Sitting of 4 April 1984

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

  NEW WRITS
  For Stafford, in the room of the right hon. Sir Hugh Charles Patrick Joseph Fraser, MBE, deceased.
  For Surrey, South-West, in the room of the right hon. Maurice Victor Macmillan, deceased. — [Mr. Wakeham.]

Oral Answers to Questions
  ENVIRONMENT

    Local Government Reform
    Mr. Wareingasked the Secretary of State for the Environment if he has received any further responses to Cmnd. 9063, "Streamlining the Cities," since he last answered oral questions.
    The Secretary of State for the Environment (Mr. Patrick Jenkin): Yes. I have now received over 2,300 responses in total.
    Mr. Wareing: What proportion of those responses call into question the right hon. Gentleman's proposals? Is he willing to accept the responses of the Merseyside chamber of commerce that Merseyside county council has successfully promoted economic and business activity in the region and that the abolition of that council would result in no savings for the business community on Merseyside? Bearing in mind that the right hon. Gentleman told the Tory party conference last October that it should listen to the voice of industry, is it not about time that he practised what he preached?
    Mr. Jenkin: The Government were elected on a clear manifesto commitment to carry out this reform of the structure of local government in metropolitan areas, and we propose to do that.
    Mr. Cormack: Will my right hon. Friend give further thought to issuing a White Paper detailing his considered proposals when he has had an opportunity to reflect on all the representations that have been made to him?
    Mr. Jenkin: I am considering the best way to announce our decisions on a number of matters about which we have received representations. I hope to show some of the Government's thinking when I move the Second Reading of the Local Government (Interim Provisions) Bill which I introduced last Friday.
    Mr. Robert C. Brown: Further to the reply given to me by the Under-Secretary on 7 March, may I ask when
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    the right hon. Gentleman proposes to publish the full objections and representations that he has had about the White Paper?
    Mr. Jenkin: As I said when I answered questions last time, it would be contrary to all precedent for the Government to publish all the representations that they have received. We shall make available shortly, I hope before the weekend, a brief summary analysis of the main points. That will be followed as soon as possible thereafter by the full summary analysis of the representations.
    Mr. Jessel: Does my right hon. Friend know how much ratepayers' money the GLC has spent on propaganda in favour of its own continuation?
    Mr. Jenkin: The figures that I have seen suggest that up to the end of March it spent more than £2 million and that it has budgeted to spend a further £1 million in the remainder of the calendar year. Many ratepayers will regard that as a gross abuse of ratepayers' money.
    Dr. Cunningham: As the proposals are against all precedent, why are the House and the 18 million people who will be affected by the proposals being denied any sight of the evidence? Is it not true that there is no manifesto commitment for the abolition of elections in 1985 as is being proposed? Does the Secretary of St ate not recognise that he is setting a very dangerous constitutional precedent in taking this course of action?
    Mr. Jenkin: On the contrary, all the precedents are in favour of what the Government are doing. In each previous local government reorganisation, in 1963 and 1972, provisions were introduced with wording very similar to that in the Bill which I hope the House will debate next week.
    Dr. Cunningham: They were by-elections.
    Mr. Jenkin: As well as catching by-elections, the provisions caught ordinary elections for county boroughs and urban and rural district elections, many of which were elected by thirds. We happen to be dealing with a council the whole of which is up for election, but the principle is the same.

    Polychlorinated Biphenyl
    Mr. Kirkwoodasked the Secretary of State for the Environment what evidence he has received on the levels of incidence of polychlorinated biphenyl in the United Kingdom; and if he will make a statement.
    The Under-Secretary of State for the Environment (Mr. William Waldegrave): Manufacture of polychlorinated biphenyls — PCBs — ceased in the United Kingdom in 1977. Their use is declining, and both their use and disposal are controlled. Evidence of a decline in environmental levels of PCBs is so far inconclusive. The evidence which Ministers receive is published and I will, with permission, circulate references in the Official Report.
    Mr. Kirkwood: I am grateful to the Minister for that reply. Does he accept that it is time to review the levels set for some of these persistent and toxic chemicals? Is he aware of the situation at Bonnyrigg, at the Re-Chem (International) factory? There is evidence that some of the cattle stock losses are attributable to PCB poisoning.
    Mr. Waldegrave: I must refer an allegation about a specific incident in Scotland to my right hon. Friend the Secretary of State for Scotland, because the inspectorate in Scotland is separate from that in England. The hon. Gentleman is right to say that Re-Chem disposes of these substances under strict controls, which are kept up to date. Further provisions are under discussion in the EC for tightening the controls, and at the recent Council of Environment Ministers I was able to say that I welcomed those proposals.
    Following are the references—

    (i) Digest of Environmental Protection and Water Statistics, No. 6, 1983 (DOE/HMSO 1984), Table 3.5(b); Additional Tables 24 and 29.

    (ii) Polychlorinated biphenyl (PCB) residues in food and human tissues: 13th report of the Steering Group on Food Surveillance (MAFF/HMSO 1983).

    Local Government Reform
    Mr. Fatchettasked the Secretary of State for the Environment what representations he has received about the proposed cancellation of the 1985 elections in the metropolitan counties.
    Mr. Patrick Jenkin: The proposed suspension was the subject of representations by all the six metropolitan counties, by a third of the metropolitan districts and by others. I considered those representations carefully before introducing the Local Government (Interim Provisions) Bill last Friday.
    Mr. Fatchett: Is the Secretary of State aware that the public are concerned that legislation is being introduced to abolish elections before the House has had an opportunity to vote on the principle of the abolition of metropolitan counties? Is not the real reason for the cancellation of elections simply the fact that the Government are frightened to give 18 million people the opportunity to vote on the issue?
    Mr. Jenkin: I can reassure the hon. Gentleman because, as I made clear when the Bill was introduced and I held a press conference, it is my intention—and I shall announce this firmly on Second Reading—that an order for the suspension of elections will not be introduced until after the House has given a Second Reading to the main abolition Bill in the next Session of Parliament. Therefore, the proprieties will be preserved.
    Mr. Hal Miller: With regard to the proposed Bill, will my right hon. Friend accept that there is a degree of scepticism about whether any reorganisation of local government can produce savings either in expenditure or staff and that he could help dispel such scepticism and gain support for his Bill if he were able to say that attention was being given to the whole question of local authority financing, without which it appears to some people that reorganisation is unlikely to produce the desired results?
    Mr. Jenkin: My hon. Friend will recognise, because he follows these things closely, that where affected authorities have been able to make worthwhile estimates of the cost to them of running the services that will devolve upon them, they have indicated the prospect of substantial savings. Part of the difficulty is that a number of authorities have forbidden their officers to take part in any discussions either with officials of my Department or with
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    the lower-tier authorities. Therefore, until that road block is removed I am not in a position to make detailed estimates covering the whole of the seven areas affected.
    Mr. Loyden: Is the Secretary of State not aware that since he declared war on local authorities he has united such divided sections of the community as the Church leaders in Liverpool and what he has referred to as the militants on Liverpool city council? Is it not time he realised that the growing opposition to the policies he is pursuing must be recognised and that he should now consider the representations that have been made to him by the mass of the community in Liverpool about Merseyside county council?
    Mr. Jenkin: There is a later question on Liverpool, but I must point out to the hon. Gentleman that the House passed the Rates Bill by a larger majority on Third Reading than on Second Reading, which does not suggest declining support. Secondly—I have to remind the House of this when I have the opportunity — we are doing no more than implementing the recommendations of a large number of metropolitan districts, including Liverpool city council, which made the proposition that power should devolve upon them.
    Mr. Bottomley: Will my right hon. Friend accept that if the measure for the suspension of the 1985 elections is passed it will imply that the House is satisfied with the Government's general proposals for metropolitan counties? Can he state whether he has yet heard from the right hon. Member for Manchester, Gorton (Mr. Kaufman) why he failed at any stage during the general election to defend the existence of the GLC or metropolitan authorities?
    Mr Jenkin: The right hon. Member for Manchester, Gorton (Mr. Kaufman) must be answerable for himself, but I think his views are well known. The answer to my hon. Friend's first point is that we do not intend to introduce the order suspending the 1985 elections until after the House has given its approval in principle, which it will do by giving a Second Reading to the main abolition Bill at the beginning of the next Session of Parliament.
    Mr. Boyes: This question is about representation. How can I be assured that you will tell the truth about the——
    Mr. Speaker: Order. I think the hon. Gentleman knows that I do tell the truth.
    Mr. Boyes: My apologies, Mr. Speaker. How can I be assured that the Secretary of State will tell the truth, when one of his underlings deliberately lied to me on 29——
    Mr. Speaker: Order. That is not in order either.
    Mr. Boyes: I am sorry if I am using the wrong word, but there are so many different words to use. When the Under-Secretary said——
    Mr. Speaker: Order. This the third time. The hon. Gentleman must not quote. He must ask his question.
    Mr. Boyes: When I asked a question about how many metropolitan council opposition leaders were against abolition, I was deliberately misled, and the House was deliberately misled, by Mr. Waldegrave——
    Mr. Speaker: Order. "The Minister" would be more helpful.
    Mr. Boyes: The Minister deliberately misled the House by implying——
    Mr. Speaker: Order. Nobody in the House deliberately misleads. The hon. Gentleman must know that.
    Mr. Boyes: The Minister misled the House when he implied that the opposition leader on the metropolitan county council of Tyne and Wear was in favour of the abolition of Tyne and Wear council. I have proved to him since, by sending him a minute of the meeting, that this is not true.
    Mr. Jenkin: I should have thought that the hon. Gentleman might decently have offered an apology for the accusations that he tried to make against my hon. Friend.
    Mr. Hayes: Is it not remarkable that Opposition Members should be complaining about a lack of consultation, when it was made clear by the British people at the general election that they wanted the abolition of the metropolitan counties because they were sick to death of the £770 million overspend, leading to the loss of jobs?
    Mr. Jenkin: My hon. Friend has obviously been reading the Labour party's manifesto at the last election, in which it proposed single-tier local government, including the abolition of the metropolitan district councils and, presumably, the GLC.
    Dr. Cunningham: Is it not complete deception for the Secretary of State to say that there are precedents for what he now proposes? When did a Government ever use a device to bypass the ballot box and change political control of a major city in this country?
    Mr. Jenkin: The precedents are perfectly clear. If the hon. Gentleman refers to schedule 3(6) to the London Government Act 1963 and to schedule 3(12) to the Local Government Act 1972, he will find precedents that are very close indeed to what we are putting before the House. The fact that on this occasion the whole authority will be up for election is a difference of degree, not a difference of principle.

    Systems-built Dwellings
    Mr. Concannonasked the Secretary of State for the Environment if he is yet able to announce the date for publication of his Bill relating to systems-built dwellings.
    The Minister for Housing and Construction (Mr. Ian Gow): The Bill will be introduced later today and published tomorrow.
    Mr. Concannon: Is the Minister aware of the urgent need for its publication, if only to allay the fears of householders who find themselves living in what is now virtually blighted property?
    Mr. Gow: I agree entirely with the right hon. Gentleman and hope that it will be possible for the Bill to have a speedy passage through the House, in order to give assistance to precisely those to whom he refers.
    Mr. Hugh Brown: Will it be a United Kingdom Bill, and will there be consultation with the Scottish Office to increase the capital allowances that will be required by authorities which must buy back houses and do a great deal of remedial work?
    Mr. Gow: The Bill will apply to England, Scotland and Wales. I understand that the Secretary of State for Northern Ireland will introduce similar provisions for
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    Northern Ireland. We have decided that where local authorities have a duty to repurchase under the arrangements there will be an Exchequer contribution equal to 75 per cent. of an authority's expenditure in excess of the defective value of the house or flat repurchased.
    Mr. Heffer: We shall examine the Bill carefully, as we on these Benches believe that the private owners concerned are entitled to assistance. Is the hon. Gentleman aware, however, that there will be many thousands of council tenants as well as local authorities—this appears to be the case at present, and I hope that the Bill will deal with the situation—who will not receive financial aid to deal with the problems involved? Has the hon. Gentleman seen the AMA report entitled "Defects in Housing'', in part 2 of which it is estimated that it will cost £5 billion to deal with the problems of post-1950 systems-built housing, and that a further £5 billion will be needed to cure the problems created by similar pre-1950 properties? What provision will be made to help both tenants and authorities? Is the hon. Gentleman not also aware that the local councils were subjected to pressure by Governments, including Labour Governments, to use systems-built housing? The councils now require assistance. What assistance will they receive under the Bill?
    Mr. Gow: I am aware of the report to which the hon. Gentleman refers. Indeed, we had a three-hour debate on this topic during the debate on the Consolidated Fund Bill last month. Present subsidy arrangements take into account expenditure on redevelopment and capitalised repairs. In general, 75 per cent. of the loan charges on capitalised repairs and redevelopment count towards an authority's subsidy entitlement.

    Council House Sales
    Mr. Dubsasked the Secretary of State for the Environment how many council properties were sold in 1982–83 other than to sitting tenants.
    The Under-Secretary of State for the Environment (Sir George Young): An estimated 5,700 dwellings were sold, other than to sitting tenants, by English local authorities and new towns in 1982–83.
    Mr. Dubs: Is the Minister aware that Wandsworth council—and this may have been done by others—has recently approached tenants on a local council estate and told them that they will have to leave their properties because they are to be done up, repaired or improved, and then sold? Will the Minister condemn this action by Wandsworth council as typifying a kind of latter-day Rachmanism which should have no part in British local government?
    Sir George Young: Certainly not. The question which the hon. Gentleman tabled deals with the sale of vacant dwellings, whereas the issues that he has just raised—[HON. MEMBERS: "No."]The question relates to dwellings sold other than to sitting tenants, and the question which the hon. Gentleman just posed relates to dwellings where there are sitting tenants.
    Wandsworth council has raised about £9 million by selling dwellings other than to sitting tenants, which has enabled it to make faster progress. I have seen an article in The Standard today which I think relates to the hon.

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    Gentleman's supplementary question. I have to say that the allocation and management of the housing stock is a matter for Wandsworth council.
    Mr. Heddle: Does my hon. Friend agree that those 5,000 people who bought their homes under the homesteading scheme, or under the half-and-half scheme, should be eternally grateful to the Government in the last Parliament for allowing them to do so? Does my hon. Friend also agree that a large proportion of those people bought their homes with the benefit of a mortgage from the local authority? Would not his advice from the Dispatch Box today be that they should transfer their mortgages to a building society at perhaps a lower rate of interest?
    Sir George Young: My hon. Friend is correct. Not only may there be advantages to the owner-occupier in such a transfer, but there would be a real benefit to the local authority, which would then be able to apply the capital received to make faster progress in tackling the housing problems that remain.
    Mr. Simon Hughes: Does the Minister accept that often it is in the interests of local residents that property should be filled rather than left empty for years, and that if, as a result, it is necessary to sell that property to local residents, so that it can be occupied and they are willing to buy at a fair price, that should be encouraged?
    Sir George Young: I absolutely agree with the hon. Gentleman. I only wish that more authorities had acted as promptly as Wandsworth council in putting vacant houses to good use.
    Mr. Speaker: Order. I know that it is getting close to Easter, but there is a great deal of unnecessary noise.
    Mr. Mawhinney: When does my hon. Friend intend to give council tenants, whether sitting or not, a statutory right to buy council shops in which they are trading?
    Sir George Young: We have no plans to introduce legislation along those lines.
    Mr. Allan Roberts: Is the Minister aware that Sefton metropolitan district council is allowing people on the waiting list and, worse, people whose houses are being demolished by the council to view empty council properties, and then telling the families that they cannot have the properties because they are to be sold with vacant possession at a profit? Is it not a scandal, when there are so many people in housing need, that people who can afford to pay for council houses, and those in need in slum clearance areas and on waiting lists, are refused the opportunity to do so?
    Sir George Young: The important thing is that vacant houses should be occupied. In many cases it is to the advantage of the local authority and those on the waiting list if those houses are occupied by owners. Most local authorities in those circumstances give first preference either to those on the waiting list or to sitting council tenants who wish to move. If they do that, they get the benefit of the re-let. What is needed in this area is a determination by local authorities to put the houses to good use, and in many cases owner-occupation is the answer.
    Mrs. Rumbold: Would it not be helpful to inform local authorities that it would be good for tenants to purchase not only the homes in which they have been living but those which are vacant, so that there can be an overall
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    policy whereby local authorities are made aware that property can be bought not only by sitting tenants but by other council tenants?
    Sir George Young: Local authorities have been given a general consent to sell vacant properties into home ownership. They can grant discounts of up to 30 per cent. off market value to buyers falling within defined priority categories, such as first-time buyers and job movers. Anything that can be done to remind local authorities of those powers would be warmly welcomed.
    Mr. John Fraser: Does the Minister recognise that there is an appalling problem of homelessness and housing need which most often occurs among people who cannot afford to buy homes? Will he undertake to restrict local authorities in the sale of empty houses and housing land to neighbouring local authorities or to housing associations which have as their prime objective the meeting of housing needs, not the making of profit?
    Sir George Young: No. I cannot see the objection to vacant property owned by local authorities being sold to people who wish to live there, especially if first preference is given to those on the waiting list.
    Several Hon. Members rose——
    Mr. Speaker: Order. We have not got very far with questions today. May I ask for shorter supplementary questions, which may possibly lead to shorter answers?

    Qualgos
    Mr. Chopeasked the Secretary of State for the Environment whether he will make a statement on Government policy towards quasi-autonomous local government organisations.
    Sir George Young: Local authorities are answerable to their electorates for their participation in other bodies. I hope that such participation is the subject of regular and rigorous reassessment, although that is a matter for local people themselves.
    Mr. Chope: Has my hon. Friend had an opportunity to read the report issued last week by the Adam Smith institute called "The Qualgo Complex", and has he noted that the report shows that about 60,000 appointments are being made to 25,000 quangos each year at a cost to ratepayers of about £40 million? Is it not time that the Government intervened to stop this local authority gravy train?
    Sir George Young: I have acquired a copy of the report, although the institute did not send me a complimentary one. I have not had time to read it carefully, but in the first instance I should wish to hear the views of those in local government to assess their reaction to the report.
    Mr. Tony Banks: Since we are talking about quangos, will the Minister inform the House when was the last time that direct elections were scrapped for a body that would continue in existence after the elections? When was the directly elected body substitued by indirectly elected——
    Mr. Speaker: Order. The hon. Gentleman is going rather wide of the question.
    Mr. Banks: No, Sir. If I may come on to the question, when was a directly elected local authority body substituted by indirectly elected quangos and joint boards and the political control of that body changed?
    Sir George Young: My right hon. Friend the Secretary of State dealt adequately with that question a few moments ago.
    Mr. Stokes: Is my hon. Friend aware that those of us who are most keen for the metropolitan districts to be abolished are equally keen that they should not be replaced by a plethora of new quangos?
    Sir George Young: My hon. Friend must await our detailed proposals on the White Paper "Streamlining the Cities" before he can comment exactly on what we have suggested.
    Mr. Straw: Is it not true that under the so-called "Streamlining the Cities" White Paper there will be an enormous increase in quangos? How many joint boards, appointed bodies and other quangos will be established if the abolition legislation goes through?
    Sir George Young: We have a number of questions on the Order Paper about abolition, on which it will be appropriate to deal with these particular points. The Government are, however, considering the responses to the White Paper "Streamlining the Cities" and we shall publish our proposals in due course.

    Local Government Reform
    Mr. Spearingasked the Secretary of State for the Environment when he now expects to publish the results of his consultations concerning the future ownership and management of bridges, tunnels, ferries and piers, currently the responsibility of the Greater London council.
    Sir George Young: This is primarily a matter for my right hon. Friend the Secretary of State for Transport. We are still considering the responses to our White Paper, "Streamlining the Cities", and we shall announce decisions on the future arrangements for particular functions in due course.
    Mr. Spearing: Is not the Minister aware that there are 16 bridges, five tunnels and 10 piers run by the GLC, together with the Woolwich free ferry, which serves my constituents in Silvertown and North Woolwich? It also carries 1 million vehicles a year at a cost of £2 million. Is he suggesting that these costs be carried by local ratepayers? Do not these facts suggest that we need local government to run the services that serve London as a whole?
    Sir George Young: Most of these points fall to my right hon. Friend the Secretary of State for Transport, but I can say that we shall take account of the financial consequences for the individual London boroughs that take over particular bridges. I am confident that the London boroughs will be able to look after the bridges. It is not the case that all the bridges in London are run by the GLC; some are run by the City of London. I understand that my right hon. Friend has given an undertaking that the Woolwich ferry will continue.
    Mr. Bottomley: Would my hon. Friend agree that, if the Government are to have to take a view on the ferry, the piers and the landing stages, it would be rather more
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    helpful if the GLC would allow the employees of those services to talk to staff of the Departments of Transport and of the Environment rather than trying to keep them in purdah?
    Sir George Young: I agree absolutely with what my hon. Friend has said.
    Mr. Cartwright: Is the Minister aware that there was no mention of the Woolwich ferry in the consultation documents? In view of the concern that the lack of a clear statement by his colleagues at the Department of Transport has aroused, can he assure the House that the Woolwich free ferry will continue as a free service?
    Sir George Young: This is a matter that falls to my right hon. Friend the Secretary of State for Transport. I understand that the Department of Transport has said that it is considering the future arrangements for the ferry but has given an undertaking that it will continue.

    Water Rates
    Mr. Holtasked the Secretary of State for the Environment what information he has as to the amounts paid by major commercial and industrial firms in water rates since the introduction of water metering, and of the comparable amount paid under the former historical method of raising payment on rateable values in (a) the Thames water authority area and (b) the Northumbrian water authority area.
    Mr. Gow: Details of individual bills paid by consumers for their water services are not held by the Department. Water undertakers offer to all classes of consumer the option of a metered supply, in order to comply with section 30 of the Water Act 1973.
    Mr. Holt: Does my hon. Friend accept that there are many domestic water ratepayers who are appalled to learn that institutions and banks can save astronomical sums of money by going over to metering and that they then have to bear the cost of that? What will the Government do to reduce the amount of money having to be paid by water ratepayers, particularly in the light of the advertisement appearing in the CBI News, encouraging all firms to go over to metering, when that money will have to be made up by the domestic ratepayer, who is currently unable to have any form of rebate?
    Mr. Gow: My hon. Friend is a distinguished former member of the Thames water authority but I must remind him that, whereas rates are a tax, water rates are a charge made for a service provided. The Government believe that it is right that the charge should reflect the use that is made by the consumer and that, in many cases, particularly with industrial and commercial premises, it is much fairer to charge on a metered basis rather than on the basis of rateable value.
    Mrs. Currie: As a financial supporter of the Thames water authority, may I ask my hon. Friend whether he has any real plans for putting a stop to the staggering rise in water rates—for example, a little rate-capping? Would he take note of the fact that many ordinary ratepayers and water ratepayers will not for long tolerate the monopoly prices charged by this monopoly supplier?
    Mr. Gow: I am happy to reassure my hon. Friend. Our estimates are that the average increase in main charges for

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    water for the coming financial year is 5·1 per cent. and for households 6·4 per cent. In the Thames water authority area, the average annual bill for a property with a rateable value of £150 will go up by £3·75 for the whole year and, for a property with a rateable value of £400, by £6·68 for the whole year.
    Mr. Nellist: Given the almost unprecedented criticism coming from the Conservative Benches, does the Minister think that it might be a good idea to institute direct elections to the water boards so that water ratepayers can decide on the future of those whom he has appointed to the boards?
    Mr. Gow: No, Sir.

    Mr. Montague Alfred
    Mr. Ernie Rossasked the Secretary of State for the Environment what costs to his Department were involved in terminating the appointment of Mr. Alfred as chairman of the Property Services Agency.
    Mr. Patrick Jenkin: My officials are in touch with Mr. Alfred on the amount to be paid by reason of the termination of his appointment.
    Mr. Ross: Does the Secretary of State admit that he sacked Mr. Alfred as chairman of the Property Services Agency because of the rampant corruption and masonic influence that exists in the PSA? Does he agree that it is time to bring in the police for a thorough investigation?
    Mr. Jenkin: I make it absolutely clear that there is no suggestion, and never has been, that Mr. Alfred was in any way implicated in any of the corruption cases. I want that to be firmly understood. His three-year service contract, which was due to run until the end of this year, was terminated by mutual agreement. In those circumstances, it is entirely appropriate that we should consider what compensation payment to make.
    Mr. Tim Smith: Does my right hon. Friend agree that one of the problems with the PSA is that it is so large that it is difficult to manage? Will he use the opportunity that has now arisen to examine the agency's functions to see what scope there is for further privatisation of them and for the additional use of design and construct contracts?
    Mr. Jenkin: My hon. Friend has put his finger firmly on the problems—the size and diversity of the PSA. I must point out to him that 100 per cent. of its main construction works and over 90 per cent. of its maintenance works are put out to private contract. Within a short time we hope that up to 60 per cent. of its design work will be put out to private contract. There are a number of major questions about the management and organisation of the PSA, and I assure my hon. Friend that we have them under active study.

    Wildlife and Countryside Act
    Mr. Stephen Rossasked the Secretary of State for the Environment if he is satisfied with the operation of the Wildlife and Countryside Act.
    Mr. Waldegrave: Yes, Sir, in general. We are, however, keeping its operation under review.
    Mr. Ross: While I recognise that the Wildlife and Countryside Act was a major step forward in
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    environmental conservation, does the Minister agree that there is a need now to take a much tougher approach with those who plough up sites of special scientific interest, such as the Halvergate marsh in Norfolk or the Alverstone marsh in my constituency, to grow grain, which we do not need? Will he take on board the recommendations of the Nature Conservancy Council and others and take steps to ensure we can prevent what is now happening and costing the nation too much money?
    Mr. Waldegrave: We always consider seriously the views of the Nature Conservancy Council. The chairman of the NCC said recently that he thought that the damage to SSSIs had diminished since the passage of the Act. We have only had a year of the full working of the Act.
    Mr. Kenneth Carlisle: Does my hon. Friend accept that the Wildlife and Countryside Act must only be a start in our campaign to protect our countryside? Is he aware that habitats are still being destroyed, with the help of public subsidies, to add to agricultural surpluses? Is not that nonsense in the light of recent events in Europe?
    Mr. Waldegrave: We shall certainly keep the relationship between agriculture and conservation under close review.
    Mr. Hardy: Does the Minister accept that in recent weeks and months substantial evidence has reached the Department about damage done to important sites as a result of the three-month loophole, which was unwittingly left within the Act? Does he accept that there is now a growing and widespread view that that loophole must be closed? Can we soon expect a favourable response to the requests that he received some weeks ago?
    Mr. Waldegrave: As I told the hon. Member when we discussed this previously, the Government are considering the matter, but I have no news for him as yet.
    Mr. Rowe: While I welcome my hon. Friend's assurance that he is keeping the Act under review, is it not true that the need to cut agricultural production, to some extent, gives an opportunity in the short term to encourage farmers — by changing the subsidy arrangements — to make better provision for conservation as many of them would like to do but find extremely difficult under present grant arrangements?
    Mr. Waldegrave: I rather agree with my hon. Friend that, as we go into a period when surpluses are bound to be cut, farmers may be more interested in the kind of approach that he mentioned.
    Mr. Dalyell: Is Halvergate now safe?
    Mr. Waldegrave: I can assure the hon. Member that Halvergate is safe for a year. We are in the process of discussions with my noble Friend the Minister of State, Ministry of Agriculture, Fisheries and Food to see whether we can ensure its long-term security, which is of great importance.
    Dr. David Clark: Having heard opinions from both sides of the House, does the Minister appreciate that many people feel that certain provisions of the Wildlife and Countryside Act have failed? May I make the Minister a serious offer? Is he prepared to meet the Opposition and reach a consensus on necessary and urgent remedial legislation?
    Mr. Waldegrave: I hear from both sides of the House that many hon. Members believe that the basis provided

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    by the Wildlife and Countryside Act may need further provisions. I shall be delighted to talk to hon. Members about their proposals.

    Football Hooliganism
    Mr. Pendryasked the Secretary of State for the Environment if he will consider making his liaison group a more effective body in the monitoring of football hooliganism.
    The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): The task of the liaison group is to co-ordinate policy and precautions against violence associated with soccer. I am currently reviewing, in the light of recent events, all options open to the Government.
    Mr. Pendry: Is the Minister aware that his liaison group met last on 16 February about two weeks before the England-France game in Paris which, as the House knows, resulted in appalling violence? How can the Minister be satisfied that the liaison group is an effective body to combat football hooliganism unless it meets regularly immediately before and after such games so that the right conclusions may be drawn? When will the Minister publish the results of his inquiry into the matter? Finally, will he broaden the group——
    Mr. Speaker: One at a time.
    Mr. Macfarlane: I understand the hon. Gentleman's anxiety, but he must not assume that because a meeting took place in February it was necessarily associated with the Paris match. Preparations for that match and others began last September, with dialogue at varying levels, as I have told the hon. Gentleman. The liaison group is essentially a partnership between football governing bodies and the relevant Departments. Mistakes have occurred, and we must continue to consider urgently problems surrounding the stadium, distribution of tickets and travel.
    Mr. Parry: The House will have noted the great example set by Liverpool and Everton fans in two Milk Cup finals. In spite of the problems of Liverpool, that shows the Government that we still have a lot of bottle. I hope that the House will express the wish that Everton reaches the final of the FA Cup.
    Mr. Macfarlane: I must refrain from partiality, but I pay the highest tribute to the football supporters and spectators of both clubs, not only for their exemplary behaviour in recent weeks but for their continuing good behaviour over many years.
    Sir Anthony Grant: Excluding, of course, the examples of Everton and Liverpool, is my hon. Friend satisfied that other clubs and players are doing all that they can to curb this nonsense? Does he think that the antics of some footballers during and immediately after matches, which did not occur in the days of Sir Stanley Matthews, Bobby Charlton and other great players, unnecessarily excite the more lunatic elements in the crowd?
    Mr. Macfarlane: The performance and actions of some football players can undoubtedly inflame spectators. However, the worst excesses of violence have occurred outside the stadium and, more recently, outside this country. Violence outside the stadium is a continuing problem for all civil authorities.
    Mr. John Hunt: Is it not true that many thugs and hooligans can be readily identified through television coverage of matches? Can more be done to track down and prosecute them by that means?
    Mr. Macfarlane: I agree with my hon. Friend that that is an important aspect. Many prosecutions result from such identification, helped by equipment inside the stadium and elsewhere. Clearly, much of my hon. Friend's question should be diverted to my hon. Friends at the Home Office.
    Mr. Ashton: Why is it that when a handful of hooligans can wreck a football stadium in Paris, the Government do nothing but wring their hands and set up a committee of inquiry, yet when miners want to go on peaceful picketing, they are stopped and over 500 are arrested——
    Mr. Speaker: Order. That is widening the question too far.
    Mr. Macfarlane: The hon. Gentleman must understand that the offences during the recent England-France match occurred outside this country. Unless the French authorities prosecute and convict, there is no statutory system in this country whereby a prosecution can take place for offences committed outside the country.
    Sir Kenneth Lewis: As there has been mention of famous football clubs, may I say to my hon. Friend that my football club of Stamford will be at Wembley in the final of the Vase? There will be no violence at that match because the fans are orderly. Is my hon. Friend aware that much of the violence comes about because the young people who go to the matches have too easy access to drink?
    Mr. Macfarlane: I take note of that point. Many league clubs automatically prohibit alcohol. We try to operate a voluntary system in this country. I wish my hon. Friend's constituency team good luck at Wembley in the final.
    Dr. Cunningham: Does not the Minister agree that, as football hooligans pose a real threat to the reputation of this country, more needs to be done to stop them travelling abroad in the first place? If the police can stop miners going about peaceful picketing, why cannot the Government come up with proposals to prevent football hooligans from doing what they are doing? That is an important question. Do not the events in Paris confirm what my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) said — that present Government policy is not working and new initiatives are required?
    Mr. Macfarlane: The present Government policy is very much working. Overseas travel and the problems surrounding English clubs and the international sides were of such concern to me that I began the European initiative in January 1983, working with some 20 other Ministers responsible for sport in the Council of Ministers. I believe that it still has time to work. Mistakes occurred on the other side of the English Channel. We are looking closely at those matters.

    Property Services Agency
    Sir William van Straubenzeeasked the Secretary of State for the Environment when he proposes to announce the name of the new chairman of the Property Services Agency.
    Mr. Haynesasked the Secretary of State for the Environment when he will make a statement regarding the future chairmanship of the Property Services Agency.
    Mr. Patrick Jenkin: I am considering that as a matter of urgency and will make an announcement as soon as possible.
    Sir William van Straubenzee: Does that answer mean that in the meanwhile, pending that announcement, the reorganisation proposals particularly associated with the name of the previous chairman, affecting regional offices such as those in Reading, will be in abeyance?
    Mr. Jenkin: When I announced the retirement, by mutual agreement, of Mr. Alfred, I made it clear that we were suspending the plans for reorganisation which, as my hon. Friend said, were closely associated with Mr. Alfred's position as chief executive. We have reached the conclusion that it would not be sensible at this stage to proceed along the lines that he advocated. However, as I said in answer to an earlier question, we are considering a number of issues about the role and future of the Property Services Agency as a matter of urgency. That factor will weigh with us in the choice of a new chief executive.
    Mr. Haynes: Will the Secretary of State now admit that the appointment of Mr. Alfred was a total disaster? Is he aware that we in the Opposition think that the right hon. Gentleman is a total disaster? Could I help the Secretary of State by asking him whether he will ensure — [AN HON. MEMBER: "Wind up, Frank."] I am not going to wind up. Will the Secretary of State ensure that there is a full debate in the House on the Public Accounts Committee report concerning the PSA before he makes a new appointment?
    Mr. Jenkin: I shall have to bear the slings and arrows that the hon. Gentleman directed at me with such fortitude as I can command. Both my right hon. Friend the Prime Minister and I have publicly expressed our thanks to Mr. Alfred for the excellent work that he did when he was chief executive of the PSA. If the hon. Gentleman is referring to the recent report of the PAC, I should tell him that it has been debated. If he is referring to the report that is shortly to come, his question is a little premature.
    Mr. Bill Walker: Does my right hon. Friend agree that the Property Services Agency is a very large and complex organisation with enormous scope for things to go wrong —deliberately or otherwise—and that it will call for a chairman of remarkable calibre to bring it to order, so that we can have confidence that it is running properly?
    Mr. Jenkin: I should like to take the opportunity of saying from the Dispatch Box that the PSA is an organisation in which a great many things go right and things are done to an extremely high standard. I should instance the opening earlier today of the Cabinet war rooms. If hon. Members can find the time to visit them, they will see that the work that the PSA can do, with the Imperial war museum, is of a very high standard indeed. But my hon. Friend is right; it is a very complex organisation and requires very high-quality management.
    Mr. Hoyle: Will the Secretary of State please ensure that whoever is appointed is suitable — unlike Mr. Alfred? Will he also ensure that he is not paid the inflated salary of £50,000 that Mr. Alfred was paid, and that there is no engagement in a another tax fiddle by paying the salary into a private company?
    Mr. Jenkin: The hon. Gentleman would be well advised not to use the words "tax fiddle" outside the House. Indeed, he should not use the privilege of this House to say such things inside the House. But we are considering the question of a successor to Mr. Alfred.
    Mr. Straw: Why does the Secretary of State not admit what everybody outside the House knows very well—that Mr. Montague Alfred was dismissed from his £1,000-a-week job as a result of two wasted years in that appointment, his failure to root out inefficiency and corruption and his consequent undermining of the confidence and trust of the overwhelming majority of the staff, whose integrity and efficiency are not in question? Will the Secretary of State say whether he agrees with the evidence given to the Public Accounts Committee by his own officials or with that given by Mr. Alfred, since the two are contradictory? Could he also say whether he is now satisfied with the actions of the PSA to root out and eliminate fraud and corruption?
    Mr. Jenkin: When I made the statement on 5 October, when we published the Wardale-Touche Ross report, I made it abundantly clear that the Government attached the highest priority to implementation of the recommendations of that report in order to—as the hon. Gentleman has said—root out the corruption that the report discussed. But I must make it abundantly clear—and I hope that the hon. Gentleman will accept this—that there is not the slightest suggestion and never has been a glimmer of suggestion that Mr. Alfred himself has had any connection with corruption.
    Mr. Straw indicated assent.
    Mr. Jenkin: I am grateful to have that assurance because, in view of some of the things that have been said, it should be firmly on the record.

    Uplands (Countryside Commission Report)
    Mr. Kennedyasked the Secretary of State for the Environment if he has received the report of the Countryside Commission, "A Better Future for the Uplands"; and if he will make a statement.
    Mr. Waldegrave: Yes, Sir. We welcome this comprehensive report, which is being studied. I shall report to the House when this study has been completed.
    Mr. Kennedy: I thank the Minister for that reply. He will, of course, recognise the departmental division of responsibility between the DOE and the Scottish Office and also the division of responsibility within the Countryside Commission itself. Given that, will the Minister take steps to see that the Scottish Office encourages a similar analysis north of the border so that the important and legitimate debate on the right balance between upland areas and forestry holdings takes place on a national basis?
    Mr. Waldegrave: I sympathise with what the hon. Member says and will certainly draw it to the attention of my right hon. Friend.
    Mr. Nicholls: Will my hon. Friend accept that, while many people in the uplands areas will welcome this report, nevertheless there are measures in it — such as the recommendation that capital allowances for land improvement and land drainage should be withdrawn in

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    certain circumstances—which will make the agricultural community in places like Dartmoor wonder whether a balance is being struck between the interests of the conservationists on the one hand and their interests and need to earn a living in an agricultural environment?
    Mr. Waldegrave: Clearly, getting the balance right is a controversial business and I note my hon. Friend's comments. I think that there are quite a lot of things in the report that some of the agriculturists like, but there are other things that certainly worry them.

    Colliery Waste
    Mr. Dormandasked the Secretary of State for the Environment what action he proposes to take to stop the tipping of colliery waste on the foreshore of the United Kingdom.
    Mr. Macfarlane: We have already taken steps to find a cost-effective and environmentally acceptable solution for spoil disposal from coastal collieries, and I am
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    considering what further action is needed in the light of the tenth report of the Royal Commission on environmental pollution.
    Mr. Dormand: Is the Minister aware that the 1981 report on coal and the environment and the report to which he has referred today condemned the tipping in the strongest possible terms and that both referred specifically to the north-east coast? Does he agree that it is essential that adequate financial assistance—certainly more than there is at present—be provided for this purpose? Why should the north-east suffer? Would the Minister sit idly by if the beaches of Bournemouth and Torquay were being destroyed?
    Mr. Macfarlane: The hon. Gentleman raises an important point. We have already taken some joint action, financed jointly by the NCB and local authorities. on an experimental pipeline at Hordern colliery. Some derelict land grant has already been spent on land reclamation in the hon. Gentleman's county of Durham but the problem is sufficiently difficult for me to wish to visit the hon. Gentleman's constituency to look at the area in some detail within the next six or seven weeks.

Mining Dispute (Police Action)
3.30 pm
Mr. Allen McKay: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the erosion of civil liberties arising from the present coal industry dispute."
To put my request into proper perspective, I should tell the House that for 20 years I was a member of the National Union of Mineworkers and for a number of years I was proud to be branch secretary at the colliery at which I worked. Fourteen years before I came to the House, however, I became a member of the British Association of Colliery Management. I am still a member of, and an unpaid consultant to, that association. Members of the association have been on the receiving end on the picket lines and will no doubt be consulting me and the general secretary about these matters in the near future. It was a very sad occasion when a member of the management team was fatally injured while carrying out safety work at a colliery and I am sure that the sympathy of the House and of the whole mining industry goes to his family.
I am not seeking a debate to attack the police force —quite the contrary—but I believe that a debate would be in the best interests of the House, of civil liberties and of the police themselves. After all, when it is all over, we shall have to live together. The police have told constituents of mine that they have every sympathy but that they also have their instructions. I believe that the House has a right to know what those instructions are, what effect the Attorney-General's statement has had on them and whether they are being carried out or exceeded.
In the light of allegations received daily by my right hon. and hon. Friends, especially those with mining interests, there is an urgent need for a debate on the erosion of the civil liberties of the people whom we represent. In the past few days, my hon. Friends have given examples of what is happening. I shall not cite all those that I have received. Suffice it to say that one of my constituents who not many years ago received a commendation from the police for going to the assistance of a sergeant who was being severely abused now says that he intends to send the commendation back because of the treatment that he has received. I hope that he will not do so, as it was well earned and deserved. Another complainant was a member of the special constabulary for many years. These people are not Yorkshire yobboes, as some would describe them, but people described at a tribunal as the salt of the earth.
There are two issues involved—the mining dispute and the erosion of civil liberties. If we are not careful, the smokescreen of the mining dispute will fog the views of hon. Members about what is happening to civil liberties. I agree with my right hon. Friend the Member for Mansfield (Mr. Concannon) that freedom and civil rights belong both to the majority and to the minority. The House ought to debate the issue before that majority and that minority accuse us of sitting on our bottoms while freedom and liberty are eroded. I am concerned about the incidents that there have been and the serious nature of what is happening.
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If the House is not concerned about the freedom of the people—both minorities and majorities—the House is nothing. I therefore believe that it is urgent and necessary that we should debate this subject.
Mr. Speaker: The hon. Member for Barnsley, West and Penistone (Mr. McKay) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the erosion of civil liberties arising from the present coal industry dispute."
I have listened carefully to what the hon. Member has said, but I regret that I do not consider that the matter which he has raised is appropriate for discussion under Standing Order No. 10. I cannot therefore submit his application to the House.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. Yesterday, as Hansard records and as you will remember, an application was made for the fifth time for a debate along the lines of that sought by my hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) today. You said that you could not grant the request, but stressed that the debate could not be granted on that day. We all understand that there are guidelines and conventions to be followed and we were —to say the least—under the impression that you would be prepared to consider such a request if a further application were made.
I am beginning to wonder whether we are being strung along—[HON. MEMBERS: "Oh!"]—that is fair enough—strung along, because this has now been going on for more than a week. The first application under Standing Order No. 10 was made a week ago last Monday, immediately after the police were sent into Nottinghamshire and Derbyshire. We have been under the impression that the allocation of a Standing Order No. 10 emergency debate was imminent. During the course of the past few days, we have felt that it was almost a certainty. We should like to know what the prospects are.
Sir Kenneth Lewis: On a point of order, Mr. Speaker.
Mr. Bob Clay: On a point of order Mr. Speaker.
Mr. Speaker: Order. There is no need for points of order on this matter. The hon. Member for Bolsover (Mr. Skinner) should not read into what I said yesterday more than what I have said today. No point of order can arise on that.
Sir Kenneth Lewis: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I have ruled on the application under Standing Order No. 10. Is the point of order on a different matter?
Sir Kenneth Lewis: No, Mr. Speaker.
Mr. Speaker: The hon. Gentleman is a very experienced Member of the House. He knows that I have ruled on the matter and that I am not prepared to take further points of order about this application under Standing Order No. 10.
Later——
Mr. Clay: On a point of order, Mr. Speaker. I seek your guidance and am not in any way challenging your

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ruling concerning the Standing Order No. 10 application. The problem of civil liberties—I am not referring to the miners' dispute——
Mr. Speaker: Order. The hon. Gentleman must raise a point of order on which I can rule. I cannot rule on civil liberties.
Later——
Mr. Clay rose——
Mr. Geoffrey Lofthouse: On a point of order, Mr. Speaker. If we are not to have a debate—you have already ruled on that matter, Mr. Speaker, and I do not challenge your ruling—when can we expect a report from the Minister about 19 of my constituents on 27 March?
Mr. Speaker: That is not a matter for me.
Later——
Mr. Clay: On a point of order, Mr. Speaker.
Mr. Speaker: Yes, but not on the Standing Order No. 10 application.
Mr. Clay: On a point of order, Mr. Speaker, my anxiety is that, your ruling having been given, the problem of civil liberties — quite separate from the miners' dispute— is now arising in Berkshire. My right hon. Friend the Member for Chesterfield (Mr. Benn) and I have been there today—it is nothing to do with the miners' dispute—and we discovered, a mile and more from the Greenham common camp, police road blocks preventing ordinary members of the public——
Mr. Speaker: Order. I appreciate that the hon. Member is relatively new, but that is not a matter on which I can rule. What happens at Greenham common is not a matter for the Chair.
Mr. Tony Benn: Further to the point of order, Mr. Speaker. I fully accept that you are not responsible for the business of the House but the point that arises is that if an hon. Member is to make an application under Standing Order No. 10, he must raise the matter in the House at the earliest possible moment. My hon. Friend the Member for Sunderland, North (Mr. Clay) and I have just returned from Greenham common, where a mass eviction occurred this morning. There is also a police road block there, which raises exactly the same issues as they do elsewhere. There is also confiscation of property and a police barrier around some property. [Interruption.]
I am sure that you, Mr. Speaker, will listen sympathetically to this point. If this matter is not raised at the earliest moment, but is raised tomorrow, you might argue that it could have been raised today. I ask you to consider this point seriously, in advance of a possible application tomorrow under Standing Order No. 10. I repeat what I said yesterday: if major erosions of civil liberties occur and are brought to the attention of the House, and if, for one reason or another, the House does not find the opportunity to discuss those matters, the House will be brought into disrepute. [Interruption.]
Mr. Speaker: Order. On the earlier incident at Greenham common, the facts were available before 12 o'clock, as the House knows. There would have been an opportunity for hon. Members to make an application under Standing Order No. 10 if they had wished.
Mr. Clay: Mr. Speaker——
Mr. Speaker: Order. I am not prepared to take any further points on this matter.

Questions to Ministers
3.38 pm
Mr. Andrew F. Bennett: On a point of order, Mr. Speaker. I draw your attention to the fact that yesterday there was a question on the Order Paper about student travel arrangements, and during education Question Time there was a lengthy exchange about question 12. At the end of that exchange, the Minister referred to
"consultations that we are undertaking".—[Official Report, 3 April 1984, Vol 57; c. 800.]
It appears that soon after that exchange took place a question was put down by the hon. Member for Mid-Kent (Mr. Rowe) for written answer today. The Government are giving a detailed statement in the form of a reply to that question, to the effect that about 125,000 students will be worse off, and that students in Ulster will be especially disadvantaged.
Is it not an abuse of the House for a Minister to avoid answering a question about student travel in Question Time, and for a written question mysteriously to appear — I understand that you do not accept the idea of planted questions, Mr. Speaker—on the Order Paper late last night and for a written answer to appear today? Hon. Members now have no opportunity to question the Government about a substantial change in the arrangements for student travel. Can you give us some guidance on this point?
Mr. Speaker: I naturally listened during Question Time yesterday and heard what was said. The hon. Gentleman draws the House's attention to written question No. 167 today, but what questions are put on the Order Paper are not matters of order or matters for me. I regret that I cannot help.
Later—
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. You said in reply to a point of order raised by my hon. Friend the Member for Denton and Reddish (Mr. Bennett) that you are not responsible for questions on the Order Paper. [HON. MEMBERS: "No."] Perhaps I misunderstood, but I thought that you suggested that you are not responsible. In so far as you are responsible, Mr. Speaker, can you refer to question No. 7 which was asked today by my hon. Friend the Member for Newham, South (Mr. Spearing). In reply to it and all supplementary questions, the Minister repeated that he was not responsible for answering that question but that it should have been answered by the Secretary of State for Transport. May we have some explanation about how it was possible for that question to be tabled in environment Question Time?
Mr. Speaker: I shall look into how the question came to be on today's Order Paper. I heard the Minister answer quite detailed points on that question, but he incidentally referred to the fact that the main responsibility lay with his right hon. Friend the Secretary of State for Transport.

Select Committees (Evidence)
Mr. Dafydd Wigley: On a point of order, Mr. Speaker. Can I raise a matter that I have discussed briefly with you and written to you about? It arises from the deliberations of the Select Committee on Welsh Affairs, but I do not wish to speak in that context, because that Committee has not reported to the House. If anything which I have said in another context and which has been reported has broken any rules of the House, I apologise.
If a Select Committee has taken evidence in public but has not published that evidence and does not intend to produce a report, although some members of the Committee might feel that a report should be published, does anything prevent hon. Members, acting in a personal capacity, from using such evidence to support a private report on the subject under consideration? If this matter needs more thought, perhaps I can leave it with you, Mr. Speaker, but I should be grateful for your guidance so that I do not break the rules of the House.
Mr. Speaker: The sensible thing for me to do is to look into the matter that the hon. Gentleman has raised. I shall communicate with him.

BILL PRESENTED
  HOUSING DEFECTS
  Mr. Patrick Jenkin, supported by Mr. Secretary Younger, Mr. Secretary Edwards, Mr. Secretary Fowler, Mr. Attorney-General, Mr. John Moore, Mr. Ian Gow and Sir George Young, presented a Bill to make provision in connection with defective dwellings disposed of by public sector authorities; and to provide for certain provisions in agreements between building societies to be disregarded for the purposes of the Restrictive Trade Practices Act 1976: And the same was read the First time; and ordered to be read a Second time upon Thursday 5 April and to be printed. [Bill 147.]

  Slaughter of Animals (Amendment)
  3.45 pm
  Mr. Richard Page: I beg to move,
  That leave be given to bring in a Bill to amend the Slaughterhouses Act 1974 in respect of methods of slaughtering food animals.
  The Bill will amend the Slaughterhouses Act 1974 by introducing a code of practice. It will require the code to be subject to a five-yearly review to cover the handling, stunning and slaughter of food animals. I present the Bill with cross-party support.
  Among the specific matters to which I require the code of practice to address itself is the standardisation of forms dealing with applications by, and the training and licensing of, slaughtermen to produce a definite commonality among the local authorities. That would be coupled with the introduction of a national trade test to agreed standards before allowing slaughtermen to move from a provisional to a full licence. That measure should help not only to ensure a high uniform national standard but also those slaughtermen who may wish to move employment from one area of authority to another.
  The code of practice would cover also the efficiency of slaughter techniques, especially when piecework and high throughput are involved. The House will appreciate that an operation that is humane and effective when handling 20 food animals per hour may not be as efficient when handling 40 animals per hour and, above that level, it may become unsatisfactory.
  I intend that the code will provide close guidance on the electrical stunning methods employed for calves, pigs and sheep, as current strength and placing of electrodes is vital in producing unconsciousness. Conditions that are not closely maintained will produce paralysis instead of loss of consciousness before slaughter.
  The code will set down methods of handling food animals when bringing them to the point of slaughter, and special attention will be given to the efficiency and condition of the restraint devices. I intend that rigorous care should be taken to ensure that the equipment used is in full, effective working order at all times.
  The code of practice would be reviewed on a five-yearly basis by the Minister. Before an update was issued, as would happen if the regulations were altered, account would be taken of the views of those organisations that appear to the Minister to represent the various interests. Account will be taken especially of the body appointed by the Minister to conduct a review during that five-year period into the handling, stunning and slaughter of animals.
  I have in mind a body such as the Farm Animal Welfare Council, but I hasten to add that I have no idea of that body's views on whether such a proposal is acceptable to it. Naturally, I hope that its response will be positive. The appointed body would have wide-ranging terms of reference and, in particular, would encourage research into these areas and promote those systems that it found to be the most humane.
  At this point, it would be right to refer to the current controversy about the exemption given to methods of religious slaughter. As the House knows, the Slaughter of Animals Act 1933 — now incorporated in the Slaughterhouses Act 1974 — required that all animals
  968
  should be first stunned by mechanical or electrical instruments before being slaughtered by being bled. A section allows an exemption for methods of religious slaughter. Those methods involve no pre-stunning, but require the animal to be first cast and then its throat cut.
  While I would be among the first to acknowledge the wisdom behind the methods in the sensible health codes promoted in the past, I should prefer, as do the hon. Members who are sponsoring the Bill, to ensure that all food animals are correctly — I emphasise the word "correctly"—stunned before slaughter. Although that is my view, it is not my wish or the purpose of the Bill to provide for the removal of exemptions. As I have said, the appointed body should examine on a five-yearly basis all the methods of handling, stunning and slaughter of food animals to determine their humane effectiveness. I emphasise that all involved should approach the matter with open hearts and minds.
  I am aware that my hon. Friend the Parliamentary Secretary currently has in train a detailed review of the way in which the present regulations are operated. If it were possible for her to watch over that sector for ever, I know that her caring approach would make the Bill unnecessary. But, naturally, that cannot be. The introduction of the code of practice, subject to regular five-yearly reviews, will mean that the latest and most humane techniques will be introduced into the slaughterhouse as of right, by changing into a duty the discretion currently given to the Minister under section 38 of the Act.
  I am sure that, with regular reviews and continual active research by an appointed body, that will result in clear and firm guidelines. It will provide the most humane treatment possible for food animals at all times in what, understandably, is an emotionally bruising business
  As I have not been officially approached by any hon. Member saying that he wishes to oppose the Bill, I look forward to the support of the whole House.
  3.54 pm
  Mr. David Alton: I wish to say a few words before the matter is pressed further. I was reassured by some of the remarks of the hon. Member for Hertfordshire South-West (Mr. Page)——
  Mr. Speaker: Order. The hon. Gentleman can only oppose the motion; he cannot debate the issue.
  Mr. Alton: I had intended to oppose the motion and still wish to do so. However, I wanted to say that I was reassured by some of the remarks——
  Mr. Dennis Skinner: On a point of order, Mr. Speaker.
  Mr. Speaker: Order. The hon. Gentleman keeps interrupting today.
  Mr. Skinner: I was raising a point of order, Mr. Speaker. When ten-minute rule Bills are debated, it has always been the common practice that one hon. Member introduces it and another hon. Member can be called upon to oppose it. A Liberal Member is trying to back both horses in the race, as usual. The result is that someone who was going to oppose the Bill on principle will not have the opportunity to put that case.
  Mr. Speaker: Order. I ask the House to calm down. The hon. Member for Liverpool, Mossley Hill (Mr. Alton)

  969
  gave me notice before I came into the Chamber that he was seeking to speak against the Bill. I have no other such indication.
  Mr. Alton: I did seek leave to speak against the Bill and I continue to seek leave to oppose it. The hon. Member for Bolsover (Mr. Skinner) may not like it, but that is the right of any hon. Member. The reason why I am speaking against the Bill is that I am unsure of what the hon. Member—[Interruption.] It is clear from what the hon. Member for Hertfordshire, South-West has just said that he is uncertain of what he wants the Bill to achieve. Considerable doubt will remain in the minds——
  Mr. Jack Straw: On a point of order, Mr. Speaker. I made inquiries about whether the Bill would be opposed, since I wished to speak against it. As the hon. Member for Liverpool, Mossley Hill (Mr. Alton) is plainly not opposing the Bill, would it be in order for you to call another hon. Member, perhaps the hon. Member for Fulham (Mr. Stevens) or myself?
  Mr. Speaker: The House will recollect that I specifically asked the hon. Member for Mossley Hill whether he was seeking to speak against the Bill; he said that he was. Presumably he will.
  Mr. Alton: In view of the occurrences of the last few days, it is clear that some Labour Members would prefer that Conservative Members were given the opportunity to speak in preference to a Liberal. I did give notice to you, Mr. Speaker, that I wished to speak against the Bill. That is what I propose to do.
  The Farm Animal Welfare Council is currently carrying out an inquiry into this practice. Only recently, in a letter, the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food said:
  "The Council is at present considering the question of the welfare of red-meat animals at the place of slaughter. The Council is examining all slaughtering practices, including ritual methods. We will, of course, give most careful consideration to any recommendations which the Council may make as the result of its findings."
  First, it is clearly premature while that kind of inquiry is being conducted to bring such a Bill before the House.
  Secondly, the evidence that the hon. Member for Hertfordshire, South-West has adduced is at best contradictory. I refer him to the view of Professor Harold Burrow, the American professor of veterinary medicine at the Royal Veterinary College in London. He said:
  "No form of slaughter, involving as it does the shedding of blood, presents a pretty sight to the onlooker".
  He went on to refer in regard to the ritual method of slaughter which Jewish and Moslem people use, to the
  "immediate loss of awareness on the part of the animal both of its surroundings and of any painful stimuli. This precludes any possibility of cruelty entering into Jewish ritual slaughter."
  Shechita and halal in the Moslem religion are carried out by men who have undergone several years of religious training and study. Indeed, a declaration was issued by the Jewish ecclesiastical authorities which makes it clear that those who carry out ritual slaughter do so only with the most careful consideration. In the declaration, the Jewish ecclesiastical authorities of Great Britain say:
  "Schechita is carried out by men who have undergone several years of religious training and study who scrupulously apply the rules and rites governing this sacred ordinance, thus ensuring the swift and painless death of the animal."
  970
  That is the second point in opposition to the Bill. At best the evidence is contradictory.
  The truth is that stunning and cutting are both horrible, but any society that eats meat must accept that animals will inevitably be slaughtered in abattoirs. The alternative is that we become a nation of vegetarians.
  The question before the House is whether the method of slaughter is cruel. Kindness to animals has been a basic Jewish teaching for 3,000 years. All the biblical laws on the subject are designed to secure humane treatment for all animals and freedom from pain. The same is true of the Moslem religion as can easily be seen from the most cursory study of the Koran.
  The effect on the Jewish and Moslem communities of passing the Bill would be severe. I have received a number of letters from Jewish people and from Moslems. The Council of Christians and Jews on Merseyside writes:
  "If it was passed … this Bill … would mean that traditionally-observant Jewish people would be denied the continued opportunity to eat meat because the special conditions applying to Shechita would be removed. If you read about this method you will observe that it has always been carried out in a humane way by skilled religious trained men".
  That view is confirmed by the honorary president of the Merseyside Shechita Board. Passing the Bill would prevent many Moslem and Jewish people from exercising their religious rights and practices in the way they have done for thousands of years.
  I am surprised that no discussions have taken place between the hon. Member for Hertfordshire, South-West and those communities, and that the hon. Gentleman did not even mention in his remarks that such discussions should take place. The Farm Animal Welfare Council's report is awaited. At the very least we should first see what that has to say.
  I should have more sympathy with the hon. Member for Hertfordshire, South-West had he raised any number of examples of cruelty to animals. We should be debating the scientific experiments at Porton Down being undertaken by the Ministry of Defence, the use of animals in relation to cosmetics, the barbarism of hunting and the export of live animals for long and stressful sea journeys before being ritually slaughtered in conditions inferior to those in a British abattoir. The Bill before the House today is ill-considered and ill-timed and the House should reject it.
  Question put, pursuant to Standing Order No. 15 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):
  The House divided: Ayes 54, Noes 155.

  Division No. 225]

  [4 pm

  AYES

  Banks, Robert (Harrogate)

  Freeman, Roger

  Banks, Tony (Newham NW)

  Gardner, Sir Edward (Fylde)

  Bennett, Sir Frederic (T'bay)

  Greenway, Harry

  Body, Richard

  Hamilton, James (M'well N)

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

  Hardy, Peter

  Campbell-Savours, Dale

  Harrison, Rt Hon Walter

  Cartwright, John

  Harvey, Robert

  Clark, Dr Michael (Rochford)

  Home Robertson, John

  Coombs, Simon

  Howells, Geraint

  Davies, Ronald (Caerphilly)

  Hughes, Sean (Knowsley S)

  Dickens, Geoffrey

  Kilroy-Silk, Robert

  Dormand, Jack

  Knight, Gregory (Derby N)

  Edwards, Bob (Wh'mpt'n SE)

  Lewis, Terence (Worsley)

  Ellis, Raymond

  Lloyd, Tony (Stretford)

  Flannery, Martin

  Lofthouse, Geoffrey

  Fookes, Miss Janet

  McCartney, Hugh

  Forrester, John

  McCurley, Mrs Anna

  Forsyth, Michael (Stirling)

  Maxwell-Hyslop, Robin

  971

  Page, Richard (Herts SW)

  Stokes, John

  Pike, Peter

  Thomas, Dr R. (Carmarthen)

  Powell, Raymond (Ogmore)

  Torney, Tom

  Proctor, K. Harvey

  Wardell, Gareth (Gower)

  Randall, Stuart

  Wareing, Robert

  Roberts, Allan (Bootle)

  Wells, Bowen (Hertford)

  Ross, Stephen (Isle of Wight)

  Winterton, Mrs Ann

  Rowe, Andrew

  Rumbold, Mrs Angela

  Tellers for the Ayes:

  Squire, Robin

  Mr. J. F. Pawsey and Mr. Christopher Murphy.

  Stanbrook, Ivor

  NOES

  Abse, Leo

  Cunningham, Dr John

  Aitken, Jonathan

  Currie, Mrs Edwina

  Anderson, Donald

  Dalyell, Tam

  Ashton, Joe

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

  Atkinson, N. (Tottenham)

  Deakins, Eric

  Bagier, Gordon A. T.

  Dobson, Frank

  Baker, Nicholas (N Dorset)

  Douglas, Dick

  Baldry, Anthony

  Dubs, Alfred

  Barron, Kevin

  Duffy, A. E. P.

  Beckett, Mrs Margaret

  Fairbairn, Nicholas

  Beith, A. J.

  Fallon, Michael

  Bendall, Vivian

  Fatchett, Derek

  Benn, Tony

  Fields, T. (L'pool Broad Gn)

  Bermingham, Gerald

  Finsberg, Sir Geoffrey

  Biggs-Davison, Sir John

  Fisher, Mark

  Blaker, Rt Hon Sir Peter

  Forth, Eric

  Boyes, Roland

  Foster, Derek

  Brown, Hugh D. (Provan)

  Franks, Cecil

  Brown, M. (Brigg & Cl'thpes)

  Fraser, J. (Norwood)

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

  Freeson, Rt Hon Reginald

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

  Freud, Clement

  Bruce, Malcolm

  Gardiner, George (Reigate)

  Bruinvels, Peter

  Garel-Jones, Tristan

  Buchan, Norman

  George, Bruce

  Burt, Alistair

  Goodhart, Sir Philip

  Butcher, John

  Gorst, John

  Campbell, Ian

  Gow, Ian

  Carlisle, Kenneth (Lincoln)

  Grant, Sir Anthony

  Clarke, Rt Hon K. (Rushcliffe)

  Hattersley, Rt Hon Roy

  Clay, Robert

  Hawkins, Sir Paul (SW N'folk)

  Cocks, Rt Hon M. (Bristol S.)

  Haynes, Frank

  Cohen, Harry

  Hayward, Robert

  Coleman, Donald

  Healey, Rt Hon Denis

  Cox, Thomas (Tooting)

  Heffer, Eric S.

  Cunliffe, Lawrence

  Higgins, Rt Hon Terence L.

  972

  Hind, Kenneth

  Randall, Stuart

  Holt, Richard

  Rees, Rt Hon M. (Leeds S)

  Hooson, Tom

  Rhodes James, Robert

  Howell, Rt Hon D. (S'heath)

  Roberts, Ernest (Hackney N)

  Hughes, Dr. Mark (Durham)

  Robinson, Mark (N'port W)

  Hughes, Robert (Aberdeen N)

  Ross, Ernest (Dundee W)

  Hughes, Simon (Southwark)

  Rossi, Sir Hugh

  Hume, John

  Sayeed, Jonathan

  Janner, Hon Greville

  Sheerman, Barry

  Jessel, Toby

  Sheldon, Rt Hon R.

  Johnson-Smith, Sir Geoffrey

  Shore, Rt Hon Peter

  Joseph, Rt Hon Sir Keith

  Short, Ms Clare (Ladywood)

  Kaufman, Rt Hon Gerald

  Silvester, Fred

  Knox, David

  Skinner, Dennis

  Lambie, David

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

  Lawler, Geoffrey

  Smith, Cyril (Rochdale)

  Lawrence, Ivan

  Smith, Tim (Beaconsfield)

  Lester, Jim

  Spencer, Derek

  Lord, Michael

  Steel, Rt Hon David

  Loyden, Edward

  Steen, Anthony

  McDonald, Dr Oonagh

  Stern, Michael

  MacKay, Andrew (Berkshire)

  Stevens, Lewis (Nuneaton)

  McNamara, Kevin

  Stevens, Martin (Fulham)

  McWilliam, John

  Stewart, Allan (Eastwood)

  Madden, Max

  Stewart, Andrew (Sherwood)

  Marshall, David (Shettleston)

  Straw, Jack

  Mason, Rt Hon Roy

  Sumberg, David

  Mates, Michael

  Taylor, Rt Hon John David

  Maxton, John

  Terlezki, Stefan

  Maynard, Miss Joan

  Thomas, Dafydd (Merioneth)

  Meacher, Michael

  Thomas, Rt Hon Peter

  Meadowcroft, Michael

  Thorne, Neil (llford S)

  Merchant, Piers

  Thornton, Malcolm

  Mikardo, Ian

  Wainwright, R.

  Miller, Dr M. S. (E Kilbride)

  White, James

  Morris, Rt Hon A. (Wshawe)

  Whitfield, John

  Morris, Rt Hon J. (Aberavon)

  Wigley, Dafydd

  Nellist, David

  Wilkinson, John

  Oakes, Rt Hon Gordon

  Wood, Timothy

  Brien, William

  Young, Sir George (Acton)

  Parry, Robert

  Patchett, Terry

  Tellers for the Noes:

  Pavitt, Laurie

  Mr. David Alton and Mr. Martin M. Brandon-Bravo.

  Porter, Barry

  Radice, Giles

  Question accordingly negatived.

Orders of the Day

  London Regional Transport Bill
  As amended (in the Standing Committee), considered.
  Ordered,
  That the order in which, on Consideration of the London Regional Transport Bill, New Clauses shall be taken shall be New Clause 7, New Clause 8, New Clause 9, New Clause 1, New Clause 2, New Clause 3, New Clause 11, New Clause 10, New Clause 4, New Clause 6, New Clause 12, other New Clauses.—[Mr. Ridley.]

New Clause 7

  RESERVE FREE TRAVEL SCHEME FOR LONDON RESIDENTS
  `(1) If immediately before 1st January in any accounting year of London Regional Transport it appears to London Regional Transport that there are not for the time being in force arrangements under section 48(1) of this Act for travel concessions for London residents which—

  (a) meet the requirements of section (Requirements as to scope and uniformity of arrangements for travel concessions under section 48(1)) of this Act as to scope and uniformity; and

  (b) will apply throughout the next following accounting year of London Regional Transport;

  the following provisions of this section (referred to below in this section and in section (Supplementary provisions with respect to the free travel scheme) of this Act as the free travel scheme) shall apply to the next following accounting year.
  (2) In any accounting year to which the free travel scheme applies it shall be the duty of London Regional Transport to grant, or (as the case may be) to exercise their control over any subsidiaries of theirs and their powers under Part I of this Act so as to secure that there are granted, the travel concessions for eligible London residents required by this section.
  (3) In this section and sections (Supplementary provisions with respect to the free travel scheme) and (Requirements as to scope and uniformity of arrangements for travel concessions under section 48(1)) of this Act—

  (a) references to eligible London residents are references to persons resident in Greater London who are eligible in accordance with section 48(7) of this Act to receive travel concessions under arrangements under subsection (1) of that section;

  (b) references to categories of such residents are references to the categories of persons so eligible mentioned in paragraphs (a), (b) and (c) of section 48(7);

  (c) "travel concession permit" means, in relation to a travel concession under any such arrangements or under this section, a document in any form indicating that the person to whom it is issued is a person entitled in accordance with those arrangements or (as the case may be) under this section to receive the concession in question;

  (d) "relevant journey" means any journey of a description within section 48(4)(a), (b) or (c) of this Act; and

  (e) references to any services under the control of London Regional Transport are references to any public passenger transport service provided by London Regional Transport or any subsidiary of theirs or by any other person in pursuance of any agreement entered into by London Regional Transport by virtue of section 3(2) of this Act.

  (4) The travel concession required by this section in the case of all eligible London residents in the blind persons' category is the waiver, on production of a travel concession permit issued to any such resident under section (Supplementary provisions with respect to the free travel scheme) of this Act, of any fare otherwise payable by the person to whom it was issued for any relevant journey on a service under the control of London Regional Transport.
  (5) The travel concession required by this section in the case of all eligible London residents in any other category is the
  974
  waiver, on production of such a permit, of any fare otherwise payable by the person to whom it was issued for any such journey beginning—

  (a) at any time on a Saturday or Sunday or on any day which is a bank holiday in England and Wales under the Banking and Financial Dealings Act 1971; or

  (b) in the daytime, evening or late-night off-peak period on any other day.

  (6) Subject to subsection (7) below, for the purposes of paragraph (b) of subsection (5) above—

  (a) the daytime off-peak period is the period from 9.30 a.m. until 4.30 p.m.;

  (b) the evening off-peak period is the period from 6.30 p.m. until midnight; and

  (c) the late-night off-peak period is the period from midnight until 1.00 a.m.

  (7) The daytime, evening or late-night off-peak period for the purposes of subsection (5)(b) above may be altered from time to time by London Regional Transport by notice published in such manner as they think fit, specifying the new period or periods and the effective date of the alteration.
  (8) A notice under subsection (7) above may not specify an effective date for the alteration of a period to which it applies falling earlier than three months after the date of publication of the notice; and before publishing any such notice London Regional Transport shall consult with all London authorities (within the meaning of section 48 of this Act) and with the Passengers' Committee.'.—[Mr. Ridley.]
  Brought up, and read the First time.
  4.13 pm
  The Secretary of State for Transport (Mr. Nicholas Ridley): I beg to move, That the clause be read a Second time.
  Mr. Speaker: With this it will be convenient to discuss the following: Amendment (a) to the new clause, in subsection (5)(b), leave out, evening'.
  Amendment (b) to the new clause, in subsection (6) (a), leave out '4.30 p.m.' and insert 'midnight'.
  Amendment (c) to the new clause, leave out paragraph (b) of subsection (6).
  Amendment (d) to the new clause, in subsection (7), leave out, evening'.
  Government new clause 8—Supplementary provisions with respect to the free travel scheme.
  Government new clause 9—Requirements as to scope and uniformity of arrangements for travel concessions under section 48(1).
  New clause 1—Travel concessions on journeys in and around London—
  `(1) The Secretary of State shall instruct the London Regional Transport Board to grant travel concessions to those eligible to receive them, in accordance with subsection (4) below, such travel concessions being not less than those provided by the Greater London Council on the appointed day.
  (2) The Secretary of State shall recover the cost of such concessions by a levy on the London Boroughs and the Common Council, which shall be a proportion of the rateable income of the local authority.
  (3) No charge may be made upon any individual for the issue of any pass for such concessions.
  (4) The persons eligible to receive travel concessions under arrangements made under subsection (1) above are persons mentioned in any of the following paragraphs, or any description of such persons, that is to say—

  (a) men over the age of 65 years and women over the age of 60 years;

  (b) blind persons, that is to say, persons so blind as to be unable to perform any work for which sight is essential;

  (c) persons suffering from any disability or injury which, in the opinion of the local authority or any of the local authorities by whom the cost incurred in granting the concession falls to be reimbursed, impairs their ability to walk, or which makes it advisable or convenient for them to be accompanied.'.

  New clause 2—Provisions for the operation of travel concessions by independent transport operators—
  'It shall be the duty of the Secretary of State

  (1)(a) subject to subsection (2) below to consider any request received from a London authority in relation to the provision of travel concessions by an independent transport operator as defined in subsection 48(8) of this Act and, if he considers it appropriate, to direct such an operator to provide travel concessions to persons eligible to receive them in accordance with subsection 48(7) of this Act similar to those concessions which are from time to time available on services provided by London Regional Transport and the Railways Board;

  (b) in relation to subsection (a) above, if he considers it appropriate, to give directions as to the maximum payments which may be made by a local authority to an independent transport service operator for the provision of travel concessions under this Section.

