, Lord Lucas of Chilworth, which said,
"tolls should be charged on estuarial crossings … which offer exceptional advantages to their users".—[Official Report, 10/3/83; col. 419.]
I am suggesting that the exceptional advantages in the case of the Dartford Tunnel do not exist in the way in which they do in some of the remoter estuarial crossings. The distances over which vehicles have to divert to avoid paying tunnel tolls are much smaller and the disadvantages of allowing that to happen are very great.
A further consideration is one of safety. Already the traffic will have to funnel down from three lanes into two lanes to go to the tunnel. The standing committee of the Royal Automobile Club, the Automobile Association and the Royal Scottish Automobile Club—an organisation with which the noble Lord the Minister has some sympathy and of which he has knowledge—believes that the presence of toll booths can cause delays with queues building up at the toll booths, additional costs to the users and serious road safety implications. I think we should bear that in mind.
I put it to your Lordships that there is a substantial prima facie case here for the removal of tolls from the Dartford Tunnel when it is intergrated with the M.25. The M.25 is part of the strategic plan, not only for the South-East of England, not only for our capital city, but for the whole country as a gateway to Europe. I believe it is a national responsibility. I am not asking your Lordships to make a hasty decision this afternoon, but I am merely asking that your Lordships support a Motion instructing the Select Committee to consider this matter with due care. I hope that at this stage the Government will not oppose this Motion. I beg to move.
Moved, That it be an Instruction to the Select Committee to whom the Bill is committed that they should carefully consider whether the power of the councils to charge tolls for the use of the tunnels should not cease on completion of the M.25 motorway of which they will be an intergral part.—[Lord Tordoff.]
3.16 p.m.
Lord Irving of Dartford: My Lords, in speaking to the Instruction I want to say that I have lived with the problems related to the Dartford Tunnel for 30 years. In 1952 I joined the Dartford Borough Council and, with the exception of one year, I have remained a member ever since and for the majority of that time I was the Member for the constituency. The first thing I did was to campaign with others for the first Dartford Tunnel. I have increasingly been dismayed at the anomalous position that has been created and is to go on into the future. When the Minister of Transport, then Mr. Ernest Marbles, announced the sanctioning of the tunnel he said that he was sorry it would be a toll tunnel but that in 20 years it would be free as the tolls would go.
Before the first tunnel was completed, people like Sir Peter Kirk, who was then the Member for Gravesend, and I were campaigning for the second tunnel. Right from that moment traffic has never stopped increasing, and it will go on increasing. But here we are 20 years on, and far from being a free tunnel the debt outstanding now is £66 million. There is no prospect of the debt being liquidated until well into the next century and only then if there is a massive increase in tolls. The increase has been steep already—180 per cent. since 1976.
The facts are, as the noble Lord, Lord Tordoff, mentioned, that there is an operating cost of £2 million, an operating surplus of £3½ million, and a debt interest repayment of £8 million, which shows one why there is so much anxiety about the continuance of the tolls and the danger that the tolls will get ever steeper. Incidentally, these figures are based on an inflation rate of 5 per cent. and an interest rate of 9 per cent.
Initially the tunnel was a means of linking Essex and Kent, although right from the beginning it took on a wider significance. This was acknowledged by the European Investment Bank, which made a very large loan for the second tunnel at very generous rates of interest to assist the communications in this part of the world. It was already seen as being a means of reducing the congestion in London. Parallel to the construction
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of the tunnel there was to be an orbital road around London. It was first proposed in 1905 and was then put in the Bressey Report of 1935. It then became part of Abercrombie's London plan in 1944 but nothing was done for 20 years. As one knows, in this country the mention in a report, however important, is no guarantee of progress.
The M.25 and the A.282 (which is the Dartford Tunnel itself) form a continuous link from the A.13 to the M.20 at Swanley. The M.20 will be opened from the A.13 to the A.1 by the end of January 1984 and this will complete—this is the essence of our case—the important link from the Midlands to the Channel ports, a purpose-built road relieving many parts of London. I should remind your Lordships that the annual load going through London is 250 million tonnes, 92 per cent. of which goes by road. Of the 8,000 miles in London we have only 56 miles of dual carriageway and 22 miles of motorway. We have the worst roads of any major city in Europe, which is all the more reason why we should use the investment we have to bring out of London the traffic which would otherwise go there. We know from Continental experience that a number of people will avoid using toll roads because of the cost. This is happening and will continue to happen as far as the Dartford Tunnel is concerned.
Here in Britain we have set our faces against tolls on motorways, and yet we continue to maintain tolls on an essential part of the most important motorway in the country which has been given maximum priority by all Governments in recent times. Of course, in addition to discouraging some traffic from using it, the significance is that at peak periods there is very considerable congestion. This causes long delays and considerable increases in industrial costs, and brings endless frustration to the people who have to use it. Also, as I think the RAC and the AA have pointed out, it is a matter which has road safety implications.
Rather than taking the logical step of freeing the tunnels from tolls, the committee is having to spend more money on the establishment next year of additional booths to deal with the traffic which is going to come as a further result of the completion of the M.25. As I say, this measure will be overtaken very quickly by events, and those booths will still not be able to handle the whole traffic and to give the maximum relief from traffic coming from London. Can planning or common sense be worse served? I appeal to the Government to free the tunnels and let the traffic flow. The new multi-billion poundsworth of roll-on roll-off installation which is being established adjacent on Stone Marshes near to the tunnels will again add very considerably to the traffic.
Clause 23 is giving a number of local authorities like my own considerable cause for concern because it is diminishing their opportunity to be consulted, and in some places is extinguishing it altogether. If the Thurrock and Dartford Borough Councils have not got an interest in this, I do not know who has, and I hope that the Committee will look very carefully at that when they are dealing with the Bill. There are two ways of dealing with the matter. It has been suggested that a time limit could be placed in the Bill so that when the M.25 has been completed the tunnel's tolls should cease. The alternative is that the Bill could be

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withdrawn altogether to allow time for this action to be taken and, in the meantime, the automatic repealing of the operation of the 1972 Act could be postponed by ministerial order.
I want to make one final observation. The worst possible thing that could happen would be for this burden of debt to be placed on local authorities. It would be inequitable and unacceptable, and I hope that the Committee will look very carefully at this matter. Let us allow the road, the estuarial crossing of the M.25, to go ahead properly in relation to the new development. Let us get the maximum cost benefit from what has been a massive investment. I hope the Government will understand that it is in everyone's interest to allow this debt to be properly and centrally funded and not to be borne by the local authorities. In that way we shall get the maximum use of a road which is probably one of the finest in the country and which ought to be used to the maximum to relieve the traffic in London.
3.24 p.m.
Baroness Platt of Writtle: My Lords, in speaking in favour of the Dartford Tunnel Bill, I must declare my interest as vice-chairman of the Essex County Council and an Essex ratepayer. You Lordships will know that the Bill is jointly promoted by Kent and Essex County Councils to replace the Dartford Tunnel Act 1967. However, I am not a member of the Tunnel Joint Committee.
The Dartford Tunnel Bill, like all local legislation, is caught by the provisions of Section 262 of the Local Government Act 1972 and therefore expires at the end of 1984 and requires renewal. The original legislation was passed by Parliament on the basis that no part of the cost of running the tunnels would fall on the ratepayers of Kent and Essex; and that remains today a very important principle, on which the need for this new Bill especially rests.
The noble Lord, Lord Tordoff, is moving an Instruction to the Select Committee:
"that they should carefully consider whether the power of the councils to charge tolls for the use of the tunnels should not cease on completion of the M.25 motorway of which they will be an integral part."
That point of view will, I understand, also be put by the petitioners to the Select Committee, and so I do not intend to divide the House on that Instruction, as the Select Committee will have to consider the matter in any case. For many years the county councils have been making representations to successive Governments for financial assistance, both individually and as part of the consortium of local authorities responsible for tolled estuarial crossings—the Mersey, Tyne and Dartford tunnels and the Humber bridge. I have letters here in 1976, in March 1979 and in 1980, where successive Governments have always firmly adhered to the principle, and I quote—
"that the costs of expensive new river crossings like the Dartford Tunnel should be paid for by tolls. The common feature of such crossings is that they offer exceptional saving in both time and cost to those who use them and are very expensive to provide and maintain. The Government think it is right that those who benefit from them should contribute to their cost through tolls".
The Government's principle is that the costs should be paid for by the user rather than by the taxpayer. If the councils were not allowed to levy tolls but still
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retained responsibility for the tunnels, the result would be even more iniquitous, as the ratepayers of Kent and Essex would have to foot the bill for the Dartford Tunnel—an important part of the national road system which will be completed later during this decade. At the present time the ratepayers of Kent and Essex do not pay the cost of the tunnel as the interest is capitalised.
When considering promoting this Bill, and before doing so, Essex County Council decided to make yet one more approach to the Department of Transport to persuade them to take over the tunnels as an integral part of the M.25 to be completed in the next few years. After consultation, Kent decided to accompany us on a joint deputation, of which I was a member. However, the Under-Secretary of State for Transport, Mrs. Lynda Chalker, said that there was no hope of persuading the Treasury to accept responsibility for the tunnels, and consequently there was no question of the Government taking over the tunnels at the present time; and that we must promote the present Bill to allow us to levy tolls and prevent the burden falling on our ratepayers. The councils have a common law liability to keep the tunnels open and the loan debt stands at £62 million; so the power to levy tolls is vital.
The Dartford Tunnel Committee, in accepting the Government's principle, however reluctantly, therefore plan to levy tolls so that the revenue should be sufficient to cover the servicing and the ultimate repayment of the capital debt as well as the maintenance costs of the crossings. It is anticipated that all outstanding capital and interest should be paid off by 1998. This, the promoters believe, can be achieved with reasonable increases in the tolls around the level of inflation, as the traffic is expected at least to double by the late 1980s. It is then intended to set up reserve and maintenance funds so that as soon as possible after that the tunnels should become toll-free. The aim of the councils is therefore the earliest possible removal of the tolls, but at no cost to their ratepayers.
If the Select Committee in coming to their decision were to accept the Instruction proposed then, in fairness to the ratepayers of Essex and Kent, it would be essential for them to recommend also that the Government take responsibility for the costs of the tunnels and make a national decision as to whether or not to charge tolls on a part of the M.25 motorway. The promoters would welcome the abolition of tolls if the costs of the tunnels were to become the responsibility of the Government. But if that is not to be the case, the Instruction leads to the worst of all possible worlds for the councils. If the councils were no longer able to charge tolls, but still retained responsibilities for the tunnels, they would be in an impossible situation, with the costs of an integral part of a national motorway falling on the local ratepayers. I hope that, after carefully considering the matter, the Select Committee will decide to support the Bill as it stands.
3.31 p.m.
Lord Underhill: My Lords, I am certain that the House will appreciate the speech which we have just heard from the noble Baroness, Lady Platt, speaking as she does as a member of the Essex County Council, while my noble friend Lord Irving, supporting a

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contrary viewpoint, has local authority connections in Kent. I have a number of interests in this matter. First, there are my transport responsibilities; but, secondly, I happen to be one of the ratepayers of the noble Baroness, Lady Platt. I reside in Essex and I use the Dartford Tunnel whenever I go into Kent or to the Channel ports, and the new M.25 will be linking up with the M.11 not far from my home. Therefore, I know the benefit which the M.25 will bring to that side of the county and of London.
We are not just talking about a normal estuarial crossing. The M.25 is to be a major orbital motorway, and as has already been said when completed it will be a vital link with the Midlands and the North for traffic going through to the Channel ports. There is already a considerable amount of construction work taking place on the Essex side, and when the motorway is completed the tunnel will be part of it, as it goes right the way through.
Apart from this important link with the Midlands and the North, a major objective of the motorway is to divert traffic from London, especially the large number of heavy lorries which now go through the capital. Even lorries with business interests in London will find the M.25 of great benefit to them. As we know from the Armitage Report, the majority of vehicles going through London have business there. But the M.25 will still enable vehicles, particularly lorries, to use the orbital route until they have to come into London at whichever point is convenient to them. Tunnel usage is bound to increase and, obviously, delays due to toll collections must be avoided. It has been said that the Standing Committee representing the three private motorists' organisations and the freight haulage interests have opposed the provisions in the Bill.
I must make it clear that I can readily understand that Essex and Kent have to promote a Bill because there will otherwise be a vacuum unless the Government accept this as a national responsibility. We know that many people who use the Dartford Tunnel are not ratepayers of either Essex or Kent. The M.25 will greatly expand that number, and a considerable number of persons using the M.25 will have no interests, connections or associations with either Essex or Kent.
Your Lordships have already heard figures for the mounting debt and it may be argued by the Minister—I hope that it will not be argued—that the way out of this difficulty is to increase the toll charges. But one has to think of what will happen when freight haulage operators are faced with increased toll charges. There are other road developments under consideration, such as the Woodford-Barking relief road. I live in the next district to Woodford, so I know what will happen there. Also, the East London river crossing is under contemplation. If toll charges for the Dartford Tunnel are increased in order eventually to wipe out the debt—and it has been stressed that the debt is increasing each year—what will happen when these relief roads which are being contemplated in a very congested part of East London are completed? Instead of helping to relieve the traffic, motorists and lorries will tend to use those roads rather than use the Dartford Tunnel.
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This is an issue which can be helped by the Government. The Government could today assist the Select Committee. If not, I hope that this instruction will be given to the Select Committee. It is an Instruction to them to consider, and in considering the matter I am certain that they will bear in mind all the points that have been made in this debate. Then, if necessary, they can come forward with a proposal, which I hope will be that this should be a national responsibility—because the M.25 will be an important part of our national motorway system—and that the Government should take over the financial responsibility for the tunnel. That seems to be the logical conclusion. We can understand why the Bill has had to be promoted now, but the Government can greatly assist the Select Committee. If they do not, I hope that the Select Committee will tell the Government what should be the position.
I therefore support the Instruction.
3.37 p.m.
Baroness Phillips: My Lords, before the noble lord, Lord Aberdare, replies, may I just support my noble friends Lord Irving and Lord Underhill? Recently, I had the privilege of being driven over the beautiful Humber Bridge at six o'clock on a Wednesday evening, for which the toll charge was £1·50. I gather that the charge for freight traffic is £6·50. We were the only car passing either way over that vast bridge at six o'clock on a Wednesday evening. In other words, people were still using the long route rather than using this bridge which has been constructed for them. I suggest that this is exactly what will happen in the case of the tunnel which we are now discussing, if people can avoid paying the toll. Surely, the receipts were not even paying the wages of the people collecting the toll on the Humber Bridge. Our great roads, our great tunnels and our great bridges must be the responsibility of the nation.
3.38 p.m.
The Lord Bishop of Rochester: My Lords, I wonder whether I may be allowed to intervene very briefly before the Minister replies. Much has been said about the importance of the Dartford Tunnel to through traffic, and the noble Lord, Lord Tordoff, referred to the undesirability of such largely heavy traffic taking alternative routes through London. As a resident of Kent, I should like to say a brief word on behalf of those who live in Kent and Essex, because local traffic in this part of the world is also very heavy. There is a surprising number of people who live in Kent and work in Essex, and vice versa, and the daily toll which they are called upon to pay is a very heavy one for them to face.
Moreover, since the tunnel was opened, one alternative route from Kent to Essex—the ferry crossing at Gravesend—has been brought to an end for motor traffic. That is a loss not so much to the through traffic but certainly to much local traffic. Therefore, I hope very much that the Select Committee will be asked to look very carefully at this matter because I believe that it is of great importance to people in both counties as well as to the big firms that are sending traffic right across the country by this route.
3.40 p.m.
Lord Lucas of Chilworth: My lords, this is a Private Bill. All I can say to the noble Lord who suggested that the Government should postpone it is that it is not in the Government's remit to postpone the Bill. The noble Lord, Lord Underhill, recognised the necessity for the Bill. Without it, a vacuum will be caused in a year or two.
The Government are in favour of the Bill. In particular, we support Clause 22, which enables the two county councils to continue to levy tolls. The Government recognise that the question of tolls over estuarial crossings is one which keenly concerns your Lordships' House. Noble Lords have this afternoon given support to the arguments put forward by motoring and freight organisations for their version of tolls. It is a matter to which the Government have given thought over recent years. The question was examined most particularly in 1979. As a result of that review, the Government were quite convinced that the policy which had been adopted by successive Governments over many years was sound and should be maintained: the policy that expensive estuarial crossings which confer exceptional benefits on users should be financed by those who use them—not by the taxpayer or, necessarily, by the ratepayer.
The policy is reasonable. The provision and maintenance of this type of crossing over wide estuaries is certainly more costly than building roads on land or bridging narrow rivers. I went to Cardiff about three weeks ago and crossed the bridge at Cardiff. To be asked to pay 40 pence seemed to me to be a very small price for the tremendous savings in time and distance which that crossing achieves. All crossings offer savings in time and money. Surely the right reverend Prelate would agree that such a crossing, at 50 pence, will save an enormous amount of time for business people moving from Kent to Essex; and with the cost of motoring would certainly reflect a saving. The policy to which I have drawn attention has been repeatedly endorsed by Parliament in various enabling Acts under which crossings have been provided, and I can see no reason for change at this time.
May I turn to two points which have been made? The noble Lord, Lord Tordoff, referring to the rising debt. The debts were low in the early 1960s because the money to build the second tunnel had not then been borrowed. The bulk of the present interest charges relates to the second tunnel, which was built in 1967. The Kent and Essex county councils say that in a few years' time they will start to repay the debt and that they expect to repay it entirely by 1998, as my noble friend Lady Platt of Writtle reminded the House. There is no doubt that the present Government's financial policies, particularly with regard to the reduction in inflation and interest charges, will make that job a little easier.
The noble Lord, Lord Tordoff, mentioned the tunnel's capacity. Doubts have been raised as to whether the tunnel can cope with the traffic which will be brought by the M.25. It may be helpful at this stage if I outline what has been done and what is planned. The department have already agreed to provide a 100 per cent. grant to the Dartford Tunnel Joint Committee so that the approach roads which link the
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M.25 to the tunnel may be widened to three-lane carriageways in each direction. Work on the Essex side is nearing completion. Work on the Kent side, which is technically more difficult, will be started shortly. Together, this work will represent a Government investment of over £14 million. It may also be that the toll plaza will need to be enlarged, and that is being considered now. If there were a further grant towards this work, for which the joint committee have asked, it would add another £3 million to the amount which the department is paying towards this project.
Lord Somers: My Lords, I understand entirely the noble Lord's argument that expensive crossings such as this should be paid for by the user rather than by the ratepayer, but does that not also apply to motorways everywhere? They are not built for nothing. Should not a toll be charged for using motorways?
Lord Lucas of Chilworth: My Lords, whether or not a toll should be charged, the fact is that motorways have been thought to be part of the strategic network of roads and should therefore be provided by central Government and supported by local government. Where, however, an alternative is provided—either a tunnel or a bridge, which in every case has been asked for by the promoting companies—which would show an exceptional saving, albeit at an exceptional cost, it has been felt almost from the beginning by successive Governments that the taxpayer should not have to bear the cost, since he bears the cost of road construction, but that the bridge user should bear the cost. The money is taken from the road user by virtue of the toll. Therefore, if one tries to relate the two, the question which the noble Lord, Lord Somers, has asked is a little different.
I believe it was the noble Lord, Lord Irving of Dartford, who raised the question of congestion. I can say to him that in the event of congestion occurring there is already in the main building programme for 1986 onwards a major scheme to provide another river crossing in East London at Barking across to Plumstead and the A.2, or, alternatively, a major bridge fitting on to the south end of the extension through East London and the North Circular Road.
If I may turn to the Instruction moved by the noble Lord, Lord Tordoff, as he has clearly told the House that Instruction would require the Select Committee carefully to consider whether the power of the councils to charge tolls for the use of the tunnel should not cease on completion of the M.25. The noble Lord argues that the orbital road, the M.25, is part of the strategic network. I would certainly agree that the Dartford Tunnel provides the link in that orbital road. As the tunnel already existed when the orbital road was planned, it would have been foolish to provide another crossing. The Government, however, do not accept that the completion of the M.25 is a reason for discontinuing the present practice of charging tolls.
As I said yesterday afternoon in answer to the noble Lord, Lord Plant, the orbital road is due to be completed in 1986. The tunnel was promoted by the Kent and Essex county councils. The second one was built under powers conferred by Parliament under the 1967 Act. Since the need for a crossing and the form which it should take were proposed by the councils,

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the tunnel is and should remain the responsibility of the councils. It was promoted on the basis of charging tolls sufficient to cover the servicing and repayment of debt as well as the administration and upkeep of the tunnel. The cost of building the tunnel was freely incurred by the county councils, and it would be quite wrong for the Government to take over their debt of some £60 million, £6 million of which is owed to the Exchequer.
I referred to what my noble friend Lady Platt of Writtle said about the debt. There is no doubt in the mind of the Government and of the operating company that that repayment schedule can be met. I cannot accept the suggestion made by the noble Lord, Lord Underhill, that the tunnel should be part of the M.25. It is the link between two parts of that motorway—as is the Severn Bridge, which is owned and operated by the Secretary of State and for which tolls are made. Even were tolls to be abolished, the debt would remain and the provision would still have to be made for servicing and repaying it by both the county councils of Kent and Essex. I suppose that they in turn would have to turn to their ratepayers. I do not believe that your Lordships would wish to add to ratepayers' burdens. Nor do I believe, as I said earlier, that the debt could be at this time passed on to the taxpayers; that is what would happen were the Exchequer to assume responsibility.
I have outlined the Government's recognition of the effect which the M.25 will have on the tunnel, and I have told your Lordships of the grants which the Government are to provide. The Government would not wish to oppose the Instruction in the name of the noble Lord, Lord Tordoff. I may say that the relevance of the M.25 to the question of whether it is proper to charge tolls on the Dartford Tunnel is a point made in all three of the petitions which have been lodged against the Bill. Therefore, the Select Committee will not be able to avoid considering that point, and the Government are happy that they should do so; it is right that the Select Committee should take evidence on this point. The Select Committee is obviously the right forum in which this matter should be debated.
To sum up, the tolls provisions of this Bill are in accordance with longstanding Government policy that the major estuarial crossings should be paid for by those who use them. It makes no difference whether the crossing is part of a motorway, such as the M.4. by the way, the debts incurred in building a tunnel have to be serviced and repaid. As I have said, the Government are not prepared to allow that cost to fall on the taxpayer. The Government support the Bill, and in particular we support the provisions in Clauses 22 and 23.
Lord Aberdare: My Lords, perhaps it might be useful if I very briefly remind your Lordships of the procedures that will be followed in the case of this Bill, which, as has already been made clear in the course of the debate, is a Private Bill. It is promoted jointly by the Essex and Kent County Councils and there are three petitions against the Bill. One is in the name of the Standing Joint Committee of the Royal Automobile Club, the Automobile Association and the Royal Scottish Automobile Club; another in the
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name of the Road Haulage Association Limited; and the third in the name of Thurrock Borough Council. These three petitions relate to the same point, as does the Instruction in the name of the noble Lord, Lord Tordoff; that is, the question of charging tolls to those who use the Dartford Tunnel.
Therefore, in any case this Bill will go to a Select Committee. The Select Committee will hear evidence on behalf of the promoters and the three petitioners. If your Lordships pass this Instruction, then that Instruction too will be considered by the same Select Committee. I will ensure that the words that have been spoken this afternoon during the course of this short debate are made available to all members of the Select Committee, so that they will also be made aware of what has been said today. In due course, when the Select Committee has come to its conclusions, it will be making a report to the House.
3.54 p.m.
Lord Tordoff: My Lords, I am grateful to the noble Lords, Lord Aberdare and Lord Lucas of Chilworth, for what they have said—and to all noble Lords who have taken part in this debate. The fact that we have had such stimulating contributions from all parts of the House justifies my having put this Motion on the Order Paper today.
Perhaps I may just briefly just pick up two points. First, on the general question of other estuarial crossings, I would submit to your Lordships that the Humber crossing and the Severn crossing are of a different order, in that the diversions which have to be made if people do not use those crossings are considerably greater. As I tried to show in what I said at the beginning, in crossing the Thames there are options open to people other than the Dartford Tunnel, but greatly to the detriment of the environment.
If the noble Lord, Lord Lucas of Chilworth, reads Hansard tomorrow, he will see that I did not say I had doubts about the capacity of the tunnel, but rather that I was worried about the capacity of the toll booths and the congestion that would occur. Even if these booths were extended, I believe that congestion would still occur. I thought that the reply of the noble Lord, Lord Lucas of Chilworth, to the noble Lord, Lord Somers, rather gave the game away. If it is right and proper that motorways are part of the strategic network of the country, then the fact that there is a gap in one that has to be paid for by private users seems to me to be curious in the extreme. The slightly casuistic way in which the noble Lord explained how the Dartford Tunnel was not to form part of the M.25 did not seem to me to really hang together. In any event, the noble Lord has been good enough to say that the Government do not intend to oppose this Instruction and so I hope that your Lordships will support it.
On Question, Motion agreed to.

Mental Health Bill [H.L.]
Report received.

Data Protection Bill [H.L.]
3.57 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Elton.)
Lord Mishcon: My Lords, before we commence our deliberations, may I ask whether we can be protected against our own data? If your Lordships will look at the second Marshalled List, you will see that it is headed "Second Marshalled List of Amendments to be moved in Committee". They are, of course, to be moved at Report stage.
Lord Elton: My Lords, the noble Lord, Lord Mishcon, is quite right when he refers to the first page of the Marshalled List. However, if he will look at the back page, he will see that it refers to Report stage quite properly.
Lord Mishcon: My Lords, that only means that this Bill is back to front, and I have always said so.
On Question, Motion agreed to.
Clause 22 [Compensation for inaccuracy]:
Lord Mottistone Lord Mottistone moved Amendment No. 62:
Page 19, line 11, leave out ("indicating") and insert ("used or disclosed only with an indication").
The noble Lord said: My Lords, Amendment No. 62 is an improved version of my Amendment No. 126 which I moved at Committee stage, and to which my noble and learned friend pointed out some objections. I hope that the change in this amendment is acceptable to him as meeting the point that he made.
Clause 22(3) provides a defence for the data user who has used inaccurate data if the data used were an accurate reflection of the data supplied to him by the data subject or by a third party. This defence seems only to be available if the data carries with it an indication of its source. The intention in providing such a defence is presumably to encourage data users to qualify the data they hold by indicating its source and hence its implied validity.
This is a matter of interest to the data subject. As currently drafted, the subsection requires that the data themselves should indicate their source before the data user can claim the defence provided. But it is not common practice to include the source of data on a computer file, and the cost of rearranging existing files and rewriting the existing software to qualify for this defence could be very high.
It is very unlikely that many data users would be prepared to incur such costs. I believe it would be in the interests of both the data user and the data subject if the qualification for the defence were just slightly less stringent, that instead of having to reorganise his files the data user should be required only to ensure that the source of the data was clear whenever the data were used or issued to a third party. In many cases this could be achieved by the use of preprinted forms or headings on computer lists, at minimal cost.
If this amendment were adopted more data users would ensure that the source of the data was evident whenever they were used, and this would give better protection to the data subject. I hope that with that rather full explanation, and the fact that we have endeavoured to take advantage of the comments by my noble and learned friend at Committee stage, the new amendment will be acceptable to the Government. I beg to move.
Lord Avebury: My Lords, I do not think the noble Lord's amendment touches the point I raised the other day, on which the Minister has been good enough to write to me in the interval between Committee and Report. The question is: what is the rule applying to data which are transferred between a subsidiary and a parent company? This is a matter which has obvious practical implications for data users who are part of large groups of companies. I hope that the noble Lord the Minister may think it desirable at this stage to give a slightly fuller explanation along the lines of the one he has already given to me in correspondence.
To summarise that, the noble Lord has said to me that the question of whether or not a subsidiary company would be a third party for the purpose of Clause 22(3), which defines the term "inaccuracy", is a difficult matter to define; it is impossible to generalise, the noble Lord said. He said that where a parent company controlled the activities of the subsidiary company to the point where the subsidiary was acting on behalf of the parent company, it would seem that information passing from the subsidiary to the parent company would not be regarded as receipt from a third party; but where the subsidiary company operated independently of the parent company, then it would seem that the courts would regard the subsidiary as a third party.
I hope the Minister will offer some further clarification, or will think that this is a matter which should be dealt with more conclusively before the Bill leaves another place. What worries me is the use of the words "it would seem". The noble Lord is not really certain what the status of information passing between a subsidiary and a parent company would be. He is telling me, and your Lordships through me, that this depends on all the circumstances and the extent to which the parent company exercises day-to-day control over the activites of the subsidiary. Therefore, whenever anybody is thinking about whether this subsection provides him with a defence, he always has to ask himself the question: does the parent company control the activities of this particular subsidiary to the extent that would satisfy a court of law, or might the inaccuracy be a material one for this purpose? I think that businesses should not be left in the uncertainty that this clause as presently drafted may lead to. Between now and the stage when the Bill gets to another place perhaps the noble Lord will think of some way of setting this out more clearly for the benefit of those in industry who have to operate this provision.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I think it probable that the noble Lord, Lord Avebury, did not realise that in the division of labour which exists between my noble

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friend and myself I was saddled with this responsibility. But I can see my noble friend on the Front Bench, and I think probably the best way of handling the noble Lord's point would be for my noble friend to be in touch with him directly. In actual fact I do not think—although on this I may be wrong; I have just briefly glanced at the correspondence between them—it is particularly relevant to my noble friend Lord Mottistone's amendment. I am grateful to my noble friend for returning to this point because it is a real point. I am grateful to him for trying to improve upon the amendment which I ventured to criticise at Committee stage. I shall still ask him to withdraw this amendment. I realise that the point is one which I ought to try to deal with, but I am not happy with the improvement which he has made to his original amendment.
If I may explain both the point and the reason why I am not happy with the proposal of my noble friend as it stands, perhaps the House will bear with me. The point is this. As my noble friend explains, it is not always, and perhaps not usually, for some reason, the case that the data user will be recording his data in a form carrying the indication that it is received information. I will refer to that by a jargon phrase, received status. It is not always the case that it is recorded in such a way that the data will have or does have the indication required to give the defence its validity in the Bill as drafted. My noble friend seeks—and I think with some justification—to say that it is good enough, in order to attract the defence, that the indication that it is received information and not originating information should travel with it wherever it goes. In other words, it would be enough if the printout contains the indication rather than that the original data do.
I myself think that if a way can be found in which that object is achieved I would like to find that way. If my noble friend will withdraw his amendment in its present form, I will undertake to ask the draftsman if such a way can be found. I cannot undertake today that it will be found because I am not sure whether it is possible. But I hope the indication I have given is at least sympathetic to my noble friend.
With regard to the point raised by the noble Lord, Lord Avebury, I think I can say to him that so far as regards this amendment we take on board the point that if the information travels it has got to travel with the indication, so far as regards the subject matter with which this amendment is concerned. I hope with that explanation my noble friend Lord Mottistone will find it possible to withdraw his amendment in due course.
Lord Mishcon: My Lords, we on these Benches definitely support the principle behind this amendment and have listened with rapt attention and expectation to the remarks of the noble and learned Lord.
Lord Mottistone: My Lords, I am indeed grateful to my noble and learned friend for his very careful explanation, and indeed for his understanding of the point that I am seeking to make. I agree with him that it is extremely difficult to find the right wording. I hope very much that he will be able to do so at some stage
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before the Bill becomes an Act and leaves parliamentary hands altogether.
I think that it is sufficiently important to justify some way of meeting the peculiarities of data handling, which are different from the peculiarities—if one can call them that—of ordinary paper handling. Things that often appear to be very simple when we write documents and cross-reference them are for very good reasons dealt with in a totally different way by data processing machines. Therefore, I think that it is important and I am sure that my noble and learned friend appreciates that. I understand why my noble and learned friend cannot give me any sort of firm undertaking, but I hope that this point will be made.
I should like to say before I sit down that I understand and take well the point made by the noble Lord, Lord Avebury. I do not think is strictly relevant to my point, but it is important and I hope that the Government will take that on board as something which needs solving as well. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.10 p.m.
Lord Wigoder Lord Wigoder moved Amendment No 63:
Page 19, line 11, leave out ("indicating that it consists") and insert ("specifying precisely the source").
The noble Lord said: My Lords, under Clause 22(1), as your Lordships know, a data subject may be entitled to compensation where the personal data held by a data user are inaccurate, but subsection (3) provides that even if those data are inaccurate it is of no consequence provided that they are data which accurately record information, inter alia, received from a third party and provided that the data indicate that they do in fact consist of such data; namely, from a third party.
It would appear that the wording as it stands is, I suggest, inadequate to give proper protection to the data subject. If all that the data user needs to say in order to claim the protection of subsection (3) is. "These data come from a third party", the data subject, first, will not be able to check whether or not that is an honest claim and, secondly, assuming that it is an honest claim, it will frequently happen that the data come from another data user and the data subject will not be able to claim, as against the other data user, that there is inaccurate information being held about him or to seek its rectification.
Thirdly, unless the data subject can discover the precise source of the inaccurate information he may be deprived of certain other obvious legal remedies. Therefore, all this little amendment seeks to do is to strengthen the protection for the data subject by requiring the data user in these circumstances not to be able to rely on a vague expression—obtained from a third party—but to indicate precisely what the source of the apparently inaccurate information is. I beg to move.
The Lord Chancellor: My Lords, the noble Lord, Lord Wigoder, described this as a little amendment. I hope to persuade your Lordships that this is not quite to give it its full importance. It is rather a big one. If I may come back, for a purpose which will shortly

