Sitting of 29 November 1983

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

    STAFFORDSHIRE BILL [Lords]
    Considered.
    Amendments made: In schedule 5, page 76, lines 21 and 22, leave out ("except section 24").
    In line 33, at end insert ("section 24,")—[The Chairman of Ways and Means.]
    To be read the Third time.

Oral Answers to Questions
  DEFENCE

    Cruise Missiles
    Mr. Allen McKayasked the Secretary of State for Defence what recent representations he has received against the deployment of cruise missiles in the United Kingdom.
    Mr. Gareth Wardellasked the Secretary of State for Defence what recent representations he has received against the deployment of cruise missiles in the United Kingdom.
    Mr. Dykesasked the Secretary of State for Defence if he has been able to assess the public reaction to cruise missiles in the United Kingdom, following their arrival on 14 November.
    Mr. Parryasked the Secretary of State for Defence what recent representations he has received since the siting of cruise missiles in the United Kingdom about their deployment.
    The Secretary of State for Defence (Mr. Michael Heseltine): My Department currently receives about 250 letters a week from Members of Parliament and from members of the public expressing a variety of views about the planned deployment of cruise missiles in this country.
    Mr. McKay: Will the Secretary of State explain the strategy which he said would strengthen our negotiating position with the Russians'? How does he explain the fact that that strategy has driven them away?
    Mr. Heseltine: The hon. Gentleman will appreciate that our negotiations and relationships with the Soviet Union are not to be judged in a matter of days or weeks, but are a longer-term concept. I have no doubt that the essential policy of deterrence, backed by a willingness to negotiate, is the one that will continue to maintain the peace that we have preserved in this country for nearly 40 years.
    Mr. Wardell: In view of the cruise missile's low speed in flight, what military advantage does the Secretary of State see in this weapon?
    Mr. Heseltine: The hon. Gentleman will realise that the concern of the Soviet Union is an indication itself of the military value of these weapons systems. A significant number of weapons systems are to be deployed unless we can reach agreement with the Soviet Union. They are deployed off-base and therefore cannot be destroyed by a first strike, which adds up to a substantial retaliatory capability, in contrast to the deployment of SS20 missiles against which they are specifically directed.
    Mr. Dykes: Does my right hon. Friend agree that the initial hysteria of a sometimes well-meaning minority has been replaced by, and contrasts with, the steadfastness and realism of the majority of British public opinion, which now looks to the Soviets to come back to Geneva in earnest to begin serious negotiations at long last?
    Mr. Heseltine: I am sure my hon. Friend is right, in that the Soviet Union must now realise that it must negotiate with the elected Governments of the Western democracies. There is nothing but enthusiam in the minds of those Governments for the resumption of negotiations at the earliest possible opportunity.
    Mr. Parry: Following the demonstrations outside the House two weeks ago, the Secretary of State is aware of the strong feelings of the general public on the subject. Is he aware of the strong feelings on Merseyside? May I inform him that any plans to bring in missiles through the port of Liverpool will be resisted by the dock workers? Are any missiles to be sited at Buttonwood?
    Mr. Heseltine: I am sure that, on reflection, the hon. Gentleman would not want me to take too much notice of a demonstration of a few hundred people outside the House, particularly when it is contrasted with the large demonstration of support within the House for the Government's policies.
    Mr. Michael McNair-Wilson: Does not the derisory small number of letters that my right hon. Friend is receiving about the deployment of these missiles underline once again the fact that the great bulk of people in this country accept the need for our nation and NATO to be properly defended? May I take this opportunity to congratulate my right hon. Friend on his excellent broadcast this morning, which has done so much to put across the Government's defence policy?
    Mr. Heseltine: I am grateful to my hon. Friend for his kind remarks. There is no greater indication of the true feelings of the British people than the fact that he is the Member of Parliament for Newbury, the chairperson of the CND having been significantly defeated in that context.
    Mr. Mason: Is the right hon. Gentleman aware that what most perturbs the majority of the British people now that cruise missiles are here is the issue of who is really in charge? For example, when American cruise missiles are deployed on British roads, who will be in charge of those convoys? Which officer of the forces involved will be in charge?
    Mr. Heseltine: The right hon. Gentleman is familiar with the arrangements, for he was, if I remember correctly, a distinguished holder of the office that I now hold. If there is a commanding officer in charge of a

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    particular deployment, he will be the officer in command. In the circumstances to which the right hon. Gentleman draws the attention of the House, he would be an American.
    Mr. Nicholls: Does my right hon. Friend agree that the history of the disarmament talks since 1979 shows that the Soviets will not negotiate seriously unless they think they have no choice but to do so? Is it not a fact that it is only because of the antics of the CND and Soviet apologists on the Opposition Benches that the Soviets have walked out of the Geneva talks?
    Mr. Heseltine: My hon. Friend has made an important point. Now that the Soviet Union realises that it has to negotiate with elected Governments, it realises also that it has to make some gesture to appease the views of the protest groups upon which it previously relied. I hope that the Soviet Union will make this a short and temporary gap in the negotiating procedures and that it will recognise, as my hon. Friend suggests, that the only way to secure the sort of arrangements that we want is by positive and helpful negotiation with the Governments of NATO countries.
    Mr. Silkin: Taking up the supplementary question of my hon. Friend the Member for Gower (Mr. Wardell), is it not a fact that General Rogers has never publicly endorsed the deployment of cruise or Pershing; that, on the contrary, he regards them as vulnerable; and that he prefers, and has said so, that there should be a conventional defence of NATO?
    Mr. Heseltine: The right hon. Gentleman must have access to some private views of General Rogers that are not available to me. I sit on the same NATO meetings as General Rogers and he has full access to all the Ministers of the Western Alliance. I have never heard him say anything other than words in support of the decisions that we have taken.

    Defence Expenditure
    Mr. Willie W. Hamiltonasked the Secretary of State for Defence if he will take further steps to supply Parliament with more detailed information on defence expenditure.
    The Minister of State for the Armed Forces (Mr. John Stanley): My Department already publishes a considerable amount of information on defence expenditure, including the annual Estimates, the Appropriation Accounts, and the annual statement and statistics on the defence Estimates, together with various memoranda submitted from time to time to parliamentary Committees. It is also open to individual right hon. and hon. Members to seek additional information on expenditure by the usual parliamentary means, and many indeed do so.
    Mr. Hamilton: When the Minister was drafting that answer, did he have in mind the article that appeared in The Observer of a week or two ago, which set out breathtaking examples of gross incompetence, waste and lack of accountability in the Ministry and instances in which accounts had been deliberately withheld from the Comptroller and Auditor General? It was stated in the article that the original estimate for the naval control centre in the underground bunker at Northwood, west London
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    was about £30 million and that within two years it had increased by 500 per cent. to £168 million? Will the hon. Gentleman confirm, or deny, those figures?
    Mr. Stanley: I cannot give the hon. Gentleman a specific answer to his question on that item of expenditure.
    Mr. Hamilton: Why not?
    Mr. Stanley: I can assure him that there were a great many inaccuracies in the article in The Observer. The Ministry's expenditure is subject to the full accountability and control that exists both within Departments and in the House. It comes within the parliamentary controls of the House that are exercised over individual Government Departments.
    Mr. Robert Atkins: If my hon. Friend is able to publish more details of expenditure within his Department within the next year, will he bear in mind that many people from Lancashire have written to me—they are present today to lobby Members of Parliament—on the importance of including the new fighter aeroplane, the agile combat aircraft? I recognise that the Government, through my right hon. Friend's Ministry, have done all that is necessary so far in waiting on the agreement of the German and Italian Governments, but will he recognise the importance that my constituents attach to the project?
    Mr. Stanley: I am grateful to my hon. Friend for once again representing so vigorously the views of his constituents. I am sure that my hon. Friend the Minister of State for Defence Procurement has noted closely what he has said.
    Mr. Silkin: Will the Minister give us some more detailed information on the cost to the nation of the closure of the naval dockyard at Gibraltar, especially as the Gibraltar workers are now doing their very best to ensure that the dockyard is not closed?
    Mr. Stanley: I do not think that I can add to the many detailed parliamentary statements that have been made on the costs involved in the Gibraltar dockyard.

    Battlefield Nuclear Weapons
    Mr. Fisherasked the Secretary of State for Defence how many battlefield nuclear weapons are deployed by the North Atlantic Treaty Organisation in Europe.
    Mr. Heseltine: NATO currently deploys about 1,100 short-range missile systems and artillery pieces which could be used in the nuclear role although many of these systems also have an important conventional role.
    Mr. Fisher: Does the right hon. Gentleman agree that these battlefield nuclear weapons, of which NATO deploys a great many more than the Warsaw pact, are the least credible of our defence options and the most dangerous in that they are likely to lead to escalation towards a full nuclear war? Will he seek a review of NATO policy on battlefield nuclear weapons?
    Mr. Heseltine: I do not accept that there is the imbalance to which the hon. Gentleman refers. We set out our views in the defence White Paper, which presents the broad balance in this context. It is in the INF range that we feel the imbalance is tipped heavily in favour of the Soviet Union. I welcome the opportunity to respond to the hon. Gentleman's suggestion of a review, which he will

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    appreciate we have recently carried out. As a result, we have decided to withdraw warheads—largely in this class of weapons system—so that in the next few years we shall have the lowest number of warheads deployed in Europe for 20 years.
    Mr. McNamara: Does the right hon. Gentleman agree that, even allowing for the withdrawals that he has announced, we shall still have a substantial number of artillery nuclear pieces within easy accessability of a Russian thrust? On the basis of "use them or lose them", there is an increasing temptation for a battlefield commander to use these pieces. Would it not be better to follow Lord Carver's advice and withdraw all these artillery nuclear pieces from the battlefield zone?
    Mr. Heseltine: It is interesting that the hon. Gentleman has this new-found vision of how to create a NATO deterrence. I am only surprised that he was so happy to support the last Labour Government, who had no such views about these short-range nuclear weapons. The Government's view is that we maintain the very deterrence which the Labour Government relied upon by maintaining deterrence at every level, and that is what we intend to do.

    Western Europe
    Mr. Leightonasked the Secretary of State for Defence if he will make a statement on the North Atlantic Treaty Organisation's policy for conventional defence in western Europe.
    Mr. Heseltine: NATO policy is to keep the peace by effective deterrence. To do that the Alliance needs to maintain sufficient forces, both conventional and nuclear, to convince a potential enemy that he could not hope to gain from an attack. The United Kingdom continues to make a substantial contribution to the conventional forces of NATO and thus to maintaining the credibility of the Alliance's strategy of flexible response and forward defence.
    Mr. Leighton: As the Secretary of State has hinted, we spend a great deal of money on BAOR. If NATO is serious about a credible conventional defence, why does it not fortify the West German border? I was told recently by a group of German Members of Parliament that that is not done because they do not want a conventional war fought on their soil and would want to go nuclear at once.
    Mr. Heseltine: That is another example of the newfound vision of the Opposition. I do not know what the hon. Gentleman has in mind, but it could be a "Maginot line" across the central front, or something like that. The idea that we do not take all steps that are appropriate to create a conventional strength on the central front makes no sense. In this direction we are broadly continuing the policies of the last Labour Government, which reinforces my view that there is little controversy between the parties on this issue.
    Mr. Nicholas Winterton: Does my right hon. Friend agree that maritime surveillance and submarine detection are important parts of the conventional role of NATO? Will he therefore give consideration to his Department—or, if necessary, another Department—assisting in reopening the Nimrod line of British Aerospace? As a nation we need more Nimrods, and other countries outside NATO, such as those in Southern Africa, could well do
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    with these aircraft. That would be helpful to NATO. It would be of great benefit to it and would guard us against the encroachment of the Soviet Union throughout the world.
    Mr. Heseltine: The decision about the Nimrod line must be a matter for the company's commercial judgment. I support my hon. Friend's general views in favour of the Government's decision on a maritime commitment of the Royal Navy. This matter was fully discussed in the House yesterday, and my only regret was the absence of virtually every Opposition right hon. and hon. Member.
    Mr. Cartwright: Given the obvious pressures on the defence budget, how does the Secretary of State plan to improve conventional capability, since it involves a use of expensive new technologies, on top of meeting the cost of fortress Falklands and the Trident programme?
    Mr. Heseltine: The cost of the Falklands policy was added to the Government's defence commitment. We have committed ourselves to a target of 3 per cent. of the NATO Alliance budget to 1985–86, and we have made provision within that target for the Trident programme.
    Miss Fookes: How do we propose to counter the Soviet Union's large store of chemical offensive weapons?
    Mr. Heseltine: This is one of the most difficult questions facing the Governments of the NATO Alliance. It is the counter to the suggestion that, in some way, a one-sided gesture of disarmament by the West influences the Soviet Union. This country made a one-sided gesture of disarmament on chemical and biological weapons, and the Soviet Union's response was to increase its capability and train its troops in the use of those weapons.
    Mr. Denzil Davies: It is clear from the Secretary of State's answer that his mind is as closed and sterile on this issue as on the issue of cruise missiles. Does he realise that during the past few years substantial changes have taken place in the nuclear escalation and that NATO's policy of flexible response, as Mr. McNamara, Field Marshal Carver and others have recognised, is based on the philosophy and principle of using nuclear weapons first? Does he realise that the sooner NATO moves away from that policy the safer we will be?
    Mr. Heseltine: The right hon. Gentleman should realise that I have not changed my mind, because the policies that I have supported have worked. The right hon. Gentleman's difficulty is that the policies that he supported worked, but he has changed his mind.

    British Army of the Rhine
    Mr. Proctorasked the Secretary of State for Defence if he will give the cost in each of the last two years of the British Army of the Rhine.
    Mr. Stanley: As stated in table 2.2 in volume 2 of the "Statement on the Defence Estimates 1983", the cost of the British Army of the Rhine was estimated to be some £1,302 million in 1981–82 and £1,512 million in 1982–83. These figures are at the Estimates prices for the years concerned.
    Mr. Proctor: In view of the large expenditure on the British Army of the Rhine, will my hon. Friend ascertain whether, in the short term, the German Government are prepared to pay an increased contribution to the costs of

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    BAOR? In the long term, given that there is pressure on the defence budget, will my hon. Friend look carefully at the reasons and arguments for the continuation of BAOR?
    Mr. Stanley: The last Labour Government agreed that the previous offset arrangements would come to an end, and this occurred in 1980.
    We regard the defence of West Germany and the whole of the central front as being indivisible from the defence of the United Kingdom. The Government's firm policy is to maintain our existing commitment to the 55,000 troops in BAOR. If those forces were brought back to this country, a high proportion of the cost to which I referred would still be incurred, because a large amount is represented by, for example, the pay of and the fuel used by those forces.
    Mr. Allan Roberts: Does the Minister accept that the vast majority of the British people who support Britain having nuclear weapons do so in the belief that those weapons will deter an invasion of Europe by conventional forces and, therefore, will lessen the need for the use of BAOR? Is much of this expenditure wasted? Does the Minister agree that any conventional war in Europe in which BAOR would be involved would inevitably escalate into a nuclear conflict?
    Mr. Stanley: It is fundamental to the whole posture of NATO's deterrent policy that we deter at the nuclear and the conventional level, since both are equally essential.

    Normandy (Anniversary Ceremonies)
    Mr. Hannamasked the Secretary of State for Defence what representations he has received requesting the use of Her Majesty's ships for the carrying of Normandy veterans to the 40 year anniversary ceremonies in France in June 1984; and if he will make a statement.
    Mr. Stanley: We have received two representations from hon. Members, including that from my hon. Friend.
    Because of the operational commitments of Royal Navy ships it seems likely that few, if any, will be made available for this purpose. However, I understand that a number of commercial operators are arranging tours of the Normandy landing areas next June.
    Mr. Hannam: I thank my hon. Friend for his efforts to try to obtain transportation for our Normandy veterans. Will he clarify the position on the use of the existing American and Canadian navy ships, because there is a strong impression among many of the Normandy veterans in the west country that the Canadians and the Americans are making their ships available for the passage of their veterans?
    Mr. Stanley: Following my hon. Friend's inquiries, the Government have made inquiries of those Governments, and I understand that the United States Government are not providing service transport. I understand that no decision has yet been made by the Canadian Government, and that any transport will be by way of spare seats on their normal trooping flights, which will take people to Germany and not to Normandy. I shall look into the position further, because I understand my hon. Friend's concern.
    Mr. Nicholas Winterton: In this connection will my hon. Friend pay attention to the needs of war widows? Will he seek to influence those commercial organisations
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    that arrange for ships to go to Normandy to give special consideration to war widows whose menfolk died in that most famous of invasions, which led to the end of the second world war and to the constitution of democracy and freedom in the Western world?
    Mr. Stanley: I hope that those who arrange these tours will consider the widows of service men as well as the veterans.
    Mr. Churchill: Will my hon. Friend endeavour to give this matter further consideration, in consultation with his colleagues? Does he agree that it would be a nice and appropriate gesture if the British Government were to make available one or possibly two Royal Navy vessels? There must be a few of these vessels left in home waters by next summer which might convey not only British Normandy veterans but Americans and Canadians who might travel to this country under their own steam.
    Mr. Stanley: I assure my hon. Friend that there are plenty of Royal Navy vessels in home waters. As I said to my hon. Friend the Member for Exeter (Mr. Hannam), I shall consider the matter further.

    Afghanistan
    Mr. John Townendasked the Secretary of State for Defence if he will make a statement as to whether any military assistance is being given to the anti-Government forces in Afghanistan.
    Mr. Heseltine: It is clear from the continuing resistance activities in Afghanistan that arms are getting through to the freedom fighters.
    Mr. Townend: Does my right hon. Friend accept that we in the West should be prepared to supply the arms required by the Afghans in their fight against Russian tyranny and domination, just as the Russians were prepared to provide arms to the Vietnamese in their fight for Communism? Will he discuss with his allies ways of ensuring that the Afghans can obtain surface-to-air missiles to defend themselves against the Russian helicopters which are causing such a large loss of life?
    Mr. Heseltine: The whole House will sympathise with the Afghans' desperate endeavours to defend themselves against foreign invasion, but I do not believe that it is appropriate for a Secretary of State to be drawn into the details of the matter.
    Mr. Amery: I appreciate that there might be practical reasons why Britain cannot supply equipment to the Afghan resistance movement, but is my right hon. Friend aware that there is a strong feeling that we should give every possible support to these freedom fighters? Will he make it clear that although we may not be doing so, there is no reason in principle why we should not?
    Mr. Heseltine: I know my right hon. Friend's concern in this matter, and I share his judgment about the wide support for the freedom fighters.
    Mr. Denzil Davies: The Secretary of State has not answered the question. Are the Government providing military assistance to the anti-Government forces in Afghanistan?
    Mr. Heseltine: The right hon. Gentleman will have heard what I said in reply to the first supplementary question. It is not appropriate for the Secretary of State to be drawn into a discussion of these matters in the House.

    Departmental Expenditure
    Mr. Kirkwoodasked the Secretary of State for Defence whether he is satisfied with the efficacy of established procedures to scrutinise the control of spending in the departments under his control.
    Mr. Heseltine: Like other Government Departments, the Ministry of Defence has well established arrangements for the internal audit of all systems of financial control and regular reports are made to the accounting officers. The arrangements have been strengthened by the creation of the post of director general of management audit, whose organisation provides independent appraisals of the efficiency with which resources are used. The Ministry is now embarked on a major programme of improvements to financial management, including MINIS—the management information system for ministers and top management—and the extension of accountable management through a system of responsibility budgets for line managers.
    Mr. Kirkwood: Returning to the important supplementary question asked by the hon. Member for Fife, Central (Mr. Hamilton), does the Secretary of State accept that if the allegations in The Observer of 13 November are correct and there is waste, inefficiency and vast overspending it is time for an urgent and public independent efficiency audit of every penny spent by the Department?
    Mr. Heseltine: Given the volume of comment always made about all Government Departments, it would not be appropriate to react in that way. Nevertheless, as I said in relation to earlier questions, I take these things seriously and I shall satisfy myself about all the points raised before letting the matter drop.
    Mr. Latham: Have the established procedures properly costed the so-called savings from the closure of the Gibraltar dockyard, amounting to about one third of the cost of a new ship? Is my right hon. Friend aware that many of us believe that there will be no savings at all?
    Mr. Heseltine: I believe that these matters were carefully considered when the decision was taken. We concluded that rationalisation would save money and manpower and concentrate the work to be undertaken on behalf of the Royal Navy in British shipyards.
    Mr. Douglas: Will the Secretary of State be more forthcoming about the MINIS system, especially in relation to the dockyards? Will he give us an idea of the loading of the yards and an assurance about the continued employment of the personnel there?
    Mr. Heseltine: The object of the MINIS system is to provide the maximum possible opportunity for informed discussion among Ministers, senior officials and those responsible for running public sector organisations. The House will be familiar with the system, as full details were made available in relation to the Department of the Environment.

    Cruise Missiles
    Mr. Flanneryasked the Secretary of State for Defence how many cruise missiles have now arrived in the United Kingdom.
    Mr. Heseltine: I am not prepared to discuss specific details of equipment delivered to RAF Greenham common. I have, however, made it clear that the first missiles were delivered to the base on 14 November, that the first flight of 16 missiles is planned to achieve initial operational capability by the end of the year, and that NATO deployments are due to be completed over a five-year period.
    Mr. Flannery: Why is the Minister not prepared to discuss something that is virtually known already? Is it not a fact that 572 missiles are to be distributed in Europe, of which we shall have 160 or so? Will the Minister agree with me—[HON. MEMBERS: "No".] Despite the public school hooligans who are interrupting, does the Minister agree that many millions of people throughout the world are deeply concerned and afraid that an accident could now precipitate us all into a nuclear war? Is it not time that we stopped glaring across the abyss and came together at the conference table by making some kind of promise to the Soviet Union that we are prepared to scale down our arms if it will do the same?
    Mr. Heseltine: The hon. Gentleman will welcome my statement earlier today about the extent to which we are reducing the number of nuclear warheads in NATO deployment to the lowest for 20 years. That is what he asks me to do. My problem is that the Soviet Union has made no response whatever.
    Mr. Leigh: Given the public interest in the installation of cruise missiles, what does my right hon. Friend think will be the public reaction to the showing of the American film, "The Day After"?
    Mr. Heseltine: I am grateful to my hon. Friend for raising this matter. I have not had the opportunity to see the film, but I shall make it my business to do so. I believe that the public will regard the horrendous portrayal of the power of nuclear weapons in that film—[Interruption.] I have read all the reviews, which have been widely presented. I believe that the public will take the view that the NATO deterrence policy is the most likely policy to ensure that such a holocaust never takes place. I hope that the public will realise that the devastation portrayed in the film takes place in America as a result of a Soviet nuclear weapon. The public should also be fully aware that the film will never be shown in the Soviet Union.
    Mr. Strang: Is it intended to deploy the cruise missiles based at Greenham common throughout the countryside for training purposes?
    Mr. Heseltine: Certainly there is an argument for doing that. I shall consider the timing and the justification for such deployment in the fullness of time.
    Mr. Key: I am sure my right hon. Friend agrees that the deployment of cruise is a serious matter, but will he reassure CND members in the Salisbury area that their telephones are not being tapped? In view of the important intelligence-gathered in a Salisbury pub at the weekend, will he also reassure CND members in that area that the large hole being dug outside RAF Chilmark is, in fact, a septic tank?
    Mr. Heseltine: I am afraid that my hon. Friend has revealed a yawning gap in my own intelligence-gathering system. I have no knowledge of those events.
    Mr. Haynes: Now that the Government have received their nuclear toy from the United States, bearing in mind that it will require equipment and spares, why does the Minister of State constantly duck the questions that I put to him regularly about such spares and equipment being kept at various Ministry locations, particularly in Nottinghamshire? If they are not to be stored in Nottinghamshire, why has security at the Chilwell base been stepped up to an unprecedented extent?
    Mr. Heseltine: As the hon. Gentleman will be fully aware, we do not provide details of military dispositions of the kind that could be advantageous to our opponents.
    Mr. Denzil Davies: In an earlier answer the Secretary of State said that the missiles could not be destroyed when they were off-base. Does he agree that although that may be true in the wastes of Nebraska or Utah it is not true when they are stuck in a traffic jam on the M4 of holed up in a bunker on some unfortunate golf course in the south of England? Does he further agree that the weapons are not merely militarily useless in Britain but, because they cannot be deployed without being detected, could lead to a first strike on this country?
    Mr. Heseltine: It is interesting to know that the right hon. Gentleman contemplates the possibility of the Soviet Union indulging in a first strike. A more detailed investigation will make it clear to him that there would be no purpose in such a first strike against this or any other NATO country, because the retaliatory capability of the West is such that the Soviet Union could never gain from such a ridiculous action.
    Sir William van Straubenzeeasked the Secretary of State for Defence whether cruise missiles are yet operational in the United Kingdom; and whether he will make a statement.
    Mr. Heseltine: NATO's plans provide for an initial operational capability to be achieved at RAF Greenham common by the end of 1983. Preparations to that end are continuing.
    Sir William van Straubenzee: I understand that my right hon. Friend cannot give details, but does he agree that if we had taken the same firm stand in similar circumstances before the second world war the dates 1939–45 would never have appeared on our war memorials and the generation of which I am part would never have spent five years in war and post-war service? Does he appreciate that the signs are now far better for meaningful negotiations towards the end for which we must all hope—controlled, supervised and mutual disarmament?
    Mr. Heseltine: I have no doubt at all that it is because of the essential experience and wisdom of my hon. Friend's question that the overwhelming majority of British people believe the arguments that he puts forward. I cannot help but be struck by the remarkable similarity between the naive arguments of the peace protest movement in the 1930s and the arguments used today.
    Mr. Norman Atkinson: With regard to public opinion, is it not true that this morning, in connection with the programme on which the Secretary of State was answering questions, the telephone exchange was jammed
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    in an unprecendeted manner by callers who wished to put hostile questions to the right hon. Gentleman? Is it not correct to say that none of the Soviet Union's intermediate weapons are targeted on the United States, except some new weapons beyond Vladivostok, but that all of NATO's intermediate weapons—cruise and Pershing—are targeted on the Soviet Union? Does that not answer the question about public opinion in the United States as against public opinion in this country and our hostility to cruise and Pershing weapons?
    Mr. Heseltine: It is about as difficult to try to guess what thousands of unanswered telephone calls are about as it is to anticipate the lurch in Labour party policy on defence matters.
    Mr. Andrew MacKay: Is my right hon. Friend aware that the great majority of people in Berkshire understand the need for the installation of cruise missiles at Greenham common, but that they are less happy at having to fund the cost of the policing of the base and the protection of what is a national deterrent?
    Mr. Heseltine: My hon. Friend raises a most important issue. I know that my right hon. and learned Friend the Home Secretary is aware of the deep public feeling on this matter. I very much hope, now that the Soviets have walked out of the Geneva negotiations and that it is apparent that we shall have to continue with the deployment policy of NATO's twin-track decision, that those who were unable to achieve a mandate in the election will stop frustrating the wishes of the elected majority of the country in this matter.
    Mr. Silkin: A moment ago the Secretary of State said that the Russians would not mount a first strike against cruise—[Interruption.] I thought that the right hon. Gentleman said that they would be silly to do so because of the nuclear power of the Western allies, who would inevitably retaliate and destroy the Soviet Union. In the light of that remark, what use is cruise militarily anyway? Is it not a political connivance by the President of the United States, agreed to in a servile manner by the right hon. Gentleman?
    Mr. Heseltine: The right hon. Gentleman cannot write history in this way. He knows full well that his Government were deeply involved in the process leading up to the decisions of NATO. He knows full well that every other NATO ally of the Labour Government went along with this decision. He knows full well that his party did not oppose it when this Government took the decision, and he knows full well that the concept of deterrence involves deterrence at every level, and that means an effective counter to the SS20s.
    Mr. Silkin rose——
    The Speaker: Order. We must move on.

    Youth Training Scheme
    Mr. Colin Shepherdasked the Secretary of State for Defence how many young people he is presently training under the auspicies of the youth training scheme.
    The Under-Secretary of State for Defence Procurement (Mr. John Lee): At the present time there are 212 trainees serving in the armed services youth training scheme and a further 120 trainees serving in mode

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    A and mode B civilian industrial schemes in defence establishments in the United Kingdom. In addition, there are a further 500 trainees in the "special" scheme in BAOR for the dependents of United Kingdom personnel serving in Germany.
    A further 600–700 places in industrial schemes should become available to offer to school leavers by Easter 1984 and, in view of the recent agreement by the Council of Civil Service Unions to non-industrial schemes, we hope to expand our numbers further during 1984 with training places in offices, computer centres and so on.
    Mr. Shepherd: Does my hon. Friend agree that the present take-up of the uniformed services youth training scheme is very much less than that for which initial allowance was made? Bearing in mind the highly enthusiastic response of participants and trainers within existing schemes, especially in the Royal Air Force at Hereford, will the right hon. Gentleman take further steps to ensure that young people are aware of this first-class opportunity to acquire a trade, participate in a fine service and possibly start a magnificent career?
    Mr. Lee: My hon. Friend is quite correct in saying that the scheme nationally has not been taken up as substantially as we would have wished, although it has been a great success at RAF Hereford. We intend to continue making leaflets available in careers offices and jobcentres. Advertising has been tried but, regrettably, it has not been especially successful. We hope that word-of-mouth recommendations from those who have been on the schemes will increasingly encourage others to participate.

  PRIME MINISTER

    Engagements
    Mr. Hanleyasked the Prime Minister if she will list her official engagements for 29 November.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I have been asked to reply.
    My right hon. Friend is attending the Commonwealth Heads of Government meeting in New Delhi.
    Mr. Hanley: Will my right hon. Friend find time today, if he is speaking to the CND, to the Leader of the Opposition or to any other believer in unilateral disarmament, to say that we have had unilateral disarmament in the whole range of chemical weapons and that Russia's only response has been further to increase its stock of chemical weapons? Will that be exactly what Russia will do in response to our unilateral nuclear disarmament?
    Mr. Biffen: I think that my hon. Friend makes a very fair point. I am certain that much the most productive policy in respect of nuclear arms reduction is that such affairs should be balanced and verifiable.
    Mr. Kinnock: We all know that the matter raised by the hon. Member for Richmond and Barnes (Mr. Hanley) is something over which the Government have totally surrendered control. I wish to raise a question over which they could have some control. We understand that the Government are refusing to intercede in the current printing dispute. In view of the fact that their legislation, above all other matters, is the major cause of the nature
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    and scale of the dispute, can the right hon. Gentleman say whether such complacency and inactivity are really in the national interest?
    Mr. Biffen: The right hon. Gentleman should not be too dismissive about the role that this country may have in influencing nuclear affairs. It is in the nature of our authority that we have to secure it largely through influencing the alliances to which we belong. If the right hon. Gentleman is so insular as to repudiate that view, it augurs ill for the future of our country under any future Labour Government.
    The right hon. Gentleman also referred to the current dispute involving the National Graphical Association. He will realise that as this is a matter which is not only before the courts but is a matter in which the powers of conciliation are being sought, I do not intend to say anything which might prejudice that, not least because there is a private notice question to follow, when the matter can be much more adequately dealt with by the responsible Secretary of State. I will say that any attempt to imply that the law has exacerbated the dispute is merely an unwillingness to recognise that all industrial disputes have proceeded within a framework of law. What has happened is that the law has been re-cast to provide a much more equitable framework for these matters.
    Mr. Kinnock: I do not think that the Government, are insular—supine and useless, yes, in these international affairs. They demonstrated as much, not only with the complex business of nuclear arms but with the relatively simple business of a Commonwealth country in the eastern Caribbean, and in many other parts of the world. As to the law, even if the right hon. Gentleman does not understand that the legislation, and litigation following it, forbids effective negotiation and conciliation, which is the only way to resolve industrial disputes, he ought at least to recognise that the Government should not have been so silly as to introduce the industrial relations legislation in the first place. Will the right hon. Gentleman answer the question in the name of the national interest? What will the Government do to bring these parties together and resolve this dispute?
    Mr. Biffen: Reasonable agencies of conciliation are available to both parties. The right hon. Gentleman appears to want to wish upon the Government a reversion to the old-fashioned technique of beer and sandwiches, which has no advantage in these circumstances. The whole House understands only too well the difficulty in which the right hon. Gentleman finds himself. He is embarrassed by the bully-boy tactics being used in the dispute.
    Mr. Tim Smithasked the Prime Minister if she will list her offical engagements for Tuesday 29 November.
    Mr. Biffen: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Smith: Does my right hon. Friend agree that the most significant constitutional change during the last Parliament was the creation of departmentally related Select Committees? Is it not, therefore, a cause for concern that after five months of this Parliament those Committees have yet to be reconstituted? Will my right hon. Friend arrange for the motions on the Order Paper to be debated and the matter disposed of in that way?
    Mr. Biffen: I share my hon. Friend's wish that the Select Committees should be established as soon as possible. He will know that the matter lies with the Committee of Selection, whose proposed motions have twice been objected to. I understand that the matter is being further considered, and I hope that proposals can be put forward that will command the general support of the House. I shall, of course, be responsive to any request from my hon. Friend the Member for Gedling (Sir P. Holland) to provide time for a debate.
    Mr. Steel: Will the Leader of the House confirm that nothing in our industrial relations law prevents the parties in the NGA dispute from going to arbitration? Has not the employer offered to do so, and also offered to abide by any decision?
    Will the right hon. Gentleman further confirm that all hon. Members have an obligation to uphold the rule of law and that that includes the leader of the Opposition, who should repudiate those members of his party who wish to join in mass intimidation?
    Mr. Biffen: I am more than delighted to confirm both points raised by the right hon. Gentleman.
    Mr. Higgins: Is it not a disgrace that there has been so much delay in setting up the Select Committees? Will my right hon. Friend ensure that, if necessary, time is provided this week so that the Committees can get on with their work?
    Will my right hon. Friend consider whether steps should be taken to make mandatory the establishment of such Committees within a month of the start of a new Parliament?
    Mr. Biffen: I shall be happy to consider my right hon. Friend's second point. On his first point, it would be better if the Committees could be established without resort to a debate. We shall have to see how the matter proceeds.
    Mr. J. Enoch Powell: When the Prime Minister comes home, will the right hon. Gentleman represent to her that there are other ways in which nine days of her time could be better used than in drafting futile communiqués in India?
    Mr. Biffen: It might be impertinent of me to make such a representation, but I shall certainly draw the attention of my right hon. Friend the Prime Minister to the right hon. Gentleman's remarks.
    Mr. Aitken: Is my right hon. Friend aware that the difficult NGA dispute may have been made immeasurably more difficult this afternoon by the extraordinary comments of the Leader of the Opposition, who appeared to be giving comfort to the £700-a-week NGA strikers, who are opposing the law through illegal methods?
    Mr. Biffen: There are certain circumstances in which a degree of reticence in this Chamber does not come amiss, and I would have thought that today was one of those occasions. I cannot believe that any responsible hon. Member would wish to support actions that were clearly in defiance of the law. The rule of law is designed to protect the weakest members of society. Once those who think that they have corporate clout disregard the law, it augers ill for us all.
    Mr. Leighton: But has not the employer in the dispute reneged on agreements for a second time? Does the Leader of the House accept that ill-judged legislation is not
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    necessarily the best way to resolve industrial relations problems? Does he further accept that misconceived laws that cannot work, and cannot be enforced, bring the law into disrepute, and that that is a serious matter?
    Mr. Biffen: I do not accept that this is ill-judged law. Even if it were, I would be happy to unite with what was said by the deputy leader of the Labour party, that
    "Those of us who believe the law to be wrong have to change it rather than break it."
    I would like to hear those remarks echoed again and again on the Opposition Benches.

    Woolwich
    Mr. Cartwrightasked the Prime Minister if she will pay an official visit to Woolwich.
    Mr. Biffen: I have been asked to reply.
    My right hon. Friend has at present no plans to do so.
    Mr. Cartwright: Is the right hon. Gentleman aware that up to half of my constituents now depend on housing benefit to help with rent and rate bills, and that the largest single group of claimants is retired people with modest occupational pensions? As they are just the sort of prudent and thrifty people who figure so prominently in Conservative propaganda, how does the right hon. Gentleman justify cutting housing benefit by up to £4·50 a week?
    Mr. Biffen: The hon. Gentleman would be the first to admit that that characteristic is not unique to his constituency. Housing benefit is now paid on such a massive scale that all hon. Members could make his claim. The question is whether the benefit should be tailored to help those most in need. The Government believe that the modest changes in housing benefit will achieve that.
    Mr. Dubs: Is the right hon. Gentleman aware that for many years it has been an established tradition that Members of Parliament can visit the military and naval establishments in the Woolwich area? Why are not similar facilities available to those of us who wish to visit Greenham common?
    Mr. Biffen: I was not aware that the hon. Gentleman had the same close constituency links with Greenham common as he has with military facilities south of the river. However, I shall look into the matter.

    Nuclear Weapons
    Mr. Norman Atkinsonasked the Prime Minister what is the statistical basis for the claim in her speech at the Guildhall on 15 November that the United States now had one-third fewer nuclear weapons than in 1967 and that the total explosive power of all United States nuclear weapons was currently only 25 per cent. of what it was in 1960.
    Mr. Biffen: I have been asked to reply.
    The figures have been set out in various United States Government documents, including Mr. Weinberger's annual report to the Congress for 1984.
    Mr. Atkinson: Is it not true that, in the light of the accords agreed in 1972 in Moscow and in 1974 in Vladivostok between President Ford and Mr. Brezhnev, the Prime Minister made an absolutely absurd statement at the Guildhall? If we ignore completely all the

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    intermediate weapons that have been deployed since 1967 and consider only the intercontinental ballistic missiles, is it not true that the number of warheads has doubled and the megaton explosive power has increased by an untold amount? Should not the Prime Minister confront honesty for a change and correct the statement that she made for propaganda purposes at the Guildhall?
    Mr. Biffen: As the burden of the hon. Gentleman's remarks is that the Prime Minister is drawing unfairly on the evidence made available in Mr. Weinberger's report, the best action I can take is to ensure that the report is placed in the Library.

    Engagements
    Dr. McDonaldasked the Prime Minister if she will list her official engagements for 29 November.
    Mr. Biffen: I have been asked to reply.
    I refer the hon. Member to the reply that I gave some moments ago.
    Dr. McDonald: Is the right hon. Gentleman aware that figures soon to be published by the Health and Safety Executive show a rise in factory and construction work deaths during the past two years? Despite that fact, are not the Government planning to cut the staff of the Health and Safety Executive? What will the right hon Gentleman do about that?
    Mr. Biffen: I do not believe that the position is as the hon. Lady states. However, I shall refer the matter to my right hon. Friend the Secretary of State for Employment. He is briefing me at my elbow, which is why I throw scepticism with some confidence.
    Mr. Latham: Will my right hon. Friend confirm that industrial relations legislation is an area of the law on which the Government have overwhelming and recent electoral support?
    Mr. Biffen: Absolutely. It is also an area in which the public will want to see who will stand up and say that the law shall be obeyed—whether it be the Leader of the Opposition or anyone else—and who will stay silent.
    Mr. Nellist: Does the Lord Privy Seal agree that the biased nature of the courts and the Acts of Parliament that the Conservatives have introduced, when used in the printers' dispute in Warrington demonstrate that the Government's aim is to emasculate the power of trade unions to defend their members? How does he answer the charge of hypocrisy in relation to the closed shops operated by doctors, solicitors and lawyers when he deals with questions relating to printers in the NGA?
    Mr. Biffen: I do not accept that the courts are partial in this area.

National Graphical Association (Dispute)
3.30 pm
Mr. John Smith (by private notice) asked the Secretary of State for Employment to make a statement on the National Graphical Association dispute.
The Secretary of State for Employment (Mr. Tom King): Before reporting on the current situation of the dispute between the Stockport Messenger Group and the National Graphical Association about the establishment of closed shop arrangements at the firm's subsidiaries at Warrington and Bury, I should advise the House of the further developments that have occurred since I spoke in the House last Wednesday in connection with the High Court actions. The court on Friday imposed a further £100,000 fine, following the failure of the National Graphical Association to pay the fine of £50,000 previously imposed and to obey the injunction to refrain from organising unlawful industrial action.
The court also ordered the sequestration of the union's assets. Later the same day, the union appealed to the Court of Appeal for a stay of the High Court's orders, pending a substantive appeal against the orders which is due to be heard tomorrow.
I understand that the Court of Appeal asked the union for an undertaking that it would pay the fines. No such undertaking was given and the Court of Appeal accordingly refused to stay the orders of the High Court but did limit the sequestration to £175,000. I understand that the commissioners have now secured this amount.
I also advised the House last Wednesday that the Advisory, Conciliation and Arbitration Service was seeking to arrange a further meeting between the parties to resolve the dispute. Following certain preliminary discussions over successive days, a meeting took place between the parties under the chairmanship of ACAS on Sunday in Manchester, and a further one took place yesterday. Regrettably, agreement did not prove possible.
Nevertheless, ACAS continued until late last night and again this morning to explore whether an acceptable basis could be found for a further meeting today.
The union made it clear that it was willing to travel to Manchester for a meeting with Mr. Shah and his fellow directors. Mr. Shah confirmed his willingness to attend provided that he could have assurance that the mass picketing threatened for Warrington this evening did not occur. The union was not able to give such an assurance. I much regret, therefore, that it now seems clear that it will not be possible for a meeting to take place today.
I confirm that ACAS will continue the efforts that it has been making throughout the dispute to find an agreed solution, but it is clearly not helped by the further threats of mass picketing which have been made. Mass picketing has no place in industrial relations in Britain. Moreover, in this dispute, mass picketing has already been determined by the courts to be unlawful and it is now positively frustrating the chance of a settlement.
Mr. Smith: Is the Secretary of State aware that a local dispute which was essentially about the reinstatement of six workers has been escalated into a serious national dispute because of the effects of using the Government's employment legislation? Is it not a serious fault of that
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legislation that a legal process is set in motion which, at each turn, makes conciliation more difficult? Has the Secretary of State read the article which appeared in yesterday's Financial Times which said:
"It is a weakness that springs from the enhanced power of management to use the ordinary courts of law, not with a view to producing a settlement of an industrial dispute, but to bring a trade union to heel"?
Would it not be appropriate for the Secretary of State to note that the threat of more legal action also inhibits useful discussions? Would it not be appropriate for the Secretary of State, in the national interest, to make a special appeal to both parties to have further discussions at his instance? As his legislation signally fails to recognise the national interest, will he make up for that defect by replacing it with a personal initiative, which the Opposition would support?
Mr. King: The right hon. and learned Gentleman said that the dispute is essentially about reinstatement. In fact, it originated in the union's desire to enforce a closed shop in two plants that were not closed shops. The dismissal of the six workers was a consequence of a dispute which originated in a different way. It is important to remember that.
When the right hon. and learned Gentleman invited me, as he did yesterday on "The World at One", to ensure that the good offices of ACAS would be available, he spoke, I believe him to have said, with the full authority of the Leader of the Opposition. He will now be aware that, while he was inviting me to do that, such talks were taking place. As I have already made clear, ACAS has been closely involved. That is its proper role.
It will be a matter of great regret to many right hon. and hon. Members that the right hon. and learned Gentleman asked a private notice question and responded to my reply without explaining his attitude to the intimidation and obstruction that will occur as a result of the NGA's invitation to mass picketing at the Warrington plant. Will he respond on behalf of the Opposition—I hope with the full authority of the Leader of the Opposition—and endorse the statement of his right hon. Friend the deputy Leader of the Opposition, who said that industrial disputes have to be conducted without violence and within the law?
Mr. Smith: Is the Secretary of State aware that the Opposition have repeatedly made it clear that we deplore violence in all circumstances? Is he also aware that we have made it clear that, if the Government expected unbalanced, divisive and discriminatory legislation to be accepted without difficulty, they must have had a curious notion of how that legislation would be applied to industrial disputes in the real worlds.
Is the Secretary of State aware that, although it is clear that the courts' decisions must be obeyed, it is worth bearing it in mind that the decisions which emanate from discriminatory legislation are, not surprisingly, seen as stacking the cards on one side? Should he not now conciliate rather than score political points?
Mr. King: Perhaps I might tell the right hon. and learned Gentleman and the House something of which he and the House were not aware yesterday. Yesterday, ACAS was trying to achieve a settlement, as it had been throughout the weekend. It is with the agreement of the House that that role is properly discharged by its independent service, not by Ministers intervening.
I listened carefully to what the right hon. and learned Gentleman said about what he called observance of the

765
law. Will he confirm that industrial disputes should be conducted without violence and within the law? Would such a statement be made with the full authority of the Leader of the Opposition?
Several Hon. Members rose——
Mr. Speaker: Order. I remind the House that a private notice question is an extension of Question Time. I propose to allow questions on this statement until 3.50 pm.
Mr. Fergus Montgomery: Will my right hon. Friend take this opportunity to tell the hotheads in the Labour party and the NGA that the way to change legislation is through the ballot box and not through violence and intimidation? There are already two busloads of people in the Warrington area. Would my right hon. Friend reiterate that the employers offered a binding arbitration and that this was refused by the union? That should be underlined, because the Opposition are apparently not prepared to accept that fact.
Is my right hon. Friend aware that the dispute occurred because the union was trying to force other members of the firm to join a union against their wishes? Will he ask the Opposition to use their influence with the union to have the illegal picketing withdrawn, and then perhaps an agreement can be reached?
Mr. King: I do not wish today to discuss the individual merits of the dispute, although I believe—it is common knowledge in the press—that an offer of binding arbitration was put forward by Mr. Shah. I am anxious that this dispute should be settled. I hope that the settlement will take place within the law. I also hope that before we finish these exchanges a clear and unequivocal statement will be made on behalf of the Opposition that they believe in the rule of law, that they deplore violent and intimidatory picketing, and that the rule of law is recognised by all hon. Members.
Mr. Robert Litherland: Will the Secretary of State tell Conservative Back Benchers that the violence is not corning from the NGA pickets but that it is caused by the Government's legislation? Is it not about time that they repealed the Act and, in the short term, took an initiative in this matter? To send the matter to arbitration would be to give the blacklegs, the parasites and the scabs a say in it. No trade union in its right mind would accept that.
Mr. King: As the hon. Gentleman will know, mass picketing has never been accepted by any Government of whatever party, and when it involves intimidation or obstruction it is a criminal offence. I should have thought that, with his Manchester connections, the hon. Gentleman would be anxious to discourage the problems that are bound to arise for the workers at the plant, the pickets and the police.
Mr. Tony Favell: Would the Minister remind Labour Members that the legislation which covers secondary picketing was passed in the 1980 Act? That Act has already been tested at the ballot box and was given the people's overwhelming approval at the last general election.
I have spoken to employees of the Stockport Messenger this afternoon. They are my constituents. They tell me that they have an overwhelming desire to have the dispute settled, but they will not give way to the bullying which
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has been going on. Up to a thousand pickets are now converging on Warrington to picket a plant where there are never more than 10 employees at any one time.
Mr. King: Such mass picketing, as the code on picketing made clear, only exacerbates disputes and sours relations not only between management and employees but between the pickets and their fellow employees. If people wonder why this problem has arisen, and other problems that are difficult to solve, that is where the answer may lie.
As my hon. Friend confirmed, it is absolutely clear that, as the requirements of the law relate only to picketing at or near the place of work, the type of picketing in question—as has already been determined by the court—is unlawful.
Mr. Doug Hoyle: Does the Minister accept that an agreement was reached with. Mr. Shah on the question of the closed shop and that he reneged on it. Does that not make Mr. Shah a devious person to deal with? In the light of this experience, does the Minister agree that the courts have no role to play in industrial relations? Will he now act like a statesman and bring the two parties together under his auspices in order to reach an agreement and bring this damaging dispute to an end?
Mr. King: I do not think that he hon. Gentleman's remarks are helpful. He should be seeking to find a way to end this damaging dispute.
It is difficult to see how I could bring the parties together when one of the parties finds it difficult to leave his plant. His workers are facing the threat of thousands of pickets outside, and it is understandable that he therefore finds it extremely difficult to leave the plant. Far from being helpful, the mass picketing is positively impeding the settlement of the dispute.
Sir Kenneth Lewis: Does my right hon. Friend agree that the mass picketing would have taken place anyway, whether or not the Government had passed the legislation, as it did before the legislation existed? The only difference is that the Government have made mass picketing illegal, as the people wished and the union has no right to use it.
Mr. King: It has always been illegal to obstruct the highway or to intimidate people when going to their place of work. I am glad to have the endorsement of the chairman of the Labour party on this point, because he appeared to suggest that there was a call in the Labour party to support the union in encouraging breaches of the law. I am referring to encouraging and paying people to come from other parts of the country to support the pickets. [Interruption.] The hon. Member says that that is untrue, but I have the evidence here from one branch offering funds to union members to come from other parts of the country to support the pickets at Warrington.
Mr. Martin J. O'Neill: This dispute is clearly a product of the unworkable legislation and the untrustworthiness of the employer who has reneged repeatedly on undertakings, and has frustrated conciliation.
Mr. King: The hon. Member has a connection with the printing industry. He may have worked in it, as I did for a number of years. We both know that mass picketing by

767
people unconnected with the firm has never been part of proper British industrial relations and is extremely damaging, not least to the trade unions themselves.
Mr. Ian Wrigglesworth: Some people are seeking to use this dispute as a battering ram to defeat by unconstitutional means the legislation to take the matter before the courts. My right hon. and hon. Friends and I deplore the action being taken outside the law and strongly support the comment by the deputy leader of the Labour party that the NGA should obey the law.
Mr. King: It would be encouraging if the hon. Gentleman's forthright condemnation were echoed by other Members on the Opposition Benches. There is no great enthusiasm from some right hon. and hon. Members on the Opposition Front Bench to rise to their feet. The House will draw its own conclusions from that.
Mr. Richard Hickmet: Does the Secretary of State accept that the present dispute has nothing to do with employment legislation but is an example of the anarchy presently ruling in Fleet street? What is the future for Fleet street when members of the NGA are apparently currently earning up to £700 a week and new machinery cannot be introduced?
Mr. King: I should not like to speculate on the future of Fleet street, but it will be plain to anyone that the actions of certain workers in walking out and striking, as they did, cannot improve Fleet street's prospects and can only serve to damage their prospects and those of other workers in Fleet street.
Mr. Ron Leighton: The House will know that I am a member of Sogat '82. Will the Secretary of State confirm that the substance of this dispute is the re-employment of six men? Will he further confirm that after Mr. Shah reneged on his first agreement, as the Secretary of State said, further negotiations took place last Sunday when Mr. Dubbins spent the whole day with the company and Mr. Shah agreed to set up a separate
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enterprise to re-employ those six men? Since then Mr. Shah has reneged again. In those circumstances, does the Secretary of State agree that, instead of wheeling out judges who hand out fines of £50,000, £100,000, £250,000 and £10 million, it would be far better for him to use his offices of conciliation to seek the re-employment of those six men and settle this dispute?
Mr. King: May I start by correcting what the hon. Gentleman said? It is a fallacy to say that this dispute originated in and is about the reinstatement of six men. It is about the establishment of closed shops at the Warrington and Bury plants. The workers at Stockport were subsequently called out by their union at another plant in support of the action in the two other plants. That is how the dispute originated. The question of reinstatement arose when those six employees went on strike and were subsequently dismissed. The origin of this dispute is the establishment of closed shops in the two other plants.
Possible ways of resolving this matter have been discussed. ACAS representatives have been actively involved in trying to find some way of resolving it. One of the ideas was the one mentioned by the hon. Gentleman. There is not the slightest prospect of such ideas being carried forward towards the settlement that must be achieved unless there can be a meeting of the people involved. That meeting will not be possible if one of the parties to the meeting is barricaded in his plant by thousands of people demonstrating.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. I wonder whether, if you have time during the course of the day, you will be able to carry out research into the number of occasions that the House has been discussing a Bill when Ministers have argued that the law is the law and must be obeyed and such laws subsequently have been dropped by the Government? You might find that in 1971 the Government were arguing that the law was the law but that before we had reached the end of that Parliament they had dropped the legislation.
Mr. Speaker: It might be an interesting piece of research, but I do not think that it is a matter for me.

People's Right to Fuel
3.53 pm
Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to stop disconnections of domestic fuel supply in cases of hardship and to help eliminate fuel poverty; and for connected purposes.
Last year I introduced a similar Bill, but, unfortunately, it went no further than First Reading because the Government would grant no time for further progress. I feel justified in trying to introduce a Bill this year because the number of domestic fuel disconnections seems to be increasing rather than decreasing. In the 12 months to 30 September 1983, the number of domestic electricity disconnections in Britain was about 100,000. The corresponding figure for gas supply disconnections was nearly 30,000. Those figures are higher than the corresponding figures for last year. They are a national scandal and show an aggregate of human misery for many families. It shows that the existing code for disconnections is not working.
The Policy Studies Institute recently produced evidence to show that over 90 per cent. of the cases of fuel disconnections come within the special categories specifically mentioned in the code of practice—people on supplementary benefit, family income supplement, and unemployment benefit, and old-age pensioners, the blind, the sick, the disabled and families with children under the age of 11 years. When such people are being deprived of a day-to-day necessity, there is something wrong with the system.
I recently had a constituency case of a single parent with a young baby whose electricity was cut off when she was out of the house. She returned to discover that an electricity board official had entered the house without her permission, and perhaps even without a warrant, because I do not know and she does not know. She was left without the electricity supply that she needed for heating, cooking and lighting.
Only yesterday the National Association of Citizens Advice Bureaux produced a report entitled "Poverty in Paying for Fuel" based on 200 cases which had been submitted to it by citizens advice bureaux throughout the country. Some of them are similar to cases that I have come across. There is an old age pensioner, for example, with a gas debt of £160. A gas board official broke into the house while the pensioner was out, possibly without a warrant, and disconnected the supply. Another case cited is of a family with two children aged two and five years. One of the children suffered from acute arthritis. That family's electricity supply was disconnected. In March this year two cases of threatened disconnections were reported to the association when it was not the consumer's debt; the landlord had incurred the debt. There were young children in both those families.
The purely voluntary code of practice is inadequate. People need statutory protection. One of the aims of my Bill is to make the code of practice statutory rather than voluntary. The boards would require a court order before any disconnection could be implemented. After all, no landlord can evict a tenant without a court order, and surely the same should apply to disconnections by the publicly owned fuel boards.
My Bill would also provide for early statutory liaison before a problem reaches the stage of threatened
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disconnection so that the appropriate advice may be given not just by the board but possibly by the DHSS and social work authorities and arrangements made to pay the debt by instalments instead of allowing it to build up to some unpayable amount.
I also propose an extension of the fuel direct scheme so that it will no longer be open solely to certain families in receipt of supplementary benefit but to anyone in receipt of DHSS benefits who wishes to participate in the scheme. There should be an extension of the opportunity to have a prepayment meter installed. If a person wants to have a prepayment meter, he should have a statutory right to it, unless it can be shown that for reasons of safety or security it would be against his interests or those of the public to install a meter.
Above all, I wish to tackle fuel poverty, which is the root of the problem, the main causes of which are low incomes and the massive price increases that have been levied by the nationalised fuel boards over recent years. I believe that recently there has been a Cabinet decision to increase the price of fuel still further. Since the Tory Government came to power in May 1979, electricity prices have increased by 82 per cent. and gas prices by 112 per cent. The Government claim that they believe in free market forces and that they do not want to intervene to reduce prices, but they are intervening to increase the prices of the nationalised fuel boards, even when the fuel boards do not want to levy those increases because they are making massive profits—like the British Gas Corporation's £660 million last year.
My Bill proposes a price freeze for at least 12 months on gas and electricity prices, and a comprehensive system of fuel allowances. At present, someone who is receiving supplementary benefit may qualify for an additional fuel allowance, but in most cases that amounts to the miserable sum of £2·05 a week. One cannot buy even half a bag of coal with that amount of money. Such a sum will not go far towards heating a house with either gas or electricity. I propose a comprehensive system of fuel allowances to help those in need; and, to obviate any requirement for yet another means test, I propose that it be linked to the existing housing benefit. We could also use it to eradicate the anomalies that have occurred since the introduction of housing benefit, whereby some people, particularly the old in sheltered housing, are getting even less assistance under the housing benefit scheme than they had under the previous scheme.
The exact amount of fuel allowance in each case will depend on the financial and domestic circumstances of the applicant and upon the climate of the area in which that person lives. Recently, Age Concern reported that the cost of heating a house in central Scotland is 28 per cent. more than in the south of England. Yet, the risk of being disconnected is more than three times greater in Scotland than in the south of England. The reason for that is the higher fuel bills because of the higher heating costs in central Scotland and also the draconian attitude of the South of Scotland Electricity Board, which may be amending its policy slightly but not nearly enough. There has been a slight improvement in the number of disconnections that it makes since I raised this matter last year. But we should continue parliamentary pressure on the SSEB, and on all the electricity boards, to try to reduce the number of disconnections to a minimum, if not to stop them altogether.

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So far, this winter has been mild, even in Scotland, but we do not know for how long that will continue. It is possible, indeed probable, that in the weeks that lie ahead many people, particularly families with young children and the elderly, will face the risk of hypothermia. Many may even face the risk of literally freezing to death. We know from official statisitics that the number of elderly persons who die in the winter months is 48,000 more than the number who die in the summer months. Those disturbing statistics speak for themselves, and demonstrate the need for my Bill.
My Bill aims to be a charter to eliminate fuel poverty and to stop the unnecessary disconnections which cause misery, hardship and health risk to countless thousands of families. Therefore, I ask the House to support my Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Dennis Canavan, Mr. William McKelvey, Mr. Ernie Ross, Mr. Kevin Barron, Mr. Gavin Strang, Mr. Robert Parry, Mr. David Winnick, Mr. Dave Nellist, Mr. Bob Clay, Mr. Tam Dalyell, Mr. Allen McKay and Mr. Dennis Skinner.

People's Right to Fuel
  PEOPLE'S RIGHT TO FUEL
  Mr. Dennis Canavan accordingly presented a Bill to stop disconnections of domestic fuel supply in cases of hardship and to help eliminate fuel poverty; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 9 December and to be printed. [Bill 64.]

Scottish Economy
4.5 pm
The Secretary of State for Scotland (Mr. George Younger): I beg to move,
That this House welcomes the remarkable progress made in restructuring and strengthening the Scottish economy through the emergence of innovative new firms, the attraction of high technology investment, the growth of financial and business services, the seizing of the industrial opportunities afforded by North Sea oil, and the modernisation of traditional industries, thus equipping Scottish industry to compete more effectively in home and overseas markets; and the major initiatives by the Government in improving the training system so that all unemployed may take full advantage of these new opportunities.
Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
Mr. Younger: This is the first occasion on which I have had any opportunity, in debate at any rate, to congratulate the hon. Member for Glasgow, Garscadden (Mr. Dewar) on taking on his new responsibilities on the Opposition Front Bench. I have no doubt that we shall have many fierce arguments, but within the limits of what is possible through the usual channels I am sure that we can organise Scottish business in a way that finds acceptability. Whether Scotland will take quite such a view, or will feel that it is getting a somewhat restricted choice in the matter by either a Younger or a Dewar, I am not sure. In any case, I welcome the hon. Gentleman and his team.
The hon. Gentleman will not have to do his job alone, I understand, as he has help coming. The Glasgow Herald on Friday reported that splendid and outspoken lady Helen Liddell announcing that she would take the Scottish Labour party back to class, and would teach them. I am not quite sure what the teaching would be, but its objective was said to be to bring the Scottish Labour party into the latter years of the 20th century. If she succeeds, she will get a warm welcome from those of us who have been in the 20th century for quite a long time.
The motion is an optimistic one, and deliberately so. The picture of the Scottish economy that is often painted is becoming out of date. Too many prophets of doom predict Scotland as nothing but a depressed area, in the grip of industrial decline, with a population quite incapable of seizing the initiative and starting up businesses on its own. This is not a true or realistic description of the Scottish economy today. When the House considers the true facts, even the most gloomy of commentators will be forced to acknowledge the progress that Scotland has made towards establishing itself on a sounder economic base. It has been doing so through the worst international recession that any of us can remember.
We begin from the premise that unemployment is undeniably a major problem. It is of great concern to all of us in the House, but it in no way diminishes our concern to say that we need to be realistic about it. There can be no quick or easy solution, as indeed every other industrial country is discovering. From the very outset we have put the view that a sustainable reduction in Scottish unemployment would require not only a sound national economy, but a patient, long-term effort to widen and strengthen the very heart of our economy. Towards this end we introduced over the life of the last Parliament a whole battery of measures, all of which are influencing, and will continue to influence in positive ways, our

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economic well-being. That we are already seeing results from these efforts will become much clearer in the course of this debate.
Let us consider what it means to say that a country has a sound economic base. A nation's economic base can be described as that particular mix of activities from which its income and wealth are generated. The more suited that structure is to the requirements of the modern industrial world, the more effective it will be in providing an acceptable and growing standard of living for that country's inhabitants.
The economic base of a country is not a static thing. As hon. Members know, the pace of technological advance is more rapid than ever, international competition is fierce, and consumer tastes and habits are changing fast. To be successful in these circumstances, therefore, an economy must above all be adaptable. It must undergo a continual process of restructuring to take advantage of the new opportunities arising in a dynamic situation.
To do this, an economy needs several resources. The basic industrial mix must be right with due representation from both manufacturing and the service sectors. Entrepreneurial flair is also needed. So, too, is a skilled and adaptable work force. The back-up of sound financial institutions is vital and, of course, there must be the right background to the economy as a whole.
Mr. John Maxton rose——
Mr. Younger: I must press on for the moment.
Let us consider how far Scotland's economy matches up to those criteria. First, there is our industrial mix. The prophets of doom that I mentioned earlier still look back to the days when Scotland led the world in heavy engineering, steel, and shipbuilding. I fully acknowledge that last century these industries were at the heart of the economy, but it is many years now since that has been so. Not just recently, but throughout much of this century, employment in those industries has been in decline. We cannot, therefore, rely on looking back to the past. Instead, I want to highlight the extent to which many of our traditional industries have succeeded in keeping pace with the times. I want to refer also to the way in which new sources of employment have grown, quite naturally, to take the place of others which have declined.
I will start with North sea oil. That is a perfect example of the relationship between adaptability and economic opportunity. North sea oil and gas are currently responsible for providing directly and indirectly some 100,000 jobs in Scotland. Many of those jobs are in quite new activities directly concerned with extraction of the oil, but many have arisen in our more traditional sectors which have adapted to meet the challenge of supplying an entirely new type of industry. For example, the Wood Group in Aberdeen has greatly expanded its engineering interests with the advent of oil development. The Wimpey Construction Company has expanded from mainly house and office building to construction on the scale required at Sullom Voe and Nigg. Seaforth Maritime, a major supplier of offshore services, started as a tug company; and Aberdeen airport has become the second busiest airport in the United Kingdom, after Heathrow.
Mr. Gordon Wilson rose——
Mr. Younger: I shall give way in a moment. Another piece of welcome news in this context is that Herreema's Lewis offshore yard at Amish Point has won
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only this week an order for the Esmond field, and that is expected to provide work for the 340 workers well into next year.
Mr. Wilson: I accept that certain parts of the country have done very well out of oil developments directly related to production, exploration and development, but will the Secretary of State admit that for the greater part of Scotland, including those areas where the population is congested, there have been virtually no industrial benefits, and that for Scotland as a nation the greatest benefit would be to have a share of the £9 billion that will go into the Treasury this year?
Mr. Younger: I do not agree with either of the hon. Gentleman's statements. It is not true to say that North sea oil benefits are concentrated in the north-east. There are many of them elsewhere in Scotland. Secondly, the hon. Gentleman said that Scotland expected to get a more that proportionate share of oil revenues. That is precisely what it gets now. Under every heading of public expenditure, almost bar none, Scotland gets more per head than any other part of the United Kingdom. I thought that the hon. Gentleman knew that.
The measures announced in the last Budget were designed to encourage the continued development of the North sea, and there has been a welcome response by the oil industry, with renewed interest in the United Kingdom continental shelf.
Mr. Dick Douglas: Does the right hon. Gentleman concede that in the Government's economic thinking there is a great deal of reliance on the stability of oil prices? What view does he take on the matter?
Mr. Younger: The hon. Gentleman is quite right. Violent fluctuations in oil prices, either upwards or downwards, create great problems for all economies. As for the view that I take, my right hon. friend the Secretary of State for Energy said in the House only last week at Question Time that it was difficult to predict the course of events with our prices, but that at the moment they were reasonably stable. I go no further than that.
We shall come to growth sectors later, and they are important, but there has been a welcome response by the oil industry, with renewed interest in the United Kingdom continental shelf. A number of new developments have already been announced, and other potential developments are under review. For example, in July, the line connecting the Northern Leg fields to the Brent system became operational. The development of North Alwyn will use links to the Frigg system, and there are now plans for a line from Fulmar to St. Fergus. That, I think, is the answer to those who thought that when the gas gathering pipeline was abandoned nothing further would happen. Clearly much is happening, and the people who thought that were wrong.
Next I shall mention banking, insurance and the finance sector.
Mr. George Foulkes rose——
Mr. Tam Dalyell rose——
Mr. Younger: There is a richness of choice here.
Mr. Speaker: Perhaps the Secretary of State will make a decision.
Mr. Younger: I think that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) was first.
Mr. Foulkes: I am grateful to the Secretary of State. Before he leaves the subject of oil, is he aware of the statement that was made at the Ayr chamber of commerce by Gerry Frew, the director of ALERT the local enterprise trust, when he said that property speculators in Ayrshire are holding on to empty property and jeopardising any industrial recovery because they are waiting for an oil boom? Is he aware that Mr. Ewen McHarg, the chairman of the Ayr chamber of commerce, said that the cause is that no fixed date has been given for the granting of licences in the Clyde for oil exploration? Will the right hon. Gentleman therefore tell us when there is to be an announcement about oil exploration in the Clyde, because the uncertainty affects the right hon. Gentleman's constituency as well as mine?
Mr. Younger: I would never take the view that something affecting the region of Ayr should be excluded from a debate of this nature. I have been trying for some months to persuade people in the west of Scotland who have been led to expect a tremendous new boom in oil development that we are at a very early stage in the exploration process. At the moment there is no evidence of any substantial finds in the area. I therefore hope that people will not have inflated expectations which may or may not prove to be true. Perhaps we should pursue this matter later, because other hon. Gentlemen wish to speak and I agreed to give way to the hon. Member for Linlithgow (Mr. Dalyell).
Mr. Dalyell: With my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), I spent the morning at the General Council of British Shipping, which confirmed something which for some time has bothered a number of us who have constituencies on the North sea, and it is the advantage that the Norwegians are getting from their tax regime. When serious people such as the chairman of Shell tankers say that the Norwegians tax regime is allowing them advantages which do not accrue to British nationals, I wonder whether the Scottish Office, along with Treasury and Trade Ministers, would at least undertake to examine this complex issue.
Mr. Younger: We in the Scottish Office always do our best to follow up any cases of unfair practices, discrimination or discriminatory measures. No doubt the hon. Gentleman will take up the matter with the Treasury, and I, too, shall take it up with my Treasury colleagues to see whether something can be done.
I shall briefly mention banking, insurance and the financial sector. It now directly employs some 90,000 people in Scotland, and Scotland is the only major financial centre in the United Kingdom, outside London. That is most important for the future development of the Scottish economy, because it provides one of the resources that I said was necessary for a sound economic base—the back-up of sound financial institutions, with the resources and management expertise that they provide.
Tourism is another sector which is playing an increasing part in bringing prosperity to Scotland. Last year, tourist expenditure earned a record £760 million and about 50,000 full-time equivalent jobs are either directly or indirectly associated with this spending.
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But alongside each of those new growth sectors certain of our traditional manufacturing industries are sustaining their presence in Scotland, despite generally difficult world trading conditions. The Borders knitwear industry, for example, has combined the able marketing of well designed, high quality products with the rapid implementation of new technology and production to achieve significant sales at home, and particularly abroad. In engineering, recent orders have included £6 million worth of contracts for ball valves to be manufactured by the Cameron Iron Works at Livingston for plants in Algeria, Norway and Russia.
Already this year British Aerospace has won a total of £10 million worth of export orders for the USA and Australia and, indeed, only yesterday a further £11 million order for six aircraft was announced. Scotland is also selling paper-making machinery to Pakistan, scarves to the Soviet Union and coaches to Hong Kong. These are only a few of the major exports contracts achieved in 1983 by Scottish companies that are clearly competitive in world markets.
But perhaps the most exciting industrial renaissance for Scotland has come from the growth of high technology industry. The real potential of this sector lies in the productivity growth of which it is capable. The output of the electronics industry, for example, has more than doubled since 1975 and has increased by two fifths between 1979 and 1982.
I am somewhat surprised that efforts are being made in certain quarters to deny even the success of our electronics industry. We are all aware of and delighted to note the major investments in Scotland which have taken place in this sector in recent years. The latest signs are that employment in electronics has increased over the past two years and, on the conventional definition of the industry, is likely to be over 40,000. Today's high technology jobs cannot be compared with the jobs in electromechanical engineering which they have supplanted. Electronics is not only a growth industry in its own right, but provides the technology from which other sectors can benefit. Our financial sector and the exploration of North sea oil would not have advanced so successfully without the ready adoption of so much sophisticated modern technology.
The electronics industry has also been notable for the opportunities it has given to indigenous Scottish companies. I have in mind such names as Fortronic, Prestwick Circuits, the largest producer of quality printed circuit boards in the country, Future Technology Systems which produces multi-purpose business machines and many others. But Scottish skills and the research facilities of our universities have also attracted many companies from abroad. The presence of such major international companies as Marconi Instruments, IBM, National Semi-Conductor, Digital and Motorola, which only last month announced a further £22 million expansion project at East Kilbride, is important in supplying employment opportunities and in creating a climate which provides further encouragement for indigenous manufacturers.
Mr. James Hamilton: With all these success stories which the right hon. Gentleman lays claim to have made, will he verify that Terex, in my constituency, is now in the hands of the receiver and that if this factory fails it will mean the loss of a further 1,015 jobs? Is he aware that in the earth removing equipment section there is no work at all and that applies also to

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Caterpillar, in my constituency? The right hon. Gentleman must know that in Lanarkshire, which has 20·4 per cent. of the insurable population unemployed, there is no success at all. If there is a factory other than Motorola, can he tell us about it?
Mr. Younger: I very much share the concern of the hon. Member for Motherwell, North (Mr. Hamilton) about Terex. It is obviously a matter of very great importance. I have already been in touch with the liquidator to make it clear that if there is any help we can give in restructuring the company in the recovery programme, if such can be put together, the Scottish Office is ready to give such help.
Health care and biotechnology are also industries of the future. Our health care industry has been growing recently at 15 per cent. a year and companies such as Ethicon are in the forefront of supplying materials for the most advanced forms of medical treatment.
It is vital that Scotland should take full advantage of the opportunities that these new technologies offer and I regard the forceful and disproportionately successful response of Scottish entrepreneurs, as can be seen from the announcement made last Friday, to the exciting possibilities we have opened up in cable television as evidence that this lesson is being learnt. The Government are fully committed to creating the conditions in which this can happen. I can only briefly allude here to the measures we have already taken, but in any case they are familiar to most hon. Members. We have introduced numerous measures to help small businesses to start up and expand and have made a wide range of schemes available throughout the country to assist industry in applying new technology. We have ended the monopoly of the British technology group over the commercial exploitation of Government-funded research and we have adopted a very positive approach to improving the collaboration between tertiary education and industry.
In addition, the Government have encouraged the Scottish Development Agency to focus its activities increasingly on the promotion of technology and enterprise within Scotland. During this Government's period of office the agency has greatly expanded the level and range of services which it provides to new and small businesses. In addition, it has launched specific initiatives to promote Scotland as a centre of technological excellence with emphasis on electronics, health care, energy-related industries and advanced engineering. The drug development unit in Dundee and the Bioscot project in Edinburgh are notable examples where the agency in partnership with the universities, local authorities and the private sector is helping to put Scotland in the forefront of new technology. The agency has also developed a science and high technology park in Glasgow and proposes to establish further parks in Dundee and Aberdeen.
Grasping the opportunities of the future is not simply a question of developing entirely new high technology industries. It is equally important that existing Scottish companies should adapt with the times. The Scottish Development Agency now provides a range of business development services to help Scottish companies and has established a technology transfer group to encourage product diversification. Scottish companies will have an unrivalled showcase for marketing their products in the Scottish exhibition centre, another SDA-sponsored initiative that the Government have backed.
Mr. Russell Johnston rose——
Mr. Younger: I have been very generous and if I give way to the hon. Gentleman it will take too long.
The restructuring of the Scottish economy is therefore well advanced. Indeed, we are fortunate that the Scottish economy is now better balanced in terms of the distribution of our manufacturing and service sectors and in terms of the mix of our manufacturing industries than most of the other regional economies in the United Kingdom. Nevertheless, there remain some areas of continuing difficulty where our objective must be to assist the necessary process of adjustment to the realities of today's world markets.
One such area is steel to which the Government have given nearly £3,000 million in support since coming to office leading to improvements in the industry's productivity to match in some cases the best levels in Europe. In achieving this more healthy competitive position overall, I do not have to remind the House of the painful reductions that have been necessary in BSC's capacity in Scotland. I should, however, like to pay tribute again to the remarkable improvements in productivity which have been achieved by the work force at Ravenscraig.
As to the proposal to export semi-finished slab from Ravenscraig to the United States, I can only say that the new chairman of BSC reported to me at our meeting last month the latest state of play on BSC's negotiations with US Steel, that these negotiations are still continuing and that it remains to be seen whether BSC and US Steel can reach agreement. I underline, however, that if and when a proposal is put to the Government by BSC it will be for Ministers to take the final decision on any deal and I and my colleagues will consider very carefully the implications for Ravenscraig.
Another area of difficulty to which I am sure many hon. Members will wish to refer is shipbuilding. I share the concern about prospects for shipbuilding on the Clyde and its importance to the local economy which was expressed to me by leaders of the Scottish churches last week and which I am sure will be repeated in the House today. In particular, I very much hope that the current negotiations between the management of Scott Lithgow and their customers at Britoil will lead to the Britoil rig being completed at Scott Lithgow rather than being moved elsewhere. I am aware of the article in one of today's newspapers, but that does not change what I have said.
Discussions between the parties are continuing. The Government have sought to help the industry overall by giving support to the tune of £840 million since we came to office. But the performance of the United Kingdom shipbuilding industry is extremely patchy. The good performance at Govan, at Hall Russell and at Fergusons is greatly to be welcomed, as is the continued development at the Yarrow yard. Overall, however, productivity within British shipbuilding is less than half the level achieved by leading European yards and only one third of the Japanese level.
The Government have agreed to consider British shipbuilding's request for "crisis aid" for its merchant shipbuilding yards within the context of the new corporate plan for the corporation and our international obligations. But, make no mistake, the market for orders, even for the

