Sitting of 1 August 1984

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

    National Strikes (Economic Effects)
    Sir David Priceasked the Secretary of State for Trade and Industry what has been the effect to date of the continuing miners' strike and other supportive strikes upon the United Kingdom's import and export trades, respectively.
    The Secretary of State for Trade and Industry (Mr. Norman Tebbit): Little changed since the reply I gave to a similar question from the hon. Member for Caerphilly (Mr. Davies) on 4 July. Imports of oil, coal and coke have increased and there has been some reduction in steel exports, but the strike has had a minimal effect on the vast majority of the United Kingdom's import and export trades.
    Sir David Price: Does my right hon. Friend agree that although this continuing strike is not good for the economy, it is even worse for the economy of the striking miners and their families? Does he also agree that the terms proposed by the National Coal Board for non-economic activities within the coal industry are the most generous on record in the whole of British industry, and should certainly be accepted?
    Mr. Tebbit: Yes, I entirely agree. The subsidies to the coal industry are extraordinarily generous and the offers for voluntary redundancy are among the most generous ever offered. As my right hon. Friend the Prime Minister observed last night, they are in marked contrast to the meanness of the right hon. Member for Chesterfield (Mr. Benn), who supports closures on economic grounds. We are all extremely sorry for the losses caused to so many miners who want to go to work and who are intimidated by massive picketing, and we are puzzled——
    Mr. Gould: Answer the question.
    Mr. Tebbit: I am answering the question. The hon. Gentleman may make his own judgment. I know that he is afraid that I shall draw attention to the fact that the Leader of the Opposition does not have the guts to ask Mr. Scargill to abide by the outcome of a ballot or even by the TUC's code on picketing.
    Mr. James Lamond: As the Secretary of State is so dismissive of the effect of the strike on imports and exports, does he share the view of the Chancellor of the
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    Exchequer that this deterioration in the fabric of the nation, and the starving of women and children in order to drive the miners back to work, is "a worthwhile investment"?
    Mr. Tebbit: It is certainly not a worthwhile investment of the funds of the National Union of Mineworkers to employ people to beat up fellow members of the union.
    On the question of what my right hon. Friend said, does anyone suggest that it is not right for the Government to ensure the continuity of electricity supplies? That is the cost involved.
    Mr. Hickmet: Would my right hon. Friend care to comment upon the description of the strike by the chairman of the Iron and Steel Trades Confederation as a political strike, or his assertion that trade union leaders are prepared to see their members' jobs sacrificed to the political ambition of one man—Mr. Arthur Scargill? What effect does my right hon. Friend think that will have upon the British Steel Corporation's export market? Is it not a disgrace that the leadership of the NUM should be prepared to see steel workers' jobs put at risk?
    Mr. Tebbit: My hon. Friend is right, except in one respect. This strike is not about one man's political ambitions; it is about the political ambitions of the Leader of the Opposition, who crawls along like a puppy at Scargill's heels.
    Mr. Douglas: In the nation's interest, will the Secretary of State give us some idea of the total cost of the strike in terms of the nation's balance sheet? Last night the Chancellor of the Exchequer seemed to suggest that £350 million or so was a good investment from the Government's point of view. What is the real cost to the nation? Does the Secretary of State think that that money is well invested in trying to defeat people who are trying to defend their communities?
    Mr. Tebbit: Whatever it costs to ensure that members of the NUM have the right to go to work without being under threat of being beaten up by pickets is worth while. Last night my right hon. Friend quoted the public expenditure involved, which is well worth while to maintain continuity of electricity, to maintain steel workers' jobs and to protect miners against pickets.
    Mr. Ward: Is my right hon. Friend aware that many of my constituents are amazed to hear that every working miner is subsidised by the taxpayer to the tune of £130 a week? They are increasingly asking how much longer they can continue to subsidise miners who are taking money out of the pockets of people on relatively low incomes and showing no concern for their own or the country's future.
    Mr. Tebbit: Uncharacteristically, my hon. Friend is being unfair to many miners. The average subsidy is £130 a week, but many miners are loyally working in good pits that are not subsidised. The question is how much we can afford to subsidise the uneconomic pits which are a burden on the backs of other miners and taxpayers. Last night the right hon. Member for Chesterfield (Mr. Benn) said that he was in favour of closing uneconomic pits. The sooner we get on with that, the better.
    Mr. Ashdown: Is not this dispute a classic example of how this terrible problem has been torn apart by Labour and Conservative Members like a rag doll? We cannot understand why the Leader of the Opposition is not

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    prepared unequivocally to condemn the appalling brutality that is occurring on picket lines. How can the Government sit by and watch the destruction of a great industry, intimidation and violence on the picket lines and the destruction of law and order, and not do anything about it?
    Mr. Tebbit: I am sorry that the hon. Gentleman cannot understand why the Leader of the Opposition is silent. He is silent because he is Scargill's puppy and dare not say a word. The Government are maintaining the miners' right to go to work through police operations to defend them. We are maintaining electricity supplies to protect consumers and we are maintaining the British Steel Corporation's ability to employ its work force. All of those matters are the responsibility of the Government, and we are fulfilling that responsibility. However, we cannot force Mr. Scargill to have a ballot and to let his members go back to work.
    Mr. Peter Bottomley: Is not the real point that Britain's economic development depends upon cost-effective energy, as much as possible of it being produced in Britain? Are we not more likely to achieve that if more people know about the cost of subsidies to the mining industry and realise that members of political parties and trade unions dare not go beyond condemning violence? They ought to call on people not to assemble in such large intimidatory numbers and not to get involved in any type of violence.
    Mr. Tebbit: My hon. Friend is undoubtedly right, but it would be a helpful first step if the TUC code on picketing, which sets down a maximum of six pickets at any works gates, were implemented. We should then see who wanted to go to work.
    Mr. Shore: Will the Secretary of State now stop complaining and answer two direct questions? Does he or does he not endorse what the Chancellor of the Exchequer said last night: that, taking account of the human and other effects and costs of the strike,
    "it represents a worthwhile investment for the nation"?—[Official Report, 31 July 1984; Vol. 65, c. 306–7.]
    Secondly, if the economic costs of the coal industry are as the Chancellor described yesterday, to what does the Secretary of State attribute the continuing deterioration of the British economy, including the massive increase in the balance of payments deficit?
    Mr. Tebbit: There is not a balance of payments deficit. I am sorry to bring the right hon. Gentleman the good news.
    Mr. Shore: A deterioration.
    Mr. Tebbit: A deterioration—from a massive surplus to balance? The right hon. Gentleman is keen on getting these things right, and I shall put him right. There are many aspects to the swings and roundabouts of trade. We have been in surplus for five years running, which is more than Labour Governments ever achieved, and we shall maintain those figures year over year.
    The right hon. Gentleman also asked about the Chancellor's statement last night. My right hon. Friend was absolutely right. The money spent in resisting the strike is money well spent, because it protects the jobs of steel workers, car workers, dock workers, Transport and General Workers Union workers and many others. Not to have expended it would have been to give in to mob
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    violence. There is no necessity for any starving. If miners were allowed by their union to go back to work, their wives and children would be well fed.

    Exchange Rates
    Mr. Knoxasked the Secretary of State for Trade and Industry how many individuals and how many organisations have made representations to him in favour of fixed exchange rates in the past year.
    The Minister for Information Technology (Mr. Kenneth Baker): I have not received any representations seeking a return to fixed exchange rates.
    Mr. Knox: Does my right hon. Friend agree that the British economy worked much better when we had fixed exchange rates? What steps are the Government taking to bring about greater stability in international exchange rates, and, as a step towards that, when do they intend to join the exchange rate mechanism of the EMS?
    Mr. Baker: I do not think that I would subscribe to my hon. Friend's view that the British economy would necessarily work better with fixed exchange rates. I remember a time when there were such rates, and there were a series of lurches of policy to maintain a level which became very unreasonable. The problem about maintaining a fixed exchange rate is rather like rolling a stone up a hill. It can be done. It requires great effort and determination, but at any time it can slip out of control and crush those who are trying to push it uphill.

    Lead in Petrol
    Mr. Neil Hamiltonasked the Secretary of State for Trade and Industry whether he will be discussing the costs to the car and oil industries of the proposed draft directives on lead in petrol and vehicle emissions at the next Council of Industry Ministers.
    The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): These draft directives were considered by Environment Ministers at the Council of Ministers on 28 June. I am not aware of any plans for formal discussions of this subject within the Council by Industry Ministers.
    Mr. Hamilton: My hon. Friend will be aware that the United Kingdom Government have been attempting to persuade the European Community to bring forward the date for the introduction of unleaded petrol in the Community from 1991 to 1989. Is he aware that the draft directives were arrived at after lengthy discussions with the car and oil industries and that any attempt to anticipate the Commission's proposal and to bring forward the date for the introduction of unleaded petrol is likely to lead only to a greater influx of Japanese cars, thereby harming the British car and oil industries?
    Mr. Lamont: I note what my hon. Friend says. Obviously, any advance on this proposal must be made on a co-ordinated basis throughout Europe. We would not wish our industry in any way to be at a disadvantage. Any advancing of the programme must obviously be across Europe.
    Mr. Rogers: Is the Minister now saying that he is prepared to poison the British people so long as we stay

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    competitive with Europe? Is that what he means by saying that, although lead has been proved a risk, he is still not ready to introduce these directives until others do?
    Mr. Lamont: The hon. Gentleman would be astonished if I were to reply yes. Indeed, that is hardly the situation. He knows that we have taken the initiative in moving forward quickly towards the introduction of unleaded petrol, but at the same time we are rightly determined to ensure that our industry is in no way disadvantaged. For that reason, this must be done on a harmonised basis throughout Europe. It is not in the interest of jobs in the motor industry to do otherwise.

    British Telecom plc
    Mr. Fisherasked the Secretary of State for Trade and Industry what proportion of the equity in British Telecom plc he intends to sell to individual shareholders.
    Mr. Kenneth Baker: It will be for the investors themselves to determine. I hope that many individuals will take up the offer.
    Mr. Fisher: Is the Minister saying that he simply does not have any idea of what the range of private small shareholding will be in British Telecom? In previous Government flotations, a maximum of 150,000 people have purchased shares to a value of £1,000 or less, and within a year of each flotation that number has been reduced to 25,000 people, or fewer. Is he not led to the inevitable conclusion that the market for individual shareholdings in such enterprises is finite and is made up mainly of people looking for a quick turnround on their money? Will he reconsider his plans in the light of this information?
    Mr. Baker: The sale of BT later this year provides a unique opportunity for a large number of individual private shareholders. On 25 May and on 17 July I announced details of the telephone subscriber scheme. I shall later today be announcing further details of that scheme. Broadly, it will mean that any telephone subscriber who invests £250 in the shares of BT will get a rental voucher of £18. Thus, a subscriber who invests £1,000 will get four quarterly rental vouchers amounting to £72. This will be seen as an attractive scheme by many telephone subscribers, who will have the opportunity to buy shares in BT and share in the success of that great enterprise.
    Mr. Richard Page: While every effort must be made to allow individuals to buy shares, bearing in mind the huge advantage of the list of telephone subscribers, does my right hon. Friend agree that the trend of share purchase has been away from individuals buying shares? Will he make sure that the huge flotation of BT is not judged by the criteria of how many individuals take up shares?
    Mr. Baker: There will be an opportunity later this year for many hundreds of thousands of people to become shareholders in BT. To begin with, there are about 240,000 employees, and already the details of the scheme for their owning shares has been announced. It means that any employee of BT, by paying £100, will be able to buy £370 worth of shares. I believe that many of those employees will take that up.
    Mr. Golding: Will the Minister take steps to ensure that IBM does not become an influential shareholder in BT? Will the right hon. Gentleman—[HON. MEMBERS:
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    "Reading."]—in the interests of ICL and of the British computer industry, ensure that the proposed link-up between BT and IBM in the national network does not proceed?
    Mr. Baker: The House need not chide the hon. Gentleman for reading on almost any occasion. As for the proposed venture of IBM and BT, they have issued a proposal which we are considering. A separate licence would have to be issued for that. We want public comment on the matter, and my right hon. Friend and I will consider it most carefully. As for shareholdings in BT, there is already a limit on the amounts which can be bought by any one group or groups working in concert.
    Mr. Chris Smith: Why are hon. Members, such as the hon. Member for Stoke-on-Trent, Central (Mr. Fisher), such wet blankets about this business of individual shareholdings in BT? Should they not be welcoming the imaginative scheme that my right hon. Friend has announced?
    Mr. Baker: One cannot hope for miracles, even on the last day of the term. There is no doubt that the scheme that I have just announced will be attractive. It will result in a dramatic increase in the number of shareholders in the United Kingdom, who will be attracted as telephone subscribers also to become shareholders.
    Mr. Ewing: Can the Minister give one example of individual shareholders, having bought shares, continuing to hold on to them beyond a year? Has he not yet come to terms with the fact that 84 per cent. of all employee shareholders sell the shares that they have been allocated within four days of purchase, and that in one case of privatisation, 150,000 individual shareholders at the beginning were reduced to 20,000 by the end of the first year? As the Minister presiding over a great industry such as BT, how does he feel at having to introduce the soap coupon discount voucher principle?
    Mr. Baker: The proposal that I have announced today has been welcomed by the board of BT, because it wants to have many shareholders.
    As regards shareholders not retaining their interest, many thousands of shareholders—for example, in Britoil—have retained their shares because of the loyalty bonus.
    As an alternative to the scheme that I announced this morning, we will a loyalty bonus scheme whereby shareholders who hold shares for more than three years will have a bonus of one for 10. I am sure that hundreds of thousands of people will join that scheme.

    Regional Policy
    Mr. Hickmetasked the Secretary of State for Trade and Industry what response he has had to the consultation period on the review of regional policy.
    Mr. Norman Lamont: The long consultation period has been welcomed, and the Government have received over 500 submissions within the deadline specified in the White Paper.
    Mr. Hickmet: When will my hon. Friend be able to make a definitive statement on regional aid? When he makes that statement, will he bear in mind the very bad effect of the coal strike upon confidence in my constituency and the desirability of that area receiving the

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    best possible designation on the new regional map? Will he bear in mind in particular that we were unable to attract Nissan, which many believe was because we did not have special development area status?
    Mr. Lamont: We hope to make an announcement in the autumn on our conclusions on regional policy.
    With regard to my hon. Friend's area and others, we shall take all the circumstances into account.
    Mr. Park: Will the Minister say when the west midlands will know whether its greatly worsened situation under this Government will be recognised?
    Mr. Lamont: As I said to my hon. Friend the Member for Glanford and Scunthorpe (Mr. Hickmet), we hope to make an announcement in the autumn.
    Mr. Cormack: Is my hon. Friend aware that many people in the west midlands believe that the area's problems are due mainly to the indiscriminate use of regional aid in other places in the past? Therefore, will he be extremely careful before he makes an announcement?
    Mr. Lamont: We have received many similar representations from the west midlands. Because of the discrimination of regional policy against non-assisted areas, we have already reduced the area covered by the regional policy map. We shall bear in mind my hon. Friend's caution.
    Mr. Dalyell: Given the problems of Bathgate—I thank the Minister for his courtesy in seeing us three times in the past six months—is there not a case for extending the advantages of Livingston development corporation to the rest of the Bathgate travel-to-work area?
    Mr. Lamont: I am sure that the hon. Gentleman, as well as the House, will understand that I cannot reply immediately from the Dispatch Box, however difficult may be the situation in an area, to the different pleas that I hear from constituencies. The hon. Gentleman knows that I am giving careful consideration to the situation in his constituency.
    Mr. Thurnham: Will my hon. Friend agree to consider carefully any new computer-drawn travel-to-work areas that may critically affect the assisted area status of towns such as Bolton?
    Mr. Lamont: My hon. Friend knows that the travel-to-work areas are the responsibility of the Department of Employment. We will not be bound by the travel-to-work areas, designated or assisted areas, although they will be the main building blocks of the system.
    Mr. Campbell-Savours: If the levels of regional assistance available in France, Italy and Spain are higher than those available to the northern region, especially Cumbria, how will it be possible for us to compete internationally for footloose industries? Does the Minister realise that at the moment we are winning nothing, that we are not gaining new industry and that we are failing in that area? Is he aware that we need the highest level of regional assistance in the northern region? Will he give some commitment to that from the Dispatch Box today?
    Mr. Lamont: One of our most important considerations is the need to attract inward investment to this country, and we must provide a level of grant that enables us to do so. We have been very successful in attracting inward investment. There is more American investment
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    here than in any other European country. We get more investment from Japan than do other countries in Europe. The hon. Gentleman is talking nonsense.
    Mr. McQuarrie: My hon. Friend will be aware that the loss of assisted area status, particularly in areas such as Grampian and Banff and Buchan—my constituency—has had a serious effect on employment. When he is considering the new regional policy, will he take into consideration the amended travel-to-work areas that would give work to areas such as the ones that I have mentioned and therefore create further employment over a wide spectrum?
    Mr. Lamont: I shall take that into account.
    Mr. Geoffrey Robinson: The Minister must be aware from successive Question Times, when there has been the same interest from all parts of the House in his new proposals for regional policy, particularly in respect of the map, that it is not a terribly satisfactory procedure whereby the House is invited only to debate the decisions that he has taken. If that is to be the case, will the hon. Gentleman give us a clear undertaking, before the recess, that when we discuss the order specifying the new map he will arrange for the Government to take such steps as are necessary, by means of a business motion, to ensure that the debate is open-ended? Thus, hon. Members affected—nearly every hon. Member will be—will have the opportunity to debate the matter, which will not be the case if there is only a one and a half hour debate after 10 o'clock.
    Mr. Lamont: The hon. Gentleman knows that the matters that he has raised are for the business managers, but I have said again and again that I well appreciate the huge interest in this subject. I have passed on that view strongly to my hon. Friends.

    Dock Strike (Economic Effects)
    Mr. Kirkwoodasked the Secretary of State for Trade and Industry what has been the effect of the dock strike on import and export figures.
    Mr. Tebbit: Transient and of no significance.
    Mr. Kirkwood: May I suggest to the Secretary of State that, if he is seeking to mitigate the costs of the dock strike, he should look carefully at the compensation amounts that are still due to the merchant bankers Lazard Freres in New York for the services of Mr. Ian MacGregor? Will he confirm that upwards of £1 million is still due in compensation and that that is subject to a pending and a future performance review? Will he further confirm that he has the means available to him, when he considers the performance reviews of Mr. MacGregor, of reducing import costs in the future?
    Mr. Tebbit: I do not think that has anything to do with the question.
    Mr. Malone: Is my right hon. Friend aware that during the dock strike severe temporary inconvenience was caused to many companies in my constituency that serve the oil industry, and that it could have had long-term effects on inward investment? Does he agree that for self-interested people who have jobs for life to put other people's jobs at risk is nothing short of reprehensible?
    Mr. Tebbit: I agree with my hon. Friend that if the strike had gone on the effects could have been damaging.

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    It was consideration of that that led dockers to conclude that, as there was no cause for the strike, it had best be called off.
    Mr. Ewing: Will the Secretary of State explain where there are people in the docks industry who have jobs for life, as the hon. Member for Aberdeen, South (Mr. Malone) alleged? Does the right hon. Gentleman not understand that the reason why the dock strike was settled was that the employers—the National Dock Labour Board—gave a sensible undertaking that, they would not again break the scheme, which was the basis on which the strike was begun? The men were provoked into striking. Is the Secretary of State not aware that it is not good enough for him to defend every reprobate employer in this country?
    Mr. Tebbit: Does the hon. Gentleman realise that it is not good enough for him to come and defend every single strike that has taken place under this Government—I am sorry, I do him an injustice. He did not defend the strikers at the National Union of Mineworkers headquarters when they struck against their employers. That is the sole exception. I notice that the hon. Gentleman defends the dock strike. I would not agree with his somewhat tendentious account of the matters concerned, but I have to say that a combination of the dock labour scheme and the Aldington-Jones agreement in effect guarantees jobs to dock workers for life.
    Several Hon. Members rose——
    Mr. Speaker: Order. I appeal for briefer questions and answers. It would be nice if we could reach Question No. 25, if possible.

    Privatisation
    Mr. Fallonasked the Secretary of State for Trade and Industry if he is satisfied with progress on the privatisation of nationalised companies under his control.
    Mr. Tebbit: Yes, though I am constantly seeking to advance the programme.
    Mr. Fallon: Does my right hon. Friend agree that the success of Weardale Steel, Tyne Ship Repair and Readheads Ship Repair shows the enormous scope in every public industry for giving workers a real stake in their future? Will he encourage his colleagues to transfer the Scottish and north-east pits to those who work in them?
    Mr. Tebbit: That is an interesting proposition for my right hon. Friend the Secretary of State for Energy. Wherever possible, we seek to give workers a substantial interest in companies that are denationalised—notably, the National Freight Corporation and some of those that my hon. Friend has mentioned. I believe that that is a very good thing and we intend to do the same with British Telecom.
    Mr. Crowther: Does the Secretary of State agree that as discussions about denationalisation of BSC special steels have been going on for more than four and a half years this long uncertainty has caused great damage in both the public and the private sectors of the industry? Will he now announce that he accepts the strongly held and expressed view of the Select Committee and drop the whole idea, especially in view of the conspicuous lack of success of the Phoenix 3 company, Sheffield Forgemasters?
    Mr. Tebbit: No. If the hon. Gentleman is interested in the steel industry and wishes to remove uncertainty, I hope that he will get on to those who have been picketing the steelworks and trying to interfere with supplies of coal and ore so that that uncertainty can be removed very quickly.
    Mr. Warren: In the progress towards the privatisation of British Shipbuilders, will my right hon. Friend consider the need to protect the company's assets in terms of the training that is now available to some 2,000 members of the company, but which BS proposes to close down during the summer recess?
    Mr. Tebbit: I am sure that the management of British Shipbuilders will ensure that adequate training is available for the men whom the industry needs to employ.
    Mr. Ashdown: What will be the loss to BL from the sale of Jaguar, first, in profit and cash flow, bearing in mind that £100 million has already been offset against originally agreed Government loan; secondly, in spin-off from research and engineering development; and, thirdly, in market and sales support, especially for Austin-Rover in Europe? What steps is he taking to assist the BL board to counteract those losses?
    Mr. Tebbit: The BL board has made it plain that it sees the sale of Jaguar as being to the advantage of the company. I am sure that I should be wise to rely on the board's commercial judgment rather than on that of the hon. Gentleman.
    Sir Dudley Smith: Is my right hon. Friend aware that the denationalisation of Jaguar is widely welcomed in the west midlands and has engendered such confidence that the company is actually taking on more employees?
    Mr. Tebbit: I realise that. but I believe that the main reason for the taking of more employees is the fact that Jaguar is once again producing motor cars that people really want to buy and are prepared to pay for.
    Mr. Ewing: As the Secretary of State is in a generous mood, will he pay tribute to the Labour Government, who rescued Jaguar, and but for whom the company would not exist for the Government to sell? Is he aware—
    Mr. Tebbit rose——
    Mr. Ewing: Is it not out of order, Mr. Speaker, for the Secretary of State to keep trying to rise while I am speaking?
    Does the Secretary of State not realise that it is his responsibility to take care of the interests of all the British people during his stewardship of the industry of this country, and not just the few who feed the coffers of the Tory party?
    Mr. Tebbitt: I am not prepared to take lectures about the national interest from the hon. Gentleman, who is notorious for supporting the most narrowly based, sectional, extreme Left-wing interests, notably those of the leadership of the National Union of Mineworkers. The only reason why a rescue was required for Jaguar and much of the rest of the British motor industry was the botched-up schemes to push together companies which had nothing in common. Those schemes were notoriously supported and pushed by previous Labour Governments.

    Investor Protection
    Mr.Tim Smithasked the Secretary of State for Trade and Industry what period he intends to allow for consultations on investor protection legislation after the publication of a White Paper.
    The Parliamentary Under-Secretary for Trade and Industry (Mr. Alex Fletcher): Consultation has been continuing throughout the year, starting with the publication of the Gower report in January, including the debate in the House earlier this month, and culminating in the advice to be received from the group advising the governor, and the insurance group advising me. The White Paper, which I hope will be published in the autumn, will be essentially a definitive statement of the Government's views.
    Mr. Smith: Notwithstanding the definitive nature of the White Paper which is to be published, does my hon. Friend agree that it will be necessary, and indeed essential, for City and other interests to be consulted if self-regulation is to be successful against the new statutory background?
    Mr. Fletcher: The consultations are currently taking place. When the White Paper is published, people in the City and elsewhere who wish to make representations will be free to do so. Another debate on the White Paper may take place in the House.
    Mr. Gould: Is the Minister aware of the growing impatience in the City, which is shared by the Bank of England and the Chancellor of the Exchequer, at his and the Secretary of State's inability even to show which way their minds are working? Will he recognise the growing weight of opinion in favour of the self-standing commission and confirm that that is his preferred option, so that minds can be concentrated on the form that the commission will take?
    Mr. Fletcher: My right hon. Friend and I are awaiting with interest the views of the group advising the governor and the insurance group advising me. When we have received their views on the matter, my right hon. Friend will produce a White Paper in the autumn.

    Procurement Policy
    Mr. Gryllsasked the Secretary of State for Trade and Industry if he will make a statement on the current proportion of public procurement going to small and medium enterprises.
    Mr. Kenneth Baker: Records are not kept on the proportion of Government procurement contracts that go to small and medium-sized firms. However, the Ministry of Defence is currently collecting information on the value of its direct contracts placed with smaller firms in the present financial year.
    Mr. Grylls: In view of the fact that in Britain smaller firms get a lesser proportion of Government orders than in almost any other industrial country, will the Department of Trade and Industry, and especially the small firms' division, play a co-ordinating role between Government Departments to raise the proportion going to small and medium-sized enterprises? The matter is important, as I am sure my hon. Friend will recognise. Will he examine
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    in particular the procurement policies of the Ministry of Defence and the Department of Health and Social Security?
    Mr. Baker: The Government's policy is that contracts must be won on merit, irrespective of company size. However, we are anxious to see, if possible, that smaller companies are put on a more equal footing to enter the competition. I welcome the work that the MOD is doing on that. The Government have taken various measures to help small companies. Recently we raised to £10,000 the threshold for contacts below which firms are normally exempt from approved procedures. We standardised the financial and general information procedures for companies to qualify as Government contractors, and we shall also standardise technical qualifications. All that will help small companies to get into the race.
    Mr. Conway: When my hon. Friend considers the method of awarding public procurement orders, will he pay special attention to those orders placed with firms operating overseas? Will he seek an urgent meeting with the Minister of State for Defence Procurement to urge that orders for MOD supplies are placed within the United Kingdom?
    Mr. Baker: A large proportion of public procurement generally is placed in the United Kingdom. That is particularly true of the Ministry of Defence. However, I shall draw my hon. Friend's views to the attention of my hon. Friend the Minister of State for Defence Procurement.

    Business and Industrial Confidence
    Mr. Silvesterasked the Secretary of State for Trade and Industry if he has met the chairman of the Confederation of British Industry recently to discuss the level of business and industrial confidence.
    Mr. Tebbit: Yes, Sir. At that meeting the president of the CBI assured me that the underlying confidence of business remained firm.
    Mr. Silvester: Did my right hon. Friend note in the survey published yesterday by the CBI that it was clearly stated that the miners' strike had had no effect on business confidence? Does he agree that the reason for that happy outcome is in large measure due to the continued assurance of electricity supplies, both by working miners and the Government?
    Mr. Tebbit: Yes indeed, Sir. The CBI understands the wisdom of undertaking the public expenditure, to which my right hon. Friend the Chancellor of the Exchequer referred last night.
    Mr. Straw: Is the Secretary of State aware that those hon. Members who are following him closely have noticed that he is extraordinarily nervous this afternoon and is even having difficulty in controlling a nervous shake of his hands as he comes to the Dispatch Box? [Interruption.]
    Mr. Speaker: Order. That does not have much to do with this question.
    Mr. Straw: Is the Secretary of State nervous, not just because he is angry with the Chancellor of the Exchequer, but because he has realised that not even his customary stock in trade of insults and bluster can disguise the fact that the recovery has petered out and that there must be a

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    major change in policy if there is to be any chance of a reduction in unemployment before the end of this Government?
    Mr. Tebbit: The hon. Gentleman should get over his shaky lack of confidence about reselection and come back into the real world.
    Sir Peter Emery: Does my right hon. Friend accept that if ever any man gave an impression of confidence on the Front Bench, it is he? When he consults the CBI, will he make it clear to all aspects of industry that the Government will continue their economic policy and that they will not waver, because if industry gets the impression that we are wavering things will begin to go wrong?
    Mr. Tebbit: Indeed, and industry has overwhelming confidence in that policy. Not only British industry is confident. I notice that, no doubt partly as a result of pressure from industry in France, the French Government have moved away from the Socialist nonsense that is still preached by the Opposition here and have come much nearer to the policies of this Government.
    Mr. Shore: When did that unique and remarkable meeting with the representatives of the CBI take place? Is the Secretary of State aware that only four months ago, when the Chancellor of the Exchequer announced a reduction in minimum interest rates from 8·5 to 8 per cent., the CBI greeted that as an enormous contribution to the effectiveness of industry? Only 10 days ago, interest rates increased from 9 per cent. to nearly 12 per cent. Was the CBI speechless on this occasion, or had it entirely forgotten its natural self-interest?
    Mr. Tebbit; CBI representatives were neither speechless nor had they forgotten their self-interest. That was why they expressed their confidence, and that of business generally, in the Government. I know that the right hon. Gentleman is pleased that interest rates have increased, because he is pleased when anything happens that is adverse to British interests.

    Merger Policy
    Mr. Gouldasked the Secretary of State for Trade and Industry what representations he has received since he announced his review of merger policy on 5 July.
    Mr. Fletcher: None, Sir.
    Mr. Gould: Was not that scrappy statement, just over a page long, a pathetic outcome of what was supposed to be a major review? Was not the Financial Times of 10 July right to say that, in its aftermath, British competition policy remained arbitrary and inconsistent? Is it not about time that the Minister and the Secretary of State stopped using competition policy as a simple slogan and developed a coherent policy?
    Mr. Fletcher: No, Sir. No, Sir. No, Sir.

    North British Steel Foundry (Bathgate)
    Mr. Dalyellasked the Secretary of State for Trade and Industry if he will make a statement on his discussions with the North British Steel Foundry, Bathgate.
    Mr. Norman Lamont: I have written to the hon. Member explaining that selective assistance for the
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    company under section 8 of the Industry Act is not available, but that the possibility of section 7 assistance is being investigated by the Scottish Office.
    Mr. Dalyell: Will the Minister's officials impress upon Mr. Grant of Lazard Freres that this company has reinvested? What temporary protection can be expected for a firm that could make a considerable contribution to the machinery required for North sea oil development, and to power generation, by producing castings of tolerances that are possibly not bettered anywhere in Europe?
    Mr. Lamont: I have asked Mr. Grant of Lazard Freres to meet representatives of the company. I agree with the hon. Gentleman that the North British group provides a range of specialised castings, including those for the North sea. However, I understand that the company intends to concentrate its production at Armadale to continue to provide specialised castings. That factor will be taken into account in the discussions between the group, the Industry Department for Scotland and the Scottish Development Agency when they are considering financial assistance.

    Motor Vehicle Sales
    Mr. Maloneasked the Secretary of State for Trade and Industry if he is satisfied that there are no unfair restrictions inhibiting the sale of motor vehicles in the United Kingdom.
    Mr. Fletcher: By its nature the selective distribution system of the motor trade contains certain restrictions. Whether any of those restrictions is, on balance, justified is a matter for consideration by the Director General of Fair Trading or the European Commission as appropriate under the relevant competition legislation.
    Mr. Malone: Is it the Government's policy that British purchasers of motor cars should be able to buy them at the keenest possible prices? If it is, will they do something about the fact that cars can be purchased more cheaply in Europe? Should not United Kingdom purchasers be able to buy motor vehicles at the same prices as their European counterparts?
    Mr. Fletcher: Subject to taxes, and on occasions distortions in the market place, I agree with my hon. Friend. We support the objectives of the Commission and we are discussing with it and with the motor manufacturers and consumer groups here how best to act in the interests of the consumer and the producer in Britain.
    Mr. Gould: What instructions were given to the United Kingdom representatives on the advisory committee which is looking at the final draft?
    Mr. Fletcher: The instructions were precisely in the terms that I described just now.
    Mr. Forth: While I am grateful for my hon. Friend's replies, may I ask him to be careful not be seduced by the arguments often advanced for the reduction of motor car prices in the United Kingdom, based simply on a slick comparison with prices in certain other continental countries? Will he be careful to listen to representations from the British motor industry about the potential effect of an arbitrary limitation of the kind being suggested in some quarters?
    Mr. Fletcher: Yes, and only last week I had a meeting with the motor manufacturers.

    Jaguar Cars
    Mr. Traceyasked the Secretary of State for Trade and Industry if he will make a further statement on progress in the privatisation plan for Jaguar cars.
    Mr. Norman Lamont: My right hon. Friend the Secretary of State announced to the House on 22 May the Government's approval of the BL board's proposal to dispose of the whole of Jaguar. This disposal was subsequently approved at an extraordinary general meeting of BL shareholders. The issue has been underwritten and prospectuses have been published. Dealings in Jaguar shares will commence late next week.
    Mr. Tracey: My hon. Friend and the Government are to be congratulated on this step, but will he keep his eyes on the further horizon—the denationalisation of the rest of BL—and will he perhaps state a time scale for it?
    Mr. Lamont: It is the Government's policy that all the constituent parts of British Leyland should be returned to the private sector. We shall be making announcements about that in due course.
    Mr. Park: Amidst all these congratulations on the privatisation of Jaguar, has the Minister considered at all the progress of Jaguar after it is privatised? I know that he cannot command any private company to invest sufficient money in research and development, but he will know that it will still require a considerable amount of investment in research if Jaguar is to continue to progress.
    Mr. Lamont: Of course that is right, but that was taken into account by the Government and the board of British Leyland when they recommended that the company be sold off. The company has been extremely successful recently. It can stand on its own feet. I see no reason why the state should continue to be in the luxury car business.
    Mr. Budgen: Will my hon. Friend recollect, amidst all these congratulations, that in the past many of the congratulators said that it was impossible to hive off any part of British Leyland? Will he remember that when he is considering his policies for the remainder of BL?
    Mr. Lamont: My hon. Friend makes an excellent point.
    Mr. Shore: We all welcome the improvement in the prospects of Jaguar, but does the Minister not understand that the terms —[Interruption.] It is not in private hands. It is in public hands. It was rescued by the public. Is the Minister not aware that the terms on which Jaguar is being offered are a disgrace and simply represent the Government's attempt to recuperate from the absolute farce of the sale of Enterprise Oil?
    Since British Aerospace was oversubscribed two and a half times, since Cable and Wireless was oversubscribed some four and a half times, and since Amersham International was oversubscribed 27½ times, how many times does the Minister think Jaguar will be oversubscribed at the giveaway price being offered this week?
    Mr. Lamont: The right hon. Gentleman knows perfectly well that it is quite impossible for me to comment on that at this precise moment.

    British Telecom plc
    Mr. Woodasked the Secretary of State for Trade and Industry if he will make a statement on progress with the privatisation of British Telecom; and whether this is in line with the Government's plans.
    Mr. Tebbit: The Government's plan to privatise British Telecom in the autumn is on schedule.
    Mr. Wood: Will my right hon. Friend expand on that encouraging reply? Perhaps he will comment especially on the staffing position in Oftel and say whether all is well in that regard, so that adequate monitoring can take place of the future success of private competition in the telecommunications industry.
    Mr. Tebbit: The arrangements in Oftel are going well, and the regulatory system will be in place on time as an effective measure of consumer protection.
    Mr. Ewing: Is the Secretary of State pleased or satisifed with the condition in BT's licence that it must give a 20 per cent. discount to its competitor, Mercury, to subsidise that company until it becomes profitable? What part does that play in the right hon. Gentleman's capitalist thinking?
    Mr. Tebbit: There is no such provision in the licence.

    London Taxicab
    Mr. Stanbrookasked the Secretary of State for Trade and Industry what is the amount of public funds invested in the development of the proposed new London taxicab.
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): My Department, with the Department of Transport and the Greater London council, has offered support to Carbodies Ltd. for the development of a new taxi. Details of this assistance, in accordance with usual procedures, must remain confidential.
    Mr. Stanbrook: Is my hon. Friend aware that this contraption is inferior in design and purpose compared with the present well-loved vehicle? Is he aware also that the prospective cost of the vehicle will be prohibitive, that it will not be bought by London taxicab drivers and that the public will not want it? Is taxpayers' money being wisely spent on this project?
    Mr. Butcher: One of the reasons for spending taxpayers' money is to tailor the car rather more effectively for the use of the disabled. We are anxious, as the company will be, to ensure that the present design, which is now 25 years old and held in great affection, should in due course be replaced. I fully understand my hon. Friend's affection for the current model.
    Mr. Campbell-Savours: What potential export evaluation has taken place of the excellent new taxi, which is based on the Range Rover? Is the Minister aware that throughout the world the new taxi will be recognised as a Range Rover and that it should enjoy maximum Government support, as it will create many jobs in the United Kingdom if it is fully exploited?
    Mr. Butcher: One of the reasons why the company has taken the decision to tailor the car more adequately for use by the disabled is that it will give it access to international

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    markets. It has been a problem that the FX4 taxi has been confined to the home market. The company is hoping to internationalise the new taxi.

    Manufactured Goods
    Mr. Parkasked the Secretary of State for Trade and Industry what was the balance of trade in manufactures for the first six months of 1984.
    Mr. Fletcher: There was a deficit of £1·6 billion, within the context of a current account surplus of £285 million in the same period.
    Mr. Park: Does the Minister agree that these figures give the lie to all the euphoria Which we heard yesterday and which we have heard today about the recovery of the United Kingdom? Does he accept that the deficit warrants the most vigorous action on the part of the Department of Trade and Industry and other Departments, to give British industry an opportunity fairly to compete in world markets?
    Mr. Fletcher: That is precisely what the Government are doing. I am sure that the hon. Gentleman will be pleased to know that our export performance in manufactures improved significantly in the second half of last year and in volume terms is now 8·5 per cent. higher than a year ago.
    Mr. Forth: I agree that the manufacturing sector is and will always be of the greatest importance, but does my hon. Friend agree that the most likely growth area for the economy and employment is in the service sector? Does he further agree that we should not become obsessed with manufacturing performance and that we should concentrate equally on the success of the service sector, which will provide our exports and jobs in future?
    Mr. Fletcher: Yes, I agree with my hon. Friend. The service sector is making a significant contribution to our balance of trade.
    Mr. Ashdown: No doubt the Minister will agree that our future balance of trade in manufactures will depend on the speed at which we adopt new technologies. Will he explain why his Department has, at two days' notice, withdrawn the Government's computer consultancy scheme and replaced it with a less well-funded scheme? Does he realise that this has created disruption within
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    computer consultancy? Does he understand that it will result inevitably in a slower take-up of the new technologies that we need so badly?
    Mr. Fletcher: No, Sir. This is part of a repackaging scheme which the Department has introduced, and the programmes have been taken up very well.
    Mr. Shore: Are these not appalling figures and do they not give the lie to all the boasts about the economy being in good shape? Is it not the case that our manufacturing trade is in deficit, it being about 60 per cent. above what it was last year and running at about £3,000 million a year, and that our total visible trade, including oil, is running at a deficit of £3,000 million a year? Is this not a disgrace?
    Mr. Fletcher: The economy is in surplus overall.

  HOME DEPARTMENT

    Civil Defence (Radio Frequencies)
    Mr. Neil Thorneasked the Secretary of State, for the Home Department if he will allocate radio frequencies for local authority/community level use for civil defence purposes.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): A Home Office communications working party is considering how to develop civil defence communications between counties, districts and communities, making the best use of available frequencies, but there are unlikely to be sufficient frequencies for exclusive allocation to civil defence.
    Mr. Thorne: I thank my hon. Friend for his reply. He is aware that, with the new civil defence regulations now coming into active force, there is likely to be a much greater demand for this type of exercise. Will my hon. Friend therefore look carefully to ascertain whether it is necessary before the end of the year to introduce some exclusive frequencies for this valuable and important work?
    Mr. Mellor: I know the importance which my hon. Friend, who is a great expert in these matters, attaches to that aspect. I shall ensure that my right hon. Friend the Minister of State, Home Office—the right hon. Member for Witney (Mr. Hurd)—who has a particular responsibility for these issues, looks carefully at what my hon. Friend says.

Coal Industry Dispute (Cost)
10.30 am
Mr. Roy Hattersley(by private notice) asked the Chancellor of the Exchequer what is the cost of the coal dispute and what are the Government's plans to meet it.
The Chancellor of the Exchequer (Mr. Nigel Lawson): As I informed the House last night, the dispute has probably added, net, some £300 million to £350 million to public expenditure so far this year. It is too soon to say precisely how that will be met, but, as I told the House last night, taking full account of the public expenditure costs of the miners' strike, I see no reason to alter the forecast that I made at the time of the Budget of a public sector borrowing requirement for the current year of some £7¼ billion.
Mr. Hattersley: Is the Chancellor of the Exchequer, even now, not aware that the comments he made last night on this subject, undoubtedly referring to a prolonged strike as a "worthwhile investment", increased fears that the Government are less interested in ending the dispute than in scoring a political victory? The right hon. Gentleman can end his embarrassment and put those fears to rest by a single simple assurance. Will he say categorically that the Government's primary aim is a negotiated settlement of the dispute based on compromise and conciliation and that the Government are at last willing — [HON. MEMBERS: "Appeasement."] I shall say it again, in case hon. Members did not hear me. The Government's primary aim should be a negotiated settlement of the dispute, based on compromise and conciliation. Are the Government at last willing to use their authority and good offices to bring about that settlement?
Mr. Lawson: I shall reply in two parts—first, to the question of what I said last night and, secondly, to the question of the strike. I shall quote from Hansard. The exchange began with what the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said in column 299, when he sought to compare the cost that the Government are incurring through the miners' strike with the cost of keeping uneconomic pits open. The right hon. Gentleman said:
"Let us assume—the newspapers tell us about this—that closing the 10 per cent. least economic pits would save, at most, £300 million. By the time the August bank holiday comes, we shall have spent five years' savings simply financing the dispute. That cannot be right".—[Official Report, 31 July 1984; Vol. 65, c. 299.]
The right hon. Gentleman was explicitly comparing the savings from closing uneconomic pits with the cost of the strike. I, in replying to the debate, told him the correct figures, and that was all there was about it. [Interruption.] Yes, precisely.
Then subsequently, in a specific interruption from the right hon. Gentleman the Leader of the Opposition, seeking clarification of where I stood on the strike, I said, and I quote again from column 309 of Hansard—[HON. MEMBERS: "Column 306."]—
"Let the right hon. Gentleman use what influence he has to get the strike called off, and nobody will be better pleased than the Government. This strike is not of our making nor of our desiring, and the right hon. Gentleman knows that". —[Official Report, 31 July 1984; Vol. 204, c. 309.]
Mr. Peter Bottomley: Is it not a fact that compromise and so-called conciliation has led to a position
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where in the House we hear from the Opposition on every issue except the real issues of the miners' dispute? Have not compromise and conciliation led to a position where not one official Opposition spokesman has been willing to say that pickets should not congregate in intimidatory numbers and not become involved in violence? Are not those the real issues?
Mr. Lawson: I agree whole-heartedly with what my hon. Friend has just said.
Several Hon. Members rose——
Mr. Speaker: Order. I remind the House that the private notice question covers the cost of the coal dispute and the Government's plans for it.
Mr. David Steel: Has not the Chancellor of the Exchequer given the House only one aspect of the cost of the coal strike? Has he studied the report from Simon and Coates, stockbrokers, which gives the cost of £240 million a month, including not just the cost of using oil in power stations, but the loss of revenues to British Rail, policing costs, lost income tax from miners on strike, and the loss of coal exports? If he has studied that report, does he agree with their figure, and was he not misleading the House by giving such a puny figure in the debate yesterday? Does he accept that the real cost is not the financial one? It is the social cost to the fabric of this country, and there is no worthwhile investment in that.
Mr. Lawson: There is, indeed, a most grievous social cost. The best way to end the strike would be for the National Union of Mineworkers to have a ballot of its members, as we have consistently sought, and as it should have done according to its rules.
I was asked specifically about the pubic expenditure costs, and I gave those. I gave the total public expenditure costs. Simon and Coates have it wrong. There is another cost—I do not want to conceal it from the House—which is not the public expenditure cost; it is the loss of miners' tax and national insurance contributions. That would bring the total up to about £400 million so far.
Mr. Michael Howard: Does my right hon. Friend agree that the implication of what has been said by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is that, if he were responsible for these matters, he would have given in to the demands of the strikers, however unreasonable, if the alternative course involved some sacrifice, however modest?
Mr. Lawson: That is right, and we must bear in mind that no Government have spent more taxpayers' money than this one on supporting the coal industry in terms of investment and very generous redundancy terms to miners who take voluntary redundancy. I think it is helpful to say that a very important clarification occurred last night. It emerged that there was no longer an issue over the closure of uneconomic pits in the Labour party, because it made it clear that it also agreed, when in government, and still agrees, that uneconomic pits should be closed. The only dispute is about the procedures to be followed. I think that that is helpful.
Mr. John McWilliam: How does the Chancellor of the Exchequer square his answer to my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) with the words in column 306 of Hansard where he says:

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"And so, even in narrow financial terms, it represents a worthwhile investment for the nation."—[Official Report, 31 July 1984; Vol. 204, c. 306–7.]
Mr. Albert McQuarrie: Talk about the uneconomic pits part of it first.
Mr. Lawson: I was directing myself to the precise comparison that the right hon. Member for Sparkbrook was making, although he got the figures wrong. The precise comparison that he made, as I read out from column 299, was between the cost of the strike in financial terms and the cost of keeping open uneconomic pits. That was the comparison he made, and I replied in those specific terms.
Mr. Ivor Stanbrook: Is not a large part of the extra expenditure incurred by the cost of policing coal mining areas? Are not the police engaged in preventing the overthrow of the law by force? Therefore, is not every penny well spent?
Mr. Lawson: Yes, indeed. Money spent on maintaining law and order in any circumstances—and in particular in circumstances where there has been some appalling violence—is money well spent, as also is money spent on keeping the power stations going to ensure security of supply to those in industry and in the home who depend on a secure supply of electricity. A great many jobs depend on it.
Mr. Tony Benn: Is the Chancellor of the Exchequer not yet aware of the significance of what he said yesterday in column 306? His speech last night confirmed what the Opposition have said throughout—that the Government planned the confrontation, provoked the confrontation and masterminded the confrontation and also budgeted for it. The cost is, of course, far greater than he mentioned. He did not mention the lost production of coal, and the effect upon the balance of payments, the effect upon secondary industries, and so on.
Is the Chancellor of the Exchequer aware that last night he let it slip out that the Government wanted the strike, are ready to pay for it however long it goes on, and are entirely responsible for the problems that it has created for the economy?
Mr. Lawson: The right hon. Member for Chesterfield (Mr. Benn), as is well known, lives in a world of his own, a world of paranoia and conspiracy theory. Like him, I was Secretary of State for Energy— [Interruption.] I was Secretary of State for Energy for two years, and if I had wanted a coal strike then, no doubt there would have been one. [Laughter.]
Mr. Speaker: Order. The Chancellor of the Exchequer is giving his answer.
Mr. Lawson: In fact—[Interruption.] In fact, there was no coal strike then—and why? It was because on those occasions the miners had the opportunity to give their answer in a ballot, and the miners on three occasions decided that there should be no strike.
The reason why there is a strike now is that the miners have been deprived of their right, under their constitution, to give their answer in a ballot.
When the right hon. Member for Sparkbrook raised the matter last night, I said, in column 309:
"This strike is not of our making nor of our desiring, and the right hon. Gentleman knows that and it is hypocrisy to say anything else."
Mr. Jonathan Aitken (Thant, South): Is my right hon. Friend aware that all this synthetic indignation from the Labour Benches is quite simply an example of how to be a bad loser the morning after a big defeat? [Interruption.] Is my right hon. Friend further aware that he has nothing with which to reproach himself? It is quite clear from the banana skin laid down—[Interruption.] It is quite clear from the banana skin laid down by the deputy Leader of the Opposition in column 299, when he referred to the fact that
"closing the 10 per cent. least economic pits would save, at most, £300 million"—
[Interruption.] It is clear that that figure is confirmed by the Chancellor of the Exchequer in column 306, when he says that the cost of the strike
"has probably added, net, some £300 million to £350 million to public expenditure so far this year."
My right hon. Friend goes on in the same context, in column 306–7, to say that
"it represents a worthwhile investment for the nation."— [Official Report, 31 July 1984; Vol. 65, c. 299–309.]
Of course closing uneconomic pits represents an investment for the nation. The Chancellor of the Exchequer should be congratulated on his frankness.
Mr. Lawson: I am grateful to my hon. Friend. He is right in particular to say that this is a rather contrived device to try to obscure the fact that last night the Opposition lost the debate and lost the argument. My right hon. Friend the Prime Minister wiped the floor with the Leader of the Opposition and with the right hon. Member for Chesterfield too.
Mr. Allen McKay (Barnsley, West and Penistorle): Would the Secretary of State now turn his mind back to Cortonwood colliery, and explain why it was that, when the board and the union had had a tried and tested procedure over many years, they failed to use that procedure? Would the right hon. Gentleman accept that what he said yesterday has hardened the attitude in the coalfield, and will only have ensured that the strike will continue further into this year and possibly into next? Will the right hon. Gentleman turn his mind away from ballots, because there is not going to be a ballot? [HON. MEMBERS: "Oh!"] Will the right hon. Gentleman not accept that a ballot was taken in Yorkshire in 1981, and that conference overwhelmingly accepted industrial action if a closure took place outside the procedure—which it did? Would not the right hon. Gentleman accept that everything that he has said suggests that they precipitated the action because they wanted it?
Mr. Lawson: I am a little surprised at the hon. Gentleman whom I know as a responsible Member and a member of one of the mining unions which is not on strike. Since he mentions Cortonwood, let me say this. At a meeting with the unions on 1 March, the area director of the National Coal Board, south Yorkshire, proposed the closure of Cortonwood colliery. He pointed out that the reserves available to the colliery were limited and, as the colliery would have to close within a few years, he suggested that its closure in 1984 would reduce production, as was necessary, without damaging the area's longer-term future. There would be no need for compulsory redundancies.
While the area director proposed that production at the colliery should cease in April, he made it clear that the normal colliery review procedure would be followed. No

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developments would be stopped or equipment withdrawn before, if the unions wished, all the various steps in the procedure had been completed and a final decision taken. He asked for a reconvened colliery review meeting as the first step in the colliery review process agreed with the unions. I understand that the NUM has not so far indicated that it would be prepared to participate in such a meeting.
Mr. Gerald Howarth: If we acceded to this politically motivated campaign of intimidation and lawlessness, would it not be at a grave cost to the nation in terms of the rule of law and parliamentary democracy? Would my right hon. Friend not agree that the British public entirely endorse what he said last night, and are entirely behind the Government in their support for the rule of law and parliamentary democracy?
Mr. Lawson: I agree with my hon. Friend. As I said earlier, it is helpful that last night it emerged that the official Opposition — the Labour party — with their considerable links with the rest of the labour movement and the National Union of Mineworkers, said clearly, in answer to questions, and quotations from them read out by my right hon. Friend the Prime Minister, that they accept the need for the closure of uneconomic pits. It is helpful that that is now clear, and that the question at issue is the question of the procedure to be followed. If that is the question at issue, it means that the divide is very much narrower and that it ought to be easier to get a solution to the problem at an early date.
Mr. Neil Kinnock: The statements that we have heard from the right hon. Gentleman in response to questions from my right hon. and hon. Friends this morning have confirmed rather than eased the fears that we had about the motivations of the Government in their pursuit of a political strike. Because the right hon. Gentleman has not been willing to stand by the words that he used last night but has used the opportunity this morning, as he did earlier on the radio, to evade the words that he used last night, I ask him—is it not the case that last night he said:
"All told, the miners' strike has probably added, net, some £300 million to £350 million to public expenditure so far this year. Although that is nothing like the figures quoted by the right hon. Gentleman, it is a substantial sum. It should be seen in perspective. It amounts to roughly one quarter of 1 per cent. of total public expenditure … it is of a strictly temporary nature … it has to be seen against subsidies from the taxpayer to the National Coal Board … And … it represents a worthwhile investment for the nation"?—[Official Report, 31 July 1984; Vol. 65, c. 306–7.]
Is that not a declaration that this Government, as I have previously accused, will spend any sum, create any chaos and meet any bill to perpetuate this strike? Did we last night not hear the inadvertent and therefore authentic voice of a Government who have now invested all of their credibility and millions and millions of pounds of the country's money in saving their own face, at immense cost?
Mr. Lawson: It is not a matter of saving the Government's face but a matter of saving the jobs of thousands of steel workers and keeping steelworks and power stations open. The right hon. Gentleman does not
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need to come here today and raise these issues, as he raised them last night. I stand by everything that I said. I said last night:
"This strike is not of our making nor of our desiring, and the right hon. Gentleman knows that and it is hypocrisy to say anything else."—[Official Report, 31 July 1984; Vol. 65, c. 309.]
Mr. Speaker: Ten-minute Bill, Mr. Derek Conway.
Hon. Members: On a point of order.
Mr. Speaker: Point of order, Mr. Greenway.
Mr. Harry Greenway: On a point of order, Mr. Speaker. With respect, my name is Greenway, not Greenaway. We have just had to listen to another speech from the Leader of the Opposition when he should be asking questions. May I refer you to Trade and Industry questions, during which you stated your ambition of getting to the end, as eventually you did, and during which you also frequently stated your aim of defending the rights of Back Benchers? We all respect that. May I ask for your guidance, Mr. Speaker? This morning, notably on the private notice question, we have had long interventions from the Labour Front Bench. In Trade and Industry questions, they intervened on almost every question, and, in addition to tabling their own questions, they took up a substantial amount of time, to the exclusion of Back Benchers. Is that in order?
Several Hon. Members rose——
Mr. Speaker: Order. It is in order, but I know that the House understands that, every time a Front-Bench Member rises, a Back Bencher does not get called. However, I must say that I think that we did extremely well today in getting to the end of Question Time and having one extra question. I hope that the House agrees. [HON. MEMBERS: Hear, hear."]
Mr. Dennis Skinner: On a point of order, Mr. Speaker.
Mr. Speaker: Yes— Mr. Skinner.
Mr. Skinner: You will remember, Mr. Speaker, that in February 1981 the Government decided that it was an extremely worthwhile investment not to take on the miners but to give in and spend several hundred million pounds on looking after uneconomic pits.
Mr. Speaker rose——
Mr. Skinner: I am coming to it. You will remember that they spent £700 million having decided to keep open uneconomic pits. [Interruption.]
Mr. Speaker: Order. I constantly give the hon. Gentleman an opportunity to put his points of order to me but he always starts off at a tangent. Could he come to his point of order straight away?
Mr. Skinner: At that time—[HON. MEMBERS: "Point of order."] The point of order is that at that time you, Mr. Speaker, were a Minister. You would have been privy to knowledge as to why the Government caved in to the miners. [HON. MEMBERS: "No."]
Mr. Dick Douglas: On a point of order——
Mr. Speaker: Order. I say to the hon. Gentleman that we cannot go back to 1981. Another point of order—Mr. Dick Douglas.
Mr. Skinner: I am not finished yet.
Mr. Douglas rose——
Mr. Skinner: I am not finished yet.
Mr. Speaker: Order. I have told the hon. Member for Bolsover (Mr. Skinner) that we cannot go back to 1981, and I ask him to resume his seat.
Mr. Skinner: I am asking whether the Government——
Mr. Speaker: Order. I order the hon. Gentleman to resume his seat. Mr. Douglas.
Mr. Douglas: On a point of order, Mr. Speaker. There is an important constitutional aspect in relation to what the Chancellor said. Would you not agree that the whole aura and constitutional position of this House is to examine public expenditure and to resist monarchs and the Executive who use public expenditure for narrow political purposes and to divide the nation? We are about to go into recess—[Interruption.] The Secretary of State for Trade and Industry objects to that type of public expenditure in relation to other people. This is the House of Commons, and we are about to go into recess. What guarantee is there that this Government, and particularly this Chancellor, will not use massive public funds for their narrow political ends——
Mr. Speaker: Order. All this takes time from the Adjournment debates, which are of importance to Back Benchers. I ask the House to raise no further points of order. However, in reply to the hon. Member for Dunfermline, West (Mr. Douglas), I must point out that it is the duty and role of this House to question Ministers. It was for that reason that this morning I granted the private notice question.
Mr. Jack Straw: On a point of order, Mr. Speaker.
Mr. Speaker: I shall call the hon. Gentleman, even though he is taking time from Back Benchers, and that is selfish.
Mr. Straw: You, Mr. Speaker, kindly granted the private notice question after the Chancellor last night had shot into his foot and after a panic meeting between the Prime Minister, the Chancellor and the Chief Whip. As there will have to be another panic meeting since today the Chancellor shot into his other foot, with his statement that if——
Mr. Speaker: Order. The hon. Gentleman is seeking to raise a question which he might have asked had I been able to call him. I remind him and the House that private notice questions are an extension of Question Time. This morning, I allowed 20 minutes on the issue, which is long enough.
Mr. Straw rose——
Mr. Speaker: Ten-minute Bill, Mr. Derek Conway.