  (2) No direction under subsection 1(a) above shall be made by the Secretary of State for the provision of travel concessions by any independent transport operator unless the Secretary of State is satisfied that financial provision for them will be made pursuant to subsections (1) and (3) of section 48 of this Act.'.
  Amendment No. 31, in clause 48, page 45, line 31, leave out from 'below' to 'enter' in line 32 and insert `the local authorities which at present fall within the boundaries of the Greater London Council shall'.
  Amendment No. 32, in clause 48, page 45, line 40, leave out from 'beginning' to 'reimburse' in line 42 and insert 'The local authorities concerned'. Government amendments Nos. 34, 35 and 40.
  Mr. Ridley: We start the Report stage with the subject which has perhaps concerned the Opposition, indeed, the whole House, more than any other subject in the Bill—the future of concessionary fares for old and disadvantaged people in London. The issues in the Bill are great and important, and it is a pity that we have had to spend so much time on this in the Bill, especially since there was never any threat to the old person's bus pass. It was in fact the Greater London council's best hope of unseating the Bill, by frightening pensioners, and it exploited that ruthlessly.
  The opposition to the Bill from the hon. Gentlemen on the Opposition Front Bench and their hon. Friends in Committee virtually collapsed after I announced on 16 February that we would provide a back-up scheme. Because of the scare campaign by the GLC, I must conclude that it was the only issue in which the Opposition saw any mileage at all. I find that sad, when one considers the important nature of the Bill.
  It is strange that those who pressed so passionately for the passes, which we always believed and meant should be provided, have not even bothered to come today to listen to the debate. I can see only two Back Benchers on the Opposition Benches.
  Mr. Peter Snape: It is one more than the Government have.
  Mr. Ridley: My hon. Friends were never in any doubt about the Government's pledge in the White Paper that the concessionary fare scheme would continue.
  I must go through some of the details. London has an especially generous system of concessionary fares. I wish to give the figures, because they show exactly how generous it is. For London, the grant-related expenditure is £28·2 million, but the cost in 1983–84 was £60·5 million, just over twice the GRE. For the shire counties, the GRE for concessionary fares is £105·1 million, and in 1983–84 the expenditure was £57 million, just about half.
  976
  In rural areas, where old people have just as great a need, if not in many cases a greater need, to be able to travel from villages and remote areas, there is roughly one quarter the financial provisions.
  So be it. If London wants to make this its priority—I believe that my hon. Friends representing London constituencies want to make it their priority—it shall be its priority, but, if that is the priority which is attached to the matter in London, it seems absolutely right that Londoners should pay for it, that it should come from the general resources of local government within the London borough areas, and that it should be treated like any other item of local authority expenditure in the future. Next year, it will grow to £65 million, due to further concessions that have been provided by the GLC, and that is a substantial amount of money. That is a priority that Londoners will have to find out of the total budgets of the boroughs when the GLC has been abolished.
  The hon. Member for Kingston upon Hull, East (Mr. Prescott) wishes to disregard this expenditure under his new clause 3, which the House will debate at length on a later occasion.
  It is totally unacceptable that the expenditure on concessionary fares should be outside the general controls of local authority spending to provide a statutory exemption for one sort of expenditure such as this from the general penalties incurred by local authorities. That would enable boroughs to increase their total expenditure to the detriment of the finances of other parts of the country.
  As to the exact treatment—again, it may be better to dwell on this when the House debates new clause 3—as I said in Committee, it is impossible to be precise about the exact financial regime in which the boroughs will find themselves when the time comes for them to shoulder the burden of paying for concessionary fares. Two Acts of Parliament hence and two years hence we shall have a clearer picture.
  However, I tried to give a sign of how matters would be when I said that we did not consider it right that there should be an increase in GREs because they apply nationally and are just about in the middle of the range for the national experience of spending. However, we would consider carefully the implications for the targets of the boroughs and their treatment for rate-capping purposes if, as I hope will not be the case, any of them come near to that. We shall, of course, try to preserve the method by which the rate yield of London is distributed from the richer to the poorer boroughs. However, we can debate those matters later.
  The Labour party has always agreed that concessionary fares should be a local responsibility, as it said in a Green Paper of 1979. It is odd that the hon. Member for Kingston upon Hull, East now wishes to take them out of the items which make up the responsibility of local government and to give them special treatment. We should infinitely prefer a voluntary scheme agreed by the boroughs. However whether it is a voluntary scheme or a compulsory scheme introduced because of the fallback provision, the hon Gentleman must agree that concessionary fares should remain the responsibility of local government. I hope that these clauses will never be implemented and that the boroughs will come to a voluntary agreement.
  New clauses 7, 8 and 9 contain the provisions which the Government suggest for the fallback scheme. They place a duty on LRT, if there is no uniform voluntary scheme in place, to provide a scheme for pensioners, the disabled

  977
  and the blind. Therefore, we are giving pensioners the reassurance that they need. The new clauses will for the first time ever give backing in statute to a London-wide concessionary fares scheme. They provide a watertight guarantee that old people and the disabled will be entitled to free off-peak travel in the future. Never before have a Government been prepared to enshrine concessionary fares in statute. The clauses go much further than anyone has been prepared to go previously. Pensioners have no such protection now, and the GLC could end the scheme tomorrow. These provisions will make that impossible.
  Our free travel scheme will come into effect automatically as a fallback should the local authorities fail to agree a voluntary scheme. We do not expect that it will be necessary, as the London Boroughs Association has agreed in principle and is already discussing a voluntary scheme. However, some boroughs — members of the Association of London Authorities — have not been prepared to discuss the scheme, and the clauses will take effect if they remain unco-operative. The statutory scheme will allow pensioners and the disabled to travel free on LRT services at all times at weekends and bank holidays, and at off-peak times on weekdays—that is, on journeys starting between 9.30 am and 4.30 pm and after 6.30 pm until 1 am the following morning. The scheme will apply to travel on buses and underground services. Blind people will have the right to travel free at all times.
  New clause 7 establishes the details of the free travel scheme. It places a duty on LRT to provide the scheme if, by the beginning of any year, it appears to LRT that a uniform voluntary scheme will not be in place during the following financial year. The new clause establishes the nature of the statutory scheme by specifying the categories of people to whom it will apply, the services on which the concessions will be available, the nature of the concession, and the times at which it will be available to those eligible for it.
  New clause 8 provides for the various administrative procedures governing the free travel scheme. It establishes the way in which LRT will make available permits to the London borough councils and the basis on which LRT will charge for them. It specifies how and when the issuing authorities will pay LRT for permits which they issue and provides a method by which they must account to LRT for the use of the permits supplied to them.
  New clause 9 lays down the circumstances that must be satisfied to bring the new statutory scheme into effect. As I said, it will come into effect only if no uniform voluntary scheme is in place. The purpose of new clause 9 is to specify exactly what is meant by "uniform" in this context. Broadly speaking, the voluntary scheme must provide the same benefits to the same eligible categories of persons and must apply the same conditions and the same periods of validity.
  Government amendments Nos. 34 and 35 are consequential on clause 47, but Government amendment No. 40 presents a slightly new point. It prevents LRT from having to grant concessions on the services of independent operators which were in existence before they came under clause 3(2). Once they come under clause 3(2), the conditions in the Bill will apply to them, but there could be—although I know of only one case—a transitional need to exclude some services already in existence.
  978
  Amendments Nos. 31 and 32 in the name of the hon. Member for Isle of Wight (Mr. Ross)—whom I am glad to see back with us in good fettle again — contain defects which I hope will make him believe that the Government's new clauses are superior. Amendment No. 31 provides for the coercion of local authorities to provide a scheme without giving them the chance to come to a voluntary agreement. It does not provide for unanimity — it would be possible under the hon. Gentleman's amendments for each borough to negotiate a different scheme with different benefits—which is one of the good features of the scheme that I am putting before the House this afternoon. It also prevents, I believe accidentally, local authorities outside Greater London from buying bus passes or concessionary fare passes from LRT. Amendment No. 33, which we shall discuss later, deals with the financial consequences for local authorities. I have already given my views about that. The amendment is unacceptable, but the hon. Gentleman might wish to discuss it in more detail when we debate new clause 3.
  New clauses 1 and 2 are also largely superseded by the Government's provisions, and they have many defects. I shall not dwell on the drafting deficiencies — for example, the new clauses do not show how the costs of the scheme will be calculated—and I do not agree with their substance, since they provide for a compulsory scheme with no opportunity for the boroughs to come to a voluntary agreement in the first place. Worst of all, they guarantee the continuance of whatever scheme the GLC leaves in place on the appointed day. The opportunities for the GLC to widen the scheme between now and the appointed day to unprecedented costs and privileges are so obvious that the hon. Member for Kingston upon Hull, East will not wish to press those new clauses. They are also designed to relieve the boroughs' expenditure from the grant penalties and financial consequences of overspending. Indeed, new clause 1 disallows local discretion in any reasonable charging for the permits.
  New clause 2 is misconceived. If the local authority is prepared to pay for concessions, operators will provide them. There is no question but that LRT will provide the bus passes, and there is no need to force it to do so. Local authorities and operators are quite able to come to financial agreement among themselves about the cost of bus passes. To legislate about this would be unnecessary.
  Our scheme——
  Mr. John Prescott: The Secretary of State appears to have misunderstood the clause. New clause 2 is concerned with independent transport operators, who will not necessarily be in any agreement with LRT. Presumably they could have obtained a road service licence from the traffic commissioners. Who secures agreement with that kind of bus operator?
  4.30 pm
  Mr. Ridley: If they come under clause 3(2), which we debated at length in Committee, the concessionary fares scheme can apply. If they are in existence now and have not yet been brought under clause 3(2), our amendment No. 40, I think rightly, excludes them because they are operating on contracts which did not include that requirement at the time that the contracts were negotiated.

  979
  There is, however, no reason why any local authority, if it so wishes, should not negotiate extra concessionary benefits, either over and above the statutory scheme, if it comes into effect, or with operators who are outside it.
  I believe our scheme to be superior. It is backed by statute, as no scheme has ever been before. It has powers to prevent the boroughs or the GLC from charging a heavy fee for bus passes. No powers of that sort exist at present in relation to London or anywhere else. It concentrates on off-peak periods—9.30 am to 4.30 pm and 6.30 pm to 1 am. That in itself will save the ratepayers £10 million in a full year. I am sure that all hon. Members will agree that it is right to keep the concessionary fare scheme to off-peak periods. It is pointless to encourage pensioners to travel when commuters are going to and from work. The origin of the concessionary fares scheme for old people was the fact that in the middle of the day buses were running three-quarters empty. To suggest that the concessions be now extended to peak times seems to me to deny both the logic and the economics of the scheme.
  The hon. Member for Kingston upon Hull, East, in his amendments (a), (b), (c) and (d), seeks to abolish the afternoon peak as a period when pensioners are barred from free travel—though not, of course, from travel. However, that would cost a further £4 million on the buses, and I believe it to be unnecessary. There is no point in encouraging pensioners to travel at peak times, even though there may be room occasionally. It discourages commuters from relying on the bus and makes them take their cars instead.
  We have powers to alter the peak hours if habits change. If it becomes possible to narrow the peak or change its timing, there are automatic powers in the new clauses to change the definition of peak times.
  I hope that the GLC will now stop flogging this dead horse. My hon. Friends who represent constituencies in London are sick of having continually to reassure people, even after 16 February when I made it clear that the Government would bring these clauses forward. On 22 February, the GLC issued a press release saying that if the GLC scheme were transferred to the London borough councils as the Government wished, pensioners' rights were likely to be severely jeopardised. That is simply not true. On 26 March, in an advertisement in The Guardian, the GLC said that old-age pensioners' free travel would certainly be hit. It is not true. In the last few days the GLC has said:
  "The Government has refused to place a legal duty on the boroughs to provide free travel for pensioners."
  That is from a GLC broadsheet dated 27 March.
  What worries me is that, despite all that has been said during many hours in Committee and during the Second Reading of the Bill by way of continued assurances, the GLC can still get it so wrong as to say that the Government have refused to place a legal duty on the boroughs. Here it is, the legal duty, just as we always said it would be. I hope that the GLC will now shut up.
  Mr. Martin Stevens: Is my right hon. Friend aware that, as recently as last week, individuals supporting a movement called "Capital" which is run by ex-Labour Members of the House were hanging about outside Barons Court and West Brompton underground stations in my constituency, telling users that the stations were to be closed, despite statements several weeks ago by both my right hon. Friend and London Transport?
  Mr. Ridley: This is the sort of reason for which the House set up the Advertising Standards Authority. One of the requirements of advertisements is that they should be vaguely true. I can assure my hon. Friend that not one of the GLC's statements about this Bill would have passed any of the tests of the ASA. If it puts up any posters of that sort, I will make sure that they are referred to that body.
  Mr. John Wilkinson (Ruislip-Northwood): Does my right hon. Friend not agree that the flagrantly disgusting behaviour of the GLC in trying to frighten the living daylights out of old-age pensioners about their free travel concession has totally obscured the perfectly rational and perhaps reasonable arguments in favour of a London-wide authority? Is this not a reason why Her Majesty's Government feel it necessary to do away with the GLC, because it has been so abusing its powers?
  Mr. Ridley: My hon. Friend is, as usual, absolutely right. The campaign against this Bill, on the GLC's own admission, cost £1 million last year and £1 million for the first quarter of this year, and for May alone a further El million has been allocated. That £3 million could have been used to help the old, the disabled and many other people living in London or, if the council had not wanted to do that, the money could have been left in the pockets of the ratepayers. Using the ratepayers' money to try to scare people quite unnecessarily is a most despicable tactic. As my hon. Friend said, if anything reinforces the case for abolishing the GLC, it is its conduct during the passage of this Bill.
  I am happy to give pensioners the reassurance that they want and need—that all that the GLC has been trying to do is to cause them anxiety and worry unnecessarily.
  Mr. Prescott: If pensioners and others presently enjoying a free pass look to any assurance from the Secretary of State's speech, I am bound to say that they will not receive it. The reality is to compare what the GLC currently gives to the people on free passes with what the clauses before us today will give them. That is the acrid test; not all the rhetoric that has been given us from the Dispatch Box.
  The Minister has been talking about the ratepayers' interests yet, at the same time, posing in the Bill the possibility that 100 per cent. of the costs of transport can be put on to the ratepayers of London. That is what is in the Bill. If we take the maximum 66 per cent. and the other little clauses that go with it, it is possible that the full amount of transport costs can be put on to the ratepayers. For the right hon. Gentleman to be abolishing the elections by the ratepayers and yet speaking at the Box as if defending democracy and the ratepayers flies against all the evidence.
  What we are asked to consider in these clauses and in the amendments is the comparison between two systems. It tends to reflect what we have always felt about the present transport legislation, where we give the transport executive the responsibility of meeting the needs of Londoners, compared with what we are doing in the Bill, where the executive body—London Regional Transport —has merely to have due regard to them.
  We must consider what is meant by "due regard to" and "transport needs". We must study the speeches made on Second Reading on 13 December by the Secretary of State and others about provisions for pensioners and what the

  981
  Secretary of State said today about referring the GLC's statements to the advertising board, or whatever it may be, to see whether they meant what they were saying then.
  On 13 December the Secretary of State was being pressed by both sides of the House to make it clear that it would be the responsibility of local authorities to provide a uniform concessionary fare scheme in London. He said:
  "I give my hon. Friend a complete assurance that I agree with him about the importance of these passes. However, I am not prepared to say that it would be right for the Government to propose legislation to take away what is properly a function of local government. Moreover, it would be wrong to do so in the Bill, because this is a part of the social provision of local government."— [Official Report, 13 December 1983; Vol. 50, c. 871.]
  As that has been changed in the Bill, it represents a U-turn by the Secretary of State. We are prepared to welcome the change, because we are worried that London boroughs will not necessarily face their responsibilities and provide a uniform scheme. The new clauses make it clear that, if the boroughs do not arrange with London Regional Transport to provide a uniform scheme, the Secretary of State can use the powers provided in the clauses to ensure that there will be a uniform scheme. We shall have a local authority service financed by the local authority but controlled by the Secretary of State. The nationalisation of London Regional Transport will deny the ratepayers any possibility of exercising direct control over it as they can at present over a local authority's expenditure.
  More than 1 million people benefit from the present free passes. They are mostly pensioners—men over 65 and women over 60 — the blind, the disabled and those whose ability to move about is impaired. We must compare what they have and what they will be given under the Bill. I am sorry that the Secretary of State has not taken the opportunity to extend the scheme to include the unemployed. I understand that Brighton borough council and some Labour-controlled authorities have done so. I am also sorry that he has not extended the scheme further in respect of certain categories of disabled people. He has not, and therefore we must deal with the Bill as it is.
  The new clauses change the hours during which the free pass can be used. It will no longer be valid between 4.30 pm and 6.30 pm, although the boroughs will be able to negotiate a change with London Regional Transport. That will mean that London Regional Transport will have to negotiate with more than 30 other bodies if it is to provide that so-called uniform scheme.
  Pensioners will be denied that peak evening period. It is one of the most valuable times to pensioners, because many of them have to go to hospitals, go shopping, visit their families and get home before dark. We know from our debates in Committee that LRT will not have to provide more buses or underground services to meet the extra demand. It would not lead to extra capital expenditure, but it would lead to more people travelling. The Secretary of State argues that it would cost an extra £4 million to provide what people entitled to concessionary travel presently enjoy. That is a judgment that we must all make. It cannot be denied that the proposal will weaken the principle and lower the service.
  982
  4.45 pm
  New clause 7(7) enables the local authorities to negotiate the times. Presumably they can be decreased or increased. It depends on the interpretation of "uniform scheme".
  Can the scheme still be considered free? There will be no charge for travelling, but there will be a charge for the provision of the pass. The borough of Bromley is already suggesting £5. Although it can be argued that expense is involved in providing the pass, it will inevitably become a charge to the pensioner, who now has the privilege of a free pass on the London Transport system. There is the possibility, therefore, of the introduction of a charge, albeit limited, to enable people to enjoy the benefit.
  The Secretary of State has said that there can be negotiations about a different system. The GLC is studying the possibility of issuing a five-year pass. Compared with providing a pass every one or two years, the cost of that would go down from £1 million to £250,000. The Secretary of State's proposal will inevitably lead to more people being involved, and more bureaucracy. That is contrary to his attitude towards bureaucracy and civil servants.
  There has not been an extension of the present system, for example, to the unemployed, so I am prepared to argue the case on what is presently provided. The uniform scheme proposed in the new clauses will result in a reduction in the availability of the services, the time at which people can travel and the possibility of charges.
  There are other serious deficiencies in the Bill to which the Secretary of State has not addressed himself. He gave certain answers in Committee, but I should like to raise the points again. Parts of London are covered by British Rail, and people are therefore dependent upon surface railways. The GLC has an arrangement with British Rail whereby its half-price away-day tickets are available to people with GLC passes. They can therefore enjoy a concessionary scheme, although the fares are higher than on London Transport. To its credit, the GLC attempted to achieve some uniformity of prices between London Transport and British Rail, but the Department of Transport made it clear that if any subsidies were used to reduce the fares for pensioners, the Department would knock the amount off the public service obligation grant given to British Rail.
  I have today received a copy of a letter which shows the effect of the new clauses and the Government's attitude towards British Rail. We have not heard from the Secretary of State whether he is prepared to retain the present half-price away-day concession which the GLC has negotiated with British Rail. The letter was sent by Mr. David Kirby, who is the director of the London and South-East services of British Rail, to the GLC about concessionary fares. The GLC had asked whether British Rail would be prepared to reach an agreement whereby free travel could be available for old-age pensioners on British Rail. Mr. Kirby says that British Rail
  "were waiting to see if the Government made any similar arrangements in relation to BR"
  for a concessionary fare scheme. Is the Secretary of State prepared to do anything about the British Rail scheme?
  Mr. Kirby makes it clear that
  "the Government would be unlikely to support a free fare scheme for OAP's on B.R. in the future."
  British Rail clearly has a view about what the Government are likely to do; that is, to do little for those who depend upon British Rail for their travel. To that extent, British

  983
  upon British Rail for their travel. To that extent, British Rail has rejected the possibility of a GLC scheme that would have allowed London pensioners to enjoy free fares on trains. Already, organisations such as British Rail are beginning to trim their sails and are not considering providing better benefits for pensioners who travel with them.
  Mr. Kirby says in the last paragraph of his letter that
  "we would however be delighted to continue with a half fare scheme for senior citizens within London."
  Of course he would like to do that. The GLC at least is prepared to maintain that principle, but what are the Government prepared to do? We must hear from the Minister of State, who I assume will reply to the debate, whether old-age pensioners who currently enjoy the concessionary fares will be able to enjoy them on British Rail services.
  I should have thought that the integration of fares was one of the reasons put forward by the Government for introducing later clauses under which British Rail will be combined with the London Regional Transport system. The Government should say exactly what the clauses mean for those categories of pensioners who presently enjoy the privilege of free passes on British Rail services but who are threatened because the clauses give no such guarantee.
  The Secretary of State seemed to misunderstand new clause 2, so he did not say much of benefit about it. It refers to the independent transport operators, who would need a road service licence from the traffic commissioners to provide a service in the stage area of London. At present that requires the agreement of the London Transport Executive although, as we know, the inspectors have been ruling against the provision of services such as the shuttle service to Heathrow and the Amos services.
  All the evidence is that the Secretary of State will ride roughshod over the recommendations and the reasons given for them. Therefore, the Opposition's concern—it will be further apparent in later debates on the Bill—is that anyone wishing to provide a bus service in London can apply independently to the traffic commissioners for a licence to run buses in the London area and will not be bound by the clause to provide any sort of concessionary system.
  The Secretary of State's response is that private operators can negotiate with the local authorities to see whether they can purchase the same service. Negotiations between the 32 London borough have caused so many problems that the Secretary of State has introduced a statutorily enforceable scheme into the Bill. One can imagine the problems faced by the dozens of private bus operators. They will probably not bother to negotiate with local authorities about pensioners' provisions when much more profit can be made from plying profitable routes at peak times, which is likely in view of the Bill.
  It is Government policy to intervene and bring more competition into the stage carriage area. It is inevitable that more services will operate under a private banner, and they will not be obliged to provide a concessionary scheme. The London bus service of the future will be known more as the pensioners' bus, on which pensioners can use their passes. A first-class service will be operated in the area by a private operator, but there is no guarantee under the existing system that, if pensioners live on a route operated by privately operated buses, they will be able to use their concessionary passes.
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  New clause 2 has been tabled to make it clear that the Secretary of State, who already has considerable powers to direct the policy, shall so direct private and independent operators to provide a service, including a concessionary service. For other private operators, including those in agreement with LRT, the routes will presumably be conditional upon agreement between LRT and private groups.
  If the Bill allows for private agreements with LRT to provide a route from A to B that will carry with it the cost of providing some form of concessionary scheme, why should private operators take on such problems when they can get a licence from the traffic commissioners and operate on the same routes without having to pick up old-age pensioners, whenever they travel? Private operators could operate their services much more profitably without taking pensioners into account.
  Those examples of the operation of agreements between LRT and private operators all reflect the doubtful effect of the clauses on the free pass system.
  The equalisation principle is another matter of considerable concern, and it was given some attention by the Secretary of State. There is no guarantee for the existing financing arrangements for the concessionary pass scheme set up by equalisation arrangement between all the London boroughs. Both Labour and Tory authorities make it clear that the equalisation scheme is a fair way to carry the costs of transport provisions, but it is not embodied in the Bill.
  The Secretary of State has told us that the equalisation scheme costs about £60 million to operate. I believe that that is a 3p rate on the GLC, which is distributed in an equalised form throughout the boroughs, in payments at the same rate. The need for passes and the areas in which pensioners are concentrated, or where passes will be purchased, are not evenly distributed throughout the boroughs. Anyone studying the distribution of pensioners in the London area can easily conclude that some boroughs have more pensioners living in them than, say, the City or Westminster, using the various comparisons between the 32 boroughs.
  If the authorities had to pay a charge dependent upon the scale of need in their area, reflected in the number of people likely to claim concessions, boroughs such as Waltham Forest would face a rate increase of between 3p and 7p. Bromley—we feel no sympathy for Bromley—would have its rate increased by from 3p to 5·3p. Bromley would probably want socialisation to result; a sort of equalisation principle under which the wealthier would pay for those whose need is greatest. In that way, the wealthier parts of the City, such as the banks, City institutions and multinational companies would have their debt relieved, whereas it would be increased where pensioners needs' were greatest.
  All that the Bill does is to redistribute benefits from the wealthy to the poorer areas of London. That is embodied in the principle of equalisation. Unless the Secretary of State is prepared to recognise that an equalisation principle is essential, he will suceed only in adding greater burdens to boroughs already under pressure to direct their resources to welfare provisions. It is clear that if pensioners are concentrated in certain areas they put considerable demands on the boroughs for welfare facilities, which in turn increases pressure on those boroughs.
  The paper that was circulated to Standing Committee Members contained comments on the Bill by the

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  Conservative group on the GLC. It makes it clear that an equalisation principle is essential and says that 27 of the 32 London boroughs will require a rate increase for the payment of concessionary fares on an individual basis because of the loss of the equalisation effect on the London-wide rate precept. Whether boroughs are Labour or Tory-controlled, a case has been made for the equalisation principle, but the Government have ridden roughshod over it. A further disadvantage would thus arise from the Bill.
  5 pm
  The amendments are designed to provide an opportunity for the House to maintain a good system guaranteed by the GLC or to vote for one that reduces the provision already enjoyed in the London area by pensioners and others. London Tory MPs should be clear about what they are voting for tonight. Hon. Members from all round the country, will be determining what the quality of local services should be for a particular area. In the rest of the country, that is normally determined by the ratepayers and those elected by them.
  Mr. Stevens: Is it not the case that the Government originally planned to do exactly what the hon. Gentleman desires—to leave it to the London boroughs, the local authorities, to do what seemed to them right for concessionary fares? As a result of pressure from all parts of the Committee on the Secretary of State, the change was made. For the first time — anyone would think that it was the last time — in history a Government have introduced statutory provisions for concessionary fares. The Secretary of State responded to what we wanted. I dare say that he was not too happy about it, but he did it. Now the hon. Gentleman is saying that he should have left it to the London boroughs, which was his original intention.
  Mr. Prescott: That was a clever little speech. The hon. Gentleman should have listened to the Secretary of State, who told us in Committee that, with the agreement of Conservative Back Benchers, he had not changed his position. It was his full intention to have this statutory scheme from the beginning. That was the whole point of the Secretary of State's speech. Some Back Benchers spoke to convince us that that was so. At least the hon. Gentleman has told us what he believed to be the position. The Opposition believe that it should be left to the local authorities to determine the services and that the elected representatives should be answerable to the electorate when they determine and provide services.
  The Government intend to abolish elections, seek to impose a central system, and then argue that the cost should be met by the local authorities. That is a poor way of dealing with the matter. We must address our arguments to the present Bill, not to the Bill as we wish it to be.
  We now know the difference between a free pass and a concessionary clause. To the Tories, a concession is less than a free pass. We oppose the new clause because it reduces the time when the concession applies at crucial parts of the day, reduces the area of coverage and is no longer applicable to half-fare travel on British Rail. The new clause establishes a first and second-class service on London buses. The London bus, as opposed to the private bus, will become known as the pensioners' free pass bus.
  986
  It institutes the concept of meeting Londoners' needs while making a profit. It introduces changes and charges in the system and greater bureaucracy. Because of the refusal to equalise the cost, the areas with the greatest need will carry the greatest burden. Once again the pensioners will have to carry the burden, while the burden of the wealthy parts of the City will be reduced. Every 1 per cent. increase in fares will lead to a £250,000 increase in the cost of concessionary schemes.
  All the disadvantages in the Bill can be compared to the one advantage in it—that the pensioner will now be able to travel free from midnight to 1 o'clock in the morning. I do not know whether Conservative Members know many pensioners who want to travel from midnight to 1 o'clock in the morning. That is not a fair exchange for the disadvantages embodied in the new clause. When we vote, let London Members be sure about the differences and the reduction of services that they will impose on the London pensioner.
  Mr. Wilkinson: I am glad to take part in this debate because it deals with the most controversial part of the whole Bill. It is the part that will be remembered longest, not least by the people of London, but especially by pensioners, disabled and blind people, who will now have a statutory right to concessionary fares that has never been enjoyed before.
  I applaud the Government's decision to introduce the new clauses. We have had an argument over mechanics, not objectives. The Government initially felt that such provisions were not necessary in the Bill because the Greater London council continues, and changes would be required only if and when Parliament decided to abolish the GLC. Therefore, there was a certain academic nature to the question. There was some force in this argument, although it was an academic argument. It could be said that this Bill is not the right vehicle for preserving concessionary fares for pensioners. I say loud and clear that, had the Government pursued that course, it would have been misunderstood because people believe that a Bill specifically dealing with the jurisdiction of London Transport is the right measure in which to ensure and guarantee concessionary fares. This precedent is important, and it will long be remembered.
  I pay tribute to the Secretary of State and the Minister of State, who listened so patiently and with such courtesy to the arguments put forward eloquently and forcefully by my hon. Friend the Member for Upminster (Sir N. Bonsor) —at the other end of the line, as I describe him—my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) and myself. I believe that we three were particularly instrumental in getting the change through. The way in which the Government addressed themselves to the difficult task of translating our objective into what was required in legislative form was exemplary.
  The Government were right to deal with this important matter on Report, when all hon. Members could discuss its import and impact on their constituents. It was a formidable piece of drafting. I should not have liked to do it myself. I am glad to have been able to defer to the legislative experts in the Department and in the Government.
  I do not believe that a concessionary fares scheme enshrined in statute is in any way a poor substitute for a totally discretionary scheme, even if one has to buy one's concessionary pass and even if old-age pensioners,

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  disabled and blind people will not be able to travel free in the evening peak hour. I still do not believe that it is an unfair exchange. It is a generous provision by the Government. That it should bind successor Governments and London Regional Transport in this way is commendable and important.
  With regard to the evening peak, GLC does not permit free travel at the morning peak, so I cannot see the logic in not applying the same rule in the evening peak. It is just as important for tired people who have had a hard day in the office to get home in reasonable comfort at the evening peak as it is for them to get to work in the morning.
  I understand the argument of the hon. Member for Kingston upon Hull, East (Mr. Prescott). He was worried that there might be a curfew for old-age pensioners. I suggest that they should take advantage of the change and stay with their relatives for tea, or if they cannot do so. they could go home a little earlier. It is not unreasonable. I am sure that the country will not judge it as such. Londoners will not, any more than they will deem it unreasonable if they have to pay to obtain their pass. Often people say that we are extremely lucky to have the concessionary fares scheme. We appreciate and value it. I am sure that people would be prepared to pay the little that was required for the administrative cost of the pass.
  Then, of course, we must not forget, in our understandable preoccupation with the evening peak and rush-hour travelling during the week, that old-age pensioners and disabled and blind people will be able to travel free throughout the weekend and at bank holidays.
  Regarding the point made by the right hon. Member for Kingston upon Hull, East about free passes for the unemployed, no doubt his intention was laudable and commendable, but to translate such generosity of intention into the financial commitment involved would be excessive. I just do not believe that it would be administratively possible in view of the very often—thank God — transient nature of people's unemployed status. There would be a potential for fraud, apart from anything else.
  So, without wishing to derogate in any way from the warm plaudits and generous support that I give to the Government for the way they have handled this measure, I believe that the Conservative GLC members have a point when they refer to the equalisation issue, in that the demographic nature of the London boroughs is not the same. Some have very high populations of pensioners, others do not; some have very high rateable values, others do not. This is the area that worries me a little—not so much in connection with this Bill, but it is the sort of anxiety that we should address ourselves to examine and analyse when we come to look at what legislative arrangements will have to be made after the Greater London council is abolished. It is the sort of argument that lends support to the view that there will be a need for a London-wide elected authority of some kind to fulfil those London-wide functions that will need still to be carried through.
  That said, I warmly support these new clauses introduced by the Government and am delighted to do so.
  Mr. Eric Deakins: I do not think that any apology is needed for my presuming to take part in the Report stage when I was not a member of the Committee on the Bill. I have an interest, of course, as a London Member, but I also have an individual interest in that I was
  988
  among the first London Members of any party to appreciate that there was a problem here. I will come to that in a moment.
  The Minister said that these new clauses provided the reassurance that pensioners needed, and those words represent a really big change of mind and heart on his part. This shows that he and the Government—and, I hope, the whole House — recognise that pensioners need reassurance. They have needed this reassurance not since the beginning of a campaign started and egged on by the GLC but since May 1983.
  In the first week of the general election campaign I was canvassing—like all other hon. Members, no doubt—in my constituency, when I came across a household with a pensioner couple who asked me rather excitedly if I had seen that the Conservatives intended to abolish the GLC. I said that I had. I had not thought very much about the consequences of that, but naturally I said that I was opposed to it. They then asked me what would happen about their bus passes and I replied that I did not know but would make some inquiries.
  I got hold of a copy of the Conservative election manifesto—not just the one put out by my Conservative opponent—and found to my surprise that, although the abolition of the GLC and the metropolitan councils was very clearly set out in relatively few words, there was not a word about the future of the free bus and tube travel passes.
  I naturally notified my own political colleagues, both in London and in other areas of the country, and in my own constituency I put out a leaflet warning pensioners that this could be one of the casualties of the abolition of the GLC. But even at that stage I do not think that it was really an issue in the general election campaign. Many pensioners and other citizens of London were not really aware of the full implications.
  Indeed, I do not believe that the Government, when they put the pledge to abolish the GLC — it was probably a hasty, last-minute decision — into their manifesto, had worked out the full consequences of the abolition of the GLC. Had they done so, they would surely have prepared a defensive brief for Conservative candidates in the London area and perhaps in the areas of the metropolitan councils, pointing out what was going to happen to the free bus and tube pass. But nothing at all was said about this by any national or local Conservative speaker during the general election campaign.
  5.15 pm
  The worries of pensioners, quite rightly, gradually spread, because when the Government were returned to power in June they put more and more emphasis on the abolition of the GLC, and, whatever pensioners may or may not think about the GLC, I am sure that all hon. Members would agree that they certainly love their free bus and tube passes. I believe that it is agreed on both sides of the House that this has probably been the biggest boon and blessing to pensioners since the 1940s and the inception of the welfare state. It has certainly made a great deal of difference to their lives. I do not want to delay the House by expatiating on the merits of the pensioners' free bus and tube passes. I think that we all agree about that.
  The Conservative threats to abolish the GLC produced this considerable worry and concern in pensioners' minds even before the GLC decided to mount a great campaign on this issue. The campaign by the pensioners has built up,

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  and they had every reason to be worried from May 1983 virtually until the early part of this year, when the Secretary of State announced that he would be making some concessions.
  The scheme which the right hon. Gentleman has announced is to be backed by statute. That certainly represents a major change of mind, if not a climb-down, by the Secretary of State, for my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) pointed out what the right hon. Gentleman said on Second Reading of the Bill.
  Mr. Harry Greenway: On the question of how Conservative candidates handled this crucial issue in the general election campaign, I said from day one that I was certain that, with the removal of London Transport from the GLC, concessionary passes for all categories would continue. I stand by that, and I raised it before anybody else on Second Reading of the Bill. I am very pleased that the Government are ensuring just that. The proof of the pudding is in the eating.
  Mr. Deakins: The hon. Gentleman no doubt had access to information which the Conservatives had from the Government but to which I was not party. I could not have given any such assurances. I would not have presumed to do so, since I had no idea what the impact would be. The hon. Gentleman, no matter what assurances he gave, must recognise that, as my hon. Friend the Member for Kingston upon Hull, East said, the scheme now to be embodied in the statute is not the same as the current scheme.
  The pensioners were certainly aided in their campaign by the GLC, but I think that Ministers and other Conservative Members would be doing themselves an injustice if they underestimated the fight which pensioners have put up in London to get the assurances that they felt they needed—some of which they have had from the Minister, although not enough, in my view. Those reassurances have been gained not by the GLC campaign but by pensioner power; I stress that.
  We should all congratulate the pensioners of London, whatever their political views, on the fight that they have put up with all hon. Members to retain their free travel concession. They have done a marvellous job and I hope that they will be emboldened—I am sure they will be—by their relative success in this campaign. They have not got all that we would like them to have, but they have got 90 per cent. of it; there are still some difficulties about peak periods, and so on.
  Mr. Martin Stevens: The hon. Gentleman has told us that, during the general election campaign, when he heard that the GLC was to be abolished, he wrote to his constituents and told them that the future of the concessionary fares, the pensioners' free passes, was in doubt. Can he assure the House that he genuinely thought at that time that that was so?
  Mr. Deakins: I did not just write to the constituents concerned. I actually produced on our little lithograph press a rather poorly set out leaflet warning pensioners of the possible consequences of the abolition of the GLC in the absence of any assurance to the contrary in the Conservative manifesto. I first studied the Conservative
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  manifesto to ensure that nothing that I said could be belied by a statement in that manifesto, but no such statement was made in it.
  I hope that the pensioners, following their success on this issue, will go forward with the pensioners' charter and other rights, including better pensions. Now that they have shown what can be done, not just in London but throughout the country, I hope that they will go on to mount campaigns on other issues of major interest to pensioners.
  Secondly, as my hon. Friend the Member for Kingston upon Hull, East pointed out, although some reassurance has been given to pensioners, it is not complete, because the evening peak concession will not be put into statutory form. I understand that the GLC was considering allowing passes to be used earlier in the morning. That would not have made it a completely free 24-hour scheme, but the GLC clearly intended to move in the right direction, whereas the Government, although they are putting the matter into statutory form, are moving in the wrong direction and away from the concessions already made.
  The Minister said that free or nearly free travel schemes really applied only to off-peak travel. It is in the economics of transport that when buses and tube trains are half-empty they can be filled with pensioners visiting friends and relatives, shopping, and so on. That is all very well, but the Minister missed the important point that pensioners do not choose to travel in the rush hour. It would scarcely be sensible for them voluntarily to choose to travel at such times. Those of us who have to do so know that the buses and tube trains are extremely crowded and uncomfortable, and even if the pensioner does not have a trolley or heavy shopping bag there is no guarantee in these days of equality that anyone will necessarily offer him or her a seat. I put it to the Minister sincerely that pensioners will not travel in peak periods unless they have a compelling reason to do so, such as visiting a sick relative in hospital in another part of London and being unable to get back before the rush hour. They will now face the choice that they faced before the major London-wide scheme was introduced, of having to delay their departure or to cut the visit short so as to beat the evening peak.
  I appeal to the Minister to reconsider. It will cost a little more, but I do not believe that it will encourage pensioners to travel in peak periods if they do not absolutely have to do so.
  Sir Nicholas Bonsor: The hon. Gentleman entirely overlooks the enormous difference in cost between issuing passes that cannot be used in peak periods and issuing them on an overall full-day basis. The Government's proposal will mean a considerable saving for the taxpayer and ratepayer. As the hon. Gentleman said, it will merely mean that when, very occasionally, pensioners need to travel at such times, they will have to pay an unfortunate but luckily quite small penalty in extra cost.
  Mr. Deakins: I take the hon. Gentleman's point. I believe that he agrees that few pensioners would choose to travel in peak periods. For those who must do so, however, it is a source of worry. Many pensioners have told me that they have to delay their visit or their return until after the peak period. Indeed, a pensioner uncle of mine who used to live in my former home area of Tottenham—he now lives in Scotland—would come to

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  visit me in central London at 2 pm or 3 pm but if he had not left by 4.30 pm he would ask whether he could stay for another cup of tea so that he did not have to walk the streets until 7 pm when free travel was available again. Conservatives may not agree, but I believe that it is worth removing that anxiety, even at some extra cost.
  Thirdly, I understand that the statutory concession announced by the Minister applies only to pensioners in London and is not available to those in other parts of the country. I hope that the Minister will correct me at once if I am wrong, but I believe that there are no such statutory provisions for transport undertakings in the rest of the country. I wonder how the Minister will justify that to the pensioners in the metropolitan counties. I hope that she will be able to assure us that the Department of Transport —with the Department of the Environment, which is the lead Department in this instance — will consider that aspect between now and next year if and when legislation to abolish the GLC and the metropolitan counties is introduced. We fully support the concession, but it seems wrong to grant it for pensioners in London and to deny it to those in the metropolitan counties.
  Finally, on what basis can the Government justify denying a statutory concession for pensioners outside the metropolitan areas? The Government should consider this seriously, as the pensioners of London have not merely been selfishly concerned about their own passes. On every possible occasion, they have raised the subject of their relatives and others whom they know outside London who do not have such a concession. One does not need to go very far outside London to find areas, not necessarily rural areas, where that is the case. Now that the Secretary of State has put his hand to the plough and is ploughing a furrow that most people in London support, although it does not go as far as we should like, I hope that he will seriously consider the case for making the same provision throughout the country.
  Mr. John Maples: The subject of concessionary travel passes for pensioners occupied a great deal of time in the Standing Committee and attracted almost all the publicity and discussion outside. When the Bill was first published, the provision for boroughs to agree a voluntary scheme was considered insufficient and there were calls for some back-up compulsion. The Government have now provided that. The new clauses provide that if the boroughs cannot agree, a compulsory back-up scheme will be enforced under the legislation.
  It is perhaps a measure of how far the Government have gone that the hon. Member for Kingston upon Hull, East (Mr. Prescott) did not actually criticise the scheme at all but concentrated his arguments on more peripheral matters such as the question of British Rail and contractors and the way in which the rate equalisation scheme might need to be adjusted. That suggests that the Government have indeed met all the criticisms and all the requirements made of them.
  It is worth reviewing the history of the scheme briefly, as it has not been entrenched since time immemorial. Many of the changes so hotly debated are extremely recent. I believe that the scheme was started in the early 1970s by certain London boroughs and was taken over by the GLC in 1973. It was extended to the tube in 1976, with a 20p flat fare, and fully extended to the tube only in May 1981, when the present GLC administration took over. The extension of the scheme to the evening peak took
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  place just over a year ago, on 28 March 1983, so that concession has certainly not been in existence since time immemorial.
  5.30 pm
  Those changes have cost a lot of money. With such schemes, it is always worth looking at what they cost. It is easy to devise schemes that are popular with, and useful to, certain sections of the community. We have heard it suggested today that the scheme should be extended to include the unemployed or pensioners in the whole country. However, no one who makes those suggestions adds up what the cost will be for the ratepayer and the taxpayer.
  When the scheme was first taken over by the GLC in 1974 it cost £9 million. Last year it cost £62 million. That is a substantial increase. Adjusted for inflation, the cost has risen at 1980 prices from £21·5 million in 1974 to £50 million last year. That is an enormous real increase. The cost has more than doubled.
  It is interesting to note that, after the scheme had matured at the end of 1975, the cost remained at about £30 million in real terms until 1982, when it jumped to £45 million. In 1983 it jumped to £50 million. Those changes coincided with the change in the administration of the Greater London council and with the extension of the scheme to cover the tube and the evening peak period. Those two changes to the scheme cost the ratepayers of London an additional £20 million at 1980 prices. The extension may well have been valuable, but it should be considered in the context of cost. Over two years, the cost of the scheme to the GLC has increased by 65 per cent. The value of the scheme must be balanced against what the ratepayer can afford. The figure of £20 million is a substantial sum of money for the ratepayers of London to pay.
  London is fortunate in having the best scheme in the country. It was the best scheme before the changes were made, and it will be the best scheme after the legislation comes into force. In many areas of the country pensioners have to pay half the fare, and in some areas—I believe that Cornwall is one—there is no scheme at all. Not only will the scheme be the best scheme in the country after London Regional Transport takes over from London Transport, but it will be better than the scheme as it existed only two and a half years ago. It will be extended fully to the tube, and it will also be entrenched in statute. At present, the GLC could change the scheme for better or for worse. A future administration at county hall might choose to remove the concessions altogether. Under this legislation, that will not be able to happen.
  It is true that there will be the possibility of a small administrative charge at the discretion of local authorities. There is also the question of the evening peak.
  Mr. Simon Hughes: It is important that we should be able to establish whether the cost is one that the ratepayer—the ratepayer, not the GLC—is prepared to pay. Should it not be the ratepayer who decides? Is it not right that the Government should accept the views of both parties in the GLC, which have successively extended the scheme, and that the Government should not seek to go back on the democratic decisions taken at county hall over the years?
  Mr. Maples: Yes, that would be so. We can take it as a fact that the GLC is probably going to be abolished. The

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  scheme will therefore have to be organised in some other way. If the GLC were to continue and London Transport's responsibility was simply being shifted to a new body, there would be no problem. The GLC could continue to run the present scheme and finance it by a general rate levied on London. It is because of the abolition of the GLC that another scheme is required. The original idea was that responsibility should devolve to the boroughs, where decisions might, perhaps, be even more democratic because there might be a greater knowledge of what people need. However, because that was not enough for the critics of the Government's proposals, the statutory scheme has been devised. It is only a back-up, and one hopes that the various local authorities will agree.
  The provision for a small administrative charge is made only because the Secretary of State has the power to say no to a small administrative charge. It would have been difficult to legislate to the effect that local authorities could not charge anything for the issue of a pass. There will certainly be some administrative costs. The Minister has assured us that nothing other than a minimal charge will be approved.
  There has been more substantial criticism about the evening peak period. I feel that the criticism has been grossly exaggerated. The right to use the pass in the evening peak period has existed only for a year. Before March 1983 there was no such right. The local authorities will still have the right, if they wish, to buy in extra time on an individual basis from London Regional Transport. They will be able to pay more and buy a pass covering that period of time.
  Many Opposition Members have expressed the opinion that pensioners will not be able to travel during the evening peak period. They will be able to travel, of course, but they will have to pay. It is probable that most of the journeys that pensioners would need to make at that time would not cost more than the minimum fare of 20p or 30p. They will not suffer any awful hardships. They can travel free before 4.30 pm and after 6.30 pm or pay a minimal charge between those times.
  There is an economic rationale for having an off-peak fare. The buses are trundling around London with empty seats, and it makes sense to fill those. seats at a minimal fare rather than to leave them empty. The same thing is done in the airline industry. If one wants to fly to New York, one can book a seat a week in advance and have the right to change it and the flight will cost about £450. Alternatively, one can travel stand-by, taking a seat that would otherwise be empty, and get there at a fraction of the cost. That is the rationale of this system.
  Mr. Deakins: The hon. Gentleman suggests that the rationale for a free travel facility for pensioners is economic—in other words, that it is designed to help the transport undertakings. In my view, the social factor is equally, if not more, important. The hon. Gentleman has overlooked the fact that pensioners should have a right to travel freely. It is one of the few blessings that those of them who are sound in wind and limb can enjoy. When they have leisure to do so, they should not be debarred from going out shopping or sightseeing, or visiting their relations or friends.
  Mr. Maples: The hon. Gentleman has twisted my remarks in an extraordinary way. I only said that it is a
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  happy coincidence when economic sense and social needs coincide, as they do in this case. It is sensible to fill bus seats at a cheap price at a time when they would otherwise be empty rather than to add to the queues and the delays at rush hours, when people need to get to work or to go home. There is an economic rationale there, and that was why the scheme was originally introduced as an off-peak scheme.
  In my view, the extension of the scheme has never made a great deal of sense, and it has certainly cost a great deal of money. My right hon. Friend said that the cost of extending the scheme was some £4 million or £5 million. I am surprised that it is so little, when the real cost of the scheme has risen by about £20 million over the two years during which it has been extended to the tube and to the evening peak. I wonder whether my right hon. Friend's figure is correct.
  The GLC levies the rate on a London-wide basis and therefore equalises the cost for the poorer boroughs over the wealthier ones. London Regional Transport will continue to be financed on that basis. The part of its grant that is supported by the rates will be charged on a London-wide basis. However, the concessionary fares scheme will not be financed in that way. That makes sense in that it gives the boroughs some say in the matter, but it would be wrong if the poorer boroughs ceased to get the financial support that, effectively, they have received from the richer ones. I raised this point in Committee. Ministers have said that they are aware of the problem but that it is a problem for the Department of the Environment.
  There was a debate on the matter in the House on 25 November last year. My hon. Friend the Minister of State quoted the following words from the White Paper "Streamlining the Cities":
  "The Government consider that there should be no undue financial advantage or disadvantage to any authority as a result of abolition".
  She quoted those words in the context of the concessionary fares scheme. At the risk of boring hon. Members by reiteration, I ask my hon. Friend and my right hon. Friend to continue to press upon the Department of the Environment the point that the London rate equalisation scheme must be altered in such a way as to take care of the additional financial burdens which will fall on 31 out of the 33 London boroughs as a result of this change. It is not good enough to play around with the GREs, targets and penalty systems and to exempt certain expenditure. We need some method by which to change the rate equalisation scheme so that funding continues to be available as at present.
  We have a good scheme. The scheme that the Government are proposing as a legislative back-up, possibly to a voluntary scheme, will be the best scheme in the country and the best that London has had except for the past six or 12 months. It is wholly to be applauded and I hope that the few London boroughs that have refused to join the negotiations with the London Boroughs Association for a generalised voluntary scheme —unfortunately, my borough of Lewisham is one—will get together and agree a scheme so that the need for invoking these clauses does not arise.
  Mr. Stephen Ross: As the Member of Parliament for a constituency outside London that does not have a generous concessionary fares scheme, I hesitate to speak. The hon. Member for Walthamstow (Mr. Deakins) has already hit the point that should be made. Vast areas

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  of the country have only small fare concessions for pensioners and most of the local authorities that operate those schemes would like desperately to make them rather better.
  Many GLC pensioners have come to the Isle of Wight in the past 10 years. At every election campaign that I have fought they have asked why they cannot have the same type of scheme as they enjoyed in London so that they can travel free on the buses. As the leader of the county council. I have tried extremely hard in the past few years to see what we can do to improve our scheme, but the more we try to put extra money into the kitty to provide perhaps even a half-fare scheme, the more we get complaints from the bus company to keep services going.
  The hon. Member for Walthamstow talked about Cornwall, where I believe many rural bus services have disappeared. In the Isle of Wight we have managed to keep some of the rural services going, but we have had to face a complicated choice on whether to keep those services going or to have a concessionary fares scheme. We are now putting between £300,000 and £400,000, which, in our budget, is a large sum of money, into keeping some rural services open and are able to provide only a niggardly scheme for pensioners. We should very much like to change that, but cannot. As we get into the ever-stronger grip of the Secretary of State for the Environment through penalties and the rest, the chances of our ever being able to do more diminish.
  I utterly reject the Bill and the abolition of the GLC, but if, as is entirely fair, we are to maintain benefits that pensioners have enjoyed in the past and expect to enjoy in the future, the Government must come up with a complicated scheme. We cannot persuade all local authorities to come into line. Amendments Nos. 31 and 32 make it obligatory, as the Secretary of State rightly said, for London boroughs to run a scheme. Such provision is not obligatory for boroughs outside the London area, such as Essex and Surrey. It is a fact of life that once concessions have been given it is extremely difficult to take them away. No Government have had the courage to face that.
  There are the most appalling differences of status with regard to television licences. A person who happens to live in an estate that is constructed with a common community room gets a television licence for about 25p a year, whereas others have to pay the full fee. It was recommended some time ago by an outside body that that concession be done away with, but no Government have had the courage to do so, so we go on dodging the issue. Having given certain undertakings, the present Government will not dodge it now. I must admit that they have honoured what they said they would do, but I shall leave it to my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) to criticise, as I am sure he will, the fact that what is proposed is not quite as good a scheme as exists now. We are messing about and using a complicated system to ensure that Londoners get their concessions and levying local authorities when they do not come into line.
  I put it to the Secretary of State, as, after all, he represents a rural constituency, that it is time the Government took on board the need for a national concessionary fares scheme. A Green Paper produced by the Labour Government tried to introduce a national half-fares scheme. The time for such a scheme has come. I am aware that the Secretary of State will have great difficulty
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  persuading his colleagues and his recent colleagues in the Treasury to provide extra money to create such a scheme, but it would be much fairer for the country.
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  Mr. Maples: What is the hon. Gentleman's estimate of the cost of extending free pensioner travel to the whole country?
  Mr. Ross: A substantial sum, which I cannot provide off the cuff. It will be argued later that local authorities will not receive compensation, having forced themselves into the scheme.
  Mr. Tony Banks: Spend less on cruise missiles.
  Mr. Ross: I agree that there are other means by which to save money, perhaps on Trident rather than cruise. We must grasp the nettle. Even if it is only a 25 per cent. scheme, a national scheme is called for when we are making such provision for London but not the metropolitan boroughs. That criticism must be made.
  Mr. Michael Shersby: I am grateful for the opportunity to speak on and welcome new clause 7 I pay tribute to my right hon. Friend the Secretary of State and my hon. Friend the Minister for the way in which they have listened to the representations made to them by London Members of Parliament on the need for this concession to be enshrined in statute. Today is a triumph for London as, for the first time, we have a concessionary fares scheme that will be enshrined in statute. New clause 7 consolidates what the London boroughs have been doing for more than a decade and makes it clear to every pensioner in London that their interests are to be protected.
  I also pay tribute to the right hon. and hon. Members who served on the Standing Committee and spent much time debating this matter, not least my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson) and for Hayes and Harlington (Mr. Dicks), whose constituencies fall within my borough. We represent an outer London borough in which the travel concession is greatly valued. What the hon. Member for Isle of Wight (Mr. Ross) said was of considerable interest as he compared what appertains in rural communities with what happens in Greater London. There is no doubt that pensioners in Greater London badly need mobility, as they do not live in compact communities in which much activity occurs on their doorsteps. They often live in more urban areas and travel is essential if they are to participate in local functions. That is possibly more true for people in Greater London than for people in rural areas.
  As my hon. Friend the Member for Lewisham, West (Mr. Maples) said, the concession on evening peak travel between 4.30 pm and 6.30 pm has applied for only a short time. He pointed out that pensioners will not be prevented from travelling during those hours. They will be able to travel free immediately before and after and probably for a small sum during those hours.
  I understand that there is to be a local option, exercisable by any borough that participates in the scheme, to buy into the 4.30 pm to 6.30 pm peak if necessary. I am sure that the boroughs will consider carefully whether to buy into that option, bearing in mind the cost and the demand for travel in their areas during that time. It is a matter for local option and councillors will be sensitive to it.

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  Unfortunately, in the past few months there has been a great deal of party political propaganda about concessionary fares as part of the Labour party's campaign to prevent the abolition of the GLC. From time to time, we are all involved in party political propaganda. It would be nice if those who serve on the GLC, as well as Opposition Members who have been generous in their remarks, would combine in welcoming this considerable advance by way of a statutory requirement.
  I hope that the London Labour-controlled authorities which apparently are not showing wholehearted support for the scheme will think again. During the late 1960s and early 1970s I was a borough councillor in two London boroughs. As a councillor for the then borough of Paddington and later Westminster, I participated in the work of the London Boroughs Association with colleagues from Labour boroughs in other parts of London. We worked well together and reached agreement on a number of matters important to Londoners as a whole. In recent months, I have been sad that a split has developed between some of the Labour-controlled and Conservative-controlled London boroughs, so that effectively there are now two associations — the London Boroughs Association and the Association of London Authorities.
  I hope that some of the political in-fighting will be put aside on this important matter, which I believe transcends party politics. It is interesting that, in this debate, which essentially involves London, every hon. Member I have heard has spoken about the advantages the scheme brings to pensioners. We should concentrate on that scheme—that is the job of the House — rather than involve ourselves in a party political fight on other matters. I hope that we can increase that concentration so that opinions become more universal than they have been in the past few months.
  I wholeheartedly welcome the new clause. It is a great step forward. Each Londoner who has the privilege of benefiting from the scheme can look at the good work done by the Secretary of State, his colleagues and the members of the Standing Committee in bringing the legislation to the House.
  Mr. Harry Cohen: I am pleased that the Secretary of State has returned to the Chamber after his absence following his short, sharp speech. "Sharp" may be the right word to describe what his Bill will be for the pensioners. I feared that he would be a long time away from the Chamber. I thought he was off to queue to collect his pass, because the restrictions introduced by the Bill will probably mean that it will be a long time before he can obtain it.
  The Government have treated pensioners badly in a number of respects. Grants and organisations have suffered cuts. In Committee my hon. Friend the Member for Tooting (Mr. Cox) referred to the cuts in grants to pensioners in his area. Social services — meals on wheels and home help services—have been caught up in the Government's onslaught on local authorities. Health cuts and hospital closures have badly affected the elderly. An increase in electricity and gas prices will be detrimental to the pensioners. Only a couple of weeks ago housing benefit cuts were made, and 700,000 people were made worse off. The Government's record with the pensioners is not good nationally.
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  Pensioners will suffer because of the Bill's action on transport passes. The Government have been obsessed with abolishing the GLC and with hiving off London Transport from the GLC. Pensioners' passes are being jeopardised, and that has caused anxiety among pensioners, to which the Secretary of State referred. It is no good the Government blaming the GLC for that anxiety, because it is the Government's fault that London pensioners are worried.
  I have three examples showing how the Government have spread that anxiety. First, on 10 July, during the weekend before the White Paper was published, The Observer stated:
  "Free travel for pensioners could be scrapped when control of the city's public transport is transferred from the GLC."
  That could only have been an inspired Government leak. That sentence shows the Government's direction when the Bill was first discussed.
  Secondly, people were worried when the Government relied on the London Boroughs Association. Early in the discussions the Government said, while under pressure from Opposition Members, that the LBA would guarantee the scheme. The Government had to wriggle off that hook as the Committee proceeded, because the LBA has no mandatory powers to guarantee such a scheme. When the Bromley case was discussed in the other place, the LBA refused point blank to become involved with the matter of pensioners' passes.
  Thirdly, anxiety was caused when, following requests from hon. Members during Adjournment debates to the Secretary of State and the Minister, the Government refused consistently to guarantee the scheme. We should not forget the Government's black propaganda against the GLC.
  There is still cause for anxiety among pensioners. It is all right for the Secretary of State to say in the House today, "The passes are safe in our hands," but that statement rings a bell. The Government said that the Health Service would be safe in their hands, yet they are closing down hospitals and wards left, right and centre.
  The Government's proposals are still opposed by pensioners' organisations and those professional organisations, including Age Concern, whose job is to care for the elderly. We should never forget that at the core of the opposition to the proposals is the belief that the Government's scheme is worse than the present GLC scheme. The present scheme is about guaranteeing free travel on London Transport—the buses and the tubes—and giving half-price travel on British Rail. Passes are issued free for five-yearly periods. About 1 million London pensioners benefit from that scheme.
  Originally, the Government said that they would transfer the scheme to the boroughs. From an early stage it was clear, given rate-capping, penalties and the mean Conservative-controlled councils, that that action would be a recipe for disaster. The result would be that some Tory-controlled councils would scrap the scheme, because of the pressures caused by penalties and rate-capping, or vary the eligibility of pensioners who apply for passes. There would be varying types of means tests in different boroughs, and hence inequality of treatment for pensioners. Pensioners would be charged for the pass or asked to pay a nominal fare when boarding a bus. Pressure from Opposition Members, the GLC and pensioners' organisations forced the Government to scrap their original plan and to guarantee a uniform scheme across London.

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  The proposed scheme is worse than the present one. It has many shortcomings. For example, local authorities will be adversely affected because the block grant problem means that they are likely to incur penalties. The Government are trying to have their cake and eat it. The Government say that they are introducing a statutory uniform scheme, but they are not prepared to put up the money for it. They will make local authorities pay for it, and ratepayers will be penalised because of that. Local authorities must pay for the permits—there is not to be the equalisation for which Conservative Members argued in Committee. That will mean rate rises in most London boroughs. My borough of Waltham Forest may find that it has to impose a 4p or 5p rate increase.
  The Government's scheme will be more bureaucratic to operate than the present scheme. That, again, will be detrimental to local authorities. Even more serious than that is that the scheme will be detrimental to pensioners. They will probably have to renew their permits more frequently. Currently, the permits last for five years, but an annual renewal may be introduced and pensioners could be charged for each renewal. Indeed, the Government can increase that charge each time if they so wish.
  I presume that pensioners will have to go to the town hall rather than their local post office to collect their permits. It is more beneficial to pensioners to collect them from the post office, because that is where they collect their pensions. That scheme works well, so why should they be forced to go to town halls?
  At present there is no charge for permits, but there will be a charge under the new scheme. The Secretary of State said that it would be for administrative purposes. That is the thin edge of the wedge. With all the powers given to him under the Bill, he could introduce increased charges later, when the pressure is off. He does not come under the same democratic control as the GLC.
  New clause 8(5) states:
  "The issue of such a permit by any issuing authority shall be subject to such terms, limitations or conditions as the authority may, with the approval of the Secretary of State, from time to time determine".
  Again, the Secretary of State has the ability to alter the terms, limitations or conditions. He could make them more restrictive as time goes on and the pressure is off him.
  There is no provision to extend the concessionary fares to British Rail or to private operators. Some privately operated buses may refuse to take pensioners' passes. That is one of the faults of the road service licence scheme in the Bill. That will create confusion among London's pensioners.
  An off-peak restriction has also been imposed. The Secretary of State is taking away the opportunity for pensioners to travel in the peak hours between 4.30 pm and 6.30 pm and, instead, gives them from midnight to 1 am. That is not a good deal for the pensioners; it will be of little value to them.
  As my hon. Friend the Member for Walthamstow (Mr. Deakins) said, the restriction on travelling in rush hours should be because it is unpleasant. Most pensioners will not want to travel during those hours, but they might need to do so for such things as a medical appointment. The choice should be theirs. After all, the Government are supposed to be the party of free choice. How about giving
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  London's pensioners the free choice to travel when they choose rather than adopting the line of phoney paternalism in the Bill?
  Pensioners may be thrown off the buses because they are travelling at the wrong time. That will mean aggro for them and for the bus queues——
  The Minister of State, Department of Transport (Mrs. Lynda Chalker): We became accustomed to the hon. Gentleman's style of speech in Committee. I want to assure London's pensioners that there is no question of their being thrown off the buses or the tubes during the period for which their concessionary passes entitle them to travel. They can finish their journey, and will certainly not be thrown off during it.
  Mr. Cohen: That was not my point. The Minister obviously does not have the examples that I have of such things happening. Pensioners might wait for a bus from 4 pm to 4.31 pm and, because the restriction begins at 4.30 pm, they will be turfed off the bus. Again, if they try to board a bus at 6.25 pm, they will be turfed off. It is an unpleasant experience. We welcomed the GLC's extension of the scheme, because it stopped such occurrences.
  There is a catalogue of the considerable reductions in the scheme that will come about because of the proposals. It is only a forerunner to reductions in the concessionary travel scheme nationally. We need the present GLC scheme, which should be maintained. I say that not only because it is popular—which it is—but because there is a genuine social need for it. It brings huge mobility benefits to pensioners.
  Much has been said about the cost of that scheme, but it means only a 3p rate. It is a bargain because of the benefits obtained. The pensioners want the present scheme to be maintained, and so do I. The Government's alternative is a poor substitute.
  Sir Nicholas Bonsor: We have covered this subject in some depth, both in Committee and in the House. Therefore, I do not propose to delay the House. I wish only to underline one or two of the more important points that have been made.
  My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) correctly said that this is the first time that there has been a statutory right to concessionary travel in London. That is one of the most important advances that the Bill is making. To give future London pensioners a right to concessionary travel that can be changed only by future statute in the House is a step forward that I am sure they will fully appreciate. The need for such a concession is obvious to all who represent London seats. The pensioners have enormously appreciated and, to a large extent, used the concessionary travel permits with which they have been issued since the GLC first introduced the scheme. I am delighted that the Government have decided to introduce a new scheme.
  As my hon. Friend the Member for Ruislip-Northwood said, there was some debate about whether this was the appropriate place to put such a clause. It was largely due to the efforts of my hon. Friend, my hon. Friend the Member for Hayes and Harlington (Mr. Dicks), myself and other Conservative Back Benchers that the Government decided to take such a course. The hon. Member for Leyton (Mr. Cohen) gave himself and his colleagues unmerited praise for having achieved this, but

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  he and his friends could have huffed and puffed and the Government would not have budged an inch had it not been for the efforts of my hon. Friends.
  The criticism that now comes in a mealy-mouthed fashion from Labour Members is not that this step has been taken by the Government but that it is inadequate. They base that criticism, so far as I can see, almost entirely on the fact that pensioners will not be able to travel free on the rush hour trains, tubes and buses. That is a wholly fallacious attack. As the hon. Member for Walthamstow (Mr. Deakins) admitted or, indeed, advanced as an argument in his favour, the pensioner would be most unlikely, if he was making a sensible judgment, to wish to travel during the rush hour. It is probably the most uncomfortable form of self-inflicted purgatory. It is absolute murder travelling on the tubes in the rush hour, as any hon. Member who has to do so can vouch. It is right that pensioners should be dissuaded from doing so and should not be encouraged to add to their own discomfort in that way.
  Of course, I appreciate that there will be occasions when pensioners feel for one reason or another that that is the only time when they can travel. As I tried to point out in my brief intervention in the speech of the hon. Member for Walthamstow, that will happen only rarely and when it does the penalty will only be that the pensioner will, unfortunately, have to pay a small amount extra to make the journey.
  Against that it is correct to set the very substantial overall cost to the Government and to ratepayers if the full concession, including peak-time travel, were to be offered in the Bill. My hon. Friend the Member for Uxbridge (Mr. Shersby) and others have said that that discretion should be left to individual councils. It is right that this statutory duty should be introduced and also that it should be limited as it is.
  The cost of the concession, as hon. Members well know, has gone up from approximately £6 million when introduced less than a decade ago to nearly £70 million. Any future statutory commitment which would index-link it would be a very dangerous step because of the cost both to taxpayers and to ratepayers. Therefore, the limitations which are being set are right.
  Pensioners in London suffer a handicap not suffered by their rural counterparts in that in the areas of London most affected by the concessionary right the community spirit is unfortunately very much weaker than it used to be and than it is in villages and small market towns in areas such as I used to represent before I moved to Upminster. I have had an opportunity to see the contrast between the rural community spirit and, sadly, the consequences in some areas of much greater mobility of population where the community spirit has broken down.
  No doubt all hon. Members have read the case of Andrew Mizon, the three-year-old boy who was battered to death by his mother and her lover. None of the neighbours noticed that this was happening. It is a symptom of the evil in society that the community spirit that used to be so strong and that is portrayed so often in our folklore and history is no longer a part of many aspects of urban life. This is the case largely in tower blocks and other large buildings, which have been put up to accommodate the elderly and the disadvantaged. It is, therefore, all the more important that the great gift of
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  mobility and the ability to get out and go shopping, visit relatives and keep in touch with old friends is maintained and secured.
  Equalisation has already been largely covered. At the moment the Bill does not deal with it. I hope that Ministers will take this very much into account when considering how the Bill needs to be developed and what other steps should be taken. It would be wrong if some poorer boroughs had to bear an intolerable burden to bring this statutory provision into effect. While I warmly welcome the new clause, it is important that equalisation is brought into effect and that the burden of providing it is more widely and fairly spread.
  6.15 pm
  Mr. Tom Cox: We heard from the Secretary of State in his opening remarks about the supposed scare stories put about by the GLC and by my Labour colleagues about the bus passes of pensioners in London being under threat. If one looks back at the Second Reading debate, one will see that, after the speech by the Secretary of State, Conservative Members expressed to him their deep concern at the lack of any clear commitment by the Government that the pensioner's bus pass as we know it in the Greater London area would be protected. We could not get a commitment. We knew of the observations of the 32 London boroughs about the schemes they wanted to introduce should the present scheme not be continued.
  It is no good the Secretary of State saying that hon. Members knew all along that the bus pass would be protected. It was not protected until the people who were benefiting from it expressed in the House and in the constituencies their real fear that under the proposals outlined in the early discussions adequate protection was not being given to ensure that the pass would remain in force. That is why the Secretary of State was forced—he did not do it willingly—to make concessions.
  As many of my hon. Friends have already said, although there have been concessions, the scheme that will shortly be implemented after the establishment of the new transport authority will not be as good as the existing scheme. The reasons have already been given. Under the Bill, transport in London will be worse. We have not heard much from the Secretary of State about the rights of elected Members after he has appointed the people who will run London transport.
  There are many other issues that one could touch on. Those of us, irrespective of the party we represent in the House, who are members of the all-party pensioners group know that the one issue that is always on the agenda at meetings is the need to extend and develop concessionary fares throughout the United Kingdom. Pensioners in other parts of the country look with envy at what we have been able to achieve in London. Looking back to the early 1970s, when the scheme was being developed, one sees that it was because of the lack of a unified scheme throughout London that the GLC took it over. It could not leave it any longer to the boroughs to decide on a scheme that would meet the needs of Londoners, irrespective of where they lived.
  The Government would like the people to believe that they intended that a new scheme would be in operation for the elderly and others who use the existing scheme. The Government were forced to do it, and it is our duty to make

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  the people of London aware that only because of the pressures that they put on the Government were the necessary changes made.
  New clause 1(4)(c) relates to the general lack of provision for the elderly and disabled in transport terms, and that is why my hon. Friends and I have talked about the importance of the dial-a-ride scheme. Disabled people have lobbied Ministers and we have had debates urging the Government to develop the dial-a-ride concept because it benefits severely disabled people. We have urged the Government to incorporate that scheme into this legislation.
  The various dial-a-ride schemes, which we hoped would be expanded, have provided the severely disabled, many of them confined to wheelchairs, with the opportunity for the first time in their lives to get about. It is to the credit of the GLC, and London boroughs working with the GLC, that the dial-a-ride scheme has been developed. Under that scheme, specially converted ambulances call at the homes of disabled people and take them to visit friends or relatives or to go shopping and so on. Without that provision, many of them would never leave their homes.
  Because of the amount of happiness that that scheme has brought to a small but important number of people, we urged the Government to ensure its continuance and development. As I say, for those who use the scheme, it is a lifeline because they are unable to use the normal public transport services. Sadly, we have had no response to our plea that that type of provision be written into the Bill. That is a deplorable indictment of the supposed concern of the Government for the disabled and the elderly. The GLC has shown its willingness to extend the service, but the Government have not given an assurance that the scheme will continue to be developed for the benefit of those who now use it.
  We have been told that we can leave it to the London boroughs to buy and provide additional services. Anybody from the London borough of Wandsworth knows that that council would not do anything of the sort. At present, Wandsworth is cutting back on the grants that were made available to certain elderly and disabled groups in the borough. Considering that borough's current record on existing services, nobody can believe that it — sadly, there are plenty of other Wandsworths in the GLC area —will buy extra services. Neither will it develop, for example, the dial-a-ride scheme.
  To their credit, many Ministers have assisted in the development of services for the disabled. The dial-a-ride scheme has benefited enormous numbers of people. Although it has proven its worth to the disabled, the Secretary of State has refused to give a commitment that it will continue. We are aware of the right hon. Gentleman's lack of concern on many issues, but we thought that the Minister of State, in view of the sort of meetings in which she has been involved, would have had some influence on her right hon. Friend on this issue.
  Hon. Members who are committed to seeing the scheme developed, with the help of those who have benefited from it, will do all in our power to embarrass the Government by showing how heartless they are. We shall do our best to ensure that the scheme flourishes and develops for the people of London who have made it clear that they need it.
  Mr. Greenway: It is always a pleasure to follow the hon. Member for Tooting (Mr. Cox), although I must repudiate the strident terms in which he set about the Government on this issue. I remind him that, although the Labour party has held office several times before and since 1945, it never guaranteed concessionary passes or made the slightest effort to do so.
  Therefore, how can the hon. Gentleman and other Labour Members berate the Government at a time when passes, for the first time ever, have been guaranteed by the Government? The Opposition are skating on very thin ice indeed. After all, the Lib-Lab pact did not seek to guarantee passes. Let there be no doubt that this is the first Government to guarantee concessionary passes; that must be to our credit.
  I was among the first on Second Reading to raise the issue of concessionary passes, for I agree with hon. Members in all parts of the House about the importance of these passes to pensioners. I would—indeed, I did—fight tooth and nail for this concession because pensioners in my constituency and throughout London find the pass a lifeline. It represents a day out, a little time away from the four walls, a chance to visit a relative in another part of London or see a grandchild at school. For people of limited means — which pensioners on supplementary benefit, for example, are, by definition—that is more important than anything else. None of us could have stood by and see that go.
  It is fair to point out that the GLC's scheme has been developed by Conservative and Labour administrations at county hall. However, it is wrong for the GLC, aided and abetted by Labour Members, to have spent at least £3 million of ratepayers' money on its spurious scheme to save passes.
  I never doubted that the passes were going to continue, and the best way to be sure that they continued was the guarantee that we have had. We have the best, and one cannot do better than that. As I said, no previous Government have ever done that. To have spent at least £3 million—some people say that it was £5 million—of ratepayers' money, much of it coming from old people who find it hard to pay, was disgraceful. A pensioner in my constituency is struggling to find £400 a year in rates. If she lived in Brent, she would have to pay £800 for a similar property. This is wrong, disgraceful and unfair and a gross misuse of public money. The GLC should now apologise to Londoners for having misspent their money.
  The central importance of the concessionary pass is to the 1·1 million pensioners and others who have been enjoying the pass, and one could not morally take it away from them. There was no question but that it had to continue, and I am delighted that it did.
  6.30 pm
  Mr. Nigel Spearing: Will the hon. Gentleman take the opportunity to put down on paper the details of the sums which he alleges have been spent by the GLC in this way? Would he not agree that the need for entrenchment of the pass system in legislation, which Sir Horace Cutler dare not take away, is due only to the inception of London Regional Transport? Had it been left to the electors of London, there would have been no need to entrench it in legislation.
  Mr. Greenway: I cannot accept what the hon. Gentleman says. He knows that Labour Members in the