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become apparent, to the rather facetious quip that the noble Lord, Lord Mishcon, made on the Motion, That the Bill be now further considered on Report, he has always taken the view—which those who listened to my speech on Second Reading will realise I do not share—that the Bill is defective because it does not deal with manual data and that manual data are equally as important as computer-contained data. I have never agreed with that because, as I said on Second Reading, the problem of policing manual data would be totally different. The scale of the danger and the nature of the danger arising from manual data are quite different and it would require not merely that manual data be included in the Bill, but that a Bill of quite a different shape be introduced for the purpose of dealing with it.
Let me put this to the noble Lord, Lord Wigoder. We have sought, of course, to draw a balance between the interest of the data subject, whose interest we are here to protect by the Bill, and the burden which we are placing on the data user, whose interest has been very ably proclaimed and supported by my noble friend Lord Mottistone. We have sought to protect the data subject without inflicting on the data user a burden greater than was reasonable.
May I suppose for just an instant that one day, and it may be already the case for aught I know, the so-called "morgue" in an ordinary newspaper office—which, looking round me in the House, probably contains files on each one of us present in the Chamber at the moment—were fed into a computer. One of the most sacred objects of the journalists' profession is that they do not reveal their sources. This is precisely what the noble Lord, Lord Wigoder, is asking us to do by his allegedly little amendment. This would be not only to impose on the data user a burden by way of expense and methodology which might prove much more burdensome and expensive than one would suppose, but also to compel him to reveal his source in, I think, every case.
The newspaper is not the only type of person who wishes to keep information to some extent confidential. Almost every law-enforcement agency requires to keep its information confidential in certain cases. We know, of course, about professional legal privilege, which we have sought to retain, but every kind of file which contains information about individuals very often contains a great deal of confidential information. The police, not least, rely very heavily upon informants and both for the security of the informant and for other reasons they do not usually desire to reveal their sources. For this reason—because I want to protect the data subject but also because I feel bound to protect the data user-I have to say that we do not find this amendment acceptable and we do not regard it as a particularly little amendment.
Lord Swinfen: My Lords, I think that this particular amendment is impractical because if the computer is going to be used efficiently it must contain the information required for the business of the computer. If the sources of all those pieces of information are to be on the computer as well it would obviate the use of the computer and might lead to the data user needing a much larger and more expensive computer—and possibly two or even three computers—or an
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extremely comprehensive manual backup system which would not, in fact, be covered by this Bill.
Lord Perry of Walton: My Lords, while appreciating what the noble and learned Lord said, may I ask whether the Government would be prepared to differentiate between the third parties to whom he has referred and third parties where there is a transfer of information from one computer file to another? That is the danger that I see in the absence of an amendment of this sort. It does not seem very difficult to flag a computer with an indication that there is a particular part of the file which has been obtained from the computer file of another data user.
Lord Wigoder: My Lords, I have listened to the noble and learned Lord's argument with the greatest of interest and to the contributions made also from other parts of your Lordship's House. The difficulty that I see as to what the noble and learned Lord suggests is simply this: ought there to be protection for, let us say, newspapers who have totally inaccurate information on their computer? I can quite understand that, where there is information which is accurate, it may be undesirable in the interests of protecting sources that it should be revealed, but where the information is wildly inaccurate it seems to me on first reading at least that Clause 22 as it now stands will deprive the data subject of any remedy whatsoever. Indeed, taking the matter a stage further, again as I read the clause, any data user can avoid any liability under Clause 22 of any kind simply by saying, "Obtained from third party". The data subject will be powerless and the registrar will be powerless; a great big coach and horses will have been driven right through this clause.
I accept of course from what the noble and learned Lord said that this amendment may well be defective in its drafting in the sense that it may have resulted in some consequences that I certainly did not intend. I hope that the noble and learned Lord might agree that there is nevertheless the possibility of a widespread abuse of Clause 22 here and that it might be desirable that it should be looked at again before another stage. With those observations, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 25 [Jurisdiction]:
4.22 p.m.
The Lord Chancellor The Lord Chancellor moved Amendment No. 64:
Page 20, line 7, at end insert—
("( ) For the purpose of determining any question whether an applicant under subsection (8) of section 21 above is entitled to the information which he seeks (including any question whether any relevant data are exempt from that section by virtue of Part IV of this Act) a court may require the information constituting any data held by the data user to be made available for its own inspection but shall not, pending the determination of that question in the applicant's favour, require the information sought by the applicant to be disclosed to him or his representatives whether by discovery (or, in Scotland, recovery) or otherwise.").
The noble and learned Lord said: My Lords, Amendment No. 64 is a Government amendment and it has fallen to me to move it. If I may also speak on Amendments Nos. 76 and 78, which are bound up with Amendment No. 64 and consequential, I can

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explain them all rather simply. It is obvious that if we are to give access under Clause 21 to the data subject and there is a dispute as to whether all or any of the information is held or comes within the right, somebody has to decide that dispute. That somebody has to be, on the general principles of the Bill, the court. The question then arises: Is the court to have access to the information, and, if it has access to the information, has it got to give it to the other side to the dispute? The answer to that in the amendment which I propose is, yes, the court must have access to the information for the purpose of deciding whether the data subject's rights have been infringed or whether his claim is justified. It would defeat the object of the whole process if at the same time the court had to disclose to the data subject what he was asking to be disclosed if he won the case.
I am bound to say that I had thought when the Bill was originally under discussion that the inherent jurisdiction of the court, applying the ordinary rules relating to discovery, privilege and so on, which have been much under discussion in recent years, would enable the court to do exactly what this amendment proposes should be done; since when I have consulted the judiciary, who do not think so—or at any rate do not all think so. So in order to achieve an object which I believe to be from the start desirable, and even common sense, this amendment has been devised, and I beg to move.
On Question, amendment agreed to.
4.26 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 65:
After Clause 25, insert the following new clause:
("Findings of Registrar as evidence.
In any proceedings brought under sections 22, 23 or 24 above any findings by the Registrar shall be admissible in evidence.").
The noble Lord said: My Lords, your Lordships may have remembered that there was an amendment, No. 139, at the Committee stage which was not moved and which dealt with the question of the findings of the registrar, saying that those findings should be admissible in evidence, and so the amendment read at the Committee stage:
"should also be deemed to be true unless the contrary was proved".
We who were responsible for the amendment reflected upon that and felt that there were disavantages possibly about trying to make the certificate of the registrar in regard to his findings a matter which would come before the courts. There were disadvantages in making those findings binding, as it were, unless the contrary were proved by one party or the other. So the amendment comes before your Lordships' House on this occasion merely making it as a matter of sensible convenience, and in order to abridge proceedings, that in the proceedings under Clauses 22, 23 or 24 the findings of the registrar should be admissible in evidence. It struck us as being a sensible amendment and I hope that your Lordships will so think. I beg to move.
The Lord Chancellor: My Lords, I hope to persuade the noble Lord that this amendment is not as desirable
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as he thinks it or tends to think it at the moment. I hope to explain quite shortly why, although I am grateful to him for bringing the point to our attention.
The first observation that I would make is that the only formal findings of a registrar under the Bill are the reasons required to be given by him on refusing an application for registration under Clause 7 or in serving a notice—an endorsement notice or a de-registration notice—under Clauses 10 and 11 or a transfer prohibition notice under Clause 12. The new clause proposed in the amendment offers no other definition of "findings". It may for aught I know be extended beyond such reasons to something else but, if so, it does not say so and I think therefore that I am entitled to go on the basis that it must refer—at least at any rate as at present drafted—to the findings which I have sought to define in my first sentences.
If the registrar makes such findings, they are in themselves without validity until some sanction is taken under them. If the data user who is served with a refusal or with an enforcement or deregistration notice takes not notice of it and defies it without taking advantage of his right to appeal to the tribunal, he will of course be prosecuted to conviction and that conviction can already be cited under Section 11 of the Civil Evidence Act 1968, which was designed to reverse a case known to lawyers as Hollington v.Hewthorn, which decided that previous convictions were not evidence of guilt; but since 1968 previous convictions have been evidence of guilt. If therefore the notice were defied and the data user was prosecuted to conviction, the Civil Evidence Act 1968 could be invoked and the amendment would be unnecessary. But if, on the other hand, the data user is not served with any notice under the Act or if he ignores the notice and is not prosecuted by the registrar or, if prosecuted, is acquitted, there is nothing which could properly be used against him in subsequent proceedings. If that were the case the amendment is objectionable.
So although I fully appreciate that the object of this amendment is a laudable one, which would be to save the data subject in proceedings which he may take under this part of the Act trouble in adducing evidence in support of his claim, this is not, in my respectful submission, the way in which to do it. If the findings are such that he ought to be able to use them he can, and the amendment is unnecessary. If, on the other hand, the findings are such that he ought not to be able to use them, he ought not to be allowed to do so and the amendment would be objectionable. I hope that I have made my point plain and I hope that the noble Lord will take it into account in his reply.
Lord Mishcon: My Lords, reckless is the Member of your Lordships' House who did not take into account anything that fell from those learned lips! It may very well be that I am on a wrong tack but I should like merely to amplify what I said before. However, I shall do so very briefly in order that the noble and learned Lord may be quite sure that he has covered in his very explicit reply the point that I was really trying to make, however inadequately.
May I remind your Lordships that under Clause 22 the data user is entitled to go where appropriate for compensation for inaccuracy. Under Clause 23 he is

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entitled to claim compensation for loss where there is an unauthorised disclosure. Under Clause 24 he is entitled to go for rectification and erasure in certain cirumstances. What I was trying to do was to save the data user, as the noble and learned Lord most correctly and courteously pointed out—
Lord Mottistone: My Lords, I hope that the noble Lord will forgive me for interrupting, but does he mean the data user or the data subject?
Lord Mishcon: My Lords, in common with all of your Lordships, I am getting mixed up with data user and data subject. I am most grateful to the noble Lord, Lord Mottistone, for his correction. I of course mean the data subject, and I am most grateful to the noble Lord. What I was trying to do was to ensure that where—as in most cases—the registrar would have investigated a complaint in regard to inaccuracy, in regard to wrongful disclosure, then instead of having to go through all of the motions again when going to the court for compensation, I should have hoped that at least there was prima facie evidence before the court. I have in mind the findings of the registrar: that he had looked into the matter—as we know in practice that will be the first stage—and found the necessity for erasure or rectification, or that there was an unauthorised disclosure, or had found that there was, indeed, an inaccuracy. That was what I was trying to achieve.
If the noble and learned Lord tells the House that he is very well seized of that being the reasoning behind it, but still feels that the amendment is unnecessary or inadvisable for the same reasons that he gave just now, then quite obviously I shall be moved by those remarks. Indeed, I imagine that the noble and learned Lord would be kind enough, with the leave of the House (if that is necessary) so to indicate.
The Lord Chancellor: My Lords, I hope that I was not being disingenuous. I rather suspected that what the noble Lord might actually have had in mind was some kind of informal finding by the registrar. That certainly would not be covered by his existing amendment because the only meaning that I can attach to the word "finding" is the kind of finding which would be definitive under the Act. But I am seized of the point that there might be a short cut. My own feeling is that if the registrar were to give the data subject material which he could use as evidence in court proceedings, it might very well be that, with the assistance of the other provisions of the Civil Evidence Act, he might find his way much smoother than he would have done before the passing of the Civil Evidence Act.
But I should like to write to the noble Lord and obtain advice about this matter. I do not think that it is absolutely obvious that the data user himself ought to be at a disadvantage in court proceedings as a result of a finding which is of a purely informal character. This is after the registrar has found—or has thought he has found—some degree of inaccuracy in the data on the record or if he finds that there has been a loss within the meaning of the succeeding section giving rise to a right of compensation or an infringement of the rights under the following section—the third
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section—of rectification or erasure. I should like to consider the problem further without commitment. If the noble Lord will find it possible to withdraw the amendment, I shall communicate with him further on the matter.
Lord Mishcon: My Lords, I have not the slightest hesitation, in view of the courteous and helpful remarks of the noble and learned Lord, in begging leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 [National security]:
4.37 p.m.
Lord Elton Lord Elton moved Amendment No. 66:
Page 20, line 32, leave out from beginning to end of line 9 on page 21 and insert—
("27.—(1) Personal data are exempt from the provisions of Part II of this Act and of sections 21 to 24 above if the exemption is required for the purpose of safeguarding national security.
(2) Any question whether the exemption mentioned in subsection (1) above is or at any time was required for the purpose there mentioned in respect of any personal data shall be determined by a Minister of the Crown; and a certificate signed by a Minister of the Crown certifying that the exemption is or at any time was so required shall be conclusive evidence of that fact.
(3) Personal data which are not exempt under subsection (1) above are exempt from the non-disclosure provisions in any case in which the disclosure of the data is for the purpose of safeguarding national security.
(4) For the purposes of subsection (3) above a certificate signed by a Minister of the Crown certifying that personal data are or have been disclosed for the purpose mentioned in that subsection shall be conclusive evidence of that fact.").
The noble Lord said: My Lords, we had a full debate on Clause 27 of the Bill in Committee when the noble and learned Lord, Lord Elwyn-Jones, spoke to a number of different amendments, and I replied in like vein—I fear at some length. Although it led to some confusion in Committee, I have no choice but to repeat that approach now for our Amendments Nos. 66 and 67 go together; and they consist of what I might call a re-presentation of the totality of Clause 27. In moving Amendment No. 66, therefore, I should also like, with permission, to speak to Amendment No. 67.
In Committee, it became clear that there was broad agreement on certain key points on both sides of the House. First, that the safeguarding of national security is of prime importance and that the Bill should not jeopardise that. Secondly, as a consequence, that special provisions were required in the Bill to exempt national security data. Thirdly, that some system of ministerial certificates was required to confirm that a claim to exemption was justified in the event of that claim being challenged. Fourthly, that any such certificates should be issued only at the highest level. Fifthly, that it was particularly important in an area such as this for the purport of the statutory provisions to be clear, as I hope they will be to the noble and learned Lord opposite.
In the light of the views expressed in Committee, we have looked again at Clause 27. I have to say that I think that we have found room for improvement—both in terms of clarification and in terms of the way in which ministerial certification will work. Let me first draw the attention of the noble and learned Lord

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opposite to a provision that has not changed (apart from drafting changes consequential on other amendments to the clause to which I shall refer in a moment). That provision is the one conferring an exemption from the non-disclosure provisions on users who are willing to disclose data for the purpose of safeguarding national security. The guardians of national security must not be prevented from being given information to assist them in their work. As is recognised in the European Convention and elsewhere in Europe, the general needs of national security must override the particular demands of data protection here.
But now let me explain what is changed by our two amendments. First, we acknowledge that the distinction between data held by a Government department and data held by other users may have been an aid to confusion rather than precision. I accept what the noble and learned Lord said—that the purpose of subsection (2) of the Bill as originally drafted was not immediately obvious. So we have done away with that distinction. Now, we propose that all data, whether held by a Government department or by, for example, a defence contractor (or the police), should be treated in the same way and should be exempt where the exemption is required to safeguard national security.
We have also considered carefully what was said about the need to avoid exemptions being claimed regardless of whether Ministers charged with determining when national security needed to be safeguarded approved the exemption. Under the clause, as amended, the test for exemption of all data is the same: they will be exempt only if a Minister determines the exemption to be required to safeguard national security. Thus, there will be no opportunity for a user to make a personal decision that data are exempt under the Bill without reference to a Minister. Unless a Minister determines that the data require exemption, no exemption can be claimed. A user claiming exemption where a Minister does not so determine will be operating unregistered and liable to the sanctions provided for by the Bill. In this way we hope to have reassured the House that exemptions under Clause 27 will be under strict ministerial control.
We have now also amended the procedure for issuing certificates in the light of our Committee debates. We were impressed by the concern expressed on both sides of the House that officials or others not specified would be able to sign "on behalf of" a Minister. I indicated in Committee that there may be some practical difficulties on occasions in getting a personal ministerial signature. But we accept that we must not allow confidence in the system to be lost because of fears of delegation of the certificating process. The difficulties will have to be overcome. Therefore, under the clause, as amended, a personal signature of a Minister is required. No delegation is possible. That is our next concession.
And finally, we have thought further about making it explicit on the face of the Bill that the ministerial functions under this clause will be performed only at the highest level. I explained in Committee why we objected to the proposal of the noble Lords opposite
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that only a Secretary of State should be involved. Our objections remain. I also have to say that we are not overly attracted by the laborious task of specifying each Minister, as the noble Lords now propose in their new amendment. However, I think that we can meet the point by the approach that we have taken in our own Amendment No. 67. This ensures that the Ministers involved must be of Cabinet rank—or else the Attorney-General or Lord Advocate (for whom I am glad to hear cheers opposite) whose special responsibilities may give them cause to hold data requiring exemption, and yet they may not be in the Cabinet.
My Lords, I fear I have again spoken at length. But I think it is important to make clear what our aims are in amending Clause 27. I say frankly that we were impressed by the debate in Committee. I said then that we would consider what we had heard. And that consideration has led us to a revision of the approach to national security data: all data are to be treated in the same way, regardless of whether the data are held by a Government department or not; no data are exempt unless a Minister determines that that exemption is necessary; certificates can only be issued personally by a Minister; and the Minister involved must be of the highest rank only. I believe that we have returned to the House with proposals that meet the concerns in Committee. I beg to move.
4.45 p.m.
Lord Mishcon: My Lords, the noble Lord the Minister need not apologise in the slightest for the length of his address to your Lordships upon these two amendments now brought forward by the Government. Indeed, they deal with important points for which we on this side have the support of certain Members of your Lordships' House who do not have the privilege of sitting on our Benches. This was something for which we fought hard. It is a measure of the Minister's breadth of mind, if I may say so, that after the consideration which he promised he has taken these points on board and has brought forward these amendments.
The first one that we fought for was to see to it that a Minister himself took responsibility and that it was not somebody signing on his behalf. That has been dealt with. The second point we fought for was the place in the hierachy of the Minister who takes that responsibility. That has been dealt with too in this amendment, and we are grateful for both. I have only two queries. One is a real query and the other one, I hope, a query which contains within it a constructive suggestion.
The first query may arise as a result of my ignorance, for which, if that be so, I apologise to your Lordships in advance. I myself was not aware of any statutory definition of "Cabinet". It may well be that there is such a statutory definition, and therefore if you put the word "Cabinet" into an Act of Parliament you are doing something which can easily be defined in accordance with our constitutional law as laid down in statute and not certain traditional names which have been given to very select people, be they in fact real or be they shadow. In those circumstances, my first question really is one for clarification and in order to

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make sure that the Government have not gone wrong in this amendment.
The second one is a question which I hope will prove to be constructive and not pedantic. Throughout Amendment No. 66 the Government have used in their amendment the word "required". If your Lordships will look at the third line, for example, of newly suggested Clause 27(1) it says,
"if the exemption is required for the purpose of safeguarding national security".
That follows right the way through the amendment. One poses the question to oneself, "required by whom?" Should not the word in fact be "necessary"?
To try to illustrate the fact that this is not a bit of pedantry but has some meaning to it, it may be that an official comes before the Minister and says, "Minister, this is required for the purpose of national security". One wants to be sure that the Minister does not say, on looking at this subsection, "Oh, I see it is required for national security. In those circumstances, here is my signature". What he has to be satisfied about when that question is put to him is that indeed it is necessary for the purpose of national security. I think that in this context the word "necessary" is a far better one than the word "required".
The last point I make upon that is that if your Lordships would be good enough to look at subsection(3) of the suggested new Clause 27, the third line reads:
"any case in which the disclosure of the data is"—
and even the word "required" is left out—
"for the purpose of safeguarding national security."
Again the word "necessary", I would have suggested, ought rightly to go into that line.
This is something that I have no doubt the noble Lord the Minister would want to look at in regard to my second point, and it is purely a question of brushing the amendment up and making it what I believe the Government would want to make it. My first question is a very real one only in the sense that I think your Lordships too would be interested to know whether there is a statutory definition of "Cabinet" and in what statute it appears.
Lord Mottistone: My Lords, I should like briefly to thank my noble friend for incorporating the point which I raised in my Amendment No. 144A on leaving out the alternative of an official signing certificates. On a point of detail, I was impressed by the argument of the noble Lord, Lord Mishcon, about the need, in appropriate places, for "necessary" rather than "required". It would seem to me at first sight that that is a good argument, and I would support it in principle.
Lord Elton: My Lords, I am glad to embark on this stage with so much approval. Long may it last. I am not so confident about my ability to answer the questions noble Lords have asked. While there may not be a statutory definition of "Cabinet", there is a precedent for the use of the term in statute and therefore I think we shall find we are on good ground; but I will test the ground in the light of the noble Lord's query. Similarly with the word "requirement". It may
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be a matter of semantics. I suspect that to require something in the sense in which the noble Lord, Lord Mishcon, suggested it might be used, there would need to be in the Bill a power to require it, and, as that power is not there, I suspect that the word "required" would be used in the sense in which he intends using the word "necessary". But, again, I shall take care between now and the next stage to see that we have not inadvertently said something we did not mean to say. I am grateful to the noble Lord and my noble friend for their remarks.
Lord Diamond: Before the matter is disposed of, my Lords, I wish to refer once more to the question of a Member of the Cabinet, because the Minister said he would look into it. I think I am right in saying that when moving the amendment he used the term "Minister of Cabinet rank", and I think he will find that it is possible to be a Minister of that rank without being a Member of the Cabinet, which is the term used in the amendment. In looking into the matter in order to get it completely clear, the Minister will no doubt look into the wording of the amendment and not the wording of his speech in which he introduced it, which, if I am right, he quite understandably used that term.
Lord Elton: My Lords, my inquiries will be both more careful and more precise in view of the noble Lord's intervention.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 67:
Page 21, line 12, at end insert—
("( ) For the purposes of this section "Minister of the Crown" means a Minister who is a member of the Cabinet, the Attorney General or the Lord Advocate.").
The noble Lord said: This amendment is consequential, my Lords. I beg to move.
On Question, amendment agreed to.
[Amendment No. 68 not moved.]
4.53 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 69:
After Clause 27, insert the following new clause:
("Special investigation of exemptions
.—(1) If a person has reason to suspect that his name is recorded as a data subject contrary to one or more of the data principles (except the seventh principle) listed in Part I of Schedule 1 to this Act under the exempted circumstances described in section 27 above, he may apply to the Registrar for a special investigation.
(2) When a special investigation is requested, the Registrar must satisfy himself that the application is made for reasons which meet the requirements of Part III of this Act and that one or more of the data principles (except the seventh principle) have possibly been contravened.
(3) Subject to subsection (2) above, the Registrar is empowered to obtain such information as is necessary to satisfy himself either—

(a) that there is no relevant data held, or

(b) that the personal data held under the terms of section 27 of this Act conforms to the data principles (except the seventh principle).

(4) In the event that the Registrar is not satisfied that the terms of subsections (3)(a) or (3)(b) above are met, he may make representations to the Secretary of State.
(5) When the Registrar has completed the special investigation he shall inform the applicant for the special investigation that it has been completed.").
The noble Lord said: My Lords, this is a substantial recasting of an amendment I moved in Committee, and is designed to take note of the points which my noble friend made at that stage. I agree with him that the question of safeguarding national security is of the highest importance, and I have endeavoured to cast the amendment in such a way as not to infringe that. However, it seems that certain of the principles will potentially be broken within the security network. For instance, principle No. 3 is:
"Personal data held for any purpose … shall not be used or disclosed in any manner incompatible with that purpose".
One might find that happening in the dim world of national security. Principle No. 4 is:
"Personal data held for any purpose … shall be adequate, relevant and not excessive".
One can imagine that with the passage of time it might become both irrelevant and excessive, and therefore that one would be broken. Under No. 5,
"Personal data shall be accurate and … kept up to date".
That is always a worry when keeping any data, and it would not be peculiar if personal data held for national security purposes suffered from a fault in that area. Principle No. 6 is:
"Personal data … shall not be kept for longer than is necessary".
What I have described might occur—in a sense, it might be more likely to occur, or to occur more often—in the area of national security, which is totally exempt because, I am afraid, officials (whoever they are and however important and reliable they may be), if they do not have a curb on their behaviour, can perhaps be thought to keep more information than they should and perhaps to keep information which has become out of date with the passage of time.
The important point about the rest of the Bill is that whoever they are—and this applies to other people within this general exemption framework—there is the possibility that the registrar can question whether they are following the principles properly. But, as I see it, he cannot ask questions in respect of certain areas of national security, and it is that power which my amendment seeks to give him. It is limited to accepting that, under certain conditions, a special investigation may be necessary. It sets out what he should seek in subsection (3), and subsection (4) gives him power to make representations if he is not satisfied that the points made in the earlier part of the clause have been met. In subsection (5) he makes a totally bland comment to the inquirer which, I hope, gives nothing away; he just says the investigation has been completed.
The inquirer will have to rely on the fact that the registrar has taken the trouble to look into the matter and has come to some sort of conclusion. It might be the conclusion in subsection (3)(a) or (b). Either way, he must accept that. It might be that he is satisfied that the information is held for a perfectly good reason. If the registrar is not satisfied, he has power to make representations about the matter. I suggest there is not much danger of, if you like, people who do not deserve to do so (I shall not go further than that to describe them) making inquiries. If one does not have one's name in some computer for national security reasons and one makes an inquiry of the registrar in the terms
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of my amendment, that will at once bring one's name to the notice of the national security people, who will look at one with a very careful eye, and one would have to be careful not to do that if one was in any way concerned about not getting on to lists of that sort.
It is a reasonable amendment, it will not break or give cause for breaking any essential security purposes, but it will give that extra safeguard and, above all, will mean that even the officials within this cloaked world will be subject to some sort of inquiry and will not get slack and inefficient. I beg to move.
Lord Mishcon: I support this constructive and useful amendment, my Lords. It follows in many ways a recommendation considered carefully and made in the Lindop Report. Mothers have often learned from their children as well as children learning from their mothers. I think that the mother country could possibly learn from the child dominion of New Zealand in this connection. From an informant much more learned than I in these matters I learnt today that New Zealand has a privacy commissioner. The post was set up under an Act in New Zealand. If a person finds that every application that he makes for a job is failing, and he has an idea that some inaccurate information about him is being disseminated from a computer, or in some other way, he can go to the privacy commissioner. The commissioner will note the complaint, make his own inquiries, and then do exactly what the noble Lord, Lord Mottistone, said. He will come back to the person, and tell him, "I am not going to tell you what I have found, but in my view you have nothing to worry about". That is the end of the matter. I should have thought that that would be a very valuable piece of assistance that could be given in the context of the Bill before us. Therefore, we on these Benches support the amendment.
Lord Swinfen: My Lords, I, too, support the amendment. The only point that needs to be carefully watched is that the registrar, or his staff who have to make the relevant inquiries, have the necessary security clearance to look at the rather secret computer data that they will need to look at.
Lord Elton: My Lords, in Committee my noble friend Lord Mottistone indicated that he would seek to refine the amendment that he then moved and bring it back to your Lordships. That he has done, and the amendment now focuses solely on national security data, rather than on all data exempted in any way under Part IV, as it did previously. Under the amendment the registrar is empowered—no, he is obliged; and that is important—to conduct a special investigation whenever anybody complains that data are being held about them in breach of any of the seven principles. The registrar cannot go back to the data subject with his findings, but he can go to the Secretary of State.
I appreciate the motives for the amendment. In Committee my noble friend described it, I think, as his "most important personal amendment". But I cannot avoid pointing out the many difficulties that it raises. First, I have to ask whether we really want to place the registrar under a statutory duty to investigate every application that he receives, since that is the effect—the inescapable effect—of the amendment.