Waste Disposal (Public Consultation)
10.57 am
Mr. Derek Conway: I beg to move,
That leave be given to bring in a Bill to place upon the designated local authority, to which application for a waste disposal licence has been made, the duty to consult with any parish council or meeting (or community council or meeting in Wales) and persons residing in the neighbourhood in whose area the land concerned is situate.
I confess that I had thought this morning would be a lonelier occasion. I suspect that the gladiatorial atmosphere which has continued from last night's debate may overshadow any public awareness which may have been created by this ten-minute Bill. Given the scenes that we have witnessed in the past 24 hours, I am particularly glad to tell the House that this Bill—the last of its type to come before Parliament this Session—has all-party support.
In addition to the support of my hon. Friends, I place on record my thanks to the hon. Member for Middlesbrough (Mr. Bell), who sits in the Labour interest, the hon. and learned Member for Montgomery (Mr. Carlile), who sits in the Liberal interest, and the hon. Member for Stockton, South (Mr. Wrigglesworth), who sits in the SDP interest, for adding their names to the Bill. I also thank the Community Rights Project for its help and advice in the preparation of this legislation.
The need for the Bill was brought to my attention by the parish council of Great and Little Ness in my constituency, where there is a particularly attractive village called Nesscliffe. It came to my attention that application had been made to Shropshire county council for a waste disposal licence to tip on a 10-acre area in that village.
Along with many other hon. Members, I assumed that legislation in the form of the planning Acts, the General Development Order and, indeed, the Control of Pollution Act 1974, would safeguard those who live in the village of Nesscliffe and in any other areas affected against such a proposal, and would ensure that they would be consulted. However, that is not the case, and, as the law stands, a county council is required to consult only the district council and water authority in its area.
It cannot be right that the first notice a member of the public has about a proposal to tip waste is when bulldozers appear in the field next door and start stripping off the top turf before tipping begins. Such proposals should be publicised so that those affected have an opportunity to raise objections and put forward alternatives.
I do not criticise Shropshire county council, which is an excellent local authority in my area, because it has followed the law as it stands. However, that law needs to be changed. This Bill, in seeking to amend the Control of Pollution Act, should not be controversial, in view of its all-party support. Those affected look to Parliament for protection. I urge hon. Members in all parts of the House to give me support in ensuring that that protection is extended.
Question put and agreed to.
Bill ordered to be brought in by Mr. Derek Conway, Mr. Alex Carlile, Mr. Ian Wrigglesworth, Mr. John Heddle, Mr. Robin Squire, Mrs. Virginia Bottomley, Mr. Geoffrey Dickens and Mr. Steve Norris.

WASTE DISPOSAL (PUBLIC CONSULTATION)
Mr. Derek Conway accordingly presented a Bill to place upon the designated local authority, to which application for a waste disposal licence has been made, the duty to consult with any parish council or meeting (or community council or meeting in Wales) and persons residing in the neighbourhood in whose area the land concerned is situate: And the same was read the First time; and ordered to be read a Second time upon Tuesday 22 October and to be printed. [Bill 228.]
PETITIONS

  Leicestershire County Cricket Club (Licensing Extension)
  11.2 am
  Mr. Derek Spencer: With your permission, Mr. Speaker, and that of the House, I beg leave to present a petition, on behalf of the members and supporters of Leicestershire county cricket club, signed by 6,067 people in support, at which stage the innings was declared closed.
  The petition alleges that the licensing justices have refused to grant extensions to the bars and host boxes at the county ground for the sale of intoxicants under section 74(4) of the Licensing Act 1964. All other first-class county grounds have such extensions. The applications from Leicestershire county cricket club were not objected to by the local police.
  The petitioners pray
  that your honourable House do urge the Secretary of State for the Home Department to bring forward guidelines on the licensing of sports grounds and sporting events for the sale of intoxicating liquor, in order to produce a uniform practice throughout England and Wales.
  I beg leave to present the petition.
  To lie upon the Table.

  Proportional Representation
  11.3 am
  Mr. Paddy Ashdown: With permission, Mr. Speaker, I beg leave to present a petition on behalf of some 700 people in my area protesting against our present grossly unfair and undemocratic system of elections and calling for electoral justice.
  Those who organised the petition—they did so in a very short time indeed—tell me that almost every person whom they approached signed it with enthusiasm. It is clear, as my right hon. Friend the Member for Glasgow, Hillhead (Mr. Jenkins) has pointed out, that this is merely the tip of the iceberg and that there is overwhelming support, in my constituency as elsewhere in Britain, in favour of fair votes.
  Apart from a national petition, to which there have been more than 1 million signatures, this is the 78th constituency petition to be presented to the House during this Parliament.
  The petition concludes:
  Wherefore your Petitioners pray that Parliament should prepare a Bill for future elections to be held by proportional representation and should hold a referendum to give the people a choice between this reform Bill and the preservation of the present system.
  I beg leave to present the petition.
  To lie upon the Table.

  Forest of Dean
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Major.]
  Mr. Speaker: We move on to the first of the Adjournment debates. As we have lost 35 minutes of the time available, I appeal to hon. Members to ensure that each of the subjects is debated for no more than half an hour.
  11.15 am
  Mr. Paul Marland: The purpose of this Adjournment debate, for which I am most grateful, is to remind my hon. Friend the Minister of the need for his urgent assistance to the Royal Forest of Dean. This is not the first time that I have mentioned the needs of the district to my hon. Friend, as we have exchanged letters and have met privately, and he has answered parliamentary questions. I have been successful in having a previous Adjournment debate and have led several delegations to various Departments designed to highlight the needs of the district. Our most recent delegation was on 17 May, when I accompanied representatives of the Forest of Dean district council on a visit to the Minister. Best of all, my hon. Friend has visited the area and seen our problems at first hand.
  The timing of the debate is very appropriate. With new applications being considered in the autumn, I am anxious to leave an impression of the Forest of Dean embedded in the mind of my hon. Friend.
  Since 1980, I and others, especially the Forest of Dean district council, have been warning of the likely steep rise in unemployment in the district, as large employers run down their work forces and, in some cases, leave the area. In this case, there is no satisfaction in having been proved right.
  To highlight the difficulties, I shall compare the level of United Kingdom unemployment at 12·4 per cent. with the general rate of unemployment in Gloucestershire of 9·4 per cent. In the Forest of Dean the rate of unemployment was 16·6 per cent. in January. Happily, it has fallen to 15 per cent. but is still substantially above the national average.
  As my hon. Friend will remember, the Forest of Dean is geographically isolated, lying between the rivers Wye and Severn. The communications are not the best in the country. Although the area is isolated, in many ways it is too close to development areas, especially those to the west.
  In the past, the Forest of Dean was heavily dependent on single industries. Traditionally, it was a mining area, and more recently the mighty Rank Xerox has employed many local people. In its heyday it employed 5,000 people and paid very good wages. The company's patents ran out and it was subjected to competition from areas of low-cost production elsewhere in the world. The problem of new methods of production and the fact that Rank Xerox had to face outside competition led to considerable reorganisation of the company, which has reduced its work force to about 1,000.
  The point of referring to Rank Xerox and the decrease in local opportunities for employment is that, with the exception of Mitcheldean, there are no disused industrial buildings in which to base new industry. Other manufacturers operate in the district, but they have always
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  been subsidiary operations of larger firms elsewhere. When their fortunes became difficult, the subsidiary companies were the first to suffer.
  The background is one of high unemployment in the district, with heavy dependence on a single industry. There is no heritage of old buildings. The area is geographically isolated and is too close for comfort, especially in the west, to special development areas.
  The Minister could rightly ask what we are doing to help ourselves. What is being done locally to help? Here, I must give credit to the Forest of Dean district council, which has shown ingenuity and determination to a degree which is not often associated with local authorities. The council has put forward ideas and has got something done. In Cinderford the council has developed the Forest Vale industrial estate, built on 104 acres of derelict land and old mine workings. The council installed the infrastructure and persuaded COSIRA to join it in the project and build some small factories. The council—it is a credit to the treasurer—spotted the benefits of section 75 of the Finance Act 1980 and constructed factories without putting the whole burden on the ratepayers. Furthermore, it was able to encourage private developers to build factories on the site, and these are now in production.
  All in all, the council has now achieved 50 units of production on the Forest Vale industrial estate. That reflects great credit on the council. That achievement should not be underestimated, especially in an area which, in many respects, is not favoured by other investors. I pay a warm tribute to the Forest of Dean district council and its officers for what they have done. It would be no secret to them or probably to you, Mr. Speaker, that the Forest of Dean district council and I do not always see eye to eye on every issue, but credit should be given where credit is due. Now that the Forest Vale industrial estate is up and running, the council is looking at a second site in Coleford. Without wanting to whinge, I believe that the latest moratorium on local council spending will make the planning of that site uncertain.
  Others have been active in the district, too. Rank Xerox has demonstrated a massive commitment to the local people by spending £500,000 of its own money in developing its now underused workshops and warehouses so that other people have the opportunity to work on that site. It has revamped some of its large warehouses for suitable tenants and, with the £500,000, has developed 50 fully serviced workshops, which have been a great success. Some 200 inquiries have been received and 112 people have put in firm applications. My hon. Friend will remember that, because he visited the Rank Xerox site a few weeks ago, when I was happy to accompany him.
  I should like to draw attention to the commitment that Rank Xerox has shown to the local people in the district, because it is enormously to its credit that it has done so much. It continues to work in the best interests of the district and to do everything possible to help the people there. Its generosity is highlighted by the appalling contrast with a company that used to employ 750 people in Lydney, known as the London Rubber Company. It wanted to reorganise its efforts somewhere else in the country and, without a backward glance, pulled out and left those 750 people high and dry. Despite approaches by the Forest of Dean district council and myself, the senior management of the London Rubber Company would have nothing to do with us. That shows what a marvellous thing Rank Xerox has done.

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  However, there is good news in addition to what Rank Xerox has done. Some other companies in the district are expanding. They create a modest number of jobs, but the fact is that they are committed to the district and are expanding. Watts, a family-run company, which for generations has operated from its own factory in Lydney, is spending about £1·5 million on developing a new tyre-making process, which will be based in Lydney.
  Sykes Pumps, which has a factory in Coleford, recently constructed an extension, which was opened by my right hon. Friend the Secretary of State for Employment. Engleharts, another company of which we in the Forest of Dean are proud, operates in Cinderford, breaking down old computers to extract the precious metals and resell them. It has expanded its operation and decided to stay in the Foreist of Dean. The last company that I should like to mention, although there are others, is Temco, a small company wholly owned by British Insulated Callender's Cables. It is a subsidiary of that company. It is a wire extruding company, which has expanded its operation from Lydbrook on the banks of the river Wye and taken larger premises in Cinderford.
  All those companies create a few extra jobs, but one has to work hard while not getting far. The chairman of the Forest of Dean district council, Mr. Arthur Cooper, and I had a joint project in sending out a brochure published by my hon. Friend's Department, entitled "How to make your business grow". We distributed 5,000 copies to all the commercial ratepayers in the district. We also visited banks, solicitors and accountants, asking for their cooperation and help in encouraging people to start up or to expand businesses in the area. I am sure that my hon. Friend would approve of that approach. I am pleased to say that we have the wholehearted support of all the people whom we visited.
  The Gloucestershire Enterprise Agency, which my hon. Friend the Minister has visited, also does its best to help in the district, so there is a great deal of local effort. I should not like anyone to think that I was asking the Government for financial help if local people were not determined to do everything possible to capitalise on that assistance. A great deal of effort has already been made and will continue to be made locally.
  There was some official recognition of our problems recently when the Development Commission designated the Forest of Dean a rural development area. That was a great shot in the arm for all those campaigning for extra help in the district as well as for local business men. Nevertheless, too many businesses outside which could set up in the district are looking elsewhere, especially to our near neighbours in the west, and too many businesses inside the district are thinking of setting up outside because they cannot obtain Government assistance. I personally know of three business men who would like to set up in the district but are seriously considering going elsewhere because no Government assistance is available in the district.
  The proportion of applications to vacancies is now twice the regional average because there simply are not enough jobs in the district. Indeed, the Forest of Dean has a higher rate of unemployment than 53 of the present 135 assisted areas. I ask my hon. Friend the Minister to
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  remember that when he considers areas for assistance in the autumn. I hope that he will also bear in mind the following points.
  In the past, we have been over-dependent on single industries. There are no old buildings which could be suitably revamped for the industries of today and tomorrow. The district is geographically isolated and its proximity to assisted areas makes it difficult to attract new industry or to encourage the expansion of existing industries. The proportion of the population out of work is now 15 per cent. We have tried very hard locally to generate more jobs and to create more industry in the area and if the Government see their way to give us the assistance that we seek we shall do all that we can to build on that help.
  I ask the Government, therefore, to consider giving the district assisted area status. This would enable newcomers and existing businesses to construct the extra buildings so sorely needed. It would also give the district access to EEC development funds. We already have access to the social funds, but the development funds are very different. Assistance from the Government will allow us to win more business and more jobs for the people of the Forest of Dean.
  As Parliament breaks for the summer, I wish to leave my hon. Friend the Minister with a deep impression of the Forest of Dean so that when he and his colleagues consider new applications for assistance he will remember with understanding and sympathy the drive and determination that he has heard about and seen at first hand in the Royal Forest of Dean and will do something to help us.
  11.20 am
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): I am grateful to my hon. Friend the Member for Gloucestershire, West (Mr. Marland) for the opportunity once again to debate the problems of his constituency, particularly those of the Forest of Dean. I know my hon. Friend will not regard me as flippant if I say that were assisted area status designated on the diligence and interest shown by its representative in this House, the Forest of Dean would qualify for immediate assisted area status at the highest level. I know his constituents will appreciate the assiduousness with which he has pressed their case over the last five years, and I congratulate him. Indeed, it was only eight weeks ago that a delegation from the Forest of Dean district council and the Gloucestershire county council led by my hon. Friend came to see me to press their case still further. I can assure my hon. Friend, therefore, that I am fully aware of the problems of the area, but, as he will know, I am not able now to give him the answer he would like on the status of the Forest of Dean.
  The Government are committed to maintaining an effective regional policy to ease the change in areas which have been dependent on the declining industries and to encourage new business in those areas. To this end, as my hon. Friend is aware, the Government issued a White Paper entitled "Regional Industrial Development" in December 1983, which set out our approach to the problem of regional assistance.
  Since 1972, when the present structure of regional industrial incentives was introduced, there have been major changes in our environment. We have become a member of the European Community and, in common with other countries, have experienced a period of

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  recession and inflation following the oil price rise. Unemployment is high throughout the country as a whole, not only in assisted areas, and thus to ensure an effective regional policy the Government must look at the problem on a national basis. As my hon. Friend knows, views on the White Paper were invited before the deadline of 31 May. We received 506 submissions by that deadline, and a further 36 subsequently. Many of these sought special status. It was as a result of that invitation that I received the delegation from the Forest of Dean to which I referred earlier.
  The problems of the Forest of Dean, which were explained to me with great skill and knowledge by my hon. Friend, appear to stem from a number of sources. Perhaps most significantly, major manufacturers, especially, as he said, Rank Xerox, have, for commercial reasons, cut down their work force substantially. There is still a continued dependence on a few large firms for employment and the area has suffered from a continuing loss of jobs and a consequent rise in the unemployment rate.
  Rank Xerox is and has been for many years by far the largest employer in the Forest of Dean. During the company's expansion at Mitcheldean and Lydney between 1963 and 1974 employment increased to a peak of 4,750 and apart from minor fluctuations remained above 4,000 until 1980. Since then, as part of a major restructuring of its operations, a series of large-scale redundancies, including the closure of the Lydney factory in 1982, have reduced the work force. In April 1983, when employment was 2,200, Rank Xerox announced long-term plans for operations in the forest involving a reduction in the work force to 1,000 by the end of 1984. This remains the company plan. The company is, however, conscious, as my hon. Friend said, of the impact of that reduction on the local community and has taken a number of measures. My hon. Friend referred to a massive commitment on its part. He was absolutely right, and I have had the benefit of seeing that at first hand.
  These measures include paying two to three times the statutory rate of redundancy pay and providing exceptionally good, index-linked pensions to those retiring early; providing retraining and guidance for redundant workers, including financing special courses at the Gloucestershire college of advanced technology; donating part of the surplus buildings at Mitcheldean for small business units—I had the pleasure of visiting the Mitcheldean site last November to see at first hand the more attractive old brewery buildings which were to be retained and adapted to provide small units for leasing; setting up a steering group, with representatives from the county and district councils, to look into ways of attracting new industry into the area and to market the remaining surplus buildings at Cinderford; and setting up, in co-operation with the county council and other local businesses, the Gloucestershire Enterprise Agency and providing both the director and secretary of the agency. My hon. Friend said that it reflected great credit on the company, and I agree completely. I was most impressed when I visited my hon. Friend's constituency.
  The agency was set up in October 1982 and was opened officially by the Duke of Gloucester on 24 November 1982. Its establishment resulted from a joint initiative by the county council and Business in the Community, but it also has the support of 20 major companies in the area, including Rank Xerox and the Dowty group. It operates
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  from shop front premises in Gloucester and has a remit to cover the whole county. It has had most influence to date in the city, where work includes the Gloucester enterprise workshops.
  In the first year of operation, the agency handled more than 2,000 inquiries and undertook 380 business reviews. It claims credit for assisting the setting up of an average of one new business a week. Although until now it has concentrated on providing advice, the agency has also run start-up courses and seminars on marketing and finance. I am glad to say that it retains relationships with the small firms service, for which I am responsible, and is an approved agency under the Finance Act 1982.
  I am also aware that other major closures have affected the area, but not all that is happening in the area should cause gloom and despondency. Forest of Dean district council has been active in promoting industrial development, and I pay tribute to it. A first unit of 12,000 sq ft built by the district council was taken by Engelhard Industries, precious metal refiners, which has purchased a further 10 acres of adjoining land and has planning approval for expansion. A second set of seven units from 600 sq ft to 2,400 sq ft totalling 10,000 sq ft, have all been let.
  The district council is considering proposals for further development, including schemes in partnership with private developers. Gloucestershire county council has given special attention to the Forest of Dean as the major employment problem area in the county, which it is, and planning proposals, including road improvements, are aimed at assisting the local economy.
  My hon. Friend mentioned Temco, which has been expanding production of nickel-plated copper wire and is reaching the limits of its present site. A further site is required, which it is hoped will be in the Forest of Dean. Formwood, which supplies the open cell ceiling market, has completed a £1·7 million expansion and increased employment. During the past two years company employment has increased from 120 to 185.
  As well as the self-help which the district council and firms within the Forest of Dean are providing themselves, I must remind my hon. Friend of the alternative industrial support available to firms in the forest. They take the form of aid under section 8 of the Industrial Development Act 1982. Between May 1979 and June 1984, 51 projects in the Cinderford and Gloucester travel-to-work areas have been offered £1,700,000 on project costs of almost £4 million, and I reassure my hon. Friend that any projects put forward for possible assistance under section 8 of the Act will be given most careful consideration by me and my colleagues. The Government can also help by providing counselling assistance through the Department of Trade and Industry's small firms service for which I am responsible, and which is based in Bristol. There are also schemes under the Support for Innovation package to assist technological development.
  I am aware that my hon. Friend is a constant campaigner for better road communications to the area. The need for good road communications in the Forest of Dean is recognised. The A48 trunk road from Gloucester forms the principal link, but when considered from a national viewpoint this route is now of little strategic importance following the completion of the M5 and M4 motorways and the Severn bridge. Any improvements to it in consequence can attract, at best, only a low priority

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  and I understand that there is little prospect of any such schemes finding a place in the national trunk roads programme for the foreseeable future.
  In conclusion, therefore, I can say to my hon. Friend, "Yes, we are fully aware of the current problems of the Cinderford travel-to-work area and in particular the Forest of Dean," and, "Yes, we will take full account of the submissions made by him, the Forest of Dean district council, the Gloucestershire county council and the many local firms which have written in support of them," but "No, I cannot give him an answer about the future assisted area status of the forest at present."
  My colleagues in the Department of Emplpoyment have now completed their review of the travel-to-work area boundaries, and this review, together with the points raised in the submissions on the regional industrial development White Paper, mean that an announcement on the new assisted area map will be made in the autumn. It would be wrong, therefore, to pre-empt any decision by isolating one particular geographical area for an immediate change in assisted area status. In the meantime, I can assure my hon. Friend that my Department is always willing to assist wherever possible any companies in his constituency which make application under the various schemes mentioned, and I thank him once again for the opportunity to debate the matter.

  Water Supplies (South-West)
  11.30 am
  Mr. David Penhaligon: I am sure that the Minister is more than aware of the anxiety in the south-west this year about water supplies. The same anxiety has been felt in previous years and no doubt will be in future years. However, I am equally sure that the hon. Gentleman will welcome this opportunity to discuss the problem on the Floor of the House.
  Those of us who live in the south-west find the position quite ludicrous. Our problem in 1984 is not unique, in that we had precisely the same one in 1976. Indeed, my part of Cornwall has hosepipe bans every year. It is rather like waiting for the cuckoo: everyone knows that it will come, but there is some doubt about precisely what the date will be.
  Next week the South West water authority will meet to consider water rationing. Apparently there are two possibilities. Either it will be done on the basis of rota cuts for 17 hours a day, or standpipes will be erected.
  We have had a dry spell, although we were told by the water authority as recently as March of this year that supplies in the reservoirs were satisfactory. Despite the dry spell, every river in the south-west is still pouring precious fresh water into the sea, the trees are a magnificent and buoyant green, and the grass where it has not been cut or chewed away by hungry animals is still green. By any international standard, applying the word "drought" to the situation is a ludicrous distortion, although it must be recognised that we have had a dry spell.
  The Government's local representatives, the members of the South West water authority, have a problem on their hands. It is worth remembering that it is the Minister who appoints the chairman and members of the authority; it is the Minister and his Government who, despite considerable opposition, thrust through the House a regulation which means that all the meetings of the authority are now held in total secrecy; it is the Minister who fixes the external financing limit of the authority, which is the amount of money that it can borrow; it is the Minister who fixes the financial target, which is the profit that the authority must make against current costs; it is the Minister who fixes the performance target, which is the amount that the authority can spend on day-to-day operations; and it is the Minister who fixes the capital outturn.
  In many ways, the only opportunity that we have these days for a public debate about the South West water authority is on the Floor of the House. In that connection, I express my warm thanks to the hon. Members for St. Ives (Mr. Harris), for Devon, North (Mr. Speller) and for Honiton (Sir P. Emery), who are present this morning to take part in the debate.
  Numerous orders have been applied for. They take two forms. The first allows a water authority to extract more water from rivers. The second reduces the amount of compensation flows over reservoirs. By statute, when a dam is erected and a reservoir created, the water authority has to allow a certain amount of water to pass through the reservoir into the river even if there is little or no water coming in at the other end.
  The authority has asked for dispensation to reduce compensatory flow rates, but the applications have been made at a rather late stage. It is amazing that there is a real

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  possibility of rationing being implemented before the full impact of the dispensation orders is felt in the region. I ask the Minister to give an assurance that the Department of the Environment will cause not one second of delay in implementing beyond that which is required by statute.
  We all hope that rationing will not be necessary in the end. We hope either that there will be a couple of days of rain or that savings will be made by consumers. However, if rationing has to be introduced, how will it be implemented? We were told by the water authority in 1976 that in no circumstances could it introduce rota cuts. Standpipes were installed in parts of Devon but at a recent meeting of the region's Members no one could be found to defend standpipes. To my knowledge, no one is in favour of standpipes.
  The proposed rota cuts will mean seven hours with water and 17 hours without. Of course, there will have to be exemptions. If the water supply is turned off for 17 hours, consumers who live at the bottom of a hill will take advantage of the fact that the water pipe is full and they will empty it. What sort of liquid will come from the pipe when the water supply is restored? How much water will be saved by the introduction of rota cuts? When the tap is turned on once more after 17 hours, something like brown sludge will pour from consumers' taps and our constituents will cause their taps to run until they can obtain some fresh water.
  Perhaps the main advantage to be gained from cutting the water supply for 17 hours is that there will be no leaks in the supply system. If there is no pressure there will be no leaks. However, the more exemptions that are allowed the more the system has to be charged by pressure. Exemptions will not cause a lot of water to be used, but the leaks will continue merrily because pressure will have to be maintained. Water reserves will diminish irrespective of the amount of water that is used.
  What exemptions should be introduced? I am sure it will be agreed universally that hospitals should be exempted from cuts. There are others who have claims of various merit. Hoteliers argue that they should be exempted on the ground of health risks within their premises. The owners of factories argue that water should continue to be supplied to their premises. There is a fish processing factory in my constituency and it will cease to function if there is no water. Farmers telephone me to tell me of the difficulties that they will face if water is not supplied to their farms. It may be possible to convince constituents that they should go without water for 17 hours, but the farmers in my constituency believe that their telepathic relations with their cattle will not enable them to explain adequately to them that there will be no water for 17 hours. What happens to kidney patients who are on dialysis machines?
  I understand that the two areas most at risk are west Cornwall—Penwith, Carrick and Kerrier—and north Devon. I do not know how extensive is the area at risk in north Devon, but in the area as a whole there will be rota cuts for 300,000 consumers. I cannot help but reflect on the fact that since 1976 the water authority has decreased its staff dramatically, and many praise the authority for doing so. I do not believe that the authority has the manpower, if it ever did, to implement rota cuts with a satisfactoy exemption system. An exemption system can be operative in some districts only by turning off the water supply and individually to every property not given an exemption.
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  This is the last opportunity before October to question the Minister on this subject. What emergency staff can be provided? There is something to be said for the water authority seconding people from the district councils—at least the local authority employees will know the area. I do not wish to be overly dramatic, but I should like to know whether help will be made available from the services in this south-west if the system has to be implemented on a large scale. I have referred to the desperate position that exists this week relative to next week and to next month, and we need the Minister to give some information on the provisions.
  The position in the long term is even more forlorn than in the short term, although that might sound ironic at this moment. About 30 per cent. of the water caught in the dams and sucked out of the rivers, old mine pits and mines, is wasted because it leaks away. That means that for every two reservoirs built to supply people another has to he built to satisfy the leaks from the system. That happens when water is being used normally. At the moment when people are economising—all credit to them for doing so—almost 50 per cent. of the water supply available to the people of the south-west is leaking away. That is ludicrous. I know of no one who would try to rationalise that position or argue that that is the best that can be done. The water authority must be provided with increased resources to get down in the near future to the business of repairing the system. As for financing locally, I am sure the Minister is aware that my region already has the highest water rates in the United Kingdom.
  In my constituency—I do not believe that the circumstances there are unique—some of the restrictions imposed in the summer were made not because of the lack of water but because the poor community at the end of the pipe had insufficient water. It is a case not of the water authority having insufficient water in the reservoir but of the lack of a large enough engine or pump to ram sufficient water down the pipe to satisfy local demand. Therefore, the authorities try to restrict demand for water. That requires investment. There is only one answer to the problem—the provision of a new and extended pipe installation scheme.
  The south-west is perhaps the fastest growing region in terms of population, and I suspect that that will continue. It is ironical that under the Water Act 1973 the local water authorities must be totally self-financing. No central help is available to them. I do not believe that the problem will ever be resolved if the Government stick rigidly to that provision. The reasons are obvious—we live in towns with populations of 5,000 to 30,000 which are 5 to 30 miles apart. No one could describe the south-west as flat. That means that there are considerable engineering problems to be faced when installing a satisfactory system. Without central assistance, there will be no end to the problem. Increasing water rates is a poor option, given that they are already high and, because there is no rebate scheme, those rates already impinge dramatically on a minority.
  My last point is about Roadford, which has become the great discussion in the south-west. As I understand it, before the Government came to power, in December 1978 the inspector made a report to the then Minister saying that Roadford should have 8,000 million gallons. There was a change of Government. It took the present Secretary of State for Defence, a former hon. Member for Tavistock, who should have known better, two years to instruct the

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  South West water authority to consider another site at Higher Horslett. That came as a great shock to the water authority, partly because it had already considered and dismissed it. It took two years for the water authority to return with a report and an inquiry and say, "No, no Mr. Minister, it must be Roadford; 8,500 million gallons, please, pronto." It took the Minister another two years, that is four years so far, to say that that was not his proposal and that it was OK for Roadford, but for 5,000 million gallons. It took the hon. Member for Teignbridge (Mr. Nicholls) to discover that the Minister will consider the matter, and that sounds reasonable.
  Leaving aside the merits of the argument whether Roadford should be 8,000 million or 5,000 million gallons, does the Minister have the power, without another public inquiry, to order that the reservoir should be much bigger? If he does, it is worth considering. If he does not, I hope that we shall not have another two-year delay to work out whether it should be a reservoir of 8,000 million or 5,000 million gallons. We need the reservoir to be built fairly quickly. I believe that the argument about the size is in danger of becoming a red herring. Time passes, and we do not have as much as we thought.
  I have some bad news for the Minister. If he believes that stopping leaks, building reservoirs and modernising the pipe system is all that is required, I shall disappoint him, because the sewerage system is no better than the water system. The hon. Member for St. Ives made a speech about it last week. In some ways, the sewerage system could be alleged to be worse. In the south-west, we are plastered with embargoes and inadequate installations.
  I know that the Government become worked up when this is suggested, but only investment in the infrastructure in the south-west will overcome the problem. The Government's view as expressed in a House of Lords Select Committee in 1982 was that, with one or two possible exceptions, the need for further resources seemed unlikely to arise until the next century. The Government considered that the water authorities were better equipped to respond to increases in demand than ever before. If that is the Government's view, they are wrong. I know of no one in the south-west, of whatever political colour—let us leave aside party politics—who would agree with that. The west country needs help now and it will need it for at least a decade. There are plenty of unemployed people who could do the work and there are plenty of skills available. The work cannot be financed solely by the people who live within the area of the South West water authority.
  Several Hon. Members rose——
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Three hon. Members are seeking to catch my eye. Do the hon. Members for Honiton (Sir P. Emery), for St. Ives (Mr. Harris) and for Devon, North (Mr. Speller) have the consent of the hon. Member for Truro (Mr. Penhaligon) and the Minister to take part in the debate?
  The Minister for Housing and Construction (Mr. Ian Gow): Provided that they are brief.
  Mr. Penhaligon indicated assent.
  Mr. Deputy Speaker: I was about to draw to the attention of the House the fact that the debate must conclude at 12 o'clock. I hope that the hon. Members will leave the Minister adequate time to reply.
  11.48 am
  Sir Peter Emery: I thank you, Mr. Deputy Speaker, the hon. Member for Truro (Mr. Penhaligon) and my hon. Friend the Minister for allowing me to speak. I shall be brief, as I have three quick points only. May it be pointed out that, when one is considering wastage, which is considerable, it is no greater in the south-west than in any other water authority area?
  It should also be pointed out that the majority of the wastage is not controlled by the South West water authority; it is under the control of householders and industry. Will my hon. Friend appeal, even at this late stage, for people to look at leaky pipes, worn washers and dripping overflow pipes? That is often the great area of wastage and it is in the hands of individuals to do something about it.
  I agree with the hon. Member for Truro (Mr. Penhaligon) that the south-west needs some assistance from the Government. Much of the demand is seasonal. Water has to be supplied for use by people who are nothing to do with the south-west and who come into the area for their holidays. It is necessary to be able to cope with that demand.
  Much of the delay in making adequate provision has not been the fault of Ministers; it has been due to pressure from environmentalists. They have much to answer for in regard to the delays in bringing new reservoirs into the south-west.
  Perhaps the Minister will be able to deal with the question of standpipes versus rota cuts. Standpipes and the collecting of water by pails is an impossible situation for the elderly, the ill and the disabled. I accept that hospitals and vital needs should not be covered by rota cuts, but I believe that the majority of people in the south-west would rather have rota cuts for a longer period than the 17 hours suggested if they could be assured that standpipe operation would not be introduced. Even if rota cuts had to be for 24 hours on one particular day, they would rather have that than standpipes.
  11.51 am
  Mr. Tony Speller: I press the Minister to obtain a firm undertaking that in no circumstances will the financial limits of the South West water authority be restrained in the coming years while it is building Roadford.
  I agree with my hon. Friend the Member for Honiton (Sir P. Emery) that delays have been caused by environmental and conservation groups. But two district councils, the Country Landowners' Association and the National Farmers' Union and several other bodies were all involved in that respect. I can understand the difficulties of the Minister, who obviously wishes to be loved and to have a job, when all the bodies which are usually against each other were for some reason united against an affirmative decision on Roadford.
  It is clear that if rationing comes we must first look after the elderly, the sick and the very young. We must also look after our local industries, or we shall turn off the bath water and lose the baby—industrial growth in our region.

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  As a householder, I am happy to say that at this moment it is raining in Instow in north Devon where I live. I can get by if I have a bath to fill with water during the day. I accept the hardships involved, because it is vital to look after our weaker brethren and to ensure that we do not destroy our industrial and commercial livelihood.
  11.52 am
  Mr. David Harris: In the past year, since I have been in the House, I have emphasised the importance of infrastructure. There must be proper provision for water and sewerage. In facing the difficulties created by the water shortage, we must not allow ourselves to say that there are no sewerage problems. That would be fatal. We must be prepared to spend what is required to provide a decent infrastructure to the south-west. I accept that that will mean cuts elsewhere. I suggest that the Minister could make cuts in the area of discretionary grants to industry. Sufficient funds must be made available to give the southwest the industry it requires. I assure the Minister that I shall not forget the subject once the rain starts.
  11.53 am
  The Minister for Housing and Construction (Mr. Ian Gow): The best news during the debate has come from my hon. Friend the Member for Devon, North (Mr. Speller), who told us that it was raining in his constituency.
  I congratulate the hon. Member for Truro (Mr. Penhaligon) on selecting a most important subject, and I am grateful to him for allowing my three hon. Friends to take part in the debate.
  The Government take immensely seriously the difficulties being faced by the constituents of the hon. Member for Truro, by the constituents of my three hon. Friends, and indeed, by all those who have been affected by the drought.
  All applications made by authorities and water companies, whether from the south-west or from other parts of the country, will be considered by my Department with the utmost expedition. I shall deal with that specifically later in my speech.
  At the outset, I appeal to everybody in the south-west of England, and in all other parts of the country where restrictions are in force, to comply most strictly with the statutory requirements, and to follow advice where advice has been given to customers by water authorities and water companies. Although the forecasting of the weather is an imprecise science, I have to say that the 30-day forecast issued yesterday by the Meteorological Office predicts below average rainfall in the south-west. To put that in context, normally Plymouth would have had nearly 13 in. of rain between 1 March and 31 July; Exeter would have had 10 in., Chivenor 11 in., Cambome 13 in. and St. Mawgan 13 in. Between 1 March and 31 July this year, Exeter has had just over 5 in., Plymouth just over 6·3 in., Chivenor 4·6 in., Camborne 7 in. and St. Mawgan 7 in.
  Elsewhere on the western side of England, and in Wales, rainfall has been exceptionally low. At Haweswater there has been less rain in the past seven months than in any year since records began 91 years ago.
  The South West water authority first imposed a hosepipe ban in north Devon and parts of Cornwall on 12 May. There is now an extension of the ban on hosepipes throughout the area of the authority. The first drought
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  order, to restrict river water running into the sea, was made on 21 June. We have now made 18 orders to conserve or augment water resources.
  The authority has carried out emergency works to make water from Wimbleball available in parts of east Devon and in mid-Devon by using temporary pumping equipment. Work is about to start on a scheme to transfer water from the Exe to the Taw. Water is also to be transferred from the Tamar to the Tavey, using a pipe that was put in after the 1976 drought.
  The South West water authority has taken every step to seek to persuade its customers to limit their consumption. It has distributed about 300,000 leaflets. It has used radio, through public service announcements, and by advertising. It has advertised on television and in newspapers, urging its consumers to halve their consumption.
  I endorse the advice that was given by my hon. Friend the Member for Honiton (Sir P. Emery) that it is possible for—and, indeed, the duty of—all customers to examine their own pipes to see whether there are any visible leaks with which they can deal. I hope that people will respond positively to that appeal.
  The measures taken by the water authority have had significant effect. Consumption earlier in the year was running at 10 per cent. above 1983 levels, but the people of Devon and Cornwall have responded to the authority's appeals to use water responsibly. In July, in the region as a whole, consumption was running at 12 per cent. below 1983 levels.
  The hon. Member for Truro asked me about the new reservoir at Roadford. I was asked whether I would have any power to alter the permission which has already been granted. The hon. Member will remember that outline planning permission has been granted for a reservoir with a reliable yield not exceeding 87·3 megalitres per day. Work on that new reservoir is due to start next year.
  When I go to the south-west tomorrow I shall be discussing with the chairman and other members of the board the timing of the commencement of work on the reservoir, which is of great importance. I think that the customers of the South West water authority will want work on the reservoir to start at the earliest possible moment. They will also want it to be completed at the earliest possible moment. I have, of course, no power to alter the planning permission which has already been granted. It would be open to the authority to seek to vary the permission which has been given, but I have no indication whatever that that is in the mind of the authority.
  My hon. Friend the Parliamentary Under-Secretary of State visited the south-west on Friday of last week. I shall be going to the south-west this evening and shall be spending the whole of tomorrow visiting the worst affected areas of the south-west. I shall be discussing with the chairman of the board the very points which have been raised in the debate.
  I think that it was common ground among all those who addressed the House that there is a widespread preference among customers of the authority for rota cuts as against standpipes. That was made very clear during the debate.
  I am grateful to the hon. Member for Truro for raising this important issue. I assure him and his constituents, as I assure all consumers of the authority in the south-west, that the Government will do their utmost to give all advice

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  and support to the authority, and will deal with the utmost expedition with all applications made to the Department for further orders under the Drought Act.

  Port Stanley Hospital (Fire)
  12 noon
  Mr. Michael Stern: On 10 April this year, a major fire broke out at the only hospital in Port Stanley, the King Edward Memorial Hospital. As a result of that fire, eight people died. The building was gutted and has since been totally unusable. In a brief debate the following day in this House, the Minister for Overseas Development undertook that there would be a full inquiry into the circumstances of the fire and that the report of the inquiry would be published. The report has now been published and has been available to the House for approximately a month.
  First, I should like to congratulate the officers who worked on the report. It is a frequent joke in this place that inquiries are a device for wasting time. In this case, the inquiry worked with commendable speed, and the conclusions in the report—although I shall question one or two of them —show that the inquiry team fully considered all the available facts.
  We must not forget, however, that perhaps the chief consequence of the fire is that the only civilian hospital in the Falklands is now a gutted shell and that the facilities are now entirely temporary and wholly inadequate. The matter is therefore urgent.
  First, we should consider the fire itself and its causes. The committee of inquiry concludes that there is strong evidence that fire precautions in that public building were wholly inadequate. The fire hoses fixed to the walls of the building were not connected to a water supply but, even if they had been, the water pressure through those hoses would have been inadequate to deal with the spread of the fire. The wiring throughout the building has already been described in this House as woefully inadequate. It is accepted that, because of the climate in the Falklands, electrical wiring suffers from greater problems there than in this country. However, attention had previously been drawn to the poor state of the wiring in the hospital, and the context was that of an island where at least four electrical fires every year are caused by defective wiring.
  Secondly, lack of fire doors was perhaps the principal and most obvious cause of the rapid spread of the fire, which was the reason why so many lives were lost. There had been many reports in the 1970s of the inadequate fire precautions in this and other public buildings in Port Stanley. In 1982, the fire officer, the civilian doctor and the military authorities together demanded the urgent installation of fire doors in the hospital—a wooden building—as the only way of stopping a fire should one break out. By the date of the fire, those doors had not even been ordered. As a result, whatever the cause of the fire—perhaps inevitably, the report was unclear about the exact cause—it spread rapidly and uncontrollably, and the deaths that occurred were to a large extent inevitable. Had fire doors been in situ, the deaths might have been avoided.
  It is only proper that the House should now add its own tribute to the comments in the report about the activities of three people at the hospital who were instrumental, inside the hospital, in saving, at considerable risk to themselves, the lives of those patients who were able to get out. Those people undoubtedly acted with a bravery which the House should commend. They were Nurse Reed of the civilian staff, Lance-Corporal Shorter from the

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  military staff, and my former constituent Nurse Barbara Chick, who died in the fire. Whatever the doubts about the exact sequence of events, it is clear that Nurse Chick died in an effort to save the lives of patients. That is the only possible explanation for the place where her body was found. As I said on 11 April, she deserves every praise.
  Mr. Tam Dalyell: Hear, hear.
  Mr. Stern: I am only sorry that, so far, this country has done nothing to offer her memory any public recognition.
  Present conditions are woefully inadequate. The hospital facilities have had to be moved into a temporary building, and we should consider the conditions in which the hospital is operating and in which the staff are having to work. There is no alternative civilian hospital. There is only the military hospital, which is itself overburdened, or the option of flying patients out for treatment in this country.
  The present civilian hospital is separated from the military hospital by over four miles of very bad roads. It has no pathology laboratory or pathology equipment. It has no X-ray technician. If an X-ray has to be taken, the patient has to be transported to the military hospital. The operating theatre is sub-standard. Transport is inadequate. If materials for testing, or patients, have to be transported, the doctors frequently have to use their own cars.
  Maternity, ear, nose and throat and gynaecological operations and medical conditions, and non-emergency surgery, cannot be handled on the island at all. The patients have to be flown out. No hospital in this country could tolerate such conditions. In the absence of any alternative, those conditions have been forced upon the island's administration, but they must be corrected as quickly as possible.
  It has become clear that other public buildings in Stanley are subject to almost as great a risk of fire. I should like to quote from Penguin News —the only newspaper circulating on the island—of 9 May:
  "To most of us, it is obvious that other buildings, such as the schools, the Town Hall and the Secretariat, are just as dangerous as was the Hospital."
  That is frightening, especially as we see from the report how inadequate were the fire precautions in the hospital and how quickly the fire spread once it took hold. Stanley house has no fire hydrants or hoses and its wiring suffers from advanced decay, yet it is being used every night as a dormitory by 30 schoolboys. Sullivan house, which has been and might still be considered for use as a dormitory for schoolgirls, is, I understand, in a similar condition.
  Although we should draw lessons from the report, it makes it clear that urgent action is necessary to improve fire precautions and medical provision in Port Stanley. The most urgent requirement is a new hospital. I understand that an architect has visited the Falklands to draw up plans. Despite the commendable speed of the inquiry, the architect's visit is all that the Falkland islanders know about the new hospital. Moreover, that visit is all that the civilian hospital staff know about the new hospital. I invite my hon. Friend the Minister to tell us when it will be built and when the plans will be published. When will the civilian hospital staff have an opportunity to comment on them? We all know that existing hospital facilities are inadequate. My hon. Friend should recommend to the
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  Falkland Islands Government that they come out into the open and tell the Falkland islanders what is happening and when.
  I have mentioned the problem of fire precautions in some public buildings in Port Stanley. The same might be true for others. The report stresses the lack of water pressure to service fire hoses and hydrants. Until that serious problem is corrected, no fire precautions in any public building can be effective. The Government have said that they do not intend formally to respond to the inquiry report but will offer advice and assistance to the Falkland Islands Government in regard to fire precautions. The Government should be advising the Falkland Islands Government that they can no longer risk neglecting fire precautions. Public buildings in all countries should have proper fire precautions. It is clear that the water pressure in Port Stanley must be raised.
  Climatic conditions in the Falklands mean that wiring has a much shorter life span than we expect in Britain. However, that fact can no longer be ignored. The Falkland Islands Government will have to take that into account in their provision of acceptable wiring standards in public buildings. Those standards are woefully worse than in private buildings. My hon. Friend should urge the Falkland Islands Government to act on the many reports that they have received from British electrical engineers who have gone to the Falklands and from their own public works department. Defective wiring must be renewed. There is still lead-cased wiring in the Falklands, which is especially susceptible to climatic conditions there. The Port Stanley administration cannot ignore the fact that wiring deteriorates more quickly there.
  One of the report's main criticisms was of the work of the public works department in the Falklands. We should remember that it is a one-man operation, with some assistance. The criticism is justified, because even such a public works department which has no system for determining its day-to-day priorities is sadly lacking. I criticise the report because it does not go far enough. The public works department was not operating alone. It was in regular consultation with more senior Government officials. They should not escape their share of the blame for the deficiencies of the Government. I understand that there were twice-daily conferences between the manager of the public works department and the officials to whom he reported. However, on 9 April—the day before the fire—the officer in charge of the public works department was unaware that the fire doors that had been requested in 1982 had not been ordered, even though he had forwarded that request. There was a sad lack in the flow of information between the public works department and the Falkland Islands Government. I hope that remedying that will be included in the Government's advice.
  Although the public works department must accept some of the blame, the managerial system in public works and buildings should be examined. I hope that, if a request is made, the Government will offer the benefit of management expertise to the Falkland Islands Government to revise and update their reporting and management systems.
  One of the report's entirely justified conclusions says:
  "We believe that it is the generally held wish of the Islanders that they should put this tragedy behind them as soon as possible and look towards the future."