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  past have criticised the concessionary pass scheme as operated by their colleagues in county hall and by Conservative administrations in county hall. It is never good enough for any of us. We all want it to be better. Having offered that criticism of their colleagues in county hall, why did Labour Members when they were in government not produce the guarantee that this Government have produced?
  When my hon. Friend the Minister replies, I ask her to consider whether she can make some concession to the unemployed, even if it is not a pass. Is there some way in which unemployed people travelling to interviews in London might have a docket or two from time to time? It can cost up to £3 or £5 to travel to London for a job interview which, if one is unemployed, is of great importance. If one is unemployed, by definition one has little money. Can something be done about that? I would welcome any such concession, which I think we owe to Londoners.
  As to the 4.30 to 6.30 pm blank period, during which a pass-holder cannot use a pass, I understand the arguments put forward by the Secretary of State. There is great pressure on transport at that time, and it would be expensive to extend the pass to cover that period. However, I wonder whether there could be an opt-in clause for pensioners who have a special need to travel regularly in those hours. It might be expensive to administer, but perhaps it could be done at a minimum cost. I should be grateful if consideration could be given to that suggestion.
  Londoners are second to none as citizens of this nation. All hon. Members know that the people of London are a great people. I wonder whether we might take a leaf out of the French book and reserve a few seats on public transport for pensioners. I accept that this may be difficult to enforce and would need careful consideration. In France, a few seats on underground trains and on buses are reserved exclusively for the use of pensioners, and people who are "mutilés de la guerre"—disabled service men—might be included in that category. I do not expect to see this enshrined in the legislation, but I hope that the Minister might offer some encouragement to London Regional Transport to make such a provision.
  Mr. Tony Banks: We have heard many immodest claims from Conservative Members about the inclusion of the new clause in the legislation. No doubt Conservative Members—I certainly accept that it is true of the hon. Member for Ealing, North (Mr. Greenway)—played a prominent part in trying to ensure that the Government changed their mind, as they have, and altered what was said when the Bill was introduced. It is a most unreal situation. The House is being detained to discuss free bus passes for pensioners and is congratulating itself on doing the decent thing by pensioners. The fact is that the scheme that the Government are introducing is not as good as the existing scheme.
  Mr. Jeremy Hanley: Does not the hon Gentleman agree that the posters exhibited by the GLC throughout London, and the Londoner newspaper, distributed at the ratepayers' expense, stated that there would be no scheme after LRT took over?
  Mr. Banks: The publicity by the GLC was to build up a campaign that would have some influence on the Government, and it worked, because the Government have manifestly changed their minds.
  Mrs. Chalker: It was not necessary.
  Mr. Banks: The Minister says that it was not necessary. Let me remind her what she said on 25 November 1983 in the Adjournment debate, when I raised the matter of free travel. I asked the Minister to allay the fears of pensioners, whom she said were being stirred up by the publicity issued from county hall. I said, and I repeat, that all she needed to do was to give an unequivocal assurance that the existing scheme would be retained when the new London Regional Transport came into being. She said:
  "I come to the next misconception of the hon. Member for Newham, North-West. This has nothing to do with London Regional Tranport. The whole issue of LRT is the management of the provision of bus and underground services in greater London. LRT will be like any other transport undertaking."
  She continued:
  "The choice is up to the London boroughs, not the Government. It is not an issue arising from the setting up of LRT, as I said, but a consequence of the abolition of the GLC."—[Official Report, 25 November 1983; Vol. 49, c. 416.]
  The Government had no intention then of writing into the legislation the safeguarding of pensioners' fares. Whoever wishes to claim the credit — whether Conservative Members wish to claim that the GLC was stirring it up, or whether they wish to claim the credit for themselves —the Government have changed their mind, and we should welcome that, to a limited extent.
  Mr. Ridley: What the hon. Gentleman says is rubbish. Can he tell me why the GLC continued to try to make out that pensioners' passes were to be taken away after I made the statement on 16 February? Since then, the GLC has not abated for one moment its mischievous propaganda, which it must now know is not true. Why did the GLC not hear what I said in the House on 16 February?
  Mr. Banks: The Secretary of State will no doubt feel a little aggrieved when I say that we wanted to see the colour of his new clause. When dealing with such a Government, it is necessary to see the small print. I have always accepted the good intentions of the Secretary of State and the Minister of State, but that is not good legislation. We want to see what they said in cold print.
  However, the Bill is not good enough, because it does not provide a great improvement in services to London's pensioners. Conservative Members have made great play of the fact that concessionary fares will now be enshrined in statute, but the proposed scheme is not as good as the present one. As long as there was a directly elected GLC in county hall there was no danger of concessionary fares being abolished, because the pensioners had exercised their power through the ballot box. They also exercised their power effectively to ensure that the Government changed their mind and introduced the new clause. Although we must welcome the new clause, it will mean that pensioners will be worse off when the new LRT authority is created. All the flannel, humbug and self-congratulation on the Conservative Benches will not make a whit of difference to that reality.
  In many aspects the new scheme will create problems. We shall discuss some of those when we debate subsequent clauses, but one problem will be the

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  implications of block grant penalties. The GLC scheme costs about £56·8 million to operate, but the GRE assessment allows for only £27·6 million. As several hon. Members have said, the councils will be issuing passes under the new scheme, which will lead to more costs and bureaucracy in the town halls. At present it is convenient for pensioners to obtain their passes from post offices.
  The Secretary of State must also address himself to equalisation. All the boroughs, with the possible exceptions of Westminster, Kensington, City of London and Camden. will be worse off if they must issue the passes themselves without the benefit of the equalisation provided by the 3p GLC rate. The Secretary of State should make a statement about this or introduce a new clause. Good intentions are not enough; we must see it in cold print. If the matter is not dealt with, boroughs such as Newham, which has a large pensioner population, most of whom are at the lowest income levels, will be in some difficulty because they must find an extra 2p rate. With rate-capping on its way, that will pose a great problem to the boroughs. The boroughs affected will include many of the outer London Tory boroughs, because London's population is moving outwards, and Barnet and Bromley, for example, will have to find a substantial additional amount of money if there is no equalisation.
  Hon. Members on both sides of the House accept that concessionary passes are a valuable asset to pensioners. We should be discussing the extension of this scheme throughout the country. As London Members, we accept that the scheme is necessary in London, but equity demands that we should discuss a national scheme. It is clear from statistics that 66 per cent. of pensioners in London do not have access to private cars. That is an average figure, but the numbers increase in boroughs such as Newham, whose pensioners rely almost entirely on buses and tubes. Therefore, the Opposition must welcome the fact that the Government have had the courtesy and decency to change their mind, although under pressure.
  6.45 pm
  However, no one should misunderstand the fact that, whether the scheme is statutorily backed or not, it is a worse scheme than pensioners presently have. It has been introduced not because the Government wish to incorporate it in legislation but because they have been forced to do so. They would not have been forced to do so, we would not have had this debate and there would be no London Regional Transport Bill were it not for the fact that they intend to abolish the GLC. To make the abolition of the GLC, as will be said in some journals, more meaningful, they found it necessary first to remove from county hall the control of London transport. This debate has nothing to do with their desire to look after London's pensioners.
  Mr. Simon Hughes: Most hon. Members are not yet pensioners, but most of us hope to be the pensioners of tomorrow. Pensioners now represent about one fifth of the electorate, and this debate is about the freedom, mobility and happiness of that enormous group in our society.
  London now has concessionary fares across the city. That was a logical move, because a city divided into 33 local authority areas does not reflect travel patterns and needs, especially of the elderly — where they shop, where they visit their families and friends, or where they go out. The travel needs of the fare-paying and the
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  concessionary fare-receiving pensioners must he considered over London as a whole. It was inadequate of the Government to imagine from the outset that the 33 local authorities could have cobbled together an agreed pattern. The matter must be considered comprehensively.
  The White Paper last summer said that the concessionary fares scheme might be continued. However, it also said that it might not, because it did not underwrite the scheme. Therefore, although I share the reservations about the campaign, the GLC should not have said that there would be no concessionary fares scheme. That was not clear then. There was a risk that the concessionary fares would be abolished, but no one could be certain. Since then, there has been growing pressure from all quarters and we have arrived at the Government's present position.
  The Government's proposals have little logic. They decided to abolish the local authority governing the needs of London, for reasons which we shall debate at length in the coming months. In doing so, they also decided to abolish the authority that was trying to co-ordinate travel in London. That task must be carried out in a co-ordinated way, as the Government have accepted by replacing the GLC with a new authority that will deal with London as a whole. Since local authorities of both colours in county hall have decided that pensioners should have concessionary fares and have devised a scheme for doing so, the Government cannot and should not impose their will by saying, "We shall change that system because we know better." They should accept the way in which evolution has left London with the present system, the best in Britain but certainly not the best that it could be and not as good as one hopes it will be one day.
  In principle, it should of course be a local authority decision, not a statutory one. The fact that there is now statutory underwriting and guarantee of the scheme comes about only because the local authority which has dealt with the matter will no longer be there to do so. It is quite clear that, wherever possible, transport should not be a nationalised industry when it deals with one area of the country; it should be the responsibility of the locally elected people.
  The Government, having decided to remove a tier of local authority jurisdiction, came up with a scheme which failed to guarantee to the people and to the boroughs of London the money that was previously raised for the scheme through the GLC rates. That was doubly illogical. Local authorities were told that they could have a scheme if they could agree on one but that there was no guarantee that the funding would be provided. Many local authorities, both Tory and Labour, said plainly that they could not afford it.
  That is how the whole process has gone on for the past months. It has proceeded from one illogical premise of the Government to another, from which they have had to move as a result of the pressure put on them.
  In some ways, it is better that the scheme be guaranteed by statute, although the power and decision should lie with the local authority, but if Members believe that things which are enshrined in statute cannot be changed at the whim of a Government whipping their Back Benchers through the Lobbies, they are mistaken.
  I accept that hon. Members from all parties have put pressure on the Government. The pensioners, too, have made a substantial contribution to the pressure. It might even be said that without the concessionary passes they

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  might have been less effective in doing so, because not as many could have come here to make their feelings known. Nevertheless, it is the pressure from all sides, the pressure of the logic of the argument, which has caused the Government to change tack.
  If the Government say that it was always their intention to provide a back-up scheme, may I challenge the Minister in this way? Today is 4 April 1984, the date of the first entry in Winston Smith's diary in George Orwell's "1984", in which he writes about the Ministry of Truth. I challenge the Minister or the Secretary of State to produce to the House an internal Government document, one of those Sarah Tisdall-type restricted documents which were, no doubt, circulating, if what the Minister says is true, last summer, a document which states that the Minister will introduce the reserve power at the right time.
  If the Government want it to be believed that they always intended to underwrite the scheme, they must prove their case. If they cannot, we shall not believe it but shall have to conclude that only pressure has bought about their change of heart.
  Criticisms remain. We are replacing the present scheme by a poorer one. The new pass may have to be paid for. Once a charge is made, it is likely to go up; that means that out of the pensioner's income, with no additional funds, he or she will have to pay for travel which is now free.
  London Regional Transport, a body not elected but totally nominated by the Secretary of State, will have power to change the hours of the concession without any consultation with or, as I understand it, reference to the this place. There will be consultation with the passengers' committee but LRT will retain the power.
  There is also the possibility of the matter being reviewed every year. Local authorities are complaining as it is. They ask to be left alone, to be given certainty and to have the threat of annual change removed. This provision has an inbuilt risk of a change of system every year.
  Nor is there any guarantee for pensioners who happen to want to use a route that, under the new scheme, may be run by an independent operator. There is no possibility of a concessionary fare there. For many pensioners, that will be a positive disadvantage.
  The disabled and the pensioners have very little. They have the worst pensions of any country in the European Community. They already get a bad deal out of our society. It now looks as though even some of that little which they have will be taken away. That is a bad thing.
  Although I cannot guarantee the same reward, I repeat some words for the Secretary of State's benefit: "Turn again." He has done so once. He has come back from the brink and produced a concessionary scheme. I ask him, like Dick Whittington, to turn again and give the pensioners what they ought to have had all along. I ask him to equivocate no longer but to produce the goods and serve that important part of our community which has suffered from all Governments for far too long and which deserves to retain what it has achieved by its own fight over the years.
  Mr. Ernie Roberts: The Secretary of State was keen to accuse the GLC of spending ratepayers' money in a campaign on the
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  issue of free fares, but the very fact that a concessionary fares scheme is now going into the Bill is justification of the money spent by the GLC. It mounted a campaign which was supported by old-age pensioners and by the disabled and, as a result of that pressure, what should have been in the original Bill is now being added by means of a new clause. That is a simple statement of fact and no argument to the contrary will alter it. The public will see that the Government have had to make a volteface in being forced to accept the logic of the GLC's campaign and the pressure put on them by the electorate.
  Had it not been for the fact that the GLC had introduced free passes, there would be no question of defending something that was non-existent. The very fact that the free pass scheme already existed caused the campaign to be mounted and the Government to face up to the necessity to continue with something which the people have and want to keep. If the GLC had not introduced a scheme of free passes in London, it would never have been in the Bill for us to consider.
  In spite of all that, however, 1 million free pass holders in London are still most apprehensive about their passes. The first body blow is the suggestion that a charge of £5 or more be made for the pass. That has been suggested in Bromley, the borough in which I live. It is suggested that that figure which could be increased at any time. Such a charge could make a pass prohibitive for old-age pensioners and others. Five pounds may seem a small amount of money to some, but it cannot easily be found by many old people in my area.
  Mr. Spearing: Does my hon. Friend realise that his concern is well founded? During Question Time we were told, though not in so many words, that the Government were considering withdrawing the free ferry at Woolwich. If they are thinking of that, they may well make a charge for passes for old-age pensioners.
  Mr. Roberts: The old-age pensioners and the disabled will be at the tender mercy of one person— not the GLC, an elected body, but the Secretary of State. Furthermore, there is a fear that the sectors of public transport which are to be sold to private profiteers will not be available for free travel for pensioners and others.
  Another fear is that poor boroughs such as Hackney, part of which I represent, will not be able to finance free travel passes because of the large number of old people and invalids in the area. Boroughs such as Hackney, which have so many social problems already because of the Tory Government, will not be able to raise the extra money needed for free passes.
  Yet another fear arises from rate capping and the rate penalties that will be imposed on such boroughs. Hackney community transport has a new "dial-a-ride" scheme. There are fears that this scheme will have to go because the borough will not be able to afford it any more than it can afford to pay for free travel for its old folk.
  London needs to equalise the cost of free travel as it exists at the moment, with the rich boroughs helping the poor boroughs. The GLC has been able to run an excellent free pass scheme with a 3p rate. With the abolition of the democratically elected body, the Government are throwing the present GLC scheme into anarchy and disruption.
  We are pleased to have had a victory and to have compelled the Government to change their mind about free

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  travel. However, we are still not satisfied that the scheme will be as good or as secure as the present one run by the GLC.
  7 pm
  Mr. Snape: The debate has been a continuation of one that has lasted for some months and shows the interest of both sides of the House in concessionary passes for pensioners.
  The Secretary of State made a predictable speech—if I may put it that way — when he described the Opposition as fighting a ruthless scare campaign. Presumably, those remarks related to our attitude towards the issue. He suggested that the Opposition were stirring pensioners into an unnecessary frenzy. He appears to want the House to believe that it was always the Government's intention to introduce this new clause and that all the fuss that has gone on for so long is completely unnecessary.
  As we have heard from my hon. Friend the Member for Newham, South, (Mr. Spearing), as recently as November last the Secretary of State was saying that legislation was not the place to deal with concessionary fares. He evidently still believes that. As recently as the Second Reading debate he was saying—I am trying to be fair about this—to some of his hon. Friends that there was no need for such a clause.
  It is predictably graceless of the right hon. Gentleman not to mention that today. He has been forced to make a U-turn, and whether that has come about as a result of pressure from my hon. Friends, from his hon. Friends—one or two of whom claimed the credit this afternoon—or, as I think most of us would acknowledge, from the pensioners, the concessions that he has made are welcome as far as they go.
  Unfortunately, as my hon. Friends have said, the concessions do not go far enough. They represent a worsening of the concessionary fare scheme for pensioners in London. It is regrettable that those of his hon. Friends who welcomed the Secretary of State's conversion have not thought fit to say that it conceals the fact that the concession, welcome thought it is, represents a reduction in travelling conditions for old-age pensioners and others in Greater London. That is regrettable and reprehensible.
  The thrust of the Government's argument in Committee was, and today has been, that the GLC extended the hours during which concessionary parties were available out of bloody-mindedness because of the threat of abolition. That is palpably untrue. It is the kind of thing that the Secretary of State, the Minister of State and Conservative Members have been saying for some months. There is nothing new about the principle of concessionary fares. One or two of my hon. Friends have said that there has never been any need for a Labour Government to introduce legislation because no Labour Government have ever abolished a local authority because they disagreed with its philosophies and policies. The underlying reason behind this deplorable legislation — to paraphrase the courageous words of two Conservative Members of the GLC in a letter to The Guardian—is the abolition of the GLC because the Government disagree with its political philosophy.
  Let us have no smokescreen about the Government's interest in pensioners' concessionary fares. The Government could easily have demonstrated that interest
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  in Committee. During the debates on clause 12 my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) moved amendment No. 41, which provided:
  "(5) The Secretary of State shall make such grant to London Transport as may be required to maintain the system of free travel permits now in operation for pensioners and disabled persons resident in Greater London". — [Official Report, Standing Committee B, 16 February 1984; c. 543.]
  It was a simple, stark amendment which would have guaranteed concessionary fares in the future. Unfortunately, every Conservative Member present voted against the amendment. So much for their interest in seeing that concessionary fares enjoyed by pensioners were continued. The hon. Member for Southwark and Bermondsey (Mr. Hughes) and his hon. Friend the Member for Isle of Wight (Mr. Ross) could not bring themselves to vote for the amendment. The hon. Member for Southwark and Bermondsey said that he did not agree with the Government dealing with these matters by legislation. I accept that to a certain extent he has repeated the same argument today. I do not believe that it is a good argument, but he would not expect me to.
  The reasons why the GLC abolished the restrictions during the evening peak hours are simple and they are not new, for all the claptrap we have heard from Conservative Members about it being done only in the past year or so for the reasons that I have given.
  As long ago as 1981, free travel for permit holders on the underground was extended to cover the evening peak period. There was a good reason for that. 'The professionals responsible for the day-to-day running of the organisation, about whom the Secretary of State speaks so fondly, found that because the evening restriction began at 4 o'clock there was considerable overcrowding on services used by schoolchildren. Pensioners who were anxious to board a bus before 4 o'clock found that it was sometimes impossible to do so because most schools in the London area finished at about that time. The restriction was lifted on the underground to enable pensioners to use an alternative form of transport. That was before the Government were, sadly, re-elected and before they published their shoddy election manifesto threatening to abolish the GLC. There is nothing new about that philosophy. The GLC has believed in it for a long time and it was determined to extend the scheme eventually to the buses.
  Such things do not come cheaply. Every social advance during my lifetime has been opposed by the Conservative party on the ground that the nation could not afford it. We have heard the same cant from Conservative Members this afternoon about evening peak hour travel for pensioners. We have also heard a great deal of cant from them about equalisation. Some of them have realised, albeit belatedly, that the legislation, which they have trooped dutifully through the Lobby to support, is likely to have a serious financial impact on their ratepayers. Instead of shedding crocodile tears in the debate, we shall give them the opportunity to do something about it, as the following debate deals with equalisation. Conservative Members can put their votes where their mouths are and show their concern for the financial rectitude of their constituents by supporting the new clause.
  The whole question of concessionary fares has exercised the minds of the Committee and the House for a long time. The Opposition desire only to preserve that which pensioners enjoy now. I do not think that we are

  1013
  asking too much of a country such as ours, or of the House. I hope that my right hon. and hon. Friends will join me in the Division Lobby to help secure that laudable objective.
  Mrs. Chalker: At the beginning of my remarks I must put to rest an issue that is not germane to the debate. It was raised by the hon. Member for Newham, South (Mr. Spearing). I understand that my hon. Friend the Under-Secretary said this afternoon that the Woolwich ferry will continue to provide services, which is exactly the opposite of what the hon. Gentleman said. That should be put right.
  Mr. Spearing: The hon. Lady has quoted exactly what the Minister said — "continue" services. The Minister declined to reply when he was challenged to say whether they would be free. I have tabled a written question for Monday next to the Secretary of State, giving him the opportunity to say that the Woolwich ferry will remain a free service. To put my intervention in order, Mr. Deputy Speaker, I hope that there will be no need for old-age pensioners' free passes on a paid Woolwich ferry.
  Mrs. Chalker: Hon. Members may wonder why I raised the matter. Knowing the skill of the hon. Member for Newham, South, I am sure that he will be well satisfied with the answer that he receives next Monday.
  We have spent some 14 hours discussing concessionary fares. I do not object to that, but I do object to the fact that so many elderly people have been disturbed and worried by the continuing propaganda that has been put about by Labour Members and some members of the GLC for the past 10 months. What a pity that the hon. Member for Walthamstow (Mr. Deakins) did not contact me in May last year. I could have saved him some expense. However, he did not do so.
  The Government have made it crystal clear from the beginning that we believe that the concessionary fares scheme should continue and would continue, and that the issue arises not on the London Regional Transport Bill, but as a result of forthcoming legislation dealing with the future of the GLC.
  In the Adjournment debate initiated by the hon. Member for Newham, North-West (Mr. Banks), I quoted a letter from the former Secretary of State for Transport:
  "I can assure you that the Government appreciate the value pensioners place on their concessionary fares and that there is no intention that they should be deprived of travel concessions when the GLC is abolished."—[Official Report, 25 November 1983; Vol. 49, c. 415.]
  I cannot believe that anything could be clearer than that. I repeated what was said in the White Paper, published in July 1983:
  "The Government have always recognised the concern of London's pensioners that a joint scheme for concessionary travel should be available to them."
  The campaign has gone on. Many people have been worried unnecessarily and have got themselves far more worked up about the issue than could be justified in any political system. I believe that my hon. Friends were right to allay the fears that have been built up. That is why a reserve scheme has been brought forward in new clauses 7, 8 and 9.
  7.15 pm
  The reserve scheme will take effect if the London boroughs do not reach voluntary agreement within the next
  1014
  two years. I have every hope that they will do so if the Association of London Authorities, those Labour-controlled London boroughs that have so far declined to discuss the matter, change their minds and reach a voluntary agreement.
  The concessionary scheme, whether it is introduced on a voluntary basis under clause 48 or has to fall back on the reserve statutory scheme, will provide Londoners with the concessionary fares scheme that they need. The statutory scheme will allow pensioners and disabled people free travel on LRT services at all times at weekends and bank holidays and at off-peak times on weekdays. It will apply to travel on buses and underground services. Blind people will have the right to travel free at all times. If additional provision is wanted, as some hon. Members have said this evening, it will be feasible for boroughs which, as the hon. Member for Walthamstow said, clearly have a social duty as well as a wider financial duty, to add to the basic uniform scheme. That is a matter for them.
  The hon. Member for Kingston upon Hull, East asked about concessions on services operated under a road service licence, not by LRT under a clause 3(2) agreement covered by the concessionary fares scheme. If the boroughs wish to facilitate travel for their pensioners under RSL services, there is no reason why independent operators should not provide those services, and there is no reason for them to refuse to do so. It would be wrong to put a private independent operator under a statutory obligation. That is one aspect that they and the borough must consider when an RSL is applied for, and it can be settled locally.
  Mr. Prescott: Is the Minister asking us to believe that the many private bus companies that she hopes to encourage to operate in stage carriage areas will undertake individual negotiations with each of the 32 boroughs? There may be as many as 100 buses. How will the scheme be maintained under those conditions?
  Mrs. Chalker: The hon. Gentleman is neatly forgetting something that I said in Committee. The RSL services would be very limited by comparison with the provision of services by LRT, under clause 3(2) agreements covered by the concessionary fares scheme. It is up to the borough concerned, where those services run within it, to decide whether its pensioners should benefit from it.
  In the same way—the hon. member for Southwark and Bermondsey (Mr. Hughes) has said this many times — the concessions available must be provided with regard to cost. One cannot make provisions without counting how the concessionary fares will be paid for. I must point out that the fares are not free but must be paid for by ratepayers and taxpayers. We must achieve a reasonable balance while providing a good concessionary fares scheme for pensioners.
  I was asked several questions, some of which were answered earlier in the debate. We know that the half-fare scheme was introduced only recently by British Rail. Since its introduction, we have heard all sorts of proposals. It was clear after the Bill's publication that the bill for the services provded by LRT would be picked up not by the GLC but by London ratepayers and future Governments. It is cynical to suggest that things could be done in future by the GLC that cannot be done now.
  Mr. Snape rose——
  Mrs. Chalker: I really must get on. I shall not give way, on the basis of the agreement that the hon. Gentleman and I have had all along.
  I was asked about the length of time for which passes could continue. It is possible that five-year passes could be issued but, sadly, many people of that age do not survive for the whole of the five-year period. There is a problem of control at the beginning because the charge for the passes would be made to cover the whole of the five-year period.
  Whereas I can understand the anxiety about having an annual renewal, there is nothing to prevent there being a longer period for the passes to be established. However, I hope that that is one of the things that the London boroughs will achieve and settle, because it is up to them to do so.
  Mr. Christopher Hawkins: When we abolish the other metropolitan councils, is it not clear that a clause such as this will be needed? Is it not unfair that people in my constituency and in other parts of Britain will have to subsidise free bus passes in London and other metropolitan council areas? Is not the inevitable conclusion that, in fairness, free bus passes should be available either all over Britain or nowhere?
  Mrs. Chalker: I was coming to that point. My hon. Friend has raised an interesting matter. It is notable that, in 1979, the then Labour Government published a Green Paper in which they advocated a national scheme of concessionary fares, but they then rejected it because they believed that the decision should be left to the individual counties.
  I shall respond to the other questions about the metropolitan counties. In the metropolitan counties, after abolition, there will be joint boards covering transport, which will be responsible for public transport. They will be able to take a unified decision about the scheme in those areas. However, the Bill is about LRT, and I return to London Transport matters. If the hon. Member for Tooting (Mr. Cox) is patient, he will find that in a later amendment something worth while is being done for those who benefit so greatly from dial-a-ride schemes. In view of the time, I ask the hon. Gentleman to allow me to leave that matter until later.
  Many hon. Members were concerned about the financing of the concessionary fares scheme and about London equalisation. The Government made it clear in the White Paper entitled "Streamlining the Cities", and we have repeated in Committee several times, that the London rates equalisation scheme would be extended to ensure that London ratepayers were not disadvantaged by the disappearance of the GLC. The London rates equalisation scheme ensures that high rateable resources in central London are redistributed to the benefit of the poorer boroughs. The Government will continue the scheme when the GLC is abolished to maintain the balance between ratepayers so that the poorer boroughs will get compensation for the cost of paying for the concessionary passes through contributions from the richer boroughs under the rates equalisation scheme.
  Many and various other comments were made, but owing to the lack of time I shall say just this about the scheme. It is a reserve provision. I believe that the LBA, as it has said many times, can reach agreement on a uniform scheme without recourse to the statute. The
  1016
  scheme has powers to prevent boroughs or the GLC charging a heavy fee for the passes. No such protection exists now. Any charges would have to be approved by my right hon. Friend the Secretary of State. It is true that it applies to off-peak travel, but a south-east London bus driver said:
  "Trying to get home after working hours is already a problem for many. Should the GLC decide to carry out this policy"—
  extending the concessionary passes through the '4. hole of the evening rush hour—
  "I am afraid we will lose what passengers we have.
  It will incense workers to club together and hire mini-cabs or coaches, or join those already travelling by coach."
  That bus driver was pointing to the balance that we have to achieve. We want pensioners to enjoy the benefit of concessionary passes in London, but travel in London is not just for pensioner passengers. We must also remember the ratepayer, as well as the taxpayer, who pay the cost of the concessionary passes. It is high time that the oft-repeated and false campaign was laid to rest and that the people responsible for London Transport got on with the job of working out the best way to provide London's pensioners and disabled people with concessionary fares in future rather than engaging in a war of sterile propaganda.
  The LBA will continue to make its efforts. The scheme that the Government have proposed in new clauses 7, 8 and 9 and consequent amendments is good, but it is mindful of the real needs of ratepayers. The Government cannot and should not ignore the cost, but we can and will ensure, and are ensuring, as we have always intended to do, that the concessionary fares scheme will continue after the abolition of the GLC.
  Question put and agreed to.
  Clause read a Second time.
  Amendment (a) proposed: In subsection (5)(b) leave out evening'.—[Mr. Prescott.]
  Question put, That the amendment be made:—
  The House divided: Ayes 181, Noes 273.

  Dlvision No. 226]

  [7.25 pm

  AYES

  Abse, Leo

  Campbell-Savours, Dale

  Adams, Allen (Paisley N)

  Carlile, Alexander (Montg'y)

  Alton, David

  Carter-Jones, Lewis

  Anderson, Donald

  Cartwright, John

  Ashley, Rt Hon Jack

  Clark, Dr David (S Shields)

  Ashton, Joe

  Clarke, Thomas

  Atkinson, N. (Tottenham)

  Clay, Robert

  Banks, Tony (Newham NW)

  Cocks, Rt Hon M. (Bristol S.)

  Barnett, Guy

  Cohen, Harry

  Barron, Kevin

  Coleman, Donald

  Beckett, Mrs Margaret

  Conlan, Bernard

  Beith, A. J.

  Cook, Robin F. (Livingston)

  Bell, Stuart

  Corbett, Robin

  Benn, Tony

  Corbyn, Jeremy

  Bennett, A. (Dent'n & Red'sh)

  Cox, Thomas (Tooting)

  Bermingham, Gerald

  Craigen, J. M.

  Blair, Anthony

  Crowther, Stan

  Boothroyd, Miss Betty

  Cunliffe, Lawrence

  Boyes, Roland

  Dalyell, Tam

  Bray, Dr Jeremy

  Davies, Rt Hon Denzil (L'lli)

  Brown, Gordon (D'f'mline E)

  Davies, Ronald (Caerphilly)

  Brown, Hugh D. (Provan)

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

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

  Deakins, Eric

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

  Dewar, Donald

  Brown, Ron (E'burgh, Leith)

  Dixon, Donald

  Bruce, Malcolm

  Dobson, Frank

  Buchan, Norman

  Dormand, Jack

  Caborn, Richard

  Douglas, Dick

  Callaghan, Jim (Heyw'd & M)

  Dubs, Alfred

  Campbell, Ian

  Duffy, A. E. P.

  1017

  Dunwoody, Hon Mrs G.

  Meadowcroft, Michael

  Eadie, Alex

  Michie, William

  Eastham, Ken

  Mikardo, Ian

  Edwards, Bob (W'h'mpt'n SE)

  Millan, Rt Hon Bruce

  Ellis, Raymond

  Mitchell, Austin (G't Grimsby)

  Evans, John (St. Helens N)

  Morris, Rt Hon A. (Wshawe)

  Ewing, Harry

  Morris, Rt Hon J. (Aberavon)

  Fatchett, Derek

  Nellist, David

  Field, Frank (Birkenhead)

  Oakes, Rt Hon Gordon

  Fields, T. (L'pool Broad Gn)

  O'Brien, William

  Fisher, Mark

  O'Neill, Martin

  Flannery, Martin

  Parry, Robert

  Foster, Derek

  Patchett, Terry

  Fraser, J. (Norwood)

  Pavitt, Laurie

  Freeson, Rt Hon Reginald

  Pendry, Tom

  Freud, Clement

  Penhaligon, David

  George, Bruce

  Pike, Peter

  Gilbert, Rt Hon Dr John

  Powell, Raymond (Ogmore)

  Gould, Bryan

  Prescott, John

  Hardy, Peter

  Randall, Stuart

  Harman, Ms Harriet

  Redmond, M.

  Harrison, Rt Hon Walter

  Rees, Rt Hon M. (Leeds S)

  Haynes, Frank

  Richardson, Ms Jo

  Healey, Rt Hon Denis

  Roberts, Ernest (Hackney N)

  Heffer, Eric S.

  Robertson, George

  Hogg, N. (C'nauld & Kilsyth)

  Robinson, G. (Coventry NW)

  Holland, Stuart (Vauxhall)

  Rogers, Allan

  Hoyle, Douglas

  Rooker, J. W.

  Hughes, Dr. Mark (Durham)

  Ross, Ernest (Dundee W)

  Hughes, Robert (Aberdeen N)

  Ross, Stephen (Isle of Wight)

  Hughes, Roy (Newport East)

  Rowlands, Ted

  Hughes, Sean (Knowsley S)

  Ryman, John

  Hughes, Simon (Southwark)

  Sedgemore, Brian

  Janner, Hon Greville

  Sheerman, Barry

  John, Brynmor

  Sheldon, Rt Hon R.

  Johnston, Russell

  Shore, Rt Hon Peter

  Jones, Barry (Alyn & Deeside)

  Short, Ms Clare (Ladywood)

  Kaufman, Rt Hon Gerald

  Silkin, Rt Hon J.

  Kennedy, Charles

  Skinner, Dennis

  Kilroy-Silk, Robert

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

  Kirkwood, Archibald

  Snape, Peter

  Lambie, David

  Spearing, Nigel

  Leadbitter, Ted

  Steel, Rt Hon David

  Leighton, Ronald

  Stott, Roger

  Lewis, Ron (Carlisle)

  Strang, Gavin

  Lewis, Terence (Worsley)

  Straw, Jack

  Lloyd, Tony (Stretford)

  Thomas, Dafydd (Merioneth)

  Lofthouse, Geoffrey

  Thomas, Dr R. (Carmarthen)

  Loyden, Edward

  Thompson, J. (Wansbeck)

  McCartney, Hugh

  Tinn, James

  McDonald, Dr Oonagh

  Torney, Tom

  McKay, Allen (Penistone)

  Wardell, Gareth (Gower)

  McKelvey, William

  Wareing, Robert

  Maclennan, Robert

  Weetch, Ken

  McNamara, Kevin

  Welsh, Michael

  McTaggart, Robert

  Williams, Rt Hon A.

  Madden, Max

  Winnick, David

  Marek, Dr John

  Young, David (Bolton SE)

  Marshall, David (Shettleston)

  Mason, Rt Hon Roy

  Tellers for the Ayes:

  Maxton, John

  Mr. James Hamilton and Mr. John McWilliam.

  Maynard, Miss Joan

  Meacher, Michael

  NOES

  Adley, Robert

  Beaumont-Dark, Anthony

  Aitken, Jonathan

  Bellingham, Henry

  Alexander, Richard

  Bendall, Vivian

  Alison, Rt Hon Michael

  Bennett, Sir Frederic (T'bay)

  Amery, Rt Hon Julian

  Benyon, William

  Amess, David

  Berry, Sir Anthony

  Ancram, Michael

  Biffen, Rt Hon John

  Arnold, Tom

  Biggs-Davison, Sir John

  Ashby, David

  Blaker, Rt Hon Sir Peter

  Atkins, Robert (South Ribble)

  Body, Richard

  Atkinson, David (B'm'th E)

  Bonsor, Sir Nicholas

  Baker, Rt Hon K. (Mole Vall'y)

  Boscawen, Hon Robert

  Baker, Nicholas (N Dorset)

  Bottomley, Peter

  Baldry, Anthony

  Bowden, Gerald (Dulwich)

  Banks, Robert (Harrogate)

  Braine, Sir Bernard

  1018

  Brandon-Bravo, Martin

  Hayhoe, Barney

  Bright, Graham

  Hayward, Robert

  Brinton, Tim

  Heathcoat-Amory, David

  Brown, M. (Brigg & Cl'thpes)

  Heddle, John

  Bruinvels, Peter

  Henderson, Barry

  Bryan, Sir Paul

  Hickmet, Richard

  Buck, Sir Antony

  Hicks, Robert

  Budgen, Nick

  Higgins, Rt Hon Terence L.

  Burt, Alistair

  Hill, James

  Butcher, John

  Hind, Kenneth

  Butler, Hon Adam

  Hirst, Michael

  Butterfill, John

  Hogg, Hon Douglas (Gr'th'm)

  Carlisle, John (N Luton)

  Holland, Sir Philip (Gedling)

  Carlisle, Kenneth (Lincoln)

  Holt, Richard

  Chalker, Mrs Lynda

  Hooson, Tom

  Chapman, Sydney

  Hordern, Peter

  Chope, Christopher

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

  Churchill, W. S.

  Howarth, Gerald (Cannock)

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

  Howe, Rt Hon Sir Geoffrey

  Clark, Dr Michael (Rochford)

  Howell, Rt Hon D. (G'ldford)

  Clark, Sir W. (Croydon S)

  Hubbard-Miles, Peter

  Clarke, Rt Hon K. (Rushcliffe)

  Hunt, John (Ravensbourne)

  Clegg, Sir Walter

  Hunter, Andrew

  Cockeram, Eric

  Jackson, Robert

  Colvin, Michael

  Jessel, Toby

  Conway, Derek

  Johnson-Smith, Sir Geoffrey

  Coombs, Simon

  Jones, Robert (W Herts)

  Cope, John

  Joseph, Rt Hon Sir Keith

  Cormack, Patrick

  Kellett-Bowman, Mrs Elaine

  Couchman, James

  Kershaw, Sir Anthony

  Crouch, David

  Key, Robert

  Currie, Mrs Edwina

  King, Rt Hon Tom

  Dorrell, Stephen

  Knight, Gregory (Derby N)

  Douglas-Hamilton, Lord J.

  Knight, Mrs Jill (Edgbaston)

  du Cann, Rt Hon Edward

  Lamont, Norman

  Dunn, Robert

  Lang, Ian

  Durant, Tony

  Lawler, Geoffrey

  Edwards, Rt Hon N. (P'broke)

  Lawrence, Ivan

  Evennett, David

  Lee, John (Pendle)

  Eyre, Sir Reginald

  Leigh, Edward (Gainsbor'gh)

  Fairbairn, Nicholas

  Lennox-Boyd, Hon Mark

  Fallon, Michael

  Lester, Jim

  Farr, John

  Lewis, Sir Kenneth (Stamf'd)

  Favell, Anthony

  Lloyd, Peter, (Fareham)

  Fenner, Mrs Peggy

  Lord, Michael

  Finsberg, Sir Geoffrey

  Lyell, Nicholas

  Fletcher, Alexander

  MacKay, Andrew (Berkshire)

  Fookes, Miss Janet

  Maginnis, Ken

  Forman, Nigel

  Major, John

  Forth, Eric

  Maples, John

  Fowler, Rt Hon Norman

  Marland, Paul

  Fox, Marcus

  Mather, Carol

  Franks, Cecil

  Mawhinney, Dr Brian

  Freeman, Roger

  Merchant, Piers

  Gale, Roger

  Meyer, Sir Anthony

  Gardiner, George (Reigate)

  Mills, lain (Meriden)

  Gardner, Sir Edward (Fylde)

  Mills, Sir Peter (West Devon)

  Garel-Jones, Tristan

  Miscampbell, Norman

  Glyn, Dr Alan

  Moate, Roger

  Goodhart, Sir Philip

  Molyneaux, Rt Hon James

  Goodlad, Alastair

  Monro, Sir Hector

  Gorst, John

  Morrison, Hon C. (Devizes)

  Gow, Ian

  Moyniharr, Hon C.

  Grant, Sir Anthony

  Mudd, David

  Greenway, Harry

  Murphy, Christopher

  Gregory, Conal

  Needham, Richard

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

  Neubert, Michael

  Griffiths, Peter (Portsm'th N)

  Newton, Tony

  Ground, Patrick

  Nicholson, J.

  Gummer, John Selwyn

  Normanton, Tom

  Hamilton, Neil (Tatton)

  Onslow, Cranley

  Hampson, Dr Keith

  Page, Richard (Herts SW)

  Hanley, Jeremy

  Peacock, Mrs Elizabeth

  Harris, David

  Percival, Rt Hon Sir Ian

  Harvey, Robert

  Pink, R. Bonner

  Havers, Rt Hon Sir Michael

  Pollock, Alexander

  Hawkins, C. (High Peak)

  Porter, Barry

  Hawkins, Sir Paul (SW N'folk)

  Powell, Rt Hon J. E. (S Down)

  Hawksley, Warren

  Powley, John

  Hayes, J.

  Raffan, Keith

  1019

  Raison, Rt Hon Timothy

  Taylor, John (Solihull)

  Renton, Tim

  Taylor, Teddy (S'end E)

  Rhodes James, Robert

  Terlezki, Stefan

  Rhys Williams, Sir Brandon

  Thomas, Rt Hon Peter

  Ridley, Rt Hon Nicholas

  Thompson, Donald (Calder V)

  Ridsdale, Sir Julian

  Thompson, Patrick (N'ich N)

  Roberts, Wyn (Conwy)

  Thorne, Neil (Ilford S)

  Robinson, Mark (N'port W)

  Thornton, Malcolm

  Roe, Mrs Marion

  Townend, John (Bridlington)

  Rossi, Sir Hugh

  Townsend, Cyril D. (B'heath)

  Rost, Peter

  Trotter, Neville

  Rowe, Andrew

  Twinn, Dr Ian

  Rumbold, Mrs Angela

  van Straubenzee, Sir W.

  Ryder, Richard

  Vaughan, Sir Gerard

  Sackville, Hon Thomas

  Viggers, Peter

  Sainsbury, Hon Timothy

  Wakeham, Rt Hon John

  Sayeed, Jonathan

  Waldegrave, Hon William

  Shaw, Giles (Pudsey)

  Walden, George

  Shelton, William (Streatham)

  Walker, Cecil (Belfast N)

  Shepherd, Richard (Aldridge)

  Walker, Bill (T'side N)

  Shersby, Michael

  Wall, Sir Patrick

  Silvester, Fred

  Waller, Gary

  Sims, Roger

  Wardle, C. (Bexhill)

  Skeet, T. H. H.

  Watson, John

  Smith, Tim (Beaconsfield)

  Watts, John

  Soames, Hon Nicholas

  Wells, John (Maidstone)

  Speed, Keith

  Wheeler, John

  Speller, Tony

  Whitfield, John

  Spencer, Derek

  Whitney, Raymond

  Spicer, Jim (W Dorset)

  Wiggin, Jerry

  Spicer, Michael (S Worcs)

  Wilkinson, John

  Squire, Robin

  Winterton, Mrs Ann

  Stanbrook, Ivor

  Winterton, Nicholas

  Stanley, John

  Wolfson, Mark

  Steen, Anthony

  Wood, Timothy

  Stern, Michael

  Woodcock, Michael

  Stevens, Lewis (Nuneaton)

  Yeo, Tim

  Stevens, Martin (Fulham)

  Young, Sir George (Acton)

  Stewart, Allan (Eastwood)

  Younger, Rt Hon George

  Stewart, Andrew (Sherwood)

  Stewart, Ian (N Hertf'dshire)

  Tellers for the Noes:

  Stokes, John

  Mr. David Hunt and Mr. Archie Hamilton.

  Stradling Thomas, J.

  Sumberg, David

  Question accordingly negatived.
  Clause added to the Bill.

New Clause 8

  SUPPLEMENTARY PROVISIONS WITH RESPECT TO THE FREE TRAVEL SCHEME
  `(1) The following provisions of this section apply for the purposes of the operation of the free travel scheme in relation to any accounting year of London Regional Transport to which the scheme applies (referred to below in this section as the relevant accounting year).
  (2) As soon as the requirements for the application of the free travel scheme to the relevant accounting year are met, London Regional Transport shall notify all London borough councils and the Common Council (referred to below in this section as issuing authorities) that the scheme will apply to that accounting year.
  (3) London Regional Transport shall from time to time supply to each issuing authority such travel concession permits as appear to London Regional Transport to be required by that authority for issue to eligible London residents in accordance with the following provisions of this section.
  (4) Subject to subsection (5) below, an issuing authority shall issue a travel concession permit supplied by London Regional Transport under this section to any eligible London resident who applies for one and is resident in the area of that authority.
  (5) The issue of such a permit by any issuing authority shall be subject to such terms, limitations or conditions as the authority may, with the approval of the Secretary of State, from time to time determine as respects any category of eligible London residents.
  (6) Before 1st February in the accounting year immediately preceding the relevant accounting year London Regional
  1020
  Transport shall give written notification to each issuing authority of the charge to be paid to them under this section by the issuing authority, for each quarter of the relevant accounting year, in respect of a travel concession permit issued under this section to an eligible London resident of each category which is valid on the first day of that quarter.
  (7) The charges payable by issuing authorities under this section—

  (a) shall be fixed by London Regional Transport with a view to securing that the costs of the operation of the free travel scheme are met from the proceeds of those charges (taking one accounting year to which the scheme applies with another, where the scheme applies to two or more consecutive accounting years); and

  (b) may differ for different quarters of an accounting year.

  (8) The reference in subsection (7)(a) above to the costs of the operation of the free travel scheme is a reference, in relation to any accounting year of London Regional Transport taken into account in fixing any charges under that subsection.. to the aggregate of—

  (a) the revenue by way of fares which London Regional Transport estimate they and any subsidiaries of theirs have lost or will lose in that year in consequence of the provision of free travel under the scheme; and

  (b) any other costs which London Regional Transport have incurred or estimate that they will incur in that year in connection with providing or for the purpose of securing the provision of free travel under the scheme (including any payments London Regional Transport have made or propose to make for that purpose to any person with whom they have entered into an agreement by N, irtue of section 3(2) of this Act).

  (9) Before the end of the first month of each quarter of the relevant accounting year, each issuing authority shall—

  (a) pay to London Regional Transport, in respect of each travel concession permit issued by that authority and valid on the first day of that quarter, the charge fixed by London Regional Transport under this section for that quarter which is applicable to that permit;

  (b) provide London Regional Transport with a written statement giving the particulars required by subsection (10) below with respect to the travel concession permits supplied to the authority by London Regional Transport under this section; and

  (c) if required to do so by London Regional Transport, return to London Regional Transport all such permits which have not been issued by the authority before the beginning of that quarter.

  (10) The particulars required by this subsection in any statement under subsection (9)(b) above with respect to any quarter of the relevant accounting year are—

  (a) the number of such permits issued to eligible London residents of each category which are valid on the first day of that quarter;

  (b) the number of such permits so issued (if any) which expired or were surrendered to the authority during the last preceding quarter; and

  (c) the number of such permits supplied for issue to eligible London residents of each category which have not been issued by the authority before the beginning of the quarter for which the statement is required.

  (11) In the application of section 48(7)(c) of this Act for the purposes of the free travel scheme and this section, the reference to the opinion of the local authority or any of the local authorities there mentioned shall be read, in relation to persons resident in the area of an issuing authority, as a reference to the opinion of that authority.
  (12) The annual report of London Regional Transport under section 33 of this Act with respect to the relevant accounting year shall contain a statement of—

  (a) the manner in which the charges fixed under this section in respect of each quarter of that year were calculated; and

  (b) the aggregate of the amounts paid to London Regional Transport during that year by the issuing authorities under this section'.—[Mr. Ridley.]

  Brought up, read the First and Second time, and added to the Bill.

New Clause 9

  REQUIREMENTS AS TO SCOPE AND UNIFORMITY OF ARRANGEMENTS FOR TRAVEL CONCESSIONS UNDER SECTION 48(1)
  `(1) Arrangements under section 48(1) of this Act for travel concessions for London residents meet the requirements of this section as to scope if they provide for the grant of travel concessions to all eligible London residents on relevant journeys on all services under the control of London Regional Transport (subject to any terms, limitations or conditions with respect to the particular journeys on any such services on which any such concession is available to eligible London residents of any category).
  (2) Arrangements under section 48(1) of this Act for travel concessions for London residents meet the requirements of this section as to uniformity if they—

  (a) make the same provision for all eligible London residents of the same category, with respect to the benefit of any travel concessions granted to those residents under the arrangements and the periods during which it is available;

  (b) make the enjoyment of the benefit of any travel concession granted under the arrangements conditional on the production, by any person seeking to travel under that concession, of a travel concession permit issued to him in accordance with the arrangements; and

  (c) make the same provision with respect to the period of validity of all travel concession permits issued in accordance with the arrangements to eligible London residents of the same category;

  whether or not, in any other respects, the arrangements make different provision for different cases in which they apply.
  (3) References in subsection (2) above to the benefit of a travel concession are references to the waiver or reduction of any fare or charge to which the arrangements in question apply, as distinct from any terms, limitations or conditions applicable to that waiver or reduction in accordance with the arrangements.
  (4) Where individual arrangements under section 48(1) made between a particular local authority or local authorities and London Regional Transport apply to certain eligible London residents only, all arrangements so made shall be considered together for the purpose of determining whether subsections (1) and (2) above are satisfied.'.—[Mr. Ridley.]
  Brought up, read the First and Second time, and added to the Bill.

New Clause 2

  PROVISIONS FOR THE OPERATION OF TRAVEL CONCESSIONS BY INDEPENDENT TRANSPORT OPERATORS
  `It shall be the duty of the Secretary of State

  (1)(a) subject to subsection (2) below to consider any request received from a London authority in relation to the provision of travel concessions by an independent transport operator as defined in subsection 48(8) of this Act and, if he considers it appropriate, to direct such an operator to provide travel concessions to persons eligible to receive them in accordance with subsection 48(7) of this Act similar to those concessions which are from time to time available on services provided by London Regional Transport and the Railways Board

  (b) in relation to subsection (a) above, if he considers it appropriate, to give directions as to the maximum payments which may be made by a local authority to an independent transport service operator for the provision of travel concessions under this Section.

  (2) No direction under subsection 1(a)above shall be made by the Secretary of State for the provision of travel concessions by any independent transport operator unless the Secretary of State is satisfied that financial provision for them will be made pursuant to subsections (1) and (3) of section 48 of this Act. '.—[Mr. Prescott.]
  Brought up, and read the First time.
  Motion made, and Question put, That the clause be read a Second time:—
  The House divided: Ayes 181, Noes 268.

  Division No. 227]

  [7.40 pm

  AYES

  Abse, Leo

  George, Bruce

  Adams, Allen (Paisley N)

  Gilbert, Rt Hon Dr John

  Alton, David

  Gould, Bryan

  Anderson, Donald

  Hamilton, W. W. (Central Fife)

  Ashley, Rt Hon Jack

  Hardy, Peter

  Ashton, Joe

  Harman, Ms Harriet

  Atkinson, N. (Tottenham)

  Harrison, Rt Hon Walter

  Banks, Tony (Newham NW)

  Haynes, Frank

  Barnett, Guy

  Healey, Rt Hon Denis

  Barron, Kevin

  Heffer, Eric S.

  Beckett, Mrs Margaret

  Hogg, N. (C'nauld & Kilsyth)

  Beith, A. J.

  Holland, Stuart (Vauxhall)

  Bell, Stuart

  Howells, Geraint

  Benn, Tony

  Hoyle, Douglas

  Bennett, A. (Dent'n & Red'sh)

  Hughes, Robert (Aberdeen N)

  Bermingham, Gerald

  Hughes, Roy (Newport East)

  Blair, Anthony

  Hughes, Sean (Knowsley S)

  Boothroyd, Miss Betty

  Hughes, Simon (Southwark)

  Boyes, Roland

  Janner, Hon Greville

  Bray, Dr Jeremy

  John, Brynmor

  Brown, Gordon (D'f'mline E)

  Johnston, Russell

  Brown, Hugh D. (Provan)

  Jones, Barry (Alyn & Deeside)

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

  Kaufman, Rt Hon Gerald

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

  Kennedy, Charles

  Brown, Ron (E'burgh, Leith)

  Kilroy-Silk, Robert

  Bruce, Malcolm

  Kirkwood, Archibald

  Buchan, Norman

  Lambie, David

  Caborn, Richard

  Leadbitter, Ted

  Callaghan, Jim (Heyw'd & M)

  Leighton, Ronald

  Campbell, Ian

  Lewis, Ron (Carlisle)

  Campbell-Savours, Dale

  Lewis, Terence (Worsley)

  Carlile, Alexander (Montg'y)

  Lloyd, Tony (Stretford)

  Carter-Jones, Lewis

  Lofthouse, Geoffrey

  Cartwright, John

  Loyden, Edward

  Clark, Dr David (S Shields)

  McCartney, Hugh

  Clarke, Thomas

  McDonald, Dr Oonagh

  Clay, Robert

  McKay, Allen (Penistone)

  Cocks, Rt Hon M. (Bristol S.)

  McKelvey, William

  Cohen, Harry

  Maclennan, Robert

  Coleman, Donald

  McNamara, Kevin

  Conlan, Bernard

  McTaggart, Robert

  Cook, Robin F. (Livingston)

  Madden, Max

  Corbett, Robin

  Marek, Dr John

  Corbyn, Jeremy

  Marshall, David (Shettleston)

  Cox, Thomas (Tooting)

  Mason, Rt Hon Roy

  Craigen, J. M.

  Maxton, John

  Crowthor, Stan

  Maynard, Miss Joan

  Cunliffe, Lawrence

  Meacher, Michael

  Dalyell, Tam

  Meadowcroft, Michael

  Davies, Rt Hon Denzil (L'lli)

  Michie, William

  Davies, Ronald (Caerphilly)

  Mikardo, Ian

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

  Millan, Rt Hon Bruce

  Deakins, Eric

  Mitchell, Austin (G't Grimsby)

  Dewar, Donald

  Morris, Rt Hon A. (W'shawe)

  Dixon, Donald

  Morris, Rt Hon J. (Aberavon)

  Dobson, Frank

  Nellist, David

  Dormand, Jack

  Oakes, Rt Hon Gordon

  Douglas, Dick

  O'Brien, William

  Dubs, Alfred

  O'Neill, Martin

  Duffy, A. E. P.

  Parry, Robert

  Dunwoody, Hon Mrs G.

  Patchett, Terry

  Eadie, Alex

  Pavitt, Laurie

  Eastham, Ken

  Pendry, Tom

  Edwards, Bob (W'h'mpt'n SE)

  Penhaligon, David

  Ellis, Raymond

  Pike, Peter

  Evans, John (St. Helens N)

  Powell, Raymond (Ogmore)

  Ewing, Harry

  Prescott, John

  Fatchett, Derek

  Randall, Stuart

  Field, Frank (Birkenhead)

  Redmond, M.

  Fields, T. (L'pool Broad Gn)

  Rees, Rt Hon M. (Leeds S)

  Fisher, Mark

  Richardson, Ms Jo

  Flannery, Martin

  Roberts, Ernest (Hackney N)

  Foster, Derek

  Robertson, George

  Fraser, J. (Norwood)

  Robinson, G. (Coventry NW)

  Freeson, Rt Hon Reginald

  Rogers, Allan

  Freud, Clement

  Rooker, J. W.

  1023

  Ross, Ernest (Dundee W)

  Thomas, Dafydd (Merioneth)

  Ross, Stephen (Isle of Wight)

  Thomas, Dr R. (Carmarthen)

  Rowlands, Ted

  Thompson, J. (Wansbeck)

  Ryman, John

  Tinn, James

  Sedgemore, Brian

  Torney, Tom

  Sheerman, Barry

  Wardell, Gareth (Gower)

  Shore, Rt Hon Peter

  Wareing, Robert

  Short, Ms Clare (Ladywood)

  Weetch, Ken

  Silkin, Rt Hon J.

  Welsh, Michael

  Skinner, Dennis

  Williams, Rt Hon A.

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

  Winnick, David

  Snape, Peter

  Young, David (Bolton SE)

  Spearing, Nigel

  Steel, Rt Hon David

  Tellers for the Ayes:

  Stott, Roger

  Mr. James Hamilton and Mr. John McWilliam.

  Strang, Gavin

  Straw, Jack

  NOES

  Adley, Robert

  du Cann, Rt Hon Edward

  Aitken, Jonathan

  Dunn, Robert

  Alexander, Richard

  Durant, Tony

  Alison, Rt Hon Michael

  Edwards, Rt Hon N. (P'broke)

  Amery, Rt Hon Julian

  Evennett, David

  Amess, David

  Eyre, Sir Reginald

  Ancram, Michael

  Fairbairn, Nicholas

  Arnold, Tom

  Fallon, Michael

  Ashby, David

  Farr, John

  Aspinwall, Jack

  Favell, Anthony

  Atkins, Robert (South Ribble)

  Fenner, Mrs Peggy

  Atkinson, David (B'm'th E)

  Finsberg, Sir Geoffrey

  Baker, Rt Hon K. (Mole Vall'y)

  Fletcher, Alexander

  Baker, Nicholas (N Dorset)

  Fookes, Miss Janet

  Baldry, Anthony

  Forman, Nigel

  Banks, Robert (Harrogate)

  Forth, Eric

  Beaumont-Dark, Anthony

  Fowler, Rt Hon Norman

  Bellingham, Henry

  Fox, Marcus

  Bendall, Vivian

  Franks, Cecil

  Bennett, Sir Frederic (T'bay)

  Freeman, Roger

  Benyon, William

  Gale, Roger

  Berry, Sir Anthony

  Gardiner, George (Reigate)

  Biggs-Davison, Sir John

  Gardner, Sir Edward (Fylde)

  Body, Richard

  Garel-Jones, Tristan

  Bonsor, Sir Nicholas

  Glyn, Dr Alan

  Boscawen, Hon Robert

  Goodhart, Sir Philip

  Bottomley, Peter

  Goodlad, Alastair

  Braine, Sir Bernard

  Gorst, John

  Brandon-Bravo, Martin

  Gow, lan

  Bright, Graham

  Grant, Sir Anthony

  Brinton, Tim

  Greenway, Harry

  Brown, M. (Brigg & Cl'thpes)

  Gregory, Conal

  Bruinvels, Peter

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

  Bryan, Sir Paul

  Griffiths, Peter (Portsm'th N)

  Buck, Sir Antony

  Ground, Patrick

  Budgen, Nick

  Gummer, John Selwyn

  Burt, Alistair

  Hamilton, Hon A. (Epsom)

  Butcher, John

  Hamilton, Neil (Tatton)

  Butler, Hon Adam

  Hampson, Dr Keith

  Butterfill, John

  Hanley, Jeremy

  Carlisle, John (N Luton)

  Harris, David

  Carlisle, Kenneth (Lincoln)

  Harvey, Robert

  Chalker, Mrs Lynda

  Havers, Rt Hon Sir Michael

  Chapman, Sydney

  Hawkins, C. (High Peak)

  Chope, Christopher

  Hawkins, Sir Paul (SW N'folk)

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

  Hawksley, Warren

  Clark, Dr Michael (Rochford)

  Hayes, J.

  Clark, Sir W. (Croydon S)

  Hayhoe, Barney

  Clarke, Rt Hon K. (Rushcliffe)

  Hayward, Robert

  Clegg, Sir Walter

  Heathcoat-Amory, David

  Cockeram, Eric

  Heddle, John

  Colvin, Michael

  Henderson, Barry

  Conway, Derek

  Hickmet, Richard

  Coombs, Simon

  Hicks, Robert

  Cope, John

  Higgins, Rt Hon Terence L.

  Cormack, Patrick

  Hill, James

  Couchman, James

  Hind, Kenneth

  Crouch, David

  Hirst, Michael

  Currie, Mrs Edwina

  Hogg, Hon Douglas (Gr'th'm)

  Dorrell, Stephen

  Holland, Sir Philip (Gedling)

  Douglas-Hamilton, Lord J.

  Holt, Richard

  1024

  Hooson, Tom

  Rowe, Andrew

  Hordern, Peter

  Rumbold, Mrs Angela

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

  Ryder, Richard

  Howarth, Gerald (Cannock)

  Sackville, Hon Thomas

  Howe, Rt Hon Sir Geoffrey

  Sainsbury, Hon Timothy

  Howell, Rt Hon D. (G'ldford)

  Sayeed, Jonathan

  Hubbard-Miles, Peter

  Shaw, Giles (Pudsey)

  Hunt, David (Wirral)

  Shelton, William (Streatham)

  Hunt, John (Ravensbourne)

  Shepherd, Richard (Aldridge)

  Hunter, Andrew

  Shersby, Michael

  Irving, Charles

  Silvester, Fred

  Jackson, Robert

  Sims, Roger

  Jessel, Toby

  Skeet, T. H. H.

  Johnson-Smith, Sir Geoffrey

  Smith, Tim (Beaconsfield)

  Jones, Robert (W Herts)

  Soames, Hon Nicholas

  Joseph, Rt Hon Sir Keith

  Speed, Keith

  Kellett-Bowman, Mrs Elaine

  Speller, Tony

  Kershaw, Sir Anthony

  Spencer, Derek

  Key, Robert

  Spicer, Jim (W Dorset)

  King, Rt Hon Tom

  Spicer, Michael (S Worcs)

  Knight, Gregory (Derby N)

  Squire, Robin

  Knight, Mrs Jill (Edgbaston)

  Stanbrook, Ivor

  Lamont, Norman

  Steen, Anthony

  Lawler, Geoffrey

  Stern, Michael

  Lawrence, Ivan

  Stevens, Lewis (Nuneaton)

  Lee, John (Pendle)

  Stevens, Martin (Fulham)

  Leigh, Edward (Gainsbor'gh)

  Stewart, Allan (Eastwood)

  Lennox-Boyd, Hon Mark

  Stewart, Andrew (Sherwood)

  Lester, Jim

  Stewart, Ian (N Hertf'dshire)

  Lewis, Sir Kenneth (Stamf'd)

  Stokes, John

  Lilley, Peter

  Stradling Thomas, J.

  Lloyd, Peter, (Fareham)

  Sumberg, David

  Lord, Michael

  Taylor, John (Solihull)

  Lyell, Nicholas

  Taylor, Teddy (S'end E)

  MacKay, Andrew (Berkshire)

  Terlezki, Stefan

  Maginnis, Ken

  Thomas, Rt Hon Peter

  Major, John

  Thompson, Donald (Calder V)

  Maples, John

  Thompson, Patrick (N'ich N)

  Marland, Paul

  Thorne, Neil (Ilford S)

  Mather, Carol

  Thornton, Malcolm

  Mawhinney, Dr Brian

  Townend, John (Bridlington)

  Merchant, Piers

  Townsend, Cyril D. (B'heath)

  Meyer, Sir Anthony

  Trotter, Neville

  Mills, Iain (Meriden)

  Twinn, Dr Ian

  Mills, Sir Peter (West Devon)

  van Straubenzee, Sir W.

  Miscampbell, Norman

  Vaughan, Sir Gerard

  Moate, Roger

  Viggers, Peter

  Molyneaux, Rt Hon James

  Wakeham, Rt Hon John

  Monro, Sir Hector

  Waldegrave, Hon William

  Morrison, Hon C. (Devizes)

  Walden, George

  Moynihan, Hon C.

  Walker, Cecil (Belfast N)

  Mudd, David

  Walker, Bill (T'side N)

  Murphy, Christopher

  Wall, Sir Patrick

  Needham, Richard

  Waller, Gary

  Newton, Tony

  Wardle, C. (Bexhill)

  Nicholson, J.

  Watson, John

  Onslow, Cranley

  Watts, John

  Page, Richard (Herts SW)

  Wells, John (Maidstone)

  Peacock, Mrs Elizabeth

  Wheeler, John

  Percival, Rt Hon Sir Ian

  Whitfield, John

  Pink, R. Bonner

  Whitney, Raymond

  Pollock, Alexander

  Wiggin, Jerry

  Powell, Rt Hon J. E. (S Down)

  Wilkinson, John

  Powley, John

  Winterton, Mrs Ann

  Raison, Rt Hon Timothy

  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 Noes:

  Rossi, Sir Hugh

  Mr. Ian Lang and Mr. Michael Neubert

  Rost, Peter

  Question accordingly negatived.

New clause 3

  DISREGARDED EXPENDITURE
  'Local authorities by whom the cost incurred in granting concessionary travel falls to be reimbursed shall not be subject to any financial penalty in respect of expenditure incurred in the provision of concessionary travel under Section 48 of this Act.'. —[Mr. Prescott.]
  Brought up, and read the First time.
  Mr. Prescott: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take amendment No. 33, in clause 48, page 45, line 43, at end insert—
  '(1A) Expenditure incurred by local authorities under this section shall be disregarded for the purposes of calculating local government overspending'.
  Mr. Prescott: The Opposition are in some confusion over the Minister's explanation of how the Government intend to deal with equalisation. The new clause seeks to elicit further information from the Government about how the disregard expenditure will be dealt with and how the principle of equalisation of the costs and penalties involved will be applied. We wish to understand exactly how the costs of the concessionary scheme will be set against local authority expenditure, bearing in mind the Government's plans for rate capping, penalties, and so on, which the GLC is already suffering in relation to other local authority activities. In this case the rate precepting authority will be the Government. They will determine the rate precept and come to the House with an order to levy a rate on the ratepayers of London for their contribution towards the transport costs of the concessionary travel scheme.
  We are concerned here with the free pass principle and the expenditure for the provision of a concessionary scheme. The cost will fall upon the 32 boroughs involved. They will have to find money to be paid to London Regional Transport for the provision of a concessionary scheme. I always find the fast-changing principles of local authority financing difficult to understand. At the best of times the general principles of local authority financing cause me some confusion. I therefore hope that the Secretary of State will be able to tell us how the principle will work in this case.
  I understand that the ratepayers will pay a proportion of the cost of the transport provided by London Regional Transport. In Committee and on Second Reading there was some argument about exactly what proportion the ratepayers should pay. The Secretary of State referred to some advertisements put out by the GLC according to which the ratepayers would be paying about 90 per cent. of the cost. Clearly there is a conflict of statistics here, but I believe that we have persuaded the Minister of State to recognise that the proportion paid by the ratepayers would be about 69 per cent. I hope that she will continue to bring the figure down, because the GLC itself seriously contests that figure. The figure may be closer to 50 per cent. One has to take into account the fact that moneys are denied to the GLC to the extent of £30 million for exceeding the expenditure level acceptable to the Government. The loss of that money is the penalty. In new clause 3 we are concerned with the effect of spending more than the limit set by the Government on local authority expenditure.
  It is also relevant to the ratepayer—we will discuss this later in the debate—that that part of British Rail
  1026
  which is now normally financed by passenger service obligation resources may become a charge on the ratepayer. The Secretary of State said that the two-thirds limit mentioned in the Bill should not be a limit for the PSO contribution. He said that the ratepayer should pay only 40 per cent. If the figure is 40 per cent.—and the Secretary of State said that that was a cockshy figure—that will be considerably more than any other local authority contributes through the PSO to the maintenance of the railway system. However, there is another clause in the Bill which deals with the PSO.
  7.45 pm
  The local authorities are to have a statutory obligation in regard to concessionary passes. The Secretary of State and the Minister of State have proudly claimed it as one of the advances of the Tory Government that the Government have intervened to introduce a central scheme for concessionary fares. One Conservative Member has asked why, if the Government are proud of statutorily imposing a minimum fares scheme, they cannot make it a requirement for the rest of the transport system. The answer to that question was avoided, but I am sure that when we debate the metropolitan authorities, the joint councils and the proposals in "Streamlining the Cities", that proposal will be to the fore. The Government are proud of acting centrally to determine a minimum concessionary scheme.
  Reference has been made to my party's policy on a minimum scheme. The aim was that every citizen in the land should benefit from a minimum scheme and a concessionary fare. We were not prepared to lay down maximums. If local authorities wished to devise better and more generous systems, we were happy to concede that they could do so. Nevertheless, especially for those who live under Tory councils, the great likelihood is that there is no concessionary fare system, and pensioners are penalised because they live in Tory areas.
  New clause 3 seeks to ensure that the cost of concessionary fares to the boroughs shall not constitute expenditure that will be liable to penalty if it brings expenditure above the level imposed upon the local authorities by the Department of the Environment and which the local authority cannot exceed without incurring penalties. Clearly the extra cost of a concessionary scheme will be an extra burden on the boroughs, and there is no guarantee that that expenditure will be disregarded.
  Many authorities are operating very near to the line, if not over it. They are now to be given another statutory responsibility, even though it is wrapped in the idea that this is something that they can do for themselves and that the Government are taking only unofficial powers to oblige them to do it. There is, to all intents and purposes, to be a statutorily enforced concessionary scheme, and the cost will not come out of the rate precept. It will be an extra cost to be carried by the local authority.
  The Government argue that they are providing a state guaranteed minimum concessionary scheme. In reality, the Government are setting the conditions and the local authority must find the resources. Why should the authority be penalised and lose further grants and resources simply because it is carrying out its statutory obligation to provide a concessionary scheme? What we are worried about is that the cost of the concessionary scheme may render the council liable to penalties.