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With every one he must at the very least satisfy himself as to whether it meets the requirements of Part III, and whether one of the principles (other than that concerning subject access) has been breached. Clearly that cannot be done without going to the data user, if of course he can identify the data user. The subject may not have done this. His suspicions may rest simply on the belief that he is being followed everywhere, or that there is a funny noise on his telephone when he uses it, or that he has twice failed to get tickets for the Royal Tournament. It is surprising what circumstances will make some people believe that the security service has got something on them, and it is also surprising the number of abstruse reasons that are advanced in appeals to me as a Minister from people who have been refused jobs such as that of prison officer.
If however the registrar can identify the user, he must then investigate the data. Incidentally, it is difficult to see how the registrar can consider whether an application is made for reasons that meet the requirements of Part III. So far as I can discover, Part III contains no requirements that can be regarded as capable of being met in those terms. It deals purely with rights to subject access—surely inapplicable here; and to compensation in certain circumstances—again inapplicable, because the registrar cannot report back to the data subject.
So the new—
Lord Mishcon: My Lords, I wonder whether, with his usual courtesy, the noble Lord the Minister will allow me to intervene, since we are on a very important matter and I am unable to speak again, other than by jumping up in this way. As I see it, in the subsection of the amendment to which the noble Lord the Minister was referring there are two points which seem immediately to upset his arguments. Since I must be wrong in thinking that his arguments are upset, I should be delighted if he would deal with the matter. First, all that is stated in subsection (2) is that the registrar must be satisfied that there is a prima facie case. That will mean that the man who thinks that he has heard mumblings on his telephone or who believes that someone living opposite is persecuting him is immediately ruled out. The amendment refers to possible contravention, not actual contravention. Secondly, the contravention relates to the principles set out in one of the schedules. The contravention is deemed to relate to something in one of the schedules, not in Part III.
Lord Elton: My Lords, I must not be drawn too closely into the Committee format which, in his opening remarks this afternoon, the noble Lord drew to our attention is not the format for today. However, if I may respond to what the noble Lord has said, I would say that, as I read subsection (2) of the amendment, it states that,
"the Registrar must satisfy himself that the application is made for reasons which meet the requirements of part III of this Act"—
Lord Mishcon: Read on.
Lord Elton: And,
"that one or more of the data principles (except the seventh principle) have possibly been contravened".
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There are two requirements, one of which, without which the other is invalid, is that the application shall meet the requirements of Part III of the Bill. Let us not fence too long on subsidiary arguments.
If I can now recollect what I was saying earlier, I have dealt with two defects which I think are serious defects, though evidently I have failed to convince the noble Lord of their seriousness. Now I should like to address the purpose, rather than the effect, of the amendment. First, should the registrar be given a role in investigating national security data? I know that in certain countries there operates a not dissimilar system. I was going to quote Sweden as an example; the noble Lord has quoted New Zealand. But in rather more countries the data are wholly exempt, as they are in the Bill, and we are convinced that that is the only approach to suit this country.
The information used by those responsible for safeguarding national security is of the highest possible sensitivity, and the proper way to handle it is to keep it contained within the smallest possible circle. Nobody who does not absolutely need to know should know, and my noble friend Lord Swinfen gave eloquent testimony to the importance of the category of the people who know. It is very easy to sound melodramatic about it all, but it is a very serious business, played for high stakes. We do not think that the registrar should be brought into this circle; nor, frankly, do we believe that it is fair or sensible to ask him to be the judge of these matters. In all seriousness I have to ask my noble friend whether in an area where the registrar will have no experience—an area, which of necessity operates covertly—and on which he can obviously seek no outside advice, he could decide if data were relevant, or adequate, or kept longer than necessary, as certain of the principles require.
That brings me to my final point. Even if we could entertain the proposed arrangement, would it provide any real assurance to data subjects? All that the registrar would be able to do would be to make representations to the Secretary of State. But the subject of the representations would know nothing of this. He would not know even whether it had been confirmed that data about him were held or not held. He would get only the assurance that the noble Lord, Lord Mishcon, said was so valuable to people living in New Zealand: that the registrar had looked into it and he need not worry. Since the registrar can do no more than pass his views on to the Secretary of State, the subject would not even have the satisfaction of knowing that, if something was wrong, it had been put right.
I am sorry to say that I consider that national security data must be wholly exempt from the Bill. There can be no halfway house. My noble friend has sought one, but it would be of little help or reassurance to subjects, it would be counter to the interests of national security, and it would impose on the registrar a heavy burden which would serve little useful purpose. I am sorry to come down so heavily on something to which clearly my noble friend attaches great importance. I would meet him if I could, but I believe that the security of the nation is too weighty a matter for us to compromise, and I must ask him not to press the amendment.
Lord Mottistone: My Lords, first, I must thank the noble Lord, Lord Mishcon, for his support. I find the answer given by my noble friend the Minister most uncharacteristic and singularly unhelpful. I was not without personal experience of this whole area at one time in my life, and I know very well what he is talking about. It was disappointing to find that the majority of what he had to say to me was a detailed criticism of the detail of my amendment—which, when one produces it single-handedly, is almost bound to be open to criticism. I challenge any one of your Lordships by himself to produce an amendment of any complexity which does not in the end have to be corrected by the Government. If one thinks about my noble friend's speech, at least three-quarters of it was a sort of nit-picking criticism which is not really appropriate to an amendment of this sort.
However, to come to the main point of his argument, he did not answer my point, which is a matter that I find of great concern—and I repeat that I have had association with these matters personally in the past—that people who can do things in secret without proper discipline upon them can do things wrong. I think that what the New Zealanders have done, and, obviously, the Swedes, has got in it the germ of an excellent idea which I would hope that my noble friend could take very carefully to heart. Forget my amendment and its details! That is not the point. It is only an example of how something might be done. It may have been all right in the days of hand-written records because those sorts of records require quite a lot of hard manual labour to produce and to retain; and they are not as likely as is computer-held information to be in risk of breaching the very principles in Schedule 1 which I believe could be breached in this particular secret area where there are no critics.
I think that the principle of what I am seeking to have put in the Bill is a very important one which ought to be taken seriously by the Government. It is very disappointing that they concentrated on criticising the detail (which is quite irrelevant at this point) of my amendment. I hope that my noble friend will think again, will take the matter back and think in detail about what I said when I introduced my amendment. I appreciate that this text could be unsuitable for this Bill and, therefore, only for that reason I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 [Crime, taxation and immigration control]:
5.17 p.m.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 70:
Page 21, line 16, at end insert ("or").
The noble and learned Lord said: Amendments Nos. 70 and 71 go together. Together, they constitute what I venture to say is perhaps the most criticised part of the Bill. Your Lordships will see that Clause 28 includes in the wide concept of the words "control of immigration" the categories of personal data which are made exempt from the subject-access provisions in this Bill. It is this exemption which has caused considerable public concern and has been condemned by organisations concerned particularly with the
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immigrant population—the Joint Council for the Welfare of Immigrants and other bodies concerned with civil liberties.
The publication of the clause has caused much anxiety not only for those lawful immigrants who are already in this country but even for those who were born here and who have been settled here for years. It is creating uncertainty, a sense of unease, a sense of discrimination, which is most undesirable (putting it at its lowest) to promote at this time. The effect of the provision will be most hardly felt by the ethnic minority communities. Indeed, it clearly is principally directed against them.
An immigration officer, for instance, is very unlikely to have any reason to try to obtain information from doctors, employers, social workers and others about a white person, born or settled in this country. That would be a rare minority event. But a black person may well be singled out for suspicion as an over-stayer or illegal entrant, and inquiries may be made, even though he or she (as I have suggested) may have been settled in this country since childhood. It is a cause for anxiety for the reasons I have already indicated. In so far as the object is to prevent or detect crime, that is already provided for in Clause 28(1)(a) of the Bill. That remains. The amendment has no effect upon that. That covers adequately the people who have broken the law in the field of immigration. That is already covered. In our submission, this is a quite gratuitous extension of what is necessary in the field of the greatest possible sensitivity in our country at this time, that of race relations. We seriously implore the Minister and the Government to withdraw this highly disturbing provision of the Bill.
Lord Mishcon: In supporting the amendment which was so eloquently moved by my noble and learned friend, may I refer to something that the noble Lord the Minister said at Committee stage when this very matter was discussed? I am referring to column 702 of the Official Report of Tuesday, 22nd February.
"Article 9. 2. b."—
He was referring to the article of the convention—
"specifically provides for derogation from the convention's provisions where necessary in the interests of protecting the rights and freedoms of others. I submit to your Lordships that that applies to the right and freedoms of those of every colour, in every community in this country, who are already settled here, and it is in their interests that we should control immigration. An ineffective control arouses fears which can be played on by unscrupulous people".
I say this! The Minister may tell me I am wrong to say it; but I am going to say it just the same. For a Minister representing, with such distinction, the Home Office, it was a remarkable argument to say that immigration control exemption from subject access is within the meaning of a convention because it is "in the interests of protecting the rights and freedoms of others". If ever words were torn out of their context and turned upside down those are the words that were spoken by the noble Lord the Minister on that occasion.
It is interesting to find out where those words,
"the rights and freedoms of others".
came from. They came from the convention, but their deduction was from the European Convention on Human Rights. The convention on Human Rights, so

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much respected by this country and to which this country was a signatory, are rights about life, liberty, fair trial, freedom of expression and the rest of it. They were certainly never meant to be twisted—I use the word without any offensive connotation—into job protection in the labour market, which the noble Lord the Minister went on to talk about, against an influx of foreign immigrants or the question of raising fears among certain members of our community because of an influx of immigrants.
I ask this question, I think pertinently, of the noble Lord the Minister: has his department—has anybody to his knowledge—submitted this question of the exemption of immigration particulars of data,if I can put it that way, to the European Assembly in any one of its departments, to the Commission, to the Ministers or to anybody? Has he asked whether that is their interpretation of what is supposed to be a derogation of rights because it is in the interests, as he put it, of protecting the rights and freedom of others? If he has so submitted it, may we know the reply? If he has not so submitted it, is he prepared to do so? Because I think I know the answer. I feel that that is only right in the context of this Bill, dealing with prevention of crime and other allied matters which are well within the purview of proper exemptions, I hope that it will not be left to another place merely to echo its voice on this matter.
I hope that this House, before the Bill reaches another place, will have exercised its usual protection of those who lead it and whose good name is at stake—the whole convention's good name is at stake in this matter—by seeing that the amendment is carried. There is no party matter in regard to this because I believe that this is supported in all parts of your Lordships' House, but I hope that the House will exercise its proper rights and duties to see that this amendment is carried.
Lord Donaldson of Kingsbridge: My Lords, the noble and learned Lord moved this amendment with admirable clarity and admirable conciseness and from this Bench we are very happy to support it.
5.25 p.m.
Lord Elton: My Lords, I wish I could be as concise as the noble Lord, Lord Donaldson of Kingsbridge, and thus secure even greater support for what I am about to say than I otherwise would, but it is not possible. I should start by giving some background on the nature of our immigration control and the way in which it is operated. I hope that noble Lords will find that useful.
Immigration into the United Kingdom is controlled under the Immigration Act 1971, as amended, and the immigration rules. The primary task of those administering immigration control is to assess whether persons subject to control do or do not qualify for admission or continued stay under the relevant rules and if so on what conditions. Leave will be refused if a person does not qualify. The Act provides rights of appeal against a refusal to the immigration appeals system. In addition Members of either House of Parliament can make representations to the Home Secretary. There is also the possibility of judicial review by the courts.
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The Act provides for a number of criminal offences covering such matters as illegal entry, overstaying, breach of conditions of stay and assisting or harbouring immigration offenders. These are an essential backup to the control but the main sanction normally is not prosecution. It is refusal of leave to enter or remain and, in the last resort, deportation or removal from the United Kingdom. In administering the Act, the Immigration and Nationality Department naturally holds a great deal of information about individuals subject to control. Some of this is held on computer because it is important that there should be a ready access to this information, both at the headquarters of the department and at the ports; they are parts of the same system.
I must now make two important points at this stage. First, the application of the immigration rules is not a racist exercise as some noble Lords seem to be tempted to suggest, nor are they concerned solely with coloured immigration. The rules apply evenhandedly to all persons who are subject to control, and if there were more white people than other people seeking to come into this country your Lordships would have no more grounds for saying this was racist against white—
Lord Avebury: My Lords, how can the Minister make that qualified assertion when he knows perfectly well that cases have been brought against this country in the European Commission of Human Rights and that at least one of them is still under consideration there and has not yet been the subject of a ruling by the European Commission?
Lord Elton: My Lords, the noble Lord argues from the particular to the general that the entire system is racist because of a situation in which a person from the ethnic minorities has brought a case in the European courts. I do not think that the individual does support the general. The noble Lord cannot, I regret, argue from a sitting position and I must not constantly give way. He has made his point. I cannot accept it. The noble Lord will be able to speak again later and doubtless with much greater cogency than by this method.
In administering the Act, the Immigration and Nationality Department holds much information available both in London and at the ports of entry and it is necessary to have it available quickly, apart from anything else, for the convenience of travellers arriving at the ports. The rules state in Section 1 of the Immigration Act 1971 that immigration officers will carry out their duties,
"without regard to the race, colour or religion of people seeking to enter the United Kingdom",
and in Section 2 that,
"the powers conferred by the Act are to be exercised without regard to a person's race, colour or religion"
Secondly, in passing the Immigration Act and approving the Immigration Rules, Parliament has decided that immigration control should operate and that it should operate effectively. It is in the interests of all people who are lawfully in this country, including our ethnic minority communities, that others should not be able to get away with abusing or evading the controls. I say that without embarrasment. I believe we should be one nation and to suggest that the protection

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of employment is not a matter of equal concern to somebody who is unemployed from the ethnic minorities as to somebody from the majority communities is as disingenuous as the noble Lord, Lord Mishcon, suggested that I was being.
Information held about individuals is the raw material of the control and speedy access to certain parts of that information with the aid of computers is an important element in the efficiency with which that control is enforced. Many decisions are taken at the ports and they have to be taken speedily, as I said, in order to avoid holding up bona fide travellers unnecessarily. That is why there are indexes which help the immigration officer to identify which passengers should be given special attention for one reason or another. There is also a need to make speedy checks if a person comes to notice inside the United Kingdom who has breached the control and gone to ground.
I turn now to the need for this specific exemption in Clause 28(1)(d) of the Bill for data held for the purpose of immigration control. The paragraph is concerned only with instances where application of the normal provisions of the Bill are actually "likely to prejudice" the control of immigration. Most of the personal data held on computers by the immigration authorities will not be covered by this exception. They are factual and routine and will be accessible to the data subject in the normal way. There is also a limited amount of information on computer about people known or suspected of being involved in criminal offences. We are here not talking only of offences under the Immigration Act—overstaying, illegal entry, et cetera—but other, often serious, possibly related offences, such as drug smuggling.
In so far as the application of the provisions of this Bill may prejudice the prevention or detection of crime or the apprehension or prosecution of offenders, such data will, of course, be exempt under paragraphs (a) and (b) of this subsection. But there is also a limited amount of personal data on computer which would not qualify under the "crime" exemption but which justifies special treatment, and it is that with which this amendment is concerned. Essentially this is information about persons (many of whom are outside the United Kingdom) who do not, or may not, qualify to enter or remain here under the Immigration Rules. Such information is essential if the immigration authorities are to do their job properly. Thus we record, for example, the fact that a person has been refused an entry clearance or leave to remain here, or that a person who has been here before has fallen a charge on public funds. If such a person should present himself at a port of entry, it is right that the previous history should be readily and speedily available to the immigration officer who examines him since it will clearly be of important assistance in deciding what leave, if any, should properly be given to the person.
It is by no means always the case that the individual concerned should be denied access to such information, but on occasion this may be necessary. Some people make continuing, determined attempts to evade the control. I should like to illustrate that, if I might. We have on record, for instance, one Portuguese natioal has been removed nine times as an illegal entrant and has been refused leave to enter six
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times since 1979. One Mauritian national has been removed five times as an illegal entrant, deported five times and refused leave to enter four times since 1972. The noble Lord, Lord Avebury, probably knows him too, and will no doubt refer to him in the speech he is about to make. These may be untypical examples but there are a number of others which are known to the authorities, who go on and on trying to enter and we cannot tell how many more may seek to evade detection and establish themselves here unlawfully. I do not think it is right to give to them any indication of the "hallmarks" by which they may be recognised which could be on the computer.
During our Committee stage I gave the example of a person who might seek to use an alias in order to evade the controls. It would clearly be of great assistance to him to be able to find out what knowledge we have, if any, of his names and, perhaps more importantly, whether that information is readily available to the immigration officer who will see him.
This exception is also relevant in another area. This is where, for one reason or another, there is reason to suspect that a person is seeking either to abuse immigration control himself or to help others to abuse that control. For example, there may be reason to believe that a man here temporarily has married in order to achieve settlement; or that a student is not pursuing his studies but is taking advantage of his leave to study in order to take incidental employment, and sometimes the claim to be studying is in any case remarkably thin. In such cases the authorities have a duty to investigate the matter to establish the truth and, if appropriate, to refuse further leave to remain. I am not saying that it will always be the case but, as with criminal investigations, to allow subject access to recorded suspicions while the matter is actually being investigated may well prejudice the investigation and therefore the effective enforcement of the control. If there is injustice or if there is thought to be injustice, there are of course the safeguards concerning appeals and representations to the Minister that I have already mentioned.
I have spoken already longer than I would wish, but I hope that this fairly full account explains why we cannot accept this amendment. There is one important misconception which I must dispel before I sit down. It is an idea which, I believe, lurks at the back of the minds of a number of noble Lords and it colours their thinking. This provision does not create some new category of information. This information is already held at present and has been held for many years. It is used quite properly for the effective enforcement of immigration control. There is no right of subject access at present and information is not now disclosed where this would prejudice immigration control.
Far from creating any new secret data bank, this provision simply seeks to continue the status quo, for the reasons I have already given. The "newness" of what the noble Lords opposite propose is that it should be prised open, to the detriment of control. The data user is there to protect all of us from the ills of uncontrolled immigration and should be free to do so. I have already said whom I mean by "all". The subject is not unprotected; there is a right of appeal and there is the right of parliamentary representation which

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many noble Lords are already familiar with. I hope that your Lordships will resist this amendment, which seems to me to be damaging to the public interest.
Lord Pitt of Hampstead: My Lords, the Minister has failed to show in what way it is necessary for the information held by the immigration department to be exempt from this Bill. What we are talking about is allowing unregulated third party access to information collected for one purpose but which is designed for another. This is the serious matter.
The Minister accused the noble Lord, Lord Avebury, of using the particular to explain the general; and then he went on to do the same. He did in fact indicate that there were one or two cases where it would have been not so good if the information had been available to the data subject. As I see it, even if the point he made has substance, the truth is that the greater harm is the fact that there can be on these computers data which are in fact untrue and which the data subject will be unable to discover are untrue because they are not available to him.
It is that which is basic to the whole matter we are discussing. It is that which in fact I thought the whole Bill was about—that in effect data users should not be allowed to have data about people which may be untrue, which can affect them and about which they have no knowledge. What the Minister has just done in his speech is to defend the right of a Government department to do just that; and, as I see it, that is basically wrong. It puts a coach and horses right through the whole concept of this Bill.
Therefore, I hope that your Lordships will accept this amendment and reject the claim made by the Government to the right to keep this sort of information and to keep it without its being able to be challenged by the people who are the subject of it and when it can be used in a manner that may be detrimental to them. I believe it is at that level that we must look at it. If somebody uses an alias, the immigration authorities have ways of discovering what he is like and, therefore, are able to challenge him. It is the same principle.
I do not think we in this country have departed from the principle that it is better that one criminal should escape than that innocent people should be punished. I thought that that was the basic principle of the whole concept of British justice. I do not think we have ever departed from that, but we are departing from it here, because the Minister is telling us that it is possible that, without this provision, the odd person who was subject to immigration control could discover the means by which he was being identified and could use that to escape immigration control. Because that one person may misuse that data, all the other people about whom there are data will be deprived of the right to see them. That is contrary to the basic principle on which this country has existed, and I invite your Lordships to give plenty of thought to what you are being invited to do.
There is no more reason for keeping these data under wraps than there is for keeping under wraps any other data which Government departments may have. Other parts of the Bill state that data subjects should be free to examine the data which other Government
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departments have about them, and the same principle should hold in this case. I am repeating what I said at the beginning. The Minister has not shown us why this aspect is so exceptional that the basic principles underlying the whole concept of the Bill should be thrown aside.
5.42 p.m.
Lord Hatch of Lusby: My Lords, like my noble friend Lord Pitt, I waited to hear the speech of the noble Lord, Lord Elton, before intervening, to see whether he had any answers to the points that we put forward on this clause, both on Second Reading and at the Committee stage. I must say that his arguments were totally unconvincing. I appeal to all sections of the House to remember that we are here in order to uphold the principles of British justice, and certain principles are laid down in this Bill.
My noble friend Lord Pitt has mentioned one, which is completely breached by this clause, that information collected for one purpose should not be used for another purpose. Looking back at both the Lindop Report and the White Paper that preceded this Bill, there was no mention of immigration control. Where has it come from? The Government have never told us why they found it necessary to insert this clause at this stage, after previous thorough examination had not, apparently, made them even contemplate it.
What is more, as my noble friend Lord Mishcon has said, it is very probable that this clause breaches the European Convention on Data Protection. The first clause of Article 9 lists the exceptions as a necessary measure in a democratic society in the interests of protecting state security, public safety, the monetary interests of the state or the suppression of criminal offences. There is no mention of immigration. Why, if the control of immigration is so important in connection with the issue of data—it is not important to just this country—has it been excluded from the European Convention? I suggest very strongly that the inclusion of this clause in this Bill will be outwith the whole spirit and application of the European Convention on Data Protection.
In giving his instances of the use of this Bill in immigration control, the noble Lord was very unconvincing. Let me put a point to him. I mentioned this issue on Second Reading. Are we not, as a House, in danger of being grossly offensive to a considerable section of the British population, when we lump them together in this Bill with, first, criminals and, secondly, those accused of tax fraud? We are putting together in this clause, as exceptions, criminals, those accused of tax fraud and immigrants. However it is covered up, that will do a great deal of damage to the reputation of this House. This is not a party matter and I appeal to the House, as a House, to think about the damage that this could do to the reputation of this House of Parliament.
One of the issues, which is germane to the question of immigration in this country, is creditworthiness, as your Lordships know. Is it not very likely that, at least, a proportion of the data provided by credit companies about immigrants will be inaccurate? That is not unusual. But those data can be protected by the data users from the data subject. There is no way under this

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clause of checking whether or not the data that have been provided are accurate.
As my noble friend Lord Pitt has pointed out, it is a basic principle of the law and the whole ethos of this country, that the one or two cases that the noble Lord mentioned would be better to slip through the net, than that innocent people should have data provided which could lead to their expulsion from this country, or prevent them from coming into this country. That is the real issue and I should have hoped that, by the time we had reached this Report stage, the Government would have withdrawn this part of Clause 28, and, if they felt that it should be drafted in a different way, would have put it separately. Do not let us lump together the immigrant section of the British people with criminals and tax evaders. Even at this late stage let us strike one blow for the sanctity of the principles which are stated quite clearly in the Bill.
Lord Elwyn-Jones: My Lords, I venture to think that the House may well be of the opinion that on a day when the Government have made some sensible concessions to the opinion of this House the reply of the noble Lord the Minister has been totally negative and totally disappointing. He has failed completely to deal with the serious questions raised by my noble friend Lord Mishcon on the effect of the convention. It is our opinion that the proposed words dealing with immigration do not come within the terms of the derogations permitted by the European Convention. I must ask him again, as has my noble friend, whether the authorities concerned with the enforcement of the convention have been consulted about the matter. Has their advice been sought? What has their response been? That is the first important matter with which it is the duty of the Minister to deal.
Secondly, why is it that the provision relating to control of immigration was not mentioned in the White Paper which was prepared by the Home Office last year? On page 5 we read:
"It is proposed that the legislation should not apply to data that need to be safeguarded for the purposes of national security. The use of certain other data relating to the other matters referred to at (A) above"—
that is, protecting state security, public safety, monetary interests or the suppression of criminal offences—
"will be exempt from legislation. The exemption will include some data needed by the police and other law enforcement agencies for the prevention and detection of crime".
Those are still there. Why has immigration now been included? It would not have been regarded as a grave matter by the Home Office a year ago. What has happened since? This is the Government's White Paper. We submit that this is a serious derogation not only of the convention but of human rights and the privacy of the subject. If this goes through, the immigration authorities will have the power and the right to have secret access to all computerised personal information systems in this country. It is a grave encroachment not only on the liberty of the subject but on his privacy as well.
Lord Wigoder: My Lords, may I ask the noble Lord the Minister to help me about one matter? Immigration law is complicated and plentiful. It
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contains a wide variety of potential crimes and potential offences. Anybody who may be about to commit a crime, or who may have committed one or be suspected of committing one, or an offence of any sort, is caught quite clearly under Clause 28(1)(a) or (b). No-one in the course of this debate has disputed the value of those provisions. Could the noble Lord the Minister help the House by giving some clear instances of cases in which he says that, as a matter of elementary common sense, the control of immigration provision is such that a subject access provision ought not to apply that would not be equally caught under the first two paragraphs? As I understood his argument on the question of the use of an alias, and so forth, reliance could be placed quite easily on paragraph (a) or paragraph (b). There would be no need at all to incorporate this other provision around which this whole argument now revolves.
Lord Elton: My Lords, I was under the impression that the noble Lord, Lord Avebury, was going to contribute to this debate. I shall be unable to rise again. If the noble Lord wishes me to respond—I should be very happy not to respond—I would prefer him to speak now or, if I may say so not discourteously, not to speak at all.
Lord Avebury: My Lords, it is very good of the Minister to be so forthcoming and to allow me to speak on the amendment. I thought, however, that I would save my remarks until the next amendment.
Lord Elton: My Lords, I look forward to it with mixed feelings. Your Lordships, with leave, will permit me to reply to a number of the shafts which have been directed towards me. They were so numerous that I am not sure I can recall them all. May I start with the matter of the White Paper and the convention to which the noble and learned Lord, Lord Elwyn-Jones, directed me. The noble and learned Lord asked me particularly how the exemption for immigration control can be reconciled with the derogation provisions of the European Convention. I ought to explain that in this context we are relying on the provision in Article 9(2)(b) of the convention which provides for derogation where this is necessary in the interests of protecting the rights and freedoms of others. As I explained earlier, the proper enforcement of immigration control is clearly in the interests of people who are lawfully in this country. Immigration control is concerned not only with numbers, although we must not forget the pressures and strains on our multiracial society which would follow from unbridled immigration. It is also concerned with jobs, houses and the opportunities for our young people.
If we are to meet our responsibilities in protecting the rights and freedoms of those who are here—and noble Lords opposite are diligent enough in telling us that these are not already as much as they should be—we must ensure that immigration is properly enforced. It is clearly unfair on those who came here properly and lawfully that others should be able to circumvent the necessary controls. It is not helpful of noble Lords who have tried to suggest all the time that it is against those very people that these controls are directed. On the contrary, they are of more assistance

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to them than they are to others. We are not lumping them together with tax evaders and criminals. Your Lordships are lumped together with criminals and lunatics when it comes to voting matters. The juxtaposition in the Bill of people who seek to come here illegally and people who do things otherwise illegally has no racist overtones whatsoever. It is damaging to the reputation of this House, of which the noble Lord, Lord Hatch of Lusby, is rightly jealous, but no more jealous than I, to suggest that this is so. I see that the noble Lord, Lord Mishcon, wishes to intervene.
Lord Mishcon: My Lords, I am most grateful to the Minister for allowing me to intervene. He appears to be going on to another subject and leaving that of the European Convention and his interpretation of those words. I did very courteously ask certain questions, which my noble and learned friend repeated. The questions were as follows: has the question of immigration control related to the provisions of data protection been referred to the European Community in any one of its divisions to obtain its opinion? If so, what was that opinion? If not, why not? And is the Minister not prepared to put that question?
Lord Elton: My Lords, to answer the noble Lord, Lord Mishcon, no, we have not gone to the Council of Europe, or to the European Parliament, or to any other European institution to get clearance of our domestic legislation. It is not our practice to do so. It is for us to decide what is right. Then it is for us to defend that decision if it is thought to be in breach of the convention. That is the straight answer to the noble Lord's question. I am glad that he brought it before me again. May I remind all noble Lords, in answer specifically to the noble Lord, Lord Pitt of Hampstead, that this exemption does not apply to the whole of immigration information, which is very considerable. It applies only to information, the release of which would be prejudicial to the control of immigration into this country. In other words, it relates to those things which assist the immigration department and immigration officers to determine who ought and who ought not to be considered for lawful admission to this country, and which, if it were revealed, would assist in defeating that purpose. I do not believe that this House thinks that that is such an unimportant purpose that it ought to be set aside for an alleged conjunction with reasons of our relationships between different communities in this country which is entirely fictitious.
Lord Pitt of Hampstead: But, my Lords—
Lord Elton: My Lords, I think I ought not to give way any more; this is not Committee stage. I have said as much as I have to say. It is quite clear to me that this amendment seeks to take out of the Bill a provision that is not sinister and which relates only to the efficient conduct of a function that is necessary to the well-being of the whole community. It does not extend to other parts of the same mass of information which is not so related. Your Lordships are invited to take away an important provision for insubstantial and emotive reasons, and I hope that my noble friends at least will support me in the Division Lobby against it.
Lord Wigoder: Before the noble Lord sits down, my Lords, will he give me a clear instance of a case where he regards the power under (d) to be necessary which would not be equally well covered by (a) or (b)?
Lord Elton: My Lords, I have done so on numerous occasions in Committee. On any occasion where that which is under investigation is not a criminal act but involves the intention to enter this country on the part of someone not entitled here, then it is needed. There are many such cases. If the noble Lord wants more precision then I will write to him, but I cannot rise to my feet for a fourth time at Report stage.
Lord Wigoder: But, my Lords, it is a crime covered by (a).
Lord Elton: It is not, my Lords. It is not a crime under certain circumstances to attempt to enter this country; it is only a crime to be here when one is in the country unlawfully. With the Borg case, that has become another area which is extremely difficult to control because the criminal offence exists only on the first day of overstay, and the noble Lord will know very well the difficulties which result from this and the fact that there is no subsequent criminal offence. I do not want to delay your Lordships with minutiae because I have detained you long enough.
The Lord Chancellor: My Lords, the Question is, That Amendment No. 70 be agreed to?
Lord Elwyn-Jones: My Lords, can we take this amendment together with Amendment No. 71, which I move:
Page 21, line 17, leave out from ("duty") to end of line 18.
The Lord Chancellor: My Lords, is it the wish of the House that I should put the Question for the two amendments en bloc? Then the Question is, That Amendments Nos. 70 and 71 be agreed to?
6.3 p.m.
On Question, Whether the said amendments (Amendments Nos. 70 and 71) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 114.

DIVISION NO. 1

CONTENTS

Airedale, L.

Cooper of Stockton Heath, L.

Amulree, L.

Crook, L.

Avebury, L.

David, B.

Aylestone, L.

Diamond, L.

Bacon, B.

Donaldson of Kingsbridge, L.

Beaumont of Whitley, L.

Elwyn-Jones, L.

Bernstein, L.

Fisher of Rednal, B.

Beswick, L.

Gaitskell, B.

Birk, B.

Gardiner, L.

Blease, L.

Glenamara, L.

Blyton, L.

Gormley, L.

Boston of Faversham, L.

Gregson, L.

Briginshaw, L.

Hale, L.

Brockway, L.

Hampton, L.

Brooks of Tremorfa, L.

Hanworth, V.

Bruce of Donington, L.

Hatch of Lusby, L.

Caradon, L.

Houghton of Sowerby, L.

Chitnis, L.

Irving of Dartford, L.

Cledwyn of Penrhos, L.

Jacques, L.

647

Jeger, B.

Ponsonby of Shulbrede, L. [Teller.]

Jenkins of Putney, L.

John-Mackie, L.

Ross of Marnock, L.

Kilmarnock, L.

Seear, B.

Kirkhill, L.

Serota, B.

Leatherland, L.

Shackleton, L.

Lee of Newton, L.

Shinwell, L.

Listowel, E.

Stedman, B.

Llewelyn-Davies of Hastoe, B.

Stewart of Fulham, L.

Longford, E.

Stone, L.

Lovell-Davis, L.

Strabolgi, L.

McIntosh of Haringey, L.

Taylor of Blackburn, L.

McNair, L.

Taylor of Gryfe, 1.

Mais, L.

Thurso, V.

Mar, C.

Underhill, L.

Mayhew, L.

Wallace of Coslany, L. [Teller.]

Mishcon, L.

Molloy, L.

Walston, L.

Nicol, B.

Wedderburn of Charlton, L.

Ogmore, L.

Whaddon, L.

Oram, L.

White, B.

Peart, L.

Wigoder, L.

Perry of Walton, L.

Willis, L.

Phillips, B.

Wootton of Abinger, B.

Pitt of Hampstead, L.

NOT-CONTENTS

Ailsa, M.

Kinloss, Ly.

Allerton, L.

Kinnaird, L.

Avon, E.

Kintore, E.

Baker, L.

Lane-Fox, B.

Bellwin, L.

Lauderdale, E.

Beloff, L.

Lawrence, L.

Belstead, L.

Lindsey and Abingdon, E.

Bessborough, E.

Long, V.

Bolton, L.

Loudoun, C.

Brougham and Vaux, L.

Lucas of Chilworth, L.

Caccia, L.

Luke, L.

Campbell of Alloway, L.

Lyell, L.

Campbell of Croy, L.

Mackay of Clashfern, L.

Cathcart, E.

MacLehose of Beoch, L.

Charteris of Amisfield, L.

Macleod of Borve, B.

Chelwood, L.

Marley, L.

Clifford of Chudleigh, L.

Massereene and Ferrard, V.

Coleraine, L.

Merrivale, L.

Cottesloe, L.

Molson, L.

Craigavon, V.

Monk Bretton, L.

Dacre of Glanton, L.

Montgomery of Alamein, V.

Davidson, V.

Mottistone, L.

De La Warr, E.

Mowbray and Stourton, L.

Denham, L. [Teller.]

Norfolk, D.

Dilhorne, V.

Northchurch, B.

Donoughmore, E.