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  I am sure that we, the Government and the Falkland Islands Government share that wish.
  With the assistance of the Falkland Islands Government, the Government have acted with commendable speed and produced a report which details areas in which the Falkland Islands Government can improve facilities in public buildings. The Government have offered advice and assistance to that end. I hope that my hon. Friend the Minister will report to the House on the extent to which additional facilities have been made available and how much they owe to the Government's advice and assistance. Britain retains a moral responsibility for conditions in the Falklands. That derives from history rather than just the past three years. The report has been made with speed and I hope that action will follow with equal speed.
  I have sought to show that major deficiencies still exist which must be put right. In Port Stanley, there is still a huge risk of another fire or major tragedy. If, heaven forbid, there were a similar tragedy in the future, the Government should not expect to escape with only an offer of help and assistance.
  12.20 pm
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): I recognise the detailed interest which my hon. Friend the Member for Bristol, North-West (Mr. Stern) has taken in this investigation into the causes of the fire, and on behalf of the House I thank him for this opportunity to debate the report of the commission of inquiry. I also endorse and repeat the condolences and tributes to those who lost their lives in that tragic event, which my right hon. Friend the Minister for Overseas Development paid when making his statement on 11 April, the day after the fire.
  As my hon. Friend recognises, the commission of inquiry was set up by the Civil Commissioner in Port Stanley, and it was to the Falkland Islands Government that the commission submitted its report. None the less, I place on record the Government's appreciation of the speed and diligence with which the commission, under the most able chairmanship of Mr. David Calcutt QC, conducted that inquiry.
  The Commission's terms of reference were announced on 18 May and it began its public hearings in Port Stanley on 24 May. It received statements from 128 people, and in three days heard evidence, most of it oral, from 47 witnesses. It produced its report to the Civil Commissioner on 5 June, and announcement of publication was made simultaneously in London and Port Stanley on 12 July. This was a most valuable report on a most difficult situation. We all recognise the value of its conclusions, and endorse the main conclusions.
  The introduction to the report states:
  "Heroic efforts by many people saved many lives, but even so eight died. Not only were the Islanders substantially deprived of their only hospital, but the small Islands community was made yet smaller. The loss was grievous and felt keenly throughout the Islands."
  We certainly endorse that statement.
  I also endorse my hon. Friend's references to one of his own constituents, Miss Barbara Chick, the state-enrolled nurse on night duty in the hospital on the night in question, who lost her life while seeking to assist patients to escape
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  from the burning building. Nurse Chick, along with others to whom my hon. Friend referred, displayed bravery and self-sacrifice which all of us commend. I am sure that my hon. Friend's remarks about a commendation will not go unnoticed.
  Mr. Dalyell: Give her a posthumous honour.
  Mr. Whitney: Indeed, those concerned should obviously consider what has been said in the House today.
  The commission of inquiry found no evidence to confirm allegations that faulty electric wiring was to blame. The report
  "eliminated arson, the electrical heater in the bathroom, an electrical fault, spontaneous combustion of the mattresses stored in the rooms, and an external source of fire as the cause of the fire".
  It added:
  "We are left with the probability that the fire must have been due to an accidental internal source of fire, inadvertently caused by either a patient, member of staff or an intruder. The evidence before us does not enable us to draw any more precise conclusion".
  Not surprisingly, given the nature of things, the report identified areas which were less than perfect. It contained some criticisms relating to the failure to connect the internal hose reels to the water supply, and the lack of fire doors. It was clear that the performance of the public works department, small as it is, was not up to standard.
  It would be improper for me to comment in any detail on a matter which is the responsibility of the Falkland Islands Government. However, the evidence of the director of the public works department to the commission of inquiry makes clear the very heavy pressure of work and conflicting demands to which the PWD has been subjected since the Argentine invasion and occupation. Additional expatriate manpower has been recruited to assist the department, especially at middle-management level, but it must be recognised that a shortage of labour at lower levels persists.
  In the short time available I should like to nail one allegation which has been shown to be untrue—the alleged priority given to the installation of central heating in 8 Ross Road West, a Government house later offered to the services. Certain evidence refuted any suggestion that this had been given any sort of priority over the connection of fire hoses to the water supply. No installation of contral heating in that house took place before the fire.
  In response to the inquiry and its recommendations, the Falkland Islands Government have already set in hand a number of steps to implement those recommendations. The system for operating the fire siren has been improved. Plans for the renewal of Stanley's water supply will, as the report recommended, contain provision for adequate water pressure to meet the needs of the fire services. Authority has been given for the purchase of five trailer pumps with hoses and accessories to replace and supplement the two pumps which failed at the time of the fire. Clear fire instructions have been provided for patients as well as for hospital staff. A number of the report's other recommendations will be followed up actively, and, independent of them, additional fire fighting equipment has been purchased. I am sure that those areas of activity will meet a number of my hon. Friend's points.
  As to the condition of other buildings owned by the Falkland Islands Government, I am sure that that Government will note my hon. Friend's comments, but I

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  can tell him that, in relation to the school hostel, Stanley house was rewired in 1981 and, in accordance with the standard procedure of the Institute of Electrical Engineers, it would not be due for a complete inspection for five years.
  However, the kitchen, which was rewired in 1983 when new equipment was installed, is subject to regular examination of the wiring. While no fire hydrants are in or immediately adjacent to the building, there are hydrants in streets bordering the plot. There are fire extinguishers in Stanley house itself and in every mobile home in the hostel grounds, as well as automatic smoke detectors. These significant improvements are being carried out, and there is a clear recognition of the sorts of dangers which rightly and justifiably concern my hon. Friend.
  Mr. Dalyell: The report says in section 6(9) that Dr. Alison Bleaney gave repeated warnings, for which she is commended. Why were those warnings not heeded?
  Mr. Whitney: Everyone concerned with the administration of the hospital, and everyone in all sections of the public works department, were concerned that many areas were less than perfect. That is in the nature of things. However, as I am sure the hon. Gentleman accepts, the inquiry's findings are clear. The fire was not caused by any deficiency in that respect. We do not live in a perfect world, and by its very nature the situation in the Falklands means that things could always fall short of perfect. That must be the case in the nature of the circumstances of isolated communities.
  Hospital provision can never be quite at the standard that one might expect in fully advanced areas, but the arrangements for the temporary hospital are working well. We have arranged for four nurses to be seconded from Westminster hospital for about six months to assist in running the hospital. Military requirements have been met by the establishment of a medical reception station on board the coastal vessel Pursuivant and a temporary military hospital in a series of linked Portakabins on the Canache. Some surgical facilities mentioned by my hon. Friend—X-rays and so on—are available through the military facilities on the Canache.
  As for the future of the hospital, the draft report of the DHSS hospital architect, who visited the island at the end of April, is under consideration. The Falkland Islands Government will be consulted about the recommendations before a firm decision is reached.
  My hon. Friend raised a number of other points which time does not permit me to answer. I shall write to him about any matters that I have not covered. I reassure him and the House that——
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Mr. David Lambie, for the next debate.

  Karen Craig
  12.31 pm
  Mr. David Lambie: I do not apologise to the Minister for Social Security for interrupting his holiday plans and bringing him to the House to answer this Adjournment debate.
  Since this case started in Easter 1981 I have been in contact with two previous Ministers for Social Security, the present Minister of State, Department of Transport, and the present Parliamentary Under-Secretary of State for Health and Social Security. With rumours of an imminent Government reshuffle, I did not want to lose the present Minister while he is still in the dock. After having been on this case for three and a quarter years, I did not want to waste another six months waiting for the new Session of Parliament.
  The decision of the social security commissioner in the case of my constituent Karen Craig justifies all the arguments that I first put to the present Minister's two predecessors, personally and by letter. Unfortunately, neither was prepared to intervene. Now, over three years later and at enormous cost to public funds, I have been proved correct. Karen Craig has won a three-year battle to confirm her entitlement to supplementary benefit after she left school on 24 April 1981 but returned to take her Scottish certificate of education examinations.
  This case followed a series of contradictory rulings by local tribunals on three constituents of mine who were former pupils at Ravenspark academy in Irvine and who left school on the same day. When their cases were heard at Kilmarnock and Ayr, Karen Craig and Martin Porter were refused social security payments. Karen was allowed to appeal to the social security commissioner. Mr. J. G. Mitchell, giving his decision on 23 October 1981, said:
  "This application"—
  that of Karen Craig—
  "raises a point of law upon which leave of appeal can properly be granted."
  Martin Porter, however, was refused leave to appeal. The commissioner in his case, Mr. Douglas Reith, on 22 April 1982, said that his
  "appeal does not raise any relevant question of law. I have decided to refuse the application."
  In the third case, my constituent Stephen Russell won his hearing before the local tribunal and was awarded social security. I represented each of those constituents at the local tribunal hearings and put their cases for them. Although identical cases, there were different decisions in each.
  The chief supplementary benefits officer, Mr. Allan Palmer, wanted to challenge the award to Stephen Russell, but changed his mind. Stephen received his cheque six months after the local hearing. Indeed, Stephen telephoned me one Saturday morning to thank me, and he told me that he had received what he described as a substantial Girocheque". He said that he had won his case. I replied, "That is strange. I have received no notification to that effect. My last information was that the chief benefits officer intended to appeal to the social security commissioners".
  Stephen received that Girocheque with no security note attached and with no explanation of what it was for. By deduction, we realised that he had won his case. To be fair

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  to the then Minister, he apologised to me personally. I can only hope that he shot a few people in London in the department concerned.
  On 5 April, Mr. A. E. Arthur, on behalf of the chief benefits officer, made a submission to the social security commissioner. He submitted:
  "That the local Tribunal in the case of Karen Craig should have referred the question whether she was entitled to child benefit to the local Insurance Officer. In not doing so, the Tribunal erred in law, thus, their decision should be set aside."
  On that point—when I again represented Karen Craig before the commissioner's hearing in Edinburgh—the commissioner, Mr. J. G. Mitchell, adjourned a decision on Karen's appeal and sent the matter back to the local national insurance tribunal in Kilmarnock to decide whether Karen's mother had been wrongly paid child benefit. After two meetings of the local tribunal in Kilmarnock, a unanimous decision was reached that child benefit had been wrongly paid to Mrs. Craig in respect of her daughter.
  As I pointed out, this all started in Easter 1981. After two years, we were back again before a local tribunal, to be told that Mrs. Craig had been wrongly paid child benefit. We won that case, and luckily, on the basis of that decision, the social security commissioner decided to grant social security to Karen. If that commissioner had not accepted that Karen was entitled to social security, I should have been in the unenviable position of advising Mrs. Craig to appeal on the basis that she had been illegally paid child benefit. In other words, I should have had to have said, "You won the case, but you must pay the money back."
  From this short history, I hope the Minister will agree that the benefit and appeal system concerning the interplay of supplementary benefit and child benefit regulations is a shambles. How could commissioner Douglas Reith have ruled that Martin Porter's case did not raise any relevant question of law and refuse him permission to appeal when another commissioner, Mr. J. G. Mitchell, had ruled that the appeal raised a point of law upon which leave to appeal could properly be granted?
  I know that both appeals were similar, as I wrote and presented them myself. The wording was identical in each case. The benefits officer, Mr. A. E. Arthur, confirmed on 5 April 1982 the opinion of commissioner J. G. Mitchell, when he wrote that the local supplementary benefit tribunal had erred in law in even hearing the case in the first place.
  I remind the House that all this started in the summer of 1981. Throughout the tribunal hearings that I attended a secretary to the tribunal was present to advise members of the tribunal. There were representatives of the benefits officer to put the case against granting social security to my constituent. Yet no one mentioned at any of those tribunal hearings the opinion that was put forward in April 1982 by the representative of the chief benefits officer in London.
  I hope that the Minister will agree, based on that evidence, that commissioner Douglas Reith should be sacked, if he is still in office. I do not know whether he is still there, but he should be sacked before he can do any more damage. An investigation should be carried out into the office of the chief benefits officer in London to explain why it took him from the end of April 1981 to 5 April 1982
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  to decide that these cases should not have been heard in the first place by a supplementary benefits tribunal, but by a national insurance tribunal.
  The cases show an element of collusion between insurance and benefits officers to prevent justice being given to claimants. The problem starts at local level, at the local DHSS office in Oban, and ends in London at the DHSS.
  I ask the Minister for an assurance that social security will be paid to my constituent Martin Porter, who was refused the right to appeal to the social security commissioner by Mr. Douglas Reith. I also ask the Minister, in view of the commissioner's decision in the case of Karen Craig, which the DHSS does not intend to appeal against according to the press, to review all the cases of young people in Scotland who left school at Easter in 1981, 1982, 1983 and this year and claimed social security but whose applications were turned down by local benefit officers. I should like the Minister to start with the cases of my constituents in Oban and to deal with the local DHSS office.
  I am asking the DHSS to re-open the files on thousands of young social security claimants who have been illegally refused social security payments. I am further strengthened in my appeal to the Minister by the recent ruling in the High Court by Mr. Justice Woolf, who upheld a case against a Social Security Minister for refusing to repay money to claimants whose benefit had been wrongly cut.
  Finally, I hope that the Minister, if he is still here after the Cabinet reshuffle, will listen more to Members of Parliament than to the legal advisers at the DHSS in London. When one is dealing with cases in Scotland and the Scottish education system, as the Minister knows from his background in education, there is a totally different system and examination system from that prevailing in England and Wales. It is unfortunate that English people who have been trained in the English education system take decisions that vitally affect those who have been brought up and trained in the Scottish education system. In those respects, someone like myself, with a background in education before coming to the House, should be listened to more by Ministers.
  I hope that the Minister will assure me today that my constituents will receive money from the DHSS and can take a decent holiday in the near future.
  12.44 pm
  The Minister for Social Security (Dr. Rhodes Boyson): I must say at the outset to the hon. Member for Cunninghame, South (Mr. Lambie) that I certainly listen to hon. Members, who write to me regularly. There is no shortage of correspondence coming into my Department. Whenever an hon. Member has a constituency problem that he would like to discuss with me, I am always willing to fix an appointment within two or three days. It is vital to do so because hon. Members know their constituents, and the areas that they represent.
  The hon. Gentleman has raised an important matter, in which he has clearly taken a close personal interest over a considerable period. He has clearly used up much time and effort.
  Mr. Lambie: Without pay.
  Dr. Boyson: The hon. Gentleman says that he has worked without pay. I shall put that on the record from the Government Benches too. There will be a new coalition of those working without pay on this case.
  I can well understand the hon. Gentleman's frustration at the long and cumbersome appeal process with which he and his constituents have had to contend. I applaud his persistence in the face of heavy odds. I pay tribute here and now to a former member of my own profession.
  Before I deal with the complex details of the particular cases that have been raised today, some of which we shall continue to consider, I should like to outline the basic principles governing school leavers' benefit entitlements. I shall first deal with the Government's intentions.
  It is a basic principle of the supplementary benefits scheme that young people up to the age of 19 are treated as dependent on their parents until they have completed their full-time education. These young people cannot claim supplementary benefit in their own right, but child benefit and other appropriate dependency benefits are payable to their parents.
  The point at which full-time education comes to an end is often difficult to identify. Prior to the reform of the supplementary benefits scheme in 1980, it was the custom to pay supplementary benefit as soon as a young person stated that he had finished his studies and was prepared to take employment.
  This proved to be a difficult system to operate fairly, as I am sure the hon. Gentleman will appreciate. Many youngsters do not make firm plans for the future until they know their examination results in the summer. Others claim benefit for holiday pocket money even though they fully intend to return to school after the holidays.
  These arrangements were difficult to administer and we decided that it would be better simply to continue to treat young people as dependent on their parents until the end of the holidays following their final term at school. The Department's current system, therefore, enables young school leavers to begin claiming from three fixed dates corresponding with the end of the Christmas, Easter and summer holidays. I recognise, with the hon. Gentleman, that this can cause some awkward problems. It is generally true to say that young people continuing in education receive less by way of benefit support than those who have left school and are unemployed. The distinction is particularly sharp when one compares the youngster who completes his education at Easter with the youngster who returns to school the following term to sit examinations in May or June who is consequently unable to claim supplementary benefit until September. This is the sort of incentive problem that we are considering carefully in the review of benefit support for children and young people that I am chairing.
  For today we must concentrate on the rules as they are, and their impact on young people like the hon. Member's constituent, Miss Craig. I have no doubt that the hon. Gentleman knows every detail of the case far better than I shall ever do. Perhaps I can put in the paragraph headings and he can fill in the details of the case. Miss Craig stopped attending school at Easter 1981. When she claimed supplementary benefit at the end of the Easter holidays, she explained that she meant to sit some Scottish certificate of education examinations the following term.
  For benefit purposes, the position is that, where a young person is following an examination course, she is not normally considered to have completed her education
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  until she has sat her final examination. There may be a period of interruption when she does not attend for a few weeks, but it is only when the examinations are over that the course is complete.
  I recognise that this may appear rather harsh if a youngster has left school at Easter in the expectation of finding a job, is unsuccessful, and then discovers that if she returned to sit an examination she would be likely to lose her entitlement to supplementary benefit for several months. But I must ask the hon. Member to consider the difficulties of an alternative system.
  If we were to allow examination candidates who stop attending school at Easter to claim supplementary benefit, we should be creating a positive financial incentive for youngsters to stop away from school for the final few weeks before their examinations. At current benefit rates, the difference would be between £6·50 child benefit payable to the parents, and £16·50 supplementary benefit in the youngster's pocket. To create this kind of temptation would, to the Department's mind, be highly irresponsible.
  The hon. Gentleman is an ex-member of the teaching profession.
  Mr. Lambie: The Minister is just repeating the arguments put forward at successive tribunals and at the hearing of the social security commissioner on behalf of the DHSS. All the arguments that he is now using were rejected by the social security commissioner. Therefore, I am not interested in what he, as the representative of the DHSS, thought the law was before the social security commissioner's decision. I want to know what he is doing now. The law is clear, and the social security commissioner's decision came down against the argument put forward so often by the Minister's representatives at local tribunals.
  Dr. Boyson: I shall reply frankly to the hon. Gentleman because he intervened frankly. I understand his concern. The Department is still not convinced that this one decision makes the application of the law different from what was previously understood by the Department. I was saying that if a person stays on at school, his parents receive child benefit, but if he leaves, he receives supplementary benefit. If a child can get supplementary benefit without taking up employment but while he is studying at home, that would ruin our education system. If people could get £10 more at home while doing an Open University course for children, as it were, and did not go to school, that would make a nonsense of the system. With all due respect to the hon. Gentleman, he must agree with me. The case turns on whether the law is what we thought it was. I have not the slightest doubt about the principle and I would be astonished if the hon. Gentleman differed from me. It would be entirely wrong for a Government to legislate to pay people £10 a week more to stay at home rather than to attend school while they were studying. Does not the hon. Gentleman agree?
  Mr. Lambie: It seems that the Minister is now rejecting the decision of the social security commissioner. Surely it is wrong for a Minister representing the DHSS to reject the decision of the court of appeal which, as far as I am concerned, was lawful.
  Dr. Boyson: I shall come to that specific point in a moment. The adjudication system in the Department is separate from the Minister. [Interruption.] The hon.

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  Gentleman must listen to me. He is a fervent believer in his cause, and there should be all credit to him for that. We introduce regulations that we believe will carry out our policy. The interpretation is dependent upon the adjudication officers, but if the adjudication is not what we expect we can go to appeal and take up other cases. If we find that the adjudication is still not what we expect, we can change the regulations. The overall policy is our concern. The adjudication officers are independent. If the law was such that everybody could get £10 a week more by staying at home instead of going to school, the law would be nonsense and would have to be changed immediately by regulation. However, we are not yet convinced that the law is nonsense. I am not reading a brief, but saying straight out what the situation is.
  As I said, if we allow examination candidates who stop attending school at Easter to claim supplementary benefit, we should be creating a positive financial incentive for youngsters to stop away from school for the final few weeks before their examinations. I do not think that any Government of any colour would want that to happen.
  Against that background, I should like to refer to the case of Miss Karen Craig, so ably handled by the hon. Gentleman. Most of the facts have been outlined. I am not querying them. He presented an appeal to the supplementary benefit appeal tribunal, but the tribunal upheld the benefit officer's decision, so Miss Craig appealed, with the help of the hon. Gentleman, to the social security commissioner. If I am in trouble with the law, I shall turn to the hon. Gentleman to represent me, because he has shown great mastery of this matter.
  Mr. Lambie: Answer the question. Never mind the credits.
  Dr. Boyson: A little credit does no harm on either side of the House from time to time.
  Mr. Lambie: It is the money that we want.
  Dr. Boyson: As a northerner, although not a Scotsman, I realise that there is a black, or a red, line at the end of any account.
  I shall not go through all the details of the case because I realise that time is going on. I would not want to stop the hon. Gentleman intervening again if he wished to do so.
  Adjudication officers do not seek leave to appeal to the commissioner in every case where they believe that a tribunal decision may be erroneous in law. They wait for a case that will settle it. The chief adjudication officer is selective in the cases that he puts forward and has regard to factors such as the importance of the point of law involved and the need to establish case law on it, and the relative cost of bringing an appeal in relation to the amount of benefit involved. I am informed that in this case he had regard to the fact that it was almost three years since the original claim to benefit and that the amount of benefit involved was relatively small. He accordingly decided not to seek to challenge the tribunal's decision on this case. I stress that that does not imply acceptance that there was no error in law. Furthermore, it can be held that this was a one-off case that did not set a precedent.
  Mr. Lambie: It was not a one-off case, but the second case. We won the case of Stephen Russell without going to the social security commissioner. How many cases must
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  I take to the Minister before he recognises the justice of the point? He keeps telling me that the appeal system is good and is completely divorced from his Department. Two decisions have been made through the appeal system, when I have gone to the referee, but the Minister now says that he will change the rules and that the referee was wrong. He is waiting to get another referee who might make a better decision. When will he pay the money to the thousands of young Scottish pupils who have been illegally denied social security payments?
  Dr. Boyson: I know that the hon. Gentleman is a keen watcher of amateur football, especially schoolboy football. We are trying to keep the goalposts where they were, but in this case the interpretation of the offside rule has been a complication. It has been a complication in soccer for the past 30 years.
  We shall not have to call upon the hon. Gentleman to help us further on the law because the chief adjudication officer is seeking to establish further case law in this troublesome case. I understand that he is currently seeking leave to appeal to the commissioner on two more recent cases. They concern young people who ceased attending school at Easter 1983 and were awarded supplementary benefit by a tribunal although they planned to return to school to sit examinations. If his application is granted, he will seek an early hearing. We want an early hearing. I agree with the hon. Gentleman that we do not want to drag out the time to three years, such as in this case. That is one reason why we have changed part of the appeal system.
  If the chief adjudication officer's application is granted, he will seek an early hearing. I shall want to await the outcome and see whether the position can be clarified throughout the adjudication system. However, should the position remain unclear, I shall need to consider very seriously whether we should amend the regulations. One thing is certain. If, in the end, children can stay at home instead of being at school and get £10 a week more, no Government of any colour will sanction that.
  We have introduced changes in the appeals system that mean that we shall no longer have the snakes and ladders exercises up and down separate appeal systems, which the hon. Gentleman experienced. Therefore, one will be able to consider employment, social security and other matters as a whole instead of going from one tribunal to the other. Those changes were made in March.
  To sum up, I appreciate that the hon. Member's experience of the appeals system has been a frustrating one and that he has good grounds for dissatisfaction with the conflicting decisions that his constituents have received. I accept much of his criticism and I share his concern that the position should be clarified, but I must end where I began in stating firmly the policy that is central to these cases. If youngsters leave school at Easter but do not find work or take up a training place, it is likely to be far more useful for them to return to school and to concentrate on getting worthwhile examination results than to stop at home. The supplementary benefit system would be rightly criticised throughout the country and the House if it encouraged examination candidates to put their longer-term prospects at risk for the sake of short-term gain.
  As I have said, I am grateful to the hon. Gentleman for bringing this case so clearly to our attention today. It will not go away and it is clear that we shall have to look into it. We hope to go to appeal to get the law clarified so that

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  we know exactly where we are. At the same time, we shall consider all the other cases that the hon. Gentleman has raised.

  East Antrim (Redevelopment)
  1 pm
  Mr. Roy Beggs: I welcome this opportunity to draw attention to the concern expressed by residents in stable, settled communities in my constituency about the Northern Ireland Housing Executive's proposals for redevelopment in East Antrim. Following publication of the proposals and the phoney consultation exercise, improvement work has ceased in the areas blighted by the proposals. Despite widespread opposition from residents, with the full backing of Carrickfergus and Larne borough councils, the Housing Executive seems determined to bulldoze its proposals through. The situation is a recipe for conflict. Farcical consultation which ignores democratically expressed wishes and the views of elected representatives at both district council and Assembly level will ultimately bring law-abiding citizens on to the streets to defend their rights against the 1984-style Big-Brother-knows-best tactics of the non-democratically constituted Housing Executive.
  Consultation with local councils and residents is utterly unreal. The planners and designers employed by the Housing Executive no longer have the major new-build projects of recent years to work on, so to remain fully employed they are now directing all their energies to producing redevelopment proposals for areas with older housing. The proposals are presented to councils and residents for so-called consultation, but the new grand scheme is defended at every stage by Housing Executive officers, who disregard local opinion and even alternative proposals. Because the Housing Executive controls the award of improvement and repair grants, all progress is halted until the executive achieves its objective of ultimate demolition.
  I give notice today that if the Housing Executive's proposals for my area are not withdrawn they will be fought through the Housing Council and the board of the Housing Executive. I shall not predict today what action councillors, Stormont Assembly Members or Northern Ireland Members of Parliament may be forced to take to show their support for the residents and the rights of owner-occupiers to keep their property and to obtain the same modernisation grants as are available to others in the self-same street.
  Owner-occupiers represent about 90 per cent. of the people affected. The elderly are fearful and young newlyweds who have purchased older properties as a first home have had their hopes dashed. Some have been trapped into paying both a mortgage and rent to the Housing Executive. Those who wish to sell cannot find buyers. As the value of their property declines due to the uncertainty, they lose sight of their earlier hopes of moving to better quality housing in the private sector. The elderly, who fear that they will have to move, spend sleepless nights when they should be able to spend their well-earned retirement in peace.
  I firmly and sincerely believe that if the improvement and repair grants had not been stopped in those areas the Housing Executive would have had no justification for its demolition and redevelopment proposals. It has even been forced to withdraw a substantial number of these houses to achieve a sufficient level of unfitness to support its proposals at a public inquiry.

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  I contend that there is no need for the Housing Executive's redevelopment schemes in my area, which have forced community groups to establish housing action areas in Ellis street, Carnhill walk and Agnes street in Carrickfergus and in the many scheduled redevelopment areas in Larne. In view of the time, I shall not list them all as the Minister is aware of them. At present, the majority of those houses are unfit because of the withdrawal of grants and the lack of action by a small number of landlords who own a small proportion of the affected properties, some of which were deliberately purchased with a view to later development for commercial use. In the Larne harbour area, for example, the harbour board purchased a number of houses as a matter of forward planning, making them available to caretaker tenants. I have asked the board to reconsider whether it wishes to be involved in housing, given the extensive land that it holds for future development, and it has now agreed to consider the future of its houses and the possibility of making them available for sale.
  I appreciate the interest shown by the Minister today. Unlike the hon. Member for Cunninghame, South (Mr. Lambie), I am confident that this Minister will be around for some time despite any reshuffles that may occur. It is thus with some confidence that I put this case to him on behalf of my constituents. I hope that he will recognise the basic desire of people in my area to own their homes and to live within their means. Every home, however humble, deserves basic amenities. The people of Northern Ireland were enraged when a former Prime Minister referred to them as spongers. My constituents are not spongers, nor are other people in Northern Ireland. They are entitled to grants which are already made available to their neighbours for the same types of houses so that they, through modernisation, can have their homes removed from the unfitness category listing. The staff of the executive have a cheek to label many of these well-maintained, clean, comfortable homes unfit, while at the same time they withhold the grants necessary to make them fit. The executive is trying to promote rundown properties to prove that its own assessment is correct.
  It is a well-known fact that the demand for public housing in Northern Ireland is diminishing. The statistics for vacant public housing alone should direct the Northern Ireland Housing Executive to put its own houses in order. It should speed up maintenance on its own property, concentrate on provision for the single and elderly and replace aluminium bungalows with permanent brick buildings on the same site—instead of causing endless inconvenience to tenants as one improvement scheme to modernise aluminium bungalows follows another.
  I want to see evidence in East Antrim of a caring Government who support owner-occupation. The planners of public housing have not always got it right in the past. Planners and builders cannot construct stable communities. The price of further upheaval is too great in human terms in a Province which has already suffered so much.
  From 1981 to 1983, of the 174 additional new dwellings in Larne, 16 were provided by the public sector and 158 were private houses. That is clear evidence of the desire to move from public to private sector housing. The executive even admits that progress to reduce unfitness in Larne has been significant. Unfitness could be overcome
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  cost effectively and would leave communities unscarred if only the executive would reintroduce improvement grants soon.
  An architect's report on houses in the harbour area deals with some of the oldest houses in the area, including a group of four which are nearly 100 years old. It said:
  "Four houses were visited—two improved, two in their original condition."
  According to the Northern Ireland Housing Executive's standards, that means that there is 50 per cent. unfitness. It continued:
  "Here, as in other areas, walls and roofs were found to be structurally sound and there is no reason why these unimproved properties could not be brought up to the standard of those modernised."
  It makes sense, for the sake of community stability, to modernise houses. It is cost-effective because approximately three homes can be modernised for the cost of one new building in the public sector. Modernised homes have a long life expectancy, the disruption of communities is avoided, and it is possible to maintain more houses at less public expense.
  I urge the Minister to persuade the Northern Ireland Housing Executive to co-operate with public representatives by recognising the well-founded opposition to its proposals. I urge him to encourage the executive to withdraw its present redevelopment proposals for East Antrim and to persuade it immediately to release improvement grants so that rapid progress can be made in modernising homes on its existing sites. I ask him to introduce legislation to require the executive in future to obtain the support of the majority of residents and the elected representatives before proceeding to force through its policies and redevelopment proposals. I also urge the Minister to reconsider the possibility of the immediate demolition of the derelict fiats in Derryhill, Rathcoole, and to take steps to prevent Drumcor Green from reaching the same state of dereliction.
  I deplore, as do all right-thinking people, the wanton vandalism by mindless delinquents, who have systematically destroyed property which would cost more than £500,000 to reinstate. It is small comfort that the inherent design faults now justify the demolition of the Derryhill complex. However, the Minister will agree that the vast amount of public housing in Rathcoole is well maintained throughout the estate. Nevertheless, the need to remove that eyesore and its graffiti is urgent. It does not reflect the efforts of good tenants who live nearby and keep their homes and gardens respectable.
  The need to replace existing shops is also urgent. We must congratulate the present shopkeepers who strive to serve the community, many of whom are elderly and require convenient shopping facilities. Because, of vandalism, which caused severe flooding and ultimately severe losses, there is a real danger that those shopkeepers will move away. In order immediately to restore confidence, priority should be given to the demolition and rebuilding of the shopping complex, with appropriate parking provision.
  Residents in the Derryhill area are opposed to the executive's delaying action. The property has been derelict for three years. The eyesore of Derryhill is an embarrassment to all who live in Rathcoole. The proposals for the area should be given higher priority than the proposals for action for the autumn of 1985. It should be possible to find the £25,000 needed for demolition and to bring forward the alternative shopping development

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  proposals. I trust that the Minister will help the executive to find both the will and the way to do something about that this autumn.
  In my constituency we have tried at all levels to use the proper channels to change the executive's proposals, but so far in vain. Considering the authority of the House and of Parliament, I hope that this will be the final effort and that it will be rewarded. I further appeal to the Minister to assist our citizens to achieve justice under bureaucracy.
  East Antrim is a good area for investment. I hope the Minister will assure the House that the executive does not discriminate in its investment policy against my law-abiding constituents, who feel hard done by when they see the level of investment in areas influenced by terrorists and paramilitary groups. At times they appear to be given priority. I am firmly assured by a building society that if the decisions are reversed and grants are again made available, it will provide money for private investment in the areas affected.
  1.19 pm
  The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Chris Patten): The hon. Member for Antrim, East (Mr. Beggs) has taken a keen interest in housing developments in Lame and in East Antrim generally, in the House, in the Northern Ireland Assembly and in all his constituency work. He has a deep and genuine concern to produce the best possible housing for his constituents. I hope that I shall always be able to represent my constituents as vigorously and as eloquently as does the hon. Gentleman.
  I assure the hon. Gentleman and the House that I share his anxiety for housing, not just in East Antrim, but in Northern Ireland as a whole. To that end, and trying to improve housing conditions as rapidly and substantially as we can, we have made housing the first priority among our social and environmental programmes. We plan to spend about £526 million in gross terms on housing in the current year. I am grateful for what the hon. Gentleman said in expressing the hope that I will continue to play a part in the housing programme. As he will appreciate, that is not entirely a matter for me, nor is it even entirely a matter for the Almighty.
  The priority that we have accorded to housing, and the consequent size of the programme both under way and under consideration, inevitably means a change very much for the better for many individuals and areas. It can also mean short-term disruption and inconvenience. I accept, too, that it can generate anxiety. Our job is to minimise that anxiety, explain what we are about and, as far as possible, to accommodate local wishes. I shall return to that point in a moment.
  Before I concentrate on redevelopment, which is the aspect of our housing programme that is highlighted in the House today, I should say that in Northern Ireland we have a comprehensive housing policy involving the public and the private sectors. The hon. Gentleman talked about the importance of the Government demonstrating their commitment to owner-occupation. The record figures for new starts in the private sector are an eloquent testament to that commitment. We have rightly placed rather more emphasis since last autumn, certainly in the public sector, on improvement, rehabilitation and the maintenance of existing stock rather than on new build. I am interested to
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  note that that adjustment in strategy has not drawn any substantial or well-informed criticism. Indeed, the contrary is true.
  We have embarked, not on the wholesale destruction of large tracts of existing housing, but on a balanced programme designed to make the most sensible and effective use of the human and financial resources available. As I understand it, the hon. Gentleman supports our housing priority in general, and he would also support the shift in strategy during the past year—a shift which owed much to the representations made to the Government and the Northern Ireland Housing Executive by the hon. Gentleman and by his right hon. and hon. Friends.
  I accept that redevelopment often causes difficulty for individuals and that opinions can be divided about the merits of some schemes. I also accept that, precisely because of that, it is vital that communications and consultation with local people are as good as possible. The Housing Executive makes every effort to ensure that its consultations are thorough, and the elected representatives in Northern Ireland do an excellent job of providing a channel of communication for their constituents. But however much we try, consultations will never enable us to satisfy all the people all the time. Indeed, consultation will not always produce unanimity of opinion within an area. In my experience, some people believe erroneously that there has been proper consultation only if it finishes with everyone else agreeing with them. There have been cases, not just in housing—although I can think of some recent examples — but in education, health and other areas, where individuals or groups of people who opposed a development at the consultation stage came to support it after the event.
  Our objective should be to be honest and realistic in our consultation, not to create expectations which cannot be fulfilled and, where wishes cannot be met, to ensure that the reasons are explained to the best of our ability.
  Mr. Beggs: I accept entirely the sentiments that the Minister has just expressed, but I must re-emphasise the fact that the Housing Executive meets those whom it intends to consult only to project its plans. The plans have already been drawn up. Consultation should start long before then, in seeking the views at local level as to what may be the way forward.
  Mr. Patten: The executive's efforts to discover from the people of Larne whether they want a housing action area, and how they believe such an area should be worked through, demonstrate its anxiety to have adequate consultation.
  The hon. Member for Antrim, East referred specially to Tullygarley in Larne, and I am aware of his longstanding and continuing interest in this topic. He has properly made representations to me about it on several occasions. As he knows, it is for the Housing Executive to consider in the first instance whether to propose redevelopment or to declare a housing action area. It is then for the Department of the Environment to consent if it believes that such a proposal is justified. Those arrangements are right and generally work well. The hon. Gentleman will understand that I do not wish to short-circuit or reverse those procedures. Indeed, it would be wrong for me to do so. I should be usurping the role of the Housing Executive, which neither I nor may predecessors have believed it right to do.

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  This matter is central to the present position. The Housing Executive has not declared a new redevelopment area in Larne and, as I understand it, has not come to a firm conclusion on whether there should be redevelopment in the Tullygarley area. Housing Executive officials have taken a comprehensive look at Larne housing. As part of the exercise, they identified about 190 houses from a total stock of more than 6,300 houses as possible candidates for redevelopment. About 115 of that figure of 190 are in the Tullygarley area. As a result of reports from public health inspectors, the Housing Executive's interest has been narrowed further to as small a group as 65 houses which are between 80 and 100 years old. The idea that those houses are in such a condition because of the non-availability of improvement grants stretches the facts some distance beyond breaking point.
  Consultation is continuing in Larne, and officers of the Housing Executive have said that they are willing to have further discussion and have provided the Tullygarley residents association with information about the public health inspector's findings. I should point out that, under section 47 of the Housing (Northern Ireland) Order 1981, the Housing Executive has a duty to declare an area to be a proposed redevelopment area if it is satisfied, first, that at least half of the land is used for housing purposes; secondly, that at least one third of the houses are unfit for human habitation, or dangerous or injurious to the health of the inhabitants of the area; and, thirdly, that it is expedient that the entire area should be redeveloped.
  It is that broad question which the executive is currently addressing. Final conclusions have not yet been reached, and formal proposals have not been put to my Department. I must emphasise that. I should not therefore wish to intervene at this stage, as my Department will have to consider whatever proposals are eventually put forward on their merits and in an open and fair-minded way. If we develop as proposed and vesting proceedings are initiated as a result, there will naturally be an opportunity for objections. If objections are received, a local inquiry will be held at which objectors can air their views to an inspector, who in turn will make recommendations to the Department. Whatever is decided, there will be long and full discussions.
  I hope that the hon. Gentleman will understand why it would be wrong for me to prejudge proposals which have not yet been made. It would be absurd as well as damaging for me to do so. I hope, too, that the hon. Gentleman will find these remarks helpful. I shall bring what he said to the attention of the chairman of the Housing Executive.
  The hon. Gentleman made one final point about the Derryhill site at Rathcoole. I have agreed to the demolition of the three-storey block of flats, maisonettes and shops at a cost of £25,000. Demolition and site clearance will commence in the autumn of next year, by which time we hope to have relocated the three shops at present carrying on business in the block. I understand that the executive proposes to provide on the cleared site new terrace housing and shops with car parking provision at a cost of about £310,000. I know how much the hon. Gentleman has pressed that solution, and I am grateful for his interest in it.
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Mr. Fred Silvester.

  Mr. Himat Singh and Miss Suwinder Kaur
  1.31 pm
  Mr. Fred Silvester: I wish to bring to the attention of the House the case of Mr. Himat Singh and Miss Suwinder Kaur. The opportunity provided at the end of the Session to raise individual cases is one which is much prized in the House, and it is appropriate that I should bring to the attention of Parliament a case which has been going on now for some years in my constituency and about which I have growing concern.
  In 1946 Mr. Kalyan Singh came to the United Kingdom. He settled in Manchester, where he became a grocer. He is now in his seventies. In the 40 years that he has been here Mr. Singh has sought to be a good citizen, but he has maintained the customs of his religion and his culture. He has eight children. Three of his daughters and all four of his sons are married. All have had their marriages arranged for them, according to the custom, without the parties meeting. In each case both husband and wife were from within the United Kingdom.
  Mr. Singh's youngest daughter is Miss Suwinder Kaur. She was born in Manchester on 15 October 1964. When this saga began she was 15 years of age. She is now an attractive and articulate 19-year-old. It is expected that Miss Kaur and her husband will live with her parents and be part of that household. Mr. Singh regards it as his duty and his care to ensure that his youngest daughter is appropriately married, and he is now getting very old.
  In 1979 the husband of another of Mr. Singh's daughters went to India to discuss the possibility that his cousin, Mr. Himat Singh, might be betrothed to Miss Kaur. Mr. Singh was then nearly 18. It was agreed that the marriage should take place and that the couple should live with Mr. Kalyan Singh in Manchester. The boy was shown a photograph. It was agreed that the marriage should not take place until the girl left school in 1981. The parents corresponded but, according to custom, it would have been frowned upon for the couple to write to each other direct.
  In July 1981 Mr. Himat Singh, following the agreement, undertook the three-day journey to New Delhi to make his application to marry Miss Kaur.
  I was first approached in this case on 24 April 1982, three years after the marriage agreement. The question then was a simple one: was it possible to secure the interview in Calcutta to avoid the three-day journey to New Delhi?
  In March 1982 Miss Kaur's mother travelled to India to satisfy herself about the satisfactory nature of the match.
  The interview of Mr. Himat Singh was eventually granted in Calcutta on 11 January 1983, 18 months after the original application. The entry clearance officer rejected his application on the twin grounds that the couple had not met and that the marriage was for the primary purpose of obtaining admission. An appeal was lodged.
  In July 1983 Mr. Himat Singh came to the United Kingdom and met his bride. The forthcoming marriage was acknowledged in the temple in Manchester. However, Mr. Singh was refused permission to remain until the hearing of the appeal in October. The Minister claimed that Mr. Singh would be jumping the queue if he stayed here, which is a curious description of someone who had

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  already been standing in line for more than two years. Without the slightest attempt at avoidance, Mr. Singh left the country on 25 September 1983, a mere 10 days before the appeal was due to be heard.
  An appeal is allowed to consider only the facts obtaining at the date of refusal. It could only consider the facts, which were already nine months old. The adjudicator could take no account of the fact that the couple had met, so Miss Kaur's solicitor was forced to withdraw the appeal and start all over again.
  On 28 October 1983 Mr. Himat Singh submitted his second application. It was now four years since the marriage agreement and 27 months since his journey to New Delhi. Back in England, Miss Kaur had celebrated her 18th birthday and come of age. Within a week the entry clearance officer had referred the second application to the Home Office, but it took him another two months to turn down the application. There was no further interview, and the matter was treated as a repeat of the previous occasion.
  I am not in the habit of discussing this type of case with my hon. and learned Friend the Minister of State, but in February of this year I raised the matter with him in his office and got nowhere. If I recall it correctly, his conclusion was that the words used by Mr. Himat Singh in his interview were as clear a case as he could find of immigration being the primary purpose for the marriage. He based his conclusion on words translated from the Hindi in answer to the question put to Mr. Singh about what he would do if he was unable to go to the United Kingdom for marriage. The entry clearance officer says that Mr. Singh replied, "What is the point of getting married then?" Mr. Singh says that he replied "It is up to you. It is in your hands." Similar discrepancies exist in other questions and answers and, without a complete transcript, it is not possible to assert which is right. But the selectivity in this form of report is manifest.
  If we consider the questions that Mr. Himat Singh remembers were asked but which the ECO felt it unnecessary to quote, one question, for example, was that if he got married and the girl left him, what would he do? What sort of question is that to be asked?
  The truth is that Parliament has laid on the ECO and the Minister a huge task, and I sympathise with them, but we have to see each case, not as an exercise in the precise analysis of words which are uttered in a very difficult context and in a second language, but in the context of what the policy was meant to achieve. Everything turns upon whether the primary purpose of the marriage was to obtain admission to the United Kingdom.
  The original refusal in January 1983 was under the old rules. The new application is caught by the more stringent new rules. What is the purpose of the rules? In the eyes of most of us, it is to prevent the honourable institution of the arranged marriage, which can be and is readily established in this country, being used as a mechanism for evading the otherwise strict control on the primary immigration of young males. That is a wise provision, but its effectiveness depends on the quality of its administration. It cannot hold if we fail to distinguish between the cynical and the genuine pursuit of marriage.
  I draw the attention of my hon. and learned Friend to two recent cases in my constituency.
  Mr. N came to the United Kingdom for private medical treatment. Six months later he was refused permission to stay. Within seven days of that refusal he applied to marry.
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  He returned to his country, having been refused permission to marry, and three years later he returned here with full clearance to marry. He married and was given an indefinite stay permit. Within nine months that marriage had broken down and Mr. N had left his wife. My hon. and learned Friend the Minister wrote to me:
  "Deportation would have been justified only if there was evidence that the marriage was contracted solely to obtain settlement."
  He added that the fact that Mr. N had
  "left the country following refusal of his application to remain for marriage … and had properly applied was sufficient to justify the conclusion that the marriage was not one of convenience."
  There was strong evidence in that case that a marriage of convenience had taken place but it cannot be said that there is evidence that a marriage of convenience is to take place between Mr. Singh and Miss Kaur.
  Another example is the marriage of Mr. A, who won permission on appeal to come to the United Kingdom as a student. He was not a serious student and was refused an extension. He withdrew his appeal against that decision and instead applied to stay for marriage. The couple went off to Gretna green and married, but the Home Office decided that it was a marriage primarily to obtain settlement and his application was refused. However, the couple lived together and so the Home Office changed its mind. My hon. and learned Friend wrote a revealing letter to me, in which he said that
  "we are bound to consider the state of marriage of a British born citizen … The reasons for the marriage did point to a marriage of convenience but, surprisingly, it does appear that there is a genuine relationship between Mr. and Mrs. A."
  That illustrates vividly the difficulty of making such a distinction. My hon. and learned Friend assumes that a marriage that is arranged cannot lead to a stable relationship, but that is not true in the Indian community.
  I am not offering an opinion on whether the decisions made in the cases of Messrs N and A were right or wrong, but in two recent cases in the past year in my constituency my hon. and learned Friend permitted stays for marriage when there was a strong prima facie case that the marriages were primarily for the purpose of admission. It would not be surprising if law-abiding citizens who go painstakingly through the system become cynical and wonder whether it would not be better to chance their arm by taking one of the less above-board routes.
  What does my hon. and learned Friend want? We know that the desire of Mr. Singh and Miss Kaur to marry is genuine. It has been so from the beginning and it is even more so now that the two young people have met. We know that it is no fly-by-night affair. The matter has been carefully and slowly conducted by British citizens of long standing who have no intention of seeking to evade immigration controls. We can never be sure of the future, but by all rational tests my hon. and learned Friend has cross-checked in this instance more thoroughly than in other cases where he has given his approval. We know that there is no threat of queue jumping. This couple have already waited for three years.
  I imagine that my hon. and learned Friend will back off from a reconsideration of this case, because he can always hide behind the appeal. If he takes that route, which I shall be sorry to hear, but which I am half expecting, he cannot escape responsibility for the disgraceful way in which the appeal has been handled. The delay continues. Mr. Himat Singh made his application in July 1981. We are still waiting, three years later, for the appeal to be heard. I have