  1027
  It is clear that payment by the boroughs for the provision of the passes will be based on how many passes are issued and not on the rateable value. The rate of 1p or 3p in the pound levied by the GLC for the concessionary system has at least some fair association with wealth, in the sense that it is related to rateable value. Under the new scheme the deciding factor will be how many people apply and pay for passes.
  As we have heard in Committee, and as the Government are certainly aware, the needs of different areas vary considerably. From the various papers that were available to the Committee, and to other hon. Members who wished to see them, it is clear that the number of pensioners in different areas varies considerably. As I have pointed out before, the equalisation principle on which the existing GLC scheme is run means that the 3p rate is the cost to all the boroughs, irrespective of how many pensioners there are in each area.
  8 pm
  Bromley, that reactionary authority that started the trend—[HON. MEMBERS: "Hear, hear."] The pensioners are not saying, "Hear, hear", and I am not sure that ratepayers in Bromley will do so when they see the consequences of buying the GLC's concessionary scheme at 5·9p in the pound, when it used to be 3p in the pound. I hear no more, "Hear, hears". Ratepayers in Bromley will certainly not be saying, "Hear, hear", because they will have to pay twice as much for less than they received under the GLC. I do not know whether ratepayers in Bromley will be satisfied to learn that, their money having been used in a court case, a businesslike way in which to run transport is to have less for twice as much money. If that represents the fruits of Bromley's victory, I hope that ratepayers there will start asking about the people who put them in those circumstances.
  Tory councillors on the GLC say that 28 out of the 32 boroughs will pay more than they now pay under the equalisation principle of 3p in the pound. Many Tory-controlled authorities will be seriously affected if equalisation is not applied. The Secretary of State tells us that the concessionary fares scheme costs nearly £60 million, but the GRE is only about £28 million to £30 million. The Government are now deciding how much money should be given for the provision of concessionary passes and are saying that they should cost about £28 million to £30 million. They concede that the present scheme costs about £60 million, so someone must find the difference to maintain it.
  Presumably the Government have achieved a good deal by knocking off off-peak travel. The assessment of the cost of the concessionary scheme is based on how many people travel at a set time. We assume that the Tory concessionary fares scheme will cost less than the present one because it will not cost as much to travel during the extra hour between 12 midnight and 1 am as between 4.30 pm and 6.30 pm, as not many pensioners want to change their travelling habits and travel at 1 am rather than between 4.30 pm and 6.30 pm. We cannot be wrong about that latter judgment. However, boroughs paying £2·6 million under the present scheme will be assessed as receiving only £1·4 million under the GRE. Therefore, unless the cost of the scheme is cut they will receive only part of the necessary money.
  If the Bill is intended — it is the Government's declared policy—to do away with artificially low fares
  1028
  which the Government believe appertain in metropolitan areas, and especially in London, every 1 per cent. increase in the fare will increase the cost of concessionary fares by £500,000. Leaving aside the extra cost resulting from fares increases, the boroughs will incur extra cost resulting from fares increases, the boroughs will incur extra cost because they will have to pay more if they have more pensioners, because they will have to purchase concessionary fares as they will no longer come out of the rate precept and because of the general level of price increases.
  There should be some form of equalisation between poorer areas or those with greater need and, for example, the City which does not have to meet great need and is wealthy.
  Mr. Matthew Parris: Am I not right in thinking that, in assessing the figures for grant-related expenditure, the Department of the Environment takes account of whether an area is poor or rich, the number of pensioners in it and the needs of people there?
  Mr. Prescott: That is a fair point. I am on dodgy ground when talking about grant-related expenditure, as I have no background in local authorities, especially local authority finance. Needs are assessed and often averaged out in the GRE. However, that argument is relevant to only half of the cost of the concessionary scheme. The Government's argument on new clause 7 was that they were keeping the same scheme and that it was only the scare stories put out by the Opposition that had made them give statutory force to the uniform scheme. The fact remains that the boroughs would have insisted that they would not spend their money, and therefore incur penalties, to provide a concessionary scheme if the choice was left to them. The whole point was to maintain the unity of the system and not have a 50 per cent. fares scheme here and a voucher scheme there. That is the real reason for the Government's new clauses.
  Local authorities might tell the Government that, if the scheme is statutorily enforced, the Government should pay for it. Indeed, that is what local authorities, even Tory-controlled ones, are saying. We are making it clear that they must provide and pay for the scheme. They are being told that they must meet the cost and that if that leads to over-expenditure they will lose money and pay more. It will therefore be possible to have a concessionary scheme that costs £1 million and, with penalties, costs £2 million. That is a rather savage way in which to deal with local authorities. Moreover, it will be local authorities with a large number of pensioners in their areas which will bear the heaviest burden. It will not be the City, but the Bromleys that will carry the burden. In that regard, equalisation is crucial.
  The Secretary of State has said that it will be possible to deal with all of these problems under the GRE. He referred us to schemes in "Streamlining the Cities" which concerned the GLC and the other metropolitan counties. The financial arrangements in chapter 5 of the White Paper say little about how to deal with local authorities with regard to the provision of concessionary schemes. It talks about the problem of what will be done for equalisation when we have joint boards and anxieties about rate precepts, but there is nothing about how to deal with the problem of transportation. Will the Department of the Environment determine the structure and cost? How will the system work? It will not be worked through the rate

  1029
  precept, because the Secretary of State will do that. Presumably it can be done only with the Department of the Environment through GRE. The Government measuring up to only half of the cost will not be much relief to local authorities, as the Government maintain that the scheme will be kept in its present form. I do not believe that the answers that we have been given are satisfactory, even to someone with my limited knowledge of local authority financing. We look forward to the Secretary of State elucidating the matter.
  In voting for the new clause, hon. Members will vote for the principle that the expenditure will be disregarded and will not impose a further penalty on Londoners. This measure is not unprecedented. I understand that policemen's pay was seen as disregarded expenditure. Under this Government, the House has allowed for extra payments to the police to be considered as disregarded expenditure. Pensioners' payments, given the penalties and burdens that may be imposed by this unfair way of financing a concessionary fare system, must be considered in the same way as policemen's pay.
  Mr. Edward Leigh: In opposing the amendment, I confess that I am sympathetic to the case made by the hon. Member for Kingston upon Hull, East (Mr. Prescott). He made out a case for boroughs to be given a choice in deciding whether to adopt a concessionary fares scheme.
  Mr. Prescott: No.
  Mr. Leigh: That aspect was put to us by my right hon. Friend the Secretary of State. The inclusion of clause 48, requiring local authorities to have a concessionary fares scheme, means imposing on them, two years in advance, a considerable financial burden. On balance, I should have preferred the boroughs to be left to their own devices in deciding whether to impose the scheme. The scare campaign about this Bill, which was led by the Greater London council, meant that the Secretary of State thought it advisable and necessary to state in the original Bill a determination that, if necessary, the boroughs must have this scheme. The Secretary of State, in considering new clause 3, is under pressure to agree, two years in advance, to exempt the boroughs from that expenditure. We cannot force the boroughs to abide by that measure. That would be ridiculous.
  I am sympathetic to the points made about grant-related expenditure and targets. As my hon. Friend the Member for Derbyshire, West (Mr. Parris) said, the number of elderly people in a borough is often considered in deciding grant-related expenditure, but that factor is often not reflected in the targets for the borough set by the Department. I hope that my right hon. Friend will explain to the House how the target figures set for boroughs will take account of the new burdens imposed on them by clause 48.
  I hope that, by limiting the scheme and restricting it to off-peak travel, the burden placed on local authorities will be less than if the existing GLC scheme were allowed to continue. The continuation of the GLC scheme would impose a considerable burden. The boroughs should therefore be given an opportunity to impose a small administrative charge, and they can do so under clause 48. If that did not happen—this has been explained to us—
  1030
  boroughs such as Bromley and Richmond might be under considerable burden. I hope that those points are helpful to the House.
  Mr. Ridley: I am happy to respond now, if that is convenient to the House. I apologise to other hon. Members who may still wish to speak. It might be helpful if I answered the questions put by the hon. Member for Kingston upon Hull, East (Mr. Prescott) and amplified what my hon. Friend the Minister for State said earlier and what I said in Committee about the method of financing and the difficulty of giving precise answers about this matter. It is not easy to be precise, because we have not seen the abolition Bill or fully worked out our policy on this matter.
  8.15 pm
  As my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) said, it will be two years before we work out the sums. My hon. Friend said also that hon. Members representing London constituencies have felt that the concessionary fares scheme is so important it should be enshrined in the legislation. They said that we were right to give way to the demands for reassurance, and I am grateful to my hon. Friends for saying that. My hon. Friend said that one cannot then put the Government under pressure to exempt local authorities from the consequences. The consequences of writing a concession into the statute must lie where they fall, and most hon. Members have accepted that the financing of the concessionary fares scheme should be included in local authorities' responsibilities.
  The rate precept for financing London Regional Transport is very different. It is a levy imposed by an order of the House on all London ratepayers, on top of what they may have to pay to their boroughs, to fund the subsidy to LRT. None of the complicated formulae for local government finance will apply to that finance. It is a separate and different type of finance.
  It may be convenient to the House if I say how the system might be adapted.
  Mr. Spearing: My raising this point will save time later and get it out of the way. In the right hon. Gentleman's last remark about the rate precept, is he saying that the precept on the boroughs imposed by Order in Council and by order of the Secretary of State will be outside the mechanisms of rate capping or GRE, whichever exists?
  Mr. Ridley: I do say that. The precept is outside any of the controls on local authority spending. The cost of the concessionary fares scheme will be within whichever mechanism is applicable.
  Mr. Wilkinson: My right hon. Friend is making an important distinction, which is central to the argument. In as much as the Government, in their wisdom, have heeded Londoners' advice and incorporated in statute the requirement that a reserve power should be available in case boroughs do not continue a free fare scheme, is it not true that the Government would be remiss if they did not also ensure that the local authorities, which must finance the concessionary fares scheme, are able to do so? It would be dangerous and wrong if they were subject to penalty for carrying out something the Government require.
  Mr. Ridley: I understand the principle that my hon. Friend is enunciating. I hope that he will let me take him through some complicated aspects, and then he can assess the position.
  GREs are a nationwide indicator based on national criteria of what it is right for an authority to have as an aim in its expenditure. The sum of the GREs determines the amount of rate support grant for the authority. In London, the GREs are under half the cost of the concessionary fares scheme. That does not necessarily mean that the GREs are too low—it is evidence that the London concessionary fares scheme is both generous and expensive and, therefore, above the GREs. It would not be right to change the GREs simply because one authority is spending a great deal more than others. The GREs will be determined on the national levels, as they have been hitherto, bearing in mind the average performance by all authorities, including the shire and metropolitan counties.
  The concessionary fares scheme will be cheaper in London, partly because we have made it off-peak —which will save £10 million—and partly because some —I hope many—boroughs will come back into grant and obtain rate support grant towards the cost of their contribution to the concessionary fares scheme. That cannot happen now because the GLC is way out beyond grant because of its overspending. But any boroughs within their targets will obtain some rate support grant towards offsetting the cost of the scheme.
  Mr. Tony Banks: It is a ludicrous position when the GRE assessment is higher than the overall target set by the Department of the Environment. A number of the right hon. Gentleman's colleagues have been getting at the Secretary of State for the Environment because the GREs that have been assessed from Marsham street come out at a greater level than the targets set — which is the absurdity of GREs when trying to assess the level of service.
  Mr. Ridley: The hon. Gentleman takes me not only outwith the careful analysis that I am trying to make of this problem, but outwith my departmental responsibility. He should address his remarks to my right hon. Friend the Secretary of State for the Environment.
  Mr. Wilkinson: This is an important point. Is it not a fact that the target that central Government sets for local government expenditure has been constantly declining in real terms? Have not even virtuous authorities, such as mine, been increasingly squeezed? That being so, how can my right hon. Friend — and I am trying to be as charitable as I can—say that matters are likely to be better and that there will be the leeway to find the £20 million difference for which we are looking?
  Mr. Ridley: I did not say that. I said that if any London borough brought its expenditure below target and, therefore, became in receipt of grant, its expenditure on concessionary fares would be grant-aided by RSG. However, if it cannot economise and bring itself within target, that will not apply. There is an added incentive for boroughs to be economical.
  Once a target has been set, when the expenditure of any given authority goes over that target holdback begins and becomes quite savage. It would be wrong for the Government to set targets for local authorities that are unrealistic in relation to the new functions and
  1032
  responsibilities that will be put on them by the abolition of the GLC. As is well known, many functions will be transferred to the boroughs on the abolition of the GLC, of which concessionary fares is just one. Others will be housing, roads, waste disposal and sewerage responsibilities. We need not go into the totality of them other than to say that a whole range of new functions will be transferred to the boroughs.
  It is right that the new targets for the boroughs in two years hence should be calculated to take account of any change in their responsibilities. That is what my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) seeks. I cannot be more specific because we do not remotely know what will be the state of the finances of the 33 London boroughs in two years hence, what will be contained in the abolition Bill, what the House will do to amend it or what my right hon. Friend will have for rate support grant in two years hence. Indeed, there are so many uncertainties that I cannot do more than give the undertaking that the new targets will be calculated to take into account the change in responsibilities.
  The next item is disregard, which means that if an authority spends money on an item that is disregarded, and would otherwise have taken that authority above target, that is disregarded for the purposes of the target. There would be no holdback because of spending on a disregard item. However, there could be loss of rate support grant in certain circumstances, but that is not the same as holdback.
  The only disregards so far are a few matters to do with the increases during the past year in the urban programme, civil defence and police pay and costs. Those are special matters that the Government feel are in a different category from the subject we are discussing. I doubt whether it is likely that my right hon. Friend will feel that concessionary fares should be disregarded.
  There are two ways of not hitting targets—one is to increase the target and the other is to disregard the expenditure for target purposes. Therefore, what I have said about targets is not entirely different from what is sought in the new clause. There is a profound difference in the sense that the treatment is different, although in both cases the particular obligation on the boroughs would be recognised.
  The London equalisation scheme is peculiar to London, and has always been with us in one form or another. The GLC, because it has a rate precept over the whole of the boroughs, performs the equalisation function. When the GLC ceases and the responsibilities are shouldered again by the boroughs, it will be necessary to have some similar form of equalisation.
  Mr. Tony Banks: I want to make a small correction. The GLC's powers will not be given back to the boroughs —the boroughs have never had the powers that they are about to receive from the GLC. If the Secretary of State does not understand that, he does not understand what led to the creation of the GLC. If the hon. Member for Woolwich (Mr. Cartwright), who keeps muttering, thinks that I have it wrong, he should intervene.
  Mr. Ridley: At one stage there was the London county council and then there was the GLC. The only point that I am making is that by one means or another the fact that there are three rich London boroughs and 30 poor ones has

  1033
  been acknowledged in the system by treating the income of London as a whole and redistributing it to a certain extent.
  8.30 pm
  Mr. John Cartwright: What the Secretary of State was indicating was that the powers to operate concessionary fares were going back to the London boroughs. If the hon. Member for Newham, North-West (Mr. Banks) was disputing that, there is no question but that the boroughs had those powers.
  Mr. Prescott: That was not the point he was making.
  Mr. Cartwright: That was what I understood him to be suggesting. If he was not suggesting that, I withdraw the comments I made.
  Mr. Ridley: I do not think I was suggesting that. My history is not good enough, but I doubt whether there were concessionary fares anywhere before the GLC was set up. I think they were introduced in 1973.
  Mr. Prescott: There have been concessionary fares since 1955.
  Mr. Ridley: I said that my history might be faulty. We are being drawn into an argument which is not necessary from the point of view of the debate.
  In implementing our commitment to avoid any major shift in the relative burden on ratepayers in different parts of London we do not envisage any change in the present machinery or the principles on which it works. We shall, however, be considering in the London boroughs whether the present scale and incidence of the scheme will have to be altered. We cannot be dogmatic now about what this will mean in terms of shifting resources from one borough to another. The calculation is very complex and depends on a thorough examination by the boroughs and by central Government.
  The details of the calculation do not matter. It is the effect of the calculation that is the key thing. Here I can assure the House, as I said, that we want to avoid any major shift in expenditure. There is no question whatsoever of hiding anything about this. As I have already explained, many decisions will have to be taken before it will be possible to put it more clearly. I think the hon. Gentleman will accept that one could not give a forthright undertaking. In the difficult circumstances, that is probably as far as he would expect me to go.
  I hope that explains the situation. The London equalisation scheme and the targets are the parts of the spectrum to which my right hon. Friend the Secretary of State for the Environment will be looking to accommodate as far as possible the cost of the scheme. It would be wrong to leave the House with any feeling that because London has chosen as one of its priorities to have a generous scheme of concessionary fares in some way it will be compensated specifically because of that. Clearly my hon. Friend the Member for Gainsborough and Horncastle would not wish Lincolnshire to be penalised because it had a particularly cheap scheme.
  Mr. Leigh: It has no scheme at all.
  Mr. Ridley: If Lincolnshire and London have different priorities, those priorities should be allowed to have their own consequences on the whole financial position of the authorities.
  I hope the House will accept that that is the best endeavour I can make to give a fairly clear guideline. I hope that the hon. Gentleman will not press his new clause because I am not sure that the drafting is perfect for such a complicated problem.
  Mr. Cartwright: The House is grateful to the Secretary of State for taking us through the complexities of local government finance in Greater London, but he has not done much to reassure those of us who are concerned about the future financing of the concessionary fares scheme. In passing, may I say that I am sad that we are going backwards. The reason why I intervened in the comment of the hon. Member for Newham, North-West (Mr. Banks) was that I was deeply involved in the negotiations of the original overall London concessionary fares scheme negotiated by the London Boroughs Association and paid for by the London boroughs. It was a heavy responsibility on some London boroughs.
  Mr. Tony Banks: I do not want to make a meal of this, but I intervened in the speech of the Secretary of State because he was talking about services and mentioned housing, sewerage and so on. Of course I knew very well —in fact, better than the Secretary of State—that the individual boroughs were operating these schemes and that it was not until 1973 that the GLC introduced a London-wide scheme. I was referring to the Secretary of State's reference to the boroughs getting back other powers which they never had.
  Mr. Cartwright: I am grateful to the hon. Gentleman for clarifying that.
  The problem which many London boroughs faced in financing schemes of their own was that the burdens were very heavy. As an active member of the London Boroughs Association at the time, I must point out that it was not easy to get agreement among all the boroughs. Some were more enthusiastic about concessionary fares than others. For that reason it was a great relief when, after 1973, the GLC took over the funding of a scheme. It was also a much fairer system, as the hon. Member for Kingston upon Hull, East (Mr. Prescott) pointed out.
  The financing through the GLC meant that the costs were shared out on the basis of rateable value and that the wealthier boroughs took a larger share than the poorer boroughs. That was a fair arrangement, particularly since, by and large, the poorer boroughs had larger numbers of elderly residents who depended on the bus service as a means of getting about. Therefore, I am sad that the overall London approach is disappearing and that we have to go back to the arrangement of the boroughs collectively having to fund the continuation of the scheme.
  The Secretary of State did not grasp the traditional grievance in local government that Ministers are very good at laying new duties and responsibilities on local authorities and taking credit for them, but they are not quite so good at providing the resources that are necessary to carry them through. When it comes to accepting that duties and responsibilities have to be paid for, we find that Ministers are apt to complain that local authorities are spending more so that they may carry out the duties that have been laid upon them. That is an aggravating attitude

  1035
  to the traditional financing of local government. It is much worse when we have the current stick or carrot target and penalty system. Some local authorities will move into the penalty area as a result of the extra burden of paying for the concessionary fares scheme.
  It will be even worse under the rate-capping system, because local authorities that are driven into the rate-capping area because of the extra expenditure on concessionary fares will suffer considerably in the sense of losing control over their own right to spend at the level they feel appropriate and their own right to levy a certain rate.
  Mr. Parris: I do not pretend to understand local government financing; very few hon. Members do, but that is another debate. As I understand it, both the rate-capping powers and the financial penalty powers relate to circumstances in which an authority has exceeded its target. I think my right hon. Friend the Secretary of State has said that targets will take account of extra spending on concessionary fares.
  Mr. Cartwright: He has, but I shall come to that later. Obviously a great deal depends on the view of the target. My experience is that it is like looking through the opposite end of a telescope. A target that seems to be fair and reasonable when viewed from Marsham street sometimes becomes difficult to achieve when viewed by the local authority.
  I want to deal first with grant-related expenditure, because in a sense it is suggested from the Conservative side that grant-related expenditure assessments are scientific assessments of what should be spent by individual local authorities. I find that hard to accept. Indeed, during the long Committee stage of the Rates Bill even Ministers did not argue that. Ministers from the Department of the Environment accepted that the GREAs were what they called rough justice in assessing the need to spend in individual local authorities. Every inner London local authority, Labour-controlled and Tory-controlled, spends a great deal in excess of its grant-related expenditure assessment on social services.
  That is a clear sign that the figures do not take account of what needs to be spent. The hon. Member for Kingston upon Hull, East reminded us, and the Secretary of State accepted, that the GRE figures for concessionary fares were less than half the actual spending level. The London Boroughs Association—a Conservative-controlled local authority body—pointed out earlier this year that if the GRE figures were not raised there would be considerable difficulties for individual local authorities.
  Mr. Ridley: The hon. Gentleman was not in his place earlier when I also gave the GRE and concessionary fares spending figures for the shire counties, where the GRE is exactly twice the spending level. Therefore, we have one set of authorities, the shire counties, spending half the GRE, and London spending twice the same GRE. That shows that London is spending four times more per pensioner than the shire counties. In other words, it does not work in quite so straightforward a way as the hon. Gentleman is suggesting.
  Mr. Cartwright: That demonstrates the stupidity of the whole GRE system — that where the need for concessionary fares is clear and established and is being met, the GRE is far too low, and where a local authority,
  1036
  for good reasons, does not think that it is an important service, the GRE figure is much higher than is needed to meet the perceived need by that local authority. That demonstrates that the system does not work.
  I was arguing in relation to the GRE situation in Greater London—the Secretary of State clearly accepted this—that if the London boroughs continue with a scheme as good as the existing one, that will involve a number of boroughs risking going into the penalty area for the operation of the target system; indeed, a number of them are already in that area.
  The same is true when it comes to rate capping, because a number of authorities already earmarked under the criteria for rate capping by the Secretary of State for the Environment are in inner London. For example, my local authority in Greenwich qualified under every one of the 11 possible criteria for rate capping, so it is already over the top. The additional expenditure on concessionary fares will not ease its problems.
  The Secretary of State has given an undertaking that when we come through this extremely uncertain period and the problem must be faced, at that point, when targets are being fixed, he will take into account the additional spending that local authorities must undertake on concessionary fares. I welcome that assurance as far as it goes, but I hope the Secretary of State will not think me ungracious when I say that we have had assurances of that sort before from Ministers in this Government.
  Mr. Parris: What about previous Governments?
  Mr. Cartwright: Perhaps that can be said of all Governments. It can certainly be said of the present Administration, who have introduced a complex system of central Government control of local government expenditure. For example, we were told by the Government that GRE would never be used as a means of controlling local authority expenditure, but merely as a means of allocating grant. That assurance has gone out of the window. I am, therefore, somewhat dubious about the Secretary of State's assurance. In any event, as I said earlier, it depends at which end of the target one is when one decides whether it is reasonable to meet it.
  I agreed with the Secretary of State when he referred to the considerable uncertainties that surround this whole area. Although I would not go along with everything that the present adminstration at county hall says, I can understand the GLC leadership saying that this is an important issue for millions of London pensioners and that, therefore, it is not unreasonable to try to unravel some of the uncertainty that surrounds it.
  We have not succeeded in doing that tonight. I hope, therefore, that the new clause will be pressed to a Division as a means of encouraging the Government to come clean in future and as a means of making it clear to local authorities that some of us understand the problem that they face in continuing a decent concessionary fares scheme for London's pensioners.
  8.45 pm
  Mr. Wilkinson: This is an important debate which exemplifies, as has been exemplified during previous stages of the Bill, the difficulty of what I would describe as legislating in vacuo. Because we do not know the future form and structure of London's government, we are in the present predicament.

  1037
  Indeed, the predicament of the transport ministerial team reminds me of that magnificent Greek sculpture of Laocoon and his two sons in the constricting embrace of a mighty python and unable to release themselves. I was about to say that my right hon. Friend is rather like a ram in the thicket, but he is too elegant and artful a politician to be so described.
  The problem is that the system of local government finance is fundamentally flawed. The Secretary of State faces many uncertainties in getting the Bill on to the statute book, and no debate has brought home to us more fully than the one in which we are now engaged the importance of recognising that if we will the end—as we have in voting for a uniform and statutory concessionary fares system—we must also vote the means.
  The Secretary of State was as generous as ever, in spirit, in saying that he felt sure that the grant-related expenditures would be looked at carefully to take account of the extra costs of providing for the concesssionary fares scheme that would fall on the boroughs. However, we have heard that many times before. It is always jam tomorrow. But even that is not what we are asking for. We are simply asking that local authorities should not be penalised in the exercise of their other duties by having to carry out responsibilities that are being placed on them by the Bill. It is as simple as that.
  Mr. Ridley: I did not say that grant-related expenditures would be looked at carefully. I referred to the targets. It is important that there should be no mistake about that.
  Mr. Wilkinson: I am grateful to my right hon. Friend for correcting what was a clear mistake. That shows how careful one must be when dealing with this esoteric terminology. The trouble is that when we talk about targets, nobody comprehends how they are computed. It is some arcane formula; we do not know where it comes from or how it is worked out. We hope that a few high-powered officials at the Department of the Environment comprehend it and we are reasonably certain that borough treasurers comprehend it, because they must work to it.
  However, at a practical level we understand the effect. In my part of London, the effect has been that the good Conservative local authority in my area, which for some years had as its leader my hon. Friend the Member for Slough (Mr. Watts), has done everything that the Government want but finds itself exceeding its target and being penalised. The penalisation system is rotten because we say that grant will be withdrawn because an authority has overspent, and the last state of that authority after the penalty is worse than the first, which makes it a perverse system.
  I would not wish the House to leave this debate without understanding that, by abolishing the GLC, we are taking away an efficient and useful system of financing concessionary fares. It is uniform and equitable, it works, it requires no particularly complicated machinery, and it has much to recommend it. That is why Cyril Taylor, the GLC member for my constituency who is the Tory transport spokesman on the GLC, in his admirable Bow Group paper on the reform of London's government, pointed out that the system of the GLC for financing concessionary fares is much easier to implement than the one that will have to be worked out which will have the
  1038
  deficiency, as the hon. Member for Kingston upon Hull, East (Mr. Prescott) explained, that the charges will be based not upon rateable value, but upon the number of passes issued.
  To take my constituency as an example, one populous ward, Northwood Hills, has a very high population of old-age pensioners, and they will need to use these free passes. In outer London, one has to use the tube, if one wishes to see one's relatives and so on. As things stand, an authority such as mine, that has already exceeded the target, will have compounded the problem of getting within the target of expenditure set by Government, unless Government can in truth translate the assurance that my right hon. Friend has given into reality in a couple of years' time.
  I do not know whether you were in the Chair, Mr. Deputy Speaker, at the conclusion of the interesting rate support grant settlement debate. The Under-Secretary of State for the Environment, my hon. Friend the Member for Bristol, West (Mr. Waldegrave), gave the verbal assurance to my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym), the former Foreign Secretary, that next year there will be no problem for virtuous authorities such as Cambridgeshire or Hillingdon, because the Government will be more generous. We are not asking for assurances of generosity but that, by a clause such as this, or some other clause that the Government may come up with in another place, we do not put responsibilities upon local authorities without establishing the means to carry them out.
  Having heard the arguments, I shall not oppose the Government in this matter. As my right hon. Friend has said, there are many uncertainties, and we are dealing with the future. In the current state of the argument, however, I shall not vote against the new clause.
  Mr. Spearing: The debate has been remarkable for its quality in that it has seen the House working at its best in respect of very bad quality legislation. Courteous exchanges have taken place between Members of different parties on technical matters. There has been mild dissent from the Government Benches, which is always a healthy sign, but this is the most impenetrable—I was going to say dog's breakfast—legislation and local and central Government financial machinery. The amendment paper contains about two pages of impenetrable prose. We have been discussing GREAs, targets and equalisation schemes. I am sure that most people who use the tubes and buses in London will have no chance of understanding what we have been discussing. This comes from a Government who do not believe, or so they say, in large-scale legislation or in bureaucracy. That is the present state, and this high quality debate has illustrated it only too well.
  Mr. Ridley: Perhaps the hon. Gentleman will accept that we are discussing something that is not in the Bill, and which the Government are resisting putting into the Bill. It will be in a Bill in a year's time, but it is hardly fair for him to make those allegations when I am trying to stop the House pre-empting other legislation.
  Mr. Spearing: The right hon. Gentleman forgets that it is his Bill, and it is his policy to change the status quo. As illustrated by the hon. Member for Ruislip and Northwood (Mr. Wilkinson), the status quo relating to travel for the elderly in London is pretty good, and local government, with the two-tier GLC and boroughs, is not all that bad either. The Government are disturbing both

  1039
  those to a large degree. Despite the right hon. Gentleman's statement that he is trying to meet requests, he is having to meet them in a structure that is very complex, and is brought about by the Government's ill thought-out policies. I can illustrate that by the right hon. Gentleman's response to the speech of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). The right hon. Gentleman gave a necessarily complex exposition. He said that he hoped he had explained the matter, whereas in fact he had not. In summary, he said that we cannot tell whether this would be appropriate, because we do not know quite what will happen, and he asked us not to press the clause because it has not yet been worked out. That was the burden of the Secretary of State's speech. I am not at all sure that he understands the importance of public transport in London to elderly people. If he did, it would have been included in the Bill in a much simpler way when he introduced it, or the Government would not have introduced the legislation at all.
  In the borough of Newham, only one tube line serves the people who are passing through the borough, with a criss-cross of bus routes. To get from one part of the borough to the other for shopping, hospital, doctor or such like, most elderly people relying on the bus—because car ownership in the borough is very low—have to use two, or maybe three, buses on a single journey. The old-age pensioner pass is a godsend. Conservative Members might say that they are playing God and that, after public pressure, they are extending the facility. There will be many problems, not exposed in the debate so far, particularly in relation to local government clawback, rate capping or whatever the Government have in store. Many sums that have been worked out by county hall, which have been bandied around in the debate, are based on what London Transport is currently charging the GLC for passes. There is no guarantee that that will be the charge in future, or that the charge will go up with the cost of living, if, indeed, the charge goes up at all. Judging from the Bill, there are suggestions that the charge might well increase. We know the Government's general attitude to making charges. Under clause 2 of the Bill the Secretary of State has dictatorial powers. The clause states:
  "It shall be the general duty of London Regional Transport, in accordance with principles from time to time approved by the Secretary of State"
  The right hon. Gentleman will have carte blanche to tell LRT what to do in respect of commercial policy and the policies that it will use to cost old-age pensioners' passes.
  9 pm
  I was even more worried by new clause 10, which states that LRT must provide information about plans which it considers,
  "appropriate for presenting their proposals in the context of past and current performance and policies of themselves and their subsidiaries."
  What does the Secretary of State mean by "performance"? To judge from the Government's past use of the word, it will mean incomes, costs, profits and efficiency. Therefore, LRT might be under pressure to increase the cost of the passes above what it might do under the present system.
  Even if that does not apply—although I fear that it will—the next problem for the boroughs is that they will have a statutory duty to supply the demand. Anyone who applies who is eligible for a pass must be supplied with one, and the boroughs must pay. That would be fine
  1040
  were it not for the arbitrary limits on GREAs and targets. The boroughs will have no choice. The Government's clawback will represent a 50 per cent. tax to the borough of Newham, since if it spends £15 million more than the Government believe that it should it must charge ratepayers £30 million for the privilege of issuing passes. That will be the effect of the Government's attitude to local government expenditure. Unlike the position that would apply even with rate support grant, let alone percentage grants, where the boroughs cannot be disadvantaged by the rate-capping proposals, if enough people apply for concessionary passes the boroughs will be faced with the unenviable choice of doubling the rates for that service or cutting other services.
  All those problems would be relieved if the Government accepted the new clause. There would be no dilemma and no unfair tax on the ratepayers in respect of those passes. Alas, for reasons that the Secretary of State explained at great length, he cannot accept the new clause tonight. Nor has he given a guarantee that he will do so in future. Indeed, he is paving the way for saying that the Government cannot accept that proposal. That is entirely illogical, given the fact that he gave the House the welcome news that the precept that LRT can make on the boroughs directly in respect of services will not be subject to GREA and target limits. If that is so, why does he not add expenditure on concessionary fares? If he did that, our fears would be set at rest, the hon. Member for Ruislip-Northwood would be happy, and the Government would be more popular than they are at present.
  Mr. Parris: "Concessionary fares" is a phrase for the compulsory sale of bus tickets. Money is confiscated from taxpayers and ratepayers, whether or not they wish to pay it, and bus passes are given to them whether or not they wish to use them. It might have occurred to Opposition Members that we also have concessionary Tridents. They are free at the point of use, but they are paid for by the taxpayer.
  Nevertheless, there is an element of redistribution of wealth in granting concessionary fares, and for that reason it is right to provide them. However, if my right hon. Friend the Secretary of State could take all the money which I hope he will manage to secure from the Chancellor of the Exchequer to pay for concessionary fares and give it in cash to old-age pensioners in London each year to spend as they please, that would be a better way of doing it than giving them bus passes. The way in which we approach matters under our constitution is such that the money can be spent only on concessionary fares. They are all that we can offer and, for the reasons given by many of my hon. Friends and by Opposition Members, we are right to offer them.
  When I look at the wording of the Opposition amendment, it is not quite clear to me what they mean by financial penalties. To the extent that a local authority exceeds its target and is penalised, in that sense it clearly has been penalised. To the extent that a local authority is within its target but has exceeded its grant-related expenditure and, therefore, has to fund all the extra spending out of its own rates and has none of it supported by central Government, one may say that that authority is in penalty in one sense. Although it is not actually being fined for every extra pound that it spends, it is having to find that money itself.

  1041
  My right hon. Friend the Secretary of State's suggestion probably strikes the right balance. He has suggested that it is right is that we take the extra spending on concessionary fares into account when adjusting targets, but that we do not, and cannot, take it into account when setting grant-related expenditure. That means that no local authority can be fined or penalised for extra spending on concessionary fares because the ceiling on its target will be raised, or ought to be raised, by that amount. As my right hon. Friend says, if someone does not want to hit his head against the ceiling he can either raise the ceiling or disregard certain cubits of his stature for the purposes of ceilings. He has chosen the first of the alternatives, and, to the extent that he is able to persuade my right hon. Friend the Secretary of State to adjust targets to take account of spending on concessionary fares, he is probably right.
  Where such a person would go too far—certainly too far for my constituents in West Derbyshire— is if he were to disregard spending on concessionary fares for the purposes of grant related expenditure. That would mean that every pound spent on concessionary fares, and as much as local authorities in London wanted to spend on concessionary fares, would have to be matched by a pound from central Government, more or less. That is roughly the proportion. That would not be right.
  Many local authorities, many shire counties, many district councils, my own among them, do not feel that the right way to spend their money is through free off-peak travel for pensioners. Some give half-price off-peak travel for pensioners, others give no help with travel for pensioners at all. Each local authority makes up its own mind. It would probably feel that it had been made rather a mug of if it found that those authorities that were giving free off-peak travel to pensioners were having all that money matched by central Government, regardless of how much they wanted to spend. I should find myself facing a certain amount of criticism in my own constituency for voting that the taxpayers' money be spent in that way. I think that it is the ratepayers' money that should be spent in that way, but the ratepayer should not be punished for spending it in that way.
  For that reason, the sort of compromise that my right hon. Friend has spoken about strikes the right balance.
  Mr. Tony Banks: It has become painfully clear to Members on both sides of the House—it has probably come as a worse shock to the Members on the Government Benches than those on the Opposition Benches—that the concessionary fares scheme that the Government are now going to enshrine in statute will cost the boroughs a lot more than the present scheme costs them. I have heard nothing to gainsay that.
  I want to ask the Minister, when she is summing up, to—[Interruption.] I understand that the Minister is not going to sum up, which is probably to her advantage, because it is clear that something that she said, before she left at the end of her shift and the Secretary of State came in for his, was a little difficult to follow. On reflection — I shall have to wait until I read Hansard— it is perhaps not altogether correct. The Minister can no doubt intervene to put my mind at rest.
  As I understand it, there will be no question of equalisation being applied to concessionary fares. My hon.
  1042
  Friend the Member for Newham, South (Mr. Spearing) gave the Government the formula and said that if London Regional Transport is going to precept—we know that it will — included in the precept should be the cost of concessionary fares. If that were to be the formula, it would answer the point made by the hon. Member for Ruislip-Northwood (Mr. Wilkinson), because the House would be determining the scheme and providing the resources. As he correctly pointed out, there is no such provision at the moment, so we will be imposing a responsibility on the boroughs which we are not giving them adequate funds to discharge. We must look carefully to see how that will work. The Minister seemed to say that equalisation would apply, but the Secretary of State has made it clear that it will not.
  The Minister quoted from the White Paper "Streamlining the Cities". As hon. Members on both sides have said, it is difficult for us to consider this legislation in a vacuum, knowing that it is predating the abolition of the GLC, which is something that might never reach the statute book. A nice mess that will leave us with.
  It is clear in Cmnd. 9063 that equalisation will not apply to anything other than services which are transferred from the GLC to the boroughs. The concessionary fares scheme will already have been written into the London Regional Transport Bill and it will therefore not be the responsibility of the GLC. It will have gone from the GLC before the appointed day for its abolition.
  There is no provision in the White Paper for equalisation for concessionary fares or transport services. A precepting authority is being set up to run London's transport—London Regional Transport. Block grant and grant-related expenditure assessment cause a great deal of anxiety to the Opposition because it is plain that London local authorities will attract block grant penalty by virtue of the concessionary fares scheme. It is difficult to know exactly when they will move into penalty. What is "at the margin"? It could be argued that this scheme or another form of service is at the margin. As all services are taken together for penalty purposes, it is difficult, if not impossible, to work out which service is attracting penalties.
  If one studies the present provisions, one sees that the grant-related expenditure assessment for the GLC area in terms of concessionary fares is about half the money that the GLC currently spends on concessionary fares. We have had to juggle with peculiar acronyms such as GREAs, and with targets for so long that I hope that sooner or later we will be given the identity, rank and number of the civil servants who devised them.
  Mr. Spearing: It is the Minister.
  Mr. Banks: It must be civil servants. Even I would not suppose that politicians could be responsible for that type of mess, because GREAs pay no attention to any particular local authority problem. That is true of concessionary fares also.
  The example of Bromley has been quoted. At the moment, Bromley's payment for the scheme proposed by the Government will be about £2·6 million. Under GREA it is only supposed to spend about £1·2 million. Bromley will have to find about £1·4 million in addition, which is not taken into account in its current GREA. That is poetic justice. I have no reason to feel much warmth and affection for Bromley.

  1043
  9.15 pm
  Unfortunately, not only Bromley will be caught up, but most of the other boroughs. Only four boroughs, if one takes the City as a borough, are making a net payment for the existing concessionary fares scheme. All the rest are net beneficiaries, although none of them will be net beneficiaries in future. The 28 or 29 remaining London boroughs will have to find additional money to pay for the scheme. The Bill does not provide for exemption from penalties. There is nothing within the precepting powers of LRT to allow them to escape from being penalised for operating a scheme that the House of Commons will have imposed upon them.
  The Secretary of State, when I asked him about GREAs and targets, told me that the scheme relates to other areas of responsibility, such as those of the Secretary of State for the Environment. I hope that the Ministers are talking among themselves. I know that there are divisions of opinion within the best ordered political parties, but unless the Secretary of State talks very closely to his right hon. Friend the Secretary of State for the Environment, I am afraid that we shall accept his good intentions but doubt his ability to deliver the goods. That is all that the House is interested in under the Bill.
  Both sides of the House have expressed concern that the proposed scheme will cost the boroughs far more, and that they will attract penalties for operating it.
  Mr. Cohen: I support the new clause which says that local authorities should not be afflicted with penalties for meeting the cost of the concessionary travel scheme. We hear that the GLC pays about £60 million to London Transport to finance the existing scheme and that its GREA is £28 million to £30 million. The figures will presumably be roughly similar when the scheme is transferred to the boroughs, so the boroughs will be penalised under these proposals.
  We know that the statutory scheme will mean that local authorities must pay, but it should not mean that they also have to pay over the odds. That will happen in this case because the proposed scheme will inevitably impose penalties on authorities.
  The Secretary of State referred to the concessionary fares scheme as London's choice, and said that the people should not be compensated for their choice. However, they are not being compensated; they are being penalised. That is what the whole debate is about.
  The Secretary of State compared London with the shires. He said that Lincolnshire does not choose to spend its GREA on the transport needs of the people, and the benefit of that is that they get lower rates. It is the old lower rates versus provision of services argument. That is fair enough—it is what local electors decide all over the place — but the Secretary of State is distorting that process. If the services are provided as the GLC does with London Transport, and as the boroughs will do, they are penalised for it.
  Many local authorities are already on the penalties borderline. Under the statutory scheme, if they are not disregarded for penalty purposes, they will be pushed over the edge and will have to make cuts in other services they provide, such as social services, housing and education.
  We must also consider the effect of rises in fares. The decision to raise fares will be made not by the local councils but by LRT. If they rise, the cost of the concessionary travel scheme will go up as well. The gap
  1044
  between that cost and what the boroughs get in their GREAs will also widen. As a result, there will be more penalties on the local authorities. Therefore, if LRT decides to raise fares, there will be an increase in the penalties on local councils, which cannot be fair.
  Hon. Members have referred to equalisation. Conservative Members argued for it in Committee. It is not provided for in the Government's proposals. I hope that they will put their votes where their mouths are. There is not a proper equalisation scheme. A greater burden will be placed on the poor areas. The 10 poorest boroughs are on the Government's hit list in the Rates Bill. They are the ones that will be hit. That is especially unfair to them if there are many pensioners in the borough.
  The Secretary of State said that one could either alter the target or disregard the expenditure for penalty purposes. He hinted that he would do the former. If he does so, the truth will be out. He is prepared to fiddle the targets for Conservative councils so that a penalty is not imposed upon them. The Secretary of State should do it the honest way and not penalise local authorities for doing their proper financial and statutory duty under the scheme.
  Mr. Stuart Holland: Several representations have been made to me on this matter by pensioners in my constituency. Among other things, they have brought to my attention the movement of population over the years, especially in the post-war years. It has meant that the children of many of those born in inner city areas now live in outer London. Mobility is important for family contact. We do not have the extended family communities that we once had in the 1930s, and even the 1940s or the early 1950s. Travel is important to pensioners.
  If one looks at the proposals, it is clear that the boroughs with the least resources and a higher than average proportion of pensioners because of the aging nature of the population in the inner city areas will be those least able to meet the costs. There is the dual phenomenon of a relatively high share of the elderly and the very young. In my borough of Lambeth, it is part of a syndrome of multiple deprivation. We have one of the highest unemployment rates in London, the highest youth unemployment, the highest unemployment of black school leavers and the highest proportion of single-parent families. Those factors are a heavy drain on resources in the London area, where we are penalised by the Government's present system.
  It used to be thought by many concerned with transport — I recognise that the Secretary of State made his professional reputation by contesting this — that principles of costs and benefits should be assessed in transport policy. It is clear that for a considerable time it has been accepted not only by London but by metropolitan authorities elsewhere that the right to either subsidised or free travel for pensioners, like the right to a pension. was a basic social right.
  This was broadly accepted by a generation of Conservatives of whom we see very little now. It was broadly accepted in the 1950s and the 1960s. It was broadly accepted in the period of Butler and Macmillan, when there was a consensus both that working people had a right to decent housing, health and education and that they had a right to a decent pension and decent travel facilities. Clearly this is now denied by the Government.
  Mrs. Chalker: Rubbish.
  Mr. Holland: The Minister says "Rubbish." I hope that, if she accepts that, she will amend the legislation now before the House.
  This is not just boot-strap finance — the kind of finance to which the Government are very much addicted. They are going to knock down the boroughs that most need to be able to meet the cost of a provision of this kind. The Prime Minister once, going into No. 10 Downing street, quoted St. Francis of Assisi. In this case it would be more appropriate to quote loosely St. Matthew: to him or her that hath shall be given by those on the Benches opposite; from him or her that hath not shall be taken away.
  It is a mean little provision, a wretched piece of legislation, and I therefore support the new clause.
  Mr. Prescott rose——
  Mr. Deputy Speaker (Mr. Harold Walker): Does the hon. Gentleman seek the leave of the House to speak again?
  Mr. Prescott: With the leave of the House, I should like to speak again.
  The Secretary of State, in his intervention on this clause, made it a little clearer why the message is not very acceptable to this side of the House. The argument that he has put against the new clause is that there are a number of reasons why he cannot accept our case that the expenditure incurred by the borough authorities in paying for the concessionary schemes should not lead to a penalty arising out of the Government's other legislation and targets set for local authorities and the penalties that they incur if they exceed those targets.
  I should like to outline why we cannot accept the reasons given by the Secretary of State. For example, he has made it clear that the concessionary scheme, because it is now statutory, since enforcing powers have been put into the Bill, is a concession to those forces that wanted to make sure that the powers were there to enforce a uniform scheme. Therefore, since the Secretary of State is giving this as a concession, he does not feel it right that he should have to pay for it, but rather that the boroughs should pay for it. That is at the heart of the argument about locally provided services, paid for by local resources and determined in local democracy and the election of local councillors.
  There is a great difference between the two sides of the House about that expression "in local democracy". It is the Government's position that in this case they are taking over the local services, and the argument is put forward, not only by Labour boroughs but by Tory boroughs, that if the Government are taking upon themselves the responsibility for providing transport in the London area, they should finance it. Clearly the Government do not accept that argument, but it is one that stretches across both Labour and Tory authorities. Therefore, the argument that it is a concession to put these statutory uniform powers in the Bill is not acceptable to us, because local authority services should be determined in a local democratic manner.
  Secondly, the argument that the rate precept will pay for the transport and should not be used to pay for the concessionary scheme is contrary to the present system and to what applies in the rest of the United Kingdom. Any concessionary scheme at present provided by the metropolitan authorities is paid for out of the rate precept. This is true at present also for the GLC. The Secretary of
  1046
  State is proposing that the concessionary fare should be paid for by the boroughs, and general transport will be paid for by a combination of ratepayers' and taxpayers' money in the two-thirds/one-third relationship to which the Secretary of State so often refers.
  We do not accept the argument that it is normal for the cost of concessionary fares to be found by local authorities. They should be financed out of the rate precept, as they are in the metropolitan authorities and other areas. The Government should have made their quality comparisons with the metropolitan authority schemes. Instead, however, the Secretary of State chose the shire schemes, which are very poor indeed. To the extent that they exist at all they are certainly very thin on the ground, and far inferior to those provided by the metropolitan authorities.
  9.30 pm
  The Secretary of State said that the rate expenditure consideration for the concessionary scheme was £30 million, but that the cost to the GLC was £60 million, arguing from that that the scheme was more generous than necessary and that the cost should therefore be reduced. He said that £10 million could be saved on the afternoon peak from 4.30 pm to 6.30 pm and that further savings could be made if the authority met the expenditure limit acceptable to the Government and thus avoided penalty. He actually said that he hoped that the money now withheld from the GLC as the penalty for excess expenditure would not be a problem for the Government because the limits acceptable to the Government would be met. I hope that that is indeed the Government's position, as it means that at least they are not institutionalising the penalties currently incurred by the GLC through providing what the Secretary of State describes as a more generous system.
  Mr. Ridley: I said that if a borough did not exceed its target and was drawing block grant the cost of the concessionary fares scheme would be reduced by virtue of its coming back into grant. That is not to say that every borough will do that, but it represents a possibility for a borough to reduce the cost by coming back into grant.
  Mr. Prescott: That may be so, though few authorities will be able to permit themselves the luxury of such adjustments when they already have great difficulty in adjusting to meet the Government's present targets. Nevertheless, we shall wait and see what happens. It is clear, however, that the Government are sticking to their argument that, whatever the cost of the concessionary scheme, it is for the boroughs to find the resources.
  Mr. Tony Banks: Does my hon. Friend accept that under provisions elsewhere in the Bill fares will undoubtedly increase, that every 1 per cent. increase in fares will add £500,000 to the cost of the current scheme and that that cost, too, will have to be borne by the boroughs? Does he agree that in those circumstances the way round the problem offered by the Secretary of State is unlikely to apply?
  Mr. Prescott: I am grateful to my hon. Friend for his comments. That was precisely our earlier point about the cost to local authorities if fares are increased, as the Government clearly intend. That would certainly add to the difficulties, even within the present expenditure limits.
  We welcome the Government's recognition that there are richer and poorer authorities. I believe the Secretary

  1047
  of State said that there were three rich ones and 30 poorer ones. That being so, there is a role for equalisation. The right hon. Gentleman talked about increasing the targets of the GRE because of the extra duties to be imposed upon authorities. That may or may not be achieved, but there is also the argument about what other changes will be made by other measures which have yet to come before the House. Of course we accept that the Bill must be consistent with existing legislation, but it is a different matter to say that it must be consistent with legislation which may be introduced in the future. The Government say that they cannot accept equalisation in connection with the new clause because other legislation which may be introduced may lead to much more complex assessments of how equalisation is to be achieved.
  The Bill makes it clear that concessionary passes must be provided and paid for, but it provides no means for equalisation of the payment. I have no hesitation in advising my hon. Friends to support the new clause.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 168, Noes 248.

  Division No. 228]

  [9.35 pm

  AYES

  Adams, Allen (Paisley N)

  Duffy, A. E. P.

  Ashley, Rt Hon Jack

  Dunwoody, Hon Mrs G.

  Ashton, Joe

  Eadie, Alex

  Atkinson, N. (Tottenham)

  Eastham, Ken

  Banks, Tony (Newham NW)

  Edwards, Bob (W'h'mpt'n SE)

  Barnett, Guy

  Ellis, Raymond

  Barron, Kevin

  Evans, John (St. Helens N)

  Beckett, Mrs Margaret

  Ewing, Harry

  Beith, A. J.

  Fatchett, Derek

  Benn, Tony

  Field, Frank (Birkenhead)

  Bennett, A. (Dent'n & Red'sh)

  Fields, T. (L'pool Broad Gn)

  Bermingham, Gerald

  Fisher, Mark

  Blair, Anthony

  Flannery, Martin

  Boothroyd, Miss Betty

  Foster, Derek

  Boyes, Roland

  Fraser, J. (Norwood)

  Bray, Dr Jeremy

  Freeson, Rt Hon Reginald

  Brown, Gordon (D'f'mline E)

  Freud, Clement

  Brown, Hugh D. (Provan)

  George, Bruce

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

  Gilbert, Rt Hon Dr John

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

  Gould, Bryan

  Brown, Ron (E'burgh, Leith)

  Hamilton, James (M'well N)

  Buchan, Norman

  Hamilton, W. W. (Central Fife)

  Caborn, Richard

  Hardy, Peter

  Callaghan, Jim (Heyw'd & M)

  Harman, Ms Harriet

  Campbell Ian

  Harrison, Rt Hon Walter

  Campbell-Savours, Dale

  Healey, Rt Hon Denis

  Carlile, Alexander (Montg'y)

  Heffer, Eric S.

  Carter-Jones, Lewis

  Hogg, N. (C'nauld & Kilsyth)

  Cartwright, John

  Holland, Stuart (Vauxhall)

  Clark, Dr David (S Shields)

  Howells, Geraint

  Clarke, Thomas

  Hoyle, Douglas

  Clay, Robert

  Hughes, Robert (Aberdeen N)

  Cocks, Rt Hon M. (Bristol S.)

  Hughes, Roy (Newport East)

  Cohen, Harry

  Hughes, Sean (Knowsley S)

  Coleman, Donald

  John, Brynmor

  Conlan, Bernard

  Jones, Barry (Alyn & Deeside)

  Cook, Robin F. (Livingston)

  Kaufman, Rt Hon Gerald

  Corbett, Robin

  Kennedy, Charles

  Corbyn, Jeremy

  Kilroy-Silk, Robert

  Cox, Thomas (Tooting)

  Kirkwood, Archibald

  Craigen, J. M.

  Lambie, David

  Crowther, Stan

  Leadbitter, Ted

  Davies, Rt Hon Denzil (L'lli)

  Leighton, Ronald

  Davies, Ronald (Caerphilly)

  Lewis, Ron (Carlisle)

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

  Lewis, Terence (Worsley)

  Deakins, Eric

  Litherland, Robert

  Dewar, Donald

  Lloyd, Tony (Stretford)

  Dixon, Donald

  Lofthouse, Geoffrey

  Dobson, Frank

  Loyden, Edward

  Dormand, Jack

  McCartney, Hugh

  Dubs, Alfred

  McDonald, Dr Oonagh

  1048

  McKay, Allen (Penistone)

  Rogers, Allan

  McKelvey, William

  Rooker, J. W.

  McNamara, Kevin

  Ross, Ernest (Dundee W)

  McTaggart, Robert

  Ross, Stephen (Isle of Wight)

  McWilliam, John

  Sedgemore, Brian

  Madden, Max

  Sheerman, Barry

  Marek, Dr John

  Shore, Rt Hon Peter

  Marshall, David (Shettleston)

  Short, Ms Clare (Ladywood)

  Mason, Rt Hon Roy

  Silkin, Rt Hon J.

  Maxton, John

  Skinner, Dennis

  Maynard, Miss Joan

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

  Meadowcroft, Michael

  Snape, Peter

  Michie, William

  Spearing, Nigel

  Mikardo, Ian

  Steel, Rt Hon David

  Millan, Rt Hon Bruce

  Stott, Roger

  Mitchell, Austin (G't Grimsby)

  Strang, Gavin

  Morris, Rt Hon A. (W'shawe)

  Straw, Jack

  Morris, Rt Hon J. (Aberavon)

  Thomas, Dafydd (Merioneth)

  Nellist, David

  Thomas, Dr R. (Carmarthen)

  O'Brien, William

  Thompson, J. (Wansbeck)

  O'Neill, Martin

  Tinn, James

  Parry, Robert

  Torney, Tom

  Patchett, Terry

  Wardell, Gareth (Gower)

  Pendry, Tom

  Wareing, Robert

  Penhaligon, David

  Weetch, Ken

  Pike, Peter

  Welsh, Michael

  Powell, Raymond (Ogmore)

  White, James

  Prescott, John

  Williams, Rt Hon A.

  Radice, Giles

  Winnick, David

  Randall, Stuart

  Young, David (Bolton SE)

  Redmond, M.

  Rees, Rt Hon M. (Leeds S)

  Tellers for the Ayes:

  Richardson, Ms Jo

  Mr. Frank Haynes and Mr. Lawrence Cunliffe.

  Robertson, George

  Robinson, G. (Coventry NW)

  NOES

  Adley, Robert

  Chalker, Mrs Lynda

  Aitken, Jonathan

  Chapman, Sydney

  Alexander, Richard

  Chope, Christopher

  Alison, Rt Hon Michael

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

  Amess, David

  Clark, Dr Michael (Rochford)

  Ancram, Michael

  Clark, Sir W. (Croydon S)

  Arnold, Tom

  Clarke, Rt Hon K. (Rushcliffe)

  Ashby, David

  Cockeram, Eric

  Aspinwall, Jack

  Colvin, Michael

  Atkins, Robert (South Ribble)

  Conway, Derek

  Atkinson, David (B'm'th E)

  Coombs, Simon

  Baker, Rt Hon K. (Mole Vall'y)

  Cormack, Patrick

  Baker, Nicholas (N Dorset)

  Couchman, James

  Baldry, Anthony

  Crouch, David

  Banks, Robert (Harrogate)

  Currie, Mrs Edwina

  Beaumont-Dark, Anthony

  Dorrell, Stephen

  Beggs, Roy

  Douglas-Hamilton, Lord J.

  Bellingham, Henry

  du Cann, Rt Hon Edward

  Bendall, Vivian

  Durant, Tony

  Bennett, Sir Frederic (T'bay)

  Dykes, Hugh

  Benyon, William

  Edwards, Rt Hon N. (P'broke)

  Berry, Sir Anthony

  Emery, Sir Peter

  Biffen, Rt Hon John

  Evennett, David

  Biggs-Davison, Sir John

  Eyre, Sir Reginald

  Body, Richard

  Fairbairn, Nicholas

  Bonsor, Sir Nicholas

  Fallon, Michael

  Boscawen, Hon Robert

  Farr, John

  Bottomley, Peter

  Favell, Anthony

  Bowden, Gerald (Dulwich)

  Fenner, Mrs Peggy

  Braine, Sir Bernard

  Fookes, Miss Janet

  Brandon-Bravo, Martin

  Forman, Nigel

  Bright, Graham

  Forth, Eric

  Brinton, Tim

  Fowler, Rt Hon Norman

  Brown, M. (Brigg & Cl'thpes)

  Fox, Marcus

  Bruinvels, Peter

  Franks, Cecil

  Bryan, Sir Paul

  Freeman, Roger

  Buck, Sir Antony

  Gale, Roger

  Budgen, Nick

  Gardiner, George (Reigate)

  Burt, Alistair

  Gardner, Sir Edward (Fylde)

  Butcher, John

  Garel-Jones, Tristan

  Butler, Hon Adam

  Glyn, Dr Alan

  Butterfill, John

  Goodhart, Sir Philip

  Carlisle, Kenneth (Lincoln)

  Gorst, John

  1049

  Grant, Sir Anthony

  Nicholson, J.

  Greenway, Harry

  Onslow, Cranley

  Gregory, Conal

  Page, Richard (Herts SW)

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

  Patten, John (Oxford)

  Griffiths, Peter (Portsm'th N)

  Percival, Rt Hon Sir Ian

  Ground, Patrick

  Pink, R. Bonner

  Gummer, John Selwyn

  Pollock, Alexander

  Hamilton, Hon A. (Epsom)

  Powell, Rt Hon J. E. (S Down)

  Hamilton, Neil (Tatton)

  Powley, John

  Hampson, Dr Keith

  Raison, Rt Hon Timothy

  Hanley, Jeremy

  Renton, Tim

  Harris, David

  Rhodes James, Robert

  Harvey, Robert

  Ridley, Rt Hon Nicholas

  Havers, Rt Hon Sir Miohael

  Ridsdale, Sir Julian

  Hawkins, C. (High Peak)

  Roberts, Wyn (Conwy)

  Hawkins, Sir Paul (SW N'folk)

  Robinson, Mark (N'port W)

  Hawksley, Warren

  Roe, Mrs Marion

  Hayes, J.

  Ross, Wm. (Londonderry)

  Hayward, Robert

  Rossi, Sir Hugh

  Heathcoat-Amory, David

  Rost, Peter

  Heddle, John

  Rowe, Andrew

  Henderson, Barry

  Rumbold, Mrs Angela

  Hickmet, Richard

  Ryder, Richard

  Hicks, Robert

  Sackville, Hon Thomas

  Higgins, Rt Hon Terence L.

  Sayeed, Jonathan

  Hind, Kenneth

  Shaw, Giles (Pudsey)

  Hirst, Michael

  Shepherd, Richard (Aldridge)

  Hogg, Hon Douglas (Gr'th'm)

  Shersby, Michael

  Holland, Sir Philip (Gedling)

  Silvester, Fred

  Holt, Richard

  Skeet, T. H. H.

  Hooson, Tom

  Soames, Hon Nicholas

  Hordern, Peter

  Speed, Keith

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

  Speller, Tony

  Howarth, Gerald (Cannock)

  Spencer, Derek

  Howell, Rt Hon D. (G'ldford)

  Spicer, Jim (W Dorset)

  Hubbard-Miles, Peter

  Spicer, Michael (S Worcs)

  Hunt, John (Ravensbourne)

  Squire, Robin

  Hunter, Andrew

  Stanbrook, Ivor

  Jackson, Robert

  Steen, Anthony

  Jenkin, Rt Hon Patrick

  Stevens, Lewis (Nuneaton)

  Jessel, Toby

  Stevens, Martin (Fulham)

  Johnson-Smith, Sir Geoffrey

  Stewart, Allan (Eastwood)

  Jones, Robert (W Herts)

  Stewart, Andrew (Sherwood)

  Joseph, Rt Hon Sir Keith

  Stewart, Ian (N Hertf'dshire)

  Kellett-Bowman, Mrs Elaine

  Stokes, John

  Key, Robert

  Stradling Thomas, J.

  King, Rt Hon Tom

  Sumberg, David

  Knight, Gregory (Derby N)

  Taylor, John (Solihull)

  Knight, Mrs Jill (Edgbaston)

  Taylor, Teddy (S'end E)

  Lang, Ian

  Terlezki, Stefan

  Lawler, Geoffrey

  Thomas, Rt Hon Peter

  Lawrence, Ivan

  Thompson, Donald (Calder V)

  Lawson, Rt Hon Nigel

  Thompson, Patrick (N'ich N)

  Leigh, Edward (Gainsbor'gh)

  Thorne, Neil (Ilford S)

  Lennox-Boyd, Hon Mark

  Thornton, Malcolm

  Lester, Jim

  Townsend, Cyril D. (B'heath)

  Lewis, Sir Kenneth (Stamf'd)

  Twinn, Dr Ian

  Lilley, Peter

  van Straubenzee, Sir W.

  Lloyd, Peter, (Fareham)

  Vaughan, Sir Gerard

  Lord, Michael

  Viggers, Peter

  Lyell, Nicholas

  Waddington, David

  McCurley, Mrs Anna

  Waldegrave, Hon William

  Maples, John

  Walden, George

  Marland, Paul

  Walker, Cecil (Belfast N)

  Mather, Carol

  Walker, Bill (T'side N)

  Mawhinney, Dr Brian

  Walker, Rt Hon P. (W'cester)

  Merchant, Piers

  Wall, Sir Patrick

  Meyer, Sir Anthony

  Waller, Gary

  Mills, lain (Meriden)

  Wardle, C. (Bexhill)

  Mills, Sir Peter (West Devon)

  Watson, John

  Miscampbell, Norman

  Wells, John (Maidstone)

  Moate, Roger

  Wheeler, John

  Molyneaux, Rt Hon James

  Whitfield, John

  Monro, Sir Hector

  Wiggin, Jerry

  Morrison, Hon C. (Devizes)

  Winterton, Mrs Ann

  Moynihan, Hon C.

  Winterton, Nicholas

  Mudd, David

  Wolfson, Mark

  Murphy, Christopher

  Wood, Timothy

  Neubert, Michael

  Woodcock, Michael

  Newton, Tony

  Yeo, Tim

  1050

  Young, Sir George (Acton)

  Tellers for the Noes:

  Younger, Rt Hon George

  Mr. John Major and Mr. David Hunt.

  Question accordingly negatived.

New Clause 11

  PUBLIC SERVICE OBLIGATION GRANTS
  The public service obligation grants paid to British Rail for its railway services in the London Regional Transport area shall be paid directly by the Secretary of State for Transport to British Rail and shall not become a charge upon the London boroughs and their ratepayers without their agreement.'—[Mir. Snape]
  Brought up, and read the First time.
  9.45 pm
  Mr. Snape: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take amendment No. 53, in page 29, line 3, leave out clauses 35, 36, 37 and 38.
  Mr. Snape: The Opposition believe that the implementation of part II offers no real prospect of much needed extra investment in London's rail services. On the contrary, we feel that the Bill threatens less investment and more expense to the ratepayers. I hope that, even at this early stage, I can convince both sides of the House of this essentially simple fact, but perhaps it is only simple to me.
  Under the present public service obligation arrangements, real investment in London is inadequate. During our protracted debates in Committee —I do not know whether the Minister would call them that—we dealt in some detail with that aspect of the problem. Hon. Members on both sides of the Committee referred to the contribution of the Select Committee on Transport to investment in British Rail within the London area. Indeed, we referred in Committee to the Select Committee report and specifically to paragraph 4.25, which stated:
  "British Rail gave us a graphic and familiar description of the effects of age and under-investment on their London and South East commuter services. There had, they said, been consistent under-investment in physical facilities and the inability to make proper provision for the future. This has resulted in a lowering of standards and a reduction in the quality of service provided. …At present, the level of investment is barely sufficient to maintain existing standards, let alone provide for the improvements in quality which are essential to ensure an attractive and efficient transport system."
  In recent years, the GLC has taken it upon itself—quite rightly—successfully to supplement that pathetically inadequate investment in BR. Yet the only reward for the GLC is to be threatened with abolition under the legislation that we are discussing——
  Mrs. Chalker: No.
  Mr. Snape: For the sake of the Minister, I shall be entirely accurate. The GLC's transport function will be stripped from it under the legislation that we are discussing. The legislation to bring about its abolition will, presumably, be introduced in the none-too-distant future. I hope that that is not too pedantic for the Minister and that it provides an accurate account of the likely events to come —[Interruption.] If the hon. Member for Fulham (Mr. Stevens) wishes to stick in his sixpennorth at this point in the debate, I should be delighted to give way to him. If he does not, I should be grateful if he would be silent.

  1051
  The Opposition believe that the implementation of part II will put Londoners in double jeopardy. They will have to pay twice over for railway services — both as taxpayers and as ratepayers. I regret that the Secretary of State, no doubt for good reason, has left the Chamber. I wanted to entertain — if that is the right word — the House with one or two of his quotations from our deliberations in Committee. However, I shall content myself by saying that it appears that the Secretary of State agrees about double jeopardy. On Tuesday 6 March, when discussing matters similar to those now before the House, the right hon. Gentleman said:
  "At present, the burden of subsidy for LRT services only will fall under the two-thirds ratepayers/one-third taxpayers ratio, as provided in the Bill. If several hundred million pounds' worth of railway subsidy were given to LRT and later had to be found by the Government, we do not intend that the extra money should be financed in the same two-thirds/one third proportion. That would greatly increase the burden on the ratepayer because at present the whole amount is paid by the taxpayer. One would have to take a judgment about whether some and, if so how much, should fall on the ratepayer." — [Official Report, Standing Committee B, 6 March 1984; c. 908.]
  Whether we should leave such a judgment to the Secretary of State is a matter for debate between both sides of the House.
  The Secretary of State has tried to draw the analogy between the proposed payments and section 20 grants in other metropolitan county areas. There is an important difference, as I am sure the Minister is aware. Perhaps I should not say this as it may prejudice her future promotion prospects, but she always appears to take a more detailed interest in these matters than does the Secretary of State.
  I think that the Minister will concede that section 20 grants are either clearly entered into or not, as the case may be, by elected local authorities. There is a great difference between the proposals that we are discussing and the purposes behind the new clause, and what takes place in metropolitan county areas as a result of agreements between elected local authorities and those charged with managing and operating the British railway system.
  One of the reasons behind the new clause is that once again the Government in part II of the Bill appear to be dedicated to the principle of double taxation of Londoners without even single representation, which is a slight variation of the old cliché. The suspicion must be that the Government and LRT together will be understandably fearful about the consequences of imposing a large new levy on London's rate-payers. Therefore, they will attempt to curtail investment in rail services. We believe that Londoners will inevitably be paying more towards transport services in London but that rail services supported directly by the public service obligation will decline.
  Having expressed my sorrow at the absence of the Secretary of State—I know it is normally regarded as only a woman's prerogative to change her mind, but perhaps I may change mine——
  Mrs. Chalker: Tell me about it.
  Mr. Snape: I would not dream of trying to tell the Minister of State anything. I have been trying to do so in Committee for what seems like a lifetime with a singular lack of success. I shall attempt to teach her, as gently as I always do, the error of her ways and of the Government's ways in regard to part II of the Bill.
  1052
  My expression of gratitude, if that is the right term, for the absence of the Secretary of State is made simply because I want to discuss the vexed question of integration which, during the Committee deliberations, was guaranteed to send him into what passes as a fury for the Secretary of State. Most of my hon. Friends would perhaps regard it as a mild fit or a foot-stamping effort, but I suppose that it passes as a fury in the sort of circles in which the Secretary of State moves.
  Our concern in Committee, which has led to us tabling the new clause, was to assist the further integration of the services to which I have referred. We regard it as nonsensical to set up under the Bill a non-elected organisation to run London's transport and then to leave matters as they are for the services of British Rail. That is unlikely to be conducive to the integration of passenger transport services within the Greater London area and is likely for the financial reasons that I outlined earlier to be counterproductive.
  However, it seems strange that the avowed purpose of part II of the Bill is to bring about any integration of passenger services when in every other part of the Bill it seems to be the Government's intention to allow passenger services to disintegrate in the Greater London area. As the House will be aware, the tendency is to separate bus services from underground services and also to privatise some of the services, but only the profitable ones.
  The Secretary of State seems to be unsure about why the powers in part II that we are seeking to amend are necessary at all. Indeed, during the deliberations in Committee he said:
  "I do not believe that we need these powers and I hope that they will not have to be brought into effect." — [Official Report, Standing Committee B, 6 March 1984; c. 937.]
  That is indeed a confession from the Secretary of State who, at least theoretically, is responsible for the promotion of legislation on behalf of his Department. For him to say that these powers are not likely to be needed is unusual even by his somewhat elastic political standards.
  The new clause should appeal to the House because it is designed to save Londoners a further financial burden. There is obviously confusion in the mind of the Government about the burden that will fall on ratepayers, and I hope that the Minister of State will provide satisfactory answers to the questions that I have asked on this issue. Our view is that this part of the Bill will add to the already frightening list of additional rates that Londoners will have to pay to meet the ideological prejudices of the Government. The Conservatives are good at accusing the GLC and Labour Members of promoting our ideological prejudices, but——
  It being Ten o'clock, further consideration of the Bill stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the London Regional Transport Bill may be proceeded with, though opposed until any hour. —[Mr. David Hunt.]
  Mr. Snape: I was referring to the already frightening list of extra rates and charges that Londoners will have to pay. Inevitably, as a result of the Bill, they will have to pay a greater proportion of the running costs of transport in London; they will have to meet, despite what the Minister of State was unwise enough to say in an earlier debate, extra payments for the concessionary fares

  1053
  scheme; and under this part of the Bill, unless the Government accept our advice, they will have to meet additional payments for British Rail, money which has traditionally come from the taxpayer.
  I do not know whether I need declare an interest as a taxpayer and London ratepayer. I am one of those poor people who will have to pay twice for this ideological nonsense to which the Government are dedicated. Indeed, for a Government who oppose the GLC on the basis of high rates and who wish to relieve Londoners of additional financial burdens, we are left wondering how much higher rates will be after this particularly confused part of the Bill becomes law.
  The Secretary of State is on record as saying that he will use his powers under part II only if other consultative measures between LRT and BR fail to achieve — I whisper gently the dreaded word — integration. However, when in Committee we debated what was then amendment No. 149, which specified that the integration of the two services should come about within three years of the appointed day, the right hon. Gentleman said:
  "That does not give us the opportunity to try the liaison operations properly and then to come to an ordered decision".—[Official Report, Standing Committee B, 6 March 1984; c. 910.]
  There appears to be little in the Bill that is particularly orderly, yet it contains many aspects that will prejudice the work that the GLC has done, especially in recent years, to bring about the sort of transport system that has benefited Londoners and those who use the city's transport system.
  In pressing the new clause, I remind the Minister of State of some of the successes that have occurred under the GLC and the desire of the GLC to enhance those successes, for example by spreading the use of the travel card to British Rail services. Does the Minister envisage the cheaper travel schemes that the GLC has introduced — to which the Conservatives take such violent objection — being widened in future years to take in British Rail services? If so, who will take that decision? A legitimate question to the Minister of State, given her passion for talking about money, is how much all this will cost, when and if such a happy position eventually comes about. If part II proves anything, it proves either that the Government willfully wil not understand what they are trying to bring about in passenger services in the greater London area, or do not care about the damage that part II will cause.
  The Minister of State waxes indignantly, as she does from time to time, when we gently chide her about the likely effect of the Bill on Londoners. If I am wrong about the likely effect of the Bill, no doubt, with that carefully prepared brief, she will be able to tell me so in due course. I hope that she will concede that the improvements—the integration of services and the fairly large programme of refurbishment of stations, and further subsidy of BR services—that have taken place under the GLC are not at risk as a result of the acceptance of part II of the Bill and the rejection of new clause 3. If she can do that, to put it mildly, we will be pleasantly surprised. We do not believe, as the only move towards integration written into this part of the Bill is for British Rail to consult London Regional Transport on fares, that that is sufficient. I ask the Minister whether she would agree that the
  1054
  consultations between LRT and BR on fares reflect the kind of genuine integration that both sides of the House would surely wish to see in London Transport.
  If the Minister of State cannot bring herself to accept the new clause, will she say how much its rejection will cost London's ratepayers, and how the bill for British Rail services in London is to be met in future? Is the money to be paid to LRT and then passed on to BR, or will it be paid to BR direct? If it is to be paid to BR direct, particularly in respect of the increased services, will it be deducted from BR's global subsidy in some other way?
  I hope that the Minister of State can bring herself to look kindly upon the new clause. The purpose of the clause is to assist the integration of BR services with those of LRT, an integration that the GLC has strived manfully—"personfully" may be more appropriate these days—to achieve, and which is directly prejudiced by the proposals in this biased Bill.
  Mrs. Chalker: I shall try to answer the hon. Member for West Bromwich, East (Mr. Snape) in an acceptable way, but I must tell him that I cannot accept his new clause. Although he may banter and flutter his eyelashes through his new spectacles, he cannot persuade me that he has made a case for saying that the Bill will increase costs to London ratepayers, because he knows from our discussions in Committee and at other times that it is in order to bring about some sensible use of taxpayers' and ratepayers' money that we are striving to achieve better integration between transport in London now provided by the London Transport Executive, under the direction of the GLC, and British Rail's London and south-east region, which is responsible to my right hon. Friend the Secretary of State.
  The new clause would prevent ratepayers from contributing towards the cost of British Rail services without the boroughs' consent, and amendment No. 53 would remove from part II the reserve powers to extend the functions of LRT in relation to British Rail services in the London regional rail passenger network. There is some similarity with the debate that we had in Committee on amendment No. 153, but I accept that the hon. Gentleman is worried that integration will fall harder upon London ratepayers in future than it does under the separate designation of public money, through the Secretary of State to British Rail, and through the GLC to London Transport.
  As the Government believe that we can achieve integration between LRT and British Rail's London and south-east region, we do not believe that the powers in part II will be heeded. However, we have always said in Committee and in previous debates on the Floor of the House that if part II should come into effect, and enshrine in legislation the combined operation of LRT and British Rail's London and south-east region, it should do so only so that the ratepayers' contributions as a combined subsidy to British Rail and LRT are lower than the contributions which we envisage might be necessary in the early years of LRT — that is, a maximum of the two thirds ratepayers' contribution and one third taxpayers' contribution.
  If we consider the new clause rather than some of the words used by the hon. Gentleman in moving it, we see that he is seeking to separate by statute the grant-aiding of bus and underground services from British Rail services. Therefore, if part II were introduced, there would no

  1055
  longer be the flexibility that we desire LRT to have in examining the rail, bus and underground networks together. The hon. Gentleman is seeking to impose financial rigidity between the British Rail services for which LRT would be responsible under part II and the bus and underground services. That cannot be his intention, and if I did not already know that he intended to vote on the new clause, I should have said that it was a probing one. However, he seems to have persuaded himself that the ratepayers' contribution will suddenly change significantly.
  I can see no reason why the total ratepayers' contributions should suddenly change significantly simply because part II has been brought into operation. It would be sensible from the time that part II was introduced to express the levy slightly differently, because it would be a smaller proportion of the increased grants to LRT—the existing total grant plus the grant to British Rail for London and the south-east.
  To give the hon. Gentleman an example, if when part II was introduced the ratepayers' levy for LRT was 60 per cent.—I take that figure for purely illustrative reasons—the total grant would decrease to a figure of 60 minus Y per cent., Y being a function of the grant being paid for British Rail's London and south-east region. In other words, the 60 minus Y per cent. would become, in effect, a new maximum percentage. Of course, that reduction would occur because virtually all the support to the board's London and south-east services now comes from central rather than local government and there is no reason why the amount of the ratepayers' contribution should suddenly become very different because part II of the Bill was brought into operation.
  10.15 pm
  I have told the hon. Gentleman on many occasions that I see no reason why it should have to happen. In Committee we explained at some length some of the proposals and ideas for bringing about a far closer liaison than has been possible to date between British Rail London and south-east region and London Transport Executive. Should it become necessary, however, it certainly does not mean that the ratepayer contribution would increase per se, because the PSO for London and south-east BR would still be available to London and south-east BR and be paid through LRT to them. What he is seeking, therefore, in his new clause and consequent amendment No. 53 is to separate, in a way which would prevent the very flexibility that he has been praising, the sums of money going to the different aspects of transport provision in London.
  While he may have some fun at my expense or that of other people about the whole issue of integration, I will say to the hon. Gentleman that I believe that there is no reason why any more resources should come from the ratepayer than at present. He knows that it is our avowed intention to reduce the amount of resources coming from the ratepayer.
  The hon. Gentleman is also being unrealistic in terms of the financing element when he talks about involving the boroughs. He has been aware, I think, from our debates that I have sought wherever possible to include consultation with the boroughs and with other interested parties in the enactment of the LRT legislation. I really cannot see, however, how one would determine the agreement of the boroughs and their ratepayers because the hon. Gentleman does not say whether he requires
  1056
  unanimity or whether a single borough or even a group of ratepayers could have an effective veto. In other words, I do not think that, when it comes down to it, the practicalities of the new clause are practicable for the working of London Transport.
  Mr. Snape: Perhaps I could answer the Minister. Although she does it charmingly, she should stop presenting assertions as facts. It has long been the view of those on the Opposition Benches, as it was their view in Committee, that it is the Government's duty and obligation to consult elected local authorities in the manner that we have outlined in the new clause. I see no insuperable objection to the consultation outlined in new clause 11. If there is some insuperable objection, perhaps the Minister would detail it rather than, no matter how gently, implying it.
  Mrs. Chalker:' The hon. Gentleman misunderstands —I suspect, somewhat purposely. There is no way in which deciding the exact monetary amounts can be part of the final decision-taking of consultation. It is perfectly true that in the preparation of plans, whether by London Regional Transport putting forward its needs for the following year or in the LRT annual plan, which we will come to on a new clause tomorrow, or in the strategic statement, which is already in the Bill—in both cases, before one ever arrives at the total amount of moneys to be apportioned from the National Exchequer and to be precepted through the rates, there will be consultation. It is crucial that final decisions are taken quickly—as they are at present, following consultations with British Rail and, I imagine, by the GLC with LT —and are not subject to the veto of any borough or group of persons.
  When considering new clause 11, the hon. Gentleman must think about one of its effects. If we were to decide that LRT could make better use of some BR lines because it could run commuter services which were more consistent and fitted in better with the LTR network than with BR, in an area composed predominantly of commuter traffic, I do not necessarily believe that it would be fair to load the total effect and cost of those rail lines on London's ratepayers. The rigidity in new clause 11 would have that effect. The cost of the maintenance of those rail lines would fall upon LRT even if they were used for long-distance travel outside the London and south-east region.
  From the comments that the hon. Gentleman has made and from my reading of new clause 11 and amendment No. 53, I do not see why he needs the terms of the amendment included in the Bill. I am confident that BR and LRT, from their expression of how they wish to work and provide services for the Londoner, will be able to work together.
  In Committee we told the hon. Gentleman about the high-level non-statutory liaison arrangements which would be overseen by my hon. Friend the Secretary of State, and, in his absence, by me. The Bill brings together LRT and BR services in the area within the same policy and financial framework. We are backing that with the statutory powers and duties provided in clauses 2 and 3. I do not see, therefore, that we shall need to have recourse to part II. Should it be needed to achieve integration, there is no way in which the hon. Gentleman's proposals would make that any easier. In fact, it would make it harder. I do not wish to put any impediment in the way of bringing together BR London and south-east region and the services which will be operated by LRT in the future.