Nugent of Guildford, L.

Drumalbyn, L.

Orkney, E.

Eccles, V.

Pender, L.

Ellenborough, L.

Portland, D.

Elton, L.

Quinton, L.

Ferrers, E.

Reigate, L.

Ferrier, L.

Renton, L.

Fortescue, E.

Rochdale, V.

Fraser of Kilmorack, L.

Romney, E.

Gainford, L.

Sandford, L.

Geoffrey-Lloyd, L.

Sandys, L.

Gibson-Watt, L.

Seebohm, L.

Gisborough, L.

Sempill, Ly.

Glanusk, L.

Shannon, E.

Glasgow, E.

Skelmersdale, L.

Glenarthur, L.

Somers, L.

Glenkinglas, L.

Spens, L.

Gridley, L.

Stamp, L.

Hailsham of Saint Marylebone, L.

Stodart of Leaston, L.

Stradbroke, E.

Hayter, L.

Strathcarron, L.

Henley, L.

Sudeley, L.

Hives, L.

Swinton, E. [Teller.]

Holderness, L.

Taylor of Hadfield, L.

Home of the Hirsel, L.

Terrington, L.

Hornsby-Smith, B.

Teynham, L.

Hunt of Tanworth, L.

Trefgarne, L.

Hylton-Foster, B.

Trumpington, B.

Inglewood, L.

Vaux of Harrowden, L.

Ingrow, L.

Vickers, B.

648

Vivian, L.

Wynford, L.

Windlesham, L.

Young, B.

Wise, L.

Resolved in the negative, and amendments disagreed to accordingly.
6.11 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 72:
Page 21, line 20, after ("which") insert ("the Registrar is satisfied that").
The noble Lord said: My Lords, this is a short amendment and I promise your Lordships a short speech. The provisions of Clause 28 at page 21 of the Bill, line 20, deal with the exemption of the matters we have just been talking about from the subject access provisions "in any case", says the Bill,
"in which the application of those provisions to the data would be likely to prejudice any of the matters mentioned in this subsection".
Nobody mentions in the Bill who will decide whether or not they do in fact prejudice any of the matters so mentioned. Therefore, this amendment is inserted in order to see that it is clear that the registrar is the person who has to be satisfied that that prejudice in fact occurs; otherwise, as I said, the Bill is silent. I beg to move.
Lord Elton: My Lords, the effect of this apparently modest amendment would be considerable. What it does is to require any data user wishing to avail himself of the exemption from subject access in Clause 28(1) to seek the approval of the registrar first. Only when the user has been able to satisfy the registrar that giving access would be likely to prejudice the prevention of crime or one of the other Clause 28(1) matters could he then avail himself of the exemption. In practice that would mean that on each occasion a representation would have to be prepared for the registrar; and on each occasion the registrar would have to be satisfied that granting access would be likely to prejudice the purpose for which the data were held.
I know that the noble Lords opposite feel that the police and the other bodies concerned should have to go through such an exhaustive procedure before any exemption is claimed. But is that really what we want? Is it really right to place the police under such a heavy burden? The claim on police resources would be very considerable. Also, the claim on the registrar's resources would be, proportionately, even more substantial. There could well be quite a number of applications for exemption from subject access; and he would have to consider every one. For those reasons, we should hesitate at least before erecting a procedure with such significant implications in this area. And I would add that what the noble Lords opposite are suggesting goes considerably further than what, to my knowledge, our European partners have done in legislating in this field.
But now let me turn to an element of the scheme of exemptions in the Bill as drafted that already provides significant safeguards against abuse by users. The noble Lords opposite rather suggest that without their amendment it is entirely up to the user to decide whether or not data should be exempt under Clause 28(1) and that there is no check on that decision. That is not so. To suggest it arises probably from a misunderstanding.

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The entitlement to subject access is enshrined in the seventh principle as well as in Clause 21; and if that principle is breached, the registrar can act. So if the registrar comes to the view that a user is claiming exemption where the statutory requirements—such as the test of prejudicing the purpose—are not met, then he can conclude that data to which access has been requested are being improperly withheld, and the seventh principle is being contravened. He can thereupon issue a notice on the user, perhaps ordering him to grant access, either just in the case of the data subject concerned or in broader terms, by requiring an amendment to the user's general practice in giving access.
So we have there a mechanism whereby the registrar can involve himself in these matters where appropriate, a mechanism that seems to have escaped the notice of the noble Lord. And there is a further safeguard in the Bill—perhaps the best safeguard of all—the courts. Where a subject wishes to challenge a data user's withholding of data under Clause 28(1), he can avail himself of Clause 21(8) and seek a court order for access. The courts will then determine whether the data concerned are properly exempt or not: and my noble and learned friend the Lord Chancellor not so long ago moved an amendment to Clause 25 designed to clarify the procedure in such cases.
Not only have noble Lords opposite overlooked that safeguard, but their amendment cuts directly across it. That may well be unintentional, but the effect is certainly to prevent the courts from reaching an independent determination of whether a claim to exemption from subject access is justified or not. For once the exemption rests on whether or not the registrar is satisfied, the role of the courts is fundamentally diminished. All they can consider is whether or not the registrar was satisfied, rather than the substantive issue of the justification for exemption. In the Bill as drafted, therefore, we have an interlocking mechanism to safeguard subjects. We avoid the need for every single claim to exemption to receive prior approval from the registrar, with all the difficulties that that presents. But we allow dissatisfied subjects to seek the assistance of the registrar to check that an exemption is justified—or indeed the registrar to mount an investigation on his own initiative if his concern is aroused. And we also allow subjects the alternative route via Clause 21(8) to the courts. We believe that this is a sensible, practicable approach which allows the registrar and the courts jointly to look after subjects' interests, without the serious difficulties that arise from the proposals of the noble Lords opposite. I hope they will think better of them.
Lord Mishcon: My Lords, the noble Lord the Minister has suggested that certain things have escaped my notice. If they had done, that would not be an exception to a general rule; it would be the general rule, I am sure. But he is not justified in this particular instance. I am not going to press this amendment, but what I am going to do—since this Bill is going to another place, and I suppose there is an opportunity at Third Reading to reconsider—is to look briefly at what the noble Lord the Minister has said where one is trying to interpret rights under Clause 28(1). At
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present the words are absolutely bald. The words say that personal data are exempt where there is likely to be a prejudice of any of the matters mentioned in this subsection. There is nothing to indicate who is the final arbiter of whether the prejudice takes place.
I suggest that if the learned registrar, when duly appointed, has grounds for suspicion and writes to the Commissioner of Police or the Home Office or whoever it may be, and says: "I have been asked to look into this matter", since the words are so bald, the answer could easily be, "The registrar is courteously referred to Section 28(1). We have taken the view that this is likely to prejudice matters mentioned in that subsection, and therefore, Mr. Registrar, we have no need to justify ourselves before you".
"Ah", says the noble Lord the Minister, telling me that things have escaped my notice, which they very likely could, "Have a look at Section 21(8), because under Section 21(8) the courts could indeed look into the matter". Therefore, if one refers to page 18 one finds that Section 21(8) reads:
"If a court is satisfied on the application of any person who has made a request under the foregoing provisions … that the data user … has failed to comply with the request in contravention of those provisions, the court may order him to comply with the request".
So the court, on looking at its rights in that matter, looks at Clause 21(8) and sees that the data user has decided, in the case of the Ministry, that it is likely to prejudice matters mentioned in the subsection, and it says that in those circumstances presumably there has been no contravention of the provisions and, prima facie, therefore, it cannot look into this matter under Clause 21(8).
I may be absolutely wrong in regard to this submission, but I do not think I am. All I ask at this stage, instead of burdening your Lordships with a long debate and argument between the Minister and myself which will be interesting for us but possibly not to your Lordships, is for the Minister to consider my remarks and if, with his usual courtesy, he can write to me in the meantime and say with good reason that I have not been talking sense, then I shall know that I ought not to raise the matter again. However, if he does find that there is some sense in what I am saying, and it appears to me that there is and that at the present moment the clause leaves the position wide open and is certainly open to doubt, I have no doubt he will take suitable action and that we will see something before Third Reading.
Lord Elton: My Lords, with your Lordships' leave, I will merely say that there is, of course, always some sense in what the noble Lord says. I regret rashly assuming that on this rare occasion he had overlooked something in the Bill. I am also grateful to him for being charitable for my much lesser legal experience than his and for giving me time to marshal my arguments, if indeed there are arguments, against what he says.
Lord Mishcon: My Lords, in those circumstances I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.22 p.m.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 73:
Page 21, leave out lines 25 to 34 and insert ("the disclosure is made under compulsion of law")
The noble and learned Lord said: My Lords, this amendment arises from the same clause which has given concern to the House, as I think is clear from the last Division. I refer to the provisions of Clause 28. The effect of subsection (2) is to establish a blanket exemption from the non-disclosure provisions for all disclosures of information to third parties relating to all four categories: prevention and detection of crime; apprehension and prosecution of offenders; assessment of tax; and control of immigration. They are all blanket exemptions. There is no provision and no element in this part of the Bill of the judicial control which exists in the proposals of the Home Office relating to the Police and Criminal Evidence Bill which is now going through another place. That Bill adopts a totally different policy for dealing with the same problem.
Under Clause 10 of that Bill the police are also given power to obtain access to confidential records, but only on the order of a circuit judge and to be made only if he is satisfied,
"that a serious arrestable offence has been committed;"
and that evidence about it cannot be obtained in any other way. There is no such judicial control in this all-embracing blanket provision. In our submission it is essential that such control should exist.
The amendment we are discussing provides that the disclosure can be made only under compulsion of law; that is to say, by an order of a court. The question whether it should be on the authority of a circuit judge or some other judicial authority could be made the subject of further consideration.
The seriousness of this matter and the importance of this amendment is reflected in a letter, of which I have received a copy, which was sent to the Home Secretary by Sir Douglas Black, the president of the Royal College of Physicians, and doing so as chairman of an inter-professional working group which was convened to advise the Health Department on access to personal health information under the Bill. The professional bodies represented on the Group, on whose behalf the president of the Royal College was writing, include the British Medical Association, the British Association of Social Workers, the British Dental Association, the British Psychological Society, the Council for Professions Supplementary to Medicine, the Health Visitors Association, the Royal College of Midwives and the Royal College of Nursing. That is a formidable array of those concerned with health matters and, of course, with the protection of the privacy of patients and, indeed, the duties of the medical profession itself. The letter to the Home Secretary says:
"The Group has asked me to express to you, as a matter of urgency, their grave concern about the eflect of Clause 28(2) of the Bill on the confidentiality of health information, and on public confidence in that confidentiality. As drafted, this sub-clause would allow anyone who happens to have custody of health records to disclose them to a wide range of public authorities, without the consent or even the knowledge of the patient or client or of the health professional who has charge of his welfare, without any judicial control, and without any prior or subsequent notice of such disclosure, even in the most general terms, to the Data Protection
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Registrar or the public. My Working Group have asked me to tell you that they find this proposal quite unacceptable."
Sir Douglas states:
"I understand that amendments have been put down for the Report stage."—
this is the relevant amendment—
"and I would urge you either to accept these, or to put forward appropriate Government amendments which will meet our objections."
If I may say so, that is the most formidable and serious support for the amendment, emanating, as I have said, from all the distinguished authorities in the field of health. Accordingly, I trust that on this amendment, at any rate, I shall receive the support of the House. I beg to move.
Lord Wigoder: My Lords, I spoke at considerable length on this same amendment in Committee and I know that what I said then is, of course, fresh in all your Lordships' minds. Therefore, it is not necessary for me to repeat the arguments this evening.
In supporting the noble and learned Lord, Lord Elwyn-Jones, I summarise what I said then in only two sentences. First, although under this clause as it stands there is no question of requiring medical men to divulge the confidences entrusted to them by their patients it will, in practice, operate as an encouragement to medical men to do so. Secondly, if that situation develops it will have an alarming effect on the patient-doctor relationship and on the trust which a patient should feel in his doctor and on the complete freedom which the patient should feel he has to disclose whatever he wishes to his doctor in the interests of the efficiency of his own medical treatment.
If the amendment is adopted it would mean that doctors would be able to disclose information only where they have been required to do so judicially. That would bring this Bill completely into line with the Police and Criminal Evidence Bill and, I suggest, would be a very desirable combination.
Lord Houghton of Sowerby: My Lords, unfortunately I was prevented from taking part in the debate on this clause during the Committee stage, but on carefully reading the debate that took place then on 22nd February I must say that I was left with a feeling of considerable confusion and unease as to precisely what powers were to be given and to whom under this subsection.
This Bill is a curious one in some ways. Part of it concerns data protection; to protect the citizen from information being accumulated which may damage him and to which he should be given access. Part of this Bill confers on the citizen a right that he does not have already. But the other part is a data disclosure Bill. We are dealing with that in subsection (2). We have finished with the rights of the citizen to access; the data access provisions and the data access exemption provisions. Now we come on to the data disclosure provisions and the exemption from them. Unless we take very great care indeed, we shall be stumbling into changes in existing practice and probably in existing statute law provisions regarding the custody of confidential information.

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This amendment does not wholly cover what I have in mind in my amendment a little later, Amendment No. 74B, which is quite specific and which deals with the particular type of confidential information—a particular area of it—which is governed at the present time by statute law. It is that that I want to see completely exempt from any disclosure provisions under this Bill.
I think that in some areas of information held by Government departments and agencies it would be far better to have the particular areas of possible disclosure discussed as separate matters rather than have them covered by what my noble and learned friend calls a blanket provision. In principle I take the view that a citizen who is required by law to disclose information about himself, with enforcement provisions supported by penalties, is entitled to be assured that the information that he gives under compulsion shall be used for the purpose for which the statute law says that it is required and under the provisions of which he is required to give it, and that the information should be used only for that purpose and for none other, except as provided by law. That is the principle of the matter and I think that it should be absolutely inviolable.
In particular cases the law does provide, and has been openly debated as providing, for an exchange of information between one agency and another. I give an example. The Inland Revenue and the Customs and Excise have freedom of exchange of information under the statute law for certain purposes which are approved by Parliament. That is all right, because then the citizen knows that, when he is giving the information to that particular agency, it may be used for another specified purpose which is clear under the law also, and he can be guided accordingly in giving his information, knowing what use may be made of it.
However, if that is to be abrogated or altered by this subsection, then I think that we are entering into a very serious quandary indeed, and that is whether we are really safeguarding the interests of the citizen under this Bill or exposing his person and his interests to a fresh risk, not specifically endorsed by law, not known to him in advance and not notified to him when it is being done. These are the dangers I think that lurk in the provisions of this particular clause. I may be confused. I make no apology for it. I was once described as a reasonably intelligent layman, and I apply my mind to these matters as best I can, but it is extremely difficult to know exactly what is afoot in these proposals. The assurances that I think we need need to be very clear and very specific.
I am not at the moment seeking to trespass upon the particular matters that I might have to refer to later; but again as an example I refer to the declaration which is made by members of the Board of Inland Revenue:
"I … do solemnly declare that I will not disclose any information received by me in the execution of my duties except for the purposes of those duties or for the purposes of any prosecution for an offence relating to inland revenue, or in such other cases as may be required by law".
If I do not ask it now I must ask it later on: is that declaration, modified, altered, abrogated, relaxed or mucked about with by this Bill? If it is, the Bill is wrong. I think that we have to take very great care that,
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if we are going to alter that, it has to be done by a Finance Bill, where previous departures from the strict code of confidentiality that I have already referred to were discussed and ultimately agreed to. But my noble and learned friend is dealing with a compulsion of law where an order of a court is made and that indeed can apply in particular cases also.
I hope that the noble Lord who handled this with great care—I thought with greater clarity towards the end of the proceedings than he began with—will be able to make some things clear. Certainly I think that he has a case to answer here as to whether information, mostly in the hands of official agencies, can be raided by other authorities under the cover of this Bill or whether they have to have something much more specific and with greater authority than appears to be provided by the system of the registrar.
6.37 p.m.
Baroness Seear: My Lords, may I follow the very serious letter from the BMA read by the noble and learned Lord, Lord Elwyn-Jones, and ask the Minister whether the implication is, for example, that the records of psychiatrists and psychoanalysts could be laid bare for the benefit of the courts? If so, it seems to me that it undermines the whole prospect of treatment of that kind. Can the Minister reassure us? I am sure that a great many people would be extremely concerned at the possibility. Can we get it on the record one way or the other?
Lord Hatch of Lusby: My Lords, I am not completely certain that this is the correct place to raise this point; it is a very short point. I think that at least obliquely it does arise here when we are discussing the collection of data. The noble Lord will recall that at the Committee stage I asked him whether his attention had been drawn to the Khera case, in which the judgment had only recently been given by the Law Lords. This clearly alters both the law relating to the control of immigration, the regulations and the practices. It has now become the law and it has removed what previously had been used within immigration regulations: the duty of candour.
I wonder whether, in replying to the points that have been raised by my noble friend Lord Houghton of Sowerby and from our Front Bench, the noble Lord the Minister would deal with that. He said in Committee that he would write to us about those points that he had not been able to cover. We are now at the Report stage and we need an answer as to whether he sees the relationship of the regulation of immigration to this Data Protection Bill as having been changed by the judgment that was published by the Law Lords.
Lord Mishcon: My Lords, very briefly I should like to bring to a head what in my submission is the essential matter before your Lordships. In the main there are two considerations. First, this is a question of voluntary disclosure and all that we have in the clause is that the person who discloses matters which are confidential has a complete defence if he has a reasonable belief in thinking that one of the matters mentioned in the clause would be prejudiced. I am thinking of prosecution, the prevention of crime and so on. The consideration of your Lordships is

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restricted to this one point. All right, let it be so, but for heaven's sake! let the data subject have notice on the register that such disclosures could be made to various authorities. If that is so, and if that is on the register, then of course a different situation applies. If it is not, it has to be under compulsion of law.
The second and last point is this. Surely it is wrong for this amendment not to be supported by your Lordships if every single one of the responsible health bodies in this country has begged of your Lordships quite openly to vote for an amendment such as this and not allow the existing words to stand.
Lord Elton: My Lords, the point from which the noble and learned Lord, Lord Elwyn-Jones, departed on his foray against the Bill on this occasion was its congruence with what we propose to provide in the Police and Criminal Evidence Bill at present in another place. Perhaps I can get that issue out of the way first by reminding your Lordships of what I said in Committee about the relationship between this clause and Clause 10 of that Bill.
The two Bills deal with different issues and it would be wholly unreasonable to apply the same provisions in respect of both sets of issues. Clause 28(2) of the Data Protection Bill applies when a user wishes to disclose information to the police in connection, say, with an investigation into crime. He is not obliged to disclose but if he wishes to then he can do so in circumstances of the kind I have described without fear of contravening the provisions of the Bill. Of course such disclosure may even assist a data subject by enabling the police to eliminate him as a suspect. With the Police and Criminal Evidence Bill we are dealing with very different matters. Clause 10 of that Bill enables the police to obtain evidence relating to the commission of a serious arrestable offence when they suspect that someone has evidence but will not make it available. In these circumstances the police cannot get the evidence without a power to do so, and that is what the Bill gives them. The Bills are therefore quite different in purpose and it is right that they should be different in construction.
Perhaps I may deal, as a preliminary, with the matter also raised by the noble Lord, Lord Houghton of Sowerby. I would just reassure him in the following terms. As I have explained both today and on other occasions, the effect of Clause 28(2) of the Bill is to disapply the non-disclosure provisions of the Bill where this application would be likely to prejudice any of the purposes specified in Clause 21(1). It does not, however, oblige the data user concerned to disclose any information in these circumstances; nor does it even authorise him so to do; nor does it affect in any way any obligation of confidence which may apply to a data user in relation to the information he holds about a data subject. This is something to which the noble Lord, Lord Mishcon, should listen carefully because it is directly relevant to what he was asking me. This clause does not affect in any way any obligation of confidence which may apply to a data user in relation to the information he holds about a data subject.
In particular, as I explained to the House during the Committee stage, Clause 28 does not override the
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Inland Revenue's strict rules of confidentiality which, with certain very limited exceptions, preclude the disclosure of information about a taxpayer to a third party without the taxpayer's consent. I had intended to say that to the noble Lord, Lord Houghton, at a later stage but from what he has said at this stage it occurred to me that he might not find it necessary to revert to that because I can give him that unqualified assurance.
I can also, as a preliminary—
Lord Mishcon: My Lords, will the noble Lord the Minister permit me to interrupt? I dealt with the voluntary nature of the disclosure and asked the noble Lord the Minister how he could possibly justify a voluntary disclosure when the register does not contain—and the data subject has been led into the belief that it is all all right if he gives the information—a warning that disclosure may in certain circumstances be made of that information. As he knows, this was called by the Lindop Committee a palpable fraud on the public. It is a responsible committee. How does the noble Lord answer that charge?
Lord Elton: My Lords, perfectly simply: if it is a palpable fraud it has been continued from time immemorial. This Bill gives no authorisation to disclose, no encouragement to disclose; it merely removes the prohibition on disclosure contained in the Bill itself. It is absolutely without effect on anything else. The noble Lord is straining at a non-existent gnat, if I may say so in that context.
I hope that the noble Lord, Lord Hatch, will also permit me to address myself to him as a preliminary—and I am sorry to have so many preliminaries. I can simply reassure him that the case of Khera has been drawn to my attention and I am advised that it does not affect this Bill at any point. I hope that the noble Lord will not ask me to explain why that should be so. I am prepared to do so at length on paper, but not now.
We have talked about balance a great deal in this Bill and we are talking now about a part of the Bill where it is important to get it right. We cannot be responsible for creating a situation in which personal data are protected to such an extent that society as a whole suffers in other respects. I do not need to remind your Lordships that the need to make special provisions in the interests of law enforcement has been recognised by all member states of the Council of Europe. Article 9 of the convention refers specifically to derogation from the convention's provisions where necessary in a democratic society in the interests, among other things, of the monetary interests of the state and the suppression of criminal offences.
I do not think that we have been leaning towards the forces of law enforcement in this respect. Unlike certain other European countries we have not allowed for a general or blanket exemption—as the noble Lord, Lord Mishcon, called it—from the Bill's requirements for what is often loosely referred to as "criminal intelligence" data. We have covered all such data by the Bill; we have required them to be registered; and we have generally made them subject to the registrar's powers.
I ought to revert to what I see as the general issue here, and perhaps I ought to illustrate by an example

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the situation that could result if this amendment were adopted. The police may often need to approach companies or organisations in the course of their inquiries into crime. For example, to check an alibi and find out whether a particular person was at work in a builder's yard on a particular day; or to find out who has bought a particular item of clothing or hired a particular vehicle in the past month. This is the kind of information that the police must seek in order to build up a picture in their investigation of a crime or a suspect. The papers constantly show how particularly dangerous people have been apprehended as a result of this type of information. But as computers are more widely used, more and more of the information will be held on them. Users will have to register their particulars. But the general run of user is not going to specify the police as a prospective recipient of data as the noble Lord suggests.
It means that all of us who are honest citizens would have to specify the police as possible recipients of data if we were to satisfy the noble Lord's desire to give warning. If the police were after a rapist, or a murderer, or any other sort of criminal, we would then feel that it was our duty as a citizen to inform the police. That is the duty of every citizen. If the police came to a user for information held on a computer, and if the user is ready to disclose the information, the user will be able to disclose it without falling foul of the provisions prohibiting disclosure that would otherwise apply, provided that the prevention or detection of crime, et cetera, would be likely to be prejudiced if such disclosure were not made.
I have written a great deal more, but it seems to me that I have addressed myself to the concern of the noble Lord and the noble and learned Lord, and indeed of Sir Douglas Black and his supporters, who read like a roll of battle honours of the Mental Health Bill, with which I am very familiar, and for which I have a high regard. I think that this must relieve the anxieties of patients, and indeed of the noble Baroness herself, because it does not produce a requirement or even a justification to disclose. It merely prevents the prohibition of disclosure elsewhere in the Bill from affecting the subject areas here described. I do not think I ought to speak longer. I cannot put it more clearly than that. It is at the end of my speech, and that is where the noble Lord, Lord Houghton of Sowerby, says that I am always best at making myself clear.
Lord Elwyn-Jones: My Lords, I regret that I do not think that that explanation will satisfy the eminent medical men who have written this letter. What is voluntary and occasional is now being given statutory significance. What is voluntary will quickly become what is obligatory, or what is sought to be obligatory. In my submission, the answer of the noble Lord is quite unsatisfactory, and I invite the views of the House upon this matter.
6.52 p.m.
On Question, Whether the said amendment (No. 73) shall be agreed to?
Their Lordships divided: Contents, 81; Not-Contents, 91.

DIVISION NO. 2

CONTENTS

Avebury, L.

Listowel, E.

Bacon, B.

Llewelyn-Davies of Hastoe, B.

Beaumont of Whitley, L.

Lockwood, B.

Beswick, L.

Longford, E.

Birk, B.

Lovell-Davis, L.

Bishopston, L.

McCarthy, L.

Blease, L.

McIntosh of Haringey, L.

Boston of Faversham, L.

McNair, L.

Briginshaw, L.

Mar, C.

Brooks of Tremorfa, L.

Mishcon, L.

Bruce of Donington, L.

Nicol, B.

Byers, L.

Ogmore, L.

Chitnis, L.

Oram, L.

Cledwyn of Penrhos, L.

Peart, L.

David, B.

Perry of Walton, L.

Diamond, L.

Phillips, B.

Elwyn-Jones, L.

Pitt of Hampstead, L.

Evans of Claughton, L.

Ponsonby of Shulbrede, L. [Teller.]

Ewart-Biggs, B.

Fisher of Rednal, B.

Portsmouth, Bp.

Gardiner, L.

Rea, L.

Glenamara, L.

Ross of Marnock, L.

Gormley, L.

Sear, B.

Gregson, L.

Serota, B.

Hale, L.

Shackleton, L.

Hampton, L.

Stedman, B.

Harris of Greenwich, L.

Stewart of Fulham, L.

Hatch of Lusby, L.

Stone, L.

Hayter, L.

Strabolgi, L.

Hooson, L.

Taylor of Blackburn, L.

Houghton of Sowerby, L.

Taylor of Gryfe, L.

Irving of Dartford, L.

Taylor of Mansfield, L.

Jacques, L.

Thurso, V.

Jeger, B.

Tordoff, L.

Jenkins of Putney, L.

Underhill, L.

John-Mackie, L.

Wallace of Coslany, L.

Kilmarnock, L.

Walston, L.

Kirkhill, L.

Wedderburn of Charlton, L.

Lawrence, L.

Whaddon, L.

Leatherland, L.

White, B.

Lee of Newton, L.

Wigoder, L. [Teller.]

NOT-CONTENTS

Ailsa, M.

Glasgow, E.

Allen of Abbeydale, L.

Glenarthur, L.

Alerton, L.

Gridley, L.

Avon, E.

Hailsham of Saint Marylebone, L.

Bellwin, L.

Belstead, L.

Henley, L.

Bessborough, E.

Hives, L.

Bolton, L.

Holderness, L.

Broadbridge, L.

Home of the Hirsel, L.

Brougham and Vaux, L.

Hornsby-Smith, B.

Caccia, L.

Hylton-Foster, B.

Campbell of Alloway, L.

Inglewood, L.

Campbell of Croy, L.

Ingrow, L.

Cathcart, E.

Kimberley, E.

Chelwood, L.

Kintore, E.

Clifford of Chudleigh, L.

Lane-Fox, B.

Coleraine, L.

Lauderdale, E.

Colville of Culross, V.

Lindsey and Abingdon, E.

Cottesloe, L.

Long, V.

Craigavon, V.

Lucas of Chilworth, L.

Dacre of Glanton, L.

Lyell, L.

Davidson, V.

Mackay of Clashfern, L.

De La Warr, E.

MacLehose of Beoch, L.

Denham, L. [Teller.]

Macloed of Borve, B.

Drumalbyn, L.

Massereene and Ferrard, V.

Elton, L.

Molson, L.

Fairfax of Cameron, L.

Monk Bretton, L.

Ferrers, E.

Montgomery of Alamein, V.

Ferrier, L.

Mottistone, L.

Forbes, L.

Mowbray and Stourton, L.

Fortescue, E.

Napier and Ettrick, L.

Fraser of Kilmorack, L.

Norfolk, D.

Gibson-Watt, L.

Nugent of Guildford, D.

Gisborough, L.

Orkney, E.

Glanusk, L.

Quinton, L.

659

Rochdale, V.

Swinfen, L.

Romney, E.

Swinton, E. [Teller.]

St. Davids, V.

Thomas of Swynnerton, L.

Saint Oswald, L.

Trefgarne, L.

Sandys, L.

Vaux of Harrowden, L.

Sempill, Ly.

Vickers, B.

Skelmersdale, L.

Vivian, L.

Spens, L.

Windlesham, L.

Stodart of Leaston, L.

Wise, L.

Stradbroke, E.

Wynford, L.