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  a letter from my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs, who is responsible for the entry clearance officer. He stated in his most recent letter about the appeal that the explanatory statement from the ECO had been delayed. He explained that it was to be sent and he added:
  "However, having completed his statement a number of discrepancies were noted and the ECO decided to refer the matter to the Home Office for further inquiries. The ECO is currently still awaiting their instructions."
  That letter was dated 5 July.
  This is impossible. There is yet more delay and this is a careless and inconsiderate way of proceeding. Do the officials not realise that they are dealing with people's lives? Would they take the same cavalier attitude if their own daughter's marriage was involved? At the very least, the Minister owes it to these young people to secure an early hearing of the appeal. I know that that is not the direct responsibility of my hon. and learned Friend, but he has some responsibility to make up for the previous lackadaisical behaviour of his Department and that of the Foreign Office. He should use his most powerful endeavours to secure an early hearing of the appeal.
  These young people have done everything by the book. The marriage was planned by their parents, but it is now their own and they want it of their own will. Their marriage creates no precedent. It cannot be said that hordes are waiting behind them ready to charge. I have watched the family squirm on this nail for three years and there is now further delay. For God's sake let us keep a sense of proportion and a sense of humanity. Let us allow Mr. Himat Singh into the United Kingdom to marry his fiancee.
  1.47 pm
  The Minister of State, Home Office (Mr. David Waddington): I am grateful to my hon. Friend the Member for Manchester, Withington (Mr. Silvester) for raising this matter. He has seen me about it and I know the depth of his concern. I welcome the opportunity that the debate gives me to explain why the Home Office made the decision that it did and where matters now stand. The debate gives me the opportunity also to express my regret that the letter that my hon. Friend sent me some time ago about the appeal was not answered. That was due partly to a mistake that was made in the referencing of the papers, and partly to the intervention of another hon. Member.
  My hon. Friend has argued his case as strongly and as cogently as anyone could. As he said, Miss Kaur wants her fiance, Mr. Singh, to join her in this country. No one present for the debate could fail to have considerable sympathy for Miss Kaur and no one could doubt her sincerity. One of the difficulties that I have in cases of this sort is explaining that it is the motives of the man and not of the woman with which we are primarily concerned when considering whether the primary purpose test has been met.
  Mr. Singh's first application for entry clearance to come to the United Kingdom to marry Miss Kaur and to settle here in right of that marriage was made in Calcutta in September 1981. My hon. Friend will forgive me if I correct him on one matter. It is not correct that Mr. Singh is still waiting for the hearing of his appeal in respect of the 1981 application. He is awaiting the hearing of an
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  appeal in respect of the second application, which was made by him towards the end of 1983. It is the right of an individual to make repeated applications, but it cannot be the right of anyone to complain that he has been kept waiting for the hearing of an appeal for X number of years when he is talking about the date of his original application and not his second, third or fourth application as a result of all his previous applications being turned down.
  In any event, Mr. Singh was interviewed in January 1983 in respect of his first application. His application was refused because the entry clearance officer could not be satisfied that the marriage was not being entered into primarily to obtain admission to the United Kingdom, and because Mr. Singh and Miss Kaur had not met. The officer's decision on primary purpose was based on what the applicant said during the interview. Mr. Singh made it clear that he had not met his fiancee. When then asked what he would do if he were unable to enter the United Kingdom for marriage, he replied:
  "What is the point of getting married then?"
  He was asked about the possibility of marrying his fiancee and taking her to live with him in India. To that he was frank enough to reply:
  "No, I would not marry her."
  The implication was that there was no point in marrying her if she wanted to live in India and not in England where he had decided that he wanted to live.
  Obviously, those were damning statements. If they were made, it is difficult to understand how anyone in his right mind could conclude that the young man's primary purpose was not to obtain entry to this country. In fairness to the applicant, and simply because the statements were so destructive of Mr. Singh's case, the entry clearance officer put the questions again, and he received those same damning replies.
  Mr. Singh was asked what he would do if his fiancée said that she wished to live in India after their marriage. Again, there was a most surprising reply if this man's principal motive had not been to get into this country at almost any cost. Mr. Singh replied that he wished to live in England and said, "Anyway, she is only a girl." In other words, he was the one who would make decisions, and his decision was that he would live in England. He said also, "I would tell her that she had to stay in England. I want to live in England."
  I do not believe that there could be any doubt about what he said. The interview was conducted in Hindi through an interpreter. I have no reason to believe that the entry clearance officer made a mistake. I do not believe that anyone would seriously suggest that the entry clearance officer would have been so wicked as to invent all those replies, which he has recorded. I have been to the Indian subcontinent to see our entry clearance officers at work, and I believe that they carry out a difficult job with skill, care and fairness. I repeat: anyone, having heard those replies by Mr. Singh, would have reached no conclusion other than that the primary purpose in Mr. Singh's mind of contracting that marriage was to obtain entry into Britain.
  Wherever there is a law or a rule there will, inevitably, be borderline cases about which it is difficult to judge whether they fall on one side of the line or another. The primary purpose rule has attracted much comment. In particular, the difficulty of applying it has been emphasised. I concede that some cases may be difficult, but this case cannot by the remotest stretch of imagination

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  be called a borderline case. When he came to this country Mr. Singh's own words permitted no other conclusion than that—I use the words in the 1980 and 1983 rules—the primary purpose of the intended marriage was to obtain admission to the United Kingdom.
  Mr. Singh had a right of appeal to an independent adjudicator. He lodged an appeal, but later withdrew it. I do not understand the suggestion by my hon. Friend that Mr. Singh had to withdraw the appeal. He could have had the evidence reviewed by the adjudicator, but he decided not to use that right. Instead, he travelled to Britain without any entry clearance and sought entry as a visitor. Not surprisingly, he was refused entry as a visitor, because the immigration officer was not satisfied that Mr. Singh was genuinely seeking entry for just two months and that he would leave the country at the end of that period. Mr. Singh was, therefore, refused leave to enter, and after a period of temporary admission was sent back to India.
  Mr. Singh's second application was made in November 1983, when he made a fresh application in Calcutta. By this stage he had met Miss Kaur, because he had been able to meet her when he was in this country on temporary admission. In view of the categorical statements made by Mr. Singh when he was interviewed in connection with his previous application, there was clearly nothing to be gained by a further interview, and the new application was also refused because the entry clearance officer had no reason to believe that the primary purpose had changed. An appeal has been lodged against the entry certificate officer's decision, and that is where the case now stands.
  I shall say a little about the appeal arrangements before I conclude, but first I want to say something about the principles on which the primary purpose rule, under which Mr. Singh's application has failed, is based, since I know that it concerns my hon. Friend. As I have said, the entry clearance officer and the other officials who have considered this case were not passing judgment on Miss Kaur. They were concerned with Mr. Singh's motives, not hers. It is worth reminding ourselves of a bit of the history of husband applications under the rules, to see why the primary purpose rule is necessary.
  Successive Governments have recognised that the pressure to obtain admission to this country is such that marriage can be abused as a device to get here. Indeed, the first safeguards to prevent abuse of the marriage provisions were introduced by the Labour Government in 1977. The then Minister who held my responsibilities, Dr. Shirley Summerskill, said that evidence left no doubt that there was substantial abuse. In other words, the right on the part of a woman settled here to bring in her husband was being substantially abused. As a result, the Labour Government changed what was then the rule so as to provide for refusal of entry clearance if the entry clearance officer had reason to believe that the marriage was one of convenience entered into primarily to obtain admission into the United Kingdom with no intention that the marriage should subsist thereafter.
  In 1979 the Conservative Government decided to strengthen what by then had come to be known as the safeguards. In the debate on immigration on 4 December 1979, my predecessor, my right hon. Friend the Member for Aylesbury (Mr. Raison), said:
  "we are not talking about the marriage of convenience that takes place purely to secure entry and then collapses. That is dealt with
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  under the present rules, if somewhat imperfectly. We are talking about marriages that may last but are merely for the purpose of immigration."
  Later in the same debate, referring to the new primary purpose test, he said:
  "Our proposals will help to seal off an avenue of primary immigration".—[Official Report, 4 December 1979; Vol. 975, c. 368–72.]
  In 1979 we knew what we wanted to do, and we did precisely what we said we would do—take steps to seal off a new avenue to primary immigration which was being exploited. We were not attacking the traditional Asian custom of arranged marriages. We were out to stop that system being abused—to prevent marriages being used by people to get into this country. I want to make it clear that what is being applied is not a policy decided by me, but a set of rules approved by Parliament.
  I know that my hon. Friend shares the Government's concern to prevent the abuse of marriage for immigration purposes. Indeed, he made that clear when he discussed this case in February. On that occasion, and again today, he contrasted this case with another one where a marriage had broken down after the person concerned had been admitted and granted settlement. However, the cases were not alike. In any event, it is not profitable to compare one case with another without going into all the facts, and there is no time to do that today. In the case of Mr. Singh, it is clear, for the reasons I have explained, that emigration to this country was his intention. That is the abuse of marriage for immigration purposes to which I have referred.
  That is not, however, the end of the matter. As I have already said, Mr. Singh has appealed. It is sometimes forgotten how generous our rights of appeal are. Decisions in cases like this do not depend solely and simply on my views and that of my officials. As I have said, the case appears clear to me. Mr. Singh can now take it before an independent adjudicator. This is what he is doing. This is his right. The adjudicator will review the case and make his decision in the light of all the evidence. Even that will not be the end of the matter. I have already told my hon. Friend that I shall look at the case again in the light of the adjudicator's determination and any recommendations that he may make.
  My hon. Friend will be aware that many years ago Parliament set up the appellate authorities to provide for a statutory review of decisions taken under the immigration rules about which there is a dispute. The adjudicators and members of the immigration appeal tribunal are judicial officers, who act independently of the Home Office.
  The position regarding the latest appeal which Mr. Singh has lodged is that under the procedure rules governing immigration appeals the entry clearance officer, who is the repondent to the appeal, will, as soon as possible, prepare a written statement of the facts relating to his decision and the reasons for it, and submit it to the appellate authorities.
  The appeal was lodged on 27 January, six months ago. That is a long wait, and I regret it. I am afraid that a delay occurred after the entry clearance officer reported to the immigration and nationality department that Mr. Singh had lodged his appeal against the refusal of his new application. Due to an unfortunate slip in the referencing of the papers, the preparation of the appeal statement was

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  held up for a time. I apologise to my hon. Friend for this in view of the interest he has taken in the case, and through him I extend my apologies to Mr. Singh and Miss Kaur.
  The preparation of the explanatory statement is now well in hand. As soon as it is ready—which should be very soon—the appellate authorities will get in touch with Mr. Singh's representatives with a view to fixing an early date for the hearing. I shall ensure that the appellate authorities know of the unfortunate delay that has occurred. I shall do everything within my power to ensure that the hearing takes place as soon as possible.

  Train Derailment (Birtley)
  Mr. John Mc William: On a point of order, Mr. Deputy Speaker. I apologise to my hon. Friend the Member for Leeds, Central (Mr. Fatchett) for interrupting his time, but may I ask your advice on how I can, at this late stage in our proceedings, given that we are to adjourn shortly for the summer recess, ask the Secretary of State for Transport to institute an inquiry into the train derailment which happened in Birtley in my constituency?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): There is no such provision. This is Adjournment time and the hon. Member for Leeds, Central (Mr. Fatchett) who has been fortunate in the ballot is entitled to have his full time. If he will give his authority for a couple of minutes, I shall allow it, but I want his permission.
  Mr. Derek Fatchett: I am happy at this late stage of the Session to show comradeship to one who wishes to raise such an important issue.
  Mr. Deputy Speaker: I shall allow the Minister to reply and I hope that he will be as brief as possible.
  2.1 pm
  The Secretary of State for Transport (Mr. Nicholas Ridley): Further to that point of order, Mr. Deputy Speaker. At 8.56 this morning the 7.45 Leeds-to-Edinburgh high speed train became derailed near Tyne yard signal box south of Newcastle. Initial reports are that, of the 200 passengers on the train, 26 have been injured. It is believed, however, that none of the injuries are serious. I should like to express my sympathy to everyone.
  The high-speed train, which is formed of eight passenger coaches with a power car at each end, was travelling over the 40 mph slow line when the derailment occurred. Six of the passenger coaches and one power car are derailed; one of the coaches is on its side and another is down an embankment. It is too early to be able to give any indication of the cause of the derailment.
  I understand that there was considerable damage to signalling equipment and that there will be delays to trains on the east coast main line. I shall ask the railway inspectorate to institute an inquiry into this accident.
  Mr. Deputy Speaker: Mr. Derek Fatchett.
  Mr. Fatchett: I am happy to allow time on that issue. Without taking over the Chair's responsibility, I do not know whether my hon. Friend the Member for Kingston-upon-Hull, East (Mr. Prescott) wants to comment, but I shall happily give way.
  Mr. John Prescott (Kingston-upon-Hull, East): Further to the point of order. The House will be extremely grateful to my hon. Friend for having been so generous under the circumstances. I do not want to delay the House and I am sure that we are all pleased that we are not hearing an announcement similar to the one we heard about the previous rail incident where there were deaths and injuries. We wish the Secretary of State well with his inquiry into this incident.
  I have written to the Secretary of State today—not knowing about this announcement—expressing my grave anxiety about the number and causes of derailments. I hope that he will consider seriously the report of the railway inspector who studies these matters, and the amount of money being spent on track maintenance.

  Geriatric Provision (South Leeds)
  2.3 pm
  Mr. Derek Fatchett: I was happy to allow that time from the Adjournment debate because it raised an important issue and one that was relevant to my constituents as it was about the Leeds-Edinburgh train.
  The debate raises an issue of importance to many people in Leeds. It is about the care of the elderly, particularly in the southern part of the city. The problem first came to my attention just over a year ago when I was first elected as a Member of the House. The Minister may have heard many similar stories, but if I can put my case I believe that it illustrates the general problem graphically.
  The problem involved a constituent of mine whose daughter came to see me and said that she was prepared to continue looking after her mother, but that her mother was causing increasing difficulties and could not be left at home in the daytime while the daughter went to work. The mother was becoming increasingly verbally aggressive and her behaviour frightened other elderly people. The daughter was looking for hospital day care for her mother. The daughter wanted to come home from work in the evening and, in a caring way, look after her mother for the rest of the day. The problem that we have in Leeds—the Minister may well recognise this—is that there is no immediate adequate provision for that mother and daughter.
  The daughter made every effort to persuade the local social services department and the district health authority to provide the necessary resources to enable her to do that. The problem is that those resources are allocated in the northern part of the city. They may be insufficient but they are also wrongly allocated geographically for my constituent.
  There was no hospital day care provision available. If the lady were to be cared for in hospital, she would have to go to Wakefield, but there was no day care available. She would be on the waiting list for nearly two years to go into Wakefield hospital. In those circumstances, the daughter was faced with the unpleasant choice of giving up her work or taking the risk of leaving her elderly mother whilst she was at work. It was a difficult choice. It is one that none of us should have to face, but I suspect that it is fairly common for my constituents and those of my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees).
  That case illustrated the general problem. It has come to my notice in my surgery many times during the past 12 months. I accept that it is a common problem, and I am sure that the Minister will make that point when he replies. It arises because there is an increasingly elderly population. I do not underestimate the importance of that response, nor am I trying to make a party political point out of a central problem for our society of how we care for the elderly. I am trying to open the Adjournment debate in a way which shows the Minister that I am not making a simple party political point but one that may help us to understand and characterise the type of services that we have in our society.
  In Leeds there is, as the Minister will no doubt say, a problem of a growing, elderly population. I shall quote one or two of the figures. There are 66,800 pensioner households in the city, and 41,300 of those people live
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  alone. That represents a massive demand upon social services, housing and the district health authority. We are living longer. That may well be to our satisfaction and something to which we can look forward, but it creates extra demand upon the available resources within the community.
  In 1979 it was estimated that there were 12,100 people between the ages of 80 and 84 in the city of Leeds. By 1991 that figure will have increased by nearly 16 per cent. to 14,700. The population over the age of 85—the very elderly—in 1979 was 8,000. It will be 10,700 by 1991.
  Many of the problems in south Leeds would not be as difficult if we had adequate resources that fitted the criteria established by the DHSS. Unfortunately, the provision of old people's homes, part III accommodation, does not match DHSS requirements. The Minister will be aware that the DHSS issues a guideline of 25 part III accommodation places for each 1,000 elderly people. We provide only 19 in Leeds, and I am in no position to suppose that that figure will increase dramatically over the next few years. I am sure that the Minister will be the first to recognise the pressures on local authority capital expenditure. To reach DHSS standards we would need an additional 609 places in pan III accommodation.
  I understand that the DHSS guidelines are now 10 years out of date. It may well be that different guidelines should be established, given the increasing age of the population and the increasing frailty of many of the elderly.
  We have the problem of a growing, elderly community, and against that backcloth I should like to mention the sort of health services provided in Leeds—and particularly in south Leeds—for the elderly. It is obvious that the elderly are dependent upon the general provisions of the National Health Service. They make use of the available resources. Indeed, they probably use them to a much greater extent than younger people do.
  It is worth noting that 45 per cent. of the total bed-days taken up by general medicine in the Leeds general infirmary in 1982 were attributable to patients over 75. The elderly make use of the excellent resources at the Leeds general infirmary and St James's hospital, but there is a particular problem with geriatric beds.
  The Government have established their own guidelines for the number of geriatric beds. The position is a little complicated, because the area that the Western district health authority calls central Leeds is what my right hon. Friend the Member for Morley and Leeds, South and I call south Leeds. In central Leeds, the number of geriatric beds allocated is below the DHSS guidelines. I am sure that the Minister will have seen the report of the working party set up by Leeds western district health authority. The working party reported in December last and concluded that there was a general shortage of resources in the southern Leeds area. On page 12 the report says:
  "The root of the difficulty here is a severe shortage of resources, in both quantity and kind, needed to operate an effective service in the area of heaviest demand."
  The Minister will no doubt recognise that the problems in south Leeds are exacerbated by the fact that it is an area of low average incomes and high unemployment. Those factors add to the difficulties of provision and the demand upon provision. That was recognised in the report of the Western district health authority.
  There is a specific problem of geriatric provision but there is a greater problem in regard to psychogeriatric care in south Leeds. Increasingly, elderly people have to be

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  referred to psychiatric care. If elderly people need psychiatric care in south Leeds, such care is not available there. It is not provided by either the eastern or western districts in south Leeds.
  An elderly person has to be referred to Stanley royal hospital in Wakefield. It puts great demands on the family of an elderly person. There are travel problems and it is difficult for a family in those circumstances to keep in touch with an elderly relative. An additional problem is that there is a waiting list of nearly two years for beds in Stanley royal hospital. I make no criticism of the facilities at Stanley royal hospital or of the staff there, but it is scandalous that in south Leeds a substantial elderly population has to rely upon Wakefield district health authority for psychiatric care and provision.
  I shall conclude my remarks shortly so that my right hon. Friend the Member for Morley and Leeds, South may have an opportunity to make some comments. I suspect that the Minister is in no position to write the two of us a blank cheque for the provision of the necessary resources. It may well be that we are not in a position to say in detail what those resources should be. At this stage we need a recognition by the DHSS that an inquiry into the nature of the resources needed and their allocation would be beneficial for the people of south Leeds. There is the difficulty that four health authorities—the regional health authority, the two Leeds district health authorities and the Wakefield health authority—are concerned with the problem.
  I suggest that the only way to resolve the deep-seated problem—I hope that the Minister recognises that it is a deep-seated problem—would be to set up an inquiry through the DHSS bringing together the four relevant health authorities. They could then help to answer questions as to the services and resources that are needed. I am sure that there would be a positive response to such an inquiry, and that the authorities would all agree that they need more resources for the community and more day care facilities.
  I hope that the Minister will recognise the problems facing us in south Leeds and give us the opportunity of establishing our case through the procedures of the DHSS. Then, perhaps, we shall not have to come back on a future occasion and increase the demands, because we shall know that we are talking to a sympathetic Minister and a sympathetic Department.
  2.16 pm
  Mr. Merlyn Rees: I am very grateful to my hon. Friend the Member for Leeds, Central (Mr. Fatchett) for giving me three or four minutes in which to speak about the problems in south Leeds.
  My hon. Friend noted that he now represents part of south Leeds. After 21 years in the area, it is apparent to me that south Leeds does not matter. Whichever Government are in power, and whatever the reorganisation in a variety of areas, south Leeds does not matter.
  South Leeds was the area of the industrial revolution. Clearance has taken 25 years and some remarkable things have been done. The Boundary Commission split south Leeds. I speak as a former Home Secretary, but not in any political way. South Leeds did not matter because it was not the sort of place from which people wrote letters to the press.
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  Ghastly flats were built and had to be knocked down. The architects who designed them lived not in south Leeds but elsewhere. Prince Charles knew what he was talking about when he criticised architects. If it had happened in the Soviet Union, the architects would have been sent to Siberia. I do not advocate that, but the architects were to blame for all those flats.
  Where are the only two motorways in Leeds? They run right through south Leeds.
  With regard to the Health Service, we need resources, but first the needs of south Leeds have to be properly considered. The Yorkshire regional health authority has told me that what I am advocating would involve a transference of resources.
  I should like to make just three points of a large number that have built up over the years. Services for the mentally ill in south Leeds are provided by Wakefield. There has been serious under-provision for some time. Services for the elderly who are also mentally ill—psychogeriatric services—are non-existent. That is a matter for serious concern. Some people say, "Block the waiting list." Thirdly, the increasing number of elderly people presents an escalating problem in terms of special housing needs and of care. There are no psychogeriatric services in south Leeds. I am telling the Minister, because he must have some responsibility in this area. Lack of psychogeriatric services puts a strain on the primary care teams and the relatives. Unless something is done there, we shall be wasting our time. If it was north Leeds or almost any other part of the country that was concerned, more notice might be taken of the problem. The general feeling in my area is that something should be done.
  Excellent geriatric services are provided by the eastern Leeds health authority, but, in their wisdom, the Government split us in two. The position in the western Leeds health authority is unsatisfactory. So far as this is his responsibility, we want the Minister to press for the provision of a psychogeriatric service, and not at someone else's expense. The service should be based at Leeds hospitals. South Leeds needs day hospital facilities, and the geriatric services provided by Leeds western district health authority should be made responsive to the needs of the people living there.
  If the House were full, hon. Members from other areas would still not comprehend what I am saying. Most of the people concerned are old ladies. If they have to go to hospital, they must go to Wakefield. They must travel to the middle of Leeds by bus and then all the way round to Wakefield, where they have to get further transport. Most hon. Members would not notice the sum of money involved, but it is a sizeable proportion of the income of these people.
  I do not say that Wakefield is not a desirable place. From the new constituency, I often pass through it. I can reach Wakefield easily in my car, but those people cannot, and they deserve to be treated in Leeds. There is something seriously wrong in south Leeds. I am not making a political point. South Leeds needs help and pressure, and that is what we are asking the Minister to provide.
  2.22 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): Thanks to the generosity of the hon. Member for Leeds, Central (Mr. Fatchett)—both to those hon. Members who are concerned about the tragic railway accident and to his right

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  hon. Friend the Member for Morley and Leeds, South (Mr. Rees)—I do not have a great deal of time for my reply. If I go at the best approximation that I can manage to an Olympic sprinter's pace, I hope that the hon. Gentleman will forgive me.
  I appreciate the spirit in which the hon. Gentleman talked about this issue and which was reflected in the way in which the right hon. Gentleman described the problems of south Leeds. It is good to see such issues discussed here in such a way.
  One of the accidents of my diary is that, at 3 pm today, I am to meet the chairman of the Yorkshire regional health authority. I shall draw this debate to his attention and make sure that he reads what has been said by the hon. Gentleman and his right hon. Friend.
  I could not accuse the hon. Member for Leeds, Central of having double standards—of being reasonable here, but highly critical of the Government in his own constituency. That excellent paper, the Yorkshire Evening Post, quoted the hon. Gentleman last Friday as saying that the problems of south Leeds had built up over the years. The hon. Gentleman did not especially blame the present Government. That is a very fair and even-handed way of examining the problems of the area.
  I will not rehearse the figures and statistics relating to the increasing problems that we all face in providing for a growing aged population, in the community, in geriatric homes or in terms of psychogeriatric provision. In many parts of the country, such provision is well distributed but, according to the hon. Gentleman, it is greatly underrepresented in his own constituency and that of his right hon. Friend.
  The hon. Gentleman referred to the lack of facilities in south Leeds and the dependence on the facilities in the neighbouring district of Wakefield. He made that point very forcibly. He referred to the lack of certain specific facilities within the district health authority area. I concede that in an ideal world every health authority would reflect, within its own geographical area, provision of every sort. However, we do not live in an ideal world. The boundaries between health authorities resemble in some ways the boundaries created by the boundary commissioners which split up old constituencies and break up old loyalties. They are not solid structures which are difficult to cross, like brick walls. They are administrative boundaries, often conterminus with local authority boundaries, and often designed to facilitate joint planning between health authorities and local authorities.
  The question is not just a matter of resources, although it would be foolish to deny the importance of resources. It is not just a matter of bed norms or norms for the number of places in part III accommodation. Norms may be easy to plan and easy enough to reach, but when one has reached them one may find oneself saying, "So what?". Care in the community has been one of the great developments of the past 10 years. We have tried to keep in the community, where most of them wish to be people who, 10 or 15 years ago, would have been regarded as geriatric. The hon. Gentleman should not be too deterministic about the boundaries of his local authority. He should not think that any movement from one district health authority to another is bad and that geriatric provision should be provided solely within a hospital, an institution or part III accommodation.
  In the five minutes that remain to me, I should like to examine the problem in a local context and then within the
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  regional context. These are the very issues that I shall draw to the attention of Bryan Askew, who does a good job as chairman of the regional health authority, when I meet him later this afternoon. In the local context, one of the most important things is good joint planning between district health authorities and local authorities. The joint consultative committee is the best forum for improving co-operation between them. The establishment of a working group is an important step in the care in the community approach that we are trying to foster. The south Leeds working group consists of representatives of the eastern Leeds health authority, the western Leeds health authority and Leeds city council.
  It is interesting to note that the group's final report refers to the
  "need for officers servicing the Joint Consultative Committee … to apply their high level of managerial skills towards ensuring better co-ordination in the planning and delivering of joint services so that individuals needing different kinds of help from more than one authority receive a more flexible responsive and truly joint service."
  That is an excellent aim. It also makes four crucial recommendations: first, to develop both short term and long term plans for increasing the level of service offered to elderly people with psychiatric problems; secondly, to assess the most appropriate future use of St. George's hospital, Rothwell; thirdly, to establish ways of improving the geriatric services provided by the western health authority for people living in south Leeds; and, fourthly, to establish the needs of homeless people in relation to the present and future use of Shaftesbury house—a local authority facility. All four recommendations are important and thought-provoking. Both Leeds health authorities have seen the working group's report and are preparing their responses for the next meeting of the joint consultative committee in September. We must await that committee's full consideration of the report before making any decisions on where to go next.
  In the wider context of Leeds, Wakefield and the county, we have asked all regional health authorities to prepare regional strategic plans for the next 10 years by early next year. I understand that, on 3 July, the chairman of Yorkshire regional health authority launched the outline strategy for the development of services in Yorkshire and emphasised the Government's and the regional health authority's desire that urgent emphasis be given to the development of services for elderly people, community-based services and especially services for the mentally ill who cannot look after themselves or be maintained in the community.
  In that outline strategy, Yorkshire regional health authority has instructed its district health authorities not to plan for district self-sufficiency, although it recognises that each district is responsible for securing, as far as possible, a comprehensive range of services for people in the area. The objective of the planning process is to ensure that the available resources of finance, manpower and capital are deployed as effectively as possible to maximise the services that are needed for patients. Everyone in the area can now make an input into the discussion of the 10-year plan.
  The western and eastern health authorities can do a great deal to help themselves by carrying through a substantial and sustained cost improvement programme which will make services more efficient and release resources for improvements in new developments, such as those which the hon. Gentleman and his right hon. Friend

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  would wish to see in south Leeds. It is within the framework of careful planning at local level by joint consultative committees involving the district and regional health authorities—within the framework of driving for greater efficiency and cost improvement—that the problems of south Leeds can, and will, be solved.

  Folkestone Tax Office (Closure)
  2.30pm
  Mr. Michael Howard: I am grateful for at last having the opportunity to raise the closure of the tax office at Folkestone, which is of such concern to many of my constituents. However, I am sorry that this concern should have caused the Minister the inevitable inconvenience of participating in a debate at this late stage before the House rises for the recess.
  I am particularly sorry that the Financial Secretary to the Treasury, who has ministerial responsibility for the decision which I seek to question, is unable to reply, although I understand why it has not been possible for him to be here.
  I raise this subject without enthusiasm. I wish to make it clear that I support the objectives that the Government are pursuing, both in general and in particular. I also support the way in which they are seeking to achieve those objectives. It is of the utmost importance for our economic future that the public service in all its manifestations should be efficient, effective and economic. Indeed, the economic future of the country is central to our future in all other respects. In particular, we cannot hope to achieve the social objectives that we all share in terms of education, health and the ability to help those in need if we do not have the resources necessary to achieve them and that can only come with economic success.
  I also accept that economic success means change. It means that we cannot expect everything to carry on as before, that we cannot expect all the services to which we have been accustomed to be provided in exactly the same way, and, even, that we cannot expect all our tax offices to remain intact.
  I believe that my constituents understand that and are prepared to support it. Indeed, the general election result in my constituency bears that out. However, if their support is to be retained and reinforced and increased, as I hope it will, it is essential that these necessary changes, particularly when they disrupt habitual patterns of life, are handled sensitively. Above all, they must be explained in a way which makes sense to those affected by them.
  On the major issues which occupy the centre of the political stage, this has been done. For those who are prepared to listen, the explanations exist and they are convincing. Had the Financial Secretary, during our lengthy exchanges on this matter, been able to convince me of the good sense of the Inland Revenue's decision to close the Folkestone tax office, and had he been able to convince me that that decision had been taken with full regard for all its implications for those affected and after a proper consideration for all the alternatives, I would have been prepared to commend that decision to my constituents and to defend it.
  However, it is a matter of regret that the Financial Secretary has not convinced me and that I have not been able to commend it, and having failed over a considerable period to convince my hon. Friend of the soundness of my criticisms of this decision, the only step now left open to me is to raise the matter in the House.
  To explain the basis of my dissatisfaction it is necessary to recite the history of my involvement in this matter. I shall not refer to all the correspondence that has passed between me and the Financial Secretary, but some of it is at least relevant, and I shall be obliged to refer to it.

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  The first I heard of the proposed closure of the Folkestone tax office was when, in late October of last year, I received a letter from the Financial Secretary. I do not blame him or anyone for that. I readily accept, as he told me in that letter, that his predecessor wrote a letter to my predecessor in April of last year giving initial notice of the Inland Revenue's plans. As it happens, neither my predecessor nor his secretary has any record or recollection of receiving such a letter. Nor have I, though my communications with my predecessor were, and are, excellent, and he was punctilious in keeping me informed of matters about which I might need to know. I do not complain or argue about that today. As I say, I accept that the letter was sent, and there could be many reasons why it failed to reach my predecessor and me.
  Whatever the reason, I knew nothing about this proposal until I received, towards the end of October, the letter from the Financial Secretary. In it he said, as one would expect, that a great deal of thought had been given to the effect which the proposal would have on the local community and whether that would outweigh the need for savings and greater efficiency. That is precisely the approach which I would have expected to be adopted. What has disturbed me about this decision is that I am not convinced that it has been.
  When I received my hon. Friend's letter, I took soundings in the constituency and then wrote to my hon. Friend. I asked him some questions. I asked whether an assessment had been made of the savings which could be expected to accrue from the closure. I asked for the result of such an assessment and, in particular, whether account had been taken of the fact that Folkestone had a high proportion of elderly residents who might be inconvenienced by having to travel further afield. I regret to say that I have not had answers which I consider to be satisfactory to the first two questions and that the answers to the third are not only mutually inconsistent but flatly contradictory of each other. That, in a nutshell, is the essence of my complaint.
  The Financial Secretary dealt with my first two questions in a letter to me in January of this year. He said that Folkestone dealt with fewer taxpayers and employers than either the Ashford or Dover tax offices, which lie on either side of the area currently served by the Folkestone tax office; that the geographical area dealt with by Folkestone district was smaller than that covered by the other two; and that its closure would cause less disruption to taxpayers and members of staff than the closure of Ashford or Dover.
  As criteria for decision-taking in this important area, those factors reveal a simplistic approach. First, they are based on a consideration of the three districts of Folkestone, Ashford and Dover in isolation from other districts in a way which I find surprising. Secondly, they ignore the qualitative differences between the various offices and their convenience in terms of location. Thirdly, they ignore such important factors as the ownership of the various premises under consideration.
  I will comment on each of those criticisms, but first explain the course which my discussions on the matter took. The Financial Secretary, having failed to satisfy me in correspondence, agreed to see me about the issue. When I put the various points to him at that meeting, he suggested that I meet the official at the Inland Revenue who had carried out the analysis on which the decision was
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  based and who would have detailed answers to questions of that kind. I welcomed that suggestion and the meeting duly took place.
  As I shall refer more than once to what was said at that meeting, let me make it clear at the outset that the official whom I met was courteous, helpful and, I have every reason to believe, frank. We had a useful discussion and he answered my questions fully. I asked him whether consideration had been given to the possibility of reorganising other units so as to arrive at a more satisfactory arrangement for the whole area. He replied that it had not, since other districts which were relevant were the right size and were not, therefore, the subject of further consideration.
  In one of his most recent letters to me, the Financial Secretary says:
  "It is not the case that the possibility of including Canterbury in the original appraisal was not looked at."
  I find that a puzzling assertion. If it means that Canterbury was looked at, found to be the right size and then ignored, it is consistent with what I was told by the official. It is no doubt accurate, but it is irrelevant since it does not meet the point that I was making.
  If it is to be ascribed a more substantive meaning, it is inconsistent with what I was told by the official to whom I was specifically referred by my hon. Friend as the person with all the detailed information at his disposal. Either way, the position is unsatisfactory and my first criticism of the first part of the decision, namely that the tax districts of Folkestone, Ashford and Dover were considered in isolation, is not satisfactorily met.
  My second criticism relates to what I described as the qualitative differences between the offices and their convenience in terms of location. If I sought to substantiate that point on the basis of a comparison between the Folkestone and Dover offices, it is not because I asked that the Dover office should be closed. I do not know whether any of the tax offices in the area should be closed, or, if one or more of them were closed, which of them it should be. My argument is that the question has not been properly examined and it is purely by way of illustration of that proposition that I make this comparison between the Folkestone office and the Dover office.
  The Folkestone tax office has a most convenient location. It is close to the railway station and it has ample car parking facilities. As my hon. Friend is doubtless aware, the Dover office does not have its own car park and is at least 15 minutes' walk from the railway station. These important matters should have been taken into account and given full weight in the decision. They were not mentioned as part of the simplistic criteria that were identified by the Financial Secretary in our correspondence. I have no confidence that they were given the weight that was justified.
  My third criticism relates to such matters as the ownership of the premises under consideration. On 25 January the Financial Secretary replied to a motion on the Adjournment that was raised by my hon. Friend the Member for Derbyshire, West (Mr. Parris) about the closure of the tax office at Matlock. The Financial Secretary, as one of his principal reasons in justifying that decision, relied on the fact that closure of the Matlock office would enable the Department to give up leased

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  premises in Matlock and to use more fully the existing Crown building in Alfreton. That was a sensible basis on which to take the decision.
  In south-east Kent, the Folkestone tax office is a Crown building that could be used more fully, but the Dover office — again, I use Dover merely for illustrative purposes—is in leased premises. Therefore, if my hon. Friend were to adopt the same criteria for Kent as for Derbyshire, that would have been a powerful consideration in favour of retaining the Folkestone office, especially as I have repeatedly asked my hon. Friend in correspondence whether there were any plans to use the space in the Crown office at Folkestone after it was vacated by the Inland Revenue. The answer that I received from my hon. Friend on that point was that the Property Services Agency has not yet decided to what use the vacated floor in the Crown building would be put. The important point, however, is that the Inland Revenue is reducing its demands on the Government estate, thus giving the potential for savings.
  With the greatest respect to my hon. Friend, that was a most surprising statement. My hon. Friend is saying in effect that, for the sake of a purely notional saving that may never be translated into hard cash, he is prepared to continue with a certain liability in the form of the rent payable on the premises in Dover, which would otherwise be unnecessary. I hope that that sort of logic is not allowed to extend too far into other areas that come under the wing of my hon. Friend's Department.
  Finally, I turn to a factor in the issue that is of great importance in itself, and that illustrates the unsatisfactory way in which the decision-making process has operated in this case. Folkestone has a population with a proportion of elderly citizens that is well above average. That is important in this context for two reasons. First, it is especially important that they should have access to facilities of this kind. Secondly, they are likely to have particular need to call at their local tax office. The complications that can arise for someone who receives a small private income in addition to a retirement pension are considerable and can lead to much confusion. The problems can be substantially eased by a personal discussion at the local tax office.
  I was especially anxious, therefore, to establish whether the fact that Folkestone has an unusually large number of elderly people had been taken into account. In a letter of 1 December, my hon. Friend assured me that the problems faced by the elderly in Folkestone had been taken into account before the final decision was taken.
  When I met the official to whom my hon. Friend had referred me as the person responsible for the analysis—the man with detailed knowledge of the facts—I asked him how this fact had been taken into account. He replied that it had not. I was so surprised by this answer that I repeated the question, but the answer was the same. When I drew this inconsistency to the attention of my hon. Friend he suggested that there must have been a misunderstanding at our meeting. With the greatest of respect to my hon. Friend, the question, "Was the fact that Folkestone has an above-average proportion of elderly people taken into account?" and the answer "No" do not admit of much misunderstanding. While I cannot speak of any misunderstanding that may exist in my hon. Friend's Department, there was no misunderstanding at the meeting
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  that I had with his official. Nor was I greatly impressed by my hon. Friend's parenthetical reference in his letter after the meeting to the effect that Dover and the south coast generally have a high proportion of elderly taxpayers. The proportion of residents of pensionable age and over is over 25 per cent. in my constituency, just over 20 per cent. in Dover and under 18 per cent. in Ashford. That significant factor should have been taken into account. It is not surprising, in the light of the events that I have described, that I am not satisfied that that has been done or that, if it has, anything like sufficient weight has been given to it.
  When I think over the matter and try to identify the essence of my hon. Friend's reasons for the decision that was taken, I am driven back again and again to one sentence in his letter to me of 30 May this year, which reads:
  "Folkestone district is sandwiched between Ashford and Dover Districts and is the obvious office to close given the reorganisation of the three Districts into two".
  I am very conscious of the fact that I am a relatively new Member of the House. I am conscious of my inexperience, and I may be naive in such matters, but I had hoped, in my inexperience and naivety, that such decisions were taken on the basis of a rather more edifying principle than piggy in the middle. I have failed to discover any more edifying principle in my hon. Friend's justification of the decision on the matter and, even at this late stage, I beg him to reconsider it.
  2.46 pm
  The Minister of State, Treasury (Mr. Barney Hayhoe): I appreciate the courteous comments of my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) in opening the debate. There was no need for him to apologise for raising a matter of concern to his constituency. It does not matter what hour it is in the House. Part of the reason why we are all here is to provide just such opportunities. I am also grateful to my hon. and learned Friend for his understanding reference to my hon. Friend the Financial Secretary to the Treasury, whose unavoidable absence from the debate, I can assure my hon. and learned Friend, is no more regretted by him than it is by myself. I shall try to respond to the points that my hon. and learned Friend made with the customary force and clarity that we associate with him, particularly when he is arguing a case on behalf of his constituency. I assure him that the Financial Secretary, with his officials, will study what he said. No doubt he will be in touch with my hon. and learned Friend if he feels that that is appropriate.
  Before dealing with the specific points about Folkestone, I think that it is right to try to set this matter in the wider context, as my hon. and learned Friend did. The general background is that in 1982 an Inland Revenue committee completed a review of the organisation of the local tax district network. It reported on the principles that should decide the size, and hence the number, of these offices. The report was part of a more general review of the work of inspectors of taxes, the aim of which was to help the Department to make the most effective use of those highly trained staff.
  As a first step, the Inland Revenue fused the principles recommended by the committee to prepare an outline plan for reorganising the tax district network. That was

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  announced to the House in April 1983, and a copy of the Inland Revenue report was placed in the Library, together with a note on the reorganisation proposals.
  The Department also circulated details of the proposals to staff and their union representatives to enable them to consider the plans and make representations. Press releases were also made in April 1983.
  In a relatively small number of cases the proposals involved the closure of the only tax district in a town, Folkestone being an example. Recognising the particular difficulties that those towns and their communities might face, the then Financial Secretary, now my right hon. Friend the Secretary of State for Transport, wrote in April last year to each of the hon. Members representing those towns to alert them to the plans. I was sorry to hear today that that letter was not seen by my hon. and learned Friend, who was then a candidate, or by the former Member for his constituency. Nevertheless, the records show that a letter was sent. As I have explained, other ways were also found to publicise the proposals.
  In reaching final decisions, the views of hon. Members, other interested parties and staff were carefully considered. The consultative process lasted about six months and it was not until late October that the final plans were announced. My hon. and learned Friend said that that was the first he heard of the plans, and I am sorry that that should be so. I do not believe that it would have been possible to contact individually all those who might have had an interest in the matter to bring the proposals to their attention. That would have involved an enormous work load. Nevertheless, I believe that the Department has behaved reasonably and properly. Indeed, I believe that my right hon. Friend the former Financial Secretary was especially courteous in writing individually to those Members whom he believed were particularly concerned.
  Implementation of the final plans will mean the closure of 164 out of a total of 765 offices. That will allow more efficient and effective use of existing staff resources, especially trained inspectors, which is the prime purpose of the exercise. It will also provide significant savings in the cost of accommodation and administration throughout the country.
  More effective use of inspector resources will be achieved in various ways. For example, a large number of fully trained inspectors will be released from management duties for redeployment in areas in which it has already been shown that they will be more cost effective, although I am afraid that it is not possible to translate this move towards greater effectiveness and efficiency into some kind of profit and loss account with quantifiable financial savings. I should stress that the reorganisation plans are not a staff cutting exercise. The intention is to make better, more effective use of existing resources.
  The closures will come mainly in cities and towns which currently have more than one tax district. Birmingham, for example, which now has 21 tax districts will be reorganised into 10 offices. The plans also mean, however, that 23 towns—including Folkestone—will lose their only tax office.
  Where the proposals involved the closure of the only tax district in a town it was recognised from the beginning that factors other than efficiency and savings had to be taken into account. In particular, loss of access and the effect on the community generally and on the staff of the offices were of considerable importance. A difficult balance had to be struck. After careful consideration, it
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  was decided that of the 39 towns scheduled to lose their tax offices under the outline proposals announced in April 1983, 16 would retain their offices, which shows the willingness of the officials and Ministers concerned to listen to and take account of the representations that were made.
  Let me now deal with Folkestone specifically. I understand that the plan is to reduce the three tax districts in Folkestone, Ashford and Dover to two districts based in Ashford and Dover. Of the three existing districts, two are below the minimum recommended size and the other is less than optimum size. The arguments for change are compelling as the reorganised districts will both be of optimum size so that the best use of staff can be achieved.
  In arriving at this decision, south-east Kent was looked at as a whole. It was in that context that the decision was taken about Folkestone. At present there are five tax districts—Margate, Canterbury and the three previously named. In the event, it was decided that Margate and Canterbury should remain unchanged. Margate is already of optimum size and covers a compact geographical area. The same may be said of Canterbury, which is situated in the centre of the area for which it is responsible.
  Although it has been suggested that a feasible alternative would be to transfer part of the area now dealt with by the Dover office to Canterbury, with the remainder going to Folkestone, thereby closing the Dover office, I am advised that the fundamental objection to that suggestion is that Canterbury would consequently have to shed a significant part of its area to Sittingbourne district, which would be generally undesirable because Sittingbourne is both 16 miles away from Canterbury and is also a vital element in another reorganisation of six tax districts.
  We are dealing with an interlocking pattern. The disturbance of one part of that pattern can lead to considerable difficulties. The compelling reason for selecting Folkestone for closure was that it was judged to produce the least inconvenience to the tax paying public in the general area on the basis that one of the three district offices was to be closed.
  My hon. Friend the Financial Secretary is well aware that the closure of the Folkestone office will cause inconvenience to many of my hon. and learned Friend's constituents. It is true that a large number of elderly tax payers live in Folkestone, a proportion of whom undoubtedly find it difficult to understand all aspects of their tax affairs—do not we all?—and that for some personal contact is often the best and perhaps the only way in which matters can be properly explained to them. As my hon. and learned Friend acknowledged, Dover and the south coast generally are popular areas for pensioners and the closure of Dover, or indeed Ashford, would pose similarly difficult problems to that of Folkestone. Therefore, this was not an easy matter to decide. However, the Inland Revenue and my hon. Friend the Financial Secretry concluded that on balance the argument for the closure of Folkestone should prevail.
  My hon. and learned Friend referred to discussions that he had had with officials. As I have not seen a full record of them, it would probably be best if I did not comment on them. I hope my hon. and learned Friend will accept that the decision does not rest with the officials. The fact: that he raised the matter with my hon. Friend the Financial Secretary should make it clear that Ministers have reconsidered all the matters in the light of the

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  representations made by my hon. and learned Friend. It would have been wholly wrong if the Financial Secretary had not done that. My hon. and learned Friend and all other hon. Members will recognise the courtesy and care which the Financial Secretary takes when he deals with such matters.
  The arguments have undoubtedly been considered. Proper arrangements were made for consultations to be made before the decision was reached. My only regret is that the letter sent by tile previous Financial Secretary did not reach my hon. and learned Friend and that the possiblity of representations from him did not arise. My hon. Friend the Financial Secretary is satisfied that due weight and consideration were given to all the arguments.
  More generally, the cost savings and improved operational efficiency that will result from the closure of 164 tax offices, including Folkestone, will make a worthwhile contribution to the Government's programme of improving the efficiency and cost-effectiveness of public services. Although my hon. and learned Friend may remain unconvinced about the Folkestone decision, I am glad that he underlined in his opening remarks his general support for the wider objective of getting better value for the money spent on the administration of the tax system. I was grateful for the general support which he gave to those plans.
  My hon. Friend the Financial Secretary will consider what my hon. and learned Friend said. It would be wrong if I held out any hope or gave any commitment of the likelihood of a change in the decision. I am sure that my hon. Friend the Financial Secretary will write to my hon. and learned Friend if anything that he said during the debate raises a new issue to which it would be appropriate for the Financial Secretary to respond.
  I hope that what I have said about the broader contents of this decision will go some way to assuring my hon. and learned Friend's constituents that the inconvenience which some of them will undoubtedly suffer as a result of the decision will be balanced overall by greater efficiency in the public services—an aim which we all share and support.