  1057
  The hon. Gentleman said a few other things which I should perhaps answer. He spoke about the travel card and asked whether it would continue and widen. I cannot give undertakings as to exactly what will happen. I think that the integral advantages—if I may use that adjective—of having a ticket which takes one from the point of departure to the point of destination, through a number of different services, is well known in other countries and is beginning to be seen here. LT's desire to achieve that and BR's readiness to look at future possibilities is something that I would wish to encourage and which I know will be one of the objectives set by my right hon. Friend for LRT in its early days.
  In taking the decisions, LRT and BR will have their own external financing limits. They are in charge of their own destiny when making economic decisions. I would regret to see on the statute book a power to dictate to able
  1058
  managers of public concerns how they should take those decisions. If one does not leave them free to take such decisions, one will never attract into the public transport service people of the right calibre to give the best service to the travelling public. I have seen that happening in other countries where, because a relatively unfettered responsibility is exercised by the chairmen of public concerns within the objectives set by the Governments of those countries, they have been able to provide a far better service for the travellers than, regrettably, we have been able to achieve so far in this country.
  We are seeking to put those things right with the Bill. I hope that my right hon. and hon. Friends will see that the rigidity that is introduced by the new clause and the amendment with regard to British Rail and LRT is to no good purpose, and could hinder the integration to which I know the hon. Member for West Bromwich, East is wedded.
  Mr. Spearing: Although I know that theoretically every Member of Parliament should be aware of what happens in a Standing Committee on a Bill, particularly those who venture into debates on Report, I confess that I have not waded through all the reports of the Committee debates. However, had I done so, I am not convinced that I would be much the wiser.
  Mr. Prescott: My hon. Friend would be.
  Mr. Spearing: A careful filler would be necessary.
  I should like to contribute to this debate on the London rail network as a Londoner who has taken some interest in London's railways over several years. I have considered them not from the point of view of the man on the Clapham omnibus, but from the point of view of the man on the Newham district line railway.
  I am confused about the purposes of clauses 35, 36 and 37, which the Minister is keen to retain. When the hon. Lady replies to the debate, I hope that she will remove some of the misapprehensions. I hope that she will do so in language that Londoners will be able to understand if they happen to read Hansard or if her words happen to go out on the ether. I believe that there is an obligation on parliamentarians to speak, when possible, in language that their constituents can understand. I fear that, because of the complexity of the legislation, that has not been a marked feature of the debate so far.
  I am confused about clauses 35, 36 and 37, because their language is extremely convoluted. I am not sure of their purpose. Perhaps the Minister, who wishes to retain them, will say a few words on those clauses in part II. I heartily endorse the hon. Lady's desire for integration. I noted her endorsement of that objective in the Bill. However, one does not achieve integration through long legalistic phrases in Bills. It can sometimes be done in other ways.
  My first question about London rail network finance is: can we assume that the grants that come to the London rail network to be—that does not necessarily mean the grant to the London and south-east rail network, as they are not the same thing—will be paid not to British Rail but to LRT? The important point is whether that will be supplemented by a precept on the London boroughs within the GLC and then paid to British Rail.
  If that is the case, let the Minister say so. I take it that that is the purpose of this part of the Bill, but let us get it clear. If it is not, I hope that the hon. Lady will tell us what will happen. The House is entitled to know. This is the last time that we can get the financial structure of these important railways in London sorted out.
  10.30 pm
  I have referred to the Minister's view on integration, and I do not believe that this is the best way to get it. The hon. Lady may not know that between 1933 and 1948 there was integration, even with the railway companies in private hands, in the London Transport area. Indeed, it was not confined to the railways. All the takings—trams, buses, trolley buses, underground railways and the main line suburban services—were put into a pool and then, on an agreed formula, the money was shared out among the operators. That system worked very well. I am not saying that it is the ideal system, but I suggest to the hon. Lady that there are all sorts of ways of integrating.
  1060
  Alas, despite her protestations, I cannot see a great deal of integration in the Bill, because is is not necessary to do it by legislation.
  Some very good things were done before the war. The 1935 to 1939 new works programme produced considerable integration among the lines of the Great Western railway, the Metropolitan and former North Eastern railway and, particularly, the former Great Eastern lines in the Stratford and West Ham areas of London. That did not require legislation in quite the same form as we have it before us tonight. So the fact that the hon. Lady makes protestations about integration does not mean that the law is the only way in which it can be achieved.
  At the same time, there have been some bad bloomers by British Rail. The continuing lack of a line between Willesden and Clapham junction is a major omission. Indeed, half that line was electrified before the war, but it is not electrified at all now. There have been some omissions from the present system. I am not saying that it is perfect, but we do not need legislation to put that right. The blocking up of the Snow Hill link between the widened lines of Kings Cross and Blackfriars was an almost criminal act permitted by the Government— it may have been my own; I make no party point here. They allowed British Rail to do that. The way in which the various regions of British Rail and London Transport were scrabbling after fares, without having a policy of coordination, was also a great feature of the post-war lack of integration of London railways.
  I cannot see how clauses 35, 36 and 37 will remedy the ills which I have identified. Indeed, from what we hear, disintegration may continue apace. During the election campaign I was at a meeting right next door to the London, Tilbury and Southend railway and, while the trains were roaring past, I pointed out to the people at the meeting that if the Conservatives got back into power they might well sell off this railway from British Rail and put it into private hands. I am not saying that will happen, but the hon. Lady cannot deny that there have been bids for what is seen to be a profitable part of the British Rail network.
  Mrs. Chalker: I hope the hon. Gentleman will agree with me that the London, Fenchurch street, Tilbury and Shoeburyness line is much in need of improvement, for the benefit of travellers on it, and that almost any improvement would be better than what some commuters have to suffer when coming up to London on that line?
  Mr. Spearing: I do not disagree with the point that the Minister has made, that it could well do with some improvements. Of course, the stock on that line (was publicly owned and publicly invested. The old London North Western, the old Midland and the old LMS did not do very well by it, but just to say that there could be improvements on any commuter line, and therefore privatisation is justified, that is stretching it somewhat. That was the implication of the Minister's remarks, even if she did not say it. She did not deny that this was a possibility when she intervened. I welcome interventions from the hon. Lady, and if she wishes to intervene again I shall be very pleased to give way, but that seems to be a complete non sequitur and confirms my charge of disintegration.
  Another example bandied around in the technical journals is the Victoria-Gatwick line. When I asked questions about that in the last Parliament, the people in

  1061
  Marsham street immediately clammed up. We now read in the technical journals that new coaches are being put on the route, with trains running every 15 minutes during the day and every hour throughout the night. That is fine, but I hope that it does not mean that that line, too, is a candidate for privatisation. It is clearly a cream route that could provide a lot of lolly for anyone given the concession, just like the ice cream man on the sea front.
  Mr. Snape: Even if it is not a candidate for privatisation, does my hon. Friend agree that that line provides a good excuse for saying that the reduction of southern region services is only 2 per cent.? That is the kind of sleight-of-hand that makes us distrust anything that the Government tell us.
  Mr. Spearing: My hon. Friend is quite right. Some of the aspirations mouthed by the Minister are quite reasonable, but looking at the straws in the wind we see something very different. I fear that while the Bill publicly calls for integration and co-operation, its real purpose is to allow profitable routes which should contribute to the public purse and to those routes which are unlikely to pay so well or at all, to be hived off arbitrarily to operators who will then make a profit out of the support provided for other routes by the taxpayer and especially the ratepayer. We shall be looking very closely indeed at the kind of operations that London Regional Transport permits in the way of privatisation.
  As I said on Second Reading and in relation to the money resolution, the Bill is a licence for the Secretary of State and London Regional Transport to allocate profit-making routes to individual persons or companies at the expense of public money provided to prop up the unprofitable routes. For all the Minister's protestations about integration, I very much fear that that is the real purpose of the Bill.
  My next question relates to the phenomenon mentioned in clause 35 — the London regional rail passenger network, not an acronym, but certainly another statutory phrase that we shall have to learn to live with in this legislative morass. Clause 35 defines the railway lines that will constitute that network as
  "such railway passenger services as may be determined from time to time by the Secretary of State, after consultation with London Regional Transport and the Railways Board."
  I hope that the Minister will tell us more about that, as it will be entirely at the behest of the Secretary of State. He may have to consult other bodies, but he will designate what the network will be. I suspect that it will not be the existing British Rail London suburban region, still less all the routes of the British Rail London and south east region to which the Minister referred—an artificial creation to some extent, although I do not dissent from the concept.
  Grave complications could arise, as it is clear that the London Regional Transport area may be different from the London regional rail passenger network. The Secretary of State could easily designate commuter lines going out well beyond not just the GLC area but even the LRT area, whatever that turns out to be.
  Many places are served by fast and quite comfortable trains these days, and people travel to London daily from quite distant places. The London to Brighton run is not the only one. There has been the electrification of the Bedford line and the Lea Valley line, and there is the great northern
  1062
  electrified line to Royston. There could be a number of candidates from the London regional rail passenger network, including even Shoeburyness, Tunbridge Wells or Hastings, or the newly electrified line in that direction.
  How far will this be carried? If those lines need some support, I presume that London Regional Transport will be able to provide it. If London Regional Transport provides support, some of the money will come from the ratepayers in London—from the precept—and that could presumably mean that ratepayers in the GLC area will be supporting lines that go well outside the GLC area into the lusher commuter areas, some of which I have mentioned.
  That would be totally unjust, particularly with rate-capping and GREAs and all the rest of it, but it is a distinct possibility under the Bill. The Minister may well justify it by saying that London is not just the GLC area and that people come in from far afield to go shopping, or to visit Whitehall, or even go to Marsham street, and that we must look at the picture as a whole. I do not deny that, but it would be wrong to use London ratepayers' money to assist such lines.
  Mrs. Chalker indicated dissent.
  Mr. Spearing: The Minister indicates that that is not so. Will she undertake that there will be legislation to prevent it? Ministers at the Department of Transport may not always have the knowledge, wisdom and understanding of the present incumbents. If there is a legislative possibility that that flow of money could take place, the Bill is very much wanting and some adjustments are necessary.
  The Bill is being introduced under a cloak of integration and improvement. However, just as the Minister's logic was somewhat adrift when she kindly intervened to suggest to me certain points about the London to Tilbury line, so the logic of the Bill may also be adrift. It is likely to provide profits by licence to certain private operators at the public expense, and it will become an administrative and legislative nightmare.
  Mr. Martin Stevens: Although, in these London debates, we welcome visiting stars to the Front Benches — the hon. Member for West Bromwich, East (Mr. Snape) and my hon. Friend the Minister of State—the rest of us always boil down to the cosy family of London Members. The hon. Member for Newham, South (Mr. Spearing) spoke with his usual mixture of good sense and craziness. If the hon. Member for Leyton (Mr. Cohen) should be lucky enough to catch your eye, Mr. Deputy Speaker, hon. Members on both sides look forward to hearing him. In the short time that he has been in the House, he has become one of our institutions. He is the Edna Everage of his part of the world and delights all who listen to him, both in the Chamber and upstairs.
  I am allowing a frivolous note to creep into my normally sombre tones because we are all standing language upside down. I shall take the argument in a simple form as it is a simple argument. The hon. Member for Newham, South is absolutely right to say that integration between London Transport and British Rail is not produced by legislation. If we tried to legislate we should screw it up. As Dr. Tony Ridley, the managing director of London Transport Rail, with whom I have discussed the matter, would say if he were here, if we try to create a mechanical structure of management by legislation, it is almost impossible to get it right. It is much

  1063
  simpler to do what the Government are doing—letting the two move closer together. Perhaps in five or six years' time a formula which lends itself to legislation will have been established, but we should be quite wrong to legislate tonight.
  10.45 pm
  At the other end of the scale is what happened to British Rail under the regime that is now going through its death throes. Many of us tried to see "Fares Fair" objectively with minds free from cant. It was amateurishly executed but based on the perfectly sound theory that it is possible to increase the size of the market by lowering prices. One of the amateurish elements of that programme, which spoiled its execution, was that there was no consultation between London Transport and BR, with the result that BR passengers switched like lightning to the suddenly much cheaper London Transport and the Secretary of State had to pick up a bill for £100 million on lost revenues to BR. Under the fairly loose and informal arrangement proposed by the Bill, that will not happen. We shall begin to get some of the benefits that we have lacked in the past few years and shall not, by a lack of communication, first damage LT and then BR but get closer without the distortion of legislation based on a lack of experience.
  Labour spokesmen keep talking about the enormous burdens that will be put on ratepayers. The truth, if I understand the emanations from the powder room at county hall, is that the new part-time directors of LT have been seized with furious resentment——
  Mr. Jeremy Corbyn: Is that a sexist or a military remark?
  Mr. Stevens: That is an interesting question. Is it sexist to say "powder room"? I was nearly stopped from speaking at York university a coupe of weeks ago because they said that I was a racist fascist. If I am either of those things I am also the king of Japan.
  Going back to the powder room, or the rest closet, the rumours are that, far from demands for subsidies increasing — to the expense of the ratepayer or the taxpayer—what enraged Mr. Livingstone's six bright young people who are helping out temporarily was that the corporate plan for LT appears to have envisaged an increase in efficiency, which will make subsidy less and less necessary. Public help will he required for long-term investment, but overall we anticipate that the need for subsidy may not form quite the mill-stone around our neck that it does now.
  The new clause and the amendment are based on false assumptions — that we need legalistically to impose integration on London Transport and British Rail before they are ready for it, and that the need for management subsidy will, with greater efficiency, increase rather than decrease. We would be wrong to accept the new clause, and I happily support the Government.
  Mr. Snape: I congratulate the hon. Member for Fulham (Mr. Stevens) on making a most interesting speech. I am sorry that, during our many weeks of deliberation in Standing Committee, he did not entertain us in the same way. I do not know whether this maxim applies to politicians as well as it does to journalists, but the hon. Gentleman during his speech never let the facts spoil a good story. Although interesting, the hon. Gentleman's speech about the lack of consultation
  1064
  between British Rail and the GLC at the same time of the "Fares Fair" scheme was wrong: the GLC offered some subsidy to the British Railways Board so that there could be a move towards the equalisation of fares, following the experimental period of fare reductions. The GLC was told by the Government, whom I am sure the hon. Gentleman is happy to support, that the funds provided by the GLC would be removed from the public service obligation and BR would not be any better off. Although the hon. Gentleman entertained us very well, I regretfully tell him that he should have a glimpse of the facts before expounding his version.
  My hon. Friend the Member for Newham, South (Mr. Spearing) summed up the debate. He put a straight question to the Minister: why are clauses 35, 36 and 37 in the Bill? We still do not know, because the Secretary of State does not know—not that he normally knows much. He has gone on record as saying that he does not think it is necessary that those clauses should be initiated. Like my hon. Friend the Member for Newham, South, I feel that we should ask why, if it is unnecessary to initiate those clauses, put them in the Bill? As the Government are fond of telling us, they are responsible for parliamentary time, and, if it becomes necessary, the proposals contained in the clauses could be covered in a separate Bill. The clauses to which my hon. Friend rightly objected, are not so much the cloak of integration, but figments of the imagination of the Secretary of State. Those of us who served on the Standing Committee know how fertile that imagination is.
  The Minister, in replying earlier, used all the usual clichés, which she does so elegantly. She talked about the sensible use of public resources. No hon. Member—not even I, despite the prejudiced view of the hon. Member for Fulham — could take exception to such anodyne sentiments. I confess that the Minister lost me when speaking about the difficulty of the joint use of railway lines. I presume that she was referring to the acceptance of the new clause.
  The hon. Lady will be as aware as I am that lines are jointly used by trains subsidised by PSO, by other trains subsidised directly under section 20 through metropolitan county councils and by profit-making—I hope—intercity trains operated by the British Railways Board. I cannot see any difficulty about the joint use of railway lines in those cases. There is no great difficulty about the joint use of railway lines for London if the new clause is accepted.
  The hon. Lady trotted out the story that we heard so often in Committee—that it is not the Government's wish to be directly involved in these matters; that it is purely a matter for "professional management". We heard those two words thrown at us time after time. Again, I must gently remind her that if she looks at railway lines in the remainder of the country, including her constituency, she might find that had it not been for the creation—I acknowledge by a Conservative Government —of the Merseyside county council, those professional managers to whom she refers so respectfully would have been delighted to close down the railway system in and around Merseyside many years ago.
  I want to be fair, but I must remind the hon. Lady that politicians of all political hues—I shall even drag in the party of the hon. Member for Southwark and Bermondsey (Mr. Hughes)—have consciously taken the decision—opposed by the professional management that the

  1065
  Government admire so much—on Merseyside, in and around Birmingham and in London that railway services run and operated by British Rail are worthy of support by the ratepayers because of the service provided.
  The hon. Lady talks about management function in the operation of transport in the London area. As she knows full well, London Regional Transport will have the sort of management function and management freedom that she has in her Department. London Regional Transport will have the same management function and management freedom as her whole Department has vis-a-vis the Treasury. She knows, as does the House, that the purpose of the Bill—we tabled the new clause to contradict that—is truly financial.
  Mrs. Chalker: No.
  Mr. Snape: Yes it is. The hon. Lady knows that. It is an attempt to ensure that less money is spent on transport in London. The hon. Lady, with her usual consistency, has throughout our debates declined to answer detailed questions on future financing and the provision of services.
  Mr. Martin Stevens rose——
  Mr. Snape: I give way to the hon. Gentleman.
  Mr. Stevens: It is hardly worth the hon. Gentleman sitting down.
  The hon. Gentleman told us earlier that the main object of the Bill was to sell off the system to those ice-cream selling chaps. He cannot have it both ways. If he does not like the idea of greater efficiency, let him stick to the reasons that he has given.
  Mr. Snape: If I were to be as unkind as the hon. Gentleman, I might say that it was hardly worth his while standing up. He should listen before he intervenes. The extremely witty reference to ice-cream was made by my hon. Friend the Member for Newham, South. Much as I should like to have my hon. Friend's speeches attributed to me, I dare say he would object if they were.
  If the hon. Member for Fulham reads the Bill, he will see that the purpose is twofold: first, it is to reduce the amount of money spent on the provision of public transport in London, and, secondly, to flog off the profitable parts wherever they can be flogged off and to anyone who is unwise enough to buy them.
  I know that the Minister of State does not wish to reply. Given the content of her earlier remarks, I can well understand why. I hope that my hon. Friends will support me by voting for the new clause.
  Question put, That the clause be read a Second time:—
  The House proceeded to a Division—
  Mr. Spearing (seated and covered): On a point of order, Mr. Deputy Speaker. Is it in order for a Minister of the Crown, when resisting an amendment, not to reply to questions put by hon. Members when the debate is not subject to guillotine or any time limit enforced by an order of the House?
  Mr. Deputy Speaker Mr. Ernest Armstrong): Nothing has been out of order. It is in order for the Minister to make her own judgment.
  The House having divided: Ayes 164, Noes 257

  Division No. 229]

  [11 pm

  AYES

  Adams, Allen (Paisley N)

  Heffer, Eric S.

  Alton, David

  Hogg, N. (C'nauld & Kilsyth)

  Anderson, Donald

  Holland, Stuart (Vauxhall)

  Ashton, Joe

  Howells, Geraint

  Atkinson, N. (Tottenham)

  Hoyle, Douglas

  Banks, Tony (Newham NW)

  Hughes, Robert (Aberdeen N)

  Barnett, Guy

  Hughes, Roy (Newport East)

  Barron, Kevin

  Hughes, Sean (Knowsley S)

  Beckett, Mrs Margaret

  Hughes, Simon (Southwark)

  Beith, A. J.

  Janner, Hon Greville

  Bell, Stuart

  John, Brynmor

  Benn, Tony

  Johnston, Russell

  Bennett, A. (Dent'n & Red'sh)

  Jones, Barry (Alyn & Deeside)

  Bermingham, Gerald

  Kennedy, Charles

  Blair, Anthony

  Kilroy-Silk, Robert

  Boothroyd, Miss Betty

  Lambie. David

  Boyes, Roland

  Leadbitter, Ted

  Bray, Dr Jeremy

  Leighton, Ronald

  Brown, Gordon (D'f'mline E)

  Lewis, Ron (Carlisle)

  Brown, Hugh D. (Provan)

  Lewis, Terence (Worsley)

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

  Litherland, Robert

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

  Lloyd, Tony (Stretford)

  Brown, Ron (E'burgh, Leith)

  Lofthouse, Geoffrey

  Bruce, Malcolm

  Loyden, Edward

  Caborn, Richard

  McCartney, Hugh

  Callaghan, Jim (Heyw'd & M)

  McDonald, Dr Oonagh

  Campbell, Ian

  McKelvey, William

  Campbell-Savours, Dale

  McNamara, Kevin

  Carlile, Alexander (Montg'y)

  McTaggart, Robert

  Carter-Jones, Lewis

  McWilliam, John

  Cartwright, John

  Madden, Max

  Clark, Dr David (S Shields)

  Marshall, David (Shettleston)

  Clarke, Thomas

  Maxton, John

  Clay, Robert

  Maynard, Miss Joan

  Cocks, Rt Hon M. (Bristol S.)

  Meacher, Michael

  Cohen, Harry

  Meadowcroft, Michael

  Coleman, Donald

  Michie, William

  Conlan, Bernard

  Mikardo, Ian

  Cook, Frank (Stockton North)

  Millan, Rt Hon Bruce

  Cook, Robin F. (Livingston)

  Mitchell, Austin ('t Grimsby)

  Corbyn, Jeremy

  Morris, Rt Hon J. (Aberavon)

  Cox, Thomas (Tooting)

  Oakes, Rt Hon Gordon

  Craigen, J. M.

  O'Brien, William

  Crowther, Stan

  O'Neill, Martin

  Cunliffe, Lawrence

  Parry, Robert

  Dalyell, Tam

  Patchett, Terry

  Davies, Rt Hon Denzil (L'lli)

  Pavitt, Laurie

  Davies, Ronald (Caerphilly)

  Pendry, Tom

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

  Penhaligon, David

  Deakins, Eric

  Pike, Peter

  Dewar, Donald

  Powell, Raymond (Ogmore)

  Dobson, Frank

  Prescott, John

  Dormand, Jack

  Randall, Stuart

  Dubs, Alfred

  Redmond, M.

  Duffy, A. E. P.

  Rees, Rt Hon M. (Leeds S)

  Dunwoody, Hon Mrs G.

  Richardson, Ms Jo

  Eadie, Alex

  Roberts, Ernest (Hackney N)

  Eastham, Ken

  Robertson, George

  Evans, John (St. Helens N)

  Robinson, G. (Coventry NW)

  Ewing, Harry

  Rogers, Allan

  Fatchett, Derek

  Ross, Ernest (Dundee W)

  Faulds, Andrew

  Sedgemore, Brian

  Field, Frank (Birkenhead)

  Sheldon, Rt Hon R.

  Fields, T. (L'pool Broad Gn)

  Shore, Rt Hon Peter

  Fisher, Mark

  Short, Ms Clare (Ladywood)

  Flannery, Martin

  Silkin, Rt Hon J.

  Foster, Derek

  Skinner, Dennis

  Fraser, J. (Norwood)

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

  Freeson, Rt Hon Reginald

  Snape, Peter

  Freud, Clement

  Spearing, Nigel

  George, Bruce

  Steel, Rt Hon David

  Gilbert, Rt Hon Dr John

  Stott, Roger

  Gould, Bryan

  Strang, Gavin

  Hamilton, James (M'well N)

  Straw, Jack

  Hardy, Peter

  Thomas, Dr R. (Carmarthen)

  Harman, Ms Harriet

  Thompson, J. (Wansbeck)

  Harrison, Rt Hon Walter

  Tinn, James

  Haynes, Frank

  Torney, Tom

  1067

  Wainwright, R.

  Winnick, David

  Wardell, Gareth (Gower)

  Young, David (Bolton SE)

  Wareing, Robert

  Welsh, Michael

  Tellers for the Ayes:

  White, James

  Mr. Allen McKay and Mr. Don Dixon.

  Williams, Rt Hon A.

  NOES

  Adley, Robert

  Eyre, Sir Reginald

  Aitken, Jonathan

  Fairbairn, Nicholas

  Alexander, Richard

  Fallon, Michael

  Amess, David

  Farr, John

  Ancram, Michael

  Favell, Anthony

  Arnold, Tom

  Fenner, Mrs Peggy

  Ashby, David

  Fletcher, Alexander

  Aspinwall, Jack

  Fookes, Miss Janet

  Atkins, Robert (South Ribble)

  Forman, Nigel

  Atkinson, David (B'm'th E)

  Forth, Eric

  Baker, Rt Hon K. (Mole Vall'y)

  Fowler, Rt Hon Norman

  Baker, Nicholas (N Dorset)

  Fox, Marcus

  Baldry, Anthony

  Franks, Cecil

  Banks, Robert (Harrogate)

  Freeman, Roger

  Beaumont-Dark, Anthony

  Gale, Roger

  Beggs, Roy

  Gardiner, George (Reigate)

  Bellingham, Henry

  Gardner, Sir Edward (Fylde)

  Bendall, Vivian

  Garel-Jones, Tristan

  Bennett, Sir Frederic (T'bay)

  Glyn, Dr Alan

  Benyon, William

  Goodhart, Sir Philip

  Berry, Sir Anthony

  Gorst, John

  Biffen, Rt Hon John

  Gow, Ian

  Biggs-Davison, Sir John

  Grant, Sir Anthony

  Bonsor, Sir Nicholas

  Greenway, Harry

  Boscawen, Hon Robert

  Gregory, Conal

  Bottomley, Peter

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

  Bowden, Gerald (Dulwich)

  Griffiths, Peter (Portsm'th N)

  Braine, Sir Bernard

  Ground, Patrick

  Brandon-Bravo, Martin

  Gummer, John Selwyn

  Bright, Graham

  Hamilton, Hon A. (Epsom)

  Brinton, Tim

  Hamilton, Neil (Tatton)

  Brooke, Hon Peter

  Hampson, Dr Keith

  Brown, M. (Brigg & Cl'thpes)

  Hanley, Jeremy

  Bruinvels, Peter

  Harris, David

  Bryan, Sir Paul

  Harvey, Robert

  Buck, Sir Antony

  Havers, Rt Hon Sir Michael

  Budgen, Nick

  Hawkins, C. (High Peak)

  Burt, Alistair

  Hawkins, Sir Paul (SW N'folk)

  Butcher, John

  Hawksley, Warren

  Butler, Hon Adam

  Hayes, J.

  Butterfill, John

  Hayward, Robert

  Carlisle, John (N Luton)

  Heathcoat-Amory, David

  Carlisle, Kenneth (Lincoln)

  Heddle, John

  Carttiss, Michael

  Henderson, Barry

  Chalker, Mrs Lynda

  Hickmet, Richard

  Chapman, Sydney

  Hicks, Robert

  Chope, Christopher

  Higgins, Rt Hon Terence L.

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

  Hill, James

  Clark, Dr Michael (Rochford)

  Hind, Kenneth

  Clark, Sir W. (Croydon S)

  Hirst, Michael

  Clarke, Rt Hon K. (Rushcliffe)

  Hogg, Hon Douglas (Gr'th'm)

  Cockeram, Eric

  Holland, Sir Philip (Gedling)

  Colvin, Michael

  Holt, Richard

  Conway, Derek

  Hooson, Tom

  Coombs, Simon

  Hordern, Peter

  Cope, John

  Howard, Michael

  Couchman, James

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

  Crouch, David

  Howarth, Gerald (Cannock)

  Currie, Mrs Edwina

  Howe, Rt Hon Sir Geoffrey

  Dorrell, Stephen

  Hubbard-Miles, Peter

  Douglas-Hamilton, Lord J.

  Hunt, David (Wirral)

  du Cann, Rt Hon Edward

  Hunt, John (Ravensbourne)

  Durant, Tony

  Hunter, Andrew

  Dykes, Hugh

  Jackson, Robert

  Edwards, Rt Hon N. (P'broke)

  Jenkin, Rt Hon Patrick

  Emery, Sir Peter

  Jessel, Toby

  Evennett, David

  Johnson-Smith, Sir Geoffrey

  1068

  Jones, Robert (W Herts)

  Shersby, Michael

  Joseph, Rt Hon Sir Keith

  Silvester, Fred

  Kellett-Bowman, Mrs Elaine

  Skeet, T. H. H.

  Kershaw, Sir Anthony

  Soames, Hon Nicholas

  Key, Robert

  Speed, Keith

  King, Rt Hon Tom

  Speller, Tony

  Knight, Gregory (Derby N)

  Spencer, Derek

  Knight, Mrs Jill (Edgbaston)

  Spicer, Jim (W Dorset)

  Lawler, Geoffrey

  Spicer, Michael (S Worcs)

  Lee, John (Pendle)

  Squire, Robin

  Leigh, Edward (Gainsbor'gh)

  Stanbrook, Ivor

  Lennox-Boyd, Hon Mark

  Steen, Anthony

  Lester, Jim

  Stern, Michael

  Lewis, Sir Kenneth (Stamf'd)

  Stevens, Lewis (Nuneaton)

  Lloyd, Ian (Havant)

  Stevens, Martin (Fulham)

  Lloyd, Peter, (Fareham)

  Stewart, Allan (Eastwood)

  Lord, Michael

  Stewart, Andrew (Sherwood)

  Lyell, Nicholas

  Stewart, Ian (N Hertf'dshire)

  McCurley, Mrs Anna

  Stokes, John

  Maginnis, Ken

  Stradling Thomas, J.

  Major, John

  Sumberg, David

  Marland, Paul

  Taylor, John (Solihull)

  Mather, Carol

  Taylor, Teddy (S'end E)

  Mawhinney, Dr Brian

  Terlezki, Stefan

  Mellor, David

  Thomas, Rt Hon Peter

  Merchant, Piers

  Thompson, Donald (Calder V)

  Meyer, Sir Anthony

  Thompson, Patrick (N'ich N)

  Mills, Iain (Meriden)

  Thorne, Neil (Ilford S)

  Mills, Sir Peter (West Devon)

  Thornton, Malcolm

  Moate, Roger

  Townend, John (Bridlington)

  Molyneaux, Rt Hon James

  Trotter, Neville

  Monro, Sir Hector

  Twinn, Dr Ian

  Morrison, Hon C. (Devizes)

  van Straubenzee, Sir W.

  Moynihan, Hon C.

  Vaughan, Sir Gerard

  Mudd, David

  Viggers, Peter

  Murphy, Christopher

  Waddington, David

  Newton, Tony

  Wakeham, Rt Hon John

  Nicholson, J.

  Waldegrave, Hon William

  Onslow, Cranley

  Walden, George

  Page, Richard (Herts SW)

  Walker, Cecil (Belfast N)

  Patten, John (Oxford)

  Walker, Bill (T'side N)

  Percival, Rt Hon Sir Ian

  Wall, Sir Patrick

  Pink, R. Bonner

  Waller, Gary

  Pollock, Alexander

  Wardle, C. (Bexhill)

  Powell, Rt Hon J. E. (S Down)

  Watson, John

  Powley, John

  Wells, Bowen (Hertford)

  Raison, Rt Hon Timothy

  Wells, John (Maidstone)

  Renton, Tim

  Wheeler, John

  Rhys Williams, Sir Brandon

  Whitfield, John

  Ridley, Rt Hon Nicholas

  Wiggin, Jerry

  Ridsdale, Sir Julian

  Wilkinson, John

  Roberts, Wyn (Conwy)

  Winterton, Mrs Ann

  Robinson, Mark (N'port W)

  Winterton, Nicholas

  Roe, Mrs Marion

  Wolfson, Mark

  Ross, Wm. (Londonderry)

  Wood, Timothy

  Rossi, Sir Hugh

  Woodcock, Michael

  Rowe, Andrew

  Yeo, Tim

  Rumbold, Mrs Angela

  Young, Sir George (Acton)

  Ryder, Richard

  Younger, Rt Hon George

  Sackville, Hon Thomas

  Sayeed, Jonathan

  Tellers for the Noes:

  Shaw, Giles (Pudsey)

  Mr. Ian Lang and Mr. Michael Neubert.

  Shelton, William (Streatham)

  Shepherd, Richard (Aldridge)

  Question accordingly negatived.
  Further consideration adjourned.—[Mr. Boscawen.]
  Bill, as amended (in the Standing Committee), to be further considered tomorrow.

  NEW WRIT
  For Cynon Valley, in the room of Joan Lyonel Evans, Esq., deceased—[Mr. Michael Cocks.]

  European Assembly Constituencies (England)
  11.13 pm
  The Under-Secretary of State for the Home Department (Mr. David Mellor): I beg to move,
  That the draft European Assembly Constituencies (England) Order 1984, which was laid before this House on 28th March, be approved.
  The Boundary Commission for England submitted its final recommendations for new European Parliament constituencies on 22 March and my right hon. and learned Friend the Secretary of State proposes that those recommendations be implemented without modifications. Article 2 of the order substitutes the constituencies described in the schedule for the existing European constituencies in England. If both Houses approve the draft order, it will be submitted to Her Majesty in Council to be made. Article 1(2) provides that the order comes into operation immediately it is made, but does not affect the present constituencies until the next general election of European Parliament representatives on 14 June.
  This review has taken only 11 months to complete, which is a remarkable achievement. In that time the commission has had to consider 900 written representations, hold nine local inquiries and publish revised recommendations for 16 constituencies. Some hon. Members may recall that the commission was at first extremely doubtful whether it could complete the review in time for its proposals to be implemented at this year's elections because of the need to comply with these important but time-consuming procedures. The fact that the commission has nevertheless achieved its goal is entirely due to the hard work and dedication of the deputy chairman, Mr. Justice Walton, his fellow members, and their small staff, who also serve the Welsh commission. I am sure that the House will wish me to express our thanks to them, and to Mr. Speaker, as ex-officio chairman, for ensuring that the review was conducted as meticulously and expeditiously as possible.
  My right hon. and learned Friend has received only 12 representations about six of the proposed 66 constituencies. This suggests that the final recommendations are acceptable to the vast majority of electors. Those representations have been carefully considered, but my right hon. and learned Friend has decided not to modify the commission's recommendations because the objections raised are similar to others considered and rejected by the commission during the review.
  The final recommendations would leave the present Hereford and Worcester, London East and London North East constituencies unchanged and make a minor boundary alteration, involving no electors, to the Cornwall and Plymouth, and Devon constituencies. The remaining 61 constituencies would all be altered to varying degrees, although many of them would retain a substantial part of their present area and electorate.
  Those changes have had to be made because of changes in the electorates of the present constituencies and alterations to the boundaries of the parliamentary constituencies between 1977 and 1983. Part H of schedule 2 to the European Assembly Elections Act 1978 provides that no parliamentary constituency shall be divided between European constituencies and that each European
  1070
  constituency shall have an electorate as near the electoral quota as is reasonably practicable, having regard, where appropriate, to special geographical considerations.
  The electoral quota for England in this review was 539,155. At the start of the review the electorates of the present European constituencies ranged from 456,965 in Liverpool, which is 15·2 per cent. below that quota, to 622,241 in Hampshire, West, which is 15·4 per cent. above the quota. The need to reduce that disparity and to align the existing boundaries with those of the new parliamentary constituencies, 119 of which were divided between European constituencies, therefore made substantial changes inevitable in some parts of the country.
  However, the commission has attempted to minimise the effects of its proposals on local government areas and existing constituencies as much as possible, although it is not statutorily required to take account of county and London borough boundaries or the inconveniences attendant on any alternations, as it was during its review of parliamentary constituencies, which have wide and different statutory criteria.
  Mr. Robert Jackson: While congratulating the Boundary Commission on its work, may I ask my hon. Friend the Minister to bear in mind for future reference, especially with regard to what he said about local authority boundaries, the fact that sometimes the nomenclature that the commission chooses is clumsy? For example, the European constituency that contains Wantage and Newbury — my constituency of Wantage being in Oxfordshire and Newbury being in Berkshire—has been called Wiltshire. The commission refused to accept any suggestion for a different name. The good people of Wantage believe that that must have been done in Brussels rather than by a British Boundary Commission.
  Mr. Mellor: Yes, it sounds as though that might be so.
  The paramount consideration before the Boundary Commission is simply parity of electorates, but the commission has also been able to increase the number of counties, districts and London boroughs which are undivided between constituencies. At present, 37 counties and London boroughs are undivided. Under the commission's proposals, 46 counties and London boroughs — including East Sussex, Norfolk and West Sussex, which will form separate constituencies—are undivided. Essex and Kent will each contain two whole constituencies, while the number of districts not divided between constituencies will rise from 262 to 284 if the commission's recommendations are implemented in full.
  However, the final test is whether the commission has achieved a better standard of parity than it did in 1978. There is no doubt that it has. The electorates of the proposed constituencies range from 7·4 per cent. below the electoral quota in Cheshire East to 6·4 per cent. above in Essex North East, compared with a range of 9·7 per cent. below the 1977 electoral quota of 516,436, to 10·4 per cent. above in 1978. I understand that some people will naturally be disappointed that the commission rejected their own suggestions for new boundaries or names in their locality, but my right hon. and learned Friend and I consider that it has done a very good job in extremely difficult circumstances.
  The way is now open for the elections on 14 June to be held on up-to-date boundaries. Not only is that right on grounds of principle, but it is vital that the political parties

  1071
  should know what the new constituency boundaries are, so that they can begin selecting their candidates. On that basis, I commend these recommendations to the House so that the uncertainty which has been a feature of the past year can be quickly ended.
  11.21 pm
  Mr. Robert Kilroy-Silk: The first thing that one ought to say about this order and the boundaries that it implements is that they are extremely late in the day in that the the elections to which they apply take place in less than two months' time. Nevertheless, we on the Opposition Benches give them a belated welcome. As the Minister has just said, there was considerable doubt and uncertainty at one time as to whether these boundaries would be implemented in time for the 1984 elections. Not so long ago, on 25 April 1983, the previous Home Secretary, now Lord Whitelaw, in a written answer, said in quite emphatic terms:
  "The commission sees no prospect of completing its review in time for its recommendations to be implemented at the 1984 elections."—[Official Report, 25 April 1983; Vol. 41, c. 212.]
  The same kind of doubt was expressed by the Under-Secretary of State when we debated the European Assembly election regulations on 26 January this year.
  This uncertainty as to whether the elections would be fought on the new boundaries has, of course, caused considerable doubt and confusion amongst the political parties and amongst registration officers. It has disrupted the selection of parliamentary candidates and, to a certain extent, disrupted also the formation of the new Euro-constituency parties that need to be established.
  I suppose that it is difficult to avoid the suspicion that the Tories knew all along that the elections were actually going to be fought on the new boundaries. It is not unremarked that it is their party alone that has not chosen candidates on the basis of existing constituencies but has frozen its candidate selection.
  Mr. Jackson: That is not so.
  Mr. Kilroy-Silk: The hon. Gentleman on the Government Benches may mutter, but it showed a surprising degree of confidence in the outcome of the Boundary Commission's proposals, which was in stark contrast with what Ministers were actually saying about whether those proposals would be implemented in time for the elections.
  Mr. Mellor: I am sorry to interrupt the hon. Gentleman so early in his speech, but I am bound to say to him—[Interruption.] That is better news than we have had so far in his speech. But perhaps I could say to him that my recollection of what I said on 26 January is that I made it clear that I believed that we would be fighting the elections on the new boundaries. We have been saying that consistently since the late summer and autumn. Of course, what my right hon. and noble Friend said on 25 April was based on the information then coming from the Boundary Commission.
  It was able to expedite its work. As the hon. Gentleman understands, we have done our best to acquaint the House, and it is rather unfair of him to say what he has. If he reads the passage of 26 January upon which he relies I think that he will find that I made the position clear.
  I suspect that the Labour party's difficulties in selecting candidates derive from the internecine strife of knifing those who are already there.
  Mr. Kilroy-Silk: There has been no difficulty in selecting candidates. The only difficulty any party has had is in knowing for which constituencies they were being selected.
  On 26 January I asked the Minister to remove the doubts and uncertainties and to give a categorical assurance, that we would be fighting the elections on the new boundaries. He was unable to give that assurance. I enumerated the procedures through which the Boundary Commission would have to go if its provisional proposals, which it had not then put before us, were objected to, if there were local inquiries and further representations. The Minister agreed that it was possible for those representations, local inquiries, and all the other matters that had to be gone through, to drag the procedures into June.
  It is not unremarkable that there was, until recently, doubt and uncertainty that the Minister could not allay as recently as 26 January. Despite that, the Conservative party had the confidence to believe that it could operate on the basis that it would be fighting the elections on the new boundaries and did not select its candidates on the existing boundaries.
  My suspicion is compounded by the fact that the delay has been absurd and unnecessary. In one respect the delay is attributable to the Government. The previous Labour Government tied the redrawing of the new Westminster boundaries into the redrawing of the European constituency boundaries for the Strasbourg election.
  When elected in 1979 the Tory Government realised that if they were to fight the election on new redrawn Westminster boundaries, which we all knew would favour the Conservative party, they needed to uncouple the redrawing of the Westminster and the European electoral boundaries. They did that. As a result they had the Westminster boundaries early and were able to fight the 1983 election on the new boundaries which favour the Conservative party. That delayed the redrawing of the European constituency boundaries. That is part of the reason for the delay and it is directly attributable to the Conservative party. There may have been good, objective reasons for uncoupling them, but it was the Government's decision. The result is that we have two months' notice of the boundaries on which we will be fighting the June election.
  Leaving aside the suspicions that the Opposition may have about the way in which the procedures have been carried out, it is absurd that we are having to fight an election in two months' time on boundaries that we know about only tonight. We have known the date of the election for some considerable time. It is not like Westminster election, which can come at any time.
  It is a simple procedure to redraw the boundaries. The commissioners say that in their report. It is just a matter of fitting the Westminster boundaries into the electoral quota determined for the United Kingdom. It would therefore have been possible to have an early result had the Government provided more resources and manpower to the Boundary Commission instead of depleting it of its resources immediately it had concluded the review of the Westminster boundaries.
  We have the boundaries now and I should like to join the Minister in thanking the commissioners for the work they have done and the manner in which they have done it, operating under the great difficulties — as I acknowledge — of the time scale left them by the

  1073
  Government's actions and policies. But now we have them, even if they have come before us only two months before the election.
  Mr. Mellor: The hon. Gentleman has quoted what I said on 26 January, and it might be of some assistance if I read a short passage from my speech to ascertain whether it accords with the argument that he advanced. I said:
  "We have tried to inform the House, at different stages, of how we see the situation. For some months it has been our view that the Boundary Commission will be able to present to the Home Secretary, in time for him—given normal circumstances — to be able to lay the relevant orders before the House, proposals that would enable the June elections to be held on new boundaries."—[Official Report, 26 January 1984; Vol. 52, c. 1160.]
  Mr. Kilroy-Silk: I do not dissent from that. I read that passage in Hansard and I was in the Chamber when the Minister uttered it. The Minister will acknowledge that that is not a guarantee, and it was a guarantee for which I asked.
  Mrs. Elaine Kellett-Bowman rose——
  Mr. Kilroy-Silk: The Minister will acknowledge also that on 26 January I stated facts from which he did not dissent. I said that it was theoretically possible and practicable for the Boundary Commission's proposals not to be implemented in time for the statutory procedures to be applied by those wishing to make objections, and the hon. Gentleman conceded that point. Even as late as the debate of 26 January, we did not know for certain—this is factually correct — that we would be fighting the elections on the new boundaries.
  We now have the proposals before us—we shall be implementing them tonight—but many of those who would have wished to object to them have been deterred from doing so. They have weighed in the balance their objections against the disruption that they may cause by delaying their implementation.
  As the Minister has said, substantial changes have been made in the constituency boundaries. Only three of the 66 Euro-constituencies in England have their boundaries unchanged. Of the remainder, 22 have slightly altered boundaries and 39 have been modified substantially. One of the constituencies which has been modified substantially is in the Northumbria and Tyne and Wear area, where the boundaries have been altered only in the past few months with the final revised proposals submitted by the commissioners. It is absurd and anomalous that a major city such as Newcastle is divided down the middle in a peculiar way between two European constituencies. That seems illogical to me as someone who does not represent a constituency in the north-east and does not come from that area. However, I have read the report and studied the map, and that is the impression with which I am left. It is an alteration that appears to have been highly unacceptable to the local authorities and Members in that region. It is remarkable that the proposals were submitted by a Conservative councillor at the last moment and accepted in toto by the commission.
  I shall demonstrate how the concertinaing of the period between announcement tonight of the new boundaries and the elections has prevented the making of some substantial claims. I am glad to see that my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) is in his place
  1074
  for I have no doubt that he will flesh out what I am about to say. He has written a strong letter to the commissioners dissenting from their proposals. I shall quote from a letter sent to the commissioners by the North Tyneside Metropolitan Borough Council, which was written by Mr. F. S. Watson, the secretary or chief legal adviser. He wrote:
  "In the Council's opinion, however, the revised proposals produce an entirely unacceptable situation, firstly at Newcastle where the City is now proposed to be further divided between two European constituencies and secondly, so far as the revised proposals affect the two Parliamentary constituencies of Tynemouth and Wallsend where the Commission would appear to have ignored completely the predominant links between these two constituencies and the community of Tyne and Wear."
  I shall quote also from a letter from the city of Newcastle upon Tyne to the secretary of the Boundary Commission for England. It is signed by the director of administration, Mr. Brockington. It states:
  "I am instructed to object in the strongest possible terms to the revised proposals for the Northumbria and Tyne and Wear European Assembly Constituencies.
  It is unthinkable that the City of Newcastle upon Tyne, the regional capital of the North East of England, should be divided between two separate constituencies."
  No doubt my hon. Friend the Member for Newcastle upon Tyne, East will wish to fill out that point in greater detail. There are strong local feelings in some parts of the country that what the commissioners have proposed is unacceptable and, in many ways, indefensible, but because of the restricted time scale, those local authorities, hon. Members like my hon. Friend and other individuals do not feel it incumbent upon them to make the representations that they would have made otherwise. The Government are responsible, and must accept that responsibility.
  However, we now have the boundaries at last. The doubt and uncertainty have been removed. I hope that much more interest will be shown by the electorate in the elections in June than was shown in the last elections. I hope that there will be a good turn-out. In any event, the Labour party will fight every seat, and win more than it did last time. We shall ensure that there will be a large, articulate and forceful British Labour presence in Strasbourg and the Council of Europe so that influence can be used to promote the principles of justice and equality and to further peace in Europe.
  11.36 pm
  Mr. A. J. Beith: I should like to refer to the Northumbria and Tyne and Wear problem. In some ways it was impossible for the Boundary Commission to solve the problem. The mere existence of the Tyne Bridge constituency itself ensures that either the city of Newcastle or the town of Gateshead is divided in whatever unit is created. Both the old and new proposals and any rival proposals involve a splitting up of the county of Tyne and Wear. That is inherent in the decision to go for single-member constituencies on a scale that involves the parcelling out of huge county areas such as that. There is no doubt that all the proposals for the Tyne and Wear area have serious geographical disadvantages—both the boundaries that form the previous constituencies and the ones proposed show that.
  I have a further complaint about the Tyne and Wear and Northumbria proposals — the use of the term "Northumbria", which is passing increasingly into our nomenclature without adequate justification. The term is

  1075
  historically used to describe an area that is much larger than the county of Northumberland—indeed, stretching down to the Humber. Its use is normally related to the description of institutions that are larger than Northumberland, such as the area of the police authority. The constituency that is called Northumbria is almost, but not quite, all the historic county of Northumberland. Northumberland would have been the better, and proper, title for it. However, that is a small niggle. There are more important arguments, but they are insoluble. The Boundary Commission could not have pleased everybody in dividing up Tyne and Wear in the way in which the system requires.
  Mr. Nicholas Brown: Does the hon. Gentleman accept that the absolute principle on which Conservative Members and the boundary commissioners who support them proceeded is wholly wrong? They divided the city of Newcastle in two to produce one seat that is wholly Labour and another that is marginally anybody's.
  Mr. Beith: The other seat is marginally in favour of the alliance. I am delighted about that.
  The Boundary Commission came across the problem when the seat of Tyne Bridge was first created. It joined together part of the city of Newcastle with a piece on the other side of the river Tyne. The problems have continued since then. They are inherent in the dividing up of the country into single-member constituencies for the European elections. The order defines single-member constituencies for those elections. Problems of geographical definition are not the only ones that arise from taking that step.
  The greatest problem of all that arises from single-member constituencies is that it is impossible to produce a fair representation of the votes cast if the country is divided in that way—in the case of England 66, or 81 in the case of the country as a whole. It is simply not possible for the range of opinion across the country to be fairly represented under such a system.
  The Boundary Commission has, by and large, and subject to a few criticisms, done its work well. I do not accept that in making the particular decision on Tyne and Wear it was motivated by support for any particular political party. There is not the slightest evidence of that. I consider that it was going about its job, as it always does, in a wholly impartial manner. I do not always agree with it, but I think that it carries out its work properly and impartially.
  But it engaged in a process of producing a system of single-member constituencies which cannot ensure a fair result at the end of the day. The hon. Member for Newcastle upon Tyne, East (Mr. Brown), who keeps interrupting from a sedentary position, seemed to suggest that the boundaries should be so organised as to produce the desired result, that if it is desired that a particular constituency be Labour, the boundary is pushed a bit further, and so on. What one should be attempting to do is ensure that the number of seats won reflects the number of votes cast. That is the basis on which the election should be conducted, and it cannot be done on the basis of single-member constituencies. In particular, it cannot be done for so small a total number of seats.
  Mr. Robin Cook: Could the hon. Gentleman clarify his thinking on the general principle he
  1076
  is enunciating? Is he saying that whatever system one tried of alternative voting patterns one could not achieve the kind of proportional result that he is seeking on a single-member constituency basis and that any alternative form of voting aiming to achieve that outcome would be incompatible with single-member constituencies? If that is the general principle he is enunciating, he is ruling out quite a large number of forms of electoral voting that are practised in many other countries.
  Mr. Beith: The proposition that the hon. Gentleman is testing is true in relation to so small a number of seats. I do not believe that one can produce a satisfactory system incorporating single-member constituencies which relates in the end the votes cast to the seats won. It simply cannot be done because we are not dealing with a large enough total number. For example, if one were to use a mixed system with single-member constituencies topped up from a list system, as in Germany—and I am merely replying to a challenge, Mr. Deputy Speaker——
  Mr. Christopher Hawkins: On a point of order, Mr. Deputy Speaker. Is this a debate about the boundaries that should be adopted within the electoral system we have in Britain or is it a lecture on proportional representation?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I am listening very carefully and it is for the Chair to decide whether an hon. Member is in order or out of order.
  Mr. Beith: I was endeavouring to respond as quickly as I could to a challenge from the Opposition Front Bench. I will simply complete my reply by saying that if, for example, one were to use instead of the system of boundaries set out in this order a system involving topping up, the number of single-member constituencies would have to be that much smaller within the total number of seats—say 40 or 50 seats—and the constituencies would have to be even larger, and the whole system would be that much more unsatisfactory. The alternative vote which the hon. Member for Newcastle upon Tyne, East canvasses from a sedentary position offers no guarantee of an ultimate relationship between results and votes cast. What it does prevent is the election in a given constituency of an individual on a minority of the votes cast.
  But this is not the occasion, Mr. Deputy Speaker. to go into great detail on this matter. I know that you would criticise me if I did so. I have done it on a previous occasion and I shall do it on many subsequent occasions.
  All I seek to say tonight is that the Boundary Commission, although it did its work in a proper manner, as it was charged to do, was embroiled in a vast gerrymander. The basis of that gerrymander is the decision to ensure that single-member constituencies be used, and the outcome of that at the last election was that the Conservative party got half of the votes and three-quarters of the seats, and the Labour party was quite seriously under-represented in Europe. Who knows what the end result will be from the votes cast in this election? The relationship is almost a random one, but it is a fairly confident prediction that there will not be much relationship between the votes cast and the seats won. That will be the case in this country, unlike any others in the Community. It will happen in England, Scotland and Wales, but not in Northern Ireland, and I do not believe that that is anything which those who believe as firmly as I do in British democracy can reasonably defend.
  11.44 pm
  Mr. John Wilkinson (Ruislip-Northwood): I shall not detain the House for long, but I wish to draw attention to certain deficiences in the way in which the boundary commissioners have conducted their affairs with regard to the proposals for London.
  First, the boundary commissioners have a duty to review European Assembly constituencies where there have been major changes in Westminster parliamentary constituencies. In the case of the Euro-constituency of London West, that has not occurred.
  Secondly, the new London West electorate is about 17,000 below the electoral quota, whereas the previous figure was much closer to the quota.
  Thirdly, the European Assembly constituencies were determined for the first time only five years ago. I do not believe that in that period there have been major demographic changes necessitating the sweeping alterations propsed by the commissioners.
  Fourthly, the commissioners are required to publish a notice in such manner as they think best calculated to bring their proposals to the attention of those concerned. With regard to London West, the local papers were not even informed, so it is not surprising that the local people were not fully aware of what was at stake, especially as the proposals were announced on 29 July, on the eve of the summer holidays last year.
  Fifthly, the commisioners exceeded their statutory duties by publishing a press release on 29 July which incorrectly referred to the relevant provisions of the 1978 Act. The press release suggested that
  "the Commission has no power to take into account any considerations (for example the breaking of local ties) other than… parity of electorates between the proposed constituencies."
  That is not the case, so the commissioners misled local electorates.
  Sixthly, in 1978–79 the Boundary Commission rightly regarded London as a special geographical consideration, but in two Euro-constituencies under the present proposals the Greater London area boundary is entirely ignored and parts of Surrey are included. I believe that that is wrong.
  Seventhly, one expects any inquiry held to be such as to command the confidence of those with a complaint to make. The chairman, however, is an assistant commissioner and combines the role of defendant, judge and jury. Objectors have no opportunity to cross-examine a commissioner representative or to make any criticism of the proposals, as that would be seen as a criticism of the chairman of the inquiry.
  Lastly, it is difficult for electors who have genuine cause for complaint to put their point of view across, because ultimately they have no recourse to the courts.
  Therefore, with regard to London and especially London West — an extraordinary and incongruous amalgam of half an inner borough, Hammersmith, with outer London boroughs—the proposals have not secured the confidence of local electors. That fact should be made known to the House.
  11.49 pm
  Mr. Nicholas Brown: There could be no more appropriate occupant of the Chair than your good self, Mr. Deputy Speaker, when I make the point that the whole House knows that I am about to make. Whatever the division of opinion between the parties about the rest of the country, the division between
  1078
  ourselves in Tyne and Wear and the county of Northumberland cannot be countenanced. I am talking not about Right versus Left, or right versus wrong, but about corruption versus decency. The division that has been made in Newcastle is corrupt—no more and no less than that. [Interruption.] The hon. Members on the Social Democratic and Liberal party Bench are jeering and trying to intervene from a sedentary position because they know that the division suits themselves and that it damned well does not suit everyone who lives in the area.
  Mr. Beith: The reason why I seem somewhat critical of the hon. Gentleman's remarks is that I regard the allegation that the boundary commissioners behaved corruptly in this matter as wholly mistaken and wrong. It would not have been made outside these walls.
  Mr. Brown: Whatever the position, the boundary commissioners' decision to divide the city of Newcastle upon Tyne in two is widely resented there. It is resented in the riverside community — which is very much a whole—and in the area which I represent.
  The reason why that decision is resented is not hard to discern. The decision makes a safe Labour seat on the river and a very marginal Tory, or perhaps Liberal, seat in the Northumberland hinterland, but it does so by dividing the city in two in a totally artificial way, and by dividing the district authorities.
  I recognise some of the faces on the Government Benches. Hon. Members may try to mask their faces with their Order Papers, but I recognise them. They know that what I say is true. They know that not only will that boundary mean that the Northumberland seat will be highly marginal, but that it has been deliberately placed so as to ensure that the population of Tyneside — the riverside population which I represent—will not have its full say in the affairs of the European Community. An artificial line has been drawn through the middle of—the middle of Newcastle. There is no justification for drawing that boundary through the middle of Newcastle——
  Mr. Deputy Speaker: Order. The hon. Gentleman must not keep repeating "the middle of Newcastle".
  Mr. Brown: As the representative of the east of Newcastle, I would be the last person to repeat "the middle of Newcastle", to the annoyance of the House.
  You must be aware, Mr. Deputy Speaker, that there is considerable resentment on Tyneside at the way in which the boundaries have been drawn. People there are asking why districts on the river have not been included in one area or the other. It would have been possible for north Tyneside and south Tyneside to be in one district, and Gateshead and Newcastle district to be in another, so that district boundaries were not crossed. You are being jeered at, Mr. Deputy Speaker, by the hooligan element in the alliance because they think that the boundary suits them. Democracy should not be decided by what suits the opportunistic elements of the alliance.
  The original commission proposals were reasonable. The commissioners accepted Newcastle, north Tyneside, south Tyneside and Gateshead as separate districts, yet we are being advised to overthrow that, to treat it with contempt and to introduce a boundary that divides the city of, Newcastle in half. Newcastle does not want to be divided. It wants to be represented in its entirety in Europe by Dr. Gordon Adam. Having said that, I resume my seat.
  Question put:
  The House divided: Ayes 145, Noes 8.

  Dlvision No. 230]

  [11.58 pm

  AYES

  Alexander, Richard

  Favell, Anthony

  Amess, David

  Forth, Eric

  Ancram, Michael

  Franks, Cecil

  Ashby, David

  Freeman, Roger

  Aspinwall, Jack

  Gale, Roger

  Atkinson, David (B'm'th E)

  Goodhart, Sir Philip

  Baker, Nicholas (N Dorset)

  Goodlad, Alastair

  Baldry, Anthony

  Gorst, John

  Bellingham, Henry

  Gregory, Conal

  Benyon, William

  Griffiths, Peter (Portsm'th N)

  Berry, Sir Anthony

  Ground, Patrick

  Boscawen, Hon Robert

  Gummer, John Selwyn

  Bottomley, Peter

  Hamilton, Hon A. (Epsom)

  Bowden, Gerald (Dulwich)

  Hamilton, Neil (Tatton)

  Braine, Sir Bernard

  Hanley, Jeremy

  Brandon-Bravo, Martin

  Harris, David

  Bright, Graham

  Harvey, Robert

  Brinton, Tim

  Hawkins, C. (High Peak)

  Brooke, Hon Peter

  Hawkins, Sir Paul (SW N'foik)

  Brown, M. (Brigg & Cl'thpes)

  Hawksley, Warren

  Bruinvels, Peter

  Hayes, J.

  Burt, Alistair

  Hayward, Robert

  Butcher, John

  Heathcoat-Amory, David

  Butterfill, John

  Heddle, John

  Carlisle, John (N Luton)

  Hickmet, Richard

  Carttiss, Michael

  Hind, Kenneth

  Chope, Christopher

  Hirst, Michael

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

  Holt, Richard

  Clark, Dr Michael (Rochford)

  Howard, Michael

  Clarke, Rt Hon K. (Rushcliffe)

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

  Conway, Derek

  Howarth, Gerald (Cannock)

  Coombs, Simon

  Hunt, David (Wirral)

  Cope, John

  Hunt, John (Ravensbourne)

  Couchman, James

  Jackson, Robert

  Currie, Mrs Edwina

  Jones, Robert (W Herts)

  Dorrell, Stephen

  Kellett-Bowman, Mrs Elaine

  Douglas-Hamilton, Lord J.

  Key, Robert

  Durant, Tony

  Knight, Gregory (Derby N)

  Evennett, David

  Knight, Mrs Jill (Edgbaston)

  Eyre, Sir Reginald

  Lang, Ian

  Fairbairn, Nicholas

  Lawler, Geoffrey

  Fallon, Michael

  Lee, John (Pendle)

  1080

  Leigh, Edward (Gainsbor'gh)

  Stern, Michael

  Lester, Jim

  Stevens, Lewis (Nuneaton)

  Lewis, Sir Kenneth (Stamf'd)

  Stevens, Martin (Fulham)

  Lord, Michael

  Stewart, Allan (Eastwood)

  Lyell, Nicholas

  Stewart, Andrew (Sherwood)

  McCurley, Mrs Anna

  Stradling Thomas, J.

  Major, John

  Sumberg, David

  Marland, Paul

  Taylor, John (Solihull)

  Mather, Carol

  Thompson, Donald (Calder V)

  Mellor, David

  Thompson, Patrick (N'ich N)

  Merchant, Piers

  Trotter, Neville

  Mills, lain (Meriden)

  Twinn, Dr Ian

  Moynihan, Hon C.

  van Straubenzee, Sir W.

  Murphy, Christopher

  Viggers, Peter

  Neubert, Michael

  Wakeham, Rt Hon John

  Newton, Tony

  Walden, George

  Page, Richard (Herts SW)

  Walker, Bill (T'side N)

  Renton, Tim

  Waller, Gary

  Robinson, Mark (N'port W)

  Wardle, C. (Bexhill)

  Roe, Mrs Marion

  Watson, John

  Ryder, Richard

  Watts, John

  Sackville, Hon Thomas

  Wells, Bowen (Hertford)

  Sayeed, Jonathan

  Wheeler, John

  Shelton, William (Streatham)

  Whitfield, John

  Smith, Tim (Beaconsfield)

  Wilkinson, John

  Soames, Hon Nicholas

  Wolfson, Mark

  Speed, Keith

  Woodcock, Michael

  Speller, Tony

  Yeo, Tim

  Spencer, Derek

  Spicer, Jim (W Dorset)

  Tellers for the Ayes:

  Spicer, Michael (S Worcs)

  Mr. Tristan Garel-Jones and Mr. Douglas Hogg.

  Stanbrook, Ivor

  NOES

  Alton, David

  Penhaligon, David

  Bruce, Malcolm

  Steel, Rt Hon David

  Carlile, Alexander (Montg'y)

  Howells, Geraint

  Tellers for the Noes:

  Johnston, Russell

  Mr. A. J. Beith and M. Michael Meadowcroft.

  Kennedy, Charles

  Question accordingly agreed to.
  Resolved,
  That the draft European Assembly Constituencies (England) Order 1984, which was laid before this House on 28th March, be approved.

  European Assembly Constituencies (Scotland)
  12.8 am
  The Under-Secretary of State for Scotland (Mr. Michael Ancram): I beg to move,
  That the draft European Assembly Constituencies (Scotland) Order 1984, which was laid before this House on 22nd March, be approved.
  The Boundary Commission for Scotland submitted its report to my right hon. Friend on 7 March. He laid it before the House on 22 March, together with this draft order, which is designed to give effect, without modification, to the commission's final recommendations. The draft order has been considered by the Joint Committee on Statutory Instruments, which had no comments. Article 2 of the order substitutes the eight European Assembly constituencies described in the schedule for the eight present Assembly constituencies in Scotland. No change in the names of the constituencies is proposed. If the draft order is approved by both Houses, my right hon. Friend will submit it to Her Majesty in Council to be made.
  The present Assembly constituencies were established in 1979 following an initial review by the Boundary Commission in 1978. The present review was made necessary by the creation in 1983 of new parliamentary constituencies on which the boundaries of the European Assembly constituencies must be based. It also takes account of changes and shifts in population. The Commission has completed its review in little more than 10 months and I should like to take this opportunity to thank it for its work, and particularly for submitting its report in time to enable its recommendations to be implemented for the elections in June.
  The European Assembly Elections Act 1978 requires there to be eight European Assembly constituencies in Scotland. The Boundary Commission has no power to vary that number. The Act requires the commission to recommend Assembly constituencies which consist of two or more whole parliamentary constituencies, each having an electorate as near the electoral quota as is reasonably practicable, having regard, where appropriate, to special geographical considerations. The electoral quota, that is to say, the average electorate on 26 April 1983 when notice of the review was published, was 491,929. Apart from the Highlands and Islands constituency, where there are obviously special geographical considerations, the 1983 electorates of the present Assembly constituencies varied from about 4 per cent. below the average in the south of Scotland to 15 per cent. above in Mid Scotland and Fife. In the Highlands and Islands the electorate was about 36 per cent. and will be 37 per cent. below the average. This means that the average electorate of the other seven Assembly constituencies has to exceed the electoral quota.
  The Commission's provisional recommendations for the Glasgow and Lothians Assembly constituencies attracted no objections, and an objection made in respect of the Highlands and Islands seat by Mrs. Winifred Ewing, the Member of the European Parliament for that seat, was withdrawn.
  There were four contentious areas, one in Tayside region and three in Strathclyde region. Two local inquiries were held. As regards Tayside, the commission accepted
  1082
  the recommendation of the assistant commissioner, Mr. John T. Cameron QC, to adhere to its provisional recommendations which placed North Tayside parliamentary constituency in North East Scotland. The counterproposal would have placed North Tayside parliamentary constituency in Mid Scotland and Fife, and Stirling parliamentary constituency in Strathclyde West.
  In the other case the assistant commissioner recommended acceptance of a counter-proposal which affected the placing of three parliamentary constituencies. The counter-proposal retained Kilmarnock and Loudoun parliamentary constituency in Strathclyde East instead of placing it in the South of Scotland, placed Cunninghame South parliamentary constituency in the South of Scotland instead of placing it in Strathclyde West, and placed Strathkelvin and Bearsden parliamentary constituency in Strathclyde West instead of in Strathclyde East.
  The commission's original proposals would have produced electorates in the three Assembly constituencies involved, namely, South of Scotland, Strathclyde East and Strathclyde West, which ranged from parity to 2·2 per cent. above the electoral quota, and it divided two districts between Assembly constituencies, namely Hamilton, and Bearsden and Milngavie. It placed the whole of Kilmarnock and Loudoun constituency, more than four fifths of the electorate of Cunninghame South constituency and almost two thirds of the electorate of Strathkelvin and Bearsden constituency, in different Assembly constituencies from those in which they currently vote.
  The counter-proposal produced electorates which range from 1 per cent. below the electoral quota to 2·5 per cent. above, and divided three districts between Assembly constituencies, namely, Cunninghame and Strathkelvin, as well as Hamilton. Under the counter-proposal, however, the electors of the three parliamentary constituencies involved remained in the same Assembly constituencies as they are at present.
  The commission took the view that the difference in the balance of electorates between its proposals and the counter-proposal was not significant and that the balance of advantage lay in preserving continuity in the electorates of Assembly constituencies rather than in keeping districts intact. Those who had supported the original proposals pressed the commission for their retention and some asked for a further local inquiry. The commission, however, decided to adhere to its revised proposals without holding a further inquiry.
  Apart from the Highlands and Islands, the commission's final recommendations produce electorates which range from 1 per cent. below the electoral quota in the South of Scotland to 11·6 per cent. above in North East Scotland. These figures are a considerable improvement on those achieved under the commission's recommendations in 1978, which varied from almost 6 per cent. below the electoral quota to more than 17 per cent. above, and they are also an improvement on the 1983 figures for the present seats which vary from some 4 per cent. below to 15 per cent. above the electoral quota. Moreover, the number of districts to be divided between Assembly constituencies will be reduced from about a dozen to fewer than half a dozen.
  My right hon. Friend has received no representations since the commission submitted its report to him. In these circumstances, I commend the order to the House.
  12.15 am
  Mr. Donald Dewar: I, too, appreciate that the Boundary Commission had to work with great speed on this review.
  Mr. Nicholas Soames: Get on with it.
  Mr. Dewar: I do not know whether the encouragement from the Conservative Benches will shorten my speech, although I am delighted to see present the hon. Member for Crawley (Mr. Soames), who once aspired to be the hon. Member for Clydebank and Milngavie but who was thwarted in that ambition by the good sense of the electorate. I am glad to see that he is still taking a lively, or at least noisy, interest in Scottish Affairs.
  As I was saying, the Boundary Commission had to work with great speed, and the result of the telescoped timetable—which was not its fault—has been a good deal of confusion and uncertainty to a late stage about the boundaries in Scotland. As was said when we were debating the English instrument, from the point of view of my party, that held back a number of important administrative arrangements, and rightly so, as democratic selection processes must be based on a knowledge of the boundary and constituency involved, and it was unfortunate that we should have been faced with such a predicament.
  As for the merits of the changes, the House will strongly support me in saying that those who wish to be involved in the detailed arguments can try reading the report, and I do not intend to rehearse those arguments at length. The only area of real controversy from the point of view of my hon. Friends and I is, of course, what was done in terms of the adjustments to the South of Scotland and to the Strathclyde East and Strathclyde West seats.
  As soon as the decision was made that Kilmarnock and Loudoun, which was in the South of Scotland, should be transferred to Strathclyde East — or, for that matter, when any other change was made — we had what I suppose in this House would be called a series of consequential amendments. As the only real criterion is the size of the European constituency, there had to be a sort of merry-go-round effect consequent on the decision to make a change in the boundaries. I can only record—and I think that I speak for all my hon. Friends—that the decision to move Kilmarnock and Loudoun into Strathclyde East; to take Cunninghame South out of Strathclyde West and into the South of Scotland; and to take Strathkelvin and Bearsden out of Strathclyde East and put it into Strathclyde West was a mistaken judgment, though I accept that it is a matter of judgment and that nobody can be absolute about such matters.
  The commissioners accepted that there were substantial arguments for their original proposals and against the final recommendation that the House is being invited to adopt. In particular, we feel that it is unfortunate that Strathkelvin and Bearsden district council area will be split, and that Cunninghame district council is to be split, with Cunninghame North remaining in Strathclyde West and Cunninghame South going into the South of Scotland seat.
  I accept that the relationship between a district council and a Euro-MP is not so important and close as the relationship between a representative in this House and his district councils. But that split in Cunninghame, on which strong representations were made to the boundary commissioners, should have been given more weight, and
  1084
  we should have preferred their original recommendations. The commissioners accepted that there were disadvantages which had to be balanced against the advantage of maintaining a greater continuity of electorates in Assembly constituencies, and they recognised that differences of opinion would, perhaps, continue. I believe that they got it right at the first attempt and that the somewhat cursory consideration that led to the changes that we now contemplate were, on balance, mistaken.
  Having said that, I must make it clear that we would not wish to make a mountain out of the matter. It is of significance but, for all that, we must accept that an honest balance was struck, at least in the minds of the commissioners, and I join in the congratulations that have been expressed to them on their efforts, at least in terms, of the conscientious way in which they set about their task, under the chairmanship of Lord Ross.
  I look forward, now that we know the details of the boundaries, to the elections, when they come. Some, perhaps, slightly ambitious remarks were made about the Labour party's state of preparedness, and its electoral processes, by the Under-Secretary of State who presented the English order. Whether the boundaries had remained as they were originally or as they now are, I believe that, in a number of seats in Scotland, my party will do well in the elections on polling day. I am greatly strengthened in that view, because the MEP for Strathclyde, West, despite what is generally thought to have been an adjustment that would strengthen his chances of re-election, has slipped away in the night. He voted with his feet, and mysteriously turned up, if I may say so, in what is called a safe seat in the City of London. That says something about the morale and the state of preparedness of the other side of the political divide.
  We shall fight on the existing boundaries, although we believe that the balance of the argument tipped in favour of the original recommendations. Having minuted our feelings on the matter, we are content to leave it there.
  12.20 am
  Mr. Malcolm Bruce: I pay tribute to the speed with which the Boundary Commission has made its report, and in broad principle we have no objections to its findings. However, its operation could have been made much simplier if Scotland had been treated as one multi-Member constituency to elect Members on a democratic basis to the European Parliament.
  Mr. Robert Jackson: Does the hon. Gentleman accept that the Liberal party's quest for seats in the European Parliament would gain credibility if hon. Members sitting on the Liberal Benches took part more frequently in the European debates of this Parliament?
  Mr. Bruce: I think that the House knows how much the Liberal party takes part in the European debates inside the House, and outside the House. We are seeking democracy for the people of Europe, as well as for the people of the United Kingdom—a matter that seems not to interest Conservative Members.
  I read an election leaflet this evening that was prepared by an aspiring but, I think, hopeless Conservative candidate who claimed that the Conservatives represented the largest one-language group in the European Parliament. If there is one admission of the failure of the European vision in the Conservative party, it is to make

  1085
  a statement of that kind, which shows a total lack of understanding of the European dimension. In those circumstances——
  Mr. Nicholas Fairbairn: What has that to do with the order that the House is debating?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I am listening very carefully. The hon. Gentleman must relate his remarks to the names and boundaries of constituencies.
  Mr. Bruce: If I may continue with the main thrust of my argument, the whole of Scotland should have been treated as one constituency to elect Members of Parliament to Europe on a democratic basis. The concern that we have is not so simple as Conservative Members seem to imply. We are concerned that the Liberal party, and, indeed, the alliance, are denied representation in the European Parliament. However, we are more concerned that the representation of the British group in the European Parliament is a total distortion of the electorate's wishes as expressed in the last election.
  Mr. Deputy Speaker: Order. The hon. Gentleman knows that the order deals solely with the boundaries and names of constituencies. The hon. Gentleman should limit his remarks to that matter.
  Mr. Bruce: The boundaries as proposed will produce a distorted result. I believe that it is reasonable for the House to concern itself with whether the result of the European elections on the basis of these boundaries will represent the wishes of voters. I contend that that will not be the case. At the last European election, the Conservative party throughout the United Kingdom secured less than 50 per cent. of the vote, but 77 per cent. of the seats. In Scotland, the distortion was even sharper.
  I suggest that the House would be better addressing itself to an order designed to secure a fair and proper representation of the British political spectrum in the European Parliament. It is not fair for the House to pass legislation that distorts representation in the European parliament and distorts the express wishes of the voters of Scotland. The order is in the interests neither of British democracy nor of European democracy.
  I take on board the jibes of Conservative Members, but the House must consider whether it is reasonable that parties which can secure more than a quarter of the vote in general or European elections should be entitled to representation in the European Parliament. I am sure that the injustice of the system in Scotland at the next election will not fall at the feet of the alliance, but will fall at the feet of the Scottish National party, which is unlikely to win any seats at all——
  Mr. Soames: Does the hon. Gentleman agree that his arguments go a little wide of the present arrangements? How would he propose that the rules should be altered within the context——
  Mr. Deputy Speaker: Order. If the hon. Member for Gordon (Mr. Bruce) addresses himself to that question, he will be ruled out of order.
  Mr. Bruce: Thank you for your guidance, Mr. Deputy Speaker. My only concern is to ensure that the European Parliament is a properly balanced and representative
  1086
  Parliament. This order is likely to secure a distortion in the representation of the European Parliament at the hands of the British Government and Parliament. That is regrettable.
  It is clearly in order to address the problem of the purpose of the order, which is to propose boundaries that will secure eight independent Members of the European Parliament elected on the first-past-the-post system. The Government and the Boundary Commission could have produced one boundary for Scotland to elect eight members. That should have been done, and the time will come when our European colleagues will no longer accept the distortion. I sometimes wonder how Britain became a member of the Community, because one condition of entry was that we should be a democracy. If the order goes through, Britain cannot claim to be a democracy in the strict terms of the Community. Therefore, I urge my right hon. and hon. Friends to oppose the order.
  Question put:—
  The House divided: Ayes 123, Noes 9.