Sudeley, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
7 p.m.
Lord Avebury Lord Avebury moved Amendment No. 74:
Page 21, line 26, after ("(1)") insert ("(a) to (c)").
The noble Lord said: The noble and learned Lord, Lord Elwyn-Jones, moved an amendment a short while ago which dealt with the subject access provisions applying to immigration control, and this amendment deals with the non-disclosure provisions. The noble Lord, Lord Houghton, was right when he said that parts of the measure should be called the Data Disclosure Bill, because the effect of the subsection with which we are dealing is that people who have personal data under their control are given authority (that they would not otherwise have had under the Bill) to transfer it to another person if it is required for the purposes of immigration control.
The Minister has explained several times—I concede this—that nobody is obliged to give this information under the Bill. However, I believe that the effect of a provision of this kind, appearing on the face of the Bill, is that people will be more inclined to give it than they otherwise would have been, and that confidential information will be transferred from one computer to another where it would not formerly have been transferred when the systems were in manual form.
The noble Lord had addressed to him by the noble Lord, Lord Houghton, when we were debating the last amendment, a perfectly fair question, which the Minister did not answer. That was whether there would be any change in the practice of Government departments, other than the Inland Revenue, in the way in which they passed information between themselves, other than was already provided for by statute. Lord Houghton will remember that when we were looking at this matter in the Royal Commission on the Standard of Conduct in Public Life we did an examination of the legislation and found there were seven Acts of Parliament which specifically authorised the transfer of information between one agency of the Government and another and that no information was transferred other than under those statutes. Now, with this provision in the Bill, we want to know—and I hope the Minister will answer the question—whether exactly the same prohibition on transfer will apply in future as was the case in the past. That question has been addressed to the noble Lord several times.
Even if the answer is that the Government will not so transfer information, the private data user will be under enormous pressure to do so. The Minister said that this provision did not create a new category of information in the sense that there was no right of subject access at present to information required for
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the purposes of immigration control. But I suggest that we are creating a new class of information; that is, the class of information held by private data users which will be more liable to disclosure for the purposes of immigration control than it would have been in the absence of a provision of this kind.
I wish to raise a few other points which the Minister raised on the previous amendment but to which I did not reply at the time, although I thought they were rather misleading. He mentioned—and it was very amusing—the case of the Portuguese citizen who had been removed nine times from this country but who still kept returning. I think I happen to know the case because it is one that is still under consideration by the Minister's colleague in the department. The person concerned maintained he was a patrial and had been trying to establish his patriality all this time, but because he did not have the date of birth of his grandfather—he had been looking in the wrong place in the records—he was unable to do so. But I understand that he now has his grandfather's birth certificate and is in a position to establish his patriality to the satisfaction of the Minister. Therefore, on the previous nine occasions when he was detected and removed, he ought to have been allowed to remain on the basis that he was entitled to be here under our law.
Another point the Minister emphasised in debating the previous amendment was the right of parliamentary representation to a Minister where anything was done which was irregular or improper under Clause 28. But everybody has the right to make representations through their Member of Parliament to any Minister; it is not something specifically given to the potential victims of the immigration control network in case they may be subject to some infringement of their rights.
There was considerable discussion, both in Committee and earlier today, of the way in which the immigration control provisions of the Bill could be treated as coming within the exemptions from the general principles laid down in the convention and which the convention, of course, permits. The Minister had said—and he repeated it today—that Article 9.2.b specifically provided for the derogation of the convention's prohibition provisions where necessary, in the interests of protecting the rights and freedoms of others. He said it was in the interests—that was the word he used—of the people settled here that immigration control should be effective.
However, I respectfully suggest that it does not mean that anybody's rights or freedoms are violated at present by reason of the fact that immigration officers may not be able to access personal data held by some private user or by another Government department. I do not think any person could bring a case under the European Convention—looking at it the other way round—alleging that there had been some violation of his rights by reason of the fact that the number of illegal entrants was marginally higher than it would otherwise have been because Home Office snoopers were able to pry into bank accounts, employment records, social service reports or medical files, as they might be able to do under Clause 28(2). But the rights and privileges of people who are, as has been said,

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largely from ethnic minorities are likely to be violated as a result of the clause, as I shall attempt to show.
As I said, the Minister pointed out that no data user was obliged to disclose personal data in consequence of Clause 28(2), and that what the provision did, strictly speaking, was only to relieve the data user from an obligation not to disclose which he would otherwise have had under the principles of Schedule 1. If it were never the intention that the data user should disclose—if there would not be cases where he will do so voluntarily as a result of the provisions of the clause—then the Minister would have had no difficulty in agreeing to the amendment. So we must work on the hypothesis that people will disclose data as a result of the provisions of Clause 28(2). The essence of the clause is that otherwise confidential information will be given to immigration officers on demand.
We are not talking about people who have committed criminal offences. The Minister kept returning to this subject and he kept talking about people who had come here illegally, being juxtaposed, quite properly, with those dealt with under (a) and (b). But as we have said time and again, for the purposes of the detection and prosecution of offenders, we do not object to those provisions; what we are concerned with is the extension of the exemption provisions to people who have not committed any criminal offence. As the noble Lord told me in reply to a Question for Written Answer, the Home Office's computer, containing 300,000 names of individuals, will cover other categories of people, such as overstayers and people who in the past have been refused leave to enter or to remain. Those were the two classes that the Minister mentioned when we were discussing the subject on 22nd February.
If someone tries to enter under another name—which was the example that the Minister gave—he is committing a criminal offence, and he will be covered by subsection (1)(a) and (b). So that leaves only the overstayers as people whom the Minister considers ought not to be entitled to the protection of non-disclosure, even though they are not suspected of having committed any criminal offence. If there are other kinds of data subject whose particulars the Government consider ought to be disclosed in furtherance of immigration control, it would be useful if in the course of the discussion on the amendment the Minister could tell us who they are. Either they can be enumerated, in which case a more limited exemption than is now to be found in the Bill could be drafted, or they cannot be enumerated, which means that virtually anybody could be the subject of a request by an immigration officer for disclosure of his personal data.
I should like to give some examples of what may be thought likely to happen. A close relative of someone who is suspected of infringing the law on immigration might be the subject of inquiries, as indeed such a person frequently is, because the Home Office works on the principle of guilt by association in the immigration rules, and it frequently suspects, for instance, the brother or a cousin of someone who has been caught for an infringement of the immigration law of wishing to do the same himself. Alternatively, there might be someone with a name similar to that of an overstayer or a suspected illegal entrant. There
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might be involved, for instance, all the tenants of a local authority who have the surname of Shah, or all the patients with Asian names who attended an antenatal clinic between certain dates.
It is the danger of fishing expeditions of the kind that I am describing that I believe most people find quite frightening when they look at this legislation. We already know that the police and the immigration authorities conduct joint raids on work places from time to time, and that many innocent people, who have settled here, and who may even be citizens of this country, are swept up in the net. Quite apart from the trauma which they must undergo as a result of the experience of being taken into a police station and interrogated, they might also suffer long-term disadvantages in consequence of being recorded, as in this case, on the police national computer.
The clause will mean that thousands, if not tens of thousands, will have their particulars entered on the illegal immigration intelligence unit computer, through having some remote connection with immigration control. Let us for a moment think about what would be the consequences for the individual who, quite unknown to himself, is one of the 300,000 persons whose names are on the computer. For instance, his personal data could be disclosed under Clause 27, if he were a civil servant being vetted for promotion, and the fact that his name had appeared on the illegal immigration intelligence unit computer at all might tip the scales against his promotion, even though his character was completely without stain. If he applied for citizenship, then again it could be held that access to the Harmondsworth computer was justified in the interests of national security, and the very fact that his name was on that computer would jeopardise his application. If he invites a relative from his country of origin to stay with him and any doubt arises about the relative's intentions to stay here only for a visit, the immigration officer dealing with the case will do a search on that person as the sponsor. If the result is positive, it might lead to the relative being refused.
The police rely heavily on informants, as the noble Lord the Minister stated in the context of a discussion on the defence against a charge of inaccuracy. It was stated that the data came from a third party, and the assumption then was that inaccurate information might frequently get into police records. Equally, I fear, it is possible that inaccurate information will get into immigration records by coming from third parties in the way that I have described.
One saw the harmful results of wrong information in their most glaring form in some of the recent police operations that have taken place. For example, the police recently burst into the bedroom of an old-age pensioner couple, as reported in the Guardian on 1st March. They went in at gunpoint, smashed their way into the flat where the old people lived, and terrorised them, when they were perfectly innocent of any offence. The whole thing had been a ghastly mistake. In the case of names held on immigration computers and information coming from other sources which may be inaccurate, the consequences might not be quite so extreme as that, but they have the additional characteristic that the victim will probably never know

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what information about him has been accessed, or how it has been used.
It is not only the organisations that are specifically concerned with civil liberties and which one would expect to be concerned about this matter—such as the National Council for Civil Liberties, or the Joint Council for the Welfare of Immigrants—that are against the proposals. The British Medical Association has pointed out the objections as it sees them. In a memorandum which it published on the clause the BMA stated:
"If, in exceptional cases, a transfer of information is made to a computer system which is classified as exempt, the BMA believes that each transfer of personal medical examination should be recorded, together with a description of the type of information released. Such transfers and descriptions should be published within a specified period of time in order that the decision to disclose may be open to scrutiny and challenge".
So the British Medical Association itself can see the dangers of this type of transfer of information that is dealt with in Clause 28(2).
The National Association of Citizens' Advice Bureaux produced what I thought was an extremely effective argument when it pointed out the problem of selectivity in confidentiality. It states that in dealing with the public, as it does, in connection with a broad mass of problems that are brought to it, it cannot say that in exceptional cases the information would be released to another agency, because then it is a question of where one draws the line. So it is either all or nothing, and the National Association of Citizens' Advice Bureaux obviously will have to decline to give information to immigration control agencies when it is asked for it, but it will be under constant pressure to do so as a result of the provisions of the clause.
I really hope that, whatever the Government ultimately decide about subject access—and I view that as equally important—they will address their minds very seriously to the transfer of data to the immigration control computers which will occur as a result of the clause, that they will think about the objections that have been raised to it not only by noble Lords in this House but also by very many organisations outside, and that they will take away the clause and remove it entirely from the Bill. I beg to move.
Lord Elton: My Lords, on Amendments Nos. 70 and 71 we considered whether immigration control was a matter which should benefit from the exemption contained in Clause 29(1), and your Lordships agreed that it should. On the last amendment, No. 73, we discussed the general question of whether there should be exemptions from the non-disclosure provisions, and again your Lordships gave the view that there should be. Now we are moved from that general area to one that is more particular and are asked to consider whether data used for the purposes of immigration control should benefit from the non-disclosure exemption.
The Government are firmly committed to the enactment of data protection legislation, but we do not believe that that commitment should offer assistance to wrongdoers. For that reason we proposed some limited exemptions which disapply certain of the provisions of the Bill where this is necessary in the
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interests of effective law enforcement. When the police are investigating crime not only should they be able, as now, to seek information from whoever can give them useful assistance, but those able to help the police should not face the threat of a criminal sanction for disclosure, where to withhold disclosure would prejudice the effective prevention or detection of crime. Similarly, if the immigration authorities need to make inquiries in a particular case involving immigration abuse, the person concerned should not be able to avoid detection just because the holder of the vital information has not registered the disclosure which is sought and, although only too ready to make the disclosure, is therefore precluded from doing so by the non-disclosure provisions.
My Lords, there are many disclosures for the purposes of immigration control that will be fully registered. The provisions of Clause 28(2) will not cast a total veil of secrecy over all such disclosures. The exemption can only apply where necessary to avoid prejudice to immigration control. Let me offer an example where the exemption will be necessary and where the exemptions for purposes such as crime prevention will not apply. A person may be convicted of a criminal offence, not necessarily an immigration offence, and the courts may fine him or give a suspended prison sentence and recommend him for deportation, as they are empowered to do. If a deportation order is made but he then goes to ground, steps have to be taken to find him so that the deportation order can be enforced. The only means of tracing him may be through the computer record of a one-time employer, or an educational establishment where he was a student, who will not have registered any possible disclosures to those responsible for immigration control. Where they do not wish to disclose the information, there will be no way of requiring them to do so. In other words, the Bill alters existing rights as to that by not so much as a hair's breadth. But where they decide that they would wish to do so, the Bill should surely not prevent them.
My Lords, deportation action is entirely administrative and the holders of the records cannot rely on paragraphs (a) and (b) of subsection (1) in order to enable them to divulge the necessary information. Without the immigration exemption in Clause 28(2) they would have no choice but to remain silent. The effect of the noble Lord's amendment might therefore be that we would be unable to give effect to the court's recommendation. The effective enforcement of immigration control does require us to seek exemption from certain of the provisions of this Bill in particular circumstances and the disclosure of information, about which we are here concerned, is an important aspect of the enforcement of immigration control.
Those are the principal considerations that I leave before your Lordships. I would pick up (because the noble Lord would otherwise tax me with not having done so) the question of any change in the Government practice as to the exchange of information between Government computers. May I remind the noble Lord that, by virtue of Clause 35(1), each Government department will be a separate user and, therefore, a transfer from one department's computer to another's will be a disclosure under the Bill and Clause 28(2) will not lead to more such disclosures

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than there now are. The noble Lord also referred to "fishing raids", as I think he called them, and suggested that exemption from the non-disclosure provisions for the purposes of immigration control could be used as the basis for what he so described.
I have to tell him that this is not the case. In the first place, no one will be under any obligation as a result of this provision to provide any information whatsoever to the immigration authorities. Where they decide to disclose data, they must have reasonable grounds for believing that failure to do so would prejudice immigration control; otherwise they lay themselves open to prosecution. I am unable to imagine circumstances in which the failure to disclose personal data which is sought on a purely speculative basis could reasonably be thought to be prejudicial to immigration control.
Secondly, random fishing operations of this sort do not take place. Any investigations that are made are made only on the basis of firm evidence against particular subjects; although I suppose that mistakes may happen. This Bill imposes constraints which do not exist at the moment and there is no reason, therefore, to suggest that this provision gives any basis for starting any such random inquiry.
The final point which I ought to pick up within the context of what I have already said is the noble Lord's reference to the immigration service intelligence unit computer. There are a large number of names of people on it, as he said. They fall into certain clearly defined categories: for instance, those who have been refused leave to enter or refused entry clearance or who, in certain cases, have been deported from the United Kingdom or who are considered to be involved in abuse or attempted abuse of immigration laws. The only other thing that I would add to that piece of information is that the vast majority of the records relate to people who are outside the United Kingdom but may seek to come here. Only some 10 per cent. of the records relate to persons thought to be in the United Kingdom. I perhaps regret having put that at the end of what I had to say. The principal consideration was that to which I first addressed myself. I hope that the noble Lord will not press his amendment. But, if he does, it is on that basis that I shall ask your Lordships to resist it.
7.25 p.m.
Lord Avebury: My Lords, the Minister said nothing to lessen my alarm about the way in which data can be transferred under this provision. For instance, if I start at the end of his remarks, he said that only 10 per cent. of the people on the illegal immigration intelligence unit were actually physically present in this country—which means that, at the moment, you have got 30,000 names there of people who are resident here, most of whom, as the noble Lord has said, are lawfully present.
Lord Elton: My Lords, my intention was to say that there were 30,000 not resident here. I am sorry; I have moved the decimal point, my Lords. The approach of
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dinner has made me over-excited. The noble Lord is quite right.
Lord Avebury: My Lords, I thought the noble Lord said that 10 per cent. of the people on the immigration intelligence unit computer were resident in this country, which means 30,000 people.
What we are talking about is not the situation that we find today but what may happen as a result of the Bill and the numbers of persons whose particulars will be transferred from other data users to the intelligence service unit under this provision. The noble Lord said that data users are not going to give information without being satisfied that they are required to do so for the purposes of immigration control. But on an earlier amendment it was said that the word of the immigration officer will be conclusive here.
If an immigration officer comes to an employer or to an educational establishment—to take the other example the Minister gave—and says that he wants all the persons in the establishment with certain names, then, if he says that that is required for the purposes of immigration control, in many cases presumably the education establishment or the employer will give the information and a large number of names will finish up in the immigration intelligence unit computer, being names of people who do not have anything at all to do with the commission of offences.
The Minister may say that there are no raids except on good evidence and it may be a fact that, for example, in the Safeways supermarket raid there were certain people apprehended who were either illegal immigrants or overstayers. What I was saying was that into that net was swept a large number of people who had no connection whatsoever with the infringement of immigration control. If those persons had their names fed into the computer, it could be very disadvantageous for them in the long run.
The Minister gave only one example to show how information of this kind could be of material importance in a case where there was no actual criminal offence being committed. That was of a person who had been given by a court of law a suspended sentence with a recommendation for deportation and who subsequently went to ground. That was a spurious example. As the Minister will find if he makes inquiries, those persons are nearly always detained under Schedule 2 to the Immigration Act 1971 pending their deportation—as are those people who come to the end of their sentence and who have been recommended for deportation by a court of law. If the Minister has not already decided whether to accept the recommendation, they will be detained following the end of their sentence under Schedule 2 to the Immigration Act 1971. Those people are not physically in a position to abscond and would never do so.
If that is the best example that the Minister can produce for the reasons why persons who have not committed a criminal offence ought to be on this computer and inquiries ought to be made about them, for example from employers or educational establishments, I am afraid that I cannot accept his argument and must ask the House to join me in the Lobby and to throw out this proposal.
7.30 p.m.
On Question, Whether the said amendment (No. 74) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 78.

DIVISION NO. 3

CONTENTS

Avebury, L.

Lockwood, B.

Bacon, B.

Longford, E.

Beaumont of Whitley, L.

Lovell-Davis, L.

Bernstein, L.

McCarthy, L.

Beswick, L.

McIntosh of Haringey, L.

Birk, B.

Mackie of Benshie, L.

Bishopston, L.

McNair, L.

Blease, L.

Milner of Leeds, L.

Bringinshaw, L.

Mishcon, L.

Bruce of Donington, L.

Nicol, B.

Byers, L.

Ogmore, L.

Chitnis, L.

Oram, L.

Cledwyn of Penrhos, L.

Peart, L.

Collison, L.

Perry of Walton, L.

David, B.

Pitt of Hampstead, L.

Elwyn-Jones, L.

Ponsonby of Shulbrede, L. [Teller.]

Evans of Claughton, L.

Ewart-Biggs, B.

Rea, L.

Foot, L.

Ross of Marnock, L.

Gardiner, L.

Seear, B.

George-Brown, L.

Serota, B.

Hampton, L.

Stewart of Fulham, L.

Harris of Greenwich, L.

Stone, L.

Hooson, L.

Strabolgi, L.

Hylton, L.

Taylor of Blackburn, L.

Irving of Dartford, L.

Taylor of Mansfield, L.

Jeger, B.

Tordoff, L.

Jenkins of Putney, L.

Underhill, L.

John-Mackie, L.

Wallace of Coslany, L.

Kaldor, L.

Whaddon, L.

Kirkhill, L.

White, B.

Kissin, L.

Wigoder, L. [Teller.]

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Ailsa, M.

Hailsham of Saint Marylebone, L.

Allerton, L.

Avon, E.

Hayter, L.

Bellwin, L.

Hives, L.

Belstead, L.

Holderness, L.

Birdwood, L.

Home of the Hirsel, L.

Boyd-Carpenter, L.

Hornsby-Smith, B.

Brougham and Vaux, L.

Ingrow, L.

Caccia, L.

Kimberley, E.

Campbell of Alloway, L.

Kintore, E.

Campbell of Croy, L.

Lane-Fox, B.

Cathcart, E.

Lauderdale, E.

Chelwood, L.

Lawrence, L.

Coleraine, L.

Long, V.

Colville of Culross, V.

Lyell, L.

Cottesloe, L.

Mackay of Clashfern, L.

Dacre of Glanton, L.

Macleod of Borve, B.

Davidson, V.

Marshall of Leeds, L.

Denham, L. [Teller.]

Massereene and Ferrard, V.

Drumalbyn, L.

Molson, L.

Eccles, V.

Monk Bretton, L.

Elton, L.

Montgomery of Alamein, V.

Fairfax of Cameron, L.

Mottistone, L.

Ferrers, E.

Norfolk, D.

Ferrier, L.

Orkney, E.

Forbes, L.

Rochdale, V.

Fortescue, E.

Romney, E.

Fraser of Kilmorack, L.

Saint Oswald, L.

Gibson-Watt, L.

Sandys, L.

Gisborough, L.

Sempill, Ly.

Glanusk, L,

Skelmersdale, L.

Glasgow, E.

Spens, L.

Glenarthur, L.

Stodart of Leaston, L.

Gridley, L.

Stradbroke, E.

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Sudeley, L.

Vivian, L.

Swinfen, L.

Windlesham, L.

Swinton, E. [Teller.]

Wise, L.

Trefgarne, L.

Wynford, L.

Vaux of Harrowden, L.

Young, B.

Vickers, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.37 p.m.
Lord Glenarthur: My Lords, this may be a convenient moment to break for dinner, and I beg to move that further consideration on Report be now adjourned until twenty minutes to nine.
Lord Ponsonby of Shulbrede: My Lords, did I understand the noble Lord to say that we would not return to the Report stage of the Data Protection Bill before 8.40 p.m.?
Lord Glenarthur: My Lords, not before twenty to nine.
Moved accordingly, and, on Question, Motion agreed to.

British Fishing Boats Bill
7.38 p.m.
Earl Ferrers: My Lords, I beg to move that the British Fishing Boats Bill be now read a second time. This Bill is introduced in order to tackle a growing problem for the United Kingdom fishing industry—that of a large influx of foreign, mainly Spanish, fishing vessels which have re-registered as British. Their motive in re-registering has been in order to circumvent the European Community licensing restrictions. A by-product of their action has been, though, a substantial and adverse effect on the interests of our catchers.
The Bill passed through all its stages in another place quite quickly during the night of 7th/8th March, and this reflected, I think, a common desire to tackle what is an urgent problem. While I would not wish in any way to circumscribe your Lordships' proceedings, I would hope that it might be possible for us to pass the Bill through all its stages this month.
In brief, the problem is that since May 1980 some 67 ex-Spanish vessels—or British vessels with a Spanish association—have become registered in this country. There are 63 registered at the present time and there are rumours of further potential applicants for registration who are trying to take advantage of the loophole which is provided by the liberal arrangements for registering vessels which, for broader international shipping reasons, we operate.
Their objective is to evade the restrictions on fishing opportunities which are provided for in the Community bilateral agreements between Spain and the Community; and the main activity of these vessels at present is vigorous fishing of the British quota for hake. Valuable non-quota species, such as the angler fish and West Coast sole, are also caught but hake is their main target and the ex-Spanish vessels are fishing

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against a British national quota which was set up by the efforts of our own catchers. I am sure that your Lordships will agree that this is quite unacceptable. The activities of these vessels not only compete with genuine British catchers, but they make no significant contribution to the fishing economy of this country because most of the catch is landed in Spain, and the bulk of that which is landed here is immediately transported to Spain by lorries direct as soon as it is landed in our ports.
There is the further disagreeable reality that, because of the way in which this is done, catches by these vessels, even when they are landed in the United Kingdom, avoid the levy which is imposed by the Sea Fish Industry Authority, because the fish are not sold here. And not only that but, because of the Spanish connection, the fish so caught benefit from import duty relief and sometimes even access, which is not available to British vessels which wish to land catches in Spain. It is, therefore, to use a colloquialism, a proper mare's nest.
I hope that I have said enough to apprise your Lordships of the nature of the problem and of the reasons for the hostility in many parts of our industry towards the growth of this new "Spanish armada". Your Lordships may wonder why we did not decide to tackle the problem through the registration system. Well, we did consider such a course, but we concluded that the solution to what we regard as a short-term problem would not lend itself to this approach because of the need for consistency with our long-term approach to international shipping questions.
I thought that your Lordships might prefer me not to take the House through this somewhat complicated-looking Bill clause by clause. The heart of the matter in fact lies in Clause 1. This empowers the fisheries Ministers to make, by order, conditions governing the qualification of British fishing vessels to fish in our waters. The key to this is the crewing of the vessels concerned. At present, apart from the skipper and the first hand (who must, in acordance with other legislation, be British nationals) the crews of the vessels in question are mainly Spanish; and the success of their present operations in fact depends on this. In order to close this loophole, we propose to use the order-making power to ensure that the crew of British fishing vessels must, in future, consist mainly of nationals of the Community.
We have in mind, therefore, to specify in the order a qualification that at least 75 per cent. of the crew of a British fishing boat which is fishing in British waters shall be Community nationals. It is possible, of course, that some of the vessels which will be affected by this change will seek to comply with the new rule by employing more British crew. If that is so, then so be it.
The remainder of the Bill deals with questions of enforcement and various other what one might call housekeeping questions, and I do not propose to weary your Lordships with a recital of them this evening, although I am, of course, willing to expand on them if any noble Lord wishes me to do so. With that explanation, I commend the Bill to the House as a significant move to tackle the problem which I have
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described. 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.)
7.45 p.m.
Lord John-Mackie: My Lords, the noble Earl, Lord Ferrers, with his usual clarity and breeziness, has put the matter to us very well indeed. The Government have asked for this Bill to be got through as quickly as possible and we have no objections to that, but in the time that we have been given—that is, tonight and next week during the Committee stage and so on—we must look at it critically.
The noble Earl has given the overall picture very well. He used the expresion "Spanish armada", which is worrying our fishermen. However, I should like to point out that these boats have been operating since 1980 and they have in that time established themselves in various ports, mainly in the South-West of England and of Wales. I understand that the Government wish to have the order laid before Easter—that is the order which the Minister of State has said will stipulate that 75 per cent. of the crew must be British, which is not in the Bill—and that it will come into effect at the beginning of April.
However much it is considered that these companies are "quota-jumping", or whatever the expression may be, they are not breaking the letter of the law. They are acting perfectly legally in using the British flag of convenience, as it is called, in the various ports they are working in. I feel that a sudden cessation of those activities might do a tremendous lot of harm in some areas. During the debate in another place it was pointed out—I do not know how accurate the figure is—that the area could be affected to the tune of five million, and a tremendous number of jobs lost. Of course, it could be short term: I would not disagree about that. The longer-term benefit might cancel it out: we do not know. After all, when we think that Spain is due to enter the Common Market in less than three years' time—and, of course, there will be a transitional period—in that period the long-term benefit might not cancel out the short-term one at the present moment.
In the same debate speakers from all the areas concerned took part, except South Wales. I know that the Secretary of State for Wales sits for that area and naturally he is inhibited from taking part in debates. But I have had representations from a company running eight of these boats from Milford Haven. A partner in the company which runs this operation is a long-established member of the fishing industry in that port. He maintains that his operations, along with those of five other boats, are the lifeblood of the fishing industry in Milford Haven. He maintains that they only fish about 50 per cent. of their time in the traditional fishing waters of Milford Haven boats. He provided me with a chart showing the areas in which they fish. The rest of the time they fish in the Bay of Biscay, which is, of course, international waters; and they land most of their fish direct into Spain.
He also maintains (and I understand it to be correct) that all the areas fished and all the fish caught are registered with MAFF, so there is no lack of informa

671
tion about how much is caught and where they are caught. They are poviding a lot of business at this port: the ice factory, the local co-operative society, plus, of course, port dues et cetera. They employ—and I have checked this—three handicapped people in repairing fish boxes on the quay.
As regards the crews, they are willing to employ British fishermen but there is none available there, except older men who are unfortunately past their best. They have brought men from Grimsby and other East coast ports, who were unemployed, but naturally those people do not stay there. Some stay for up to six months, but others stay for less than a fortnight. They have started training young men and they have four young "deckie-learners" employed on their boats. At present, they have 12 young men aged from 16 to 18 at the fishery training section of Grimsby Technical College, and another 16 are ready to start again in May. So, as the noble Earl, Lord Ferrers, said, they are doing a lot to try to crew-up with British people, but it takes time. I was surprised to be told that unemployment in the area is 30 per cent. It seems an extraordinarily high figure, but I have checked it. If these boats are stopped as suddenly as they are likely to be, it will not help that situation.
Your Lordships may think that I have just lapped-up the story of an interested party. Quite frankly, I am a little too long on the tooth for that. I have checked on the partner in this company, and have found that he is a very respected member of the fishing industry in Milford Haven. He has been in the job for the past 25 years, and his father and grandfather were in it before him. I have also checked with the various local fishermen's associations and have found that the picture which I have described is basically correct. I had a word with the chief executive of the council. When I asked for the chief executive, I was slightly amused to be told that he was just called the town clerk. Names like chief executive have not yet reached Milford Haven. But he confirmed the situation regarding unemployment in the area, and the fact that those eight boats had made a considerable difference.
It can be said that you can legislate only for a majority. I have discussed with Members in the other House and various other people the situation in Cornwall and around that area where there is a problem. I agree about the difficulty of legislating for a majority, but I should like to suggest two courses. Can some time be given to crew-up with EEC fishermen, or is it possible to legislate on a regional basis? I wonder whether the noble Earl would care to comment on that. I do not know, but we may have to look at this in Committee next week.
I have raised these points simply because there is another side to the story, and because in hurried legislation like this, although it may be very necessary, there can be mistakes and this House is here to see that mistakes do not occur. Considerable injustice could arise if we did not look at the position very carefully. I look forward to hearing the Government's view on what I have said; but we shall see that the Bill gets through in the time that we are given, provided that these points are looked at carefully.
7.53 p.m.
Lord Mackie of Benshie: My Lords, I entirely agree with my noble kinsman that we must look at this carefully. But if 63 Spanish boats have taken the trouble to register as British boats and employ people who I understand do very little but give them an excuse to work the fishing grounds, after which the fish goes to Spain, there is something very wrong. The Bill must bristle with difficulties. It may well create a lawyers' paradise. The noble Earl, Lord Ferrers, talked about 75 per cent. of the crew; but I do not think he said that they must be British. I believe he said that they must be citizens of the Community. This raises a lot of other questions. What about Community boats, for example, in waters within the 12-mile limit? Are they to be allowed to fish there?
We all hope that in a certain length of time Spain will be a member of the Community and what will happen then? Will we have a renewal of the traffic? What real harm are these boats doing? I think the noble Earl said that they fish mainly for hake. Is there no market for hake here? Is there a far better market in Spain? Are our fishermen allowed to land in Spain? These are all questions that we need to look at because it might be said that the Spaniards are very enterprising. I should like to know more about the rules governing landing in Spain. I should also like to know whether they get a higher price there, and, if so, why our own fishermen cannot take advantage of the position.
I think that the lawyers will have to look at the other questions which will arise, and when we reach the Committee stage I shall certainly ask some of my noble friends who are lawyers to take them up. It is a little curious to lay down rules and make orders, so that unless a boat has 75 per cent. British employees it cannot do certain things which other British registered boats can do. It raises questions about what happens to foreign-owned companies in this country, which may well have British employees and which take advantage of British markets, British subsidies and other things. It appears to be making a very strong exception of fishing boats, if these registered boats are not allowed to take advantage of British conditions. In other words, while I admit that the Bill must be necessary if 63 foreign vessels have gone to the trouble of registering as British vessels, it appears to me that the difficulties are immense. I should like the noble Earl to answer those questions about Community nationals and about the profitability of this traffic. I should also like to know why our own fishermen cannot take advantage of this traffic, if it is profitable.
7.57 p.m.
Lord Campbell of Croy: My Lords, I congratulate my noble friend on introducing this Bill and I thank him for his explanation of it. As he and, I think, other noble Lords who have spoken will know, I have on several occasions in recent months been pressing for a measure of this kind to be introduced by the Government. I believe that action is now essential. There are over 60 of these ex-Spanish vessels now registered at different ports in the United Kingdom, including some ports in Scotland. By masquerading as British, they have been making absolute nonsense of the European Community's fishing agreements. Not only have they

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been fishing in the European pond, as if they were British, but they have also been enjoying United Kingdom privileges which have been hard-won during nearly 10 years of negotiations within the EEC. It would have been intolerable and totally unacceptable, after the EEC agreements were reached in January, only a few weeks ago, if some measure of this kind had not been introduced.
These Spanish vessels have added to the numbers of the genuine United Kingdom fishing fleet, which is allotted quotas. Indeed, if this measure were not going forward, how many more such boats from Spain or, indeed, other countries outside the European Community would have gone through the process of getting themselves registered in United Kingdom ports?
The main problem in recent years, where our fishing industry and our neighbour countries' fishing industries are concerned, is that too many fishing boats have been chasing limited stocks of fish in European waters. As my noble friend has said, the Spanish vessels have been fishing for one species in particular, which is a quota species—one for which within the EEC quotas are allotted—and that is hake. I know that hake is a fish for which British fishermen have been fishing for many years. In port fish markets over the last 30 years I have seen quantities of hake which have been landed.
These 60 foreign vessels have been making use of the red ensign as a flag of great convenience for substantial fishing operations. Until Spain joins the Community, her fishing boats should be working within any bilateral agreements which are concluded, if they wish to operate within the EEC pond. That is the correct way. What would mostly be available under such agreements would be the species of fish which are not in danger of being over-fished—that is, fish which would not be under quota. That is the kind of agreement under which Spanish fishing vessels registered in Spain should be fishing if they are within the Community's fishing limits.
In this debate we should not consider what happens when Spain becomes a member of the EEC. That would take us all night. We have touched on this matter before, in particular during our debate on the enlargement report of the Select Committee. It is clear—the Government have said so—that a vital part of the negotiations for Spain's entry will be agreement upon changing the fishing policy of the Community. The Spanish fleet as a whole is now larger than the fleet of any member of the Community, including our own. That is indeed an armada which we shall have to consider and deal with later. The Bill deals with the immediate situation, and rightly so. I do not criticise the Spanish fishermen who have been doing this; nor do I criticise the Spanish Government. I must make that absolutely clear. What is being done is entirely legal. But what it does is to upset and distort the purposes of international agreements. Indeed, it drives a coach and horses through the European Economic Community's fishing policy.
If I may turn to the Bill, it is an enabling measure. Clause 1 simply gives to the Government the power to lay orders. I understand that the Government propose to lay the first order in April, which is only a few weeks
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away. I was very glad to hear this, and I hope that my noble friend will be able to confirm it when he speaks at the end of the debate. It is not in the Bill, but we have heard, as the noble Lord, Lord John-Mackie, has said, that the intention is to prescribe a percentage—75 per cent. is being mentioned—of the crew who must be, and we understand that it is to be, nationals of the Community. That is rather different from the similar idea which was used when we were considering in a debate here a few weeks ago the question of whether ex-Spanish boats registered in the United Kingdom should be eligible for the grants which the Government were then about to make. The main provision was that 75 per cent. of the crews should be United Kingdom nationals. Like the noble Lord, Lord John-Mackie, I should like some explanation of the difference and to know whether the Government believe that 75 per cent. of EEC nationals would not vitiate the agreement about our own coastal strips of 12 miles and 6 miles. It would have been outrageous if by the interplay of technicalities these ex-Spanish fishing boats were to be receiving the special interim subsidies which were issued by the Government, and therefore coming from the British taxpayer, during the period when the EEC agreement was being negotiated.
The area to be specified, in which the Bill when it is enacted is to be valid, is, we understand, to be the United Kingdom 200-mile limit, not the whole of the EEC pond. This could be changed in future by later orders under Clause 1. I approve of that system. The advantage of Clause 1 is that the Government should be able to lay further orders if it seems that loopholes have been found—that is, ways of circumventing the provisions of an earlier order.
It is clear that some British people have been providing the brass plates and helping over the required British skipper and mate in order that such vessels should be able to qualify for United Kingdom registration. I am sure that sometimes this has been done with the best of intentions. The suggestion that this has been making some contribution on a modest scale to certain areas, on the lines mentioned by the noble lord, Lord John-Mackie, must be set against the overriding needs of the existing United Kingdom fishing industry and the potential, from British sources, to fill any gaps. Over the last two years the Government have had to grant substantial sums to the United Kingdom fishing industry because many of the boats have been tied up. Although, therefore, some local contributions may have been made, because this situation has been allowed to develop over the last three years or so, that cannot be allowed to override the much more important factors. These ex-Spanish fishing boats enjoy certain advantages. My noble friend mentioned the levy and the duties. This is known to our fishermen who consider they are having to operate on an unequal basis.
Under the Bill, the boats will remain registered as British. Accordingly, I have two further questions to which I should be grateful for answers this evening, if possible. First, I understand that the British shipping industry does not feel that problems will be raised by the Bill. I wonder whether my noble friend could confirm that point. The way in which the Bill is drafted means that the vessels remain registered as United