  Secondary Education (West Glamorgan)
  3 pm
  Mr. Gareth Wardell: I am grateful for the opportunity to comment on the approval by the Secretary of State for Wales of west Glamorgan's scheme for the reorganisation of secondary education in Gower in the face of objections from more than 2,500 people. It is vital to place this matter in historical perspective. On 19 May 1983, during the general election campaign, at a party political meeting in Bishopston, the Secretary of State for Wales made detailed comments on west Glamorgan's previous plan that was then before him. It is unprecedented for a Secretary of State, acting in a quasi-judicial capacity, to make detailed comments in that way. It showed a lack of integrity, an abdication of responsibility to Tory Central Office and a betrayal of trust.
  Subsequently, the Secretary of State turned down west Glamorgan's plan. He could do little else, as he had pre-empted any other decision by his earlier desire at Bishopston to catch votes. This afternoon, I seek an assurance from the Minister that such cheap political gimmickry will not be repeated.
  In that speech, referring to Gowerton school, the Secretary of State said:
  "I have considered the representations that have been made and examined the arguments very carefully and I have to say that Her Majesty's Inspectors would have to produce some quite unexpected and compelling arguments to persuade me that it would be right to destroy such a centre of excellence."
  As the plan that has now been approved will mean that the children of Bishopston, at the age of 16, will have the additional option of attending Gorseinon tertiary college, on top of their existing options to attend Gowerton school, Olchfa, and the college of further education at Swansea, and since the children of Gowerton comprehensive school will, at the age of 16, have the option of entering Gorseinon tertiary college under the plan, where is the unexpected and compelling evidence from Her Majesty's inspectors since that speech?
  On Monday of this week, when I asked the Minister of State whether he would publish the assessment and advice that he received from Her Majesty's inspectors on the county council's plans, he was not prepared to do so. I should be grateful if he would tell the House now how Gowerton sixth form pupils will be protected under the plan that he has approved.
  By turning down west Glamorgan's first plan, the Secretary of State forced west Glamorgan to turn to a second-best solution. It aroused anger and bitterness in me that neither the Secretary of State nor the Minister of State made any serious attempt to understand fully the complexities and implications of the plan that they approved.
  I give just two examples. Earlier this week I asked the Minister whether he would list the schools affected by this reorganisation that Ministers in his Department had visited before approving the reorganisation. His reply was, "None." In other words, no Minister went to see the implications on the ground.
  I draw my second illustration from the letter sent out from the Welsh Office giving the decision of 20 July. It states:

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  "The release of the Penyrheol lower school building for use by the Treuchaf primary school will now be delayed a further three years."
  However, on Monday of this week when I asked the Minister, first, about the modification or conditions that he attached to his approval of the plan by west Glamorgan, his answer was:
  "My right hon. Friend approved the proposals without modification. He has no power under the Education Act 1980 to impose conditions."
  On the same day, I asked him whether he would publish in the Official Report the definitive date when the pupils of the bilingual school at Loughor would be transferred to Talbot road Gowerton. He replied:
  "This is a matter for West Glamorgan county council."
  In the letter from the Welsh Office giving the Minister's decision, he said specifically that this matter would be delayed for three years, yet he is in no position to do that, as he made clear in answer to those two questions earlier this week.
  In a letter published in last night's South Wales Evening Post, the parents of Welsh-speaking children said that, if bilingual pupils were not moved as promised to Gowerton, the Welsh and English parents would fight the Welsh Office together. The letter continued:
  "The site is not large enough for 750 pupils (the proposed size of the school) nor would there be room for all the facilities, for example, science and language laboratories, metal and woodworking areas, domestic science facilities, etc., needed by a secondary school for 11 to 16-year-olds. If there was any move to make the site permanent, we could all object together."
  To whom will those parents object if the plans go through as the Minister says in his letter? In three years' time those children will be moved. He has no power to compel the local authority to make that move, yet he says that in three years that move will take place.
  In another question this week, I asked the Minister what grounds there were to reject the first plan. In his reply, he said that one of the reasons, though not the main one, was the excellence at Gowerton school. He said:
  "The Oystermouth location for the proposed bilingual secondary school was also unacceptable."
  But the Oystermouth school would have had existing facilities for 11 to 16-year-olds. It had the laboratories and the facilities that would have been possible for a bilingual school to be set up there. It would have given the county council the flexibility that it needed to prepare the buildings at the Talbot road site in Gowerton, even with the Government cuts in local authority expenditure. Now that flexibility has gone.
  There is not one way in which the scheme is an improvement on the one that the Secretary of State rejected. The new scheme will cause great hardship to many children in Gowerton. The Gowerton sixth form will contract. Indeed, it will probably disappear following the attendant decline in morale among its staff and pupils. The children will vote with their feet and go to the new tertiary college.
  The primary schoolchildren at Treuchaf will remain where they are, unsure when their facilities will be improved. Plaster is falling off the ceilings within the building and there is not one hall in the school where they can have a morning assembly together. Four-year-old children will be sharing a playground with secondary school pupils drawn from a wide area of west Glamorgan. In three years' time there is no guarantee that the bilingual
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  school will have adequate facilities and the primary children of Penyrheol will remain in an antique building with relatively primitive facilities.
  I have considered this issue extremely carefully. I would not have made comments on a personal level against the Secretary of State or the Minister of State without going through a most careful and heart-searching process. I am sure that the Minister will accept that I would not have made this criticism without first considering carefully all the facts.
  The county council's plan was rejected during a party political meeting. That has resulted in the children of many primary schools in my constituency having to tolerate inadequate facilities and in west Glamorgan having been forced to produce a solution that is far from ideal. I wish that the Secretary of State or the Minister of State had visited the schools. As politicians, we are so often accused of being far away from the grassroots that we represent. I know the schools at first hand and I would not have spoken in such a personal way had I not felt deeply within me a considerable sense of anger and bitterness.
  I hope that the Minister will give me an assurance that no more schemes will be rejected at party political meetings. I hope that in future Welsh Office civil servants will not make statements that are later contradicted by the Minister's answers to me. It is plain that the Minister is in no position to say to the people of Treuchaf that in three years the Penyrheol lower comprehensive school building will be theirs. He cannot do that; if only the Minister understood that and other arguments that I have been advancing, he would be able to press the local authority to make changes, even on the basis of the arguments that are contained in the letter of 20 July.
  3.13 pm
  The Minister of State, Welsh Office (Mr. John Stradling Thomas): The hon. Member for Gower (Mr. Wardell) has been fortunate enough to have the opportunity in this debate to present yet again a series of sectional arguments against the approval of West Glamorgan county council's reorganisation of post-16 education in Penyrheol, Pontardulais and Gorseinon and the establishment of a second bilingual school in the county.
  The hon. Gentleman knows, or should know since he has been told often enough, that the initiative for such proposals rests entirely with local education authorities, not with my right hon. Friend the Secretary of State or myself. This is right and proper, as the duty of ensuring that sufficient and adequate education provision is made to meet the needs of their areas is placed firmly on the authorities by the Education Acts.
  Labour Members are fond of levelling at the Government the charge of unwarranted interference in local affairs and frequently talk blandly about centralisation and the erosion of local democracy when it suits them. to do so. But local democracy is apparently acceptable only when it results in conclusions and decisions which meet with their approval. In all other cases, as we have noted this afternoon, they press continually for more interference in local affairs and, as in this case, criticise my right hon. Friend the Secretary of State for permitting local authorities to implement proposals that arouse any dislike or opposition whatever.
  I have said that the initiative for making proposals rests with the local authorities. If a local education authority

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  intends to establish, close or significantly alter the character of a county school, notices of the proposal must first be published in accordance with section 12 of the Education Act 1980. A period of two months after publication is allowed in which objections may be made. Most commonly, satutory objections are those submitted by 10 or more local government electors for the area acting together. If statutory objections are registered the decision on the proposal is automatically reserved to my right hon. Friend the Secretary of State who then has three options. I believe that the hon. Member for Gower, with his experience in education, knows that full well. He has to be reminded of it, however, because of the overblown rhetoric of his recent speech. The three options are as follows. My right hon. Friend may reject the proposal, approve it, or, after consulting the local education authority, approve it with such modifications as he thinks desirable. I remind the House that the scope for modification is limited in that it may not substantially change the character of a proposal. A typical example would be a change in the implementation date.
  It is worth pausing to make a few observations on the limits which the Act quite rightly imposes on my right hon. Friend's powers. First, he cannot make proposals for school reorganisation. He can only approve or reject those made by authorities. Secondly, he cannot substitute his judgment for that of the authority which makes a proposal, except that he can reject a proposal which does not commend itself or, after consultations with the proposing authority, approve it with modifications which fall within fairly narrow limits which I have already described. Thirdly—this is important—he cannot give a conditional approval. He may express views on the implementation of proposals—and frequently does so, as in the decision letter—but these views do not carry the weight of his statutory decision. In practice, therefore, his statutory function is essentially United to the approval or rejection of proposals made by responsible local authorities.
  The proposal by West Glamorgan county council, which is the subject of this debate and which was recently approved by my right hon. Friend, is for the establishment of a second bilingual secondary school in the county to open in September this year. It is to be established initially in the premises occupied until now by the lower school of Penyrheol comprehensive school and will move in 1987 to the Talbot street premises presently occupied by Gowerton comprehensive school. The proposal also provides for the cessation of post-16 education at Penyrheol comprehensive school from September 1986 and the provision from that date of post-16 education currently provided in the school and in the college of further education at a tertiary college in Gorseinon.
  Until now there has been only one bilingual secondary school in west Glamorgan and that is in Ystalyfera, which is virtually on the northern boundary of the county, as the hon. Member is aware. He did not say that its pupils have come from a very wide area, with many having to undertake long and difficult journeys to get there. But he concedes that it has become increasingly evident that a second such school is needed in the county to cater for likely future needs and to provide secondary bilingual education in the western part of the county.
  The Government's policy is that bilingual education at both primary and secondary level should be provided to
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  meet local needs wherever this is possible. I challenge any Opposition Member to dispute that there is a demand in the western part of west Glamorgan, particularly in the hon. Member's constituency. Obviously, it is for the local education authority to assess those needs in the first instance and to determine how they can best be met. I find it surprising that the hon. Member should concentrate so completely on a whole range of other issues and ignore the central fact that the proposal and decision give an enormous boost to bilingual education in his constituency and in the county generally. He seems to be positively dismissive of that. By his words he shall be judged.
  West Glamorgan county council has formally adopted a policy of providing post-16 education so far as possible in a number of tertiary colleges throughout the county, and the part of the proposal which relates to Penyrheol comprehensive school is in furtherance of this policy. Furthermore, this part of the proposal has been generally accepted, and indeed expected, by the people of the area.
  It may be asked — I understand this because it is complicated—what connection there is between these two parts of the proposal and why they were not dealt with separately. To some extent that is at the heart of the debate, but it is not a question that I can answer. The proposal is the authority's proposal—I cannot emphasise that too much—and it was its view that provision for the bilingual school could be made only in the context of a proposal which extended also to the reorganisation of sixth form education in the Penyrheol-Pontardulais area. It was and remains my view that the two aspects would have been better dealt with separately. I think that has given rise to much of the difficulty, but I respect the alternative view taken by the authority and I can see its grounds for taking it. Whether I agree or disagree is irrelevant.
  Hon. Members will remember that in 1983—much play was made of this by the hon. Gentleman—my right hon. Friend rejected an earlier similar proposal by the authority. That proposal would have located the bilingual secondary school initially at Oystermouth, which would have entailed some problems, before moving to its long-term site in premises at Gowerton comprehensive school. The proposal would, however, have included a change in the status of Gowerton comprehensive school so that it no longer provided education beyond the age of 16. The Secretary of State was unable to accept this part of the proposal, for reasons I gave earlier, and perforce rejected the whole.
  Mr. Wardell: At a party political meeting.
  Mr. Stradling Thomas: The hon. Member makes great play about party political meetings. He tries to have the best of both worlds. In some instances he claims that the decision was taken before, but when it suits him he blames the Secretary of State for delaying the decision until after the election. He can try to have his cake and eat it, but he cannot get away with it.
  My right hon. Friend the Secretary of State welcomed the proposal for a second bilingual secondary school and hoped that the authority would quickly make alternative proposals for its establishment. The authority did so earlier this year, and those proposals have been agreed and will now be implemented.
  I emphasise that the Secretary of State and the authority are both convinced of the need for the school and that there

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  is a very large measure of public support for it in the county. I am only sorry that the hon. Member does not throw in his weight for such a desirable development.
  The proposals now approved stimulated no objections to the removal of post-16 education from Penyrheol comprehensive school and do not affect the age range catered for at Gowerton. In the Secretary of State's view, the proposal was acceptable and would forward the provision of bilingual education in the county as well as making adequate provision, in line with the authority's policy for post-16 education in the Penyrheol/Pontardulais area, thus making the best of the two complicated matters that were brought together in the proposals.
  There were a number of objections to the bilingual school— not, I would stress, to its establishement as such but to its siting. Primarily, those centred on the present premises of Tre Uchaf primary school and Penclawdd junior school. As the hon. Member has explained, the parents of children at Tre Uchaf primary school have long expected that the premises of Penyrheol lower school would, when vacated by the comprehensive school, be made available for the primary school. They claim, in fact, that the authority made promises to that effect.
  I concede immediately that there are unsatisfactory features at the present primary school premises — as there are at many others in west Glamorgan and elsewhere in Wales—and there is no doubt that the secondary school premises would—after remodelling, I remind the House—offer superior accommodation. That building will, in any event, be available for reassignment in 1987 when the bilingual school moves to its long-term premises in Talbot street. That is the plan. Whether it will then be made available for Tre Uchaf primary school I cannot say, but I have no doubt that the authority will bear in mind the needs of that school and its claim to those premises.
  Similarly, the parents of pupils at Penclawdd junior school had hoped that the school would be able to move into the Penclawdd annex of Gowerton comprehensive school. The allocation of the Talbot street premises to the bilingual school will undoubtedly delay the day when the Penclawdd annex can be released for other use, but again I expect that when that day arrives the authority will be mindful of the needs of Penclawdd junior school.
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  I do, of course, as does the Secretary of State, appreciate how bitter is the disappointment of the parents of children at both primary schools that the schools must, for the time being at least, continue in premises inferior to others which might have become available.
  The authority took the view that the higher priority lay with the extension of bilingual secondary provision and the rationalisation of post-16 education. That is a view that the Secretary of State accepted in making his decision. Certainly he saw additional bilingual provision as a major priority.
  In a perfect world, it would be possible to make proposals and decisions which would satisfy all demands simultaneously and fully. But, sadly, on the eve of the recess, we do not live in a perfect world or one provided with a cornucopia of resources, whether in the form of money or of desirable school premises. Authorities have to make choices and set priorities, and decisions have to be made on a balance of advantages and disadvantages.
  In the present case, there are positive advantages for bilingual education, and provision in the two primary schools will be no worse than before. They will suffer no disadvantage; they will simply not gain now an advantage which they expected.
  In giving his decision in the case, the Secretary of State set out his reasons fully and expressed to the authority his hope that all reasonable steps would be taken to minimise any problems facing the two primary schools and Gowerton comprehensive school. He and I are convinced that his decision was in the best interests of education in west Glamorgan, and I am surprised, for the reasons that I have given, that the hon. Member does not agree.
  Nevertheless, Mr. Speaker, it is my privilege, at 3.29 pm on 1 August, to wish you personally and the rest of the House a happy and flourishing recess.
  Mr. Speaker: Before I adjourn the House, I should like to wish all hon. Members a restful and a refreshing holiday. I am sure that they would like me to express that wish and hope to all staff of the House who serve us so well.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes past Three o'clock till Monday 22 October, pursuant to the Resolution of the House of 26 July.

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  Laughing Geese
  Laughing Geese
  Locate in Scotland Unit
  Locate in Scotland Unit
  Pint Glasses
  Pint Glasses
  Salmonella
  Salmonella
  Cream
  Cream
  Kingsway, Dundee
  Kingsway, Dundee
  Peterhead Prison
  Peterhead Prison
  Salmon
  Salmon
  Areas of Deprivation
  Areas of Deprivation
  Urban Programme
  Urban Programme
  Employment and Training Scheme
  Employment and Training Scheme
  Departmental Staff
  Departmental Staff
SOCIAL SERVICES
  Oxygen Contractors
  Oxygen Contractors
  Regional Secure Psychiatric Units
  Regional Secure Psychiatric Units
  National Health Service (Supplies)
  National Health Service (Supplies)
  Women (Clinics)
  Women (Clinics)
  Health Education Council
  Health Education Council
  Industrial Dispute (Newcastle)
  Industrial Dispute (Newcastle)
  Benefits
  Benefits
  Retirement Pensioners
  Retirement Pensioners
  Departmental Advertising
  Departmental Advertising
  Child Benefit
  Child Benefit
  National Health Service (Advertising)
  National Health Service (Advertising)
  Death Grant
  Death Grant
  Non-Discrimination Policy
  Non-Discrimination Policy
  Benefits
  Benefits
  Genetic Manipulation
  Genetic Manipulation
  Supplementary Benefit (Southampton)
  Supplementary Benefit (Southampton)
  Sick Pay
  Sick Pay
  Wessex Regional Health Authority
  Wessex Regional Health Authority
  World Population Conference
  World Population Conference
  Infertility
  Infertility
  Embryo Freezing
  Embryo Freezing
  Amniocentisis
  Amniocentisis
  Artificial Insemination Donors
  Artificial Insemination Donors
  Miscarriages
  Miscarriages
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Medical Records
  Medical Records
  Microcomputer (Perry Barr Office)
  Microcomputer (Perry Barr Office)
  Bodies Corporate (Social Security Act 1975)
  Bodies Corporate (Social Security Act 1975)
  Spectacles (Sales)
  Spectacles (Sales)
  Children and Young Persons Act 1969 (Police Information)
  Children and Young Persons Act 1969 (Police Information)
  Warnock Report
  Warnock Report
  Occupational Deafness
  Occupational Deafness
  Hospital Waiting Lists
  Hospital Waiting Lists
  National Childminding Association
  National Childminding Association
  Mobility Allowance (Appeals)
  Mobility Allowance (Appeals)
  Disabled Persons
  Disabled Persons
  Sterilisation
  Sterilisation
  Disabled and Handicapped Persons (Housing Benefit)
  Disabled and Handicapped Persons (Housing Benefit)
  Radio Frequency Allocations
  Radio Frequency Allocations
EMPLOYMENT
  Health and Safety (Construction Industry)
  Health and Safety (Construction Industry)
  Asbestos Stripping
  Asbestos Stripping
  Job Seekers
  Job Seekers
  Disadvantaged Persons
  Disadvantaged Persons
  Departmental Staff
  Departmental Staff
  Travel-to-Work Areas
  Travel-to-Work Areas
  Labour Statistics
  Labour Statistics
  Manual Earnings
  Manual Earnings
  Journey-to-work Areas
  Journey-to-work Areas
  Jobcentres
  Jobcentres
  Skill Shortages
  Skill Shortages
  Employment Statistics
  Employment Statistics
  Training
  Training
  Youth Training Scheme
  Youth Training Scheme
  Bolton
  Bolton
  Audio Typing (Hearing Loss)
  Audio Typing (Hearing Loss)
ENVIRONMENT
  St. George's Hall, Liverpool
  St. George's Hall, Liverpool
  Deregulation
  Deregulation
  Local Government Reform
  Local Government Reform
  Athletic Bodies (Television Contracts)
  Athletic Bodies (Television Contracts)
  Domestic Properties (Valuation)
  Domestic Properties (Valuation)
  International Garden Festival
  International Garden Festival
  Local Authorities (Capital Receipts)
  Local Authorities (Capital Receipts)
  Local Authorities (Housing Investment Programmes)
  Local Authorities (Housing Investment Programmes)
  Birmingham Inner City Partnership Area
  Birmingham Inner City Partnership Area
  Home Improvement Grants System
  Home Improvement Grants System
  Tenants (Repair Rights)
  Tenants (Repair Rights)
  Measures of Need
  Measures of Need
  Deprivation (Census Statistics)
  Deprivation (Census Statistics)
  Birmingham (Migration)
  Birmingham (Migration)
  Brent (Urban Programme)
  Brent (Urban Programme)
  Nether Lodge, Quernmore
  Nether Lodge, Quernmore
  Dog Licences
  Dog Licences
  Water Quality Control
  Water Quality Control
  Property Services Agency
  Property Services Agency
  Stolport (London Dockland)
  Stolport (London Dockland)
  Smiths Houses
  Smiths Houses
  Public Service Employees
  Public Service Employees
  London Docklands Development Corporation
  London Docklands Development Corporation
  GLC Housing Committee
  GLC Housing Committee
  Radioactive Materials
  Radioactive Materials
  Inner City Areas (Investment)
  Inner City Areas (Investment)
  Asbestos
  Asbestos
  Alnwick District Council
  Alnwick District Council
  Beaches (Pollution)
  Beaches (Pollution)
  Reservoirs Act 1975
  Reservoirs Act 1975
NATIONAL FINANCE
  Income Tax
  Income Tax
  Economic Statistics
  Economic Statistics
  Gross Domestic Product
  Gross Domestic Product
  National Insurance Payments
  National Insurance Payments
  Government Revenue
  Government Revenue
  Economy
  Economy
  Departmental Efficiency
  Departmental Efficiency
  Business Expansion Scheme
  Business Expansion Scheme
  Local Authority Expenditure
  Local Authority Expenditure
  Corporation Tax
  Corporation Tax
  Value Added Tax
  Value Added Tax
  Deregulation
  Deregulation
  Departmental Staff
  Departmental Staff
  Foreign Travel Expenses
  Foreign Travel Expenses
  Central Computer and Telecommunications Agency
  Central Computer and Telecommunications Agency
  Select Committees
  Select Committees
  Law Enforcement Allowance
  Law Enforcement Allowance
  GCHQ
  GCHQ
  Interest Rates
  Interest Rates
  Cable and Wireless
  Cable and Wireless
  Gross National Product
  Gross National Product
  Returning Officers
  Returning Officers
  European Year of Music
  European Year of Music
  Extra-Statutory Concessions
  Extra-Statutory Concessions
  Stock Exchanges
  Stock Exchanges
TRADE AND INDUSTRY
  Radio Frequencies Allocation
  Radio Frequencies Allocation
  Telephone Kiosks
  Telephone Kiosks
  Assisted Areas
  Assisted Areas
  Cammell Laird
  Cammell Laird
  Patent Law
  Patent Law

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

Family Practitioner Committees: Report
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 did not publish the Binder Hamlyn report on the financial control of family practioner committees prior to the passage of the Health and Social Security Bill through Parliament and when they will publish it.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, the Government have been studying the Binder Hamlyn report in the context of a number of other major issues which need to be considered in relationship to the development of primary health care. We intend to publish a Green Paper about future primary health care needs later this year and may publish the Binder Hamlyn report at the same time.
Lord Kilmarnock: My Lords, I thank the noble Lord for that reply. May I ask him why the Government seem to be going back on the stronger commitment given by the Secretary of State on 6th April in another place at col. 691 of the Official Report when he said:
"I expect to publish the Binder Hamlyn report at the same time as the Green Paper"?
How does that match with the word "may" used by the noble Lord and used by Mr. Kenneth Clarke also in another place? Has this report not been on the Secretary of State's desk for months; would it not have been helpful to have it before us while the Health and Social Security Bill was going through this House; and can the noble Lord now give us an assurance that it will come out in a reasonable time so that we can read it—preferably before the Green Paper?
Lord Glenarthur: My Lords, I cannot go further than I have already gone. But as the noble Lord will be aware, the Binder Hamlyn report is concerned with the financial control of family practitioner services overall; and, as I have said, it is just one of the issues which need to be considered in relation to the development of primary health care. The purpose of the Green Paper to which I referred in the original Answer, and that approach, is to bring these particular strands together and the Binder Hamlyn report is being studied in this wider context.
Lord Ennals: My Lords, is the Minister aware that this is the sixth occasion on which we have asked him
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about the publication of this report, and that on the last occasion, as the noble Lord said, he told us that it would be published soon? Since this is a report paid for by the taxpayer, and since it is of great concern to those involved in primary health care, why can it not be published now? Why should the report be preserved just for the Secretary of State and Ministers and not made available to other members of the public and the professions who are deeply anxious about this report? Is it just that it is going to be published when the House has risen? Why cannot the noble Lord give a more precise answer?
Lord Glenarthur: My Lords, it really is a matter for my right honourable friend to decide when he wishes, and if he wishes, to publish a particular report. As I have said, a Green Paper is being published. What goes into that Green Paper will no doubt to some extent reflect what is in the Binder Hamlyn report. The two are interconnected. In that respect, while I am quite sure that my right honourable friend will note the concern of the noble Lord, Lord Ennals, I can give no further commitment than I have already given.
Lord Ennals: My Lords, can the noble Lord say why he previously said that it would be published soon and he now says that it may be published? What is the reason for this withdrawal from a commitment that it will be published?
Lord Glenarthur: My Lords, the noble Lord is aware of what my right honourable friend said earlier on this year, and also of what has been said subsequently. I am afraid that I have nothing to add to either of those statements.
Lord Winstanley: My Lords, arising from the Binder Hamlyn report, which we may or may not see in due course, can the noble Lord confirm that no attempt will be made to apply cash limits to family practitioner committee services? Does the noble Lord agree that these services must inevitably be demand-led; and that the demand in terms of the number of people who are ill, the nature of the illnesses from which they suffer and the treatment which they require, is something which nobody can predict in advance with accuracy?
Lord Glenarthur: My Lords, I am well aware of the noble Lord's particular expertise in this matter. But the question of cash limiting the family practitioner services was one of the options which Binder Hamlyn were asked to look at, and until we have completed our study of the report and the other issues which are related to it, no decisions will be taken on it.
Lord Diamond: My Lords, is the noble Lord aware that we are all grateful to the Government for studying the report but we cannot understand what is the difficulty about allowing others to study the report at the same time? Is the noble Lord in difficulty about getting a second copy? If so, we would be glad to help him.
Lord Glenarthur: My Lords, I am afraid that I can go no further than I have already gone, and the noble Lord will have to wait and see.
Lord Leatherland: My Lords, may I ask the Minister whether when he said that the matters relating to this Question were mixed up, he was confining that expression to the matters in this Question or to Government policy generally?
Lord Glenarthur: My Lords, I am sorry, but I did not hear the first part of the noble Lord's supplementary question. If he would like to repeat it, I will try to answer it.
Lord Kilmarnock: My Lords, if, as the noble Lord, Lord Winstanley, suggested, the Government are thinking of cash limiting general practitioners, is this not something that the Binder Hamlyn report must certainly have given some advice on? Is it not therefore of great interest to all of us in your Lordships' House and outside in the country to know what they have said about it? If the report is already published, bound and printed, why should it not come out in advance of the Green Paper so that we can all have time to look at it, instead of assimilating a great deal of material in a rush?
Lord Glenarthur: My Lords, the Government commission reports from all sorts of sources from time to time, and I see no reason why this report should be treated in any way differently from the others. So I am sorry but the noble Lord will have to wait and see when and if it is published.

Medical Research Council: Unit Closures
2.44 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 what Medical Research Council units have been closed or are threatened with closure.
The Earl of Swinton: My Lords, the Medical Research Council reviews the future of all of its units from time to time, generally when a unit director is due to retire. Over the past eight years, 22 units have been closed, and a further three willl close shortly. I understand that the future of a further five units is under consideration by the council and that decisions on two of these will be taken in October. I might add that during the same period 14 new units have been established; another will be established in the autumn.
Lord Kilmarnock: My Lords, I thank the noble Earl for his Answer. May I ask him whether or not it is the case that the Advisory Body for Research Councils initially guaranteed level funding to the Medical Research Council for 1984–85 but that the outturn in real terms will be £2 million less than in the current year? Is it not also the case that the Medical Research Council is being required to contribute to redundancies in other research councils? Is it right that moneys voted by Parliament for medical research should be used for this end? Why should not the
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research councils as a whole be given the same benefit as the universities, of having their redundancies met from other funds?
The Earl of Swinton: My Lords, the noble Lord, Lord Kilmarnock, was perfectly correct in what he said in the first part of his supplementary question: that the Medical Research Council's grant-in-aid for 1984–85 represents very approximately the same share of the science budget as in 1983–84. However, the council is having to accommodate within its cash limits some unavoidable increases in expenditure, such as an actuarial increase in the employers' superannuation contribution and an increase arising from the formula for calculating subscriptions to international bodies. Therefore, it faces a drop in disposable income, which it estimates might be about £2 million. As far as paying for the restructuring of other councils is concerned, the Advisory Body for the Research Councils has provisionally recommended that the Medical Research Council should make contributions towards the cost of necessary restructuring at the AFRC and NERC during 1985–86 and 1986–87. Final advice on the allocation of the science budget in 1985–86 will be given by the ABRC later this year. In the light of that advice, my right honourable friend will make an announcement on allocations.
Lord Renton: My Lords, is my noble friend aware that it is in the public interest that the number of people who are horn mentally handicapped should be reduced; that there are very many causes of mental handicap, and that it is only by continuing research into it that those causes can be isolated and prevented? Will my noble friend give an undertaking that there will be no diminution of research effort into the causes of mental handicap?
The Earl of Swinton: My Lords, I agree with my noble friend Lord Renton, but I cannot make the statement that he wishes because, as I said in my original Answer, the future of a number of units is being considered.
Lord Hunter of Newington: My Lords, does the Minister agree that a further consequence is that the Medical Research Council will have to notify the universities that support for some of their outstanding work will have to cease, and that therefore some of this work will have to be abandoned?
The Earl of Swinton: My Lords, I am not sure about that. As I understand it, one of the points that the Medical Research Council is making is that it is determined to increase its support for more high-quality research in universities. That is one of the reasons why it is making some economies.
Lord Molloy: My Lords, in addition to the advisory council, would the Minister be prepared to consider taking into account the views of the BMA and other interested medical bodies? Does he agree that their views, as well as those of the universities, should be garnered and gathered in, in the interests of providing first-class research for the National Health Service?
The Earl of Swinton: My Lords, a large impact on research is made by a number of bodies, quite apart from the Medical Research Council. Biomedical research is carried out by the universities and medical schools, using the funds provided for teaching and research through the University Grants Committee. I ought also to mention the extremely valuable contribution that is made by the private and charitable sectors.
Lord Todd: My Lords, does the noble Earl realise that, whatever anyone may say about the statistics, spanning about £2 million, the fact is that the closure of four units by the Medical Research Council this year will be due essentially to lack of money and that it is just a symptom of what will happen: that more units will be closed unless something is done, and done pretty quickly, to restore some, at least, of the damaging cuts which have been made in the budget of the Medical Research Council and also in the grants made to the universities? I do not want to throw this open to science in general, but let us just think about the kind of things which the Medical Research Council supports. In the case of molecular biology—
Noble Lords: Question!
Lord Todd: Yes, it is coming, my Lords. Molecular biology, in which we used to be pre-eminent, though now, I am afraid, we are not, is now moving into clinical medicine, and through biotechnology it is moving into industry. I should like to know whether the Government are aware of this fact and whether they are going to do anything to restore the cuts which have been made, and which have resulted not merely in a loss of morale but in many of our young people going abroad to make their careers and use their talents; because if it is not, then in a matter of a few years' time we are going to appear among the also-rans in a world where social change has occurred on a very great scale.
The Earl of Swinton: My Lords, I am not quite sure from where the noble Lord, Lord Todd, obtained his figures about four units closing this year. As I understand it, the three units which are due to close shortly are: the dental unit; the unit for the laboratory studies of tuberculosis; and the tuberculosis and chest diseases unit. The last two are to be replaced by a new TB and related infections unit which is due to open in October. As to the other units, there is no definite decision to be made until October. I know that my right honourable friend the Secretary of State for Education and Science is very well aware of the financial difficulties which the council face. I should, however, emphasise that no decision on the level of funding for the council for the next few years will be made until later this year.
Lord Ennals: My Lords, does the Minister agree that research into the treatment and cure of diseases is as vital to the national interest as research into industrial development is vital for the economic outlook of this country? Does he not feel a deep sense of concern because there will be £2 million less available for
790
medical research for the various reasons which he gave the House? Will he not indicate to his right honourable friend the Secretary of State the degree of concern which has been expressed from all sides of the House this afternoon regarding cuts in medical research? Surely, this is something which no Government would willingly want to do.
The Earl of Swinton: My Lords, I am well aware that any cut in medical research is an unhappy state of affairs because of the amount of valuable work which is done. At the same time, I should say that medical research is a very emotive subject and the amount of money which can be spent on it is bottomless; you can go on researching for ever if you wish. I know that my right honourable friend is concerned about this matter, and I shall certainly draw his attention to the questions which have been asked in the House this afternoon.
Lord Campbell of Alloway: My Lords, may I ask my noble friend the Minister whether there is any intention to close the unit which researches into the safety of vaccines administered to children?
The Earl of Swinton: My Lords, I am certainly not aware of any such proposals.
Lord Kilmarnock: My Lords, can the noble Earl the Minister explain how a Government professing commitment to the pursuit of excellence are contributing to the brain drain—unless, of course, they are to review their policies? Is it not the case that there are important commercial spin-offs from medical research as in the case of the promotion by Seltec of monoclonal antibodies? Following what was said by the noble Lord, Lord Ennals, will the noble Earl reaffirm his undertaking to bring to the notice of the Secretary of State the widespread concern about this matter which has been expressed on all sides of your Lordships' House?
The Earl of Swinton: My Lords, with all due respect to the noble Lord, Lord Kilmarnock, I have undertaken to do that and I think I am a man of my word; at any rate, I like to think so. When I say that I shall do something, I like to think that I will do it. As to this great fuss about the cuts, I must point out that the council's 1984–1985 grant-in-aid is £117.2 million compared with £113·7 million in 1983–84.
Lord Kilmarnock: My Lords, before the noble Earl sits down—
Noble Lords: Oh!
Lord Kilmarnock:—would he not agree that that represents a cut in real terms?
The Earl of Swinton: My Lords, I think that is just about level pegging.

Pit Closure Policy
2.54 p.m.
Lord Moyne: 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 the National Coal Board, in planning the closure of pits they consider uneconomic, took into account the cost to the Exchequer in unemployment benefits which would result from closures at this present time; and whether, where any closure would cause an overall loss to the nation in the short term, a moratorium might not be agreed until unemployment falls or coal consumption increases.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, the closure of any colliery is subject to the industry's colliery review procedure, and is only undertaken after the most careful consideration. The National Coal Board is now making huge losses; nearly £2 billion in the last four years. A substantial part of this loss was caused by excess production from a relatively small tail of highly uneconomic pits, and no Government could possibly agree to go on financing losses on that scale without remedial action being taken.
Lord Moyne: My Lords, in thanking my noble friend for his Answer, may I ask him whether or not he can endorse the promise of the Secretary of State for Energy regarding the mining industry and those thrown out of work by pit closures? It was an undertaking which was announced to the press the day after I had tabled my Question—post hoc but assuredly not propter hoc. Can the noble Earl give any assurances in the context of that statement regarding the phasing of closures, help for families which have to move and support, in the provision of houses, for the local authorities concerned?
The Earl of Avon: My Lords, I readily endorse what was said by my right honourable friend the Secretary of State for Energy. I can also underline that there are generous removal allowances which are already paid by the National Coal Board to men who transfer to other pits following a closure or manpower reduction. Men who move, so far that they have to move house, receive full reimbursement of expenses associated with the move, including such costs as introductory visits, removal expenses and solicitors' fees.
Lord Barnett: My Lords, noting that the noble Earl endorses the views of his right honourable friend the Secretary of State for Energy, does he also endorse the views of the Chancellor of the Exchequer that virtually any expense would be worthwhile on an industrial dispute, no matter at what level, in order to ensure the closure of what he calls "uneconomic pits"?
The Earl of Avon: My Lords, as my right honourable friend the Chancellor of the Exchequer said in his statement in the other place earlier today, the dispute has probably added net some £300 million to £350 million to public expenditure so far this year:
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otherwise his comments were in support of Government policy.
Lord Molloy: Would the noble Earl agree that prewar and post-war there have been occasions when we have closed pits which later we have been desperately keen to reopen because their value cannot be counted in pounds, shillings and pence at any one time? Would the Government consider establishing a specialist board comprising geologists, mining engineers, energy economists, and miners' representatives to examine the wealth and future of Great Britain's pits, and the policy of closing those which are at present under threat?
The Earl of Avon: My Lords, I note the suggestion of the noble Lord, but I should like to remind him that the Labour Government not only accepted the principle that uneconomic pits should close but embodied it in legislation by providing in the 1977 Coal Industry Act for social grants to be paid to assist in the closure of pits of uneconomic capacity.
Lord Beswick: My Lords, would the noble Earl be good enough to clarify the answer which he gave to my noble friend, Lord Barnett? Will he say whether he believes that the £300 million to £350 million cost of the strike so far has been, to quote the Chancellor of the Exchequer "a worthwhile investment"?
The Earl of Avon: My Lords, I do not have a copy of this morning's Hansard, so I cannot refer to what the noble Lord says. I know of the charges made in the other place, but they seemed to me to be explained by the desperation of those making them at the embarrassing stories which they have to tell.
Lord Mackie of Benshie: My Lords, would the noble Earl answer the first question, which I think was: are the National Coal Board asked to take into account the nation's losses when they are looking at the economic viability of a pit? That, I think, was the original Question.
The Earl of Avon: My Lords,in my original reply I said that pit closures were only undertaken after most careful consideration, and I referred to the cause of a substantial part of the loss.
Lord Stoddart of Swindon: My Lords, is it not a fact that, as a result of this particular strike, the Government and the nation have lost—including the loss of coal mined—some £2,000 million, and that is a great deal of money? Can the noble Earl say whether the Government will consider bearing in mind that by the end of the century we shall need 40 per cent. more coal? Will he say whether the Government are prepared to make new approaches to the miners and to the National Coal Board with a view to keeping pits open on a care and maintenance basis? Will he also say exactly what the Government are going to do while this House is in recess for the next 10 or 11 weeks?
The Earl of Avon: My Lords, I do not associate myself with the figures produced by the noble Lord. I should like to say to him that this Government have invested more in the coal industry than his

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Government did and we continue to put our deeds where our mouth is. We will continue to invest in and to back the coal industry. We look forward to the time when the coal conversion scheme gets off the ground again.
I suggest that during the Recess we can hope that the harassment and intimidation that is going on throughout the country will stop and that the miners will have the ability to make their own decisions.
Lord Stoddart of Swindon: But, my Lords, the situation may get infinitely worse during the Recess, both in social and political terms. Will the Government give an assurance that, if necessary, Parliament will be recalled?
The Earl of Avon: My Lords, it is not for me to answer that question: that is for the usual channels. But I believe that the message we can take to the country is, "End harassment, end intimidation, and let the miners make their own choice".
Lord Gisborough: My Lords, is not criticism rather rich from a party which has nailed its colours to the mast of Mr. Scargill, whose object is to create unemployment for political purposes?
The Earl of Avon: My Lords, I remind the House there are many miners working at this time as well.
Lord Underhill: My Lords, does the Minister recognise that the baying from the Benches behind him will not help to settle this dispute? What is required is not just hope and statements; what is required is statesmanship on the part of the Government in getting together with the two parties concerned.
The Earl of Avon: My Lords, I should like to see the ballot which has been called for. I do not see why one should not be held.
Lord De Freyne: My Lords, can my noble friend the Minister say what it costs per tonne to find coal in this country compared with any other country in the Common Market, at today's rates?
The Earl of Avon: My Lords, the average price of coal in our country is at the moment around £40 per tonne, as against the best we can get out at £28, which compares with other imported coal which comes to Thames-side slightly cheaper than that.
Lord Molloy: My Lords, is the Minister aware that he is absolutely correct when he says that goverments of all complexions have exhibited appalling myopia in dealing with an industry they knew very little about? We closed pits before the war and the person who opened them for us, because we needed those pits, happened to be Hitler. Since the war we have closed pits, and then because of energy crises we have had to reopen them as well.
Will the Minister bear in mind that, until the present dispute, the industrial record of British miners, according to a United Nations survey, was the best?
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When the Minister speaks of contributions made by governments to the coal industry, will he remember that none of them comes near to the massive contribution made by the coal mining communities of Britain to this great industry?
The Earl of Avon: My Lords, I am happy to pay tribute to the coal mining industry; just as the noble Lord has done. I hope very much that it gets together, and holds a ballot, and works at full force.
Lord Stoddart of Swindon: My Lords, will the Minister answer the question put by his noble friend: what is the cost of British coal compared with the cost of coal mined in the Common Market? If he cannot answer that question, I will do it for him.
The Lord President of the Council (Viscount Whitelaw): My Lords, I think it must be accepted that we are about to debate many of these problems for the rest of the afternoon. I hope that the noble Lord opposite and the rest of the House will realise that that is the point at which it will be possible to produce such arguments. We have already spent a considerable part of Question Time and I feel that we should go on to the last Question, and then come to the debate.

Children's Clothing: VAT Exemption
3.3 p.m.
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will confirm that children's clothing and footwear will continue to be exempted from value added tax.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, the Government have no intention at present of imposing VAT of young children's clothing and footwear.
Baroness Nicol: My Lords, I am very grateful to the noble Earl the Minister for that Answer. Does he realise that it conflicts with the reply given to the Independent Footwear Retailers' Association, in which his right honourable friend stated, in response to a similar question:
"In the long run, the indirect tax base may have to be further extended so that income tax can be further reduced"?
He went on to say that nothing could be exempt from that. Can the Minister comment?
The Earl of Gowrie: My Lords, it is indeed the policy of the Government to shift the burden of taxes from direct to indirect taxation. Naturally, one cannot tell what the future will bring, but, as I said to the noble Baroness and the House, the Government have no intention at present of imposing VAT on young children's clothing.
Baroness David: My Lords, may I ask the Minister whether books—in which I hope he has a special

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interest as Minister for the arts and libraries—will continue to be exempt from value added tax also?
The Earl of Gowrie: My Lords, the Government also have no plans at present to impose VAT on books.
Baroness David: My Lords, may I ask the Minister how long "at present" goes on for?
The Earl of Gowrie: My Lords, the present goes on until it comes to an end.
Baroness Nicol: My Lords, when "at present" does come to an end, will the Minister make sure that children's shoes, above all else, remain exempt from VAT for as long as possible? Is the Minister aware that not only would VAT place a tremendous burden on parents who have to keep replacing shoes for young children (as I am sure he is aware) but also that the retailers' association is very worried about the threat of cheap imports and the possible damage to young children's feet caused both by passing shoes down the family and also by their being made to wear those shoes for too long? Will the Minister promise that children's shoes will be the very last to be considered?
The Earl of Gowrie: My Lords, I am an Irishman, and I could point out to the noble Baroness, to the House and, indeed, to my right honourable friend the Chancellor of the Exchequer that a government in Ireland fell recently over this issue.
Lord Swinfen: My Lords, may I ask my noble friend what he meant by "young children" in his response to the original Question, which referred only to "children"?
The Earl of Gowrie: My Lords, my original Answer referred to "young children". I assume that "young children" are pre-adolescent.

House of Lords Offices
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move that the Fourth Report from the Select Committee be agreed to.
Moved, That the Fourth Report from the Select Committee be agreed to.—(Lord Aberdare.)
The report read as follows:
ORDERED TO REPORT
The Committee have met and been attended by the Clerk of the Parliaments and the Gentleman Usher of the Black Rod.
1. Judicial Sittings
The Committee noted with approval a decision of the Administration Sub-Committee that Judicial Sittings should as a general rule be held in the afternoon at 2 p.m. instead of in the morning.
2. Refreshment Department
A Report from the Sub-Committee was received.
A statement of Account for the Financial year 1983–84 was laid before the Committee and approved.
3. Computer Developments
A Report from the Computer Sub-Committee on the arrangements for replacing the computer system in the House of Lords Library was received. The Committee authorised provision for the cost of installing associated additional telephone equipment.
4. Staff-of the House
A Report from the Sub-Committee was received.
The Committee were informed of the temporary appointment of Mr. J. Parker as additional Staff Inspector and approved the rate of pay for the post.
The Committee also authorised temporary pay supplements for the Editor and Assistant Editor of Debates.
5. Parliament Office and Library
The Clerk of the Parliaments informed the Committee that he had appointed Mr. C. Preece as Assistant Accountant in the place of Mr. R. A. Devin and Mr. P. M. Byrne to the new post of third Sub-Editor of Debates.
The Committee approved the creation of a temporary additional post of Assistant Librarian and authorised payment of a responsibility allowance to a Higher Executive Officer.
6. Internal Audit
The Committee were informed of the appointment of Miss C. D. Stone as Internal Auditor to the Houses of Parliament and approved provision for a share of the cost of the post.
7. Revised Scales of Par
The Committee confirmed the application of Code Memorandum CM/647 dated 12th June 1984—Pay of the Senior Open Structure of the Civil Service—to senior Officers of the House of Lords.
8. Law Lords Opinions
The Committee approved a scale of charges for providing copies of the opinions of Lords of Appeal.
9. Uniform Allowances
The Committee approved a revision of the allowances paid to Clerks at the Table, the Gentleman Usher of the Black Rod and Yeoman Usher, for the provision of items of Court Dress and of the uniform allowances paid to Doorkeepers.
10. Commonwealth Association of Hansard Editors
The Committee authorised payment of the cost of expenses incurred by the Editor of the House of Lords' Official Report when attending meetings of the Association.
11. Superannuation
The Committee authorised the payment of a revised Pension and Lump Sum to Lord Henderson of Brompton, K.C.B., formerly Clerk of the Parliaments, who retired on 27th July 1983.
The Committee were notified of the following awards made under the House of Lords Staff Pension Scheme:—

(a) Compensation payments, Preserved Pension and Lump Sum to Mr. R. A. Devin, Assistant Accountant, on his retirement from 1st September 1984.

(b) Pension and Lump Sum to Mr. A. F. Fryers, M.B.E., Higher Executive Officer, who retires on 31st July 1984.

(c) Short Service payment to Mrs. G. E. Armour, Personal Secretary, who resigned on the 29th June 1984.

(d) Short Service payment to Mrs. S. Cooper, Personal Secretary, who resigned on the 27th April 1984.

(e) Short Service payment to Mrs. D. A. Russell, Plate Room Assistant, who retired through ill-health on the 7th July 1984.

(f) Supplementary Death Benefit to personal representative of Mrs. C. Mason, former Housemaid, who died on the 16th May 1984.

On Question, Motion agreed to.

The Economy and Industry
3.7 p.m.
Lord Diamondrose to call attention to the lack of confidence in sterling, to levels of industrial production, to the state of the nation's infrastructure and to the measures required to improve living standards and restore a stable society in the United Kingdom; and to move for Papers.
The noble Lord said: My Lords, on behalf of the Alliance, I beg to move the Motion standing in my name on the Order Paper. It is our hope that we are in this way providing an opportunity for a wide-ranging debate—an end of term debate—that we hope is felt to be timely. Although I myself will certainly not attempt to cover the whole ground, I am sure that we on these Benches shall between us make a number of important points and suggestions, with perhaps a modicum of criticism. But before making any criticism, may I say to the Government a warm "Thank you" for providing the time, and express our great appreciation to them for providing two such eminent Ministers to share in our debate.
As there is so much ground to cover I will, if I may, rely in part on previous speeches. Only last week the noble Lord, Lord Bruce of Donington, set out a number of salient statistics—and I am very grateful to him for having done so—which show that by comparison with 1979 (that is, covering the present Government's continuous five-year period of office) inflation was down, but so too was the value of sterling, the rate of saving, the output of our manufacturing industries and investment in them—all after five long years.
The noble Lord could have added that from 1950 until the start of this year there was no improvement in the average standard of living. But as we all know, the outstanding difference is the two million rise in unemployment, with more than one million long-term unemployed and approximately one million people under the age of 25 unemployed. The figures are still rising and so is crime. There is increasing evidence that the two are connected, as one would expect, especially among the young. This is a most serious development which we ignore at our peril.
In a speech last year I explained that we were not blaming the Government for the whole of the 2 million increase. I suggested that it would be fair to apportion one-half to the Government's policies and the other half to the effect of the world recession. I gave chapter and verse for that view, and I prayed in support three international committee reports. In a speech this year, in March, I set out all the figures to show that we were not maintaining the nation's infrastructure and still less providing for enormous accruing liabilities. Therefore, in short, apart from the fall in inflation, we have had five wasted years; and on unemployment we are confronted with a tragedy of huge dimensions. That is the intolerable cost the nation has suffered from the manner in which the Government have tackled inflation. For inflation still means too much money chasing too few goods and the remedy is to reduce the supply of money and increase the supply of goods—to do both.
However, the Government have concentrated exclusively on reducing the supply of money and that
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is why I claim justification in calling it "narrow monetarism". That is why the noble Lord, Lord Bruce of Donington, was moved last week to say that any fool could halve inflation at that cost. In this situation it is not surprising that the outside world's confidence in us is at a low ebb. The evidence for this is to be found in the continuing slide in the value of the pound, in the big drop in the stock markets, in the price that foreigners are prepared to pay for British Government bonds—I believe that the dollar price at the moment is the lowest for eight years—and, above all, in the two successive rises in interest rates.
We now have a real rate of interest—I am sure we all understand that—namely, the difference between the nominal rate of interest and the rate of inflation: what a borrower really gets back, not in money terms but in real terms, out of his loan. We now have a real level of interest which is higher I understand than it has been for centuries. I believe we have to go back to the Middle Ages to find a parallel.
However, we on these Benches must not underrate the inventiveness of this Government. They have invented a new alibi. As it has become impossible after this length of time to continue to maintain that everything that is good is due to the Government's monetary policy and everything that is bad is due to outside influences—the world recession—the Chancellor of the Duchy of Lancaster has now put out a new line. Everything, he said, was going well until we were caught up in the wash of the American speed boat and had, as a result, to put up interest rates twice in seven days.
That excuse will just not wash. The fact is that we have lost the outside world's confidence in sterling. The double rise in interest rates was merely the outward sign of the inner weakness and had little to do with the United States. What it had to do with was the worrying trend in the money supply figures. It had to do with the situation in the mines and the docks; it had to do with fears about oil prices; it had to do with daily lawlessness, and of course no other currency was similarly affected as would obviously have been the case if this was due to the United States.
It was important for the Government that the alibi should be invented because otherwise their policy is seen to have failed—as indeed it has. This is no hiccup in an orderly ascent to higher living standards. It is, I fear, the beginning of the end of the cyclical movement away from recession, an automatic movement which has been hampered by the dead weight of narrow monetarism. The prospect now is for a lower rate of economic growth and a higher rate of inflation, especially with the increase in mortgage rates. I imagine that investment will be heavily discouraged and competitiveness undoubtedly will be damaged. Most of the cyclical factors now point downwards, and with the long-term effects of the coal strike still to be felt we can expect a continuation of the present high interest rates and some increase in the public sector borrowing requirement. Above all, unemployment is likely to rise even further.
As a result of Government policies, the world recession has bitten deeper in the United Kingdom than elsewhere and recovery has been less marked. It is indeed a dreary prospect, for confidence, which has been slow to crumble, is even slower to rebuild. I ask

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myself: what is the Government's response to this great challenge? The answer I find is that they think it right to turn their back on all those problems and to concentrate on selling off the family silver. It is difficult to think of anything more irrelevant. Not only that, they use the proceeds from selling the family silver for the weekly housekeeping. It is difficult to think of anything more irresponsible.
The Government pursue privatisation with ever-increasing abandon. Not for them the discipline accepted by all other governments that if you want great change you have the responsibility of proving the need for it and to justify it. No, you avoid all that by producing the myth that there is a presumption that denationalisation works wonders. If a nationalised industry performs better after denationalisation, you must not inquire whether that was likely to have happened in any event. You do not have to show that the improvement was due to the fact of denationalisation, you simply presume that it was.
That may satisfy a Government desperately trying to clothe a naked dogmatism with the outward appearance of respectability, but it does not satisfy the rest of us. We see how good management introduced into a business in the public sector produces identifiable good results in exactly the same way as good management does in the private sector. I take two examples which will be familiar to your Lordships —Jaguar and British Airways—both still in the public sector. Four Nears ago, a new manager arrived at Jaguar. The figures speak for themselves: in year one, a large loss; in year two, a small loss; in year three, a small profit; and in year four, a large profit. The key is an increase in output per employee of two and a half times—not 2½ per cent.—and all due to everything that we include in the phrase "enlightened management".
The other example, which is equally impressive and equally attributable to the introduction of enlightened management, is British Airways. No one who had the pleasure of listening to the excellent maiden speech of the noble Lord, Lord King of Wartnaby, and his plea for joint participation can fail to be impressed by his humanity and enlightened approach.
It is quite clear that it is nonsense to pretend that you can get good results only in the private sector. It may be right to nationalise in a particular case, as it certainly was in the case of Rolls-Royce—although, as far as I recollect, there was no mention in the Conservative Party manifesto at the time of the intention to do that. It may be right to denationalise in a particular case for compelling reasons. But what cannot be right is to sell national assets wherever you can lay your hands on them in the mad scramble to find the cash to make ends meet.
It cannot be right where there is no possibility of selling off a whole business to pluck out the saleable part, irrespective of the havoc caused to what is left behind. It cannot be right to split an effective undertaking, after 400 years, into four separate, less effective parts and in the process put at risk an important part of the country's defences. It cannot be right to be panicked into selling at what is, I hope, the bottom of the market, no matter how poor the price.
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One example of selling irrespective of the damage to what is left, irrespective of the low price and indeed irrespective of the private shareholders' protests, is the decision to sell the family Jaguar, again just to get at the cash. That brings us straight back to the American scene, for Jaguars have been selling very well in the States, and so have many other British products, so much so that we are running a substantial surplus in trade with the United States. Looked at from the point of view of the United States, that is part of the large deficit which it is deliberately running, which the Chancellor is criticising and which is the latest and easiest alibi available to the Government. Nothing could be easier than to say, "Let's blame it all onto the Yanks".
The first obvious point is that far from criticising the Americans, the Government should be thanking their lucky stars that the United States Treasury is happy to be running a large deficit which enables Jaguar cars and other goods to be sold there at a handsome profit. Indeed, those who are clamouring for the United States to put its house in order, as the saying goes, are in fact asking for a reduction in American purchases from ourselves and the rest of the world of some £60 billion a year at present. Whenever that huge deficit is reduced, as it undoubtedly will be, we shall inevitably find exporting to North America more difficult; and no doubt the Government will then claim that the reason for any new economic difficulties is again a factor outside their control—namely, the running down of the United States deficit.
There is much more that I should like to say in support of the Motion, but time will not permit. Perhaps I might have your Lordships' indulgence to say just two other things. The first is to read to you a letter from a friend in Moscow. He writes:
"I recently went to the cinema to see the film they're all talking about here. It's called 'Freedom in the Capitalist West' and is simply a series of shots of the miners' strike, the picket lines, the bloody clashes with the police, including mounted police, and of course the deaths. I cannot tell you how ashamed I felt at the scenes depicted and the reaction of the Russian audience. It is proving the greatest propaganda victory ever for the Kremlin and has put us back years in the fight for Western ideas. Do the Government understand the enormous damage being done to the reputation of the United Kingdom? If so, how can they continue to turn their back on it?"
I confess that that was an imagined letter, but it could well have been written, and the conclusion drawn is a true one. In a matter of such importance to Britain and of such immense cost—we know that the cost has been estimated by a firm of well-known City brokers at between £2½ billion and £3 billion per year—no Government can pretend to turn their back or evade their responsibilities.
Finally, I turn once more to the American economic scene, where the combination of monetarism and Keynesian policies—that is to say, both a measure of control of money supply and a measure of boosting the supply of goods—is proving highly successful. With the help of an expansionary fiscal policy and a large budget deficit, there has been a huge fall in unemployment, a great growth in the economy—incomparably greater than our own—a strong dollar, and, in spite of all this and of higher interest rates, no damaging increase whatever in the rate of inflation, which is currently below ours.
I do not claim that the parallel with the United