  Division No. 231]

  [12.25 am

  AYES

  Alexander, Richard

  Hamilton, Neil (Tatton)

  Amess, David

  Hanley, Jeremy

  Ancram, Michael

  Harris, David

  Ashby, David

  Hawkins, C. (High Peak)

  Atkinson, David (B'm'th E)

  Hawkins, Sir Paul (SW N'folk)

  Baker, Nicholas (N Dorset)

  Hawksley, Warren

  Baldry, Anthony

  Hayes, J.

  Bellingham, Henry

  Hayward, Robert

  Benyon, William

  Heathcoat-Amory, David

  Berry, Sir Anthony

  Hickmet, Richard

  Boscawen, Hon Robert

  Hind, Kenneth

  Bottomley, Peter

  Hirst, Michael

  Bowden, Gerald (Dulwich)

  Holt, Richard

  Brandon-Bravo, Martin

  Howard, Michael

  Bright, Graham

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

  Brinton, Tim

  Howarth, Gerald (Cannock)

  Brooke, Hon Peter

  Hunt, David (Wirral)

  Brown, M. (Brigg & Cl'thpes)

  Hunt, John (Ravensbourne)

  Bruinvels, Peter

  Jackson, Robert

  Burt, Alistair

  Jones, Robert (W Herts)

  Butcher, John

  Kellett-Bowman, Mrs Elaine

  Butterfill, John

  Key, Robert

  Carlisle, John (N Luton)

  Knight, Gregory (Derby N)

  Carttiss, Michael

  Knight, Mrs Jill (Edgbaston)

  Chope, Christopher

  Lawler, Geoffrey

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

  Lee, John (Pendle)

  Clark, Dr Michael (Rochford)

  Leigh, Edward (Gainsbor'gh)

  Clarke, Rt Hon K. (Rushcliffe)

  Lester, Jim

  Conway, Derek

  Lewis, Sir Kenneth (Stamf'd)

  Coombs, Simon

  Lord, Michael

  Cope, John

  Lyell, Nicholas

  Couchman, James

  McCurley, Mrs Anna

  Currie, Mrs Edwina

  Major, John

  Dorrell, Stephen

  Marland, Paul

  Douglas-Hamilton, Lord J.

  Mather, Carol

  Evennett, David

  Merchant, Piers

  Fairbairn, Nicholas

  Mills, Iain (Meriden)

  Fallon, Michael

  Moynihan, Hon C.

  Favell, Anthony

  Murphy, Christopher

  Forth, Eric

  Neubert, Michael

  Franks, Cecil

  Newton, Tony

  Freeman, Roger

  Page, Richard (Herts SW)

  Gale, Roger

  Robinson, Mark (N'port W)

  Garel-Jones, Tristan

  Roe, Mrs Marion

  Goodhart, Sir Philip

  Ryder, Richard

  Goodlad, Alastair

  Sackville, Hon Thomas

  Gorst, John

  Sayeed, Jonathan

  Gregory, Conal

  Shelton, William (Streatham)

  Griffiths, Peter (Portsm'th N)

  Smith, Tim (Beaconsfield)

  Ground, Patrick

  Soames, Hon Nicholas

  Gummer, John Selwyn

  Speed, Keith

  Hamilton, Hon A. (Epsom)

  Speller, Tony

  1087

  Spencer, Derek

  Walden, George

  Stanbrook, Ivor

  Waller, Gary

  Stern, Michael

  Wardle, C. (Bexhill)

  Stevens, Lewis (Nuneaton)

  Watson, John

  Stevens, Martin (Fulham)

  Watts, John

  Stewart, Allan (Eastwood)

  Wells, Bowen (Hertford)

  Stewart, Andrew (Sherwood)

  Wheeler, John

  Stradling Thomas, J.

  Whitfield, John

  Sumberg, David

  Wilkinson, John

  Taylor, John (Solihull)

  Wolfson, Mark

  Thompson, Donald (Calder V)

  Wood, Timothy

  Thompson, Patrick (N'ich N)

  Yeo, Tim

  Trotter, Neville

  Twinn, Dr Ian

  Tellers for the Ayes:

  van Straubenzee, Sir W.

  Mr. Ian Lang and Mr. Douglas Hogg.

  Viggers, Peter

  Wakeham, Rt Hon John

  NOES

  Alton, David

  Penhaligon, David

  Beith, A. J.

  Steel, Rt Hon David

  Bruce, Malcolm

  Carlile, Alexander (Montg'y)

  Tellers for the Noes

  Howells, Geraint

  Mr. Michael Meadowcroft and Mr. Charles Kennedy

  Hughes, Simon (Southwark)

  Johnston, Russell

  Question accordingly agreed to.
  Resolved,
  That the draft European Assembly Constituencies (Scotland) Order 1984, which was laid before this House on 22nd March, be approved.

  Disabled People (Barnsley)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
  12.38 am
  Mr. Terry Patchett: I must make it clear to the Minister at the start that my reasons for seeking the debate arise from answers to parliamentary questions that I received from his Department relating to information that I was urgently seeking on behalf of the registered disabled unemployed in my constituency. It would not be unreasonable to say that I was amazed by the veil of secrecy that appeared as I began to seek information about them.
  As I began to evaluate the extent of the problem, which one would assume would not be too difficult, I was amazed at the Minister's attitude. For example on Monday, 5 March I asked
  "the Secretary of State for Employment if he will publish in the Official Report the firms in the area covered by the Barnsley, East constituency who employ their quota of disabled people in accordance with the law."—[Official Report, 5 March 1984; Vol. 55 c. 466.]
  To my great surprise, I was told that that was a secret. It was said that the Manpower Services Commission, which operates the quota scheme, treats information that would identify individual firms in confidence and that it would be inappropriate to publish the information requested. That reply is not acceptable to me and I do not believe that it is acceptable to the House. The MSC is a public body that is publicly accountable and it is in the interests of open government that information that we pay to acquire should be made available to hon. Members.
  On 12 March I asked the Secretary of State
  "why he considers it inappropriate to publish the names of firms which employed a quota of disabled people in accordance with the law of the land."
  There was yet anoher evasive reply from the Minister. He wrote:
  "There is no obligation on employers to make quota information publicly available. Successive Governments have treated information about the quota positions of individual employers as confidential. Individual employers are free to publish this information themselves if they so wish."
  I do not accept that answer. If successive Governments have done that, successive Governments have been involved in worsening the problems of the disabled.
  I must question the Minister's reply because a previous Labour Government treated the quota position of some individual employers as public information and prosecuted a number of them for failing to observe the quota provisions. I feel that I am entitled to have questions answered to clarify the issue in my constituency, which should not be too difficult a task. I do not know why the veil of secrecy prevails and I deplore the Department's attitude. Regardless of what has happened in the past, as a Minister in the Department of Employment it is the hon. Gentleman's responsibility to ensure that the quota laws are observed. I have not been a Member of this place while "successive Governments" have been in power, but the way in which they have treated the quota system appears to have been unfortunate, to say the least. I do not support secrecy where the law of the land is broken. Laws that were made 40 years ago should not be flouted. It appears that it was a kinder House of Commons 40 years ago, and it was certainly a more far-seeing one. It cared about the

  1089
  disabled and it enshrined their rights in the 1944 statute to protect them from discrimination and to allow them to work. That is what the quota system is all about.
  Why is it so difficult to get a straight answer to a straight question in this place? I want the measures enacted by previous Governments to be upheld and observed. I am not interested in perpetuating the secrecy that is shown by the Government and Government quangos such as the MSC. I ask the Minister to explain why the names of firms in my constituency which are observing the law cannot be supplied to me. Their position is honourable and law-abiding.
  In another question on 12 March I asked the Minister:
  "how many firms in the area covered by the Barnsley, East constituency operate the quota scheme for the employment of disabled persons, as required by law; and what information he has regarding the number of firms to which this law applies, which are currently failing to employ the required quota."
  I referred only to registered disabled. Yet again, I was told that
  "Information is not available in the precise form requested."
  Perhaps the Minister will explain what that answer means. He added:
  "On 1 June 1983, there were 112 employers to which the quota provisions of the Disabled Persons (Employment) Act 1944 applied in the area covered the Barnsley, Wombwell, Goldthorpe, Mexborough and Hemsworth jobcentres. Of these, 39 met the quota and a further 68 held permits"——
  permits of dispensation—
  "to engage workers not registered as disabled." — [Official Report, 12 March, 1984; Vol. 56, c. 33.]
  Presumably, one adds 39 and 68, and subtracts the sum from 112, and the answer is five. Therefore, that was a complicated way of replying. One has to dissect the answer to find the figure that is embedded in it.
  That means that the Minister knows that five firms in Barnsley, East are breaking the law and not meeting their statutory requirements under the Disabled Persons (Employment) Act 1944. If one takes five as an average of every constituency in the country, one can see that a horrifying number of firms might be breaking the law, and the Government are doing absolutely nothing about it. There is not one hon. Member who could support that law breaking, for we are law makers, not law breakers. Not only should the Minister provide at once the information that I requested but he should enforce the Act throughout the country.
  I think that the Minister will agree that enormous enthusiasm is being shown by his Government over policing an Act passed by the House, to control pickets involved in an important dispute. However, the humanity shown by the House 40 years ago in the 1944 Act, which said that firms should draw 3 per cent. of their work force from disabled workers, has been overlooked to the pain and detriment of many disabled, who face a bleak future unless they enjoy positive discrimination.
  Conservative Members are enthusiastic about the Trade Union Bill, and can back it with thousands of police. However, a 40-year-old law that helps those least able to help themselves attracts no enthusiasm. The new law is enforced for the trade unions, but the old law is overlooked for the registered disabled. That is not only disgraceful but totally inhuman.
  My hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) was on the receiving end of the Government's attitude to the sick and disabled when he
  1090
  sought to put through the House the Chronically Sick and Disabled Persons (Amendment) Bill, which was so cruelly killed by the Government. He then said that there were 5·5 million disabled people, and he wanted the Government to outlaw discrimination against the disabled.
  I refer the Minister to the relevant parts of the 1944 Act. Section 9(1) states that where firms are not already employing the quotas, they should do so
  "at times when vacancies occur, to allocate vacancies for that purpose".
  Section 9(2) states:
  "a person to whom this section applies shall not at any time take, or offer to take, into his employment any person other than a person registered as handicapped by disablement, if immediately after the taking in of that person the number of persons so registered in the employment of the person to whom this section applies … would be less than his quota."
  Section 9(5) states:
  "A person to whom this section applies who for the time being has in his employment a person registered as handicapped by disablement shall not, unless he has reasonable cause for doing so, discontinue the employment of that person, if immediately after the discontinuance the number of persons so registered in the employment of the person to whom this section applies …would be less than his quota".
  Section 9(6) also specifically states:
  "Any person who contravenes subsection (2) or subsection (5) of this section shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding one hundred pounds or to imprisonment for a term not exceeding three months, or to both such fine and such imprisonment."
  I put it to the Minister that those figures are 40 years old, and he may like to consider an amendment to the 1944 Act to bring it into line with present-day prices.
  I thank you, Mr. Deputy Speaker, for your indulgence over this matter of such importance to my constituency, and indeed to every other constituency in this country. I look forward to some real information and some straight replies from the right hon. Gentleman tonight, and to assurances that his Government will uphold the law of this country in respect of the quota system employment of disabled persons. Let us hear, loud and clear, that the Government's intention is to uphold this law, and when they intend to begin to do just that.
  12.51 am
  Mr. Robert N. Wareing: I am obliged to my hon. Friend the Member for Barnsley, East (Mr. Patchett) for allowing me to take part in the Adjournment debate which he has initiated. In raising the question of discrimination against disabled people in employment in his constituency he has done a service not only to his own constituents but to the handicapped in all our constituencies.
  My hon. Friend gave examples of three occasions when he was given evasive answers. I am sure that he would not have been very surprised about that, because evasive answers are endemic with this Government. This appears to be especially true about details which are embarrassing to the Government's business paymasters. Examples can be found in other spheres—for instance, when questions have been raised about regional aid to firms which have moved to development areas and then moved out again.
  Representing, as I do, a Liverpool constituency, I find it ironic that the Secretary of State for the Environment should be threatening councillors there with dire consequences if they declare what is euphemistically called an "illegal budget" aimed at serving the interests of disadvantaged people and saving them from cuts in jobs

  1091
  and services, while at the same time the Government refuse to take action against employers who are in contravention of the 1944 Disabled Persons (Employment) Act.
  There was a time when most employers adhered to the letter of the law. They were law-abiding rather than lawbreaking. I understand that in 1960 some 60 per cent. of firms adhered to the quota. Twenty years later, only 32 per cent. of employers were obeying the law. All the others were law-breakers in this matter.
  In the debate on 18 November on the Chronically Sick and Disabled Persons (Amendment) Bill, which I introduced, the Under-Secretary of State for Health and Social Security admitted that that 40-year-old law was not being enforced. He did not say why, although it is open to any Government to ensure that the law is enforced. My hon. Friend the Member for Barnsley, East has mentioned a number of instances in which, under the Labour Government, employers were penalised for disobeying this law. I would have hoped that that would happen many more times than it did even under the Labour Government.
  It is a disgrace, especially at a time of mass unemployment — for which the Government are to a large extent responsible—that disabled people should suffer even more than the able-bodied from the shortage of jobs. A week or so ago my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) met a delegation of disabled people's organisations from Scotland, Wales and Northern Ireland, who assured him that some 80 per cent. of disabled people in their parts of Britain were jobless. I venture to suggest that on Merseyside, and probably in Barnsley, East, the circumstances are not very different. There is an obligation on all of us who have suffering humanity at heart to do something to lift the burdens on those people, who need to work even more than the able-bodied unemployed, because employment is therapeutic for disabled people.
  Government Departments themselves are not without guilt in failing to observe the quotas. The answers to a number of recent questions from my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) have been very revealing in that respect.
  It may be argued that successive Governments have been to blame, but Labour party policy accepts the need to outlaw discrimination against disabled people. If my Bill had become law and the disablement commission had been set up, I am sure that such a body could have been of great assistance to the Government in finding ways and means of ensuring that employers observe the quota.
  Many cases of discrimination in employment have come to light. The Under-Secretary of State will recall that I referred to him the case of Fiona Hartley in Thirsk, not a million miles from Barnsley, East, against whom the local jobcentre discriminated, despite the Minister's answer to me. I wonder whether the jobcentre in Barnsley is adopting the same attitude as the jobcentre in Thirsk, which denied Fiona Hartley the possibility of applying for a job but only a few hours later sent her able-bodied sister, who was married and used a different surname, after the selfsame job. Action must be taken against that king of discrimination against the disabled.
  My hon. Friend has done a service in raising this matter today. I hope that it will be a first move to engage the Government's interest and concern to ensure that the 1944 Act is enforced, especially at this time of mass unemployment. The Government should not tell the
  1092
  miners and the Liverpool councillors to obey the law when 68 per cent. of employers are being allowed to get off scot free while ignoring their obligations to the most needy members of society.
  12.57 am
  The Under-Secretary of State for Employment (Mr. Alan Clark): I congratulate the hon. Member for Barnsley, East (Mr. Patchett) on his success in the ballot and on choosing as the subject of this short debate a matter that understandably causes concern to many people in his constituency and throughout the country. I congratulate him, too, on the temperate way in which he put his case and I know that he speaks with the authority of a vice-chairman of his party's employment committee.
  The House will recognise that the hon. Gentleman and I, and indeed the hon. Member for Liverpool, West Derby (Mr. Wareing), are at one in acknowledging that many disabled people face difficulties which they feel especially acutely in finding and retaining suitable jobs. I respect the hon. Gentleman's concern and his efforts to do what he can to promote employment among disabled people in the Barnsley area; I know that he attaches great importance to that.
  As the Minister responsible, I accept that the Government must recognise and respond to the special needs of the disabled which arise to the extent that they are at a relative disadvantage in the labour market. I assure the hon. Gentleman that the Government remain firmly committed to maintaining the considerable level of assistance available to help to improve the employment prospects of disabled people.
  The hon. Gentleman devoted much of his speech to one particular aspect of the range of measures which help to promote the employment of disabled people — the statutory quota scheme. He referred to what he alleged to be a veil of secrecy which surrounded the answers that I gave to his written questions. I must immediately repudiate that allegation. There was no intention to conceal anything, and still less to mislead the hon. Gentleman. He said that, in the case of one answer, he could arrive at the figure that he required only by subtracting one figure from another. I do not think that that is a very arduous requirement, but if the hon. Gentleman objected to the form of the answer, he could have written to me again. If he cares to write to me again after this debate on that or any other subject, I will do my best to ensure that he receives an intelligible answer.
  The hon. Gentleman claimed that there was evidence to show that a number of firms in Barnsley were breaking the law by not fufilling their quota commitments. The hon. Member for West Derby also used the phrase "breaking the law". I shall try to clarify the hon. Gentlemans' thinking on this point, and I must refute the allegations. First, however, I should like to say a word or two about the quota scheme in general, in order to put the matter in context.
  I readily accept that the quota is still regarded by many registered disabled people and others with an interest in these matters as an important safeguard for their employment prospects. Over the years, it has undoubtedly done much to help the disabled gain and keep jobs. It has been with us in broadly its present form since the end of the second world war. As both hon. Gentlemen will recognise, it originated in quite different circumstances. The Act was passed in 1944 in anticipation of large numbers of wounded and mutilated people returning from

  1093
  service for their country and in recognition of the fact that society as a whole had an obligation to see that they ranked equally in their employment prospects with those who were not mutilated.
  Circumstances have altered since then, and the original concept of the 1944 Act has to some extent been overtaken by circumstances, although it remains entirely valid as a symbol of our commitment to help disabled people's employment.
  Mr. Patchett: Are we talking about some Act of whose existence I was not aware—a war disabled persons' Act —or about the Act of 1944? Has the 1944 Act been amended to apply only to the war disabled, or does it still apply to disabled people, full stop?
  Mr. Clark: I understand the hon. Gentleman's point, but the origins of the Act have to be seen in the context of 1944, when it was expected that a large number of wounded and mutilated people would be coming on to the labour market.
  I will explain to the hon. Gentleman why his allegations of breaking the law are to some extent misconceived. There is not much time left, and I hope that I will be forgiven if I do not give way again. The hon. Member for West Derby used up more of my time than that of his hon. Friend.
  The quota no longer operates as originally intended. One can argue about the reasons why that is so, but there can be no disputing the facts. The quota scheme applies only to registered disabled people, and registration is and always has been voluntary. For some years now, there have been nowhere near enough registered disabled people to enable all employers to meet their 3 per cent. quota in full. Even if they wished to do so, they could not. Registered disabled people currently account for only 1·1 per cent. of the total work force and are far outnumbered by those who suffer some disability but choose not to register. The provisions of the 1944 Act refer to registered disabled people. The first thing that we must recognise is that it is physically impossible for employers to comply, even with the best will in the world. There are not enough registered disabled people to go round.
  The Government have asked the Manpower Services Commission to examine ways of making the quota scheme more effective within the framework of existing legislation. It has set up a working group including
  1094
  grepresentatives from the Confederation of British Industry, The Trades Union Congress and voluntary organisations, which will report later this year.
  In Barnsley, as in the rest of the country, the majority of employers do not and cannot employ the full 3 per cent. quota of disabled people. That does not affect the formal quota position. Many such firms employ other disabled people who have chosen not to register. They are quite a large number and many may suffer acute conditions, as the hon. Member for West Derby has often reminded us in his valuable speeches.
  The hon. Gentleman quoted some figures that I gave him in a recent parliamentary reply which showed that, in an area that is somewhat wider than his constituency because of the coverage of the jobcentres concerned, out of 112 employers subject to the quota provisions, 39 met the 3 per cent. quota and a further 68 had obtained permits allowing them to recruit other than registered disabled people.
  The hon. Gentleman is mistaken in assuming that the small number of employers who neither fulfil the quota, nor hold a current permit, must be breaking the law. This is simply not the case. I must emphasise this point and make the position quite clear. It is not an offence to be below the 3 per cent. quota. An offence occurs only if an employer unreasonably discharges a registered disabled person when he is or would become below the quota or if he recruits other than registered disabled people when the firm is below quota and without a valid permit.
  There are proper checks on employers' compliance with the quota requirements and I can assure the House that statutory duties are not being neglected or ignored as the hon. Gentleman has suggested.
  The figures on quota compliance are available and I have given them to the hon. Gentleman. The overall national figures are published each year in the Department of Employment Gazette, and, following the practice adopted by all previous Governments, we do not publish information about the quota positions of individual employers. I am quite sure that it is right to treat the information provided in this way as confidential, although there is nothing to prevent them from publishing the information themselves. Many have chosen to do so since the introduction of the requirement under the Companies Act 1980, whereby employers have to include a statement of their policy towards the employment of disabled people in the directors' report.
  Question put and agreed to.
  Adjourned accordingly at seven minutes past One 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 Oxford.

Prescriptions: Generic Substitution
Lord Kilmarnock: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why they decided to raise NHS prescription charges rather than save a comparable amount of money through generic substitution by pharmacists as proposed in paragraph 24 of the Greenfield Report on Effective Prescribing.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, the two issues raised are quite separate. The increase in prescription charges from 1st April reflects the Government's view that increases in the costs of services—in this case the pharmaceutical service—should be reflected in charges. This year's increase also makes a small contribution to the extra cost of providing the family practitioner services. The Government's decision not to introduce generic substitution was taken because both doctors and pharmacists foresaw it leading to problems of divided responsibilities for the treatment of patients. We are however encouraging doctors themselves to prescribe drugs by generic name.
Lord Kilmarnock: My Lords, while thanking the noble Lord for that reply, may I say that I am not sure that the two issues are as separate as he makes out. Is it not the case that if the Government wanted to save some £30 to £40 million, a ready means was at hand without raising prescription charges? Is it not also the case that many hospitals, which are cash limited, are trying to achieve savings by limiting prescriptions to outpatients and patients on discharge to one to two weeks, with a recommendation to GPs to continue the treatment? Is this not a further reason for encouraging generic substitution to limit the open ended drug bill in the family practitioner sector?
Lord Glenarthur: My Lords, when the Greenfield Report was published, the Government said that we were anxious to avoid continuing uncertainty; but it soon became quite clear that generic substitution could not be separated from more general steps that we were considering, and have now taken, to make savings on the drugs bill. All the potential saving came out of the same pharmaceutical company profits and there is a limit to how much we can take without endangering the industry. We had to wait until it was clear how much we could save through changes in the PPRS before coming to a final decision on generic substitution.
Lord Sainsbury: My Lords, is the Minister aware that I was chairman of the committee of inquiry into the relationship of the pharmaceutical industry and the National Health Service, and one of its recommendations was that brand names should not be used in any new pharmaceutical product? Has the ministry considered that recommendation?
Lord Glenarthur: My Lords, I am sure that that recommendation has been considered; but, as the noble Lord, Lord Sainsbury, will know, it is very much a matter for individual drug companies. Their views, too, have to be taken into account.
Lord Somers: My Lords, would it not be possible for those who are forced to have a repeat prescription— say once a month or thereabouts—not to have to pay the same prescription charge each time?
Lord Glenarthur: My Lords, there is a method by which those that need repeat prescriptions can pay a block rate. I am afraid I cannot remember the actual term for it; but I will certainly let the noble Lord know.
Lord Ennals: My Lords, on prescription charges, how can the Minister justify what is in fact an 800 per cent. increase since 1979? Is he not aware that there are many needy people, particularly the unemployed, who actually cannot afford the medication which they have been prescribed? On the Greenfield Report, is he aware that many people will feel that his answer is not a satisfactory one? If he looks very carefully at recommendation 24, to which the noble Lord, Lord Kilmarnock, referred, in no way is the doctor's clinical freedom interfered with at all.
Lord Glenarthur: My Lords, on the last point which the noble Lord raises, there were I think 14 recommendations of Greenfield, all but one of which were accepted by the Government. On the one to which the noble Lord attributed the figure No. 24, I am afraid the noble Lord is not correct. There is a strong view among doctors that it would be an infringement of their freedom to prescribe drugs of their choice. So far as the prescription charge is concerned, the noble Lord will remember that 72 per cent. of all prescriptions are free, anyway.
Lord Ennals: My Lords, the noble Lord says that it restricts the clinical freedom of doctors. May I challenge him on that, because according to recommendation 24 every doctor is entitled to say that he wishes a particular prescription to be for a particu-lar brand. How can that be restricting his clinical freedom?
Lord Glenarthur: My Lords, our belief is that it is better to educate rather than coerce doctors in this particular way and that is why we propose to encourage generic prescribing and not substitution.
Lord Blyton: My Lords, is the Minister aware that when he came to power in 1979, prescription charges were 20 pence per item? They have now risen to £ 1.60 per item, Does he not think that it is disgraceful and disgusting bearing in mind that people are paying more for their health stamp than they paid in 1979?
Lord Glenarthur: My Lords, the figures for prescription charges are what the noble Lord describes, but there is no change in the categories of people who are entitled to free prescriptions. Along with the 20p increase in the prescription charge, the income level at which people may be exempted from prescription charges will be raised by the same amount. This ensures that no one currently on low income exemption—which refers to the point that the noble Lord, Lord Ennals, made—will lose out due to the increase in prescription charges.
Lord Rea: My Lords, is the noble Lord aware that generic substitution has been practised in hospitals for some years without the objection of any hospital doctors? Can he give an explanation as to why the same system should not be applied to general practice, where the bulk of prescribing takes place?
Lord Glenarthur: Yes, my Lords; I am aware of what the noble Lord says. So far as the second part of his question is concerned, when we consulted we found that there was no general support for what he suggests. The recommendation could not be implemented without the agreement of the medical profession and—and this, too, relates to the point raised by the noble Lord, Lord Ennals—they objected to the element of compulsion involved.
Lord Diamond: My Lords, will the noble Lord be good enough to reconsider the answer that he gave to my noble friend Lord Sainsbury when he indicated that brand names could not be kept off new products because it was a matter for the drug manufacturers? Is it not the case that the drug manufacturers lend a very careful ear to what the Government have to say to them, having regard to the fact that the Government are their main customer? Therefore, so far as new products are concerned, would it not be reasonable to expect that progress could be made in this difficult matter by paying attention to what my noble friend, as chairman of the committee, reported?
Lord Glenarthur: My Lords, I am certainly grateful to the noble Lord, Lord Sainsbury, for his contribution. But the fact remains that some drugs have extremely complex names, and I do not think that it would necessarily be right, nor convenient to the patients who have these drugs, to use these sometimes extremely long and complex terms.
Lord Winstanley: My Lords, is it not rather odd that the noble Lord should tell the House that it is the Government's view that prescription charges should rise in relation to the increase in pharmaceutical costs, if one bears in mind that the prescription charge is £1.60 per item, whether the item happens to be a bottle of tablets, with each tablet costing £10, or whether the tablets cost only a few pence a bucketful?
Lord Glenarthur: My Lords, I shall certainly study the noble Lord's remarks.
Lord Kilmarnock: My Lords, does not the noble Lord agree that there is no mention at all of coercion in paragraph 24 of the Greenfield Report—that was the word that he used—and would he not undertake
706
through his department to encourage a pilot scheme involving the very simple procedure which is recommended in that paragraph?
Lord Glenarthur: My Lords, the matter of generic substitution has been raised and so it will not be ruled out forever, but whether or not there is a possibility of further savings in the way that the noble Lord suggests remains to be seen.
Baroness Ewart-Biggs: My Lords, can the Minister give the sum which he estimates would be saved in the financial year 1984–85 by the genuine substitution of generic names for brand names in National Health Service prescriptions?
Lord Glenarthur: My Lords, I am afraid that I could not give that figure without notice.
The Countess of Mar: My Lords, is the noble Lord aware that there are a great many people who appreciate the value of the National Health Service and the drugs that are prescribed for them? For example, I am on drugs which cost £1 for each tablet. My doctor made me aware of the cost, I asked him whether there was any alternative, and he said, "No". I need these tablets, and I very much appreciate the help that is given to me by the National Health Service.
Lord Glenarthur: My Lords. I am very grateful to the noble Countess for her remarks. I am well aware of that kind of situation; I have also come across it myself.

GP Hospitals: Proposed Closures
2.47 p.m.
Lord Kilmarnock: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will intervene to arrest the closure of up to 31 GP hospitals currently under threat and whether they will institute a serious inquiry into the real savings, if any, which are likely to result from this drastic reduction in beds available to general practitioners.
Lord Glenarthur: My Lords, the Government value the important contribution made by GP hospitals to the National Health Service. Their place in the pattern of district services is primarily a matter for health authorities to decide in consultation with others concerned at local level. Many hospitals closure proposals are resolved locally, but in every case where the community health council opposes a closure a ministerial decision is required before closure can take place. Every case referred to Ministers is considered on its merits, and closure is approved only if we are satisfied that, on the balance of the arguments, patient services would benefit either directly or by the release of resources for developments in other parts of the service.
Lord Kilmarnock: My Lords, I thank the noble Lord for that reply. Is he aware that there is a very genuine wave of popular concern about the closures that are in the offing? I understand that the number is now 37, rather than 31, as stated in my Question. Have the Government read Occasional Paper 23 of the Royal College of General Practitioners, in which it is stated:
"The importance to a general practitioner and to the efficiency of his service to the community of an association with a hospital is difficult to exaggerate"?
Finally, have the Government seen the report on community hospital planning by the West Midlands Health Authority Physician, Dr. John Beasley, which is based on a study of seven GP hospitals and which recommends an extention of the system?
Lord Glenarthur: My Lords, I am sure that my department will have studied all the documents to which the noble Lord has referred.
Lord Ennals: My Lords, is the Minister aware that there is an increasing number of GP hospitals that are now being proposed for closure? Does he know of any case in which this is being done because the standards of clinical care for patients in the hospital have sunk below the normal level? Will he not agree that these small hospitals provide an invaluable service, not only to their patients but also in linking the community services with the hospitals? If 31 hospitals are at stake, what about the other 320 that exist up and down the country? Cannot the noble Lord take a more positive view about this, rather than simply saying that it is a matter for other people?
Lord Glenarthur: My Lords, as the noble Lord, with his experience, will know quite well, the Government certainly do take a positive view about hospitals. The fact is that hospitals might have to be closed for a number of different reasons; for example, for repairs, because of staffing shortages, to remove a risk of infection, or for reasons of reallocation of resources. I do not think the noble Lord will find that the 31 hospitals, or the 37 to which the noble Lord, Lord Kilmarnock, referred, will necessarily all meet the fate that noble Lords opposite seem to think they might meet.
Lord Wallace of Coslany: My Lords, is the Minister aware that the Question refers to GP hospitals? I appreciate from what the Minister has said that the Secretary of State's consent should be obtained before closure. Is he further aware, however, that it is not only a question of GP hospitals but of GP beds? Many district health authorities, forced to make economies, are cutting out GP beds and, in some cases, closing complete wards devoted to GP beds. This is where the Minister does not have to give consent.
Lord Glenarthur: My Lords, the noble Lord refers essentially to what might be temporary closures for a variety of different reasons, to which I think I gave some answer in my reply to the noble Lord, Lord Ennals.
Baroness Masham of Ilton: My Lords, will the Minister agree that, now that there are hardly any convalescent homes left, the GP hospital serves to free
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the acute beds that sometimes get blocked, so enabling patients, after the acute stage, to go back to their home areas and be looked after by their GP? Is this not a very important advantage?
Lord Glenarthur: My Lords, I am well aware of the importance of the hospitals or homes to which the noble Baroness refers, and to the importance of GP hospitals generally. The essential factor is that the need for GP hospitals, or anything of that sort, depends very much on local conditions, and it should be local health authorities that make decisions about them.
Lord Wallace of Coslany: My Lords, I want to come back at the Minister. The noble Lord, when I referred to GP beds, said that this was a temporary measure. This is not necessarily so. My opinion is—
Noble Lords: Question!
Lord Wallace of Coslany: My Lords, is the noble Lord aware that the "temporary" issue of these beds will be resolved and got rid of only when this Government are disposed of?
Lord Glenarthur: My Lords, for several years now there has been an annual net reduction in the number of hospital beds. However, changes in the practice of medicine mean that we are now treating more patients in a fewer number of beds.
Lord Winstanley: My Lords, will the noble Lord give some thought to the reverse of the Question of my noble friend Lord Kilmomock and consider the possibility of a serious inquiry into the real savings that would result from a re-opening of GP hospitals that have already been closed? Does he not agree that those hospitals achieved excellent results in the limited cases with which they dealt—results that compared very favourably with those in general hospitals? Is he aware that real benefits could arise from the re-opening of some of the GP hospitals already closed?
Lord Glenarthur: My Lords, again, much will depend on local health authorities, and it is really a matter for them.
Lord Cledwyn of Penrhos: My Lords, the noble Lord said that the closure or otherwise of these important hospitals is a matter for the area health authorities. If area health authorities are in financial difficulties about keeping these cottage or GP hospitals open, will the noble Lord's right honourable friend take steps to help the area health authorities to keep them open? Is he aware that these GP hospitals are absolutely essential, especially in scattered rural communities and small towns which are some distance away from the larger hospitals, and that they provide an absolutely first-rate local service?
Lord Glenarthur: My Lords, as I have said, I fully endorse the remarks of the noble Lord, Lord Cledwyn, about the valuable service that these hospitals undertake. But the fact is that the Government attach importance to controlling public expenditure, and health authorities have a statutory duty to remain within their allocations. That is why it is a matter for

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the health authorities to decide, in the local circumstances prevailing, how services should best be provided.
Lord Rea: My Lords, will the noble Lord not agree, as several noble Lords have indicated, that where personal care is concerned the Schumacher principle of small but beautiful often applies? More seriously, is he aware of recent disquiet that the laid-down procedure for consultation prior to closure is not always adhered to? Is he able to state that both the informal and the formal stages of this procedure will be strictly followed in the case of any closures that are proposed in the future?
Lord Glenarthur: My Lords, I shall certainly send to the noble Lord a copy of the consultation procedures that lead, or could lead, to the closure of any small hospital.
Baroness Masham of Ilton: My Lords, is it not the Secretary of State who takes the final decision on closure, even if a district health authority wants a GP hospital closed?
Lord Glenarthur: My Lords, I shall send a copy of what I am sending to the noble Lord, Lord Rea, to the noble Baroness.
Lord Kilmarnock: My Lords, although the Minister says that this is a local matter, does he not agree that in 1980 his department issued a paper favouring this kind of hospital? Will he confirm that there has been no reversal of his department's general policy on the matter?
Lord Glenarthur: My Lords, there has been no reversal of the policy to which the noble Lord refers.

Sickle Cell Anaemia: Screening
2.56 p.m.
Lord Hatch of Lusby: 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 are aware of the lack of screening facilities in this country to detect sickle cell anaemia, and if so whether they are prepared to take any action.
Lord Glenarthur: My Lords, the technical facilities required to undertake screening of blood samples for sickle cell anaemia are already available in National Health Service hospital laboratories. The Health Education Council has recently published guidance for members of the health professions, and others concerned with the care of children, on the problems of people with sickle cell anaemia. The organisation of screening programmes is for health authorities to decide in the light of local needs, but I understand that it is increasingly the practice to screen those at risk when they come into contact with the health service.
Lord Hatch of Lusby: My Lords, I thank the Minister for that reply. Can he tell the House whether it is the case that a number of black children have died through this disease because of the lack of screening facilities? Is it not the case that only three weeks ago, in Lambeth, a boy of two died from this disease, which he had had since birth but which had never been diagnosed as sickle cell anaemia?
Lord Glenarthur: My Lords, it is certainly the case that sickle cell anaemia is most likely to occur among people whose families come from or originate from West Africa or the Caribbean and the eastern part of the Mediterranean seaboard. I am not in a position to comment on the circumstances of the tragic case of the Lambeth boy to which the noble Lord refers. I understand, however, that there are now arrangements at King's College Hospital, which serves part of the Lambeth area, to screen the new-born for sickle cell anaemia, and at St. Thomas' Hospital for the screening of children considered at risk.
Lord Ennals: My Lords, is the noble Lord aware that four times during the three Questions today he has referred to the responsibility being not that of the Secretary of State but that of the health authorities? As the Secretary of State is restricting the amount of money available for the health authorities, is it not time that he gave some lead in terms of priorities in these matters?
Lord Glenarthur: My Lords, unlike the party opposite we are at least trying to work within the limits of the money that is available. It does not grow on trees. That is why we believe in trying to put the duty particularly onto the local health authorities, so that they can decide the priorites and the needs of their own areas.
Lord Rea: My Lords, is the noble Lord aware that a conference was held yesterday on this important problem at the Institute of Child Health, sponsored by all four of the Thames regions, and that this conference was concerned that insufficient use was being made of existing facilities? Will the noble Lord ensure that his right honourable friend studies the recommendations of this conference, which asked for more research and more education of health professionals and the immigrant community? This will not be very expensive, I assure him.
Lord Glenarthur: My Lords, I am aware of the conference to which the noble Lord refers, and will certainly note with interest the differing schemes designed to screen the new-born that are being evaluated. Again, it will be a matter for local decision based on the local needs of the population. The noble Lord, Lord Hatch, raised the fact that it was coloured children who suffered from the disease. That varies the problem, in density, throughout the country.
Baroness Masham of Ilton: My Lords, will the Minister agree that when screening children for sickle cell anaemia it is very important that it should be accompanied by sensitive counselling, and genetic counselling, because otherwise it can be most distressing to the parents? Is he aware that in 1981 the

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Winston Churchill Memorial Fellowship sent someone to study this disease in America and Jamaica? Would he like a copy of that very interesting report?
Lord Glenarthur: My Lords, I am sure that the report has been studied by the department, but experience of attempts in the United States at general population screening of at-risk groups has not been favourable. I should, however, like to see the report if the noble Baroness has a copy. So far as genetic counselling is concerned, my noble friend will be aware that there is at present no cure for sickle cell anaemia, although palliative measures can reduce mortality. Counselling and advice to prospective parents who may be carriers of the disease are thus no less important than the screening of the disease itself.
Lord Hatch of Lusby: My Lords, to follow up the noble Lord's last answer, does the noble Lord agree that, as the noble Baroness has pointed out, this counselling service and the medical follow-up are of equal importance to the screening methods and are of particular importance, if not as regards curing the disease then certainly as regards preventing its spread? Does he also agree that sensitive counselling to the parents can prevent the spread of this disease? Will he get his department to look into what are at least alleged delays in setting up both screening and counselling in order to restrict this disease to the minimum proportions in this country?
Lord Glenarthur: My Lords, genetic counselling can be undertaken by obstetricians, haematologists and paediatricians, and in the more complicated cases the advice of a clinical geneticist can be sought and a special genetic advisory service is available in each region. The Government provide funds for the Health Education Council, and I have already mentioned the council's recent guidance for the health-care professions and others concerned with children. We also give grants to the two main voluntary bodies in this field, the Sickle Cell Society and the Organisation for Sickle Cell Anaemia and Research, which are making a very valuable contribution to education, information and counselling services.

Arts Council: Future Strategy
3.2 p.m.
Lord Jenkins of Putney: 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 are aware of public concern about the recent decisions by the Arts Council.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, I believe that the Arts Council's review of its priorities is to be commended, and I welcome its decision to free resources for innovation and development, particu-larly in the regions. I am delighted that the strategy document The Glory of the Garden has in fact been extremely well received.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that a welcome proposal to increase arts subsidy outside London should not be carried out at the cost of killing existing clients of the Arts Council? Is he further aware that the erosion of the arm's length principle which this policy seems to indicate and of the response theory of patronage, introduces an unwelcome element of what might be called the Fuhrerprinzip into the structure of public support for the arts? Will he arrange an early debate in which all these matters can be discussed?
The Earl of Gowrie: My Lords, in respect of the arm's length principle, I can only say that I would consider myself to make a most unlikely Fůhrer. The Arts Council knows very well what it is doing and, as I have said, I think that what it is doing is to be commended. There is no evidence of any likely decimation of arts provision in London. But many people, including many on the noble Lord's side of the House, have drawn attention in the past to the imbalance between the regions and London.
Lord Renton: My Lords, is my noble friend aware that there are large expanded towns and new towns with many people living in them, which have been artistically deprived ever since the expansion started? Is he also aware that the Arts Council is moving in the right direction in order to see to it that the people in those towns can enjoy the best things in life without having to come to London?
The Earl of Gowrie: My Lords, I welcome what my noble friend has said and I will draw the attention of the Arts Council to my noble friend's remarks.
Lord Donaldson of Kingsbridge: My Lords, is my noble friend aware that, whereas it may be acceptable to avoid giving help to things which want to start, it is almost never acceptable to withdraw funds from things which have started and which are going well? That seems to me to be one of the most serious criticisms of the present developments which are indicated by the recent Arts Council decisions.
The Earl of Gowrie: My Lords, I only disclaim friendship with the noble Lord in the politcal rather than the personal sense. But I would draw his attention to the wise remark of Sir William Rees-Mogg that all arts funding is on a leasehold rather than a freehold basis.
Lord Strabolgi: My Lords, is the noble Earl aware that all these threatened closures, including many in the regions, and the threat to axe one of our most distinguished national orchestras, stem from the fact that the Government are not funding the Arts Council sufficiently?
The Earl of Gowrie: My Lords, the Government provided an 8.7 per cent. increase to the Arts Council this year, which is considerably above the rate of inflation and considerably above the level pegging which was my own ministerial remit. I would also point out to the noble Lord, Lord Strabolgi, that that figure does not include wiping off several significant deficits on the part of major companies. If one were to

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be a little naughty in accounting terms, one could well add those on, in which case the figure would be closer to 11 per cent. I do not think that there is any substance in what the noble Lord is saying at all.
Viscount Eccles: My Lords, I agree very much with the Minister that the Arts Council's new policy is right, but does he think we can go much further in that desirable direction unless the great national companies—Covent Garden and the National Theatre—are directly funded and taken off the back of the Arts Council?
The Earl of Gowrie: My Lords, my noble friend with his distinguished record as a previous Minister will be listened to in respect of that advice. But I have to say that I remain at present rather sceptical about whether it would be wise for Ministers to be directly involved in the fortunes of any individual company, however distinguished.
Lord Taylor of Gryfe: My Lords, is the Minister aware that the new emphasis of the distribution of Arts Council funds to the regions is much welcomed in certain parts of the country' and that his rescue operation for Scottish Opera is much appreciated North of the Border?
The Earl of Gowrie: My Lords, I am very grateful to the noble Lord, Lord Taylor of Gryfe, and I shall draw my own attention to his remarks!
Lord Moyne: My Lords, will the noble Earl comment on a view put forward in a letter in The Times today in which it was suggested that the Arts Council would give no support in areas which were deprived of support by their local authorities, thus making them more deprived than ever?
The Earl of Gowrie: My Lords, I will look at the point made by my noble friend, but I do not think there are reasonable grounds for fear in this area.
Lord Strabolgi: My Lords, may I ask the noble Earl how he thinks that we shall be able to bring more music to the regions by closing down Opera 80, which has been so successful in Liverpool?
The Earl of Gowrie: My Lords, the noble Lord, Lord Strabolgi, will be aware of the vastly increased provision in recent years under successive Governments—as I would be the first to say in the provision of the very admirable but very expensive high art form of opera. However, that phenomenon, which I certainly welcome as an opera lover, does not of course mean that every opera company can be immune from financial problems.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that many of us are delighted to hear that he is not in favour of direct funding and to that extent he will fend off the possibility of more dirigiste policies which appear to be in danger of being adopted by the Arts Council? Is he further aware that I am reliably informed that both the Chairman and the General Secretary of the Arts Council do not stand on his left?
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Finally, I should like to press the noble Earl a little further on the question of a debate. Will he provide Government time for a debate on all these matters?
The Earl of Gowrie: My Lords, the provision of time for a debate is, of course, not a matter for me. But the usual channels can take the matter up and I shall be delighted to respond to the wishes of the House.

Business
Lord Denham: My Lords, with the leave of the House I should like to say a brief word about the timing of this afternoon's debate standing in the name of the noble Lord, Lord Beswick. As this is the first occasion on which the House has applied the five-hour time limit which your Lordships approved on 25th January, I had expected to suggest a time standard. This would have entitled intermediate Peers to speak for marginally longer than both the mover of the debate and my noble friend the Minister, even allowing for the right of my noble friend to rise 25 minutes before the scheduled end of the debate. However, I believe that the House would appreciate it if noble Lords would exercise a voluntary restraint rigid enough to initiate the spirit of this new type of limited debate.

Interest Rates
3.10 p.m.
Lord Beswick Lord Beswick rose to call attention to the burden of high interest rates on productive industry and on central and local government finances; to the diversion of effort to less productive but more financially rewarding activities which these high interest rates encourage and to the excessive strain on the stablility of large areas of the third world occasioned by this high cost of borrowing; and to move for Papers.
The noble Lord said: My Lords, it is now nine months since first I put down a Motion about the need to reduce interest rates, and since then we have seen a tentative movement downwards of¼, ½ and even 1 per cent. I do not claim a cause and effect, but the welcome given, even to those fractional changes, suggests that the Motion was rightly conceived. The reason why I still call for this discussion is because the reductions, though in the right direction, do not nearly go far enough; and, probably more importantly, they do not result from a new, deliberate and direct policy, using new techniques and on the basis of wider world agreement. The trends which facilitated those reductions could well be reversed and we could again have an upward tendency, with quite disastrous results. Indeed, that upward tendency can be seen already in the United States, and few will swear that, unless a radically new approach is adopted, it will not be followed here.
I want to get from the Government a wider, clearer and firmer support for the proposition that the high interest rates that we have seen—and still see—discourage the production of real wealth; they tend to distort the economy; they divert resources and activity from genuinely fruitful banking to the crude

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handling and dealing in money; and in some parts of the world they are imposing a strain on the economic and social systems that is so severe and so unjust that a breaking point may yet be reached.
I trust that the Minister will not be tempted to spend too much time telling us how successful the Government have been in reducing the rate since the record reached by Sir Geoffrey Howe in 1979. The fact is that last week on non-risk money the Government were still prepared to pay 10 per cent. on the stock issue. A generation has grown up which seems to regard a double-digit return on Government stocks as a normal state of affairs. It is an essential discipline to get these rates in historical perspective. Admittedly on 1st August 1914 the authorities put up the bank rate to 10 per cent., but it was down to 6 per cent. five days later and throughout that war it varied between 6, 5 and 5½ per cent.
In the Second World War, we showed an even cleverer grasp of essentials. The bank rate was actually doubled on 24th August 1939, but it was from 2 per cent. to 4 per cent. With all the strains that the conflict with Germany imposed, and with the inevitably high borrowing requirement, the rate came down to 3 per cent., and on 26th October 1939 it fell to 2 per cent., where it stayed throughout the war. That 2 per cent. is worth savouring.
Of course, there are two arguments which will be raised when I recount those rates. I shall be told that the control of credit and credit creation was possible in war by means unacceptable in times of peace. Then there is the factor of inflation and all the modern jargon about real and nominal rates. I shall try to answer those two points. Those war-time techniques showed that it can be done, and I ask that we should now look again, with an honest, open and inquiring mind, to see in what way those techniques can be adapted and fitted into a new world monetary system. There is no party point here; there is a problem which needs the brains of all parties for its solution.
As to that second point about inflation, it is possible to show that high interest rates are more of a cause than a cure of inflation. Unemployment and depressed commodity prices rather than interest rates have helped bring down inflation. Moreover, I believe that we should stop clouding the issue with talk of nominal and real rates.
If I as a manufacturer need to borrow in order to buy new equipment and I work out my costs, I cannot say that the 10 per cent. or more is only a nominal rate and does not count. Of course, I may be told that by the time the new product is on the market the whole price level will have risen and I can recoup my costs at the expense of the consumer. However, that is only saying that the high cost of borrowing is all right so long as we have continued inflation. Yet, we all agree that inflation is a curse that we must cure.
Here maybe we come to the crux of the matter. At one time when I raised this issue I would be told that high interest rates were necessary; that it was their "function"—"function" was the word—to control the volume of money, which in turn was essential to control the rate of inflation. But I wonder whether it can now be shown that there is this tidy relationship between lending rates and the volume of money. If this
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is suggested, I should want to know whether by "money" is meant M3, Ml, MO or PSL2, and what factor is allowed for velocity of circulation. If we are to have the new thinking for which I ask, we must first throw out these over-clever terms of the discredited aspects of monetarism.
May I make it clear that I draw a distinction between creative investment, which makes possible the production of more goods and useful services, and the interest charges imposed as part of a fallacious monetary theory which has been responsible for much of latter-day usury. Many years ago the chairman of a little airline, which I helped to start, told me with pride that he proposed to recommend a dividend of 10 per cent. Results had been good; everyone had worked hard; prospects were even better; and the shareholders who had taken the risk—and almost all were workers—deserved a reward.
But I draw a distinction between that and the occasion in 1979 when the Chancellor declared that things were so bad, that things had gone wrong, the outlook was black and he proposed to put up the MLR to 17 per cent. In other words, at a time when pressure to cut back public services is greatest, the reward to the money-lender is highest. That cannot be right. I recall the Nazi slogan, Kraft durch Freude: Strength through Joy. The Chancellor might well have coined the phrase, "Strength through Usury".
My case is that using interest rates in that way damages the economy. It puts on the brakes certainly, but only on one side of the car. The national vehicle will lurch from useful production to more profitable short-term speculation. The high cost of money may well defer the building of a factory, but it will never stop the opening of a casino. The facts about the decline in manufacturing production are there to be seen. We are producing no more and maybe less in non-oil manufactures than we were five years ago. We have an overseas trading deficit in manufactured goods for the first time ever. I may be told to look at the February figures. Of course I have done so. When one subtracts oil, precious stones and bullion from those figures, they are much more modest. And over the three-month period the overseas trading deficit is still £1.9 billions. The stock argument of present-day Ministers is that we must be more competitive. That is a safe enough remark to make. But the truth is that in the modern industrial world you need modern tools to be competitive, and tools are expensive.
Old-fashioned defensive work practices can be quoted, but it is not really the work practices of working men and women that have held back production. New investment was needed. Our chief competitors have had certain advantages. Some were almost paid for losing the war. Their national debts were virtually wiped out. Their post-war defence costs have been minimal compared with ours, and much of their research and re-equipment was financed before the cost of money went up.
In our case the money was there. The Wilson report made that clear enough. In fact the Western world has been awash with money. This Government have done something for small businesses—expansion schemes, and so on—but for those who have to go into the market it cost too much and still costs too much. What

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I say is not out of line with the recent report of ACARD—the Advisory Council for Applied Research and Development—which said:
"There is no shortage of money, nor of requirement for investment, but major difficulties facing manufacturers are the true cost of borrowing in relation to profitability."
In carefully argued terms it seems to me that the Deputy Governor of the Bank of England made that same point, which is my point, in a speech on 22nd February this year. Mr. McMahon properly paid tribute to the efforts and the success achieved by manufacturers against difficulties, but he also said:
"current levels of investment are insufficient to support sustained expansion on the supply side… net investment in non-North Sea industrial and commercial companies as a proportion of their net capital stock fell from 5 per cent. per annum in the mid-1960s to less than 2 per cent in the mid-1970s and is now below 1 per cent."
The Deputy Governor said that different types of finance made measurement difficult, but he also said:
"The cost of capital has been significantly higher in relation to real profitability than in either the 1960s or the 1970s… and the disincentive to fixed investment is unmistakable."
That speech was in February, and there has been little basic change since then It was in February too that Mr Reagan's own economic committee spoke of the "perilous"—I quote their own word—situation in the United States economy caused by borrowing and high interest rates.
So much for the discouragement of production. But the Motion goes on to refer to,
"the diversion of effort to less productive but more financially rewarding activities" —
in other words, the one-sided braking I ought to confess incidentally that that phrase was given to me by my noble friend Lord Lever, who would have been here today to support the Motion but is in New York on a very happy family occasion.
It is excessively fashionable these days to speak proudly of the growth of the service industries As a child of the British Co-operative Movement, I certainly do not belittle those who usefully serve, and I respect the reputable bankers, but there are other activities which have sprouted in recent years and within the margins, as I see it, of recent interest rates I noticed a letter in The Times on 1st March under the elegant heading of "Muck and Brass" Beneath that heading Mr. Sutherland wrote:
"The most prosperous people in the United Kingdom today are those who would not touch manufacturing with a barge pole—the moneylenders the brokers the middlemen, the agents. And every month the list of company liquidations grows longer. "
In accordance with Government thinking, the Treasury report of February stressed the importance of the service sector In the small print I saw that the fastest growth between 1973 and 1979 was in the financial sector, and what they call "miscellaneous and others" accounted for a quarter of the whole growth No doubt that miscellaneous heading covered most of the individuals of whom Mr. Sutherland wrote.
I think of today's techniques of overnight and weekend depositing and I wonder if they do not go beyond the bounds of useful service. Shrewd operators who contrive to deposit on Friday afternoon rather than Monday morning can earn more in their brief operation than a skilled engineer will earn his firm in
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a matter of months. I see that one industrial company with a very positive cash flow gives a figure in its 1983 accounts of no less than £125 million in net interest receipts from loans and deposits None of its share-holders can complain, but comparing that figure with what the 130,000 employees engaged in designing, making, and marketing actual goods were able to show in profits, one is bound to ask if there is not something wrong—not with that company certainly but with the economic situation within which we work.
Even our old friends the building societies are moving with the times. I see that Mr. Tuke of the Woolwich society says that profits from gilts, which accounted for 30 per cent. of reserves in 1981, actually accounted for 64 per cent. last year. The Government's response is to tax those profits, but how much better if the whole lnflationarv process had not been started by the high yields obtainable on Government stocks.
If this level of interest is pernicious, as I say, that influence is compounded and exaggerated by modern technology in communication facilities. In the days of our youth—or certainly in the youth of my noble friend Lord Shinwell—if one wanted to transfer money from London to New York it involved a gentleman with a briefcase, an ocean liner and a matter of about five days In these days of almost instantaneous transmission the situation is markedly different. The profitability of Reuters is one evidence of that.
The modern techniques of money payments and receipts make a nonsense of the simplistic theories of Mr. Friedman. And they open the door to the slick speculator I read in The Times that in 1981 over 20,000 billion dollars were traded across the exchanges in the spot markets alone. That figure represents something like 15 times the total annual world trade. Some burned their fingers that year, I am told Maybe, but they certainly did not contribute to orderly world trade.
There is another area in which insecurity and injustice are writ large for all those who want to read. My Motion calls attention to the especial strains on the economic and social system of much of the Third World In February of last year I put down a Parliamentary Question on this aspect of the problem, and I fear that the noble Lord, Lord Cockfield, that day brushed it aside with a comment that it had been discussed the previous week. It had, and a very interesting discussion too, between most distinguished Members of this House and those with notable financial experience. But most of that discussion, I fear, had been of the need to reschedule debts and of possible action by the IMF or Governments designed primarily to secure the international banking system—the lenders. The collapse as against the reform of the international banking system would indeed be a calamity for all concerned, but I am suggesting that we need to look at this mammoth debt burden a little more sympathetically from the debtor's point of view.
A recent Observer article said:
"Africa's new overlords the neat IMF men bearing briefcases with combination locks, make a sharp contrast with the paternalistic governors wearing their swords and plumed hats But for all their good intentions they are starting to be almost as keenly resented. "
I have heard it said by some that the huge borrowing

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of the Third World was excessive and ill-used. Maybe there is some truth in that. But it is only another way of saying that the one-time old-fashioned judgment of the reputable banker was not so much in evidence. Or we could say that the Third World countries should have said—as the British manufacturers have said—"We certainly want your money but on the terms you are demanding it, it just does not make sense".
However, they did borrow; their export earnings did fall with the fall of commodity prices, and the interest rate payable bore no relation to their realities but only to the domestic monetary policy of the United States of America.
Noble Lords no doubt saw the letter to The Times on 3rd March from the Ambassadors of the Dominican Republic, Ecuador and Mexico. They conclude a letter, which we should do well to study, by saying:
"It is almost impossible to apply the IMF prescriptions without the danger of social upheavals.
Yes, we want to pay. Proof of that is that in the past five years the developing world has paid in interest $126 billion. At this rate the interest payments will soon have exceeded the total of $140 billion borrowed during the same five-year period".
According to a report in the Economist, the World Bank emphasises the wretchedness of those figures with a calculation that the poor South borrowed $85 billion last year from the wealthy developed countries, but paid their creditors $95 billion in interest and capital. Leave out the morality of it all if you like, but that is a travesty of sound economics and, indeed, self-interest. And a net flow of cash from the rich to the poor is one thing, but a net flow of cash from the poor to the rich is a new style colonialism without the governor's plumes.
Self-interest comes into it, I am suggesting, when one considers, as the OECD pointed out, that the less developed countries take one quarter of industrial countries exports. How can we get a genuine recovery of world trade if that quarter is cut back still further? The OECD estimate was that the austerity programmes demanded of the debtors would in 1983 involve a reduction in demand of $17 billion.
A representative of one of those Third World countries said the other day:
"We could cut back imports, we could give up developments, we could condemn our people to starvation—or we could cut interest on our debts".
I know there are those who would say they could also cut out waste, but the choice is basically as they stated.
What ought we to suggest they choose? In a balanced article in the journal Defence and Diplomacy, Lord Charles Cecil calculated that, in the case of Brazil, if their interest rate were "capped" (as he put it) at 5 per cent. they could expect a current account surplus of perhaps $1·5 billion and prospects of growth in the future. What a potential transformation.
One is tempted also to say that if that same process of capping was applied to United Kingdom local authorities' debt there would be a similar transformation. If that same treatment were applied to £35, 180 million of their debt borrowed at rates from 6·6 per cent. to 13 per cent. (according to the figures
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which the noble Lord, Lord Bellwin, was kind enough to give me) we could see a saving of around £1,700 million a year—which we might compare with the estimated £178 million saving of the other rate-capping process being applied by Her Majesty's Government which is causing so much pain and grief.
In the minutes available to me in this debate I have focussed narrowly on the evils of high interest but I am not so naive as to believe the solution is a simple one of capping rates. My aim is more to stimulate thought than to thrust forward any easy solutions. But I do say that solutions have to be found, and quickly.
At the meeting of the Commonwealth Heads of Government last November, our own Government agreed a statement which said:
"the situation calls for a comprehensive review of the international monetary, financial and relevant trade issues An immediate process of consultation is needed".
I ask the noble Lord the Minister who is to reply: what contribution is Her Majesty's Government making to that process?
As for our own national situation, I suggest that the challenge to find new techniques of money management faces the Government equally with those parties presently in opposition. We will all welcome incipient signs of recovery, but so far those signs largely reflect consumer spending by a limited sector and the numbers of unemployed and underprivileged continue to creep upwards I think the Government would do well to have a contingency plan in case they have to think about controlling money supplies again. As for my own party and the party of the noble Lords who sit to my right, we have plans for creating new wealth, improving the infrastructure and employing more people by schemes of public investment. I am sure that that is right, but I do say to my friends that, if that investment is funded at 10 per cent or more, then we, too, shall run into trouble.
I have quoted a lot of figures. If I had the moral courage of my noble friend Lord Soper, I might have started with a text from Pope Eugenius III, who in the year 1150 said:
"Who takes more than the amount of the sum lent involves himself in the sin of usury."
I do not go as far as that, but I do state the obvious if we all lived on interest, we should all starve. What I am concerned to secure is an adjustment in our economic affairs which ensures more encouragement and a fairer reward to those who actually produce those things by which we live.
My Lords, I beg to move for Papers.
3.38 p.m.
The Earl of Gowrie: My Lords, I congratulate the noble Lord, Lord Beswick, not only on the choice of his Motion but on the effect which the wording of the Motion has had on the money markets. Since he put the Motion down for debate we have seen all the major clearing banks in the United Kingdom cut their base rates, while prime rates in the United States have risen. I will say more about this later No doubt the noble Lord, Lord Beswick, will continue to claim—as his speech claimed—that interest rates are far too high. I agree with him there interest rates are too high, both here and abroad On that there is little to debate.

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Where I think the noble Lord, Lord Beswick, and I differ is on how best further reductions in interest rates may be brought about —and we may also differ, of course, on the old vexed question of the chicken and the egg.
It is important that the noble Lord and his colleagues on all the Opposition Benches should understand our policies which, whatever their difficulties and whatever painful effects are still abroad in the economy, have achieved a continued downward trend in inflation and interests rates, and therefore an environment in which industry and employment can improve. Our ultimate objective is stable prices with still lower interest rates. We aim to achieve stable prices through the policy laid out in what is called the Medium-Term Financial Strategy, that is to say a combination of monetary control and prudent fiscal policies.
The House will be relieved to know that I shall not spend a long time on the monetary aggregates; sufficient to say that on the monetary side we now have targets for the growth of both broad money, as measured by what is called sterling M3, and narrow money, measured by what is called M0. But far from being discredited, attention to monetary aggregates is now a feature of economic management of all Governments. Indeed, the noble Lord, Lord Barnett, whose winding up of the debate I look forward to, was to his credit deeply involved in bringing about this state of affairs. He may be aware that I paid tribute to him and his Chancellor of the Exchequer at the time.
By maintaining sound monetary conditions we shall continue to reduce inflation, and lower inflation means lower interest rates. Without recourse to jargon, one could argue that, historically, interest rates vary rather little while inflation rates vary much more widely. There, of course, is the rub. The rub is that we still have high nominal rates of interest and, as I shall argue in a little more detail in a few moments, those high nominal rates of interest are what are damaging in real terms.
The noble Lord, Lord Beswick, said that the fastest arenas of growth in our economy in 1973 to 1979—a period dominated by Labour Administrations—were in the financial sector. Was not that a feature of high inflation rates of the 1970s which we are now trying to get down? Without success in getting it down I agree with the noble Lord, Lord Beswick, that the outlook for manufacturing as against financial services will remain gloomy.
On the fiscal side we need to achieve further reductions in the public sector borrowing requirement as a share of gross domestic product to allow deceleration in monetary growth and reductions in inflation. That will bring about the conditions for further falls in interest rates, in both nominal and real terms. Our policies are directed to achieving a progressive reduction in borrowing over the medium term. Such restraint is essential if we are to achieve sound money conditions, without creating fresh upward pressure on interest rates.
We have already some justification for saying that the proof of this particular pudding is in the eating because we have made significant progress. The marked reductions in inflation and interest rates in the
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United Kingdom during this recovery have contributed to the strong growth of output: a growth which has been well ahead of other European countries. The recent ½ per cent. reduction in the main clearers' base rates to 8½ per cent. (apart from Barclays Bank which came down ¼ per cent. to 8¾ per cent.) was a clear endorsement of the Chancellor's Budget. Base rates are now more than 7 per cent. below their peak in the autumn of 1981 and are at their lowest level since May 1978. Indeed, apart from a period in 1977–78, when there was very strong upward pressure on the pound, base rates are at their lowest level since August 1973.
Looking at other key interest rates, long and short term market rates have continued their decline over the past year. At the short end, three month sterling interbank rates are now down around 8⅚ per cent., about half what they were in December 1980, while at the long end the yield on 20 year gilts is now around 10½ per cent.; that is almost 6 per cent. down on its last major peak in October 1981. Over the last year short rates have come down by over 1½ per cent. and longs by about ½ per cent.
I will have more to say about international comparisons, particularly with the United States, but for now I would remind the House that soon after our base rates came down by ½ per cent., prime rates in America rose by about the same amount. Across the board our interest rates are now well down on those in the United States. Long rates, in particular, are now almost 2 per cent. below, in contrast with what we saw over virtually the whole post-war period. This is the result of our firm monetary control and our prudent control of the United Kingdom's public sector borrowing requirement. Even those who are opposed to us politically would have to acknowledge that achievement. Our aim is to achieve further reductions in nominal interest rates, but the centre of my argument is that we can only do that if we stick to policies that will reduce inflation as well.
I want to talk for a moment about real interest rates and investment. The main reason for high nominal interest rates is inflation and the expectation that inflation will continue. Despite our success in bringing inflation down, there is still a legacy of fear—a legacy from earlier governments—that sooner or later governments of all complexions give up the battle against inflation as they have done in the past. The only way to overcome that fear is to show that we mean what we say. This Government will not give up. Our ultimate objective is price stability. The policies set out in the medium term strategy should enable us to make substantial progress during the life of this Parliament. Success will bring down interest rates as well as inflation.
Relative to the current rate of inflation, the rates are no longer abnormally high. The Bank of England recently published estimates of the real cost of borrowing as measured by short-term interest rates compared with inflation over the last 20 or so years. This work concluded that the real before-tax interest rate paid by company borrowers has averaged around 4½ per cent. since the period when we were elected. This is much the same as the average level during the 1960s and around 1½ per cent. or 2 per cent. lower than

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comparable real interest costs calculated for both the United States of America and for Germany over the past four years.
The same calculations suggest that the real cost of borrowing was much lower—indeed sometimes it was negative—during the 1970s, when inflation was both high and variable. But the House should not draw the conclusion that a combination of high interest rates and high inflation would produce a climate favourable to productive investment. In fact, the noble Lord, Lord Beswick, himself acknowledged that they did not. The reverse is the case, for the following reasons: high nominal interest rates would still squeeze company cash flow in the early years of the life of any investment. The noble Lord acknowledged that. This "front-end loading" (in the jargon) is caused because when inflation is high lenders charge high nominal rates to protect themselves against the declining value of the principal of their loans. It means, therefore, that high nominal interest rates, as I have already indicated, are always bad for investment, whatever the real rate of interest.
Secondly, and more fundamentally, one of the principal evils of high inflation is that it creates fear and uncertainty about the future real cost of borrowing. Uncertainty and fear are the enemies, the deterrent to investment. Forecasting inflation is always hazardous and at high rates of interest the margin for error is a wide one. No company can plan sensibly and competently for the future in such conditions. What companies need above all is financial stability; and that is not to be had unless we defeat inflation, and defeat it permanently.
Industry appreciates what this Government have achieved in this regard and appreciates our strategy for going on. The CBI's latest monthly trends have shown a further strengthening of both total and export demand. More firms now expect to increase their output than at any time since 1976. The results also point to the recovery in output becoming more widespread. Profitability is expected to rise. The CBI's forecast of the pre-tax rates of return of non-North Sea industrial and commercial companies has been revised up to 8½ per cent. this year, and an 8 per cent. rate of return is expected next year. These figures compare with a rate of return before tax of 4½ per cent. in 1982 after 20 years of decline; and I would say to the noble Lord, Lord Beswick, in particular, that manufacturing investment is forecast to rise by about 8 per cent. both this year and next. I know therefore that he will welcome that.
I want now to turn to the cost of servicing public sector debt to which the noble Lord's Motion was also addressed. Unlike the company sector, the public sector is a major issue of fixed-interest debt. The cost of servicing public-sector debt is a legacy of borrowing in the past. It will account for all the additional money that the public sector is expected to borrow in 1984–85; interest payments on public sector debt of all types are expected to have totalled nearly £16,000 million in 1983–84 and that would represent over 10 per cent. of total public spending. It is only thanks to our success in controlling public borrowing in recent years that we have kept debt interest payments down to this already too high level. In the mid-1970s, the
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public sector borrowing requirement rose to almost 10 per cent. of GDP but fell to less than 3½ per cent.—and that is a very significant fall—in 1981–82 and 1982–83. Latest forecasts for 1983–84 suggest that, as a percentage of the gross domestic product, our borrowing will remain at the 1982–83 level. It is projected to fall sharply as a proportion of domestic product next year. If we had pursued the policy of high public-spending borrowing requirements which some, not least the shadow Chancellor Mr. Hattersley, have been advocating, we would now have a much higher volume of accumulated public debt to service. Again, as the noble Lord, Lord Barnett, knows and as the noble Lord, Lord Beswick, appeared not to know, Governments borrow in the real, not the ideal, world. They have to pay the going rate; and, indeed, they affect the rates by the scale of their entry into the market.
Does that not argue that the Government are right to try to contain the scale of their borrowing, and that the outlook for industry will continue to be bleak unless we maintain this position? Without the discipline that we have imposed on ourselves and on others we would have much higher interest rates now. As it is, the decline in borrowing since 1980–81 has been accompanied, as we see, by a fall in short-term interest rates of no fewer than five percentage points. Again, the proof of this pudding is not the theory of it but the eating of it. It may be suggested that governments have an interest in inflation which reduces the real value of outstanding borrowing and may reduce the real cost of debt service. We reject this cynical philosophy. We accept that there is a price to be paid for achieving the benefits of financial stability and lower inflation. If the price is that we do not defraud those who lend to Government by eroding the real value of their loans, no one should say that we are wrong to pay.
May I come quickly to the other part of the Motion, the issue of world interest rates. The speed with which we can reduce inflation and interest rates will be affected, and is being affected, by events outside our control. That makes it more, not less, important for us to follow sound financial policies. We cannot ignore the fact that high interest rates (as the noble Lord, Lord Beswick, has told us) have been a world-wide difficulty. The high levels of interest rates in recent years have put a burden on all borrowing, sovereign borrowers, corporate borrowers, consumer borrowers. But they have imposed a heavier burden on the developing countries. I agree with the noble Lord, Lord Beswick, that this phenomenon is a real threat to the developing or so-called, third world. The gains therefore from lower rates are large. Indeed, it has been calculated that a 1 per cent. cut in world interest rates would relieve debtor countries of some 5,000 million dollars in interest payments alone in a given year. A broad measure of agreement now exists that the key to lower interest rates is further progress towards reducing budget deficits. Of particular concern here is the effect of high United States federal budget deficits in maintaining high United States interest rates. Last year, the US budget deficit amounted to 195,000 million dollars; that is to say, 6 per cent. of the gross domestic product, which in American terms is twice the level of 1982, and the highest in the post-war period of American history.

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In the absence of further measures, it is forecast to stay at around 200,000 million dollars until the end of the decade, even accepting the Administration's assumptions. Others, using perhaps more pessimistic but, some would argue, more realistic assumptions, estimate deficits could be significantly higher. The prospect of such large deficits continuing into the medium term inevitably raises interest rates far above what they would otherwise be. Both Dr. Feldstein, the United States president's economic adviser, and Mr. Volcker, the chairman of the Federal Reserve Board, have repeatedly stressed their concern that this is leading to a lopsided United States recovery and jeopardising growth and potential. The further risk is that, with strong economic recovery continuing, it will result in yet higher interest rates and/or a resurgence of inflation, thus further damaging growth prospects. The recent rise in United States interest rates, with 3-month rates well over 10 per cent., compared to 8¾ per cent. a year ago, is very worrying.
The folly of those who suggested that we should follow the United States example of a rising budget deficit—and again these suggestions have come from the official Opposition; although not, I acknowledge, from the noble Lord, Lord Beswick, today—should be apparent to all except the most blinkered. In announcing his budget for fiscal 1985 in February of this year, President Reagan said:
"Only the threat of indefinitely prolonged high budget deficits threatens the continuation of sustained non-inflationary growth and prosperity".
This problem is a structural one and continued recovery will not eliminate it. It has been accompanied by a rapidly expanding external deficit. Both are likely to prove unsustainable and the net capital inflows necessary to finance these deficits have been at the expense of other borrowings causing growing resentment elsewhere in the world. It is therefore in everyone's interest that Congress and the Administration agree how to cut the deficit. We would welcome proposals, including President Reagan's latest 150,000 million dollar savings package, if they are likely to foster the necessary agreement. But so far I have to say that we have yet to see concrete results.
As I have said, higher American interest rates inevitably influence rates elsewhere. But as the British experience shows, sound financial discipline can allow some freedom of manoeuvre, and allow it quite quickly. I have pointed out that, in contrast to most of our post-war history, British interest rates are now lower than American ones, even at the long end. The lessons of the gains from monetary and fiscal responsibility in shielding domestic economies from adverse international financial disturbances apply generally in Europe and in the developing countries. I mean that you have to have immense development potential to escape the consequences of running high rates of inflation in the short term, and you never escape its consequences in the medium or longer term. Witness Latin American difficulties in this context.
The noble Lord, Lord Beswick, refers in his Motion to the problems of the developing world. Almost two years ago the world woke up one fine morning to find that Mexico was on the brink of disaster. There were those who then feared for the safety of the world
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financial system, especially when other countries—Brazil and Argentina, for instance—ran into similar difficulties; but prompt co-operative action by banks and international institutions of governments on more than one occasion succeeded in coming to the rescue. I have on occasion, wearing another hat, rather startled some of my arts clients by saying that such and such grants are safe where the Government are concerned subject to continued good behaviour by Brazil and Argentina. When they ask what their group or theatre company has to do with Brazil or Argentina, I say: "In this tight little globe, more or less everything".
There is still no room for complacency. A number of countries continue to cause concern. I agree altogether with the noble Lord, Lord Beswick, that high world interest rates add to the burden of debtor countries, and that makes it all the more important for the United States Government to get its borrowing down. High interest rates in America have led, in turn, to a higher dollar, which for debts denominated in dollars has added further to the burden. There is a growing feeling in international circles that the problem is becoming a bit more manageable and that the light at the end of the tunnel is not for the moment that of an oncoming train.
While pursuing sound domestic policies, debtor countries can help to ease their financial burdens. Mexico and Brazil, for instance, have been able to secure better terms on this year's new money as a result of adherence to IMF programmes. I am sure that the noble Lord, Lord Beswick, is right in suggesting that this puts great strains on their political and social systems. Therefore, it is important for those countries, wherever they can, to carry the bulk of their people with them.
For the medium term, developing countries should do more to reduce barriers to inward direct investment. The cost of such capital is less sensitive to world interest rates since the parent company will look for the equity return, related to the profitability of the investment. In such ways the problems of the debtor countries can be dealt with, and in this context I would recommend the Government's policy of freeing the economy from exchange controls—a freedom which, rather in contra-distinction to what he was arguing earlier, the party associated with the noble Lord, Lord Beswick, wishes to abolish.
In conclusion, in the United Kingdom we are now seeing the benefits of the Government's resolute application of prudent money and fiscal policies. Inflation has fallen from a peak of 22 per cent. in May 1980 to around 5 per cent. now. It is set to fall further over the next year, bringing us closer to the ultimate objective of price stability. As inflation has been brought down so interest rates have fallen. Indeed, with base rates at their lowest level for six years the noble Lord's Motion is a little bit out of touch in some of its wording with the current situation. Lower inflation and interest rates have boosted the confidence of both consumers and businesses. Lower inflation has meant that consumers have less need to save to maintain the real value of their wealth intact, and lower inflation has meant that businesses can plan with more certainty and are now seeing increases in company spending on capital equipment.