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best yards, is extremely difficult. The industry can hope to survive only if it accepts new working practices and improves its performance.
The long-term viability of the coal industry is vital to our national as well as to Scotland's general economic well-being. To that end the Government have invested £3·5 billion to enable the industry to become and remain competitive. How this is achieved in detail is for the National Coal Board: it knows what the task is and must be given the management authority to get on with it.
More generally, we recognise that the process of adjustment involves not only industries but individuals.
Mr. Alexander Eadie: Surely the right hon. Gentleman is not going to gloss over the problems of the coal industry in his speech. He knows that there has been a reduction in coal burn, so what does he propose to do? Does he mean that there must be a further contraction of the Scottish coal industry? He is the custodian, to some extent, of the Scottish economy, and he should be telling the House today what he proposes to do to ensure that we sustain a prosperous coal industry in Scotland.
Mr. Younger: I understand the hon. Gentleman's concern about the matter, and the reason why I mentioned the industry is that it is important to Scotland. It appears that the coal burn will increase in the immediate years ahead, which I am sure the hon. Gentleman will welcome; but the Government have provided large sums to help the industry to restructure itself, and we must now let the management get on with that job.
I reject the option of continuing to pour money into declining industries simply to avoid the social consequences, because such subsidies would never create lasting jobs or real wealth. At the same time, we recognise the need to provide opportunities for individuals who, in many cases, have given much of their working lives to a single employer. While it is rarely possible following a major closure to find another employer to recruit on the same scale overnight, the success of the SDA task force in the Garnock valley and of the enterprise zone at Clydebank show what can be done. In both areas concerted efforts by the SDA and other agencies have created a rich diversity of new businesses, often building on the initiative of those made redundant.
While I have no wish to minimise the severe effects of unemployment on individuals, or the severity of the problem of long-term unemployment, it is important to bear in mind that the simple unemployment totals released each month mask substantial movements on and off the register. Well over 100,000 people have been leaving or joining the register each quarter, and in the two latest available quarters the flow off the register has exceeded the flow on to it. Placings by jobcentres and professional and executive register offices have also been rising. In the third quarter of this year, the number of people placed in Scotland totalled 62,000–10,000 more than in the same period of 1982.
Of course there are areas that have been especially hard hit by unemployment because of the rundown of the traditional industries, or in some cases of other industries.
Mr. Russell Johnston: The Secretary of State has not yet referred to the fact that the Highlands and Islands Development Board has run out of money. Is he aware that
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it costs the state less if the board creates a job than it does to support a person with unemployment benefit and social security? Can he explain why, if he is anxious to promote viable industry, he is not doing something to ensure that the board receives more money?
Mr. Younger: The hon. Gentleman is not strictly correct in what he says. The Highlands and Islands Development Board has been so successful during the past few years that it has managed to use hugely greater sums each year than in the previous year. The hon. Gentleman will know that the board has received increased funds to deal with an increasing problem, and it has been generously funded by the Government. My hon. Friend the Under-Secretary of State will say something more about the board when he replies to the debate. Anyone who examines the record of money allocated to the board since 1979 could say nothing other than that the Government have most generously funded that organisation during those years. The hon. Gentleman's criticism does not stand up.
There are areas that have been especially hard hit by unemployment because of the rundown of traditional industries, or in some cases because of special features such as remoteness. We have recognised the need to concentrate special help on such areas. The Government are firmly committed to effective regional policy, and this has already played an important part in transforming the Scottish economy. As the House knows, my right hon. Friend the Secretary of State for Trade and Industry will shortly publish a White Paper on this subject. This will set out the framework and allow a generous period for consultation.
Another crucial ingredient of a sound economic base is the need for a skilled and adaptable work force. In any analysis of Britain's economic performance during the past couple of decades there has been a substantial question mark against the extent and content of skill training. Insufficient training has too often led to opportunities slipping through our fingers because of the lack of expertise to appreciate a new idea's potential, and to translate that potential into a commercial asset. The Government, in concert with the Manpower Services Commission, have at last set out to tackle this issue systematically.
In 1981 the MSC set out three key objectives in its new training initiative. The first was to develop skill training by moving away from time-serving apprenticeships towards agreed standards of practical skill as the main criterion, and with more flexible entry points in terms of age or examination attainments. Progress on this front has been steady. Obviously much negotiation between employers' organisations and trade unions is necessary to secure progress. At least the principle is not widely contested; it is the detailed implementation that inevitably takes time.
The second objective was to give all young people under 18 either full-time further education in school or college, or a period of planned work experience and training. This was realised this autumn with the inception of the youth training scheme, which already has 43,000 places for 16-year-olds and some 17-year-old school leavers in Scotland. YTS represents a bridge between school and work that the country has sadly lacked in the past. It will also pave the way for progress on the third

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objective—providing wider opportunities for adults, whether in or out of work, to train and retrain at various stages in their working lives.
Further progress on the third objective must await the Government's consideration of the recommendations just made to us by the commission following the consultations that the commission set in train with the publication last April of the discussion document "Towards an Adult Training Strategy". Since the commission's important and weighty proposals have only just reached myself and my colleagues the Secretaries of State for Employment and for Wales, it would be improper for me to comment on them now.
However, I wish to emphasise a central point about training, which is that there must be a willing and active partnership between industry, Government, including MSC, and the education and training providers. If not, different assumptions and different objectives can blunt the effectiveness of our training efforts. With our record of close co-operation in those sectors in Scotland, I am hopeful that we can rise to the challenge. Developments in the curriculum and examinations for 14 to 16-year-olds, and our action plan for 16 to 18-year-olds, show that all the interests involved, which include industry as well as education, are very much alive to the contribution that a more highly trained and adaptable work force will make to the future of Scotland. In particular, it is essential that young people leaving school should have a proper understanding of the world of work. I am confident that this understanding will be given by the new courses being developed as part of our programme of educational reform in schools. The courses will reflect the recognition that education meets the needs of industry. My Department will be issuing a circular within the next few days with plans for a restructuring of technical education for 14 to 16-year-olds. In addition to major improvements in craft and design courses, two new courses in computing studies and technological studies will be developed for the new SCE standard grade.
A vital prerequisite of a sound economy that I have not mentioned so far is the need for the correct macroeconomic conditions.—[HON. MEMBERS: "Oh!"] When we came to power in 1979, the British economy had embarked on a disastrous course. Since 1975, our unit labour costs had almost doubled, while they had increased by only a third in the United States, by one-sixth in Germany, and had stayed almost flat in Japan. Inflation was out of control and the world recession did nothing to increase demand for British products. The main undertaking that we gave to the country was that inflation would be beaten, and we have held to that promise. Inflation, at about 5 per cent., is now at its lowest for 15 years, and I am confident that it will fall still further in the months ahead. There has also been a major improvement in our manufacturing productivity. At the same time, average wage settlements have moderated, and these two factors, together with a shading in the exchange rate, have greatly improved the United Kingdom's competitive position since 1981. The background conditions are therefore improving considerably.
Mr. Archy Kirkwood: Does it not occur to the Secretary of State that everything he has just said about the way the Scottish economy is responding to this massage, economic and otherwise, flies
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in the face of the evidence that has been recently produced by the CBI in Scotland and by the Fraser of Allander Institute?
Mr. Younger: I do not agree with the hon. Gentleman. It is closely in line with the forecasts. Whether hon. Gentlemen appreciate the point or not, the improvement in Scotland has been even more striking than that in the United Kingdom as a whole. While the United Kingdoms manufacturing productivity has been increaseing at 2 per cent. per annum, Scotland's has been increasing at 5 per cent. per annum. While, during the recession, United Kingdom manufacturing production between 1979 and 1983 fell by 14·3 per cent., in Scotland it fell by only 9·9 per cent. Even during the worst of the recession neither our manufacturing output nor our employment fell as fast as it did in the rest of the United Kingdom. In 1971 Scotland was ranked eighth among the United Kingdom economy planning regions in terms of GDP per head of population. Scotland has now risen to second place in that league.
It is against that background that the amendment tabled by the Opposition seems so out of place and irrelevant to the position of Scotland today.
Mr. Dennis Canavan: Will the Secretary of State come down to earth and answer a couple of simple questions? How many people in Scotland have lost their jobs since he got his job as Secretary of State for Scotland? When does the right hon. Gentleman expect a decrease in the appalling level of unemployment in Scotland that his Government have created?
Mr. Younger: On the latter point, do not need to expect a decrease—it has been taking place in the past three months, although the hon. Gentleman may not have noticed.
Mr. Canavan: Answer the question.
Mr. Younger: It is unreal for the official Opposition to condemn economic depression and unemployment without saying anything concrete about how it should be dealt with. Their amendment strikes at the whole of the positive side of the Scottish economy and demonstrates only too clearly that the Opposition do not welcome the new developments in Scotland and probably do not fully understand them properly either.
This leads me to wonder what the position would be today if I had acted upon the advice given to me so consistently by the official Opposition over the past four years. We all know—and I think that there will be general agreement on both sides of the House on this—that had the Opposition's advice been heeded the levels of public expenditure would be very much higher than they are now. That would have had to be paid for by higher taxes and higher interest rates with higher borrowing, and undoubtedly a much higher rate of inflation. All of those consequences would be gravely damaging to business and industry in Scotland and indeed contradict explicitly everything that business and industry have been asking the Government to do. There is no way, for example, that the national insurance surcharge, invented and devised by the Labour Government, could have been reduced in the way that it has and no way that our higher productivity and greater competitiveness could have been achieved with a Labour Government piling extra burdens on to our industries all through this difficult period.
The Opposition's economic policy has been clearly seen to be incredible by public opinion generally over the

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past year and the damage that it would have done would nowhere have been more severe than in Scotland, which has been slowly but steadily building up a new industrial base during those years.
I very much hope that the hon. Member for Garscadden will now succeed where others have failed in bringing his party in Scotland to accept and welcome the new developments and new attitudes that have grown up throughout industry in Scotland and which today, by their amendment, the Official Opposition are rejecting. For the rest of us it is essential that we redouble our efforts to make Scottish industry more competitive by cutting costs and improving our products and their design and marketing wherever we can. That is the only way in the long term geniunely to win back the markets that we have lost over the past 15 years and that is the only way to create genuine new jobs. Of course, we still must face many problems but the hard decisions that have been taken over the past few years have begun to pay off. In recent months we have seen signs of this only too clearly. Unemployment, seasonally adjusted, has fallen by an average of 700 a month in the past three months. That is the most encouraging three-monthly trend for four years. Vacancies are now more than 30 per cent. higher than in the second quarter of last year. Placings by jobcentres have increased—60,000 people found jobs through this route in the third quarter of 1983, which is 10,000 up on the previous year. In the first nine months of this year, private housing starts were 32 per cent. up on the same period last year. The October review of the Scottish economy by PEIDA points to a continued recovery in Scotland in 1984. The growth rate of manufacturing productivity in Scotland between 1978 and 1982 was running at about 5 per cent. a year whereas in the United Kingdom it was running at only 2 per cent.
In whatever way hon. Members look at these trends over recent months and weeks, they will see clearly that the hard decisions taken are beginning to pay off. This is not the time to reverse progress or to change the course of the Scottish economy. We have seen, for the first time in the lifetimes of most hon. Members, a change in the traditional relativity between the Scottish economy and that of the United Kingsdom as a whole. That is due to the fact that at long last Scotland is part of our economic recovery and is about to lead this country out of the recession that has caused so much damage.
4.46 pm
Mr. Donald Dewar: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'notes with growing anger and alarm the Government's failure to sustain Scotland's industrial base and to protect her people from the ravages of economic depression and high unemployment; calls on Her Majesty's Government to reverse policies which have struck both at the traditional heavy industries and those based on the new technologies; and condemns the tragic waste of North Sea oil revenue largely committed to paying for ever-lengthening dole queues and the all too obvious inability of the Secretary of State for Scotland to fight within the Cabinet for recognition of Scotland's pressing economic needs.'.
I should like to start by thanking the Secretary of State for Scotland for his kind words at the beginning of his speech. I am almost an expert now on the right hon. Gentleman's performances. For a wild moment or two, I
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thought that there were one or two timid signs of attempted humour in his opening sentences, but his speech deteriorated predictably into a fifth-rate economic lecture of the type that gives modern studies a bad name. The only excitement, if I can call it that, in the right hon. Gentleman's speech was the occasional loyal bleating of his junior Ministers, who in a few minutes will be sent back to Dover house to practise the difficult job of grasping future opportunities, whatever they may be, under this Government.
I watched a film on television the other day which centred on the domestic life of a small desert rodent which struck me as having many of the characteristics of the Secretary of State. It was a small and, I suppose one might say, neat and slightly sleekit animal, with one real characteristic—whenever danger threatened and there was a crisis in the offing, it scrabbled into a hole and lay there squeaking ineffectively in the hope that the danger would pass away. That may be an absolutely admirable strategy for survival among desert rodents, but it is not recommended for Secretaries of State for Scotland. As the House recognises, we face a crisis that will not go away. What we look for from the Secretary of State is not just a survival strategy, but an ability to get up and face the magnitude of the crisis.
I recognise that the right hon. Gentleman's advisers have been working hard to improve his image. I have been reading many of the puffs that appear in the technical press. I was amazed to hear the other day that the right hon. Gentleman is a benevolent dictator. I question at least one of those words. There was a splendid photograph, which I think came from the right hon. Gentleman's Argyll and Sutherland Highlanders' days of him looking square into the future under the caption:
"He who speaks for Scotland."
The reality of the right hon. Gentleman's position is well instanced by the signatures at the head of the Government's motion. The Prime Minister rightly leads the way, followed by an odd job lot, if I may say so, of Ministers, including the Secretary of State for Education and Science whose connection with Scotland is thankfully remote. Bringing up the rear is the Secretary of State for Scotland. That is perhaps a tribute to a clerk in the Prime Minister's office who remembered to include the right hon. Gentleman's name at the last minute. I suppose that someone said, "Gosh, I suppose that we had better put him in. What is his name, anyway?" The inclusion of the right hon. Gentleman's name is a touching tribute to attention to detail and due regard for what is proper. The right hon. Gentleman appears at the bottom of the list—the end of the pecking order.
I object to the content of the motion, not to the signatories. We have been presented with appalling complacency. First, there is complacency about the level of unemployment. It is a piece of cheek to suggest that the Government have been strengthening the Scottish economy. To say so is to fly in the face of all the evidence. One of my difficulties in my new position on the Opposition Front Bench is that I have to read the Secretary of State's speeches, which are kindly supplied to me by the Scottish Information Office.
Mr. Younger: The hon. Gentleman asked to be supplied with them.
Mr. Dewar: Yes, I did. They are extremely interesting speeches. I shall draw the attention of the House to a

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speech that the right hon. Gentleman made to the Institute of Directors at Auchterarder on 11 October. During the course of his speech, he said:
"No one can deny that the present levels of unemployment are distressingly high."
I suspect that anyone who says, "No one can deny that", would very much like to make the denial, but knows that it is impossible to do so. To talk about unemployment being "distressingly high" is to approach the problem in and academic and detached manner. It is a description that shows there is no gut feeling. The Opposition say that unemployment is tragic, not merely distressing.
There are 333,000 Scots out of work, of whom more than 120,000 have been out of work for over 12 months. In June 1979 there were 2·1 million in work, but in June 1983 that figure had fallen to 1·8 milion. The right hon. Gentleman calmly makes the assumption that he can take credit for the oil jobs. If we had not had the windfall of North sea oil, the Scottish economy would be in an appalling mess. Since 1979 we have seen more than a 50 per cent. increase in the number of directly related oil jobs. At the same time, we have broken away from the old unanimity of view that we should use North sea oil revenue to create an industrial base for Scotland's future. That trust has been betrayed. If anyone asks "What did you do with the oil?"——
Mr. Wilson: Will the hon. Gentleman give way?
Mr. Dewar: No, I shall not give way to the hon. Gentleman.
Mr. Wilson rose——
Mr. Deputy Speaker (Mr. Paul Dean): Order. The hon. Member for Glasgow, Garscadden (Mr. Dewar) has made it clear that he is not giving way.
Mr. Dewar: I shall not give way to the hon. Gentleman. As the House is rightly anxious to protect small minorities, even in Scottish politics, the hon. Gentleman may be able to catch the eye of the Chair later and make his point during his speech. We shall wait until then to hear it.
Mr. Wilson: Will the hon. Gentleman give way?
Mr. Dewar: The industrial base of Scotland——
Mr. Wilson: Will the hon. Gentleman give way?
Mr. Deputy Speaker: Order. The hon. Member for Dundee, East (Mr. Wilson) should not push his luck. I know that he hopes to intervene in the debate.
Mr. Dewar: We are entitled to be bitter about the way in which the oil revenue has been wasted. There is complacency about the level of unemployment and there is complacency also about the chances and prospects of recovery for the Scottish economy. The Secretary of State is showing every sign—the name changes with ministerial changes—of Lawson's disease, which is fatuous optimism in the face of all the evidence.
I have read the Fraser of Allander Institute report of November 1983. It comes hot from the press, but it does not come with good news for the Government. It states that Scotland is the only region not to have had an increase in seasonally adjusted vacancies in the three months to October. Every region of the United Kingdom except Scotland had an increase, but it has decreased in the United Kingdom generally. Overtime in Scotland is falling more
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rapidly than in the United Kingdom overall. The index of industrial production fell by 2·6 per cent. from the first quarter of 1982 to the first quarter of 1983
The Under-Secretary of State for Scotland (Mr. Michael Ancram): Who wrote the report?
Mr. Dewar: I can tell the Under-Secretary of State that it was not written by a Labour politician. It is the report of the Fraser of Allander Institute.
Mr. Michael Forsyth rose——
Mr. Dewar: It is unfortunate that the opinion expressed in the report is that any recovery that there may have been——
Mr. Forsyth: Will the hon. Gentleman give way?
Mr. Deputy Speaker: Order. It is clear that the hon. Member for Glasgow, Garscadden (Mr. Dewar) is not giving way.
Mr. Dewar: I am not giving way to the hon. Member for Stirling (Mr. Forsyth). I shall be delighted to give way to other hon. Members in a short while, but I shall not give, way to the hon. Gentleman.
The summing up of the Fraser of Allander Institute is that recovery, if recovery there ever was, is flagging. I believe that recovery was stillborn.
The Government are complacent about trends in the Scottish economy. There is a programmed response every time we consider the Scottish economy. Ministers start talking about the silicon glen concept, and we get a chips-with-everything response. I made some mistakes in anticipating the Secretary of State's speech. I thought that it would contain references to Wang, Digital and National Semi-Conductors. I think that I anticipated six of the seven examples that the right hon. Gentleman chose to present but there were one or two in the mix that. I did not pick. It was a predictable response. We welcome the jobs that these undertakings have created and we want to see more of them, but we are entitled to object to any suggestion that they have replaced heavy job losses in other sectors and that they provide a disguise for the Government's abject failure.
I am indebted to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) for his written question which was answered on 10 November. The answer revealed that employment in the electronics industry in Scotland in 1970 was 48,258, in 1981, 37,626 and it is now 36,500. The Secretary of State used another figure this afternoon, but he referred to 36,500 when he addressed the Scottish Council seminar at Aviemore on 28 October.
The census of employment of September 1981 provides other interesting figures. We cannot obtain a more up-to-date census, because the Government have put a stop to the statistics appearing. As the Conservative Government approached power in 1978, there were 51,000 employees in the electrical and electronic engineering industries in Scotland. In 1981 there were 42,000. I do not glory in gloomy news—I should love to be able to report an expansion in that sector—but I must present the figures to correct the unsoundly based euphoria that has been created to try to distract public attention from the reality of what is happening.
The Opposition recognise the need for change in the Scottish economy, but we should never underestimate the necessity of protecting and preserving jobs in the

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traditional heavy industries of Scotland. The 1981 census of employment reveals that at that time there were 74,000 jobs in the iron and steel, coal and shipbuilding industries in Scotland. With the help of some friends I have tried to trace all the notified redundancies between the September 1981 census and 1983. In mining and quarrying, metal manufacturing and shipbuilding—we adopted wider categories and have probably produced an overestimate—there were about 9,000 notified redundancies. If that figure is subtracted from the 74,000 jobs in the three basic major industries, those industries still provide about 65,000 jobs in Scotland. We think that those industries are important, especially when they are compared with the 36,500 jobs in what I would like to see as the growing electronics and high-tech sectors.
We must fight every inch of the way to preserve what is rapidly becoming an endangered species—manufacturing jobs. Deindustrialisation is an ugly word for an ugly process, but it is a harsh reality and it describes what has been happening since the right hon. Member for Ayr (Mr. Younger) became Secretary of State. In 1979, 596,000 Scots were employed in manufacturing industry and in 1983 there were 431,000. The right hon. Gentleman has presided over the disappearance of 165,000 jobs in manufacturing industry. That is not mere complacency but criminal complacency by the Government.
Mr. Robert Maclennan: Was the hon. Gentleman struck, as I was, by the fact that the Secretary of State did not mention the building industry and the decay of Scotland's infrastructure, which would be very labour-intensive if it were properly used?
Mr. Dewar: I have very much sympathy with the hon. Gentleman's point. The Secretary of State managed a few names, such as Wimpey. He probably feels very much at home with Wimpey. However, he avoided a large number of danger points to which the hon. Member for Caithness and Sutherland (Mr. Maclennan) will no doubt refer if he catches your eye, Mr. Deputy Speaker. There has been a vicious attack upon infrastructure in Scotland, and the Government have stood back and watched it happen. My hon. Friend the Member for Falkirk, West (Mr. Canavan) last night pointed out that we had some things for which we could be thankful. The deindustrialisation of the Clyde has brought the salmon back, but I do not believe that there has been any other useful by-product of the Secretary of State's efforts.
The Secretary of State mentioned Ravenscraig. He bravely says that he has no idea what is happening and that no proposition has been put to him. He has often been warned by the Labour party that the preservation of Ravenscraig as an integrated steel works cannot be equated with ending its processes at the slab stage, the Fairless deal with a loss of about 2,000 jobs in Scotland, our cash being used in the modernisation of United States steel plants and trade being carried across the Atlantic in United States ships. If such a deal is proposed, we expect the Secretary of State to meet it head on and to protect the interests of the Scottish steel industry.
At the moment, we have continuous casting in the United Kingdom. If we were to commit all of Ravenscraig's continuous casting production to foreign markets we would deny the United Kingdom industry this particularly desirable form of slab, or we would commit
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the British Steel Corporation to a duplication of that casting facility. That would make no sense either way. I gather that the Secretary of State in this, as in every other passage of his speech, had almost nothing to say to us. If he receives a proposal before the House rises for Christmas, we expect him to come quickly to the Dispatch Box to tell us what has happened. We do not want irrevocable decisions to be taken under cover of the Christmas recess.
The Labour party makes it clear that the loss of a significant number of jobs in the particularly sensitive area of Scott Lithgow will be unacceptable. I accept that delicate negotiations are under way and that Britoil and British Shipbuilders must try to renegotiate that contract. We hope that that negotiation will be successful. At some point, however, the Government must take responsibility. If things are going wrong and initiatives can be taken, we expect the Secretary of State to take a more active part than he has taken in the past.
There must be a balance of energy sources. The coal industry is suffering from the recession, economic decline and the lack of demand that is built on that. There is a strategic case for a viable coal industry, and that should command the Government's attention. The Government must not rip the heart out of the industry. North sea oil supplies will not last for ever and coal may have an increasing part to play towards the end of the century. I hope that the Secretary of State will examine combined heat and power schemes, the problem of the coal burn, the cut in the South of Scotland Electricity Board's consumption, the long-term implications of gasification and the experience built up at the Lurgie plant.
The hon. Member for Caithness and Sutherland said that there has been silence from the Government about the construction industry. Many construction workers are out of work. Savage cuts, especially in local government spending, have had maximum impact on the industry. I received a letter, as I suspect did other hon. Members, from the Royal Incorporation of Architects in Scotland which described the decisions which have created a dead stop in many parts of the country where improvement and repair grants have been a disaster. That is true. That is a matter to which we shall want to return on many other occasions in an attempt to get some satisfactory answers.
Almost everywhere there are signs of disaster and problems. It is no good the Secretary of State looking pained. Companies such as Anderson Strathclyde, Weir Pumps, Terex, UIE, British Leyland and John Brown—I can give list after list—have problems because they are Scottish and because recently they have experienced many redundancies. It is no good saying that there is a recovery in some sections. High technology industries, such as aviation, and the record of Rolls-Royce in Hillington which has experienced a rundown in the labour force again show a need for Government courage and support, even in the most sophisticated industries, to sustain technology and development and to capture world markets.
All hon. Members accept that problems cannot be wished away. The world recession will not disappear because we change our Government, but the Conservative Administration by their errors have compounded many of the problems that we face. We cannot cut expenditure and pretend that it merely affects services, because it also affects jobs. We cannot increase industrial costs or taxation, as the Government have done, without killing the

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possibility of recovery. If that is thought to be a partisan statement, I refer the Secretary of State to Sir Terence Beckett's speech on 24 November 1983. There may be an attack on regional policy. If it comes, we shall resist it, but we know that if it is carried through more jobs will be taken from the hard-pressed areas of Scotland.
I want to see more smeadum and fight from the Secretary of State on such issues. In his speech to the Institute of Directors at Auchterarder we come across an important dividing line. The right hon. Gentleman complained about those who think
"that if the Government financed major job creation programmes reducing our unemployment totals at a stroke this would be a success."
A great deal can be said for "reducing our unemployment totals" and for the Government shouldering their responsibility to create jobs. The Secretary of State went on to say that this was not a realistic objective. With unemployment totals and problems in Scotland at such levels, it must be a realistic objective, and we must have a Government who are prepared to face the task and get on with the job.
What has happened after five years in Scotland under the latterday apostles of Adam Smith? Their monument is an index of industrial production more than 10 per cent. below the 1975 level and record levels of unemployment. In Glasgow Sir Campbell Fraser talked about Scotland being a "miracle of self help". I think that that was a touch optimistic, given the recent CBI forecasts and the confidence of CBI members. Sir Campbell Fraser was right to say that what has been achieved in Scotland has tended to be done on the principle of self help, because we have had precious little help from the Government. The Conservative Administration have been an oppressive, expensive and embittering disaster. We shall therefore vote against the Government's incompetence, insensitivity and complacency and, above all, record of failure that has cost Scotland and its people dear.
5.8 pm
Sir Hector Monro: The hon. Member for Glasgow, Garscadden (Mr. Dewar) leaves me breathless. I have never heard such an inconsequential speech delivered with such fervour. Had I sat back and closed my eyes, I might have dreamt of the somewhat slower speeches of Lord Ross of Marnock, or even the right hon. Member for Glasgow, Govan (Mr. Millan). It was the same old stuff that we have heard so often, with no new solutions or constructive policies for the development of the economy in Scotland.
The shadow Secretary of State totally failed to deal with the central issue—inflation. My right hon. Friend the Chancellor recently made his autumn economic statement. It is clear that if we want to spend more money that will mean higher taxation or increased borrowing, either of which will lead to a rise in inflation and interest rates, which can only lead to an increase in unemployment rather than the decrease that we all so much desire. Inflation and interest rates must therefore be at the heart of our deliberations today. Let us not forget that interest rates are at their lowest for five and a half years, which itself brings confidence to industry.
It is all too easy for the Opposition to talk about spending our way out of trouble. That simply is not possible. Such a policy would inevitably damage industry and business as well as increasing unemployment. The
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legacy of the 1974–79 Labour Government is all too stark—raging inflation leading to high unemployment. The Socialists never learnt that when inflation reached 26·9 per cent. in 1975 it began the great economic depression that the country has faced ever since.
There is just a wee glimmer of hope, however, that some Socialists are beginning to learn. The Times of 25 July carried the following statement:
"Last June our economic policy was a net vote-loser. Our vague hopes of achieving growth through spending were barely understood and rarely believed. The idea of 'borrowing to expand' proved crucially unpopular. The British people realised that the whole strategy lacked two essential ingredients: a coherent plan for investment and a scheme to Combat inflation".
That quotation, of course, comes from the deputy Leader of the Opposition and shadow Chancellor, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). That statement is entirely contrary to the view expressed in the amendment, to which he has now put his signature. He cannot have it both ways. I hope that he will be here later in the debate to explain how he reconciles the two views.
The Conservatives have won the inflation battle. This is no time to relax but it is time to bring confidence to industry rather than the doom and gloom constantly spread. by the Opposition. They seem to forget that they are still suffering from a devastating election defeat in which they received no mandate to govern, and they have had no new ideas or changes in policy since their utter failure in June.
In Scotland the Labour party is becoming a parochial Strathclyde party. Give or take a couple of miles on either side of the Forth bridge, one can drive from Gretna Green to John o'Groats without passing through a Labour constituency. Labour has no control in Scotland. The importance of the Labour party in Scotland to the Socialist movement is shown by the fact that the shadow Secretary of State for Scotland is not in the shadow Cabinet. That is one of the most serious omissions by the new Leader of the Opposition. One hears rumours that one right hon. Gentleman and one hon. Gentleman declined the position. That does not say much for the importance of Scotland or devolution. The shadow Cabinet appointments show that Scotland is of no importance to the Labour party. It is sad that the Socialist representatives of Strathclyde are so ignored by the Labour leader. Labour has no seats on the border, in the south, the east or the north-east and only one in Grampian. Right up to the Highlands and Islands there is no sign of Socialism—and thank God for that. [HON. MEMBERS: "How many Tories are there?" ] Alliance voters are slowly realising how wrong they were and will no doubt return to us in droves at the next election
The Opposition talk only of expenditure and cuts. They should consider the facts. There are no cuts in social security, in the National Health Service or in law and order, and there have been welcome increases in areas such as agriculture which are so important to the Scottish economy. The Opposition seem to think that there is no investment in Scotland, but that is not true. In Dumfries and Galloway new investment of more than £40 million has been completed or started in the past four months. That is a significant amount and very welcome in terms of new jobs.
The Opposition do not begin to understand the effect of the high rates levied by Socialist authorities on incoming investment. Regional and district rates are

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driving out the commercial and business centres of Edinburgh and Glasgow. That is the result of Socialist policies.
Mr. Maxton: Which district council in Scotland has the highest average domestic rate payments per household?
Sir Hector Monro: I know that my constituents have the lowest, which is far more important.
I welcome the Government's efforts to help small industries and businesses because that is where the resurgence of the economy will come from. The Government have helped small businesses and industries with no fewer than 110 measures, but there is more to be done for that sector in terms of taxation. More important, there is still far too much red tape, which must be removed. We must also consider the damaging effect of the wages councils on shopkeepers in Scotland and reexamine the Employment Protection Act, which probably does more to keep people out of work than any other measure.
Simplicity in the grants and methods of help available is vital in attracting new industry to Scotland. The Secretary of State and his Department have produced excellent brochures on the various forms of assistance, as has the Scottish Development Agency. I am delighted that my right hon. Friend emphasised the increased expenditure by the SDA throughout Scotland. It is doing excellent work and it is essential for it to keep close to the people on the ground and never to lose the personal touch that it has built up. The ability to telephone the head of the SDA and talk to him personally is a great advantage to those who need urgent help.
Regional policy is extremely important and will be dealt with in a White Paper in the not too distant future. That policy is crucial to the United Kingdom and has provided 500,000 or more jobs, stemming from the Local Employment Act 1983, which rightly stressed the importance of small development districts in areas of high unemployment and provided substantial funds to help such areas through the creation of advanced factories and all the other regional incentives.
Subsequent Governments extended assistance to 43 per cent. of the working population, which was too wide. The Government were right to reduce the figure to 27 per cent. If we are to re-examine the policy while maintaining the same input of resources, we should be prepared to reconsider reducing the number of areas eligible for support and concentrate our resources on supporting areas of high unemployment, which is substantial throughout the United Kingdom. If we concentrate our resources on the areas that have unemployment at 15 to 20 per cent. they would receive the maximum benefit. Statistically speaking, we are shifting unemployment from one area to another without creating more jobs.
I wish to see incentives concentrated in essential areas but using the same amount of money, thereby enabling the areas with the highest unemployment to increase their ability to bring in new jobs. We should seriously consider introducing service industries into areas of high unemployment. They can create jobs in the same way as manufacturing industries. Given the assistance of my right hon. Friend the Secretary of State for Scotland to the tourist board, I hope that we can see developments there.
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We must regard tourism as one of the growth industries of the next decade. The more help that the Government can give to providing quality hotels that will attract visitors from the south and abroad, the more we shall be able to move in the right direction.
I hope that we shall look carefully at the relationship between regional policy and EC grants. It is unfair that some areas are not permitted to have EC grants because they are non-assisted. Such help is essential for the forestry industry in my part of the world. It needs the infrastructure grants from Europe.
I wish to emphasise to my right hon. Friend how important it is for him to make a major effort to look after the rural economy. Unemployment in the countryside is just as severe as in urban areas. In addition, there are fewer opportunities for work. We must begin by having a profitable agriculture industry because that leads to jobs in agricultural engineering, seed merchants, auction marts, smithies and so on. We must further re-examine the opportunities of bringing light industries to the countryside. We must encourage them to relocate in those areas. We must keep the population in the rural areas to maintain the schools, the churches, the village halls and most importantly public transport and everything else that contributes to a viable countryside. A tremendous amount remains to be done.
The Secretary of State is right to say that he has provided a first-class platform from which we can begin to expand. I am the first to accept that we have a long way to go to combat the problem of unemployment. I welcome what my right hon. Friend has said about the future. The Government must have positive and constructive policies. The policies of the Opposition are in disarray. They have not proposed any new ideas that can produce so much as one new job. They suggest that we should spend, spend, spend, but such a policy would be followed by inflation, high interest rates and high unemployment. It seems that the Opposition will never learn. My right hon. Friend must maintain his policies from which will emanate the jobs that we so urgently require.
5.25 pm
Mr. Bruce Millan: I wish to make some remarks about the general state of the Scottish economy, and also refer to the two main employers in my area, both of whom are facing serious problems.
I congratulate my hon. Friend the Member for Glasgow, Carscadden (Mr. Dewar) on his extremely effective and comprehensive speech which compared extremely favourably with the usual rigmarole that we heard from the Secretary of State for Scotland. The debate was offered by the Government. Having heard the Secretary of State, I wonder why he bothered, because he had nothing to tell us. The right hon. Gentleman's presentation was an extremely selective and distorted review of the state of the Scottish economy. We are debating Scotland's economic position against an extremely gloomy overall economic background. I shall not enter into the Secretary of State's argument about macroeconomic policy, as we had a general economic debate recently. Until we have a substantial change in Government policy and get rid of the Government's obsession with cutting public sector borrowing, monetarism and the rest, there is no hope for the Scottish economy and whatever is done by the Scottish Development

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Agency, the Government or anybody else, they are swimming against a tide that is overwhelmingly against Scotland, as it is against the United Kingdom.
The Chancellor's autumn budget held out no hope for the Scottish economy. The budget was not only criticised by the Opposition and the TUC, but the Government got a raspberry from the CBI which is disputing the Chancellor's optimistic forecasts about increased output in the country in 1984.
The worst aspect of the Chancellor's statement was the admitted acknowledgement that during 1984–85 the level of unemployment in this country will be exactly the same as it is now. In other words, there will be no relief at all from the intolerable and appalling levels of unemployment. The social consequences of such high unemployment will live with us for many years, especially among the younger generation, who are increasingly bitter and disillusioned about a society and Government who they consider have let them down.
The position in Scotland and elsewhere has been obscured by the Government's fiddling of the figures. The published figure of 333,000 is not the true figure for Scotland. If we consider the old method of presenting the figures, we must add at least 50,000 or even as much as 75,000 or 100,000. We must also add the 82,000 Scots who are being supported by temporary schemes of employment. The real unemployment position is much worse than the crude figures suggest.
I consider the Secretary of State's remark that Scotland has come out of the recession, or is bearing up so much better than the rest of the United Kingdom, as offensive. Bearing in mind North sea oil, it would be absolutely astonishing if that were not the position. The Government have managed to foul up pretty well everything else that they have touched, but at least they have been unable to foul up the geography of North sea oil which has brought Scotland about 100,000 jobs. Without those jobs, the unemployment position would be absolutely catastrophic. It is a myth to suggest that Scotland is doing much better than the rest of the United Kingdom.
My hon. Friend the Member for Garscadden referred to the recent report of the Fraser of Allander Institute. The index of industrial production for Scotland in the first quarter of 1983 was published on 5 September. The Scottish Office's own press notice stated:
"The 0·8 per cent, fall in manufacturing in Scotland"—
that is referring to the first quarter—
"compared with an increase of 2·3 per cent, in the UK."
In other words, the Scottish economy is performing worse than the rest of the United Kingdom. It continued:
"Excluding petroleum and natural gas, industrial production in Scotland fell by 1·6 per cent, in the first quarter of 1983 which compared with a rise of 1·6 per cent, in UK output for the same period."
There are signs that the Scottish economy is performing worse than the national economy.
The other myth that has been sedulously propagated by the Government during the past two or three years is that new industries, such as the electronics industry, compensate for the loss of jobs in the older industries. I have said repeatedly that we must encourage the new industries. We naturally want them to locate in Scotland, whether they come from overseas or from other parts of Britain. However, we dispute whether such industries compensate for the loss of employment in the older industries, and I also question our attitude towards the older industries.
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Labour Members have always stated firmly that as well as encouraging new industries we must protect and sustain the older traditional industries. An informative article by Alf Young which appeared in the Glasgow Herald this morning, following a parliamentary answer given to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), made it clear that there is an unanswerable case for the protection of the traditional industries which, in terms of crude employment, are as important to Scotland as the newer industries.
A false dichotomy is sometimes made when discussing new and old industries—there is a suggestion that the older industries use ancient technology while the newer industries use modern technology. Of course new industries use modern technology, but anyone with knowledge of the shipbuilding, steel and coal industries will know that a great deal of modern technology is used by them. One reason why the older industries have performed rather badly is that insufficient modern technology has been introduced into our older industries compared with that introduced into the industries of the rest of the world.
I wish to mention two industries in my constituency. Govan is an excellent shipyard, and the Secretary of State acknowledged that in his speech. The CEGB is placing an order for three coal-carrying ships within the next few months. I find it both astonishing and incredible, given the uproar over the CEGB when the order for a cable-laying ship was given to Korea, that this order has been put out to international lender. There is no guarantee that the order will be placed within the United Kingdom, where Harland and Wolff and Govan are the two competitors.
I do not accept that this is a matter where ordinary market forces come into play. The CEGB is a nationalised industry, and another nationalised industry—shipbuilding—is interested in the order. It would be an utter scandal if that order was placed abroad. I warn the Secretary of State and the Minister that there will be a major political row if that order is not placed within the United Kingdom. I am looking for it to come to Govan, which is uniquely suited to build those ships.
The Govan shipyard is quickly running out of work. Unless it receives additional orders, it will run out of work completely by the spring of 1984. That will affect 2,700 jobs. It is desperately important that a yard that has done so much to make itself efficient should obtain that order.
The second industry in my constituency that I want to mention is also the largest employer—although jobs are rapidly disappearing there, too. I refer to Rolls-Royce at Hillington. Only three years ago it employed 6,000 people—it now employs only 3,000. I am talking about the aero-engine industry, which no one could claim uses old and outdated technology. Rolls-Royce is acknowledged as the world's leading aero-engine manufacturer. Yet 3,000 jobs have disappeared and further redundancies were announced last week. It is vital to Hillington and Rolls-Royce generally that the V2500 project receives Government funding. Rolls-Royce has a 30 per cent. share in that international project, and there is an application before the Government for launch aid of £113 million.
The aero-engine industry, indeed, the whole of the aerospace industry, is sometimes neglected in debates. The aerospace industry is extremely important to Scotland, not only through Rolls-Royce but in avionics through such firms as Ferranti and Marconi. It is essential that the V2500 project is aided by the Government—

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otherwise Rolls-Royce, which has already shed so much labour, will go further downhill and will gradually lose to its American and other competitors.
One of the partners in the V2500 project—together with Pratt and Whitney, Rolls-Royce, a German firm and an Italian firm—is a Japanese consortium. It is involved in the project to learn high technology from the United Kingdom, and also from Pratt and Whitney. I deplore that position, although I accept that in such expensive projects there must be international co-operation. It is an example of an area where the Japanese are years behind the United Kingdom in technology. If we want our industry to remain in the forefront, the V2500 project must be supported by the Government.
The Government must also support the A320 airbus project, which is also important to Rolls-Royce. It is yet another example of the lack of Government direction in industrial policy. British Caledonian is buying the A320, but British Airways is buying the Boeing 737. A British nationalised industry is buying an American aircraft with American engines. If the two projects that I have mentioned are given the go-ahead, a European aircraft will be available which, I hope, will be fitted with Rolls-Royce engines that are largely manufactured in Britain. It is scandalous that the Government have allowed British Airways to make such a decision. The Government are interested only in privatising British Airways, and not in maintaining the British aerospace industry.
I am concerned about an issue that the Secretary of State did not mention today, regional policy. A review of regional policy is taking place, and the only hard evidence we have about the outcome is what the Chancellor of the Exchequer said in the autumn statement about a reduction in regional development grants. When I challenged him about that he said, "Do not ask me, ask the Ministers responsible". We understand that the Scottish Office is still interested in regional development, so when the Minister replies I hope that he will say something about that.
We know that the grant will be reduced——
The Under-Secretary of State for Scotland (Mr. Allan Stewart): No.
Mr. Millan: The hon. Gentleman denies it, but I am quoting from the Chancellor's autumn statement.
Expenditure on regional development grant is to be reduced. That means that either the level of grant will be reduced or some areas in Scotland and elsewhere will be de-scheduled. The Minister shakes his head but we know what happened in 1979. It was announced in July 1979 that regional aid to Scotland was to be reduced by 30 per cent. It just so happened that the four areas in Scotland which were upgraded were in Ayrshire and included the Ayr constituency of the Secretary of State for Scotland. However, 42 areas were downgraded.
If the Minister would like to assure us that what I have described will not happen I shall gladly give way. Any reduction in the amount of regional aid to Scotland, bearing in mind the appalling level of unemployment that we now have, will be unacceptable and represent a dereliction of duty by the Secretary of State. We have not forgotten that he allowed such a reduction in 1979.
Mr. Allan Stewart: I shall deal with the right hon. Gentleman's point later. If he read an article in The Scotsman yesterday he would know the facts about the autumn statement.
Mr. Millan: I am asking the Minister whether regional development grant will be reduced next year. The autumn statement says quite definitely that it will. Can he assure me that the review of regional policy will not involve a diminution of aid to Scotland? He has not been able to give me such an assurance. I shall be extremely happy if he is able to give that assurance later, having received information from the Box but I do not believe that he will because all the signs are extremely ominous. Incidentally, we should not have to go to The Scotsman to get information when we have Ministers who are supposed to be looking after Scottish interests.
I hope that we shall not be seduced by the idea of giving up automatic regional development grant and replacing it with selective assistance. It is not practical and Scotland would suffer considerably as a result. I know that selective assistance has been mentioned by right hon. and hon. Members on both sides of the House. It is a seductive proposition but it would be extremely dangerous for the regions. We must have an element of automatic grant if the system is to work for the benefit of Scotland. That does not mean that there is no case for examining big schemes that have automatic assistance but do not need it. I have held that view for many years. However, to some extent, that would be locking the stable door after the horse has bolted because grants have already been paid to oil developments and the rest. We should also examine carefully the effect on the electronics industry of being more selective rather than automatically paying some of the grants.
I should like regional aid to be directed more towards job creation. I should welcome such a change through, for example, the reintroduction of the regional employment premium or some other scheme, whereby we relate subsidies to labour rather than to capital. Bearing in mind the appalling levels of unemployment in Scotland, it is not sensible that regional aid should be devoted solely to capital expenditure rather than employment. I hope that a change can be made in that regard.
The signs with regard to regional aid are ominous. We remember our experience of 1979. There is no way out of Scotland's present economic tragedy without major policy changes. We shall not have such changes from the Conservative Government. However, on specific issues such as Rolls-Royce, even the Tory Government can provide aid to protect jobs in such important industries in my constituency. I am sure that every right hon. and hon. Member is able to make similar pleas for threatened industries in their constituencies.
5.44 pm
Mr. Michael Hirst: I echo the words of my hon. Friend the Member for Dumfries (Sir H. Monro) who found the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) full of doom and gloom and destructively critical. I also listened in vain for an explanation of how the Labour party proposes to generate jobs in Scotland. At the end of the hon. Gentleman's speech I was in no doubt why his party lost 250,000 votes at the recent general election and why, no doubt, it will lose the same number at the next one.

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The hon. Member for Garscadden singularly failed to tell the House what the Opposition's alternative is. I read the Opposition amendment. It offers no hope for the 300,000 people in Scotland who might, in their folly, turn to the Labour party for a remedy. Would the Labour party spend or borrow to generate more jobs? Have the Opposition learnt nothing? The seeds of destruction for manufacturing capacity in Scotland were sown during the Labour Government when the hyper-inflation of 1975–76 destroyed the competiveness of Scottish manufacturing industry.
I accept that, in Scotland, we live with unacceptably high levels of unemployment. We have a preponderance of traditional industries and we have recently gone through the worst world recession for 50 years. It is of no comfort to me, as a Scottish Member of Parliament, that the level of unemployment is higher in several other regions of the United Kingdom. Opposition Members should not try to delude the House and the nation into thinking that they have a monopoly of anxiety about the problems that are thrown up by unemployment. Conservative Members are deeply worried about them too. More than that, the Government have taken much action to mitigate the worst effects of unemployment and to generate more new jobs.
The pattern of employment in Scotland has altered radically and irreversibly. We shall never again have the days of Beardmore's and Singer's, which employed tens of thousands of people. We must face reality and recognise that the future lies with a vigorous sector of smaller businesses which are capable of adapting quickly to the changing circumstances and markets of the 1980s.
Mr. Foulkes: Can the hon. Gentleman tell us of one sector of industry in Scotland in which there has been a substantial increase in jobs in the past five years?
Mr. Hirst: Yes, the financial sector. Opposition Members might laugh but the financial sector has made Scotland the second most important centre of capitalism in the United Kingdom. Edinburgh is an important European financial centre. The hon. Member for Carrick, Cumnock and Doon Valley might shake his head but he should come out of his Socialist enclave in the west of Scotland, visit Edinburgh and admire the work that is being done there. There has been a substantial increase in employment in the financial sector.
The amendments tabled by the Labour party, the Liberal-Social Democratic alliance and by the Scottish National party offer no hope or solution. They merely castigate the Government. Not unusually, alliance Members are not present.
Mr. Albert McQuarrie: Two of them are here.
Mr. Hirst: One half of the alliance is here but I am never too sure whether they speak for the other half.
Nothing in the amendments tells us how opposition parties would deal with the problem that the country faces. My perception is slightly different. I see many exciting things happening in Scotland, and I am sorry that Opposition Members are so quick to denigrate many of the achievements taking place in Scotland at the moment. Before coming to this place a few months ago my experience—unlike that of some Opposition Members, perhaps—was that of a partner in a major accounting firm. I saw for myself many exciting things taking place throughout the length and breadth of Scotland.
Mr. Foulkes: Where?
Mr. Hirst: I have to respect the confidence of my erstwhile clients, but I can point to many examples of companies. My right hon. Friend the Secretary of State for Scotland has listed many examples including Motorola and National Semi-Conductors. These companies are employing more people now than when a Labour Government was last in power. They are also putting Scotland on the map to a significant extent as a manufacturer of electronic components.
My party and my Government have been prepared to encourage rather than to retard the massive restructuring taking place in the Scottish economy. When the Labour party was last in power, it was prepared to frustrate any effort to allow the radical restructuring of nationalised industries to-take place. Had it tackled the problems of the steel industry in the 1960s and 1970s, that industry would not have suffered from the great problems it has recently experienced. The Labour party has failed to learn that it is the duty of Government to aid the process of industrial transformation as the Conservative Government have done.
Business and industry are like life. Conservative Members believe in and espouse the cause of regeneration. It is sad that the Labour party seems to cling to the corpse. There is no future in that. The massive restructuring has left Scotland with far more competitive industries, and the Scottish economy is now far more broadly based than that of, say, the west midlands.
When we talk about the achievements of the Government in the past few years we should not forget their efforts to promote the small business sector. That is a part of the business world of which I have an intimate and detailed working knowledge. I am well aware of the efforts of the Scottish Economic Planning Department, the SDA and the European regional development fund. The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), who speaks for the Opposition on European Affairs, would do well to listen. The European development fund has made a significant contribution to helping small businesses in Scotland, not just with grants but with the provision of better business services and so on. Such things are what the small business man with the courage to set up a business needs. I am proud to welcome the initiative from Europe.
Mr. James Hamilton: The hon. Member is an accountant. When he talks about small businesses he must know that, since the Conservative Government came to power in 1979, 300 companies have gone into liquidation in Scotland. We did not get those figures from the Scottish Office, whose organisation was far too unwieldy to give them, but from the Library. I know of another two liquidations during the past three weeks, and there is also Terex, which employs 1,015 people. Does that suggest that the Scottish economy is making progress?
Mr. Hirst: The creation of new companies has far outstripped those that have died. A substantial number of new businesses have been created during the past couple of years, and the new businesses are creating more jobs than have been lost.
Mr. Foulkes: rose——
Mr. Hirst: I have given way to the hon. Gentleman's colleagues. [Interruption.] I am not talking nonsense. I

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shall be grateful if the Minister will confirm for the benefit of Opposition Members that far more new businesses have been created in the past couple of years than have been destroyed though insolvency.
We have also seen in the past four years a remarkable degree of co-operation between the public and the private sectors. There have been many imaginative schemes. I am surprised that the hon. Gentleman shrugs his shoulders. The SDA has done a substantial amount of work in his constituency.
Mr. Foulkes rose——
Mr. Hirst: No, I shall not give way. I shall press on, so that other hon. Members may speak later.
Mr. Foulkes rose——
Mr. Deputy Speaker: Order. It is clear that the hon. Gentleman is not giving way.
Mr. Hirst: I am grateful to you, Mr. Deputy Speaker, for your protection. I have indicated firmly to the hon. Gentleman that, having taken some of his specious points of information, I intend to press on.
There is substantial regeneration going on around Glasgow. A great deal of work is being done in the imaginative co-operation between the public and the private sectors. There is the construction of an exhibition centre and a science park. The enterprise agencies are doing much useful work. They would be very disappointed if they thought that Opposition Members failed to recognise their contribution to solving the problems of unemployment.
Mr. Foulkes: The hon. Gentleman is like the little Dutch boy putting his finger in the dyke.
Mr. Hirst: The results of the past four years show that Scotland is now better placed to face the future. The right hon. Member for Glasgow, Govan (Mr. Millan) suggested that all the economic pointers were downwards. I draw his attention to the report of Professor Donald McKay of PEIDA. The right hon. Gentleman will remember that name, because he engaged Professor McKay to carry out surveys for him when he was Secretary of State for Scotland. Professor McKay has said that there will be a further significant acceleration in the rate of economic recovery in 1984. I am sure that Professor McKay would be delighted to know that his surveys have been cited in this House. He is considered in Scotland to be a leading authority on such matters.
A moment ago I mentioned the breadth of the Scottish economy. The past four years have brought us to the point when an encouraging number of sectors are poised to go further forward.
Mr. Foulkes: Which ones?
Mr. Hirst: The financial sector is now employing 90,000 people. I can tell the hon. Member for Carrick, Cumnock and Doon Valley that the use of electronic and data processing methods in Scottish banking is now the most advanced in Europe. That is something of which every Scotsman should be proud. The Scottish capital centres are handling more than one third of the private funds in the United Kingdom. I am talking about £5 billion and 90,000 jobs. That sector is very significant. Edinburgh has become a venture capital centre. Such developments
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augur well for the future. There are exciting possibilities for tourism, which now employs about 50,000 people. I echo what my hon. Friend the Member for Dumfries has said. It is an important sector, which should get appropriate support and encouragement.
What industry wants above all is stable conditions. I welcome the statement by the Chancellor of the Exchequer that not only is the rate of inflation low and staying low but that interest rates are at their lowest level for five years. That is important for investment. I draw the attention of Labour Members to the CBI survey, which was made public earlier this week. It stated that the investment intentions of the Scottish business community are increasing all the time. There is a virtuous circle of higher productivity leading to higher profitability, enhanced cash flow and opportunities for investment.
Mr. James Wallace: Would the hon. Member care to give his views on how the increased energy prices, expected as a consequence of the Chancellor's statement, will affect the Scottish economy?
Mr. Hirst: I am grateful to the hon. Gentleman for that question. I cannot say what the impact will be. Plainly, the Scottish business community is aware that it may have to pay marginally more, but it is less than the rate of inflation. Energy prices paid by industry in Scotland and the other parts of the United Kingdom are lower than those paid in West Germany and the United States, which are Scotland's principal competitors.
The quiet and growing confidence that exists in certain parts of Scotland cannot be measured by statistics—[Interruption.] I wonder how far Opposition Members travel when they return to their constituencies. The slow regeneration taking place in Scotland is producing an air of confidence. The traditional Scottish talents of enterprise, hard work, innovation and skill have an opportunity to flourish again in stable conditions. I believe that in the fullness of time the Government's courageous stand will prove justified. At least if offers hope for the future, which is a great deal more than anything I have heard from the Opposition.
6.1 pm
Mr. Gordon Wilson: The public in Scotland will appreciate that this debate gives us an opportunity to consider the Scottish economy. What they will fail to realise is that there are few English Members of Parliament present, and that when the Secretary of State was halfway through his speech there were still only four or five Conservative Back Benchers willing to listen to him. The speech that I heard from the Secretary of State was one that I have heard frequently from the incumbent, whether during the previous Labour Government or this Government. Secretaries of State——
Mr. Foulkes rose——
Mr. Wilson: The hon. Gentleman should give me a chance to develop my thoughts. He will note, of course, that his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) refused to give way to any intervention.
In the past Secretaries of State for Scotland have tried to magnify the achievements of the Scottish economy in an endeavour to conceal its continuing rundown. I do not recognise what I have heard tonight from the Conservative Benches about the state of the Scottish economy—nor would any of my constituents or those of other hon.

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Members, who are unemployed—or about the hope that the Government see in the regeneration of the economy. We are grasping at peanuts, and nothing more.
I was disappointed by the hon. Member for Garscadden. The Government have at least shown some imagination in the way in which they have worded their motion when they refer to
"the remarkable progress made in restructuring and strengthening the Scottish economy"
without any facts to support it. However, the hon. Gentleman's speech was entirely negative. He failed to come up with any proposals, although he must be given credit for a small glimpse of imagination. He said that the Labour party had been in favour of Scottish oil revenues—I should say North sea oil revenues, to put it more neutrally—being used for industrial regeneration. I am therefore not surprised that he was so embarrassed by his invention that he refused to give way. The Labour party in Scotland has never claimed any specific share of the oil revenues for spending in Scotland. Under the previous Labour Government, the Treasury issued a White Paper on the subject suggesting that the oil revenues should fall within the Treasury's grasp and not be hypothecated for industrial development. That point should be put plainly before the House.
Secondly, it struck me as remarkable that the Government and the Labour party spokesman refused to take on board the critical position affecting the coal industry. We have seen the amount of coal burn decline by about 50 per cent. We know that the Torness nuclear development is just around the corner. It is not just the fall in demand that poses problems for the coal industry; it is the increasing proportion of the nuclear element and the fact that within a few years the majority share of electricity generation in Scotland will come from nuclear power without any of the benefits of a reduction in price.
In a debate of this kind, it is worth being realistic. The first fact that we must take on board is that the English economy is emerging from the recession into extreme difficulty. When the Secretary of State said that Scotland was near the top of the league table of United Kingdom areas, that was describing not so much an improvement in the Scottish position as a rundown in certain other areas of the United Kingdom.
I am convinced that the overall United Kingdom economy is in trouble and that it will be in greater trouble as the years roll by. Only this year the United Kingdom has become a net importer of industrial goods. It relies on the export or production value of oil from the North sea to help its balance of payments. If that were taken away, there would be a worrying, yawning gap, because in about three to four years oil production will have peaked and begun a steady but slow decline. That would not be important in terms of Scotland's population, but it will be in terms of the United Kingdom's population.
As the oil revenue dips, whichever party is in power in the United Kingdom, the Government will have a lower proportion of oil revenues available for industrial or any other kind of development. That will pose considerable problems for the Chancellor of the Exchequer. I do not recognise the incipient boom in expansion to which the Government have been pointing. In his autumn statement, the Chancellor said that the United Kingdom economy was recovering. There is no evidence that that applies to
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Scotland. I do not wish to rehearse the evidence that has been given before, but the CBI industrial survey of November this year says that
"business confidence seems to have slipped back in Scotland in the last four months … The volume of total new orders has continued to decline … Labour shedding in Scottish manufacturing has continued at a broadly unchanged rate. There is no evidence that this rate of demanning will fall significantly in the coming months."
The latest information and statistics, produced by the Fraser of Allander Institute, do not give the impression that the Scottish economy has turned the corner and that it is leading the United Kingdom economy out of the overall decline and recession.
Mr. Michael Forsyth: I am grateful to the lion. Gentleman for giving way, because the hon. Member for Glasgow, Garscadden (Mr. Dewar) would not give way on the same point. Surely the point about the Fraser of Allander survey is that it does not include, on its own admission in today's Glasgow Herald, any data from the service industries, which it finds impossible to get. Any survey which is based on the manufacturing sector only is bound to present a gloomy picture, because the boom has come in the service sector. It is dishonest to use those figures to reflect Scotland's economic position.
Mr. Wilson: This is one of the rare occasions on which I would agree with the hon. Gentleman. The service element is a significant part of the economy. The hon. Gentleman should address the complaints that he feels necessary about the lack of statistics and data to the Government, who have not yet produced them in a satisfactory form. There is a danger that the hon. Gentleman and other Conservative Members will start to talk about the expansion of the service sector. It may be, as oil has brought advantages to Aberdeen and Grampian., that Edinburgh has shown some improvement in the service sector, but many other parts of the country, which would welcome more service industry expansion, are not seeing it.
To continue the point made by the hon. Gentleman, it is probably in the service sector that the small industries will make the greatest contribution, given the time lag between a small business starting in manufacturing and its being able to grow to a significant size. The Government have failed to take into consideration the traumatic experience, which I have had in Dundee and which other hon. Members must have had in their constituencies, of seeing large firms, perhaps in the engineering and mechanical industries, suddenly imploding with that loss of thousands of jobs. We know that the electronics industry, welcome though it is, will find difficulty in making up for the loss of those jobs and in maintaining the levels of employment, if we are to believe some of the information given to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes).
The Government have to accept responsibility for the overall management of the Scottish economy, so let us examine public expenditure. The Government must tell the House and the Scottish people why Scottish Office expenditure is declining—and declining at a rate faster than ever I had expected. From 1979–80, it was 6 per cent., but from 1983–84—the time of the autumn statement—it has gone down to 5 per cent. That is a £1,289 million loss this year if we are to apply the 1979–80 percentage to the 1983–84 expenditure plans. In real terms, Scottish

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Office spending has declined from £6,450 million in 1979–80 to £6,339 million in the autumn statement for 1983–84.
I do not suppose that hon. Members would see anything vindictive in those figures, which I can only describe as disgraceful. Perhaps it is due to the workings of the mysterious Barnett formula. It is the result of a feeble regime in St. Andrew's house, and a Scottish Secretary of State who does not have the wit, will or ability to defend Scotland's interests. It is ironic that on the very day that the Chancellor was forced to admit yet another £1 billion windfall from Scottish oil the public expenditure plans revealed a £1 billion embezzlement of Scottish public finance. We must remind ourselves that the Barnett formula, which was arranged during the time of the previous Labour Government, has removed the ability of the Scottish Office to negotiate its appropriate share of expenditure on the basis of need.
As the right hon. Member for Glasgow, Govan (Mr. Millan) dealt with the problem of regional policy, obviously there are moves afoot. The Government are engaged in what can only be described as a transparent propaganda campaign on regional aid. There was an inspired leak that it would be abolished or diluted severely. On 24 November, the Glasgow Herald, through more inspired leaks, reported that spending Ministers and the Scottish Office had won a victory—that word should be in parentheses—and regional aid was to be retained. Scottish opinion is being softened up for a further decline in a programme that has already declined 40 per cent. in real terms, comparing the last two fiscal years with 1975 and 1977. Even in the heyday of the 1960s, Scottish Office expenditure did not represent a significant redistribution of resources within the United Kingdom.
I remember when the regional employment premium was curtailed within six weeks. One of the firms in my constituency got the news from Grampian television, because it had suddenly been released without any consultation. We were repeatedly reassured in answer after answer that there was no doubt but that the quantum would remain the same and that the new selective scheme that had been introduced would lead to opportunities for Scotland. Although it took two years for the figures to come through, they showed that there was a dramatic downturn in the Scottish share, because it had relied on the regional employment premium.
Propaganda rather than substance has been the mark of this Government's attitude, and that has been displayed in the debate. I understand that the Government are considering changing the Scottish Economic Planning Department to the Industrial Department for Scotland. I see the Minister indicating assent. I am not surprised that the name has been changed. Since when did the Scottish Office have any responsibility for economic planning? It has brutally, and honestly on this occasion, trimmed down what should be its function to one that is purely aid to industry. We require the formulation of an economic strategy for Scotland, but unfortunately we are not getting it.
I come now to the announcement in the autumn statement on housing benefits. Scotland has a low proportion of owner-occupation. The Government are not
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trimming the mortgage subsidy, but they are trimming the housing benefit, and that is of more importance for Scotland.
The fuel price increases that are being introduced will impinge most heavily on the sick, the unemployed and the elderly, and, because of our climatic conditions, they will obviously have more impact on Scotland.
I do not see any opportunity for improvement. If I could, I should be the first to admit and recognise it, because I do not wish to see my country exposed to economic decline. Although there have been some improvements, the overall trend within the Scottish economy has been unhelpful. It is a source of international, not just Scottish, amazement that Scotland, the world's fifth largest oil producer, a country that can claim to be the European centre of the electronics industry, an area with higher industrial productivity than in the United Kingdom as a whole—for a reason that many of us do not approve, namely the elimination of weaker brethen, causing large-scale unemployment—and a country with a skilled and flexible workforce should suffer the profound economic and social distress that is visited on the Scottish people.
The answer to this appalling paradox is political rather than economic. Here I come to the heart of the Scottish problem. Scotland is ruled—perhaps passively, perhaps by agreement or consent—by an occupying power. In the last election, as in the 1979 election, the English Conservative party and its Scottish surrogate were decisively rejected by the Scottish electorate. Yet that same electorate is ruled by the people that it rejected. The experience of 1979 had a profound effect on many hon. Members, particularly the Labour party. The prospect of a repeat in 1983 of the events of 1979 led to a number of Labour party members—some of whom had been here and had been vocal, but are not here now—promising to disrupt the House of Commons and its Committees to force the Government to recognise Scotland's legitimate right to self-government.
In recent weeks there has been a blank refusal to accept that Labour has a special and leading place in the representation of Scottish interests. On the Scottish Standing Committees, Labour Members have been outnumbered by Conservatives. We have the ridiculous situation that the Labour representation on the Scottish Affairs Select Committee has been reduced to a rump. Despite consistent provocation, it appears that the dogs of war have lost their bark and——
Mr. John Home Robertson: Wait for it.
Mr. Wilson: The hon. Gentleman says "Wait for it." We have been waiting in vain for action, and the hon. Gentleman and his colleagues have done nothing. Some of them have accepted shadow Cabinet positions as the price for selling their responsibilities. I have waited in vain, but I am forced to the conclusion that Scottish Labour Members lack both guts and will. They have a mandate, but they are frightened to use it.
No amount of devolution or Scottish Assemblies will provide the answer to Scotland's economic problems. The Treasury will never allow decentralisation of economic power. The Labour and alliance parties do not recognise that they are guilty of massive self-deception. As the Scottish National party amendment shows, only when

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there is an independent Scottish Parliament, with control over the Scottish economy, will our economy improve and the Scottish people find prosperity. Until that day comes, useful though these debates are, we shall receive only words and a further decline in our prospects for the future.
6.20 pm
Mr. Allen Adams: Perhaps the funniest speech we heard today was that of the hon. Member for Strathkelvin and Bearsden (Mr. Hirst). If I heard him correctly, he said that Scotland was a centre of capitalism. For the people in the bars in Rose street at 1 o'clock on a Friday afternoon, the advocates in Scotland's parliament building in Parliament square, and the accountants and lawyers who frequent the city, I am sure that Scotland is a centre of capitalism. It is a pity that the Scottish people do not agree. It is tragic that at the last election Scotland elected 41 Labour Members—41 Socialists. Perhaps there were not many from Bearsden, and perhaps not many from Edinburgh, but we had an outstanding victory. I stress that it was not a singular victory; it was not a one-off victory.
Mr. Hirst rose——
Mr. Adams: If the hon. Gentleman will sit down, I shall allow him to intervene in a minute. It is one of many victories that have taken place consistently since 1945. The Scottish people have said consistently during those years that the values that Conservative Members represent and advocate are totally abhorrent——
Mr. Hirst rose——
Mr. Adams:—to the vast majority of the Scottish people, who want a voice and a say in their own matters. I shall come back to that subject in a moment.
The whole thrust, tenor and direction of the arguments that we have heard from the Conservative Benches throughout this debate could be summed up in the words of the late President Harry S. Truman, "Save a buck and sacrifice the people". That is what this Government are doing. I am sure that the Tory-controlled council in Lochgilphead will be turning somersaults at the thought of saving a penny on the rates. I am sure that the Lothian regional council will be turning somersaults at the thought of taking concessionary fares away from old age pensioners. No doubt they will be ecstatic in Grampian that grannies cannot get a home help. Is that something to do proud of? I do not think so; nor do the Scottish people think so. We on the Labour Benches believe that those services are necessary in a decent and civilised society. We have to pay for them. We must never retreat from that position.
Unfortunately—or perhaps fortunately for the rest of us—the Secretary of State for Scotland, who of course does not command a majority of seats in Scotland, has now left the Chamber. One might hope that he has perhaps left the country. In fact, I am sorry that he is not here. He spoke this afternoon rather obscurely about the exportation of shawls. I am not quite sure where they are exported from in Scotland, but I do know that the exportation of shawls in Scotland started in Paisley. In fact, Paisley was built on the textile industry, and the textile industry itself was originally built on the production and sale of shawls.
Only 40 years ago—perhaps this is a good indicator of the decline of the Scottish economy, and perhaps of the British economy and the economy generally—20,000
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people worked in the textile industry in Paisley. Today, only 1,500 people work in the textile industry in Paisley—a magnificent success story, certainly when one remembers that during the past three years that industry in Paisley has lost 3,000 jobs. That is one industry alone, the industry that the Secretary of State mentioned this afternoon—the exportation of Paisley shawls.
It is my belief, and it is certainly the belief of my party in Scotland, which has passed resolutions year after year, that the solution to the problem in Scotland is to establish a Parliament in Edinburgh with tax-raising powers. I hope that all Opposition Members agree with me when I say, and I repeat unashamedly, that the solution—or one of the solutions, perhaps the major solution—to the problem of the Scottish economy is a Parliament in Edinburgh with tax-raising powers. Scottish accountants in the Labour party have said that time after time.
Mr. Wilson rose——
Mr. Adams: I shall give way in a moment.
The question must now be put to the Scottish Labour party and the Scottish Trades Union Congress, "What exactly do you want to do about it?" We must realise that we are grossly outnumbered in this House. Frankly, the solution lies in their hands.
We in the Labour party have been saying that for a number of years now, and the strong feeling is coming to the boil, largely because of the way that we have been treated in the House by the Government over the past four years. The Scottish Labour party does not want to hurt anyone or to take assets away from anyone, but we want to express ourselves in our own way. Only when our priorities are treated as the first and main priorities, and not as secondary considerations, will Scotland come out of the economic mess in which it now finds itself.
Mr. Wilson: I thank the hon. Gentleman for giving way. I agree with him that the problem of the Labour party in Scotland has been its ability to pass resolutions on this subject but not to enact them. I agree with what he says about the need for a Scottish Parliament with economic powers, but why did not his party's spokesman, the hon. Member for Glasgow, Garscadden (Mr. Dewar), mention that subject?
Mr. Adams: The hon. Member for Dundee, East i Mr. Wilson) will have to ask my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). I think I said that the Scottish Labour party has already made its position clear. It is now a matter for the Scottish Labour party to ask hon. Members to implement the party's policy. All hon. Members can count. We know the situation. My party and the Scottish National party can pass resolutions, but what effect can we give to these resolutions with only 71 or 72 Members?
The Government's claim about an economic success story in Scotland is truly laughable. From the record of the Government of the past four years in three constituencies, Paisley, North, Paisley, South and Renfrew, West and Inverclyde, we can tell the Government how many jobs have been lost. We have lost 4,000 jobs at Talbot, 1,500 jobs at Coats Patons, 500 jobs at Chivas, the whisky manufacturers, 1,000 jobs at Babcock and 500 jobs at Rolls-Royce.
Mrs. Anna McCurley rose——
Mr. Adams: We have lost 500 jobs at Craigs in Paisley, and another 500 at Brown and Poulsons. In the constituency of the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) 2,000 jobs have been lost at India Tyres. At the royal ordnance factory at Bishopton we reckon to lose perhaps 1,500. If that is a success story, perhaps the Government would explain to us their concept of failure because I calculate that in three constituencies we are talking of the loss of nearly 14,000 jobs.
Only yesterday I met shop stewards from the National Union of Railwaymen in Paisley who tell me that there is a threat to another 200 or 300 jobs in the west of Scotland area with the possible closure of stations at Saltcoats and Fairlie, with the possible reduction of staff in Ayr, the constituency of the Secretary of State, with the possible reduction of staff at Wemyss bay and the possible closure of Wemyss bay station and the possible reduction of staff at Gourock in Paisley.
If this were a Government intent on building up industry and commerce in the west of Scotland, one reasonable way would be to maintain and safeguard the infrastructure, the roads, rail and airways. We want to hear from the Secretary of State and the Government tonight a clear and specific undertaking that the jobs in British Railways will be safeguarded and there will be no closure of stations in the west of Scotland.
I would also like to hear about the future of Ardrossan harbour, one of the two remaining links with Northern Ireland.
I also wish to hear from the Secretary of State, who tried to paint an image of a technological revolution in Scotland, about the future of aircraft maintenance in Glasgow. Other hon. Members have referred to modern industries. The Secretary of State cannot describe that as an outdated heavy industry. Can the right hon. Gentleman give the House some guarantee that if British Airways intended to remove Trident maintenance from Glasgow to Heathrow he would intervene and try to remonstrate with the board? These are very highly skilled and technical jobs whose loss would not benefit the Scottish economy.
The issue that hon. Members should be raising is that of Scotland's control over Scotland's affairs. I hope that many of my hon. Friends will say it is time that Scotland and the Scottish people made it known that we are fed up with the rule imposed upon us which we have demonstrated clearly since 1945 we do not want.
6.34 pm
Mr. Michael Forsyth: The Opposition, as usual, have tried to blame everyone for the defects and problems in the Scottish economy. They have tried to blame the Government for not pursuing the irresponsible Socialist policies of inflating the economy which they advocated unsuccessfully at the last election. The Opposition have tried to blame the financial community—the investors—for seeking opportunities overseas, foreigners for withdrawing their investments from the United Kingdom and, most of all, the public for not buying British and they have suggested once again that the Government are at fault for not facing up to that problem by bringing in protection. The Opposition have tried to blame everyone but the real culprits, who are themselves.
Opposition Members have even sought to exaggerate the problem. It was noticeable in a number of Opposition speeches that hon. Gentlemen refused to give way when they were making statements about the state of the Scottish
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economy and how bad it is, statements that they knew were not entirely well founded. The statement in the Fraser of Allander Institute report, it was said, reflected a fair measure of the success of the Scottish economy, yet it included no mention of service industry, which is a condemnation of the Labour party's amendment. That amendment is a disgrace. It makes no mention not only of the service sector but of tourism, the two major sources of employment in Scotland.
We have all known——
Mr. Maxton rose——
Mr. Forsyth: No, I shall not give way. I shall treat the hon. Gentleman with the same courtesy as that accorded to me by the hon. Member for Glasgow, Garscadden (Mr. Dewar).
We have all known that the Scottish economy, since the first world war, has been over-dependent on traditional heavy industries. We have all known since the first world war that the modern consumer industries would have to replace these traditional industries and that the service sector would have a part to play. We have all known that the wasteful restrictive practices which are endemic in Scottish industry would have to be abandoned. We have all known that people would have to change their jobs more often. Every one of us has known that the only way to enjoy a prosperous future in Scotland is to accept change. Opposition Members know this as much as hon. Members on the Government Benches.
What have the Opposition done? They have taken every opportunity to frustrate change and to hold back progress in support of the status quo, whatever the cost. They have adopted the role of "reactionary" in the worst possible meaning of the word. The Opposition sometimes speak as if they support every sit-in, resist every redundancy and challenge every closure. That is an entirely understandable approach to politics for them because those whose jobs are threatened have votes and their unions have power within the Labour party. If resisting economic change makes electoral sense, then it reinforces itself because the low wages and the unemployment that result can be blamed on the wicked Tories.
Instead of leading their supporters to acceptance of change and persuading them of the importance of progress, Opposition Members have made a career out of reaction and invested their extremely limited political capital in dead-end jobs in dead-end industries. They have piled folly on folly by adopting the unthinking belief that any problem can be solved by spending more and more of other people's money. They have even infected others with their costly greed.
Several industrial disasters that the Government have had to tackle had their origins in the dabbling of the Opposition's distant predecessors. If Scotland is held back by an old-fashioned economy, if Scotland is handicapped by outdated attitudes, if too many people are fighting the battles of the 19th century instead of meeting the challenge of the 21st century, the Opposition and their lamentable lack of leadership are largely responsible. Had the Labour party been able to influence events in the previous century as successfully as it has in this century, we would still be employing people in the Highlands to produce charcoal by smelting iron taken from bog ore. One lesson that we can learn from the past is that politics and business do not mix.
No doubt those who invested millions of pounds of public money in Linwood, Fort William, Invergordon and