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Kingdom is absolutely complete, but what I do say is that we can no longer deny the power of budget deficits, properly handled, to boost economies without giving rise to unacceptable inflationary consequences. That is what the Alliance has argued for so long, and we now see it happening; that is what a number of highly respected Tories have pleaded for; that is what the CBI has required; that is what the Government, in their blind, know-all pursuit of extreme monetarism have spurned, at the cost of so much waste of idle resources, at the cost of so much human misery, at the cost of so many fissures in our society and at the cost of one million rotting lives. My Lords, I beg to move for Papers.
3.28 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, the noble Lord, Lord Diamond, in the Motion that he moves has set out matters of concern as seen by the SDP. It is important that I should deal with these matters even though I could not always agree with the noble Lord's concerns, with his diagnosis, or with his remedies.
As the Alliance well knows, the course of true love rarely runs smoothly, but neither does the course of economic recovery. There are bound to be cross currents, patches of choppy water and the occasional squall, but no storm is imminent. There are no storm clouds on the horizon. There is no need to change course. It would be wrong to change course. We do not propose to change course.
The miners' strike is a cause for concern, but coal continues to be mined. A third of the miners continue to work. No steel works have been closed. No power stations have been closed. Industry is not short of coal. Stock piles remain very large. The true cause for concern is the damage being inflicted on the mining industry: the violence and intimidation; the denial of democratic rights. These are all causes for concern. But what they call for is reinforcement of our existing policies, not a change in them and still less an abandonment.
The pound was the next subject raised by the noble Lord, Lord Diamond. The pound has fallen in value, particularly against the dollar. Is that a cause for concern? In some respects most certainly yes. But even here we must be careful not to exaggerate what has happened. While the pound has fallen against the dollar it has actually risen against the Deutschmark and has held steady against the European currencies.
The effective value of the pound yesterday stood at 78.5. In March 1983 it stood at 79.1. There has been virtually no change over this period. If we look at the pound in terms of the EMS currencies the position is that the pound in March 1983 stood at 91.8. By the time of the Budget this year it had risen from 91.8 to 99.4 and yesterday it stood at 99.4. So while there has been a depreciation compared with the dollar, against other currencies the pound has held remarkably steady. But of course, as the noble Lord, Lord Diamond, himself says, the weakness of the pound, even where it has occurred, is not an unalloyed misfortune. It is also an opportunity—an opportunity for our manufacturers in export markets and a better opportunity to compete against imports. We must
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take advantage of our opportunities, not be obsessed by our problems.
May I turn to interest rates? Of course we deplore the recent sharp rise in interest rates. Our domestic policies have been tailored to keeping interest rates down. That is why the PSBR has been set on a downward course. This year it is planned to come down to 2¼ per cent. of gross domestic product. Under Labour it reached nearly 10 per cent. I am not trying to make your Lordships' flesh creep but the noble Lord, Lord Diamond, referred to the record of the Labour Party and I think this is one particular record which is not one to be altogether proud of.
In part, the rise in interest rates is due to irresponsible industrial action in this country which illustrates the damage strikes can do to the strikers themselves, to their people and to the community as a whole. But in large measure the increase is due to the rise in American interest rates. We are responsible for our own domestic policies and we must get those policies right. But we cannot insulate ourselves from the world outside. If interest rates in America soar we cannot entirely prevent interest rates here rising as well. Until recently our interest rates were well below comparable American rates—nearly three percentage points lower for most of this year. But the combination of industrial troubles in this country and further sharp increases in American interest rates have forced our own interest rates up as well. But as Francis Bacon said:
"Adversity is not without comforts and hopes".
The rise in American interest rates reflects their enormous budget deficit. That budget deficit in turn is reflected in an enormous deficit on their balance of payments. America is offering the finest export market in the world, wide open to all the other countries in the world. It is up to us to take advantage of it. Our exporters are already doing so. Exports to the United States in the first six months of this year were up by 22 per cent.; non-oil exports were up by 31 per cent. That is the way you turn your problems into successes. Let us for a moment forget our penchant for criticising America and turn instead to congratulating our exporters, the companies, the managements and the workers who have contributed to these export successes.
But what about the effect on industrial investment? Of course we should like to see lower interest rates. But what generates investment is the prospect of profit. Profits are rising—up 25 per cent. on a year ago; no less than 40 per cent. up compared with two years ago. Industry is now earning 8 per cent. in real terms on its capital employed—the highest figure for many years. My right honourable friend the Chancellor of the Exchequer's Budget means that the rate of corporation tax—that is the tax on profits—will be cut drastically. The main rate will be cut down to 35 per cent. by 1986, the small company rate down to 30 per cent. right away. This is how you set the stage for profitable, well directed investment; how you ensure that investment decisions are soundly based on economic considerations—not on tax considerations—and how you achieve a proper balance between man and machine. And investment is rising—up 10 per cent. over the past 12 months. In their survey published today the CBI forecast a further

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increase of 12 per cent. this year and another 7 per cent. next year.
Is our rate of growth in output a cause for concern? It was up 2 per cent. in 1982; it was up 3 per cent. in 1983: the same again, we expect, in 1984. Last year it was the highest in the European Community; this year it is still one of the highest. Total output is now at its highest level ever and higher than in 1979 despite the fact of the recession. This may well be a disappointment for the Labour Party and for the Alliance but it is a source of satisfaction for the rest of us. We have weathered the storm of the recession. We are safely out on the other side.
The noble Lord, Lord Diamond, said that the average standard of living has not increased in this country since 1950. I find it difficult to believe what has led him to that dramatic conclusion. In fact real disposable income has increased by 127 per cent. since 1950. This is of course in real terms. Since the beginning of 1983 it has risen by 3 per cent. The most remarkable thing about the present recession is that real disposable personal income, which is the best overall measurement of the standard of living, has increased steadily over the years.
May I now turn to the question of the infrastructure?
Lord Diamond: My Lords, may I interrupt the noble Lord, if he would be kind enough to give way, as he has referred to me?
Lord Cockfield: My Lords, yes of course.
Lord Diamond: My Lords, I am grateful to him for telling me that I apparently said 1950. Of course the year to which I was referring was 1980. I apologise for the fact. My eyes will be better after the Recess, after a certain amount of surgery. I merely read the wrong figure. I apologise.
Lord Cockfield: My Lords, I am most grateful to the noble Lord. I thought I had heard him correctly and this is why I was so surprised at the figure. The fact is that although there have been year to year fluctuations, the total of personal disposable income today is significantly higher than it was on average during the 1970s. You can always pick out one or two odd years when the figures may have gone up or may have gone down, but the total of real personal disposable income over the years has increased at a significant rate.
May I now come back to the question of the infrastructure. It is a matter on which the noble Lord, Lord Diamond, has expressed considerable concern. It is, of course, a favourite topic of the Alliance. It was raised in the debate on 18th January initiated by the noble Lord, Lord Ezra, and again in the debate on 7th March initiated by the noble Lord, Lord Diamond, himself. There is little I can add to what was said on those occasions. But following suggestions made by the noble Lord, Lord Diamond, and others, we have now included in this year's public expenditure White Paper a special table—this is Table 1.13—showing capital expenditure by the public sector over a period of years. As that table shows, capital expenditure in real terms has not varied very much over this period.
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It is not very different today in real terms from what it was in 1978–79.
One cannot make a simple distinction and say that capital expenditure is necessarily good and revenue expenditure necessarily bad. There are many examples of capital expenditure which has been misdirected and effectively the money lost. What really matters is that capital expenditure should be cost-effective, and this is the basis on which we take our decisions. Very often, what is needed is not so much capital expenditure as better utilisation of existing capital resources or expenditure on repairs and maintenance. Repairs and maintenance represent additional expenditure by the public sector to the value of about 50 per cent. of the capital contracts.
If we look at the picture as a whole, the broad canvas of our economic affairs, the true picture is one of temporary difficulties and a number of important problems still remaining to he solved, but also one of real progress, real success and real hope for the future. There is nothing here to indicate the need for any change in course; nothing here to indicate any gain from a change in course. On the contrary, it is consistency of policy that is the bedrock of confidence; and it is confidence that is the foundation on which the future is built. As anyone who has run a business knows, success lies in building on success. That is what we are doing, what we propose doing and what we shall continue doing.
Our hope for the future rests upon our fundamental belief in the dignity, in the energy, in the resourcefulness of free men. There is a creative urge in man—to plough the field, to reach for the stars. Man is master of his own destiny. He can provide himself and his family with food and shelter and with the amenities of life by the work of his hand and of his brain, by his intellectual prowess and creative ability. What we have to do is to release that creative ability to establish a society which makes it possible for man to exercise his talents to the full and to develop them for the benefit of himself and of the society in which he lives and of which he is a member.
The reason why we criticise the way our society and our economy developed in the years up to 1979 was because inflation, state intervention, the growth of the nationalised industries and the public sector and misguided attempts to control and direct all conspired together to destroy the freedom of ordinary men, their independence, their initiative, the cardinal virtues of self-reliance, the striving for a better today and faith in the future. It was these qualities which were sapped by the growth of big government.
It needs a very great transformation in our society, a great change in outlook and in our institutions, if we are to re-create the spirit of enterprise and progress, if we are to generate the wealth we need to support a growing standard of living, to provide for those who cannot provide for themselves, and to supply the funds for investment for the future.
Very great changes we have made. They are crucially important. We must keep them constantly in mind, not least because further progress must be made. Let me set out our most significant achievements. First, we have brought inflation down to its lowest level for half a generation. For the first time in

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our lifetime we can hold out the hope of stable prices—maybe some time ahead, but even more important, therefore, to keep our eye firmly fixed on it. Second, we have dismantled a whole raft of controls that restricted individuals, obstructed change and hindered growth: pay control, price control, exchange control, hire-purchase control, office development permits and industrial development certificates. Third, we have improved the free working of the labour market by our trade union reforms and changes in the Employment Protection Acts.
Fourth, we have reduced the size of government. The Civil Service is now the smallest since the war. Fifth, we have denationalised important sectors of industry. We have moved them out of the public sector and back into the private sector, where they will be subject to the disciplines and the opportunities of the market economy. Sixth, the state pre-empts too big a share of the national output. The recession pushed it up even further. But it is now set firmly on a downward path: 45.8 per cent. of GDP in 1975–76, 44.2 per cent. in 1981, 42 per cent. now. It needs to come down further.
Seventh, we have greatly extended the private ownership of property—ownership by the people themselves, not by faceless state corporations. Twelve and a half million people now own their own homes: 600,000 council house tenants have bought their homes and 175,000 more are in the process of buying. There are 12 million people in occupational pension schemes, 20 million people with money in building societies, 17 million people with national savings accounts, and 2 million people owning shares in companies. This is a picture of a property-owning democracy. The ownership of property is the bulwark of freedom. What distinguishes the democracies of the West from the tyrannies of the East is the right to own private property.
Eighth, we have embarked on major reform of the tax structure designed to promote economic growth. In his Budget this year, my right honourable friend the Chancellor of the Exchequer abolished the national insurance surcharge, introduced a new structure for business taxation and made substantial increases in the main income tax thresholds, which now stand 16 per cent. higher in real terms than they did when we took office.
These, then, are the main strands of our policy—a policy designed to set our feet firmly on the road which will lead to a healthy, vigorous society. As a nation, we face a serious problem in unemployment. No one would deny the waste in resources or the hardship this causes. But it is a problem that all the countries of the Western industrial world face. Our problem is worse than most other people's because our record in terms of competitiveness is worse than other people's. The way to deal with unemployment is to create new jobs on a sound, long-term basis—new jobs in new companies, new jobs in growing companies, and new jobs in self-employment.
The key to this is competitiveness. We will only employ more people if we have a higher level of output. We will only have a higher level of output if we are fully competitive with our main industrial competitors. That is why moderation in wage settlements is essential. Real wages have been falling in
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the United States. They have been rising in this country. That is one of the principal reasons why millions of new jobs have been created in America, while unemployment has been increasing in this country. Every union negotiator who secures an increase in pay unmatched by productivity is negotiating unemployment for his members or the members of other unions. Every employer who concedes an excessive pay settlement damages the future of his own company and destroys job prospects.
Realism in pay settlements is not the only factor. A well-trained workforce, good management, good design, quality and innovation are all crucial factors. The Government can and do help in all these matters. But the onus rests essentially on industry itself—on managers and workforce alike. Crucially important, too, is that we should take full advantage of the growth in the service sector—not just the traditional services such as hotels, restaurants, retailing and tourism, but also the new information—based services—banking, finance, consultancy, the professions, including accountancy, information technology and the innumerable service industries which support manufacturing industry.
I have on a number of occasions made the point in your Lordships' House that it is quite wrong to try to drive a wedge between manufacture and services. We tend to think of services too much in terms of hotels and restaurants, retail distribution, and so on. These are very important. But the great growth sector today and tomorrow lies in the information-based services, and these are complementary to and supportive of manufacturing industry. We are living in an era of far-reaching economic change. You cannot obstruct economic change except at great cost to yourself. The right policy is to embrace change and make a success of it.
Despite all the difficulties, we are creating new jobs in this country. The total number of people in work has risen by 260,000 over the past year. There are over 330,000 new jobs in the service sector. We have a higher proportion of our people in work than in France, Belgium, Italy and the Netherlands, and about the same as in Western Germany. We need to do better; but that is crucially dependent on the better working of the labour market, and that is why we have directed so much attention to that. It is dependent, too, on encouraging people to set up in business where they will not only employ themselves but offer employment to others. Our fiscal policy is directed to this end. So, too, is the enterprise allowance scheme which is helping 1,000 a week of the unemployed to set up in business.
A long hot summer is coming to an end. On this, the last day of term, we look forward to Autumn, to Keats',
"Season of mists and mellow fruitfulness".
When in years to come we look back over these years through which we have lived—these historic years, these years of change—the difficulties of the present will largely be forgotten. We will wonder why we worried so much about them. Only those who lived through these years will remember why, will remember that stress and strain are very real when they are suffered. But courage and leadership alike demand that we should keep an eye firmly on the

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future; that we should know where we are going; that we should nurture an unfaltering determination to reach our goal; that we should resist with all our might those who would destroy our ancient freedoms, or, for reasons selfish or misguided, would obstruct our progress. We have indeed transformed the basis of our economic society. We have set our feet on a new path. The verdict of history will be that it was the right path: that we lacked neither courage nor leadership; and that together we have taken our people to a better future.
3.57 p.m.
Lord Barnett: My Lords, I imagine that some of us listened with some astonishment to the speech we have just heard from the noble Lord, Lord Cockfield. I know the sun was shining—at least, it was when we started—but the degree of complacency was quite unbelievable. The speech would have been listened to with outrage and astonishment by the near 4 million people outside who do not share his complacency because they are not free to work. Really, it was a quite astonishing catalogue of complacency—one that has rarely been heard in this House, I should have thought, or, indeed, in any other.
I should like to begin, if I may, by congratulating the noble Lord, Lord Diamond. I almost said "my noble friend", because I am bound to regard in that light anybody who was a noble friend for so long, and a former Chief Secretary. I congratulate him both on his Motion and on his speech. I hope the House will join with me in saying that we hope the surgery to which he referred will be highly successful and that he will be with us, in the best of health, after the Recess.
I must say to the noble Lord, Lord Cockfield, that when he started to tell us about the course of true love I wondered what kind of a speech he was about to deliver. Of course, at the end it was clear to me what kind of a speech it was. It was about some unique course of true love, with no squalls; indeed, he used the word "squalls". He said, "There's no need for change; everything is marvellous; we'll just carry on as we are". His platitudes were a little mixed in the sense that he told us we had got to have change as well. So we cannot continue just as we are; we have got to have change. continuing as we are. If the noble Lord does not mind my saying so, it was a very odd speech. In a moment I shall refer to some parts of it.
I should like to come straightaway to the Motion, which refers to,
"the lack of confidence in sterling".
Let me say at once that I think all Treasury Ministers—past, present, and hopeful ones for the future—should have a certain sense of humility about the level of sterling at any particular time. Certainly I would share the view of the noble Lord, Lord Cockfield, that the present strength of the dollar is very much the reason, rather than the weakness of the pound, for the dollar/pound relationship. The Government cannot, of course, be blamed for that strength of the dollar, although even there I am bound to say to the noble Lord that some of his arguments about the state of the economy of the United States, and their deficit, sounded a little odd, to say the least, in relationship to the fact that, despite that deficit, the
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United States are still managing to maintain levels of employment that we have not been able to get anywhere near. There are things to be learned from what the United States have been doing in their economic performance.
But I say right at the outset that I do not blame the Government directly for the fact that the dollar is strong and the pound is weak against the dollar. On the other hand, it is hardly a sign of confidence in the way our Government are handling our economy when we see what is happening to sterling in the world. Of course, the Government would be more credible—much more credible—if they had not claimed the huge success for their stable economic policies that they did when the pound was at 2.40 dollars. I am sure that the noble Lord will recall the Prime Minister's words at that time: oh, yes, 2.40 dollars was not too strong; that was a sign of the great strength of the British economy. We did not hear anything then like we heard today from the noble Lord about the great opportunities for exporters with the low exchange rate. We never heard anything about that. The 2.40 dollars was a sign of stability in the pound and the British economy.
Therefore, I am bound to say to the noble Lord that he should be rather more careful in the way in which he chooses to speak about our relationship with the US dollar. I, for my part, accept that much of the relationship of sterling with the dollar is not our fault. On the other hand, the noble Lord is also right when he says that the effective rate is a more important measure. It is a nonsense that we arc constantly looking only at the dollar/sterling exchange rate. The effective rate is much the more important measure: and, of course, it has been relatively strong in recent years and in recent weeks and months. Indeed, from 30th March to 25th June the effective rate actually rose l½ per cent.
But the key question is: if the noble Lord is right, if the effective rate is what matters (and I agree with him), then why are we slavishly following the United States interest rates? What is the point of that? If we should be looking not at the dollar exchange rate but only at the effective rate, what on earth are we doing damaging our economy to the extent that we are, which the noble Lord will be the first to admit? Indeed, the Chancellor told us that he hopes that it will be only temporary, because he knows the damage that high interest rates do. Yet despite the fact that what matters is the effective rate, we are still following the United States interest rates up. Why? Perhaps the noble Earl, Lord Gowrie, may even one day be in the exalted position of being able to speak even more importantly on economic matters than he already does, and perhaps this evening he will be able to tell us why we are following the United States in this matter.
But if we cannot claim it to be our fault because the United States interest rates are high, neither does it indicate (from the way in which the noble Lord presented it) great confidence in the way in which we manage our economy, in the way in which the Government's policies are working so magnificently (according to what he was saying), when even to maintain the present effective rate we have had to increase interest rates to the present high and damaging levels. Why on earth has that been necessary

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if we have been as strong and as stable an economy as the noble Lord told us this afternoon? Why has he had to do that? The noble Lord will not be speaking again, and so I direct my question to the noble Earl, and no doubt he will be able to tell us.
Of course, the rate—the effective rate as well—is not only directly affected by what the United States do: it is affected by other events beyond Government control. It is affected by what is happening to the oil price in the world. We cannot blame the Government for that. Things happen in the Middle East and in all parts of the world, and the state of oil prices is not the Government's fault. But as the noble Lord said, it is also affected by events nearer home. It is affected by industrial disputes. Indeed, we have been told not only today but on many occasions how damaging are industrial disputes. If they are that damaging, why on earth do the Government sit back for 20 weeks and let them go on at a huge cost to the British economy? That is what most people outside this House do not understand. We can all blame this or that man or the other, but the plain fact is that when the Government tell us how damaging it all is and they sit on the sidelines, or pretend to do so, for 20 weeks and allow it all to happen and affect the exchange rate, as the noble Lord told us again today, then I ask why on earth are the Government doing nothing whatever about it?
The Government have always argued, although the noble Lord did not do so today, that they do not have an exchange rate policy. I would be interested to know from the noble Earl, as he is listing the questions that he is to answer this evening, whether the Government still have no exchange rate policy. Is that still the argument? Of course, I am bound to tell the noble Lord that nobody believed it at the time, and if he says "Yes" this evening they will not believe him this evening. They have managed to contend to some extent that they did not have an exchange rate policy while we "de-coupled"—that is the correct word. We kept our interest rates below those in the United States and, if we did not have an exchange rate policy, left the exchange rate to take the strain at whatever level the market felt right. It could then be argued that there was no exchange rate policy.
But we are now back to a situation where the Government have decided to take the strain on interest rates. So we have the worst possible kind of exchange rate policy, doing great damage to the hopes of sustained recovery, of which the noble Lord spoke. Professor Symons of the LSE has argued that each 1 per cent. rise in short-term interest rates results in a ¼ per cent. fall in employment below what would otherwise be. Yet despite that, despite the fact that what matters is the effective rate, as the noble Lord himself said, the Government are still allowing the economy to be damaged by these excessively high interest rates. Despite the change, despite all that has been going on in the last few weeks and the damage to the economy through the high interest rates, the whole of the noble Lord's speech was a catalogue of what used to be called TINA—There Is No Alternative.
I am sorry to tell the noble Lord that one of the Government's strong supporters—indeed, possibly their strongest supporter; a great monetarist named Gordon Pepper of Greenwells—disagrees with the Government at present. He has two suggestions. First,
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he suggests that the Government should strive for international agreement particularly with Japan and Germany, and should not follow United States interest rates up. I think that is a good idea, although I am bound to say to Gordon Pepper and the Government that I do not think that there is a great prospect of success in the direction of getting the agreement of the Japanese and the Germans in this particular area. But it is certainly worth following.
However, he went on to make another suggestion, and before I come to that let me say what I think might be helpful—and, again, it is not the total answer, but it is something that we could do without international agreement. We could join the EMS, the full exchange rate mechanism. I do not pretend that it would be a panacea, but certainly in view of our present exchange rate levels it would be some help, and it would not leave us in the kind of situation that the Government are in at the present time. But it is not of itself the answer.
Lord Bruce-Gardyne: My Lords, will the noble Lord give way?
Lord Barnett: Certainly, my Lords. I have always told the noble Lord that we should pretend that we are in the other place.
Lord Bruce-Gardyne: My Lords, I am most grateful to the noble Lord. I want to make sure that I have understood what the noble Lord has just said. Is the noble Lord seriously contending that had we been members of the European monetary mechanism last month we should have been able to avoid the rise in interest rates that then occurred? Is not the truth of the matter that in order to maintain our place in the monetary grid we should have had to acquiesce to a much sharper, swifter and earlier rise in interest rates?
Lord Barnett: My Lords, I was not saying that, but I do not know whether those comments obviate the need for the noble Lord to make a speech later. There will be some who will hope that that will be the case! I certainly was not advocating what the noble Lord has put forward. I was careful to say that I do not believe that joining the full exchange rate mechanism of the EMS is a panacea or a full answer. There are still other problems which face this country and which would face this country whether we were in or out. But I do believe that it would be of some help. I know that the noble Lord is a great supporter of Mr. Gordon Pepper and so he will be very interested in the second suggestion of Mr. Pepper which I propose to quote for his benefit, and I hope for the benefit of the noble Lord, Lord Cockfield, and the House. He said:
"If such an agreement cannot be achieved"—
that is the one to which I previously referred—
"and sterling comes under pressure, the UK [monetary] authorities should adopt a foreign exchange policy of benign neglect and resist those who argue that they must accede to ingrained market expectations of a rise in interest rates".
So Mr. Pepper, who shares monetarist theories with the noble Lord, puts that forward as a proposal.
I am bound to say to Mr. Pepper and to the House that on this occasion I entirely agree with him. I think

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that the Government should allow the strain to be taken on the exchange rate rather than interest rates, which are much more damaging to our economic stability and our prospects and hopes for growth. I say to the noble Lord, Lord Cockfield, and to the Government that if they decide—not because I have asked them to—to take the strain on the exchange rate rather than on interest rates, I promise the noble Lord, the Prime Minister and the Chancellor that, despite what they used to say to me in 1976 when the rate dropped to the catastrophic level of 1·56 dollars to the pound, I for one will not attack them for a temporary fall in the pound. It would certainly be preferable to a large increase in interest rates, which we now have.
However, if we are to have a weighted average strong pound, in the longer term the real answer will depend upon the underlying strength of the economy, including, as the Motion says, levels of industrial production, and the need for measures to improve the infrastructure, and living standards and to create a stable society.
Sadly, despite what the noble Lord said about levels of industrial production today—and they are certainly higher than they have been—the plain fact is (the noble Lord never spoke about it, but he knows it) that virtually every independent outside economic observer and forecaster is forecasting a decline next year. The noble Lord knows that and it will be much worse if interest rates stay as high as they are at the present time. He knows that, and that should have made him deliver a somewhat less complacent speech than the one which we heard this afternoon. However, even with present levels of industrial output, we are still not achieving the improvements in the desperately needed expenditure on infrastructure that this country requires.
My noble friend Lord Cledwyn, our Leader, in a debate on 18th January in this House spelt out in very detailed terms the vital, if not desperate, needs we have in terms of infrastructure. On sewage, he spoke of "5,000 sewer failures a year"; on major roads he spoke of the frightening increase in the maintenance required; on minor roads he referred, as every noble Lord will know, to the evidence all around us of the appalling deterioration; on the subject of the railways he said that much of the system was built in the last century; on housing, where the Government themselves have argued that we need 300,000 more starts a year, he said that we are getting 200,000 and fewer; and now we have a drought, which illustrates the desperate need for increased expenditure on water supply.
It is, indeed, a dismal picture as opposed to the one which the noble Lord presented this afternoon and it is compounded by the Government's short-sighted refusal to recognise the different circumstances pertaining now as against the time when unemployment levels were much lower and when we did not have the benefits of North Sea oil. Instead of spending on vitally needed infrastructure, this Government are squandering the benefits of North Sea oil and other scarce resources on financing unemployment, which they themselves have created.
As to the Motion's reference to:
"the measures required to improve living standards",
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I have spoken in this House recently about poverty in our country and I do not pretend for one moment that in the short term, with the limited resources available and the need to concentrate on infrastructure, there will be much room for a general improvement in living standards. Indeed, I believe that it would be dishonest to pretend that any Government could provide huge general increases in living standards and at one and the same time help those in the direst need and find the money from public resources for the infrastructure. We could not.
The trouble with the Government's policies is that they are improving living standards for some, as the noble Lord told us, but, as was made quite clear in a recent debate, by any British standards millions of people are living on far too low a level. All this is creating anything but the stable society of which the Government boasted. I very much agree with the Motion that we need to "restore a stable society". Regretfully, the Government are ignoring the obvious need for a change of direction. Indeed, we were told today that they would stick steadily to this course. They told us that. Having set themselves on this path, it must inevitably mean this. With the current level of growth in output that we have this year, if we cannot reduce the level of unemployment, when growth falls in the next few years unemployment will inevitably increase even further. So the whole strategy which the Government are deploying, and of which the noble Lord boasted, is making a stable society impossible.
On the other hand, I have to say to the noble Lord, Lord Diamond, that he did not spell out any alternative policies today. I agree with much of his diagnosis. We know what the noble Lord's party's policies are; he did not have time to spell them out today. They want a statutory incomes policy of a kind. But real success cannot be achieved without a working arrangement with the trade unions in this country. That is not a statutory incomes policy. A statutory incomes policy is not necessary if you have agreement and it is unworkable if you do not have agreement. I willingly concede that no Government, including a Labour Government, have yet achieved such working arrangements, but I am bound to tell your Lordships that it remains the only hope, and Labour remains the only party with any prospects of achieving it.
4.17 p.m.
The Lord Bishop of Coventry: My Lords, I too am grateful to the noble Lord, Lord Diamond, for his comprehensive Motion. It is very tempting to comment on a wide range of issues, but I wish to discipline myself to one main general observation concerning that part of the Motion about restoring a stable society. There can be no doubt that economic considerations are crucial for the health of our country and the battle against inflation. The promotion of policies aimed at economic growth must occupy the energies of those responsible for government. Without economic stability the outlook is indeed bleak. That must be a priority concern.
But it also needs to be said that economic viability is not itself sufficient. It is simply not true that economic stability automatically guarantees social stability, and it is the absence of coherent social policy

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which constitutes the real anxiety just now. We may be successful in winning the economic battle, thus ensuring a future for our society, but we may then have a society which we do not want.
A critical scrutiny of social trends must therefore accompany economic progress and a vigilant attention to the quality of life is necessary if we are to combat the threats to social stability. Present economic policies aimed at reducing levels of public expenditure are having a serious effect on central and local government, and in turn on their capacity to provide services necessary for our social health. Cuts in education, for example, are affecting the whole educational spectrum—higher education as well as schools.
The Open University—which I believe has made an incalculable contribution since its inception—is to be cut by 17 per cent. over the next three years, and that is a crippling cut for so important a service. Education represents an enormous personal investment in the future of our society, and I cannot believe that monetary saving justifies the starving of this investment.
There are a number of areas where policy has set targets and expectations but where lack of resources has led to an inadequate service being offered. In London the statutory obligations on local authorities to house families can only be fulfilled by an increasing and intolerable use of bed and breakfast hotels. Even here delayed payment of social security benefits can lead to families being put out on the streets because they cannot pay their bills.
At the General Synod group of sessions a few weeks ago much concern was expressed in a debate about our treatment of the mentally handicapped. Many authorities have made little or no progress to offer care in the community to increasing numbers of mentally handicapped people living locally. It is a common experience in times of stringency that the survival of well-established services makes consideration of any new demands virtually impossible, and rate capping and the strict application of control prevents the development of new services.
Again the continuing high levels of unemployment cause concern about our future stability. The collapse of some areas of manufacturing industry has had a very detrimental effect on many local communities. I speak with feeling since Coventry, with its narrow economic base—namely, the car industry—has been badly affected. I have often felt that if it is necessary that many should be made unemployed for the sake of the national economy, there is some injustice in expecting them to bear the brunt of economic solutions without giving equal attention to their plight.
I know of course that it is easy to dramatise the connection between unemployment and social instability, and that many will deny that there is any connection. But your Lordships' committee on unemployment seemed to be in no two minds that unemployment provides motive and opportunity for one great threat to social stability; namely, crime. Unemployment is a great spectre in our inner cities, and the frustration it causes, together with the decline in housing, social security, education and other services, adds to the air of frustration and
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canvas of the economy. As a non-economist that is what I propose to do. I have no doubt that the manifest lack of confidence in sterling is a complicated issue. Economists assure me that that is so. There are proximate reasons given, and one of them given today hopelessness, and—alas!—the ethnic minorities appear to be among the hardest hit.
Whatever the rights and wrongs of the present miners' dispute, the levels of social conflict it has engendered must be a matter of the greatest anxiety. On the law and order aspect of this debate, we must note how much police time and resources are being taken up in this prolonged conflict, and the detrimental effect it has on helpful moves such as community policing. Social control at present is too much led by the police themselves, and that is not a criticism of the police. They have to execute an unenviable duty on behalf of the whole community. Incidentally, it is not irrelevant in this connection and to the whole matter of social stability to note that we still have only 200 black policemen in London in a total of 26,500.
When Beveridge devised his insurance principle, he envisaged the situation where practically full-time employment was possible. By 1983 over 1 million people had been unemployed for over a year. Recent figures suggest that 650,000 have been unemployed for two years. As we look ahead I believe that one of our greatest social problems is that of large numbers of young people who will have no experience at all of employment.
I have been engaged in much consultation about the future of work in the city of Coventry, and I know how difficult it is to arrive at any coherent prediction about employment trends, and whether modern technology will create enough jobs in the future as industry has in the past, or whether on the contrary it will preclude a return to the notion of full employment.
It seems essential that we ought to be giving serious thought to the structuring of a society where work is not necessarily equated with paid employment and where the dignity of human service is preserved. That thinking, in my judgment, is essential if we are to banish anxiety about our future stability, and there is all too little thought being given to that particular issue. My plea, therefore, is for serious thought about trends of society and the quality of its life, for economic viability alone will not guarantee a stable society.
4.26 p.m.
Lord boson: My Lords, I shall not follow the right reverend Prelate the Bishop of Coventry in what he said, save to say that I very much agreed with him, and as he spoke the question came to my mind, is the heavy social cost we have paid in the last few years justified by the economic achievements? If not,there is something seriously wrong.
I am neither a businessman nor an economist, and I was lost in admiration for the astonishing speech made by the noble Lord, Lord Cockfield, with his many flights of poetic fancy. Early in his speech he took reassurance from the words of, I think, Francis Bacon:
"Adversity is not without comforts and hopes".

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Thereafter it seemed to me that his speech was singularly lacking in "comforts" and singularly dependent on "hopes".
The noble Lord invited us to look at the broad has been the strength of the American dollar. I have heard other reasons given, such as the expected fall in the price of oil with its resultant effect on the rate of inflation. But it is also, surely, a measure of the assessment of the outside world of the effectiveness of Government long-term policies.
In this House we ought at least to be able to detach ourselves a little from the party warfare which so affects our political life in the other place, and in many ways clouds the judgment of the country on many of these issues.
We all take up a partisan view and often put ourselves in blinkers because of that. One of the attractions of the Prime Minister's economic policy when she came to power was her emphasis on the need for a long-term view of economic life, and her attempt, as she described it, to get away from the hand-to-mouth living of the governments which had preceded her. There was a great deal to be said for this approach. There is no doubt that there had been a steady decline in the competitiveness of British industry. Anybody taking a detached view in 1979, whatever their political colour, would have been fairly convinced that there had to be some drastic changes in the British economy and in the measures that we have taken with regard to it.
The noble Lord, Lord Cockfield, came back in the course of his speech to what is regarded by this Government, and regarded widely, as the touchstone for eventual success: namely, competitiveness: that we must restore the competitiveness of this country. I use the term "competitiveness" now in its widest sense, because competitiveness not only means price but reliability of the product and so on. Five years after 1979 I should like to pose this question: are we really more competitive? Because, if we are not, all the struggle, all the social costs so excellently described by the right reverend Prelate, have been to no avail.
The emphasis put by the Government on productivity increases—and reference was made by the noble Lord to improvements in productivity, for example, in 1983—is due primarily to the shedding of the least productive labour and not to any significant degree to new investment, to retraining, retooling and other growth components. In other words, this country is to a considerable extent treading water.
We ought to consider what steps have been taken by the Government to achieve their long-term aims and whether they are proving effective. Successive Chancellors of the Exchequer justify reductions in taxation for the better off because it was argued that this would help to increase savings, these savings would be translated into investment in British industry, and if we allowed the free forces of the market to operate we would have considerably more investment in British industry. But the truth is—and we all have to face this—that this just has not happened. In the last five years £15 billion of British savings has been invested abroad. Is there any reason to think that with the buoyancy of the American
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market at the moment the money markets of London and those advising them do not advise our investors large and small to invest abroad rather than at home? Is this not what has been happening in the country? Are the Government happy about this?
The Earl of Gowrie: My Lords, I am most grateful to the noble Lord for giving way. I shall answer this point at length when I wind up, but while this point is fresh in the minds of the House I must tell the noble Lord that there is no evidence whatsoever of any shortage of investment capital in this country for profitable activity.
Lord Hooson: My Lords, there never has been any lack of investment capital. There is a lack of investment and opportunity for investment. What the Government have to do is to create the right atmosphere and the right opportunities for investment. The truth is that the investment is going abroad. Are the Government happy about this? Is this what was envisaged when taxation was reduced? Are we going through all this miserable social battle for little or no eventual benefit? That is the real question at issue. Is it possible to claim that there is in any way now a true free market which the Government so insist upon, referring to its virtues?
In the earlier part of the nineteenth century the Liberals were great believers in the effectiveness of the free market, but we lived in very different social and economic conditions in those days. Even then we paid a very heavy social price for the operation of the so-called free market. The Government attitude towards trade unions indicates that they believe that the unions' power distorts the ability to operate in a free market, but there is no comparable sign of any vigour in Government policy to deal with the great market power of the large corporations which again distorts the free market.
Is not the lack of confidence in sterling due more to a growing belief among people outside this country that the Government's policies are not arresting the long-term economic decline of our country, save marginally, than to proximate causes?
Above all, the Government seemed to have failed to provide the leadership to ensure reinvestment in this country. The capital is here to be invested: why is it not being invested? I have never heard a single answer to that question. Why are our investors constantly being advised to invest abroad? They are investing abroad and why is it that the home market does not appear to be attractive? Why have the Government failed to create the necessary poise and confidence to restrore stability to Britain's manufacturing industry?
The Motion refers to the state of the nation's infrastructure. The state of the infrastructure is obviously a considerable indicator in determining whether a country is in a state to arrest its industrial decline. The noble Lord from the Opposition Front Bench spoke of the current water problem and the lack of expenditure on the infrastructure in the water industry. I remember the late Nye Bevan once saying about our country that we were a country almost made of coal and surrounded by fish and only a genius could produce a shortage. We might add to that that we are heavily endowed with water, yet whenever we have a

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warm summer we seem to be lacking in water resources, obviously due to the lack of expenditure on the infrastructure.
There is deterioration of our roads at A time when millions are unemployed. Our railways are under threat; our sewers, especially in the larger inner city areas, are greatly in need of modernisation and repair. Yet we can tolerate 3 or 4 million unemployed and we do not provide the capital for this work to be done.
The question has been asked: why is the United States economy succeeding when ours is not? Is it because the Americans at least see in their country the opportunity for investing and are investing? I was told recently by somebody who had been in Philadelphia three years ago that he found that work on the rather derelict inner city had made enormous changes in the last two or three years.
Are we content to go along with the hopes of this Government that the economy in some magical way will improve? Or do we need to take more substantial steps to improve it? It seems to me that the heart of the problem is the need to invest in British industry to ensure that there is proper capital investment and proper training for management. The difference in management already referred to at Jaguars has made an enormous difference, coupled with the right capital investment behind it. The retraining and retooling of British industry is still very much overdue. After five years of this Government what have we got—real progress? All we have done, surely, is slim at the margin. We have not begun to set the real basis for economic recovery.
4.38 p.m.
Lord Bruce-Gardyne: My Lords, I listened to what the noble Lord, Lord Hooson, had to say about the need for investment. I must honestly confess that I have sometimes felt that we have not suffered in this country so much from inadequate investment as inadequate return from the investment that we have made. If one contemplates the record of state provision of investment from Concorde right the way through to DeLorean, one has to have considerable reservations about the ability of Governments in this country to make wise and salubrious decisions in this area.
I should like to join with other noble Lords in congratulating the noble Lord, Lord Diamond, on initiating this debate. He has given us a wide menu. One might almost say that all human life is there. I listened with particular interest to what he had to say and also to what the noble Lord, Lord Barnett, had to say on the matter of the exchange rate which features in this Motion. It is sometimes difficult for the Government to get it right. Most of the time we are told by the Opposition parties that what we ought to have is a more competitive exchange rate. Then when the exchange rate slips they say that it is a demonstration of the total collapse of confidence in Her Majesty's Government. I suppose it is the privilege of Opposition parties always to have it both ways. We have heard a bit of both arguments this afternoon.
Fortunately, or unfortunately, I for my part tend to wonder about the capacity of governments by taking counsel in an arena of floating exchange rates to be
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able to determine, or even to influence, to any great extent, the status of parity. I suspect that one apocalyptic comment from Dr. Henry Kaufman or the sale of a single Jumbo jet to Saudi Arabia in exchange for oil is likely to have more impact on the sterling exchange rate than any burning of midnight oil in Great George Street. And to a considerable extent I suspect that this is also the case about interest rates.
The noble Lord, Lord Barnett, waxed very indignant about the way in which, according to him, the Government had put the recovery at risk by pushing up interest rates in order to stabilise the exchange rate. He quoted at length Mr. Gordon Pepper, for whom I have much admiration and respect. I must confess that I even wonder whether Mr. Gordon Pepper is fully seized of the comparative difficulty of ensuring that you can get interest rates necessarily where you want them at any given time. I submit to your Lordships that if the markets are sufficiently determined with sufficient pressure to push interest rates up, the situation will require more than the sort of agreement which Mr. Gordon Pepper talks of with the Germans and the Japanese—and I agree with the noble Lord, Lord Barnett, that it might not be easy to come to that—and more also, I suggest, than loud pronouncements about our willingness to take pressures on the exchange rate on the chin.
Indeed, I think we could afford to pay some attention to what happened last month when the Bank of England issued a statement—whether they were responsible for it, I know not—to the effect that there was no reason on grounds of domestic monetary policy for a rise in interest rates. Did that satisfy the markets? On the contrary. The immediate reaction of the market, I think entirely predictably, was to push the pressure for higher interest rates all the more strongly. I think that one of the lessons of this recent experience, if I may say so, is that not only is the power of governments to determine the exchange rate or level of interest rates pretty restricted but, furthermore, if they attempt to defy the judgment and the pressures of the market at any given time they are liable to find that they have to make an adjustment in the end which is more severe and steeper than it would have been had they acted more promptly in response to market pressures.
None of that is to argue that we are totally powerless to influence the levels of interest rates. I have no doubt at all that the smaller the public sector borrowing requirement, other things being equal, the lower our level of interest rates will be. That is why I so strongly commend the Government on the way in which they have responded to what, for my money, I must confess is an excessive level of public expenditure for reasons which we understand, by insisting that that should be properly financed out of taxation. I think that that has been entirely right because I believe that by achieving a falling PSBR as a proportion of GDP we create the environment for interest rates being lower than they would otherwise be. But it is a relative influence and not an absolute influence, and I must say that I doubt very much that we can expect to decouple totally from interest rate movements on the other side of the Atlantic or that we can necessarily expect to escape the pressures when sentiment changes, for example, in the oil market.