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It is against this background that total output has been growing steadily now for three years; GDP is running above its previous peak in 1979. Encouragingly, total employment is growing again, including an increase of around 170,000 in service sector employment over the first three-quarters of last year. What marks this recovery out is that its roots are in sound finance and honest money. It does not contain within it the seeds of its own destruction, as did the engineered booms which brought so many previous recoveries to a premature end.
So I would argue that prospects are more favourable than for some time. Broadly-based non-inflationary growth is set to continue, with a rise of 5 per cent. in exports, a further 3 per cent. increase in consumer spending and. as corporate profits continue to improve strongly, a 10 per cent. increase in industrial development. Acknowledging the strictures of the noble Lord, Lord Beswick, in reaching that figure I have taken oil investment out of the picture. According to the OECD, we are now growing faster than any other member of the Community, and the outlook is thus consistent with further growth in employment. I did argue in a debate last week that there is no very comfortable relation between recovery of this kind and overall levels of employment. Obviously, the rate at which new jobs are created will depend very much on realistic methods of pay.
A key aim of the Budget was to encourage business to continue to raise its performance and to build upon the welcome improvement in productivity, and that is now under way. In this way business can better satisfy rising demand over the years ahead. In this way, too, rising demand also translates into better prospects for preserving and, I hope, adding to real jobs. The radical reforms of business taxation, for instance—the phased withdrawal of capital allowances in parallel with cuts in corporation tax—do remove inefficient and outdated distortions. The measures provide the corporate sector with a clear framework of company taxation, and above all, the assurance of lower rates of tax over the rest of this Parliament.
To paraphrase the noble Lord's Motion, the Budget aimed to divert effort to more productive activities, to better-quality investment and to investment for real returns rather than tax advantage. In the medium term, therefore, we will maintain steady downward pressure on monetary growth and steady downward pressure on public borrowing as a proportion of national output. This offers the best hope—I would argue the only hope—that interest rates will come down further. The fall in base rates which followed hard on the heels of the Budget was striking confirmation that we were right both in our analysis and in our execution of policy, and we urge other governments to follow our example.
4.8 p.m.
Lord Taylor of Gryfe: My Lords, the House is indebted to the noble Lord, Lord Beswick, for introducing this important subject in the reasonable manner in which he has presented his case. He has avoided a substantial reference to party policy in the matter, and has invited us to stimulate our thoughts a little.
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May I say from these Benches that in general we agree with the proposition presented by the noble Lord, Lord Beswick, that the levels of interest rates seen over the last five years have undoubtedly, viewed in isolation, had a detrimental effect on the British and world economy. High nominal and real rates of interest have contributed to the deep recession from which the world is only now gradually recovering, but they cannot be ascribed solely to the high cost of money as the causes of recession are much more deeply rooted and some Government policy decisions have had a devastating effect on the state of the economy. It is not simply a matter of high interest rates. To discuss interest rates in isolation is unsatisfactory A discussion of this kind must embrace all aspects of economic policy, but since the subject is concerned substantially with interest rates. I think it is worthwhile having a quick look at the factors affecting interest rates.
I apologise to your Lordships for the fact that this description of how interest rates are established is a little elementary. But the interest rate is the price that brings together the borrower and the lender, and the lender is compensated for allowing the borrower to use money for a period of time. The rate of compensation demanded will be determined by various factors, such as the expected depreciation in the value of money—the rate of price inflation—the risk that the borrower may not be able to repay and the other uses to which the lender can put the money. The borrower will also be influenced by the expected rate of price inflation and its effect on the project which he is undertaking The anticipated rate of return on the project will certainly be the most important consideration of any borrower.
Recently, borrowing decisions have been complicated during the recession by the need for countries and companies to continue operations in the short term while they have had reasonable long-term prospects. This has led to "distress borrowing" to ride the storm of recession-induced losses, while the longer term prospect would be judged to be somewhat better The painful effects of the retrenchment necessary to secure these short-term loans have been seen in the lengthening queues of unemployed and the large falls in income suffered by the LDCs.
The very high levels of both nominal and real interest rates that have been experienced have been caused in part by the needs of borrowers and lenders, but also by the monetarist policies of the major OECD governments since the late 1970s The monetary links between these countries have meant that high rates in one country have led to high rates all round. Perhaps I may say this to my friends in the Labour Party: we cannot legislate independently in this field and, although the siege economy strategy seems to be popular in some Labour circles at the moment, it fails to recognise the crucial factor of our interdependence.
The conversion to monetarism of major governments immediately led to a large increase in interest rates internationally. In fairness to the Government, inflation has subsequently fallen and interest rates have fallen slightly in turn But the major obstacles to further reductions are the expectations that inflation will rise again, and the growth of credit demands internationally and within the major

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economies could contribute to a further increase in interest rates. There is evidence in today's Financial Times of a certain degree of nervousness in the United States and an anticipated increase in interest rates as the budget deficit mounts. As has been said by speakers from both Front Benches already, this could have an extremely serious impact on the LDCs who are substantial borrowers.
The international debt problem will be with us for some time to come and, like the noble Earl, Lord Gowrie. I too, am encouraged by the steps that have been taken by the international banking community to put their house in order. I had the pleasure of being in Washington last year during the IMF meetings, and I was impressed by the recognition on the part of the international banking community that they had to establish institutions and lending policies which could cope with the difficulties that had emerged in the case of Mexico, Argentina, Brazil and so on. Unfortunately, the application of the general principles of the IMF has not only been harsh but in many cases has been indiscriminate and has created serious political tensions in the governments of LDCs, who have had to impose very unpopular policies. As has been stated by the noble Earl, Lord Gowrie, a 1 per cent. rise in dollar interest rates, which is quite possible, would now increase the total indebtedness of the LDCs by 6 billion dollars in a year.
Last week I happened to be in Cuba, which is one of the LDCs. In Cuba, 84 per cent. of their export earnings, from which they have to service debt, are from sugar. It is the most important commodity in their economy. But the price of sugar today has fallen, in terms of equivalent purchasing power, to the 1932 price of sugar which devastated the whole of the Caribbean economies. Here we have a critical situation, that these countries are having to service an increased mountain of debt with commodities that have collapsed in price. It is no wonder that Cuba finds her rescue elsewhere than in the Western world. The country is almost forced into dependence on the Soviet Union. It might be sensible, in judging the future of LDCs, to be more receptive in making financial accommodation than sending in troops at a later stage and at great expense.
The monetary stance taken by the major governments was initially responsible for the current levels of interest rates. Although there is an uneven recovery on its way, this will make greater demands on credit and may, particularly in the United States, which has to finance a major budget deficit, create an increasing spiral of interest charges. As I say, this would be devastating in terms of LDCs servicing debt.
It is interesting in the United States, which represents the most serious factor affecting world interest rates, to talk to bankers. There is a general view here that bankers enjoy rising interest rates and making large profits, but I am quite sure that, if you interviewed any United States bankers, with their large debts in the LDCs, they would very much welcome a reduction in interest rates. It might make some of their assets in the balance-sheets look a little more respectable. So there is no pressure on the part of bankers to increase interest rates here or in the United States.
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There are always plusses and minuses in the United States situation. I was interested at the IMF to see the French Socialist Minister of Finance point his finger at the United States delegation and say, "Of course, you know that you in the Reagan Administration are the last of the Keynesians. You are financing your prosperity on a substantial budget deficit." That is happening, but the moment of truth will presumably arrive after the election But there are plusses and minuses, and there is no doubt that a 5 per cent. growth rate, which has been achieved in the United States, and the high dollar, are increasing the opportunities in that market for the LDCs and others and can make some impact on raw material prices.
We have to accept a good deal of what the noble Earl Lord Gowrie, said about some elements of recovery in the United Kingdom's economy, but it is a recovery amounting to only about 2 per cent. per annum, which is not very exciting. The inflation rate has certainly been brought under control, but the interest rate will fall only if we can anticipate a long-term holding of a low interest rate Bankers are reluctant to lend at reasonable rates in a situation where borrowings may be repaid in inflation pounds Despite what the Government claim, the rate of return on investments, which is crucial to this whole area, has risen in Britain from the depths reached in 1980–81 only to the level at which it was when the Government took office In 1980–81, the real pre-tax rate of return for industrial and commercial companies, as estimated by the Bank of England, fell to about 3 per cent Since then it has risen to 7 per cent. But, in borrowing to finance investment, companies are faced with real interest rates at very high levels in historical terms The incentive for savers to provide funds for productive investment and for companies to use them is influenced by the expected rate of return as well as the current rate. This will be determined by the economic prospects. It is disappointing that the Government's medium-term plans only allow for a very gradual change in the financial conditions in which potential investors operate. Only if Britain's long-term anticipated inflation rate can be held to, say, 4 to 5 per cent. will lenders, both domestic and international, be willing to supply funds at lower rates of interest.
High interest rates have been bad for the economy as a whole, and there has been some suggestion that the banks have gained more than most in expanding their lending activities while others have been in trouble There is quite a fashion in Labour Party circles at the moment to blame the City for many of the difficulties of our economy and the lack of investment but I would suggest to some of my friends in the Labour Party that they should read the Wilson Report, in particular the section dealing with lending for the development of North Sea oil, which indicates that on occasion the banks are not totally unreceptive to the needs of the economy It is not only in the case of LDCs that the banks have been concerned about the mounting indebtedness If one looks at bank returns, one observes very large-scale provision for United Kingdom companies, where there has been a long list of failures and receiverships.
The Government's monetarist policies have had some effect in lowering both interest and inflation, but

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their effects upon the real economy have been devastating in human terms. I do not believe that it is simply the objective of Government policy to hold down inflation, important though that is. and even interest rates. We have got to measure the impact of this total monetarist strategy in human terms—in terms of the increased number of unemployed people who see no prospect of employment. Also, the efforts to restrain Government borrowing have been heavy-handed. Capital projects have been cut much more readily than current expenditure. That applies particu-larly in the case of the nationalised industries and infrastructural expenditure. The level of capacity utilisation—of capital and labour—is still too low, and is expected to rise only slowly. The appropriate degree of fiscal stimulus should still be higher, and judging from the evidence of other OECD countries there is little to suggest that higher infrastructural expenditure would necessarily cause a renewed rise in interest rates. The lowering of interest rates should not, anyway, be the single aim of Government policy. Government policy should be measured by a much larger canvas than that.
The speech of the noble Lord, Lord Beswick, was interesting, even perceptive in its analysis. It pandered a little to the current fashion in the Labour Party, that the City and the banks are the enemy who frustrate economic revival and make fat profits. A reading of the Wilson Report, and of the activities on the more inventive side of British banking and services, could correct that imbalance. Undue disregard of rare public spending could be inflationary. I commend to the House the controlled reflationary policies for our domestic economy which have been advocated by the Alliance. They are much more realistic in terms of meeting the problem of high interest rates.
May I also suggest that the continued insistence by my right honourable friend Roy Jenkins upon strengthening the international banking and financial institutions could make some contribution to achieving the objectives which the noble Lord, Lord Beswick, has in mind. It is not only high interest rates that are a contributory factor to recession and lack of investment. Currency fluctuation is a major factor in creating nervousness. To the extent that we are able to create international institutions which will contribute to a greater degree of stability in this field, we shall be achieving some of the objectives which have been sought in the Motion now before us.
4.26 p.m.
Lord Jacques: My Lords, may I congratulate my noble friend Lord Beswick not only on his Motion but for the speech which he made in opening the debate. It reminded me of some of the excellent speeches he made from the other side of the Table when we were in office—a very pleasant memory. May I also say how much I welcome the abolition of the national insurance surcharge. It was a tax upon jobs. I do not expect immediate results from its abolition, but in the long term I believe that it will be beneficial. Its abolition is a step in the right direction.
I welcome the proposed change in corporation tax—the switching of relief from capital allowances to lower rates of tax. This change will correct two
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imbalances This tax was too favourable to the company which tended to employ capital rather than labour, and too harsh on the company which employed labour rather than capital The change which has been proposed by the Chancellor will correct that imbalance Rates of depreciation will still be higher than commercial rates of depreciation; consequently, they will be fair and reasonable. I would say, from commercial experience, that they are just about right: a little higher than commercial rates, which is just as they ought to be.
The proposed change in corporation tax has also corrected the imbalance between the large, well-established company and the small often new company When, for example, money was spent on a considerable scale upon the development of a new product, there would probably be a loss as a result of the development of that product. This was not serious for the large company which would have made profits in other departments; it could set its capital allowances against the profits made by the other departments. The large company was therefore '"sitting pretty". However, the small company, especially the new, small company, which made losses would have no other departments against which to set off its losses. Consequently, it was at a considerable disadvantage By switching relief from capital allowances to reduced rates of tax the Chancellor is helping the small company It is important to help small companies because the products of our economy come, to a lesser extent than anywhere else in the western world, from our smaller companies Therefore we have great scope for using policy to help the small company.
I would also point out that the system of capital reliefs was expiring in any case because it was not working So much so. there was a total of £30,000 million of unused allowances carried forward because there were no profits against which to set them The situation called out for radical change and I believe that the Chancellor of the Exchequer was right in taking the action that he did, although I know that some of my colleagues would disagree with that point of view.
The impact of high interest rates on British industry has been devastating in the past three years. For a long period the question of whether or not a company was successful depended not so much upon its efficiency but more upon how far its funding was subject to the current rate of interest, that was the crucial factor High rates of interest do not merely reduce the disposable income of a company but also tempt the company, in order to keep its goodwill on the equity market, to pay dividends which it cannot afford to pay.
In the three years from 1980 to 1982 the earnings cover for dividends was at the lowest point it had ever been, even measured on an historic cost basis Measured on a current cost basis, the cover was even more inadequate In one half of the 24 industrial sectors monitored by the Bank of England, the aggregate payments in each of those three years was not covered by earnings One of the consequences was that there was practically no investment. Indeed, investment during those three years in manufacturing industry was negative; that is to say, the amount invested was less than the amount of depreciation of the existing assets Consequently, industries suffered

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not only immediately but in the long term also, because of the lack of provision for the future.
We are often told that there is plenty of money and it is not because there is no money that there is no investment; that it is because there are no profitable projects in which to invest the money. May I suggest that the demand may be less than it would otherwise be because the rate of interest is too high. If we got the rate of interest down then the demand would probably be greater and more projects would be profitable. The rate of interest has to come down if the Western economy is to be successful. I believe that there is a good deal to be said for the proposal of Mr. Heath. He says that we should tackle high interest, if we can. by international action.
Mr. Heath's proposal is that the United Kingdom would lose nothing by joining the European Monetary System. If we did so, we could then use our influence to bring the European Monetary System, the dollar and the yen under the umbrella of the International Monetary Fund, and use that machinery for control-ling the world's rate of interest. That is probably a modern version of a future Bretton Woods. I do not believe that we are likely to achieve another Bretton Woods, because that agreement came at a particular period of time immediately after the war, when it was comparatively easy to get agreement and to act upon it. But I feel that Mr. Heath's suggestion will probably be the easiest way in the long term to approach the problem from an international point of view.
The noble Lord, Lord Taylor of Gryfe, told the Labour Party in pointed terms that so far as the rate of interest is concerned, this was not a sphere in which our country would legislate alone. I say to the noble Lord that this country has never been in a stronger position than it is now to legislate alone in this particular field. For the first time it has a balance of payments which is substantially protected by oil exports. That very substantial protection puts this country in a stronger position for dealing with interest rates. If we could do it to some extent before, then we can do it even more now. Why should we not control the outflow of money? Is it good that the insurance premiums and pension contributions of our workers should be invested abroad so as to export employment? Surely there is a great deal to be said for controlling the outflow of money. If you control the outflow of money then you can proceed to fix your own rate of interest.
It might be that the oil receipts were not sufficient to protect the balance of payments and that there was some effect upon the balance of sterling. But why should we be afraid of that? The present position is that industry—particularly manufacturing industry— is 25 per cent. less competitive than it was in the mid-1970s. This was almost entirely due to the over-valuation of sterling. If our attempts to reduce the rate of interest caused sterling to fall, it would do manufacturing industry and those who are unemployed a great deal of good.
We have areas of the country such as the West Midlands where for generations the percentage of unemployed has been substantially less than the
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national figure. Now those areas have a level of unemployment which is substantially greater than the national figure. We have to do something about that situation. Let there be no mistake but that this country cannot live off service industries alone; that is too much like taking in our own washing. We must have manufacturing industry, and we must have it on a greater scale than exists at the present time. We must rebuild our manufacturing base. In particular, we must rebuild our engineering industries, including the making of cars, because they support our coal and our steel industries. Aid will be necessary to expand that manufacturing base and I suggest that aid should be on the basis of selectivity and not upon taxation, as it was through the old corporation tax.
I sympathise with the Government and with their wish to control inflation. I even sympathise with them when they say that theirs is the only method because they have seen other methods fail. But I would point out to them that in the long run the demoralisation which is caused by unemployment is far more serious for our society than is inflation—far more serious. We cannot afford to concentrate entirely on inflation and neglect the problem of unemployment.
As I have said in this Chamber several times, all Western governments must spend themselves out of depression. They have no choice. The choice is how they spend themselves out of depression. Whether the Government spend money on 10 people to lie idle on unemployment benefit or whether they pay them to do necessary and useful work which is required in the community—that is the choice. I will grant at once that putting men to work involves greater cost than paying unemployment benefit, but there are multiplying advantages. Instead of receiving unemployment benefit those men will be taxpayers. They will spend their income and the people who sell them goods will make more profit and become even greater taxpayers. So there is a multiplying effect which should be taken into account.
I believe that it is possible to have selected public works which would reduce unemployment without affecting our balance of payments because we can choose those works which have little import input. I would also point out that in a period where there is increasing productivity, as we have had in the last few years—that is to say, the output per worker has increased—it is absolutely essential that there should be expanding demand. If we do not have expanding demand then increased productivity results in unemployment. However, if we have expanding demand we can have increased productivity without increasing unemployment. That is all the more reason why public works should be used to expand demand.
In conclusion, I remind this House that no Government have ever been subsidised the way that the present Government are subsidised. They are receiving £8,000 million of tax from North Sea oil. What would some of the previous Governments have done if they had had that wealth coming to them? But that oil will run out. It will dry up. Unless we resolve our problem of unemployment before the oil runs out we shall be in extremely serious difficulties. Our standard of living will be threatened. Our educational standards will be threatened. Certainly our health service will be threatened. Those are the long-term

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possibilities unless we can deal with unemployment. If we are to deal with unemployment we must have a Government who recognise that there is not just one way of dealing with inflation. There are several ways, and with some of the ways it is possible at the same time to have budgetary policies which will minimise unemployment. That is not possible—or is certainly very difficult—with the methods of controlling inflation upon which this Government insist.
For my part, I believe the future of this country depends on how far we can develop partnership in industry—a partnership in which a company, whether it be private or a nationalised concern, is in co-operation with the workers through their trade union. By that I mean the trade union should be consulted on all matters affecting the employment of its members. It should be fully informed. In return, the union should be prepared to enter into agreements whereby it is prepared to have all disputes settled by arbitration—indeed, binding arbitration. That is being done by the Japanese in our own country and if it is good for the Japanese it is also good for British companies. But before we can get anywhere near that, we need a Government who are prepared to co-operate with both sides of industry; a Government who are looking for consensus and co-operation. When that day comes, I shall see some future for Britain.
4.45 p.m.
Viscount Trenchard: My Lords, may I also congrat-ulate the noble Lord, Lord Beswick, not just on introducing this interesting Motion but on the way in which he introduced it, which was worthy of this House and not so much reminiscent of the political to-and-fro that goes on in another place. I shall try to keep very much to that same note in supporting my noble friend. I do not know whether he needs my support, but I looked at the list of speakers at lunchtime today and saw that no one was supporting him from the Benches behind him, so I put down my name, which means that I shall set Hansard an even greater puzzle than usual.
I have common ground and, to a degree, a common background with the noble Lord, Lord Beswick. I have spent 30 full-time years in manufacturing industry, and I believe that the future of this country still depends upon our productive industries. I believe that it is absolutely vital that they shall have expanded very considerably before oil starts to run out—as, indeed, the noble Lord, Lord Jacques, said just now. Along with others, I certainly do not accept the thesis that we can live on service industries alone. In very broad terms, over half the service industries are themselves dependent upon manufacturing industry. If one looks at it in terms of the percentage of earnings, of the country's GDP, the contribution by manufacturing industry and the service industries dependent upon it is still by far the largest part of our earnings.
Before I leave the service industries one must defend them. In most cases, and in particular in relation to our financial sector, they have remained extremely competitive in the world and they have brought us invaluable invisible earnings. The majority of my remarks will be addressed to the competitive position
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of British manufacturing industry, but we have to recognise that part of the invisible earnings sector remained competitive during a period when British manufacturing industry, did not.
I should like to say a word in relation to the long-term historical survey of the noble Lord, Lord Beswick, when he went back to the First World War. There was, of course, an era when currencies were absolutely sacred—prior to the Keynes era—when very low nominal interest rates existed There were periods, as we know very well, when there was actual deflation and not inflation. We also know that interpreters of Keynes, following him, more than Keynes himself, developed his policies so as to lead in the end to accelerating inflation all over the world, to budget deficits of greater and greater proportions and to the world finding out that this route to Utopia was not real if exploited as it had been We all hope—and there is common ground in this debate again—that we shall see world interest rates come down My noble friend pointed out that Britain is playing quite a leading part in influencing world interest rates to come down at the present time.
It is no good dismissing the significance of real interest rates and nominal interest rates and, as my noble friend pointed out, periods when we have had negative interest rates. It is no good pointing out that industry is not well served when it has to pay 10 per cent. on loans whether or not there is a high rate of inflation at that time. The fact is, as my noble friend made clear, that that kind of situation with inflation as its base, is thoroughly unhelpful to industry.
My noble friend has also dealt with the point that moneylenders—and not having been in the city at any part of my life I have no particularly high regard for them—do not earn big profits just because interest rates are high. That is a non sequitur. It depends again upon the rate of inflation and upon the real rate of interest.
If I may now turn to the main contribution that I would like to make to this debate, so much of this disagreement between us and moderates and sensible people on the Benches opposite and in the country holding similar beliefs is based upon the assumption that there have been slightly softer—from a monetary point of view—and better options, which have been practised in the past and which have not produced at least such bad results, as they see them, as the sound monetary policies of this Government. They point particularly, of course, to the tragic unemployment, a view that we all share.
Were those policies in the 'sixties and 'seventies, of moderate reflation as they were sometimes called, or of slightly augmenting demand, successful? I would like to point out that in any normal period of moderate world growth they would have produced disaster at the time that they were introduced. I believe that those policies were in fact disastrous but that the result of them was masked.
As some of your Lordships know I base this on the trend of British shares of market for its manufactured goods In 1960 we had nearly 20 per cent. of the world market for manufactured goods By 1978 we had 9 per cent. we had lost over half our world market share inside two decades Our production was actually no

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lower, it was slightly higher and our standard of living, with hiccups, had not gone down; it had gone slightly up. What we failed to notice, or notice sufficiently, was that 13 more countries passed us by in the order of GDP per head of population or in the order of richness. That made 16 by 1978. The world market doubled; our shares halved; everybody else's standards of living rose enormously; ours stayed still.
This happened to be a period when the free world grew faster than it has ever grown before and probably ever will again. It is a question as to whether those policies could have lasted in any normal times. In my view, they quite clearly could not. They would have led to heavy unemployment as our shares of market dwindled—in the 'sixties even, not even waiting for the 'seventies.
So I believe that the whole divide between us in this debate and in nearly every other economic debate is based on the misconception of the last two decades of our history. The reality was that, with inflation, with controls of every kind on industry, with other factors which time prevents me from going into today, our manufacturing industry was becoming less and less competitive and we were losing more and more of our share.
It is hardly surprising that when the world recession arrived and growth stopped, the bloodbath ensued. It was perhaps made a bit worse by the extremely strong exchange rate for the pound at that period, which owed some of its strength to the North Sea oil coming on stream at the same time. It was not so much the interest rates that caused the bloodbath; it was our uncompetitiveness, the end of world growth and then the strengthening of the pound.
Things really are improving. The noble Lord, Lord Taylor of Gryfe, used the word that the improvement was a "staggering" one. That word has two meanings. You could say, bearing in mind how uncompetitive we were in 1978, the fact that we have stopped the fall in our world shares of market, that we are growing again faster than most of our competitor countries, that we have controlled our unit costs better than they have, that that change in a matter of a few years is indeed staggering. Indeed, it is clear that the Stock Exchange is reacting to this improvement in the share values of British manufacturing industry. When I ceased to be a Minister and was able to look after my small savings again, I am glad to tell you that 1 put them back into British manufacturing industry in this country, including industries like textiles. I can further tell you that as a result I have made more money than I was paid as a Minister.
It is clear that every estimate of figures in 1983 has subsequently been revised upwards and that the rate of improvement is 3 per cent. rather than the 2 per cent. a little grudgingly admitted by the noble Lords on the other side. I do not believe it is nearly fast enough because I think we have the opportunity of a century to recover lost market shares and to go ahead. Our costs in this country today are in my view extremely competitive.
I had a great deal to do with the introduction of the statistics about how uncompetitive we were in relation to a certain base year, which I think the noble Lord, Lord Jacques, mentioned. I did it because I wanted my colleagues in Government, when I was at the
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Department of Industry, to understand just how great were the pressures on an uncompetitive manufacturing industry with a strong pound at the same time So I know the detail of the statistics which I dragged out of the Central Statistical Office at that time Furthermore, I know that today we are competitive and are proved competitive by the figures which my noble friend has given and which I mentioned just now.
Our productivity increases in the past two years are of Japanese proportions, that is, they have not been produced nationally by anybody else except Japan in recent years, and I believe they can be kept up. I would like more investment. I would like more investment to have taken place, but it is a truism of life that if you are hopelessly uncompetitive you pay for it, and I am afraid we have paid for it. But our investment is rising and our productivity is rising dramatically, which proves that our existing investments are not incapable of better utilisation.
If one studies these statistics of world growth and of shares of market, and if one looks at the longer term since World War l, as the noble Lord, Lord Beswick, has done, one really cannot doubt but that the world will be better served if there is sound monetary policy—not as the only policy, but if there is sound monetary policy in as many countries as possible I, too, as an industrialist am critical of the particular significance of any one monetary measure, and I welcome the greater flexibility that has been shown by the Government in recent years in relation to particular measures.
It is suggested that we can spend more money in the public sector, or on capital projects, whether they be in the private or the public sector, and that if we do those things, it will not really affect inflation. It is money, like all other money, and it will be spent and paid to people, and if we spend more money than we have earned as a country and start running our deficits up again, we shall only undo the really dramatic turnaround in our competitiveness of the last three years.
It is no good classifying different aspects of expenditure in the home market and saying that this one or that one does not count They would produce a return to the policies of the 'sixties and 'seventies, and if they produced it in a period of only slow world growth, or more normal world growth, then they would lead to instant disaster Here I think of certain previous policies—and I am not suggesting that they were all Labour policies; they also included Conservative policies under the Heath Government But if we had returned to those policies in the recent recession, or if we returned to them now in a period of slow growth, they would produce disaster because there would no longer be the huge world growth to mask our policies of fool's paradise, as they were.
5.2 p.m.
Lord Soper: My Lords, I am sure that the House will be grateful to my noble friend for introducing a topic upon which his own assertion was that it ought to stimulate thought, and I dare say that a great deal of thought has already been stimulated on the very wide issues that are involved in this Motion. I am persuaded—I was almost going to say. "stung"—into

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participating in the debate by the contemporary resurgence of the quite impudent notion that the clergy should keep out of politics.
I have no prescriptive right and no expertise with which to compare my own competence in this field with that of the politicians and others who have already entertained and instructed your Lordships today. But I reflect that upon no subject has the Church historically spent so much time as it has upon the practical issue in the realm of economics of the place which usury, or interest, should play, or should not play, in a society which can claim to be Christian. Therefore I shall presume to make comments about three of the deliverances of the Church—or rather two positive deliverances of the Church from time to lime—and an almost total absence of any generalised programme and policy over the last few centuries.
The mediaeval Church condemned upon the Aristotelian principle the taking of interest because, as they insisted, money was barren, and therefore those who manipulated money were not making any contribution to the ongoing society in which they lived, and were to be reprimanded, and indeed to be condemned, for so doing. I notice from the wording of the Motion the extent to which the manipulation of money, which is itself sterile in its processes, has become a very large part of the economic field.
Secondly, the Church maintained that usually the ugly sister (if you like) of interest was itself a contribution to the sin of avarice, which was one of the deadly sins, and that it is inescapable that those who pronounce upon the uses of interest may indeed be committing a heinous crime, and that therefore any aspect of interest should be regarded with the greatest of care and, where it was permissible, should be well scaffolded within principles which did not encourage, but rather discouraged, the evil of avarice.
Let me therefore, for a brief time, recall the affairs that historically belong to these three propositions. The Schoolmen in the Middle Ages, endeavouring to formulate their ideas with regard to the barrenness of money, described goods in two terms: there were those which were fungible, and those which were non-fungible. The Schoolmen yielded to no modern chancellors in their ability to be almost entirely incomprehensible, and therefore I would presume, if I may, to define what they meant by the word, "fungible":
"Fungible is said of a thing which is the subject of an obligation, when another thing of the same or another class may be delivered in lieu of it".
I have thought about that for some time, and it really means that a flat swap is permissible.
But the quality of the fungible goods—those that have a limited usefulness and which can be exchanged, such as, say, goods that can be eaten—is very different from the non-fungible quality of that which can be borrowed, such as a horse, or a house, for that has a continuing usefulness. Therefore from the very' beginning it was possible for the Schoolmen to recognise that in some concerns and in some affairs interest was permissible. But money was not non-fungible, it was fungible. It was barren in itself, and therefore those who manipulated it for profit, or for
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the increase of their own wellbeing, were committing a sin.
That has I think remained a very potent element in the analysis of the position which money now plays in a modern economy where, as I say. its manipulation is of great importance to those who can by such means create a false excess of money without contributing anything that is in itself creative to the sum total of the wellbeing of the community.
As to the second proposition—that which is involved in the question as to whether it is possible to take interest morally—the fathers of the Church recognised that in some circumstances it was necessary to provide an outlet allowing that money, though it was barren, when it was borrowed might yet indeed cause misfortune to those who had lent it. That produced two ideas which, if your Lordships will allow me. I shall put in Latin, which makes them sound rather more important. The proposition lucrum cessans (that is to say, money was lost because it was borrowed or lent) was considered a just reason for a modest amount of interest to be taken. The other, damnum emergens (which sounds much more ominous), where by the lending of money you yourself were suffering some loss, also permitted the taking of interest.
But, as the history book recalls, it was a losing battle against those who, in an increasingly competitive world, and with the emergence of what is so often called economic man, were in fact involved in processes which no longer permitted the somewhat simplistic idea that any taking of interest was itself to be condemned.
So I turn to the third of the comments which I believe are to be derived from an analysis of the history book, in particular with regard to its Christian content. It is true that Luther, who was obviously a child of the Reformation and of the Renaissance, was conformative very largely to the Schoolmen's principle. He did not believe one gulden could produce another. In the Reformation processes he was accompanied of course by no less a figure than Calvin, and I think it may be argued that Calvin was the father of the capitalist system, in as much as it was said of him that he treated money as an apothecary treats poison. In much of what he said, he announced his total hostility to any aberrance from the mediaeval doctrines. Yet, at the same time, he opened the door to the capitalist system in no uncertain fashion. And, indeed, if he regarded money as a poison, he had a very secure place for it in the medicine chest he operated. This is the evidence that begins to emerge as you read, for instance. Pascal's Provincial Letters, when the Christian Church is confronted with the new emergence of a capitalist society, or the beginnings of it, with the discovery of silver on the other side of the Atlantic and the emergence of the middle classes and the burghers in Holland.
What happened, if I may say so without offence, was this. The Christian Church decided to give up the struggle and allow what Tawney so immaculately set forth in his Religion and the Rise of Capitalism that instead of the Christian Church maintaining a generalised attitude to the whole economic field, it abdicated. It abdicated that field to such an extent that I have to tell you with regret that no less a figure than

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John Wesley, my spiritual father, announced that the well conducted Christian was enjoined to get all he could, to save all he could and give all he could—a thing that was totally irrelevant and inconsistent with the general principle that any economic society must conform to the general pattern of the Christian faith.
It is the abandonment of that attitude of reliance upon moral principles that I believe to be the outstanding comment that the absence of any denned and regular opposition has meant for the Christian Church and, indeed, for the modern world. Therefore, although it may sound extravagant in your Lordships' House today, I find that the capitalist system is immoral and the evidence can be found in the second part of the proposition that we are debating—that with an overplus of all kinds of commodities within the capitalist system, the rate of penury and. indeed, of total destitution tends to increase and that the third world is very largely in a condition now in which it is impossible to find the kind of interest available in order to save itself or to be helped towards some kind of better situation.
I know that this socialist concept, for that is what it is, is not particularly popular today. But if there is one element within the general announcement of what the Christian Church has done. I stand here to condemn, I hope humbly enough, its total reliance upon the market forces in its general concept of what modern society ought to be like and its abandonment of that moral principle which began with its prohibition of usury and which could have been the answer to the ever-increasing processes of monetarism and the secular society in which what is profitable takes precedence over what is right.
These may not be particularly practical concepts within the framework of this debate. But it does for me become even more important not that the clergy should keep out of politics but that the clergy should be much more informed and better aware of what is the nature of the politics in which they are intending, or should be intending, to take their part. If they do that, 1, for one, believe that they will have to be much more revolutionary. They will have to make a much more categorical denunciation of the general principles of the society that now pervades the world. If I am in a very small minority, at least I have said my say.
5.14 p.m.
Lord Seebohm: My Lords, I am sure that your Lordships will all agree that the noble Lord. Lord Beswick, is a past master at asking very difficult questions. I think that your Lordships will also agree that his charming and innocent way of putting a question might lead one to fall into the trap of thinking that it is fairly easy to answer. In fact, when he speaks one realises that he has done a great deal of homework and that it will not be easy to answer all his questions. I agree with him entirely about the evil of high interest rates, but I do not agree with his analysis. It is that topic with which I intend to deal.
It is first necessary to say something about nominal rates and real rates. All of us know what nominal rates are, but there is some considerable confusion about what are real rates. The difference between nominal rates and real rates is the expected and subsequent rate
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of inflation, not the rate on the day that you are looking at. It so happens that right through the 1970s and for most of the 1980s we had negative interest rates except. I think, for 1977. At the time in 1975, I remember, when inflation was running at 20 per cent., the rate at which my firm, Finance for Industry, was lending money was 16 per cent. We were compelled to have that rate for the simple reason that we had to raise it ourselves at very close to that figure. Today, a good bank customer would probably be able to borrow at about 10 per cent. The expected rate of inflation is 5 per cent. So now, there is a positive rate of 5 per cent., which is historically very high indeed. There is considerable scope, in my view, for getting interest rates down, one way or another.
It was by no means a disadvantage in those high rate times for people to borrow at 16 per cent. if they were to invest in fixed assets. For instance, if they were putting up a factory and had waited a year, it would have cost 20 per cent. more, and another year, 20 per cent. more than that. Looking back, it would have been much cheaper to pay 16 per cent. particularly if done on a floating rate. The story is very different when dealing with finance for current assets. Let us suppose that you are quoting for a contract in the Middle East, which will take a year and for which you have to borrow all the working capital. If you are being charged at 15 per cent. by your bank or the market, then that is a direct 1 5 per cent. cost that you have to add in the tender. When competing against a German firm, possibly paying only 4 per cent., you have an 11 per cent, figure against you before you start. Nominal rates are very much more important for normal business arrangements than is the real rate.
To understand what has happend to the cost, supply and demand for money, I hope that I may be forgiven for describing briefly the fundamental change in the money market mechanism that took place in the 1960s and early 1970s. This was as I saw it in my branch work at the bank and later sitting at my desk in the City. The system that started then has persisted to this day. In the 1960s, owing to the fact that London was (and still is. of course) the financial centre of the world, the foreign banks streamed into London, first to take advantage of the Eurodollar market but also—this is true of the American banks in particular—to compete directly with us in more ordinary banking lending. They operated in the wholesale market and therefore had no deposit base and no money at all with which to operate, since they did not provide current or deposit accounts for the general public. As wholesale banks, they were interested in lending fairly large chunks of money for, say, three or four years to blue chip companies. But, as they had no money available, the only way they could go into the money market was on their good name to borrow short for three or six months at a time.
However, to borrow short on variable rates and then long on fixed rates was a quick way, as everyone knows, to bankruptcy. They therefore invented or at least introduced into this country a fairly new type of lending. This was to lend for a medium term on rates that were not fixed but floating for six months at a time and were then re-fixed at a rate at which they could raise the money on the market. In this way they could lend long-term money at short-term rates. This, of

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course, became a hot selling point to big companies because short-term rates in those days were considerably lower than long-term rates.
In my view that began the complete destruction of the fixed interest bond market for a whole decade and more. These banks, therefore, could match exactly their borrowing and lending costs, and made their profit from, Say, a 1 per cent. turn or "add on" to the raising rate. This had two damaging effects on the clearing banks. First, they lost an increasing proportion of their deposits to the money market and they also lost a growing amount of their profitable and trouble-free tendings.
The comparatively new method of borrowing short and lending long was, to my mind, an undesirable development because it meant that the lending banker—in this case mainly the Americans—in order to maintain his medium-term contract, would have to pay the money market rate of the day, however high it was, and pass that on to the borrower. This defect really came to roost in 1972, when the Heath Administration decided to make a dash for growth. I had one customer who was offered £20 million, which he needed, for 10 years at 8 per cent. at the beginning of 1973, but having refused because he preferred the short-term rate he was paying up to 14 per cent. 12 months later. As it was a leasing company with fixed interest to its leasing customers, it took several years to recover, and meanwhile he was virtually bleeding to death.
The other aspect of high interest rates to which the noble Lord referred was that they encouraged the unsound but financially profitable people. I should like to know more of his views on that matter, because in my view the reason why the property market blew up and then failed had nothing to do with interest rates, but was simply to do with inflation. The fact that interest rates were high made it less profitable rather than more profitable to buy property and to speculate on it. In my view it was entirely due to the fact that there were negative real rates and inflation was so much higher than the interest rates that they could make a considerable profit.
The other main point that the noble Lord mentioned was the question of how we can control interest rates. Here we are on a very difficult point. The first principle that we must accept is that you can control interest rates and let exchange rates rip, or you can control exchange rates and let our interest rates rip. We have been trying to compromise on that as far as we can, but there is only a very limited way in which we can do it. The Bank of England has clearly in the last few days been in the money market buying sterling in order to keep the rate reasonable, with the exchange rate not going too low, since the attraction of the American market with high rates is taking international money, over which we have no control, from sterling into dollars. I think that the noble Lord would have liked to see some form of exchange control, but I believe that that would be a great mistake. The Bank of England tells us that the increase in the rate, possibly, due to the freedom of the exchange rates, could be as much as ½ per cent., but not more.
The other point which I should like to raise is the problem of the third world. Here we must remember
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that when the oil crisis arose in 1973 the oil consumers were in a ghastly position compared with the oil producers There was a massive transfer of wealth from oil consumers to oil producers This resulted in large quantities of dollars floating about on the international market, and third world countries particularly were in a desperate state in trying to buy absolutely essential imports when they had completely run out of foreign exchange.
In that instance the problem of recycling came in, and in my view the banks did a magnificent job. They recycled at a considerable risk and it saved some of these countries from suffering a major disaster because they could not import their essential imports After a time, as all this money was borrowed on the Euro-dollar market interest rates began to rise with inflation and naturally those who had lent the money on a floating rate basis had to put up their rates to the rates which they had to pay the money market to get it and that introduced the disastrous interest rates which the third world has been charged.
I am afraid that I do not know the solution. Some banks may yet go bankrupt. On the other hand, there is some sign from various sources—the oil companies themselves the OPEC countries and other sources—that it is gradually being sorted out Certain large debts have in fact been written oft as regards some countries—not necessarily the sovereign debts, but other debts such as trade debts—in fairly large quantities So I am hopeful that it will come through, and that in a few years' time we shall be able to see something like normal conditions.
I should like to confirm what the noble Lord, Lord Taylor of Gryfe, has said. Bankers hate high rates We are longing to see them come down. We make a bigger margin when rates are high, but high rates limit our business customers In the long run low rates increase our business, increase trade and everything else. We are longing to see them come down In order to bring rates down we have to control inflation, and inflation goes hand in hand with high nominal rates If we want to cure the latter, we must cure the former.
5.27 p.m.
Lord Oram: My Lords, the speeches of my noble friend Lord Beswick and others have made a formidable case in support of the thesis of his Motion; namely, that under current financial policies the wrong industrial and commercial activities are being encouraged and the wrong people are reaping the benefits. It is about the last part of my noble friend's Motion—that which deals with the third world—that I would like to speak. For it is in the third world that we see the most painful consequences of present policies and it is there that we see the most threatening signs of catastrophe The noble Lord, Lord Seebohm, has just touched on the problem which I would like to deal with at a little more length.
These problems have not suddenly tome upon us Indeed, as the noble Lord Lord Seebohm, indicated, they date back to 1973 or 1974 when the rapid and massive increase in the price of oil brought about a general price inflation to the very great detriment of, particularly, the poorer non-oil producing developing countries Ever since that point we have seen deepening divisions in both national and international

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societies. At home, increasingly, as my noble friend Lord Jacques pointed out, the division is between the "haves" and "have-nots", defined as those who have a job and those who do not have a job. But in the world at large there is a deepening divide between the developed industrialised countries, on the one hand, and the underdeveloped countries, on the other hand. But there are also deep divisions within the third world itself, between the countries which are fortunate enough to have oil and those that do not.
In view of all the complexities that have been rehearsed in speeches so far about the cause and effect of these troubles and divisions—and I agree with the noble Lord. Lord Taylor of Gryfe, that the causes go much deeper and much wider than the one question of interest rates—I believe that my noble friend Lord Beswick has done well to focus the attention of your Lordships' House in this debate on the particular element of interest rates. Certainly in the third world it is interest rates which, over recent years, have been creating the severe debt problem. It is a problem that has been getting worse year by year.
I ask myself: why has this been so, particularly over the last five years? Of course, these have been the years of severe depression and unemployment throughout the world, and they have been years in which restrictive monetary policies have been applied throughout most of the industrialised world, with rising interest rates as a major feature of those restrictive monetary policies.
Whatever may or may not be the evidence that these policies have been beneficial in our own country or comparable countries, I suggest that there is plenty of evidence that they have produced disastrous consequences in the developing countries. Because the economies of the developed countries have been depressed, those countries have imported less from the third world. As a consequence, commodity prices have slumped and export earnings have declined. The combined effect of high interest rates and low commodity prices has recently been pin-pointed by the trade Minister of one of the suffering countries—namely, Brazil—when he said that:
"if interest rates and commodity prices had remained at 1979 levels, the country's debt would now be only 47 billion dollars instead of a calamitous 95 billion dollars".
In other words, their problem would be only half as large, even though it might be disastrous in any case.
Moreover, we must remember that the prices of manufactured goods that the third world needs to buy have risen during that period, so that the developing countries get caught between the two blades of cruel scissors in trade. I have the privilege of serving on Sub-Committee B of your Lordships' Select Committee dealing with European affairs. We have recently heard impressive evidence from spokesmen directly from the third world countries. This is how one of them expressed their dilemma in concrete, down-to-earth terms:
"a few years ago we could buy a tractor for something like 10,000 dollars. Now it costs us about 25,000 dollars…A truck used to cost less than 40,000 dollars but now costs more than 70,000 dollars. The cost of a bus has risen from 60,000 dollars to 125,000 dollars. At the same time on our exports side, the price of a tonne of coffee has dropped from 5,000 dollars to 3,000 dollars…It is the same thing for unprocessed hides…We could sell a tonne of unprocessed hides for 2,300 dollars; now this fetches only 1,300. We could go on
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like that. What in short we are saying is that on the one hand our terms of trade are deteriorating in a substantial degree and therefore, although we are trying to realise more of our own export earnings, these earnings are just not enough because we simply have to produce more and more to just only maintain our level of earnings".
I thought that that was a graphic description of the dilemma facing third world countries. When they are faced with grim facts like that, what can developing countries do? I suggest that the answer is just one word: "Borrow" and in the past few years they have indeed been borrowing They have been borrowing at high rates of interest from private banks and the consequent debt burden is becoming overwhelming It has been estimated that for 21 major borrowers among the developing countries, the ratio of outstanding debt to exports shot up between 1979 and 1982. I shall illustrate the shooting up in this way.
In 1979 the debt was 133 per cent. of exports, which was alarming enough, but only three years later the ratio had gone up to 172 per cent. But it is probably the figures of interest and of amortisation which are more significant for today's particular debate They are equally disturbing In 1979 of every 100 dollars' worth of export earnings by these 21 countries, 50 dollars went to the service of debt In 1982—three years later—of every 100 dollars of exports no fewer than 75 dollars had to be used for interest and capital repayments In the major Latin American countries—to which at one point the noble Earl, Lord Gowrie, referred—the servicing of debts swallows up all the export earnings, and a good deal more.
Perhaps the greatest irony of the situation over these past few years, the late 1970s and the early 1980s, is that it was when the balance of payments difficulties of developing countries were becoming most crucial that official aid flows slowed down and, in some cases, even declined. In 1981—which I think is the last year for which overall figures are available—official aid to developing countries declined by 6 per cent. in current terms and even more in real terms.
That is one of the main reasons why the developing countries had to turn to private banks, and they have to pay the private banks' rates of interest which are considerably higher than the rates which are required for official aid. That is why these debts to private banks have become so significant in recent years. But I suggest that there were other reasons as well Some developing countries, mistakenly, may have seen this private lending as a means of avoiding the conditionally which is so closely attached to IMF operations. There is a good deal of conditionally, of course, in relation to bilateral official funds But that freedom which they perhaps hoped for was short-lived, because the private banks are now needing to lay down strict conditions when negotiating new loans. Moreover, they are tending to confine their new lending to the richer of the developing countries so that the poorer ones are deprived still more of the resources that they need.
However, in my view, the major part of the blame for the present critical situation, with its ever-present danger of defaults, rests principally with the banks themselves In my view, they lent money in a reckless and irresponsible way during that period At home they were losing customers in the developed world because of the depression, and they saw a chance to fill

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the gap by lending to developing countries at high interest rates and with the prospect, as they hoped, of high profits. Those developing countries which have no oil have found themselves paying very high interest rates indeed. The average figure in 1981 was 18 per cent., whereas it had been 8 per cent. 10 years earlier.
These rates are the so called "floating rates" which the noble Lord. Lord Seebohm, has explained, and which vary with the rates which the lender has to pay on the short-term market and which are updated every few months. This is the new mechanism which the noble Lord, Lord Seebohm, described whereby it is the borrower who has to bear a major risk and it is the lender who finds protection through this method.
What is the effect of all this so far as the developing countries are concerned? It means, I suggest, that the "have-nots" now have even less. In your Lordships' House we have several times over the past few years debated the condition of the third world and its problems. Notably we did so in connection with the two Brandt reports and in a debate more recently when the noble Lord, Lord Seebohm, so effectively introduced a debate on world hunger.
It is during that period while we have been talking about these problems that the debts have been rising. It is during that period, too, that the living standards of the developing countries have been falling and the problems of hunger, of malnutrition, of high mortality rates, of illiteracy, of unemployment and of homelessness have been getting worse. The countries which suffer from these maladies are now able to produce less themselves because they have been deprived of the resources for production. And since their populations continue to increase, the inevitable result, as we see so often on television screens and in descriptive articles, is increasing destitution for their populations all round.
So what are we to do about this situation that has developed to such crisis proportions? Temporarily, of course, we must patch things up—and that is what is being done. The latest bit of patching up was last weekend when the Argentine was the latest of a series of countries to be rescued by a package deal put together by the United States and a number of Latin American countries.
The noble Earl, Lord Gowrie, took our minds back two years to the similar situation in Mexico when a package put together had become necessary. He said that we should not be complacent in this matter, and I thoroughly agree with him; but it seemed to me that he sounded a little complacent regarding the ease, or the apparent ease, with which the crisis of a few years ago had been overcome. But the point is that this was one in a series of crises: crisis after crisis, following one after another. There is one mentioned in today's paper, that a package deal is necessary to get Nigeria out of its critical balance-of-payments situation. The point is that these arrangements which are being reached from time to time are essentially temporary. They are essentially patching up. I believe that they are little more than a postponement of the evil day of default and collapse, unless we adopt more fundamental policies to deal with them.
Before I attempt to deal quite briefly with what should be done, may I point to one thing that should
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emphatically not be done; namely, retrenchment on official aid to developing countries. To make my point I would recall what I read in the Hansard of another place of 14th March in what struck me as an extraor-dinary Written Question and Answer, when Mr. Marland suggested that part of aid to four specified countries should be earmarked to liquidate debts. I was glad to see that the Minister of Overseas Development gave his colleague a robust answer to the effect that it was not Government policy to allocate United Kingdom bilateral aid for the direct purpose of liquidating outstanding foreign commercial debts. I was most relieved to see that answer, because there had been no suggestion from the questioner that aid should be increased for this purpose. It was simply suggested that part of the aid programme should be switched to creditors at home. I would only make the comment that I hope that Mr. Marland was speaking on his behalf alone, in which case perhaps it does not matter very much, but if he was representative of any significant body of opinion in his party, then I suggest it is much to be deplored.
Indeed, instead of pursuing policies of retrenchment through restrictive monetary methods, through the reduction of official aid, and through, as we have seen. the provision of expensive bank loans at rates which the third world economies cannot possibly sustain, we in the developed world must be bold enough to adopt those remedies which were put forward so cogently in the two Brandt reports. We need, that is to say, an expansion of official aid on concessionary terms both bilaterally and through institutions such as the International Development Association and the Special Drawing Rights of the International Monetary Fund.
Above all, we should acknowledge the central message of Brandt; namely, that the problems are mutual, they concern both the developed and the developing world, and the solutions must also be mutual. This means surely that we should do what we can for the development of the third world countries in order that they can provide a better market for us. but it also means, the other way round, that we need co-ordinated economic expansion in the developed countries in order that we can be better markets for the developing countries. I believe that it is vital to understand that point about the interdependence of North and South.
It is this interdependence of the fortunes of the richer countries with the fortunes of the poorer countries which is illustrated in the double-barrelled nature of the Motion which my noble friend Lord Beswick has moved. For he calls attention in his Motion—as he did effectively in his speech—to the effect of high interest rates not only on our own economy here but also on the much weaker, much poorer economies of the countries in the southern hemisphere. It is my view therefore that his Motion, and even more his speech, have rendered a signal service to your Lordships' House today.
5.49 p.m.
Lord Walston: My Lords. I too am grateful to the noble Lord, Lord Beswick, for having given us the chance of discussing this important problem, and particularly for having allowed us to widen the sphere

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so that it embraces, as it must embrace, the third world. I am happy to be following the noble Lord, Lord Oram, and I thank him for his also admirable speech. I should like just to underline one point that he made, particularly in his closing remarks. That is the enormous importance of the third world to us in this country and to the developed world as a whole as a market for our products. The figures that he gave for coffee, for tractors, and for buses are of enormous significance. Until the third world is in a position to buy more from us our economic recovery will never be as rapid or as complete as it should be and as we hope it to be.
I shall deal solely with the third world and two aspects of it. Some 15 years ago I did a calculation. It was something rather better than a back-of-an-envelope calculation but I do not claim for it any enormous accuracy. In that calculation I worked out the capital cost at the then prevailing prices in this country of providing a road system, a hospital system and an educational system of a standard that we have here. The capital cost had to stand interest at 5 per cent. The cost per head of the population here came out at a figure of £50 per year in interest charges alone. Since that time costs of building roads, hospitals and schools must have increased by at least four times, and interest rates have doubled: in other words, that figure of £50 per head would now be something closer to £400 per head, or possibly even more than that.
I am not suggesting that the third world countries can expect us to provide them with facilities of that order; to arrive at that would take centuries. But I do suggest that today they require facilities which are at least 25 per cent. of those we enjoy in this country and which would—if they were to pay the normal interest charges—mean a payment for them of £50 per head. That is something which perhaps we can support in this country. With average incomes of £200, £250 or £300 per head, which is the case in many of the third world countries, it is clearly impossible. I am therefore forced to the conclusion that the provision of the essential facilities of schools, hospitals, and universities and other places of education, cannot be provided out of money which is lent, no matter how concessionary the terms are. They can only be provided as free gifts, and that is the main aspect of the aid from the rich of the North to the South. We can forget about interest rates in that case because it is a contribution—charitable if you like; but self-interest I believe also applies.
We move from there to different aspects of development where high interest rates are playing such a devastating part, as was pointed out to us by the noble Lord. Lord Oram. What can we do about it? One of the most important needs for development in a country is a communications system—roads. Brazil is a fabulously potentially-rich country. It is fabulously poor and underdeveloped at the present time. Nigeria is another country of the third world in a similar position, and your Lordships will know of many others which require more roads and more transport systems.
I suggest that instead of paying interest at fixed rates on the loans necessary for those roads, we should learn from the experience of the United States in their great days of railway development at the end of the last century. The West was opened up very largely because
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the railways were given concessions of land along those routes which they developed and where their tracks ran. They became rich not so much out of the traffic which they carried as out of the development land which grew enormously in value as a result of these new communications. The same thing will happen in the third world countries as communications develop—not in railways now—in the form of roads and possibly airfields.
I suggest that the reward to the investor—be it the World Bank or private enterprise—should not be the fixed interest under which the countries are today suffering, but rather land concessions in those areas which are to be served by the new communications. They will, in fact, probably do very much better in that way than by having their fixed interest returns. They may have to wait longer, but from the commercial point of view they will benefit from it. In other cases the answer surely must lie to some extent in an increase in equity shareholding and a decrease in fixed interest borrowing. In plantations, mines and areas of that sort, which will in a matter of a few years have a serious and profitable commercial future, it would be far better for all concerned if a large part of the money needed for developing such enterprises were to be put up in the form of equity. If the commodity market slumped, the lender as well as the borrower would suffer. If and when it boomed, both would profit. It is the diminution of the equity element in lending to overseas countries for their economic development which, in my opinion, is one of the major factors causing the present problem.
Another major factor of course—but it is too large to embark upon here—is the instability of commodity prices. It is my own opinion that until we have a system—such as that which we had under the Commonwealth Sugar Agreement—for stabilising prices of major commodities in countries of the third world, we will always be faced with these recurrent economic difficulties.
There is a third problem of a rather smaller nature and at a lower level, but one which is undoubtedly serious in many third world countries. I am referring now to the small economic enterprises from the small farm or plantation upwards. As we have heard, the slump in commodity prices has meant that a lot of these concerns have for a good many years been running at a loss. It has been accentuated in many cases, as in central and Southern Africa at the present time, by an unprecedented three-year drought. Some of those enterprises are very small and some are substantial commercial organisations, but the only way they can keep afloat is by borrowing from the bank. Their indebtedness is far too heavy. The banks are in a difficult position as they are already owed money, and it does them no good to let any of these enterprises fail because no one will come along and buy the property at the present time. But a very large proportion of the increased income which is coming in in commodity prices at the beginning of the recovery has to go, not to pay off the bank loan, not to extend production or to re-equip, but simply to pay the interest on the existing bank loan. Here again, if the bankers operating in those areas were empowered by their owners to advance money in return for shares for the equity of the enterprise. I believe that the situation

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would recover itself very much more rapidly than it possibly could at the present time.
It is of enormous political importance for us that the third world should be stable and that its prosperity should grow. For political reasons, it is only prudent for us to do what we can along the lines which have been outlined today by various speakers, including possibly my own suggestions, to improve the political stability of these regions. Economically, undoubtedly it is in our interests that the third world should be more prosperous as buyers of our own goods and the goods of our factories.
From the moral point of view—I would here, very modestly, associate myself with the remarkable speech of the noble Lord, Lord Soper—if we invested as financial enterprises in the equity and shared the risk with the developers, the people doing the work, then as to the very well justified accusations of usury and of going against the tenets and teachings of the Christian Church, which is supposed to guide our activities in all respects, political and otherwise—by sharing in the equity rather than by lending at usurious rates of interest—I believe we would be coming closer to the moral standards which the noble Lord, Lord Soper, has expounded to us.
Viscount Massereene and Ferrard: My Lords, before the noble Lord sits down, I think he has rather forgotten that in some of these third world countries there is instability of governments. I understood from his speech that he suggested that if we lent them money we could have equity in their companies or have land. We have experience of this. If this is done with unstable governments—and unfortunately so many of the governments in the developing world are unstable—we can say goodbye to our money. The noble Lord, drew a parallel with the railways in America. True enough, that would open up—
Noble Lords: Order!
The Earl of Gowrie: My Lords, only one point.
Viscount Massereene and Ferrard: My Lords, I will tell the noble Lord afterwards where he was wrong.
6.3 p.m.
Lord Hatch of Lusby: My Lords, there are two factors in this debate that strike me as interesting. The first is that if your Lordships include myself, the last five speakers have concentrated on that part of the Motion which deals with the third world, with the poor of our globe. I trust that this is not lost on the noble Earl who is to wind up, and that he will spend a substantial part of his winding up speech in answering the points that have been made.
The second factor is that again, as I have mentioned so often from these Benches, here is a debate on business and financial interests. Out of 13 speakers there has been one Front Bench speaker and one Back Bench speaker from the party of business: the Conservative Party. With sympathy to the noble Earl, I think he might draw the attention of the managers of his party to this constant lack of interest that is shown from the Benches behind him. We would like the
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opportunity of a little sniping from time to time. We do not hear the orthodox business point of view put forward from those Benches and debates of this kind are largely confined to Members on this side of the House.
The Earl of Gowrie: My Lords, I am most grateful to the noble Lord for giving way. I drew substantial comfort from the speech from the Cross-Benches of the noble Lord, Lord Seebohm, and even to a large degree from the speech from the Alliance Bench of the noble Lord, Lord Taylor of Gryfe.
Lord Hatch of Lusby: My Lords, I am very glad that the noble Earl is making some movement away from the traditional party which he supports. Perhaps he can move even further by the end of the debate.
It has been mentioned by several speakers this afternoon, and particularly in the opening speech of my noble friend Lord Beswick, that the traditionally capital importing countries of the world today have now become capital exporting countries. Indeed, one of the most remarkable comments made was that passage in the speech of my noble friend Lord Beswick when he pointed out that last year the third world countries were exporting 10 billion dollars more than they were importing; that they had received 85 billion dollars and that they had sent abroad 95 billion dollars. What kind of a world is this? What kind of a world is it in which the poor are subsidising the rich? That issue goes much deeper into the fabric of our world society than is shown by the figures, because it means that the farmers particularly of the third world countries are now having to produce crops for export instead of crops to feed the population of their countries. Those crops are linked, tied, to the necessity to service the debts which their government have incurred.
The noble Viscount opposite has drawn my attention to this from time to time. There is extrava-gance in the third world, certainly. There is extrava-gance in many countries. If one really wants to see extravagance one cannot do better than go to the United States of America. There is extravagance; there is wasteful spending; there is prestige spending. All that has to be admitted and should be admitted. It has been pointed out by many of us who have spent many years in third world countries. But do not let us neglect the responsibility of the developed world, the Western world in particular, for the incurring of this tremendous debt burden which is threatening the stability of the present international monetary system.
Let us consider the operation of the multinational companies and their repatriation of profits. For example, it is the multinational companies that completely dominate the productive system of most Latin American countries. Look again at the banks which have been referred to previously this afternoon; look at the wasteful and profligate way in which the banks, when money was plentiful, thrust money on third world countries. This is not being patronising. It is certainly the responsiblity of Ministers of finance and governments in third world countries. Nevertheless, there is no doubt that the banks used a whole series of inducements to persuade third world governments to borrow at a time—in the case of

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Nigeria it looked as though Nigeria would participate in the oil boom—when the prospect for the future looked rosy. Borrowing is essential for development. In any country, developed or undeveloped, borrowing to promote development is one of the essential attributes.
I believe that this issue goes deeper still. I have before in this Chamber argued the case that the healthiest method of development is to take the agricultural surplus of a country, invest that in the development of manufacturing industry, seek export markets in order to foster that industry and then unite industry and agriculture. I know that that is over-simplifying the case but it is a process which has stood the test of time.
How is any third world country to follow that model today, when a large section of its agricultural exports have to be devoted to the servicing of debts? How is manufacturing industry to develop in this world of growing protectionism? How is a manufacturing industry to develop at a time in which the sale of commodities to support it is often below the cost of production? And when you put together the problem of the payment of interest on debts and the falling commodity prices, there, as my noble friend Lord Oram pointed out, you have a prescription for disaster.
I would only refer, as I have done before, to the country that I know best, the country of Zambia. There, the short-term foreign debt has increased by 50 per cent. over the past two years. It was 1.5 billion kwacha two years ago and it is now 2.2 billion kwacha. Why?—because the Zambians have had to produce their copper and sell it at a price below the cost of production. As a consequence, they have used up their foreign reserves and, as a further consequence of this disastrous slide—and this should, again, bring home the point so well expressed by my noble friend Lord Oram that this concerns us, the workers and citizens of this country—a slide which the Zambians have been unable to halt, they are no longer eligible to qualify under the ECGD insurance scheme to receive our exports. Therefore, the disaster of the Zambians is reflected in lower employment in areas of this country that could be producing goods that the Zambians need. And Zambia is only one case among a hundred, where, because of the double problem of the weight of interest payments and the reduction in commodity prices, not only are the people of the third world suffering, but employment is undermined in this country.
My Lords, it is only two or three years ago that I remember that very remarkable man President Nyerere (whom I was privileged to know when he was a student in Edinburgh) saying here in a speech at the Royal Commonwealth Society that, whereas in 1970 one tonne of sisal, which is the main export crop of Tanzania, would buy a tractor, by then it took 28 tonnes of sisal to buy that same tractor. As my noble friend Lord Oram pointed out in his figures, that is the practical problem, the practical hurdle, which is to be seen throughout the third world today when you put together the issue of the weight of the interest with the fall in the price of those commodities on which so many third world countries still depend.
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What do we expect these countries to do? Do we expect them to increase their exports to us? There is a very large lobby in this country against any increase of imports from third world countries into Britain and, indeed, into the EEC generally. Do we expect them to reduce their imports from us? Do we want to produce less to send to third world countries? Do we want to put more people out of employment, or do we want to induce the banks, once again, to increase their lending? Nobody has suggested that this afternoon and I doubt whether they will.
So I come to one specific issue which I want to put to the noble Earl who is to wind up. It is to ask him whether he has considered or whether he will consider another path towards at least approaching this central issue which so many speakers this afternoon have illustrated within this Motion. What is the Government's attitude to the special drawing rights? The increase in the SDRs was suspended as long ago as January 1981. Is it going to be increased in the future? Is it the Government's policy to increase the special drawing rights of the IMF; because there is at least a cogent argument that whereas some Members opposite would argue that the investment, or the gifts of extra cash, to third world countries can be inflationary, the special drawings rights were specially designed to avoid that inflationary effect. Yet, they have been suspended now for a matter of over three years.
I am sure that the noble Earl would agree that the so-called capital-importing countries—although we have seen that they are now capital-exporting countries—are all short of foreign reserves; and that this is a handicap to the world trade on which this country so greatly depends. How are we going to help to rebuild the reserves of those debtor states, to restore their creditworthiness on which an expanded trade programme depends?
Next week the interim committee of the IMF is meeting. I should like the noble Earl to address himself to the attitude which Her Majesty's Government will be taking at that interim committee and, because final decisions cannot be taken by an interim committee, at successive committees within the IMF to the fact that the use of expanded, increased special drawing rights can affect this central global issue of the debt which is not only weighing on the backs of third world countries and undermining political stability in third world countries but is also throwing a spanner into the whole process of development and production within the third world.
Finally, my Lords, let us never forget—and we may be talking in figures, we may be talking in initials, or we may be talking about institutions—-that, basically, we are talking about people, and it is the people who count. And it is the people whom we should have most clearly in mind when we are arguing the case of the relationship between money, between debt and between institutions. Over the past two years the gross domestic product of Latin American countries as a whole has fallen by 3.6 per cent. In the world as a whole the developing countries' exports were 7 per cent. lower last year than they were in 1980. Among the low-income African countries it is expected by the World Bank that by the end of the 1980s income per head will be less than it was in 1960. These are figures illustrating the plight of people.