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all the other places believed sincerely that the creation of growth sectors would help the Scottish economy; but the plants are closed, the new jobs have gone and the money has gone. Who knows what profitable projects that money might have financed had it been left in the taxpayers' pocket? No doubt those who introduced selective employment tax genuinely believed that it would help manufacturing industry, and that it would penalise the service sector. It certainly penalised the service sector by destroying thousands of jobs and potential jobs, but it did not do much good to manufacturing industry. Who knows how many jobs we might have had but for that misguided measure?
No doubt the Governments who bailed out bankrupt businesses believed that they were helping to avoid hardship, but all that they did was to drag out the inevitable death throes and keep people in lower-paid jobs, in poor working conditions and with no hope for the future. Who knows how many growing new industries were held back because the skilled labour that they needed was unavailable? The practical examples are endless. Political interference in industry has cost money, jobs and growth.
In the 19th century Scotland prospered with the qualities that are endemic in the Scots, as my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst) said, of initiative and enterprise. Scotland exploited a wide demand for the products of its heavy industries. After the first world war that demand declined and, aided and abetted by well-meaning but wrong-headed politicians, workers and managers fought to preserve out-of-date factories and ruinous restrictive practices, to cling to the impoverished way of life that they knew rather than to seek the prosperity that a rapidly changing world offered. Sixty years later the problems are still with us. Businesses that should have closed their doors decades ago are kept alive by massive transfusions of taxpayers' money and the moral support of politicians who should know better. The role of Government in the Scottish economy, if there is one——
Mr. Dewar: Will the hon. Gentleman give way?
Mr. Forsyth: I shall not give way. The hon. Gentleman would not do me the courtesy of giving way during his speech.
The role of Government in the Scottish economy lies in removing the restrictions that inhibit change, the planning controls that stifle the growth of small businesses, the employment legislation that penalises those who would take on an extra worker, the wages councils which price people out of jobs, the education system that leaves so many of our youngsters almost unemployable, and the taxes that bleed profitable businesses to prop up their ailing competitors.
Mr. Maxton: If that is the case, why is taxation now higher than it was in 1979?
Mr. Forsyth: At every opportunity the Opposition press the Government into spending more money, and because we have a moderate and responsible Government they respond to those demands. I am trying to point a way of achieving growth other than by increasing taxation.
All of the areas in which the Government are trying to remove restrictions and regulations are areas where the Government can and should act, but more important are the areas where they should not act. Each pound spent on
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a declining industry is a pound lost to an expanding one. The provision of a financial crutch for lame ducks and life support systems for dead ones deprives new businesses of the capital, workers and customers that they need. We preserve the past in Scotland by sacrificing the future. and it is a bargain for which our children will curse us.
Mr. Dewar: I take the hon. Gentleman's point that there are many factories open now in Scotland which the hon. Gentleman believes should be closed, and which are a drag upon the Scottish economy. Obviously the hon. Gentleman has given much thought to his thesis, and must have looked round Scotland and itemised those plants and factories that he believes should be closed. Will he give us one or two examples?
Mr. Forsyth: If the hon. Gentleman takes the point, he will be as aware as I am of the factories that should be closed. [HON. MEMBERS: "Oh"' I was talking about industries rather than factories.
So that they can oblige the hon. Member for Glasgow, Cathcart (Mr. Maxton) in his desire to cut taxes, the Government must not only turn down the drip feed of public funds, but they must abandon the delusion that electoral victory gives an insight into industry and an expertise in business far superior to that possessed by those who make their living from it. That is the point which the hon. Member for Dundee, West (Mr. Ross) has been trying to make from a sedentary position. I have not met many successful business men, industrialists or financiers who are willing to sacrifice their successful business careers for a career in politics, let alone for a job in the Civil Service. No Government, however able or well-meaning, can hope to succeed where experts refuse to invest. Decades of disasters have demonstrated that truth all too clearly, and practical experience shows that locating new factories for the benefit of election prospects seldom benefits the business., means that the Government have a continuing financial commitment to keep plant alive, and inhibits the development in the area of viable new businesses.
Our aim must be the development and growth of a specifically Scottish economy. On the radio this morning the BBC's economics correspondent, Peter Clarke, said that today the House would debate a Scottish economy that really does not exist. In a sense, he was right. We must create a Scottish economy. My hon. Friend the Member for Strathkelvin and Bearsden said that insurance, banking and finance are playing an increasing part in our economy, with about 90,000 people finding employment in those industries and in tourism. Scottish investment trusts now fund about one third of all investment in the United Kingdom. There is potential in Scotland that has been marked by the launch of a new merchant bank and a new licensed deposit taker.
However, we should go further and create new Scottish companies, mainly with Scottish shareholders, by privatising nationalised companies and organisations such as the Scottish electricity boards, the Forth and Clyde port authorities, the Scottish Transport Group and the Forestry Commission. We should free them from the control of Ministers and civil servants, and seek a relaxation of Treasury and Bank of England control over the Scottish banking system. There may be a case for the central bank having an informal arrangement with the Scottish banks, but there is no case for the rigid controls imposed by the

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Bank Notes (Scotland) Act 1845. Before 1845 the Scottish banks enjoyed freedom of action on the currency, which was neither abused to harm the public nor misused to threaten the unions. There is no reason why that freedom should not be restored. The developments in the Edinburgh financial community, were such a move to be made, would be highly significant in employment terms, and we could develop a money market in Edinburgh or even in Glasgow. In the short term the rights enjoyed by the older Scottish banks to issue their own bank notes, under the watchful eye of the Bank of England, should be extended to the new banks, including the trustee savings banks. I hope that my right hon. Friend will take up this matter with my right hon. Friend the Chancellor of the Exchequer.
Too much of the Scottish economy has been dominated by government, national and local, and too much has been controlled by the politicians. It is not the different ways that they have exercised that control that should be at issue in this debate but the very existence of that control. Of course, Opposition Members will preach doom and gloom. They will scratch around for every indicator that things are getting worse. They will forget the projections that they made during the election campaign. Of course we can expect nothing but the policies of despair from them because that is all they have to offer. They demand that we fight to the last taxpayer to defend declining industries and to protect the unprofitable ones. In the tattered tradition of General Ludd, they are frightened of change and fearful of the new freedom that it can bring.
The tragedy of the past 60 years is that those self-same, negative attitudes have dominated Scottish politics, delaying or completely destroying desirable development. They must not be allowed to do so in the future.
6.50 pm
Mr. Alexander Eadie: The Secretary of State for Scotland is present and will have gathered by this time that the Opposition are anything but impressed by his statement to the House on the Scottish economy. There was a remarkable inconsistency in the right hon. Gentleman's remarks. Only recently his right hon. Friend the Chancellor of the Exchequer unveiled the autumn statement, which clearly showed the "progress" that the Treasury sees in the economy. It was predicted that there would be no economic growth, that unemployment would not diminish, and that inflation, the reduction of which was the great prize that was dangled before the nation, would probably decrease to 4·5 per cent. I am sure that the House will agree that that is depressing news, but things are even more depressing than that.
I noticed that the Fraser of Allander Institute was mentioned during the debate. That is not the only institute or economic organisation that makes economic forecasts. What has the National Institute of Economic and Social Research said about the economy? It said that if the Government's policies are continued we will have, in 1984, probably 200,000 unemployed and an increase in inflation to about 7·5 per cent. Those forecasts come not from the Labour party but from an economic institution that does not share the Government's optimism. If we apply the usual 10 per cent. to that 200,000 figure, we
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shall have 20,000 more unemployed people in Scotland next year. If I were the Secretary of State for Scotland, I would be very concerned about the position.
Mr. Hirst rose——
Mr. Eadie: The hon. Gentleman has already made his speech and I wish to make mine.
The Labour party is not producing these gloomy forecasts, as has been suggested during the debate. I notice that John Davidson, the chairman of the CBI, who has been criticised in the House as being an echo of the Conservative party in Scotland, has said that we may have two economies in Scotland come 1984. He went on to suggest that 1984 would probably bring severe competition, which could be fatal for some industries in Scotland. One cannot have a forecast gloomier than that. That shows the seriousness of the position in Scotland and the complacency of the Secretary of State in dealing with it.
Has the right hon. Gentleman considered the serious nature of Scotland's present economic position? The House may recall the campaign in Scotland during the mid-1970s which referred to "Scottish oil". The right hon. Gentleman will be aware of how that campaign influenced some people in relation to what was happening to Scottish oil in the economy. The reply was—we all gave that reply—that it was British oil. It was also said that we would gain an advantage because it was British oil and we were British. We were told that the economy would be topped up because we were members of the United Kingdom——
Mr. Younger indicated assent.
Mr. Eadie: I see that the Secretary of State is nodding his head in approval.
I wish now to deal with the issue of energy in Scotland. The right hon. Gentleman was good enough to give way to me earlier and I appreciated that. I referred to coal burn in Scotland in relation to the South of Scotland Electricity Board. The right hon Gentleman must be aware of the figures. He knows that it has been suggested that coal burn in Scotland will be reduced from 6·2 million tonnes to 3·8 million tonnes, although the National Coal Board has suggested that, if a little is added to that, it might be only 4·8 million tonnes. The reduction is explained by the economic recession to which the right hon. Gentleman referred in his speech, by the consequences of the closure of Invergordon, the fact that we have increased our nuclear power capacity and by the difficulties in generating electricity. But the right hon. Gentleman cannot gainsay the fact that the announcement of the South of Scotland Electricity Board is serious. A reduction of 2·8 million tonnes in coal burn will mean the closure of five Scottish pits and the loss of 4,800 jobs.
A reduction of 1·7 million tonnes coal burn will mean that 3,000 jobs in Scotland are in danger. It must be said time and again that if there is to be a resurgence in the Scottish economy we must have a strong coal industry, a strong steel industry and a strong railway industry. Unless those basic industries are strong, there will be no resurgence of the Scottish economy. What does the Secretary of State propose to do about this serious position? It is not good enough for him to say complacently that in two or three years' time, when Peterhead stops using the gas condensates, 6 million

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tonnes will be burned. What about the interim period? One cannot put miners on the scrap heap just like that—nor can one just close pits and expect, with the wave of a magic wand, to resuscitate them later. When a pit is closed, it is closed for all time. The right hon. Gentleman has a responsibility to ask the Minister who is to reply to make a statement about the serious reduction in coal burn by the South of Scotland Electricity Board.
When the Secretary of State was talking about Scottish coal he came close to describing it as a national heritage. In previous debates on oil we have described North sea oil as a heritage fund. Contrary to the ridiculous statements made by Mr. MacGregor, we have an abundance of coal in Scotland. It is the only fossil fuel that Scotland has in abundance. For example, there are the Musselburgh bay reserves. I signed an agreement in 1978 that led to development at Mussleburgh bay. There are the Happendon reserves. In addition, there is Auchendinny, Comrie, Sorn, and the Cannobie coalfield, which I know the right hon. Gentleman knows something about. That coalfield probably extends into Cumberland. We have rich coal reserves. Mr. MacGregor has suggested that all the best coal in Scotland has already been worked. The chairman of the National Coal Board should obtain proper advice before he makes such statements in Scotland.
When the Secretary of State responded to my earlier intervention he talked about investment in the coal industry. I suggested to the right hon. Gentleman that to some extent he was the custodian of the Scottish economy. I suggest that he should inquire into investment in the coal industry in Scotland. Since the Conservative Government took office in 1979 not one new pit has been sunk in Scotland. When the Under-Secretary of State replies I hope that he will not mention Castlebridge. I attended the sinking of Castlebridge when I had ministerial responsibility for coal. There has not been a new pit sunk in the United Kingdom since.
I hope that the Secretary of State is aware of the distribution of the investment that has taken place. As I said last week in a coal debate, 81 per cent. of the investment in the industry has been directed to Yorkshire, the midlands and surrounding areas. The remaining 19 per cent. of the investment has been distributed in what has been described as peripheral coalfields. These fields are in south Wales, Leicestershire, part of Derbyshire, Durham, Cumbria, Northumberland and Scotland. The 19 per cent. has been divided between them all and it seems that Scotland has been treated as a peripheral coalfield. I suggest to the right hon. Gentleman, as I suggested to the Secretary of State for Energy last week, that the consequence of a policy that excludes new pit sinkings and new investment will be a contraction of the coal industry in Scotland.
The Secretary of State will probably say that Opposition Members should be making constructive contributions. We are ideally poised in Scotland to take advantage of our coal reserves. It is in our strategic and economic interests to develop the coal industry. There is the opportunity to introduce liquefaction, and dual processing could be introduced at Grangemouth. When discussing the liquefaction of coal we are not talking about a new technical process, because we have been reprocessing for years. We are talking about a new raw material that could be derived through coal. We could go ahead with the developments that were bequeathed to the Conservative Government in 1979.
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If those developments had gone ahead, the pilot plants would be ready and we could enjoy the commercial liquefaction of coal. I suggest to the Secretary of State that he should stand up for Scotland. He should stress that Scotland is rich in coal reserves. The Scottish people want to take part in the experimentation of the liquefaction of coal, because Scotland is ideally suited to be a part of such an experiment. Therefore, Scotland is entitled to its share of the allocation of resources that will be necessary to get the research and development project under way.
Mr. Forsyth rose——
Mr. Eadie: I shall not give way as I want to bring my remarks to a conclusion as quickly as I can.
The Secretary of State must be aware of the exciting new developments at Westfield. We have already broken through the barrier of producing synthetic North sea gas and it is already being produced at Westfield. We know that we have coal in abundance and the North sea oil production will be reduced to a trickle at the end of the 1990s. The reduction of that supply will be accompanied by a diminution of the capacity to produce North sea gas. We should be grabbing the new opportunities that are inherent in the gasification of coal, coal being one of Scotland's richest assets.
I hope that the Secretary of State will not ask the Under-Secretary of State to deal only with the economics of coal gasification. We have invested millions and millions of pounds in the gas pipeline throughout the country and when the supply of North sea gas starts to diminish we shall want to continue to capitalise on that investment. h would be nonsense to wipe away that investment, and that is why we want to introduce the gasification of coal.
The right hon. Gentleman must fight for Scotland. Scotland has rich assets but its people are probably the richest asset of all. Scotland must have a voice in the British Cabinet. That voice should say, "As we have wealth in the North sea and in solid fuel, we are entitled to our fair share of the allocation of financial resources." Scotland is ideally poised to implement the policy of research and development, and that is why the right hon. Gentleman must stand up for Scotland.
I hope that we shall not end up in Scotland with nothing but nuclear power generation, and no coal industry when the oil industry has disappeared. That would be unacceptable to me, to the Scottish people and to my right hon. and hon. Friends. If the right hon. Gentleman wants to be constructive, he has a responsibility to say, through the Under-Secretary of State, that next week he will be prepared to meet area officials of the National Union of Mineworkers in Scotland, along with Labour Members from mining areas, to discuss how we should tackle coal burn and the broader issue of the Scottish mining industry. That would be a constructive approach and I challenge the right hon. Gentleman to issue invitations to such a meeting. Let us meet the right hon. Gentleman and determine what contribution can be made to ensure that we have a strong, viable and economic coal industry. We want to play our part in ensuring that we have a sustainable Scottish economy.
7.9 pm
Mrs. Anna McCurley: During the past two decades there has been

815
a persistent decline in Scotland's traditional industrial base. The Labour party in opposition has a strange amnesia about what it did when in power.
The hon. Member for Midlothian (Mr. Eadie) talked about the coal industry. The Labour Government were responsible for as many pit closures before 1979 as we have been for closures of any kind in Scotland. If pits that we are supposed to keep open—for example, Cardowan—are losing £10,000 per man per annum because of inefficiency, there is a good case for closing them.
Scotland has been beset by outdated working practices, poor productivity and lack of competitiveness. The hon. Member for Paisley, North (Mr. Adams), who is just leaving the Chamber——
Mr. Eadie rose——
Mrs. McCurley: I shall not give way.
Mr. Eadie: Come on.
Mrs. McCurley: The hon. Member for Paisley, North was talking about Paisley shawls as an industry that went into decline because nobody wanted the product. Much the same has happened in Scotland during the past 150 years.
Mr. Adams rose——
Mrs. McCurley: The textile industry has become uncompetitive. Last week, I spoke to a leading manufacturer who uses British textiles—sometimes he uses a border tweed and certain other textiles. When I asked him why he did not use tailoring textiles, he said that it was because the British textile industry had failed to come up to date and to meet the demands of the customer. That is what happened with Paisley shawls and what is happening to our industries.
Mr. Adams rose——
Mrs. McCurley: When the Labour Government were in power and responsible for industry, they were beginning to realise what they had not realised before—that the country was being destroyed by hyperinflation. The hon. Member for Paisley, North used a phrase by Harry Truman—"Save a buck and destroy the people".
Mr. Adams rose——
Mrs. McCurley: I rephrase what Harry Truman said and say "Overspend a buck and destroy the people". That is what the Labour Government's policies were doing.
Mr. AdamsWill the hon. Lady give way?
Mrs. McCurley: I shall not give way.
The Conservative Government have attempted to drag Scotland into a modern industrial framework. It is heartening that, because of the newer style of industries, more people are employed in the electronics industry in Scotland than in the coal, steel and shipbuilding industries put together.
It is important that there should be a balance, but the Opposition's problem is that they overemphasised traditional industries, because those industries are their traditional power base. They refuse to accept that that power base is being eroded in the newer industries. The largest employer in my area is the microelectronics industry, which is assisting in an area that is suffering a decline in traditional industries.
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The hon. Member for Glasgow, Garscadden (Mr. Dewar) talked about the deindustrialisation of the Clyde. I suggest that in my constituency there is a re-industrialisation of the Clyde. The hon. Member for Garscadden either does not understand or does not want to understand the potential in these new industries. He is a classic example of Opposition Members who think that if there is not an oil can in one hand and a spanner in the other and a massive work force it is not real industry. The Opposition fail to recognise that there are 60,000 small businesses which act as vital employers.
Mr. Maxton: What about the small industries?
Mrs. McCurley: We need a degree of resolution as well as evolution in industry.
One of the major employers in my constituency is the tourist industry. I classify tourism as a major industry and it is a labour-intensive industry. We should be counting on the service industries. The Government have an excellent record in extending finance to the tourist industry. The tourist industry provides £250 million in income for Scotland. The Minister of State said in the other place that it stimulates £620 million of purchases in our economy. It also provides 50,000 basic jobs and more are unaccounted for in the statistics. One working person in 38 is involved in some aspect of the tourist industry, and there is a great potential for more involvement. The Government's expenditure on the tourist industry has risen by 7 per cent. to a record £760 million. The tourist industry in Scotland now ranks third behind oil and whisky and could overtake them.
A Bill was presented today by the Minister of State in another place to allow the Scottish Tourist Board to promote Scotland abroad untrammelled by restraints from the British Tourist Authority. That will encourage not only extra tourism but new investment in Scotland. I especially welcome the new investment in my area.
An imaginative and highly commendable project masterminded by the editor of Greenock Evening Telegraph was for the development of the waterfront in Inverclyde. The Scottish Development Agency has agreed to a feasibility study and the tourist board of the Inverclyde district council has agreed to support the scheme. It could bring millions of pounds of investment to my area, and could provide the building industry with an immense amount of work on the waterfront housing developments and the small factory units which this type of area would attract.
The leisure industry is big business. The hon. Member for Paisley, North would be grateful if the textile industry could obtain some advantages from this scheme. Sportswear would be an important component of the leisure industry. These are all spin-offs from that industry.
Dr. Norman A. Godman rose——
Mrs. McCurley: This development should be taking place. It is imaginative, practical and progressive. We should be looking towards the tourist industry as one of our most important revenue earners. This area has largely been ignored by the Opposition. I put in my bid for whatever finance the Government have for this industry in my area. It is a remarkably underdeveloped area. The Clyde has remarkable potential and could be the saviour of Scotland.
7.18 pm
Mr. Bob McTaggart: Yet again, we hear promises of economic recovery from the Conservatives and we are led to believe that the Government strategy is at last beginning to show results. The Chancellor of the Exchequer talked about the Government's "winning combinations". If such a recovery were really under way, if output had returned even to 1979 levels and trade in manufactures were running at a surplus rather than a £4 billion deficit, if our industries were more competitive than they were in 1979 rather than 15 per cent. less so, and, above all, if the unemployment figures showed signs of tumbling rapidly, the Opposition would certainly welcome those developments. To use the Prime Minister's infamous phrase, we might even rejoice.
We do not believe that anything of the kind is happening. Unemployment continues at the worst levels ever known in this country, our economy stagnates in the deepest slump for 60 years and on the horizon is the not-too-distant prospect of dwindling returns from North sea oil. One of the unfortunate results of four and a half years of the Government's economic strategy has been that the great opportunity of North sea oil has been missed and the revenues squandered when they could have been invested in industry.
Mr. Forsyth: Will the hon. Gentleman give way?
Mr. McTaggart: As a result, our future as a successful manufacturing and exporting nation has been seriously undermined.
The Government's record is one of failure and Ministers and Conservative Members should be deeply ashamed of it. With so much evidence to the contrary, it is incredible that Ministers still try to convince the House and the country that their policies are beneficial. Their economic strategy has failed and, as always, Scotland has paid a heavy price. Nearly 250,000 pensioners are now struggling on the poverty line, dreading the onset of every winter with its threat of hypothermia. One in five Scots now has an income at or below supplementary benefit level. The housing stock deteriorates daily while housing budgets are slashed by the Secretary of State for Scotland. Our Health Service is denied the proper resources to meet the legislative demands of our people. Our major industries are squeezed and threatened with closure.
Prolonged unemployment has become a reality for about half the men in many parts of Glasgow, as my constituents can testify. Mass unemployment has become the chief distinguishing feature of the Scottish economy in the 1980s. There can be no more depressing observation than that. As my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) said, it is even difficult to arrive at a realistic and truthful figure for unemployment in Scotland because the figures have been doctored. The figures now exclude the thousands of married women who cannot claim benefit but who are unemployed and would dearly like the chance of a job. The unemployed over the age of 60 are no longer required to sign on. Further tens of thousands are excluded because they are involved in the Government's special employment and training schemes, which are all too often just one step away from the dole queue. Perhaps the Secretary of State will explain why those people cannot have the real jobs that the Prime Minister promised in the run-up to the 1979 election.

Taking all those exclusions into account, it is reasonable to suggest that under the Tories almost 500,000
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Scots cannot find work. In a nation of 5 million people, that is a savage indictment of any Government. Ministers at the Scottish Office must decide how much longer they can support Government policies that are so damaging to Scotland when in the June election those policies were overwhelmingly rejected by the people of Scotland.
We have heard before and no doubt we shall hear again today the claim that there is a world recession and that what is happening to the Scottish economy is happening to all Western industrial economies. It may even be claimed that there is little that any individual country can do to overcome the problems common to all, but that argument cannot be sustained.
Earlier this year, I asked the Library to compute the number of people who would be unemployed in Glasgow if the unemployment rate were the same as those current in other Western industrial countries. The results make interesting reading. If our unemployment rate had been the same as those of Japan, Norway, Sweden or Austria, there would be between 75,000 and 80,000 fewer unemployed in Glasgow alone because unemployment in those countries was between 2 per cent. and 3 per cent. whereas it was more than 16 per cent. in Glasgow and about 15 per cent. in Scotland as a whole.
If the Japanese, Norwegian, Swedish and Austrian Governments can pursue policies that hold unemployment to 2 per cent. or 3 per cent. in the midst of a world recession, the British Government should be able to pursue policies that would significantly reduce unemployment here. All that is lacking is the political will to do so.
Mr. Hirst: Will the hon. Gentleman give way?
Mr. McTaggart: Why cannot the Government sanction the spending of public money on the many projects that are so desperately needed and would give a much needed boost to the economy and job prospects? One thinks of railway electrification and the replacement of Victorian sewers. Why do not the Government allocate to local authorities the capital to launch a massive house building and modernisation programme to meet the needs of the thousands on the council waiting lists, at the same time giving work to the thousands of construction workers on the dole? Why will the Government not sanction public spending to bring old age pensions and unemployment and social security benefit to decent levels so that recipients are not cut off by their lifestyle like so many lepers?
Mr. Hirst rose——
Mr. McTaggart: I am corning to the point that the hon. Gentleman probably wishes to make.
It may be argued that we cannot afford to do these things. I argue that we cannot afford not to do them., as there can be few bigger spenders of public money than unemployment itself.
The Government are reluctant to talk about the real cost of unemployment. For some years now, they have published only the cost of unemployment benefit and supplementary benefit paid across the counter. Even the most casual observer knows that the true cost is far greater. There is the cost to be met from the redundancy fund. There is the extra cost in higher rate and rent rebates. There is the shortfall in tax revenue. There is the cost of all the other factors associated with mass unemployment. Recent estimates put the cost of keeping 4 million unemployed at about £20 billion per year.

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The Government have a clear choice. Either they continue to waste public money keeping people out of work or they use it for specific projects to get people back to work. We need more skilled teachers to meet education demands. We need more doctors and nurses to meet the needs of an aging population. We need more houses of the kind in which people wish to live. We need better roads and railways.
Mr. Henderson: Will the hon. Gentleman give way?
Mr. McTaggart: We need more people earning and spending money to keep the economy moving. In fact, we need a change of Government—and the sooner that change comes, the better for all the people of Scotland.
7.29 pm
Mr. Malcolm Bruce: I appreciate being called to speak as I represent the one political Scottish force that increased its support at the general election at the expense of other political parties. I believe that our contribution to the debate—although our amendment, regrettably, has not been selected—is both positive and constructive, which, I regret to say, is more than we have had from the two Front Bench spokesmen.
The Secretary of State, by his selective use of figures and facts, was trying to give the impression that the Scottish economy was successful. I do not think that Conservative Members have referred to the fact that one third of a million Scottish people are unemployed. That figure is just about double what it was when the Government came to power in 1979. To brush that fact aside and discuss other matters is an insult to the intelligence of the House and the Scottish people.
It is worthwhile examining the background against which the Scottish economy operates. Britain, for the first time in its history, is a net importer of manufactured goods. My information is that such a state of affairs represented £1,222 million of deficit in the first half of the year—a catastrophic figure. The figure is worse when one considers that the deficit on our non-oil account has trebled in the past year and is now at an annual rate of £8,000 million. The only way that Britain, and therefore Scotland, can survive as a trading nation is by selling its goods and services to the world, and that we are clearly failing to do. That is the achievement of almost five years of Conservative Government.
We must bear in mind what Scotland can achieve for the energy industries and the role that the energy industries should be playing in the development of the Scottish economy.
Mr. Barry Henderson: I hope that the hon. Gentleman does not intend running down the achievements of Scotland in any sense. About 30 per cent. of all Scottish products are exported. Can the hon. Gentleman name any country in the world, including Japan, the United States and Germany, that can match that achievement?
Mr. Bruce: The hon. Gentleman has intervened just as I was about to deal with that subject. If we remove oil, the British economy is in a serious position. Its trading position is weak, not strong.
The debate is remarkable in how it differs from a debate that might have been conducted in a more optimistic spirit
820
10 years ago. I am sure, as the hon. Member for Dundee, East (Mr. Wilson) said, that one would not think that our oil production amounts to £15,000 million per year, because it gives us no benefits. Our oil revenues support the unemployed. The Government's policies have failed to take advantage of the opportunity given to us by the discovery of North sea oil and gas.
Mr. Younger: Surely the hon. Member for Gordon (Mr. Bruce), whose constituency is in the middle of the Grampian region, did not mean that we have received no benefit from North sea oil.
Mr. Bruce: I am suggesting not that my constituents have not benefited from North sea oil developments, but that the Government have failed to take full account of the contribution of oil to the British and Scottish economies. Hon. Members have expressed dissatisfaction about other parts of Scotland not securing the benefit from North sea oil development that they might have wished and expected.
We have not even had the benefit of competitive energy pricing, even though we produce our own oil and gas. We are the largest energy producer in Europe and we charge ourselves prices at or above the world level. We are not giving ourselves even the smallest selective benefit from being such a large producer of oil and gas. The Government are directly responsible for not giving the right type of lead to enable the developments at Corpack and Invergordon to survive. The key to the failure of those enterprises was their inability to compete in energy prices with industries in other countries that gained more advantageous energy deals. I accept that the Secretary of State eventually produced a package for Invergordon, but it was far too late. Had it been presented at the beginning, we might have been able to save Invergordon.
Bearing in mind the change in the price of aluminium in the past few months—just before the closure of Invergordon the price of aluminium was £650 per tonne compared with £1,116 per tonne now, which is almost double—there is some interest in the possibility of reopening the Invergordon plant. How is the Scottish Office trying to bring that about? Is the Secretary of State prepared to offer an energy deal to any operator who might wish to reopen Invergordon similar to the one he offered at the time of the closure?
The difficulties in our economy in the past 10 years have been caused substantially by the rise in energy prices. However, the Government have not pursued a policy actively to promote energy conservation in any significant way. Energy conservation is not just an economic benefit, but an industry in its own right and one of which Scotland is well placed to take advantage. It makes use of the construction and engineering industries and building services of which Scotland has a considerable concentration. Had the Government taken a serious approach to the problem, many thousands of jobs could have been created. One estimate is that a vigorous development of energy conservation could create 70,000 jobs in Scotland.
The Government's failure to allow the British Gas Corporation to embark upon the gas gathering system has meant that the chickens are coming home to roost. The present price of gas is such that the gas gathering system would have been a viable proposition. The signs are that the volume of gas would have been sufficient to sustain the viability of the enterprise. The danger is that we shall have

821
to import gas. By failing to develop our own gas gathering system, we have failed to provide the fabrication yards in the Highlands with the orders that they need and the steel mills in central Scotland with the orders that they could have met.
Although the Government fought for Ravenscraig—there may be a difference of view as to how strongly they fought—they would not have had to fight had the gas gathering system gone ahead, because the demand for steel would have sustained Ravenscraig through the recession.
The Government have not proposed the type of support for developing our offshore technology that will enable us to be world leaders when gas and oil production in the North sea has been exhausted.
I assure the Minister that I receive evidence from my constituents about the difficulties of developing new technology because development aid is not available in the Grampian region. I object to the attempts by other agencies to lure people to other parts of Scotland—I do not object if they are successful but their actions undermine the viability of the projects and so prevent them from proceeding. I suggest that in research and development, the specialist training required for the development of our oil and gas technology, and the development of our overseas capability, we have not had sufficient support from the Government to ensure that Britain is a world leader in offshore technology. Scotland should be looking to the offshore industry to lead the world. I do not accept the Government's argument that what they are doing in leaving development to the private sector is adequate. It is not giving us the chance to compete with countries, such as Norway and France, which are given more Government backing for their offshore industries. Although France has no offshore oil and gas production, its offshore industry is nearly as large as Britain's. That is because the French Government vigorously backed their industry.
I have deliberately and consciously concentrated on the energy industry, because I believe that it is important to and can be the basis for Scotland's future. I suggest that for the Government to give selective figures and to claim credit in areas in which they have not directly participated does not demonstrate any economic strategy for the future.
There is no sign of where Scotland's economy will be in five, 10 or 15 years. We need a strategy for economic development and the development of new employment. We have heard nothing from the Government to suggest that there will be a significant improvement in employment prospects. The people of Scotland want to know where future generations might expect to find work. That can be achieved only by a partnership between the Government and the private sector.
It was interesting to hear the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) taking a different view from her hon. Friend the Member for Stirling (Mr. Forsyth) about the role of the public sector when she thought that it might benefit her constituency. Her views did not square with the philosophy expressed by her hon. Friend. Constructive partnerships have made countries with which we are competing—such as Japan, West Germany and Scandinavia—successful. If we want to be successful, we must be prepared to look at what those countries do and learn from them. It is time for the Government to play a more active role in identifying the
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industries which, with proper backing, could succeed. We have not seen any evidence Of any such commitment from the Government.
Only one Conservative Member mentioned the problems of the rural areas. We must recognise the rundown of services and the lack of new job opportunities in the rural areas, and take that on board as part of a regional economic development strategy. The Scottish Development Agency has no specific responsibility for development in rural areas. Indeed, most rural areas have less assistance than the rural areas of England, which at least have the benefit of the Development Commission and COSIRA. No specific development has been earmarked for rural areas in Scotland.
As my hon. Friend the Member for Inverness, Nairn and Lochaber (Mr. Johnston) said, we acknowledge that the Highlands and Islands Development Board has increased demand for grants., but the Government's refusal to increase grant means that it is not sufficient to meet that demand. The SDA has no brief to provide such assistance, and it is not doing so. It is time that the Government directed the SDA to accept responsibility for development in rural areas.
Mr. McQuarrie: If the hon. Gentleman looks round his constituency, he will discover that the SDA has constructed industrial units and given considerable assistance to businesses during the past five years.
Mr. Bruce: The hon. Gentleman has not challenged my point that the SDA has not accepted responsibility for promoting employment and development in rural areas. Of course, I am not simply referring to manufacturing. Everyone knows that the maintenance of rural communities depends on providing services to allow industries to flourish.
The western part of my constituency has record unemployment, comparable to some of the worst parts of Clydeside. There is the bleak forecast of 30 per cent. unemployment in 10 years' time. That is hardly a success story, and there is nothing in the Government's package to suggest that they intend to do anything about it. It is high time that they recognised the real problems facing rural communities and the need for a positive approach. Other hon. Members and I have made representations to the Secretary of State, but we have been speaking to a stone wall.
I hope that all hon. Members recognise the need to encourage and develop the growth of small businesses. Large-scale manufacturing enterprises will not provide future jobs. The development of the service industry and new small businesses is likely to provide the greatest potential for new growth and employment. I welcome the Government's acknowledgment of that fact, but I regret that, compared with other countries, the development of new small businesses is well below what it should be. That is partly because the climate in which we operate and the general trading performance of Britain do not pull businesses through the recession.
I recognise that I cannot address my criticisms to the Secretary of State because, at the end of the day, he is dependent on the economic strategy pursued by the Chancellor of the Exchequer—an economic strategy that has produced record unemployment and a trading catastrophe. Nothing that the Government say suggests any way out of that problem. If we cannot trade profitably as a nation, we shall not survive.

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The figures that I quoted earlier show that we are failing to pay our way in the world. Unless we can do that, we shall be bankrupt. The Secretary of State's statement today left out all the embarrassing facts about the one third of a million unemployed in Scotland. He failed to address himself to the future. He gave no sign of what the position might be in five or 10 years. He simply asked us to trust him, and all would be well. But the record of the past five years does not persuade me to do that. That record might explain why support for the Government and for other parties in Scotland fell at the general election and why support for the alliance rose by 300 per cent.
7.46 pm
Mr. Gerald Malone: I am glad to have the opportunity to speak in this important debate. I am sorry that I did not hear the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) because I was engaged on Committee work. I understand that I missed a part of his speech that supported what the Government have been doing since 1979—I refer to the Opposition amendment, which
"calls on Her Majesty's Government to reverse policies which have struck both at the traditional heavy industries and those based on the new technologies".
Since the Government were elected in 1979 they have attempted to reverse the decline brought about by successive Socialist Governments. I congratulate the hon. Member for Garscadden on including that congratulatory element in the Opposition amendment.
This is a vital debate for Scotland, and especially for the north-east of Scotland. I wish to highlight several aspects of the Government motion, the first being the North sea oil industry. The Government have given a great boost to confidence in the exploitation and future development of North sea oil since they were re-elected in June. At that time there was a slight lack of confidence in the oil industry as a whole and development was being held back. With the passage of the Petroleum Royalty (Relief) Bill, the oil industry will receive much-needed encouragement.
The news from the North sea has been good during the past quarter. Three more fields have come on stream—Brae, Magnus and Maureen, and development plans have been approved for one other field. It is not an exaggeration to say that, as a result of the Bill, 30 new fields will be encouraged. Those fields are marginal, and would not have been developed without that legislation. The Government deserve congratulation for that.
The effects on the Grampian region during the past few years of the Government's North sea oil policy have been clear. Until June there was a significant increase in oil-related jobs in the Grampian region. In Grampian, 6,300 new jobs have been created in the oil-related sector in that short time. That represents an increase of 16 per cent. for the rest of the Scottish economy. There has been an increase of 8·5 per cent. in oil-related jobs. Therefore, the Government have presided over a success story in that industry. Hon. Members on both sides of the House should be grateful for that.
While I have listened to the debate, I have wondered whether Opposition Members know what they are talking about when they discuss North sea oil and when it will run out. They suggest that it will run out by the 1990s or the
824
turn of the century. Their view is not shared by oil companies, which are investing heavily in the North sea and the Grampian region. They believe that development of North sea oil will continue well into the next century. The north-east of Scotland enjoys plans and investment to bring North sea oil in for some 30 or 40 years. It is worth bearing in mind that projections about North sea oil reserves have been pessimistic rather than optimistic.
We were told that we should reach the peak of production in the early 1980s. That peak will not be reached until between 1985 and 1990. Moreover, if the Government continue their sensible policies of making fields economically viable by changes in the tax structure, there are sufficient fields to enable North sea oil development to continue far beyond the turn of the century. We must all be grateful for that.
Mr. McQuarrie: My hon. Friend might have made a small error when he referred to the number of jobs created in 1983. Oil-related jobs increased from 34,000 in 1978 to 63,000, not 6,300 as my hon. Friend suggested.
Mr. Malone: I am sorry if I misled my hon. Friend. I intended to say that the number of new oil-related jobs in Grampian region in 1982–83 increased by 6,300. I was not referring to the total number of jobs in the oil sector.
There are other encouraging signs in the North sea oil development story that could be related to other parts of the Scottish economy. One is that the north-east of Scotland is beginning to enjoy not just the benefit from subsidiaries of companies being set up there. Such companies are bringing their entire infrastructure to the area. They are setting up their headquarters and decision-making processes there.
International Drilling Fluids is just one company that has decided to concentrate all of its production, development and capacity in the north-east of Scotland. The number of companies that decide to do that will increase. That is encouraging for the simple reason that, when North sea oil begins to run out, we shall have a base upon which we can export technology to other areas that are developing offshore oilfields. The trend that I have described is growing and is to be welcomed.
The north-east of Scotland has not been reluctant to train its own young people to enable them to participate in the development of North sea oil. Schemes have been set up by Shell in conjunction with Grampian regional council. The result has been four-year training schemes for offshore technicians. Companies coming to the area can therefore take advantage of a local and qualified labour force. That, too, is most encouraging.
During the past few years the supply industry has flourished and there is every sign that it will continue to do so. However, there is one cloud on the horizon, which the hon. Member for Linlithgow (Mr. Dalyell) mentioned. As the supply industry in the North sea has developed, there have been cases of competitors being unfairly subsidised and undercutting our indigenous industry.
The hon. Member Linlithgow hit the nail on the head when he pointed out that the Norwegians are a classic case in point. By giving tax allowances for those who build supply vessels, they encourage the employment of those vessels at grossly uncompetitive prices. They are now intervening in the North sea supply market and might render a substantial number of our companies unprofitable. For proof it is necessary only to examine the daily

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rates for chartering supply vessels. Once, such a charter would cost £3,000 a day. Now, the going rate for such a vessel at Aberdeen can be less than £1,000 a day. The result is that many companies are now forced to put boats out at unprofitable rates of charter. That might lead to our supply industry being severely damaged.
Mr. Dalyell: I have written formally to the Secretary of State suggesting that, on the Norwegian tax regime, he should contact Mr. Richard Tookey, president of the General Council of British Shipping and Shell International Marine, and Mr. Bill Menzies-Wilson who is chairman of Ocean Transport and Trading Ltd., who are experts in these matters.
Mr. Malone: I am sure that my right hon. Friend will more than welcome constructive suggestions. This is a matter of great concern.
The Offshore Supplies Office has said that 70 per cent. of services in the North sea are supplied by British industry. I am not convinced that that explains the matter. Indeed, I believe that something is being concealed. Concealed in that 70 per cent. of vessels which service the North sea rigs are many foreign-owned vessels which, although they are registered in Britain and fly a British flag, belong to companies the controlling interests of which are not related to Britain. That is worrying and I hope that the Government will accept that they must encourage as much intervention by British companies in that sector as possible. I am sure that the Offshore Supplies Office does a good job but I should like to encourage it to do even better.
I do not believe that Conservative Members should be prepared to countenance the unfair and subsidised competition that is beginning to go into the North sea. I shall be interested to hear what my hon. Friend has to say about what he proposes to do to put the matter right.
I am not sure whether what the hon. Member for Gordon (Mr. Bruce) said about our attitude to the collection of North sea gas shows that the Liberal party has moved with the times or whether it is sticking to arguments that have long since gone. Any gas-gathering requirement from the North sea can be carried out properly and acceptably by private enterprise. The flag system, the western leg that is about to be developed and the proposed pipelines that are being developed by private industry have resulted in what would have been a red herring being completely avoided. Any public expenditure on a gas-gathering pipeline would have been irrelevant and a waste of taxpayers' money.
Mr. Bruce: Will the hon. Gentleman not acknowledge that the schemes that he is talking about will develop only a fraction of the gas resources that would have been developed with an integrated system? Will he acknowledge that the British Gas Corporation, British Petroleum and Britoil—BNOC at the time—were keen to go ahead with such a system? He is suggesting that their commercial judgment was at fault two years ago, but facts have proved otherwise.
Mr. Malone: I am prepared to concede that a private company will take public money if that money is thrown at it. The enthusiasm for the pipeline did not surprise me. However, although many marginal gasfields might well have been developed, they would never have been economically viable, and we would have had subsidised
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gas in another form. By insisting on controls on flaring in the North sea and making sure that the systems would be developed by private industry, the Government took the right course. There is now a comprehensive system of gas-gathering in the North sea, none of which has been installed at the taxpayers' expense.
Part of the Government's motion suggests that financial and other services should be extended. With that, in my view, should be coupled a suggestion about free ports in Scotland. I hope that Scotland will be allocated a number of free ports. Some applications have already been made, including one from the Aberdeen area by Barratt. If I talk about the competition for free ports in Scotland, I may run the risk of coming into conflict with the Secretary of State. I believe that Scotland should be allocated at least two free ports, because Scotland has shown that it has the potential to use the asset of a free port. Aberdeen has been allocated a cable channel because that part of Scotland has shown considerable enterprise. I believe that a free port should be allocated to the Aberdeen area for the same reason.
Mr. Maxton rose——
Mr. Malone: I will give way when I have made this point. Opposition Members have said that free ports are irrelevant, that we do not need them, and that they do not stand up in their own right. I believe that they represent a great innovation in the Scottish economy and that Scotland should take advantage of them.
Mr. Maxton: Like enterprise zones, free ports merely draw jobs from other parts of the country. They do not create any new jobs. That would be the effect of a free port in Aberdeen or in any other part of Scotland.
Mr. Malone: I completely reject that view. Free ports are not in any way analogous to enterprise zones. If free ports were to be used in this country as a simple device to relocate labour and move jobs, I would be against them, but they are a device for bringing new jobs into the country. Jobs would be created not only in the free ports but in the service industries that supply them. I ask the hon. Gentleman to study examples of properly constituted free ports elsewhere in the world.
Mr. Ron Brown: Will the hon. Gentleman give way?
Mr. Malone: No, I have already given way on this point. Where free ports have been properly constituted, they have been a great success. They have been job creators. Every projection and prediction indicates that free ports will handle about 20 to 25 per cent. of the volume of the world economy before the end of the decade. If the hon. Gentleman is suggesting that Scotland can afford to do without such institutions, I find it hard to agree with him.
Free ports create jobs in a number of ways. They relax the regime of customs duties and taxes and excise duties, which might well discourage people from attempting to manufacture in this country. They encourage the assembly of items of which the individual components would be highly taxed if they were imported. They generate a great deal of wealth. The hon. Member for Glasgow, Cathcart (Mr. Maxton) should consider the free port of Miami. From a completely cold start, the free port now employs 10,000 people. It covers 90 or 100 acres. It has brought new jobs to the American economy.

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There are certain criteria that the Government should remember when deciding where to locate the free ports. Free ports should not be regarded as a crutch for areas that are not able to sustain industrial growth. I agree with the hon. Member for Cathcart to the extent that I believe that free ports should not be enterprise zones in another form. A free port should be situated in an area of growth, with a well-developed sea port and an up-to-date airport. If the free port is to be a device for encouraging inward investment, it should be placed in an area that is internationally recognised. It will be no surprise to hon. Members to learn that the city of Aberdeen fulfils all those criteria. The Government have been very successful in grasping the nettle of free ports. I shall look forward with interest to further developments.
Regional aid is currently under discussion, and various submissions are being received and considered by the Government. Regional aid has been a blunt instrument used to encourage capital investment. In many respects, it has not encouraged job creation. The loss of regional development area status has sometimes left indigenous manufacturing industry in some areas of Scotland, such as Grampian region, very non-competitive. Certain industries in Grampian find it difficult to compete with similar industries located in other parts of the United Kingdom that receive grant aid. Particularly in Grampian region, that has resulted in the wasteful device of moving jobs around the country at the taxpayers' expense. That must stop. I do not believe that Government intervention in the economy will or should stop, but I hope that when the Government turn their attention to a new device for placing public funds at the disposal of industry, they will do it on a collective basis. I hope that they will judge on the merits of the case rather than the place where the industry happens to be located. When regional policy is replaced, there are several criteria that must be borne in mind.
This debate will deeply divide the House. From the Opposition we hear a tale of woe unleavened by the appearance of any light on the economic scene, while the Government may sometimes be tempted to speak selectively. However, the public can be expected to give credibility to what we say only if we take a realistic look at the signs in the Scottish economy. In the Scottish economy, we are beginning to see the signs of hope. I am appalled by the Opposition's peddling of gloom and not hope, especially as they are substantially responsible for the gloom that they are now able to see.
Manufacturing production rose in 1982. Output per man rose by 7·6 per cent. last year, making us more competitive than we have been for years. The number of strikes fell. I rejoice at all these things because they mean that our economy is once again becoming competitive.
What do the Opposition want from the Scottish economy? Do they want a return to the old days when public money was splurged on industries that eventually went bankrupt? Do they seriously want to see more Linwoods? Do they want to increase steel capacity in Scotland when there is a glut not only on the European market, but on the world market? Are the Opposition seriously suggesting that they want to increase coal production when there are millions of tonnes of unused coal at the pitheads at the moment? They are, as usual, looking to the past.
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All that we have heard from the Opposition is the case for what I would describe as the "dinosaur industries." They present a picture of the economy, which is a picture of the past. It is something of a video nasty the title of which is, "When subsidies ruled the earth." That attitude will not be found on this side of the House. Our argument is based upon the future of the Scottish economy, not the past. That is something from which the Scottish people can take heart. There are hopeful signs that we are getting it right but that will not happen as a result of any of the Opposition's policies. The Opposition say that they will get it right, but all they will do is return to the strategy from which we suffered under a Labour Government.
8.10 pm
Mr. Ernie Ross: A feature of today's debate is that many Conservative Members did not seem to understand what the Minister said when he opened the debate. Some of them are so far removed from the reality in Scotland that one asks which part of Scotland they represent.
The only good thing that one can take from the speech of the hon. Member for Aberdeen, South (Mr. Malone) is that, unlike his predecessor, Mr. Iain Sproat, he did not try to blame all Scotland's economic woes on the social security scroungers whom his colleague could not identify when he was challenged. A good day's work in Scottish industry might change the hon. Gentleman's attitude and that of the hon. Member for Stirling (Mr. Forsyth) and give them an idea of some of the problems faced by industry.
In the debate, the Government stand accused of having destroyed our trade, ruined our industries and thrown millions of people out of work. They have created an industrial wasteland of despair and depression. Furthermore, they have no policy with which to clear up the mess that they have created. As the depression of 1979–83 has gone on, more and more of the factories, the jobs and resources that could have been used to combat that depression have been destroyed by Government action.
In his autumn statement, the Chancellor seemed surprised that regional grants were not being taken up. That is because there are no factories, industries or employers who believe sufficiently in the Government's strategy to allow them to take up the regional grant.

Unemployed people in Scotland and Great Britain do not want to hear stories of how the depression could have been a great deal worse; they want to hear what the Government, who have the responsibility to govern, will do about it.
I shall concentrate on the city of Dundee. We have 16,000 unemployed people due almost entirely to the Government's economic policies. Of the unemployed men, 40 per cent. have been unemployed for over a year. We have lost over 3 million working days in Dundee, due not to strikes or sickness, but to unemployment. There is no city or country that can afford such grossly inefficient management of the economy and its human resources.
Thousands of millions of pounds have been poured down the drain of unemployment. Money has been cold-bloodedly used to pay the unemployed to keep them unemployed. At the same time, the Government have been helping the rich to become richer. Since 1979 those earning £40,000 a year have become 22 per cent. better off and those earning £80,000 a year are 54 per cent. better

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off. Government policies which have condemned millions to the wastage of unemployment have enabled the rich to become better off.
The jute industry in my city has lost 5,000 jobs over the past five years. We have identified to the Government the difficulty that the GATT agreements have caused us. We had the charade of Beiulau stealing machinery and experience from Dundee to which the Government refused to respond. The industry has excellent labour relations, low wages and flexibility among its employees and yet it still lost 5,000 jobs. When the Dundee Jute Traders Employers Association—not the trade unions—asked the Government for protection for the special Dundee products it received the simple answer "No."
The Government's ways of trying to help the economy do not succeed. The youth training scheme does not help those who are trying to provide training for young people who will, it is hoped, benefit if the economy picks up. The Dundee engineering training group has made it clear to all hon. Members in the Tayside area that it is experiencing difficulties in continuing to operate the youth training scheme. It opened its factory in 1969 with 55 trainees. That figure has risen to 135. It had a membership of 45 companies. Until August this year, its income came from companies, sponsorship of apprenticeships and the EITB craft award trainees. It says that the youth training scheme could well lead to the closure of Dundee engineering training group. The Government's response to that has been dismal.
In his statement, the Chancellor identified areas in the Civil Service where he saw the need for cuts. He saw a need in particular in the Inland Revenue, and yet we know that the economy could be helped if we could get our hands on the £718 million that the Inland Revenue Staff Association has identified as being the amount of unpaid tax. Surely that is one way in which the economy could be helped.
The Government are determined to continue their attacks on the Civil Service. There have been two examples in Dundee of Civil Service cuts not helping the local economy. In the Customs and Excise the Government seem determined to cut the preventative and rummage staff who are necessary to stop drugs coming into this country. As a result the young people of Dundee and Scotland are suffering because drugs are coming in through the port. Despite the fact that we have identified the problems, when the collector wrote to me recently he said that the
"flexible use of staff and the reduced level of work"
could be compared to the number of vessels arriving in Dundee, which he claims has decreased. However, the number of vessels bringing drugs into Dundee has not decreased. There is no chance that the rummage staff who have to cover the whole of the central belt of Scotland will be able to do anything about the drugs coming into Dundee.
The hon. Member for Stirling has left the Chamber. He made what I suppose he would claim were some well-informed and well-intentioned comments. We listened to a young man who demonstrated that theory is all right but that it does not work in practice. I doubt whether he has ever worked in industry. He should take advantage of the scheme which enables hon. Members to obtain some experience of industry. He is a product of a university, but
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there are other products of the university that are important to the economy—those who leave university and contribute to the economy.
We were reassured once again by the Prime Minister that the universities would suffer no cuts, and yet when we study the strategy for higher education in the 1990s there is a letter from the University Grants Committee to chancellors and principals on 4 November 1983 which says that it will be considering further cuts in the numbers entering university. More importantly, it says that Government funding will have to be considered anew and that the universities should be looking for funding from private sources. Where are these private sources in a stagnating economy?
The report also says that there will be a drop of 20 per cent. in student numbers between 1988 and 1996, and yet there is no apparent provision for growth in numbers for women or mature students, of whom there is an excess on the register. The report says that it wants to shift the finances of the universities to industry and private enterprise. Where will this finance come from, with industry and private enterprise as it now is?
The Government are deliberately trying to minimise the public's awareness of the extent of their economic policy and the effect that it is having on unemployment. During the debate, Conservative Members have attempted to downgrade the contents of the Fraser of Allander Institute report by suggesting that it is inadequate. The Minister knows that it is and he knows why it is because he is the Minister who stopped the unemployment figures being issued by standard industrial clarification. He did that to hide the figures that Fraser of Allander and hon. Members on both sides of the House would have required if they had wished to make a proper input into the debate. When I asked why he had made that decision, the Minister replied in a letter:
"It was decided that since details of previous occupation are not needed for benefit purposes, it would be a sensible economy to discontinue the collection of this data."
What he meant was that there is far more behind this Tory party decision and thinking. He and his Government are saying that all the unemployed are the same, they are faceless people and do not represent the joiners, bricklayers, nurses and waiters in service industry. He is trying to make the unemployed all the same so that it is easier to accept that there are 16,000 unemployed people in Dundee. Rather than identify them and making it clear how his economic policies are affecting the economy of Scotland, he is hiding behind the fact that the data "are not needed for benefit purposes". That is why he could not identify the real unemployment.
The under-employed are also suffering from the Government's economic policies. Those are the people who, because of the pressure on the economy, are having to take jobs that they regard as being below jobs they are qualified to do. That is not to denigrate the jobs that they now have to accept, but many people who have left university as graduates, or have left industry with qualifications, have had to accept jobs outwith the qualifications that they have obtained because of the serious lack of movement in the economy. They are not satisfied and are disgruntled with an economic policy that fails to allow them to achieve their full potential.
The Conservative party may claim that it has cut inflation, but one cannot buy anything if one is unemployed. If one does not have the money one cannot

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spend it. These people want jobs, not sermons from the Prime Minister, and they want opportunities, not slogans. There is an old saying "You don't win anything by standing for nothing." When it comes to relieving unemployment, the Government stand for nothing. On that basis, they will continue to lose the battle against unemployment. It is time that they did the job that they were elected to do and governed. It is time that they started dealing with the economic collapse that Scotland and the country at large are facing.
Throughout this week people from the aerospace and associated industries have been telling us about the serious problems that face an industry that is not one of the old traditional industries, although it is a traditional industry. We have argued that this industry needs support, and workers from all over Britain, including Scotland, have come to the House to point out that the Government's policies are not helping the industry.
The Minister may have a flash of inspiration and remind us of the recent sale of the HS146. However, the HS146 would not exist had it been left up to the management of Hawker Siddeley. It had no confidence in the plane, but the workers fought for the plane against the management and against the then Secretary of State for Employment, the present Secretary of State for Trade and Industry. The success of that plane owes more to the determination of the work force than to the management of the industry. This week, that industry is making it clear that it needs help, and quickly.
Today, Scottish Members had the opportunity of lunching with the moderator of the Church of Scotland. It is significant that even the church leaders recently identified the real problems that the Government are not tackling. I shall put on record the comments that they made when talking about the serious problems facing one of our old industries. They said that from their experience of the great danger facing working people and their families in Scotland as the result of the crisis in the shipbuilding industry, it was time for the Government to adopt a positive maritime policy. Those words have been used by many hon. Members when talking about shipbuilding. They went on to say that there was a need for an interrelationship of shipping and shipbuilding industries, including defence and offshore capacity. These words will ring in the ears of many hon. Members on both sides of the House. They went on to identify the problems that are a result of the crisis in the industry and spoke about the grievious social consequences of unemployment such as marital breakdown, children taken into care, violence in the home, fuel disconnections, alcoholism, glue sniffing, drugs and the deterioration of physical and mental health. Such references have been missing from the speeches of Conservative Members.
The economy in Scotland and in the country as a whole is in serious decline and it will need more than the comments that we have so far heard to convince the people of Scotland or the country as a whole that Conservative Members appreciate the economic plight in which they are living.
8.27 pm
Mr. Albert McQuarrie: I speak after the hon. Member for Dundee, West (Mr. Ross), as I did on the occasion of the Second Reading of the
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Tenants' Rights Etc. (Scotland) Amendment Bill. During that debate, the hon. Gentleman intervened in my speech when I was discussing rents. He shouted "Never", when I said that I was speaking about the city of Dundee in particular. May I make it clear that that was general banter, and that I had no intention of any discourtesy towards the city of Dundee. I hope that the hon. Gentleman will accept that. I am making a genuine apology for something that I said inadvertently, and I hope that the hon. Gentleman will accept it as such.
We have listened today to the usual long-winded oration from the hon. Member for Glasgow, Garscadden (Mr. Dewar). Doom and gloom are his major occupation. Much of what he said is total rubbish and relates only to the city of Glasgow. Nothing is ever said by him or his colleagues about the continued improvement in the economy of Scotland as a whole. We hear only about the area that he represents—a constituency within the area of a local authority that spends money like water and pays little heed to the need to bring the Scottish economy up to the standard that the Scottish people want.
I shall devote my remarks to the Grampian region, which, over the years, has shown that there can be positive growth. I am proud to be one of the Members who represent that region. For the benefit of those hon. Members who have never been north-east of Perth, Grampian is in the north-east corner of Scotland.
Mr. Henderson: I thank my hon. Friend for giving way. I think that he was wise to give advice to those hon. Members who know nothing about the country north of Perth. My hon. Friend will know that the Labour party, which makes such claims about representing Scotland, has only two Members of Parliament representing constituencies north of Perth.
Mr. McQuarrie: I thank my hon. Friend for drawing my attention to that.
For the benefit of hon. Members who have not been north of Perth, except for the Labour party conference, Grampian region is in the north-east corner of Scotland, bounded on the north and east by the North sea, and on the west by the Grampian mountains, from which the region takes its name.
Mr. Maxton: It is not a maiden speech.
Mr. McQuarrie: The region is rich in natural resources. It is a region of fertile farmlands, forestry, fishing, and now oil and gas. I am sure that Labour Members are extremely jealous of the advantages of the Grampian region. The land and sea have dominated our economic structure for generations and will continue to do so.
The region covers 3,400 square miles and has a population of 485,000 people, many of whom live in Aberdeen. The Grampian region, and in particular Aberdeen, has been the focus of one of the most remarkable development successes in the United Kingdom, as a result of the discovery and exploration of offshore gas and oil. More than 2 million barrels of crude oil a day are currently being produced from 21 fields. The oil revenues represent about 12 per cent. of the United Kingdom gross national product.
Mr. Maxton: Subsidy.
Mr. McQuarrie: There is no subsidy. However, despite its strong economy, Grampian, as an industrial

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development authority, continues to give priority to the non-traditional industries, which are the source and lifeblood of our rural areas and remote communities and our long-term future.
The hon. Member for Gordon (Mr. Bruce) said that rural areas had hardly been mentioned. He may well be wrong. He has not been in the House long enough to know that during the past five years I have spent most of my time complaining about the problems of rural areas. In due course, he will learn that hon. Members who represent rural constituencies do take a direct interest in those problems.
Mr. Martin J. O'Neill rose——
Mr. McQuarrie: In the redistribution of boundaries the hon. Member for Gordon was given a highly satisfactory part of a rural area. I am sure he cannot claim that there is 30 per cent. unemployment in his area. I shall now give way to the hon. Member for Clackmannan (Mr. O'Neill).
Mr. O'Neill: We are always interested to hear hon. Members read Scottish Office briefs, but it is surely not in order for tonight's debate to be used as an opportunity to read the briefs of the Grampian tourist board.
Mr. McQuarrie: This is a speech not for the Grampian tourist board, nor for the Scottish Office, but by a Conservative Member of Parliament democratically elected to represent a constituency. The hon. Member for Clackmannan is being impertinent when one recalls that the speeches he makes from the Dispatch Box are chapter and verse prepared for him by a Labour party research assistant, not one word having come out of his own head.
Having spoken about the traditional industries, I wish to refer to fishing and farming—indigenous industries. Those industries have suffered mainly from the loss of assisted area status. That is a great blow to the area that I represent. I want to establish clearly that when the White Paper on regional policy is published it should outline a selective regional policy for companies requiring aid. It is fair to say that Grampian is the one region that has had a growth rate. The growth rate in employment was the figure I quoted to my hon. Friend the Member for Aberdeen, South (Mr. Malone). In 1974 the figure for oil-related industry was 34,000; by 1983 it was 63,800. By the end of the 1980s, that figure will go up to 100,000. Therefore, before the end of the 1980s we can look forward to a further 30,000 jobs.
In looking at the Grampian area, the problem of selective aid for the indigenous industries—fishing, farming and small engineering—must be taken into account. Many jobs exist and a great number of jobs will be created. Crosse and Blackwell recently announced an increase of 160 employees in Fergus in the coming year. The gas pipelines and improvements in gas production will create a further several hundred jobs in the area.
In Fraserburgh a scheme has been started in conjunction with the SDA—I draw the attention of the hon. Member for Gordon to this—to improve the employment situation. Unfortunately, oil passed Fraserburgh by. There was a drop in fishing because of the failure to finalise a common fisheries policy. That was because of the inability of other member nations to agree quotas. A common fisheries policy would have been of great benefit to the fishing industry, and it was accepted as such by the
834
industry. There was no dispute about that. General agreement on a common fisheries policy would ensure the living standards of the fishing industry far into the future.
Similar considerations apply to farming. There have been reductions in the programmes for pig and beef production, yet the region has not accepted that the recession would drag it down.
The great advantage of having a conserved, controlled region is that it would take under its wing the opportunities that must be given to create employment. The region has created jobs out of ratepayers' money at British Fish Canners and other places in the constituency. At General Motors, 1,500 jobs were lost due to the withdrawal to Indianapolis. In CPT in Fraserburgh 1,770 jobs were cut to 750 jobs. Scotland's economy is improving. The opportunities exist and people are taking advantage of them. I agree that that is the area where all the gas and oil comes ashore, so many jobs are being created there.
The hon. Member for Gordon should not say that no jobs are being created in his constituency. The number of people employed on the construction of houses in his constituency and the number of people who have bought houses there belie the story of doom and gloom that he tried to sell the House tonight. That is an important part of the Scottish economy because it is contributing to the revenue, which helps to ensure that the Scottish economy can advance.
My hon. Friend the Member for Aberdeen, South (Mr. Malone) quoted figures that show a general upturn in the economy. I agree with him. The Government are on the road to recovery. They are bringing the economy back to profit.
Many hon. Members have talked about steel, and some of us visited the steelworks to see what was happening. The construction industry has been in recession, but it is now coming out of it. More houses are now being built in the private sector than were built last year. Those are signs that the economy is coming out of the recession. During the next year the Government will show positively that their policies—especially those that they have implemented for Scotland—will be of great benefit.
Mr. Maxton: Will the hon. Gentleman tell the House how many houses were built or started this year compared with 1979, which is a much more significant year than 1982?
Mr. McQuarrie: I do not have those figures with me. I am sure that the hon. Gentleman knew perfectly well when he asked the question that I would not have them. If he knows, he can tell me.
Mr. Ron Brown: Is the hon. Gentleman aware that a record number of companies are going bust each week, thanks to his Government's policies? Where is the economic miracle? I am sure that it does not exist in Grampian.
Mr. McQuarrie: I do not suggest that there is an economic miracle. One must build a house from a solid foundation. In 1979, the Government inherited a bankrupt nation from the Labour Government—[Interruption.] The hon. Member for Dundee, East (Mr. Wilson) may not have thought it bankrupt, but sadly he has been away ill for some time. However, now that he is back in his place, I see that he has not lost his fervour for a Parliament in Scotland. He is wasting the time of the House.