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Kingdom vessels. But the Bill applies only to fishing vessels. Therefore, the rest of British shipping should not be affected.
My second question is a little more complicated, but I believe it is important and I hope your Lordships will be prepared to bear with me. It concerns the cooperation which may be necessary with other member countries of the Community. I have Ireland particularly in mind. Let us suppose that some of these ex-Spanish vessels, still registered in the United Kingdom, were, after the Bill has been enacted, fishing within Ireland's fishing limits—that is, beyond the 200-mile limit of the United Kingdom or beyond the median line between the United Kingdom and Ireland. Whether those vessels were fishing for quota species or other species, there could well be complaints from the Irish Government, and those complaints would presumably be directed to the United Kingdom Government. Technically they would be United Kingdom vessels which, as both the Irish Government and Irish fishermen would think, would be making use of the British flag in order to fish in their waters as if they were Community vessels. How are such situations to be dealt with? Have the Government in mind that it would perhaps be possible to extend the area to the whole of the EEC pond rather than simply to the 200-mile United Kingdom fishing limit? Or are there further problems if we try to do that?
The last point I wish to raise is one of speed. I will remind your Lordships that the other place passed this Bill through all its stages from Second Reading to Third Reading and with a Committee stage including amendments, in one day. In fact, it was during a night but it was within four hours. That was because the other place recognised the urgency of this Bill. I hope that we in this House will do the same. I will also point out that there must have been 20 or more speakers, but not a single voice was raised in opposition to this Bill from any part of the other place. Several speakers pointed out that there was quite a bit of lobbying in this country against the Bill, which is understandable. But they also pointed out that the lobbying was done by people who betrayed that they knew very little about the British fishing industry and that many of the arguments were not very significant.
It will be seen that having urged the Government to do something about this problem, because it could have become much greater with more and more vessels being registered in this way, I welcome what the Government are doing and hope that your Lordships will give a passage to this Bill without delay.
8.11 p.m.
Baroness Hornsby-Smith: My Lords, it will not surprise your Lordships how warmly I welcome this Bill. Indeed, I can certainly assure your Lordships' House how well this Bill has been received by the inshore fishermen and the leaders of the Trawlermen's Protection Society in Sutton Harbour and, I am given to understand, by the protection societies in other ports. I have been informed that there was a BBC programme in which the point of view put forward by the noble Lord, Lord John-Mackie, had a very fair run. What I find deplorable is that the Secretary of the Joint Trawlermen's Protection Societies for the South
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Coast fishing ports, Mr. Cooper, has never been contacted, and nor has Mr. Williams, the representative in our port with a view of the genuine inshore fishermen.
I believe there has been some misunderstanding over the fact that this has mainly affected the 12-mile inshore limit. There are certain variations, and for traditional historic reasons it is six miles, but basically it is a 12-mile limit. Within that limit the French cannot fish and the Danes cannot fish. Those are our inshore limits. The main objection is that these boats, through the device of declaring themselves as being British registered, are not only counting against the quantity of fish which is listed against the United Kingdom, but are also taking advantage over their EEC colleagues who are not allowed to fish in that area. This Bill is of enormous importance to our inshore fishermen, who have had a very rough 10 years.
I should like to congratulate my noble friend and his right honourable friend the Minister for the speed with which they have dealt with this flagrant abuse —however feeble it may appear on the face of it—of the regulations covering the registration of British trawlers. I should also like to thank my noble friend and his colleagues for their tolerance towards my persistence on this issue.
Down in the South-West, the inshore fishermen, by and large, have comparatively small boats. They are competing against trawlers worth anything from ¼ million to £1 million, undoubtedly owned and operated from Madrid and registered under the shell of £100 companies, some of which were investigated in Lloyd's List and found to have only £5 paid up capital. They are operating as British owned. Further, their operative skipper and crew are all Spanish with a second English skipper merely preparing and presenting the paperwork at the ports and registering the vessel as British. By this ruse, they fish within our 12-mile limit. If they are allowed to continue pursuing this course, how long before the Italians, the Portuguese, the Danes and others all think that this is a happy and easy ruse by which to enter Britain's 12-mile limit? I guarantee that if a British trawler went within the Spanish 12-mile limit, it would have a gunboat after it.
The trawlermen were heartened by the quota arrangements arranged by the right honourable gentleman the Minister of Agriculture, Fisheries and Food, and we were looking forward to a modest increase in the number of trawlers being recommissioned due to the fact that we had an assured quota under the EEC regulations. We felt that the Government had dealt with the Klondikers and the Russian boats, and had dealt with the Danish one-man invasion into our inshore waters. Now, they suddenly have on the horizon 67 trawlers. There were 67 trawlers in southern waters in one day when I went out there, and how many there are in the North my noble friend will know better than I. Many of those vessels had very substantial catches; far better than those which the boats of our inshore fishermen could carry. They went off with their catches to their own real home ports. Not only did they purloin chunks of the United Kingdom fishing quota, for which we fought so hard, but from the point of view of the ports, they deprived them of

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their legitimate landing charges, which provide the major part of fishing harbour income.
We welcome the increased surveillance by the fisheries patrol and in particular their inspection of nets. Infringements apply to many nationalities, and not exclusively to the Spanish, with the use of much smaller meshes than those which have been agreed by the EEC. This is disastrous for all the attempts to maintain quotas and to ensure that we do not catch immature fish and so reduce the stocks for which we have agreed quotas, and have ordered the mesh size of fishing nets. By catching these smaller, immature fish, all the efforts of the European Community to conserve fishing stocks are being jeopardised. The fishing authorities have already found that some of these Spanish operated boats do not conform to the safety regulations that we enforce. Indeed, they have been challenged on the too small number of life rafts which they carry.
British trawlermen have a long and proud record of fishing skills and seamanship. To the inshore fishermen, the 12-mile limit is their home territory. They welcome this legislation, which will ensure that a trawler flying a British flag or bearing British registration will be truly owned by a British company capable of paying for the type of vessel that is employed, and that it shall be substantially manned by British or, occasionally EEC crews; and that inshore fishing within prescribed limits agreed by the EEC shall be applied nationally and not become international through such ruses as those I have mentioned. I heartily welcome this Bill and hope that your Lordships will see it quickly on its way.
8.20 p.m.
Lord Saint Oswald: My Lords, what has drawn me into this debate is the impression that there is more in this than flashed before the eyes and passed the ears of another place within the last few weeks. We have been told with satisfaction how quickly it went through. The Members of both Houses are busy men and women, and Governments of all complexions like to bring through with expedition legislation to be enacted. This admirable energy can lead to occasional injustice, and I believe it has led to some measure of injustice in this case and up to this point.
In particular—and this is something to which I shall have to return before the end of a suitably brief speech—the promoters of an enterprising and potentially profitable scheme have not been given, so I understand, the opportunity to discuss its merits with a Minister. They have been kept at arm's length, or at least, they feel that they have been kept at arm's length, and should this be so it would seem to me uncivil and a dubious policy in my book. They consider that their enterprising and potentially profitable scheme is being emasculated as one result of this Bill, and certain speeches have made it clear that this is the intention, to emasculate. They seek a normal opportunity to discuss their views with a Minister and officials.
What is concerned is the fishing by some 60 British registered middle-water trawlers, purchased in Spain, the catches being sold by Britain to Spain. As a European I have to see in this a sensible and at least potentially a valuable joint venture to the benefit of
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our country and Spain. The principal species of fish involved is hake, and I have heard convincing denials that the fishing for hake in the South-Western approaches to our country does disturb the activities of our local inshore fishermen who mostly fish for inshore species. My noble friend and neighbour who is sitting along the Bench contradicted this just now, and she knows the territory better than I do, she knows the coastline better than I do. I find it a pity that she found it necessary to introduce the word "abuse"; and some of the fairly inflammatory language which followed explaining why she considered it an abuse distressed me.
Whatever hake may be caught, whether by the middle-water boats or the local fishermen—and the latter's amount is very limited—it is landed in the Welsh and South-Western ports. This is where my information comes from. It is landed in the Welsh and South-Western ports and exported to the European Community and Spanish markets. The resultant harbour and handling dues from the middle water boats, and other administrative expenditure, accrues to the benefit of our country. Yet, if the Bill is passed in its present form the activity and the benefits of these middle water trawlers must cease overnight; that is to say, it has been suggested that it would probably be in April. The operators cannot recruit the necessary 75 per cent. of European Community crew that they need to recruit over a phased period of time, although they have told me they would be perfectly willing to seek such crews given reasonable time. This modification was in fact tactfully and pleasantly put forward by the noble Lord, Lord John-Mackie.
Given this span of time—and it could be a variable span of time up to two years—a minimum of 600 to 1,000 jobs could become available to British nationals. There is of course the realistic factor that if and when Spain enters the European Community, Spanish fishermen will become automatically eligible to crew these trawlers. We have been told that this does not matter, that we should not be talking about this. The fact is, if action of the kind contemplated in this Bill is taken as rapidly as proposed it will hardly make for good inter-Community relations when that day comes.
Lord Cambell of Croy: My Lords, I wonder if my noble friend would allow me to intervene. I am most grateful to him. I think I was the only speaker who spoke about Spain joining the Community. I certainly did not say that it did not matter. What I said was that we could not discuss this now because it was such a major matter. Some of us have been discussing this in Select Committee and in debates in this House for a long time, and we have been assured that that will be one of the main subjects in the negotiations for Spain's entry. That is a separate matter, although it is connected, which we really could not discuss this evening.
Lord Saint Oswald: My Lords, I was only responding, I hope, as gently as my noble friend has gently intervened. I was saying that it is pertinent to this Bill and to this debate.
For these reasons, and others, I am persuaded that we need to examine the various issues involved in this Bill with the greatest care during its Committee stage

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to ensure that injustice is not done and distrust created, through hasty judgment, solely to achieve the speedy enactment of this proposed legislation. I repeat, I am not speaking to criticise the legislation itself, only to note certain details which appear to have been ignored or lightly treated. My information is that local British fishermen concentrate on the inshore species. What limited hake is caught by them is mainly transported by lorry from British ports in Wales and the South-West to the Continent, principally to the North of Spain. The operation of what is called the joint venture fleet, described in a rather excited way as a Spanish armada, offers a means of expanding and rendering more efficient this trade, thereby providing additional employment and export earnings to this country.
Such potential involving, as it does, a friendly country, now an aspirant to Common Market membership, should, I affirm, be given encouragement rather than a cold shoulder. It should be measured encouragement, not wholesale encouragement and not unquestioning encouragement. It should be a measure of encouragement. In the past few days I have spoken to serious, thoughful men who have sought interviews with Ministers to expound their plans. I seriously hope that this can be done. A spokesman might come from the Welsh fish producers' organisation. There are other bodies involved. They have not so far been received and this distresses me. It would be far better from every point of view if a Minister involved in these matters should receive a deputation and so, in all probability, obviate the need for the setting down and debate of amendments during the latter stages of this Bill.
8.28 p.m.
Earl Ferrers: My Lords, I am grateful to those of your Lordships who have taken part in this debate and for the views which have been expressed. It is not surprising that in a debate of this nature the views of the two kinsmen, the noble Lord, Lord Mackie of Benshie, and the noble Lord, Lord John-Mackie, characteristically do not agree. That is something to which we have become used, and charming it is and very helpful. It is also not surprising when there is a degree of urgency that certain views of apprehension have been expressed. I should like to deal with that, if I may, because it is important.
I think that we ought to consider, first of all, exactly what the situation is. As my noble friend Lord Campbell of Croy and my noble friend Lady Hornsby-Smith have said, the situation is that for 10 years we have been trying to get a European Communities fisheries policy. It has been very difficult, as anyone who has been involved in the negotiations knows. The business of quotas was one which took a tremendous amount of work, effort and negotiation. Throughout all this our own British fishing industry was going through a very difficult time, and as my noble friend Lord Campbell rightly said, was given very substantial grants in order to help it through this difficult time.
The quotas which were achieved were quotas caught by our own fishermen. It is not surprising that during that time the fishing and the access to our own waters by Spanish vesels has in fact decreased because, under
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the terms of the European Community's bilateral fisheries agreement with Spain, fishing opportunities for vessels from Spain in Community waters were restricted. Licences to fish have been reduced in line with the agreement with the result that in 1982 only 130 vessels were eligible compared with 240 in 1978. Some of the unsuccessful applicants for licences acted quickly and they simply became British.
The noble Lord, Lord John-Mackie, said that there was nothing unlawful about that. That is right. There was nothing unlawful about it, but it so happens, as my noble friend Lord Campbell of Croy said, that it drove a coach and horses through what we are trying to achieve in the common fisheries policy. Of course, it is perfectly all right for them to do what they did within the meaning of the law as it stood, but we considered that this required redress and, indeed, the fishing industry wished for it.
The noble Lord, Lord John-Mackie, and others have asked what will happen when Spain joins the Community in about three years' time. That is a longer view. This problem is an imminent one. My noble friend Lord Saint Oswald says that he is a good European and what is done must be done for the benefit of the United Kingdom and Spain, but I ask him to consider whether it is right for Spanish vessels to re-register as British vessels and, crewed by people from countries which are not members of the Community, thereby be permitted to fish in our waters for fish which are quotas of Great Britain. They then possibly enter British ports and unload those fish straight into lorries, thereby ensuring that they are not sold in Great Britain and ensuring that they do not pay a levy. The fish are then transported from the United Kingdom by lorry to Spain where they receive import duty free access, and where they also get access, and yet where our own fishermen who catch the same fish do not sometimes have access and do have quotas imposed upon them. That is not fair and nor is it right.
The noble Lord, Lord Mackie of Benshie, asked what harm is being done by these boats. I hope that I have explained to him that where they take fish out of our waters which are not sold in the United Kingdom those fish are not accounted for by the quota. The fish go to Spain, are sold there, and whether or not that sale is notified depends on the circumstances. If it is not notified it does not count against our quota, but it does mean that our waters are over-fished. If those landings are notified then, of course, they go against our quota and, therefore, it is against the interests of the British fishermen.
Lord Mackie of Benshie: My Lords, I am grateful for that explanation. Does this mean that if a pukka British vessel exported fish to Spain it would pay a tariff or it would not be allowed in? In other words, do the Spanish authorities make an exception and, in fact, they know there is a fiddle and let in these fish free of quota, levy and duty?
Earl Ferrers: My Lords, I would not know whether the Spanish Government consider it a fiddle or not. What I can tell the noble Lord is that on occasions fishermen from these re-registered vessels can land their fish in Spain without the import quotas which are presented when our fishermen land the same fish in Spain.

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The noble Lord, Lord Mackie of Benshie, also asked whether there is no market for hake here. It is true that the greater market is in Spain. I think that about 3,800 tonnes were landed in 1982, and possibly more than that. These vessels landed a tonnage somewhere in that region, which is a considerable amount and accounted for the majority of our quota of hake.
The noble Lord, Lord John-Mackie, said that this would create difficulties with employment. I do not deny that there will be some difficulties in some circumstances. Obviously that is the point of changing the law. When one changes the law one does so in order to correct something which is wrong. If that is so there are bound to be at least some short-term difficulties. However, I hope that the noble Lord will see that in the long term it is not right that advantage should be taken of the particular circumstances in which we find ourselves and for other vessels to come from other countries to be registered in Britain and thus operate against the interests of the European Community's fisheries policy and against the interests of our own fishermen under it.
Lord John-Mackie: My Lords, I hope that the noble Earl did not think that I was condoning what went on. I simply said that they were working within the letter of the law. I believe that was the expression I used. I was pointing out, as he rightly said, the effect that that might have because it has been going on since 1980. That was all I said. I am not condoning it by any means.
Earl Ferrers: My Lords, I am so glad that the noble Lord was not condoning it, although I think he was getting a little close to it. He is quite right in saying that they were operating within the law. I merely come back to what I said earlier, that they were doing so and that is the reason why we wish to change the law.
The noble Lord, Lord John-Mackie, and one or two others referred to the business of Community nationals crewing the boats and asked why they were not British. It would have been contrary to Articles 7 and 48 of the Treaty of Rome to discriminate and say that vessels in the Community should be crewed by British fishermen. They can, of course, be crewed by nationals of Community member states and that is the reason why that is made in that particular form.
Lord Mackie of Benshie: My Lords, I am sorry to keep bothering the noble Minister but why, then, do the present regulations say that the captain and one other must be British?
Earl Ferrers: My Lords, because that is so under a different form of legislation which goes back, I believe, if I remember correctly, to the 1947 Aliens Act, but I may need to be corrected on that. I may have that wrong, but that comes under a different form of legislation.
My noble friend Lord Campbell of Croy referred to how far we intended to limit the scope. The scope of the order will apply to British fisheries limits in the first instance, partly because of the difficulty of enforcement by British sea fisheries officers outside those limits and partly because we believe it is for the European Commission to introduce legislation on the
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Community front and for other member states such as France and Ireland to apply measures directly in their waters. Therefore, there should be harmony of effort and that is what we seek to achieve.
The noble Lord asked when the order was expected to be laid. I expect this will be done, probably, at the beginning of April.
My noble friend Lord Campbell of Croy also asked whether the British shipping industry thinks that any problems will be raised. There has been unanimous support for the Bill. No adverse view has been expressed by the shipping and fishing industries. It is unlikely that the rest of the fishing industry will be affected. He also asked about whether there would be co-operation with other European members. I have explained that that is the idea and that we hope that there will be a harmony of effort.
Lord Campbell of Croy: My Lords, I do not necessarily need a reply this evening, because this is complicated, but in replying to my point about Ireland, which is the best example, my noble friend said that the Irish Government would probably be introducing an equivalent measure. But that will be concerned with Irish registered boats. We will still have a situation where a Spanish vessel, which appears to be, and is theoretically registered as, a United Kingdom vessel (because it still will be a United Kingdom registered vessel), is doing things within Irish fishing limits which the Irish Government think that it ought not to be doing. Presumably the complaint will then come to us.
Earl Ferrers: My Lords, that is the reason why we hope to have, and indeed are having, consultations with both Ireland and France as to how mutually these problems can be overcome.
Perhaps I could correct one thing which I said to the noble Lord, Lord Mackie of Benshie. The law concerned under which the captain and the first hand must be British is the Aliens (Restriction) Act 1919. I think that I said it was 1947.
My noble friend Lord Saint Oswald referred to the consultations with the joint venture companies. Our decision to legislate against the re-registered foreign vessels in order to prevent them getting round the Community agreements and fishing our quotas, was taken in the full knowledge of the nature of their operations and their place in our fishing industry. If they adapt themselves to the new arrangements in a way which would qualify them to fish, then of course that would be fine, but we have got an urgent problem. It is all very fine for my noble friends to say, "Let us have two years in order to put this right", but we have an urgent problem and our proposed solution takes account of all the relevant factors, including the express views of those who organise the re-registered vessels.
My Lords, my noble friend would be quite wrong if he felt that the views which the people to whom he has spoken have not been taken on board. They have been. They have been considered very carefully, but, for the reasons which I have given, we consider this an urgent problem. We consider that it is not the correct way at present to deal with either the common fisheries policy or with our own fishermen. The conditions are

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not correct, and that is the reason why the Government have thought fit to produce this Bill in order to rectify what is, frankly, an evasion and a using of a loophole. I hope therefore that I have managed to persuade your Lordships that this Bill is reasonable and that your Lordships will give it a Second Reading. I beg to move that the Bill be now read a second time.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Data Protection Bill [H.L.]
Report stage resumed on Clause 28.
8.44 p.m.
Lord Wigoder Lord Wigoder moved Amendment No. 74A:
Page 21, line 34, at end insert—
("Provided that in the event of personal data having been disclosed under this subsection for any of the purposes mentioned in subsection (1) above the person disclosing such information shall within four weeks of such disclosure notify the Registrar in a prescribed form of the extent and nature of such disclosure and the purpose thereof.").
The noble Lord said: My Lords, the vast majority of your Lordships now present will recognise this amendment as being the first half of an amendment that was tabled at Committee stage. The second half was shot down in flames by the noble Lord, Lord Swinfen, among others, and I think, on reflection, quite rightly so. But the first half obviously had some appeal and was of some interest to the Government.
The noble Lord, Lord Elton, at the end of the discussion on this part of the amendment, said:
"I should like to give further thought to the possibility of the registrar being alerted to exempt disclosures of a potentially sensitive nature, so that he can ensure that subjects' rights are being protected so far as is consistent with effective law enforcement. This is an area that bristles with practical difficulties."
That is not, I think, the first time that the noble Lord has used that expression. He went on to say:
"I certainly cannot give a commitment at this stage. But I can go so far as to say that, although we cannot accept the amendment, we will think further about the points that have been made in this discussion."—[Official Report, 22/2/83; col. 713.].
The object of the amendment is to ensure that exempt disclosures are registered. This would then enable the registrar in the course of his annual report to Parliament, or in any other reports that he thought appropriate, to draw attention to the extent of such disclosures if he thought it appropriate to do so. This would then enable the various professional bodies in particular that are concerned about the extent to which there might be disclosures of confidential information, to see to what extent the process is extending. This monitoring might, I think, be in the interests of the general public and particularly of data subjects.
In those circumstances, I have tabled this amendment at a late stage, waiting to see whether the Government tabled one of their own, in order to see what the noble Lord, Lord Elton, has to say about his further thinking that he indicated on Committee stage. My Lords, I beg to move.
Lord Elton: My Lords, I am indebted to the noble Lord, Lord Wigoder, for the care he has taken to
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remove those elements in the amendment that he moved in Committee to which I (and indeed my noble friend Lord Swinfen) took exception. I have to say that, to my eyes, the amendment he has just moved raises far fewer difficulties. Gone are the references in particular to the registrar giving subject access to data disclosed for crime prevention purposes under Clause 28(2), which was a particular failing of the earlier version. Now, my Lords, we have a proposal simply that what we can call for convenience "exempt disclosures" should be notified to the registrar in a prescribed form.
Under the Bill as it is presently cast, of course, the registrar is already fully empowered to check up on any disclosures and consider whether they are covered by the user's registered particulars. If they are not so covered, and a claim to exemption is made by the user, the registrar may investigate whether that claim is well founded. If not, he can of course take action against the user. However, I see the point that the noble Lord is making, although I think it is necessary—and I referred to this in Committee—to look very carefully at any mechanism that submits every exempt disclosure to a new notification procedure.
In Committee I undertook to think further about the approach that the noble Lord—on behalf, as he said, of the BMA—had put forward. He has now presented it in a refined version—and certainly a version that avoids some of the more prominent problems. I am grateful for that. I hope that he will understand that I do not think that we are yet at the point where we can clearly see where we should go. We shall certainly examine further the approach that the noble Lord has urged upon us. But we do want to consider with some care the implications of what he proposes both for the registrar and for the police. Let there be no mistake: we are determined not to compromise effective law enforcement; we must never lose sight of that. We also want to pay particular attention to detail here, to ensure that if any new procedures are introduced they are properly designed to achieve the desired aim.
I appreciate that I have not given the noble Lord a firm "yes" on this amendment, but he will appreciate that I have not given him a firm "no". I hope he will be patient. This is something on which it would be foolish to rush our fences. We want to look at it further, and therefore I hope that he will not press it now, because he could, I think, be satisfied with the clear understanding that we have expressed of what is being aimed at, and our readiness to continue our examination of his proposal that we have already started.
Lord Swinfen: I am delighted to see that the noble Lord had a parachute.
Lord Wigoder: My Lords, I regard the observations of the noble Lord, Lord Elton, as a constructive reply to this amendment. I am pleased to learn that the Government will continue to consider the merits of what I appreciate is a problem that has many difficult edges. In the knowledge that they are going to continue to consider it, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.50 p.m.
Lord Houghton of Sowerby Lord Houghton of Sowerby had given notice of his intention to move Amendment No. 74B:
Page 21, line 42, at end insert—
("(5) Nothing in this section shall override, abrogate or alter the form of the declarations of secrecy required respectively by section 58 of the Finance Act 1969 (relating to disclosure for statistical purposes by the Board of Inland Revenue) and by Parts I, II and III of Schedule 1 to the Taxes Management Act 1970 from General and Special Commissioners of Taxes, the Commissioners of Inland Revenue, Inspectors and Collectors of Taxes, and other officers.").
The noble Lord said: My Lords, in view of the fully satisfactory reply that the noble Lord gave to my comments on Amendment No. 73, there is no need for me to move Amendment No. 74B.
[Amendment No. 74B not moved.]
Clause 29 [Health and social work]:
Lord Avebury Lord Avebury moved Amendment No. 75:
Page 22, line 1, leave out subsection (1).
The noble Lord said: My Lords, this is a probing amendment designed to see where the Government have reached in their consultations with the bodies concerned on the appropriate restrictions to be imposed on subject access to health and social work records. I should like to remind your Lordships of what the noble Lord the Minister said on Second Reading. At column 1581 of the Official Report for 20th January 1983, he said:
"We have not reached a final view on the appropriate restrictions upon subject access to health and social work records. In these areas it is essential that there should be full consultation with the medical and other professions involved. Those consultations are going on now".
He went on to say:
"Clearly the restrictions on the right of access must be kept to a minimum, consistent with protecting the subject himself from coming up against information which could be seriously harmful to him. I am sure noble Lords would agree that we ought only to decide where that frontier of discretion lies in the light of the fullest discussion".
As I understand it, consultations are still in progress with medical and other related professions. But I am also informed by Dame Elizabeth Ackroyd, the Chairman of the Patients' Association, that that association has not yet been consulted. I do not think that any other organisations serving the interests of patients have been brought into the discussions either. But I am informed that the view of the Patients' Association is that people should have access to their records, if they wish; that that is on record with the Home Office in the reply that it made to the White Paper on Data Protection; and that it believes that there is nothing in law to prevent access now, although in practice doctors very rarely agree to it.
At the Consumer Congress in 1982, where there was representation of a very wide range of consumer bodies, a resolution was passed including, inter alia the thought:
"that patients be given fundamental rights regarding access to information, including case records".
Turning from the general to the particular, the Patients' Association knows from its own files of cases put to it by individuals, that many people are worried by the refusal of access to their records and they may
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well suspect, rightly or wrongly, that comments are made about their characters and circumstances which prejudice the attitude of doctors towards them so that their medical treatment is also affected; or they should like to have a truthful diagnosis of the disease and they worry because they believe that the doctor has not been prepared to divulge it to them.
Unfortunately this matter was not dealt with by the Lindop Committee which said that the climate of opinion was moving in the direction of greater openness, but it would be a mistake to embody in the legislation itself an exception to the general rule that a data subject should be able to see his records. However, in a number of other countries including Sweden, Norway, France, West Germany and Austria, the legislation has been passed in a form which gives patients access to their individual medical records. There could be safeguards against access which would be likely seriously to damage the patient's health or that of another person. The example might be where there was a note in the record that a child was not the husband's, but the husband did not know that. I believe that in some psychiatric cases there would be justification for non-disclosure. Also there could be an appeal procedure as in Sweden where there have been only a handful of cases of refusal of access to records. The Patients' Association itself agrees that access could be refused in certain circumstances but it also holds that the onus should be on the data user to prove the case for refusal and that there should be such an appeal procedure.
In their evidence to the Lindop Committee the association declared that there should be an appeal to the data protection authority, which was then proposed, against a doctor's refusal of access, because it said at the time that doctors were often unnecessarily secretive and possessive about their records. In the present circumstances what is suggested by the association is that a general appeal procedure should be provided in the Bill, although in other circumstances it might have preferred the health ombudsman.
So to summarise: its is submitted that most patients worry about access to their notes and it is the refusal of access to case records which causes anxiety. Secondly, the vast majority of medical records at present are manual and therefore are not directly affected by the Bill. But if the Bill were amended so as to allow access in principle to computerised records, then the practice is bound to extend sooner or later to the manual records and this would be in accordance with what the Lindop Committee said about movements in the climate of opinion. I beg to move.
Lord Drumalbyn: My Lords, I should like to ask my noble friend what really is the status of this particular subsection. It is perhaps a little surprising to find the subsection in this form in a Bill of this kind. I have no doubt that consultations have been taking place, and I take it that perhaps those consultations have not yet been completed. But to find a subsection subject to affirmative procedure order is at least surprising. I wonder whether the Government intended that it should be rather consultative at present, with perhaps the possibility of reaching a decision as regards the final form before Parliament passes this measure. What do the Government really intend here? Is it