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We often talk about the scourge of diseases among the children living in third world countries. We give the figure normally of 17 million children dying per year. Those children do not die primarily through diseases: they die mainly because they are vulnerable to diseases through malnutrition and starvation. We are talking this afternoon about the creation of that vulnerability to the diseases which cause their deaths. We are therefore not just talking about interest rates in the abstract nor about institutions like the IMF, but about the life and death of millions of people living in the third world for whom we are responsible and the Government are responsible. We look forward to hearing how the Government intend to fulfil that responsibility.
6.22 p.m.
Lord McIntosh of Haringey: My Lords, as my noble friend has just said, the last five speeches have been about the problems of the third world and the impact on the third world of interest rates. I hope it will be taken as evidence of my own incapacity rather than any reflection on the importance of the subject of the third world, or indeed on the quality of the speeches, if I turn completely from that subject to what is literally a parochial subject: namely, the burden of interest rates on local authorities, which is included in the admirable Motion of my noble friend Lord Beswick.
I recall (though, reasonably enough, others may not) that in a debate in this House last October on the matter of central and local government expenditure, I put the case to the Government that local authorities were prudent and reasonable in the way in which they borrowed for the purposes of capital expenditure. I put it to the Government that in fact the public sector borrowing requirement has been in surplus for most of the past 20 years, and that local authorities generally, on the maturity of loans, were paying back less in real terms than had been paid out originally, even allowing for interest on the loans when they were first taken out.
I do not think that in saying that that is the case, and that local authorities are right to borrow, there is any conflict with saying that the conditions under which they have to borrow cause enormous problems for local authorities—problems which appear to be inadequately, if at all, recognised, either in general economic debate or particularly in the actions of central government. Let me give some indication of the size of the problem which local authorities face. At 31st March 1983, which is the last date for which I have figures, the total of local authority debt amounted to £43·7 billion, and the average rate of interest on that debt in the year 1982–83 was 11·83 per cent. That means that the debt charges to local authorities over that period were approximately some £4 billion on a total local authority expenditure of £20 billion; in other words, 20 per cent. of their total expenditure went in repayment and interest charges, and of that figure at least half must have been interest payments.
The Government would say, in response to that, that the participation of the Public Works Loan Board, in dealing with local authority expenditure, has been increasing and that that participation has been
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beneficial to local authorities in that the rates of interest for the Public Works Loan Board have been of the order of 10 or 11 per cent., which is more favourable than the rates on the market. Indeed, the Government have been encouraging local authorities to use the Public Works Loan Board, partly for the "theological" reason, I suspect, that borrowings from the board do not count in M3 in the Government's own peculiar monetarist interpretation of our national accounts. But I suspect—and I shall be interested to see whether the noble Earl, Lord Gowrie, is prepared to contradict me—that the ability of the Public Works Loan Board to continue to increase its share of local authority borrowing will not be very great in the next year or two. The relationship between bank balances and local authority expenditure makes it more and more difficult for the Public Works Loan Board to continue its present participation in local authority capital markets.
Clearly, the very size of interest payments of local authorities must be, in the words of my noble friend Lord Beswick, "a great burden" on local authorities. I want to suggest that it is not just the sheer size—that could be discounted by a consideration of inflation and therefore a consideration of the real rate of interest—but the insecurity which faces treasurers of local authorities in trying to make prudent decisions and to protect their ratepayers from the worst fluctuations and dangers which face them.
The noble Earl said in his opening speech that forecasting inflation is always hazardous. I think one could go further than that. Casey Stengel, the manager of the New York Yankees, once said:
"Accurate predictions are very hard to make, particularly when they are about the future".
The noble Viscount, Lord Trenchard, went backwards as well. He talked about the misconceptions in the past two decades of our history about economic policy. That reminded me of the bursar of an Oxford college who objected to his college's borrowing policy on the grounds that the past two centuries had been "wholly untypical".
It is the uncertainty of interest rates and of borrowing charges which is the most dangerous thing for local authorities. If we take the period 1978 to 1983, the average rates which have been payable, based on bank base rates, by local authorities range between 6½ per cent. and 17 per cent. It is virtually impossible for any local authority to make an accurate estimate even one year ahead of what they are actually going to be, and therefore not to face the risk either of under-provision or of over-provision for interest payments.
Over-provision is a fairly simple but clearly very dangerous course to take. If you make over-provision you are taking money from the ratepayers earlier than you need to do, and all the people in your area suffer. If you make under-provision, there used to be ways round that. It used to be possible for a treasurer to adjust his under-provision by the way he dealt with housing subsidies. He used to be able to adjust his charges accordingly and to be able to borrow short without too much difficulty. And indeed there was always the possibility of a supplementary rate.
But nowadays the flexibility available to the treasurer of a local authority who has made, for

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whatever reason, under-provision for inflation, and therefore for interest charges, is rapidly being taken away and will be taken away even more if and when the Government's Rates Bill is finally enacted. In their Rates Bill, the Government are not only seeking to cap the expenditure of a certain number of authorities: they are seeking to take away the ability of all authorities under the general powers to make reasonable economic assessments of their needs, of their likely expenditure and therefore of their needs for revenue. Not only is the supplementary rate being taken away, but it would be necessary, if the legislation were passed, for a treasurer to make a special applica-tion to the Secretary of State if he wanted to undertake any additional borrowing to deal with fluctuations in interest rates.
That is not a recipe for prudent management of local authority finances: it is a recipe—and I am talking now about the treasurers and not, in any way, about the politicians—for excessive caution by financial officials in local authorities. It is a recipe for the kind of excessive caution which will inevitably lead to larger and earlier charges against the ratepayers. The Government show very little understanding of the nature of the problems which local authorities face from high interest rates, and very little understanding of how it is that Government could help the prudent management of local authorities in the way they approach their financial problems.
The problem raised by my noble friend Lord Beswick is an all-embracing problem. It affects all aspects of our economy. I have sought to show in this brief intervention only that, in the particular case of local authority expenditure, the Government are hardly tempering the wind to the shorn lamb. They are actually making for extravagance, making for bad provision, making for high fluctuations in the expenditure of local authorities, and therefore the expenditure required of individual ratepayers.
6.32 p.m.
Lord Ezra: My Lords, the great merit of the important Motion which has been so ably introduced by the noble Lord, Lord Beswick, is that it is possible to choose one or more of the items without dealing with the whole lot, and at this advanced hour of our debate I shall try to be selective, as indeed was the noble Lord, Lord McIntosh, who has just spoken. As he pointed out, we have had a series of very eloquent speeches made on the subject of the third world, and I should like to join, in particular, my noble friend Lord Walston in paying tribute to the noble Lord, Lord Soper, for his very learned and compelling speech, in which he drew our attention to the moral aspects of the third world problem.
But I should like to concentrate on those parts of the Motion which deal with the burden of high interest rates on productive industry and the diversion of effort to less productive but more financially rewarding activities. Like my noble friend Lord Taylor of Gryfe, I should like to start by taking a wider view of this problem before coming down to specific proposals. It is necessary in looking at this aspect of the Motion to consider the state of economic affairs in the nation at the present time. There is no doubt that there is a
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gathering momentum of recovery, and the latest CBI report emphasised that this is gathering pace.
What is important, however, is to get an impression of the nature of that recovery, and that is still somewhat eneven. In geographical terms, it still tends to be concentrated towards the south-eastern portion of the nation, and it diminishes in its intensity as one moves northwards. In sectoral terms, it still tends to be concentrated at the consumer goods end, the high technology end, and tends to peter out as one goes deeper towards heavy industrial activities. Therefore, I believe that what emerges from that analysis, if it be a correct one, is that the aim must now be to try to widen in both geographic and sectoral terms the momentum of the recovery. The big question is how this can be done without falling back into the difficulties of inflation and within the means available. I think that this is, therefore, a very germane issue to the main point raised by the noble Lord, Lord Beswick.
I was very pleased indeed to hear the noble Viscount, Lord Trenchard, emphasise the importance which he attached to manufacturing industry. He was quite right to point out that at least half the service industries, which have been expanding so rapidly recently, are totally dependent for their existence on the manufacturing industries. This is something that must be very carefully borne in mind as one considers this problem. When one comes to the question of investment, there is not the slightest doubt that from a very low level investment is now beginning to recover.
The important issue, however, is not the totality of the investment; it is the quality of the investment. If that investment is to be concentrated in areas of the economy which will be less labour-intensive, more up-market in the technological sense, then we shall continue to get the unevenness which we are experiencing at the present time. The challenge will be to see how we can, in an effective manner, steer a greater proportion of the investment down into the manufacturing and heavy industrial area and so help to deal with this immobility in the whole question of unemployment.
That was the worst part of the CBI report: that in spite of the recovery, in spite of the 2 to 3 per cent. improvement in the economy that they foresaw, they could not see this having any impact on unemployment over the period ahead with which they were dealing. So that is the challenge and that is the circumstance in which we should be considering this whole question of high interest rates.
The noble Earl, Lord Gowrie, in his as usual, very fluent speech, drew attention to the problems that high nominal rates of interest can cause in those industries which have a long lead time in their investment. This loading at the front can be a very onerous obligation, and can therefore be a major disincentive to long-term investment. For example, I happen to believe that investment in such projects as major combined heat and power schemes, which I know the Government are very keen to stimulate and which were the objective lying behind the Energy Act which we debated in its various stages last year, is likely to be very difficult to stimulate so long as interest rates remain where they are, because those are projects which will require large amounts of capital and a long period before they can mature and show a return. So

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if we are to try to deepen the recovery, we have to look very seriously at this problem of interest rates which was so effectively raised by the noble Lord, Lord Beswick.
One of the most encouraging recent developments is the way in which we have been able to move our interest rates in a different direction from the American interest rates. I recall, when we were debating this subject a few months ago—and we were all, as now, keen on reducing interest rates—the major reason given for our interest rates being so high was the impact of the American level. I think it is a very good sign that we are now moving in the opposite direction. As the noble Lord, Lord Jacques, pointed out, undoubtedly the benefits which we are getting from the North Sea have given us the strength with which to move our own interest rates separately from those of the Americans.
There is no doubt that in the United States interest rates are bound to increase as they begin seriously to tackle the problem of their budgetary deficit. We must not be caught up in that slipstream. On the other hand, the period during which we can move independently of the United States and other countries which may be putting up their interest rates is going to be limited. As the noble Lord, Lord Jacques pointed out, it is limited to the period when we shall have the benefit of the North Sea revenues. Those could be reaching their peak in a matter of a few years.
Therefore, my conclusion is that we have, I believe, a unique opportunity, while our present circumstances persist, to extend in an effective manner the recovery which is already evident in certain sectors and in certain areas if we take courageously the steps that seem to be necessary, particularly in relation to interest rates. Positively and firmly moving our rates down, whatever may be happening to them elsewhere, while we are in this favoured position seems to me to be a very important element in getting the sort of full-blooded recovery which we should all like to see.
6.42 p.m.
Lord Barnett: My Lords, I know that everybody who has taken part in this debate, or who has heard any part of it, will wish to join me in congratulating my noble friend Lord Beswick both on his excellent Motion and on the way in which he introduced it. I doubt whether anybody will disagree that it has stimulated a remarkably fine debate, made all the better by the intervention of my noble friend Lord Soper who made a quite remarkable speech which, speaking for myself, I thoroughly enjoyed. I would not seek to emulate it. During the course of my remarks I hope to deal with some of the practical problems of the day. Servants of the Church are required to deal with these problems, and to receive remuneration from rents and interest is something with which my noble friend would probably disagree.
I was particularly interested when the noble Viscount, Lord Trenchard, told us that one of the reasons why he agreed that the Government were doing well for industry—he was the only speaker on the Government side, so perhaps he felt obliged to say that—was that, since coming out of Government, he had invested in equities in manufacturing industry and
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had done very well. I have to tell him that that is more due to the time when the noble Viscount happened to leave Government than to anything the Government did, and that he should not expect too much in the future.
Viscount Trenchard: My Lords, since the noble Lord has commented on a personal remark of mine, may I say that I merely pointed out that the confidence of the Stock Exchange, which is not generally misplaced, is extremely high about the future of manufacturing industry, which is what I invested in.
Lord Barnett: My Lords, I am interested in the noble Viscount's comments. During the course of my remarks, I hope to show that that is very' far from being the case. If we were to judge by the state of the equity market now and say that everything in the garden is marvellous, we should be very foolish indeed.
Let me turn immediately to the speech of the noble Earl, Lord Gowrie. I feel a little diffident about criticising him too much, because from time to time I want to be able to go and see him in order to ask for money for the arts. Therefore, I shall have to be careful. Let me begin by saying that I agree with the noble Lord, Lord Ezra, that the economy is in a period of recovery. Few would doubt that. I do not doubt it. According to historical evidence, we in this country are going through a very high period of economic growth. But the noble Earl was, to say the least, more than a little complacent in his remarks about the prospects for future economic growth. His remarks about those prospects may, in a few years' time, look a little sick. When we look at the rate of growth in the future, it might not, for the reasons I have indicated, be at the present level.
Turning to the Motion, few will dispute—indeed, nobody did dispute it during the debate—that high interest rates are a burden, particularly on industry. This point was well made by the noble Lord, Lord Ezra, and by my noble friends Lord Beswick and Lord Jacques. As my noble friend Lord McIntosh of Haringey said, they also have serious effects on local authorities. These matters were also brought to the attention of your Lordships by the noble Lord, Lord Taylor of Gryfe.
I should have liked to say a word about the problems of the third world, but they have been so fully and effectively covered by noble Lords who know so much more about the subject than do I that I feel free to concentrate on the domestic economy. The speeches of my noble friends Lord Oram and Lord Seebohm, besides the speech of my noble friend Lord Hatch, with which I agree so much, and the speech of the noble Lord, Lord Walston, were of a very high calibre, by any standard. I hope that the noble Earl will take account of them both in his winding-up speech and when advising the Government about the kind of policies which need to be pursued.
Turning to the management of the economy generally, the problem over the Government's cure for high inflation and high interest rates is that it is likely, I fear, to be worse than the disease itself. Nothing that the noble Earl has said has made me alter my view. Both he and the Government must answer the real charge: that they have put inflation above every other

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economic problem facing the nation, especially the problem of unemployment. I accept that the noble Earl and the Government sincerely and genuinely believe that if they reduce the rate of inflation and, with it, interest rates, it will have the effect of improving the rest of the economy. Sadly there is absolutely no evidence, either at home or abroad, that it is likely to have that kind of effect. The Government have shown that by pursuing for a sufficiently long period a deflationary policy the rate of inflation and interest rates can be reduced. However, the real problem in trying to run any economy—I willingly concede that nobody in any party in this country has yet managed to solve this problem—is the juggler's trick of getting all the economic balls in the air at the same time and solving the problems of inflation, unemployment, growth, balance of payments and so on. As I have already said, the Government genuinely believe that once they have solved the problem of inflation, all else will come right.
The Library have kindly extracted for me figures which show that in 1983 the real rate of interest was the highest since the war, apart from 1967, which was the year of devaluation; yet 1983 saw the highest rate of economic growth that we have had for some years—3 per cent. Therefore, a high real rate of interest at that time did not restrict growth. However, I hasten to assure your Lordships that I am not for a moment suggesting that we need high real rates of interest in order to achieve high rates of economic growth. All I am saying is that there is absolutely no evidence, either from last year or from other years since the war, that low real rates of interest at the same time achieve high real rates of economic growth. Equally, there is no evidence that the Government's method of bringing down the rate of inflation and interest rates is likely to help unemployment in the long term. There are many other reasons why unemployment has refused to come down despite the fact that we have had these levels of growth in the past year or two. All the signs are—very sadly indeed—that there will be no reduction in the appalling level of unemployment.
I want to say at once to your Lordships that international statistical comparisons of what happens in other countries are usually quite misleading. Certainly it does not necessarily follow that countries such as the United Kingdom could for any length of time sustain low unemployment with high inflation and high interest rates. I do not believe that for a moment. I believe that we should seek in every conceivable way to bring down the rate of inflation and keep it down and, if we can achieve them, have low rates of interest—particularly because of the devastating effects of high rates in areas which have been referred to by so many other speakers in this debate—especially in the third world. Managing the United Kingdom's economy requires particularly the skills of the juggler. There is no evidence yet that this Government or any other government have achieved that skill.
I want to say a few words about the two main difficulties of achieving the trick of getting all the economic balls in the air at the same time. First, the problem of managing a domestic economy—certainly in the United Kingdom—is that when any government have tried to solve one of the problems (such as the
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Labour Government's attempt to bring down unemployment and the attempts of previous Conservative Governments to bring down unemployment by stimulating the economy) the net effect has been to increase inflation. We did not eventually achieve the sustained levels of growth for which some of us hoped. Also, there is little evidence to support the belief that, having brought inflation down to 4½ per cent. or 5 per cent., it can be reduced to the 3 per cent. by 1988–89 forecast in the Chancel-lor's Budget speech. I shall be very surprised if he manages to achieve that figure of 3 per cent. Even assuming that he does, there is no evidence that it will bring down the level of unemployment substantially, if at all. Nor is there any evidence that we shall be able to sustain the levels of economic growth which we have been achieving in recent years.
The second difficulty concerns the way in which we in the United Kingdom can pursue sensible domestic economic policies when the rest of the world—particularly the United States—begins to move, as it may, in the opposite direction. Indeed, I fear that once the presidential elections are out of the way it is likely that the level of economic growth which there has been in the United States cannot be sustained much longer and that we shall see it coming down, with a recession being created in that country if not elsewhere.
Let me deal first with the management of the domestic economy. All governments—including that in which I had the honour to serve—have fought the battle to beat the problem of inflation and to get the rest of the economy right with one arm tied tightly behind their backs: that is to say, without the wholehearted co-operation of both sides of industry. I particularly refer to the co-operation of the trade unions. The Labour Government did achieve for short periods some co-operation, followed by an explosion. This Government—rightly or wrongly—are not seeking even the minimum co-operation. Indeed, some will think that they are positively seeking provocation. The Government believe that they can perform the juggler's trick by simply bringing inflation down and then everything else will fall into line thereafter. There is no evidence that that is likely to work.
What then is to be done? I myself am satisfied that securing the active co-operation of the trade union movement by any government, Labour or Conservative, at the present time in what inevitably would be a policy for incomes is unlikely. The chance of achieving that is slim. I do not want to shirk the issue. I do not mean a statutory incomes policy, because if you have an understanding with the trade union movement you do not need legislation. Indeed, it would be positively counter-productive, as we have seen in the past, while legislation without an understanding simply will not work and has not worked. That is not to say that we should not strive for such an understanding. Without it, I say to your Lordships that there is little or no chance of sustaining the permanent situation which all of us would like to see—the juggler's trick of getting all the balls in the air at the same time, or, in other words, achieving economic growth, getting unemployment down, getting inflation down and keeping it down, and keeping interest rates down.

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We have to keep striving for that policy despite the difficulties and despite the impossibility, but certainly this Government are not seeking to achieve it. I am sure that if this Motion is right—and every speaker in this debate has agreed that it is—about the damaging nature of high inflation and high interest rates, then one day we shall really have to find a lasting solution that will deal with all the problems and not just one of them; not just inflation or interest rates.
Even if we were rather more successful in managing our own domestic economy your Lordships know that we should still face the second of the difficulties to which I referred; namely, how we keep the United Kingdom's domestic economy on a sensible path when the rest of the world, and particularly the United States, is moving in the opposite direction. As the noble Lord, Lord Taylor of Gryfe, said, one has to face the fact that, if the rest of the world is in a major recession, we cannot escape it and pretend that we live in another world. We have tried to do that in the past, as other countries in the Western world have tried. But we cannot escape and say, "We are going to run our economy differently"—certainly not in a country like the United Kingdom.
There is much we can do short of such a major recession. We could do much more if the EEC was talking about these major problems instead of its current obsessions. But it is not doing so, and it is unlikely to be doing so in the near future. So if the United States increase interest rates (and I fear that they are all too likely to do so) then there is absolutely no need for us to follow suit, as another noble Lord has said. The noble Earl the Minister said, quite rightly, that the Government have not followed the path of US interest rates in recent weeks and months. But I should like to make a little bet, if one is allowed to do so in your Lordships' House, that the next time US interest rates rise, so will ours. Unfortunately, the Chancellor above all people still hankers, as we saw from his Budget speech, after such concepts as sterling M3, PSL2, M2 and his new definition of MO. These policies, plus his mistaken concern about maintaining an exchange rate higher than it needs to be, will, I fear, mean that interest rates are more likely to rise than fall. This was said by my noble friend, Lord Jacques, and by a number of other speakers.
I conclude by reverting to the Motion calling attention to the burden of high interest rates, upon which all speakers have agreed. They must be reduced, but that reduction must be part of an economic policy which, as I have said, seeks to win on all fronts. Like the juggler, we must keep all the balls in the air, especially the one marked "employment". This Government may have temporarily won on one front—that of inflation—but I fear the consequences for our nation and for the wider world—as expressed in this Motion and in the course of our debate—in terms of long-term growth, employment and the very social cohesion of our people if we do not move along different paths.
6.59 p.m.
The Earl of Gowrie: My Lords, I have said it before, and so I apologise for saying it again, but the quality of the economic debates in your Lordships' House is, even allowing for our besetting sin of self-
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congratulation, still well ahead of the quality of economic debates in another place, most of which I read carefully. I sometimes feel the quality of economic opposition in your Lordships' House follows suit, perhaps for the simple reason that the conventions of your Lordships' House allow credit occasionally to be given where it is due. I welcomed the limited credit that most sides of the House have given to some aspects, at least, of the Government's economic policies.
The noble Lord, Lord McIntosh of Haringey, put it very well, I thought, when he said that the Motion of the noble Lord, Lord Beswick, was concerned with an all-embracing problem which affects every aspect of our economy. That is one of the reasons why the debate has been a specially interesting one. It is also one of the reasons why it is a difficult debate to which to reply. Your Lordships would not wish me at this hour, even though I believe I have over an hour in hand under the new rules, to use that time to wander too far and wide into some of the fascinating reaches of the debate. However, I should like to say to the noble Lord, Lord Beswick, and to the House—because I treat the subject with the greatest seriousness—that my opening speech, for better or for worse, was really part of my general reply. Most of the issues which have arisen in the debate—not least those connected with the third world—were covered, at least in terms of general policy objectives. I will therefore restrict myself to trying to deal with particular points which have been made during the debate.
With regard to the speech of the noble Lord, Lord Beswick, since I spoke after him I think some of the points that he made were touched upon in my opening speech. However, he raised a specific point which was echoed by the noble Lord, Lord Jacques, with calls for "a new Bretton Woods"—the phrase used by the Commonwealth Secretariat when in 1982 the Commonwealth Finance Ministers commissioned a paper from the secretariat with that title. The noble Lord, Lord Beswick, wanted to hear what we thought about it. We welcome further work to identify areas for improvement in the international monetary system, and I shall briefly touch on that later. But we believe it is best to work within and to develop existing international institutions. The United Kingdom is a member of the Commonwealth Consultative Group, set up in New Delhi by the heads of government, and we are playing our full part there. It is rather early to make a substantive report on progress, as I am sure the noble Lord will understand; but we look forward to the meeting of the Commonwealth Finance Ministers in September, when the group's report will be considered. Perhaps that will be the time for the noble Lord to return to questioning me about it.
I found much to agree with, not for the first time, in the speech of the noble Lord, Lord Taylor of Gryfe. In particular, I welcome his realistic acceptance that banks want falling interest rates and that a fall in interest rates does require, first, that inflation should be seen to be under control. I therefore find it a little surprising that he blamed monetarist policies for the recession, because that ignores, to mention only one thing, the oil price shock that disrupted growth, sapped confidence and, moreover, boosted inflation; though, as a bit of a purist on this front. I would say that it was perhaps the reaction of various Western

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Administrations to that shock rather than the shock itself that did the most harm.
After such a shock to the world economy it takes time to get back onto an even keel and lay the foundations for non-inflationary growth. It is the policy—and I say this particularly to the noble Lord, Lord Barnett—not of getting inflation down at all costs but of sustaining lower rates of inflation and, therefore, establishing the conditions for non-inflationary growth, in which the Government are most exercised. It is not enough to talk about inflation. We must also, as almost all the House acknowledged, talk about growth. We feel that one is the prerequisite of the other. As I said in my opening remarks, we are seeing some signs in the real world that we are on the right track.
The noble Lord, Lord Taylor, also criticised our approach to capital expenditure on infrastructure. We do not have targets for spending on infrastructure as such—targets to be applied willy-nilly. Surely the right approach is to look at each proposal for capital spending on its merits, to see whether there is a genuine need and whether the project is justified economically. It is a great myth that there is no capital spending in this economy. It is also, I fear, something of a myth that capital spending, which is, in things like construction, increasingly capital intensive (like so much else in our economy) will by itself cure unemployment. Again, I apologise for repeating a point from personal experience that I have made many times in your Lordships' House, but if capital spending could solve economic problems generally, or unemployment specifically, Northern Ireland would be an exceptionally good case and we all know that it is not.
I very much enjoyed the speech of the noble Lord, Lord Jacques, not least because he managed from the Labour Benches and in the same speech to distribute praise equally between my right honourable friend Mr. Nigel Lawson and my right honourable friend the previous Prime Minister, Mr. Edward Heath. That is something of a squaring of the circle even for your Lordships' House, but nonetheless welcome or enjoyable for that. The noble Lord, Lord Jacques, wished us to join the European Monetary System. That is something which we constantly watch and keep under review, although I have to say that there are no early plans to join. As the experience of the Government of which the noble Lord, Lord Jacques, was a member and supported bears witness, joining in the wrong conditions would not only be damaging to ourselves but damaging to the system and could mean greater interest rate instability. That would not be helpful to British industry, and the CBI Council recognised this by voting against sterling's participation in the ERM last October. That said, I remain personally convinced that in the long term we should join. It is a matter of getting the conditions right.
Both the noble Lord, Lord Jacques, and the noble Lord, Lord Oram, talked about the need for international monetary reform. I welcome the decision, following the Williamsburg summit, of the Finance Ministers of industrial countries to work to identify areas where improvements in international monetary systems might be sought. Again, I believe
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that we need to work within and to develop existing international institutions, rather than to fall into the old trap of hoping that the creation of new institutions will somehow ameliorate the problems. It is also important to recognise that the original Bretton Woods arrangements, which have been much praised in this and other economic debates, broke down through inflationary policies by member governments. It seems to me that a general view about the importance of controlling inflation does offer the best prospects for going back to a stable and durable international system.
The noble Lord, Lord Jacques, was a little rude about the service industries, thinking them somehow less respectable than manufacturing industries. I would point out to him that they are rather more than "taking in our own washing". We export more and more services. Indeed, it seems to me that it is increasingly difficult to make the old distinction between service and manufacturing industries.
My noble friend Lord Trenchard has been teased, and so have I, for being the only speakers on the Conservative Benches. Naturally, I assume that such is the confidence in the policies of Her Majesty's Government on this side of the House that there has not been quite the usual imperative to attend. I congratulate my noble friend, not only for what he said but for backing Britain successfully, and 1 welcome his wise and encouraging words about the indicators for growth in manufacturing industry given by the equity markets.
I think they are especially encouraging because of their source. The noble Lord shared an office with me in the early days and years of the first Thatcher administration and he provided a very early analysis of the exchange rate difficulties to me. Perhaps we should collectively have listened more carefully to my noble friend. He also provided, it seems to me, if I may say so without patronising him in any way, an object lesson in behaviour that we should all follow when we leave Government. The usual thing is to castigate the Governments in which one has served, when in their wisdom or lack of it they dispense of one's services, which alas they do from time to time. In this case my noble friend, who has more reason than most to have been proved right in much of his early analysis, was glad that the Government was getting back to the paths of virtue.
Everyone who spoke in the debate admired—and so did I—the speech of the noble Lord, Lord Soper. It was very fascinating to go into the theology of usury. At one point during his remarks I looked up at the press Gallery and was pleased to see a great chiaroscuro cloud of puzzlement over their faces. The noble Lord must in future break them in a little more gently to the change of gear that he introduces regularly into your Lordships' House.
As it happens, my brother is an expert and writer about contemporary Islam, and he has often interested me in describing the ways in which modern Islamic states try to get round their interdict in terms of usury and interest rates. I therefore felt in reasonably familiar territory in the first part of the noble Lord's speech when he was dealing with the mediaeval approach. But that said, and with all my admiration for his originality, I do think that the noble Lord, Lord

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Soper, subscribes to a great myth—the myth that money is not creative. Money is, like art indeed, a medium of exchange, literally a method of communication. It seems to me that one should follow what the great Wesley, whom he described as his father in theological terms, urged in getting all one can—perhaps one could adapt "saving all one can" to "investing all one can", and certainly giving all one can—not least in the interests of the employment of others. It seems to me that socialism, which the noble Lord held up to us as a moral imperative as well as an economic one, has few successful exemplars, and few lead richer or fuller material or moral lives as a consequence of its adoption internationally. Perhaps people simply have not got it right yet but I am sceptical about that.
The noble Lord, Lord Seebohm, generally endorsed the Government's policy. Of course, this was all the more welcome for the fact that it did not come from our own Benches. He endorsed the need to get down interest rates by getting down inflation and recognising that the latter was a prerequisite of the former.
The noble Lord, Lord Oram, made a most interesting speech on the third world theme and others took up many of his thoughts. I thought it should be said to him that not all developing countries need to be considered poor. One of the mysteries of the modern world is why international financial stability should be so threatened by a country with the potential of, say, the Argentine. Admittedly my analysis may be superficial as I do not know the country, but from all I know of the facts and figures about it, it should be a very wealthy country indeed and its potential is enormous. Again, the importance of getting sound financial management and sound political systems is very relevant in this regard.
The noble Lord, Lord Oram, was perhaps a little inconsistent in criticising banks for lending money to third world countries in a reckless and irresponsible way—a criticism that I would certainly endorse—but he also appeared to be urging developing countries to borrow all they could, and that again is a circle that it seems to me he was trying to square.
The noble Lord, Lord Walston, talked about aid rather than loans. I think it would be fair to say to him that it is a moral imperative on this country, and indeed on all the western countries, to become richer. Without improving our own growth rates we certainly will not have the purchasing capacity to help, in the most sustained and practical way, the third world. Though I certainly agree with him that there is a need for aid.
The United States of America has of course put out very large sums of aid to developing countries during my entire adult lifetime; and I am talking about direct intervention, not investment or aid seeking a return. We also remember, of course, the great injection of aid to a devastated Europe after the war. One is not always thanked for this and I am still of the view—if I may relapse into my arts role for a moment—that one of the most significant novels of the post-war period is Graham Greene's The Quiet American, which deals with this dilemma of the well-intentioned aide acting in fact as an explosive ingredient in some international situations.
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I am certainly very close to the noble Lord, Lord Walston, in his urging for equity capital investment on an international scale, and again I commend the Government's policy of liberating ourselves from exchange controls and making this possible. Again, one has to be very delicate and careful in political terms because the notion of the profiteer and the exploiter can often run counter to the notion of internal investment or investment from outside sources being beneficial to the bodies who receive the investment.
I have a note here which will try to deal with the specific point put to me by the noble Lord, Lord Hatch, about special drawing rights. I have to tell him that we are not convinced that there is a global shortage of liquidity (in his words) which the IMF's articles require to be demonstrated before a new SDR is allocated. As he himself anticipated, we would argue that a premature allocation could be inflationary. We do, however, expect world reserves to grow in line with world trade, and of course we recognise that some individual countries face very severe problems and that their reserves may be depleted excessively. The answer to these individual problems, it seems to me, is for them to agree programmes for recovery with the fund. The fund is not draconian; it is indeed sensitive in the plurality of its applications to solutions to different places. It might therefore supply them with liquidity and make it conditional on their keeping to prudent policies. I am a passionate believer in the International Monetary Fund and confess that it has been the long ambition of mine to try to work for it one day.
Coming to the speech of the noble Lord, Lord McIntosh, he brought us back to this part of the earth in dealing with the problems facing local authorities. Again, rather predictably but, I really believe, accurately, I can only say that the local authorities must be helped by lower inflation. Many of their difficulties have been the inflationary shocks, not least in terms of wage claims, of the 1970s. But they must struggle to contain their current costs. Again over 70 per cent. of their spending is involved in wages.
The noble Lord complains about the uncertainty facing local authorities. Again, I tried to deal with this issue of inflationary expectations in my opening speech. The point of this dull-sounding medium-term financial strategy is not the dogmatic attraction of our own forms of economic theology, but simply a signal to client bodies, whether in the public or private sectors, that the Government mean what they say, that this is roughly what their spending and borrowing is going to be over a precise period of time, and that they should therefore have lowered uncertainty and be able to plan accordingly.
As to the issue of rate capping, it is perhaps rather late to go into this, and perhaps I am the wrong person to deal with it. But is seems to me that rate capping is there to stop the upward drift of spending, borrowing and taxation; and if it is applied as I believe it should be, it can only bring down interest rates in the long term. So I wholly support it. I think that the particu-larly moral problem where rate capping is concerned is really that local government is now providing far too large a share of local government finance, and therefore it would be impossible for any government in

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present conditions to lose all controls over the money that they supply.
I welcomed the recognition by the noble Lord, Lord Ezra, that interest rates are moving in the opposite direction from those in America. However, I quarrel with him about one part of his analysis. This is not all to do with North Sea oil. North Sea oil is a significant, but relatively small, sector of our economy. Other sectors play an enormous part, not least coal. If it can sort out its problems, it has a great future in this economy, and is underwriting our sources of energy in the long term. Also, there are factors such as our fiscal and monetary stance. I think that the noble Lord, Lord Barnett, was right in saying that if there is a big hike in American interest rates it will be very difficult for ours not to go up. But I would hope that we would keep the present successful differential between them, if at all possible.
The last point I wish to make deals with the biggest problem of all—the problem of unemployment. I tried to go into this question in a debate last week, and I then admitted, as I think Ministers should take every opportunity to admit, that not merely in our own economy but in the Western economies generally now, there is no very easy or comfortable correlation between improved economic growth and performance and the solution to this terrible problem.
Broadly, we have to concentrate on generating the wealth in the most competitive and cost-effective ways, and I believe that markets and a little help from governments will then see that we can tackle unemployment through a sensible spending of that wealth. Our big fault is to try to confuse the issues of unemployment in a capital-intensive economy and a high productivity economy with the issues of wealth generation. But this is a large subject, and I am sure that we shall return to it many times during the life of this Parliament.
The noble Lord, Lord Barnett, talked about the need for co-operation with the trade unions. I think that this co-operation is going on at many levels all the time. It is simply the view of the Government that the two sides of industry work best together when both are least interfered with by Government, and I think there is some reason to believe that that may work out, though of course there remain very great anxieties and difficulties in some large public sector unions.
I said my piece at the beginning. I do not accept that the Government have concentrated on lowering inflation to the exclusion of all the other balls in the air (to adopt a phrase of the noble Lord, Lord Barnett). However, I reiterate our view that both nationally and internationally lowered inflation is a prerequisite of the sustained growth which this country, and indeed other countries, not least the developing ones, so badly need.
Lord Beswick: My Lords, I have the time sincerely to thank all those noble Lords who have taken part in the debate, and not least for their unremittingly good-tempered approach to the issues which I sought to describe. I have learned much from the debate, not least the meaning of the term "fungible". My noble friend Lord Hatch seemed to think that the speakers
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before him had concentrated on questions regarding the third world. I confess that I did not quite follow his arithmetic because among the five speakers before him was the noble Lord, Lord Soper, and not for one moment can I believe that the principles and the theology which the noble Lord, Lord Soper, expounded to us were meant to apply to the third world only. Those are matters for us to take very much to heart.
I thought that when he took to task the noble Lord, Lord Soper, on the question of money, the noble Earl, Lord Gowrie, was not quite dealing with some of the issues that had been raised. The noble Earl says that money is creative. I wonder whether he would say that the 20,000 billion dollars that went across the exchanges into the spot market alone in 1981 was creative. Much of that was just a question of taking a quick turn, and it is the kind of thing I think we must so arrange our affairs as to reduce.
Having said that, I was grateful to the noble Earl for the number of times in which in his first speech he agreed with what I had said. Since I have referred to the fact that the noble Earl made a first speech and then a second speech, I must say that I was reminded of Mr. Harold Macmillan, now the noble Earl, Lord Stockton, who once, when challenged in the other place in a debate on the Budget, said, "I am not a twice-nightly performer". Since those days the Conservative Party has acquired very competent twice-nightly performers, and I am sure that we congratulate the noble Earl, Lord Gowrie, on the way he has succeeded twice in the one evening in giving us a half-hour speech.
But I must again say to the noble Earl that I agree with what my noble friend Lord Barnett said—that the noble Earl was very complacent about the problem of unemployment. If the figure of 3½ million unemployed—or 4½ million, which it really is—is not brought down, we shall have trouble. I say again that if as a result of world pressures, or transatlantic pressures, the Government once more have recourse to an upward movement in interest rates, then they will so add to an already unacceptable mass of unemployment and under-privilege in this country as to make revolt quite inevitable.
The noble Earl said that the Government had to borrow in the real world. But I put it to him that the real world is shaped by human hands. We could do something to change the conditions within which money is borrowed or invested. There are ideas such as more direct control of monetary bases, a more positive direction of credit, and perhaps a two-tier interest rate. These ought seriously to be studied—and, as I have suggested, not only on that side of the House, but on this side, too. With regard to the international sphere, I say again, as so many others have already said, that concerted worldwide effort is needed to secure a stable world monetary situation and to extend repayment, at lower rates of interest, of the quite absurd debt burden of the third world.
But I shall not restart the whole argument. I say again to all noble Lords who have taken part in the debate, thank you very much; and I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Areas of Outstanding Beauty: Protection
7.29 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton rose to ask Her Majesty's Government what steps they are taking to protect existing areas of outstanding beauty, and whether they are satisfied that planning procedures are adequate, bearing in mind recent decisions in respect of Prussia Cove, Cornwall.
The noble Lord said: My Lords, I begin with an apology on behalf of the noble Lord, Lord Bullock, who has taken a deep and continuing interest in these matters and especially in Prussia Cove. The noble Lord is out of the country but his interest in the issue is undiminished. I should also mention the noble Lord, Lord Winstanley, who cannot be here tonight but who would have added value to the occasion as a former chairman of Countryside Commission.
When we debate a topic in your Lordships' House it is always of value if we begin with a definition of what we are talking about. It may help if we use a definition already enshrined in legislation. The National Parks and Access to the Countryside Act 1949 puts it thus:
"The Commission"—
that is the National Parks Commission—
"may, by order, made as respects any area in England and Wales, not being in a National Park, which appears to them to be of such outstanding natural beauty that it is desirable that the provisions of this Act relating to such areas should apply thereto, designate the area for the purposes of this Act as an area of outstanding natural beauty."
We also have the value of a policy statement from the Countryside Commission dated November 1983 which restates principles and objectives:
"The title 'Area of outstanding natural beauty' is a clumsy one for a simple concept. Areas of outstanding natural beauty are parts of the countryside of England and Wales which, while they lack extensive areas of open country suitable for recreation and national park status, are nonetheless of such fine landscape quality that there is a national"—
I stress "national"—
"as well as a local interest in keeping them so. The purpose of designation is to conserve and enhance natural beauty, which includes protecting flora, fauna and geological as well as landscape features.".
The Secretary of State had this to say about that policy statement of the Countryside Commission:
"The Government believe that the present legislation governing the aims and administration of AONBs provides a sound basis for the further development of policies towards them. Like the Commission, we consider that the conservation of natural beauty should continue to be the primary objective of such policies."
May I say to the Minister that I appreciate the general care and concern for conservation that rests within the Department of the Environment. Its best intentions are often thwarted by uncaring and sometimes mercenary groups of individuals. But the public look to the Secretary of State as a court of last resort as well as a provider of constant vigilance to ensure that our heritage is not wantonly eroded. My concerns are shared by others—the Council for the Protection of Rural England. In the case I raise tonight, the CPRE's Cornwall branch has been outstandingly vigilant. In a letter to me dated 18th January, I was told:
"The inspector's individual view was in total disagreement with the previous decisions of the Kerrier District Council and with the provisions of the Cornwall County Council structure plan. It also
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ignored the clearly expressed public wish that this coastline should remain undeveloped. When we asked the Secretary of State to revoke this permission we then learnt that he will only exercise his default powers in the most exceptional circumstances and where damage to the wider public interest is involved. If the preservation of a beautiful sector of the English coastline does not fall into this category then we would like to know what does."
Let me say what a pleasure it is to note that the president of the Cornwall branch of the Council for the Protection of Rural England, Lord Saint Levan, has decided to make his maiden speech in this important debate. So far as I am concerned, he will add authority to it. The national officers of the CPRE have supplied me with many illustrations recently and currently causing them great unease over the manner in which planning decisions are being taken at variance with the stated objectives of AONBs within areas of outstanding natural beauty. I simply mention them briefly: Beeny, near Tintagel, Cornwall; Branscombe in East Devon; Sussex Downs, where oil drilling is a problem; Newnham Valley, Kent Downs, where motorcycle scrambling takes place; and Leighton Hall, Arnside. I ask the Minister simple, straightforward questions. What faith can the public place in the Secretary of State that he always keeps in mind his duties towards AONBs in planning matters? And how does he ensure that local planning authorities are aware that he will not tolerate them ignoring their responsibilities, as has happened, I believe, at Prussia Cove?
The Ramblers' Association has expressed to me its concern that firmer policies towards AONBs must be developed. It is concerned about the inconsistency shown in protecting these areas. The ramblers want to see the role of the countryside strengthened with much more frequent reviews by local authorities and government of policy towards these areas. They want to see greater co-ordination among the interests in areas of outstanding natural beauty the Forestry Commission, the Ministry of Agriculture, the Countryside Commission, the CPRE, the ramblers and the public. The ramblers want to see greater levels of public finance made available to enhance and protect these areas. I am disturbed when I detect, perhaps even at Prussia Cove, that approvals are given or go unchallenged, sometimes because local councillors fear the cost to them of opposing such developments.
The site at Prussia Cove, Cornwall, from its descrip-tion and the pictures I have seen, is one of the loveliest parts of Britain. It has enjoyed the protection of designation as being within an area of outstanding natural beauty for more than 25 years. It has been subject to an Article 4 direction for 20 years. The issue I wish to raise with the Minister tonight is the present status of a field, a tiny part of a larger, lovely, unspoiled part of the Cornish coastline. I do so in the context of intense dissatisfaction with planning procedures and the fear that what has happened can happen again, not only in Cornwall but in other designated areas of outstanding natural beauty.
The question that has to be asked of the Minister is just what care or interest he takes to ensure that his approval of such areas is respected and whether he bothers to monitor what happens to them after designation? If he falls back on the defence that local people know best and that he does not like to interfere,

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he must remember that we are talking about Britain's heritage. Ultimately, I believe that the Secretary of State has responsibilities. We want to find out tonight what they are in respect of these areas.
It was as long ago as June 1974 that Mr. Solomons, the district planning officer of Kerrier District Council, said when refusing development:
"The site is shown as 'white' land in the county development plan and it is undesirable to permit the intensification of holiday units in an area of outstanding natural beauty. The access to the site is inadequate and although it is proposed that it should be improved, danger and obstruction would be caused to fast moving traffic on the county Class 1 road, the A394."
That was stated 10 years ago. It was in August 1980 that Mr. Calder, the county planning officer for Cornwall, wrote after a refusal:
"The site is within the coastal belt where it is the policy of the county planning authority to prohibit all development except that which it considers to be of an essential nature".
And he added:
"The development, if permitted, would result in undue detriment to the amenities of an area of great landscape value and an area designated as of outstanding natural beauty".
It was in March 1982 that Mr. Griffiths, the county planning officer for Cornwall, wrote:
"After being advised of the previous history relating to this site and the report that was submitted to the committee in October last year, it was decided that the district council should be advised that the proposal was in conflict with structure plan policy 13C relating to AONBs. This policy states that the preservation and enhance-ment of the landscape will be given priority over other considerations relating to development and the management of change. This proposal is therefore in material conflict with this policy and this would be a reason for refusing permission for this proposal."
It was in June 1982 that Mr. Solomons, the district planning officer of Kerrier council, wrote after yet another refusal:
"The stationing of tents and motorised caravans on this site is incompatible with the provisions of the county structure plan having regard to its location in an area of outstanding natural beauty and great landscape value."
He also said:
"Tents and motorised caravans would be prominent and constitute an alien feature in the coastal landscape and would result in a more intensive use of the site to the detriment of the visual amenities of the area".
Twelve months later planning permission has been granted to make permanent an annual temporary use, persistently refused, and with clear exploitation potential. It is in the light of that, of necessity, encapsulated history of refusals to consolidate uses on this field that I must ask the Minister a series of questions of which I have given him notice.
Does the Minister consider that the area of outstanding natural beauty containing Higher Kenneggy and the adjacent Prussia Cove has received the protection intended under that designation, together with the coinciding designations of an Article 4 direction under the Town and Country Planning Act 1971?
Will the Minister comment on this situation? Paragraph 13C of the structure plan states in designated areas of natural beauty:
"The preservation and enhancement of the landscape will be given priority over other considerations relating to development and management of change."
How in the face of that is it possible to approve that development? Is the Minister now aware that over the
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period September 1981 to September 1982 three separate applications were refused for non-compliance with the structure plan, by the district council and endorsed by the county council? Does the Minister appreciate that when an appeal was dismissed the inspector did so on two specific grounds relating to road, sight lines and unsatisfactory access to the beach—a beach reached by a ladder which the inspector declined to test or use?
Has the Minister studied paragraph 18 of the inspector's report wherein he said:
"I commend the council's general policy of resisting further camping and caravanning and chalet sites within an area of natural beauty and that it deserves support in the interest of preserving and enhancing the attractive appearance of those areas."
Against that background, can the Minister understand the cynicism and despair felt by thousands of local people—and I believe thousands elsewhere—that the inspector showed contradictions of mind-boggling inconsistency, only matched by those of the local and county council in failing to maintain and defend their own policies?
The Minister is aware that, by virtue of an earlier revocation, £90,000 was paid to new owners of a field, and that was an outcome of great satisfaction to thousands of local and countrywide users of this area. Can the Minister appreciate that they were shattered when this further consolidation of an annually renewable use was granted? What advice has the Minister for these and many others who fear that both structure plans and designations as areas of natural beauty can be set aside to cater for the expansionist plans of developers? Can the Minister acknowledge the difference between a farmer in situ expanding a use and a sale of land to others wholly for the purpose of gain and contrary to established planning laws?
What do I hope to achieve by this debate tonight? First, to alert the public to the insidious erosion of our heritage which is taking place under our noses. Secondly, to provide the Minister with the opportunity to answer for the unease that I have shown widely exists that when there is determination, coach and horses can be driven through hitherto otherwise solid protections for our heritage. Thirdly, my purpose tonight is to expose the miserable history of planning blunders at Prussia Cove culminating in a permission being granted by a frightened council, fearful that to refuse could land them with the bill, and a Minister who refuses to exercise his reserve power for fear that he will be faced with the bill. We know who has gained—the developer who bought the land. The nation is the loser.
The credibility of the whole network of protection for the countryside is also raised here tonight. I admit that the Minister has his problems and I do not flinch tonight from adding to them. However, I know him as a Minister who cares about the countryside. He has demonstrated that time after time in my short time in the House. He is also concerned about the credibility and the integrity of the decisions of his department. Tonight he has the opportunity to add to them, both by considering this wretched case and by acting swiftly and decisively to save the position at Prussia Cove— and the "Prussia Coves" of tomorrow.
I began my remarks with an apology. I conclude with a grateful, well-deserved acknowledgement.

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Michael Tunstall Behrens and his family have worked tirelessly to save this part of Cornwall from desecration. His family have maintained properties within this area for more than 100 years. No property has been externally altered since 1914–70 years. None of their land is used for chalets, caravans or tents. Their commitment has been total. They have been sustained in the knowledge that they have justice on their side. They have been supported by thousands in Cornwall and beyond. They have fought with passion and conviction. They deserve the goodwill of the Minister. In having the privilege of presenting their case in your Lordships' House tonight, I applaud their fight; they deserve our thanks and, I hope, those of the whole House.
7.47 p.m.
Lord Saint Levan: My Lords, I should very much like to thank the noble Lord for raising the question of Prussia Cove and whether planning procedures are sufficient to protect the beauty of the whole of Mount's Bay. I am talking about all the land between the Lizard and Land's End. Prussia Cove is an extremely important cove. So many coves in West Cornwall have been ruined in the last few years partly because of unfortunate planning developments and partly because, unfortunately, inshore fisherman can no longer make a living and the little cottages lived in by those fishermen have now been sold to other people.
The Prussia Cove decision was most unfortunate. This is an area of outstanding natural beauty subject to an Article 4 direction—an area specifically designated by the Cornwall County Council plan as an area that should be preserved. We all thought, after three planning refusals, that nothing more would happen. Then we had the inspector's report.
The inspector's report made the problem much more difficult. It is difficult to read the report and understand, as a layman, exactly what was intended. The noble Lord has kindly told your Lordships that I am the President of the Council for the Protection of Rural England in Cornwall and that we do care desperately about the conservation of these natural beauty spots. We are conservationists, but we are also extremely aware of other planning problems.
This planning report, which deals with the development which we opposed, does not seem to be clear. Some paragraphs of the report seem to be putting forward the submission of the developers; other paragraphs of the report deal with the submissions of the council; and other paragraphs deal with rather different planning considerations—for example, whether there was a road traffic problem, whether the pathway down to the coast was important and so on. But the most important part of the report—the part which said that this site could be developed—should have been given special prominence and special significance so that an ordinary layman would know what it meant and how it was going to affect future planning applications.
There are various questions that I should like to ask the Minister about the advice that is given to inspectors. If there are additional materials made available to inspectors on the conduct and
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presentation of appeals, are they made available to the public? If not, should they be? Is there any guidance given to inspectors as to the way in which they reach conclusions in their reports, especially where those conclusions may prejudice future planning applications? What guidance is given to inspectors on the presentation of their arguments, including, importantly, summary statements that the ordinary lay person can understand? From the national point of view, are there ways in which recent planning appeals affecting areas of outstanding natural beauty can be categorised and monitored so that a degree of consistency can be brought about as between one part of the country and another? Would a classification system for appeals of the sort described here be useful if the department as well as the ordinary members of the public wanted to know what was happening?
This is a particularly difficult case. We have an area of outstanding natural beauty. Behind it, a mile or two away, there is land that is not designated for building. Every developer will look at the Cornwall structure plan and see that there is some land that can be developed. Behind that land there are the beautiful Tregony and Godolphin hills of outstanding natural beauty, some of the land covenanted to the National Trust. About 10 miles away, on the other coast, there is St. Ives and another part of Cornwall.
I am very worried about one other matter. I am particularly concerned about the circular which the Department of the Environment issues to its planning authorities and planning officers Circular No. 22 of 1980 states that aesthetics are entirely a subjective matter. Planning authorities must not seek to impose their tastes on developers simply because they believe them to be superior. In Mount's Bay it is extremely important that aesthetics should be taken into account. In the last 50 years much has happened; many developments have taken place which I think nearly everyone would regret. In the future I very much hope that there will be a circular to planning authorities and inspectors stating that they should take a more positive approach to planning.
Perhaps I may give one brief example. I am very concerned about instructions given to planners about the colour of buildings. Many buildings in Mount's Bay are painted white because originally, in order to prevent damp, they were painted with lime. Afterwards some cottages were made to look very attractive having been painted with Snowcem. Now if one looks at the whole of the coastline of Mount's Bay one sees splashes of white all over this beautiful coast. I hope that planning officers will be encouraged to ensure that colours are natural and that buildings blend in with the countryside.
Other developments will take place in Mount's Bay which will be extremely important in the near future. The town of Penzance is an area of high unemployment. Unfortunately, the only place where new factories can be built is on the Eastern Green—the access to the town which is right on the coast. When tourists revisit historic towns in the South-West, they will find that nearly all the entrances to those towns are now lined with new developments. I accept this because obviously unemployment is an important factor.

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Perhaps I may give another brief example. I live at St. Michael's Mount, which is a National Trust property and one of the most visited National Trust properties in the country. Every year over 170,000 people go round it and over one million people in this country who are National Trust members can visit St. Michael's Mount without spending a single penny. Marazion needed a new community association building. This was extremely important for the leisure activities of the town and it provided the unemployed with somewhere to go. Under the auspices of the Manpower Services Commission it was built by the unemployed. The building covers over 8,000 square feet. It could have been absolutely disastrous to the view that tourists had of the town from the Mount. However, we were very lucky. The community association in the village took enormous trouble to ensure that that building fitted into the skyline and that it was built of the right materials. Instead of having a large roof, it had a pyramid roof because that would not stick out too much. I am quite sure that the guides to St. Michael's Mount will point to this building and tell visitors to the Mount that not only does the building melt well into the landscape, but it is an enhancement; it is something to be proud of. Therefore, can the Minister introduce more positive planning and in a future circular give more detailed instructions in order to save the heritage coast of Mount's Bay?
7.55 p.m.
Lord Leconfield and Egremont: My Lords, I should like to congratulate the noble Lord, Lord Saint Levan, on a most interesting maiden speech. I hope that we may be able to persuade him to contribute to our deliberations in the future. For a few moments I should like to change the emphasis of this most important debate and perhaps broaden it by speaking on a matter of considerable importance to those who live in the south, and particularly the south-east, of England.
This matter has been raised in your Lordships' House before, but the problem has grown somewhat since then. Perhaps I ought to declare an interest. I come from the south-east, from the County of Sussex. I am president of the Sussex county branch of the Council for the Protection of Rural England. This debate, or a part of it, is especially timely from our point of view, for we in Sussex are faced with the prospect of a major oilfield on our doorstep. This has naturally stirred up a considerable amount of feeling in the county.
The two county councils—the West and East Sussex County Councils—have given planning consent to two companies to drill exploratory wells within their respective licence areas. Both of these proposed drillings are in designated AONBs—areas of outstanding natural beauty. It has been pointed out that the planning consents are of only limited duration and do not include permission to extract. But it is worth bearing in mind that once permission to explore for oil has been granted, if oil is then found permission to extract has always followed. This would seem to indicate that, to be effective, refusal has always to come before the granting of permission to explore. Therefore, if oil is present in commercial quantities on
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these two sites, they will almost certainly go on to become productive oil wells.
There is reason to believe that there may be a great many other places where oil is present in commercial quantities in the downland and high Weald areas of Sussex. The geological strata in the Humbly Grove field in Hampshire continue east through Sussex into Kent. Indeed, two more applications for permission to explore for oil are expected shortly for areas in the high Weald, a recently confirmed area of outstanding natural beauty.
There are, of course, problems, apart from the drilling of the oil wells. These include difficulties of transportation along minor country roads, the building of gathering stations—which. I understand, in Hampshire can occupy up to four acres—vast storage tanks, distribution points, and enormous initial disruption from the bringing in of material for construction.
I believe, for instance, to speak of transportation, that in parts of the Humbly Grove field there are up to 44 tanker movements a day. Your Lordships will be aware that the maximum size and weight of these juggernaut lorries have recently been increased to be in line with the rest of the European Community. It may be imagined how the country lanes of the Sussex countryside will cope with these brutes going along them 44 times a day.
Of course, the roads could be improved, but what a terrible effect such improvements would have on the character of the intimate and fragile countryside, the landscape of Kipling and of Belloc! An alternative to removal by tanker is to pipe the oil to a nearby gathering station; but even if this were done the gathering station itself is, as I understand it, a very considerable industrial complex. What we should perhaps be asking ourselves is: is this what we want in an area of outstanding natural beauty? If it is, what is the point of taking the trouble to designate such areas at all?
However, I do not want to be dogmatic. I understand and I accept that in certain areas of outstanding natural beauty, or AONBs, where the damage would be minimal, oil extraction is a possibility. But surely there are others where the landscape is of such a quality that it is of the utmost importance to preserve its character.
I return to the word "fragile", and all those who know the part of the world in which I am fortunate enough to live will, I think, agree that this is an apposite description. The countryside in the south of England, especially in the south-east, is of an intimate and fragile nature, easily knocked out of scale. Would it not be fair to ask, or to say, that in such an area of outstanding natural beauty there should be a strong presumption against oil exploration and development?
I understand that the Government are considering new guidelines in this delicate matter. At the moment the county planning authorities have to take decisions on individual single applications for one borehole without knowing the full extent of a possible oilfield. What I am asking for is—and I would be interested to hear the Minister's response on this point—that the oil company which makes the application should be bound to divulge the full extent of its knowledge at that

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time as to the possible amount of oil present, and the likely result of industrial works that will be needed to exploit this to the maximum. If this knowledge was to be forthcoming it would allow the planning authority in question to judge the best way to limit the damage caused to the surrounding countryside, the beauty of which led to its designation as an area of outstanding natural beauty in the first place.
One alarming point remains, and I should like to leave your Lordships with this by perhaps simply posing a question. Are the county councils equipped to deal with the exceedingly complex planning applica-tions and forecasts submitted to them by the oil companies? If they lack the expertise in the highly technical field of oil exploration to do this, how will they obtain it? I should like to hear the Minister's views on this. I understand that independent advice on such matters, if available, would be exceedingly expensive and possibly outside the range of local government departments, which, after all, these days, have to operate within extremely tight budgets.
8.6 p.m.
Lord Melchett: My Lords, I think there are three of us who would like to join in this debate whose names are not on the list, and from various hand signals around the Chamber I think I am going to go first. I should like to congratulate my noble friend on asking an important Question and say that I entirely agree with the case that he and the noble Lord, Lord Saint Levan, made about Prussia Cove. I have had some correspondence about the case which I read with great interest. It seems to me that the muddled planning history of this particular site provides absolutely no justification for the decision that appears to have been taken. In both this case and the case which the noble Lord, Lord Leconfield and Egremont, mentioned of oil exploration, there is a serious problem, in that the Department of the Environment have given people messages that they are not going to call in applications in cases where sensitive sites such as AONBs are at risk nearly as frequently as they did in the past. That is a regrettable line for the department to have taken. I have no doubt that that message has got through to local planning authorities, and that this is putting at risk a number of beautiful areas of our countryside.
I did not want to add anything to the two problems which have been aired already this evening, but to bring up a third problem—one which illustrates another threat to AONBs which my noble friend mentioned in introducing the debate; namely, the intrusion and noise and danger of motor cycles using areas of the countryside which have not been prepared for them; using green lanes and, in particular, using the Ridgeway, which is a designated long distance path designated for the use of walkers and horse riders as a place where they can get away from the noise and fumes of motor traffic, whether it is from cars or motorbikes. It is of course a very important part—indeed I would say the most important part—of an area of outstanding natural beauty.
It is also a route of enormous historical and archaeological importance, and one that it is important to preserve for those reasons, let alone the huge enjoyment that it would provide to walkers were
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it not for the extensive use which is made of the Ridgeway by motor cycles. The problem here is slightly different from the one that has been raised already this evening; namely, the need to persuade the Countryside Commission that they should implement a policy decision which they took some years ago to apply to the relevant government department for a traffic regulation order which would ban all vehicles from the green lane part of the Ridgeway apart from agricultural vehicles, emergency vehicles, and vehicles for the disabled. In other words, all legitimate use of the route would be able to continue but not motor cycles.
To give your Lordships a brief indication of the extent of the problem I should like to quote from a correspondent in a magazine called Motor Cycling, who wrote as follows:
"Thud, splat and here's another mean teen greenie bombarding its way through the slimy dales searching for grassy lanes like a busy wasp searching for something to sting."
The pleasure which is looked for by people driving motor cycles along green lanes and in particular lanes which have been designated for people to walk is simply that: to churn through mud making as much mess and splashing as possible, and to make as much noise as possible. Indeed, correspondents in the motor cycling magazines sometimes complain that the bikes they have just bought do not make enough noise. In one instance of which I have a record the magazine provided some information about how a motor bike could be made noisier—the production model could be made noisier—without jeopardising the chances of passing the MOT test with it. It might be worth giving another quote, this one from The Sunday Times Magazine some time ago, where a person describing the joys of riding motor cycles in this sort of area said:
"The tougher the terrain and the worse the weather, the more fun it is. The great sensation of trail riding is the exhilaration of getting over the obstacles and the excitement of anticipating the hazards. Motor-cycles are noisy but trail riders argue their sport is not anti-social because they seldom meet anyone else on the green roads."
I very much doubt whether that is so. It is certainly not the case on the Ridgeway. For example, the photographer and author of a book about the Ridgeway wrote:
"Sunday afternoons were regularly shattered by the horrible noise from the trail riders. You could hear them for miles before they appeared and miles after they disappeared. No trail rider who ever passed me cut out his engine or gave any sign of acknowledging my presence or right to walk the trail. I had to leap out of the way with my camera and tripods."
That was the case some time ago. The fact that this problem in some respects is getting worse rather than better is illustrated first of all by an advertisement from Motor Cycle News of 28th March of this year, where the advertisement for the bike is headed, "A Thumper with more punch" a description which a certain walker on the Ridgeway may well feel is particularly apt: on 13th November last year, a Mr. Gavin Sellers was hit by a motorcycle, laid off work for six months and, as far as I can tell from a photograph of his leg injury, had about 20 stitches in his leg. Apart from the very serious injury which it caused him, that afternoon there were 100 motor cyclists using the Ridgeway for some sort of rally—indeed, as a race track—with the consequences for that particular walker that I have mentioned and a completely ruined day for all the others who were using the Ridgeway on that Sunday.

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The Countryside Commission, who are responsible for going to the Government to ask for a Traffic Regulation Order, have taken the view that they needed to try voluntary restraint first. This seems to me to ignore the fact that the risk of one accident such as happened to Mr. Sellers is a risk which is not worth running in these circumstances. There seems to me to be absolutely no justification for allowing motor-cycles on this particular designated long distance route for walkers and for horse riders if there is a risk of this sort of accident happening, which there clearly is. It seems to me only a matter of time before somebody—probably a child—is killed on the Ridgeway as a result of motor-cycles going down it in this way. Those people on the Countryside Commission who have to take a decision on this—incidentally, a decision which is going to be taken tomorrow—will bear a very heavy responsibility—not if that happens, but, in my view, when, inevitably, that happens. The Countryside Commission voluntary scheme has had some success in reducing the number of motor-cycles using the Ridgeway at times when it has been operating. Nevertheless, large numbers have continued to use the route and, as an article in Country Life this year stated, nearly one-fifth of the motor-cycle use was illegal: that is, unlicenced machines or under-age riders. The report which has been made on the voluntary restraint scheme states that the police clearly do not regard it as a priority to enforce the law against this very high proportion of motor-cycle riders on the Ridgeway who are breaking the law—no doubt not insured and, as a result, putting at even greater risk those people who may be injured by their activities.
This problem has been with us for a great many years and the Countryside Commission, as I say, apart from trying this scheme of voluntary restraint, has so far refused to go to the Government to ask for a traffic regulation order. I find this a quite incomprehensible state of affairs. The only argument I have heard from the Countryside Commission to justify their failure to go to the Government for a traffic regulation order is that they think they would be turned down by the Government.
My particular reason for wanting to raise this case tonight (as I say, the evening before the commission comes to a decision on these matters) is to seek an assurance from the noble Lord the Minister that the Government have not said anything to the Countryside Commission—as I am sure they have not—which would give the commission grounds for believing that they would be turned down if they asked the Government for a traffic regulation order on the Ridgeway given the fact that the voluntary restraint system has shown up a large level of illegal use there: a serious accident has happened in the last few months, and the level of use, while reduced during the periods of voluntary restraint, is still, in my view, quite unacceptably high for a route which is designated for walkers and horse riders.
The Countryside Commission also argued that, were the Government to turn down a request for a traffic regulation order, that would place them in a worse position than they are in now. That seems to me to be tantamount to suggesting that the Government are blackmailing the commission by saying, "If you
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apply to us for a traffic regulation order, not only will we turn it down but we will make sure that things are in a worse state after it is turned down than they are now". Again, I find it hard to believe that the Government could have said anything, whether by commission or omission, which would have given the Countryside Commission that impression. Again, I ask the noble Lord the Minister to give me an assurance that that is not the case.
I am encouraged to ask the noble Lord the Minister for this information because of something which his honourable friend, Mr. Waldegrave, the Minister at the Department of the Environment, responsible for many of these matters and countryside conservation generally, said recently in an interview with the CPRE—which has been mentioned at least twice this evening. It was that he saw the need for strict controls over such motorised forms of countryside recreation. He went on to say that nevertheless—and I would agree with this—room has to be found even for them somewhere. I am sure all of us would agree with that. The question is: should room be found for noisy motor-cycles many of which are being ridden by under-age riders with no insurance on a route which has been designated as being of national importance for people wanting a quiet walk, or a quiet ride on a horse, in the countryside? I am sure the answer must be no, and I hope the noble Lord the Minister will confirm this.
8.18 p.m.
Lord Vivian: My Lords, the hour is getting late, and I promise not to detain your Lordships for more than two minutes. As a Cornishman, may I take this opportunity of congratulating the noble Lord, Lord Saint Levan, on his informative and persuasive maiden speech. He is a true son of Cornwall, and I am sure that we who have the privilege of being Members of your Lordships' House will benefit greatly when, in the future, he speaks to us on matters appertaining to Cornwall and the West Country.
Cornishmen will also be very grateful to the noble Lord, Lord Graham of Edmonton, for bringing this Unstarred Question before the House this evening. He has put many pertinent points before us tonight, and I hope that they will prove to be fully persuasive to all noble Lords. I hope the noble Lord the Minister, when he comes to reply, will take into account the many points that your Lordships have made for the preservation of Prussia Cove, for it is one of the most beautiful coastal places in Cornwall. In conclusion, I would plead with Her Majesty's Government not to allow this cove of peace and great beauty to be destroyed by development.
8.19 p.m.
Baroness White: My Lords, I apologise to the noble Lord the Minister and to the House for not having put my name down on the list of speakers, but I was not sure whether I could be here this evening. However, I did receive correspondence about Prussia Cove at the time my noble friend put down his Unstarred Question some little time ago. I wanted to assure the House tonight that the points he has made are of very great significance, not only at Prussia Cove.

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I am delighted, not only to be able to congratulate the noble Lord, Lord Saint Levan, on his maiden speech, which was a helpful one—I hope we shall hear from him often again—but also to add my support as president of the Council for the Protection of Rural Wales. We are two years younger than the CPRE, and we regard that organisation as our elder brother. A wrong decision at Prussia Cove could have considerable influence in undermining future decisions in other parts of the country. We have an area of outstanding natural beauty in South Wales, the Gower Peninsula, with a magnificent coastline. Great efforts have so far been made to protect it—on the whole successfully—but one decision of this nature could help to undermine future decisions. Then we have the Pembrokeshire Coast National Park, also with very beautiful inlets and coves, comparable with Prussia Cove.
I am stressing to the Minister that this is not merely a local matter. It is a question of sustaining designated areas, whether they are areas of outstanding natural beauty, sites of scientific interest or national parks. If these are not supported in appropriate circumstances, then wrong decisions have effects on other places. They set precedents which are highly undesirable, and from everything that I have heard I feel there is great danger, if the wrong decision is sustained at Prussia Cove, that it will have damaging effects in other places.
8.22 p.m.
Lord Skelmersdale: My Lords, the noble Baroness, Lady White, is quite right in saying that this is not merely a local matter, and in the course of my speech I want to set this in the context of a much wider perspective. In that connection I am grateful to the noble Lord, Lord Graham of Edmonton, for providing this opportunity for me to restate the Government's policy on the protection of our areas of outstanding natural beauty. I am also grateful to the noble Lord for providing my noble friend. Lord Saint Levan, with a platform for his maiden speech—a thoughtful and most interesting contribution. I should perhaps say that the platform is a slightly more level one than my noble friend's more normal perch on St. Michael's Mount. At the moment I am unable to answer his detailed questions, but if I may I will write to him. On one of his more general points I would say that what is acceptable design in one area may not be in another.
My right honourable friend the former Secretary of State for the Environment outlined the Government's policy in a Statement he made in another place in July 1982. That was in response to the findings of a wide-ranging review undertaken by the Countryside Commission—the first major appraisal of these areas since designation first began in 1956. The commission is responsible for proposals for the designation of areas of outstanding natural beauty—a process subject to confirmation by my right honourable friend. As he said in 1982, the Government believe that the present legislation governing the aims and administration of AONBs provides a sound basis for the further development of policies towards them. Like the commission, we believe that the conservation of natural beauty should continue to be the primary object of such policies.
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My right honourable friend the present Secretary of State for the Environment has recently demonstrated the Government's commitment to the role of AONBs in the planning system by confirming three new areas, bringing the overall total to 35. These include the Camel Estuary extension to the Cornwall AONB: the original area includes Prussia Cove, to which the noble Lord refers in his Question. The order designating the Cornwall AONB was confirmed in 1959, and with this recent extension the total area of this AONB is now 373 square miles.
The statutory purpose of designation is the preservation and enhancement of natural beauty. The Government recognise that these areas should be used also to meet recreational needs, but only in so far as recreational use is consistent with conservation, agriculture and forestry.
We have made it clear that confirmation of an AONB designation order carries with it a formal recognition by the Government that the landscape of the area is of national importance. That means we should not normally expect to see the siting in these areas of, for example, large-scale industrial or commercial development unless there was a proven and overriding national interest and no reasonable alternative site was available. In other words, the national significance of the beauty of the area becomes a factor—and in practice a very important factor—in the decision the planning authority has to take when an application for permission is made.
It is for the Government to see that the countryside is properly protected, so that, quite apart from other considerations, people may continue to enjoy the relief it affords from the day-to-day pressures of urban life. That inevitably involves a degree of classification and comparison. We must endeavour to quantify benefits which are largely subjective and which cannot be expressed as figures in a balance sheet.
That is part of the planning process. We live on a small and densely-populated island. Land is a limited resource which we must use wisely and with foresight if we are to accommodate successfully the many and often conflicting demands which society places upon it. It is the task of central government to provide a framework for achieving a balance between these various demands. But we can do so only in broad terms. We cannot devise a single national plan to cover all contingencies. It would be impossible to do that while retaining the necessary flexibility to respond to the individual needs of local circumstances. That is exactly what local authorities—in this case Prussia Cove and some of the others we have heard mentioned tonight—represented by their planning departments and, ultimately, their planning committees, are for.
Local conditions are many and diverse, even within the bounds of a unified designation system. Areas of outstanding natural beauty come in all shapes and sizes. Some are large, like the North Wessex Downs and the Chilterns; others, like Cannock Chase and Dedham Vale, are much smaller. Some, like the Quantock Hills in my part of the world, are compact and readily identifiable: others, like the Cornwall AONB, are fragmented. Some, like the Sussex Downs, are rich agriculturally, others, like the Forest of Bowland, are wild and remote. There is no single character, and there can be no single, all-embracing strategy.

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The planning system needs to be flexible enough to combine the needs of conservation and the environ-ment with the need to provide for economic growth. Allowance can and must be made for industrial, commercial and housing development (including development to encourage the tourist industry n places like Cornwall). But Her Majesty's Government have made it abundantly clear that development has to be controlled and that this Government are strongly-committed to the preservation of the natural environ-ment, including areas which have been designated as being of outstanding natural beauty.
Your Lordships may know that we have made a special development order, which goes by the lengthy title of the Town and Country Planning (National Parks, Areas of Outstanding Natural Beauty and Conservation Areas) Special Development Order 1981. This limits the kind of development allowed elsewhere, without planning permission, under the general development order. For example, it means that householders and industrialists cannot make such large extensions to their premises in these areas without permission, as they can elsewhere.
The Government's job is to provide guidelines by which others, principally the local planning authorities, may formulate proposals for the shape of future land use. Under the development plan system, which we have heard mentioned tonight, county councils are responsible for preparing structure plans, and for keeping them under review. Both county and district councils may, where necessary, prepare local plans.
Structure and local plans set out the land use policies, including those to be applied within areas of outstanding natural beauty. They provide frameworks for development control and the co-ordination and direction of development. The procedures followed during the preparation or adoption or approval of plans enable the views of all those interested to be taken into account before the plans are approved or adopted. The structure plan at that stage has presumptions of various developments in various areas, and the interests of areas of outstanding natural beauty would already have been covered. Approval of structure plans by the Secretary of State, with modifications as appropriate, enables the Government to ensure that they are satisfied with the broad land use policies to be applied within these areas.
Perhaps this is an appropriate moment to say that where circumstances change the structure plan will have to be altered and the alteration approved by the Secretary of State. I am thinking particulary of recent interest in oil prospecting on land in East Sussex and the county council's proposals to alter the structure plan. My noble friend Lord Leconfield and Egremont raised this issue. As he fairly said, we have been there before: on 23rd November last to be exact.
It has been the policy of successive Governments over the years to give every possible encouragement to the exploration and proving of our indigenous mineral reserves. Oil and natural gas are no exception. It is only by determining the location and full extent of our indigenous hydrocarbon resources that we can make sensible provision for the future, and ensure that energy needs are balanced against environmental considerations. Successive Governments have also
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taken the view that individual applications for permission to explore for minerals should be dealt with on their merits, without consideration of the possible merits of further developments which may or may not occur. I think that the important thing for my noble friend and the House to realise is that there can be no presumption either way. In any case, a second planning approval would be necessary if further drilling were to be required, or to put up the oil tank farms or anything else which might be required for the exploitation, rather than exploration, of such a resource.
When it comes to the question whether particular developments should or should not be allowed in areas of outstanding natural beauty, as in the case of the caravan site at Prussia Cove, it must be for the local authority concerned to take a decision initially, bearing in mind the policy content of their development plans and other material considerations which, I must remind the House, have already been approved by the Secretary of State. One of those other considerations will be the national significance of the amenity value of the area. The Government would expect local planning authorities to attach greater weight to conservation objectives in the exercise of development control and other planning functions in areas of outstanding natural beauty than in undesignated parts of the countryside, but one cannot lay down rigid rules. The total area of the Cornwall AONB is 375 square miles, and it already contains much developed land. Total bans on development, regardless of local considerations, will be neither right nor practical.
My right honourable friend the Secretary of State for the Environment normally becomes involved only if a particular development is of such regional or national significance that he feels it appropriate to call in the planning applications as his own decision or, if the authority refuses the application, the applicant appeals to him against that refusal. I can tell my noble friend that my right honourable friend decided that this was not appropriate in the case of Ditchling Beacon. It would be possible further to tighten planning controls in these areas, but I am not convinced that we will be justified in so doing. Nor do I accept that the Prussia Cove case demonstrates the need for such a change.
Certainly there has been controversy, and the planning history of the site is complicated. This application concerns a re-application for planning permission to have tents and caravans which has been granted on an annual basis since the end of the second world war. In September 1981 the farmer put in his normal annual application and had it turned down, as were two further applications. It would be unprofitable to speculate why. We do not know what communications passed between the developer and the local planning authority in this case. At least, I do not know. If the noble Lord, Lord Graham, has evidence of such things, I should like to see it. He gave the suggestion—I would not put it any higher—in his speech that perhaps he might. All that I have to go on is paragraph 12 of the inspector's report. It says:
"The council stated that the structure plan policies normally only allow the development or extension of camping or caravan sites where, among other things, they were not within an area of outstanding natural beauty".

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I must disagree with the noble Lord when he asserts that this was the main reason, if (and I can only say "if) it was. The inspector considered it was fallacious. Otherwise, how could he have said, in paragraph 17 of the same report, that he considered the principal issues to be determined included whether the continued—I repeat "continued"—use of the appeal site would be unduly harmful to the visual amenities of the area. Then he concluded, in paragraph 23, that if certain conditions of access were improved there was in his view no reason why a permanent permission should not be granted. The appeal was, however, refused by the self-same inspector. There is nothing improper in the fact that once deficiencies have been rectified to the satisfaction of the local planning authority, a subsequent application should be granted by them, as indeed it was. It was a local matter determined by an appeal locally and within a proper interpretation of the structure plan, which, I have already said, took the fact of the area of outstanding natural beauty into account when it was prepared.
On the more general point made by the noble Lord—namely, that structure plans and AONBs can be set aside to cater for (I think he said) expansionist plans of developers—
Lord Graham of Edmonton: My Lords, I appreciate the convention, and I did not wish to rise at all. I hope the noble Lord will understand that. Will the Minister not take on board the enormous significance of the translation from "temporary" to "permanent" in this instance; and, not only that, but that once a permanent permission has been granted it immediately provides the opportunity for consolidation and then, after consolidation, for expansion? A crucial aspect is the recommendation or the indication by the inspector that a permanent permission should be given—and from that has flowed a great deal.
Lord Skelmersdale: My Lords, I accept that there is a difference between annually-renewed temporary permissions and a permanent permission. How could I say otherwise? I think the point that I was trying to make was that these annual permissions had been going on for a very long time. The decision was that no permission at all could be granted unless access was improved. Access was improved; and the application was for a permanent permission for these tents and caravans. The local planning authority can only determine an application that is put in front of them. They saw no objection, in the light of the new circumstances, to refusing that application which was put in front of them. Equally, I do not see any reason why they should have determined it any other way.
I was going on to say that on the more general point made by the noble Lord, namely, that structure plans and AONBs can be set aside to cater for expansionist plans and developments, this case does not fit that comment; nor did any that I have yet heard of. The planning laws of this country are concerned with proposed developments themselves and not with the developer, whether expansionist or otherwise. On the expansionist point which the noble Lord, Lord Graham, has just mentioned in his intervention, I would say that the fact that there is now a permanent
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permission for a site which has been no different in size or scope or any other internal dimension since the war cannot constitute a presumption that any further development can go on.
Lord Graham of Edmonton: Just you wait.
Lord Skelmersdale: My Lords, the noble Lord says, "Just you wait". All that I can say is that if anybody puts in an application I should look very carefully at the planning authority. Every case must be decided on its merits and the history of this planning consent, which I believe to come out right for the reasons I have given, should not be taken as a precedent for future applications, whether in the immediate vicinity or anywhere else.
I must agree with the noble Lord, Lord Melchett, that the Ridgeway is a long-term problem which has erupted in your Lordships' House from time to time. I take the basic point made by the noble Lord, especially the noise and danger factors. I, too, should like to associate myself with his comments on the unfortunate man who had his leg broken as a result of being hit by a motor-cycle while he was walking on the Ridgeway. I really thought that the noble Lord went even stronger than I have heard him go for a very long time.
Over the last eight years or so, I have heard as many lunatic suggestions from him as he has heard from me. None, however, on either side has been quite as lunatic as that to which he has treated your Lordships this evening. He suggested that the Countryside Commission would not promote a traffic regulation order on the Ridgeway because the Government would turn it down. That strikes me as the most ludicrous thought for two reasons; first, it is pure speculation; and, secondly, no Government can be presumed to have a view until they are asked. I am sure that was the noble Lord's interpretation of the facts when he was answering from this Dispatch Box, as it is mine now.
Seriously, I am reliably informed that the Countryside Commission has at present set aside a traffic regulation order for the Ridgeway until experience has been gained of the voluntary arrange-ment which is now operating. Whether they change their minds tomorrow, of course, remains to be seen, and I do not think that anything we say in this House should attempt to pre-empt that decision.
Returning to the Question on the Order Paper, the Government's policy is to leave detailed planning control so far as possible with the planning authorities. We think it is right that, as representative bodies, they should answer to the local electorate for local decisions. Central control here would be unnecessarily bureaucratic and time-consuming. The general planning policy framework, including, as I have said, areas of outstanding natural beauty and the like within which local authorities operate, is laid down by the Government and applications for development with more than local significance can be called in by the Secretary of State for his decision. We believe that this strikes the right balance between the national and the local interests and that the procedures are indeed adequate.
Lord Graham of Edmonton: My Lords, before the noble Lord sits down, has the Minister any answers to the questions I asked during the debate, or is it his intention to reply to them? The Minister might recall that I gave him notice of those questions earlier, I understand the problems, but I should like to know whether I am going to get answers.
Lord Skelmersdale: My Lords, I did not intend to answer the points made by the noble Lord, point for point, because a good third of the questions that he asked I have already answered in the course of my speech, by pointing out that the actual planning permission for this development at Higher Kenneggy was as a result of a continued series of successful applications and not as a new development.
House adjourned at seventeen minutes before nine o'clock.

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