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In 1979 the Government inherited a bankrupt country. In our manifestos of 1979 and 1983 we told Britain what we would do to bring it back to prosperity. That undertaking was endorsed in 1979, and again massively in 1983. If the Government continue to implement the policies in their manifestos, by the end of the 1980s Britain will be healthier than it is now.
Several Hon. Members rose——
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The Front Bench spokesmen hope to catch my eye at 9.20 pm, in another 35 minutes. The number of hon. Members that I am able to call will depend on the length of speeches of those hon. Members who are fortunate enough to catch my eye in the meantime.
8.45 pm
Mr. Michael J. Martin: Two years ago the Secretary of State took part in a debate on British Aluminium in which he argued that the Government could do nothing for British Aluminium because of the aluminium glut in the United Kingdom and throughout the world.
The hon. Member for Gordon (Mr. Bruce) was right when he said that the price of aluminium has increased drastically, but it has done so because of the redundancies that have taken place in the aluminium industry. We are in a good position because at least we have the opportunity of reopening the Invergordon smelter. It would have been a tragedy had that smelter been razed to the ground. Many manufacturers in Britain cannot get supplies of aluminium at the moment. That is a sad state of affairs, because only two years ago we were telling the men of Invergordon that there was no work for them and that they would have to leave.
I am sorry to say that the story of Invergordon and the story of the aluminium industry applies to every industry in Scotland. It applies to coal—Cardowan pit has been closed. The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) mentioned Cardowan and referred to how much money it would take to subsidise the pit, but she did not mention the fact that we are pumping millions of pounds into the Falklands of which no one had even heard a few years ago. We do not hear a cheep from the Conservative Benches about how much money is going there.
Mr. Dalyell: It is £6 billion.
Mr. Martin: Coal is important, and if we are thinking of future generations we should be exploiting that asset and we should be thinking of ways of keeping Cardowan open.
The same story applies to railways, engineering and steel. It is an absolute scandal that our industries are being run down to a bare minimum. We will lose what little industrial base we have.
My right hon. Friend the Member for Glasgow, Govan (Mr. Millan) mentioned Rolls-Royce in Hillington. I left Rolls-Royce in Hillington in 1976 to become a full-time union officer for NUPE. When I left the factory, 6,000 workers, men and women, were employed of whom 90 per cent. were highly skilled. That figure is now down to 3,000. Those 3,000 jobs were lost from the aero-engines division of Hillington quietly because it was done through natural wastage. Those are not just numbers to me—
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those are friends, families, people with whom I have worked, people I know and people who have put a great deal of devotion and skill into the industry. Something must be done. When the aerospace lobby was here only last night it expressed the worry that if the design teams from aerospace were lost we shall be in great trouble in defence and in civil aviation.
Like other hon. Members, I take a great interest in industry. I am chairman of the Labour party subcommittee on industry in Scotland. I take the trouble to go to factories to see what is happening in industry. When we ask employers whether their businesses are successful, we are told that success means that they are actually surviving. They say that if they are surviving they are successful. They do not talk about a full order book now—being successful means having three weeks work on the shop floor. If they get three months' work they turn somersaults.
There are many small engineering companies which have depended upon larger companies such as Howdens, Rolls-Royce, Scott Lithgow, and Anderson Strathclyde. The smaller companies depended on subcontracts from large companies, but the larger companies are now drying up their work and even competing with small contractors. They are submitting unrealistic quotes to keep their work forces ticking over. It is commendable that they are keeping their work forces occupied, but small companies which depended on them and their work are going out of business.
The Secretary of State and his Ministers tell us that everything in the garden is rosy. They can point to companies that are doing reasonably well but I hope that they will not forget that the companies which are surviving are doing so on the work which was done by companies which went bankrupt. Many companies go out of business and the company that survives is not creating and obtaining new work. It is surviving on the misfortunes of companies which have gone bankrupt.
The Government hold the key. They must initiate large capital projects which will give work to larger companies and which in turn can give work to subcontractors.
I have heard a great deal about new technology. The Secretary of State is trying to kid us on by saying that new technology will replace the old industries. I wish new electronics industries well and I am glad that they are coming to Scotland, but I hear a good deal of nonsense about new technology. There is much talk about floppy discs, software, hardware and home computers. Even hon. Members have acquired pieces of this new equipment. Let anyone name it and they are talking about it, megabytes included. However, the new industries cannot survive unless we have healthy traditional industries in the manufacturing sector. A builder does not need a computer to calculate his payroll or ledgering work if he has only two weeks' work for his men. If he is in that position, he can carry the figures in his head.
The new industries are excellent and I wish them well. I know that we have the expertise to cope with them. At the same time we should not kid ourselves, for they do not replace old industries. The old industries and the new industries should be complementary to one another if we are to have an expanding industry.
We must encourage British companies to make more bids for North sea work. There is high technology work in the North sea and many of our traditional companies are frightened off. They do not take that work on board or even

837
tender for it. The larger companies with North sea contracts are going abroad for their contractors. Some British companies which have North sea contracts are giving subcontracts to Norwegian companies. It is a scandal that British companies should be overlooking British subcontractors. It saddens me to think that in the Norwegian sector every supply ship is Norwegian. Only 50 per cent. of the ships that supply our offshore companies are British. The other 50 per cent. are Norwegian or of other nationalities.
If Norwegian North sea and offshore industries are protected, we should take a leaf out of their books. It might not be cricket to do that, but we are not playing cricket when faced with the serious problem of unemployment. The Norwegian ships are doing well in supplying the offshore industries because of the Norwegian tax system and subsidies to the shipbuilding and other industries.
There is serious concern about Korean, Japanese, French and German steel coming into this country. It is all very well for the Secretary of State to tell us that he supports Ravenscraig and that he is not happy about the deal between the Americans and the British Steel Corporation, but he must do something to stop the dumping of foreign steel. If he wants to support the steel industry, he must make his voice heard in the Cabinet.
Many British manufacturers when making a substantial order for steel from British stockholders often believe that they are buying British steel. It is disturbing that, when the supply is delivered to their factories, they discover on examining the Lloyd's certificate that the stockholder has sent them foreign steel. Many stockholding companies which claim to be British and to be supporting British industry are buying foreign steel and selling it in that manner. This should be examined. If British stockholders are buying foreign steel, they should advertise that they are stocking not British steel but dumped goods. The hon. Member for Grantham (Mr. Hogg) laughs. There is no point in the Secretary of State for Scotland telling us that he supports Ravenscraig if he does nothing to protect us from the dumping of foreign steel.
The Scottish retail industry has done an excellent job in employing labour. Gone are the days in the retail industry when young boys and girls worked for a time and their only experience was work behind a counter. It is of great credit to the retail industry that it now gives a good training to many young men and women.
We have the best service in the world because we can take goods from every part of the world and from this country and distribute them throughout the country. We face a problem because, although we need many foreign products and foods which cannot be grown here and it is good that we have that service, our foreign competitors can use our retail industry to their advantage because of our centralised system whereas people in Britain who try to export goods to France, Germany and other foreign markets find that the retail system in those countries is not good, and, therefore, they are disadvantaged.
The building industry and developments in the private sector have been mentioned. I am sure that building workers are grateful for the work provided by private employers building houses throughout Scotland. Nevertheless, although we have debated this before, I ask the Secretary of State again to reconsider the Government's decision to reduce the 90 per cent. improvement and repair grants because that decision will do great damage to the building industry, especially to
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those companies in Scotland which have developed expertise in rehabilitation. Companies specialising in new-build cannot do that work and there is a danger of losing the companies that have gathered so much expertise in rehabilitation in such a short period. Those companies do very good work and their loss would mean further unemployment in areas such as mine.
Finally, if we are concerned about the Scottish economy and its future, we must look at the traditional industries as well as the new industries.
9.1 pm
Mr. Barry Henderson: The hon. Member for Glasgow, Springburn (Mr. Martina is an awfully decent fellow. He had a good girn about the Scottish economy, but, like so many Labour Members, he failed to analyse the cause of the problems and what it is proper for Governments to do about them.
I hope that the whole House will accept that unemployment has not come to us suddenly or recently. There has been a rising tide of unemployment both in this country and in Scotland for more than a decade, probably two decades. It is worth remembering that, although the Labour Government did not want unemployment, it doubled during their period of office. Many of the problems with which we are now coping arose from their erroneous solutions to the unemployment problems at that time.
Perhaps the most dramatic change—this is why I believe that my right hon. Friend the Secretary of State was entirely right to look forward with confidence to the future of the Scottish economy—is that many of the root problems that faced the Government when they took office are no longer with us. The rising tide of unemployment is still with us, due to previous errors, but it has been slowing. It is perhaps too early to say that we have now hit slack water, but as the Government's measures have increasingly taken effect the rate has certainly slowed. The conditions now emerging hold out real prospects that the tide that has risen for so many years may finally turn, perhaps permanently.
It is curious that so many areas of Scotland in which unemployment is worst are areas where Socialism is strongest. I do not know whether that is a direct chicken and egg effect, but areas in which local authorities have been under continuous Socialist control for many years and for which there is strong Socialist representation in Parliament often have severe unemployment problems. In many areas the attitudes to Socialism are counterproductive to the prospects of economic advance. I believe that the idea that one can have everything guaranteed for life regardless of what one does or contributes is bound in the long run to bring about the economic circumstances that resulted in the International Monetary Fund being brought in to bale out a bankrupt Labour Government. The Lib-Lab pact saw a massive increase in unemployment and a massive pumping out of public expenditure which failed to cure the problems.
Opposition Members laughed when my hon. Friends referred to some of the success stories in the Scottish service and tourism industries, particularly when my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst) referred to the importance of financial services. One hon. Member shouted out "How many jobs has that brought?" The answer is that 2,000 jobs per annum have been brought to Scotland in financial services in recent

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years. They are important jobs. My hon. Friend the Member for Renfrewshire, West and Inverclyde (Mrs. McCurley)——
Mr. McKelvey: I am trying to follow the hon. Gentleman's analysis in which he ascribes the problem of unemployment in Scotland to Socialist district and regional councils. The Scottish electorate voted 2:1 in favour of Socialism in the general election, irrespective of district or council elections. Yet the hon. Gentleman referred to success in tourism and service industries in Scotland. If he is to blame Socialism for unemployment, he must be consistent.
Mr. Henderson: I am happy to be consistent. The problem with Socialist local authorities is that they spend money to buy votes and ruin industry.
The hon. Member for Dundee, West (Mr. Ross) said that in his Socialist-controlled local authority area rates have increased by more than 150 per cent. in four years. At my end of the Tay bridge—our constituencies are separated only by the width of the river Tay—district council rates have increased by 2p or 3p in the same period. It is against that background that local authorities can help or hinder industry.
When we examine the extent to which Socialists are representative of Scotland, we realise that the Labour party lost tens of thousands of votes in Scotland at the last election. Moreover, one in six of the Labour candidates in Scotland lost their deposits. The Labour candidate in my constituency lost his deposit by getting only 5 per cent. of the votes cast. Therefore, perhaps we shall hear less about the Labour mandate. Labour has caused serious harm to Scottish interests. It has been a disgrace that Labour Members, with party political interests, have continued to run down much of what is fine in Scotland and much of which we can be proud in the Scottish economy. I do not suggest that all is perfect. The Government have addressed themselves to the real problems of Scotland. They have created a firmer foundation for its future. Many aspects of the Scottish economy give great encouragement to the future. I wish that Labour Members would say more about that.
I agree that there is a continuing future role for traditional Scottish industries, many of which use the most advanced techniques. That is no reason for Opposition Members to denigrate the importance of high technology in general and electronics in particular, and the services that go with them.
Some Opposition Members want to keep open uneconomic pits with wholly unsatisfactory employment conditions for men who would be better employed elsewhere—[Interruption.] To do so, they are prepared to charge—[Interruption.] Have you noticed, Mr. Deputy Speaker, that when Conservative Members speak there is a constant barrage of noise from the Opposition, but when Opposition Members speak they are listened to with courtesy? Opposition Members do not like to hear the facts about the Scottish economy.
Opposition Members are arguing for increased electricity prices to keep open uneconomic pits with unsatisfactory job facilities. It is unfortunate that they have chosen to run down Scotland and the prospects for the Scottish economy. We are entitled to feel confident about the future because prices are steadier than at any time in
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the past 15 years, inflation is falling, interest rates are lower than in the United States—which has not happened for many a long year—investment is growing, exports are rising, demand is expanding, output is increasing and profitability is strengthening.
Those are the reasons why I urge the House to support the Government motion.
9.11 pm
Mr. John Maxton: We have heard some remarkable speeches from Conservative Members. They have ranged from the pre-Adam Smith economics of the hon. Member for Stirling (Mr. Forsyth)—to describe his views as Adam Smith economics would be to insult Adam Smith, he was so simplistic in the way that he presented them—to expressions of great hope from the hon. Member for Fife, North-East (Mr. Henderson).
We all want to see an improvement in the Scottish economy; that must be the aim of every hon. Member, of any party, who represents a Scottish seat. Opposition Members want to see that improvement much more than Conservative Members because more of our constituents suffer from the economic blight in Scotland brought about by Government policies.
Of course there has been a slowdown in the decline in the Scottish economy. If the number of unemployed had not decreased but had continued at the rate of the past four years, by the end of the Government's reign almost everyone in Scotland would have been unemployed.
The leader in the Glasgow Herald today said that
"Devolution is indirectly involved in so far as the Government's decision to grant a debate has been read as a ploy to defuse the controversy over the proposed composition of the Select Committee for Scottish Affairs."
Mr. Allan Stewart: Oh, really.
Mr. Maxton: I admit that I read that article with some incredulity. I find it difficult to believe that a minor Opposition amendment forced the Government to grant the debate. I am sure that that is not possible, and I am not sure that the Glasgow Herald thinks it possible, either. However, the debate has a great deal to do with devolution.
The Opposition's aim is to have a Select Committee that will do the job properly. To do that, it needs more active Labour Members and fewer semi-retired Conservative Members. We must have a Select Committee, and when we debate its composition I hope that I shall catch Mr. Speaker's eye so that I can develop my argument in detail.
If this debate did not have anything to do with devolution it would not have been opened by the Secretary of State for Scotland—it would have been opened by the Chancellor of the Exchequer. It may be that among the list of names attached to the motion, no one other than the right hon. Gentleman would open the debate. Perhaps the Prime Minister, the Foreign Secretary, the Home Secretary, the Chancellor of the Exchequer and the Secretary of State for Education and Science all refused to open the debate, so that at the end of the day the Secretary of State for Scotland had to open it.
Devolution, and the assembly that Scotland should have, have a great deal to do with the Scottish economy. Of course, no one is claiming that a Scottish assembly could solve all the economic problems of Scotland, which

841
is subject to British, European and world economic conditions, as is every other part of the United Kingdom. However, there are issues which affect the Scottish economy that would have been, and still should be dealt with by the Scottish assembly. One has been mentioned—building and construction, especially under local government. No other activity in the economy can more quickly stimulate growth than house building, construction and civil engineering. Many civil engineers maintain that unless there is major investment in our sewers and waterworks there is likely to be a major health hazard. Conservative Members might laugh but those people support the Tory party, not Labour. Indeed, many of them give money to the Conservative party. They might not continue to do that. Building and construction depends on public expenditure from local authorities and the Government. Such expenditure would have been covered by the Scottish assembly.
We hear a great deal from Conservative Members about tourism. They say that tourism is a great growth industry which will provide many new jobs. That is marvellous. However, I wonder whether the hon. Member for Stirling believes that we should subsidise ferries to our holiday resort islands and the roads, railways and airlines that serve the Highlands. I wonder whether he believes that we should ensure that local authorities can provide proper leisure facilities.
The biggest tourist attraction in Glasgow is the Burrell collection. It nearly did not open because the Secretary of State for Scotland cut into Glasgow district council's expenditure so much that it had to face the possibility of abandoning it. The collection is, however, a remarkable success story in terms of tourism.
Mr. Younger rose——
Mr. Maxton: I shall not give way as I have only four minutes left. I have sat through the whole debate and am not prepared to give way. The Burrell collection, the Scottish National Opera and the Scottish National Orchestra depend on public subsidy to survive. They are major tourist attractions yet the Government are reducing the funds provided to them.
When somebody arrives in the area with a young family they might be attracted by Scotland's beautiful scenery but they also want leisure activities such as playing fields and swing parks for their children. They want a variety of facilities. Such facilities are provided by the local authorities, which the Government have hammered.
Education is another important subject. The Secretary of State has the brass neck to talk about a skilled work force in Scotland and yet yesterday's Evening Times says that Strathclyde university will have to turn away thousands of well-qualified applicants. Indeed, those people are better qualified than many of their predecessors. Where will those people get the skill training of which the Secretary of State speaks?
The Government have cut expenditure on education, housing and leisure. Their record on public expenditure is appalling. It is time that they learnt the simple lesson that it is not possible to sustain private enterprise in a modern economy without massive public expenditure. Someone said that it is possible to get new jobs by spending money. I agree. It does not matter whether that money is provided by the private or the public purse, new jobs can be achieved only by spending money. I prefer it to come from the public purse, so that we can control investment.
842
All the matters that I have mentioned should he under the control of a Scottish assembly. They should be the job of the Scottish assembly. If we had the assembly, for which the Scottish people voted, then, although we would still have the economic problems created by the Conservative Government, there would be a body elected by the Scottish people to protect them from the worst onslaughts of the Government in public expenditure.
9.21 pm
Mr. Jim Craigen: This has been a lively debate, if nothing else, but the Government have not really answered any of the points raised in their own motion.
I was glad that the hon. Member for Banff and Buchan (Mr. McQuarrie) made a speech. They do not make Tories like him in Scotland any more. I remind him that he and his party supported the removal of assisted status from the Aberdeen area. I hope that the Under-Secretary of State who is to reply to the debate will assure us that he is doing his utmost to preserve Scotland's position in relation to regional aid. We want to know the score for Scotland in the current discussions on United Kingdom policy. Will the Under-Secretary confirm that there is no map in the White Paper to be published? That would contradict the arrangements by which the EC identifies areas in need of assistance. I am worried about the fact that the Secretary of State for Trade and Industry was recently quoted in the press as suggesting that, if only people in the "regions" which receive assistance would accept lower wages, it might be easier to operate a regional policy. We do not accept that view in any way.
The Secretary of State and the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) referred to the west of Scotland science park. I am glad that the park is in the constituency of Maryhill. I was keen that the park should be situated both in Glasgow and, of course, in Maryhill. It represents a unique partnership between Glasgow university and Strathclyde university backed up substantially by the Scottish Development Agency. I made efforts at the time to ensure that Glasgow district council planning department and other departments in the city gave it the fullest support possible. I was, however, never under any illusion that it would provide a vast number of jobs. What is important is the potential and the spin-off.
We welcome high technology industries. We want to see those new industries developed. However, as my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) pointed out, as well as trying to attract the new industries we have to pay attention to the existing industries, many of which are crucial to the Scottish economy.
Like my hon. Friend the Member for Glasgow, Springburn (Mr. Martin), who last night chaired a meeting with a Rolls-Royce delegation from Hillington and East Kilbride, my right hon. Friend referred to the importance of Government support for Rolls-Royce. I hope that the Minister will also take up my right hon. Friend's point about the shipbuilding order for the Clyde. My hon. Friend the Member for Midlothian (Mr. Eadie) pointed out, with passion, the importance of the coal industry to the future of Scotland.
When the hon. Member for Dumfries (Sir H. Mona)) referred to the importance of the service and retail industries in Scotland, my mind wandered to the number of shopping days to Christmas. We should remember what

843
has happened to purchasing power in Scotland and to the amount of money available in many Scottish households from Banff to Stranraer.
The points that were made by the hon. Member for Dundee, East (Mr. Wilson) and my hon. Friends the Members for Dundee, West (Mr. Ross) and for Glasgow, Central (Mr. McTaggart) about the impact of the changes being made in the Government's housing benefit legislation cannot be ignored. If ever there were a vindictive assault on the income of many Scottish households, it is the changes being made in respect of young people, where benefits will be cut because those young people stay at home and do not happen to have a job. That seems strange so soon after a Budget in which the Government gave substantial mortgage income tax relief to those in the higher income bracket.
Mr. McQuarrie: And to the council tenants.
Mr. Craigen: Do not let us start on the Tenants' Rights, Etc. (Scotland) Amendment Bill. Let us deal with the point that has been made constantly by the CBI, which extolls the virtue of capital projects to the exclusion of their revenue implications. I attended the CBI conference in Glasgow which the Lord Provost Dr. Michael Kelly and the district council had done so much to draw to the city. Many of the wives at that conference were going to the Burrell collection to see the treasures of the late Sir William Burrell at the magnificent Pollok estate. If we listened to the message that comes across constantly from the CBI and other bodies, the Burrell collection would not have been opened to the public because there would have been no staff, nor any will by the district council, to open it.
We should accept that capital and revenue expenditure are, in many ways, inseparable Siamese twins. There is no point in building sheltered housing if the local authority cannot afford to appoint a warden. Many other examples of such nonsense arise when the argument is advanced that capital projects are good but revenue projects are bad. That makes a nonsense of building anything.
I want to talk about the problems of inner cities. I assure the hon. Member for Banff and Buchan that I have visited many small places in his area. I believe in moving around the country, but the problems that face cities are the ones to which the Government must address themselves seriously.
The effect of the change in the housing improvement grant system disturbs me greatly, because the bulldozer will become a familiar sight on our urban landscape once again. We will not be able to preserve many of the tenements and other properties which house improvement and repair grants have done so much to refurbish.
Will the Minister assure us that the Housing Corporation will not cut back substantially, as many of my housing associations fear, in the decision which will be announced, I believe, next month? The Government are going back on their June manifesto commitment over the support which was promised for the renewal of our inner cities and to the work of our housing associations. Local authority new building has almost shuddered to a halt. We look to our housing associations to provide the refurbishment and renovation of our inner city areas.
I received a memorandum yesterday from the Scottish Federation of Building Trade Employers—hardly an
844
organisation that is affiliated to the Labour party—pointing out the tremendous drop there has been in the numbers employed in the building industry in Scotland since 1979. It is a drop of 23 per cent. in an industry which has traditionally provided a large number of apprenticeship opportunities for the young people of Scotland. This is something at which the Minister should look closely because many of the firms in the federation are working at 70 per cent. capacity.
When it came to youth unemployment, the Minister trotted out the usual story about the youth training scheme. I recently visited, as I regularly do, a supplementary benefit office, a jobcentre and an unemployment office in my constituency. It is important that Members of Parliament call in on these offices. If some of the Tory Back Benchers paid such visits now and again, that would knock some of the smart Alec stuff that we have had this afternoon out of their heads. I find it repugnant that young people are having to sit around these offices because there is insufficient work in Scotland, especially when one looks round and sees all the things that could easily be done in Scotland if there were the political will to do it.
When I was visiting one of these offices, someone commented to me that in a recent application for a clerical post there was a young man who had been out of work for nine months who had six higher and four ordinary grade certificates in the Scottish certificate of education. The Minister can wax eloquently about the education opportunities afforded, but we know that many of our universities could take in more students if the Government gave them the necessary backing. I hope that the Minister will respond to the points made by Strathclyde university on this because it is over-subscribed, as are many other universities.
My hon. Friend the Member for Dundee, West referred to the lost capacity through unemployment. We never hear about the £15 billion, £16 billion, or £17 billion lost to the Treasury or that that has to be given out as unemployment benefit and to meet other social obligations that the Government have to pick up. The Government would be better doing their accounting in a more positive fashion.
Long-term unemployment is the most serious aspect of unemployment, and is a fast-rising segment of unemployment in Scotland. I can see the Minister indicating dissent, so I shall ask him what he was doing when the Manpower Services Commission told the area boards in Glasgow and elsewhere that there was no more money for the community programme. This is the only little tool that the Government have produced to deal with the problem of the long-term unemployed in the past two years. Both Glasgow district and Strathclyde region councils and the voluntary organisations are caught up in potential legal disputes because they have already recruited people into the programme and the Government have suddenly announced, yet again, that there will be a freeze on future resources for this programme.
The Secretary of State for Scotland referred to the number of places that jobcentres have been filling, but I wonder whether he has been looking closely at the trend in part-time work. The jobcentre that I visited recently said that a third of the places that it had filled were for part-time jobs. That is welcome for those that obtain part-time employment, but although it reduces unemployment figures, it also means that part-time earnings come into households rather than full-time earnings.

845
Despite the fact that this kingdom has had the advantages of North sea oil, and the Government have had the benefit of its developing riches and potential, the Government have found it necessary to slap on a tax on gas and electricity, thus affecting heating, lighting and cooking costs, and industrial costs. Many of the firms that I visit complain not so much about rates as about energy costs. The Government should not underestimate the extent to which this development of policy will injure many of the firms which have supported the Government through the CBI.
Let us not throw away our basic traditional industries. Let us use them, and develop the new industries. The bubble will burst at some future date—the year does not matter. We should be preparing now for the day when we shall no longer be able to afford the way North sea oil has masked the serious deterioration in our manufacturing capacity and performance. We can have all the desk calculators and computers that we like, but if we run out of coal in the fireplace, and if we run down the textile industry, the importance of which my hon. Friend the Member for Paisley, North (Mr. Adams) stressed earlier, and the steel industry, the country will indeed be in a serious situation.
The Government motion burbles on about a Scotland that we do not recognise. It has been written by people who do not know, far less comprehend, what is happening in Scotland at present. It is a derisory motion. It has been drafted by Ministers whose actions—more often inactions—at the Scottish Office are denying elderly people in Scotland the care and comfort that they deserve, and who are frustrating the fulfilment of people in their middle years and, above all, are cruelly blighting the future prospects of young people in Scotland.
The Secretary of State and his Minister are more like carrier pigeons carrying messages from No. 10 to Edinburgh, and pretty ineffectively at that. If ever there were a couple of "Haddies", they are the Under-Secretary and the Secretary of State.
We reject entirely the claim that the Government make in their motion. It is a fraudulent claim. We condemn the Ministers who have put pen to paper and who believe that this is the Scotland of today. Those Ministers are responsible for the present state of disrepair in which our country finds itself. Their incompetence and callous indifference reveal that every day of the week. The sooner we get rid of them, the better for Scotland.
9.38 pm
The Under-Secretary of State for Scotland (Mr. Allan Stewart): I congratulate the hon. Member for Glasgow, Maryhill (Mr. Craigen) on his elevation to the Front Bench and on his first speech from the Dispatch Box. He will not expect me to agree with everything that he said. I have never been described as both fish and fowl within a period of about 10 seconds, but I am sure that all hon. Members will agree with me when I say that the hon. Member brings to his position considerable expertise and experience, and that his views will be listened to with respect by all hon. Members.
The Government consider it important at this stage early in the new Parliament to give the House the opportunity to consider the Scottish economy. There have inevitably been areas of disagreement between hon. Members but a number of constructive comments as well.
846
It was astonishing that the hon. Member for Glasgow, Garscadden (Mr. Dewar), who spent most of the last Parliament complaining about the lack of opportunities, as he saw it, to discuss Scottish business, did not even deign to welcome the fact that the Government have allocated a day of Government time to consider the Scottish economy. At least the hon. Member for Dundee, East (Mr. Wilson) welcomed the debate. The reason the hon. Member for Garscadden did not welcome it was well put by my hon. Friend the Member for Dumfries (Sir H. Monro), and the hon. Member for Dundee, East who both said that the hon. Member for Garscadden had nothing of substance to say.
The hon. Member for Garscadden is described in the press as something of a pessimist, particularly, the press say, about the future of the Labour party, which is perfectly understandable. I am bound to say that the hon. Member was completely negative in his speech. At least the hon. Member for Maryhill praised the science park. It was astonishing that the hon. Member for Garscadden did not even mention the Clydebank enterprise zone on the boundaries of his constituency. The words of the hon. Member for Garscadden who attacked the enterprise zone will be listened to with great interest by the Labour council of Clydebank, which has supported the enterprise zone.
Hon. Members have made a number of specific constituency points in the debate. The hon. Member for Motherwell, North (Mr. Hamilton) mentioned the situation at Terex and I know that he has had talks with the receiver about that. I assure him that my officials in the industry department are in touch with the receiver but, as he will appreciate, the responsibility is with the receiver.
The hon. Member for Paisley, North (Mr. Adams) made a specific claim that British Rail was currently seeking 200 redundancies. I assure the hon. Member that he is misinformed. I believe he had not checked that claim with British Rail.
The hon. Member for Midlothian (Mr. Eadie) spoke with his customary expertise and conviction and, indeed, passion on the coal industry. My hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley) and my hon. Friend the Member for Fife, North-East (Mr. Henderson) correctly put the question of the coal industry into its economic context. My hon. Friends pointed out that uneconomic pits also closed under the Labour Government.
My hon. Friend the Member for Aberdeen, South (Mr. Malone) in an extremely well-informed speech put forward the case for a free port in Aberdeen. I can tell my hon. Friend that I hope decisions on a free port will be reached by the Government early in the new year.
Mr. Dewar rose——
Mr. Stewart: The hon. Member for Garscadden did not give way during his speech. I must try to answer as many points raised by hon. Members as possible in a long debate. The House knows that the Front Benches agreed to have only 20 minutes each to wind up the debate.
My hon. Friend the Member for Banff and Buchan (Mr. McQuarrie) gave an excellent description of the industries and the achievements of the Grampian region.
The hon. Member for Glasgow, Cathcart (Mr. Maxton) seems to have a constituency interest in the arts; perhaps he is looking for a Front Bench post as shadow Scottish

847
spokesman for the arts. I should tell him that the Scottish Office paid for half of the cost of setting up the Burrell collection, and that next year the Scottish National Opera will receive a grant of about £2·5 million from the taxpayer.
The general theme of this debate has been change, and to reject change is to reject the possibility of progress.
Mr. Dalyell rose——
Mr. Stewart: I apologise to the hon. Gentleman, but I shall not give way. [HON. MEMBERS: "Give way."] The hon. Member for Garscadden did not give way once during his speech.
Several hon. Members who spoke today implicitly rejected change. They mentioned the decline in some sectors of industry and gave instances of firms in difficulties, and suggested that those alone prove the generally poor state of the Scottish economy. However, the House should consider the full picture. The process of industrial revolution means the growth of some sectors and the decline of others. [HON. MEMBERS: "Which sectors?"] That is a normal and natural part of industrial progress. The proper response is adaptability and a readiness to change with the times, as my hon. Friend the Member for Stirling (Mr. Forsyth) said. Scotland has already shown that, in large measure, it is equipped to make that response.
Opposition Members asked me to list the areas of growth. As many of my hon. Friends said, North sea oil and gas extraction and related activities have provided, from almost nothing, more than 100,000 jobs in Scotland. I am glad to say that employment in that area shows signs of increasing further. The Manpower Services Commission estimated in June this year that employment in firms wholly involved in North sea oil activities was 8·5 per cent. higher than it was in June 1982.
My hon. Friend the Member for Aberdeen, South mentioned the success of Government measures in encouraging production, and he also mentioned the longterm future of the oil industry. The hon. Member for Glasgow, Springburn (Mr. Martin) mentioned the importance, with which I agree, of Scottish firms supplying that industry, and he discussed the role of the Offshore Supplies Office. On the most recent figures available, during a four-year period 67 per cent. to 79 per cent. of products for North sea industries were supplied by United Kingdom companies.
Another major area of expansion has been the service industries. However, we heard nothing from the Opposition about service industries during this debate, despite the fact that they employ 64·6 per cent. of the Scottish work force, and despite the fact that employment in those industries has increased by more than 180,000 since 1970, and increased by 11,000 between 1979 and 1981 alone. The most significant increase was in the professional and scientific services, but as my hon. Friend the Member for Strathkelvin and Bearsden mentioned the importance of the service industries, and said that they make Edinburgh an international port of call for big business that is as important as Zurich or Frankfurt—[Interruption.] I do not know why Opposition Members scoff at the achievement of the financial sector in
848
Scotland. My hon. Friends the Members for Renfrew, West and Inverclyde and for Dumfries mentioned the importance of tourism.
As my hon. Friend the Member for Fife, North-East rightly said, one would never have guessed from this debate that unemployment in Scotland doubled under the labour Government. It is absurd for Opposition Members to say that they have easy answers and remedies now. The decline in manufacturing employment in Scotland began long before the Conservative Government came to office. From 1970 to 1979, during most of which time Opposition Members were in government, manufacturing employment declined by 110,000.
My hon. Friend the Member for Strathkelvin and Bearsden referred to the rate of new starts in Scotland. The statistics show that in 1981 8,000 new companies were registered in Scotland. Of course most of them are not at present major employers, but they are the seed corn from which tomorrow's major enterprises will grow. Success has been achieved—[Interruption.] I know that Opposition Members do not like to hear this. Success has been achieved in companies producing everything from computer software and hi-fi at the sophisticated end of the market to customised souvenirs for oil companies.
Numerous cases of expansion have come to my attention. My hon. Friend the Member for Banff and Buchan mentioned the announcement by Crosse and Blackwell of the creation of 140 jobs at Peterhead, and only last month Fine Fare supermarkets promised 3,500 jobs in Scotland, with the building of 12 new stores.
Mr. Robert Hughes rose——
Mr. Stewart: I hear the Opposition deputy Chief Whip, the hon. Member for Aberdeen, North (Mr. Hughes), muttering away. The hon. Gentleman, I am sure, will welcome the 50 new jobs at Lovable at Cumbernauld.
Many companies get under way and expand without coming to the Government for help, but when they do come my Department has been able to help considerably. Selective financial assistance offered to companies in Scotland since 1 January this year has totalled £45 million. One hundred and eighty five projects have been involved, promising 9,636 new jobs and safeguarding a further 7,374. Do Opposition Members welcome that?
Several hon. Members have asked about regional policy. As the House knows, we are currently reviewing regional policy. My right hon. Friend the Secretary of State for Trade and Industry will shortly publish a White Paper which will set out the new structure of incentives and will invite views on several related issues, including rates of grant for assisted area coverage. The White Paper will allow a generous period for consultations. I hope that that reassures the hon. Member for Dundee, East.
I can assure the House that all the views expressed will be taken into account. May I remind the House that in our manifesto we confirmed our commitment to an effective regional policy to ease the process of change in areas which have been dependent on declining industries and to encourage new businesses in those areas. Regional policy has of course played an important part in Scotland.
I should like to answer the particular point that the right hon. Member for Glasgow, Govan (Mr. Millan) made about the autumn statement. The figures in the autumn statement reflect the reduced expenditure on regional development grant on the current basis of payment. The

849
reason for that, as I am sure the right hon. Gentleman will appreciate, is the uneven flow of regional development grant payments because of the large capital intensive projects such as Sullom Voe, Moss Morran and BP at Grangemouth.
The hon. Members for Gordon and for Inverness, Nairn and Lochaber (Mr. Johnston) asked about the Highlands and Islands Development Board. The Government fully appreciate the problems facing the Highlands and islands and therefore attach a great deal of importance to the excellent work carried out by the board. Our commitment is shown by the substantial increases in the funds we have allocated to it—£12·7 million in 1978–79 rising to £29·8 million in the current year, including £3·5 million of the £10 million that we made available to allow the board to take special measures following the Invergordon smelter closure. The board has an excellent record, and I reaffirm the Government's full commitment to and support for it, as evidenced by the extra funds to which I have referred.
Mr. Russell Johnston rose——
Mr. Stewart: No, I shall not give way.
Opposition Members have made a number of political points. The hon. Member for Dundee, East spoke on behalf of the Scottish National party with the full and massive authority of more than 50 lost deposits behind his party. He made the usual plea for an independent Scotland. We have heard rather less of the spurious mandate argument that Opposition Members have previously advanced.
Mr. Foulkes rose——
Mr. Stewart: If the hon. Member wishes to advance that argument, I have no doubt that he will have plenty of other opportunities to do so.
Perhaps hon. Members are considering in more detail the Labour vote in Scotland following the 1979 election. The Labour party lost about 250,000 votes. As my hon. Friend the Member for Dumfries observed, outside the central belt of Scotland and Strathclyde——
Mr. Maxton rose——
Mr. Stewart: Outside that area the performance of the Labour party was every bit as dismal as in the south-east of England. It is a party in decline. It has been thrown back on its traditional strongholds, and that has been evident in the speeches of Labour Members. As my hon. Friends have emphasised, there have been real and lasting improvements in the underlying position of the Scottish economy, which has gone through a long process of readjustment in changing national and international markets.
The Government's policy is designed to combat inflation as it faces a competitive economy. That is as essential for Scotland as it is for the United Kingdom as a whole. The success of our policy is clear. Inflation is down to its lowest level for almost 15 years. Interest rates have fallen by seven percentage points since the autumn of 1981. In Scotland the Government are employing a wide range of policy instruments to aid readjustment. Our education system is equipping young people with skills for the future and employers are co-operating magnificently with the youth training scheme. The SDA and the HIDB have an important part to play, but the future depends on our entrepreneurs, managers and the work force as a whole.
850
There is a new realism in Scotland. People throughout Scotland, whether employed in multinationals, local firms, in manufacturing or in service industries, realise that the best guarantor of jobs for the future is a satisfied customer. But customers have been ignored by the Opposition. We have hardly heard the word "customer" from Labour Members, but the customer cannot be ignored in the market place.
I believe that the Scottish economy can look forward confidently to the challenges and opportunities of the next few years. My hon. Friends have pointed to the many areas of real progress under the Government. In contrast, the Opposition's approach has been entirely negative. Their amendment does not even pay tribute to the successes and the hard work of Scottish firms, which have faced the difficulties of recession by improving productivity and by selling successfully at home and abroad. As my hon. Friend the Member for Stirling told the House, the Opposition are a party of the past with a philosophy from the past. Their policies, in so far as they have any, are packages from the past.
The next few years will show the Scottish economy turning round fundamentally. In contrast to the policies of the Opposition, those of the Government are realistic and sensible. We have not hesitated to face difficult decisions to create the right conditions for the long-term future of the Scottish economy and the long-term prosperity of the Scottish people, and that we shall continue to do.
I ask my right hon. and hon. Friends to support the Government's motion and to reject the Opposition's amendment.
Question put, That the amendment be made:—
The House divided: Ayes 186, Noes 328.

Division No. 80]

[10 pm

AYES

Adams, Allen (Paisley N)

Cowans, Harry

Alton, David

Craigen, J. M.

Anderson, Donald

Crowther, Stan

Ashdown, Paddy

Cunliffe, Lawrence

Ashley, Rt Hon Jack

Cunningham, Dr John

Ashton, Joe

Dalyell, Tam

Atkinson, N. (Tottenham)

Davies, Rt Hon Denzil (L'lli)

Bagier, Gordon A. T.

Davies, Ronald (Caerphilly)

Banks, Tony (Newham NW)

Davis, Terry (B'ham, H'ge H'l)

Barron, Kevin

Deakins, Eric

Beckett, Mrs Margaret

Dewar, Donald

Bell, Stuart

Dixon, Donald

Bidwell, Sydney

Dobson, Frank

Blair, Anthony

Dormand, Jack

Boothroyd, Miss Betty

Douglas, Dick

Bray, Dr Jeremy

Dubs, Alfred

Brown, Hugh D. (Provan)

Duffy, A. E. P.

Brown, N. (N'c'tle-u-Tyne E)

Dunwoody, Hon Mrs G.

Brown, R. (N'c'tle-u-Tyne N)

Eadie, Alex

Brown, Ron (E'burgh, Leith)

Eastham, Ken

Bruce, Malcolm

Ellis, Raymond

Callaghan, Rt Hon J.

Evans, Ioan (Cynon Valley)

Callaghan, Jim (Heyw'd & M)

Evans, John (St. Helens N)

Campbell, Ian

Ewing, Harry

Canavan, Dennis

Fatchett, Derek

Carlile, Alexander (Montg'y)

Faulds, Andrew

Carter-Jones, Lewis

Field, Frank (Birkenhead)

Cartwright, John

Fisher, Mark

Clark, Dr David (S Shields)

Flannery, Martin

Clay, Robert

Foot, Rt Hon Michael

Cocks, Rt Hon M. (Bristol S.)

Forrester, John

Cohen, Harry

Foster, Derek

Coleman, Donald

Foulkes, George

Concannon, Rt Hon J, D.

Fraser, J. (Norwood)

Conlan, Bernard

Freeson, Rt Hon Reginald

Corbett, Robin

Gilbert, Rt Hon Dr John

Corbyn, Jeremy

Godman, Dr Norman

851

Golding, John

Orme, Rt Hon Stanley

Gould, Bryan

Park, George

Hamilton, W. W. (Central Fife)

Parry, Robert

Harrison, Rt Hon Walter

Patchett, Terry

Hart, Rt Hon Dame Judith

Penhaligon, David

Haynes, Frank

Pike, Peter

Heffer, Eric S.

Powell, Raymond (Ogmore)

Hogg, N. (C'nauld & Kilsyth)

Prescott, John

Holland, Stuart (Vauxhall)

Radice, Giles

Hoyle, Douglas

Randall, Stuart

Hughes, Mark (Durham)

Redmond, M.

Hughes, Robert (Aberdeen N)

Rees, Rt Hon M. (Leeds S)

Hughes, Roy (Newport East)

Richardson, Ms Jo

Hughes, Sean (Knowsley S)

Roberts, Allan (Bootle)

Janner, Hon Greville

Roberts, Ernest (Hackney N)

John, Brynmor

Robertson, George

Johnston, Russell

Rooker, J. W.

Jones, Barry (Alyn & Deeside)

Ross, Ernest (Dundee W)

Kaufman, Rt Hon Gerald

Rowlands, Ted

Kennedy, Charles

Ryman, John

Kilroy-Silk, Robert

Sedgemore, Brian

Kinnock, Rt Hon Neil

Sheerman, Barry

Kirkwood, Archibald

Sheldon, Rt Hon R.

Lamond, James

Shore, Rt Hon Peter

Leadbitter, Ted

Short, Mrs R. (W'hampt'n NE)

Leighton, Ronald

Silkin, Rt Hon J.

Lewis, Ron (Carlisle)

Skinner, Dennis

Lewis, Terence (Worsley)

Smith, C. (Isl'ton S & F'bury)

Litherland, Robert

Smith, Cyril (Rochdale)

Lloyd, Tony (Stretford)

Smith, Rt Hon J. (M'kl'ds E)

Lofthouse, Geoffrey

Snape, Peter

McCartney, Hugh

Soley, Clive

McDonald, Dr Oonagh

Spearing, Nigel

McKay, Allen (Penistone)

Steel, Rt Hon David

McKelvey, William

Stewart, Rt Hon D. (W Isles)

Mackenzie, Rt Hon Gregor

Stott, Roger

Maclennan, Robert

Strang, Gavin

McNamara, Kevin

Straw, Jack

McTaggart, Robert

Thomas, Dr R. (Carmarthen)

McWilliam, John

Thompson, J. (Wansbeck)

Madden, Max

Thorne, Stan (Preston)

Marek, Dr John

Tinn, James

Marshall, David (Shettleston)

Torney, Tom

Martin, Michael

Varley, Rt Hon Eric G.

Mason, Rt Hon Roy

Wainwright, R.

Maxton, John

Wallace, James

Maynard, Miss Joan

Wardell, Gareth (Gower)

Meacher, Michael

Weetch, Ken

Meadowcroft, Michael

White, James

Michie, William

Williams, Rt Hon A.

Mikardo, Ian

Wilson, Gordon

Millan, Rt Hon Bruce

Winnick, David

Mitchell, Austin (G't Grimsby)

Woodall, Alec

Morris, Rt Hon A. (W'shawe)

Wrigglesworth, Ian

Nellist, David

Oakes, Rt Hon Gordon

Tellers for the Ayes:

O'Brien, William

Mr. James Hamilton and

O'Neill, Martin

Mr. John Home Robertson.

NOES

Adley, Robert

Body, Richard

Aitken, Jonathan

Bonsor, Sir Nicholas

Alexander, Richard

Bottomley, Peter

Amess, David

Bowden, A. (Brighton K'to'n)

Ancram, Michael

Bowden, Gerald (Dulwich)

Arnold, Tom

Boyson, Dr Rhodes

Ashby, David

Braine, Sir Bernard

Aspinwall, Jack

Brandon-Bravo, Martin

Atkins, Robert (South Ribble)

Bright, Graham

Baker, Kenneth (Mole Valley)

Brinton, Tim

Baker, Nicholas (N Dorset)

Brittan, Rt Hon Leon

Baldry, Anthony

Brooke, Hon Peter

Batiste, Spencer

Brown, M. (Brigg & Cl'thpes)

Beaumont-Dark, Anthony

Browne, John

Bellingham, Henry

Bruinvels, Peter

Benyon, William

Bryan, Sir Paul

Berry, Sir Anthony

Buchanan-Smith, Rt Hon A.

Biffen, Rt Hon John

Buck, Sir Antony

Biggs-Davison, Sir John

Budgen, Nick

Blaker, Rt Hon Sir Peter

Bulmer, Esmond

852

Burt, Alistair

Hayward, Robert

Butcher, John

Heath, Rt Hon Edward

Butterfill, John

Heathcoat-Amory, David

Carlisle, John (N Luton)

Heddle, John

Carlisle, Kenneth (Lincoln)

Henderson, Barry

Carttiss, Michael

Heseltine, Rt Hon Michael

Chalker, Mrs Lynda

Hickmet, Richard

Chapman, Sydney

Hicks, Robert

Chope, Christopher

Higgins, Rt Hon Terence L.

Churchill, W. S.

Hind, Kenneth

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

Hirst, Michael

Clark, Dr Michael (Rochford)

Hogg, Hon Douglas (Gr'th'm)

Clarke Kenneth (Rushcliffe)

Holland, Sir Philip (Gedling)

Clegg, Sir Walter

Holt, Richard

Cockeram, Eric

Hooson, Tom

Colvin, Michael

Hordern, Peter

Conway, Derek

Howard, Michael

Coombs, Simon

Howarth, Alan (Stratf'd-on-A)

Cope, John

Howarth, Gerald (Cannock)

Couchman, James

Howell, Rt Hon D. (G'ldford)

Critchley, Julian

Hubbard-Miles, Peter

Crouch, David

Hunt, David (Wirral)

Currie, Mrs Edwina

Hunt, John (Ravensbourne)

Dickens, Geoffrey

Hunter, Andrew

Dicks, T.

Hurd, Rt Hon Douglas

Dorrell, Stephen

Irving, Charles

Dover, Denshore

Jackson, Robert

Durant, Tony

Jenkin, Rt Hon Patrick

Dykes, Hugh

Johnson-Smith, Sir Geoffrey

Eggar, Tim

Jones, Gwilym (Cardiff N)

Emery, Sir Peter

Jones, Robert (W Herts)

Evennett, David

Jopling, Rt Hon Michael

Eyre, Reginald

Joseph, Rt Hon Sir Keith

Fairbairn, Nicholas

Kellett-Bowman, Mrs Elaine

Fallon, Michael

Kershaw, Sir Anthony

Favell, Anthony

Key, Robert

Fenner, Mrs Peggy

King, Roger (B'ham N'field)

Finsberg, Geoffrey

King, Rt Hon Tom

Fookes, Miss Janet

Knight, Gregory (Derby N)

Forman, Nigel

Knowles, Michael

Forsyth, Michael (Stirling)

Knox, David

Forth, Eric

Lang, Ian

Fowler, Rt Hon Norman

Latham, Michael

Fox, Marcus

Lawler, Geoffrey

Franks, Cecil

Lawrence, Ivan

Fraser, Peter (Angus East)

Lawson, Rt Hon Nigel

Freeman, Roger

Leigh, Edward (Gainsbor'gh)

Fry, Peter

Lennox-Boyd, Hon Mark

Gale, Roger

Lester, Jim

Galley, Roy

Lewis, Sir Kenneth (Stamf'd)

Gardiner, George (Reigate)

Lightbown, David

Gardner, Sir Edward (Fylde)

Lilley, Peter

Garel-Jones, Tristan

Lloyd, Ian (Havant)

Gilmour, Rt Hon Sir Ian

Lloyd, Peter, (Fareham)

Glyn, Dr Alan

Lord, Michael

Goodhart, Sir Philip

Luce, Richard

Goodlad, Alastair

Lyell, Nicholas

Gow, Ian

McCrindle, Robert

Gower, Sir Raymond

McCurley, Mrs Anna

Greenway, Harry

Macfarlane, Neil

Gregory, Conal

MacGregor, John

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

MacKay, Andrew (Berkshire)

Griffiths, Peter (Portsm'th N)

MacKay, John (Argyll & Bute)

Grist, Ian

Maclean, David John.

Ground, Patrick

McNair-Wilson, M. (N'bury)

Grylls, Michael

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

Gummer, John Selwyn

McQuarrie, Albert

Hamilton, Hon A. (Epsom)

Major, John

Hamilton, Neil (Tatton)

Malins, Humfrey

Hampson, Dr Keith

Malone, Gerald

Hanley, Jeremy

Maples, John

Hannam, John

Marland, Paul

Hargreaves, Kenneth

Marlow, Antony

Harris, David

Marshall, Michael (Arundel)

Harvey, Robert

Mates, Michael

Haselhurst, Alan

Maude, Francis

Havers, Rt Hon Sir Michael

Mawhinney, Dr Brian

Hawkins, C. (High Peak)

Maxwell-Hyslop, Robin

Hawksley, Warren

Mellon David

Hayhoe, Barney

Merchant, Piers

853

Miller, Hal (B'grove)

Sims, Roger

Mills, Iain (Meriden)

Skeet, T. H. H.

Mills, Sir Peter (West Devon)

Smith, Tim (Beaconsfield)

Miscampbell, Norman

Soames, Hon Nicholas

Mitchell, David (NW Hants)

Spence, John

Moate, Roger

Spencer, D.

Monro, Sir Hector

Spicer, Jim (W Dorset)

Montgomery, Fergus

Spicer, Michael (S Worcs)

Moore, John

Squire, Robin

Morrison, Hon C. (Devizes)

Stanbrook, Ivor

Morrison, Hon P. (Chester)

Stanley, John

Moynihan, Hon C.

Steen, Anthony

Mudd, David

Stern, Michael

Neale, Gerrard

Stevens, Lewis (Nuneaton)

Needham, Richard

Stevens, Martin (Fulham)

Nelson, Anthony

Stewart, Allan (Eastwood)

Neubert, Michael

Stewart, Andrew (Sherwood)

Newton, Tony

Stewart, Ian (N Hertf'dshire)

Nicholls, Patrick

Stradling Thomas, J.

Normanton, Tom

Sumberg, David

Norris, Steven

Tapsell, Peter

Onslow, Cranley

Taylor, John (Solihull)

Oppenheim, Philip

Taylor, Teddy (S'end E)

Oppenheim, Rt Hon Mrs S.

Tebbit, Rt Hon Norman

Ottaway, Richard

Temple-Morris, Peter

Page, Richard (Herts SW)

Terlezki, Stefan

Parris, Matthew

Thompson, Donald (Calder V)

Patten, John (Oxford)

Thompson, Patrick (N'ich N)

Pattie, Geoffrey

Thorne, Neil (llford S)

Pawsey, James

Thornton, Malcolm

Peacock, Mrs Elizabeth

Thurnham, Peter

Pink, R. Bonner

Townend, John (Bridlington)

Pollock, Alexander

Tracey, Richard

Porter, Barry

Twinn, Dr Ian

Powell, William (Corby)

van Straubenzee, Sir W.

Powley, John

Vaughan, Dr Gerard

Prentice, Rt Hon Reg

Viggers, Peter

Price, Sir David

Waddington, David

Raffan, Keith

Wakeham, Rt Hon John

Raison, Rt Hon Timothy

Waldegrave, Hon William

Rathbone, Tim

Walden, George

Rees, Rt Hon Peter (Dover)

Walker, Rt Hon P. (W'cester)

Renton, Tim

Wall, Sir Patrick

Rhodes James, Robert

Waller, Gary

Rhys Williams, Sir Brandon

Walters, Dennis

Ridley, Rt Hon Nicholas

Wardle, C. (Bexhill)

Ridsdale, Sir Julian

Warren, Kenneth

Roberts, Wyn (Conwy)

Watson, John

Robinson, Mark (N'port W)

Watts, John

Roe, Mrs Marion

Wells, Bowen (Hertford)

Rost, Peter

Wells, John (Maidstone)

Rowe, Andrew

Wheeler, John

Rumbold, Mrs Angela

Whitfield, John

Ryder, Richard

Whitney, Raymond

Sackville, Hon Thomas

Winterton, Mrs Ann

Sainsbury, Hon Timothy

Winterton, Nicholas

St. John-Stevas, Rt Hon N.

Wolfson, Mark

Sayeed, Jonathan

Wood, Timothy

Scott, Nicholas

Woodcock, Michael

Shaw, Giles (Pudsey)

Yeo, Tim

Shaw, Sir Michael (Scarb')

Young, Sir George (Acton)

Shelton, William (Streatham)

Younger, Rt Hon George

Shepherd, Colin (Hereford)

Shepherd, Richard (Aldridge)

Tellers for the Noes:

Shersby, Michael

Mr. Carol Mather and

Silvester, Fred

Mr. Robert Boscawen

Question accordingly negatived
Main Question put:—
The House divided: Ayes 326, Noes 185.

Division No. 81]

[10.13 pm

AYES

Adley, Robert

Ashby, David

Aitken, Jonathan

Aspinwall, Jack

Alexander, Richard

Atkins, Robert (South Ribble)

Amess, David

Baker, Kenneth (Mole Valley)

Ancram, Michael

Baker, Nicholas (N Dorset)

Arnold, Tom

Baldry, Anthony

854

Batiste, Spencer

Gilmour, Rt Hon Sir Ian

Beaumont-Dark, Anthony

Glyn, Dr Alan

Bellingham, Henry

Goodhart, Sir Philip

Benyon, William

Goodlad, Alastair

Berry, Sir Anthony

Gow, Ian

Biffen, Rt Hon John

Gower, Sir Raymond

Biggs-Davison, Sir John

Greenway, Harry

Blaker, Rt Hon Sir Peter

Gregory, Conal

Body, Richard

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

Bonsor, Sir Nicholas

Griffiths, Peter (Portsm'th N)

Bottomley, Peter

Grist, Ian

Bowden, A. (Brighton K'to'n)

Ground, Patrick

Bowden, Gerald (Dulwich)

Grylls, Michael

Boyson, Dr Rhodes

Gummer, John Selwyn

Braine, Sir Bernard

Hamilton, Hon A. (Epsom)

Brandon-Bravo, Martin

Hamilton, Neil (Tatton)

Bright, Graham

Hampson, Dr Keith

Brinton, Tim

Hanley, Jeremy

Brittan, Rt Hon Leon

Hannam, John

Brooke, Hon Peter

Hargreaves, Kenneth

Brown, M. (Brigg & Cl'thpes)

Harris, David

Browne, John

Harvey, Robert

Bruinvels, Peter

Haselhurst, Alan

Bryan, Sir Paul

Havers, Rt Hon Sir Michael

Buchanan-Smith, Rt Hon A.

Hawkins, C. (High Peak)

Buck, Sir Antony

Hawksley, Warren

Budgen, Nick

Hayhoe, Barney

Bulmer, Esmond

Hayward, Robert

Burt, Alistair

Heath, Rt Hon Edward

Butcher, John

Heathcoat-Amory, David

Butterfill, John

Heddle, John

Carlisle, John (N Luton)

Henderson, Barry

Carlisle, Kenneth (Lincoln)

Heseltine, Rt Hon Michael

Carttiss, Michael

Hickmet, Richard

Chalker, Mrs Lynda

Hicks, Robert

Chapman, Sydney

Higgins, Rt Hon Terence L.

Chope, Christopher

Hind, Kenneth

Churchill, W. S.

Hirst, Michael

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

Hogg, Hon Douglas (Gr'th'm)

Clark, Dr Michael (Rochford)

Holland, Sir Philip (Gedling)

Clarke Kenneth (Rushcliffe)

Holt, Richard

Clegg, Sir Walter

Hooson, Tom

Cockeram, Eric

Hordern, Peter

Colvin, Michael

Howard, Michael

Conway, Derek

Howarth, Alan (Stratf'd-on-A)

Coombs, Simon

Howarth, Gerald (Cannock)

Cope, John

Howell, Rt Hon D. (G'ldford)

Couchman, James

Hubbard-Miles, Peter

Crouch, David

Hunt, David (Wirral)

Currie, Mrs Edwina

Hunt, John (Ravensbourne)

Dickens, Geoffrey

Hunter, Andrew

Dicks, T.

Hurd, Rt Hon Douglas

Dorrell, Stephen

Irving, Charles

Dover, Denshore

Jackson, Robert

Durant, Tony

Jenkin, Rt Hon Patrick

Dykes, Hugh

Johnson-Smith, Sir Geoffrey

Eggar, Tim

Jones, Gwilym (Cardiff N)

Emery, Sir Peter

Jones, Robert (W Herts)

Evennett, David

Jopling, Rt Hon Michael

Eyre, Reginald

Joseph, Rt Hon Sir Keith

Fairbairn, Nicholas

Kellett-Bowman, Mrs Elaine

Fallon, Michael

Kershaw, Sir Anthony

Favell, Anthony

Key, Robert

Fenner, Mrs Peggy

King, Roger (B'ham N field)

Finsberg, Geoffrey

King, Rt Hon Tom

Fookes, Miss Janet

Knight, Gregory (Derby N)

Forman, Nigel

Knowles, Michael

Forsyth, Michael (Stirling)

Knox, David

Forth, Eric

Lang, Ian

Fowler, Rt Hon Norman

Latham, Michael

Fox, Marcus

Lawler, Geoffrey

Franks, Cecil

Lawrence, Ivan

Fraser, Peter (Angus East)

Lawson, Rt Hon Nigel

Freeman, Roger

Leigh, Edward (Gainsbor'gh)

Fry, Peter

Lennox-Boyd, Hon Mark

Gale, Roger

Lester, Jim

Galley, Roy

Lewis, Sir Kenneth (Stamf'd)

Gardiner, George (Reigate)

Lightbown, David

Gardner, Sir Edward (Fylde)

Lilley, Peter

Garel-Jones, Tristan

Lloyd, Ian (Havant)

855

Lloyd, Peter, (Fareham)

Rumbold, Mrs Angela

Lord, Michael

Ryder, Richard

Luce, Richard

Sackville, Hon Thomas

Lyell, Nicholas

Sainsbury, Hon Timothy

McCrindle, Robert

St. John-Stevas, Rt Hon N.

McCurley, Mrs Anna

Sayeed, Jonathan

Macfarlane, Neil

Scott, Nicholas

MacGregor, John

Shaw, Giles (Pudsey)

MacKay, Andrew (Berkshire)

Shaw, Sir Michael (Scarb')

MacKay, John (Argyll & Bute)

Shelton, William (Streatham)

Maclean, David John.

Shepherd, Colin (Hereford)

McNair-Wilson, M. (N'bury)

Shepherd, Richard (Aldridge)

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

Shersby, Michael

McQuarrie, Albert

Sims, Roger

Major, John

Skeet, T. H. H.

Malins, Humfrey

Smith, Tim (Beaconsfield)

Malone, Gerald

Soames, Hon Nicholas

Maples, John

Spence, John

Marland, Paul

Spencer, D.

Marlow, Antony

Spicer, Jim (W Dorset)

Marshall, Michael (Arundel)

Spicer, Michael (S Worcs)

Mates, Michael

Squire, Robin

Maude, Francis

Stanbrook, Ivor

Mawhinney, Dr Brian

Stanley, John

Maxwell-Hyslop, Robin

Steen, Anthony

Mellor, David

Stern, Michael

Merchant, Piers

Stevens, Lewis (Nuneaton)

Miller, Hal (B'grove)

Stevens, Martin (Fulham)

Mills, Iain (Meriden)

Stewart, Allan (Eastwood)

Mills, Sir Peter (West Devon)

Stewart, Andrew (Sherwood)

Miscampbell, Norman

Stewart, Ian (N Hertf'dshire)

Mitchell, David (NW Hants)

Stradling Thomas, J.

Moate, Roger

Sumberg, David

Monro, Sir Hector

Tapsell, Peter

Montgomery, Fergus

Taylor, John (Solihull)

Moore, John

Taylor, Teddy (S'end E)

Morrison, Hon C. (Devizes)

Tebbit, Rt Hon Norman

Morrison, Hon P. (Chester)

Temple-Morris, Peter

Moynihan, Hon C.

Terlezki, Stefan

Mudd, David

Thompson, Donald (Calder V)

Neale, Gerrard

Thompson, Patrick (N'ich N)

Needham, Richard

Thorne, Neil (llford S)

Nelson, Anthony

Thornton, Malcolm

Neubert, Michael

Thurnham, Peter

Newton, Tony

Townend, John (Bridlington)

Nicholls, Patrick

Tracey, Richard

Normanton, Tom

Twinn, Dr Ian

Norris, Steven

van Straubenzee, Sir W.

Onslow, Cranley

Vaughan, Dr Gerard

Oppenheim, Philip

Viggers, Peter

Oppenheim, Rt Hon Mrs S.

Waddington, David

Ottaway, Richard

Wakeham, Rt Hon John

Page, Richard (Herts SW)

Waldegrave, Hon William

Parris, Matthew

Walden, George

Patten, John (Oxford)

Walker, Rt Hon P. (W'cester)

Pattie, Geoffrey

Wall, Sir Patrick

Pawsey, James

Waller, Gary

Peacock, Mrs Elizabeth

Walters, Dennis

Pink, R. Bonner

Wardle, C. (Bexhill)

Pollock, Alexander

Warren, Kenneth

Porter, Barry

Watson, John

Powell, William (Corby)

Watts, John

Powley, John

Wells, Bowen (Hertford)

Prentice, Rt Hon Reg

Wells, John (Maidstone)

Price, Sir David

Wheeler, John

Raffan, Keith

Whitfield, John

Raison, Rt Hon Timothy

Whitney, Raymond

Rathbone, Tim

Winterton, Mrs Ann

Rees, Rt Hon Peter (Dover)

Winterton, Nicholas

Renton, Tim

Wolfson, Mark

Rhodes James, Robert

Wood, Timothy

Rhys Williams, Sir Brandon

Woodcock, Michael

Ridley, Rt Hon Nicholas

Yeo, Tim

Ridsdale, Sir Julian

Young, Sir George (Acton)

Roberts, Wyn (Conwy)

Younger, Rt Hon George

Robinson, Mark (N'port W)

Roe, Mrs Marion

Tellers for the Ayes:

Rost, Peter

Mr. Carol Mather and

Rowe, Andrew

Mr. Robert Boscawen.

856

NOES

Adams, Allen (Paisley N)

Heffer, Eric S.

Alton, David

Hogg, N. (C'nauld & Kilsyth)

Anderson, Donald

Holland, Stuart (Vauxhall)

Ashdown, Paddy

Hoyle, Douglas

Ashley, Rt Hon Jack

Hughes, Mark (Durham)

Ashton, Joe

Hughes, Robert (Aberdeen N)

Atkinson, N. (Tottenham)

Hughes, Roy (Newport East)

Bagier, Gordon A. T.

Hughes, Sean (Knowsley S)

Banks, Tony (Newham NW)

Hughes, Simon (Southwark)

Barron, Kevin

Janner, Hon Greville

Beckett, Mrs Margaret

John, Brynmor

Bell, Stuart

Johnston, Russell

Bidwell, Sydney

Jones, Barry (Alyn & Deeside)

Blair, Anthony

Kaufman, Rt Hon Gerald

Boothroyd, Miss Betty

Kennedy, Charles

Bray, Dr Jeremy

Kilroy-Silk, Robert

Brown, Hugh D. (Provan)

Kinnock, Rt Hon Neil

Brown, N. (N'c'tle-u-Tyne E)

Kirkwood, Archibald

Brown, R. (N'c'tle-u-Tyne N)

Lamond, James

Brown, Ron (E'burgh, Leith)

Leadbitter, Ted

Bruce, Malcolm

Leighton, Ronald

Callaghan, Jim (Heyw'd & M)

Lewis, Ron (Carlisle)

Campbell, Ian

Lewis, Terence (Worsley)

Canavan, Dennis

Litherland, Robert

Carlile, Alexander (Montg'y)

Lloyd, Tony (Stretford)

Carter-Jones, Lewis

Lofthouse, Geoffrey

Cartwright, John

McCartney, Hugh

Clark, Dr David (S Shields)

McDonald, Dr Oonagh

Clay, Robert

McKay, Allen (Penistone)

Cocks, Rt Hon M. (Bristol S.)

McKelvey, William

Cohen, Harry

Mackenzie, Rt Hon Gregor

Coleman, Donald

Maclennan, Robert

Concannon, Rt Hon J. D.

McNamara, Kevin

Conlan, Bernard

McTaggart, Robert

Corbett, Robin

McWilliam, John

Corbyn, Jeremy

Madden, Max

Cowans, Harry

Marek, Dr John

Craigen, J. M.

Marshall, David (Shettleston)

Crowther, Stan

Martin, Michael

Cunliffe, Lawrence

Mason, Rt Hon Roy

Cunningham, Dr John

Maxton, John

Dalyell, Tam

Maynard, Miss Joan

Davies, Rt Hon Denzil (L'lli)

Meacher, Michael

Davies, Ronald (Caerphilly)

Meadowcroft, Michael

Davis, Terry (B'ham, H'ge H'l)

Michie, William

Deakins, Eric

Mikardo, Ian

Dewar, Donald

Millan, Rt Hon Bruce

Dixon, Donald

Mitchell, Austin (G't Grimsby)

Dobson, Frank

Morris, Rt Hon A. (W'shawe)

Dormand, Jack

Nellist, David

Douglas, Dick

Oakes, Rt Hon Gordon

Dubs, Alfred

O'Brien, William

Duffy, A. E. P.

O'Neill, Martin

Dunwoody, Hon Mrs G.

Orme, Rt Hon Stanley

Eadie, Alex

Park, George

Eastham, Ken

Parry, Robert

Ellis, Raymond

Patchett, Terry

Evans, Ioan (Cynon Valley)

Penhaligon, David

Evans, John (St. Helens N)

Pike, Peter

Ewing, Harry

Powell, Raymond (Ogmore)

Fatchett, Derek

Prescott, John

Faulds, Andrew

Radice, Giles

Field, Frank (Birkenhead)

Randall, Stuart

Fisher, Mark

Redmond, M.

Flannery, Martin

Rees, Rt Hon M. (Leeds S)

Foot, Rt Hon Michael

Richardson, Ms Jo

Forrester, John

Roberts, Allan (Bootle)

Foster, Derek

Roberts, Ernest (Hackney N)

Foulkes, George

Robertson, George

Fraser, J. (Norwood)

Rooker, J. W.

Freeson, Rt Hon Reginald

Ross, Ernest (Dundee W)

Gilbert, Rt Hon Dr John

Rowlands, Ted

Godman, Dr Norman

Ryman, John

Golding, John

Sedgemore, Brian

Gould, Bryan

Sheerman, Barry

Hamilton, W. W. (Central Fife)

Sheldon, Rt Hon R.

Harrison, Rt Hon Walter

Shore, Rt Hon Peter

Hart, Rt Hon Dame Judith

Short, Mrs R. (W'hampt'n NE)

Haynes, Frank

Silkin, Rt Hon J.

857

Skinner, Dennis

Torney, Tom

Smith, C. (Isl'ton S & F'bury)

Varley, Rt Hon Eric G.

Smith, Cyril (Rochdale)

Wallace, James

Smith, Rt Hon J. (M'kl'ds E)

Warden, Gareth (Gower)

Snape, Peter

Weetch, Ken

Soley, Clive

White, James

Spearing, Nigel

Williams, Rt Hon A.

Steel, Rt Hon David

Wilson, Gordon

Stewart, Rt Hon D. (W Isles)

Winnick, David

Stott, Roger

Woodall, Alec

Strang, Gavin

Wrigglesworth, Ian

Straw, Jack

Thomas, Dr R. (Carmarthen)

Tellers for the Noes:

Thompson, J. (Wansbeck)

Mr. James Hamilton and.

Thorne, Stan (Preston)

Mr. John Home Robertson.

Tinn, James

Question accordingly agreed to.
Resolved,
That this House welcomes the remarkable progress made in restructuring and strengthening the Scottish economy through the emergency of innovative new firms, the attraction of high technology investment, the growth of financial and business services, the seizing of the industrial opportunities afforded by North Sea oil, and the modernisaton of traditional industries, thus equipping Scottish industry to compete more effectively in home and overseas markets; and the major initiatives by the Government in improving the training system so that all unemployed may take full advantage of these new opportunities.

Isle of Man (Fishing Limits)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
10.25 pm
Mr. Stuart Randall: The Isle of Man fishing limits are of great concern to many hon. Members, particularly my hon. Friends the Members for Kingston upon Hull, North (Mr. McNamara) and Kingston upon Hull, East (Mr. Prescott). The matter came into focus last May when the Isle of Man Government produced the report of the commission of inquiry into the fishing industry. The report was produced by the Isle of Man authorities because the Isle of Man had been going through a very difficult period. The economy is largely based on tourism, which has difficulties in surviving now that there are package holidays to sunnier parts of Europe. There is also the finance industry, because the Isle of Man could be described as a tax haven. There is a fear that the economy has all its eggs in one basket and is therefore vulnerable. Consequently there is a desire to do something about the fishing industry.
People in the industry have told me that the report is ambitious and that many of its recommendations are questionable, but it would not be appropriate for me to go into detail on technical issues tonight.
I wish to draw attention to a letter on page 10 of the report, which was originally marked "Strictly Confidential". It is to the secretary of the Isle of Man Government from the secretary to the Commission, and states that the commission will
"recommend that the future of a successful fishing industry in the Island will depend upon the Island Government having sole control of the fisheries within the territorial sea around the Island."
That statement is very strong and very clear. It is stated that the Island Government must have sole control if the fishing industry is to be successful. That is a precondition of the plans in this document for extending and encouraging the fishing industry. I know that the Under-Secretary has had discussions with the Isle of Man Government, because I asked a written question on this matter on 11 July. I asked the Under-Secretary of State whether discussions had been taking place and what had emerged from them. The Under-Secretary replied:
"Discussions are being held with the Isle of Man Government on various proposals on fishing, including a suggestion that the island's jurisdiction over fisheries might be extended from the existing three-mile limit to 12 miles."—[Official Report, 11 July 1983; Vol. 45, c. 215.]
I should like to ask the Under-Secretary what has happened since then. I presume that the discussions have been rolling forward. How far have they gone on the subject of the possible extension of the Isle of Man's jurisdiction? That is the key question for the people of Hull.
The other matter contained in the report which is of great interest to the people of Hull, and probably to Scotland also, is the emphasis that the report places on Manx vessels. Page 12 summarises the various recommendations. Number eight states:
"Manx vessels should receive priority in licence allocations but, should the local fleet be unable to catch the available quota, then licences could be issued to non-Manx vessels."
I feel that that is a strong statement. It says clearly that Manx vessels should have everything worthwhile but that if there are any crumbs left on the table the other vessels

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in the United Kingdom fleet should have some. If the Isle of Man Government proceed with the plans as recommended in the report there will be nothing left for the rest of the United Kingdom fleet.
What is the Under-Secretary's reaction to that, because it would have serious ramifications for the Hull fleet? I am interested in who will answer these fishery questions. The Isle of Man Government are talking about extending their jurisdiction. The report talks about licensing. Any amendment to existing legislation would have to embrace licences and there is certainly a blurred edge to the two issues. I shall be interested to hear what the Minister says on that point.
In one of the trade magazines—Fishing News—dated 1 July 1983 Percy Radcliffe expressed a great deal of confidence in extending the limits. The subheadline says
"'No doubts' on Manx limits".
The remainder of the article says:
"Talks to extend Manx fishing limits from three to 12 miles will be successful, the Isle of Man's prime minister"—
I did not know that it had a Prime Minister—
"said last week. Making an announcement on the current stage of the talks with the U.K. government, Percy Radcliffe said he was confident of success".
It is interesting that the issues had then become political in the sense that a senior Isle of Man politician was discussing them. I do not know with whom he was discussing them. Perhaps it was with officials. It was clearly felt to be a matter of political priority. I have never met Mr. Percy Radcliffe but he must have had something to go on to have made such a strong statement.
Will the Under-Secretary tell the House how far the talks have gone and what else has been said to Mr. Percy Radcliffe on this issue, which the Opposition feel is crucial?
As to the Hull interest in this, we are talking about two products, scallops and queenies. These are caught by vessels that are both Hull and Scottish registered, and they sail out of Scottish ports, go down to the Isle of Man and bring the fish back to Scottish ports. The fish are then sent by road down to Hull, where they are processed. They are removed from the shells, washed, packaged, weighed and distributed. This is a significant operation because about 90 per cent. of the product is exported, which means that it has a powerful effect on the balance of payments.
The product is also important to Hull, in that this is a labour-intensive industry, employing about 150 people there. I cannot speak for the Scottish industry, but we are talking about at least 500 jobs in direct employment. We can add the indirect labour of the people who pick up the shells that are no use and have to be transported to the local dumps, those who produce the packaging, and so on. There are many indirect jobs at stake, and about £400,000 was poured into Hull in the last financial year in wages alone. That is significant, and if it were to be lost, that would be devastating for the city of Hull.
Sir Hector Monro: I am interested in what the hon. Gentleman is saying. I represent the fishermen of south-west Scotland, from Kirkcudbright and Annan. I am glad that the hon. Gentleman has raised this matter, and I am looking forward to my hon. Friend's reply as much as he is.
Mr. Randall: I am sure that my hon. Friends who have fishing interests in Scotland view this matter with great concern.
Mr. J. Enoch Powell: Not only in Scotland.
Mr. Randall: We should include Northern Ireland.
We must recognise that we are talking about a substantial industry in the United Kingdom. It has orders of a magnitude far greater than those of the Isle of Man. I do not claim to have seen all the processing factories in the Isle of Man, but I have seen a few of them. I do not wish to be disrespectful, but they are trivial compared to the operations in Hull, Scotland and Northern Ireland.
In addition to its scale, the industry has vessels that are suited to the task in hand. I shall not refer too much to the report, but some of the vessels proposed in it are not suitable to the job, as I was told by some of the fishermen. The industry is well equipped with all-season vessels, that can do the winter as well as the summer work. The stern equipment is of high technology. We are talking about well-set up, well-equipped, vessels and companies, with well-trained crews that are getting the results in that fish is landed, which is important.
I am told by people in the industry that those who are doing the work are energetic. The skippers go to sea most of the time. They do not wait for calm, sunny weather. That is important.
If the Isle of Man proposals were implemented and the Isle of Man had the jurisdiction that it claims is essential—it wants sole responsibility—the viability of the companies that employ the staff would come into serious question. The people involved feel bitter about that, because their industries—certainly in Hull—have been built up over the past 10 to 12 years. They feel that it would be devastating to lose all the effort and investment that have been put in.
There has been devastation in Hull as a result of lost opportunities in deep sea fishing because of Iceland and the EC. I know that the other two Members who represent Hull feel strongly on this matter. As well as deep sea fishing, we have recently lost part of the nautical training operation. Even now the Torrey fish research station is under threat. My hon. Friends the Members for Kingston upon Hull, East and Kingston upon Hull, North feel that to lose that would be a kick in the teeth and something that we cannot accept.
We view the report with great concern. The industry is happy to have sensible and reasonable conservation measures, but it cannot tolerate the restrictive quotas and unacceptable discrimination in the report.
I end by asking the Under-Secretary a few questions. Will the Government agree to extend the Isle of Man's jurisdiction to 12 miles? If so, will there be discrimination between Isle of Man and United Kingdom vessels, and if so, to what extent? How does the Under-Secretary intend to do justice to the customary rights of United Kingdom fishermen to fish in these waters? Furthermore, what effect would extended jurisdiction have on the United Kingdom's responsibility for those waters under EC policies and rules, bearing in mind that the Isle of Man is not part of the EC? Finally, will the Under-Secretary confirm that the Government will ensure that, whatever arrangements are made with the Manx Government, the Hull shellfish industry will not be prevented from continuing to thrive?
10.43 pm
The Under-Secretary of State for the Home Department (Mr. David Mellor): The House is indebted to the hon. Member for Kingston upon Hull, West (Mr. Randall) for raising this important matter. It is a sure sign of the importance of the issue that he and I are not having a private conversation, and that we are joined by a number of other hon. Members. I am glad to see present the hon. Member for Kingston upon Hull, East (Mr. Prescott), the hon. Member for Greenock and Port Glasgow (Dr. Godman), who represents Scottish interests, the right hon. Member for Down, South (Mr. Powell), who will raise similar issues on the Adjournment on Thursday, and my hon. Friend the Member for Dumfries (Sir H. Monro). As a sign of the importance that the Government attach to the matter, I am here because of the Home Office's constitutional interests in relations with the Isle of Man, but the Minister of State, Ministry of Agriculture, Fisheries and Food, my hon. Friend the Member for Norfolk, South (Mr. MacGregor), who is intimately concerned with fishery matters, is here to show the importance that he attaches to a debate that touches greatly on the vital interests of fishermen, not just in Hull—although Hull is important enough—but in Scotland and Northern Ireland.
I hope to be able to put the mind of the hon. Member for Kingston upon Hull at rest on the central issue that he raised.
The first point I want to stress is that we are in no doubt about the importance of this matter to United Kingdom interests. We recognise the concern that this request from the Isle of Man has caused in the minds of United Kingdom fishermen.
Let us be clear about what the Manx have asked for. At present they issue licences for fishing in the three-mile belt round the island through their own Board of Agriculture, and Fisheries and their Sea Fisheries Committee in consultation with my hon. Friend and others at the Ministry of Agriculture, Fisheries and Food. What they seek, as the hon. Gentleman has made clear, is a licensing power for a 12-mile limit round the island. Their immediate concern is to strengthen the measures of fish stock conservation which currently apply there. The issue has given rise to very high feelings. It was, as the hon. Gentleman has made clear from the report that he has read to us, a recommendation of a fisheries commission established by the Isle of Man Government that a licensing system should be introduced in these waters with—and this is the point that touched on the rawest of nerves, I appreciate—an element of discrimination to favour Manx fishing vessels.
As the House will know, my right hon. and learned Friend the Home Secretary visited the Isle of Man last week. Prior to his visit it was made perfectly clear to the Isle of Man Government that this proposal for discrimination against United Kingdom fishermen was quite unacceptable to Her Majesty's Government.
During the discussions that were held last week I am glad to tell the hon. Gentleman and other hon. Members that the Isle of Man Government firmly declared that they accepted that discrimination against United Kingdom fishermen was not a tenable proposition and they gave an assurance that, if any new measure were agreed, they would not attempt to discriminate in this way.
Mr. J. Enoch Powell: What is the advantage for the Isle of Man in extending their jurisdiction?
Mr. Mellor: That question is not a matter for me but more a matter for them. The important point I can make clear to the House is that the Government of the Isle of Man no longer propose to pursue any question of discrimination against United Kingdom fishing interests.
The question at issue remains that of any legitimate interest there may be on the part of all fishermen and not just the Isle of Man to look at the conservation position and see whether any measures are appropriate.
I believe—and I hope I take those hon. Members with constituency interests in the matter with me in this—that the fact that the Isle of Man Government have backed off any proposal to discriminate is a major step forward and I hope will be welcomed as just that. Other matters need to be discussed, as the hon. Gentleman has indicated. I wish to make our position clear on those other matters.
We need to recognise that what the Isle of Man Government said last week was a radical departure from their previous position and one which I hope will allay many of the anxieties the hon. Gentleman has raised.
The Manx proposals stem immediately from the report of a commission of inquiry to which reference has already been made. That was established by the island Government to examine the Manx fishing industry and to suggest how its viability might be improved. The commission reported that fish stocks round the island are under pressure and there has been overfishing of all stocks in the past few years which has led to a decline in catch rates and progressively reduced annual allowable catches. This in turn has had an adverse impact on the viability of the fishing industry in the Isle of Man as elsewhere.
Many of the recommendations of the commission, as the hon. Gentleman will have seen from his study of it, are of a domestic nature and relate to internal matters of marketing, administration and the provision of infrastructure and support services for the island fishing industry. They need not concern us, but those which envisage a discriminatory licensing system are now recognised as untenable not just by the Government—we have maintained that position all along—but by the Government of the Isle of Man, and hence need no longer concern us. However, the problem of overfishing, it it be as described by the commission, is a matter of concern not just to the Isle of Man and its fishermen, but to the United Kingdom and its fishermen, who have traditionally fished there and who will continue to do so.
The next step upon which we can all agree is to establish the state of the fish stocks around the Isle of Man. We shall be doing that, and we must consider, in the light of that investigation, whether additional conservation measures are necessary. I hope that that is believed to be sensible and desirable, in the interests of all of those who fish in the seas around the Isle of Man, and to be no different from the measures that we would take in other parts of the ocean in which British fishing interests predominate. If further conservation measures are agreed to be necessary—any agreement pre-supposes wider prior consultation—it would have to be on a nondiscriminatory basis. No one can reasonably object to this now that the Isle of Man has dropped the idea of discrimination. I hope that we can concentrate on the central issue, which is the needs of all fishermen who have

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traditionally fished in those waters. That must involve a consideration of the depletion of the fish stocks, and any practical action needed to deal with it.
I hope that my speech has been reassuring to the hon. Gentleman, and that my central message will remain with
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him: that any question of allowing discrimination against United Kingdom fishermen in the waters traditionally fished by them around the Isle of Man does not arise.
Question put and agreed to.
Adjourned accordingly at eight minutes to Eleven o'clock.

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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Peterborough.
The following Lords took and subscribed the Oath or made the solemn Affirmation:
Shane Hugh Maryon, Viscount Gough;
Roger Edward, Lord Mostyn.