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intended to get further experience of the working of this, and if so what does the noble Lord hope to achieve, and how long does he think it will take to achieve it?
Lord Elton: My Lords, the noble Lord, Lord Avebury, will be aware that this amendment would have diametrically the opposite effect to one moved in Committee by his noble friend Lord Wigoder. That amendment sought to require the Secretary of State to introduce orders providing exemption from subject access to health data. This amendment, on the other hand, seeks to make all health data available to subjects by preventing the Secretary of State from having such powers. But as this is a probing amendment I think that is merely a matter of elegant tactics.
The application of this legislation in the health field raises, as your Lordships realise, very sensitive questions particularly when it comes to subject access. We need to consider very carefully whether it is right in all circumstances for a data subject to have untrammelled access to all the health information which may be held about him. Is it right, for example, that a doctor should be obliged to tell a subject that he has an incurable or terminal illness? Some, I suppose, may be secretive by nature, as the noble Lord suggests, but what about when the doctor sincerely and rightly believes that doing so would cause unnecessasry suffering or distress? Would it be right to provide subject access if so doing would disturb the patient and prejudice his successful treatment in a non-terminal disease?
These are fundamental questions and we cannot brush them aside just because they prejudice a right of access which in other respects we value so highly. We therefore provided in Clause 29(1) a mechanism by which constraints can be placed on access should we consider constraints necessary. Obviously we shall take account of the advice of the medical profession in coming to a conclusion about making the order, and we are indeed aware of the Patients' Association's views and they will form part of the matter which we shall then consider.
It does not mean that an order will mean that there will be necessarily total exemption for all health data. What Clause 29(1) does is to keep our options open by allowing constraints to be applied should we need them. I think that is probably the answer to my noble friend who asked why this was in the Bill in this form. It is a power available should it be needed, and because it touches a sensitive and important area it is subject to the affirmative procedure in Parliament so that it cannot be slipped through as an administrative démarche.
In following this path we are fully in line with Article 9.2.B of the Convention which provides for derogation from the general principles in the interests of protecting the data subject. We are currently consulting with health professional groups to determine what arrangements might need to be made. I do not wish to prejudge the outcome of these discussions, but your Lordships will be aware that any orders which are made under this provision will need the approval of both Houses of Parliament. By using
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this method we have preserved flexibility, what is more, to meet changes of practice within the professions from which we take the advice.
Lord Avebury: My Lords, I was rather hoping that the Minister could tell us a little more about the nature of this consultative process. Although I entirely appreciate what he said about the sensitivity of the questions we are now dealing with, it would be right that Parliament should have some idea in mind of the nature of the likely regulations that are going to be made by the Government while there is still an opportunity of discussing them in the proceedings on the Bill, rather than wait until the affirmative orders are made at some subsequent time.
It would be much more convenient for the professions themselves if there could be the fullest possible discussion between us during the proceedings on the Bill, and particularly in another place, rather than wait until some time afterwards to know precisely what kind of orders the Minister is going to make. I said that this is a probing amendment and I meant it. I am not going to push it any further at this stage. Having laid down the marker, I think it will probably have to be left for our colleagues in another place to take this a stage further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 31 [Domestic or other limited purposes]:
9.4 p.m.
The Lord Chancellor The Lord Chancellor moved Amendment No. 76:
Page 22, line 30, leave out ("Parts II and III of this Act") and insert ("Part II of this Act and of sections 21 to 24 above").
The noble and learned Lord said: My Lords, I spoke to this with Amendment No. 64, which was accepted. I therefore beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 77:
Page 22, line 35, after ("held") insert ("by a data user").
The noble Lord said: My Lords, with permission, in speaking to Amendment No. 77 I shall speak to Amendment No. 80 as well. When I do so I shall probably also refer to Amendments Nos. 79 and 81. Those are amendments tabled in the names of noble Lords opposite. It would be wrong to claim that these are Government amendments. Noble Lords opposite had a large hand in the genesis of what I now propose. The noble and learned Lord, Lord Elwyn-Jones, has been helpful in drawing our attention to the fact that subsections (2) and (3) of Clause 31 are cast in such a way that the exemption can be claimed when subjects have consented only to the data being held. This has the effect that once a subject's consent has been received, the exemption can be claimed. And if the data are then disclosed to another user, even though the subject may not know of it, the new user can also claim the exemption.
That was not our intention. And we have looked again at the provision in the light of what the noble and learned Lord said. He and the noble Lord, Lord Mishcon, have tabled their own amendments to Clause 31. I have to say that they do not quite do the trick. Subsection (2) is drafted in terms of data being

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exempt in certain circumstances. Any disapplication of the subsection also has to be in terms of data—one cannot do it by drafting in terms of disclosures as the noble Lords have sought to do. However, to try to achieve the desired effect by drafting in terms of data the disclosure of which has been consented to, leads, we found, to a quite extraordinarily complicated and convoluted provision. And that is why we have taken the approach in Amendments Nos. 77 and 80 which allows for very neat drafting and overcomes the problem by a somewhat different means. What we have done is to insert the words "by a data user" in line 35 so that the data to which both paragraphs (a) and (b) of subsection (2) refer are held by identified persons. That enables us then, with the second amendment, to tie the exemption in subsection (3) down to the specific user to whose holding of the data the subject has consented.
Thus, if a user benefiting from the exemption passes the data on to another user, that user will not inherit the exemption, and that is what the noble Lord sought to achieve. In order to benefit from it himself, he will have to give the subjects the opportunity to object to his holding it. By taking this approach, we have avoided a cumbersome new provision and have achieved, we believe, the result which noble Lords opposite desired. I am grateful to them for having drawn our attention to the point and hope they will accept my assurance that it is herein met. I beg to move.
Lord Elwyn-Jones: My Lords, I am grateful that the Minister has taken up the point that was raised in earlier amendments. He then accepted the case for the principle we referred to and undertook to try to remedy the mischief. It would seem that the mischief has now been remedied, but we shall look a little more closely at this group of amendments before the final stage of the Bill. In the meantime, we are grateful to him for having taken up the point and for so generously acknowledging the fons et origo of it.
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendment No. 78:
Page 22, line 39, leave out ("Parts II and III of this Act") and insert ("Part II of this Act and of sections 21 to 24 above").
The noble and learned Lord said: My Lords, I spoke to this with Amendments Nos. 64 and 76, and it is consequential on them. I beg to move.
On Question, amendment agreed to.
9.11 p.m.
Lord Drumalbyn Lord Drumalbyn moved Amendment No. 78A:
Page 22, line 39, at end insert—
("( Personal data comprising only names and addresses available to any person from published sources are exempt from the provisions of Part II of this Act and of sections 21 to 24 above.").
The noble Lord said: My Lords, I feel rather more than usually diffident in intervening in the discussions at this stage, when nearly everyone here has borne not only today but several days on the Bill. This amendment reflects a matter that has been put to me, a matter of which I have perhaps a little more knowledge than I have of most of the rest of the Bill.
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Its effect is intended to exempt from the provisions of Part II and Sections 21 to 24 of the Bill personal data held by a data user and comprising only names and addresses, which are available to anyone who cares to cull them from published sources such as electoral rolls and telephone or street directories or to acquire them from someone else who has taken the trouble to do so. The sources, in other words, are the data subjects themselves who supply the information to those who compile those publications.
The provision would cover exemption from Part II, which deals with registration; from Clause 21, which deals with the rights of data subjects to access and the obligations of data users to accord access; from compensation for unauthorised disclosure; and from the obligation to rectify or erase. If anybody wonders what would be the good of holding a list in the form of personal data consisting only of names and addresses, the answer is that it is important to thousands of people in business, not to mention charities and other organisations, to have such lists. But the data must be such that they are as accurate and up-to-date as possible.
I can see no need at all to impose a duty to rectify the list where the name is misspelt or the individual has changed his or her address. I say that because it is very much in the interest of the data user to get and keep his data—consisting only, as I say, of names and addresses—right. If anyone receives a communication from the data user which is wrong in any respect, that recipient, if he is interested, will be quick to point out the error to the data user, and the data user will be equally quick to rectify the error. It is in his interest to do so. It follows that the courts should never be involved. Principle No. 5, so far as I can see, is safeguarded by common interest, at least to the extent that it can ever be safeguarded, and I am a little doubtful whether it is possible to safeguard it completely.
In response to an amendment moved by my noble friend Lord Mottistone, my noble friend the Minister said:
… many of those people who have studied this subject over the years have been forced to conclude that there is no such thing as wholly harmless data".—[Official Report, 22/2/83; col. 721.]
Certainly I have not spent years studying real-life cases, and I doubt whether he has either, (though he must have studied quite a lot recently), and apparently some who have did not reach the same conclusion—assuming, if I may say so, his quote is wholly accurate. As to the many who were forced to reach it, perhaps my noble friend could tell your Lordships what forced them to do so? Was it facts, or was it fears? Can he give any examples?
It is difficult to see what possible harm lists of names and addresses of themselves could do. Even if they are not wholly accurate or up to date on any given day, all the harm that I can see that could be done would be in expenditure wasted on the part of the data user, to the extent that some of his communications would not reach their destination. I can see no other harm being done. I suggest that nobody can reasonably doubt that such lists are necessary, whether or not the information that they contain is translated into data. What is certain is that it is sensible to take advantage of modem technology and to translate the lists into data

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because it is more efficient and more economical, especially when larger lists are concerned. I venture to suggest that it is also sensible to avoid the cost of registration, if registration is demonstrably not essential and no harm can result to the data subject.
The Government have gone a long way in Clause 31 to ease the burden on the registrar. There is a very real danger that that poor gentleman, or lady (as it may be), and his or her score of staff will be literally smothered by applications for registration and subsequent complaints. I am given to understand that that actually happened in Norway. There, it seems, the data commissioner had to implore the Government to restrict the scope of the Act. I am also told that in other countries where data protection legislation has been in force for some time distinctions between harmless and potentially harmful data have worked quite satisfactorily, even though they go rather further than does this amendment.
What practical use is made of lists of names and addresses? I am told that they are used for the purposes of address verification; that is, keeping the names and addresses accurate. Among the users are companies, charities, political parties, and even private individuals.
Some of your Lordships may feel that the amendment is unnecessary; you may feel that it is inconceivable that the registrar would rule that such purposes were incompatible with the measure. In any case the burden of registration in each instance would be very light. But can we be sure about that argument? Take, for example, the electoral register. Let us suppose that an electoral registration officer failed to register as one of his purposes the making available of the electoral register to data users who wish to bring their own names and addresses up to date in the register. The electoral register is, I believe, the only countrywide list that records in every year the names and addresses of electors, including new addresses, new households forming, others disappearing, entire streets being pulled down, and new houses being erected. Surely it is self-evident that to deny business, not to mention again charities, and everyone else, who wish the use of the electoral register for verification of their lists of names and addresses would work to the detriment of data users and data subjects alike. Indeed, it would bring data users into conflict with principle five, which lays a duty upon them to keep their lists up to date.
The main difference between the amendment and subsections (2) and (3) is that under the amendment there is no obligation on the data user to consult each prospective data subject on whether he may hold data about him, even though it is limited to name and address. I feel that the scale of some of the lists involved would make that quite impracticable on grounds of costs alone. Moreover, such consultation would itself constitute unauthorised use of personal data in some cases.
As I did not have an opportunity of introducing this amendment at an earlier stage, perhaps your Lordships will bear with me a minute or so longer. I wonder how a businessman could set about availing himself of the exemptions in subsections (2) and(3) unless he first compiled a list of potential customers
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and clients whom he could ask whether they objected to his holding data relating to them. I have no doubt that it could be done, but only by antiquated methods and at much greater cost. My case for this amendment is that the personal data which it seeks to exempt are finite in quantity, definite in character, inexorably public and, so far from being harmful, are of considerable benefit to both data users and data subjects.
I very much hope that my noble friend will see fit to accept it, at least in principle, even if its drafting is imperfect. There is, after all, another stage of the Bill in this House, not to mention the stages in another place. I beg to move.
Lord Mishcon: My Lords, the noble Lord, Lord Drumalbyn, always puts a case very effectively. If I may say so on this occasion, I wonder whether he realises (unless I am wrong) that there is a door that he has left open. We are dealing with personal data here. Let us take it for granted that you merely have names and addresses of people—and they could include the name of the noble Lord, Lord Elton, the name of the noble Lord, Lord Drumalbyn, or my own—who were accustomed to play truant at school. I am giving an amusing example, I hope, but, of course, the examples could be such that they are not amusing.
You have the heading: "Those who played truant at school and who are Members of the House of Lords", and you have, say, three names and three addresses underneath. The heading is not within the definition of "personal data". That may be the fault of the noble Lord the Minister for not listening in a more receptive way to the speeches that we made from these Benches when we were trying to define terms. At all events, the heading would not be "personal data". What was underneath would be the name and address. But what would be the result of that would be something that I am sure that the noble Lord, Lord Drumalbyn, had not got in his mind when he was moving this amendment. For those reasons, unless the noble Lord the Minister or the noble Lord, Lord Drumalbyn, feel that my reasoning is wrong, I should have thought that we should accept this amendment with great hesitation.
9.23 p.m.
Lord Elton: My Lords, My noble friend Lord Drumalbyn is in effect offering with this amendment a slightly less restrictive version of the exemption already in Clause 31(2)(b). Where we have limited the purpose for which names and addresses should be held to the distribution of articles, my noble friend suggests that there should be no limitation as to purpose. I am not sure whether there is anyone who can envisage what sort of data user would hold only names and addresses—and it is only names and addresses; any other information and the exemption is lost—for a purpose other than distributing articles. My noble friend may have suggested some.
My first impression is that it is difficult to see any objection to the broadening of Clause 31(2)(b) in the way my noble friend suggests. I shall read with care what the noble Lord, Lord Mishcon, has said—not all of which will be as misleading as his representations of my school attendance record appear to be. However, I would prefer not to accept the amendment at this

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stage. First, because on its own it duplicates the existing Clause 31(2)(b). We ought to have either one or the other in the Bill. Secondly, we have to decide whether the qualifications in Clause 31(3) should apply to these data. Placing the provision as he does in the clause my noble friend does not make his intentions altogether clear in that respect.
Finally, I should not like to give the impression that this is the end of the hunt. The noble Lord said that we were looking for wholly harmless data. My noble friend has perhaps found a unicorn, but it is a remarkably small one. Indeed, I have a feeling that it would in practice be of value to very few data users. None the less, I am most obliged to my noble friend and I hope he will accept this treatment of his amendment.
Lord Drumalbyn: My Lords, I am grateful to the noble Lord opposite and to my noble friend beside me here for their courteous rejoinders. May I just say again, before withdrawing my amendment, that there is a great difference between my amendment and subsections (2) and (3), in that my amendment does not give an opportunity to the data subjects to object—not that they will necessarily take their opportunity. But this is a very big one and it is essential to the purpose that I have in mind in proposing my amendment. I ask my noble friend to bear that in mind. Again, I think him for the way in which he has responded, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 79 not moved.]
The Lord Chancellor: My Lords, Amendment No. 80 may be consequential on Amendment No. 77.
Lord Elton: It is indeed, my Lords.
Lord Elton Lord Elton moved Amendment No. 80:
Page 22, line 42, after ("asked") insert ("by the club or data user").
On Question, amendment agreed to.
[Amendments Nos. 81 and 82 not moved.]
[Amendment No. 82A not moved.]
Clause 32 [Other exemptions]:
Lord Mishcon Lord Mishcon moved Amendment No. 83:
Page 23, line 17, after ("out") insert ("bona fide academic").
The noble Lord said: My Lords, I wonder if I may shortly remind your Lordships of an interesting discussion which took place and is recorded at col. 734 of the proceedings on 22nd February, at the Committee stage. I then attempted to argue that there should be some definition of "research" because indeed some statistical research might be the sort of research that one would want to catch under the Bill, whereas other types of research would be such as we would not want to catch. After, the noble Lord, Lord Elton, had courteously driven his unicorn in this direction and caused it to utter certain words of wisdom, such as that he felt that there were types of research which would fall into one definition and not into another and that
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one should be very careful that one was not including or excluding types of research that ought to be excluded or included.
I then ventured to say that possibly it might be suitable if the noble Lord the Minister and I could correspond between the Committee and the Report stages to see whether an agreed definition of "research" could come out. I know that the noble Lord the Minister has been engaged upon activities that are much more important than corresponding with me on a description of "research". That is obvious from the fact that I have not received a letter from him. Thus I was left with no alternative, together with my noble friends, but to answer his challenge and to try to do the best I could by way of a definition. If, as a result of the Minister's cogitations he is now able to give a better definition, or to argue why there should be no definition at all, I should be delighted to hear from him. In the meantime, I beg to move.
Lord Mottistone: My Lords, for once, I have to make an unqualified objection to this amendment. To put "bona fide academic" in the clause cuts out all sorts of other research—commercial research—which it would be very important to have exempt, except of course when the results were in a form which identified the data subjects, or any of them, which is in the rest of this subsection. So I would hope very much that my noble friends will resist this and not accept the qualification.
Lord Swinfen: My Lords, my noble friend has literally taken the words out of my mouth!
Lord Elton: My Lords, I think I ought to start with the words: "Mea culpa, mea maxima culpa". I apologise both to the noble Lord for the discourtesy to him in not having written to him and to your Lordships for necessitating my rehearsal now of the points he wishes to hear.
Clause 32(3) provides an exemption from subject access for personal data held only for the purpose of preparing statistics or carrying out research. The Government believe that personal data held in these circumstances pose no great threat to the privacy of data subjects since they are rarely published in a form that identifies data subjects—and your Lordships will note that it is a condition of the exemption which is set out in Clause 32(3) that the results of such statistical and research work should not be published in a form which identifies data subjects. Indeed, we believe that data used in these ways are not held for a purpose which is "personal" to the data subject at all. The fact that they are personal data is incidental to the primary statistical or research use of the data. We also recognise that it would be quite unduly burdensome on users of these data to grant subject access to them. We have concluded that an exemption from the requirement to grant access is justified and will not detract from our scheme's protection of data subjects.
I should stress that the exemption is available only when the data concerned are used for statistical and research purposes, and no other. Once data are also used for some other purpose, the exemption is lost and subject access has to be given. And, secondly, the exemption is dependent on the data not being made

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available to anybody else in a form that identifies the data subject. I think that those two conditions go a long way to ensure that the research will be, as the noble Lord requires, "bona fide". Certainly I would have strong doubts about using such a phrase in this context: it seems to add nothing of worth to the provision.
Perhaps I should turn to the other leg of the noble Lord's definition, which is "academic". The effect of that qualification is far from clear to me. We discussed a similar amendment at the earlier stage. That would have limited the exemption to historical or scientific research, and my objection then was that this would be over-restrictive.
I do not think that this reply is actually answering the noble Lord's principal point, to which I have already addressed myself. It is not the kind of research that is the main factor in allowing exemption; it is the fact that it is research and therefore the use of personal data in a particular way that places the privacy of the subject at only minimal risk. That, and the requirement that the results shall not be served up in a way which identifies the subject of the research, renders them immune from harm. I hope that what I have said does somewhat reduce the noble Lord's anxiety in this field.
Lord Mishcon: My Lords, I acquit the noble Lord the Minister of any discourtesy: that would be the last thing he could ever be accused of. But I confess that I am still unhappy that the word "research" has no definition because we can all imagine types of research which all of us would wish to be caught by this Bill. I could do no more than put down the amendment with words that I realised, even when putting them down, would not satisfy your Lordshps or the noble Lord the Minister. But I do beg of him to consider the principle involved and to see whether, with the expert guidance that he has and which is not available to me, he can think of some way of dealing with the problem which I think still exists. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.35 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 84:
Page 23, line 20, leave out ("identifies") and insert ("enables").
The noble Lord said: My Lords, if it is your Lordships' wish, I can speak to Amendments Nos. 84 and 85 together. The purpose of these amendments is to remove what I think learned statisticians call the "small cell". In other words, what you do in a published research study is so to describe a situation that, although you do not name somebody, you quite clearly identify him. To give an example of that, if there is in a very small village one gentleman who has the privilege to be coloured, and you therefore talk about a coloured person in that village, quite obviously, although his name has not been mentioned, everyone can clearly identify him. It is that which we are trying to get at by the use of the words in the amendments.
The Lindop Committee, which I understand included a professor of statistics and, indeed, a distinguished epidemiologist, dealt with this problem in paragraphs 26.6 and 26.7 of its report, and I understand that there is no reason to anticipate any objection to these amendments from those of the community of statistics and research. In view of the desirability of getting over the problem to which I have ventured to address myself to your Lordships, I beg to move.
Lord Elton: My Lords, the noble Lord's amendments would alter the circumstances in which statistical and research data qualified for the exemption from subject access which Clause 32(3) provides. As drafted, the exemption could be claimed, provided the results of the work in question were made available in a form which did not identify any of the data subjects—that is to say, the results did not in themselves identify the individuals in question. The apparently minor modification which the noble Lord's amendments would introduce, of allowing the exemption only where the result did not enable the data subject to be identified, would, in fact, be a substantial change, as a result of which, I suspect, this exemption would become worthless to the majority of those engaged in work in this area.
In the Bill as drafted, the test is whether the results themselves identify individuals, without any further information having been brought to bear. It need not be a matter of a data subject being identified by name, but it would rely upon the possibility of identifying an individual from the research results alone. To accept the noble Lord's amendments, on the other hand, would entail depriving researchers of this exemption, if the results simply enabled individuals to be identified—whether as a result of further research, or as a result of some further knowledge, which anyone having access to those data might, quite accidentally, happen to possess.
It might, for example, be that a prison governor, by reason of the specialised knowledge he possessed of the inmates of his establishment, was able to identify certain of the anonymised individuals in regard to whom a piece of penal research had been undertaken. The result of the noble Lord's amendments as I read them is that, in latter instance, the research would not qualify for exemption, even though to anyone else reading the results there would be no possibility of identifying anyone. And the problem is that those preparing the statistics or carrying out the research would very seldom be able to know in advance whether there might be some individual possessed of this specialised knowledge and thus capable, for himself, of identifying an individual data subject. In other words, we would have provided an exemption, but effectively have ensured that it was unlikely ever to be of any practical value to those whom it was designed to help, because they could not know what other knowledge those looking at their published results would have. I see the force of what the noble Lord has said. We have looked at the area with some care, but we seem to have come as close as we can to the edge of what he wants he wants without dissipating altogether the usefulness of the exemption. I am sorry we cannot do better.
Lord Mishcon: My Lords, I thought I detected—and colleagues in the law will recognise what I am saying—a Hulton v. Jones point in the answer which the noble Lord the Minister gave. If, after the consideration which has undoubtedly been given to the matter, the noble Lord has been advised that it is impossible to go further without going over a boundary that neither he nor I would want to do, I must be content, certainly for the time being, with his answer. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 85 not moved.]
9.42 p.m.
Lord Avebury Lord Avebury moved Amendment No. 86:
After Clause 32, insert the following new clause:
("Regulation of exempted data.
The Secretary of State may make regulations requiring data users holding data exempted by this Part of this Act from any provision of Part II or III of this Act to conform to provisions specified in those regulations with respect to those data.").
The noble Lord said: My Lords, this is another approach to the problem of the potential harm which may be caused as a result of the exemptions in the Bill. Here, instead of removing from the area the exemptions which we discussed earlier, the notion I had in mind was to build in safeguards where personal data is under the control of an exempted user, and power is given to the Secretary of State to require such a user to conform to regulations. Although I appreciate my noble friend's reluctance to add to the number of ministerial discretions allowed in the Bill, I am afraid I am not capable of formulating precisely what kinds of restriction would be most effective in minimising the damage which is otherwise likely to be caused.
For purposes of illustration only, I mention again the British Medical Association's suggestion that each transfer of personal medical information should be recorded, together with a description of the type of information released. The association propose further that such transfers and descriptions should be published within a specified period of time in order that the decisions to disclose may be open to scrutiny and challenge.
If I were the Secretary of State I would wish to have such a power and I would execise it in order to see that at the very minimum regulations were made on the lines which the BMA have suggested. I would go further and say: why do we not provide that all transfers to exempt systems should be treated in the same manner? It is better not to try to draft across the Floor of the House the kinds of regulations which the Secretary of State would bring in if he had such a power. I believe that such a power is necessary, and I hope the Minister will agree to accept the amendment. I beg to move.
Lord Elton: My Lords, my starting point in dealing with the amendment, as I indicated to my noble friend Lord Swinfen in reply to one of the amendments which he moved earlier during the Report stage, is that an order-making power is not necessarily unobjectionable because there is no obligation to use it. Any such power on the face of the statute raises the expectation that it will one day be used and generates
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pressure to use it, regardless of whether it is justified to do so. I am bound to say I do not envisage a circumstance in which it would be appropriate to make use of this sort of power. For one thing, as I also indicated in Committee, the Secretary of State already enjoys the power under the Bill to provide increased protection in the especially sensitive areas for which Clause 2(3) provides.
I argued to the noble Lord, Lord Mishcon, and I do so again here, that there is no reason why such safeguards might not extend to the function of making good protection lost by exemption, say, from the subject access or non-disclosure provisions. If it were ever right to use the power being proposed in the present amendment, then surely those are the very areas in which a Secretary of State might choose to use it.
Moreover, except in regard to data totally exempted from the provisions of the Bill, the registrar will still retain substantial influence in the case of other data. Apart from the area of national security and the limited exemptions for which Clause 31 provides, the registrar will always retain some powers wherever the other exemptions are claimed. There will be nothing to prevent him looking with particular care at data in respect of which, say, subject access exemption has been claimed, in order to ensure that such other principles as still apply in the circumstances of the case are being complied with. He might, for example, decide to examine with particular care a question such as the accuracy of the data or the security procedures being provided. Yet, this amendment would in some way double up that on aspect of registrar oversight. The registrar would pursue his course while the Secretary of State, albeit after consultation with him, would follow what might prove to be quite a different approach to the protection of the data in question.
I do not see from this amendment how that potential conflict can be resolved. Nor do I see how the Secretary of State would see to it that his own regulations were carried into effect. Would he be required to order the registrar to take certain action, which I believe would be a dangerous departure, given the care that we have taken to distance the registrar from the influence of the Secretary of State? Or is there to be some direct sanction applying to data users who fail to comply with the Secretary of State's regulations? The power given to the Secretary of State under Clause 2(3) is to augment the data protection principles, thereby automatically affecting the scope of the registrar's jurisdiction. There is nothing like that in this amendment, so that there is provision neither for the policing of these regulations nor for any sanctions.
I hope that I have said enough to make it clear why I believe such a power to be unnecessary and why I do not believe in any case that it would work. I hope that in so doing I have cast light on the areas of concern which the noble Lord wanted to be further illuminated.
Lord Avebury: My Lords, I shall have to study that reply and come back to the noble Lord the Minister at a later stage. At first sight, I am not happy that the provisions of Clause 2(3) entirely meet the point, because there the Secretary of State is given power to

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modify or supplement the data protection principles in relation to personal data of a very limited kind—if the noble Lord will look at subsection (3)(a) to (d). There could be personal data of many other kinds exempted under Parts II and III of the Bill which the Secretary of State's powers would not touch at all.
The point made by the noble Lord about the registrar also does not satisfy me because the registrar will have no power to order that data exempted under
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Parts II and III will be treated in a particular way. He would not, for example, be able to satisfy the suggestion of the British Medical Association that transfer to exempt systems should be recorded and that after a period of time they should be released. I would prefer to study the Minister's arguments in detail before deciding whether to take this matter any further. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.49 p.m.
Lord Avebury Lord Avebury moved Amendment No. 87:
After Clause 32, insert the following new clause:
("Removal of exemptions
. The Secretary of State may by order remove exemption from personal data exempted by Parts II and III of this Act, or any personal data exempted by an order under section 32(1) above.")
The noble Lord said: Again, my Lords, I agree with my noble friend that one does not want to add needlessly to the powers of the Secretary of State; but here we have a case where the Secretary of State already possesses the power in Section 32(1) to exempt subject access provisions from personal data of certain kinds. This is a reciprocal power to allow the Secretary of State to remove exemptions from personal data under certain circumstances.
For example, if one takes the immigrant intelligence unit computer that we were discussing earlier, the noble Lord the Minister has assured us on several occasions that much of the personal data that is contained there will not be denied personal access, because it will not relate to persons who commit criminal offences and so on. So there may be parts of the files held by data users which would be properly exempted which the Minister would think fit to remove from exemption. I think therefore this is a power that he would like to have. I beg to move.
Lord Elton: My Lords, we are becoming familiar with the suggestion by the noble Lord that the Secretary of State should be given new powers, and on this occasion it appears to be even more far-reaching than on the last. For what is being suggested is that the Secretary of State should by order be able to reverse significant areas of the Bill as decided by Parliament. Those who have been most critical of the exemption provisions in Part IV of the Bill have asserted that these are issues of fundamental importance; we have spent some considerable time on them in your Lordships' House and I have no doubt that they will attract a lot of attention elsewhere in another place. Believing though I do that these provisions are right and necessary, I would be the last to deny the need for Parliament to give them the greatest possible scrutiny. But having said that, it seems to me inappropriate to suggest that those decisions should be made capable of reversal after a less thorough scrutiny than Parliament has given to their original formulation. I acknowledge that the noble Lord's consequential amendments to Clause 36 would subject any attempt to use this order-making power to the most rigorous of the forms of scrutiny available in the case of subordinate legislation—to resolution by both Houses of Parliament—but we do not need to go far back in Hansard to find the noble Lord himself saying that these are far inferior to the scrutiny given in the passage of the Bill.
Governments are the first to be criticised if they attempt to avoid the full rigours of parliamentary examination of proposals by tucking substantial powers away in subordinate legislation, yet here we are being asked to allow that to happen in respect of some very important and sensitive issues—national security and crime prevention to name but two obvious examples. Clause 28(1), for example, permits
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exemption from the subject access provisions where the application of those provisions would be likely to prejudice the prevention or detection of crime. Are we suggesting that it would be right in subordinate legislation to decide that those provisions should apply even though the prevention or detection of crime would thereby be prejudiced?
There is another side to all this, the opposite end of the spectrum, as it were, from the crime and security side. Clause 31 exempts from the provisions of Parts II and III of the Bill in the case of data held for domestic or other limited purposes. I wonder whether it would be right to provide for an order-making power subjecting to the provisions of the Bill data which Parliament after full deliberation had decided should be exempt. Or to take another example—and here I look in the direction of the noble and learned Lord, Lord Elwyn-Jones—to provide an order-making power enabling the exemption from subject access to be removed in the case of data to which a claim of legal professional privilege could be maintained. I think I have said enough to show my concern that what is being proposed here is beyond the limits of what is permissible in subordinate legislation. I do not believe that it would be right to allow for so radical a reversal of what Parliament has decided in these provisions, and I think that is the overriding consideration. I recognise that this is a probing amendment, but those are the reasons for which anything of this sort ought to be resisted.
Lord Avebury: My Lords, I think the noble Lord the Minister is perfectly well aware that I was not envisaging that any future Secretary of State would use this power to remove exemption from the systems that are covered by paragraphs (a), (b) and (c) of Clause 28(1). Coming back again to what has been said on several occasions about the system of immigration control, the Minister is well aware that this has been the subject of widespread criticism, not only within this House but from many organisations of a highly respectable character outside. So it is not beyond the bounds of possibility that some future Secretary of State would very much welcome the power to bring before the House proposals to remove from exemption some of the systems at present covered. But I know that this is not a point that I shall get across to the Minister this evening, so I might as well withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 33 [Reports, information and advice]:
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 88 and 89:
Page 24, line 10, leave out ("and advice")
Page 24, line 12, at end insert ("and may give advice to any person as to any of those matters.")
The noble Lord said: It might be for the convenience of your Lordships if we take Amendments Nos. 88 and 89 together.
Concern was expressed in Committee by a number of noble Lords as to whether the registrar possessed the power, if he wished to use it, to provide advice to any individuals who sought it from him. I argued that the requirement in Clause 33 to disseminate information and advice gave him all he needed, but there were