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Before I turn, as I should like to, briefly, to what seem to me to be the prospects now, I should like to pick up one further grievance upon which the noble Lord, Lord Diamond, spent a minute or two. This is what he described as the Government's propensity to sell off the family silver. He suggested that the experience of Jaguar and the experience of British Airways demonstrated that an industry could be perfectly well turned round by good management in the public sector. I would accept the examples that he gave us, but I would tell him of a conversation that I had with the father of the noble Lord, Lord Melchett, shortly after he had been appointed by the noble Lord, Lord Wilson, to be the first chairman of the nationalised steel industry in the 1960s. He said to me then that he did not think that the name in the share register, whether it was the Government or a host of private shareholders, made any difference. I saw him three or four years later, shortly before his death, and I reminded him of this conversation. I asked him if he was still of that opinion. He said that he was still of the opinion that that should be the case but he had to concede that it was not remotely the case and that the truth was that life in the public sector for management was totally different. That, to my mind, is the fundamental reason why it is all the better to get the successful companies like Jaguar and like British Airways out of the public sector where management can perform and be judged on its performance by the market.
If I may now turn briefly to what seem to me to be the prospects ahead of us, the noble Lord, Lord Barnett, said that every independent forecaster—I hope that I heard him correctly—was forecasting a decline in output for the United Kingdom next year. I do not know which independent forecaster he reads, but I am bound to say that I must be reading different ones. I would draw his attention, for example, to the latest predictions from the OECD. The OECD could hardly be described as a sort of "Thatcherism in exile". Their prediction is that next year is liable to see a rate of growth in the United Kingdom economy of about 2.7 per cent. with an actual fall in the level of unemployment—one of the only three countries in western Europe which they foresee experiencing a fall in the level of unemployment.
My right honourable friend has reminded the House of the latest CBI prediction on investment and the extremely encouraging rise in the trend of profitability in manufacturing industry which has been so desperately needed. I do not try to pretend, and I would not dream of doing so, that all these forecasts can be taken as Holy Writ, any more than I would accept that the gloomy predictions of the noble Lord can be taken as Holy Writ. I was slightly worried, I must confess, to hear my noble friend say that there were no signs of any problems and that there were no storms imminent. I do not like these sorts of medium-term weather forecasts. I think they can sometimes cause us trouble.
I must say that I would have thought that there were one or two potential shocks lurking around. For example—and we have not heard much about it this afternoon—I have a suspicion that it is more possible now than perhaps it has been hitherto that there could
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be a real sharp break in the international oil price: and I think that that is something we need to consider. I believe that if that were to happen it is a circumstance where it would be entirely right for the Government, to the extent that they possibly could—and I do not overestimate that—to accept that such a pressure of such a crack in the oil price should be taken on the exchange rate: because, after all, the inflationary pressures would be sharply muted by cheaper prices of commodities. If, indeed, any corrective action were needed in those circumstances, and I do not say that it would be, I would have thought that the logical place to look to was some possible rise in the levels of indirect taxation. I think that we should be prepared possibly for some strains in this area in the weeks and months ahead. On balance, I suspect that they will actually be conducive to the encouragement of the recovery from the world recession rather than the other way round.
Finally, I want to conclude with one word on a subject that was, of course, rightly raised by the noble Lord, Lord Diamond, and a number of other speakers. That is the intractable problem of unemployment. My noble friend drew attention to the difference between the experience of the United States and ourselves in this area over recent years. I am convinced that we still need to look more closely at some of the artificial barriers that we have erected in the labour markets, particularly in this country.
I hope that my noble friends will study carefully the latest publications from the Institute of Economic Affairs which analyse the consequences of the work of the wages councils and bodies such as the Equal Opportunities Commission. I read the other day that since the Equal Opportunities Commission has been managing our affairs in this area the wages of women in our society have risen from 63 per cent. of male wages to 74 per cent. in a period of 14 years. What we were not told was that the number of women in unemployment as a proportion of total unemployment has, over the same period, risen from 14 per cent. to 30 per cent.
Baroness Seear: My Lords, perhaps I may—
Lord Bruce-Gardyne: My Lords, if the noble Baroness will forgive me, I am just completing my remarks. I do not wish to delay the House and I am sure that she will pick up that point when she comes to make her own speech towards the end of the debate.
I hope that we have not gone soft on the need to examine very closely the desirability of some of these artificial distortions of the labour market. If we look particularly at the area of youth employment we can hardly fail to realise that the artificial narrowing of differentials between the earnings of juveniles and of adults must have been a contributory factor to the relatively poor performance in the field of youth employment in this country compared with our neighbours. These are areas at which we should look and I believe that the opportunities could come to follow on next year in that arena.
4.52 p.m.
Lord Harris of Greenwich: My Lords, I hope that the noble Lord, Lord Bruce-Gardyne, will forgive me

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if I do not follow him in his interesting speech this afternoon because I want to devote my attention to the last few words of the Motion of my noble friend which makes reference to the need … to "restore a stable society". It would be tempting to follow the noble Lord, Lord Bruce-Gardyne, particularly in the light of what he has just said about the improvement of the position of women in terms of their income over the past few years, but I suspect that my noble friend Lady Seear will be in a rather better position to deal with that point when she speaks in this debate later this evening.
I wish to discuss this more limited area set out in the Motion of my noble friend as did the right reverend Prelate the Bishop of Coventry, with whose speech, if I may say so, I very much agreed. I want to discuss two inter-related issues; but before I do so I should perhaps declare an interest in that I am a director of a company involved in job creation and of another which has recently been involved in litigation with the National Graphical Association based on the Government's fairly recent trade union legislation.
I want to discuss, first, the dispute between the National Union of Mineworkers and the National Coal Board; and, secondly, the serious consequences that this is having on the police service in its efforts to maintain public order in the coalfields. Let me say at the outset that I understand and sympathise with miners who fear that the closure of their pits will damage grievously their local communities, making it still more difficult for their own children to secure jobs when they leave school. It is simply silly in my view to minimise these fears or to attempt to do so in communities which are sometimes experiencing unemployment at a level of 18 per cent. or more.
That is why I very much regret that the Government—so far at least—have not done something to reduce these wholly understandable anxieties. To take just one example, I consider that they should have encouraged the National Coal Board to follow the excellent example of the British Steel Corporation and establish a job creation agency to help men where pits are likely to be closed to set up in business on their own account. The British steel industry has done admirable work in this field in creating workshops in steel closure areas—in communities as diverse as Corby, Consett, and Cardiff. If the Govenment are prepared to continue to support an initiative in the publicly-owned steel industry, why have they so far at least appeared to take an entirely contrary view when it comes to the publicly-owned mining industry?
I turn now to the merits of the dispute. I find it hard to understand how any rational, balanced, person, aspiring to any position of political responsibility, can do other than oppose Mr. Scargill. He says that unless a mine is physically exhausted, it must remain open. He concedes nothing—whether a pit is losing £5 million a year, £10 million a year or £15 million a year is, to Mr. Scargill, totally irrelevant. It must in all circumstances remain open. I do not believe that any Government of any political persuasion could possibly accept such an entirely nonsensical proposition. And in the past of course a closure programme has continued both under Labour and Conservative
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Governments, under the noble Lord, Lord Robens, and under my noble friend Lord Ezra.
What has changed has been the arrival on the scene of Mr. Scargill as president of the National Union of Mineworkers. Mr. Scargill, as we know, views with total contempt his precedessors as leaders of the NUM. He believes that they were collaborationists with the class enemy. To him, the dispute is simply another engagement in the class war. He rejects any thought of compromise. It is to be victory or nothing. Despite the clear rules of the National Union of Mineworkers, he has rejected a ballot of his own membership. He has encouraged the most brutal methods against miners who want to go to work. Almost nightly we witness on television the sickening episodes of violence as sometimes hundreds of miners charge lines of police officers attempting to maintain the right of free men to go to work.
But it is not just a question of violence on the picket line. We have intimidation directed against non-strikers' homes—men who are just as much members of the National Union of Mineworkers as Mr. Scargill and Mr. McGahey, but who, in the absence of the ballot which is required by the union's own rules, are not prepared to go on strike. We have seen the case of Mr. Inverarity in East Lothian, with his house surrounded by 40 strikers from County Durham. Their purpose is to intimidate Mr. Inverarity and his family so that he would cease going to work at Bilston Glen colliery. We have had the even more tragic case of Mr. James Clay of Sneyd Green near Stoke-on-Trent. He returned to work because the financial pressures of remaining on strike had begun to overwhelm him and his family. He was abused and spat at by strikers. His wife received threatening telephone calls; one directed in the most brutal terms at his 12 year-old daughter. Mr. Clay could stand it no longer and he killed himself. The North Staffordshire coroner said at the inquest:
"I am fully aware of the fact that this is not an isolated case, but the consequences are, thank God, isolated".
Later a chief superintendent of the Staffordshire police said that 30 other working miners had received threats, and he believed that many other cases had gone unreported. In Nottinghamshire the situation is even worse. There the chief constable has said that 486 cases of intimidation have been reported to the police; and how many more have gone, again, unreported?
When Mr. Scargill is confronted with evidence of this character, he exhibits not even a trace of human compassion. He simply denounces the police. I have no doubt that many Labour Members of this House—I am quite sure the overwhelming majority, if not all—are just as disgusted as everybody else by conduct of this character. But their colleagues in another place—with only one or two very important exceptions, it has to be said—have been preoccupied by what they claim to be the intolerable conduct of the police in the mining dispute and it is to this issue that I now wish to turn.
In the early stages of the strike, the Opposition in another place remained fairly silent on the issue; but as the violence on the picket line began, so did their attacks upon the police. Of course, I have no doubt whatever that in a number of isolated cases individual policemen have "lost their heads". Tired of being

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abused and assaulted, they have struck back. Such conduct is of course entirely unacceptable, and if it is proved that it has taken place it is right that disciplinary action should follow.
But who seriously believes that the problems we are now facing in the coalfields of Derbyshire, Nottinghamshire, Lancashire and Scotland are caused by the police? Such a suggestion is in my view entirely absurd, yet that is precisely what was the central feature of the Opposition's attack in another place only last week. At about the same time we had the speech of the Leader of the Opposition in another place, Mr. Kinnock, at the Durham miners' gala. He declared:
"We cannot permit Mrs. Thatcher to have a further victory in her war against the British people."—
and he added—
"This is a fight for survival."
I can recall few incidents since the war in which any Opposition has committed itself so explicitly to support a trade union in such a punishing national strike, and I can think of no occasion on which it has done so when 30 per cent. of the workers involved have refused to go on strike. Yet that is where the Leader of the Opposition in another place has led his party. I am sure that he has many private doubts about this whole question, but his public position is one of firm public support for Mr. Scargill, and this, together with the campaign which is being waged in another place and outside Parliament against the police, is already creating serious problems concerning the relationship between a number of chief constables and their police authorities. I know of at least five police authorities where this is now beginning to be an extremely serious potential problem. In one case, the case of South Yorkshire, this matter has already gone before the courts.
Let us be quite clear about what is happening. A determined effort is being made to prevent the police from carrying out their duties. The police of course have an absolute duty to maintain the Queen's peace. They have an absolute duty to ensure that men who want to go to work are not prevented from doing so by large, unruly mobs. They have an absolute duty to prevent the harassment of the wives and children of those going to work by violent men trying to force them to go on strike.
The quite deliberate attempt which is being made by a number of councillors on this limited but important number of police authorities to apply grossly improper pressure on chief constables will I am sure be resisted. I would add only this. If this type of conduct continues, it may do serious long-term damage to the relationship between police authorities and chief constables. It may also be used as an excuse to raise again the question of the reorganistion of the structure of policing in this country. I would very much regret that. I want, as do my noble friends, to maintain a situation in which police forces continue to have the closest relationship with the communities that they are called upon to police. But that being so, and quite apart from all the other factors involved, I very much hope that the supporters of Mr. Scargill on some of our police authorities will begin to realise the dangers to which
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their own irresponsible conduct is beginning to lead them.
I turn finally to another question which relates directly to the violence on the picket lines. The police have charged large numbers of demonstrators with criminal offences. However—and the noble Earl, Lord Gowrie, will not be surprised when I come back to this point: we debated it on the Trade Union Act only a very few days ago—why is it the case that the nationalised industries have refrained from using the civil law? We have been reminded by the Government repeatedly of the great benefits that we are all deriving from their trade union legislation, and in particular from the fact that it makes secondary action unlawful. But we are seeing examples on television every night of secondary picketing. It is violent, it is often brutal and it is wholly unlawful.
Yet the nationalised industries concerned have, as we know, taken no action at all in the courts. They have sat on their hands and—as I mentioned to the noble Earl only a few days ago—thanks to the leaks of Government documents to the Daily Mirror we now know why. They have been told by the Government not to go to the courts. It has been left to small private employers to take the risks—and these are considerable—of using the Government's trade union legislation, when the industries over which the Government have direct control are told by the Government not to use the law in any circumstances—
The Earl of Gowrie: My Lords, I am most grateful to the noble Lord for giving way, but this is an extemely important point. When he took me to task in the earlier stages of the debate with the fact that the law was not being used, his implication was that the law was not being used at all. The noble Lord's implication has now changed. He accepts that the law is being used by some independent sector industries against the National Union of Mineworkers, so he will see that the law is in fact being used. He is now asking why the nationalised industries are not making use of the law. At that stage, I said that the essence of civil law was its voluntary character, as distinct, as we all know, from the criminal law which we all have to obey; that it is up to the Coal Board to decide whether to seek injunctions from the courts and the rest in this instance. I also said that I had no doubt at all that, if the situation deteriorated, this and other industries would decide it might well be in their interests to go to law.
Lord Harris of Greenwich: My Lords, I am grateful to the noble Earl. If I may say so, I was not altogether surprised by the fact that some private employers were using the law, given the fact that I happen to be on the board of a company which has itself used the law. I made it quite clear on the last occasion that the most disturbing aspect of this situation was the fact—it has not been denied, and it has not been denied by the noble Earl this afternoon—that the Government have given instructions to nationalised industries—
The Earl of Gowrie: No.
Lord Harris of Greenwich: My Lords, I will listen with interest and with particular care to what the noble

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Earl says when he comes to reply. But I am bound to tell him that it has not only been published in the press and there has been no attempt to deny it up to now. It is also the opinion of many nationalised industries that that is the very firm view of the Government. If the noble Earl wishes to make it clear tonight that nationalised industries are perfectly free to use the civil law forthwith, I am sure that they will be extremely glad to have that reassurance from the noble Earl. It would be quite intolerable if it were going to be left simply to Mr. Richard Read and Mr. George Read to use the civil remedies which exist to prevent these continual breaches of the law.
Nobody on these Benches would derive any pleasure from seeing this great union, the National Union of Mineworkers, grievously and perhaps irretrievably damaged by this dispute. I can remember, as can many of my noble friends, many fine men who have devoted their lives to building up the National Union of Mineworkers—men such as my old friend and colleague Sam Watson and the noble Lord, Lord Gormley. The union's present course of action cannot possibly succeed. When, following the decision of Mr. Justice Park on Monday to fine the South Wales area of the National Union of Mineworkers £50,000 for contempt, Mr. Scargill called on the trade union movement—and I quote him—"to give total physical support" to his union he was demonstrating once again, in my view, that this dispute is not, to him, a normal dispute between a trade union and an employer. He was calling on the trade union movement to join him in a full-blooded assault upon the rule of law.
We on these Benches want there to be a reasonable solution to the present deeply damaging dispute in the coalfields. I am sure that that is the view of all sensible people in all parts of the House. However, on one matter we must make our position entirely clear. The attack by Mr. Scargill on the rule of law is not a matter upon which anybody who believes in the fundamental principles of our parliamentary democracy can possibly remain neutral. I believe that everybody who wants Britain to remain a liberal and tolerant society must speak out and do so without any ambiguity. Mr. Scargill cannot be allowed to succeed.
5.12 p.m.
Lord Marsh: My Lords, one of the very real problems of membership of this House, as I have discovered, is that so many of its Members have worked together so closely in the past that they share the experiences of each other. I am bound to say that when I listened to the noble Lord, Lord Diamond, with whom I worked as a colleague and from whom I learned a great deal, I had to remind myself that we had sat in the same Government around the same Cabinet table. There certainly seemed to me to be no recollection by the noble Lord of the economic horrors through which we lived during that period: the dashed hopes and dreams, the realisation of the limitations of governmental power, faced with a hostile international economic situation. Those aspects were certainly borne in on me.
I remember at that stage being badly treated by the noble Lord, Lord Diamond—as all Ministers are by all Chief Secretaries to the Treasury—in his every effort to
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grasp back every penny that he conceivably could in order to cut public expenditure in every direction that he conceivably could. This is the same noble Lord to whom I was summoned—members of the public are not aware that Chief Secretaries summon Cabinet Ministers—during a great battle about the number of traffic wardens who could be employed in Central London, because of the need to cut back on public expenditure. If the noble Lord remembers a calm, stable economy—all of us, having heard the noble Lord, Lord Cockfield, are in danger of sliding into a lyrical way of speech—with Ministers confidently steering the nation through the economic troubles of those days, I am bound to tell him that I remember a very different picture. Indeed, the key reason why I moved from the Labour Party to, technically, these Cross-Benches, but in practice possibly slightly further—
A noble Lord: My Lords, in reality.
Lord Marsh: Certainly; I am grateful for the compliment. One of the reasons in my mind was not the change—I shall come to that in a moment—in political power and direction within the Labour Party, as applied to some people subsequently after failing to be elected to the National Executive of the Labour Party. The main reason why I moved across was because that period proved to me that the measures upon which the entire socialist approach to economic matters was based did not work. I remember 14th March 1968, when we looked over the edge and saw how close we were to total economic collapse at that period and how grateful we were that the International Monetary Fund, like the Eleventh United States Cavalry in a bad "B" feature movie, came to our rescue and forced us to do things that we were longing to do but which politically we were unable to do.
That was the situation in those days. Of course we have problems today, but it is foolish to exaggerate them. The noble Lord referred to the continuing drop in the value of the pound, and the Motion speaks of "the lack of confidence in sterling". That simply is not true. As the noble Lord, Lord Barnett, gently pointed out, the pound, in common with virtually every other currency, is "off" against the United States dollar, but it is not down against the majority of other currencies. It is a problem, but it is an international problem. Until we get used to the idea (this was the problem when I was a member of the Government) that this is a very small island which cannot manage its economy internally as if it were on a different planet, and that it is affected by matters in other, bigger and more important countries, we shall not solve the problem.
The noble Lord mentioned the drop in the London stock market. Again, most of the stock markets around the world outside the United States are down. Even the Tokyo stock market is down. This is a worldwide phenomenon. This is not to suggest that we have no problems. The most serious problem we face, which is referred to in every debate of this type, is unemployment. That is an incredibly serious and sad problem, but it is a problem which exists at present in most Western European countries. It is not a peculiarly British problem. Nevertheless, it is a serious, deep, endemic and complex problem.

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The righ reverend Prelate the Bishop of Coventry referred to the effect on communities of the contraction in the automobile industry in the Coventry area. May I mention just one element in that problem. The reason why the automobile industry has recovered to some extent in the United Kingdom is not because of anything that the Government have done but because the people working in the industry, at long last and just in time, in some cases, realised that they themselves were destroying their industry. The reason why the British car industry could not compete in third markets and, even worse, could not compete even in its own domestic market was largely because of the actions of people within the British car industry.
This is not to say that all of the problems we face over unemployment are due to the people who work in industry. It is a much more complex problem than that. It is one problem among very many. Anybody who suggests that there is a single cause of British unemployment is either naïve or stupid. There are very many different reasons. Our problems go back a very long way. One factor which is very clear in my mind and which is at the basis of this debate is that what was described as Butskellism—a sort of Galbraithian approach to the economy and politics—simply did not work. Both parties tried it. There was very little difference between the two parties. With the greatest respect, there is little difference between the majority who sit now on these Benches and a large number of Conservative BackBenchers. There are differences of emphasis and differences of argument, but the idea that there was a central, cosy approach to British politics and to the British economy is dead, because it did not work.
What happened at the general election of 1979 was that for the first time this country embarked upon a radical change of approach in direction on both the economic and the political front. It was bound to be a very uncomfortable ride; you cannot change the attitudes, habits, and thinking of a nation overnight simply by changing the Prime Minister—though I think she has had that effect on some of her immediate colleagues. But what you can do, I think, is to see clear evidence that fundamentally the country is now beginning to move towards a very different but more stable approach with a likelihood that we can now survive the problems of the future. I think the country is on a more hopeful course now than at any time in the last 25 years.
The problems of the steel industry, the coal industry and the railway industry have demonstrably not been solved or even reduced since I was a member of the Government dealing with those nationalised industries in the 1960s. Indeed, we are seeing today the consequences of trying, and failing completely, to ignore the pressure of market forces in those industries. Contrary to popular opinion, if the nationalised industries had been allowed to contract steadily, there would have been far less hardship.
What happened under both parties? Certainly, I played my part in this. We believed that we could halt the move towards contraction, so time and again in every one of those industries we went to the men and said: one more heave, a plan for coal, a plan for steel, a plan for the railways: let us have this number of
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redundancies and then you are on a plateau. Five years went past and there was another crisis. and another 10,000, 15,000 or 20,000 men suddenly found themselves out of work when they had been promised security. So we came back and we produced another plan for coal. another plan for steel and another plan for the railways and said: another 15,000 redundancies and then you have a career for life. It was a wicked deception but one which was based on ignorance and not on any desire to deceive.
It is true of coal as much as anything. In the 1960s I was closing pits. I do not know how many I was responsible for closing but it was certainly quite a lot. This was with the full support of the entire Labour Cabinet at that time and, to their credit, with the tacit support of some of the leaders of the National Union of Mineworkers then who knew full well that these pits could not stay open. and they wanted the best deal they could get for their members in the process. That, I think, is the role of a trade union leadership.
Towards the end of his speech the noble Lord read a fascinating letter from his Moscow friend about the miners' strike and violence on the picket lines. I am sure it would worry any audience in the world. I am sure that which we see is terrifying to any person living in this country.
I was amazed to hear the noble Lord. Lord Barnett—another member of the National Union of former Chief Secretaries to the Treasury. I found his arguments very persuasive. I do not think some of them would be very popular among many of the leading or more powerful figures in his party; I found his arguments very persuasive. I was amazed to hear him hint that the Government should intervene in the present dispute in the coal industry. They can only intervene in this dispute at this stage by surrendering. If that were to happen it would be the most disastrous thing which had happened to this country for many years. I believe it would be a disastrous thing for the Conservative Party as well. Fortunately, there is no possibility of that happening.
I return to a theme of the noble Lord. Lord Harris of Greenwich. Night after night we are seeing, until we now accept it, a state of total lawlessness in this country. It is not a question of failing to observe trade union legislation; we are talking about criminal law. We know—because they boast of it—that there are men in the present dispute who meet (because they tell us when they have had a meeting) and they discuss and plan violence and intimidation: violence against people and damage to property. It does not happen by accident; you do not have 10,000 pickets to have a cosy chat with 30 miners going to work; you do it to frighten people; you smash windows to frighten them. I am not a lawyer but I cannot believe that that which we are seeing night after night is legal. I think the time is coming when we have to take action on that basis. I think the line has been reached now when we can no longer sit back and fine people £500 when we know that they are just puppets of men who are orchestrating the whole campaign. If that means we have to reach a stage where the egocentrics of the Left have to go to gaol, then so be it; because there were nice cosy Liberals in the 'thirties who baulked at the bad behaviour of ruffians and louts in the streets but did

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nothing about it. In the end they suffered—and many other people suffered with them.
In the past we would never have accepted the right of the Army, the CBI, the unions or anybody to challenge an elected Government. Today we do accept it; everybody speaks about it; no problem. Last Sunday the agenda for the forthcoming conference of the TUC was published. Over and over again, as if in the course of cocktail chat, the resolutions are designed to use industrial power to bring down the Government. On this issue I do not care whether it is a Labour Government, a Conservative Government, or, to be fanciful, a Liberal Government in office: I will defend to the end the right of the Government to see out its period on the basis of the votes of the people which put it there. If that is being challenged, then I think Parliament has to pick up that challenge.
The other day an article came into my possession. We cannot pretend we do not know what is going on. The article referred to Mr. Scargill, who is only one of many. They are not under the bed any more; we know who they are: Mr. Ted Grant is well-known to Members of these Benches; he is a powerful figure in the land regarding selection conferences of sitting Members of Parliament. Mr. Ken Livingstone's charm is exceeded only by his sinisterness. Ted Knight is another. There are many of them. They explain in the article quite clearly what they want to do. Mr. Scargill was interviewed in 1975 in the New Left Review. He was looking back at the strikes of 1969, 1972 and 1974. He took a little peep into the future. Of the strike in 1969 he said:
"a number of us had launched an organisation called the Barnsley Miners' Forum, of which I was secretary. This forum was a platform for the left and a platform for ideas within the movement. You cannot have this sort of forum without having a concentration of ideas, and some kind of unity developing in the coalfields— In 1970 we had an abortive strike in Yorkshire. This was mainly because the issue at stake was the wrong one; we couldn't get the unity we wanted among the left and there were splits".
That was a quite conscious decision as far back as that. Then he refers to 1972:
"You see, we took the view that we were in a class war. We were not playing cricket on the village green, like they did in '26. We were out to defeat Heath and Heath's policies because we were fighting a government. Anyone who thinks otherwise was living in cloud-cuckoo land. We had to declare war on them and the only way you could declare war was to attack the vulnerable points … The miners' union was not opposed to the distribution of coal. We were only opposed to the distribution of coal to industry because we wished to paralyse the nation's economy".
He seems to be a very open sort of character.
"It's as simple as that. We were fighting a class war and you don't fight a war with sticks and bladders. You fight a war with the weapons that are going to win it".
Finally, he said:
"you will not get common ownership of the means of production, you will not get real control of the society in which we live, unless you commit and convince the working class of the need to struggle".
This, bear in mind, was in 1975.
"It may be that we get a strike situation on our hands similar to '72 or '74 where another Saltley [mine] can occur. If we get another Saltley then the whole picture can change from one where you have a peaceful road to one where you do not have such a peaceful road."
I think the challenge has been spelt out very clearly. In the 1970s people decided the only way they could get power in this country was to infiltrate the Labour Party. The noble Lord, Lord Underhill, who is not here now, made a major effort to prevent them doing
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it—a very gallant effort at some risk to his own employment—but he failed because it was too late.
I remember the screams when Andy Bevan became the Labour Party's youth officer, because he was a dedicated "Trot". That is now commonplace. We now see the natural, logical conclusion. We see people who would not be seen dead in the same conference chamber as the noble Lord, Lord Barnett—and he would make a pretty good effort to get out before they entered, anyhow!2014;in positions of great power and influence in the Labour Party, in positions of power controlling our great municipalities throughout the country. Do not believe that rate capping is the result of some theoretical, constitutional argument. It is an effort to stop the use of public money for very dubious purposes. We see the same trend in areas of the trade union movement.
We have stayed quiet for so long that the Government now have a duty to pick up that challenge in the very near future and fight back. When ordinary people are too delicate and too gentle, they always get trodden on by the nasty people. The ordinary people of this country have reached the stage where they are entitled to demand protection from the violence of thugs seeking to gain political power through sheer brutality and intimidation.
5.31 p.m.
Lord Taylor of Gryfe: My Lords, your Lordships will forgive me if I try to reduce the temperature of this debate. It is not that I am without sympathy for some of the observations which have been made by the noble Lord, Lord Marsh, and by my noble friend Lord Harris of Greenwich, but I am afraid that this important debate on the broad spectrum of the economy of this country will be somewhat over-shadowed by the issues which have been raised by those two noble Lords. That would be a pity, but inevitably the headlines will be directed towards the matters they have raised to the exclusion of some of the major issues which we have to discuss this afternoon.
I was somewhat disappointed with the speech of the noble Lord, Lord Cockfield. That is not because I am not an admirer of the noble Lord, because I admire his lucidity and competence. But what shook me was his confidence and complacency. It is a confidence that is not justified by events. I hope that he will take cognisance of some of the comments made by the noble Lord, Lord Bruce-Gardyne: that it is not easy to forecast the trend in international economic affairs. The upset in the price of oil which is well on the way will have substantial effects on the state of the United Kingdom's economy.
Some noble Lords may be interested to learn that I lunched today with the noble Lord, Lord Lever of Manchester, and will not be surprised to hear that I was impressed by his lack of confidence in the international banking situation. Noble Lords might direct their attention to the interesting situation concerning Continental Illinois Bank in the United States. Of all the free enterprise countries, there the government had to move in and the Federal Reserve had to guarantee Continental Illinois, one of the largest banks in the United States. These are all indications of a degree of uncertainty in the

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international situation. There is also the problem of high interest rates and their impact on the indebtedness of third world countries, to which my noble friend Lord Walston will no doubt refer later. These are all major areas of uncertainty which can easily upset the confidence expressed by the noble Lord. Lord Cockfield, this afternoon.
I hope that when we are examining these economic problems we will look at them with some humility, knowing that these uncertainties exist. I hope that we will examine these problems with objectivity and without necessarily a commitment to party dogma. The experience of the noble Lord, Lord Marsh, is similar to my own. We have both been members of the Labour Party. The factor which brought me to these Benches was that this is an objective, pragmatic party which seeks to solve economic problems not with slogans or with blanket solutions but by examining the issues critically and trying to develop solutions which are in the national interest.
The Labour Party is still committed, I am afraid, to the Clause 4 solutions to our economic problems, which are quite out of date. I am sure that the noble Lord, Lord Barnett, does not subscribe completely to that theory. By the same token. the Conservative Party and the Government are committed with a dedication that is surprising to the dogma that simply by privatising large sectors of the economy there will suddenly be achieved some economic growth and stability, and that great powers of energy and inventiveness will be released.
As this is the "end of term", perhaps we should be looking at these matters in a non-partisan way. Perhaps I should call in evidence the external examiner, the Economist of 7th July, which states in an important article:
"Mrs. Thatcher's second government is stepping out to become Britain's most inept since the war. The mishaps, mistakes and omissions which have characterised its first full year now have ministers in difficulty with farmers, miners, peers, local authorities, EEC allies, even City financiers".
It cannot be said that the Economist is the official organ of the Social Democratic Party, or of the Alliance, or even of the Labour Party. But this article does indicate that all is not as certain or as rosy as was pretended this afternoon by the noble Lord, Lord Cockfield.
What is the basic element in the Government's economic strategy in relation to nationalisation? The noble Lord, Lord Diamond, has dealt with this aspect to some extent, but I will give your Lordships the list, because this was given when Mr. John Moore, Treasury Financial Secretary, made what was described as a reasssuring speech, according to the Financial Times. The report was headlined, "Moore moves to lift confidence", and he was reported as saying that the Government still have a full programme ahead, hoping to return Rolls-Royce, Shorts and British Leyland to the private sector before the end of this Parliament, together with as many as possible of Britain's airports, substantial parts of British Steel and British Shipbuilders, the operations of National Bus and the Royal Ordnance factories. According to Mr. Moore, the Government's official spokesman, all this is to be completed before the end
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of this Parliament. Does anyone seriously believe that that kind of programme will release some kind of industrial revival in Great Britain? It is more likely to disrupt industrial revival than to encourage it.
The Financial Times—which, again, is not a supporter of this party at all—reported in another article:
"At first the Treasury just assumed it could sell £2 billion or more a year; now it is having to listen to the City more and to take account of the impact on the stock market, on rights issues and on gilt-edged issues".
A great deal was said in earlier economic debates about crowding out borrowing by the nationalised industries, but certainly the market will be crowded out by the unloading of all this stock onto the market to the detriment of rights issues and the ability of private companies to raise capital. So this is not a recipe for economic success.
The Social Democrats and the Liberal Party, our allies, take the view that there are certain sectors of the economy which should be released for private investment. Obviously, Sealink and hotels had become irrelevant to the conduct of British Rail; and even the car industry—if one does not separate the profitable part from the unprofitable part—might be a candidate for the injection of private capital. Therefore, we should be looking at these matters not in terms of whether they fit the party programme but objectively as to whether they could be better run and organised and what their impact would be on the total national economy.
The Government are committed substantially to this programme, but their timing and pricing of issues so far has not given us great confidence in their ability to discharge the ambitious programme that they have ahead of them. The issues of Amersham and British Aerospace, Associated British Ports—35 times over-subscribed and dealt the next day at a premium of 23 per cent.—are all indications that the pressure of the Treasury to get the £2 billion each year drives the Government into a situation into which the conditions of the market are discarded; whereas any private company would examine the state of the market before it engaged in such a programme.
That has not been a feature of the Treasury's behaviour. Enterprise Oil was launched at a time when the oil market was weak and a large amount was left with the underwriters. In fact, RTZ entered the market and bought up the shares from the underwriters. That issue gave no confidence to the City and the underwriters for the forthcoming British Telecom issue. We used to talk about British Telecom realising about £4 billion to £5 billion on this great issue. I notice that speakers are now talking about £3 billion and £4 billion as though £1 billion was neither here nor there. The American market is not responsive to this issue, despite all the propaganda and the fact that £60 million is, I gather, to be spent on advertising the issue and perhaps a similar sum in fees. It does not look as though the nation will get anything like the asset value of the company which the Government are now selling.
I want simply to deal with one other problem because I have been tempted by the noble Lord, Lord Cockfield, to pursue him in his philosophical speculation on the good society and the kind of society

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that we want. Like the noble Lord, Lord Marsh, I became a socialist very early on because I had some vision of a good society. I am not sure that the good society will be realised with the policies now being pursued by the official Opposition and that is why I am no longer with them. However, I have always believed that the good society and the existence of democracy depended on a great degree of consensus, agreement and patient understanding. But this Government have elevated confrontation to be a virtue. They have alienated local authorities and turned industrial disputes, education, health and other areas into a situation where there is tension in our society.
The good society depends on a fraternal relationship between human beings who live in that society. It is dependent on caring for people; it is dependent on compassion; it is dependent on the right priorities. Medical research was discussed this afternoon in a Question. In a good society I would regard that as a major and top priority. I do not believe that massive spending on the Trident missile, for example, instead of some of the social services is sensible in a good society. I suggest to the noble Lord, Lord Cockfield, because I know he is a sensitive man, that during the Recess he should take a walk through Bathgate, Linwood, or the areas of high unemployment in Scotland. If he thinks that we are now in the uplands heading for a new and bright society where the creative energies of the people are released, he is living in a fantasy world.
There are millions of people who are anxious to work in our society but who are denied that opportunity. Those people are concerned about the welfare of their children, their education, care and so on. Every night they see advertisements on ITV promoting this or that product and their children want these things just as much as any of our children, but they are denied them. We are just about to depart for our holidays, but they are denied holidays. The society that has been created is not the good society. It is not the fraternal society. It is not the society of neighbourliness. It is not the society of partnership in industrial relations which we on these Benches advocate. It is not the society of caring. It is a society of confrontation.
The Government are to be condemned, not simply on the basis of the economic statistics that are bandied about in this debate, but because they are not creating a society where people feel at one with one another, who are prepared to encourage service, voluntaryism and all those virtues of a good society. It is on that score that the Government are to be condemned.
5.45 p.m.
Lord Walston: My Lords, I am glad to be following my noble friend Lord Taylor of Gryfe, in particular on his last point because it is about that rather than the third world, as he suggested I might, that I should like to take up your Lordships' time for a very few minutes.
For the Motion we are enormously grateful to the noble Lord, Lord Diamond. If he has the clarity of vision with his eyes that he does with his mind there is certainly no need for any further operation on them. To have the economic recovery which is still as far away, a stable society and the other things mentioned in this Motion we need a whole variety of things. We
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must conquer inflation and the Government—I give them credit for it—have gone a long way, not the whole way but a long way in overcoming inflation. We must have more investment of the right sort. We must have investment in all the things we have heard about today and on other occasions; in the infrastructure, in the factories and the other aspects necessary for a modern, sophisticated economic society.
We must have investment in education, but in that the Government are very weak. We must have investment in research—not only research in the factories themselves in the various industries but in basic research. When we have trained our scientists we must be sure that they remain in this country instead of going overseas where one hears increasingly that there are more opportunities for them.
In addition to all those things we must have good labour relations. No matter how modern and efficient a factory may be, no matter how high class its scientists or how good its salesman and no matter what infrastructure there may be to carry its goods about the world, unless there are good labour relations we shall never succeed. Following the point touched on by my noble friend Lord Taylor of Gryfe, to my mind that is one of the greatest failings of the present Government. They are a Government who believe in figures and are guided by economic theories, who listen to experts of one kind or another and who pursue a narrow aim wholeheartedly. On certain occasions, as with the Falklands episode, they have an amazing success but that is not the way to re-create a country and its economy.
One cannot do it purely by figures, statistics or theory. One must do it with human beings—the human beings who will produce the wealth. Alas, with the present Government as time has gone by the human factor has become of decreasing importance. The result is that the ordinary people feel less and less at one with the Government and are coming to feel not only not at one but actively opposed to the Government, because they believe the Government are opposed to them. They do not have their interests at heart. They work in statistics, and not in human beings.
Of course it is the job of any good industrialist, any good employer of labour, to make sure that the members of his workforce not only understand the objectives but have trust in their bosses as being people who will give them a square deal, they knowing that if the firm is going through a good time they will share in its advantages, and if it is going through a bad time then they will be prepared also to share in some of the disadvantages. That is an essential part of good labour relations. Many firms have that, much to their credit. But the bigger ones especially are finding it harder and harder to maintain that good relationship in the light of the Government's general attitude, not only to labour but to so many other things.
One could expand on that thesis in many ways. For example, there are our troubles with the European Economic Community. We may say that we have come back from Fontainebleau with a victory or we may say that the action of the European Parliament is despicable. But what we have created in Europe is exactly the same as what the Government are creating in labour relations in this country. As my noble friend

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said, it is an attitude of confrontation: "I am right, and anybody who disagrees with me is wrong, wrong, wrong". One cannot get co-operation and success in any walk of life if that is the attitude.
We have heard—and it is not surprising—about Mr. Scargill and what he is doing to the coal industry and the entire economy in this country. As I think your Lordships know, I am a farmer. I know that you can sow your seed where you like, but, whether the seed is good or bad, it will come up well only if you have prepared the land, if you have tilled it and cultivated it properly. The Government are the ones who till and cultivate the land. It has to be faced that Mr. Scargill's evil seed would never have come up in the way that it has, it would never have spread throughout the country in the way that it has, unless the Government had prepared the soil for it so that it could flourish.
I very much fear that unless there is a change of heart, and a speedy change of heart, which is translated in such a way that the whole country sees it, we shall have not only the Scargills but other people with similar views—possibly with less extreme views—who will find it easier and easier, either for their own political doctrinaire reasons or for their own self-aggrandisement, their own personal ambition, to sow their seeds on the land well prepared, alas!, by the Government.
We must create, and we must make sure that the people of this country realise that we have a Government who are determined to create, the right kind of society. They must be seen to be a Government who are not only conquering inflation, who are not only standing up for our interests in Europe and who are not only striving to make industry more efficient, but who are determined to see that we have a society which is based on justice, on understanding and on that much over-used word, compassion. That is the Government's job in this. When they do that—if they do that!—the industrialists, the employers of labour, will have a very much easier task in ensuring that the people who work for them and with them work with a will, with enthusiasm and with success for themselves—that is an important factor, it is true—but, above all, for the country.
I believe—I was going to say I fear, and perhaps in a way I do—that the present Government have by their actions and attitudes shown that they are incapable of creating that type of society. It is something which does not appeal to them and which does not strike at them in any serious way. I am afraid that the official Labour Opposition have shown by their actions in another place—not by the very fine speech of the noble Lord, Lord Barnett—that they are a party of appeasement and not one which will stand up for the things which my noble friend Lord Harris of Greenwich and others have spoken about. I believe that the only hope for this country—a hope which inevitably must be deferred for at least three years—is in a party pledged to the attitude and ideals of the Alliance. For that reason I am happy to say a few words in support of the Motion of my noble friend Lord Diamond.
5.55 p.m.
Baroness Elles: My Lords. I too should like warmly to thank the noble Lord, Lord Diamond, for having
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given this House an opportunity to have what might be called a state of the nation debate. So many aspects of our society and economy have been debated by so many noble Lords that it would be fair game for any Member of your Lordships' House to pick up any one of the strands thrown before us this afternoon and elaborate on it.
I say to the noble Lord, Lord Walston (whom I cannot entirely follow in what he was saying in criticising the Government) that we readily forget successes and are only too ready to point out what may appear at the moment to be the failures. But only in the last few weeks—and this was adumbrated by the noble Lord, Lord Marsh—the Government have had a great success in slimming down British Steel. It was an extremely difficult task and, as far as one can make out, it has been done with extreme success. It now produces 4 million tonnes less a year, but its productivity rate has gone up by 28 per cent. Why are the workers of British Steel determined to hold on to their jobs. despite great difficulties and the attempts that have been made to stop them carrying on with their work? That is the kind of successful measure which the Government have had the courage to carry out and for which I believe they have been given too little credit.
I should like to take this opportunity to give credit to Bill Sirs and to all those in the steel industry who have worked together to keep men on the job and to cam, on the work which they have been entrusted with for the benefit of the nation and which others in a totally totalitarian way are trying to stop. There are many other examples. I take issue with the noble Lord, Lord Walston, and would point out that the Government are compassionate. They are concerned with the people in this country. Indeed, if they were not, they would not have been returned with such overwhelming success in June of last year.
If imitation is the sincerest form of flattery, the Government must be extremely pleased with the imitation that they have had from all the major Western governments in the past two or three years. We all remember the attacks on the Prime Minister and on the form of policies that the Government were said to be implementing in this country. But I do not think that there is now one Western government with a democratic regime that has not followed the programmes of this Government in the economic field. Even the OECD Ministers, who met quite recently, referred to the fundamental necessity for lower inflation and said that it was:
"an essential component of a stable economic environment leading to higher growth and employment".
I think that most noble Lords follow affairs across the Channel, despite the fact that such things are foreign. Your Lordships will know that the Socialist Government in France started off with the usual Socialist tactics. They went for reflation and for high combined government and worker expenditure, and they raised the minimum wage by 10 per cent. What happened? With their French logic, of course, they recognised clearly that they were on the road to economic disaster, and had the courage while still in government to change their tactic. They radically changed their economic programme. One of the first things they did was to make immediate attempts to

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slash public expenditure, and they transferred investment from declining heavy industries to new technology. Everything they have been doing has been in conformity with the policies successfully carried out by our present Government. The result in France has been that, as in this country, they have reduced the rate of inflation from somewhere well over 9 per cent. only last year to somewhere near 7½ per cent. within the short space of time since the change of policies. I think that this is a tribute to the policies which this Government have also been following.
I should like to comment in a few words on what the right reverend Prelate the Bishop of Coventry said. Unfortunately he is not in his place at the moment. He spoke on the question of a sound social policy. Of course a sound social policy is an essential aspect of raising the standard of living. This is referred to in Lord Diamond's Motion. However, sufficient credit is never given to the fact that it is the reduction in the rate of inflation which has primarily removed the undue burdens on those with low fixed incomes, be they in the form of state payments or resulting from personal savings.
This has been one of the major contributions of the Government. By reducing the rate of inflation they have removed the fears of eight million or so pensioners and families on low incomes who every week were being faced with the problem of how to meet rises in prices. You cannot estimate the result of a low inflation rate unless you have done social work for many years and seen the horror, fear and anxiety of people being presented with regularly increasing bills and a fixed low income, knowing that the two will never be able to meet each other. This is again a major feature of the Government's policy to which insufficient attention has been paid.
However, I say this to the Government. If they have not already started looking at it I would ask them earnestly to study the proposal of the Institute of Fiscal Studies. This is dealing with an old problem which I know my noble friend Lord Cockfield has considered for many years—the relationship between social security and tax benefits. The proposal suggests that it is not totally in the search for efficiency that we shall find a solution. This is because it is precisely the people in need of social security and social aid whose life is least accurately described by the word "efficiency". This may result from desertion, death, imprisonment, illness, or whatever; these are the kind of impacts on one's life that cannot be computerised. Therefore, there must be a means of dealing with the events in life which distort and change the circumstances of those who need social or financial help of one kind or another. There must be flexibility in any scheme which is produced along the lines—if they are to he followed—of the proposals of the institute.
I should like now to turn to three isolated points which are nevertheless, connected with the ongoing success of the economy of this country. Two of them refer to questions related to the European Economic Community. I know my noble friend Lord Bruce-Gardyne will not agree with me. Nevertheless, I shall risk saying it and, as I have never had and never shall have the honour of serving in the Treasury, I feel free to speak my mind, untrained and uncritical.
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My first comment refers to the stability of the exchange rate. I believe that you cannot conduct a successful commercial enterprise in the world as it stands today unless you have the benefit of a stable exchange rate. This is one of the reasons why I personally believe—and I know this is not Government policy but I state it from these Benches in a personal capacity—that we must join the exchange rate mechanism of the European Monetary System. There is no doubt in my mind about that. Of course there are financial and technical reasons why we should not have done so in the past. Nevertheless I still believe that there are overriding political, financial and commercial reasons for joining which outweigh those for staying out.
I believe joining would have three results. The pound would acquire greater stability in relation to Euro currencies, which are after all the currencies with which this country deals in the major quantities of its exports and trade. It would serve to strengthen the Euro currencies themselves as against the volatility of the dollar and the high interest rates from which we in this part of the world are all suffering. I believe that, if you had a strong European Monetary System or indeed a European monetary union, the European currencies together would be able to exert a much stronger effect and be less influenced by the actions and reactions of the dollar.
It would also enable an expansion of the use of the common currency—ecus—throughout the European Community, which would of course lead to great savings on the exchanges, because trade and commerce could be dealt with in one currency. It does not take a lot of imagination to realise what was the loss to this country with the collapse of the sterling area, where one had had a common currency with a very large home market in terms of numbers, when one compares it with the US dollar, which after all serves a home market of 230 million people. It is surely logical that we should seek some kind of operation, obviously not removing sterling altogether but one where we could use a common unit for commerce and financial deals between countries which, after all, are part of a single economic community.
The second matter about which I would beg the Government to do something as soon as possible is to take note in the first place of the agreement between the French and German governments for the opening of frontiers between the countries, so enabling transport to flow freely with the minimum of checks and customs procedure. It is of course well known to the Government and to your Lordships that the cost of customs procedures and hold-ups at customs alone amounts to well over £500 million a year to businesses.
If the Government were to come to bilateral agreements with those countries which have channel ports on the Continent and with which we do a considerable amount of trade, I believe it would be of great assistance to businessmen in getting their goods and traffic through easily and quickly with the same facility as exists between France and Germany. If we hold back on this, again we shall lose the edge of competitiveness of our products in the markets of the European Community member states as against those

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of France and Germany. So I would beg the Government to look at this and not wait for some Commission regulation which will be fought over for years. I beg the Government to start immediately on bilateral agreements, just as France and Germany have done.
The third point I should like to make is on the question of investment. That has been discussed quite widely during the debate. Investment, particularly in high tech industries in this country, is not only investment in industry but investment in people. We are already finding that there are flourishing firms who are looking to expand their products and their markets and already find that they cannot get a sufficient number of trained electronic and computer engineers to handle these jobs. They are not only the jobs of tomorrow, as they are so often called, but they are already the jobs of today. This is something at which I believe the Government should look with all urgency.
I ask the Government to consider this. In the 'seventies in the United States 30 per cent. of young people aged 20 were still in higher education. In Japan there were 25 per cent. But in Europe the figure varied from 11 to 17 per cent. If we are going to benefit from the programme of information technology with which this country is meant to be developing its future industries something must be done about it. You have only to consider that six out of eight of computers in this country come from the United States and nine out of 10 video recorders come from Japan. I understand that the McKinsey Report which was prepared quite recently for the European Commission (which I must confess I have not read but I have merely seen the details that were reported) said that there are about 4 million jobs at risk. I understand that by 1990, if the right measures are not taken by European governments, including that of the United Kingdom, to deal with research, development, training and investment, we can lose 2 million jobs. If we do the right thing and follow the correct policies as outlined in the McKinsey Report there can be 2 million new jobs. This is only in the field of information technology. We cannot afford to lose the opportunities available to us.
The final words of Lord Diamond's Motion refer to a return to stability, to a stable society. We have had remarkable speeches today from the noble Lord, Lord Marsh, and the noble Lord, Lord Harris of Greenwich. I think that they were really informing this House that we actually have a stable society; we are not returning to one. Our problem is to retain the stable society which we have and to resist the attacks which are now trying to undermine democracy and the elected Government of this country. I would certainly hope that all sides of this House would be willing to pay tribute to the 60,000 miners and their families who nightly have to resist physical intimidation and physical violence by those who are using weapons which I, in my lifetime, and I am sure the majority of noble Lords in this House will have known as the signs of totalitarianism—a form of government and a form of regime that I hope will never be acceptable to noble Lords on any side of this House.
6.10 p.m.
Lord Ezra: My Lords, the big advantage that my noble friend Lord Diamond has conferred on us this afternoon is not only the timeliness of the Motion that he has put to the House but also the wide ranging way in which it has been framed. It enables those who speak to choose particular aspects instead of going over the same ground again. I should like to choose the aspect of the levels of industrial production and the state of the infrastructure. I should like to get there by considering for a moment some of the difficulties that I feel we are confronting as a nation. Whether these difficulties are due to external or internal factors, they are nevertheless difficulties. They are emerging in different ways. For example, one rather unsettling report in the newspapers this morning is the CBI quarterly review. It is the most disturbing quarterly review for the past 18 months—still, on balance, optimistic but the measure of optimism has been very much reduced.
Reference has been made to the exchange rate and to the interest rate increase. These are also disturbing factors, whatever might be the cause. The prospect of unsettlement in oil prices could be a very serious matter for this country bearing in mind our involvement in the North Sea. The fact that unemployment has remained so stubbornly at its present level—indeed, tending to increase—is another adverse factor. Others are the fact that our manufacturing capability has tended to reduce over recent years and the fact that our balance of payments on manufactured goods has shown a really dramatic decline in relation to imports. In 1982 we showed a balance-of-payments surplus on manufactured goods trade of £2.5 billion, converted in 1983 to a deficit of £2 billion. In the first quarter of this year, we incurred a deficit of £650 million; in the second quarter £990 million. I am not listing these items to contend that things are all going wrong. I merely think that at this stage we should be thoroughly objective, identify the things that are causing difficulties, and then see whether, out of this variety of problems that have suddenly beset us, something emerges that might suggest a change of emphasis in policies.
I believe that there is a certain factor which is a source of weakness in our affairs. Although the oil in the North Sea is an undoubted and undisputed asset, its possession has created difficulties that need to be counter-balanced. The fact is that sterling soared to its highest level in recent years not because of anything that was happening in the general economy of Britain but because the oil price was very high at that period. Sterling not only is now weakened because of the dollar position but could be further weakened because the oil price might be coming down substantially. In other words, I believe that we are becoming unduly dependent on our oil assets.
So the question that we can honestly ask ourselves, in trying to be totally objective, is, "Should we do something to counter-balance that situation? Without in any way diminishing the benefits to be derived from the possession of oil, should we seek to insure ourselves against a situation in which we seem to be pushed around by world forces because of our possession of the oil?" The way in which this needs to be counter-balanced is for us to pay more attention to our

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industrial and manufacturing capability and our infrastructure. I am afraid that Government policies, and certainly speeches made in this House, have given the impression that the Government feel that it is not particularly important if our manufacturing capability diminishes because other things can take its place; for example, service activities, banking activities, high technology, and so on.
I do not believe that this is a valid proposition. The simple fact is that we are going to require, as far ahead as we can see, the products of manufacturing industry. If we do not produce those things ourselves, we shall have to get them from elsewhere. We are already seeing the signs and shape of things to come. What makes it doubly serious is that even though the prospects of oil reserves are now stated to be rather better than we had at one time thought, it is nevertheless the consensus of opinion among the experts in the oil industry that we are likely to reach our peak in oil production in this country in about two years' time. From then on there will be a progressive diminution in our overseas earnings from oil, even though we may remain for a long time capable of meeting our own needs in oil. If, at the same time, this unfortunate trend in the balance of payments on manufactured goods continues on the lines on which it is proceeding at the moment, it does not take much imagination to see the difficulties that we could be in.
The question, of course, arises, "How can this emphasis be changed?" I was interested by an article in the Economist recently, where it was shown, in an analysis of the American industrial resurgence, that this was not exclusively a matter of high technology, not exclusively a matter of expanding service industries. What was now beginning to happen was that high technology was being applied more and more to what had become known as the smoke-stack industries. The Economist concluded:
"The question for Britain is not whether to spend £400 million on a fifth generation computer project, but what can the micro-chip do for existing industries in Bolton and Bradford?"
I believe that there is here a challenge that we ought to be facing up to more effectively than appears to be the case at the moment. We have the benefit of the oil. We have still a very large manufacturing base. We have also developed exceptional skills in high technology. We have to create a blend of these three components which will give us a greater prospect of international stability than it looks as if we shall have. I am talking particularly about stability in the balance of payments.
I fear also that the apparent neglect of the infrastructure—I know that this is a rather boring topic for some noble Lords on the Government Bench but nevertheless we must keep coming back to it—is exacerbating the difficulties to which I have referred. Any improvement in the infrastructure leads to more jobs and more contracts for the private sector of industry. There are large segments of the private sector entirely dependent on the contracts that they can get for the infrastructure. This in itself would be no justification for launching into major projects in order to give them contracts. However, I have been examining fairly closely the various aspects of the infrastructure and talking to many of those involved over the past couple of years or so.
I must say that I have come to the conclusion that
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whether one talks about the water industry, sewerage, roads, or the state of house disrepair, there is a great amount of work to be done in all these sectors. We know all about it. There have been an enormous number of highly-detailed reports on these subjects. If the number of pages which have been written in recent years on these subjects had been converted into positive investment, we would have solved the problem; so there is no cause for any further inquiries.
On roads, we have had very full reports, one recently by the CBI. On the water supply system, your Lordships' own House produced a report through the Select Committee on Science and Technology; we debated that last year; and there have been many others. On housing, there has been the recent survey of English housing, which has demonstrated the problems. So the issues are extremely clear, and it seems to me that we need to take another look at this whole infrastructure position if we are committed, as any Government in this country must be committed, to sound economic growth. We cannot have that economic growth without having an adequate infrastructure on which to base it in physical terms. This indeed is the point that was made by the CBI in their recent report, The Fabric of the Nation.
Infrastructure investment for desirable purposes will itself stimulate greater activity through manufacturing industry, because one thing leads to another. The contracts are taken up; the roads have to be built; the houses have to be repaired. The people who manufacture the components then get into activity, and so it works its way through. At the same time we have this stimulus at the consumer end of the economy and at the high-technology end. A stimulus at the lower end could then mean that we could have a more balanced movement throughout the whole of the industrial sector.
I invite the Government to have another look at this question of the infrastructure. When we on this side of the House raise questions about the infrastructure, almost invariably we are told, "Yes, of course these things might be desirable, but it's a question of what money we have". I do not know how the money availability is calculated. If infrastructure projects are left right to the end of the queue it is no surprise that there is very little money left. If they were treated with rather higher priority, as I believe they should be, then we could be taking a different view of what we could afford and what we could not afford.
I believe we have now come to a period when perhaps we should be trying to redress the balance of the economic activity of our country, and accept, as has now been recognised in other major industrialised countries, that we should not be making a wholesale transition away from manufacturing industry into other activities. The transition we should be making is a transition into a new sort of manufacturing industry, infused with the benefits of high technology so as to expand those industries on that new basis, and not progressively to give them up.
Overshadowing the whole of our industrial scene at the moment is the unfortunate dispute in the coal industry. Having been involved in that industry for many years, I witness it all with a great feeling of sadness. It was an industry of great achievement and it has a great potential, but the longer this dispute lasts,