The Pearson Commission: Recommendations
Lord Graham of Edmonton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they intend to act on the main recommendations of the report of the Royal Commission on Civil Liability and Compensation for Personal Injury (the Pearson Commission).
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, of the 188 recommendations of the commission, some have already been acted on including some of those on damages, work injuries, sea and inland waterways and occupiers' liability. The Government have not yet taken a final decision on the implementation of other recommendations including those on road injuries and product liability. For a wide variety of reasons the Government have decided not to implement certain other recommendations.
Lord Graham of Edmonton: My Lords, will the noble and learned Lord the Lord Chancellor confirm that Answers to previous parliamentary Questions relating to the state of the art defence are still Government policy? Will that topic still remain on the agenda of the Committee of Permanent Representatives? While the Government wait for harmonisation of the EEC directive, can the House be told what steps are being taken to discuss with commerce and industry the undoubtedly heavy costs which will eventually flow from strict liability?
The Lord Chancellor: My Lords, I think I can confirm that it is part of the Government's policy to maintain the state of the art defence. I do not think, without notice, that I can give a full account of the various consultations which have taken place with industry, but they have been pretty extensive. Of course at the moment the state of the art defence is one of the obstacles to the European Directive which is under consideration at Brussels. That is the best answer that I can give to the noble Lord's supplementary question.
Lord Underhill: My Lords, does the noble and learned Lord the Lord Chancellor recall—
554
undoubtedly he does—the debate that took place in this House on the Pearson Report when considerable attention was given to the "no fault road compensation scheme"? In view of the large number of persons who suffer injury, for which there is no compensation, arising from road accidents, will the Government move fairly quickly on that item?
The Lord Chancellor: My Lords, the road compensation scheme is probably one of the most controversial of all the Pearson recommendations. Simply in terms of manpower it would cost a thousand new jobs, 200 of which would be medical. I wonder whether that is the best way in which to use 200 doctors. At 1977 prices it would cost £64 million a year and I am wondering whether £64 million—if one is going to spend it on the disabled—is best spent in that particular way. There are two alternate views and doctrines about how we ought to deal with disablement. One such view was put very well by the noble Baroness. Lady Lane-Fox, when we had the vaccine damage debate. The view put forward then was that we ought to use our resources to help all disabled people depending upon the nature of their disablement and the extent of their disablement. The other view is that we should select particular groups of disabled people—for instance, people who are vaccine damaged or people injured on the roads, as the noble Lord's supplementary question implied—and concentrate on particular groups of the disabled not according to the nature or extent but according to the cause of their disablement. I belong to the "Lane-Fox school"; but the Government have not yet adopted quite the same view.

Pilotage Regulations
2.41 p.m.
Lord Gainford: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to change current pilotage regulations.
Lord Lucas of Chilworth: My Lords, successive Administrations in recent years have envisaged such changes. My right honourable friend is now giving most careful consideration to new policy initiatives and he hopes to be able to make a Statement before long.
Lord Gainford: My Lords, I thank my noble friend for that reply. Can he assure me that there is no danger of there being an increase in the cost of pilotage off British shores within the next few years?
Lord Lucas of Chilworth: My Lords, I do not think I can give my noble friend Lord Gainford a total assurance. However, some two years ago, in August 1981, my noble friend Lord Trefgarne said that he hoped that any change would not reflect further expense upon the shipping industry. I am quite sure that that would be our policy today.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that the House will be encouraged to know that there is to be an early Statement by the Government on this important issue? Is he further aware that pilots around the coast—certainly in Wales and the Merseyside area—are deeply concerned that there should be some early Statement by the Government? Could he give the House an indication when the Statement will in fact be made? Will it be within the next month, or will it take longer than that?
Lord Lucas of Chilworth: My Lords, I am grateful to the noble Lord the Leader of the Opposition for his question. The short answer is that a Statement will probably be made next year. Some very delicate negotiations with the pilots, the pilots' association and other interested parties are currently in hand, and they are taking some little while to resolve. I would not expect my honourable friend to make a Statement until well into next year.

Magistrates' Courts: Financial Cutbacks
2.44 p.m.
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what effect restrictions on local government spending are having on the functioning of the magistrates' courts.
The Lord Chancellor: My Lords, the magistrates' courts service is financed as to 80 per cent. by a specific grant and has thus largely been protected from the general pressure to cut expenditure. It goes without saying, however, that the magistrates' courts are not exempt from the continuing need for economy.
Baroness Nicol: My Lords, I am grateful to the noble and learned Lord the Lord Chancellor for that reply. However, is he aware that in at least one area of the country the effect of the cuts on the magistrates' court is that the police have been asked to reduce their input of cases to that court by 15 per cent.? Is the noble and learned Lord further aware that the enforcement of arrears in that same area is almost at a standstill? Therefore, the alternative to prison, which is available to the magistrates, has ceased to mean anything.
The Lord Chancellor: My Lords, I am not aware of the particular area to which the noble Baroness refers. If she will give me some evidence about it, I shall have it looked into. However. I think that the noble Baroness should bear in mind that the current expenditure on magistrates' courts between 1979 and estimated 1985–86 has gone up from £72 million to £93 million, to £107 million, to £118 million, to £129 million, to £135 million, to £140 million. There are 19 major court systems already in the plans up to 1985–86 and I have 31 more in the pipeline.
Lord Harmar-Nicholls: My Lords, can my noble and learned friend say whether anybody anywhere has the power to tell the police to reduce what is called their "input" when they are carrying out their duty?
The Lord Chancellor: My Lords, I am just waiting to see what the noble Baroness tells me in answer to my invitation.
Lord Cledwyn of Penrhos: My Lords, notwithstanding the impressive statistics produced by the noble and learned Lord, is he aware that, in addition to the complaint made by my noble friend, probation officers throughout the country are deeply concerned about the effect of these economies upon the probation service? Is he aware that the community service, which indeed the Government so keenly support, is also affected by these economies? Would the noble and learned Lord be prepared to make his own inquiries to find out whether these important services are affected?
The Lord Chancellor: My Lords, I should hardly have described a rise from £72 million to £140 million as economy. The Question I was asked refers to the functioning of the magistrates' courts. If the noble Lord on the Opposition Front Bench puts down a Question about the probation service or the community service, I think that they would be very suitable subjects for a Question. I must say in parenthesis that, although I am answering for the Government, as all Ministers do, the noble Lord is as well aware as I am that this is a Home Office question and if my noble friend Lord Elton were here he would probably be more forthcoming than I am.
Lord Avebury: My Lords, in his original reply the noble and learned Lord said that 80 per cent. of the expenditure on magistrates' courts comes from central Government funds, which means that the remaining 20 per cent. is financed by the local authorities. In fact, he did not answer the noble Baroness's Question as to what effect the restrictions on local government spending had had on that 20 per cent. I wonder whether he would address his mind to that question.
The Lord Chancellor: My Lords, that extra 20 per cent. is not entirely financed by local authorities. It comes out of the rate support grant which, as the noble Lord knows, is very largely central Government money from a different source. However, the short answer to the noble Lord's question is that if there is any effect on the magistrates' courts, it must surely be purely marginal.
Lord Diamond: My Lords, while the whole House will be most grateful to the noble and learned Lord for the current costs which he has supplied to the House, is he in a position to help the House by giving the realistic figures—that is to say, the comparison at constant prices?
The Lord Chancellor: No, my Lords, I am not. However, if the noble Lord tables a Question to that effect, he shall surely have an excellent answer from my noble friend.
Baroness Macleod of Borve: My Lords, in reference to the answer given by my noble and learned friend the Lord Chancellor, can he confirm that it is now policy to replace police court staff with civilian staff in magistrates' courts?
The Lord Chancellor: My Lords, I could not without notice, but I think that the answer is, Yes.
Earl Fortescue: My Lords, are the Government aware that the problem outlined by the noble Baroness does not apply in Oxfordshire, which is the only county about which I am in a position to speak? Any reasonable request from the magistrates' courts committee in that county is almost always agreed to by the county council.
The Lord Chancellor: My Lords, I am glad to hear what my noble friend says, but I do not think we can go through the country area by area.
Baroness Nicol: My Lords, the global figures given by the noble and learned Lord the Lord Chancellor are convincing, but nevertheless the local interpretation is what matters in the application of law and order. Will the noble and learned Lord therefore agree that if I write to him—he will understand that I do not wish to name this area because it would be an invitation to crime in that area—he will perhaps investigate this matter?
The Lord Chancellor: My Lords, the matter will be investigated, but by my noble friend Lord Elton.

Heating Allowances for the Elderly
2.51 p.m.
Lord Hill of Luton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the legal basis for the reduction in the heating allowances of some elderly persons.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, the Supplementary Benefit (Housing Benefit) (Requirements and Resources) Consequential Amendments Regulations 1982, approved by your Lordships on 30th July 1982, introduced some changes to the rules governing help to supplementary benefit claimants who pay for their heating with their rent. As part of these changes, claimants who pay a fixed charge for their heating and who do not need any extra heating can no longer receive extra heating additions. In the Government's view, it would not have been right to have continued paying those heating additions to claimants who did not need to pay for extra heating over and above that provided by the fixed charge.
Lord Hill of Luton: My Lords, is the noble Lord aware that the relevant part of the regulations which he has quoted is so obscure as to suggest that only the draftsman can understand it? Secondly, is the noble Lord aware that neither of the Ministers who, in this House and the other place, put these regulations to Parliament for approval made the slightest reference to the power which they apparently give to reduce the incomes of some elderly and infirm persons who need
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additional heating by almost £2 a week, and that that was done without explanation or warning?
Lord Glenarthur: My Lords, I am afraid I must agree with the noble Lord when he says that the rules are complex: complex they certainly are. So far as his second point is concerned, the change in the supplementary benefit rules did not take heating additions away from claimants who needed extra heating. The only losers (if that is the right word) are people whose landlords provide full heating for a fixed charge. In those cases that charge is fully reflected in the housing benefit they receive.
Lord Molloy: My Lords, is the noble Lord aware that in addition to the valid and important points made a moment ago by the noble Lord, Lord Hill of Luton, there is also a grave anxiety arising among the poor, the crippled, the invalid and the elderly as to how the Government are going to help them when the increases in gas and electricity take place? Can the noble Lord give the House some indication of what help will be afforded to those in the categories I have mentioned when the increases take place?
Lord Glenarthur: My Lords, the Government are spending well over £350 million this year on extra help with heating costs for those most in need. These supplementary benefit heating additions have just been increased in line with the increase in fuel prices to May of this year, which was 8.6 per cent., and are now at their highest ever level in real terms. They should, as in the past, be increased again next year in the light of increases in fuel prices, to which the noble Lord referred, during the 12 months ending May 1984.
Lord Stallard: My Lords, is the noble Lord aware that much of the confusion has arisen because the implementation of the supplementary benefit regulations and the changes to the heating additions made in the supplementary benefit regulations were introduced at the same time as the partial operation of the housing benefit scheme? This has caused a great deal of confusion. Is he aware that that confusion has been made worse because many local authorities up and down the country put different interpretations on the regulations depending on their particular policy arrangements? Is he further aware that this has meant that many elderly people have lost heating additions of up to £4.65 per week in some areas? Does he agree with me that the time is now right for the introduction of a comprehensive fuel strategy covering all fuels and all aspects, including insulation and conservation, and with a mind to the ever-increasing punitive burden of standing charges on elderly people?
Lord Glenarthur: My Lords, I think that the answer to the last supplementary that the noble Lord asked was covered when I answered his noble friend Lord Molloy. To go to the first part, housing benefit has of course resulted in a reduction in supplementary benefit payments to some people because their housing requirements are now met by the local authority. Although this may have meant that some claimants needed to make changes to their budgeting arrangements, the introduction of housing benefit has

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not, in itself, affected the sum which claimants have available for living expenses.
The noble Lord also asked about the difficulties (I think that was his word) in the transfer to the local authorities of this responsibility. It is true that at the end of July roughly 20 per cent. of all authorities had not fully completed the changeover to housing benefit, but even at that time the cases outstanding amounted to only 5 per cent. of the total number of claimants involved.
Lord Kilmarnock: My Lords, have the Government made any calculation of the cost to the public utilities of abolishing standing charges for pensioners?
Lord Glenarthur: My Lords, I am sorry, but I did not hear the last part of the noble Lords' question.
Lord Kilmarnock: My Lords, my question was whether the Government have made any calculation of the cost to the public utilities in this country of abolishing the standing charges for pensioners.
Lord Glenarthur: My Lords, not that I know; but if there is one, I shall let the noble Lord have it.
Lord Molloy: My Lords, to avoid adding to the difficulties and complexities outlined by the noble Lord, Lord Hill of Luton, and my noble friend behind me, in so far as the gas authorities and the electricity authorities say, and have told the Government, that they do not want to increase prices, is it not obvious that the thing for the Government to do is not to put up the prices, and not to give people the problem of trying to work out how to get the extra couple of shillings to pay for the increases, but to stop the increases? Is that not the real answer?
Lord Glenarthur: No, my Lords. Apart from anything else, that is rather a different question. I should say again to the noble Lord that the sums of money which this Government are spending are over £350 million a year, which are far higher than the sums spent by any previous Government. We introduced extensions to the criteria for the payment of heating additions in 1980 so that pensioners over 70, or families with children under five and on supplementary benefit, now get a heating addition automatically.
Lord Glenamara: My Lords, is the noble Lord aware that what he refers to euphemistically as "adjusting their budgeting arrangements" means the difference between getting by and poverty, penury, and hypothermia for tens of thousands of old people this winter? Is this not a disgusting and disgraceful thing for this Government to do?
Lord Glenarthur: My Lords, I am afraid that the noble Lord is overstating the case. The fact remains that those who lose out (if that is a form of words which is acceptable to the noble Lord) are those who were in fact over-provided for in the first case.
Lord Stoddart of Swindon: My Lords, is it not a fact that, although the noble Minister has made a great
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boast about the additional assistance given to pensioners, that assistance is in fact limited. as he said, to those in certain categories? People between the ages of 65 and 80 get very cold indeed, and need additional assistance as well. As my noble friend Lord Molloy said the fact that additional charges are going to be levied on all people. including pensioners, through the action of the Chancellor of the Exchequer in relation to the gas and electricity industries, is going to cause much distress and heart-searching to many old people. Will the noble Minister respond to the request by my noble friend that the Government look at this again and allow the electricity and gas corporations to hold prices for another year?
Lord Glenarthur: My Lords, that really is another question, and I do not think it is one that I ought to go into now. Of course, as I said just now, the increases that take place in the prices in both the gas and electricity industries will be reflected in the rises that take place inline with inflation up to May next year.
Baroness Burton of Coventry: My Lords, we shall have a chance of discussing these matters further in the debate next week. But, arising out of the Question posed by the noble Lord, Lord Hill of Luton, and without going into the rights or wrongs of the matter, does the Minister feel able to accept that, whatever the Government may have explained. the matter is not clear to many people who are involved, who are terribly worried about this and have difficulty in paying their bills at present? Would the Minister feel able to ask his right honourable friend whether the publicity about these matters in the press could be considered again so that it is both in better English and more easily understood by people who are frightened at the thought of winter?
Lord Glenarthur: Yes, my Lords, we share the concern of all those who are worried about the effect that winter could have on the elderly and infirm. If there is a form of words that can be used to make it more clear we shall consider it. But I should not like to be drawn on whether or not there would be a change in the end.
Baroness Fisher of Rednal: My Lords, will the noble Lord enlarge on his reply when he said that the elderly had been "over-provided for"? Does he mean that we have kept them too warm or does he mean to say that the weather is not so cold? He used the phrase "over-provided". The provision was through the DHSS without being too generous to the old-age pensioners.
Lord Glenarthur: My Lords, if the phrase "over-provided for" is capable of misinterpretation. I apologise. I share the noble Baroness's concern; but the fact remains that those who have now lost in the way that I described were getting double treatment to some extent in what amounts to a complex area and one that I should be delighted to talk to the noble Baroness about later or perhaps answer her in writing. This is a difficult subject. The fact remains that some people were receiving double benefit and that has now gone.
Lord Hill of Luton: My Lords, does the Minister deny that there are some ageing and infirm people who have lost nearly £2 a week as a result of the approval of these regulations? Secondly, will he ask for his right honourable friend to arrange that housing authorities, who are aware of old people needing more than the common level of heating provided for others, should notify the names of those people to the local office of the DHSS so that the position can be remedied? Finally, is the Minister aware of the case which I brought to the notice of the department: that an old lady of 85, nearly blind, suffered that reduction of just under £2—£1.90 in fact—as a result of the application of these regulations? No amount of debate will persuade one that that is right in modern conditions and modern circumstances.
Lord Glenarthur: My Lords, I am afraid that I cannot, without notice, say categorically whether the figure that the noble Lord quotes is right or wrong. But any claimant whose fixed charge does not meet all his or her heating needs can still be considered for a heating addition under the normal rules. Indeed, many claimants in this position are better off under the new arrangements than before because they can now get both heating additions from supplementary benefit and a further rebate of a percentage of the amenity charge as part of their housing benefit.
Lord Stallard: My Lords, may I take the noble Lord back to the point that I raised in my first question about the different interpretations being put on these regulations by local authorities throughout the country? May I ask him to reconsider sending out some notes of guidance for clarification to local authorities and publishing the information more widely than it is at present?
Lord Glenarthur: My Lords, I shall certainly consider that and see what we can do to help.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Gray of Contin will, with the leave of the House, repeat in the form of a Statement an answer to a Private Notice Question in another place on the National Graphical Association dispute.
It may be for the convenience of the House if I announce that dinner will be available at the usual time of 7.30 this evening.

Inshore Fishing (Scotland) Bill [H.L.]
3.6 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, I beg to move that this Bill be now read a second time.
The regulation of inshore fisheries in Scotland has a long history. Scottish sea fisheries are governed by provisions scattered through an extensive body of legislation ranging from the Fisheries Act 1705 to the Fisheries Act 1981. Deriving from the parent Acts are
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a large number of orders and by-laws. In this way the Secretary of State has available to him a great number of powers relating to inshore fishing.
This extensive body of law has taken shape in response to differing circumstances and for differing, though related, purposes. It is time to stop grafting new shoots on to what is now a very venerable trunk and to start afresh with a completely new plant. This Bill provides for the repeal of the existing outdated legislation governing inshore fishing and its replacement by a readily comprehensible and enforceable regime, suited to modern conditions in the fishing industry.
The conclusion that a fresh start was needed was first reached some years ago now. In 1967 the noble Lord, Lord Ross of Marnock, set up a committee under the chairmanship of Lord Cameron to review the regulation of Scottish inshore fisheries. That committee reported in 1970 and concluded that the legislation was difficult to understand, obsolete in certain respects and irrelevant to modern conditions. Lord Cameron recommended many changes. While the Government were considering this report we joined the EEC and that in turn created radical changes not only in the law but also in fishing patterns. It became clear that a comprehensive revision could not take place until we knew the final shape of the common fisheries policy. That policy was concluded only earlier this year and so it is with, I think, commendable speed that the Government have reacted by bringing before your Lordships our proposals.
Apart from the decisions on the common fisheries policy, there was one other development in the last four years which has had a part in shaping the scene. For nearly 80 years it was generally believed that there was a prohibition on trawling within three miles of the shore. In 1979 however the Sheriff at Dingwall decided that the ban applied only to bottom trawling and that midwater trawling for pelagic species was permissible. This has meant that, particularly on the west coast, pelagic trawlers have been able to come right up to the shore to take fish, a development which has increased the number of incidents occurring between static and mobile gear fishermen.
Following the Dingwall judgment and by way of preparation for the situation, once the common fisheries policy had been decided, my noble predecessor as Minister of State asked a committee of officials to reconsider the findings of the Cameron Report in the light of the many changes and developments since 1970. That committee issued a report in 1981 as a departmental consultation paper on which the views of the industry and other interested persons were sought.
It will be no surprise to the House to learn that a wide variety of views and reactions were submitted. We have given very careful consideration to the representations received, and it is on the basis of all this preparatory work that we have brought this Bill before the House.
Having sketched in very briefly the background, I should like to turn to the Bill itself and to outline some of its main aspects. This Bill is designed primarily to achieve two main objectives: these are the protection

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and conservation of fish stocks, particularly immature and breeding stocks, and the minimisation of conflict between static and mobile gear fishermen. It is the habit of fish to breed and to grow in the waters close inshore and, if I may borrow a term from another important primary source of food, it is these stocks which are the seed corn of the fishing industry. As such they are especially vulnerable to unregulated exploitation.
At the same time, and often in the same areas, we are seeing increasing conflict because of the incompatibility of pursuing static and mobile gear fishing. The Government recognise that both types of fishing have important roles to play and that fishermen in both sectors have a perfect right to earn a decent livelihood. Because that right can be threatened in the current circumstances we are aiming to create conditions which will provide fairness and equity in our inshore waters.
The Bill is very short because it is, in a sense, a neutral measure. It does not make any proposals for regulation but simply creates the context and framework within which the Secretary of State may make orders for regulating the fisheries. The choice of structure is deliberate because we want to avoid becoming locked into regulations which, although they may be appropriate for today's fishing patterns, might not be appropriate in future years. We want to create a system which can respond flexibly, quickly and sympathetically to the changing demands of the fishing industry.
The heart of the Bill is in Clause 1, which enables the Secretary of State to make orders regulating fishing in the waters around the coast of Scotland out to a distance of six miles from the baseline. We have chosen this distance because it is within six miles from baselines that almost all the static gear fishing is carried out. This is also the area within which only British fishermen may operate. While it is true that for the major part of the Scottish coast United Kingdom fishermen have exclusive rights out to 12 miles, there are areas where other EEC fishermen have specific rights in the 6-to-12 mile belt. There are, of course, already existing United Kingdom and Community laws for regulation of the more complex position where United Kingdom and other EEC nationals have rights. The clause provides for the prohibition of fishing for all fish, or for some kinds of fish, or fishing by specified methods. These prohibitions may be applied at specific times of the year and there is also scope for exceptions to the prohibitions.
In fact, it is the Secretary of State's intention to create what have been called static gear reserves and fish nursery areas. That is to say, he proposes to designate certain areas of the sea within which it will be illegal to fish by trawl, seine and other mobile gears. For the convenience of the House, I intend to place in the Library between now and Committee stage a copy of my right honourable friend's initial proposals for these static gear and young fish nursery areas. It is also our intention that the views of fishing organisations both at local and at national level be sought in this connection.
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We shall also repeal the existing provisions. In particular, we intend to dispense with the restrictions on the use of certain types of trawl gear within three miles of the coast. Scotland has a large coastline and there are many parts of it where static gear fishermen do not fish or where there are no concentrations of immature fish. It is, therefore, unreasonable to prevent the mobile gear fishermen from having access to these waters. It is also a wasteful use of our enforcement resources to have to police a three-mile limit around the whole of the coast.
In deciding upon a strategy of static gear reserves and young fish nursery areas, we are conscious that other schemes had been put forward by some of the interests involved. In particular, there have been calls for some kind of local or area management of the fisheries. We gave this proposal very serious consideration, but decided in the end that it would be wrong for the Secretary of State to devolve his powers in this respect and, even if he did, that the creation of these local committees might well give rise to more problems than they would solve. There could be problems of demarcation since the fish stocks might well not correspond as neatly to the committee areas as we would wish. There would also be difficulties if a committee in one area adopted a more restrictive or a more relaxed line on particular issues than a committee in another area. Indeed, we took the view that such a measure would create as many problems as it would solve.
The Scottish fleet has historically been a nomadic fleet and we have no wish to compartmentalise its operations. Nor would we wish to run the risk of certain areas of the country being discriminated against by other areas of the country. It therefore is appropriate that these matters should continue to be decided centrally.
Turning now to Clause 2, I would point out that with the removal of the ban on trawling within three miles of the coast it will be necessary to extend the protection for fixed salmon nets, which currently applies to certain areas of the waters around Scotland. Clause 2 makes a general prohibition on the use of mobile gear within half a mile of any fixed salmon net and ensures that the existing legal protection is not lost with the repeal of the old legislation.
Clause 3 of the Bill describes the offences created by failing to comply with orders made under Clause 1 and makes provision for the penalties to be imposed. Clauses 4 and 5 describe the powers of British sea fishery officers to enforce the legislation. These provisions correspond to provisions already enacted in other fisheries legislation, as does Clause 6, which relates to offences by corporate bodies and the recovery of fines. Clause 7 defines the terms used in the Bill. Clause 8makes provision for repeals and consequential amendments including the repeal of obsolete and spent legislation as detailed in the schedules. Clause 9 provides for the coming into force of the Bill on a date to be appointed by the Secretary of State. This will also allow for the current legal regime to remain in force until the new provisions can be effected.
Finally, I turn to the Schedules. Schedule 1 specifies certain minor and consequential amendments and Schedule 2 the repeals, in whole or in part, of those

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redundant pieces of legislation which are replaced by the Bill.
My Lords, I have attempted to set out concisely our aims in bringing this Bill before the House. I have no doubt that noble Lords have studied the Bill carefully and will have points to make both today and later in Committee. This is an important measure both for those in isolated coastal communities who depend for their living on static gear fishing and for those who prosecute fisheries in the larger vessels, away from their home bases. It should not be forgotten that these latter fishermen are equally dependent on fishing. The essence of the problem is therefore not only to strike a balance between these competing interests but to maintain that balance through future years. I believe that in this Bill we have the necessary tool with which to do that job. I therefore commend this Bill to the House. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Gray of Contin.)
3.20 p.m.
Lord Ross of Marnock: My Lords, I think we are grateful to the noble Lord the Minister of State for his explanation of the Bill. He said that his explanation was concise. He is quite right about that. But I think he should have read his words more closely when he said we now have a readily comprehensible new regime. Might I ask him this, first of all? Where is it? I defy any noble Lord to read this Bill and tell us what the new regime is. It just is not there. This is purely and simply an enabling Bill—enabling the Secretary of State to do what he likes.
I agree with the noble Lord that it is time something was done. As a matter of fact, I agreed to this somewhere around 1967, when I set up the Cameron Inquiry into fishing regulations. I now find my past catching up with me all the time in this place. I may say that the committee reported in December 1970 and the report was addressed to me, but by that time I was no longer Secretary of State, as the noble Lord on the other side will recollect.
To suggest that he is now carrying out with speed the wishes of the Cameron Committee report of 1970 is stretching it a bit much. These things could have been done, and in fact I am sure many of them have been waiting in the pigeonholes of St. Andrew's House to be done, over a long time. I agree that they have to be done. The noble and learned Lord, Lord Cameron, happily, is still with us despite the fact that it is 13 years since he put his name to this report. He is still a judge in the Scottish courts, and more power to his elbow because his work for Scotland, not just judicially but in many other realms of public service, has been quite amazing for a man of his age. He is a man of considerable stature. I do not know what he will think of this Bill.
The noble and learned Lord was faced with about 24 Acts of Parliament stretching, I think, from George II in 1755 right up to 1968. We have added a few since then. Stemming from them were by-laws, mainly from the 1885 Act. There were about 84 bylaws, and that is not counting the other three that were purely by-laws repealing former by-laws. So there was a growth that required to be modernised; but to say
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that it was just lopping off and starting with a new trunk is wrong. By the way, you do not start with a new trunk; you usually plant something. What we are doing—at least, I hope so—is saving what is worthwhile and planting something new that is worthwhile.
But we have to appreciate the need for the regulation in the first instance. In the early eighteenth century there was considerable concern—and this is a theme which runs through all the regulations in respect of inshore fishing—about the new coming in and the old being worried and concerned as to what was going to happen to their existing livelihoods. It affected established communities; and I think that it was in 1862 that a Royal Commission was set up which condemned Acts of Parliament which had previously just been published. It is interesting to see what was said then, because the Government are in danger of having the same said now. They said:
"The Acts of 1860 and 1861 arose out of and conflicts engendered among rival sets of fishermen, by the influence brought to bear on Parliament by the large body of drift net fishermen, fish curers and other vested interests."
They introduced regulations bringing in the circle net, which was an early form of seine net. This has gone on all over the years.
But we look at this Bill, and what does it do? It gives power to the Secretary of State by order. We will never see this again: not even an affirmative resolution or a negative resolution, but purely by way of a statutory instrument he can make these changes contain something that has been entirely opposed for a long time. The Secretary of State, if he likes, can continue it, affecting the livelihoods of communities up and down the coasts of Scotland. Do your Lordships think it is right and fair for the Government to come along and say, "Here we have a comprehensible, new regime"? It is nothing of the kind. I should like to quote to your Lordships what some of the fishermen themselves have to say about it. By the way, the only speed the Government are to be commended on is the speed with which they introduced this Bill. This is the 29th. I should know that, because it is the day before St. Andrew's Day. They would not have dared to bring this along on St. Andrew's Day; but the Government got as near as they could to keep the Scots busy.
The Bill was printed only on the 17th of this month, and this is the 29th. The 17th was a Friday, by the way, which means that most Scottish Members of both Houses would probably have seen it after that weekend. The Minister of State thinks that we have all read it and studied it and have had a chance to discuss it with fishermen, and so on. I have barely had time to write a letter or telephone people and get a reply back. I have complained about this before. If this House wants itself to be taken seriously so far as Scottish affairs are concerned, then they should not push us around like this and expect us merely to be rubber stamps in respect of anything that the Government do. Please let it not happen again. Here we have two Bills on the one day, and we have seen them for only about a week. It is not good enough. I do not blame the Minister; he is new to it. But he should have known from his short experience of the Scottish Office. It is probably not their fault, either, but the fault of the people who run this place.

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What have the Scottish fishermen to say about this?
"What we have now is a situation in which interested parties will seek to gain an advantage over others by attempting to persuade the Secretary of State to enact legislation favourable to them".
So here we are, in the same situation as that which people were complaining about in the year 1862. That was the Scottish Fishermen's Organisation; and the same point is made by the Scottish Fishermen's Federation and by the Clyde Fishermen's Association. All agree that there should be modernisation; all agree that there should be a new Act; but nobody agrees that this is the kind of Act we should have. The consultations with the fishermen should have gone down to the points of detail, and the nursery bays and the restrictions to be introduced should have been in a schedule to the Bill. That was one of the recommendations of the Cameron Report. The report suggested what should be in the Bill. That was 13 years ago. There have been 13 years to think about it, and the Secretary of State has been working on it closely for three years and not just since the completion of the EEC negotiations.
I wish to say that many of the Scottish fishermen are not looking to the House of Lords today: they are wondering what is happening in Bergen, wondering about the quota they are going to get in negotiation and what we are going to give away to the Norwegians in respect of our fish stocks here, to enable us to fish. It is, of course, important for us to fish in Norwegian waters for cod, haddock and other fish.
This is exactly what the noble and learned Lord, Lord Cameron, said in his conclusion. He said that the new legislation should also,
"Schedule and define all major plaice nursery areas"
and provide for this, that and the next thing. There is nothing of that in here.
There was one other important thing that was said by the noble and learned Lord, Lord Cameron, at, I think, paragraph 143—because much has been said by the Minister of State about the protection of static gear. What did the noble and learned Lord, Lord Cameron, say about that? They considered the matter, the pros and the cons, and said:
"Consideration must however be given to the fact that selective restrictions would create many anomalous and inequitable situations because it would be virtually impossible, without recreating the total coastal reservation, to provide reserved areas for all creel, line and ground net fishermen."
They pointed to the practical difficulties of it, and in paragraph 146 said:
"On balance therefore we have come to the conclusion that the case for protecting the special interests of the static gear fishermen is not such as to warrant the imposition of restrictions on other methods of fishing".
They made a reservation in respect of the newer developments of fish farming and I think nobody would disagree with that. So the Government are not even carrying out one of the main recommendations of the Cameron Committee.
The Bill itself is non-controversial; but what the Government are going to do after it comes into force is very controversial indeed. For example, the Clyde Coast fishermen point out that they see no need for any static gear reserves in their area—that is, from
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Ardnamurchan Point to the Mull of Galloway. They say:
"Static gear fishermen and mobile fishermen have reached an understanding which allows for a constant exchange of information which reduces conflict".
They agree with the conservation aspects; but this important point about static gear is one of the most controversial that the Government have embarked upon. There is nothing in the Bill about it. You could not read Clause 1 and say that the Government are going to do that. This is what has come out of the Government's discussions following the 1981 consultations. The same is true about the Scottish Fishermen's Federation who say:
"We are totally opposed to the concept of static gear reserves",
and they represent over 1,000 fishermen in Scotland. They go on:
"The present restrictions on the use of mobile gear within three miles are outdated and should be removed".
The Government are going to do that, but we have not been able to tell what conditions, if any, there will be. There are some laid down by the Cameron Report.
What we have now is a situation which nobody wants. We have been through all this before. The fishermen's organisations used to be very divided indeed. I think that it took the efforts of the EEC to bring them all together for their own protection. I plead with the Government to change their minds about this. Why not introduce that schedule into the Bill right at the start? We shall then see it. It might take the Bill a little longer to go through this House and another place, but I can assure the noble Lord that there will be very considerable bitterness; and the reactions of the Clyde Coast fishermen, the Fishermen's Federation and the Pelagic Fishermen's Association are all the same.
May I quote from the Western Isles Free Press, which the noble Lord has probably seen. That says:
"John Nicholson, General Manager of the Stornoway Fishermen's Co-operative, said that all the arguments lead back to the need for local management. It was quite unnecessary to ban trawling within all areas at all times."
They went on to say:
"We have been working quite happily here on the basis of local agreement about where and when different kinds of fishing should have precedence".
But that will be thrown on its head by the central control of the Secretary of State.
The Secretary of the Highlands and Islands Fishermen's Association says that they are against static gear reserves and they have told the noble Lord, Lord Gray, so. It is not getting round to the problem of conservation and improving stocks. They are concerned about the lack of local consideration. The Secretary of the Mallaig and North-West Fishermen's Association said that the idea of area management would be much preferable. If static gear reserves were created, he feared that the reaction of trawlermen would be,
"Don't step out of there or we'll tow your creels away."
This is creating the very conditions that we hoped to get away from.
We have heard plenty about EEC fishermen coming into what, in modern terms, would be called "our waters". There is much bitterness within our own

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coastal fishing areas about what the Minister of State calls "nomadic fleets". You are foreign if you come from just a few miles away. What we have achieved is a friendly exchange and, with the recommendations of the Cameron Report being so opposed to the privilege given to static fishermen, the Government should not have embarked on this Bill. So I hope that the Minister's mind is not closed to that. We will try, somehow or other, to deal with this when we come to Committee.
It is a very important industry. It is an industry that has come through very hard times, but they are the kind of people who survive hard times and struggle on. It should be appreciated just how much of the white fish that we eat here in London is produced and landed by Scottish fishermen. With all the difficulties that they have, they should not have more put upon them by a Bill which claims to be modernising and simplifying, but which throws us, once again, completely into confusion. Of course, we shall support the Bill, but in Committee we shall need to go very much further in trying to get the Government to change their minds in relation to the structure of the Bill.
3.35 p.m.
Lord Grimond: My Lords, it is a very great pleasure, on this my first speech in your Lordships' Chamber, to follow two such familiar and doughty warriors as the noble Lords, Lord Gray and Lord Ross. I understand that one of the most valuable functions of this House is to scrutinise and revise legislation, but I take it that we are also prepared to ask from time to time whether particular Bills are necessary at all. One of the most telling arguments in favour of the Bill before us is that it repeals a great deal of previous legislation, but it has positive aspects of its own. It is extremely widely drawn, and under it regulations could be made about practically anything. It also gives extremely wide powers, though they may have appeared in previous Bills.
In an interesting debate last week initiated by the noble Lord, Lord Boyd-Carpenter, several speakers mentioned the handicap placed upon productive activities in this country not only by the great number of regulations, but by their constant change. Indeed, I think everybody now admits that the mass of regulations can be a very serious matter for those who are trying to make wealth. I have some sympathy for Lord Palmerston, who was once heard to remark rather testily:
"Surely, we cannot go on legislating forever".
Of course, he was wrong for as conditions change new legislation is needed. But it has become a mounting flood, together with the regulations made under it.
A short time ago I measured the thickness of the statutes passed in the year when I was first elected into Parliament and I then measured the thickness of the statutes passed in a more recent year. The latter year was two-and-a-half-times as thick. I may say that the first year was under a Labour Government and the second one was under a Conservative one. Some of your Lordships may be thinking, in your cynical way, that the only reason why the Liberals have not contributed to this flood is that nobody has asked them; and, if you are thinking that, I must confess that I think you are right.
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The fact is that legislating and regulating have become a national disease throughout the country. Yet the strange thing is that a great deal of it is clearly trivial and much of it harmful, while very important matters go untouched. For example, we await sensible proposals about local government finance, and your Lordships are now well aware that the reform of this Chamber has brooked no delay since 1910. Therefore, I think we are entitled to ask whether the positive aspects of this Bill are essential.
My first question to the Minister, which of course he dealt with in his lucid way to some extent, is whether the Government do not have adequate powers now to limit fishing. It is only a week or two ago since I understood that they limited sprat fishing in the Forth, in accordance with EEC regulations. But the noble Lord indicated that he felt that the Government's powers were either insufficient or too complicated. I ask him to say a little more about that at some stage of the Bill.
As he said, the Bill principally does two things. It virtually abolishes the three-mile limit and it gives Ministers power to forbid certain types of fishing in specified areas by sea-going fishing boats, where static fishing is carried on. As regards the three-mile limit, I do not believe that anybody will weep many tears over its abolition. The only question is whether it is worth doing. The three-mile limit is so widely disregarded that nobody will notice whether it is abolished.
As to the protection of static fishermen, this is needed in some places, in particular where static fishermen suffer from the depredations of trawlers, but I understood the Minister to say that this Bill is intended to apply only to certain areas of the coast and not to the whole of Scotland. Secondly, the lobster, crab, mussel and oyster fishers, and so on, who are meant to be the beneficiaries of the Bill, have expressed very grave doubts about it. They are in grave doubt. as I believe the noble Lord, Lord Ross of Marnock, said, as to whether legislation is the right way to tackle the matter. Many of them would prefer to go on trying to make agreements with the mobile seagoing fishermen. They fear that if these fishermen are kept out of certain areas it will be more difficult still to come to any sensible agreement over the areas which are still open.
I come next to an important question, which again was touched on by the Minister: the possibility of area agreements. I understood the Minister to say that he did not believe that at the moment such agreements could meet the case with which the Bill purports to deal. The Minister will be aware that in Orkney and Shetland there is a great deal of pressure for a management scheme. It is thought in Orkney and Shetland that it would protect stocks and the livelihood of the fishing communities and would also deal with one of the main problems with which the Bill is concerned. In the last Parliament the Secretary of State for Scotland assured me that he would carefully consider any local management scheme that was put to him. Does that undertaking still stand? Are the Government prepared to consider such schemes? They are, I know, acceptable to the EEC and I hope that they might be acceptable to the Government. Are conversations proceeding about such schemes, or are the Government waiting for the local fishermen's associations to

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make the first move? I should be very grateful for some information. It is highly relevant to the Bill, as the Minister himself indicated.
Many of your Lordships are very familiar with these fishing areas. I see that the noble Lord, Lord Boothby, has put down his name to speak. He is still widely respected throughout the Scottish fishing communities. On one occasion he said that Orkney and Shetland were too conservative to vote anything but Liberal, but that slight error has been forgiven him and I am very glad that he is still taking a deep interest in the industry.
All those who know the fishing communities recognise that the fishing villages have valuable characteristics which, if destroyed, can never be replaced. For many of them there is no possibility of any other employment. The Islands of Skerries, off Shetland, are merely clusters of rocks in the North Sea but their population, unlike most of Shetland, has remained almost unchanged for 150 years. The people are hardworking and comparatively happy. The reason for that is fishing; fishing has certain characteristics which make a human appeal that is not always recognised. First, it is to some extent in the nature of a gamble; it is more exciting than agriculture. Secondly, it gets the men out of the house; this is very important, particularly in wet climates. Therefore we should proceed very carefully over all fishing matters. If you destroy the livelihood of the three Skerries boats you will have to evacuate the islands; there is nothing else, conceivably, that the population can do. The situation in many of the other islands—in Whalsay and in Burra—is much the same. The Bill will undoubtedly create some difficulties for fishing, in particular for mackerel fishing. Like the noble Lord, Lord Ross of Marnock, I beg the Government to keep in the closest touch with the fishermen and make sure that the Bill meets the admitted needs with which it purports to deal.
Since I have for a very short time been a Member of your Lordships' Chamber I have been particularly heartened by many remarks, but by none more than hearing a certain noble Baroness proclaim at a quarter past six in the evening that as the hour was getting late she would curtail her remarks. This is a sentiment seldom expressed in the other place, even at a quarter past six in the morning. It is an example I hope to follow.
3.45 p.m.
Viscount Massereene and Ferrard: My Lords, your Lordships may imagine my surprise and delight upon entering the House to see that I was to speak after the noble Lord, Lord Grimond, who has just made his maiden speech. I feel sure that somebody far more eloquent and important than I ought to have been the first to congratulate the noble Lord. We all know that the noble Lord has been a very distinguished Leader of the Liberal Party for many years and that for about 30 years he was the Member of Parliament for Orkney and Shetland. Your Lordships' House will derive great benefit from such a distinguished Member. The noble Lord may derive some comfort from being congratulated by a Tory when I tell him that my grandfather—my mother's father—was for some time
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a Liberal Member of Parliament. If he were alive today, whether he would be a Liberal Member of Parliament I do not know. I hope that the noble Lord will play a great part in this House; his knowledge will be of great value to this Chamber.
Turning to the Bill, the noble Lord, Lord Ross of Marnock, gave it a rather cold reception. He called it an enabling Bill, which in a sense it is. The noble Lord objects to the Secretary of State having such all-embracing powers. However, this is essential in the case of fishing in the Western Highlands, especially in the Inner Hebrides, of which I have some experience. I had a lobster fishery there a long time ago. The various fishery associations will obviously lobby the Secretary of State and make suggestions to him. I am perfectly sure that the Secretary of State, whoever he may be in the future but certainly the present one, will listen very attentively and carry out many of their wishes, so I cannot see what the noble Lord is objecting to.
I have been warning this House for some time about the scarcity of fish in the Western Highlands: in the Inner and Outer Hebrides. I was extremely worried at the time that the herring disappeared. I warned the Government of the day that the herring would disappear. I do not like repeating what I said in this House a few years ago, but the two lochs which jut into my estate were nursery lochs for herring. The Government of the day allowed three factory ships to go there. and they loaded all the herring fry which had been caught by local boats. But it was a policy of madness, and in a short time there were no herring. We have the herring back now, though not in the plentiful numbers I remember. But they have come back, owing to the various regulations which the Government have imposed.
When it comes to boats—and I am now talking about inshore fishing. which is the subject of this Bill—it is true enough that there are not the number of boats that there used to be in the 1930s, but the modern boat, which, with all is gear, one might also call electronic, is so efficient and fast that it can catch far more fish than a boat of the 1930s: in fact, a modern boat can probably catch 20 times as much fish. As I recall, the local boats that I remember worked chiefly as sailing boats. They had some standing lugsails, and there were many more of them, but they certainly could not reap the harvest which the modern boats do. The Highlands Development Board—meaning well—have supplied on grants many boats for inshore fishing, but perhaps they have rather overdone that.
There is one question I should like to ask regarding "static" fishing. It does not strictly come into this field so perhaps I should not ask it, but in my area—that is, around the Isle of Mull—we are rather plagued by skin divers. I know this aspect does not come into the Bill and I apologise to my noble friend for mentioning it. But I have often wondered whether skin divers who are diving commercially should not be registered, as fishing boats are. Skin divers can completely clear the scallops, lobsters and all the other shellfish out of an area. As regards the two lochs that I have mentioned, divers have told me—because I myself do not skin dive—that they are now just like a harrowed wheat field which has not been sown. They are completely

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bare of everything because they have been over-trawled by boats and over-fished by skin divers. Perhaps in the future, the Government might try to regulate that aspect.
A matter that really worries me and which is my chief interest is the question of salmon and sea trout. Poaching of salmon now in the sea lochs around the West Coast is really appalling. This year especially, when we had a drought, the salmon could not get up the rivers and they were mercilessly poached from boats chiefly at night. It is difficult to prevent that happening. One certainly cannot prevent it as an individual and the police cannot prevent it because they do not have boats. We can stop people poaching at the mouth of the rivers or we try to—and we seize quite a few nets. But, when poachers operate a little further out, it is quite impossible for estate staff to stop them.
I understand that the fisheries service of the Department of Agriculture, Fisheries and Food is now employing helicopters in conjunction with fishery cruisers to find out anyone who is poaching in the daytime. That is all right during the day, but one cannot do much at night with a helicopter.
With regard to penalties, I am all for those, as your Lordships might expect—but we do find on the West Coast that the sheriffs (especially one in Oban) often impose extremely small fines although the maximum fines are very big. I hope that in future the judiciary will impose not the minimum fine but will try to frighten those who carry out big poaching with bigger fines. I was told of one young man who obtained a new boat and bought a new car completely from poaching salmon.
The situation is especially hard on rod fishermen, who had a very bad year in 1982 and again this year. They bring in a lot of income to the country. If salmon poaching cannot be stopped, this country will lose a great deal of income, especially from foreign rod fishermen.
I have spoken long enough, but I wish to welcome the Bill. I only wish it had been possible to have brought it in even earlier. The Government have been extremely quick in producing this Bill, which is really surprising—that is, it is not surprising of the Government but it is surprising that they have managed to get the Civil Service to really get going on this. I am sure the Bill will do a great deal to preserve the fishing around the Western Highlands.

Messenger Newspaper Group: Dispute
3.56 p.m.
Lord Gray of Contin: My Lords, it may be for the convenience of the House if I now repeat an Answer given in another place about the dispute at the Stockport Messenger newspaper group. My right honourable friend the Secretary of State for Employment delivered a Statement which reads as follows:
"Before reporting on the current situation of the dispute between the Stockport Messenger Group and the National Graphical Association about the establishment of closed shop arrangements at the firm's subsidiaries at Warrington and Bury, I should
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advise the House of the further developments in connection with the High Court actions that have occurred since I spoke in the House last Wednesday. The court on Friday imposed a further £100,000 fine following the failure of the National Graphical Association to pay the fine of £50,000 previously imposed and to obey the injunction to refrain from organising unlawful industrial action.
"The court also ordered the sequestration of the union's assets. Later the same day the union appealed to the Court of Appeal for a stay of the High Court's orders, pending a substantive appeal against the orders which is due to be heard tomorrow.
"I understand that the Court of Appeal asked the union for an undertaking that it would pay the fines. No such undertaking was given and the Court of Appeal accordingly refused to stay the orders of the High Court, but did limit the sequestration to £175,000. I understand the commissioners have now secured this amount.
"I also advised the House last Wednesday that the Advisory, Conciliation and Arbitration Service was seeking to arrange a further meeting between the parties to resolve the dispute. Following certain preliminary discussions over successive days a meeting under the chairmanship of the conciliation service took place between the parties on Sunday in Manchester, and a further one took place yesterday. Regrettably, agreement did not prove possible.
"Nevertheless, the conciliation service continued until late last night and again this morning to explore whether an acceptable basis could be found for a further meeting today.
"The union made clear that they were willing to travel to Manchester for a meeting with Mr. Shah and his fellow directors. Mr. Shah confirmed his willingness to attend provided he could have assurance that the mass picketing threatened for Warrington this evening did not occur. The union were not able to give such an assurance. I much regret therefore that it now seems clear that it will not be possible for a meeting to take place today. I confirm that the conciliation service will continue the efforts that they have been making throughout the dispute to find an agreed solution, but it is clearly not helped by the further threats of mass picketing which have been made.
"I have to say to the House that mass picketing has no place in industrial relations in this country. Moreover, in this dispute mass picketing has already been determined by the courts to be unlawful, and is now positively frustrating the chance of a settlement".
My Lords, that concludes the Statement.
4 p.m.
Lord Dean of Beswick: My Lords, may I first of all thank the noble Lord the Minister for his Statement delivered in reply to the Private Notice Question tabled in another place. Parts of the Statement refer to legal processes, and my information is that Mr. Shah has activated some other legal processes today. So I do not propose, nor would it be right, to comment on those.

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The Minister must be aware that this was a local dispute concerning the reinstatement of six workers. It has been escalated into a serious national dispute because of the effects of Conservative Government employment legislation. Is it not a serious fault that in these Acts a legal process is set in being that makes conciliation more difficult? Can I urge upon the Minister once again to continue to press the Secretary of State as a matter of urgency to seek to bring the parties involved in this dispute together in order to resolve the dispute in the interests of all.
Lord Rochester: My Lords, from these Benches I join in thanking the noble Lord, Lord Gray of Contin, for having repeated the Statement. I have little to add to what I said in response to the Statement upon the dispute last week when I spoke on behalf of my noble friends and allies. We share the regret expressed in the Statement that it has not been possible to reach an agreement.
Like the noble Lord, Lord Dean, I do not propose to get involved in the merits of the dispute, elements of which, as he said, are sub judice, save to make one thing abundantly plain; that is that in the serious situation which looks like developing in Cheshire tonight we regard the primary need to be to uphold the law. Will the noble Lord confirm that it is not simply unlawful, as the Statement puts it, but a criminal offence for pickets to obstruct the highway or the entrance to premises or to seek physically to bar the passage of vehicles? Does he further agree that Section E of the code of practice on picketing, approved by both Houses of Parliament, gives specific guidance that when people seek by sheer weight of numbers to stop others delivering goods what is intended is obstruction? Finally, even at this late hour we would urge those who may be contemplating taking part in illegal mass picketing tonight to desist from it.
Lord Gray of Contin: My Lords, I should like to thank the noble Lord, Lord Dean of Beswick, and the noble Lord, Lord Rochester, for the way in which they have responded to this Statement, and for doing their best to keep this unfortunate situation as one of regret and not trying to make too much political capital out of it. I would, however, say to Lord Dean of Beswick that the law has become involved only because of the intimidatory picketing which has taken place, and indeed if this picketing were ended a settlement would be more easily achieved. I strongly refute his suggestion that this has anything whatever to do with the legislation which the Government have introduced. Indeed, I would further say to him that those who break the law must first of all act within the law. I am sure the whole House would agree with that sentiment.
To the noble Lord, Lord Rochester, I would say that it is correct—he is absolutely right—that criminal offences have taken place, and it is for the police to deal with those, as they have been doing. I would agree entirely with him in his attitude and the attitude he has expressed on behalf of noble Lords in his party.
Lord Harris of Greenwich: My Lords, may I ask the noble Lord two points arising from the Statement? First, would he confirm, notwithstanding what the noble Lord, Lord Dean of Beswick, said, that the 1980 and 1982 Acts in no way changed the law so far as illegal picketing was concerned; that in fact it has always been unlawful to do what was done in Warrington last week and what it is suggested is going to take place in Warrington this evening?
The second point is this. It has been suggested in the press and on television and radio that a special train is being sent from London tonight to carry demonstrators to Warrington and this has been arranged by the National Graphical Association. I have no idea whether this suggestion is true, but would he not agree that were it to be true it would be a serious matter for a nationalised industry to take to Warrington several hundred demonstrators who would be participating in what the courts have held to be unlawful assembly?
Lord Gray of Contin: My Lords, I thank the noble Lord, Lord Harris, for his comment. He is correct that the 1982 Act changed nothing which previously referred to unlawful picketing. So far as his second point is concerned, it just could be—I am being as charitable as I can be—that British Rail feels bound to ensure that ordinary passengers do not suffer because of the presence of pickets. Nevertheless, I can only agree with the noble Lord that if this special train is designed for the pure purpose of picketing then it is a very regrettable step.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that the trade union solidarity which is being demonstrated by members of the National Graphical Association is the same trade union solidarity which the noble Lord would so warmly applaud, indeed has warmly applauded, when it has occurred in Poland?
Lord Gray of Contin: My Lords, I really think that the noble Lord is rather confused in his thinking on this issue. I would certainly not agree that it is the same solidarity.
Lord Boyd-Carpenter: My Lords, is it not great confusion of thought to mix up trade union solidarity with a deliberate attempt at intimidation by the mass attendance of people whose purpose is intimidation, and which quite apart from any breach of the law is thoroughly uncivilised behaviour which must cast doubt on the merits of the claim of those who adopt it?
Lord Gray of Contin: My Lords, my noble friend is absolutely correct and I am sure that he expresses the sentiments of the whole House when we condemn any form of violence on picket lines.
Lord Marsh: My Lords, would the noble Lord not agree, on reflection, that it is impossible to keep politics out of this particular dispute, which has long since ceased to be an industrial dispute and is clearly being conducted in its implications as a direct challenge to the courts and Parliament?
Lord Gray of Contin: My Lords, I agree entirely with the noble Lord. What I said earlier was that I acknowledged that those who had spoken on behalf of other political parties in your Lordships' House had not sought to make particular political points out of it, and that I appreciated. But I entirely agree that the action itself is highly politically motivated.
Lord Campbell of Alloway: My Lords, would my noble friend the Minister not agree that, if the information given by the noble Lord, Lord Harris of Greenwich, is correct, a most serious situation has arisen, where it is impracticable for the court of its own motion to deal with those in open defiance of the law, because a nationalised industry will be assisting a party in legal proceedings, a party found to be in contempt, to continue and extend the measure of that contempt?
Lord Gray of Contin: My Lords, I agree with my noble friend that this is a very serious matter but I think it would be of little benefit for me to comment on a matter which is virtually for the courts.
Lord Ardwick: My Lords, is the noble Lord aware that many of us would be relieved if every effort were made to minimise a horrible situation?
Lord Gray of Contin: My Lords, I am sure that every effort will be made, but I do not believe that this is a matter for Government action.
Lord Dean of Beswick: My Lords, may I once again reiterate to noble Lords, as I did last week, that my party is not prepared to instruct, encourage or suggest violence in any industrial situation? I think it is to be somewhat regretted that there have been undertones in some of the utterances in the Chamber today that that might not be the standpoint of my party. We completely and utterly reject that. We are saying that people must on all occasions act within the law as it stands. If there are bad laws they need changing. I rest my submission on that.
Lord Gray of Contin: My Lords, of course I accept that. I am delighted that the noble Lord joins me in total condemnation of violence on picket lines.

Inshore Fishing (Scotland) Bill [H.L.]
4.11 p.m.
Second Reading debate resumed.
Lord Boothby: My Lords, I revert to the rather more congenial subject of inshore fishing. I should like to start my very brief remarks by saying what a privilege I regard it for those of us here to have been present and, still better, to have heard the maiden speech of the noble Lord, Lord Grimond. It was brilliant and, more than that, it was better than most of us expected—which is saying a good deal. It was a taste of the many delicious things which we all hope are to come. We thank him, and I thank him personally and deeply, for the privilege of being present when he made his speech. It was the most remarkable maiden speech that I have heard in this place or, indeed, in the other place.
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I have been addressing one or other of the Houses of Parliament on the subject of the inshore fishing industry for exactly 60 unbroken years, so it is with some emotion that I rise to make my last speech about it. Unlike the noble Lord, Lord Ross of Marnock. I regard this as a necessary Bill for Scotland. I do not agree with the arguments he advanced against it, but I do agree with him up to this point: it is essentially a precautionary Bill, a Bill of last resort. I hope that it will never have to be used. It is a necessary precaution for Scotland and of that I am satisfied, having lived for many years with the inshore fishing industry of Scotland and, indeed, of Orkney and Shetland. I am quite satisfied that the protection for the inshore fishing fleet provided by the Navy and the Air Force is more than adequate. We have the power, if necessary, to enforce this legislation and that in itself will ensure that it is never necessary to use it.
The whole future of the fishing industry in this country depends on, and revolves around, one word—"conservation". Nothing else matters. When I first became Member of Parliament for Aberdeenshire, East, we were exporting one million barrels of cured herring to Russia and the Baltic states every year. At the same time we were throwing thousands of herring into the sea because they could not be used. Then the Norwegians, the Danes and the Dutch came in. They reduced the mesh sizes and started catching immature herring wholesale to be used for industrial purposes—chiefly the manufacture of fishmeal. That was the warning signal, and it was the beginning of the end because the shoals began to diminish.
The person who first brought my attention to this was a practical fisherman himself of great skill; the late Provost Robert Forman, of Peterhead. He said, "Look here, if this goes on the herring fishing industry is in for a sharp decline. We must build a dual-purpose fleet so that we can have sea-fishing boats which can change overnight from driftnet fishing to seine net fishing for white fish". He enlisted my support; and over a period of three or four years we built up a very big fleet of what were called dual-purpose craft. When the final crash came in the herring industry, they saved the inshore fishing industry of Scotland.
I look back with nostalgia to the days when there was great spring fishing out of Lerwick, summer fishing out of Peterhead and Fraserburgh, and autumn fishing out of Yarmouth and Lowestoft. I used to go to all three, and it was a very exciting experience. Nothing like that exists today. Herring were cheap, popular and the main diet of a large part of the population of Eastern Europe—herrings and potatoes.
All that gradually went. All the worst of our fears were realised. I thought at one time that the inshore fishing industry would collapse altogether, and that it was doomed to failure. Then came the end of the deep-sea long-distance fishing industry out of Grimsby, Hull and Fleetwood to Iceland and Newfoundland. That will never come back. It has gone. The trawlers have gone—there are only two or three left. There is nothing left but the inshore fishing industry which must be bolstered at all costs.
When Mr. Heath took us into the Common Market he obliged us to sign the Treaty of Rome which we had

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no part in framing. We refused to take part in the negotiations at Messina, when it was drafted. In that treaty we gave the right to all the continental countries of Europe to fish up to our beaches with trawlers. That would have been the end of the inshore fishing industry. It was saved, if I may say so, by the noble Lord, Lord Campbell of Croy, to whom the fishing industry owes an irreparable debt. He was Secretary of State for Scotland at the time. He insisted on, and succeeded in getting, a 12-mile limit round the coasts of this country which saved the inshore fishing industry from total destruction.
Then began a most promising international move within the EEC which was brought to a brilliant conclusion by Mr. Peter Walker, whose final negotiations were skilful in the extreme and gave this country and the other countries of Europe a very good bargain. They began to see the point that if they went on overfishing as they were doing they would kill the fishing industry altogether. We should never forget the service which Mr. Peter Walker gave. He was the best Minister of Agriculture, Fisheries and Food I have known during the whole of my parliamentary career.
Now things are getting steadily but slowly better. This season has been a good season for the fishermen. They do not say so—and one would dare to say so to them only at the risk of one's life—but they are making a lot of money. You do not say that, to an Aberdonian, anyway. You learn to keep quiet on that subject. But a lot of them do make a lot of money. There is oil, too: but you do not talk about money in Aberdeen; you just keep it very carefully. But the fishermen are doing well at the moment, and they are going to do better, I hope.
At one moment about six months ago I was frightened of the Norwegians. They were difficult. They would not enter into the agreement which had been negotiated in Strasbourg. They started fishing rather wildly, especially for herring in the North Sea, and for small herring at that. But now they are having a change of mind and heart. Their attitude is quite different. I feel much more hopeful that they will join the club. They may not join the EC. I do not blame them altogether for that, because the finances are not very satisfactory. But I think they will join the fishing club.
If we get all Europe working together, why, then, I am sure we have a bright future for the inshore fishing industry, with all that it stands for in the way of a wonderful life and the wonderful people that take part in it. If we do, I shall feel that I have not spent all my life in vain. I think that is just about all I want to say. I feel optimistic. I think that deep in his heart the noble Lord, Lord Ross of Marnock, does not feel as savagely pessimistic as he sometimes makes out in his public speeches.
4.24 p.m.
Lord Kirkhill: My Lords, I must apologise to the House for my failure to be in my place at the start of this Second Reading debate, but I plead, at least in partial mitigation, that some disconnected travel arrangements did not quite match the needs of the hour. I assure the noble Lord, Lord Gray of Contin, that no discourtesy was intended him. To speak
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shortly after the most distinguished maiden speech of Lord Grimond is indeed a privilege. It is an experience which I am sure that other noble Lords will share during the occasions which lie ahead.
Clause 1 of this Bill flows directly from the discussion document produced by the Department of Agriculture and Fisheries for Scotland in October 1981. The precursor to all that was the Cameron Committee deliberations of more than a decade ago, as the noble Lord, Lord Ross of Marnock, properly pointed out. Incidentally, the DAFS document followed a comprehensive review of all fisheries legislation applicable to Scottish inshore waters. As the clause confirms, the two principal recommendations which emerged from the consultative document were, first, that the Secretary of State for Scotland should be given new powers to designate certain areas around the coast of Scotland as static gear reserves which would become the sole province of the creel fishermen; and, secondly, that the present prohibition on the use of mobile gear within three miles of the coastline should be abolished.
The reaction to all this from some 1,000 Scottish fishing vessels of all sizes, and covering eight fishermen's associations, is one of some astonishment, not least of course because traditionally those who earn their living at sea, dependent upon each other as they often ultimately are for survival, would consider that in the event of conflict between static and mobile gear fishermen voluntary agreement between the parties operating in the locality is much to be preferred to the resolution of dispute by statutory regulation. Indeed, if there has to be legislation, what is required is a proper system of management which would give to all a fair share of the catch. I think that the Minister, despite his contrary argument earlier, should take this point on board. Surely, if continuity of supply is to be maintained, rather than the creation of these reserves, fisheries should be sustained on an area basis.
The Government should pay heed to the voice of criticism which has been raised on an almost all-industry basis against the principal provision contained in the Bill. Although at Second Reading Governments seldom have second thoughts, they must surely recognise the industry's additional but most genuine worry; namely, the powers contained in the Bill enabling the Secretary of State of the day to introduce static gear reserves without further consultation, should he decide so to do. I suggest to your Lordships that, in the best tradition of this House, come the Committee stage of this Bill such an arrogant assumption of power by the Secretary of State should be denied him.
4.28 p.m.
Lord Gray of Contin: My Lords, we have had a very useful debate on this Second Reading. I am grateful to noble Lords who decided to take part in the debate for the contributions they made. I should particularly like to associate myself with those who have already congratulated the noble Lord, Lord Grimond, on his maiden speech. Apart from anything else, I welcome being joined by a near neighbour from the other place. We represented seats not too far apart and shared many concerns for the area. It was also a great privilege for me to take part in a debate to which the

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noble Lord, Lord Boothby, contributed. He was one of my boyhood heroes and one of my heroes in my early days in politics. It is a great distinction for me to participate in a debate with him.
The noble Lord, Lord Ross of Marnock, who spoke at the beginning of the debate, asked me a number of questions, and I shall do my best to try to answer them. Whether I shall be able to satisfy the noble Lord is an entirely different matter, but I shall certainly do my best. He asked me why no regime was actually specified in the Bill. A general enabling measure is needed in the first instance in order to give the necessary flexibility and adaptability to the future regimes, and we believe that it is right to proceed in this way by enabling legislation, to be followed by specific subordinate measures. As I have promised, I shall be placing proposals before the House prior to our consideration of the Bill in Committee.
The noble Lord also asked me about static gear reserves and nursery areas, and he suggested that these might have been spelled out in a schedule to the Bill. In our view such a proposal would be too inflexible, and it would be difficult to change areas once established. There are always changing circumstances within the industry, and we believe that flexibility is very important. The Government's proposals were included in the consultation paper issued to the industry, and revised proposals will be put to the House and the industry before the Committee stage.
The noble Lord also asked about orders under the Bill, and suggested that they would not be subject to parliamentary scrutiny. This is essentially a re-enactment of the present position, whereby by-laws made under the existing legislation do not require parliamentary approval. The orders are likely to be very technical, but they will of course be subject to the scrutiny of the Joint Committee on Statutory Instruments. Such an arrangement has the virtue of simplicity, and can allow action to be taken quickly, if necessary. It is also very flexible.
The noble Lord referred to the Cameron Committee, and also mentioned static gear reserves. Static gear fishing has greatly increased since Lord Cameron reported in 1970. It now has considerable economic importance for certain isolated areas, and some measure of protection is required.
Finally, the noble Lord suggested to me that the industry does not like the Bill. It appears that the noble Lord disagrees with what I am saying, but he gave a number of examples of sections of the industry which do not like parts of the Bill. I shall give way to the noble Lord.
Lord Ross of Marnock: My Lords, the complaint is not about the Bill, but about what the Government are going to do with it. The Government can do anything they like, good or bad. There are one or two things which the Government have said that they are going to do which the industry does not like.
Lord Gray of Contin:Yes, my Lords, I would not try to deny that, but at the same time I am sure that the noble Lord would agree with me that it would be extremely difficult—indeed it would be highly unlikely—to be able to devise a Bill which would
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receive general acclaim from the whole of the fishing industry. The complaints about various parts of the Bill from sections of the industry arise frequently for different reasons. Some of the static gear fishermen are not too keen on the idea of static gear reserves, because they feel that they would lead to an inhibition regarding fishing elsewhere, while the trawlermen do not like static gear reserves for the simple reason that they are areas in which they would not be able to fish. So I think that there would be difficulties. However, I believe that we have been able to achieve a fair compromise, and I am sure that after the Bill has had the advantage of its Committee stage, in which we can consider it in more depth, we shall produce legislation which will be to the benefit of the industry.
The noble Lord, Lord Grimond, asked, why not use the existing powers, and he wanted to know why was it necessary to legislate at all. The situation here is that the present body of law, being venerable, was enacted in the face of circumstances different from those of today, and some tidying up and rationalisation is almost inevitable. The new powers will allow greater flexibility and greater simplicity, which will ensure a lessening of the burdens upon the industry; and I am quite sure that the noble Lord would welcome that.
The noble Lord also asked me about the Secretary of State's promise on local management. I do not believe that the Secretary of State should necessarily surrender to local communities his functions in controlling the fisheries. However, since we issued a paper on the future structure and management of the industry earlier this year, we have been discussing quota management with the Scottish Fishermen's Federation and with others, too, in the industry. There will certainly be a place for local advisory committees in the context of future quota management; and I can assure the noble Lord on that point.
The noble Viscount, Lord Massereene and Ferrard, asked me about control of skin divers diving for lobsters and scallops. The advice that we receive from scientists is that to have controls on the minimum sizes of these fish is the best way to achieve conservation. I am well aware that in the industry there are voices calling for the licensing of lobster fishermen so as to control the activities of part-timers, and we are looking at this very difficult issue in the context of the future structure and management of the industry.
The noble Viscount also raised the question of salmon poaching. We are aware of the increase in poaching, and we have provided additional patrols, by ships and aircraft, in order to try to control it. Some success has been achieved, but I have to admit that it has not been nearly as great as we should have wished.
The noble Viscount also raised with me the question of penalties for fishing offences. Inevitably this must be a matter for the courts. It is for Parliament to decide what punishment is available for the courts to impose, but it must always be for the courts themselves, in the light of particular circumstances, to judge how to treat a particular offence.
The noble Lord, Lord Boothby, gave us a most interesting talk on his experience in the fishing industry. It is true to say that in this House there are few people who have his experience and wealth of knowledge on the subject. We all listened with interest

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to what the noble Lord said, and I am sure that we also look forward to reading the report of his speech, since he raised so many significant points which doubtless we shall all want to digest in our own time.
The noble Lord, Lord Kirkhill, also put to me some suggestions, which I assure him I shall consider very carefully. Of course, I fully appreciate the problems that he has had with some of his travelling arrangements, which accounted for his not being able to be present from the beginning of the debate.
We have had a very useful Second Reading debate. We have aired the problems which exist within the industry, as well as the various aspects of the industry. Again, I thank your Lordships for participating, and I have pleasure in concluding the debate and commending the Second Reading of the Bill.
On Question, Bill read a second time and committed to a Committee of the Whole House.

Tourism (Overseas Promotion) (Scotland) Bill [H.L.]
4.39 p.m.
Lord Gray of Contin: My Lords, I beg to move that this Bill be now read a second time. I am delighted to have an opportunity, for the second time today, to present to your Lordships a Bill which deals with one of my own direct responsibilities within the Scottish Office—on this occasion, tourism. This is a subject which is of tremendous importance to Scotland and to the Scottish economy. The Government's election manifesto included a firm commitment to extend the powers of the Scottish Tourist Board to include promotional activity overseas. Our belief in the importance of the tourist industry is reflected by our bringing forward the necessary legislation this Session. The Tourism (Overseas Promotion) (Scotland) Bill before your Lordships today gives effect to our commitment.
The contribution of tourism to employment and revenue has for too long been overlooked or underestimated. In Scotland, tourism revenue currently amounts to some £760 million per annum and provides at least 50,000 full-time equivalent jobs. Tourists from overseas are disproportionately valuable to us. Though overseas visitors represent only 9 per cent. of all visitors to Scotland, they account for nearly 27 per cent. of all expenditure. Annual overseas earnings from Scottish tourism amount to £200 million. Tourism is therefore third after oil and whisky exports. The case for maximising the effectiveness of Scotland's overseas tourism promotion is therefore compelling.
Noble Lords may like to be reminded of the present arrangements for the promotion of Scotland overseas. Under the Local Government and Planning (Scotland) Act 1982, district and islands councils and area tourist boards in Scotland may promote themselves overseas subject to the consent of the Secretary of State. This consent condition is designed to prevent overlap or duplication of effort and to ensure value for money from local authority visits abroad. The Highlands and Islands Development Board also has powers to undertake promotions abroad at its own hand. The
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Scottish Tourist Board is now helping to co-ordinate local authority and area tourist board promotions on an all Scotland basis, and I believe a more effective programme of overseas sales missions is emerging as a result.
It is however with the private sector and with the sales efforts of the smaller tourist operators that make up the bulk of Scotland's tourist industry that I am particularly concerned today. Many of these small businesses cannot afford to promote themselves fully without some assistance from public funds. This is where we confront the statutory framework for overseas tourism promotion. Under the Development of Tourism Act 1969, responsibility for the overseas promotion of Great Britain and all its parts lies principally with the British Tourist Authority. The national tourist boards of England, Scotland and Wales are expressly prevented from acting abroad—unless as agents of the British Tourist Authority and using BTA funds. This means that the Scottish Tourist Board may not at its own hand incur expenditure on overseas promotion of Scotland or give financial assistance to Scottish tourist operators trying to sell their products abroad.
My Lords, times change. The arrangements which in 1969 were apt and effective, now seem unduly restrictive. Of the three countries of the United Kingdom, Scotland in particular now has a recognisable and commercially saleable image in a number of important and potentially very valuable overseas markets. For many thousands of expatriate Scots around the world, Scotland has a powerful attraction quite different from that of "Britain". And for many Europeans, Scotland has special scenic, historical and recreational attractions. Scotland and its wide range of matchless holiday opportunities has to be marketed vigorously if these markets are to be fully tapped. The products of the smaller operators have to be co-ordinated into a powerful and distinctively Scottish promotion programme if the Scottish tourist industry is to hold its own internationally.
Throughout the Government's last term of office, our consistent aim was to improve and enhance the Scottish Tourist Board's overseas role. The board has an intimate knowledge of the Scottish holiday product. We believe therefore it should have an effective influence on overseas promotion of Scotland. Various administrative changes have therefore been made within the 1969 Act to enlarge the Scottish Tourist Board's agency role in overseas promotions and to help the British Tourist Authority to take fuller account of Scottish promotion needs in its overall Great Britain programme. Chief of these changes was the appointment to the Scottish Tourist Board in 1981 of a director of overseas tourism, whose principal functions are to link the British Tourist Authority more closely with Scottish operators and to coordinate Scottish overseas marketing initiatives.
Our belief in the need to extend the Scottish Tourist Board's overseas role was confirmed by the findings of the committee of inquiry into local government in Scotland. chaired by my noble friend Lord Stodart, which reported in 1981. The committee recommended that the Scottish Tourist Board should itself have power similar to that enjoyed by Scottish local authorities to promote Scotland overseas. We are now to a

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large extent accepting this advice. We do not, however, advocate a total transfer of responsibility for Scottish overseas promotion from the British Tourist Authority to the Scottish Tourist Board. We believe this would deprive Scotland of access to those many markets where the saleable destination is and will remain "Britain". Rather, we are persuaded that it makes commercial sense to identify those markets where, in addition to marketing Britain, Scotland can be promoted effectively in its own right. We believe that substantial benefits will flow from more aggressive promotion of Scotland in these selected markets.
The Government believe that the best way to exploit these markets is to allow the Scottish Tourist Board to undertake at its own hand promotions of Scotland overseas. This is what the Tourism (Overseas Promotion) (Scotland) Bill before your Lordships tonight, is intended to achieve.
Clause 1 of the Bill contains the two main operative provisions. Subsection (1) lifts the 1969 Act restriction on overseas activity by the Scottish Tourist Board and enables the board to undertake, in its own right, promotions of Scotland overseas. I must make it quite clear that the effect of this provision is to allow the Scottish Tourist Board to supplement, not to replace, the efforts of the British Tourist Authority on Scotland's and Britain's behalf. The proposed extension of the Scottish Tourist Board's powers will not deprive the Scottish tourist industry of the excellent service it has received, and I am sure will continue to receive, from the British Tourist Authority. I am happy to put our appreciation of the work of the British Tourist Authority on Scotland's behalf very firmly on the record. Nor will the Bill in any way detract from BTA's powers under the 1969 Act to promote Scotland and Britain abroad. The BTA will be expected to continue to devote at least as much of its promotional spend and effort to Scotland as in the past. The extension of the Scottish Tourist Board's powers will mean, simply, that the authority will no longer be the only tourist board with power to promote Scotland overseas. The Government's intention is that, through this Bill, the Scottish Tourist Board should be able to provide supplementary promotion opportunities for those in Scotland who want to market their distinctively Scottish products in a co-ordinated way.
The Government are however conscious of the need to ensure that any overseas activities undertaken by the Scottish Tourist Board do in practice complement BTA's promotion efforts for Great Britain; that there is no wasteful overlap or duplication of effort between the two bodies; and that the overall Great Britain promotion effort by BTA remains properly co-ordinated. The Bill therefore provides in Clause 1, subsection (2), that the Scottish Tourist Board's power to promote Scotland overseas shall be exercisable only with the consent of the Secretary of State for Scotland who will, before giving or withholding such consent, consult the BTA. This consent condition is broadly similar to that already applying to Scottish local authorities and area tourist boards. It does not represent a BTA veto. But it will ensure that the Scottish Tourist Board's promotions of Scotland constructively complement the BTA's continuing efforts on Scotland's behalf.
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The Secretary of State for Scotland will be able to influence not only the content but also the scale of the Board's operations abroad through his financial control over the Scottish Tourist Board's grant-in-aid. The Government envisage the board undertaking an overseas programme costing about £200,000 per annum at 1983 prices. I am delighted to announce that, as from 1984–85, we will be making the Scottish Tourist Board an additional annual allocation of £200,000 for that purpose. The proposals in this Bill are therefore fully backed by additional resources. In relation to BTA's expenditure on Scotland's behalf—currently estimated at over £2 million per annum—the Scottish Tourist Board's programme will therefore be small. However, we believe that it will be cost-effective and that it will allow Scotland to penetrate the most promising overseas markets.
This view is shared by the British Tourist Authority itself. The present chairman of the BTA—Sir Henry Marking—has publicly expressed the authority's support for proposals designed to give Scotland some scope for self-promotion overseas, subject to the safeguards for British interests which I have described.
The proposals in this Bill therefore reflect the Government's aim to encourage the growth of Scotland's overseas tourism trade while guarding against fragmentation of the total Great Britain promotion effort abroad. This Bill introduces a much-needed element of flexibility into the current statutory arrangements, and I warmly commend it to the House. 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 Gray of Contin.)
4.52 p.m.
Lord Carmichael of Kelvingrove: My Lords, I am very conscious of the fact that, as I rise to speak in your House for the first time, we are approaching the end of one of the periodic seasons of maiden speeches, and I feel sustained only by your Lordships' long and renowned record of tolerance on these occasions, and can only hope that this tolerance will endure for the next few minutes. In one respect at least I am fortunate. The business of the House has brought forward this Bill which gives me the opportunity, so soon after my introduction, to speak on a subject in which I have some interest, and which of course is of very great interest to Scotland. As the noble Lord said, tourism is a growing and important industry for most parts of the world and, perhaps more than most, it is an important industry for Scotland.
This Bill, introduced by the noble Lord, deals specifically with extending the powers of the Scottish Tourist Board. The Development of Tourism Act 1969 is amended to:
"include the power"—
that is, the power of the Scottish Tourist Board—
"to carry on any activities outside the United Kingdom for the purpose of encouraging people to visit Scotland".
As the noble Lord said, to some extent it is based on the Stodart Report of 1981, and I am glad to see from the list of speakers that the noble Lord, Lord Stodart, will be speaking later. I shall be very interested to hear his comments as to whether he thinks the results of the

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inquiry and the very interesting report he produced have really been fulfilled by this Government Bill, which is really an amendment to the 1969 Act. The noble Lord particularly wanted the Scottish Tourist Board to have the sole rights of promoting Scotland abroad, although I think there is an argument for discussion in what the Minister has said. This is a matter we can examine when we reach further stages of the Bill.
The power of the Scottish Tourist Board to sell or to promote Scotland abroad is circumscribed by the condition which the Minister dealt with at some length—that the Secretary of State for Scotland must give his consent to the activities after consultation with the British Tourist Authority. The noble Lord who introduced the Bill will be aware that we must receive more clarification of this condition. We shall certainly go into it more deeply later. It appeared to me that the noble Lord was rather over-selling the Bill as against the statement made by his honourable friend the Minister of State for Trade and Industry in another place, who actually went out of his way to say that the powers granted by this Bill to the Scottish Tourist Board were very limited indeed. I think that this is a matter on which further clarification will be needed. However, this is perhaps not the best time or the best occasion for me to stray into controversy. I can only assure the noble Lord that we await his answers to some of these points.
However, one matter on which we must be agreed is the growing importance of tourism as an industry. I was pleased that he gave the figures for the Scottish industry over the past few years, which I had not been able to obtain. But I understand that last year tourism in the United Kingdom as a whole reached a figure of some £8½billion, and that approaching 1 million people were employed in the industry. I have heard estimates that by the end of the century tourism will be the biggest single industry next to armaments, and the end of the century is only 16 years away. I only hope that sufficient will survive in the world that people will want to reap the benefits of travel, leisure and relaxation, and so stop the continual arms escalation and make tourism by far the biggest industry in the world.
While accepting that there is an important role for a national body, such as the British Tourist Authority, in the setting of standards, the training of people in the tourist industry, the co-operation with the industry in all the grades that the noble Lord mentioned (including the operators, the road transport people, those running the railways, the airline people and the hotel people), and the important role of liaising with the Government on questions of strategic planning, I hope that we never lose sight of the importance of the local initiative which is essential for a good tourist industry.
Perhaps I could give an example; it is certainly not a Scottish one, but it illustrates the point. Many years ago, wearing quite a different hat, I had some little involvement in the transfer of the National Railway Museum to York. The primary purpose was not tourism, but was more tied up with railway finance. However, the citizens of York and the local authorities of York immediately saw the advantages to the city in having the museum there, and they gave the Ministry
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a great deal of help over getting it moved there. They saw immediately that the addition of an historic railway centre would add to their other splendid attractions, and would make the whole much more important than the sum of the individual parts. Their enthusiasm was very helpful in overcoming the difficulties, which I assure noble Lords are inherent in trying to move anything out of London to any other part of the country. I use this as an example to show the importance of local initiative by the local authority or by local entrepreneurs giving encouragement to the tourist industry.
My own city of Glasgow has made great efforts over the past few years to attract visitors from other parts of Britain and from abroad. The current "Glasgow Smiles Better" campaign and the "Come Home to Glasgow" campaign have both been very successful. For instance, I understand that the "Come Home to Glasgow" campaign has, on a count. attracted at least 10,000 new visitors to the city in the past year. However, it is part of a concerted plan that the whole of the Clyde area has realised that, with the decline of heavy engineering and the near death of the great shipbuilding industry, the problems were quite enormous.
When one thinks of the great ocean liners built on the Clyde which, at the fitting out stage, would employ up to 1,000 joiners, perhaps 500 of both electricians and plumbers, and many other trades as well, one realises the enormous gap that has to be filled in some way. I am not suggesting that tourism can fill the gap. What I am convinced of is that with the expansion of tourism, and if the opportunities are taken, we can certainly go some way and can make a positive contribution to filling the gap left by the decline of some of our traditional heavy industries.
Glasgow has worked closely and enthusiastically with the Scottish Tourist Board in promoting the city at home and abroad. The "Come home to Glasgow" campaign has been successful, and the cleaning up of some of our old and magnificent Victorian tenements has been a revelation to many of the citizens, giving them new heart. I only hope that the Minister will use his influence with his right honourable friend the Secretary of State to see whether we can have that campaign continuing.
The Glasgow marathon is now the third biggest in the world. It attracts many overseas entrants, who we hope will act as ambassadors for Scotland when they go back to their own homelands. Two new large modern hotels have opened in the last year, and the Scottish National Exhibition Centre is in the course of construction. The latest news I have is that the Burrell collection, which was opened only in October, has in the first 30 days attracted over 100,000 visitors, which is quite a staggering number by the standards of any other museum in the country. I am trying to emphasise the importance of local output and enthusiasm to the tourist drive. Nor is their drive or their enthusiasm selfish. Those who come to Glasgow or to Edinburgh because of their special attractions will almost certainly visit other parts of Scotland, and will, we hope, find something there which will bring them back in future years to spend at least some part of their holiday.