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those who remained anxious lest he might be precluded from giving advice on an individual basis. I undertook to look again at this point. Having done so, I remain convinced that Clause 33(2) is adequate for the point in question, but I do recognise the force of the concern which has been expressed, and accept that it is desirable to state on the face of the Bill that the registrar can give advice to individuals.
We have repeated on a number of occasions the view that the registrar will, in general, proceed by means of consultation and advice, rather than through the exercise of his formal powers, except as a last resort. But I agree that that advisory role should be spelt out. This is what the proposed amendments to Clause 33(2) are designed to achieve. I beg to move.
Lord Gardiner: My Lords, we are deeply grateful to the Government for the consideration they have given to amendments moved in Committee. We are naturally a little sorry that they have not applied the same arguments to the question whether in the Bill there is any power for the registrar to investigate complaints. Perhaps they would be good enough to look at that before the next stage of the Bill. Meanwhile, we are very grateful for the amendments.
On Question, amendments agreed to.
Clause 35 [Application to government departments and policies]:
Lord Gardiner Lord Gardiner moved Amendment No. 90:
Page 25, line 12, at end insert—
("(6) Subsection (1) above shall not be treated as affecting in any manner the responsibility of any Minister of the Crown for the acts or omissions of any government department.")
The noble and learned Lord said: My Lords, the sole object of this amendment is to obtain information. Your Lordships may or may not remember that at about 3.48 p.m. on the afternoon of 17th February, at col. 346, I rose to ask a question for the simple reason that I wondered what was the answer. The question which I asked, because no one had asked it before, was: in the case of a Government computer like the immigration computer, who is the data user? Would it be the Home Secretary, the Home Office, the Secretary of State, the man in charge of the actual machine or someone I hadn't thought of?
It is right that I should at once make it plain that I asked this question on Clause Stand Part, but the Minister had received no notice of it and, understandably therefore, he was not immediately prepared with the answer. We waited for the usual help to arrive from a known quarter and he then said that he was told his bet should be on the Home Secretary. A little after nine o'clock that evening, at col. 417, the noble Lord, Lord Elton, rose and said that he had now been told that he had lost his money and that the answer was the Home Office.
One or two further questions, I am afraid, arise from that. The first question, of which I have given notice because I thought it might need a little research, is: what are the precedents, if any, for making a Government department a person within the meaning of an
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Act of Parliament? Secondly, does the noble Lord, or do the Government, take the view, or do they not, that, who is the registered data user in the case of a Government computer, is really a question of construction for the courts to decide? One could perhaps take out a construction summons for a declaration, " That on the true construction of the Data Protection Act 1983 the data user in the case of a Government computer is …", because of course it must depend primarily on Clause 1(5) which defines a data user.
The next question that I should like to ask is whether the Government do or do not agree with the view. This is not really a question for the Government to decide at all; it is probably simply a question of construction for the court. But, my Lords, so long as the answer is, " the Home Office ", I think that one or two other questions arise also. The first is: what has happened to the doctrine of ministerial responsibility? I shall be corrected, I am sure, if I am wrong; but, as I have always understood it, it is part of our constitutional doctrine that the Minister who is in charge of a Government department is always responsible for what that department does. If it has done something wrong—he may be not to blame in any way at all; he may know nothing about it—then he has to resign. That is what we call the doctrine of ministerial responsibility. If the answer is that it is the Home Office and not the Home Secretary, then I do respectfully ask: what has happened to the doctrine of ministerial responsibility?
Then I think there is another question, and it is this. If it is the Home Office, what has happened to the doctrine that one cannot criticise civil servants because they cannot answer back? Is this some subtle ploy to make sure that nobody can criticise whatever anybody does about the immigration computer, because it is only the Home Office which is responsible and they are civil servants and they cannot answer back so one cannot criticise them? Therefore, I would also ask: what has happened to the doctrine that one cannot criticise civil servants?
Then, as it seems to me, there is one more question, and it is this. Suppose that in the working of the Act in relation to the immigration computer the Home Secretary is of the opinion that his officials have not been applying the Act rightly and he says to them, "You have been doing A. I have come to the conclusion that you ought to have been doing B, so in future you will have to do B ". Will they be entitled to say—as apparently they frequently do on television but not I think outside television—"No, Minister. We should always regard anything you say with the utmost reverence but you really must get it into your head that this is a matter for us, the Home Office; it is not a matter for you, the Home Secretary. Do you not remember Lord Elton telling the House of Lords? First, he said that it was the Home Secretary but then that was changed and he said that it was the Home Office, and that is us. So without talking about anybody taking a running jump, we must make it plain that this is a matter for us to decide and you have to go away and leave it to us to decide it". Is that right?
10.3 p.m.
Lord Renton: My Lords, I have listened to the noble and learned Lord, Lord Gardiner, with very great interest, as one always does, but especially on this question of ministerial responsibility, a matter about which in our constitution I have had grave doubts for a long time. The doctrine contains, when one tries to think it through, various absurdities.
As the noble and learned Lord has mentioned the Home Office, may I mention the remarkable example of the Home Secretary in relation to the Metropolitan Police. He is responsible to Parliament for everything that the Metropolitan Police do. That is the theory of the matter. But also under our legislation he has no power to tell them how to do it except in certain very wide circumstances which are defined by statute. There is but one example.
This is a huge subject and, with deep respect to the noble and learned Lord, I would very much doubt whether we should attempt to make an exception to it in this particular way. In our constitution, and by its evolution, we have a type of natural instinct for ironing out the absurdities by the way in which we apply it in practice in Parliament. I would have thought that here we are in a considerable difficulty because, if the noble and learned Lord is right, the Government department which is given this obligation would have to be sued as a Government department. Instead of suing the Home Secretary one would have to sue the department. That would be a new constitutional departure as well which, by a sidewind, the noble and learned Lord would be making. I must confess that these thoughts of mine are entirely improvised and inspired only by what I have heard the noble and learned Lord just say.
Lord Glenarthur: My Lords, I feel somewhat self-conscious in view of a barrage of legal expertise such as that both behind me and in front of me. But the noble and learned Lord, Lord Gardiner, raised a number of questions, the first of which was the question of precedents. The noble and learned Lord asked whether there were any precedents for treating a Government department as a person for the purposes of a statute. I have to say that I know of no direct precedent. But that is because we have not hitherto needed to legislate for Government departments in the way that has been required in this Bill. Obviously it was necessary to provide that the personal data held by Government departments and similar bodies should be subject to the Bill. And we were determined to achieve this in the most effective way open to us.
One approach would have been to apply the Bill to the Crown as a whole. That would, of course, have been well-precedented. But the effect would have been that the Crown might have been able to register as a single data user. And transfers of information within Government would not have been revealed on the register because they would not have been between separate entities in the terms of the Bill, but within the one, all-embracing entity—the Crown. That is why Clause 35(1) treats Government departments (as defined in Clause 37) as private persons, requiring them to register separately and to treat exchanges of information between each other as exchanges between separate entities, thus revealing them on the public register and allowing them to be brought within the controls on disclosures in the Bill.
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Our whole approach, therefore, is aimed at treating Government departments so far as possible in the same way as other data users in the private sector are treated. As I have said, the Government are not aware of any precedents for this particular approach, nor are we aware of any direct precedent for the situation we have sought to deal with. There are, however, precedents for not treating the Crown as a seamless whole. For example, under Section 17 of the Crown Proceedings Act, civil proceedings against the Crown are to be instituted against the appropriate Government department, drawn from an authorised list, rather than the Crown, which I think deals with the point raised by my noble friend Lord Renton.
The assumption behind Clause 35(1) is that Government departments will register under the Bill. Indeed, the noble and learned Lord, Lord Gardiner, did, as he said, elicit that information during the Committee stage. If the intention of his amendment is to ensure that Clause 35(1) does not affect the general position as regards the responsibilities and liabilities of Ministers, then the amendment is unnecessary. Clause 35(1) simply makes provision as to how the data protection scheme will apply to departments on the assumption that departments will register. It does not affect the political responsibility of the Ministers in charge of those departments; nor does it reduce their public accountability.
I should also like to allay any doubts about the principle of registering Government departments rather than the Ministers who control them. This does not conflict with the concept of ministerial responsibility. In practical terms the consequences of drafting the Bill so that Ministers rather than departments registered would be minimal. As is the case with Government departments, it would be contrary to constitutional practice to make a Minister criminally liable; criminal proceedings would, therefore, still be a nonsense, and at the end of the day the Bill would still have to rest on the assumption that the Crown will not act in breach of the Crown's own laws. In relation to civil remedies, too, it would seem to make little difference whether the Minister or the department is to be sued, as the cost of any compensation would in any case fall on public funds where the act complained of was done in a public capacity.
Clause 35(1) will in no way affect a Minister's responsibility before Parliament to answer for the actions of his department. Nor will it relieve him of any other personal responsibilities that he may have either in political or legal terms. There is therefore nothing to fear from Clause 35(1). It does not represent an inroad into the responsibility of Ministers. Rather, it is an effective and sensible way of applying the provisions of the Data Protection Bill to Government in a way that treats Government for all practical purposes in the same way as non-governmental data users. I hope that with that explanation the noble and learned Lord will be content and feel able to withdraw his amendment.
Lord Hylton: My Lords, we have seen in the past separate Government departments merged into one as, for instance, in the case of the Department of the Environment from which, I may say, later the Department of Transport was extricated and became

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separate again. Can the noble Lord say what the position is likely to be in the future—I am asking this without any warning at all, I know—if what are now separate entities become merged into a single department? Would the data remain in some way separate or not?
Lord Swinfen: My Lords, what would be the position of companies merging and dividing? A similar point arises.
Lord Glenarthur: My Lords, so far as Lord Hylton's point is concerned, I understand that they would both have to change their registered particulars in the case of a splitting of the departments. My noble friend Lord Swinfen's point I think may also be covered by that answer. I hope it satisfies him.
Lord Gardiner: My Lords, I am grateful to the noble Lord for what he has said. I am not clear from what he said whether or not he is taking the view that the question: who is the registered data user in relation to a Government computer? " is a matter for the construction of the court. Secondly, what happens if there is a difference of opinion between the Minister and the Home Office in the practical working of the Act? Are the Home Office entitled to say to the Minister, " No, Minister, this really is for us. It is not for you." If they cannot say that, what does it mean by saying that it is the Home Office and not the Home Secretary?
Lord Elton: My Lords, if it was me who lost my money, perhaps I ought to reply to the noble and learned Lord. The user is, we envisage under Clause 35, the department. The responsibility and answerability of the Minister shelters civil servants from criticism for all the reasons that the noble and learned Lord gave; but he can direct the whiplash of his tongue, as he is accustomed to, to the Home Secretary or to the other Secretaries of State in other departments. As to differences of opinion between permanent Secretaries and Secretaries of State, to some extent they probably revolve around personalities. But the noble and learned Lord will know from his own experience of Government what the responsibilities are; and they are not changed by this Bill, as I see it, at all.
Lord Gardiner: My Lords. 1 shall consider most carefully what has been said and, if necessary, return to it at Third Reading. I am grateful to the noble Lord and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 36 [Regulations, rules and orders]:
Lord Elwyn-Jones Lord Elwyn-Jones had given notice of his intention to move Amendment No. 91:
Page 25, line 21, after (" Registrar ") insert (" and the Advisory Committee ")
The noble and learned Lord said: My Lords, by a grave misfortune the proposal for an advisory
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committee was not accepted. It has been a kind of Banquo's Ghost, unlike the unicorn, and we have not come to grips with either. But in the circumstances, I shall not move this amendment.
[Amendment No. 91 not moved.]
[Amendments Nos. 92 to 94 not moved.]
10.15 p.m.
Lord Renton Lord Renton moved Amendment No. 94A:
Page 25, line 29, leave out subsections (6) and (7).
The noble Lord said: My Lords, I can deal with this very briefly. Although most of the Bill is well drafted, I hope the Government and draftsman will look again at the drafting of Clause 36(6) and (7). It seems strange to put together two such different matters as,
"Regulations prescribing fees for the purposes of any provision of this Act",
and regulations for the period mentioned in Clause 8(2), which is,
"the period for which an entry is to be retained in pursuance of a renewal application ('the renewal period')".
We find in Clause 36(7) this same juxtaposition. I think it would be more helpful to the ultimate users of the statute, when it becomes one, if those matters could be separated.
I have a further point—it is one which could be made on a number of occasions—which the noble and learned Lord, Lord Simon of Glaisdale, made with great effect recently when it occurred often in another Bill. I refer to the habit, which has descended from the 19th century, of referring to the need for the approval of the Treasury. The Treasury, anyway, have a finger in every pie, and consulting the Treasury is part of the routine process of consultation within Government. It seems otiose to be stating it here and in many other places. I beg to move.
Lord Glenarthur: My Lords, I have listened carefully to my noble friend's explanation of the amendment. It is one of a series in which he is drawing to our attention certain points as to the way the Bill has been drafted or structured. I am only too ready to undertake that we will study carefully what he said and consider the implications. But many of your Lordships will accept, I know, that too much subordinate detail in a Bill tends to obscure its main principles. For this reason, therefore, we have been careful to place such matters in the schedules, or to leave them out of the Bill altogether where they are not needed at all. But when it came to the requirement that statutory instruments concerned with access fees, registration fees and the period of registration should be laid before Parliament after being made, it seemed to us reasonable to place this requirement in the body of the Bill. It is, of course, the frequency of the renewal period which will affect the level of the fee, and hence the link to which my noble friend referred.
As regards subsection (7), again it is important that the main body of the Bill should make it clear that the

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Secretary of State shall be able to make regulations prescribing registration fees only after consultation with the Treasury and the registrar. The Treasury has the responsibility for ensuring that no unnecessary strains are placed on the public purse, and the registrar is the person charged with running the data protection ship, so to speak. As I said at the outset, we will certainly look carefully at what my noble friend said, without giving any cast-iron guarantee that we can necessarily take it all in; and in the light of what I have said I hope he will feel reassured and accept that at least the point he has raised is being looked at.
Lord Renton: My Lords, I am grateful to my noble friend for that explanation and for saying he will look at the matter again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 37 [General Interpretation]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 95:
Page 26, line 7, at end insert—
(" "enactment" includes an enactment passed after this Act;")
The noble Lord said: My Lords, there are a number of provisions in the Bill which deal with the relation between the Data Protection Bill and other enactments. This amendment will eliminate any possible doubt that these references to enactments include future Acts. Obviously it will be open to Parliament to make explicit provision to the contrary in any future Act if that is appropriate; but in the absence of such provision, the courts will have a useful rule of construction when considering the relationship between this Bill once enacted, and any future Act. If this were left in doubt, it might be necessary to make specific provision in any future Act which overlapped with the Bill. Bearing in mind that no conflict would arise unless the information concerned was to be held as personal data in the terms of Clause 1, the need for such provision might not be obvious at the time of enactment, and this would lead to confusion. Obviously it is better that such confusion should be avoided, and all doubt eliminated. I therefore beg to move.
On Question, amendment agreed to.
Clause 38 [commencement and transitional provisions]:
Lord Mishcon Lord Mishcon moved Amendment No. 96:
Page 26, line 36, at end insert—
("( ) After the end of the period mentioned in subsection (1) above, no application for registration shall be made by data users of any category holding personal data for any purpose until the end of a further period of six months after the Secretary of State shall by order have specified that category or that purpose (or both) as requiring registration.")
The noble Lord said: My Lords, at precisely 11.15 p.m. one evening during the Committee stage I moved an amendment in which I asked for mercy for the registrar, and at nearly half-past ten at Report stage I am not at all sure that I ought not to couple your Lordships with the plea for mercy, if you have to listen
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to a long speech from me. The reason for seeking mercy for the registrar on the last occasion arose because it was thought that on Day 1, with his little department, he will be confronted with a whole mass of applications, and it was suggested that for the purpose of administrative sense the registrar ought to be enabled to phase the applications, dealing with the most sensitive ones first. Obviously one realises that, for example, a payroll system which has to be registered might not be of the most essential and immediate character. So the amendment was moved on the basis that the registrar would be able to phase.
The noble Lord, Lord Glenarthur, most courteously dealt with the amendment, and he had two objections to it. The first was that the registrar should not have put on him the onus of fixing priorities. Secondly, if one looked at Clause 7(5) of the Bill, one would find that in any event he had the power to defer applications. We have concentrated upon those two objections, and we have met the first one by imposing the duty upon, or giving the power to, the Secretary of State, and we think that in terms of common sense in administration it ought to be the Secretary of State, not the registrar.
I have looked at Clause 7(5). If your Lordships look at it, you will find the following words:
"If in any case it appears to the Registrar that an application needs more consideration than can be given to it in the period mentioned in subsection (1) … he shall as soon as practicable and in any case before the end of that period notify the applicant in writing to that effect".
I do not think that we ought to invite the registrar to cheat—especially on the very first day when he comes into office—by saying, "Well, I am going to use the powers in Clause 7(5). I haven't even looked at your application. I don't know whether it requires one minute's consideration or 10 months' consideration. But because I can't reach it within the period I am going to use Clause 7(5)". That would not be at all an honest use of Clause 7(5). It is there because if there is a complicated application that will take a considerable time, the registrar is given leave to take a certain period of time over and above the period stipulated in the Bill in order to deal with it.
Bearing in mind that in our view Clause 7(5) is not applicable in these circumstances, we have tried to cover the real burden that will rest on the registrar's department. In order that there should not be chaos something must be done about the phasing provisions. There is nothing in the Bill to deal with the situation, and, as I say, the Secretary of State has now been invited to carry out the duty of phasing. So the registrar will not be deemed to be subjective in dealing with applications. It will be the objective view of the Secretary of State as to which ones he ought to deal with in order of priority. I beg to move.
Lord Glenarthur: My Lords, I have listened carefully to what the noble Lord has said, but I have to say that I have grave doubts as to whether the amendment that he proposes would in fact achieve its purpose. There are two points which I can put briefly. First, there are significant advantages in achieving comprehensive registration at an early stage; and secondly, there is no need for elaborate phasing-in provisions for registration.

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The early establishment of the register will have advantages both domestically and internationally. One of the aims of public registration set out in the White Paper was to increase public awareness of the existence and purpose of computerised personal information systems, and it is obviously desirable that this be achieved quickly. Secondly, the establishment of the register will go a long way towards persuading the United Kingdom's trading partners that we take seriously the need for data protection, and are moving quickly towards the implementation of legislation.
Thus the transitional scheme in Clause 38 has been designed to achieve the early establishment of a comprehensive register while giving data users and computer bureaux a longer period under Clause 38(2) in which to come into compliance with the principles. As we explained in Committee, the Government do not believe that elaborate phasing in arrangements is required for registration. Of course it is accepted that there will be a mass of applications during the initial six months' period and at times it may be impossible for the registrar to give full consideration to all applications within two months of receiving them. Yet Clause 7(5) makes the necessary provision here, by allowing the registrar to indicate to the applicant that he may undertake operations pending full consideration of his application.
Subsection (5) of Clause 7 is not a cheat. It is designed specifically for this purpose as well as for particularly complex applications which could come forward. We believe therefore that what is proposed in Clause 38 is a practical means of achieving comprehensive registration with all the attendant advantages at the earliest possible stage. The amendment, I think, would be nothing but a recipe for delay, certainly for some confusion and, also, I think, for some hardship.
Lord Mishcon: My Lords, I have listened with respect to what the noble Lord the Minister has said. As often is the case, time will see whether he is right or the forecast of some chaos is right. He is one who must accept responsibility at this stage for the administrative sense of the Bill. Therefore, there is no point in my continuing that fight. I have said my little piece and that must be that.
On the point of Clause 7(5), may I remind the noble Lord that I certainly did not say that the clasue was a cheat. The clause is perfectly clear. What I said was that one should not ask the registrar (as the noble Lord the Minister on the last occasion asked him) to use this clause for the purpose merely of deferring an application which he has not even looked at, because his department is swamped.
I am saying, and I said with all sincerity, that if I sent the noble Lord a letter and he told me that he wanted further time in which to consider my letter because of its contents, and, in fact, he had not even looked at it because he was too busy, I would say that that was not a proper way to deal with the matter. In truth, what he ought to say is that he needs further time to look at it, but not that he needs further time for consideration of it because of its complexity—which is what Clause 7(5) goes to.
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If the noble Lord the Minister wants to give that power instead of adopting my amendment, then I respectively suggest that he looks again at Clause 7(5). If he wants to give the registrar that power, let him do it in sheer honesty on the basis that further time is required because of administrative difficulties in dealing with it, not that it requires further consideration; because, in my view, that is a dishonest use of the power contained in Clause 7(5). Having said that, I leave the matter there and ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.29 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 97:
Page 26, line 37, leave out ("two years") and insert ("six months")
The noble Lord said: I think that again I can deal quite shortly with this amendment. At Committee stage, I made a point; and, if I may say so with respect to the noble Lord the Minister, he did not then answer it at all and I do not think that he was seized of it. It may be my fault that I did not make myself clear, although I think, on reading again what I said, that the language was fairly lucid, even if one takes into account the time of the day or night at which I made it.
What it means is this: as the Bill at present stands, even if the registrar finds the most scandalous contraventions of all the data principles in an application that he gets for registration, he can do absolutely nothing about it for two whole years. That is what the Bill says. That is what the clause says and that is what we are faced with. That is the real mischief—but I must not repeat what I said on the last amendment—of insisting that all applications to register must come up on Day 1. If the registration can be phased by categories then the time for users to put their houses in order would be the period before they are called in for registration and, in that case, another period of six months would be ample before the registrar can begin to exercise his powers.
So to some extent what I said on the last amendment is linked to this one; but in view of the Minister's answer to me, with no phasing we are left with the situation that the registrar, as I said, can see the most patent contraventions of principles on an application for registration and, as we have now left the Bill if we do not amend it, we cannot do anything about it for two years. On the person can go, having put in his application for registration, and he can carry on for two whole years without the registrar being able to do anything about it. I beg to move.
Lord Glenarthur: My Lords, I thought I had convinced the noble Lord at Committee with the arguments that I advocated then. However I see I did not quite succeed, so I shall have to repeat them.
I argued then that the two-year transitional period before the registrar's powers became fully effective was absolutely essential if we were not to place substantial cost burdens on the shoulders of data users, both public and private. Users will not know, before the Bill has completed its parliamentary passage, just what is going to be expected of them—particularly so far as

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the provision of subject access is concerned, but also in regard to other data protection principles. Only when the final obligation is clear can they be expected to start making the necessary detailed alterations to their systems and procedures, and the Government have recognised from the start that this may take considerable time in some cases. To allow only six months from the appointed day—and we do not intend to delay the latter any longer than necessary to complete the practical functions that will have to be performed after Royal Assent and before the registrar begins operation—would be to place users under very great difficulties. In some instances that might mean replacing existing equipment early, or making expensive alterations to computer systems, whereas allowing a little more time might enable those changes to be incorporated into the planned replacement of equipment. But this does not mean that the registrar will be without influence during this interim period.
The need to achieve "balance" is something we have mentioned continually during the passage of this Bill: the need to balance the demand for effective data protection at as early a date as possible, against the legitimate demand from users that they should not be placed under undue constraints in achieving this objective. In this matter of the speed of implementation we believe we have the balance just about right, and I hope that, on further reflection, the noble Lord will agree.
Lord Mishcon: My Lords, before the noble Lord sits down, to save the House from being wearied by another speech from me, would he kindly answer the direct question which I put to him? It is this: is it correct or not that under the provisions of the Bill as they now are the registrar can find on an application contravention of every one of the principles set out in the schedule? Is it right that if he finds that he can do nothing as against the user—nothing at all—for a period of two years? If that is right, I ask the Minister to say so, because then we have to revert to this matter on Third Reading. I think many Members of your Lordships' House would be horrified to know it.
Lord Glenarthur: My Lords, with the leave of the House, I can tell the noble Lord that he is correct: that is the case.
Lord Mishcon: My Lords, with a heavy heart and a somewhat light head at this hour, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Renton Lord Renton moved Amendment No. 97A:
Page 27, line 7, leave out subsections (4) and (5).
The noble Lord said: My Lords, I shall not detain your Lordships for long. As we have heard from the discussion on the last two amendments, this is a very, very complicated commencement clause. To my mind, the complexity reaches its climax when we come to consider subsections (4) and (5) and try to find out exactly when it is that the provisions to which they refer will come into operation.
We find that the contravention of data protection principles, which are very important and are
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mentioned in Clause 16(1)(b), will not come into operation until the end of the period mentioned in subsection (2) and that period will not come into operation until the end of two years from the day appointed under subsection (1). So that we have an indeterminate, unspecified period waiting for the Secretary of State to make his appointed order. Then we have to wait for six months and then we have to wait for some time after a further period of two years before we find when the right of access by data subjects to their personal data can be made.
I am not just complaining, as I have done, as my noble and learned friend the Lord Chancellor knows, about the complexity of commencement provisions which parliamentary counsel, on instructions from departments, seem unable to avoid. I am referring to a specific complexity, an indeterminate period, resulting from the way that this is drafted; and what I have said about the right of access by data subject to personal data applies also of course to the contravention of data protection principles. They are both referred to in subsection (4).
As regards subsection (5), I must confess there is not such a strong case for alteration, but I should be grateful if it could be further considered because here we find we are back to the end of the period mentioned in subsection (1). It is not until the end of that period that compensation for inaccuracy can be paid under Section 22. So without more ado, I hope I have drawn attention to this matter, which will cause confusion in the minds of the ultimate readers or users of the statute, so that my noble friend on the Front Bench will say that he will have it further considered.
Lord Glenarthur: My Lords, I rise with some trepidation to deal with this amendment, not only because I am well aware of my noble friend's formidable reputation in matters of this kind but also because, as he rightly says, the matter is complicated. As we have stated on a number of occasions, the Government wish to ensure that the Bill does not impose an undue burden on resources. It is therefore essential that it should make provision to give an adequate time period for data users and computer bureaux to come into compliance with the scheme. This involves the postponement of the application of certain of the obligations imposed and powers conferred by the Bill, and that is what Clause 38 is primarily all about. It would appear right, therefore, that these matters be spelt out on the face of the Bill. The question of when statutory rights and duties apply in this way is, on this occasion at least, surely too fundamental to the effect of the Bill to be left to a schedule.
My noble friend asked particularly about subsections (4) and (5) of Clause 38. Subsection (4) disapplies two provisions of the Bill for a period of two years after the day to be appointed by the Secretary of State under Clause 38(1). First, it disapplies Clause 16(1) (b), which now empowers a circuit judge to issue an entry warrant where he is satisfied that evidence of a contravention of the data protection principle is to be found. Given that the registrar's powers to require compliance with the principles will not apply during the two-year period, it would be wrong for this aspect of the power of entry to apply. Secondly, Clause 38(4)

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disapplies Clause 21 during the two-year period. Clause 21 deals with the right of subject access alongside the seventh data protection priciple. It may take some time for certain users to establish procedures for giving subject access, and to require them to do so unreasonably soon would place an excessive burden on users' resources.
As for Clause 38(5), I think that we will probably discuss this further with Amendment No. 98, so I will, if I may, merely deal with the matter briefly now. Clause 22(3) of the Bill defines the term "accuracy" in such a way that opinions or information received from the subject or a third party are not to be regarded as inaccurate, provided that their status is made clear. The problem for data users is that it would be very expensive, and in some cases impossible, to search through existing records differentiating opinions and received information. Clause 38(5) therefore disapplies the accuracy-related provisions of the Bill during the first six months, to allow users time to make arrangements for data coming to them to be recorded in such a way that their status is indicated. It also disapplies these provisions thereafter, in respect of data shown to have been held by the data user in question since before the end of the initial six-month
When I started. I said that this is a complicated matter. I have it set out in tabular form and I should be delighted to show my noble friend afterwards. That might make more sense. But we will, of course, study carefully my noble friend's remarks when we can read them in the Official Report, and I hope that with that assurance he will be satisfied.
Lord Renton: My Lords, I am grateful to my noble friend. I think that I had better read my own remarks in the Official Report before my noble friend does. But I am not suggesting that important provisions of this kind, which affect the application of the whole of the Bill, should be in a schedule, although, as my noble friend had the temerity to say that he has a schedule, it is very tempting to suggest that the effect of the clause could very well be repeated in the schedule, and that is for consideration. I think it is quite clear from what my noble friend has said that he would like to have further thoughts about the whole of this clause, and, on the assumption that he will do so, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.44 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 98:
Page 27, line 10, leave out from ("above") to end of line 17.
The noble Lord said: My Lords, in the same spirit to which the noble Lord, Lord Renton, gave expression. I hope that, at the very least, the noble Lord the Minister, when my voice fades after this final amendment on Report stage, will do me the courtesy of giving his rapt attention to this amendment and to the words with which I move it. The extraordinary situation, as I see it—and I believe that your Lordships may agree—of Clause 38(5) is that all false or misleading data which are held by the data user before Clause 22 comes into force—that is, six months before
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the appointed day—will enjoy complete immunity in perpetuity from correction. I can think of no conceivable argument for this. Once the Act comes into force, surely data users should bring all their records up to the standard of accuracy which is required. It would be perfectly proper to give them generous time within which to do so; but to say that in perpetuity the records of, say, every single one of your Lordships, including myself, however inaccurate they may be, are not subject to the provisions of the Bill—for correction, or whatever—merely because they are inaccurate at the date when Clause 22 comes into effect, cannot be right.
I have already said that at this late hour there is no point in my plaintively calling for a Division if the noble Lord the Minister does not accept my amendment. All I can possibly do, in sheer common sense, is to ask him to be good enough between now and Third Reading to consider this point very carefully indeed and either accept the amendment or put down an amendment which satisfies him more than this one does. I beg to move.
Lord Mottistone: My Lords. I too, have the same misgivings as the noble Lord, Lord Mishcon, on this point. I hope my noble friend will give careful thought to it with a view to putting it right before the Bill is passed.
Lord Glenarthur: My Lords, we have arrived at another point in the Bill where the balance between the need to protect the data subject and the desire not to impede the sensible use of personal data by data users is particularly difficult. During an earlier amendment we touched on Clause 38(5), and I ought to go into it a little more. It is complex. The effect of Clause 38(5) is to disapply those provisions of the Bill that have the effect of requiring data to be accurate during the initial six-month period after the day to be appointed by the Secretary of State and to disapply them thereafter in respect of data that the user can show have been held since before the end of that period. Clause 38(5) first disapplies Clause 22 which entitles a data subject to apply to the courts for compensation where damaged by the inaccuracy of personal data (and thereby disapplies the similar right in respect of rectification under Clause 24(1)(a), which depends on Clause 22). Secondly, Clause 38(5) provides that the registrar shall treat the provision about accuracy in the fifth principle as inapplicable when exercising his powers—again where what we might call "old" data are concerned.
The need for Clause 38(5) follows from the approach adopted to accuracy under Clause 22(3). That clause recognises that data users cannot be expected to vouch for the substance of personal data which consist of opinions, or of information received from a third party. I may believe that the noble Lord opposite has a brilliant intellect; but if I commit that belief to a computer it cannot be tested for accuracy. Beliefs, opinions, suspicions and the rest are not susceptible to such tests. Equally, if the noble Lord were to tell me that he attended a particular school, or indulges in a particular hobby, I take that on trust. If it turns out he misled me, it is scarcely my fault. Thus. Clause 22(3) provides that the test of accuracy does not

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apply to such data, provided the status of the personal data is indicated. This however creates a difficulty in the case of existing records. I am sure that noble Lords with experience in the use of computers will appreciate the vast resource implications of having to comb through all existing records in order to differentiate opinions and received information so that they can benefit from the provisions of Clause 22(3). And that is why Clause 38(5) in effect disapplies the requirement for accuracy during the initial six-month period, and thereafter in respect of old data; that is, personal data that the data user can demonstrate he already held prior to the end of the initial six-month period.
In the light of this explanation of the function of Clause 38(5), your Lordships will realise that the amendment proposed by the noble Lord, Lord Mishcon, would defeat its main purpose. The amendment would require data users to conduct detailed scrutiny of all existing personal data in order to differentiate opinions and received information, so that they would be in a position to take advantage of the interpretation in Clause 22(3). I have listened carefully and with considerable interest to the arguments put by the noble Lord, Lord Mishcon, and those in support of him put by my noble friend Lord Mottistone. In view of those arguments I am willing to consider this matter further, and with that assurance I hope that the noble Lord will withdraw his amendment.
Lord Mishcon: My Lords, those words were very generous and I want to take advantage of them. In view of the noble Lord's reply, I will merely add that it is an odd situation when such inaccuracies remain in perpetuity. I repeat that, of course, if a generous time were given to the data user, I am sure we would all agree that that was the proper balance. It is an odd situation when something gives a data subject a right if it happens to have been recorded against him and is inaccurate in July 1984 or whenever the date may be; but if by some extraordinary circumstance it happens to have been recorded a few months before that date, he can do nothing about it. It is an extraordinary situation and one that cannot be right.
I am grateful to the noble Lord, Lord Glenarthur, for his undertaking to look at this point again. I am sure that, in view of the seriousness of this matter, his will not be an empty undertaking and that it will have, as he has promised, his very concentrated attention. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Greater London Council (General Powers) (No. 2) Bill
Returned from the Commons with the amendments agreed to.

Lloyds Bowmaker Bill [H.L.]
Reported from the Unopposed Bill Committee with amendments.
House adjourned at seven minutes before eleven o'clock.

  WILDLIFE AND COUNTRYSIDE ACT 1981: DECISIONS TO PROSECUTE
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