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the more it widens its scope, the more that future prospects are going to be damaged for all—those in the industry and those who they serve. Like everyone else in this House, I deplore thoroughly what has been happening on the picket line. I do not believe that that represents the average British miner expressing his opposition in an industrial dispute. I am at a loss personally, as most people must be, to suggest how we can quickly resolve this issue on a proper basis. I regret that the most recent negotiations held between the Coal Board and the NUM ended in failure. I thought the Coal Board had gone a very long way to meet what I thought were the stated claims of the NUM. I should have expected the dispute to be settled on that basis. I was extremely surprised that it was not.
There is only one suggestion that I should like to make for consideration and in an attempt to help. From time to time members of the Government—the Secretary of State for Energy in particular; occasionally the Prime Minister and other leading ministers—have indicated their intention to continue to support the coal industry by investment and in other ways. The Coal Board also have made their various offers in negotiations. I think it might be timely, at an appropriate moment for all this to be put together in a single, simple document which would make clear to the public and to the mineworkers what the Government's policy is. I think that there is some confusion in the public mind, although those of us who follow these things are perfectly well aware of what the Government have said; but it has been said on a number of occasions and in different places.
I should like to see this dispute ended quickly. But for it to be ended quickly it has to be brought back to being a dispute within the coal industry and not a political one. If the Government were to issue at the appropriate time a clear statement of their policy towards coal, this might help to achieve that desirable objective.
6.27 p.m.
Lord Wilson of Langside: My Lords, the noble Lord, Lord Ezra, said that the Front Bench opposite might well find boring the subject of infrastructure. I imagine that not only the Front Benches but perhaps the rest of the House would find even more boring the subject of social stability and its retention or restoration. We are all agreed that we are much in debt to the noble Lord, Lord Diamond, for his presentation of this extremely wide Motion.
I would not venture into any other aspects of the Motion—at least, not in this company, for I am only a more or less hard-working lawyer—but I should like to take up the point raised by the noble Lord, Lord Marsh; and I am sorry he is not in his place. He referred graphically to the nightly scenes of violence on the picket lines, and he asked whether or not they were legal. I have no doubt at all that, at least in the jurisdiction with which I am familiar, they are very far from legal. Then he went on to say that it was time the Government took up the challenge. Many of your Lordships on the other side of the House expressed warm and wholehearted agreement with that.
What puzzles me is why the Government have not already taken up this challenge. It has been obvious
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from a very early stage that, to the Scargill-McGahey axis, this was a political strike. Of course, they are perfectly entitled to their points of view. I think Mr. McGahey is a member of the Communist Party. In this free country they are perfectly entitled to these views; but their purpose is to create instability. That is their declared purpose. This we know. Why, then, did the Government not take up the challenge?
I can understand that, if intervention could mean nothing else except buns and beer in Downing Street with the bully boys of the Scargill-McGahey axis, there would be little to be said for it. But why at an early stage did the Government not make it clear that, while the settlement of the dispute between the National Union of Mineworkers and the National Coal Board would be left, at least at the early stage, to them to resolve, they would exercise the full powers and authority of government to ensure, for example, that a supply of fuel, coal, coke and iron ore to, in particular, Ravenscraig, Llanwern and Scunthorpe was maintained? The only reason those steelworks are still in operation—and this point appears to have escaped a great many people—is due to the action of the police. As I see it, we are indebted to the police for the preservation of these great steelworks. If the police had not been there, those steelworks would be gone by now, and gone for good. That is merely one of the aspects as regards which we are indebted to the police.
But why did the Government leave it to the police? Why did not the Government say explicitly right from the beginning that they would exercise all the legitimate authority and powers of government to ensure that whatever happened between the National Union of Mineworkers and the National Coal Board, supplies to industry would be maintained? Indeed, they could have gone further and they could have said, "If our powers are inadequate to this end, then we shall ask Parliament for more". They have not done that. They have not done it yet. My impression is that the Scargill-McGahey axis has found the Government's approach of a combination of rhetorical denunciations of mob rule and a passive lack of positive action, utterly resistible. Indeed, there was one time a few days ago when the press were beginning to talk as if the axis would win. You cannot compromise politically with people like that.
It is an elementary political lesson that I thought most politicians learned in their political cradle that the basis of parliamentary democracy is agreement on fundamentals. If you do not have that, you cannot have compromise and consensus. So there is no point in thinking that the Government can compromise with Scargill, McGahey and company. I know that they have denounced them, but that is not enough. Have Ministers not learned that the Scargills and the McGaheys of this political world love to be in a position to exchange denunciations? They are experts in rhetorical denunciation. They love to be asked what they have to say about violence on the picket line. They are demagogues. They have no conscience in saying that of course it is all the fault of the police. My own impression of the Government in this context is that they have been (to use a good old Scottish word which at least the noble and learned Lord, Lord Cameron of Lochbroom, will know) a bit "dwaibly". Your Lordships can ask the noble and learned Lord

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for the translation. It was a favourite word of Robert Louis Stevenson.
I took up the point made by the noble Lord, Lord Marsh, because, like him, I was in the Labour Party from adolescence to late middle age, and then I felt I ought to have known better. But rather than go to the Cross-Benches I came here, not because I am left with any illusions about political parties—in my advanced years I tend to regard political parties as necessary evils—but because at least I have faith that we here are on the right lines; and I think that the noble Lord, Lord Marsh, was quite wrong when he suggested that the present Government were on the right lines, at least in the context of achieving social stability. Social stability is under threat. There is no doubt about that; and the Government concede it. They say that there are enemies within and that we must now fight the enemies within. I must say, to use the phrase beloved of Mr. Jimmy Edwards, the comedian, that I find this a somewhat primitive and ugly political approach. I do not think that it promotes social stability.
Ministers are charged—in my view sometimes unfairly—with complacency, and certainly many people feel that they are complacent about the present situation. The noble Lord. Lord Cockfield, even suggested that in a few years we would be wondering why we were worrying about the present situation, why we were worrying about the school-leavers who cannot get jobs and who turn to crime. The Government seem reluctant even to concede that there is a link between crime, unemployment and other forms of deprivation.
If you test the question of the success or otherwise of the Government's attempts to maintain social stability against, for example, the background of the miners' dispute or against the incidence of crime, which has reached an unacceptable level, you have to ask the question: is the Government's approach to this problem of social stability adequate, not only to meet the immediate threat of, for example, the miners' dispute, but to create the type of social and industrial atmosphere that will immunise us against future threats? If there was a general feeling in the nation that the Government were on the right lines as regards the attack in inflation and unemployment, which are the real enemies, and if the nation felt that the Government were on the right lines as regards defeating those enemies, then we would have no need to fear the Scargills and the McGaheys. But the nation, whatever the noble Lord, Lord Cockfield, may say, does not feel that, and manifestly I think that the nation is right.
6.40 p.m.
Baroness Seear: My Lords, those of us who are in many ways deeply critical of the Government's policies and practices do our cause no good by denying the achievements which the Government have to their record. It is a great achievement that inflation has been reduced to the extent that it has, and I very much agree with the noble Baroness, Lady Elles, that it is easy to forget past pain and to forget the grip of fear that millions of people felt as inflation rose and rose and as resources to meet those increasing prices seemed to get fewer and fewer.
Therefore, from these Benches we have always
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supported the need to fight the battle against inflation. We also recognise that the Government have, at any rate, done something to increase competitiveness and to take action in areas which had previously been neglected—such as the professions, in which competition has been remarkably limited in the past. So far the Government have not gone very far in that direction, but at least they have taken a long overdue step.
Of course, not all the Government's stated moves in the direction of increasing competitiveness carry a great deal of conviction, and we who take a pragmatic view about privatisation, object to it primarily where the creation of so—called private enterprise out of public enterprise has been nothing more than the creation of yet another monopoly rather than a real increase in competitiveness. We also recognise that the Government have at any rate done something to shift this muscle-bound old country towards a more subtle and alert approach to the problems that confront it.
We recognise that the Government did get a majority in the House of Commons in support of what they had done in the previous five years. I would remind the Government that it was a majority in the House of Commons, not a majority in the country. I am surprised that none of my colleagues from these Benches has made this point this evening. It would be totally inappropriate for a debate of this kind to come to an end without pointing out that the Government do, in fact, represent a minority in this country and not a majority, and that their boasted support of the majority in the House of Commons is based on the false electoral system, so strongly supported by both the Conservative Government and the Labour Party, who are determined not to give up their highly preferential position of being able to command seats on a very small number of votes. But that is by the way and is not really to be found under the heading of today's debate introduced by my noble friend Lord Diamond. Therefore, we recognise that the Government have had achievements.
However, there are deep worries. There are deep worries about interest rates. In real terms these are the highest interest rates we have ever had. I do not reach back as far as the Middle Ages, to which my noble friend Lord Diamond referred: but in real terms, interest rates are tremendously high. If they stay at their present level then they run the risk of undermining much of the achievement that the Government have had. We cannot have high interest rates of this kind without mortgage rates being seriously affected, which in turn is bound to bring high pressure for increased wages and for increased social security payments. It will of course curb consumer expenditure. If you curb consumer expenditure, then the confidence, on which industry is beginning to revive (and I give credit to the Government that there is a sign of recovery) will disappear if these interest rates stay at this present abnormal level.
I for my part—and I know that there is disagreement in many quarters and across parties about this—would have been willing to see the value of the pound go down further rather than have it supported by the present level of high interest rates. After all, advantages would flow from this—advantages in our ability to export, and advantages in our ability to limit imports without in any way cutting across our

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obligation to fight protectionism. But that has not been how the Government have seen it. I just hope that they will have second thoughts.
The second large criticism is of course the extent to which the Government have failed to deal with the problem of unemployment. I should like to make a point to the noble Lord, Lord Bruce-Gardyne, which I was unable to make when he made his speech, when he referred to the great increase in women's unemployment and attributed this to the EOC policies, based of course on the Equal Pay Act, which was passed by Parliament and which the EOC was entrusted to implement. He was inferring that the existence of equal pay had created greater unemployment among women. First and foremost, nobody really knows what the increase in women's unemployment has been because of the extraordinary provision which we had in the past, that married women did not have to pay national insurance contributions, were therefore not eligible for unemployment pay, and therefore did not register, and nobody has ever really known how many women were unemployed and how many were not. Then there is great surprise when there is a recovery in the economy because unexpectedly more women come onto the labour market and start to work. Nobody knew they were there because their names were not on the register of the unemployed. So the unlikely argument of the noble Lord, Lord Bruce-Gardyne, that it is the Equal Pay Act that has led women to unemployment is, to say the least, not proven; and there are many other reasons why women are unemployed besides the only very partially successful implementation of the Equal Pay Act.
Leaving that on one side, the existence of nearly 4 million unemployed—because we need to include these women who are not registered in the numbers of unemployed—is something about which the Government should be deeply concerned and they should recognise that it is a failure to offset the successes that they claim. We find it is extremely difficult to believe that they can themselves believe that market forces will clear the unemployment position without more action being taken. The noble Earl, Lord Gowrie, shakes his head, but at any rate there are some influential members of his party who believe that you can leave it all to market forces. I shall return to that matter in a moment, but that must be marked as one of the gravest failures of this Government.
However, it is not only the ways in which the Government have not succeeded in dealing with some of our most serious problems. which today are in danger of undermining even the successes that they have achieved, which concern us. One of the most important parts of a Government's job is to look to the future to see that they are not only dealing with today's problems but that they are anticipating and coping with the issues that will confront us in the near future. I do not ask them to star-gaze into the great distance, but to look at problems which will be upon us before very long.
I should like to make three points as to where I believe the Government should direct attention if such successes as they have had are to be sustained and if
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the problems with which they have failed to deal have any hope of being adequately dealt with in the future. I take up the point that the noble Baroness, Lady Elles, made. I believe that the Government should now come out strongly as a far more determined and convinced member of the European Community than they have ever shown themselves to be in the past. Our stability in the future depends on an effective European Community, a genuine free trade area and a genuine community. This will not be achieved if the Government maintain their present Gaullist approach towards the European Community.
So many times this Government have given the impression that they are fighting their corner in Europe, defending British interests, regardless of what it does to the real development of the Community as a community. Can we not at least suggest that the time has now come fully to join the EMS, the monetary mechanism, and to become a real part of the European community, taking advantage of it and playing our full part in the monetary and economic developments in which our participation is long overdue? We were told in the past that we could not do it because the value of the pound was too high; we are almost being told now that we cannot do it because the value of the pound is too low. There is no perfect moment and there is no perfect point in the value of the pound. We must get on with it, partly because of the economic advantages and partly because it would show (and such a gesture is long overdue) that we really do mean business by Europe.
Those of us who ever go to Europe—and everyone on the Government Front Bench must do this—and who meet colleagues inside the Community, know how unpopular we have made ourselves. It is no good saying that it is all the fault of the other people, that they do not understand us, and that we have justice on our side. The senior politicians in Europe are now saying, "If the British don't like it, they had better get out, or at least we will have a two-tier Europe and Britain will be in the lower of those two tiers". This is no position for us to be in if we are going to face the future with any confidence, and get the full value that is to be got from our membership of the Community, and to give what it is in our capacity to give in order to make the Community a really effective element. This should be one of the high priorities of the Government in the months to come.
Secondly, what thought have the Government really given to what is going to happen on the wages front and to inflation if the recovery—which the Government tell us is coming, and which we all hope is coming—is a reality and is sustained? What evidence is there that the Government will not find themselves faced, as we have been faced again and again when there is recovery in this country, with a pressure for wage increases which they will not be able to halt, and which will turn us back on the path of inflation from which we have recovered with such difficulty and such pain over recent years?
There are only two ways in which you can avoid wage increases leading to inflation. There is no doubt that excessive wage increases are a major, if not the major, cause of inflation in country after country. As the noble Lord, Lord Cockfield, pointed out, the fact that the Americans have been able to increase the

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number of jobs without having inflation has been due to the fact that there has been sensible wage restraint in the United States. Have the Government any reason to suppose that the same kind of restraint will be exercised in this country when the recovery comes and the trade unions are in the bargaining position that they would like to get back to as soon as they possibly can? What preparation are they making for that?
There are only two ways of dealing with it. One is some kind of wages policy, against which the Government have set their face. The other is to get real collaboration and support from the trade unions and trade union members up and down the country. The Government have gone out of their way to make it more difficult to get this support, to get this consensus, to get this understanding. It must have been a masterpiece unrivalled in the history of any Government to have fallen foul of the Right-wing trade unionists over Cheltenham in the way the Government did, and to have betrayed—and that is not too strong a word—Len Murray, the General Secretary of the TUC, by the way they conducted their affairs in Cheltenham.
Len Murray had gone out on a limb in order to try to get discussion going again with the Government. Len Murray had taken the line that the law must be obeyed at all costs. He had been accused—of course he had been accused—of selling out to the Government. Then within a matter of weeks the Cheltenham incident occurred and he was left defenceless against his critics, the very people the Government should have been trying to immobilise.
In the face of that, how do the Government think they are really going to get the kind of collaboration they need? If they do not get that collaboration, and they will not have an incomes policy, how are they going to stop wage inflation the minute that the national economic recovery returns? What plans have the Government for dealing with unemployment in the future? I pay tribute to the Government for having done more to get a trained labour force than any previous government. It is long overdue, but they are at least doing it.
Although there have been mistakes, the Government have put more money into training, and paid more recognition to the need for a trained labour force, than any Government previously of any colour. But unemployment is not going to be dealt with by national economic recovery. In fact in some ways the quicker the recovery the more severe aspects of the unemployment problem will become. As we have said so often, there will be no economic future for the unskilled. The unskilled, those with no competences. will not find jobs as the economy recovers.
We are in serious danger—and this is where the phrases about stability in this Motion come very much into play—of developing a permanent under-class of people who take no part in the economic, and therefore no part in the social, life of our society. We have to face the fact that there have to be interventionist policies which will draw these people, who would otherwise fall into this under-class, into real economic activity; into real participation in the activities of our society.
The Government have made partial moves in this direction through some of the MSC Programmes,
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particularly the Community programmes, but again the Government have a good idea and then they ruin it. It was beginning to build real participation at local level between local authorities, voluntary bodies, and Government money through the MSC. But do the Government realise what damage they have done at local level with their stop and start policies which have alienated so many of the voluntary bodies that the whole movement, which was one of the most exciting developments of grass-roots collaboration between the statutory and the voluntary, is in danger of being seriously undermined? Will the Government look at that again? Will they really see whether they cannot give greater stability to the schemes which have been undertaken, and to which a great deal of time and energy have been devoted but which are now being seriously undermined?
Finally this Government are throwing away the opportunity—I was going to say of the century, but at least of decades. There is today a great vacuum in political thinking. Throughout my youth a great many of the political enthusiasts believed that socialism was the doctrine to be followed that would lead us to a better society. Today there are very few true believers left. In fact, the only true believers—and this is the problem of the Labour Party—are the people on the Left; the people whom they would reject. This is their great dilemma. It is their dilemma, not my dilemma or the Government's dilemma; but it is the Government's opportunity because there is a great vacuum through the failure of socialism. The noble Baroness, Lady Elles, referred to it. But look across the globe. Look at Bob Hawke in Australia. Look at Mitterrand in France. They are all socialists, but their policies —this is true—are very much the policies of the monetarists, of the Government, because the facts of the situation make it abundantly clear that the old socialist analyses of society and the economy simply do not work. It is a busted flush. It has left a vacuum.
What are the Government putting into that vacuum? They have the chance to create a new concept of the kind of society that we want. I was waiting to hear what the noble Lord, Lord Cockfield, would say in answer to the question which was in my mind. I think he thought he was answering it with that list he gave at the end of his speech, but the great weakness of the Government's approach showed up when he said that the difference between Western countries and the East is that in the West we own property. My Lords, the difference between the East and the West is the difference that we believe in human rights, and they do not; that we believe in the supreme importance of individuals, and they do not. To say that we let them own their own house is a very inadequate interpretation.
6.59 p.m.
Lord Bruce of Donington: My Lords, we on this side are most grateful to the Alliance for having secured the opportunity for this debate. I find myself in almost entire agreement with the diagnosis put forward by the noble Lord, Lord Diamond. I would sincerely hope that his future advancement within the Alliance will not suffer in any way because of the support I feel bound, in all honesty, to give to him this afternoon.
I listened with great interest to the speech of the noble Lord, Lord Cockfield, to whom I have already

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paid tribute for the one achievement of the Government which I outlined in my speech to your Lordships' House on 25th July. I do not propose to repeat my appreciation this afternoon. The noble Lord was, as usual, beamingly self-satisfied. There were occasional cross-currents he admitted, but he did not see any storm clouds on the horizon and no change of course was necessary. There were temporary difficulties, but there was good hope. One could see his satisfaction about the absence of clouds on the horizon until the tropical storm blew up from the noble Lord, Lord Marsh, who made it quite clear that there is a very substantial cloud indeed on the horizon. I thought the noble Lord frowned a little in the course of that vitriolic attack on the Government.
I listened to the stern words of the noble Lord, Lord Marsh; in his view the Government were not doing all the things that he and all responsible citizens wanted them to do. I should have thought that that would have amounted to a criticism, but perhaps the Government are so used to self-congratulation that they applauded the one onslaught they have had from within their own ranks.
Things are not really like this. It is no good Government spokesmen in either House getting up after five years—most of which years have been punctuated by assurances from Ministers that things would be better next year—and saying that everything is on course, that there are no storm clouds on the horizon, when this conflicts with people's everyday experience.
I will not repeat any of the figures, or indeed the arguments, that I made in our last economics debate. But I am bound to say that noble Lords are living under an illusion if they really think that the ordinary citizen of this country thinks that things are improving, that everything is all right, that the economy is in good shape and that there is a roseate future.
The noble Lord, Lord Bruce-Gardyne, in the course of his observations said that some doubts had been cast upon the future of the economy, but he was not acquainted with the forecasts that cast doubts on the Government's own forecast. I have them before me. I will certainly not read them out, but if the noble Lord would care to refer some time later to the Financial Times of 16th June headed, "Industrial output figures show fall continuing", or the Financial Times of 14th July which says, "Recovery slows in manufacturing", alternatively another quotation from the Financial Times of 19th July saying, "Long-term indicator casts doubt on recovery", or a further article on 24th July saying, "Slower growth this year forecast", then he must expect that there is a substantial body of responsible forecasting opinion within the City of London itself that casts considerable doubt on the noble Lord's complacency in this matter.
Messrs. James Capel, the well-known stockbrokers in the City—and I refer the noble Lord to the Financial Times of 30th July—are already hazarding the possibility of the recovery, as far as it has gone, petering out, with the possibility of a recession, albeit a mild one, in the year 1986. It really is not true to say that the predictions of the noble Lord forecasting a reasonably smooth situation and hope, above all
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things, are not contradicted by criticism from responsible sources within the City.
The principal question that we have to decide—this continues to be raised in this House and in another place time after time—is what can the Government do in situations of this kind? Is it true that there is nothing that they can do except to allow the free vent of ordinary market forces? This is the official view of the Government. As I have said before, it does not stop them whenever things go well in a particular part of the economy to claim immediate credit for it, whereas all the adverse factors are either acts of God or beyond their control.
May I take noble Lords back a little—and carry with me the noble Lord, Lord Marsh, as well—to what were derisorily called the Butskellite eras, the eras of successive Labour and Conservative Governments who, although they had different emphasis and pursued different policies and different priorities, nevertheless had a broad degree of consensus. The noble Lord gave some graphic examples in considerable rhetorical form of his experiences within the Labour Government. Perhaps noble Lords will forgive me if I reiterate my own allegiance to my party because so many other people seem to have fallen by the wayside. I joined the Labour Party in 1935. I have remained a member ever since and am very pleased and proud to be a member of the Labour Party.
But the noble Lord recounted his circumstances when he was a member of the Labour Government. He pointed out that he was forced, or the Government were forced, at that time to take action that was repugnant to the very policies that they had been putting forward due to international pressures arising from the balance-of-payments situation. This happened under Conservative and Labour Governments right the way through at intervals because the economy became (to use the overworked term) "overheated" and it had to be "cooled down" because the balance-of-payments situation made it absolutely necessary.
That does not prove that the endeavours by successive governments to try to steer the economy were themselves wrong. In fact, owing precisely to the fact that both governments in their own ways and with their own priorities were able to steer the economy through, in part, their ownership of the nationalised industries—exercising considerable demand on the manufacturing capacity of the private sector—they were enabled to achieve a broad degree of stability. This much must be said. Those particular years, until the oil crisis itself, were a period—and the noble Lord very often boasted about it—of rising prosperity generally in the United Kingdom; although, as we have repeatedly pointed out on this side of the House, it still left pockets of poverty—large pockets of poverty—which under this Government have increased out of all recognition both in size and in intensity.
Lord Marsh: My Lords, will the noble Lord allow me?
Lord Bruce of Donington: My Lords, I did not interrupt the noble Lord when he was speaking and my time is very limited. After having accumulated the experience of the years immediately following the war and after making many mistakes, as all governments

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composed of human beings make mistakes—and even though the noble Lord, Lord Cockfield, who never makes a mistake, is a Member of this particular Cabinet—it was really silly to abandon the kind of very limited guidance and control that was adopted in those years; it was very silly indeed because the experience that had been accumulated over those years since the end of the war under conditions in which this country was no longer exposed to the balance of payments difficulties that had taken place in the past owing precisely to North Sea oil, would have made it far easier not to have conducted the economy but to have guided it in a way in which we should not have had inflicted upon us the large-scale unemployment that we have today.
In fact, it has been a wasted opportunity. Even after May 1979, we could have avoided this if we had taken suitable steps to stimulate investment, albeit on a limited scale, and if we had made a real endeavour over the control of interest rates. The noble Lord, Lord Bruce-Gardyne, said that the Government had no control over interest rates. He should go back to the interest rates of 1979. I have the chart in front of me. American interest rates were lagging below ours until this idiotic rise in interest rates took place, a matter of some 5 per cent. in two or three months in the later months of 1979, where we put them up way above American interest rates and the interest rates in the United States followed.
So we had a chance. We have a number of problems today. There are clouds, whatever the noble Lord, Lord Cockfield, may say. There is a prospect which has been referred to of the possibility—and it is only a possibility; I do not want to give credence to it—of a sharp fall in oil prices. This would have a very considerable effect upon Treasury revenues as the noble Lord knows. There is the menace (which is getting rather more than a cloud) of the international banking system which was referred to by the noble Lord, Lord Taylor of Gryfe. There is also again the problem of the whole instability of the Middle East which one simply cannot shove under the carpet and pretend that it does not exist. There is the whole problem of unemployment and the threat to social stability that arises from it.
These are very great problems and to imagine for one moment that everything can be left to the free play of the market to solve is really a lot of nonsense. Within two or three months from now, when Parliament resumes, I venture to predict even now that although noble Lords opposite will be spelling out the same story as before, the problems will become graver and the problems will become more menacing. But it requires more than the economic steps that have to be taken. It requires more than the investment in the infrastructure, the investment if necessary in manufacture, which can begin to stimulate demand and to stimulate output.
All these things are easily capable of accomplishment provided that the will is there and that the humility is there also, the humility to say to oneself. "Really, I have made a number of mistakes in the past in the way that I have conducted this affair; and I am now prepared to learn from the mistakes"—because the population at large simply do
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not believe that the Government have not made any mistakes. To pretend that they have been on one course of rectitude for the whole time, a course which is not going to change, is something that the public will not indefinitely accept. The Government will have to do more than that.
These are not entirely economic matters. These are matters of what we will call for the moment, very loosely, social ethos. These are a matter, when people are leaders, of tapping the spirit of men, of engaging their affections, of stimulating them to purpose. These are the real functions of leadership. One does not have to go very far to encapsulate the kind of spirit about which I am talking. In today's issue of the Financial Times, to which I draw the attention of noble Lords, there is a feature by Professor Michael D. Stephens and Dr. Kenneth H. Lawson. It is not at all remarkable these days that it should appear in the Financial Times because, unlike most of the press that is under the patronage of the Prime Minister and the party opposite, articles do appear in it of which the late C. P. Scott would have thoroughly approved for inclusion in his very great newspaper.
What I mean can be encapsulated thus. This is what the writers say—and it should burn into the minds of those that really want to understand it. They say:
"There is no vision of the ideal state: there is no conception of 'a good life' to be striven for. Government plays only a minimal role. It is concerned with the processes of ensuring that the rights and the rule of law are upheld, that the state is defended and little else.
"It is no accident, therefore, that notions such as 'the welfare state' are unfashionable, because they require the establishment of shared values and of consensus about social goals.
"What has emerged from the freedom of the 1960s is a single universal criterion by which to judge policies, decisions and the conduct of affairs at all levels. It is money. 'That something pays' is the criterion of its worth, and all the processes in society are judged by it. What is done, what is made, and what is said are of no consequence provided that the processes involved cost little and earn much.
"We have emerged as a society in which discussion about worthwhile ends is ruled out as irrelevant because we have come to believe that there are no worthwhile ends beyond our self-preservation".
That, my Lords, is an adequate expression of the Government's philosophy and the consequences of its application. In the six weeks or two months that we are relieved from our parliamentary duties and are perhaps able to reflect a little more than we can in the hurly-burly of parliamentary and business life, we can hope that some of the truth contained within that very adequate statement may sink in and that possibly on our return the Prime Minister and the Government may consider giving a moral lead to Britain.
7.22 p.m.
The Earl of Gowrie: My Lords, the noble Lord, Lord Bruce of Donington, could best be described as a robust Bourbon. In his 35 years' membership, as he described it, of the Labour Party, he has not learned a great deal and he has forgotten very little—
Lord Bruce of Donington: My Lords. 49 years.
The Earl of Gowrie: My Lords, I beg the pardon of the noble Lord, he is even more Bourbonesque than I expected. He may have forgotten very little and he may not have learned very much, but he delivers his views with robustness, good humour and a great deal

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of clarity. I find it a little rich that a noble Lord of the class of 1945 should be lecturing the Benches on which I sit and those behind me on consensus politics, the virtues of Butskellism and the rest of it. I might point out to him that I think it was the noble Lord, Lord Butler, himself, who introduced my noble friend Lord Cockfield into this House. My noble friend was whispering to me on the Front Bench a few moments ago that his initial Treasury experience was gained at the knee of the noble Lord, Lord Butler, when he was Chancellor in 1951.
There is a serious point here. As I argued when I was sitting where the noble Lord, Lord Bruce of Donington, now sits, when his party were in Government—I was an economics spokesman in your Lordships' House—we were all learning in the 'seventies that the manipulation of demand in order to deliver employment was not an option any longer enjoyed by contemporary Western Governments, and if we were going to look at the issue of unemployment we would have to look at it through slightly different lenses. I learned that lesson not from the noble Lord, Lord Butler, but from Mr. Joel Barnett, as he then was, from the right honourable gentleman Mr. Denis Healey, and indeed from the then Prime Minister, Mr. Callaghan. They all preached that message. It is a pity that the present Labour Party is not acknowledging it, is not building on the lessons learned at that time, and that we are right back into the Bourbonesque era of the 'sixties in the speech made by the noble Lord, Lord Bruce of Donington, in winding up the debate tonight.
It has been a very interesting debate. It was a little disjointed, perhaps, in that I was not quite sure at any given point whether we were debating the miners' strike or the economy in general. I hope the House will be content if I stick to the economy in general, and as we are all a little "demob" happy at this hour of the evening and at this stage in July—
Noble Lords: Augustx0021;
The Earl of Gowrie: My Lords, August. It has seemed a longer July than usual, and I do not want to extend it artificially. I shall simply deal as best I can with some of the points that have been made.
After five years it is a good time to take stock; and after five years of Conservative Government our view is that the British economy is substantially healthier now—not a question of looking to a roseate future. This comment was made not by anyone on my side of the House during this debate but by the noble Lord, Lord Marsh, a former Labour Minister, and, indeed (to be fair to her, in the context of other remarks which were critical of the Government), by the noble Baroness, Lady Seear. The fact is that the prospects for the long-term are much brighter if one has lower inflation. We have rising employment in this country. We have a higher rate of growth than we have enjoyed on a substained level for many years: and we have much greater competitiveness. Of course, the fundamental soundness of the economy—this was the point of squalls and storms made by my noble friend—has recently been overshadowed, particularly in its presentation, by the appalling violence on the miners' picket lines and by the tragedy of the lives of many individual miners who do not wish to strike. The
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intransigent attitude of the leadership of the National Union of Mineworkers has led to misgivings and anxieties both at home and abroad.
I would say, however, to the noble Lord, Lord Bruce of Donington, that some of the headlines expressing a certain amount of anxiety and gloom which he read out were taken from before the dock strike was settled. I think there was a substantial revival in confidence when it was seen that this brushfire was not spreading.
We are committed to maintaining policies designed to build a firm financial framework in which industry and commerce can flourish, with stable prices. That is a very far cry from saying that governments never make mistakes or are never wrong. In fact, I think it was my right honourable friend Sir Keith Joseph who said loudly and publicly fairly early on in the Government's period of office that we lost our first year. Reflecting back on the vanished glories of Professor Clegg, how right he wasx0021;
It is nevertheless most important for government to give a clear steer in the areas where they are uniquely responsible for financial stability. It is therefore reasonable for the Government to look at the indicators of increased productivity, investment, rising employment and the like, and to claim a very considerable degree of success. The Government can further claim that if this can be maintained and if own goals are not scored, the success will continue. But in saving that, one must recognise a very simple and uncomfortable truth. It is, alas, the purest illusion to think that unemployment is any longer the indication of economic health within the British wages and welfare context that it used to be.
When I went to Oxford some 20 to 25 years ago I asked who were the cleverest men in that university. I was told that there were two who were head and shoulders above all the others. One was Sir Isaiah Berlin and the other was Mr. Brian Walden. On the whole, as a Conservative fellow, I have stuck to that view over the past 25 years; and when I have any personal anxieties or difficulties which need intellectual solution I consult Sir Isaiah, and when I have any political or economic doubts I consult Mr. Walden. I noticed that in a recent article—at least as recent as the article quoted by the noble Lord, Lord Bruce of Donington—Mr. Walden said:
"Already we have learnt something. The British want unemployment reduced but within the confines of existing beliefs about wages and welfare".
Within that context. I doubt whether unemployment in the wider level will be at all easily reduced.
We certainly need to discuss the issue on this and on other occasions, and we need to discuss the social consequences of high levels of unemployment and the social polices that we need to ameliorate them. I was very glad that it was my noble friend Lady Elles who took up the challenge set down by the right reverend Prelate in front of her to consider those policies. But the simple fact is that in an age when machines make other machines more effectively than human beings can, it is idle to pretend that the levels of unemployment, which still seem to me to be remarkably high in this economy, are the indicators that they used to be.
A great deal of the argument in this evening's debate has centered around the issue of privatisation, and we

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had that familiar and much loved trope given to us again, in the phrase of the noble Lord, Lord Diamond, about the family silver being sold for weekly housekeeping. I prefer, as your Lordships will remember, to think of the family silver being returned to the family. But the noble Lord, Lord Diamond, said that the Government were pursuing privatisation with ever-increasing abandon—a kind of wanton denationalisation.
I thought that that part of the noble Lord's speech—and I do not wish, in any way, to get him into trouble with his own high command, because I have a very high regard for him—was somewhat at variance with a statement put out by his leader, Dr. Owen, who said:
"Profits are the motive force of the private sector and service the motive force of the public sector. The public sector then has to be broken down further so as to identify the commercial public sector and the public service sector"—
those are unexceptional and sensible statements. He then went on to say:
"The SDP has not yet developed a strategic view on the role of the commercial public sector. If public ownership is to be just about efficiency in acting commercially, privatisation is logically invevitable".
Of course, the sole purpose of public sector activity is not necessarily about efficiency and acting commercially, but wealth generation and wealth creation is about that. One of the things that we confuse in this economy, and we sometimes also confuse in these debates, is the distinction between going all out for commercial success and efficiency, in order to generate money—and you can then have an argument about how to distribute it socially—and the feeling that somehow you must attend to the social consequences of what is fundamentally an economic argument about wealth generation, while you are trying to make wealth. I think that that confusion is one that constantly needs clearing up.
Much was also made in the debate by noble Lords about capital spending, and the amount and volume of capital spending in the public sector. It seemed to me to be the burden of the policy of the noble Lord, Lord Diamond, after his criticisms of the Government, that we should borrow more money, presumably for greater capital spending, particularly on the infrastructure. No government hitherto—and perhaps we should all mend our ways—have had precise targets for spending on the infrastructure. Proposals for capital spending are of course considered on their merits with particular attention to the benefit to the United Kingdom economy as a whole.
It seemed to me to be curious that the noble Lords, Lord Diamond and Lord Ezra, talked as if no capital spending was going on in this economy. You have only to look at the budgets of my right honourable friend Mr. Heseltine at the Ministry of Defence, and the capital spending there, to give the lie to that. To take an area with which the noble Lord, Lord Marsh, is familiar, no less than £306 million has recently been given to British Rail for the electrification of the East coast main line. That would seem to me to be a thoroughly sensible project—
Lord Ezra: My Lords, if I may intervene and thank the noble Earl for giving way, I certainly had no
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intention of indicating that there was no capital expenditure. But I indicated certain sectors of the infrastructure where I thought the needs exceeded the amount of money that is presently being made available.
The Earl of Gowrie: My Lords, I am sure we could all think of those. But as the noble Lord knows, in the coal industry, with which he is profoundly familiar—and I welcomed nearly everything he had to say in his remarkable speech about the tragedy facing the coal industry at present—the immense volume of spending by the Government denies resources to other industries which may need capital projects. We have to tailor the capital spending that we all want to the resources that we have.
There is of course a significant volume of spending on roads. In England this year, alone, the spending is planned to be £1¼ billion. Spending includes large projects like the M.25 orbital motorway around London, on which no less than £360 million has been spent since 1979, and in total public sector capital spending has been broadly constant in real terms over the period since 1978–79. I am sure that noble Lords on all sides of the House would not think that we could engineer greater economic growth in this country by increasing our motorway programme over and above the resources that will be available to fill it, or by borrowing at a level that would be difficult to pay back.
May I say, too, to the noble Lord, Lord Ezra, on the issue of interest rates—and these were also raised by the noble Lord, Lord Barnett—that we have not come to the conclusion, and we should not come to the conclusion, that the US budget deficit is the cause of better employment performance in the USA. That was a rather misleading suggestion to make, if I may say so. It is quite clear that the contrast between the United States and the European experience on jobs—that is to say, 15 million new jobs in the United States and falling employment in Europe over the past 10 years—cannot be explained by differences in budgetary policies.
United States employment rose 13 million between 1975 and 1979, a period over which United States fiscal policy became more restrictive, but increased by only 2 million between 1979 and 1983, when fiscal policy was becoming much more expansionary. Surely, the sharp contrast between the experience of the United States and Europe is almost entirely due to more efficient, competitive, innovative and adaptive labour and goods markets in the United States. This is a point that was being made by Mr. Brian Walden in his article. Over the past 10 years, average earnings in the United States have declined in real terms, while workers in Western Europe have seen real earnings rise by around one-eighth.
I am perfectly prepared to take criticism of the Government's record on unemployment from people who are suggesting that their own wages—like, I may say, those of most Ministers—should be kept in line with what the economy can afford. Charity does begin at home and does begin in one's own pocket. Those of us, as I have said on many occasions, who work in the public service sector and do not have direct profits to show must be extremely modest in what we ask from

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the economy at this time, unless we do not care very much about unemployment.
The effects, too, of the dock strike and rising interest rates during the survey period of the CBI, which was mentioned by the noble Lord, Lord Bruce, seem to have had an adverse effect on recorded business optimism. It is not surprising that some of these results should have been adversely affected; but what is important is that the underlying message of the CBI's recent survey is that the recovery is continuing with no signs of increased inflationary pressures.
The lesson the Government have to give again and again is that what we are in business to try to achieve is sustained jobs and a sustainable improvement in the economy—not a dash out of difficulty or a dash for growth. We as a political party have been guilty of that in our own time—I am perfectly prepared to admit to past mistakes—but at least, unlike the noble Lord, Lord Bruce of Donington, we are prepared to learn from our mistakes.
I do not believe that this is either the moment or the occasion for me to talk too much about the miners' strike. It is a terrible tragedy—all the more so because it is needless. Nobody, not even the most strident critic of the Government, has suggested that there is anything whatsoever wrong with the package being offered to the coal industry, or the degree of the Government's commitment to it. All the criticisms, all the arguments, have revolved around something that is quite different. I must say that I thought the speech of the noble Lord, Lord Marsh, was remarkable for its vigour and power and for the noble Lord's particularly virile way of putting things, if I may so describe it. But those who might find the noble Lord's style a little overdone for their taste can find very many of the same points being made dim inuendo by the noble Lord, Lord Ezra. As your Lordships know, both these men have deep experience of the situation in the nationalised industries.
What we have to hope will come out of the miners' strike, in terms of social stability—another matter under debate—is the message that violence and intimidation cannot and must not be seen to pay. if we are able to get that message over, we shall be able to underscore ourselves both at home and abroad as the stable society which profoundly and at heart we are.
I turn back to the main theme of the debate and the speech made by the noble Lord, Lord Hooson. Recently I emigrated to the noble Lord's old constituency. It is very remarkable that the noble Lord has consented to leave it and come here. It is such a beautiful constituency. It is a great pleasure for me to live in it. The noble Lord was wrong, however, despite his good background, in the point that he made about investment abroad. The British economy has always invested abroad. Many commentators—sometimes I sympathise with them—have said that where we went wrong was when we ceased to be shopkeepers and traders and became imperialists and that the British Empire should have stayed as it started off, as the East India Company. I have some sympathy with that point of view. It is extremely sensible, at a time of diminishing energy assets, that we should be storing up treasure abroad which will come back to us. But people are investing at home as well. As I said in my
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brief intervention during the noble Lord's speech, there is no difficulty about obtaining capital in this country if, first, one can obtain the profitable enterprises into which to put capital. If therefore we are all aiming to ensure that there are more profitable enterprises, we should have no difficulty in getting the money.
Service sector investment is now at an all-time high. Manufacturing investment—and I agree that we need investment in manufacturing at least as much—which was hard hit during the recession has turned round to show an increase of some 11 per cent. in the six months to March compared with the previous six months. This follows in the wake of a dramatic turn-round in company profits and profitability. The profits of industrial and commercial companies have risen by no less than 40 per cent. in the last two years. During the last year. the share of industrial and commercial companies' profits in total domestic income was higher than at any time since figures were first compiled in 1960—about 18 per cent.
I share the view of my right honourable friend the Chancellor of the Exchequer that the present increase in interest rates is a very regrettable response to market forces. We believe that we have to respond to such forces. The consequences of not so doing can be very grave indeed. But we do not think that the market is right in its judgment. We believe that the market will come to its senses and that before very long the rates will come down. The real net rate of return for non-North Sea industrial and commercial companies has recovered sharply and this year could be the highest for over 10 years. Company liquidity is high. Businesses are seeing their financial position strengthened —indeed, stronger than for a long time—though I admit that this is from a low base. But recovery is what we are in business to try to achieve.
I sympathise with the noble Lord. Lord Barnett, whose admirable book Inside the Treasury has once more been quoted, not merely in this debate but yesterday by no less a person than the Prime Minister. It must be a terrible burden for the noble Lord to have so many readers. I hope that they all bought their copies, or at least that the public finance coming from my own Ministry in terms of public lending right is helping the noble Lord out a bit. We have a great deal to learn from him.
The noble Lord asked me about our exchange rate policy. We keep an eye on the exchange rate. It is an indicator, like other indicators. I do not believe that it is the engine of economic growth. On the whole, it tends to tell you where you are at a given point rather than how to get there. But we shall certainly keep this indicator closely in view.
I am a bit of a heretic within my own party. Why should not one be so from time to time? I slightly incline to the view of the noble Baroness and, indeed, of my noble friend about the European Monetary System. But at present I am kept safely away from these issues and can therefore enjoy the luxury of my heresies in the Office of Arts and Libraries.
In conclusion, the overall message is still clear: the Government can set the framework for British competitive success but cannot guarantee that success. If British business and industry wins orders at home and abroad there will be more jobs. If we win

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fewer orders there will be fewer jobs. We believe profoundly and passionately in competition and in the ability of the British to compete if they are given clear signals to do so, if those who put obstacles in their path are not rewarded and if the consequences of both success and failure are clear to all. If, for instance, public spending rises as a proportion of gross domestic product, there will be fewer resources available for business expansion and consumer choice. If strikes are of benefit to workers, there are likely to be more strikes. If not, there will be fewer strikes. If labour costs rise faster than output, there will be fewer jobs. Our economic policy is, in short, about the return of common sense to economics. I certainly did not feel that in his reiteration of that point the noble Lord, Lord Marsh, was in any way critical of the Government.
Since we are a trading economy and are not self-sufficient we have to score goals if we are to earn the money for that large proportion of our food which we cannot, even with a highly efficient agricultural sector, produce ourselves. We have to score goals, too, if we are to earn the money to support our cherished welfare services. We cannot afford own goals like the present miners' strike, and are bound to suffer from such own goals. Therefore, it is of the first importance that the community as a whole should receive clear signals that strikes do not pay. The private sector and most of the public industries have learned this lesson. The leadership of the National Union of Mineworkers, unlike so many of their members, have yet to do so. But they will learn it.
In our first year in office, the medium term financial strategy set us on the road towards currency stability. We are well on our way. We still have some way to go, but nobody doubts that our purpose is to stay on that road. What we now also have to do is to give to the British public clear signals about the need to win orders at home and abroad, if we are to improve the employment situation and job opportunities for our children. New jobs are coming on stream at present at the rate of about one-quarter of a million new jobs per annum. Of course, there will continue to be job losses in older businesses and industries, or in those which can no longer compete successfully. That is why unemployment overall continues to rise, though I am glad to say at a substantially lower rate than during the past few years.
Add great sea changes in the labour market, the rise in the population of working age and the continuing and thoroughly justified desire of more and more women to seek employment; add, too, the growth in new technologies, and your Lordships will, I believe, come to the conclusion that high unemployment is likely to remain a major problem for the Western economies for many years to come. So we shall have to go on spending large sums in protecting those who, through no fault of their own, are caught in the painful machinery of an economy changing gear. We shall have to go on spending large sums to train people for new industries and to buy people out of old industries. I must say to the House that I can think of no better way to spend the revenue from North Sea oil than on any of these things.
7.51 p.m.
Lord Diamond: My Lords, on behalf of all those who have contributed to this debate, I am sure I can say to the noble Earl, Lord Gowrie, that we are grateful to him for the care which he has taken to answer so many of the points put forward by speakers. All that remains for me to do is to repeat my thanks and to explain the anxiety I had when I put down the Motion. I feared that I might be criticised because a very wide Motion might result in the debate being a series of parallel thrusts which never meet; we would therefore have had no confrontation of the kind which happened in another place quite recently. I feel that your Lordships have been very kind indeed in accepting the view that a very broadly based Motion was suitable at this time to give all of us an opportunity to contribute, and to give the Government an opportunity of covering a very wide field.
I am most grateful to everybody who has participated in the debate, and I am even grateful to the noble Lord, Lord Marsh for criticising me because I did not give him enough money for something or other. The noble Lord has apparently forgotten that chief secretaries only enjoy criticism. If any Minister says "Thank you" to a chief secretary, then the chief secretary knows immediately that he has made a ghastly error.
I wish I could go individually into those speeches which have been made. I have been most impressed. I have listened to every single speech and enjoyed every second. I shall read them all again tomorrow in the Official Report. I think it has been a very worthwhile debate. I am glad my part in the debate is over. All that remains for me to do is to say to the members of the Government Front Bench that they need a good holiday and I wish them a good holiday. Would that I could wish them a very long holiday! Having said that, may I ask leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Adjournment
The Earl of Swinton: My Lords, before I move the adjournment of the House, may I take the opportunity, from this Dispatch box, of wishing all noble Lords and Ladies in all parts of the House a very happy and peaceful summer break. I think everyone would agree on all sides of the House that we have had a very busy and lengthy Session; it has been one of the busiest for some time. Again, I am sure that all noble Lords and Ladies on all sides of the House will join with me in paying our tributes and offering our thanks to the staff, who have really made life very tolerable for us in extremely difficult conditions. To those we see, and to the many behind the scenes whom we do not see, I am sure noble Lords would wish to say thank you very much indeed.
Lord Ponsonby of Shulbrede: My Lords, I should like to join with the Deputy Chief Whip in the best wishes which he has extended to Members of the House and in the thanks he has extended to the staff of the House. Particularly I should like to extend a vote of thanks to the staff of the refreshment department, who have had to cope with a unique number of late

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night sittings and also with a unique number of very large Divisions; they have had to cope with a lot of hungry Peers at very late hours. I know that this will have brought a smile to the chairman of the refreshment committee, but it is something for which we are very grateful. We are grateful for the patience, tolerance and good humour which has been shown at such times. We shall return in October reinvigorated for the fight, and I can assure the Deputy Chief Whip that I shall do my utmost to see that the Government are not free from embarrassment.
Lord Kilmarnock: My Lords, we on these Benches would also like to wish noble Lords a very happy and well deserved recess. We hope that noble Lords on the other Benches will not hold it against us that we were responsible for the debate this afternoon. I think, as the noble Lord, Lord Diamond, said, it has been well worth while. Finally, we would like to associate ourselves with the remarks of the Deputy Chief Whip about the staff. We really could not function without them, and we hope that they will not hold it against us that we have kept them in the House until five minutes to eight this evening—it is not too bad; I thought it might be later.

Hereford City Council Bill [H.L.]
Reported from the Select Committee on Unopposed Provisions with amendments.
Surrey County Council Bill [H.L.]
The Queen's consent signified; Bill reported from the Select Committee on Unopposed Provisions with amendments.

Worcester City Council Bill [H.L.]
Reported from the Select Committee on Unopposed Provisions with amendments.
House adjourned for the Summer Recess at five minutes before eight o'clock until Tuesday, 16th October next.

  STRAW AND STUBBLE BURNING: ADOPTION OF BY-LAWS
  STRAW AND STUBBLE BURNING: ADOPTION OF BY-LAWS
  PICKETING BY NUM
  PICKETING BY NUM
  SSSIs: AGRICULTURAL GRANT POLICY
  SSSIs: AGRICULTURAL GRANT POLICY
  SSSIs: NCC OBJECTIONS TO GRANT APPLICATIONS
  SSSIs: NCC OBJECTIONS TO GRANT APPLICATIONS
  CEREAL HECTARAGE AND STRAW YIELD 1984
  CEREAL HECTARAGE AND STRAW YIELD 1984
  OIL SEED RAPE HECTARAGE AND STRAW YIELD 1984
  OIL SEED RAPE HECTARAGE AND STRAW YIELD 1984
  FARM MACHINERY: EEC TYPE APPROVAL
  FARM MACHINERY: EEC TYPE APPROVAL
  AIRCRAFT AND SHIPBUILDING NATIONALISATION ACT: EUROPEAN COURT DECISION
  AIRCRAFT AND SHIPBUILDING NATIONALISATION ACT: EUROPEAN COURT DECISION
  GREENHAM COMMON: WOMEN'S CLAIM
  GREENHAM COMMON: WOMEN'S CLAIM
  MSC: RELATIONSHIP WITH SECRETARY OF STATE FOR EDUCATION AND SCIENCE
  MSC: RELATIONSHIP WITH SECRETARY OF STATE FOR EDUCATION AND SCIENCE
  SUPPLEMENTARY BENEFIT CLAIMS AND CHILDREN'S SAVINGS
  SUPPLEMENTARY BENEFIT CLAIMS AND CHILDREN'S SAVINGS
  DIVING: ACCIDENT AND TREATMENT STATISTICS
  DIVING: ACCIDENT AND TREATMENT STATISTICS
  HM CUSTOMS: PREVENTION OF DRUG SMUGGLING
  HM CUSTOMS: PREVENTION OF DRUG SMUGGLING
  PHYSICAL SECURITY OF MILITARY INSTALLATIONS: REPORT
  PHYSICAL SECURITY OF MILITARY INSTALLATIONS: REPORT
  ENGINEER OFFICERS IN THE ARMED FORCES
  ENGINEER OFFICERS IN THE ARMED FORCES
  TERRITORIAL ARMY EXPANSION: BATTALION NAMES
  TERRITORIAL ARMY EXPANSION: BATTALION NAMES
  TERRITORIAL ARMY EXPANSION: ADDITIONS TO SAS
  TERRITORIAL ARMY EXPANSION: ADDITIONS TO SAS
  THE QUEEN'S FLIGHT: REPLACEMENT AIRCRAFT
  THE QUEEN'S FLIGHT: REPLACEMENT AIRCRAFT
  RIGHT TO BUY: DELAYS IN IMPLEMENTATION
  RIGHT TO BUY: DELAYS IN IMPLEMENTATION
  DISABLED PERSONS: EMPLOYMENT CODE OF GOOD PRACTICE
  DISABLED PERSONS: EMPLOYMENT CODE OF GOOD PRACTICE
  DISABLED EMPLOYMENT: INFORMATION ON GRANTS AND AID SCHEMES
  DISABLED EMPLOYMENT: INFORMATION ON GRANTS AND AID SCHEMES
  HONG KONG: NEGOTIATIONS WITH CHINA
  HONG KONG: NEGOTIATIONS WITH CHINA
  LOCAL GOVERNMENT (INTERIM PROVISIONS) ACT: GENERAL CONSENTS
  LOCAL GOVERNMENT (INTERIM PROVISIONS) ACT: GENERAL CONSENTS
  DISABLED EMPLOYMENT QUOTA SCHEME: EMPLOYERS' PERMITS
  DISABLED EMPLOYMENT QUOTA SCHEME: EMPLOYERS' PERMITS