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I cannot recall any occasion when I have travelled abroad—even in the south, here in England—when someone in the company I have spoken to did not claim a Scottish ancestry, however tenuous. There must be a market, as the Scottish Tourist Board and as many of the local authorities have discovered, in Scottish people abroad coming back to find their roots. I am sure that the great reservoir of potential tourists all over the world would find the pull of Scotland for at least part of their holiday very strong. With the growing involvement of local authorities and the co-operation of the industry, I believe that an important contribution can be made to our economy.
The Bill, limited as it may be, gives the Scottish Tourist Board some powers to tell the world about Scotland. The Scottish Tourist Board know the people in the industry, know the local authorities, and are the right people to encourage this co-ordination. I therefore have great pleasure in welcoming the Bill on behalf of this side of the House.
5.3 p.m.
Lord Taylor of Gryfe: My Lords, first, I want to congratulate the noble Lord, Lord Carmichael, on his quick promotion to the Front Bench and for his excellent maiden speech. It is a particular pleasure for me to welcome him because of a long personal association both with him and his family. The noble Lord has spent literally all his life in politics. He was brought up in the stimulating atmosphere of the Independent Labour Party in Glasgow; an experience which I shared and enjoyed. His father introduced me to the Glasgow town council nearly half a century ago—that great centre, that great training ground for future Members of Parliament, the Glasgow City Council—and the noble Lord, Lord Carmichael, followed his father to Westminster having served his apprenticeship in Glasgow. He has had experience in Government office, and I am sure that that experience and background will enable him to make a notable contribution to the affairs of this House, and we hope that he will exercise his talents in that direction.
I want secondly to welcome the Bill. It has been described with a certain lack of enthusiasm in certain quarters; but I noticed that the Observer headed a column the other Sunday, "Scotland declares UDI in tourism". I doubt whether even the Minister would claim that that ambition is achieved in the comparatively modest measure that he has before us. What causes me a little concern—and this was expressed by the noble Lord, Lord Carmichael—is that while powers have to be exercised by the Scottish Tourist Board in pursuance of this Bill, first of all before it can do the kind of thing it is now charged with, it has to clear it with the Secretary of State for Scotland. He, in turn, will clear it with the British Tourist Authority before he can do the things that he would obviously want to do. Perhaps the Minister will give us some greater reassurance in this regard.
Both the Minister and the noble Lord, Lord Carmichael, have given some statistics with regard to the importance of the tourist trade. In Scotland it has a value of £760 million per annum and provides direct employment to anything between 60,000 and 70,000 people, and, as both noble Lords have said, makes some contribution to relieving the devastation which is
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caused by the deterioration in our traditional industries. It is estimated that overseas earnings of Scottish tourism are something like £250 million, which is a considerable contribution to the export industry.
There is one difficulty, and I come back to it, in relation to the British Tourist Authority. I hope that the Minister will clarify the point of the role of the Scottish Tourist Board. Recently there has been an announcement that the chairman of the British Tourist Authority is also to be the chairman of the English Tourist Board. This would almost suggest that his influence as a national chairman might be restricted to his concern for Wales and for England.
This seems to be the case in a similar arrangement in relation to the Arts Council. Those of us who live in Scotland will agree with the Minister that Scotland has something special to sell. I hope that our friends in this House who are English will not regard it as unduly arrogant to say so, but any of us who have the privilege of travelling extensively abroad—and I come from a recent Burns' supper in Tokyo at which there was tremendous interest and response to the Scottish image, and all that Scotland stood for—will recognise that there is a special Scottish dimension in tourism. But yet in the past few years in the promotional material of the British Tourist Authority I can give two examples which show that they are not fully sensitive to the special dimension of Scotland.
Not so long ago the British Tourist Authority published motoring maps for tourists visiting this country. The roads terminated at Oban. There was a suggestion that if you went beyond Oban you somehow or other fell off the end of Scotland. This indicated that all that glorious countryside of Scotland, Wester Ross, well known to the Minister, was neglected in that kind of promotion.
In material distributed by the British Tourist Authority in the United States there was also an interesting description of Barra as a, "rugge, uninhabited He bridean island". I am sure that the hotel keepers and all the bed and breakfast people in Barra must resent that kind of description; it does nothing for the tourism of the area. I can certainly commend Barra as an excellent place to spend a peaceful and relaxing holiday. But it is because of this insensitivity that the Scottish people are a little concerned and a little apprehensive about the British Tourist Authority.
Something that has been most encouraging in the past few years is not simply the support that the Scottish Tourist Board has given to the development of tourism, but the very substantial private investment in tourism. It is not often that I say kind words about privatisation, but one should consider the transformation that has been effected at the Gleneagles Hotel or at the Old Course Hotel at St. Andrews which were starved of investment when they were part of British Rail. They are now very lively and very attractive tourist centres.
Scotland has a good deal to offer not only in scenery and traditional hospitality, but I am sure the Minister appreciates its special contribution to golf.
There is a belief in the English Tourist Board that all visitors who come to this country necessarily come to

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London first and then should be syphoned off to Scotland. That is not true. People who want a carefree and fresh air relaxing holiday on the best golf courses in the world do not want to go to London first and then to Scotland. I hope that this measure will alter that misconception that people inevitably want to "do" London first. In my experience it is not true. With these comments in relation to the Bill, I support and commend it. I hope that it will have the effect that the Minister has described.
5.11 p.m.
Lord Stodart of Leaston: My Lords, may I, in my turn, add my warm congratulations on two fronts: first, to the noble Lord, Lord Carmichael of Kelvingrove, who has sat glaring across at me in another place for many years but who has, as is normal, been a great friend of mine personally outside the Chamber. In congratulating him on his maiden speech I would say that many years ago—and he touched on this himself—tourism might not have been regarded as the most appropriate subject for someone living in the City of Glasgow. I do not think that anyone who lives in Scotland today can fail to be impressed by the tremendous efforts that the District of Glasgow, as it is now officially called, is making and the success I believe it will have in building itself up as a great tourist centre. I should add, as a former Member of Parliament for part of the City of Edinburgh, that Edinburgh will have to watch its laurels.
Secondly, I offer my warmest congratulations to my noble friend Lord Gray. To achieve, as he has told the House, £200,000 for the Scottish Tourist Board at a time when there are cuts all round shows tremendous powers of advocacy and persuasion. I am quite sure that there will be celebrations at the headquarters of the Scottish Tourist Board tonight, for without that extra money I doubt whether the overseas promotion could have been done, even with the consent of the Secretary of State and even after consultation with the British Tourist Authority.
My interest in this debate is perhaps not altogether surprising. My noble friend has referred to the fact that it is only two years since the committee over which I presided made inquiries into tourism in Scotland, among other things. Some 12 reasonably intelligent people of widely different interests and widely differing political views one of whom, Mr. Clarke, is now a Member of the House of Commons on the Opposition Benches, and another of whom has found his way on to the Benches here—found what we regarded as some very strange inconsistencies. At that time any local authority, be it island, district or region, was able to promote its own particular beauties and attractions in any part of the world. Quite a number did so. Regions and district councils within the same region vied together, competing with one another, and totally failing to concentrate their efforts.
As my noble friend has told your Lordships, the Highland and Island Development Board had the right to promote abroad tourism in its area. Its evidence to us was that it worked closely and harmoniously with the British Tourist Authority, but on occasion it could
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and did send a representative to a world fair if the budget allowed that. It could, if it wished, hire a public relations firm in, say, New York or Tokyo to promote a particular event in its area. What it told us was somewhat ironical; namely, that when at an overseas event it was usually asked questions about places such as Pitlochry or Edinburgh, which were outside its area but in that part of Scotland which the Scottish Tourist Board did not have the same freedom to promote and were not allowed to promote unless on behalf of the British Tourist Authority.
Every chairman of the Scottish Tourist Board since it was set up has asked for autonomy in overseas activity. It is cynical to say so, but it may be true that power produces a thirst for more power, perhaps, so your Lordships should discard those particular views as being the views of interested parties.
I still recall the strength of feeling and the absolute and total unanimity among members of the Stodart Committee that there was no logic in what we had heard. If promotion abroad was allowed to the Highland and Island Development Board and was found by them to be invaluable, and if, in addition, as we were told, the fruits of their efforts were found successful by the area tourist organisations within the Highland area, why not cross the Highland line? So we recommended.
Perhaps we were thinking a bit too far ahead, and it may be that my noble friend thinks that the time for that is not yet. As he says, there have been changes since my committee reported. In 1981, a director of overseas tourism was announced and appointed almost immediately. Now, the Scottish Tourist Board can go further still. It can promote overseas provided (as the noble Lord, Lord Taylor, pointed out) that the Secretary of State consents and provided that the Scottish Tourist Board consults, but, I suppose, not necessarily requiring the approval of, the British Tourist Authority. The noble Lord, Lord Carmichael, said that he would be interested to know whether I thought that this Bill was quite in line with what we had proposed. It would be totally dishonest, after putting my name to the report, if I did not express preference for what we recommended.
Quite frankly, I am not much impressed—and, again, the noble Lord, Lord Taylor, referred to this—by what seems to be the apparently eternal claim that most people from abroad come to London first and that it is the job of the British Tourist Authority to pull them here. I do not doubt that this may have been true in 1969. I do not believe that the majority of the visitors to this country fly into Heathrow Airport out of sheer pleasure. I do not believe that they come there because they want to do so; and, having struggled in there, is it not going to be unduly hard work for them to go there again en route for Edinburgh, Glasgow, Aberdeen or Inverness?
Given more direct services into Scotland, which are bound to come, Scotland will take a higher place in the tourist table in its own right. Of that, I am quite certain. No market is static, not even a tourist one; and less well-known places in the world will, I believe, become more sought after.
My noble friend in his opening speech referred to his dislike of duplication. He said that the object of the

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Bill was to enable the Scottish Tourist Board to supplement, not to replace, the British Tourist Authority. I would say to him that I think that one can supplement without duplicating. I do not think that the Scottish Tourist Board would be so foolish as to want to fly its flag over premises next door to those of the British Tourist Authority in the world's capitals. But I see sense in the Scottish Tourist Board having perhaps a wing or a floor in the British Tourist Authority's buildings, doing their own thing and paying the British Tourist Authority a commercial rent for the job—just, incidentally, as does the Northern Ireland Tourist Board.
I listened, as we all did, to my noble friend's most persuasive speech. I think that he has achieved much. He will be the first to admit that there is still this rather strange anomaly between the powers of the Highlands and Islands Development Board and the Scottish Tourist Board. Personally, I think that they are too anomalous to remain for long and I suspect, and I hope that this will be only the first step in rationalising the situation.
5.25 p.m.
Lord Wilson of Langside: My Lords, not for the first time, I agree with the noble Lord, Lord Stodart, in saying that both the noble Lord, Lord Carmichael of Kelvingrove, and the noble Lord, Lord Gray of Contin, have earned our congratulations this afternoon. I have known Lord Carmichael almost as long as I have known Lord Taylor of Gryfe but, as time has marched on, I shall not indulge in any reminiscences about the personal relationships which we have. We all hope to hear him on many occasions in the future.
The noble Lord, Lord Gray of Contin, is to be congratulated on this small step forward. It will have been quite a hard fight, I am sure, in the political and economic climate that exists today. It is not a big step but it is a step, and a step in the right direction. It makes one think—and the thought is perhaps provoked to some extent by what the noble Lord, Lord Grimond, said in his memorable speech earlier this afternoon—about the fact that we should require an Act of Parliament to give to the Scottish Tourist Board a power to carry on any activities outside the United Kingdom for the purpose of encouraging people to visit Scotland. I find much food for thought, in relation to the way in which we govern ourselves, in the fact that an Act of Parliament should be necessary for this purpose when we have already a provision in the Act of 1969 that the Scottish Tourist Board can act as an agent for the British Tourist Authority in this very matter.
Listening to the speeches and thinking of these aspects this afternoon, I was tempted to wonder whether there may not be a fundamental flaw in the administrative structure which we established in 1969 to promote the development of tourism to and within Great Britain. It certainly has some features which, when I looked at them yesterday, struck me as a little odd. Unfortunately, I cannot recall whether they struck me as odd in 1969 and whether, if they did, I then said so, as of course I should have done; because I was a member of the Government which promoted this particular piece of legislation.
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The structure consists of a British Tourist Authority and three boards. The peculiarity is that the functions of the boards in England, Wales and Scotland are identical with those of the authority in these countries. Each board has, as it were, a sort of concurrent jurisdiction in its own country with the authority. But the authority has exclusive jurisdiction in relation to overseas activities. My point in raising this aspect of the matter is that I am wondering whether this is the kind of set-up which has given rise to the difficulties which this Bill has been designed to meet. One can understand an authority being established to help to co-ordinate the activities of the three boards overseas. But the British Tourist Authority's functions go much wider than that.
I am inclined to wonder why and whether it is a good thing, or whether it does not carry within it the seed which promotes bureaucracy in its less acceptable forms. And, of course, something must be wrong in the way it has been working. That is why we have had to have this Bill, which of course we all welcome and wish well. I await with interest what the Minister will have to say as to why the Government did not accept the much more wide-ranging suggestion of the committee of the noble Lord, Lord Stodart, who have already been referred to, and why they regard it as being in the interests of both efficiency and economy that the present structure should be maintained. The recommendation of the Stodart Committee was of course a unanimous one, and I would hope that the Minister can elaborate on the reasons why these proposals were rejected.
5.31 p.m.
Lord Ferrier: My Lords, I make no apology for jumping in at this moment. I have been provoked to speak by the speech of the noble Lord, Lord Taylor of Gryfe, and to some extent by my noble friend Lord Stodart, talking about tourists coming to Scotland having to go through London. What is wrong with Prestwick? I daresay we shall hear more about that from the noble Lord, Lord Ross of Marnock, when the time comes, but it so happens that I have had two recent experiences which have a bearing on what has been said today.
I travel by train from Ayr on my way to Edinburgh—and incidentally there is no through service from Ayr to Edinburgh: you have to change stations if you do not want to wait for at least an hour and a half to change trains at the Central station. I found myself in a compartment with two American ladies who had arrived at Prestwick, with tickets to Edinburgh via the Central. They were not aware that there was a service from Ayr to Edinburgh viathe Central but that it is not co-ordinated in any way at all. However, they said they did not mind and they would only have to wait an hour and a half in the Central to get the connection via Shotts. It occurred to me then what a pity it is that there is no direct service between Ayr and Edinburgh which stops at Prestwick—any more, by the way, than there is a direct service from Edinburgh to Perth. You have to change if you wish to go from Edinburgh to Perth.
I wonder whether the tourist board would think of allotting a special task to one of their staff to keep British Rail up to the mark. I travelled yesterday in the

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day train from Stranraer to Euston. I joined it in Ayrshire and the windows were so dirty that you could not see out at all. It was a lovely autumn day but, except for the fact that there were cattle in the fields, the windows concealed the rest of the view from me altogether. I think that British Rail should have been on the mark about that.
Lord Taylor of Gryfe: My Lords, I wonder whether the noble Lord could get an up-to-date copy of the British Rail timetable. That shows that you do not have to wait an hour and a half at Glasgow Central in order to get a train. They run every half-hour to Edinburgh from Queen Street, and also every second train from Edinburgh to Perth is a direct through train.
Lord Ferrier: My Lords, I know about that: I travel myself. Are you aware that the bus which you have to take from the Central to Queen Street charges 25p and no change is given? It is no trun by the railways at all; it is run by the Glasgow Corporation. I have had trouble there, though not for myself, because I am wise enough to carry change; but there are people with children who are unable to find the change to pay the 25p. No, the service is perfectly possible; it would be possible for British Rail to introduce a through service via the Central. I think there is one train you do not have to wait about an hour for, but they do not co-ordinate otherwise. All I was saying was that I think it would be in aid of the tourist board if they had somebody to keep an eye on British Rail.
The noble Lord, Lord Stodart, referred to the Highland Railway. There again, that needs watching. I have not been on it recently, but it is the most magnificent scenic route anywhere in the world, perhaps, and I wonder whether more could not be made of it.
I have spoken about the through service from Edinburgh to Perth. The only other criticism of something which I suggest is worth watching is the design of the new sleepers, which are spoken of with rapture by many people. But I wonder whether the noble Lord, Lord Mackie of Benshie, (shall we say?) has tried sleeping in one of the new sleepers. If so, I wonder how he fitted into the new bunks. As for my noble friend Lord Swinton, I tremble to think how he would even get in at the door of the sleeper. However, those are points of design which I think could be examined in terms of our sleepers and in terms of our tourist trade, which is what we are concerned about.
This train I travelled on from Stranraer to Euston did not stop at Prestwick. I have written to the Railway Board and asked them: "Why don't you stop at Prestwick?" They said, "Because if people want to go to London they do not want to get out at Prestwick". That is by the way, but the fact is that, although my train was an hour and a half late (it broke down on Shap), it did not stop at Prestwick. It is perfectly possible for tourists to go to Annan, to Dumfries and to Carlisle to switch on to other scenic parts of the line. I think that is much needed.
All I can say is that I should be delighted to help if I were asked to do so. I should be delighted if the railways people or the tourist board were to send someone to see me, because I am a lifelong supporter
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of railway travel and I should like to see it developed more than it is today. I look forward to hearing what my old friend Lord Ross of Marnock says about Prestwick.
5.38 p.m.
Lord MacLeod of Fuinary: My Lords, in the first place, may I express my appreciation of the promoter of this Bill, the Minister, in allowing me to speak although my name is not on the list? I shall reward him by speaking only very shortly, but I am speaking here mainly because of my interest in the tourist situation. I happen to belong to a group of people who, in the island of Iona, are responsible for an abbey; and from the end of May to the beginning of September people usually work out that 2,500 tourists come to the Island of Iona every week during that period; so perhaps I can speak on behalf of the tourist industry and the proposition. It is simply to say that, on behalf of the tourist industry and on behalf of the tourists who come, we very much appreciate this Bill. We appreciate also the extent to which the authority in England still continues to be concerned and at the moment is prepared to give a grant to Scotland and to allow Scotland to speak in its own name in this regard. I simply rise to say that, and I should have preceded it by saying how much I appreciated the speech of the noble Lord, Lord Carmichael of Kelvingrove, and how we hope he will often speak to us again.
5.40 p.m.
Lord Mackie of Benshie: My Lords, this has been a most interesting debate and a great number of points of view have been expressed about a great number of subjects, particularly the fitting of myself and the noble Earl into the new railway carriages. I found them very comfortable, except that when you try to put down the blasted tray which is supposed to hold your tea it will not come over yourself at all. The old design, and the facilities provided in the older carriages, were extraordinarily useful and much more comfortable—
The Earl of Swinton: My Lords, I am sorry to ask the noble Lord to give way, but I am sure that if he and I travel in the same carriage we shall need a little more than the local brew of tea to see us through safely.
Lord Mackie of Benshie: My Lords, I wholly concur with that. But I. too, must welcome the Bill, if only because it has led to an expression of a great number of very useful opinions in this House. It gives us a chance to stress the tremendous importance of tourism, not only to Scotland but to the whole country, at the present time when our manufacturing exports have fallen away to such an extent that, if we did not have the oil that we are at present exporting, we would be one of the poorest countries not only in Europe but in the developed world.
Tourism is of immense importance to the whole country and to Scotland. The figures given are quite interesting, in that 10 per cent. of the tourists who come to Scotland are from overseas. But they are much more important than just 10 per cent., because they spend much more. Their spending is something like 3 per cent., which is about three times the amount spent by the home tourist, which is where the figure of between £200 million and £250 million comes from.

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Then, again, North American tourists are alleged to spend five times as much, and they should be greatly encouraged. I understand also, although the report has not come out, that the trend this year is up and that we are up to about a figure of 10 per cent. for overseas visitors. We have done rather better in Scotland than last year.
Another encouraging point is that 50per cent. of Scots take their holidays at home in Scotland. It is a very good thing to go to a restaurant where the proprietor eats in, but it is a very bad thing to go to a restaurant where the proprietor eats out. So this is a very good point in favour of Scotland. The increase in Americans may well be due purely to the fact that the exchange rate is now very much more reasonable, which enourages them to come. They like to come for a lot of different reasons and I should like to back up what the noble Lord, Lord Stodart, and other people said about Scotland as a separate entity. I do not think that people necessarily want to proceed from London up to Scotland. I think that they come to Scotland for entirely different reasons. Nothing could be less similar than the environment of the Highlands of Ross and Cromarty and the regions of Soho or Piccadilly. This attraction needs separate promotion and it certainly needs much more co-ordination than it has had in the past.
I welcome the step forward—it is a pretty small one and I am sure that the noble Lord the Minister will not disagree with that—but it is a very necessary one. It is ludicrous that the Highlands Board should have promoted abroad, and that the local tourist boards could promote abroad, but that the very energetic Scottish Tourist Board was unable to spend any money there. The need for more promotion is very great, because large new markets are opening up. I was at the Inter-Parliamentary Union Conference in South Korea this year and there is an astonishing creation of wealth going on all over the Far East, starting with Japan but now spreading to South Korea, Hong Kong and Singapore. All round that area there is a great new market for tourism growing up and a great amount of new wealth being created. That must not be neglected and it needs to be promoted. They have no traditional links with Scotland, but they want to travel and see other parts of the world.
The Government need to do a lot more to promote tourism in Scotland. For example—and it is all part of the same thing—there is no official scheme to grade the quality, or to upgrade the quality, of self-catering cottages, boarding houses, bed and breakfast hotels and so on. If there was a grading-up scheme there would atleast be a weapon which could be used to keep them up to the mark, particularly in the most attractive areas of Scotland. People come for the great beauty around them and there is an automatic flow of tourists. But in some cases—not in many—the service leaves a good deal to be desired, and the Government need to provide money for this sort of thing to be exposed and to improve matters all over Scotland.
I do not want to go on, because it has all been said, but I should like to say a little about the money. The noble Lord really cannot say that £200,000 is a tremendous amount to promote Scotland throughout the world. It would pay the Government to spend more money on promotion. It is not money that has
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been thrown down the drain; it is money that will bring a return. If money is short, there are two ways in which to operate. Either you can cut back, or else you can go out to make more money. In the case of the promotion of Scotland, there is a tremendous future for bringing in money. As I said before, it is a separate market from the rest of the country, and certainly from London, and it would bring tremendous returns if the promotion were well done throughout the world. If my arithmetic is right £200,000 is about 0.1 per cent. No business promoting itself would consider that 0.1 per cent. was a big deal with regard to bringing in fresh business. I would say only that it is a step forward. I hope that the Government, encouraged by this first step, will take further steps and provide a decent amount of money to allow the Scottish Tourist Board to co-ordinate their efforts, in order to get the people and put in the work of getting more tourists into Scotland.
5.48 p.m.
Lord Ross of Marnock: My Lords, I think that the Government will be well pleased by the reception of the Bill. It gives to the Scottish Tourist Board a power which has been pressed for, over a long time, and I join those who welcome the Bill and the fact that we have made this breakthrough. My first task is to congratulate my noble friend the former Member for Kelvingrove, and now Lord Carmichael of Kelvingrove, on his maiden speech. The ultimate accolade in Scotland is to say, "I kent his faither." I can also say, "I kent his mither as well." His father became a Member of Parliament just a few months before I did in 1946. Before that, his father was very well known as the secretary of the Independent Labour Party of which I, too, had been a member, and he was always the election agent for Jimmy Maxton.
Neil has proved to be a worthy son of his father. I do not know whether people know it, but his brother-in-law is also in the other place, so politics has been in the blood. He was a very hardworking Member of Parliament. He held junior office at the Ministry of Technology and also at the Ministry of Transport, and there is no one who welcomes him more to this Bench than I do. Noble Lords will appreciate that when in future we discuss a long Scottish Bill a Division will not need to be called in order to allow Lord Ross of Marnock to get a smoke. Somebody else will be sitting in the Front Bench to look after everything.
It has been an interesting debate. We trod paths which I thought we would never reach: the merits of the old and the new British Rail sleepers, the trials and tribulations of the noble Lord, Lord Ferrier, and his American friends, and the defence of the new sleepers by the noble Lord, Lord Mackie of Benshie. I should mention, although I am probably out of place in mentioning it, that a very distinguished civil servant wrote an elegy on the old sleepers. When he spoke about the new sleeper the tag line at the end was always "Aye, but there's nae place to hang up my watch". I agree with the noble Lord, Lord Mackie of Benshie, about the questionable value of that little shelf. As soon as you turn round you knock it up—and everything that is on it.
We may have done some good by mentioning British Rail in this debate, although we are giving a

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much more important power to the tourist board. I have a considerable interest in it; I was Secretary of State when it became a statutory body. Until that time the tourist board in Scotland was almost a self-perpetuating body. Lord Rosebery was the chairman when I took over. People have forgotten that Lord Rosebery was Secretary of State for Scotland in the months leading up to the declaration of a general election and the holding of Parliament in 1945. He thought highly of the tourist board. Its main promoter was Tom Johnston. In the early days the board did not get a very large grant-in-aid from the Government. On one occasion after Lord Rosebery had won a race at Newmarket he gave £1,000 to Tom Johnston to set up a genealogical society.
The noble Lord, Lord Mackie of Benshie, made the valid point that for hundreds of thousands of Scots and for the many, many more people of Scottish descent all round the world Scotland means something. So we have a ready-made market. I am glad that we have already tapped that market to a very considerable extent by means of the Highlands and Islands Development Board. We were shown to be growing up in Britain as far as tourism is concerned when we created the statutory boards and the British Tourist Authority in 1969.This was followed up immediately by special grants for refurbishing old hotels and building new ones. Considerable advantage was taken of those grants. They improved the hotel situation no end in places like Edinburgh and Glasgow; private developers took advantage of what was on offer. A certain amount of similar activity is still carried on—a great deal by the Highlands and Islands Development Board and some by the tourist board. We have every reason to be grateful for the success of the tourist board under its various chairmen. Alan Devereux, the present chairman, is certainly a headline hunter, but if he puts Scotland on the map I am content. Everybody who goes abroad is a tourist authority for Scotland. That applies even to Scottish football teams.
Noble Lords: Oh!
Lord Ross of Marnock: Noble Lords should have been with me in Spain for the World Cup and seen the welcome given to Scottish football teams and Scottish supporters. They would have been proud of the Scottish supporters if they had seen them going through the streets of Seville arm in arm with the Brazilians who defeated them. They created tremendous goodwill for Scotland and for Scottish football. The Aberdeen football team do the same wherever they go. That applies, too, to Celtic and to Rangers. We have every reason to be proud of the quality of Scottish supporters. I am not going to say anything about English supporters. Indeed, I am trying hard not to say anything at all about England! Scotland has a distinctive character. There are the glories of the Highlands and the heather. We have something which symbolises Scotland to put into any exhibition. It puts England into the shade. Let us be honest about it. When it comes to tourist or trade exhibitions, the fact that we have tartans and heather, which are recognised symbols of our country, is to our advantage. They are jealously looked upon by other people.
A noble Lord: And there are our golf courses.
Lord Ross of Marnock: But we do not take them abroad to trade exhibitions. I shall come to golf courses in a minute. The Scottish Tourist Board has been offering specialised holidays—golfing holidays, fishing holidays. Golf is cheaper in Scotland than anywhere else in the world.
A noble Lord: And better.
Lord Ross of Marnock: Of course; that goes without saying. We have not yet translated St. Andrews to any part of England. And we are not going to hand St. Andrews over entirely to the British Tourist Authority. We have got tremendous tourist advantages. I agree with those noble Lords who said that visitors do not necessarily go first to London. They go to London for perhaps different reasons. We are concerned that work should be done within the United Kingdom to ensure that we take full advantage of the tourist efforts which are being made by the local authorities and the heritage organisations. I happen to be the vice-chairman of the National Trust for Scotland. I know exactly what that trust means to Scotland and the attraction that it holds for tourists and people with specialised interests. I know, too, of the co-operation we receive from the Scottish Tourist Board and from the Countryside Commission in the work that we are doing. Many bodies are concerned with improving access for tourists and with improving the facilities for their entertainment and enjoyment while they are in Scotland. We should appreciate all that is being done.
It is right that we should extend this new power to the Scottish Tourist Board. If one thinks of it, we are only giving them the power which district councils already enjoy. When it is put into perspective, one sees that we are not doing anything that is world shattering. We are not giving the board as much power as the Highlands and Islands Development Board already enjoy, power which I gave to that board in 1966 when it was created. There were of course special circumstances in that case.
I say to the Minister of State that no good at all was done to this Bill and to the efforts which the Scottish Office have made to achieve this power by what was said in the House of Commons by the Minister—Mr. Lamont, I believe. I do not know whether he was trying to appease the English and the Welsh when he said that Scotland was getting only a very limited overseas power. The Minister said it more than once and he kept on saying it—so much so that a former Solicitor General spoke of the suspicions of the Scots about what is being done. The fact is that the main drive overseas will still be made by the British Tourist Authority. They are going to spend£2 million. The British Tourist Authority is to be reorganised. They will share headquarters with the English Tourist Authority. The chairman of the English Tourist Authority will become the new chairman of the British Tourist Authority. Although it is not on the cards yet, it may well lead to a merger. This tends to make the Scots rather suspicious as to whether the proper amount of attention will be given to Scotland's needs and Scottish potentialities.

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This brings me to the point which was made quite fairly by the noble Lord, Lord Stodart of Leaston, concerning what his committee said, which was fairly clear. It was less than fair to quote Lord Stodart, who supported the Bill, and, in quoting him, the noble Lord, Lord Gray, missed out one very important word:
"The Scottish Tourist Board should be given overseas promotional powers in its own right and be solely responsible for promoting Scotland abroad".
I should not have minded if they had been given the main powers in consultation with the BTA because I think the BTA will have a task to do for Scotland in areas we cannot always reach. But they have been given this very subordinate power after the trumpets have blared in Scotland for the great breakthrough, though we have at last what the Conservatives offered in their manifesto—£200,000-worth. That is a pretty small sum in relation to the job that should be done and is being done. It may be that the job is not being done properly on our behalf by the BTA. That sum is very small in relation to the job that should be done.
I should like to ask a direct question of the Minister. How much is the Highlands and Islands Development Board spending on tourism and how does that compare with what is being spent by the tourist board on the whole of Scotland? And I do not just mean overseas. They have had a tremendous success. Tribute has been paid to them by members of the House who come from that area and who know what happens there. They have had a tremendous success this year. Even in October they had 53 per cent. occupancy of some of their hotels which they still continue to support with grant.
Somebody mentioned Barra today. One hotel in Barra—and one was put up under the Highlands and Islands Development Board hotel scheme—probably employs the equivalent of the number of people in Birmingham who are employed by the motor industry. That is what a big hotel and a successful hotel can mean to a small place. Who was it that mentioned Barra? Who was it who said that people had never heard of it? Have they never heard of Compton Mackenzie? That is where he lived and where he wrote Whisky Galore; they have probably heard of Whisky Galore.
I am glad that we have this new flexibility for the board. I hope that it is only a start. When one considers that £200 million was spent by overseas tourists in Scotland this year and calculates what the Treasury's take-off from that expenditure was, then it can be seen that we are not spending all that much on the expansion of the industry. I hope to see a very considerable expansion, and I certainly wish well to the tourist board in their new ventures.
I suggest, too, that they have been successful in taking up the power we gave them two years ago for the creation of the new area tourist organisations involving local interests such as hotelkeepers and shopkeepers plus the local authorities. They have started well—probably better in some places than in others, but the information they obtain from tourists can be fed through to the Scottish Tourist Board in respect of where the board can project special efforts overseas.
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We have every reason to be proud of what we do in respect of tourism. We welcome the Bill. We have been wanting it. It is not that we distrust the British Tourist Authority, but we believe that we can do the job better because we know better just exactly what the advantages are of Scotland. I hope that this will be just the start of something and that we shall see the figures reversed. The Scots are the best ambassadors for themselves.
6.5 p.m.
Lord Gray of Contin: My Lords, first it is my very pleasant duty, for a second time today, to associate myself with those who have congratulated a maiden speaker. On this occasion, it is a great pleasure to welcome the noble Lord, Lord Carmichael of Kelvingrove to the House of Lords. We hope he will participate frequently—and not only in Scottish matters, though we are sure that Scottish matters will feature largely in his interests. I perhaps have a particular reason for welcoming the noble Lord because his brother-in-law who is in another place was for many years my pair. Therefore I have a special affection towards his family.
The noble Lord, Lord Carmichael of Kelvingrove, asked me for some clarification about the British Tourist Authority approval procedures and the relationship between the Scottish Tourist Board and the British Tourist Authority in that way. Let me emphasise that the purpose of consultation with the British Tourist Authority is to ensure that the Scottish Tourist Board in its own promotions does not duplicate what the BTA is already doing in the same place.
As to the actual decision on whether the Scottish Tourist Board goes ahead with a particular project overseas, that is the responsibility of and a decision for the Secretary of State and nobody else. The requirement is that the Secretary of State shall consult with the BTA. But let nobody make any mistake: the actual decision is that of the Secretary of State and nobody else. I hope that point is quite clear.
The noble Lord, Lord Taylor of Gryfe, was concerned, as a number of speakers were, about the possibility of a merger between the English Tourist Board and the British Tourist Authority. He suggested that, since there was one chairman, it seemed likely. I should make it clear to the noble Lord that the chairman, Mr. Bluck, has been asked only to examine the possibility of a merger. No decision whatever has been taken on this matter. Indeed, so far as the Scottish Tourist Board is concerned, we believe that this Bill strengthens its role substantially.
I accept that on occasion the British Tourist Authority has made mistakes. Some of the examples which the noble Lord gave are distressing to Scots—of that there is no doubt. But, by and large, the British Tourist Authority has done a very good job by Scotland. Its promotion of our interests has been most acceptable, and over recent years particularly the relationship which has existed between the BTA and the Scottish Tourist Board has been very good indeed.
My noble friend Lord Stodart of Leaston gave a welcome to this Bill, and I was most grateful to him for the comments he made. There is little difference

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between us so far as our attitude to the Bill is concerned; perhaps a little difference in emphasis here and there. My noble friend did point out that we did not go the whole way—and this was raised also by a number of other noble Lords—in following the recommendation of his committee. On the other hand, we have made a very significant step towards what his committee recommended. We believe that it would have been a mistake to go the whole way because it is still in Scotland's interest that we should be allowed access to areas which are notably British areas. We do not want to exclude ourselves from the potential of gaining from the spin-off from projects which relate principally to Britain. We believe—and Scots are noted throughout the world for trying to get the best of both worlds—that we have actually achieved quite a significant step in obtaining the best of two worlds so far as promotional activities are concerned.
Lord Mackie of Benshie: My Lords, if the Minister will allow me, can he clarify one point? Did I understand him to say that out of the British Tourist Authority's spending abroad, £2 million could be attributed to Scotland?
Lord Gray of Contin: Yes, my Lords, that was a point I dealt with in my opening speech—and that is correct. I shall deal in a little more detail with the financial questions in a few minutes, when I shall be dealing with another point relating to finance which the noble Lord raised.
My noble friend Lord Stodart also suggested that it might have been better if we had gone the whole way forward and given complete autonomy to the STB. If I may add to what I have already said, we want to promote Scotland and Britain; it is not a question of promoting only Scotland. We want to supplement what is already being done by the British Tourist Authority and we believe we can do it better in this way and through this legislation.
The noble and learned Lord, Lord Wilson of Langside, dealt with exactly the same point. He will forgive me if I do not repeat myself again, because what I had to say in answer to the point of my noble friend Lord Stodart is identical. There is also the point, of course, that at the end of the day the British taxpayer foots the bill and we must avoid wasteful duplication. We must ensure that we get the best value for the money spent. All those points are covered in the line which we have taken and in our decision to follow this form of legislation.
The noble Lord, Lord Ferrier, made some very interesting comments about the merit and demerit of British Rail. My noble friend Lord Lyell has handed to me an updated version of the railway timetable, which I shall pass on to the noble Lord, from which I see that there is a wide variety of services which could be available to him and that refreshments are available on a great many of them. The noble Lord asked me about the particular attitude of British Rail and how they might keep up to the mark as far as tourism was concerned. British Rail are, I think, very well aware of the importance of tourism, not just to the economy of Scotland but also to their own revenue, and I believe
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that regular meetings already take place between the Scottish Tourist Board and British Rail. I think that from those meetings British Rail will be kept very well aware of the sort of criticism which is made of them from time to time. But when we are making criticisms I do not think we should overlook the praise which is also given. No doubt those who read of our deliberations in this House will balance one against the other.
I turn to the noble Lord, Lord Mackie of Benshie, for whose welcome to the Bill I was grateful. He said it was a small but important measure. I would go a little further; I would say it is a small but very important measure—indeed a very significant measure. I would suggest to him that the £200,000 to which I referred is, of course, only supplementing what is already spent. He rightly made the point himself that £2 million is already being spent, and this £200,000 is being supplemented by the Scottish Tourist Board, which will benefit from the original sum that will continue to be spent by the British Tourist Authority. We believe that the Scottish Tourist Board, being based in Scotland and having a most direct knowledge of the best way in which Scotland may be presented and projected overseas, is well equipped to work along with the BTA in this effort.
Lord Mackie of Benshie: My Lords, if I may intervene, can the noble Lord tell us how the BTA calculate the £2 million spent in Scotland?
Lord Gray of Contin: My Lords, I am afraid I simply cannot answer that question off the top of my head, but I will certainly be very happy to contact the chairman of the British Tourist Authority on behalf of the noble Lord, and when I have the information from him I shall be happy to forward it to the noble Lord.
The noble Lord made mention of the good season, and, yes, I can confirm that this has been a very good season. Final figures are not yet available, but, from my own travels around Scotland during the Recess, I can confirm that the number of times on which I visited hotels where I was told that they were either fully booked or practically fully booked was encouraging indeed. I think it speaks well for the standard of service which is being offered in Scotland these days.
I take the point that the noble Lord made when he suggested there were some areas where there could perhaps still be improvement. We can never be satisfied with the service offered. I know that some areas are conscious of this and the local tourist organisations will be doing their utmost to see that improvement is made.
On the question of grading accommodation, this is a matter which is being actively pursued by the new Scottish Confederation of Tourism under the chairmanship of the STB chairman, Mr. Devereux. I agree that this is a very desirable step forward and I am glad that SCOT is taking it seriously.
Lord Ross of Marnock also welcomed the Bill, and I was interested in what he said about the Scottish football sides which travel abroad, the fact that they are ambassadors and are now accepting the responsibility which they have. There was a time, regrettably, when this was not so, but I think we can all now be very proud of the way in which Scottish

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football supporters are behaving when they go abroad. I do not think we ever had any doubt about the merit of the teams, but some of the supporters were not exactly as we would have wished. I think lessons have been learned and there is a marked improvement which could be followed in other parts of the country. The success of Aberdeen Football Club is being put to good effect. I can tell the noble Lord that the Aberdeen Tourist Board have mounted promotions to Sweden and to Germany with considerable success. I have no doubt that other clubs will give this idea to other tourist boards, and it must be welcomed.
The noble Lord asked me the direct question about how much the Highlands and Islands Development Board spends on tourism. Of its total budget of some £36 million in 1983–84, approximately £7 million will be spent on tourism, and, of that figure, approximately £200,000 on overseas promotions. Add to this the Scottish Tourist Board's total budget of nearly 8 million, and I think noble Lords will accept that Scotland has done rather well in Government support so far as tourism is concerned.
My Lords, I am most grateful for the enthusiastic welcome that has been given to this Bill and for the very useful contributions which we have had from all those who took part.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Housing (Payment for Well Maintained Houses) (Scotland) Order 1983
6.19 p.m.
Lord Gray of Contin Lord Gray of Contin rose to move, That the order laid before the House on 27th October be approved.
The noble Lord said: My Lords, I beg to move that the order laid before the House on 27th October be approved.
The purpose of the order is to prescribe a new multiplier of 12.7 to be used in calculating by reference to the rate able value of a house the amount of a well maintained payment under Section 21 of the Housing (Scotland) Act 1969. A "well maintained" payment is a supplementary payment made by the local authority over and above the basic compensation provided for in statute. It is an incentive and reward to residents to maintain their houses in good order even although the houses are sub-tolerable.
Local authorities are required, under Section 25 of the Housing (Scotland) Act 1966, as amended by the Housing (Scotland) Acts of 1969 and 1974, to make payments in respect of well maintained houses which fail to meet the tolerable standard and have been vacated in pursuance of a closing order or a demolition order or have been purchased compulsorily by a local authority in order to effect repairs. Local authorities are also required, under Section 30 of the Housing (Scotland) Act 1974, to make payments for well maintained, but sub-tolerable, houses in housing action areas which are made the subject of compulsory purchase for the purpose of bringing them up to the requisite standard.
The basis for determining a "well maintained" payment is that it should equal the rateable value of the house multiplied by a factor prescribed by statute. Since being set by statute in 1957 the multiplying factor has been 7·2, but there has been a steady increase to the value of the payments as an automatic result of rating revaluations. The increase from 7·2 to 12·7 is intended to reflect fully the increase in maintenance costs which has taken place since the multiplier was last reviewed in 1978.
Since the institution of "well maintained" payments in 1957 revaluation of Scottish rateable values has occurred on four occasions—in 1961, 1966, 1971 and 1978. It has, therefore, hitherto been unnecessary to adjust the multiplier of 7·2, set by statute in 1957, in order to maintain the value of "well maintained" payments.
In local authority expenditure terms the effect will be minimal because "well maintained" payments are a minor part of a local authority's slum clearance budget; indeed, we have reason to believe that if progress on clearance is maintained total expenditure by Scottish local authorities on these payments should only increase by around £75,000. I beg to move.
Moved, That the order laid before the House on 27th October be approved.—(Lord Gray of Contin.)
Lord Ross of Marnock: My Lords, I entirely agree with what is being done.
On Question, Motion agreed to.

United Kingdom Trade Patterns: ECC Report
6.22 p.m.
Lord Greenhill of Harrow Lord Greenhill of Harrow rose to move, That this House takes note of the report of the European Communities Committee on the United Kingdom's changing Trade Patterns subsequent to membership of the EEC. [7th Report, 1983–84, H.L. 41.]
The noble Lord said: My Lords, I am sure that we turn with reluctance from the pleasant and relaxed consideration of Scottish affairs to the more worrying question of the pattern of United Kingdom trade since our membership of the EEC became effective. I am afraid our report on this subject is a very bulky document and has a price tag which puts it quite out of reach of any casual reader outside the House. But it does record some interesting facts and gives a very good insight into the changes that have taken place.
Historically speaking, our belated accession to the European Community will be one of the landmarks of the latter half of this century. The reasons why we hesitated so long can be well understood in retrospect, given the attitudes which the Government and the people of this country took up in the aftermath of an exhausting but nonetheless victorious war—a war in which we felt in part let down by the Europeans and in part saved by the Americans. Eventually when we came round to joining the Community it had succeeded beyond all expectations. Fierce controversy preceded our accession and continued afterwards to the detriment of our interests. This controversy is not dead, although the opponents of membership seem to stop short of complete withdrawal. But a reform of the

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Community must surely be inevitable within the next few years and the reform will in part be shaped by those who have previously opposed our membership completely.
The inquiry which led to this report was started before the general election and was interrupted by it. For this reason it has taken longer than we would have wished and may in some respects be a little dated. But I believe its central message holds good and the report will always be a very useful source of reference. The purpose of our inquiry was to try to clarify one of the main issues in the controversy about membership and by so doing help accurate conclusions to be drawn and sensible judgments made in the future. The main issue which interested us was how far membership of the community has affected the pattern of our external trade. Was membership beneficial or was it damaging? Did it help to solve our trade problems or merely create new ones?
Statistics have been used by the protagonists in this argument to reach absolutely opposite conclusions. Such independent studies as have been carried out on the whole have been designed for a specialist or academic readership. The sub-committee identified the need for an objective study for the general reader of the effects of membership on Britain's external trade. That is what we set out to do and your Lordships must judge how far we have succeeded. Personally, I found the conclusions of the committee less clear-cut than I had hoped, through no fault of the committee but because the effects themselves were so hard to unravel. I was also surprised to find the fact of membership so much less important in trade than I had once imagined.
We must thank our many witnesses for their cooperation. There was no shortage of persons who volunteered to come forward. I commend the evidence to your Lordships. It is almost all of an extremely high standard and expressed with great frankness. It is invidious to make a selection of the witnesses, but I believe that your Lordships will find of particular interest the evidence of the redoubtable Mr. Ian MacGregor, the then chairman of British Steel; the views of Mr. Sallitt and his colleagues; of BEAMA, and of Mr. Horton and his Chemical Industry Association partners. Particularly refreshing was the evidence of the enterprising representatives of the British clothing industry. Of particularly topical interest are the important but somewhat disturbing views of the Society of Motor Manufacturers and Traders.
I do not suppose that I am alone in this House in having difficulty in finding a way through statistics. They are kept to a minimum in the report, but I should like to thank Government departments for their determined efforts to get their statistical products understood—certainly by the chairman. I also thank the distinguished economists who from time to time clarified and often confused the issues. We were piloted through these minefields by our specialist adviser, AnnMorgan, who was equipped with both the expertise and the common-sense needed. The committee have tried to set out their general conclusions in a way which will encourage and facilitate the debate. They are set out in paragraphs 95 to 102 and
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summarised in paragraph 103. I do not want to take up your Lordships' time by reiterating them. Members of the sub-committee participating in the debate will, I am sure, speak on those conclusions which interest them particularly.
I should like to confine myself to five points which are illustrative of our findings. First, what is clear at once is that the high initial expectations of a surge of increased trade with Europe following our accession were not fulfilled. The onset of the recession after 1973 of course obscures the extent of the change. It would certainly be true to say that our membership of the Community did reinforce the necessary and desirable shift of trade towards Europe which was already under way before we joined. But the advertised dynamic of membership cannot be identified. Europe was of course bound to replace many of our former traditional markets.
The second point I want to make is this. Membership of the Community itself was rarely considered by witnesses as a major influence on the flow of imports or exports. Far more influential than the fact of membership were the volatile exchange rates characteristic of the period and our woeful lack of competitiveness in many important areas. It is this lack of competitiveness which again and again is seen at the root of most of our trade problems, not only with Europe but with the other parts of the world.
Thirdly, most industrial witnesses nevertheless were of the opinion that membership had, on the whole, been beneficial. They usually expressed enthusiasm for the political aspects of the Community but were rather more uncertain and restrained from an economic point of view. Indeed, one of the witnesses, Mr. Grierson, a director of the General Electric Company, while yielding to no one in his political enthusiasm, went as far as to say that, from a trading point of view, membership was an irrelevance. None of the significant witnesses advocated withdrawal. As we say in the report:
"Quite simply membership is regarded as essential to the future well-being of British industry".
Fourthly, no more than anyone else was the sub-committee able to arrive at firm quantitative conclusions about the effect of membership on the pattern of trade. One cannot know what would have happened had we not joined, and truly comparable statistics are extremely elusive. But there can be little doubt that membership played an important part in sustaining trade and industrial activity in the United Kingdom in the recent difficult years and helped to attract investment to this country from overseas. It also encouraged some investment within the country.
Fifthly, opponents of membership have made much of the alarming growth of the adverse balance of United Kingdom trade in manufactures with the rest of the Community. From this it has been argued that accession has delivered a deadly blow at our industrial base. However, we concluded, with appropriate supporting figures, that this decline is not due to membership; other causes are dominant. This is confirmed by the fact that there is a comparable decline in manufactured trade with other industrial countries. This is shown on chart 4 on page xl.
It is of course an extremely serious matter. Earnings from service industries, buoyant as they are, cannot fill

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the gap. Your Lordships will also see in the report some interesting evidence from the invisible export committee. But the basic remedy for this adverse balance lies very much in the hands of our own industry. Good products, competitive in price, ingenious and modern in design, well marketed and well serviced, will go a long way to solve this problem.
On listening to witnesses one could not escape a feeling of disappointment that membership of the Community has not had a more beneficial influence on our trade. It has to be recognised that industry's response to membership was tardy in many cases, and even now the less successful business men have a great deal to learn from their more prompt and successful colleagues. Also the members of the Export to Europe sections of the Department of Trade are now extremely well equipped to help and advise. Having seen some of them at close range recently, I pay tribute to their enthusiasm and tenacity. Among many business men there are revived hopes for the future. These revived hopes spring in part from the fact that some of our industries are now markedly more competitive than they used to be. Competition from the Continent was in many cases a shock—a shock which was sometimes beneficial and sometimes fatal.
Now that the United Kingdom membership has been endorsed by the electorate, we are entitled to hope that the views of Her Majesty's Government will be more sympathetically received by other members of the Community and the Commission, now that our commitment is clearer. There is not much evidence of this so far but since the Stuttgart meeting the Government have a plan of action which has been published and which covers many facets of the Community's work. The recent news from Brussels is more encouraging.
Nowhere should the Government work harder than in seeking to remove the non-tariff barriers in trade and services constantly mentioned during our inquiry as a cause of difficulty. As the report observes:
"Trade is not yet free and the Community is not a common market."
There is at least a decade of hard work ahead, and the competitiveness of our industry is fundamental, as well as a solution to the damaging volatility of exchange rates.
The Treaty of Rome related to political and economic conditions at the time of its signature. These conditions have long been overtaken, and we live in a totally different world. There is an urgent need to see that this basic instrument of the community reflects contemporary conditions. Her Majesty's Government should work hard to see that it does, and it is in that direction that we should direct our effects. I beg to move.
Moved, That this House takes note of the Report of the European Communities Committee on the United Kingdom's changing Trade Patterns subsequent to membership of the EEC.—(Lord Greenhill of Harrow.) [7th Report, 1983–84, H.L. 41.]
6.38 p.m.
Lord Bruce of Donington: My Lords, the House will be extremely grateful to the noble Lord, Lord Greenhill of Harrow, for having introduced this
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Motion this evening. If I may say so, he has delivered his observations in a most thoughtful and moderate tone which becomes the gravity of the situation with which we are confronted in relation to the Common Market itself. I hope that the House will have the opportunity to hear the maiden speech of the noble Lord, Lord Kaberry of Adel. I was not fortunate enough to be in another place at the same time as he was, but we know here of his distinguished career. We look forward eagerly to his maiden speech and indeed to his continuing and, in so far as possible, full-time attention to the affairs of this House. The noble Lord's speech will be very welcome indeed here tonight.
The speech of the noble Lord, Lord Greenhill of Harrow, and indeed the report itself, and its preparation, reflect an understandable anxiety concerning Britain's membership of the EEC. This impression is not in any way diminished by the knowledge that the European Commissioners are also extremely anxious about the Community, since, as we learned from the press the other day, even in these times of financial stringency, the Commission is devoting £3 million to advertising the virtues of the European Community prior to the EEC elections that are due to be held next year. Had the virtues of the Community by now been obvious, and well understood and experienced by everybody, it might have been unnecessary to undertake that kind of expenditure.
Two types of anxiety are reflected in the report. The first is the anxiety of the original and passionate protagonists of EEC membership as an essential prelude to eventual European union. The report itself, as well as at times interventions by members of the committee, show that those people involved were almost trying to prove to themselves that the hope to which they gave voice so long ago had turned into actuality. There is also reflected a wider anxiety, covering the whole perspective of our actual relationship with the EEC and with various other parts of the world.
As the noble Lord, Lord Greenhill of Harrow, has already said, the report did not really arrive at any firm conclusions. I put it to your Lordships that perhaps one reason why it was unable to arrive at any firm conclusions was that there was still a subjective wish to justify British membership of the EEC. I would make it clear that I am not in any way trying to deride that. People are entitled to their own passionate beliefs. If people have no aims, there is no progress, and therefore one can understand, especially after a period of about 10 years, the subconscious wish to be able to justify the high hopes that were once held.
The difficulty met by the committee in trying to arrive at firm conclusions arose to some extent from the nature of the data provided to it, in particular that from the Department of Trade and Industry. Wading through the mass of statistics that have been incorporated—only in part, one should imagine—in the report, one finds every now and again a queer, immediate shift from a rendering of actual figures to a string of percentages. If one wants to convert the percentages into actuality, one has to read across all the columns. Undoubtedly this has complicated the report. I am quite sure that the noble Lord, Lord Lyell, will agree with me that we are not all statisticians—not even distinguished Members of your Lordships'

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House—and I venture to suggest that these matters could have been presented with rather greater clarity than has been used in the report.
There have been two main developments in British trade and industry since we joined the Community. There have been two principal developments; for the moment I am purposely leaving out the question of the provision of services. The first development relates to agriculture; and I make no apology for introducing agriculture because it is dealt with to a very large extent in the report itself, replete with all kinds of figures that have been provided from the Ministry of Agriculture and elsewhere.
I believe it is important that at the outset we deal with the agricultural development and the industrial development quite separately. True enough, they are interrelated, but the first point that we must bear in mind, whether or not it may be palatable to all the various interests involved—and agriculture is not wholly unrepresented in this place, in the Cabinet, or in another place—is that the workings of the agricultural part of the European Community and those of the industrial part are quite separate and distinct, and are actually in conflict.
The agricultural system enshrined in the CAP completely violates every kind of competitiveness—free enterprise competitiveness—that is the characteristic, or is supposed to be the characteristic, of the industrial side. Therefore, there are two opposing philosophies within one system. Though I would not for one moment suggest the proposition, nor seek to argue its feasibility, what would happen to agriculture in Europe if it were openly exposed to the same degree of competitiveness as there is in industry?
Certain effects have arisen from the situation, and one of the trends has been a very considerable increase in agricultural trade and, indeed, agricultural exports. However, no understanding of the anxieties concerning the European Economic Community is complete unless one appreciates the cost of the common agricultural policy in both money and price terms. Any suggestion that this factor can somehow be overlooked and swept under the carpet is not conducive towards getting to the root problems of the European Community.
I shall not trouble the House with many figures; my noble friend Lord Stoddart of Swindon will later deal with this aspect in greater detail. However, according to the Economist, the total impact of the CAP, in terms of an average figure over all farms, means an annual subsidy of £20,000 per farmer. I emphasise: an annual subsidy of £20,000 per farmer. This has been achieved by the operation of the CAP, the extent of which every year has been criticised by succeeding Governments and by almost every party of state in the United Kingdom.
Does it not occur to someone that just as one may on occasion have to apply cash limits to Government expenditure so, too, one ought to apply cash limits to the common agricultural policy itself? For some estimate as to the effects of the CAP one has only to look—and your Lordships may care to take the reference because I am quite unable to read it all—at the Financial Times of 13th October where there
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appeared an article by Mr. Samuel Brittan who I can assure the House is not a paid-up member of the Labour Party or, for that matter, so far as I know, even a sympathiser. I am given to understand that he always has the reputation of being a financial commentator of the utmost rectitude. In his feature on 13th October he put the costs of EEC membership—and he is referring to the CAP—in 1980 in terms of £4,450 million and the benefits at £1,895 million giving a net loss of £2,555 million per annum. The source of the figures he quoted was the Institute of Fiscal Studies. Incidentally, those figures included not only the customs duties and VAT payments that have a direct impact on our budget, but they also reflected the higher prices paid by the consumer.
The reason why I mention the latter—the higher prices paid by the consumer—is that it is estimated that the prices we pay in the United Kingdom are, on average, some 10 per cent. higher than they would have been if we had not had the rather dubious benefit of the common agricultural policy. That means that wage claims, which have an impact upon industrial costs, are bound to be set higher due to the fact that the worker in this country has to pay rather more for his food.
Dealing with the industrial side, there can be no doubt that the stark effects are shown in the graph which is reproduced in the report on page xl; Chart 4 shows the balance of trade in manufactures by areas. The visual impact is immediately clear. Can it really be an absolute coincidence that from 1972 onwards our deficit in manufactures progressively decreased? Is it really conceivable that this is entirely a coincidence?
Unfortunately the figures shown in the report only go up to 1981 and they are not always shown in the DTI report in a comparable form. So I obtained some figures through the computer of the DTI which revealed the comparable figures in the case of manufacturing industry in 1972 as compared with 1982. Apart from two items there is very little essential move in any of the adverse or favourable balances. There is nothing of very great significance that can determine an immediate and easily perceptible trend, except in the case of manufactures. I am talking under SITC classification Nos. 6, 7, and 8 which cover manufacturing goods. In 1972 we had a trade surplus of £40.4 million; in 1982 we had an adverse balance of £4,802 million; and 1983 bids fair to have an adverse balance of £5,000 million. At the same time—and this is the other trend—whereas in 1982 in lubricants and mineral fuels (SITC classification No. 3) we had a surplus of only £101.7 million, in 1982 we had a surplus of £4,742 million. Those are the two principal changes that have taken place and they are quite unmistakable.
I repeat: Is it to be said that this is purely a coincidence? Evidently the report thinks that it is. Evidently the report attaches no particular significance to this progressive trend which is displayed by those two stark figures. It is said that there are alternative reasons for this. One is the onset of the recession. I cast my memory back to the time when we entered the Community and had the referendum campaign, the reason for our joining the European Community was precisely that in joining a larger unit of this kind it would be possible to avoid recession. That is what we

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were promised. Nor is there any real logical reason why there should have been a recession in Europe at all—there is no reason at all in the light of the fact that there are still very large unsatisfied demands in Europe and a large number of unemployed people who are capable of fulfilling those demands.
It can be said—and said with some justification—that one cannot altogether blame the Community for not having avoided the recession because, of course, as is well known and recognised now, it was unfortunately this country that led Europe into a recession, and in fact led the world into a recession. This was mainly because of the idiotic application of severely deflationary policies instanced in the first place by a ridiculous rise in interest rates of some 5 per cent. towards the latter end of 1979, and the application of disastrous monetary policies, which everybody now admits were wrong anyway.
In a way that perhaps supports the case of the committee and the arguments put forward by the noble Lord, to the effect that we cannot really blame this all on the European Community. I would say that there is justice in that, but that the Community was itself designed and the Treaty of Rome was concluded in the confident supposition that by the binding together in closer unity of all these nations recession could be avoided.
There are two sides to the equation involving the determination of the adverse balance of trade. An adverse balance of trade can be caused by a shortfall in exports, by a considerable surge in imports, or by a combination of both. As regards exports, it is perfectly true to say that the volatility of the exchange rates—but, above all, the disastrous level to which they were driven by an insane monetary and interest policy—undoubtedly had an effect on the competitiveness of British exports abroad. Of course, this was denied at the time and has been denied for the past two or three years, but the denials now, particularly from the Government, are not very obvious.
There is also the question of some degree of obstruction to British exports into Europe in the Community itself. In his evidence the noble Lord, Lord Kearton—and he will be speaking at a later stage in the debate—raised this; and, indeed, there is abundant justification for it. That is one of the characteristics which we have tended to meet in Europe. By and large, Britain honours her obligations to the letter and, apart from the slight hiccup over the tachograph, has honoured every obligation to Europe. She has been more communautaire than the rest. Very often it is in the rest—particularly in the case of France and, as I am quite prepared to show in detail, in the case of Germany—that there has been obstruction.
However, the other side of the equation is the terrific surge of imports into this country, which is beyond doubt. Once again, this has been due very largely to the effect of exchange rates, which have acted as a subsidy for imports into this country. As we all know quite well, there have also been hidden subsidies for energy and matters of that kind which, to a very large degree, have been dealt with in the national press. However, above all, owing precisely to the deflationary policies that have been followed, British industry's costs here at home for domestic consumption have been
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unnecessarily increased by reason of the cash flow difficulties that have been imposed upon British industry by a deflationary policy followed to its extreme by Her Majesty's Government.
I think I speak with common knowledge when I say that if one goes into a store to buy British products, time after time one finds that delivery will take five, six or even 10 weeks. The stores are not prepared to carry stocks because of their cash flow difficulties, which are an inherent part of a policy of deflation which is pursued by the Government; whereas our Continental competitors are prepared to send vast quantities of goods either on sale or return or on extended credit terms, and, therefore, firms here are more willing to stock them.
These are matters which of course have to be tackled at a national level, but they have their Community overtones. If it were so minded, even within the limitations of its devotion to free enterprise in industry, the Community has the institutional means of being able to carry through the necessary reforms to ensure a uniformity of exchange rates, a uniformity in terms of standards, a uniformity in terms of interest charges, and all the rest. But it is no nearer doing that now that it was 10 years ago. In fact, it is farther away.
The other factor which has operated and which is referred to in the report is investment. Unfortunately, it is a fact that since we joined the Community there has been a net outflow of funds for investment purposes into the Community of £2,691 million. On top of all this, over the nine years that we have been a member we have spent £2,659 million from the purse which has gone into Community funds. That is our net contribution, after rebates, for nine years. Many may think that we have paid a great deal for a very little—except, of course, the agricultural community.
What, therefore, should our verdict be? I do not think that we can isolate our membership of the European Community, or that we can exempt it, from a partial responsibility for the state of our trade with the Community or for our own state of affairs here. I think that other factors have exacerbated it. One of the factors that has exacerbated it more than anything else is the quite ridiculous provisions of the Treaty of Rome, which virtually are a sanction for free enterprise without restriction throughout Europe—free and open competition in the true, old monetarist conception of the term. We think that that has failed.
What we need in Britain—and, indeed, what the Continent needs—first is a radical reform of the common agricultural policy; and by "radical reform" I mean radical reform involving cash limits. Then we have to work together with our Continental colleagues—not necessarily confined to the EEC—to seek a plan which will involve the changing of the Treaty of Rome, providing for the planned co-operation between members states, their industrial enterprises and their financial institutions, and providing for a planned objective not only for Europe but for developing countries and the remainder of the world.
I am all for co-operating to the utmost with our European colleagues. I think it is vital that we achieve as wide an area of co-operation as we can. Yet I cannot help feeling that we have a responsibility to the

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Commonwealth as a whole, which comprises some quarter of the world's population and whose representatives are now meeting in conference at a most critical time. I cannot help feeling that, however much we may seek to co-operate with our European colleagues, the whole of our history beckons us to cement, to strengthen and to extend our relationship with the Commonwealth itself.
7.9 p.m.
Lord Ezra: My Lords, I should like to join with the noble Lord, Lord Bruce of Donington, in congratulating the noble Lord, Lord Greenhill of Harrow, on the way in which he presented this very important report. As someone who has been involved for many years in the operations of the European Community, the report struck me as being extremely well-balanced, judicious and careful in its findings. It was charting territory which is extremely complex to chart, because it was trying to identify the Community effect on trading patterns, which are inevitably influenced by a whole variety of factors. I believe that the conclusions reached are as fair and as proper as anyone could reach in a study of this sort on this subject. I believe that the work done by the sub-committee will considerably enhance the growing reputation of your Lordships' Select Committee on the European Communities.
It is a fact, as the noble Lord, Lord Greenhill, stated, that unfortunately we joined the European Community too late. Had we joined it 10 or 15 years earlier we should undoubtedly have shared in the great period of growth that was witnessed during the 1960s. We of course had our period of growth then. I believe it would have been further enhanced. We should also have been able to have a moderating impact on the CAP, about which the noble Lord, Lord Bruce of Donington, spoke.
As it was, we joined in 1973 on the eve of the most serious adverse repercussions in the world's industrial and commercial affairs since the end of the second world war. The impact was almost instant, because no sooner was the ink dry on the document of accession than of course there was the serious blow of the oil price increase. So far as our trade pattern was concerned there is not the slightest doubt that that had the biggest impact in that year. I have the figures here, and in the year 1973 our oil, which we were then importing altogether—we had not, as yet, exploited the North Sea—cost us £941 million. In the year 1974 that was £3,357 million. It went up nearly fourfold. There is no doubt that that had much the most important impact at that time on our overseas trade.
The report presented by the noble Lord, Lord Greenhill, did absolutely the right thing early on in paragraph 5 in identifying all the other factors which were certainly collectively, and possibly individually, more important in affecting our trade at that period than the single effect of going into the European Community. I should like to remind your Lordships of some of those factors. There were not only the oil crises of 1973–74 and 1979, and also the recession to which they gave rise; the policies which individual governments then adopted to deal with that recession, which of course varied and had a variable impact on
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their trading situation; the problem of inflation; and the problem of fluctuating exchange rates. It is difficult to distinguish the impact of these various factors.
The report nevertheless shows up one disturbing conclusion about which we are all aware. As a result of the combination of all these uncertainties and difficulties which have arisen in the decade since we joined the Community and which were largely outwith the Community in their cause, we have suffered substantially in our visible trading balance. As we well know, and as the figures show in the report at Table 4, it is clear that the rising earnings on oil, which has been so effectively exploited in the North Sea, have masked the declining contribution from our manufactured trade.
I should like to mention the figures which update Table 4 for the first 10 months of this year which I have obtained from the Department of Trade and Industry. If we take the overall balance as it was revealed in the October figures, we were showing a surplus of £3.6 billion for the 10 months of last year: for the 10 months of this year, that has fallen to £0.4 billion—that is, £400 million. If you take the oil, on which we achieved a surplus of £3.3 billion in the 10 months of last year, the surplus earned on oil in the first 10 months of this year is £5.3 billion, an increase of £2 billion. That is a fantastic improvement in performance, for which there must be congratulations.
If, however, we look at the manufacturing position, I am afraid to say that the position is bleak indeed. We see that for the first 10 months of 1982 the net surplus earned on manufactures was nearly £2 billion: £1,925 million. For the first 10 months of this year, regrettably, the balance on our manufactures is minus £2,092 million. That is a swing of no less than £4,000 million. I do not believe that this has ever happened in our industrial history before. I have looked up the figures for 1931, which the noble Lord, Lord Lyell, gave in answer to a question. The swing then was that in 1930 we earned £42 million on our manufacturing account, and in 1931 we lost £7 million. I do not know how these terms translate into today's money, but that is the only evidence of such a swing in peacetime in something like 150 years—the period for which the statistics exist.
We are, therefore—and this report has underlined it—for a whole variety of reasons which are not due to our membership of the Community but to wider factors external to the Community, worldwide factors, and some internal factors in our own country, facing this critical situation where we can put alongside the trend in our manufacturing trade the likelihood that the oil earnings will start diminishing in the next two to three years. We face a serious situation indeed.
If your Lordships would turn to Chart No. 3 on page xx of the report, you will see that that is a chart which shows the index of our performance in manufacturing trade. It starts at a figure of something like 220 in 1963–100 would represent a balance—and it falls to just over 100 in 1982, but in fact the position, as the report makes clear, fell to an index of 94—that is, we were showing this negative position—in the first three months of 1983, and the latest figure that the Department of Trade and Industry has kindly supplied me with shows that for October it had fallen to 89.

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I do not know whether this is a trend. Let us hope it is not. If it is, let us hope it will be reversed. But if this trend goes on, on the one hand, and if the oil surpluses begin to diminish, on the other, then this is the time when surely we ought to be addressing ourselves very seriously indeed to this question. I believe that the excellent report which the noble Lord, Lord Greenhill, has put to us today should form the basis for a further inquiry, a wider inquiry, into our overseas trade. I put forward the suggestion for a special Select Committee on this subject on a previous occasion recently, and the noble Lord, Lord Lyell, said that he would sympathetically consider it. Therefore, I should not like to press him further on it; but shall merely say that I believe that the report which we have heard today should be the first step in trying to investigate fully, and to determine, the causes of and the possible remedies for the serious situation that we face.
There are some, of course, who would argue that an inquiry of this sort ought really to be addressed to the total economic and industrial structure of the nation. There is some substance in that, because obviously the two are interlinked, as our overseas trade accounts for something like 20 per cent. of our GNP. It is a large proportion. Nevertheless there are special aspects of the problem. Much work has already been done within the NEDO organisation into those industries which, in certain circumstances, could contribute more to export earnings. We should do well to bring those together. A great deal of work has been done to inquire into the impact of fluctuating exchanges. Indeed, your Lordships had a very informed debate the other day on the whole subject of the European Monetary System and the possible timeliness or otherwise of our joining that system to get greater stability of exchange rates. Here is a vitally important question to be further pursued.
There is the whole question of competing more effectively with imports, because that is the essence of the problem. It is the imports flowing in which are causing the difficulty, rather than the exports going out, which are continuing to rise. It is the ever-rising tide of imports that creates the difficulties. We should consider how we can compete with them more effectively.
Finally we should be considering whether the aids and the assistance which are provided for exports in full conformity with our various international treaties could not be increased and substantially improved. I believe that there would be merit in following this effective and balanced inquiry into our trading relations with the Community with a further inquiry, taking into account all the good work that has been done here and in no way duplicating it, and widening that out to cover the issue which is touched on in the report and which I believe should be delved into more thoroughly.
7.21 p.m.
Lord Kaberry of Adel: My Lords, I am deeply appreciative of the honour I have in being able to address your Lordships for the first time and I am equally aware of the obligations placed upon me on an occasion of this kind. I am, however,. helped very much by the wide-ranging subject matter before us which involves not only the future prosperity of our
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people. It not only concerns our manufacturers, traders and wage earners who struggle with many problems to overcome changing patterns of trade, but it is upon their success that all people in these islands depend for the increasing standards for which they all search.
We are considering a report which, in effect, is a report of an inquest on the pattern of our trade since we joined the EEC. Quite rightly it gives an open verdict and within the terms of such an open verdict the debate can range, I trust, widely. I hope it can, because, as I have seen, our patterns of trade in this country have been continuously changing from time immemorial. They are changing today and I hope that they will continue to change in the years to come.
I remind your Lordships, who must have personal knowledge, of the many changes in industry and trade which have taken place in the parts of the country which you know best. I recall that as a boy in Leeds I heard of the closure of the Leeds steelworks. Over the years I saw the disappearance of the famous Leeds engineering works, the products of which works had been spread over the whole of the then known world. I saw the decline of the railway foundries, the disappearance of many of our large tanneries, and changes in our chemical works. This was compensated in time and part by the rise of the readymade clothing industry, to which reference has been made already today. That was a success; now it largely depends on which manufacturer one speaks to to get a straight answer about whether it is a success.
That was followed by the rise in warehousing and administrative centres and other new buildings which took their place. It was the resilience of our people to adapt to change and to wage a continuous struggle to find newer forms of industry and trade. Perhaps the greatest asset we have and always have had is the innate capacity, knowledge and determination of our great wage earning forces in this country. They seek to make collectively the finest goods—at least we think they are—in the world and to sell them in the face of the most difficult competiton.
I hope your Lordships will forgive me if I refer especially to those qualities which still exist and have existed for many generations in that part of the country which best I know. In the cities, towns, villages and hamlets which bestraddle our Pennine range, they cover and have done over the past 150 years many industries which have been built up from small beginnings, largely without any of the governmental assistance which has been so readily and lavishly poured out in recent years. There was no limit to their horizon for selling and they were urged on by a spirit of independence, of competence and of adventure. There were difficulties in developments. I have no doubt that many of your Lordships can point to many skeletons of buildings across that range, but, by Jove, today there are many new creations taking their place.
I now briefly refer to the report. With respect and a degree of humility, I offer my congratulations to the chairman and members of the committee for the skilful way in which they carried out their duties. As one who for many years past in another place was a member of Select Committees, or as chairman of the Select Committee on industry and trade and on nationalised industries, I know a little—perhaps only

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in part—of the time which members spend on studying the vast number of reports that are showered upon them like confetti once anyone outside is invited to send a report. There are problems of waging the proper conduct of the examination of witnesses who appear before them. On this occasion the members asked 607 questions. They had answers some of which I would describe as being better than others, but they were all rather helpful in the process of coming to a decision.
After the time spent on this study from January to July this year the committee finally produced this most interesting document, and the least I can do is to thank your Lordships very much for putting before us the many problems which concern us today in our trade and industry. The report ranges over a wide spectrum of industries and finance. It covers (to show that at least I have read the report) questions ranging from the price of cereals to the price of suits in West End stores, from problems about ladies' dresses from the EEC and from sugar to men's shirts. I discovered the interesting fact, in the answer to Question 536, of what is called the "French shirt syndrome"; here it is said,
"No matter how much money a Frenchman has he buys five shirts a year".
A syndrome of that kind perhaps helps us better to understand other nationalistic syndromes which apply to other countries both within and without the EEC.
I must not venture too deeply on an occasion such as this into problems associated with membership. However, may it suffice for me to say that membership of the EEC is not—and was never planned to be—a king of leaning post against which some idle traders could lean and pick up the orders as they went past. That just does not happen. Rather, it should be some form of starting block to give them greater impetus in their urge to manufacture and to trade. The report brings in a large number of factors which apply to our trade worldwide as well as to membership of the EEC.
May I, with your Lordships' consent, briefly refer to one or two matters which have been referred to in previous Select Committee reports. For example, how necessary it is to have some common standards worldwide and to have some international authoritative body which not only can lay down the standards but in fact can have some form of enforcement. Reference has already been made to the urgent need to deal with non-tariff barriers to our trade. They are applied still in a very subtle manner, difficult sometimes to define. But clearly it is a problem which will have to be resolved if we are to have ultimately the fair trade for which we seek.
It is clear still that, despite all the rules and regulations in or outside the EEC, quicker and more effective action will have to be taken with regard to dumping. We have to deal with the unfairness of foreign tariffs, often unilaterally applied against us without any quick response on our part. I appreciate in that regard that we are conditioned in the EEC by our membership of it and that their speed becomes our speed. It is therefore necessary for us to have a lively body urging constant action by the authorities of the EEC. The fundamental facts of free trade must mean some fair trade on equal terms, with no national
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subsidies. Many people believe, even on the Continent, that there are too many hidden subsidies, too many hidden advantages given to our competitors in the EEC.
There is also the question of languages. I feel that our educational establishments could still pay greater attention to the universal teaching not only of the EEC languages but also of the languages of the Far Eastern countries, which would enable our representatives the more easily to penetrate into the interior of Japan or China whenever the conditions may prevail. Everyone reading this report is struck by the detailed attention that the committee pay to the necessity of doing something and of not just sitting back and making complaints about the situation as it is at the present time. I believe that the spirit which urged our forbears to go out to manufacture the best and to sell it in the face of the fiercest competition will still see us through many of the difficulties which confront us at the present time. I hope that this debate will never end—that it will not finish with the conclusion of the last speech made by your Lordships in this Chamber this afternoon. I am certain that trade organisations and all organisations associated with trade and industry will carry on the debate. I, for one, am deeply grateful to the committee for giving a lead, for setting out so clearly the many problems which confront us; and I shall rejoice to have the opportunity at some time in the future of taking part in a further debate on this matter.
7.35 p.m.
Lord Rhodes: My Lords, we owe our thanks to the noble Lord, Lord Greenhill of Harrow, for introducing this matter this afternoon. We who sat on the committee were privileged to sit under his chairmanship because he proved himself one of the best chairmen that ever I have sat under. To the noble Lord. Lord Kaberry, may I give a welcome from an old friend who spent a lot of time in his company in the other place. He has the best characteristics of a Yorkshireman; and, although his Government in 1974 tried to make me into a Greater Mancunian, I am very delighted to say that I still remain a Yorkshireman. I am very glad indeed to have the privilege of congratulating him on a very good speech and to hope that we hear him many times again. To the noble Lord, Lord Bruce (who is a lot younger man than I am) I say that I am not going to rake up the subject of whether we should be in or out of the Common Market.
I remind him that it takes a long time to change direction in human affairs. It took Moses 40 years to bring the Israelites out of Egypt; it took 40 years for the disassembling of Empire; and—mark my words!—it will take 40 years before the true integration of Europe comes about. We are in it and we cannot get out of it because we have nowhere else to go. If he had been able to accompany me to the Far East on the five journeys that I have made, he would rapidly agree with me that to take our place in world affairs we need the countries of Europe working together. It is up to Government—this Government—to do something about what we have in this report.
The noble Lord, Lord Greenhill of Harrow, drew attention to the first paragraph in the study. He quoted the words:

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"The Committee therefore saw a need for an objective study of the effects of membership on Britain's foreign trade designed for the general reader".
It is a bit of a tall order for a general reader. Who is the general reader? The report is priced at £14·45. They are not queueing up at any of the branches of the Stationery Office, I am sure, to buy something like this at £14·45. But it is worth every penny of it to somebody who is in trade or who is a student of affairs in Europe. The primary object of any committee sitting upstairs, as we do, is surely to assist this House in carrying out its responsibilities in a particular field of inquiry. The committee sat upstairs for six months sifting through evidence and coming to what I think were first-class conclusions.
You cannot have discussion on a subject like this without its having repercussions outside this House. So you have in front of you the question of the dual role, and if we accept the fact that we need to be able to bring matters to the notice of people outside the House, then we have to consider how we can get the information to them. My complaint about the way in which Select Committees have been wrong is the way in which their reports have been distributed. What is the use of doing months of work if it does not get to the place where it needs to be read? If we accept that outside this House there is interest in this subject, we should make a new channel of communication, making this House more important, in terms of its usefulness, than ever before.
How are we going to do it? What happens when a report is being made? First of all, there is the oral evidence, which is typed out and available. The investigations leading to this report are nearly 12 months old. Is there a way of getting the information to the people who matter more quickly? What can be done? I do not know whether everybody here got through the post today this document from the London World Trade Centre Association: it makes a criticism of our report which, in my opinion, is absolutely first class. There is no doubt that it indicates a way in which we could spread the knowledge that is acquired, and the opinions that we have come to, to turn our conclusions into reality.
This report says:
"Clearly any attempt at direct contact with individual companies would require an enormous effort with a high level of likely waste. There is, however, a much more manageable channel through intermediaries. For trade and industry subjects, these would include business journals, including British Business and the Financial Times. Over 80 Chambers of Commerce are reached through the Association of British Chambers of Commerce—the CBI with over 200 individual associations, a relatively small number of other active trade bodies, departmental press officers—including, where appropriate, that of the BOTB".
I put that to the Government because of experience I have had in the past when I have pursued this question of where these reports get to. On one classic occasion when we did a report on textiles, 160 copies were sent to the Holborn Stationery Office—I am sure they are very, very interested in textiles in Holborn—but when they sent six to Manchester I thought it was a bit thick. If this is going on at the present time we would like to know about it; and in the hope that it may spur somebody on to take a little bit of action, I will have aword now about the summary of conclusions, paragraph 103, sub-paragraph (vii):
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"the British Government should in particular work for the removal of non-tariff barriers to trade within the Community".
It goes on to talk about what should be done also in the way of disseminating information and encouragement. This report is really a continuation of the report we produced on the internal market, and the same things are cropping up time and time again. This is one of the things that crops up not only in the internal market but also in the one that we are discussing.
The main feature of all barriers to trade is uncertainty. Administrative barriers are hard to estimate in advance and deliberate Government policies to restrict imports are difficult to detect or predict. Here one remembers in evidence what the French produced in terms of trying to obstruct the entry of video recorders into France. There was a flood of video recorders en route for France and they switched the port of entry from the normal one which could deal with the job to Poitiers, which had hardly an office at all and which effectively and successfully impeded the video recorders from getting into France for 12 months. There was a famous case called the Cassis de Dijon which left in its trail a whole series of doubts as to the legality of barriers and doubts about what firms were expected to do. This haziness has had a most unfortunate effect in that many firms have given up trying to find their way through this jungle of barriers.
It would be interesting if the Minister could tell us what action has been taken by the United Kingdom Government since we produced our report on internal conditions and internal trade and the one that we are discussing today. For instance, has the customs documentation been simplified? Have steps been taken to shift many administrative and financial transactions associated with Community trade away from the frontiers and to reduce the documentation to one sheet of paper?
If no representations have been made, what on earth were we doing when we were sitting for so long on the inward market report? We want to know from Government what action has been taken on these matters. Have any steps been taken to get rid of national differences in VAT procedures? These are matters of current importance. What are we doing about Italian state aid? If we cannot stop it, what about harmonising it? However, despite all these difficulties, there is no doubt, from the statistics available to us, that both for the United Kingdom and for the EEC as a whole trade liberalisation outweighs restrictive measures. Well over 40 per cent. of all United Kingdom trade is with other member states, as compared to 30 per cent. in 1973.
Another very important thing which readers of this report must take on board is that the witnesses who gave evidence before our committee said without exception that they were better off within the Common Market than out of it.
Unfortunately, there is a general lack of understanding by Governments and people of the advantgaes which are to be gained by having an integrated Community. Consequently, the political will is not there to achieve it. I say that we are in. We cannot come out. We have nowhere else to go and we should do all in our power to revive our situation. Otherwise the time will come when we shall regret this

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inaction. When much of our industry has disappeared, and the Pacific nations dominate the consumer and the consumer durable market, it will be too late to regret the fact that we have not done enough in our day and generation to make this integrated Europe work.
7.50 p.m.
Lord Hayter: My Lords, I confess to finding myself very cynical about lots of matters in connection with the European Economic Community, but I join the noble Lord, Lord Rhodes, in saying how adroit, expert and tactful our chairman was throughout this committee and he has cured some of my cynicism. But I also follow the noble Lord, Lord Rhodes, in talking about the dissemination of this report and I would be presumptuous enough to make a suggestion to a general reader who happens to come across it. There are 424 pages and I suggest that the first thing to do is to forget all about the statistical pages. That will solve part of the problem. Having done that, I suppose that, logically, one should also ignore the witnesses who claimed to be economists. Of course, some of them were brilliant, as the noble Lord. Lord Greenhill of Harrow, said, but they were so boring. If one does that, one gets to the rest of the report and is faced with the question: so what?
From an industrialist's point of view, the report makes most interesting reading. It is always good to know what the other chap has been thinking, and some of the witnesses were most frank about the conversations that they had had in the various committees, their associations and their board meetings. Then, again—a point that was mentioned in the excellent maiden speech—one can follow the subtle influence on industry of the country's foreign policy. I have been mixed up with a company which has been going for 160 years. and I read about how in Victorian times our thoughts were naturally led towards what I tactfully call the senior members of the Commonwealth. Then at the turn of the century we, for our part, turned to tsarist Russia and to South America and then, more latterly, to the Far East, the Near East and now, finally, to Europe.
I have to admit—I do not know whether with pride or with shame—that our company went into Europe a long time before this country went into Europe, because we suddenly realised that that was going to be the market of the future. The difficulty that arose from that was the simple one that we set up factories in Europe, to the detriment in a way, I suppose, of our factories here, because had we been in the European Economic Community our goods would have been manufactured here and we should have been concentrating on marketing in Europe as a whole.
Serving on this committee has emphasised to us, as one person after another has said tonight, the difficulties of the non-tariff barriers, of which, in my own case, I think standards the most important. Standards of design, standards of quality, standards of performance—all of these can he manipulated to make a very bitter experience for those people who are novices going into Europe. By the way, I forgot to give your Lordships one very good example about statistics, which, as our report said, show a lot of discrepancies because of trade definitions and revisions to
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more recent data. One of our best witnesses, the British Electrical and Allied Manufacturers'Association—gave an excellent example of this, when the export of mobile radar equipment worth over £1 million was, instead of being credited to them, credited to the car industry because it had wheels. That shows what can happen so far as statistics are concerned.
But, to get back to standards and to the bitter experience that can follow from them, there used to be talk in the old days about perfidious Albion, but I can assure your Lordships that we have nothing on France or Germany when it come to some of these troubles. The report states very clearly that trade is not yet free and the Community is not yet a Common Market, and I blame standards, administrative procedures and the state aids about which the noble Lord. Lord Rhodes, was talking. Of course, there comes into one's mind the phrase, "What's sauce for the goose is sauce for the gander", but long term I think most industrialists know that the famous word "harmonisation" will be the correct answer. When the time comes for a European standard in the various industries which are trying to make a living in Europe, then we shall have gone a very important step forward.
We have lost 15 years' momentum and we have to make up that loss. One of the reasons why we have to make up that loss is not only the economic one but the political one. A long time ago, I was privileged to hear Sir Robert Menzies speak in Australia about our entry or our possible entry—because we did not go into it at the time—into Europe. He said that it was a political concept, but one that had kept us free from war in this continent of ours for the best part of 40 years. That is why we have to support it and that is why we have to make our way.
The Motion asks that this House will take note of the report. I am sure that the House will take note of the report. I hope that industry, too, will take note of it, because there are points there of interest to anybody. And I certainly hope that the Government will take note of it. As has been mentioned, we had some excellent witnesses from the Department of Trade and Industry and it was they who saw, and indicated, the way in which they could combat the problems of the non-tariff barriers. They have a big part to play. Individual industries cannot do very much; even the trade associations can do but little more. But with the help of the Government, I am sure that we can make a really good contribution to the future of our conduct in Europe. We are there to stay and so we had better get on with it.
7.58 p.m.
Lord Molloy: My Lords, may I first congratulate the noble Lord, Lord Kaberry, on his maiden Speech and say how pleased I was to hear again that voice which I heard so often over very many years in another place, and I am sure that he will not feel too upset at hearing my voice again. The compliments that have been paid have been very well deserved.
With regard to the committee under the chairmanship of that very able chairman, I do not know whether to congratulate them or to commiserate with them. It has been an extraordinarily difficult task. One must be fair. What we all suffer from—some of it makes us angry, some of it makes us a little upset and

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some of it makes us feel deceived, whatever side we are on—is the enormous propaganda campaign, some of it downright lies, some of it pointing out so many wonderful things, as if we had been a little offshore island in the North Sea which the world had forgotten about. Now, after we had been tossed around for so many years, this wonderful EEC would allow us to join it and, therefore, to be successful.
But there would not have been many of those great countries in that EEC if it had not been for this country, and it would have been a totally different Europe altogether. I sometimes think that that should now and then be said.
We must never forget the political abomination which decided to wipe out an entire people by the million. They could have won, and almost did win, and there was no Common Market around at that time. We must never forget the role which this island played, followed later by the Soviet Union and the United States of America.
Therefore I agree with those who say that perhaps our greatest mistake was not to join the Iron and Steel Community right from the beginning. We made a massive contribution from 1945 to 1950, when France, Germany, Holland and Belgium were laid waste and the economy was run on a couple of fags, a bar of soap and a bar of chocolate. We made a generous contribution but we ought to have been in the Iron and Steel Community right from the beginning. We should have been the foremost member discussing the matters which resulted in the Treaty of Rome. But now we are in the difficult situation of knowing that all is not well. Nevertheless, we have to be realistic. This Chamber should acknowledge that it is not the EEC which has led to failure. The failure lies with the gross exaggerations of big business, which campaigned on the basis that all was going to be lovely if we joined the EEC. It is unfair to blame our membership of the Community. We must never again allow those who embarked upon one of the greatest deceptions I have ever known in my life to say such things. When asked, people say, "I voted to go into the EEC: I was all for it". The vote for entry into the EEC was overwhelming because of the power of propaganda. During that campaign the biggest casualty of all was truth.
The members of this committee have made, by their report, a sensible contribution which will help us to understand what really is the position. It would be quite useless now to say that some of us are for staying in the EEC and that others are against it. We are in Europe whether we like it or not. However, we should not be made scapegoats, as we already have been. During the summits to be held in May and June of next year the voice of this country has got to be asserted. Europe must remember that the ultimate ideal is a common market. Very few of the trade barriers have been removed. People say that we have got to remain in the EEC. We must resist that assertion and ask, "How on earth did we manage before we joined the EEC?" We must move forward to a new era and take a leaf out of the activities of EFTA, which is still doing many remarkable things. When one looks at the EFTA countries—we belonged to EFTA at one time—one sees the absolutely remarkable progress that they have made. They have moved into an
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alliance with Yugoslavia. This may be a pointer to the future. Instead of hurling terrible weapons at one another, the countries on either side of the iron curtain ought to begin trading with one another. The EEC has failed hopelessly in this connection.
I believe that we have to stay in the EEC. The Government have said that they will help people in all sorts of ways, by providing financial help and information. We all acknowledge that Britain's foreign trade has shifted towards the EEC. If it has shifted towards the EEC, one has to ask: from whence has it been shifted? We ought not to be too happy about the answer to that question. Britain's foreign trade has shifted from some of those countries which in our hour of need said, "We stand beside you foursquare". In other words, it has shifted from many parts of the British Commonwealth. Many Members of your Lordships' House know that when they go abroad on IPU or CPA delegations this is still pointed out to them. We cannot dismiss this as just an emotional spasm. They still feel very deeply about it. We should have created a balance. The EEC could have joined us in obtaining better trading arrangements within the Commonwealth and, indeed, within the EEC. It is not too late, I believe, to achieve that aim. I should much prefer us to work along those lines than to sustain the ugly, offensive practice of keeping prices up, resulting in butter and beef mountains and wine lakes.
I do not know whether the committee realise—when I read the report I saw no evidence of it—how much it costs to build these massive warehouses in which to keep the butter, the beef and the thousands and thousands of barrels of wine. When one realises that the cost of building those warehouses, storing the surplus products and maintaining security would keep London going for 18 months, it makes one think. So we have to say loudly and clearly that surely there must be a better way.
I hope that I shall not be regarded as being too heavily anti-Russian. I am not against the Russian people. I do not like the political system in Russia, but when I hear voices in Europe telling us that we must have nothing to do with those awful people in the Eastern states, but that they can help us out by buying millions of tonnes of our beef and butter which we will not allow the British or the French old age pensioners to have at a reduced rate, and then I hear that these magnificent administrators have discovered that they sold too much and must buy back from the Soviet Union at a dearer price than that at which they sold the beef and the butter, particularly the butter, it is far from good enough.
I do not suppose that many of my fellow Britons will read this remarkable report. A previous speaker said that its cost—£14.45—is a deterrent. That is perhaps the reason why people will not read this astounding report. However, the balance which is sought is sensible. Certainly the report is not sycophantic on the one hand or offensive on the other. The report contains points which we shall ignore at our peril. There is little doubt that the private enterprise system comes out of it very badly indeed. The leaders of industry in this country are shown to have very little initiative.
The figures which were read out by the noble Lord, Lord Ezra, were disturbing. We have heard statements

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made by Treasury Ministers on the Front Bench opposite. Somebody is not telling the truth. Either those Treasury Ministers were not telling the truth, or the noble Lord, Lord Ezra, who read out that data, was wilfully untrue. Therefore I ask the Minister to get hold of Hansard, take it to the Treasury Ministers who sit on the Front Bench and ask them either to confirm what they have said about this massive improvement or to admit that they, too, were led up the garden path and must withdraw some of the things they have said over the past 12 months. Either we have to accept what they have been saying or what the noble Lord, Lord Ezra, and this report is saying. When we had a big debate about the EEC before we went into the Community, truth was the greatest casualty. One of the great things about the report is that it shows no bias, it is courageous. and it is as factual as can be. Those qualities must be acknowledged.
An article which was published in The Times on 7th July had this to say:
"Britain has been slower to adapt its attitudes to a number of EEC markets than member states who have been playing the game longer".
One cannot blame the Common Market if our initiative is not there. On the other hand, the article went on to state:
"Britain exported over £13,874,000 of manufactured goods to the EEC last year. But, to the continuing embarrassment of the pro-EEC establishment, our net trading position has clearly deteriorated on the job-creating manufacturing side since we joined the market a decade ago".
The article continued with these words:
"Ten years of surpluses before entry have given way to ten years of deficit since".
Whether one is pro- or anti-Common Market, statistics of that kind can give pleasure to no one. One may be violently anti-Common Market but on reading such a statistic, one has to acknowledge that such a situation hurts and damages Britain; that it helps to create that most vile of all conditions—unemployment within the ordinary British family and the loss of work by the breadwinner. which is a very dangerous situation. So even those who are anti-Common Market should not feel too much glee at such facts in the report or in The Times.
If both the report and the debate in this Chamber are examined by Government Ministers in depth, they should give some indication as to what should be done to set matters aright in the forthcoming summits with regard to the EEC. I was never in favour of Britain joining but the vote to join was overwhelming, and therefore those who would oppose it afterwards can only label themselves as being totally undemocratic. Once we went in, we gave of our best.
Another point I should briefly like to draw to your Lordships' attention is the farce and tragedy of the European Parliament. Nobody knows who sits there. Nobody knows who they are. Nobody knows whether they make any speeches. They all seem to be doing their best to get into another place rather than stay where they are. It is a fiasco. It was not always like that, I can remember when I was a Member of the European Parliament. I remember that Conservative Members. Liberal Members and Labour Members—particularly my noble friend Lord Bruce of Donington
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—were almost hated by the commissioners. My noble friend's great crime was that he knew his stuff better than they knew theirs. The commissioners did not like me because I could not get out of the habit of that lapsus linguae of referring to them as "commissars".
The fact was that we could stand up and say—as we did very often from all parties in that European Parliament—"We are not satisfied with what has happened here today. We do not accept the commissioners' explanations. We believe that our country is not getting a square deal". Then would come the line that frightened and concerned them: "We will go back to our Parliament and explain what has happened". That used to have most beneficial effects—not merely beneficial for Britain but also for the principle of the European Economic Community. That has been lost and is probably gone for ever.
As the report before us is very comprehensive. I intended to speak about it at great length but I realise that other noble Lords wish to speak as well. There is one other element of which I should like to make mention: I should like to see more concern shown with regard to the handicapped of Europe. The handicapped people of Europe are an integral element of EEC social policy. But surely social policy does not amount to much if it is mentioned only once every five years.
I believe that the principle of reciprocity of our National Health Service ought to have much more attention within the Common Market than it has. It is a great principle and I hope that Mr. Ivor Richard, the Commissioner for Employment and Social Affairs, if he reads of this debate. as a former Member of the other place, will see to it that the principle of reciprocity within the NHS is given far higher status than it has at the moment.
To unite on health is the greatest cause and therefore must hold the prime position in all countries and all segments of public life within the EEC. If that aspect was given a much higher status and more attention throughout the Common Market countries, there would be a feeling that at long last, on fundamentals, we are getting together, because health is the handmaiden of peace and contentment.
The European Parliament needs overhauling. The British Parliament and other parliaments should see to it that we can no longer depend on cut throat competition and that what is really required in the EEC is ECP—namely, economic community planning. If there is proper, decent and sane economic planning within the Community, then we can make a success of it and we shall not I hope have to wait for the 40 years adumbrated by one of my noble friends earlier in this debate. If we are to make a success of it, it should not be for all the politicians and all the commissioners; and not for all the businessmen, bankers and financiers but for the real people who count: the ordinary folk. When the ordinary folk of all these countries can see that it is worthwhile joining and that it will achieve not merely an economic victory, it will make a massive contribution to world peace.
8.17 p.m.
Viscount Rochdale: My Lords, may I start by adding my congratulations to my noble friend Lord Kaberry of Adel for his very interesting and important maiden

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speech? The noble Lord, Lord Molloy, will forgive me if I do not follow him in everything he said. But I was extremely interested in what he had to say about the European Parliament. I agree with some of the points he made—particularly the point he made right at the beginning of his speech: that we should have joined the Community right from the word go, just as the noble Lord, Lord Greenhill of Harrow, said.
I was privileged to be a member of the sub-committee which produced the report. I should like to say straight away how much I valued sitting once more under the chairmanship of the noble Lord, Lord Greenhill of Harrow. He carried us along through a very difficult maze of information, which is something that many chairman cannot so easily achieve.
As other noble Lords have said, and as the report says right at the beginning, we were trying to provide an objective study of the effects of membership on Britain's foreign trade designed—and this point has been mentioned over and over again—for the general reader. I believe that the report as it has appeared has demonstrated how important that need was. For myself, and no doubt rather naively, I hoped that we might go rather further and that we might even have produced a report that would be a sort of child's guide to the situation. But the report itself shows how very wrong I was; how impossible such a thing would have been. It leaves me in no doubt at all as to the complexity of the subject with which we are dealing. The very fact that the report brings out that complexity shows, to my mind, that it has done a very important job of work.
It is true, and this point has also been mentioned, that the outcome of the past two general elections has gone a long way to consolidate our membership of the Community as our permanent niche. Yet during those campaigns, and since then, one has heard over and over again opinions voiced to the contrary, sometimes, no doubt, put forward with sincerity, but, in my view, based too often on over-simplification of a very complex situation—over-simplification which resulted in a quite wrong expectancy of results in the early days; and over-simplification today of the reasons for our actual experience during the time of our membership.
The question we had to answer, to my mind, quite a simple question, was has our trade benefited or otherwise from membership? Was membership a help or was it a deterrent? During the course of the inquiry we, of course, had access to an enormous amount of statistics, but statistics that were by no means always calculated on the same basis, which made their interpretation exceedingly difficult. To my mind, it is that difficulty that has added to our problem.
Already there were in existence various trends, various changes, various motions affecting our world trading position which had nothing whatever to do with our membership of the Community. Let me just mention one or two. There was the growth in the world of the new industrial countries. There was the restrictive trading from some former Commonwealth markets. There was the erosion of the Commonwealth preference system. There was the fall in Britain's share of world trade. And in consequence of many of those trends—and there may be other reasons as well—there had been as a result a shift of our trade into Europe,
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which again had really nothing whatsoever to do with whether we were going to be a member of the Community or not. Those situations were there.
What I have mentioned are just a few of the underlying long-term changes affecting the pattern of our trade. Others are mentioned in the report, and have been mentioned in your Lordships' House this afternoon, which were going on long before our entry into the Community and obviously they blur any easy assessment of the consequences of our actual entry into the Community. That did not make our job in the inquiry any easier.
Looking at the situation once we had become a member, there are other factors which again make an easy and clear assessment of the situation more difficult. One of the most interesting points that the report brings out is the different ways in which membership is affecting different industries; and not only that, but the different ways in which membership affects different sectors of the same industry. It all makes a very complex picture, so that it is not easy to say that being a member has been an advantage or it has been a disadvantage.
Let me mention just very briefly two or three examples. For instance, the chemical industry, as the report says, has an almost uniquely successful record, both within the Community and elsewhere, and has been really little affected by membership. The steel industry, with all its problems, and its need, along with the steel industries of all the Western countries, to be streamlined, seems able now to find important export customers in Europe, always provided that its continued improvement of efficiency can be maintained. Then one looks at the mechanical engineering industries, the electrical engineering industries, and they illustrate the point so well of the widely different degrees of success, or lack of success, in Europe experienced by different sectors of those industries.
The motor industry, seemed to have a fairly neutral experience from membership; textiles had a not entirely unworthy record in Europe, but like textile industries of all the Western European countries it was more affected by other outside industry from further afield, from the Far East. No doubt these various industries are strengthened by common membership and working together.
The clothing industry, which one noble Lord has mentioned, shows an encouraging record and again one where membership no doubt provides co-ordinated defence against low-cost competitors from far afield. Of course, the clothing industry has done extremely well in pursuing and exploiting a very selective market in Europe, and I think it is to he congratulated on the success it is having there.
Having said all that, there are one or two industries I have purposely not mentioned. I have not mentioned processed food; no doubt the noble Lord, Lord Sainsbury. will be referring to that. But the different industries can show very different results, and this complicates a clear picture of advantage or otherwise. There are, however, certain common threads, I believe, in our experience which stand out and are very important. Undoubtedly membership has been a spur to competitive effort throughout British industry, and

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to greater efficiency. This, I believe, has been a valuable lesson.
Undoubtedly our membership has re-emphasised the enormous importance, particularly in a sophisticated market like Europe, of good marketing. While marketing in such circumstances may be easier for the large firms, marketing for the small firms, we learnt in our inquiry, is often very difficult. With world trading conditions as they are today, both these lessons—greater competitive effort and better marketing—must be of value generally to British industry, not only in Europe but for the trade that it is doing around the world. So our membership has taught some good lessons.
Again, having said all that, the really significant fact that comes out in our inquiry, with all its complexity, is that notwithstanding all the evidence we received. whether from those who have been and are successful in Europe or from those finding matters very difficult, from none did we meet other than a strongly voiced view, from the point of view of British trade and industry, that it would be nothing less than a disaster to contemplate withdrawal at this time.
It may be that when membership was being advocated in the early days, and no doubt advocated with great sincerity, the political advantages that might be experienced were sometimes overstated. It may be that as a result there have been disappointments. There have been disappointments. Unexpected obstacles have emerged. Many references have been made this afternoon to non-tariff barriers. All these have emerged. But, for all that, we found no case for thinking that a wrong step was taken at the time when the country decided to enter Europe.
I hope that this report will be carefully studied. It is expensive but it has an enormous amount in it of importance. I hope it will prove to be a valuable tool, helping to point the way as different obstacles are overcome, so that we can go forward as a unique world trading bloc of ever-increasing strength, perhaps with different countries specialising in different industries where best they can—whether by industries or by sectors of industries. That may well involve a degree of adaptability which in some cases could be a little painful: but specialisation is something that we heard about and is something that can pull together an industry as a body. I am thinking of the motor industry where parts are made in one country and assembled in another. and so on. It will produce a trading bloc in which British industry will be able to contribute to the full and to a very marked extent.
8.32 p.m.
Lord Sainsbury: My Lords, I venture to take part in this interesting and important debate because agriculture and food obviously play a part in the pattern of trade. Moreover, they are subjects which have concerned me for many years as a member of Subcommittee D. The report points to the level of agricultural self-sufficiency in the United Kingdom which has increased by a considerable amount during our membership of the Community. It is unfortunate that members of the Community have interpreted—in my view incorrectly—one of the objectives of the common
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agricultural policy as being the attainment of a high level of self-sufficiency.
I am sure that your Lordships are all well aware of the huge agricultural surpluses which have resulted from the operation of the CAP. Experience shows that a policy aiming for a high level of self-sufficiency, coupled with open-ended price guarantees, invariably produces surpluses. The high price levels have encouraged considerable productivity gains while demand for food has increased but little. I must emphasise that the increase in the level of self-sufficiency has been a consequence—some may say an unfortunate consequence—of the operation of the CAP. It is not explicitly stated in the Treaty of Rome as being either the objective or an intention of the CAP. The objectives of the CAP, as stated in Article 39 of the Treaty, include the stabilisation of agricultural markets and the assurance of the availability of supplies. As Mr. Buckwell, from the University of Newcastle-upon-Tyne, so rightly pointed out when giving evidence to the committee, stability and self-sufficiency are two quite separate things. There are means of stabilising the market and ensuring adequate supplies at any level of self-sufficiency.
The increase in agricultural productivity and the production of surpluses have naturally affected the trade pattern, not only of agricultural raw materials but also of processed and manufactured foods. As is to be expected, the ratio of food and drink imports to consumption has fallen rather slowly from 1972 to 1978; but thereafter it fell sharply. In the past 10 years there has been a fall in the United Kingdom's volume of imports of all foods. Exports have more than doubled. although it was a doubling of a comparatively small figure. The United Kingdom's trade deficit for food rose in value but this was because prices of imported food more than trebled. Perhaps more significant has been the shift in the direction of the United Kingdom's trade towards the Community.
An interesting figure brought out by the report is that the Community now supplies almost half of all United Kingdom food imports. as against one-fifth or so in the early 1960s. This shift in the direction of trade has been to the detriment of many of our former trading partners. It is of concern that at a time of increasing protectionism and bilateralism these countries are losing their markets in Britain and in the EEC. The most current issue is of course that of the special access arrangements for New Zealand butter which are under review. The European Commission's proposal for reducing even further the import quota for butter will do serious harm to New Zealand's dairy industry and its economy. Britain, as opposed to most other members of the Community, has always been a net importer of food. Unfortunately, this has caused a conflict of interest between members because Britain, by paying the high prices for imports of products protected by the CAP, has effectively been making budget transfers to the Community. The reduction in the United Kingdom's imports has reduced the total amount of these transfers but not to an extent that is great enough to alleviate the conflict.
In discussions on the CAP, its effect on the food manufacturing industry is often overlooked. In particular, the industry is disadvantaged by EEC raw material prices which are sometimes considerably

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higher than world prices. For example, Community prices exceeded world prices on 1st December 1982 by 68 per cent. for common wheat and 149 per cent. for white sugar. Not only have there been these added costs to the industry but also sometimes increased difficulty in obtaining raw materials.
Although the food manufacturers justifiably complain about the operation of the CAP, they show a positive and commendable attitude towards membership of the Community. The Food Manufacturers' Federation is quoted in the report as saying:
"We happen to believe there is quite a bit wrong with the Common Agricultural Policy. We do not see the way to solve that particular problem is by coming out".
Certainly we all accept that the CAP is in drastic need of reform. However, despite the disadvantages incurred by this policy, membership of the Community does provide the food industry with valuable scope for improved export effort.
So often Britain's consumer interests are neglected when policy decisions are taken in Brussels. Although consumers may have benefited from a wider choice of foodstuffs as a result of food imports from the Community, they have certainly paid higher prices for some foods. The Ministry of Agriculture, Fisheries and Food has estimated this additional cost of food imports from the Community in recent years as being between £200 million and £300 million. Given these figures, it is possible to challenge that the CAP has achieved its objective of ensuring that supplies reach consumers at reasonable prices. Consumers would claim it has not.
In conclusion, may I add my congratulations to the noble Lord, Lord Greenhill of Harrow, and his colleagues. I hope the report, detailed and extensive though it is expensive as it is—will have a wide readership. It illustrates that in spite of all the Community's imperfections, our continued membership is so vital to the future of our economy.
8.43 p.m.
Lord Brimelow: My Lords, if this debate has demonstrated anything, it is our tendency to stray outside the strict terms of the subject under debate. I think that we have touched on pretty well every aspect of the Community of which we disapprove. The terms of reference of the report as stated in the sub-title are:
"The United Kingdom's changing trade patterns subsequent to membership of the European Community".
I emphasise the term "subsequent to"; it is not "consequent on" or "caused by". The temptation to explore whether a temporal sequence justifies the assumption of a cause and effect relationship is irresistible. Sub-committee B succumbed to that temptation and we have succumbed to it this evening. In that I see nothing bad. The exploration has shown that, in the matter of the trade patterns subsequent to our joining the Community, the terms "subsequent to" and "caused by" are not congruent.
In trade in agricultural products it is possible without difficulty to demonstrate that there is a causal relationship between the CAP and the changing patterns of our trade. The noble Lord, Lord Sainsbury, drew attention to that. I share the apprehensions he
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expressed about the Commission's present proposals with regard to our trade with New Zealand. But the sub-committee's report also showed that when we move from trade in agricultural products to trade in manufactured goods it is far more difficult to establish what the effect of our membership has been on the changing patterns of our trade. In many industries it is clear that membership has not been the dominant factor. From this I think one conclusion emerges. That is that the relationship between our membership and the patterns of our trade is not clear and is not the same in all industries. There is a temptation always to make simple assertions on that subject. Simple assertions are nearly always wrong.
I now pass to the one reservation that I have about the recommendations in this report. I was not a member of Sub-Committee B when the oral evidence was being taken. I became a member at its last session, when the draft was already being considered. I, too, pay tribute to the noble Lord, Lord Greenhill of Harrow. I have worked under him in different capacities. I think he has steered the committee very well in producing this report. But I have one reservation about Recommendation (vii) in paragraph 103. That recommendation begins:
"the British Government should in particular work for the removal of non-tariff barriers to trade within the Community".
Several previous speakers have supported that recommendation. Given the complexity of the relationship between our membership and trade, the difference between industries and the difference between commodities within a given industry, I find that recommendation a little bit too sweeping.
Let us take for instance the motor industry. On page 173 there is a reply to Question 321 by Mr. Turnbull, the President of the Society of Motor Manufacturers and Traders. He was very reserved on the question of getting rid of non-tariff barriers to trade in so far as the motor vehicle industry in this country might be affected. What he said was:
"it is always a possibility that the industry' will decline virtually to nothing with negligible investment in the motor industry in Britain. At that stage we would have to import substantially more vehicles than we do today. The balance of payments could change adversely to the effect of almost £7 billion, as we have already pointed out to the Treasury. This shocked the Chancellor and his colleagues but we have said it is a very real possibility unless we have some long-term strategy planning for the industry".
In other words, the establishment of a true common market, with no barriers at all, could be bad for the health of the motor industry.
The report is discretely reticent on the methods which have been used to give the motor vehicle industry such modest degree of protection as it still enjoys. The report is equally reticent on the very large sums of money that have been transferred to foreign motor vehicle manufacturers as a result of the high prices which they are able to obtain in this country. These are not consequences of our entry into the Community. In so far as Community-manufactured motor vehicles are concerned, they appear to be derogations from the conditions of the Treaty of Rome. Nonetheless, I think that the recommendation needs to be looked at a little carefully as regards the motor vehicle industry.
If your Lordships look at the evidence of Mr. Grierson on behalf of the General Electric Company,

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you will see that he, too, was somewhat reserved about the concept of a truly free common market. I have in mind his answer 390, on page 216. That is my reservation.
I should like to make one broader comment. With regard to many commodities, chiefly manufactures, it cannot be demonstrated that our membership of the Community has made much difference to the patterns of our foreign trade. Some people in this country have been tempted to argue on that basis that in relation to those commodities our withdrawal from the Community would not make much difference, either. That is a non sequitur. What the report brings out is that the patterns of trade are affected by many factors additional to the simple fact of being in, or not being in, the European Community.
Those who have thought with care about the consequences of withdrawal are aware that, after our withdrawal, the subsequent patterns of trade would be influenced not so much by the mere fact of withdrawal as by the trade stategies, and in particular the protectionist policies—if we were to adopt the alternative economic strategy—which we followed after withdrawal, and also by the reaction to our policies of our trading partners throughout the world, and not only within the European Community.
If we were to withdraw, we should be facing problems quite different in nature and in scale from those reviewed in the report which we have been debating tonight, and in my opinion the only conclusion which can be drawn from the report about the handling of a post-withdrawal situation is that we should need eyes on every side of our heads all the time.
My own approach to the European Community is sceptical and beady-eyed. I do not have a very high regard for the institutions of the Community. I follow the historian R. H. Tawney in the observation that institutions tend to develop into parodies of the hopes originally placed in them. But nothing in this report has undermined my belief that we are better off in the Community than we should be if we were to withdraw from it.
8.55 p.m.
Lord Hatch of Lusby: My Lords, I must start by thanking the noble Lord, Lord Greenhill of Harrow, for his chairmanship of the committee and the production of the report. I would also express my sympathy with the noble Lord, Lord Lyell, who once again, in yet another debate on economic issues, is having to sit on the Front Bench without the presence of the eager-beaver businessmen who give such support to the Conservative Party.
I should like to take up two points that have been made—first by the noble Lord, Lord Bruce of Donington, and then by the noble Lord, Lord Molloy—about the effect on the Commonwealth that is shown in the report of the changing of British trade as a result of membership of the EEC. But I do not want to pursue that aspect simply on the issue of the Commonwealth, because I should like to pass on from referring to those two noble Lords to what the noble Lord, Lord Ezra, said tonight, as he said it on a
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previous evening, in a wider context; namely, the effect of British membership of the EEC—and a variety of other issues, too—not just on the Commonwealth but on our trade with the whole of the developing world, indeed with the half of the world market which is at present closed.
The noble Lord will not be surprised if I repeat some figures. I have only one point to make, and it is contained in paragraph 8 of the report. on page ix. The paragraph states:
"Despite the changes in world trading conditions during the 1970s, certain long-term influences continued to affect United Kingdom external trading patterns in the same fashion as in earlier years, and in particular to promote the exchange of goods with members of the Community. During the 1960s, the importance of external trade relative to domestic output grew steadily; manufacturers accounted for an increasing share of imports; and the share of trade with other industrial countries, particularly the six original members of the EEC, the USA and Japan, rose while that with other developed countries outside Western Europe and with the rest of the world diminished".
None of us can be complacent about the situation that we are discussing tonight. Only this week it has been revealed that in the month of October there was a trade deficit—a trade deficit of£269 million. Already in the Autumn Budget Statement the Chancellor had reduced the budget forecast from a forecast earlier this year of a balance of £1½ billion to a balance of half a billion pounds. We now know that in October imports rose by £508 million or 10 per cent. to a record figure, while exports fell by 1½ per cent.
It may be that the Chancellor will achieve his revised objective—revised from £1½ billion to half a billion—but surely the trend is quite obvious and is bound to endanger the economic future of this country for the rest of this century once North Sea oil begins to decline. That surely is the danger to which we should be addressing ourselves and the issue about which we should be asking ourselves when we question what effect membership of the EEC has upon our trading pattern.
I am one of those who for over 20 years have opposed British membership of the EEC, but I have done so on totally different grounds from those of many of my own colleagues and, indeed, Members on the other side of the House. Some of my colleagues have supported British membership of the EEC as an internationalist gesture. I believe that it is the opposite. I believe that it is basically joining a rich white man's club, excluding many of our traditional trading partners who are neither rich nor white.
However, having joined the EEC and bearing in mind that the decision has been confirmed by the electorate—and we must fully admit that, although we are still entitled to criticise the effects of membership of the EEC—it is our job to ensure that the EEC performs its highest ambitions and does not just bumble along on the lowest common denominator. It seems to me that what has happened since we joined the EEC has borne out the fears of many of us that we were cutting ourselves off into a segment—admittedly a big segment—of world trade, but a segment that is circumscribed by the particular effects of the Industrial Revolution of last century which has given us a wealth which separates us from the vast majority of mankind.
There is a certain degree of complacency or limitation in the report which could be overcome by

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the proposal put forward by the noble Lord, Lord Ezra, for a committee of this House to look into the whole trading pattern of Britain including not only the EEC but also the EEC in relation to the rest of the world. As a member of the EEC I believe that we should be taking a lead. There are others in the EEC who would certainly support us—for example, those who have supported the concept of the Lomé Convention and who want to see the Lomé Convention greatly widened and greatly strengthened.
What in fact has happened has happened not just because we joined the EEC but because we joined the EEC and then removed all restrictions on the export of foreign exchange. That was done in 1979. What have been the results? The results are shown not just in the figures of the report but in the figures which I have given the House previously and which I make no apology for repeating. In the last recorded year the United Kingdom sent 18 per cent. of its exports to the non-oil developing countries. In the same year Japan sent 31.1 per cent. of its exports to developing countries and the United States sent 31.8 per cent.
. Why is there this disparity? Why is Britain with its long, historic relations with Commonwealth countries—previously with colonial countries—so far behind those who foresee that the future prosperity of this country and the people of this country, and particularly the future prosperity of the present generation—the younger generation of this country—depends upon our relations with the world that today cannot buy our goods? Since restrictions on the export of capital from this country were removed, although British domestic capital has increased by only 15 per cent. our outward direct investment in Western Europe—in other words, in our competitors in the developed world—has increased by 700 per cent. That is the kernel of the issue.
If we are to take the report seriously we must expand it—as the noble Lord, Lord Ezra, has suggested—into a whole examination of our export policies, the way in which we support our exports, the markets that we seek in other countries and the manner in which we enable, assist, and develop those markets which today lie fallow before us. We shall then be able to use this valuable report as a starting point rather than as a final document.
9.8 p.m.
Lord Kearton: My Lords, it was a privilege to sit on Sub-Committee B under the chairmanship of the noble Lord, Lord Greenhill. We dealt with a complicated subject. We had masses of documentation and masses of statistics, but the noble Lord, Lord Greenhill of Harrow, steered us through this maze with calm efficiency and courtesy which it was really an education to experience. The way in which he brought out the best in all our witnesses was also something which betrayed his long experience in the diplomatic field. It was also a pleasure to be here for the maiden speech of the noble Lord, Lord Kaberry. The noble Lord, Lord Kaberry, was not only eloquent, but he demonstrated by his comments that he had actually read the report. At least, he had certainly read the part of the report which dealt with textiles, and he made some extremely interesting comments on it.
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It has also been fascinating to hear the different contributions, which have covered most of the points of detail in the report which one might have wanted to bring out. The oratorical styles in this House are extremely stimulating to listen to. Anyone who has come from the very calm atmosphere of business finds the cut and thrust of this House quite startling, although I have reason to believe that the cut and thrust in the other House is even more vigorous. However, in this House it is conducted with a charm and good nature which adds to its effectiveness. Therefore, in my few comments I shall try to use a rather broad brush.
Entry into the Common Market, with the elimination of tariff barriers, was a sensible thing to do. As the committee found, entry did not cause any violent shift in trading patterns. Trends which were already well established were moderately reinforced. The mutual trade between the other members of the Common Market and ourselves has expanded and will continue to expand, and any interference with this process could only be harmful to us.
It can be argued that in some areas our Common Market partners have been more vigorous in opening up our markets for their products than we have been in penetrating theirs. It remains true that nationalistic buying is still in evidence in some key activities, such as telecommunications. Each state in the Community reserves some products for domestic manufacture. It is also true that the dismantling of non-tariff barriers to trade has proceeded more slowly than was hoped, and in this country we maintain a reserve towards the European Monetary System which is deep-seated.
Among the members of the Community, no matter what is sometimes published, there has in effect been little abrogation of national sovereignty. Except in the area of the common agricultural policy, the Common Market is closer to a customs union than a truly common market. As the noble Lord, Lord Ezra, pointed out and as the report makes clear, the real upheavals in trade since our accession have been due to rises in energy prices, to our emergence as an important producer of oil and to exchange rate fluctuations. The high exchange rates of 1980 and 1981, coupled with high interest rates, followed nearly a decade when some branches of industry failed to keep up with overseas productivity achievements and product development. As a result, in the early 1980s there was a scrapping of some of our industrial capacity. There were essential productivity gains in the remaining installations, with the effect that we experienced a rapid fall in manufacturing employment and an increase in total unemployment conservatively calculated at 3 million.
The Government rightly take satisfaction in the fall in inflation since 1979, although it is still higher than is the case with some of our competitors; they take pride and satisfaction in the fall in interest rates, although they are still higher than is the case with some of our competitors; and they take pride and satisfaction in a recovery in output at a rate which, for the moment, seems rather better than that of some of our Common Market partners, although total output is only just regaining the levels of 1979. The Government also point out that investment has begun to show

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some improvement, although it is still below the spending of a few years ago.
It was obvious to the sub-committee that trade with our partners in the Common Market was subsumed in the larger question of our general trading competitiveness, and here, as various Members have said tonight, the outlook gives cause for some anxiety. As the noble Lords, Lord Ezra and Lord Hatch, have pointed out, we are currently propped up by the North Sea hydrocarbons. Gross oil exports amount to £12 billion a year and net exports—a direct contribution to balance of payments—to £6 billion a year. We are 70 per cent. self-sufficient in natural gas, saving us about £3.5 billion a year in equivalent imports. Yet, notwithstanding these advantages, we shall this year be running a deficit on visible trade of about £2 billion, which the estimated surplus on invisible trade of about the same amount will just about balance. The handsome surpluses of 1981 and 1982 will have vanished.
The pound sterling is currently bumping along at a rate against the dollar which is around the all-time low. Its rate against a relevant basket of currencies is also faltering. A low value of the pound makes imports dearer and exports more competitive, and in the past three to four years there is no doubt that our remaining industry has become leaner, fitter and more competitive than it was. Yet the experience this year is that imports, in volume, are 6 per cent. up on last year and export volume has hardly changed. As has been widely publicised, we have this year failed to match manufactured imports with manufactured exports. We look to a deficit of £3 billion or more. The graph of Chart 3 on page xx of the sub-committee's report has taken a sharp plunge downwards. The recent survey report of the CBI does not give much hope that the graph will show a reverse trend in 1984.
One of the good effects of the common agricultural policy, aided by the efficiency of our farmers, is that we are now more self-sufficient in food than for ages past, and that food imports now form not much more than 10 per cent. of our total import bill. Even this is about half covered by food and beverage exports. It is manufactures which dominate the visible import bill. They represent about 70 per cent. of the total. The deficit on motor vehicles and motor vehicle components will reach a record this year—over £2 billion. Without the rescue of British Leyland it would have been far worse.
Besides helping to finance our imports, North Sea resources also prop up the tax revenues. The total take from oil and gas this year will not be far short of £10 billion—about 8 per cent. of Government spending. To keep taxation within tolerable bounds—although industry would not agree that, so far as they are concerned, the bounds are tolerable—the Government are also selling off sundry capital assets. Without the windfall of North Sea revenues, the situation would be unsustainable.
But we all know that in the North Sea we are rapidly using up assets which cannot be replaced. It is an extractive industry. Extraction rates are now at, or near, their peak and will only be maintained at such levels for another two or three years. There seems
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bound to be a contraction before the end of this decade, accelerating in the next decade, so that we could be a net importer of energy within 10 years.
How shall we cover such a shortfall? It seems most unlikely that it will be by growth in the surplus on invisibles. The evidence of the sub-committee of the Committee on Invisible Exports was not very encouraging in this regard. The competition in international services is growing, just as the competition in manufactured goods has intensified.
We have a time bomb ticking away in the exhaustion of our North Sea assets. We need to increase our manufacturing strength, along with our manufacturing competitiveness. I strongly support the call made by my noble friend Lord Ezra three weeks ago and again today, and reinforced by my noble friend Lord Hatch, for a wide-ranging inquiry by a select committee on overseas trade in its totality. It could be—I say it could be—that a Government policy of benevolent neutrality in trade matters is not a sufficient policy to carry this country successfully through the transition from an oil exporting to an oil importing country.
If we are to maintain, and indeed increase, living standards and services in this country, it is difficult to see how this will be done without a big increase in efficient manufacturing capacity. The noble Lord, Lord Sieff of Brimpton, recently gave in this House some examples of such developments which his own company had inspired. We must find a way of encouraging other commercial and industrial managements to think and act in the same constructive way.
A select committee could explore all possibilities dispassionately on a non-party basis, and hopefully reach conclusions with positive recommendations which would bite. If we do not start expanding once more the manufacturing facilities of this country, and start immediately, then the time bomb of the North Sea assets will assuredly blow us off course, and blow us off course in a way which will make the recent recession but a minor happening in comparison.
9.18 p.m.
Lord Kilmarnock: My Lords, we are all grateful to the noble Lord, Lord Greenhill of Harrow, for introducing this valuable report with his usual lucidity and objectivity. I was a member of his sub-committee but I am afraid that other pressures did not allow me to be as regular an attender as I should liked to be, and it is more as an outsider than as a member of his team that I shall address myself to the report.
First, let me say how much I welcome the contributions of other noble Lords not associated with the sub-committee who have spoken so effectively this evening. The reports of the European Scrutiny Committee, as we all know, are often—and rightly—of a rather technical nature, and this tends to limit the debates on them to those closely concerned in their preparation. On this occasion the importance of the theme has attracted several noble Lords from outside the inner circle of the sub-committee, and this has added weight and breadth to the debate. I think particularly of the speech of my noble friend Lord Ezra, to which I shall refer later.

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I particularly enjoyed Lord Rhodes' reminder that it takes 40 years for real shifts in human behaviour to take place; but do we have 40 years to complete and extend the market? It is a matter of common knowledge—and indeed the noble Lord, Lord Greenhill, said as much—that this report was originallay designed to give objective guidance to those striving to make up their minds whether Britain would be better off inside or outside the Community. It was impossible to set up any accurate yardstick of what would have happened had we not joined when we did. That remains forever in the realm of speculation. But the sub-committee looked painstakingly at the subsequent experience sector by sector, and concluded that in most cases membership had reinforced trends that were already established prior to membership. In the words of Dr. Shepherd of the University of Sussex in his submission,
"the gravitation of British trade towards EEC partners clearly predates British membership of the EEC, and was the consequence of GATT trade liberalisation, combined with the "pull" of high economic growth in the EEC".
This may make membership sound rather peripheral, but it does not mean we could have gone our own sweet way with better or even comparable results from outside the Community's garden wall. Though entry may have had fewer so-called dynamic effects than we had hoped for, there can be no doubt that the effect of withdrawal would be, or would have been, extremely adverse. This is quite clearly brought out in the report's summary of conclusions in paragraph 103(iii) where we read that witnesses,
"were almost unanimous in stating that withdrawal from membership would be damaging to the future well being of British industry".
That was also the conclusion of the electorate at the last general election, even though they did not have the benefit of the report. Does this mean that we can put Lord Greenhill of Harrow's book—for book it is—upon the shelf? No, it does not. It is obviously true that the report, in so far as it aimed to clear our minds over continuing membership of the Community, has been overtaken by events. But there is a great deal more to it than that because it is, after all, not only about trade with the Community, but about trade patterns with the world at large subsequent to membership. The noble Lord, Lord Brimelow, stressed that the phrase was "subsequent to" and not "caused by". Both the body of the report and the appendices are packed with extremely interesting data and opinions which deserve further study and leave us with much food for thought.
It emerges from paragraphs 15 and 102 that fluctuations in the exchange rate are seen as making a far greater impact on trade performance than the removal of relatively modern tariffs that came with membership of the Community. I quote:
"witnesses repeatedly stressed the importance of the rise in sterling, and its deleterious effects on their business".
But it is not only the rises but the violent fluctuations that cause havoc here. This is a point to which I shall return.
It also emerges from paragraph 23 that:
"One of the outstanding features of postwar economic development in major industrial countries has been the increasing importance of trade as measured by the ratio of foreign trade (both exports and imports) to domestic output".
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This is presumably a result of the rapid growth of EEC intra-industry trade in the 1970s to which our attention is drawn again by Dr. Shepherd on page 358. It means that the profile of products exported is coming more and more to resemble that of products imported. This appears to be accompanied by the growth of intra-firm trade as a result of the growing importance of multinational corporations in manufacturing investment.
Dr. Shepherd then wrote:
"This evidence of a rapid and profound change in the United Kingdom's rÔle in the international division of labour—particularly associated with increasing trade in the EEC (though the US and Japan are also important)—needs further consideration".
My immediate response is, "You can say that again!" It certainly seems to me to reinforce Lord Ezra's plea for a committee to consider these matters further.
Taking exports alone let us consider the Treasury's economic progress report No. 152 of December 1982, table 1. I have it here. We find that exports as a percentage of GDP have risen for the United Kingdom from 20.2 per cent. during the period 1960–66 to 28.8 per cent. in the period 1974 to 1980. To a layman this would seem to show that while our share of the world export market was halved in the past 20 years, our dependence upon exports has increased. Your Lordships might say that is fine provided that we can keep our current share, but one finds in the same Treasury tables that the ratio of exports to GDP has increased in France, Germany and Italy by roughly comparable percentages. We therefore are not the only people in the world—as we seem sometimes to imply—who depend on a high proportion of exports.
If this level of activity is to be maintained providing opportunities for all it seems axiomatic that world trade will have to expand. If we are locked into a mutual trading arrangement in Europe, valuable though it may be, even if the volume and speed of inter-change of those goods remains at the present level, we shall be extremely lucky to maintain even our present reduced share of world trade, unless there are other markets coming on stream. Lord Greenhill of Harrow's report is also suggestive here. At paragraph 89 we read:
"Our trade with non-industrial countries still consists principally of the exchange of exports of manufactures for food, raw materials and fuels, despite the increasing flow of manufactured exports from the 'new industrial countries"—
that is, the much feared NICs.
—"who are included in this group. By its very nature United Kingdom trade (or that of any other industrial exporter) with the non-industrial world generates a substantial export surplus on manufactures, just as it produces a deficit on food, raw materials and fuels".
This is admittedly the milk of pure classical theory on the international division of labour, but does it really reflect what is happening? The developing countries are obviously very important to us but if they cannot enter the world market neither we nor they will benefit. All your Lordships, I am sure, are familiar with W. W. Rostow's famous book called The Stages of Economic Growth, from which it is perfectly clear that a self-supporting agriculture with a surplus for export is a vital precondition of economic take-off. If third world agriculture does not get off the ground, nothing else will. Yet we persist with agricultural

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protectionism and subsidised over-production, to which my noble friend Lord Sainsbury made reference. This has a very damaging effect on tender economies highly dependent on their agriculture and commodity sectors. We clearly need to subject Community policies in this area to very hard scrutiny.
This is not a third world debate and the noble Lord, Lord Hatch, did not turn it into one; but I think it is worth directing your Lordships' attention to the ODI publication, Economic Prospects for the Third World: the 1983 Forecasts by Sheila Page. This, as its name implies, looks at things from the other side of the fence. The developed countries—we and others—take more than two-thirds of the exports of developing countries. It is our external demand which affects the developing countries most directly. By the same token, their imports depend on the purchasing power of their exports and the availability of grants and loans to finance their deficit. Both of these sources are threatened. Transfers from OECD and the OPEC countries have decreased and the median value of forecasts by OECD, IMF and UNCTAD show a decline in the availability of short-term financing while medium-term financing also looks like falling.
Current forecasts of world trade growth are not encouraging. In the slightly longer term the basket of forecasts shows average industrial country growth flickering around 2 per cent. for 1980–85—which is a decline from 2½ per cent. over the period 1973–80 and from 3½ per cent. over the shorter period of 1975–80, despite the oil crises. For the developing countries to achieve a consistent 2½per cent. growth rate, their exports would need to grow by 4 per cent.
Though the World Bank is more bullish than others, the European Community and UNCTAD both suggest that structural factors have permanently reduced normal growth rates, and the United Nations expects "slow growth in 1985–90 because of structural rigidities". The European Community believe that structural change and low investment could lead the European economy into a prolonged period of low growth and even of depression. GATT foresees the worst overall five-year performance for 35 years. None of these things is conclusive. Economic forecasters have perhaps a less good record than political pollsters, but the mood is important and is not without foundation. It does not point to a tremendous upsurge in world trade.
I am sure I have said enough to show that Lord Greenhill's report certainly should not be put on the shelf. It has raised issues which we really must pursue,
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and I will end my speech by putting four questions to the noble Lord, Lord Lyell. First, paragraphs 15 and 102 of the report both stress the adverse effects of a fluctuating exchange rate. The witnesses were businessmen, not politicians. In view of this and of the debate recently held in our Lordships' House in which a large majority of speakers, and not least the noble Lord, Lord O'Brien of Lothbury, advocated joining the EMS, do not the Government think that the time has finally come to stop shilly-shallying about this? It would be the greatest boon they could possibly confer on exporters, to whose performance they attach such importance. What is the hang-up?
Secondly, what about the export of services? The noble Lord, Lord Greenhill of Harrow, touched only briefly on this, referring to paragraphs 84 and 85 of the report. I do not know if my noble friend Lord Ezra wants to; I hope he does. Annex A of the report submitted by the Committee on Invisible Exports makes interesting reading. The accepting houses do not seem to have done too badly, but what about the British insurers' heartfelt plea for the implementation of the Non-Life Freedom of Services Directive? The droit d'établissement looks very nice on paper but in some areas it is almost meaningless. What plans have the Government to achieve some progress on that?
Thirdly, in view of the forecast I have quoted in respect of developing countries and our trade with them, what steps do the Government propose to take within UNCTAD and other relevant bodies to ensure that the developing countries get a fair price for their agricultural produce and for their other commodities, thus enabling them to pay their debts and to participate to our mutual advantage in the more sophisticated areas of world trade?
Finally, does the noble Lord, Lord Lyell, not agree that the noble Lord, Lord Ezra, has made a very telling case for a committee to study these matters? I think it was the noble Lord, Lord Kaberry, who said that this debate will never end.
A noble Lord: Hear. hear!
Lord Kilmarnock: That may be so, my Lords, but it needs a structure, which can only be provided by proper evidence and a proper report. Let us then build on the foundation of the noble Lord, Lord Greenhill, and extend the inquiry into our wider trade relations with the world as a whole. Will the noble Lord take this message to his noble friend the Leader of the House, where I understand it may not find an unsympathetic reception?
9.32 p.m.
Lord Stoddart of Swindon: My Lords, I, too, would like to congratulate the noble Lord, Lord Greenhill of Harrow, on his report and indeed on the concise way in which he presented it to the House. I shall certainly deal in a moment with one or two points that he made, but before doing so I should like, with the greatest of pleasure, to congratulate the noble Lord, Lord Kaberry, with whom I have—I hardly like to use the word "duelled"—had some discussions, particularly when we both served on the Select Committee for nationalised industries in another place.
I know that the noble Lord, Lord Kaberry, who has had great experience in many fields—not least in the law, where he has been not only a law maker and law practitioner but a law enforcer as well—is also a man of very keen mind, as indeed we saw from his speech today. I would also say to your Lordships that he is a man of great courtesy—and I say this very sincerely—and also of infinite charm. If any of your Lordships have the opportunity to travel abroad with him on a Boeing 747, or any other form of transport, I recommend it because his charm opens doors which would otherwise remain closed and you getthings that you would otherwise be denied. His charm, as I say, is great and renowned, certainly in another place. His speech in fact referred to the people he has always served and he referred, rightly, to their qualities of resilience and to the capacity of the British people to overcome all difficulties. I agree with him so much. They have always done so in the past, and will do so in the future. The noble Lord said that he would pronounce an open verdict on the report. I can assure the noble Lord that there is no open verdict in this House on his maiden speech. I feel sure the verdict of your Lordships' House is that he made a most significant contribution to the debate and that his future contributions will be very welcome indeed.
As I said, the noble Lord, Lord Greenhill of Harrow, made a concise speech and he made the point, quite rightly, that the high initial expectations of what membership of the EEC would bring have not been realised. The fact is that those expectations were raised far too high and they were expectations which could never have been realised. It is a great pity that more people did not realise that at the time when we went in, or indeed at the time of the referendum in 1975, because then those expectations would not have been raised and the bitter disappointment which so many of us feel now would not be suffered.
I have taken part in many debates about the EEC in a number of places, not only in the other place but out in the country as well. Over the years the debates about the EEC, certainly in another place, have reminded me of the story of the emperor's new clothes. The emperor is stark naked, but the populace will simply not agree that he is. The experts, the tailors and the courtiers told the people that the emperor had on his fine golden clothes. Although people saw that he was naked, they simply did not believe it, because they had been told that he was garbed in great and beautiful raiments. Eventually, a small boy blew the gaff and the emperor was ashamed.
During the debate tonight I have not had that impression. Indeed, the debate that we have had tonight has been a good one. People are beginning to
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confront the real problems which face this country within the EEC, and it is only by accepting the realities, by agreeing to the truth of Britain's situation within the Common Market, that we shall be able to take the corrective action which is so necessary.
Of course, as the committee pointed out, there has been a shift of imports and exports to the EEC since we joined. That was inevitable. It was bound to happen because, first, there was the removal of tariffs; and, secondly, we lost preference in EFTA, Eire and the Commonwealth. That made us less competitive there. Indeed, because we stopped buying commodities and goods, particularly food, from those areas they were not then in a position to take exports from this country. There was a virtual prohibition of imports of many basic foodstuffs from our traditional suppliers, such as New Zealand, Australia and Canada, which injured their ability to buy from us. Indeed, New Zealand's ability may be injured further because, as the noble Lord, Lord Sainsbury, said, the 87,000 tonnes of butter which they export to this country is now under threat, particularly from the French and the Irish Republic. If they lose those exports to this country, the economy of New Zealand will be decimated. They will be unable to withstand the shock. Once again, therefore, there will be a further shift of imports, because New Zealand will be unable to buy exports from this country.
The central issue remains the surplus or deficit on manufactures with the EEC and the ratio of exports to imports of manufactures in trade with the EEC compared to trade with the rest of the world. Many noble Lords mentioned that issue earlier tonight. We were told before entry that we should greatly strengthen our trading position and that this would offset the high food prices which would come about by entry into the EEC. In fact, the opposite has happened.
In 1970, the year before our application to join, we had a surplus of £1·9 billion in manufactures, at 1983 prices, with the EEC. In the first nine months of 1983 we were running an annual deficit of £7·8 billion in manufactures with the EEC. That is a total turn-round of £10 billion, equal to getting on for 1 million jobs. That is the situation which was mentioned by the noble Lord, Lord Ezra, but I fear that his figures, as I thought I heard them, understated the position in relation to the deficit on manufactures. In another place on 16th November, in answer to a Question asking the Secretary of State for Trade and Industry to give the current balance of trade in manufactures for the past 12 months with the rest of the European Community, the Minister of State at the Department of Trade and Industry said:
"Since the second quarter of 1979 there has been a total deficit on trade in manufactures with the other countries of the European Community of £15·1 billion and a surplus with the rest of the world of £28·7 billion.
"In the year ending September 1983 there was a deficit on manufacturing trade with the Community of £6·4 billion".—[official Report, Commons; cols. 839 and 840.]
The deficit was not £2·2 billion but £6·4 billion. That is an absolute disaster.
Lord Ezra: My Lords, if I may enlighten the noble Lord, I was referring to the total manufactured trade of the United Kingdom, not only its manufactured trade

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with the Community. The figures I quoted reflected that position.
Lord Stoddart of Swindon: Then I misunderstood the noble Lord, and I hope he will forgive me. His figures were correct for total manufactures, but he has enabled me to emphasise those figures, and I thank him for raising the point. That, therefore, is the real situation which we face. The export-import ratio for manufactures traded with the EEC fell by 40 per cent. to 74 per cent. between 1970 and 1982, while the ratio in the case of other countries fell by only 16 per cent. to 111 per cent.
The latest trade figures are even worse. I have no doubt that your Lordships saw them when they were issued on the 24th of this month. Including oil, the figures looked something like this: in 1981, we exported to the EEC £20,940 million worth of goods and we imported £21,718 million, a deficit of only £778 million. In the year up to October 1983 we exported £21,610 million and imported £24,832 million, a deficit of £3,212 million. And that includes oil. As the noble Lord, Lord Kearton, mentioned, we simply cannot go on like this. North Sea oil will indeed start running out before the end of the decade and, unless we can replace North Sea oil with manufacturing capacity which has been run down over a long period of time, then this country will face a catastrophe.
The situation in relation to trade with the EEC is a dangerous one. It is one that will have to be dealt with and we are entitled to ask the Government, particularly in the light of what the noble Lord, Lord Kearton, said, what exactly they will be doing over the next four years to deal with the situation when North Sea oil does run out and what they will do to rebuild Britain's manufacturing base—because our whole future depends on it, and the employment of our people depends on it.
For example, during the questioning by the committee of witnesses from the CBI, my noble friend Lord Stewart of Fulham asked the CBI about their claim that 2½ million jobs would be at risk if we pulled out of the Common Market. The deputy director of the CBI did not seem to be at all sure of himself, but nevetheless admitted to the view that the Common Market was a net contributor to job creation.
Unfortunately, that question was not pursued, but the committee might have pointed out, first, that only 10 per cent. of manufacturing output goes to the EEC; secondly, that only 5.5 million people are employed in United Kingdom manufacturing; and, thirdly, that we now import £3 worth of manufactures from the EEC to every £2 we export to it. whereas in 1970 we imported from the EEC only £4 of manufactures for every £5 we exported to the Community.
Under those circumstances it is quite impossible, as was claimed by the CBI and indeed by the Government, before the election, that there should be 2½million jobs at stake if we left the Common Market. That is a completely impossible situation. I wish that such ridiculous claims were not made by responsible organisations.
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If one looks at the position in straight terms of trade, if we came out of the Common Market there would be an increase in job opportunities. But we cannot look at it in such absurd terms and I hope that in future when the CBI—which is a highly responsible body—and the Government make estimates of the results of our terms of trading with the EEC, they will deal with the matter much more responsibly.
For example, on the question of cars alone, I used to represent in another place an area where cars were made—and I can well remember that in 1975, at the time of the referendum, the then chairman of BLMC sent out a letter to the car workers stating that if Britain did not remain a member of the EEC, the British car industry would collapse. As it happened, the British car industry just about collapsed because we did remain in it. As a result of EEC membership, we now import 10 cars from the EEC for every one that we sell to it. In 1970, we imported only five cars for every eight we sold. That again shows the extent of the disaster which has hit our manufacturing industry over the past 10 years. The fact that this House has been prepared tonight to begin to face up to the problems which confront us is, I think, entirely good.
Before I finish, I should like to say a few words about agriculture. The noble Lord. Lord Sainsbury, dealt with that aspect extremely well and put the situation as it really is. When he criticised agricultural self-sufficiency he was absolutely correct; it is bad not only for this country but for the rest of the world, particularly the developing world. So long as there is an open-ended subsidy of agriculture, the disaster of food mountains, the disaster of ruination for so many under-developed countries, will be compounded.
The enormous support given by the taxpayer and the consumer to agriculture grows every year; it is open-ended. It was estimated by Mr. Richard Body, who was then the Member of Parliament for Holland-with-Boston, in his book, Agriculture:—the Triumph and the Shame, that we were subsidising agriculture to the tune of£3,350 million a year; that was in his terms, £13,000 for every farmer in this country. Indeed the consumer and the taxpayer together were subsidising the farmer to the extent of 166 per cent. of the farmer's net income.
That is a nonsense situation because not only is it producing food surpluses, not only is it undermining many of the economies of the under-developed world, but it is altering our countryside, it is altering our environment, it is making use of land for growing grain which ought not to be used for growing grain; we are using grade 3 land and we are trying to grow wheat and grain on chalk land. It is a nonsence; it is a waste of money. It is a waste not only of this country's financial resources but a waste of the world's resources in fertilisers which, because they are in short supply, have their price pushed up, thereby making it not only dearer for us to grow grain but dearer for underdeveloped countries to grow grain as well. It is a policy, frankly, which is hurting the consumer. It is making each family in this country pay £5 a week more for food than they need to. As my noble friend pointed out earlier, it is forcing up unit costs and therefore putting pressure on wages; and that in turn affects our ability to export to the EEC or to anywhere else.

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This crazy common agricultural policy really has to be dealt with. I sincerely trust that the Minister, when he winds up tonight, will give the assurance that he will at least make it absolutely clear to the Government that we expect firm action to be taken by Britain at the earliest possible moment, at the summit, to ensure that there are fundamental alterations made to the common agricultural policy.
If we spent £3,500 million on investment in manufacturing industry every year we would provide very many jobs indeed. However, when it is suggested that we should subsidise the steel industry, that we should spend more on developing coal in order that we shall have adequate fuel supplies when North Sea oil runs out, or that, through the National Enterprise Board (which has now been disbanded) we should use money for investment in manufacturing industry, we are told that it is not right to subsidise single industries. Yet here we are subsidising a single industry to the extent of £3,300 million per annum. At the same time, we are limiting our ability to compete as we should be competing in the markets of the world.
I have very much enjoyed this debate. I hope we shall have many more of them because I believe the subject of Britain's membership of the EEC and our role in the wider world is something which should exercise the minds of your Lordships on many occasions. As the noble Lord, Lord Kearton, mentioned, I believe that our very future as an industrial country is now at stake. Indeed, if the future of our country is not to he safeguarded in this House, where is it to be safeguarded?
9.56 p.m.
Lord Lyell: My Lords, after three and a half hours of a fascinating, closely argued and very detailed debate I should like to start by saying how very useful it has been to have this tremendous opportunity of discussing the pattern of United Kingdom trade since joining the EEC. As I am sure all of your Lordships who have sat through the debate will be aware, all the contributions have been of a particularly high quality. Indeed, the tone was set by the notable opening speech of the noble Lord, Lord Greenhill of Harrow. It is my first opportunity to add my compliments to the tremendous volley of deserved congratulations from all parts of the House to my noble friend Lord Kaberry of Adel on his remarkable maiden speech. As your Lordships have already heard, he has a very distinguished record of service, first as a lawyer in his native county of Yorkshire—a worthy representative of the White Rose—and I understand that at some stage my noble friend served in the Board of Trade. Of course, he has a long and distinguished service to his country, a particularly gallant record during the second world war, and has also served in another place in an earlier incarnation.
The United Kingdom has now been a member of the Community for more than 10 years. It is an appropriate time to look back and to consider what the effects of membership have been. Your Lordships' committee, under the able chairmanship of the noble Lord, Lord Greenhill of Harrow, has produced a most valuable report which will be an important work of reference in years to come. Of course, it contains a most thoughtful analysis of the available information
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and it reaches useful conclusions which help to explain past events and we believe will provide lessons for the future.
I find it most heartening that almost all the witnesses who gave evidence to the committee considered that membership had, on the whole, been beneficial. That is certainly the view of the Government. Of course, it is equally clear to me that the United Kingdom is now so much part of the Community that it would be disastrous for us to pull out. I noted especially that the witnesses were almost unanimous on that score. The noble Lord, Lord Rhodes, added his support to this particular aspect of the report. The noble Lord, Lord Brimelow, rightly pointed out during the course of his particularly relevant and welcome remarks that the fact that we cannot quantify exactly the benefits of having joined does not make any the less real and severe the damage which would result from withdrawing.
I hope that your Lordships will bear with me if in replying to this debate on behalf of the Government I begin by making a few general remarks on the committee's report. As your Lordships will have noticed, the shift towards exporting to the Community was already apparent in the 1960s. That trend has been consolidated since we became part of the Community. The share of our exports going to the Community has risen from 30 per cent. before our accession in 1972 to about 43 per cent. last year. But the report indicates that the number and complexity of factors which have affected the United Kingdom's trade patterns since we joined the Community are such that it is impossible to unscramble the effects of membership in statistical terms.
We have dealt in considerable statistics this evening, and your Lordships will be aware that any consideration of trade in manufactures between the United Kingdom and the rest of the Community must be set against the background of decline in the United Kingdom share of the main manufacturing countries' exports of manufacturers from around 20 per cent. in the early 1960s to around 10 per cent. today. When North Sea oil began to flow it not only affected the composition of our exports to the rest of the Community and elsewhere but also contributed to a rise in the value of sterling—which many sectors of industry saw as the main factor influencing their competitiveness.
We found the committee's analysis of trade in manufactures interesting, thoughtful and most original. Many of your Lordships have pointed out that before the United Kingdom joined the European Community the balance of trade in manufactures with the Community was in surplus each year. Since then it has gone into deficit. For the rest of the world there was a surplus before 1973 and an even greater surplus each year since. It is therefore maintained that this proves that membership of the European Community has been bad for United Kingdom industry. The report of the committee demonstrates that this view is both superficial and incorrect.
The fallacy in this argument lies in the grouping of the rest of the world as a homogeneous economic entity comparable to the European Community. This is not the case. The rest of the world comprises

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advanced industrial countries such as those in the European Free Trade Association, the United States of America, Canada and Japan, but it also consists of non-industrial countries. By its very nature United Kingdom trade with non-industrial countries must generate substantial export surplus on manufactures. just as it produces a deficit in food and raw materials. It is therefore quite wrong to include this trade in a comparison of trade with the European Community.
The committee has made a correct comparison between United Kingdom trade in manufacturers with Europe and with other industrial countries. In this comparison it is quite clear that our trade with the European Community has shown a similar pattern to trade with other industrial countries. It could be argued that this comparison of balances of trade is too seriously affected by inflation to be reliable. But a rough allowance for inflation can be made by using such a device as the ratio percentage of exports to imports. The noble Lord, Lord Stoddart of Swindon, among others, raised that topic. The deterioration in this ratio has been less for trade with Community countries than for trade with other industrialised countries.
Such indications, and the testimony of the vast majority, of witnesses who appeared before the committee, suggest that the cause of the difficulties of manufacturing industry lies elsewhere than in our membership of the European Community. Detractors of Community membership would do well to reflect on the fact that this comparison shows that between 1972 (our year before accession) and 1982 the ratio for United Kingdom trade in manufactures with the European Community declined by 27 per cent. and with other industrial countries outside the European Community it declined by 35 per cent.
I hope that the noble Lord, Lord Bruce—whose usual passionate speech I shall have much more to say about—will accept that tonight is not the time to go into all his figures. However, as is always the case in regard to my noble professional colleague, Lord Bruce, and as a normal courtesy, I shall certainly read all the statistics that he gave. I hope that I can digest them.
As the evidence which was supplied to the committee clearly indicates, the experience of the past 10 years or so has produced an almost unanimous view within industry that membership of the Community is crucial to its interests. As one might expect, the degree of enthusiasm differs between industries and also between firms in the same manufacturing sector. We found that spelled out in the 103 or so paragraphs of the report of the committee.
The opportunities which are presented by what many industrialists rightly regard as a major extension of their home market have been most readily seized by companies with positive attitudes to the Community, vigorous marketing strategies, and of course competitive products and prices. These companies have seen membership not as a panacea which would remove the need for competitiveness and effort, but as an opportunity to show that they could use these qualities to conquer new markets in Europe. Government and industry must now build on what such companies have achieved.
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I should now like briefly to turn to the comments in the report on individual sectors. First, I note, as indeed did my noble friend Lord Rochdale, that the committee praised the "almost uniquely successful record" of the chemical industry. I agree with that comment. I agree also with the views which were expressed by the chemical industry itself on both the beneficial effects on productivity which have resulted from Community membership and the catastrophic results to that industry which would follow withdrawal from the Community.
We should also consider steel and textiles, which are two of our other major basic industries. As your Lordships will be aware, for a number of years these two industries have experienced severe difficulties. How has membership of the Community enabled these sectors better to face the effects of the dramatic decline in steel demand throughout the industrialised world since the late 1970s and the relentless import competition from low-cost textile producers?
In the case of steel—which was once again mentioned by my noble friend Lord Rochdale—there was the three-month strike by the British Steel Corporation in 1980. This had a lasting effect on steel users, who naturally switched to foreign sources for steel. Secondly, and more generally, falling demand for steel has resulted in depressed prices and, regrettably, soaring losses by steel companies. That has not been unique to the United Kingdom, and it has led various countries to subsidise steel production in an attempt to retain their market share.
This trend has coincided with the emergence of a number of efficient and low-cost third country producers. The Community's response has been to take concerted action through the Davignon anti-crisis measures, which are designed to restore the steel industry's competitiveness and viability and to re-establish market stability. As I am sure various experts among your Lordships will be aware, this policy has three strands: first, production quotas; secondly, capacity cuts, the vast bulk of which will in the future fall upon other member states; and, thirdly, voluntary restraint arrangements with third countries. Such concerted measures, from which, I would stress the United Kingdom industry is deriving much benefit, would not have been possible without the Community.
I wish briefly to turn to textiles. We have seen very fierce competition from low-cost textile producers, and this has forced United Kingdom and other Community manufacturers of basic yarns and fabrics to concentrate more and more on producing higher value-added specialities. This rationalisation of product ranges and the concentration of production facilities led to an intensification of intra-Community competition. Of course, until around 1979 the United Kingdom industry sustained a creditable performance, but it subsequently lost its competitive edge in many subsectors. The industrysees the high exchange rates and, indeed, high inflation as the main contributory factors. But of course it is now—
Lord Hatch of Lusby: My Lords, will the noble Lord give way?
Lord Lyell: My Lords, I have to try to reply to the supporters of the noble Lord. If he can retain his patience, I will come to him at the end. I ask the noble Lord to retain patience. In common with most other industries, our textile firms will only prosper if they concentrate on producing products of the quality and the price which customers require.
The report also identified the mechanical engineering sector as one which has not yet succeeded in benefiting from the opportunities of the enlarged home market which is brought about by Community membership. Although of course this sector has made strenuous efforts to overcome competitive weakness by cutting costs, reducing over-manning and improving design, efficiency and above all productivity, I think that many people in the industry would agree that much remains to be done. Of course future growth prospects increasingly lie in the application and exploitation of new technologies and the introduction of modern plants and equipment. Government support schemes will play their part in promoting this process of change.
Various noble Lords who have spoken this evening brought the motor industry into the arena. This industry may at first sight seem only to have reaped limited benefit from Britain's membership of the Community. Although exports to Europe have grown, so too have imports. Helped initially by the dismantling of tariff barriers, imports from the rest of the Community far outstrip our exports. But there is little reason to suppose that imports from the Community would be much lower if Britain were outside the Community. The retention of tariff barriers would have been a greater impediment to British exporters over the past 10 years than to the more efficient continental companies wishing to sell in the United Kingdom.
As is borne out in the conclusions to the report, Community membership has helped to facilitate the rationalisation of the industry on a more European basis, providing vehicle assemblers with greater potential for economies of scale. At this point, I would briefly turn to the component makers in the motor industries. If they are competitive they are able to benefit from increased export opportunities. The Community market is becoming increasingly important for the British motor industry. This has been the only area of real growth.
However, here as elsewhere we come to the word which has featured in at least five of the speeches which have been made in the debate this evening. I am referring to competitiveness. That is the key word. Industry's ability to compete with European manufacturers would have been critical whether or not Britain was a member of the Community. The Government warmly welcome the great strides which have been made by British manufacturers in improving their international competitiveness. Only in continuing these improvements will our industry be in a position to take full advantage of the benefits and the opportunities provided by continued membership of the European Community.
I would stress to the House that the battle for competitiveness is being won. I would remind your Lordships that United Kingdom cost competitiveness has improved by over 20 per cent. since early 1981.
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This of course reflects lower wage settlements than abroad, higher productivity growth and the depreciation of sterling from its admittedly high level in 1979–80. But there have also been signs of improvements in non-price factors, such as design and reliability, which are a particularly important aspect of the competitiveness of exports.
I should like to touch on investment by overseas companies. Your Lordships will be aware—and it is certainly in the report—that investment of overseas companies in the establishment of United Kingdom-based operations is particularly welcomed by the Government—especially investment in manufacturing industry in this country. According to the last census of production in 1979, only 2½per cent. of manufacturing establishments in the United Kingdom were foreign-owned, but those establishments accounted for 14 per cent. of employment in manufacturing and no less than 22 per cent. of net capital expenditure. In the years 1980 to 1983 we expect some 45,000 jobs to have been created as a result of inward investment.
Of course, the point we should stress is that the great majority of new inward investment in manufacturing is made by non-European companies wishing to establish a manufacturing base inside the large European tariff-free market. In so doing, they produce goods that would otherwise be imported, and they export goods to other Community states. This is a very valuable twofold benefit to our balance of payments in manufactures. The evidence submitted to the committee by industry, the views of potential inward investors expressed to Government officials and of course independent opinion research all agree that our membership of the Community is a key factor in any decision by a non-European company to locate facilities in the United Kingdom.
I think that the question of the common agricultural policy was raised by virtually every speaker in considerable degrees of strength. Of course, we should have to look at the agriculture and food manufacturing industries aided and abetted by the very germane and valuable comments—for which we are grateful—of the noble Lord, Lord Sainsbury. When we do this we are faced—as, of course, the committee recognised—with the problem of assessing the effects of membership without knowing what national policy would have been had the United Kingdom not been in the Community. Of course, it is impossible to say what food prices or, indeed, the costs to the Exchequer would otherwise have been, and, while one can point to trends such as the growth in the United Kingdom's self-sufficiency in food, one cannot simply judge how far this is a result of membership.
However, I would stress two things to your Lordships in this especially interesting area. First, it is a key feature of the common agricultural policy that imports from other member states are cheaper than those from third countries. This has been a crucial factor in the development of trade patterns, leading the United Kingdom to take a higher proportion of its food imports from other countries in the Community.
The other point, which I would stress, is that it is recognised throughout the Community that the common agricultural policy needs an overhaul. A fundamental review is now taking place, with major

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decisions due to be taken at the Athens Summit in a few days' time. I believe that the noble Lord, Lord Molloy, referred to next year's summit. As he is aware, the Greeks still have the presidency and a summit is taking place in Athens very early next month. I would stress to the noble Lord and to your Lordships that the Government continue to press hard for action on prices and, above all, on surplus production. I hope that the noble Lords, Lord Molloy and Lord Bruce, and above all the noble Lord, Lord Sainsbury, will accept our strong insistence on this.
The question of the internal market was referred to. As your Lordships are aware, this was debated about a year ago and my noble friend Lord Cockfield made a powerful and impassioned reply. In its conclusions, this report calls for Government action on non-tariff barriers within the Community. As my noble friend Lord Cockfield made clear in the debate on your Lordships' very valuable report on internal barriers to trade a year ago, the Government are committed to making a reality of the internal market for goods and services. The Council of Ministers has, for the first time, this year devoted time to purely internal market matters. I believe that this confirms the importance that the Community as a whole gives to freeing trade from those obstacles that remain.
However, I would hope that your Lordships would agree that we must keep the problem in perspective. Forty-three per cent. of our total two-way trade is with our European partners. This suggests that a great deal of trade is already free and open, but, as we have heard from your Lordships—and indeed, we have to admit it—the situation is not yet perfect. We think that a good start has been made on removing obstacles to trade in goods, but progress on freeing the market in services has been lamentably slow. The Government will continue to push for action on both fronts. The noble Lord. Lord Rhodes, might accept that as an answer to his question.
The committee drew attention at the end of its report to the difficulties which were created for British industry by the high rates of inflation which were experienced in this country during the last 10 years, as was so well explained, as always, by the noble Lord, Lord Ezra. The damage which inflation inflicted on British industry and on society in general was substantial, but I am sure your Lordships would join with me in celebrating the fact that the fight against inflation is being won.
Rates of inflation which were up to 20 per cent. and higher are now a thing of the past. There is still more to be done, but I would remind your Lordships, in view of the various friendly noises that are coming from across the Chamber, that even at a rate of 5 per cent. inflation prices double every 14 years or so. From industry's point of view the important thing is that our rate of inflation is no longer widely out of line with that of our main competitors.
May I attempt to cover some of the points raised by your Lordships in the course of this debate. The noble Lord, Lord Molloy, in the course of a wide-ranging speech suggested that the Community might take a leaf out of EFTA's book by making agreements with Yugoslavia and possibly other countries. The noble
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Lord will be interested to learn that the Community indeed has a trade agreement with Yugoslavia, as with most other countries of the Mediterranean basin. The noble Lord, Lord Molloy, also mentioned the Commonwealth. The Community's Lomé convention with the African, Caribbean, and Pacific states provides a better and freer trade régime between the United Kingdom and Commonwealth countries than existed before we joined the Community.
The noble Lord, Lord Kilmarnock, asked me four questions. I hope I can try to get some way towards them tonight. He raised first the question of insurance services. I am sure that he will agree with us that the industry expects a marked increase in the export of United Kingdom insurance services as and when the services directive is implemented. Any of your Lordships who have enjoyed listening, as indeed I have, to the noble Lord, Lord Bruce, over the years will be aware that this too is one of his especially dear projects. I would hope that this will be relevant to his questions as well.
Although this is bound to be compensated by the import of services from other European Community insurers, we confidently expect that the balance will be in favour of the United Kingdom. The net benefit to the United Kingdom balance of payments is expected to be around £70 million in the first year after implementation of the directive. The noble Lord, Lord Kilmarnock, also asked me about the Select Committee. I certainly could not go any further than any of the remarks I made in the course of the last debate that we had when I was attempting to answer the question raised by the noble Lord, Lord Ezra. This is a matter for my noble friend the Leader of the House. The noble Lord also raised the question of agriculture in developing countries. I shall certainly pass on to my right honourable friend the Minister of Agriculture the germane comments raised by the noble Lord, Lord Kilmarnock.
The noble Lord, Lord Hatch, raised among other things the question of the white man's club. He likened the Community to a white man's club. He mentioned the Lomé Convention. As he and your Lordships will be aware, this provides non-reciprocally duty-free access to the industrial goods of the ACP states. It also provides many other provisions of great benefit to those states: such systems as Stabex, development aid and suchlike. This goes to show that the Community does not shut itself off from the rest of the world.
The noble Lord, Lord Stoddart of Swindon, and others of your Lordships raised the question of access of Commonwealth products, such as New Zealand butter, to the Community. I am sure that the noble Lord will be pleased to know that New Zealand butter imports to the EEC are regulated under quota and the United Kingdom is campaigning particularly strongly to retain New Zealand access to the European Community market.
The noble Lord, Lord Brimelow, raised the point of the motor industry. I was fascinated to read Question 321—the noble Lord mentioned that question—where I found some particularly germane comments. I will not weary your Lordships with them tonight. Perhaps we can all take our copies home and read them with a glass of milk later tonight. The noble Lord, Lord Brimelow, raised the question of non-tariff barriers

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and the motor industry. Surely the long-term survival of the United Kingdom motor industry depends on its being, above all, competitive and not protected by non-tariff barriers. I drew attention to this in my earlier remarks on the motor industry. I hope the noble Lord will accept that we can also argue that the retention of such non-tariff barriers would be a greater impediment to United Kingdom exports than to the efficient European countries selling their motor cars in Britain.
The Earl of Longford: My Lords, I hope that the noble Lord will not think me very impolite if I point out that he has been speaking for half an hour. There is a very important debate to follow and I wonder if he would bear that in mind.
Lord Lyell: My Lords, perhaps if the noble Earl would bear in mind that I spoke to his noble colleague. The debate continued for 3½ hours before I rose to reply. I am trying to restrict my remarks, but I hope the noble Earl might just accord me the thought that his noble friends Lord Bruce of Donington and Lord Stoddart of Swindon, though they made germane points, spoke for a total of 53 minutes. I am trying, with the courtesy of your Lordships, to reply. I can see perfectly well; though my sight is getting worse, I can see. If I could get on, I hope the noble Lord will think this is important. I have sat for 3½ hours and I hope the noble Earl will bear that in mind.
The noble Lord, Lord Bruce, in a particularly passionate speech, as always, raised many points. I hope I have covered some of them. I promised to read his comments very carefully and if there is anything I have missed I shall take care to write to him.
The noble Lord, Lord Ezra mentioned the question of competitiveness. I hope I covered that.
I know that it would be convenient and it is the wish of your Lordships for me to conclude my remarks. The importance of the United Kingdom's membership of the European Community cannot be over-emphasised. Besides being the world's largest trading unit the Community is able to play a much greater role in world affairs than any one member state could on it's own. I said at the start of my remarks that in 1973 when we joined the Community, some 30 per cent. of our exports went to European Community markets. Today the figure is close on 43 per cent. and six out of seven of the United Kingdom's top export markets are members of the European Community. While the winds of protectionism continue to blow around the world the United Kingdom's unrestricted open access to this vast market is invaluable.
We have therefore a crucial interest in the development of the European Community as a whole and to improve our position within it by taking full advantage of the trading benefits which continued membership of the Community offers. The Community must continue to move forward by becoming larger, by adopting new policies to promote Europe's development and by removing the remaining barriers which hinder truly free trade between member states. The Community must sort out the internal problems on the budget and on the common agricultural policy which are distracting it from making progress on these other fronts. We look to the
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European Council in Athens to take the decisions necessary to implement the declaration which was made earlier this year at Stuttgart which spoke of "broad action to ensure the relaunch of the European Community".
Lord Hatch of Lusby: My Lords, before the noble Lord sits down, was he aware when he referred to competition in textiles that seven times as many textiles are imported into this country from the developed countries as from the developing countries?
Lord Lyell: I was not, my Lords. I shall note the noble Lord's comments with interest and gratitude.
10.30 p.m.
Lord Greenhill of Harrow: My Lords, it is tempting to take advantage of the last word, but I will resist it. On behalf of the committee, I would like to thank the noble Lords who have complimented us on our report. The report, I hope, will continue to be useful but tonight it prompted a debate of the kind which we had very much hoped for. I should like particularly to thank the noble Lord, Lord Bruce of Donington, and the noble Lord, Lord Ezra, for the excellent start which they gave to the debate. I did not envy the Minister the task of replying to such a long debate, but he did so with his customary zest and fluency—which sometimes strengthens his arguments and sometimes conceals their weakness.
I leave the debate this evening with two impressions. The first is that some of the wasteful bitterness has gone out of the debate on the membership of the Common Market, and, more importantly, there is a general recognition of the very grave problems which face us which were so succinctly set out by the noble Lord. Lord Kearton. I only hope that this recognition will enable us to work together to try to solve them.
On Question, Motion agreed to.

Mental Health: Richmond Fellowship Inquiry
10.32 p.m.
Lord Beswick Lord Beswick rose to ask Her Majesty's Government to what extent they agree with the report of the Richmond Fellowship Inquiry on Mental Health and the Community and particularly with the plea for essential funds to ensure progress towards the mental health service proposed in the report.
The noble Lord said: My Lords, my Unstarred Question relates to the Report of the Richmond Fellowship Inquiry on Mental Health and the Community, copies of which report are available in the Printed Paper Office. The report asserts that today the mental health services in our country are in a situation of crisis. After a wide-ranging inquiry, and, excepting myself, involving persons of considerable experience and accepted authority in their respective fields, the report sets out the facts and makes reasonably detailed recommendations as to how the essential community care should be structured, supervised and

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financed. It also recommends that there should be a Minister with clear, and known, responsibility for this work.
The noble Lord and his department have been good enough to consider this report, and what I am now asking is the extent to which they agree with it, and what they have done, or propose to do, to further its objectives. Alternatively, if they find themselves in disagreement with parts of the report, I wonder if the noble Lord will say which parts and why the disagreement.
The noble Lord has said, in answer to a parliamentary Question, that he is the Minister with this clear responsibility and I should like to thank him warmly for making it possible to come to the House at this late hour and answer personally the questions which we put. It would be good to think that this discussion will help make his responsibilities even more widely known, and it will we hope serve to increase public support for his efforts and even increase his influence for good.
The idea that a known personal commitment of one Minister to the development of a special field in social activity is surely borne out by the example of Mr. Alf Morris, a Member of the other place, who, when designated as Minister with special responsibility for the physically handicapped, made an impact upon the country. We should like to think that example would be repeated.
It was my noble friend Lord Longford who, in the course of his quite exceptional—and I am tempted to say, saintly—concern for the less fortunate among us, raised in this House on 31st March 1981 the issue of the alternative care of men and women who had been or could beneficially be transferred from the larger mental hospitals. It was the Minister's reply on that occasion which seemed to me to expose the serious nature and extent of the present problem. The Minister then said that from 1954 to 1979 the number of hospital places had been reduced from 145,000 to 76,000, but he was quite unable to show that the necessary alternative services had been provided.
I think it is commonly agreed that an enlightened forward policy will entail the closure of many large hospitals, though I should like to add that no-one should appear to deprecate the devoted service in some hospitals like the Maudsley and the Royal Bethlem. Nor should we under-value the available professional skills or the new drugs and treatments which have been developed. But there could and should be a more rewarding deployment of those skills in the new stage of development of our care of the mentally ill. That is what the report calls for.
I think it is instructive—certainly to me—to see how the attitude towards the mentally ill has developed and changed in the past two centuries. I wonder whether the Minister will agree with me that the paragraphs in the report which give a concentrated account of past attitudes towards, and treatment of, the mentally ill are—for the non-professionals at any rate—absolutely fascinating and most moving. Those paragraphs, incidentally, were written by Professor Wing, to whose unsurpassed depth of experience I know others would wish me to pay the highest possible tribute.
That account tells how, at the beginning of the 19th century we would have been talking of pauper lunatics, not of the mentally ill; there would have been parish overseers, the local bride wells and the private madhouses. The fate for some in those days was being chained in a coal cellar or some other out-of-sight places. Then came the Lunacy Acts of 1890 and 1891, and the custodial era. After the First World War there was the Mental Treatment Act of 1930 to supplant the Lunacy Acts. After the Second World War we had that great period of social reform in which I can recall some of us singing "Bread of Heaven" as we marched through the Division Lobbies to vote for an improved pensions system, family allowances, supplementary benefits and a truly national health service.
We are now faced with a new challenge. Those old large mental hospitals, which in their day were a great advance, are to give way to more enlightened community care. But the reason why the report uses the term "crisis" is because hospital closures are taking place before alternative care is provided. Where there should be a progressive step forward, there is, in effect, a shrugging off of responsibility.
The figures given by the Minister in that 1981 discussion showed that there were 69,000 fewer beds than in 1954—fewer beds, I emphasise, not fewer people needing care. The report states that the 69,000 figure is now nearing 80,000, and the closure programme continues. The question to which this inquiry tried to find answers is: what happened to those human beings hitherto provided for in the hospitals? Some are fortunate to have a home environment in which they can, at any rate, secure shelter. Sadly, in too many of those cases, the resultant tensions lead to a break-up of the home. A number of others find assistance and, in some cases, supervised accommodation in those voluntary bodies whose contribution and potential for the future is dealt with in the report.
The efforts of some of those voluntary bodies are frustrated by inadequate financial support. The Richmond Fellowship, for example, could make more accommodation available, but it does need the funding. Of those referred to it by the hospitals, at least three-quarters are without financial support. Some evidence suggests that local authority social service support is available for those who would—if I may put it in this way—be a public nuisance, but not for those who, given proper professional care, could recover to be useful members of the communty.
Then there is evidence, some of it reinforced by a recent article in the Sunday Times, that many other former patients of those large hospitals end up in squalid lodging houses or sleeping even more rough. The ultimate fate of some of these discharged patients is suicide. For others, it is re-entry into hospital. What there should be in a truly civilised society is a properly organised and suitably qualified supervision, guidance and, in cases, accommodation.
The Guardian of 25th October reports a speech by the noble Lord in which he announced the further closure of some 20 or 30 large psychiatric hospitals. If I may say so, he made a good case for those closures. But what of the alternative positive provisions? According to that same report, the Minister promised £25,000 extra to MIND. I am sure that the money will

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be well spent by that fine voluntary organisation, but in the context of that closure announcement it seemed a pitiful gesture.
I now ask the Minister specifically: when the department assembled for him the facts about that additional closure programme, did he require to be worked out the number of patients who would be affected, and did he satisfy himself that there would be effective agencies through which alternative care would be provided for an equivalent number of patients?
This report outlines a suggested structure for the alternative services required. It proposes a district joint mental health development committee. This committee would bring together the resources of the regional and district health authorities, the voluntary organisations and the social services departments of the local authorities. I now ask the Minister: does he agree with this concept? Does he further agree that, to make a reality of such a committee, adequate—and that means increased—funding must be made available? This report calls for a development fund, because savings from closures will arise in the future, but the costs for the alternatives come now. So we do need this development fund.
I understand that the Government are now considering a new management structure for the health service. Could not the district joint committees recommended by the report be fitted into that new structure? Would it not be possible, with a sound management system, to ensure through the joint committee that monies intended for mental health care are in fact used for that purpose? Can the Minister assure us that these joint committees in each district will have an effective place in this new projected system?
The Minister will also agree, I am sure, that the necessary extent and standard of care should be maintained in each and every district, and we should like to have the Government's view of the report's recommendation that this essential standard of service should be monitored by inspectors appointed by the Government. The precedent for this is, of course, that of Her Majesty's Inspectors in the education service. On this point, we were advised especially by a quite superb authority. I vividly recall with not a little sadness Lord Redcliffe-Maud, not many days before his death, reaffirming his support for this recommendation.
There are others to speak more qualified than am I, but I must acknowledge the generous assistance of the Richmond Fellowship which made this inquiry and report possible, and also the special contribution of the director of the fellowship, Elly Jansen.
Finally, I emphasise the extent of the human problem with which we are dealing. One woman in five and one man in nine will require psychiatric treatment at some time in their lives. The pain and the sadness caused to those who are near and dear to them is probably deeper, and in a most hurtful and special way deeper, than with physical illness. We never see in the public press pictures of the mentally ill gallantly overcoming their affliction, as we do so often, so beautifully and so encouragingly, with the physically handicapped. There is a reluctance on the part of the
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public to face up to the problems of the mentally ill. The figures I have been shown indicate that voluntary financial assistance is less easily attracted for this cause of the mentally disturbed.
For all these reasons, we feel that a new effort, an extra effort, must be made to make a reality of this concept of community care for the mentally ill. I hope that the Minister tonight will be able to convince us that he is prepared to make that effort.
10.47 p.m.
Lord Vivian: My Lords, I am sure that all noble Lords are most grateful to the noble Lord, Lord Beswick, for putting his Unstarred Question as to what extent Her Majesty's Government agree with the report of the Richmond Fellowship Inquiry on Mental Health and the Community and particularly with the plea for essential funds to ensure progress towards the mental health service proposed in the report. The noble Lord has dealt with the wide-ranging report very fully, so perhaps your Lordships will allow me to state some of the reasons why I am particularly interested.
We learn from the report that since 1954 hospital places for the mentally ill have been reduced from 143,000 to 76,000 in 1979. Patients are in hospital for a shorter period of time and many of them are discharged still needing treatment which, it is agreed, is best managed outside hospital. Half of those in hospital with mental illness for more than one year are over 65 years of age. Many of these patients could leave hospital and live in hostels and attend day centres, thus becoming integrated again into the community, if local authorities and voluntary agencies had adequate funds to staff and develop such hostels and day centres. In the absence of these funds, local authorities are unable to accept this responsibility, so these people remain in hospital.
The report of the Richmond Fellowship inquiry points out on page 31 that when, as occasionally happens, services are available and working well, the social difficulties presented by severe mental illness are ameliorated and the individuals and their relatives are able to cope.
On page 31 of the report we are told, and here I start to quote:
"Many people do recover from severe mental illness and are pleased with the care they have received. However, it is clear to members of the Enquiry that services generally fall woefully short of achieving the quality of life for the mentally ill and their families that was envisaged when the run-down of the large hospitals began with such a fanfare. During the transition from care in large institutions to care distributed between many small local units, staffed by professionals with little training in common who need not be in close touch with each other, the problem of overall coordination has not received sufficient priority. Even within one administrative hierarchy such as a District Health Authority or a Social Services Department each small centre tends to develop its own traditions, select its own clients, guard its own autonomy and deny responsibility for what happens elsewhere".
The report considers that for the mentally ill—excluding the elderly mentally infirm or mentally retarded—we need to provide as an absolute minimum to achieve a decent standard of care the following services per 100,000 of the population: district general hospital beds, 50; day hospital places, 25; hostel-wards for long-term illnesses, 17; short-term and rehabilitation hostels, 4 to 6; and long-stay

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accommodation in staffed and unstaffed homes, and in supervised lodging, 15 to 24; while for day centre places the number is 60.
Many districts do not attain even those minimal standards and progress towards those figures has been very slow. It is demonstrated by the fact that for every 100,000 population, only 12 people are supported by the local authorities; and the amount of suitable places in residential accommodation and for day care has scarcely risen since 1975 and has now reached 11 and 17 respectively, as opposed to a recommended 19 and 60. Even minimal levels will not be reached by the end of the century.
In addition to those basic needs, we should be providing work day centres for skills which fall between occupational therapy and sheltered workshops; some high-level sheltered factories; and rehabilitation units where people can be prepared for independent living in group homes and bedsitters. There will also be a need for hostels which provide refuge rather than treatment. Obviously, the present system of financing care for the mentally ill has failed and there is a need for proper service provision with good organisation and adequate staff training.
In view of the few facts I have mentioned, I would follow the noble Lord, Lord Beswick, and ask my noble friend Lord Glenarthur to what extent Her Majesty's Government agree with the Report of the Richmond Fellowship Inquiry on Mental Health and the Community and, in particular, with the plea for essential funds to ensure progress towards the mental health service proposed in the report.
Finally, before resuming my seat, I should like to offer my sincerest thanks to the many doctors (there is one in particular) and the physiotherapists (again, there is one in particular) who have helped me. I would also wish to thank the matrons and sisters and the nursing staff of several hospitals I have attended. It is the result of their collective work that has enabled me to speak very briefly to your Lordships tonight in this Chamber, the greatest club in the world.
10.56 p.m.
Lord Winstanley: My Lords, I must begin by thanking the noble Lord, Lord Beswick, on two separate counts: first, I obviously must thank him for drawing the attention of the Minister (and thereby the Government) to this report, which is on a desperately important subject which requires some urgent action. The noble Lord, by his Unstarred Question, has at least enabled the Minister to let us know the Government's thinking on this subject at this time. I must certainly thank the noble Lord for that. Secondly, I should like personally to thank him for having played a very important and crucial role in the business of the Richmond Fellowship inquiry, and in the preparation of its report.
I, too, had the honour to be a member of this inquiry. It is true that while I perhaps made some contribution and was able to put a fair amount of time and work into it in the early stages, I am afraid that my staying power was not as great as I might have wished, and other work made it necessary for me, not to withdraw from the inquiry but to take a less positive role in it after it had started. But, very fortunately, by
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that time we had recruited the support and assistance of the noble Lord, Lord Beswick. Without the assistance that he gave us in the terminal stages, this report would not have appeared in the very clear form in which it does, and I do not think would have had the degree of influence which it now has.
In a sense, I have already declared an oblique interest in this subject as a member of the inquiry, and as such I think I ought to exercise a certain discretion and self-discipline with regard to my contribution to this debate. I know other members of the inquiry are to speak: the noble Earl, Lord Longford, who did so much to set up this inquiry and put an enormous amount of work into it as chairman, and the noble Lord, Lord Richardson, who brought immense professional expertise and experience to bear on this subject and gave us invaluable advice. In general what we really want to do, even at this very late hour, is to allow sufficient time to enable the noble Lord the Minister to give us a full reply to the points raised and the recommendations put forward in the report. Therefore, I will try to limit my remarks merely to three separate points.
First, and briefly, I think it would be right at this point to indicate that the recommendations contained in this report do have the broad support of all my noble friends on these Benches; I think it right that the Minister should know that. To move to my second point, I should like to underline as firmly as I can one particular recommendation which is contained in the report and which has been referred to already by Lord Beswick: the specific recommendation for the designation of a named Minister to have responsibility for mental health and all matters immediately connected therewith. That recommendation is found on page 92, Recommendation 1:
"The obligation placed on local health and social services under the Mental Health Act (1959) and the Health and Public Services Act (1968) should be reaffirmed by statute and the duty to see that it is implemented vested in a named Minister."
It is utterly clear, and that is the recommendation I should like to underline.
Recommendation 2 is very much connected:
"A development fund should be set up under the control of a designated Minister working with a Departmental Planning Board."
On that particular second elaboration of the functions of the named Minister, perhaps it is interesting to note that in this connection the Richmond Fellowship's inquiry is not the only fount of wisdom on this particular subject. The noble Lord will have noticed that the Scottish Association for Mental Health prepared a report on this very same subject back in August. It is interesting to note that in its report it clearly calls for the establishment of a development fund to pump prime initiatives. Indeed, many of its proposals are very much in line with the proposals in our own recommendations.
However, I leave those for the moment and come back to the specific recommendation for a designated named Minister responsible for mental health matters. As a doctor I am very well aware and conscious of the trend to end the separation of mental illness from illness in general. That trend has been going on for some years. The trend is gradually to close the old mental institutions and have the mentally ill treated in the normal way with other people in general hospitals.

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There has been a trend towards increasing acceptance in the community and by the community that mental illness is an illness and not a separate subject.
I have no wish to halt that trend but I believe that the existence of a named Minister with specific responsibility for mental health matters would be immensely heartening to all those who work in this field. That was most certainly the experience when a Minister was appointed with special responsibility for the disabled. That was not segregating the disabled in some special way. But if we are to make progress in this very important field of improving community care we are bound to be very dependent on the various voluntary bodies which work in this field. I refer to bodies such as MIND. the Richmond Fellowship, the Elizabeth Fitzroy Trust, and many others. I believe that the appointment of a Minister with specific responsibility would be immensely heartening to all those voluntary bodies. They would know that one Minister had responsibility and that there was one person to whom they could go with their appeals and anxieties.
I know that the noble Lord the Minister will recollect that in an earlier debate on another subject I referred to the need some day to break down this huge conglomerate, the Department of Health and Social Security, and perhaps hive off what are largely Treasury functions, such as dealing with pensions, and give us back a Minister of Health with Cabinet rank responsible for the National Health Service and for health, but for almost nothing else. I do not wish to re-open that subject now but this recommendation of a Minister being designated for a specific purpose is different and very much narrower. It would be encouraging to patients, to their relatives and to all the other people who feel that this part of the National Health Service has been a Cinderella, that it has been neglected and swept away. It would be an encouragement to them and to the voluntary sector upon which, I am sure, we shall be desperately dependent in the future. I should like to hear the Minister's reaction to that suggestion related, too, to the development fund, and I shall briefly return to the development fund in a moment.
My third and final point is that the whole purpose of the noble Lord's Question is to draw the Government's attention to this report and enable the Minister to give us his department's preliminary reactions, at least, to the important recommendations contained in it. I think it is right to say, as I have said before, that the Richmond Fellowship, and this inquiry, is not the only fount of wisdom on this subject. I have already referred to the Scottish Association for Mental Health, which has taken important initiatives.
My attention has also been drawn to a very interesting report which has been prepared by Mrs. Harrison-Gledhill, who is a professional counsellor and psychiatric therapist. She has prepared a report on the closure of the Camberwell Resettlement Unit. Some noble Lords will know the Camberwell Resettlement Unit. It was previously called the Camberwell Reception Centre but for some 25 years it has colloquially been known to those living in it and those dependent upon it as "The Spike". It is very much a home for the socially regressed and the incompetent and deals with single homeless people.
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Almost by definition, single homeless people are very often mentally ill. That is often why they are homeless. Because they are single, they need accommodation. Many of these people found that accommodation in the Camberwell Resettlement Unit which is now being closed. Because it is being closed, the department, the department's officials and others have the responsibility of resettling these people. I know that the report by Mrs. Harrison-Gledhill has been discussed within the department. I gave the noble Lord the Minister notice of the fact that I should ask him whether it had been drawn to his attention.
I notice that the report refers particularly to the resettlement of these single homeless people and to the efforts which officials are making. It says:
"Only a small percentage of those considered suitable for resettlement have been and have stayed resettled for more than six months. The staff spend their lives doing what daily experience teaches them is virtually impossible".
I am not in any way trying to depart from the main report we are discussing, but it is interesting that a specific report on a specific problem which arises at the same time perhaps gives further evidence in addition to our report, which is couched in much more general terms.
Later in the report of Mrs. Harrison-Gledhill she says that the staff in, I think, department SB3 within the Department of Health and Social Security,
"are confident that through their arrangements with private organisations they will find suitable accommodation by the time the unit finally closes".
That means that there is already an understanding that there have to be some arrangements with private organisations and so on.
The essential point that the Richmond Fellowship inquiry underlines is that there has been a gradual reduction in the number of mentally ill people in hospital and a closure of hospital beds, but there has been no corresponding increase in the back-up services in the community to care for the increasing number who are having to be cared for at home. In simple economic terms, now that new methods of psychiatric treatment are so complex and sometimes so consumptive of resources of one kind or another, it is desperately wasteful to spend scarce resources on, for example, rendering a schizophrenic patient stable to the extent that he can return to the community and then finding that there is no back-up support in the community. Virtually all the money spent in the hospital will have been wasted. It is that kind of waste that the inquiry wishes to avoid, as no doubt do the Government.
The suggestion for a development fund—which has also been developed by the Scottish Association for Mental Health—relates to the possibility of a better integration of official or statutory provisions with the provisions of the voluntary sector. This Government have a record which is very good in certain areas. I have been involved in certain new initiatives which the Government have taken regarding the restoration of areas of decaying cities. Projects which were to be undertaken by a Government department in partnership with local authorities have now been privatised to the extent that they have been set up under trusts to enable the public sector (Government and local government) to unlock private funds from local

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industry, local voluntary bodies and others who can assist in various ways. I am the chairman of one such trust—the Operation Groundwork Trust.
In this field we have to find more resources. One way in which new resources could be found at the moment would be by the kind of pump-priming exercise to which our report refers, as does the Scottish report. It would enable the voluntary sector to do a great deal more than it now does. Let us make no mistake: it is doing an enormous amount at the moment. MIND, the Richmond Fellowship and all sorts of other bodies are making an enormous contribution. Without that contribution, things would be very much worse.
But if we are to put things to rights, the contribution must be much bigger. I believe that the recommendation for a development fund, coupled with one particular Minister with specific responsibility, could really change the whole atmosphere and feeling in this area, so that those working in it would move ahead with new confidence that at long last it was not to continue forever to be the Cinderella of the health service.
Mrs. Harrison-Gledhill's report also contains some ideas for new methods of treatment, and I believe that our report emphasises the fact that we must look for new initiatives. We must find funds with which to promote new initiatives. Mrs. Hamson-Gledhill's report includes a reference to a fresh initiative regarding new methods of dealing with the socially regressed and incompetent. That is the kind of thing which we should not neglect. If we neglect it, we could lose opportunities which could perhaps change in a very important way the situation for the mentally ill and all those who are responsible for them.
I have spoken for too long, and I am very anxious to hear what the noble Lord the Minister has to say. I look forward to receiving a little encouragement from him.
11.11 p.m.
The Earl of Longford: My Lords, it is a special pleasure to follow the noble Lord, Lord Winstanley, whose contribution to our work was much more valuable than his modesty allowed him to tell us. It was also very pleasant to find the noble Lord. Lord Vivian. emerging as the first Conservative spokesman in the debate. He was at school with me, as was his old friend, the noble Earl, Lord Halsbury, though they were of course much junior to me. But, in so far as he belongs to my period, I am very happy to find him beginning a political career at a time when the careers of some of us are drawing towards a gentle close.
Of course I am grateful, as we all must be, to the noble Lord, Lord Beswick, for the lucid, attractive, and always forceful way in which he initiated this discussion. As the noble Lord, Lord Winstanley, said, the noble Lord was all-important in our work. In fact in the later stages of drawing up the report he played a bigger part than I did. We are grateful to him for all he did in that regard, and for what he has said to us this evening. I echo many things that he has said, and perhaps in my own remarks I may repeat too many of them. However, in particular I want to join with him in paying tribute to two hospitals known very well to both of us, the Maudsley, and the Royal Bethlem.
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I must mention one remark of the noble Lord's which I think I must have misheard. He made a reference to someone—I could hardly think that it was myself—being saintly. There must have been something wrong there. Of course all the Members of the House are saintly in their better moments. But the noble Lord, Lord Lyell, will forgive me for saying that my feelings were not saintly—they were more devilish than saintly—towards the end of the last debate, as it dragged along its weary course towards a close. I mention that point only to dispel any idea that anybody here, and least of all myself, would wish to claim any degree of saintliness. I think that the gesture of tying one's shoe lace, which the noble Lord is now doing, is particularly effective as a form of tacit rebuke.
I am sure that all members of the committee are very grateful to the noble Lord. Lord Beswick, for his speech this evening, and in turn I am sure that the noble Lord and myself are extremely grateful to the members of the committee for all their labours. In addition to leading psychiatrists and the noble Lord, Lord Beswick, and myself, the committee included four other Members of your Lordships' House. The noble Lord, Lord Winstanley, has already spoken, and we looked upon the noble Lord, Lord Richardson, as a father figure. No doubt he will give a kind of paternal blessing to these proceedings as soon as I sit down. The noble Baroness, Lady Trumpington, played a very useful part. It has apparently secured her promotion onto a higher level altogether, and so she is not able to take part in this debate. I know that the noble Baroness, Lady Faithfull, was anxious to participate. As we all know, she possesses as wide a knowledge—perhaps a wider one—of the social services as anybody in this House.
I also echo the tribute paid by the noble Lord, Lord Beswick, to the late Lord Redcliffe-Maud, who was much respected here. He worked as a member of our committee, coming up to London from Oxford almost to the day of his death. I can guess where he is at the present time, and I know he will be happy to look down on us and know that we are aware of what he underwent on our behalf.
We were indeed fortunate to be sustained, financially and otherwise, by the Richmond Fellowship, and, in that connection I would mention, as did the noble Lord, Lord Beswick, Miss Elly Jansen. She came to this country some years ago—although she is by no means an old woman, far from it—as a theological student and, as far as I know, she came without funds and built up this network of homes throughout this country and other parts of the world. I would also mention the help that we received from the Matthews Trust, whose founder. Peter Thompson, was also a valid member of our committee.
When I opened the debate on this subject—the debate which led to this inquiry and report—the Minister, who was here earlier this evening, was very sympathetic when speaking on behalf of the Government, and I would certainly like to acknowledge the goodwill shown throughout by the officials. I have no wish to reiterate what I said during that debate in March 1981. I would only say that the task is even harder than I thought and the need is even greater.
I am quite sure in my own mind—although the whole argument of the report does not rest upon

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this—that no considerable improvement of our mental aftercare provision is possible without a substantial injection of new money and new resources. I should be misleading the House if I gave any other impression. I am aware that the prospect of obtaining new resources at the present time from the present Government is not very encouraging. The outlook is bleak. Money is found for Fortress Falklands and money is found for prison building on a large scale. Large sums of money are involved. I am citing the facts. Indeed, as regards prison building, it would be far more profitable to spend the money on alternative means of treatment. I will not go into those matters now: they raise issues that obviously divide the country at present. I just wish to record the opinion that, until we are ready for a large allocation of resources to this and to the other social services, we must not expect very great improvement.
However, let us take the Government's policy as regards those matters. We are faced, whatever Government are in power, with the fact of mental illness. We have the fact stated by the noble Lord, Lord Beswick, that one woman in five, and one man in nine will receive psychiatric treatment at some time in their lives. In view of that, it might be thought that there would be a tremendous national demand for better treatment for the mentally sick. It would be an exaggeration to claim that such a demand shows itself at the present time. I would just linger on one reason for that which was touched on by the noble Lord, Lord Beswick, and which can be underlined to some advantage. No one, I hope, will underestimate my own concern for the physically disabled. Only yesterday I moved the First Reading of a new Bill to assist them, and that Bill will be taken fairly soon in this House. But the fact is that the physically disabled have wonderful champions in this House and elsewhere—people who are ready to stand up and share in the sufferings of the disabled and take pride, to use the biblical expression, "in their infirmity".
However, with the mentally ill it is quite different. They lurk in the shadows. Anybody in this House or elsewhere who is mentally ill, or who has relatives who are mentally ill, will hesitate to mention the fact. Some years ago I was chairman of the National Society for the Mentally Handicapped and I can remember the tremendous wave of encouragement that was given to the mentally handicapped when, in this House, Lord Grenfell, at that time treasurer of the National Society for the Mentally Handicapped, rose up on the Benches opposite and mentioned his mongoloid daughter. It cost him an effort, and some of his friends at least two whiskies and sodas before he spoke and another two afterwards. It was a great spiritual strain, but that made a difference, and all the more because it is so rarely done.
However, those are the facts. The mentally ill will remain for some time a weak lobby, and that means that those who sympathise with them, whether or not they have any sort of personal connection with this subject, must redouble their efforts to be of assistance.
The noble Lord, Lord Beswick, and other speakers have explained the contents of this report so lucidly that I shall not try to go over the ground again. I shall just mention two points, both of which have already been touched on, but I am bound to mention them
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again. One is the implications of this strange phrase "community care", which has become a shibboleth, but which could mean many wonderful things or be meaningless. I do not need to repeat what has been said by the noble Lords, Lord Beswick and Lord Winstanley, in particular, but, in fact, up till now it has been something of a snare and a delusion. We have had the easy part of the Mental Health Act 1959 carried out; we are beginning to empty the hospitals, and good luck to that policy. But we have failed—if not totally, then very largely—to carry out the other part: to build up community care. I know that the Minister is well aware of the strong case for greatly expanding community care.
I shall just touch on one proposal in the report which has been mentioned by other speakers—the proposal for joint mental health development committees throughout the districts. The success or failure of the attempt to make community care a reality will depend on these rather clumsily labelled committees. I hope that the proposal for these joint committees in the districts, which in itself will be quite inexpensive, will at least obtain the support of the Minister. I know that, within the confines of Government policy, the Minister is genuinely anxious to help the mentally ill. So perhaps he will find it possible to say something about that particular proposal when he winds up.
I come finally to the question of a Minister with special responsibilities for mental health. Few will deny that the appointment of a Minister for the Arts has been a far-reaching benefit to the arts and, through the arts, to the country. The same was said of the appointment of a Minister for the Disabled—in that case Mr. Alf Morris—though lately his role seems to have been rather smudged. I shall state boldly my own conviction that the cause of mental health, so long neglected, and, for reasons which I touched on earlier, always likely to be underplayed, would benefit enormously from the appointment of a Minister recognised in official circles and by the general public as a designated champion in the way, for example, that the Minister for the Arts is recognised now as a designated champion.
I am not now concerned with the precise level of the proposed Minister. I know about these levels from experience. I have been a Lord-in-Waiting, an Under-Secretary, a Minister of State, a Minister of my own department but outside the Cabinet, and a Minister with a department inside the Cabinet. I know the way that one can move backwards and forwards between those various situations.
The most successful Minister for the Arts, by common consent, was Jennie Lee, who started ministerial life, if I remember correctly, as a Parliamentary Under-Secretary in the Ministry of Education. So while the level is important it is not everything. Mr. Alf Morris, coming to his task admittedly with the great achievement of the Bill behind him, was equally effective although no more than an Under-Secretary. May I say respectfully to the Minister who is to reply, and who is liked by everyone, that it is not enough for us to be told that he has a special responsibility within the department.
Any of us who has been an Under-Secretary, or had Under-Secretaries under him, will know that that in itself does not give the Minister any great influence.

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Many years ago I was an Under-Secretary in the War Office and given the responsibility of recruiting. But no one thought that I had very much power over recruiting. I do not know whether it did any better or any worse in my time than at any other time, but I was not the Minister of Recruiting in the same sense that a Minister with responsibility for the arts is Minister for the Arts.
I am certainly not concerned with personalities. So far as I am concerned, the noble Lord might well be the ideal Minister, so I hope he will not think I have in mind some suggestion that he should be replaced by somebody else. Not at all. I am happy to see him sitting there, but it is no good his telling us that he is already Minister for the mentally ill. That means nothing if it is simply something that leaks out in the course of Question Time.
If we go back to the Gospels we find that Jesus Christ placed physical and mental illness on the same footing. A high proportion, something like a third of the miraculous cures, were mental cures. Today the language is different. We do not talk about casting out devils, or at any rate that is not the phraseology used in official circles, but the issues are not really changed. Christian traditions and modern psychiatric advances combine to produce profound tenderness towards the mentally sick among so many dedicated people.
Your Lordships may remember that one of the multitude brought to Christ his son who had what is called a "dumb spirit". I am now quoting from the Gospel.
"'Oft times' he said, 'it hath cast him into the fire, and into the waters, to destroy him: but if thou canst do any thing, have compassion on us, and help us'. Jesus said unto him, 'If thou canst believe, all things are possible to him that believeth.' And straightway the father of the child cried out, and said with tears, 'Lord, I believe; help thou mine unbelief'".
The question today is whether we care enough, and whether we believe enough in our duty to the mentally ill. In this House at least I am hopeful that the answer is that we do.
11.28 p.m.
Lord Richardson: My Lords, the difference in the way that we should think about the mentally ill and the physically ill is very small; and the way in which we should attempt to relieve the mentally ill who have returned to the community is indeed compatible with the best medical principles as practised throughout medicine today. We believe—and in this of course the Government encourage us—that patients should not be in hospital longer than they need be, and that they should be cared for properly when they return to the community. This is widely accepted, and the periods in hospital for physical illness are always reducing.
What the Richmond inquiry has come up with, apart from their insistence, about which your Lordships have heard, is the importance of the organisation headed by a Minister, and funded in such a way that the funds cannot be diverted to other purposes, and it can be seen by all concerned that the funds are not so diverted, and that the Minister and those below him are profoundly dedicated and interested. This principle has been put to the House with great vigour by the speakers this evening. All I want to say is that the professional people, at a lower
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level, that of the patient, will have to implement the efforts that we so earnestly hope the Minister will tell us he is prepared to make, and they are able to do so; they are willing and know how to work as a team.
However, teams have to be trained. Although there is evidence of admirable training for the constituent parts of the team—namely, the doctors, the nurses and social workers; and. very important, the voluntary workers who do so much—there is, nevertheless, an important gap which needs to be dealt with. That is, to produce a common core of information and training which is common to all the professions concerned, so that they understand each other, and so that their disciplines will inter digitate and not be separate. A nurse should know the point of view of the social worker and not be solely concerned with the giving of her particular skills. The social worker should understand the place of the nurse. The doctor should be able to communicate, to explain and to understand the problems of the other professions and how best they can exercise their skills.
If this is done, as it can be, provided that there is confidence in the minds of these professionals that real support will be maintained and not diverted or amputated by cuts, then I have no doubt that great advances could be made in the care of people who should not be in hospital, but who should be, if not in their own homes, as near to their homes as they possibly can be.
A terrible burden lies on the families and on sufferers from mental illness; a burden that I am convinced is more than is felt by almost any form of physical illness. In the report the word "stigma" appears, and that appeared advisedly. I am trying to say that with co-ordination, proper appreciation of the skills of others and bringing them all together to bear on the patient, great things can be achieved. But they cannot be achieved at all—they can hardly be begun—unless there is the real confidence that those who are responsible for organising the service are profoundly prepared to see that it works. To put it in more practical terms: they must see that it works in accordance with the Griffiths' philosophy, and to see that it is properly financed. We all await the Minister. We have spent a great deal of time saying so and I will now sit down.
11.33 p.m.
Lord Wallace of Coslany: My Lords, we are dealing with a very important subject, unfortunately at a late hour, and in an Unstarred Question debate. The subject needs much wider discussion, although one should be very grateful indeed to all those noble Lords who have taken part in the debate so far.
It is not my intention to make a long speech. not as long as my speech in the debate of 31st March 1981. I reread the whole of that debate and congratulate the Richmond Fellowship on the way it used that debate to set up the inquiry which has resulted in such an excellent and positive report. It would be fair to say that in the last two years welcome changes have taken place in the mental health field, mainly as a result of the passing of the Mental Health (Amendment) Act, in the various stages of which this House played a very prominent part. But this Act, itself, asserting as it does patients' rights, adds to the problems that are fully faced in the Richmond Report.

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Reference has been made by my noble friend Lord Beswick to press reports, particularly in the Sunday Times of 20th November, which featured an article by a lady called Margery Wallace; but she is certainly no relation. She dealt with the pitiable position of,
"thousands of mentally ill people being abandoned in squalid lodging houses or even decanted on to the streets".
It is a sad story compared to the situation which exists in the 40 centres run by the Richmond Fellowship. We have been told that over the years the number of mental patients has been run down, so far as hospital treatment has been concerned, by about 70,000; and now a further 20,000 are expected to leave hospital as a result of closures. This will only add to present problems.
I agree that some of our old, outdated mental hospitals need to be demolished. There is one close to me, Darenth Park, which is going to be demolished. But the trouble is that, even so, patients will have to settle down in the transfer to the new units of accommodation within the hospitals and get used to their new surroundings. The nurses have admitted that. It will be difficult enough for these patients, but at least they will have skilled nursing staff available to assist them in the transition period. Release into the outside world, for many, unfortunately, does not mean the provision of care and reasonable accommodation. The release of many people from institutional care, some after a very long period, raises the problems of aftercare accommodation and employment.
Most of the people leaving a mental hospital after a lengthy stay face a very strange world and need care and guidance gradually to accustom themselves to a new and very strange environment. This is where the recommendation to set up a new organisation, particularly at district level, would go a long way to organise methods to provide that badly needed care.
In the debate on 31st March 1981, I referred to what happened in Norwich, where the local authority, the voluntary organisations and the health authority got together to produce transitional accommodation where female patients were able to settle down, to face the problem of buying things themselves and to do the little things which mean so much. And they were being helped by experienced nurses seconded for the job. That is an ideal scheme and such schemes are ideal. But unfortunately there is still a long way to go. The setting up of the suggested new organisation, as I have said, will go a long way to intensify efforts in the recommendation that has been advanced.
My Lords, there is a call for a designated Minister. It is a fact that the Minister responsible for the mental health services—and that by his own admission, probably at a very loose moment—is the noble Lord, Lord Glenarthur. It would be interesting and useful to the House if he could outline very briefly his present responsibilities in the mental health field. I ask this purely for information and no more. But, of course, what is needed is a Minister with complete responsibility for the mental health service and answerable to Parliament as such. In saying this, there is no personal reflection on the noble Lord, Lord Glenarthur, who himself, I know, is taking a very keen interest in this problem.
The mental health section, as the noble Lord, Lord Winstanley, and others have said, is still the Cinderella
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of the National Health Service. It is true that some of the stigma unnaturally attributed to mental illness has been gradually removed, but too much of it still remains and a majority of people just do not want to know.
Furthermore, in the present public concern over the effect of cuts in the National Health Service—or, to be fair, and putting the Government's view, the drive for efficiency and economic management—the plight of mental hospitals and their related services tends to be overlooked when they are suffering at least as much as or, in some cases, more than general hospitals. This attitude is mainly because the local general hospital is regarded as part of the community, while the mental hospital is normally not discussed by the majority. I say "the majority" deliberately because it gives me the opportunity to pay to the valuable and useful work put in by friends of various mental hospitals tribute for the efforts they make, the funds they raise and the visiting that they carry out. These are extremely enlightened people doing valuable voluntary work.
The inquiry report does cast light on the importance of mental health care in all its aspects in the community, and its title, Mental Health and the Community, is apt and underlines the outstanding need for such an approach. Of course, finance is needed—and here I must admit that I lack a degree of confidence that it will be provided in the very near future; but you never know, and the need must be stressed.
In conclusion, may I say this? Here is a report compiled with sympathy and understanding with sensible, progressive and logical recommendations. Like my noble friends, I look forward to the reply of the noble Lord, Lord Glenarthur, which, I am certain, will be made in a sympathetic manner and perhaps will raise a ray of hope, or even a slight degree of optimism. I hope it will.
11.42 p.m.
Lord Glenarthur: My Lords, I think we are all grateful to the noble Lord, Lord Beswick for asking this Question tonight. When he started his speech, the noble Lord referred to the history of mental health as fascinating and moving, and we have heard some fascinating and certainly some moving speeches tonight. He is quite right in what he says: that to the uninitiated in this field it often seems a sad and even distressing subject to become involved in, and I must confess that to some extent I found this myself when I took up my present responsibilities. But I have to say that I have also found a great deal to be encouraged about in the way that the mentally ill are looked after. While I would be the last to say that there are no problems at all, I do not think that the situation is quite as bleak as some noble Lords have made out tonight.
The report with which this Unstarred Question is concerned, as the noble Lord is aware, was received by my Department in July and, as I said in your Lordships' House on 2nd November, is still being considered. As the noble Lord, Lord Beswick, will no doubt recall, my officials recently met him, the noble Earl, Lord Longford, the noble Lord, Lord Winstanley, and the noble Lord, Lord Richardson, and representatives of the Richmond Fellowship to

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discuss the conclusions and recommendations of the report. As we said then, the Government's initial broad reaction is quite favourable. But I have to stress that consideration of the report has not yet finally been completed. Nevertheless, it is quite clear even now that it would be difficult to implement some of the recommendations it makes. In particular, those that involve additional expenditure or involve issues that we would normally expect health authorities to decide for themselves will require our particular concern. Our response will naturally also have to take account of the recommendations contained in the recent National Health Service Management Inquiry: the Griffiths report, to which the noble Lord, Lord Beswick, referred.
Your Lordships will be aware that the purposes of this inquiry were to review the initiatives that had been taken by the Government to improve health service efficiency and to advise on further action. The team has produced recommendations designed to improve accountability and to strengthen management in the National Health Service. Their aims—and ours—are to secure the best deal for patients and the community within available resources; the best value for the taxpayer and the best possible motivation of staff.
While none of the recommendations relates specifically to psychiatric services, most will have some implications for their future delivery. The report has been welcomed by the Government and its general thrust has been accepted. Consultations are now proceeding with health authorities and professional and other interests. At this early stage, it seems likely that such things as the extension of the accountability review process through to unit level, the initiation of cost improvement programmes, which will certainly help mental health, the taking of all day-to-day decisions at hospital or unit level, the greater involvement of clinicians in the management process and other items which I could list, could all impinge beneficially on the mental health services in this period of transition.
A number of your Lordships raised the matter of a Minister with special responsibility for mental health. As was stated, it is something which was raised on 2nd November when I answered a Question. I am sorry that some of your Lordships feel that more needs to be done on this account. I understand the motives behind their argument, but I think they will accept that there are obvious pitfalls in attaching a variety of specific labels to Ministers. They will undoubtedly multiply and, in doing so, may become devalued and therefore meaningless.
I was surprised to hear from the noble Earl, Lord Longford, that the country at large did not know that I have my particular responsibility until, as he put it, it leaked out at Question Time. I can assure him that it was only a very few hours after I reached my desk at the Elephant and Castle when both the voluntary and the statutory sectors got in touch with me. They have not ceased to do so since, and I enjoy meeting them, hearing from them and talking to them, and I learn a very great deal from what they have to say. So I hope I can reassure both them, and those of your Lordships who are concerned on this point, that my responsibilities for mental health take up a very large
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proportion of my time.
Perhaps I may come back to that in a moment, but the noble Lord. Lord Wallace, asked me exactly what my responsibilities are so far as mental health is concerned. I could elaborate at some length on what I am going to say, but I do not think I shall do so now. What I ought to say is that I provide something of a focal point within the department for the development and review of mental health services. This involves co-ordinating the contributions of the voluntary sector, the health service and local personal social services.
I have already made a number of visits around the country to form a first-hand impression of the problems faced in this field and, in doing so, I have met representatives of organisations such as MIND, the Mental Health Foundation and MENCAP. The noble Lord, Lord Winstanley, drew attention to the importance of these voluntary agencies. He is quite right. We really could not do without them, though I do not think I could agree fully with the noble Earl, Lord Longford, that with powerful bodies such as these the mentally ill do not have champions. They most certainly do.
The noble Earl, Lord Longford, and the noble Lord, Lord Winstanley, also referred to the financial position generally. I think it would probably be worth my while pointing out at this juncture that the department's grants to the voluntary bodies—taking them as a separate issue in the mental health field—will amount to about £800,000 this year. So I hope that that indicates that we attach a very great deal of importance to all the work that they do, and do what we can to encourage them.
However, to come back to the point made by the noble Earl about labelling a Minister with special responsibilities, I am sure that that is a point which my right honourable friend the Secretary of State and my right honourable friend the Prime Minister will take into account. I do not think I can go further on this point than to say what I said earlier.
Perhaps I can list now those aspects of the report which the Government can commend. They are: the accent on comprehensive mental health services in every district; the emphasis on training of staff; the need for co-ordinated planning between health and local authorities; the involvement and greater recognition of the role of the voluntary sector; and the monitoring of service provision and standards.
May I now turn to some of the more specific recommendations contained in the report. On the question of a new development fund, the report considers that the present joint funding arrangements are unsatisfactory because local authorities and voluntary organisations have to take over revenue costs from health authorities after a "tapering" period. I am aware that there are difficulties at the local level over joint finance, and the point the report makes will be fully considered. Nevertheless, the Government introduced improvements to the system earlier this year. These should ease some of the problems that have arisen.
The report envisages the establishment of a new development fund, as described by the noble Lord, Lord Beswick. This would involve a substantial annual

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investment of additional funds made available by central Government over a considerable period of time. The money would be disbursed through joint funding arrangements so that revenue costs could be continued indefinitely.
I must point out that such a fund could only be financed from existing resources and would thus have to come from monies at present allocated to health and local authorities. There are two major obstacles to this proposal. First, it would have the effect of transferring responsibility for decisions on service needs and provision from the local level to central authority. This flies in the face of the long-standing policy of local decision-making being an essential part of community care. Secondly, it would single out mental illness for special treatment, even though there are of course other priorities—for example, mentally handicapped people, whom I also look after, elderly people and physically handicapped people. I really do not believe, despite what has been said in the debate tonight, that the Government could necessarily agree to set any one priority group ahead of the others, although the points which noble Lords have made will be taken into account.
Lord Beswick: My Lords, is it really proper to proceed with the closure programme if the alternative services are not to be financed because the money is not available?
Lord Glenarthur: My Lords, the closure of some of these hospitals will lead to the repositioning—if that is the right word to use—of a great deal of cash which is tied up in hospitals which do not necessarily meet the requirements of the people who are in them. To give an example of the kind of funds which will be made available from revenue, a couple of weeks ago I visited one of the hospitals in Surrey which is due to close in due course. I believe I am right in saying that the figure I was quoted for heating alone was £500 per patient per year. That is a fairly staggering figure. If it is possible to divert revenue which is being wasted in some respects in this way and to put it into the community, it may be one way in which we can meet the noble Lord's requests.
The report also recommends a departmental planning board specially for mental illness to assist the Minister with special responsibility for mental health in the task of allocating money from the development fund to improve mental health services generally. This recommendation goes hand in hand with that for a new development fund and also raises similar difficulties. On the positive side, my honourable friend the Minister for Health recently agreed to set up a joint working party with the local authority associations to consider improvements to the joint planning arrangements. This development holds out the promise of more effective and better co-ordinated planning for the future.
One of the other recommendations in the report—to which the noble Earl, Lord Longford, referred—is the setting up the joint mental health development committees. They would have the responsibility for achieving minimal standards for district services. The report envisages that they be given statutory force.
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The Government endorse the need for joint planning between health and local authorities, as I made plain just now, and recently passed legislation to give voluntary organisations places on joint consultative committees. It is a matter for a joint consultative committee itself to decide what committee structure it needs—so that if it does consider a mental health development committee to be more effective than a joint care planning team, it can no doubt act on the inquiry's recommendation.
The report goes on to propose—as the noble Lord, Lord Beswick, said—the setting up of an inspectorate to monitor services along the lines of Her Majesty's Inspectors of Schools system. Its function would be to extend the valuable work of the health advisory service and social work services. The report also mentions the strengthened inspectoral role that the Government have announced for social work service.
We shall carefully consider that proposal because it echoes the Government's desire to obtain effective and efficient services. However, we may well conclude that it will be better to rely on strengthening the existing mechanisms for monitoring service provision rather than creating new mechanisms; and the health advisory service already has an excellent reputation.
Another of the report's recommendations for which I have some sympathy is that the basic elements required in a comprehensive community service should be made mandatory. It is already our long-term aim that comprehensive mental health services should be provided in every district. But as the 1975 White Paper, Better Services for the Mentally Ill, made clear, progress towards them will take 20 to 30 years to reach fruition and will depend on the ability of the nation's economy to provide the necessary financial resources. It is in the long-term interests of all mentally ill people, therefore, that the economic progress this Government have made is maintained and built upon.
In order to improve accountability and clarify objectives, a system of annual performance reviews was introduced into the National Health Service in January last year. Mental illness provision is one of the subjects studied in preparation for the reviews and indeed it features in most of the review meetings themselves. Those are just the sort of meetings which discuss the kind of closure programmes to which the noble Lord, Lord Beswick, referred in his speech. I can certainly assure the noble Lord that I take a particular interest in the programmes which regional health authorities put forward when I undertake such reviews, which I do fairly regularly. Those reviews are also continued between the region and the district concerned. There is great merit in the review procedure.
I note that the report further urges that the obligation placed on local health and social services under the Mental Health Act 1983 and the Health Services and Public Health Act 1968 should be reaffirmed by statute. The report is almost certainly referring to the statutory obligation to provide aftercare services. The 1983 Act does partly reaffirm the statutory obligation to provide after-care, but there has been a duty placed on local authorities to make appropriate arrangements for mentally ill people for many years. It can be traced back to powers in the

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National Health Service Act 1946, which directions—issued in 1950—converted to a duty.
Those directions were renewed in a circular issued to local authorities in 1974 advising them of their responsibilities. We have consistently taken the view that Section 117 of the Mental Health Act 1983 does no more than re-state an existing responsibility and we therefore see no need to reaffirm that obligation yet again.
Several noble Lords are concerned at the need to promote good mental health positively. On this front the department are involved in such matters are improving the position for those people who care for relatives and friends suffering from mental illness. It may not have been a point brought out tonight but I believe it is one worth stating now.
We are discussing with the Health Education Council ways of promoting and increasing public awareness of mental health. We fund organisations active in the field of bereavement counselling such as CRUSE and the Widows' Advisory Trust, and we are looking into the special problems raised by disturbed adolescents—all areas, we think, where investment of time and money can have quite wide-ranging benefits.
Several of your Lordships have said some—I do not know if discouraging is the right word, but I think it almost amounted to that—things about the reality of the care in the community. I should like to respond to some of the points raised. First, it needs to be clearly understood that this is not a new policy: successive Governments for many years have embraced the policy that most people who need continuing care should be looked after in the community. Mentally ill people are but one of the groups that this policy involves. Most of our psychiatric patients who had been in hospital a long time and who could benefit from living outside hospital have already been discharged.
It also needs to be clearly borne in mind that the great majority of people who suffer from a mental illness either never go into hospital for treatment or, if they do, are discharged to home and family within weeks. Thus, most mentally ill people already receive the most natural form of care in the community—that is, of course, care.
The noble Lord, Lord Wallace, mentioned the figure of 20,000 who might be transferred from mental hospitals. He is not quite correct in that figure, I am afraid; I ought to tell him that of the approximately 70,000 patients at present in mental hospitals it is estimated that up to about 5,000 may benefit from living outside and it is on this comparatively small proportion that the "care in the community" policy focuses. That figure puts in perspective what I think was really a fairly misleading statement in the article in the Sunday Times that was referred to earlier, which more or less implied that hospitals were being closed willy-nilly, and the patients were being turned out into the streets. That is not the case.
The noble Lord, Lord Winstanley, asked about residential accommodation and the number of places there were. It might interest him to know that residential accommodation has increased by over 30 per cent.
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between 1975 and 1982, and day centres by about 50 per cent. over the same period. Day hospital places increased by about 150 per cent. between 1970 and 1981. The noble Lord also asked about the provision of psychiatric nurses in the community. I can tell him that staff numbers more than doubled between 1976 and 1981.
Because we were aware that the financial arrangements between health and local authorities designed to assist the move to community care were not working as well as they might, we introduced more flexibility into the system earlier this year. Health authorities can now guarantee continued funding to local authorities and voluntary organisations for people moving out of hospital, and this ought to assist progress considerably. We shall also shortly be issuing a circular to extend the joint finance arrangements to cover the costs of providing accommodation, for instance, through housing associations, and this too should help.
The noble Lord, Lord Richardson, spoke of the need for professional training on a multi-disciplinary basis. Perhaps I may say to him that the Government fully recognise the desirability of effective training for all staff involved in the provision of mental health service. I have read with interest the report's suggestions for improvement of professional training, and I am particularly impressed by what the noble Lord, Lord Richardson, said in calling for a common core of information to be available for the different professions. I am grateful to him for his contribution.
The noble Lord, Lord Winstanley, asked about Mrs. Harrison-Gledhill's report. May I briefly tell him that in 1981 the Government announced plans, as he knows, for the replacement of the Camberwell Resettlement Unit by small hostels run by voluntary organisations to be funded jointly by the DHSS and Department of the Environment. Work is well advanced towards completing the objective of closing the resettlement unit by the end of1985. Mrs. Harrison-Gledhill's report on the problems likely to be experienced during the closing down period and her suggestions for the future treatment of the socially regressed and incompetent have been studied in the various branches of the department with considerable interest. When officials met her in August last they made a number of comments which she agreed to consider. I have to tell the noble Lord, Lord Winstanley, that we have not heard from her since. She has not come back to us so I cannot go much further on that tonight.
I close by stating my very real appreciation for the enormous contribution made and the effort that has gone into the production of the Richmond Fellowship Report. I and my ministerial colleagues will continue to give the report's recommendations our close consideration. We certainly do not profess to hold a monopoly on the fount of wisdom on this matter. However, I hope that I have demonstrated this evening the genuine efforts we are making to improve mental health services and that we are only too keenly aware of the issues raised in the report.
House adjourned at seven minutes past midnight.

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